2022 SUPREME COURT DECISIONS

ON
LABOR CASES

JANUARY

Conqueror Industrial Peace Management Cooperative Vs. Joey Balingbing, et al./Sagara

Metro Plastics Industrial Corporation Vs. Joey Balingbing, et al.
G.R. No. 250311, January 5, 2022

To be considered as a labor-only contractor, the lack of substantial capital of the

contractor must concur with the fact that the employees ' work directly relates to the main
business of the principal.

Article 106 of the Labor Code defines labor-only contracting, thus:

Art. 106. Contractor or Subcontractor. -x x x

xxxx

There is "labor-only" contracting where the person supplying workers to an employer

does not have substantial capital or investment in the form of tools, equipment, machineries, work
premises among others, and the workers recruited and placed by such person are performing
activities which are directly related to the principal business of such employer. xxx (Italics
supplied. )

The above-quoted provision is implemented by Section 5 of DOLE DO 18, Series of

2002 (18-02), thus:

Section 5. Prohibition against labor-only contracting. ―Labor-only contracting is

hereby declared prohibited. For this purpose, labor-only contracting shall refer to an arrangement
where the contractor or subcontractor merely recruits, supplies, or places workers to perfom1 a
job, work or service for a principal, and any of the following elements [is] present:

i. The contractor or subcontractor does not have substantial capital or investment

which relates to the job, work or service to be performed and the employees
recruited, supplied or placed by such contractor or subcontractor are
performing activities which are directly related to the main business of the
principal; or
ii. ii. The contractor does not exercise the right to control over the performance of
the work of the contractual employee. (Italics supplied.)

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 Outsourcing of services is not prohibited in all instances. To be considered as
labor-only contracting, three requisites must concur under Article 106 of the Labor Code
and Section 5(i) of DO 18-02:

1. the contractor or subcontractor merely recruits, supplies, or places

workers to perform a job, work or service for a principal;
2. the contractor or subcontractor does not have substantial capital of at
least P3,000,000.0041 or investment which relates to the job, work or service to
be performed; and
3. the employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the main
business of the principal.

Primarily, Conqueror is presumed to have complied with all the requirements of a

legitimate job contractor considering the Certificates of Registration issued to it by the
DOLE.

At any rate, Conqueror has a substantial capital of more than P3,000,000.00 with
working premises at Unit 2807 Makati Corporate Office, City Land, Pasong Tamo
Tower, Chino Roces Ave., Makati City. Having substantial capital and work premises of
its own, Conqueror cannot be considered as a labor-only contractor by the alleged fact
that respondents performed activities directly related to the main business of Sagara. To
be considered a labor-only contractor, the lack of substantial capital or investment must
concur with the fact that the work of the employees is directly related to the main
business of the principal, which is not the case herein. This is shown by the use of the
conjunction "and" in Article 106 of the Labor Code and Section 5(i) of DO 18-02, viz.: "
[t]he contractor or subcontractor does not have substantial capital or investment which
relates to the job, work or service to be performed and the employees recruited, supplied
or placed by such contractor or subcontractor are performing activities which are
directly related to the main business of the principal."

Furthermore, while it may be argued that Conqueror did not have investment in
the form of tools, equipment, and machineries, it is sufficient that it has a substantial
capital of more than P3,000,000.00.

The law does not require a contractor to have both substantial capital and
investment in the form of tools, equipment, machineries, etc. This can be gleaned from
the use of the conjunction "or" in Article 106 of the Labor Code and Section 5(i) of DO
18-02, viz. : "[t]he contractor or subcontractor does not have substantial capital or
investment which relates to the job, work or service to be performed."

If the objective was to oblige the contractor to prove that he has both capital and
the requisite investment, then the conjunction "and" should have been used.

Besides, to require a contractor to have both substantial capitalization and

investment in the form of tools, equipment, machineries, etc. would be to overlook the
accustomed system in different industries where contractors are merely outsourced to

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 provide ancillary or logistic services to the principal. These services range from janitorial
services, security, housekeeping, creatives, and other non-core services similar to those
performed by respondents. Notably, Conqueror deployed them to Sagara to perform the
following: (1) manually transport materials from the storage warehouse to the work
station; (2) load finished goods to the delivery trucks; (3) label products; and (4) recycle
waste materials. Given the type of services Conqueror provides Sagara under their
Contract of Service, there is no need for it to invest in any equipment or machineries in
the plant of Sagara.

xxx

FEBRUARY

Reynaldo P. Cabatan Vs. Southeast Asia Shipping Corp./Atty. Romeo Dalusong and/or
Maritime Management Services
G.R. No. 219495. February 28, 2022

Exception to the 3-day reporting requirement under Section 20 (B) paragraph 3 of the 2000
POEA-SEC - when seafarer is physically incapacitated from complying

It is undisputed that Cabatan's employment contract with SEASCORP executed on

January 30, 2010 is governed by the 2000 Amended Standard Terms and Conditions Governing
the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships (2000 POEA-
SEC). Paragraph 3, Section 20 (B) thereof regarding disability benefits provides:

B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS. -The

liabilities of the employer when the seafarer suffers work-related injury or illness
during the term of his contract are as follows:

xxxx

3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to
sickness allowance equivalent to his basic wage until he is declared fit to work by
the company-designated physician or the degree of permanent disability has been
assessed by the company-designated physician but in no case shall it exceed one
hundred twenty (120) days.

For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three working days upon
his return except when he is physically incapacitated to do so, in which case, a
written notice to the agency within the same period is deemed as compliance.

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 Failure of the seafarer to comply with the mandatory reporting requirement shall
result in his forfeiture of the right to claim the above benefits. (Emphasis
supplied)

xxx

Thus, in order to claim compensability under the forgoing section, it is required that the
seafarer must have: (1) suffered a work-related illness or injury during the term of his contract;
and (2) submitted himself to a mandatory post-employment medical examination within three (3)
working days upon his arrival. As explained in Jebsens Maritime, Inc. v. Undag, the purpose of
the three-day mandatory reporting requirement is to enable the company-designated physician to
ascertain if the seafarer's injury or illness is work.-related xxx

As pointed out by Cabatan, the three-day mandatory reporting requirement is not

absolute. In Wallem Maritime Services v. National Labor Relations Commission, the Court
explained that if the seafarer is physically incapacitated from complying with the requirement for
being terminally ill and is in need of immediate medical attention, the mandatory reporting
period may be dispensed with.

However, the three-day reporting requirement is not absolute as correctly pointed out by
Cabatan. Paragraph 3, Section 20 (B) of the POEA-SEC also provides that a seafarer who is
physically incapacitated to report for a post-employment examination may send a written notice
to its agency within the same period. In Status Maritime Corp. v. Spouses Delalamon, We
recognized the deteriorating condition of the seafarer who cannot be reasonably expected to
report to his employer's office considering the physical strain caused by his illness. Moreover,
the employer was already notified of the failing health condition of the seafarer upon finding out
he was diagnosed with a serious illness abroad.

Based on the foregoing, Cabatan's claim for disability benefits and other monetary
awards prayed for by him must be denied. It is evident that Cabatan was repatriated due to the
expiration of his contract. Regardless of the cause of his repatriation, he was required to submit
himself to a post-employment medical examination by the company-designated physician within
three working days upon his return in order to ascertain if he was really suffering from a work-
related injury or illness. Cabatan may only be excused from such requirement if he was
physically incapacitated to do so. However, such is not the case at bar.

Puregold Price Club, Inc. Vs. Court of Appeals and Renato M. Cruz, Jr.
G.R. No. 244374. February 15, 2022

Procedural rules are not to be treated as mere technicalities;

Petitions for certiorari must be filed strictly within sixty (60) days from notice of
judgment or from the order denying a motion for reconsideration;

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 For purposes of period of appeal, when a party is represented by counsel, service of
orders and notices must be made upon such counsel

Anent the merits of the case, the Court agrees with PPCI’s argument that the CA erred in
giving due course to Renato's petition for certiorari for being filed out of time. As the Rule now
stands, petitions for certiorari must be filed strictly within sixty (60) days from notice of
judgment or from the order denying a motion for reconsideration. There can no longer be any
extension of the 60-day period within which to file a petition for certiorari, save in exceptional or
meritorious cases anchored on special or compelling reasons. Contrary to Renato's theory, the
reglementary period to avail the remedy of certiorari must be reckoned on December 29, 2016 or
the date his counsel received the NLRC Resolution denying the motion for reconsideration, and
not on January 12, 2017 when he allegedly received the assailed resolution. To be sure, the
records reveal that Renato's counsel was validly notified of the assailed NLRC Resolution on
December 29, 2016 xxx

Verily, when a party is represented by counsel of record, service of orders and notices
must be made upon such counsel. Notice to the client or to any other lawyer other than the
counsel of record, is not notice in law. Moreover, while decisions, resolutions, or orders are
served on both parties and their counsel/representative, for purposes of appeal, the period shall
be counted from receipt of such decisions, resolutions, or orders by the counsel or representative
of record. Likewise, Section 4(b), Rule III of the 2011 NLRC Rules of Procedure provides that
for purposes of appeal, the period shall be counted from receipt of the decisions, resolutions, or
orders by the counsel or representative of record.

xxx

Applying these precepts, Renato had sixty (60) days counted from the date his counsel
received on December 29, 2016 the NLRC Resolution denying the motion for reconsideration or
until February 27, 2017 within which to avail a petition for certiorari. As intimated earlier,
Renato filed his petition for certiorari before the CA only on March 13, 201 7 or fourteen (14)
days beyond the reglementary period. Notably, Renato neither moved for an extension of time
nor presented any exceptional or meritorious circumstance to exempt him from the strict
application of the 60-day period rule.

Immutability and unalterability of final and executory decisions

All told, the CA should have dismissed outright Renato's petition for certiorari for being
time-barred. The CA should not have delved into the issues concerning the propriety of the
NLRC Resolutions dated September 8, 2016 and October 28, 2016 which remanded the case to
the LA for further proceedings. Suffice it to say that these resolutions perfunctorily become final
and executory absent a timely petition for certiorari. On this point, the Court reiterates that a
decision that has acquired finality becomes immutable and unalterable and may no longer be
modified in any respect, even if the modification is meant to correct erroneous conclusions of
fact or law and whether it will be made by the court that rendered it or by the highest court of the
land. All the issues between the parties are deemed resolved and laid to rest once a judgment
becomes final and executory; execution of the decision proceeds as a matter of right as vested

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rights are acquired by the winning party. Just as a losing party has the right to appeal within the
prescribed period, the winning party has the correlative right to enjoy the finality of the decision
on the case. After all, a denial of a petition for being time-barred is tantamount to a decision on
the merits. Otherwise, there will be no end to litigation, and this will set to naught the main role
of courts of justice to assist in the enforcement of the rule of law and the maintenance of peace
and order by settling justiciable controversies with finality.

Luisito C. Reyes Vs. Jebsens Maritime, Inc. and Alfa Ship & Crew Management GMBH
G.R. No. 230502. February 15, 2022

Compensability of seafarer’s injury or illness

For disability to be compensable under Sec. 20(A) of the 2010 POEA-SEC, two elements
must concur: (1) the injury or illness must be work-related; and (2) the work-related injury or
illness must have existed during the term of the seafarer's contract. In the present case, it is
undisputed that petitioner's injury happened during the term of his contract while on board the
vessel. The LA and the NLRC denied the disability benefits because petitioner failed to
substantially show the causal connection between his work and his illness. The NLRC ruled that
awards of compensation cannot rest on bare allegations, speculations or presumptions. The CA,
on the other hand, disagreed with the labor tribunals and came up with a contrary finding that
petitioner's illness or injury was, in fact, work-related.

The Court, in Sestoso v. United Philippine Lines, Inc., citing More Maritime Agencies,
Inc. v. NLRC, held that compensability of an illness or injury does not depend on whether the
injury or disease was pre-existing at the time of employment but rather on whether the injury or
illness is work-related or had been aggravated by the seafarer's working condition.

Under POEA Memorandum Circular No. 10, Series of 2010, referred to as the Standard
Terms and Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going
Vessels (MC No. 10) and deemed incorporated in every employment contract of seafarers, work-
related illness is defined as any sickness as a result of an occupational disease listed under Sec.
32-A of the contract with the conditions set therein; while work-related injury is an injury arising
out of and in the course of employment.

In the same MC No. 10, Sec. 20, par. A(4) categorically provides that those illnesses not
listed in Sec. 32 of the contract are disputably presumed as work-related.

The law clearly laid down a legal presumption of work-related illness or injury in favor
of seafarers. This legal presumption was borne by the fact that the said list cannot account for all
known and unknown illnesses/diseases that may be associated with, caused or aggravated by
such working conditions, and that the presumption is made in the law to signify that the non-
inclusion in the list of occupational diseases does not translate to an absolute exclusion from
disability benefits. Thus, the burden is on the employer to disprove the work-relatedness, failing

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which, the disputable presumption that a particular injury or illness that results in disability is
work-related stands.

xxx
Nonetheless, the presumption of work-relatedness does not extend to the matter of
compensability. Compensability pertains to the entitlement to receive compensation and benefits
upon a showing that work conditions caused or at least increased the risk of the injury or illness.

Petitioner's work included, among others: the ass1stmg in cargo handling and operations;
handling of the vessel, in docking, anchoring, piloting en route, in close quarters and open sea
conditions; assisting in mooring and unmooring of the vessel in port and at off-shore locations;
and the testing of equipment. The CA correctly observed that the examinations, procedures, and
diagnosis have amply proven petitioner's work-related injury. The nature and demand of his
work as a seafarer, which the CA found to have been physically demanding, aggravated his
medical condition resulting in a fracture to his lumbar spine. Jurisprudence states that although
the employer is not the insurer of the health of his employees, he takes them as he finds them and
assumes the risk of liability.

Compensability of seafarer’s illness or injury does not automatically translate to

entitlement to disability benefits

Having shown that petitioner's injury is compensable because it has a causal connection
with his work and he suffered the same during the term of his contract, the next question is:
should petitioner be entitled to total and permanent disability benefits?

A seafarer's entitlement to disability benefits is not automatic simply because of a finding

that his illness or injury is compensable. In Gamboa v. Maunlad Trans, Inc., the Court reiterated
the settled rule that the entitlement of a seafarer on overseas employment to disability benefits is
governed by law, by the parties' contracts, and by the medical findings. By law, the relevant
statutory provisions are Articles 197 to 199 (formerly Arts. 191 to 193) of the Labor Code in
relation to Sec. 2(a), Rule X of the Amended Rules on Employee Compensation. By contract, the
material contracts are the POEA-SEC, which is deemed incorporated in every seafarer's
employment contract and considered to be the minimum requirements acceptable to the
government, the parties' CBA, if any, and the employment agreement between the seafarer and
the employer.

xxx

Petitioner, a Second Officer, invoked Sec. 21 of the CBA in claiming total and permanent
disability benefits in the amount of $235,224.00 xxx

Petitioner refers to Sec. 21 to support his claim for disability benefits due to his accident
while employed by respondents. It is, thus, incumbent upon petitioner to prove by substantial
evidence that he figured in an accident on board the vessel. It is basic that whoever alleges a fact
has the burden of proving it because a mere allegation is not evidence.

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 Petitioner failed to prove the fact of accident, either by documentary or testimonial
evidence.

xxx

Nonetheless, petitioner is not without any recourse as the POEA-SEC also governs his
employment contract. The POEA-SEC is imbued with public interest and is deemed incorporated
in every employment contract of seafarers. As the Court gives credence to the assessment of
petitioner's physicians of choice, he is entitled to the maximum total and permanent disability
benefit of$60,000.00 provided under the POEA-SEC.

Referral to a third doctor is mandatory, and the party who fails to abide thereby
would be in breach of the POEA-SEC;
When findings of company-designated physician not deemed conclusive and binding

xxx The same law expressly provides that in case of disagreement or conflict between the
findings of the company-designated physician and the seafarer's physician of choice, a third
doctor may be jointly agreed upon by the parties. The findings of the third doctor shall be final
and binding on both employer and seafarer. The Court has repeatedly emphasized that referral to
a third doctor is mandatory, and the party who fails to abide thereby would be in breach of the
POEA-SEC.
In the present case, the company-designated physician issued a Final Medical Report on
July 14, 2014, within 108 days from petitioner's repatriation, that the latter had healed from
compression fracture, after undergoing series of tests, medications, and 12 sessions of physical
therapy. He was found to have attained maximal medical improvement and was deemed fit to
work. Petitioner's physician of choice, Dr. Magtira, however, issued a Medical Report on July
23, 2014, with the findings that petitioner had lost his pre-injury capacity and was unfit to go
back to his previous work due to the said impairment. Dr. Magtira declared petitioner to have
permanent disability and permanently unfit in any capacity for further sea duties. The conflicting
findings called for the referral to a third doctor jointly agreed upon by the parties and whose
findings shall be final and binding upon them. The initiative for referral to a third doctor should
come from the employee, i.e., petitioner himself. He must actively or expressly request for it.
Consequently, the Minutes of the Single Entry Approach (SENA) revealed that petitioner
provided Jebsens with the second doctor's certificate and relevant CBA provision. Also, contrary
to the CA's findings, petitioner expressly proposed the referral to a third doctor. It was
respondents who refused this, claiming through their counsel, that they had not been given
authority to refer the case to a third doctor.
To reiterate, referral to a third doctor is mandatory in case of disagreements between the
findings of the company-designated physician and the employee's physician of choice.
Jurisprudence further holds that upon notification by the seafarer of his intention to refer the
conflicting findings to a third doctor, the company carries the burden of initiating the process for
referral to a third doctor commonly agreed upon between the parties.

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 Respondents clearly failed to abide by the mandatory referral procedure under the law.
As a result, the findings of the company-designated physician cannot be automatically deemed
conclusive and binding. Accordingly, the Court must now weigh the inherent merits of the
medical findings presented by both sides.

Rodelio R. Onia Vs. Leonis Navigation Company, Inc., World Maritime Co. Ltd., Capt.
Hernani P. Feusca, Felix Andrada, Ricardo Nolledo, Ryo Matsunaga, Takashi Uto,
Valeriano R. Del Rosario, Mary Jean Madrenero, and Jennifer E. Cerrada
G.R. No. 256878. February 14, 2022

There is no concealment of pre-existing illnesses that will disqualify the seafarer from
recovering disability benefits if the employer/shipping company was put on notice of the
medical condition during PEME

At the onset, the Court finds that concealment cannot be appreciated against petitioner;
hence, he cannot be deemed barred from claiming disability benefits.

Under Section 20 (E) of the 2010 Philippine Overseas Employment Administration

(POEA) - Standard Employment Contract (2010 POEA-SEC), "[a] seafarer who knowingly
conceals a pre-existing illness or condition in the Pre-Employment Medical Examination
(PEME) shall be liable for misrepresentation and shall be disqualified from any compensation
and benefits." In this regard, jurisprudence expounds that an illness is considered pre-existing
within the contemplation of Section 20 (E) of the 2010 POEA-SEC if, among others, the seafarer
had been diagnosed and has knowledge of such illness or condition but failed to disclose the
same during the PEME, and such cannot be diagnosed during the PEME.

In this case, it clearly appears that petitioner's alleged pre-existing illnesses, i.e.,
hypertension and diabetes mellitus, are conditions which are easily discoverable during his
PEME; thus, they cannot be deemed pre-existing within the contemplation of Section 20 (E) of
the 2010 POEA-SEC. Indeed, records show that petitioner underwent the required PEME, and
his hypertension could have been easily detected by standard/routine tests conducted during the
said examination, i.e., blood pressure test, electrocardiogram, chest x-ray, and/or blood
chemistry. It is also undisputed that despite being pronounced to be "FIT FOR SEA DUTY," the
company-accredited physician even prescribed maintenance medicines, i.e., Metformin,
Glebenclamide and Amlodipine Besilate to petitioner for his hypertensive cardiovascular disease
and diabetes mellitus. This only confirms the fact that respondents were already put on notice of
petitioner's medical condition as early as his PEME.

Work-relatedness or compensability of seafarer’s hypertension and diabetes

Under Section 20 (A) of the 2010 POEA-SEC, the employer is liable for disability
benefits when the seafarer suffers from a work-related injury or illness during the term of his
contract. A work-related illness is defined as "any sickness as a result of an occupational disease
listed under Section 32-A of this Contract with the conditions set therein satisfied. xxx

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 It should be stressed that petitioner's diagnosed illnesses of "Cerebrovascular infarct, Left
Pons, Hypertensive Cardiovascular Disease and Diabetes Mellitus" are presumed to be work-
related, since these are listed under Section 32-A (Occupational Diseases) of the 2010 POEA-
SEC. Particularly, they are listed under paragraphs 12 and 13, respectively referring to "Cerebra-
vascular events" and "End Organ Damage Resulting from Uncontrolled Hypertension."

Meanwhile, for cerebrovascular disease to be deemed compensable, paragraph 12,

Section 32-A of the 2010 POEA-SEC requires all of the following conditions to be met:

12. CEREBROVASCULAR EVENTS

All of the following conditions must be met:
a. lf the heart disease was known to have been present during employment, there must be
proof that an acute exacerbation was clearly precipitated by an unusual strain by reasons of the
nature of his work.
b. The strain of work that brings about an acute attack must be [of] sufficient severity and
must be followed within 24 hours by the clinical signs of a cardiac insult to constitute causal
relationship.
c. If a person who was apparently asymptomatic before being subjected to strain at work
showed signs and symptoms of cardiac injury during the performance of his work and such
symptoms and signs persisted, it is reasonable to claim a causal relationship.
d. If a person is a known hypertensive or diabetic, he should show compliance with
prescribed maintenance and doctor-recommended lifestyle changes. The employer shall provide
a workplace conducive for such compliance in accordance with Section 1 (A) paragraph 5.
e . In [sic] a patient not known to have hypertension or diabetes, as indicated on his last
PEME[.]

On the other hand, for hypertension to be deemed compensable, paragraph 13, Section
32-A of the 2010 POEA-SEC provides:

Impairment of function of the organs such as kidneys, heart, eyes and brain under the
following conditions considered compensable:

a. If a person is a known hypertensive or diabetic, he should show compliance with

prescribed maintenance medications and doctor-recommended lifestyle changes. The employer
shall provide a workplace conducive for such compliance in accordance with Section 1 (A)
paragraph.
b. In [sic] a patient not known to have hypertension has the following on his last PEME:
normal BP, normal CXR and ECG/treadmill.

Here, petitioner suffered a brain stroke which eventually led to a diagnosis for
"Cerebrovascular infarct, Left Pons, hypertensive Cardiovascular Disease and Diabetes
Mellitus." It is not difficult to discern that the nature of the duties performed by petitioner as an
oiler and his exposure to various elements while on board the vessel have contributed to the
onset or aggravation of his illnesses. To highlight, it is undisputed that petitioner's duties on
board were to " maintain[], clean[], and at times, operate[] ship engine parts, including blowers,

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compressors, motors, gears, ejectors, and other equipment." Petitioner likewise operated the
lubricant filtering and purifying equipment and kept logs of the vessel's oiling. In doing his work,
petitioner stayed for a considerable period at the vessel's engine room which experienced
fluctuating and extreme temperatures. Moreover, he was exposed to engine fumes and chemicals
which all the more contributed or at least aggravated his illness. In fact, it was while in the
performance of his duties on board the MV Navios Koyo that petitioner experienced the major
symptoms of a cerebrovascular event, i.e., blurry vision, dizziness, numbness in the right side of
the body and speech becoming slurred. Clearly, a linkage between petitioner's illnesses and work
exists in this case. To be sure, jurisprudence provides that the existing nature of the seafarer's
illness does not bar compensation if the same was aggravated due to his working conditions.

Moreover, petitioner was able to show compliance with the requisites listed under
paragraphs 12 and 13, Section 32-A of the 2010 POEA-SEC. To be specific, petitioner's case
falls under paragraphs 12 (d) and 13 (a) as he was shown to be hypertensive and diabetic, and
was taking prescribed medications, such as Metformin, Glebenclamide, and Amlodipine Besilate.

Company-designated physician to issue a final and definite assessment within the

120 or 240-day period; otherwise, the disability is deemed as total and permanent by
operation of law

Case law instructs that in the event that a seafarer suffers a work-related illness in the
course of his employment, the employer is obligated to refer him or her to a company-designated
physician, who has the responsibility to arrive at a final and definite assessment of the seafarer's
degree of disability within a period of 120 days from repatriation. This period may be extended
up to a maximum of 240 days, if the seafarer requires further medical treatment. Notably, the
responsibility of the company-designated physician to come up with a final and definite
assessment within the foregoing prescribed periods demands that the disability rating be properly
reflected in a formal medical report. On this score, it is well-established that, to be deemed valid,
this assessment must be complete and definite; otherwise, the medical report shall be set aside
and the disability grading contained therein rendered invalid. In this instance, where the precise
medical status of the seafarer's disability remains unresolved, the law steps in and deems the
same as total and permanent.

In this case, it appears that the lower tribunals glossed over the fact that no final and
definite assessment was made within the prescribed periods, thereby rendering petitioner’s
disability as total and permanent by operation of law.

Records disclose that petitioner was medically repatriated on June 13, 2016, had
undergone assessment before June 22, 2016 when he was discharged, and eventually was issued
a Medical Report dated July 5, 2016 by the company-designated physician. Notably, apart from
such report, no other medical report appears on record. However, the medical report by the
company-designated physician, while issued within the prescribed period, failed to contain any
statement-much less an assessment-on the degree of petitioner's disability. Hence, the same
cannot be considered as a final and definite disability assessment. xxx

xxx

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 Verily, the failure of the company-designated physician to issue a final and definite
assessment within the prescribed periods gave rise to the conclusive presumption that petitioner's
disability was total and permanent; thus, entitling him to total and permanent disability benefits.
In this regard, it bears emphasizing that the issuance of a final and definite disability assessment
by the employer within the prescribed periods is strictly necessary in order to determine the true
extent of a seafarer's sickness or injury and his or her capacity to resume work as such. Without
such assessment, the extent of a seafarer's sickness or injury remains an open question and thus,
prejudicial to claims for disability benefits. As such, in line with the general policy of our laws to
afford protection to labor, the failure to comply with this mandatory requirement renders the
seafarer's disability as total and permanent by operation of law.

Traveloka Philippines, Inc. and Yady Guitana Vs. Poncevic Capino Ceballos, Jr.
G.R. No. 254697. February 14, 2022

Constructive dismissal; Employer is charged with the burden of proving that its conduct is
based on valid and legitimate grounds

"[C]onstructive dismissal is defined as quitting or cessation of work because continued

employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank
or a diminution of pay and other benefits. It exists 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. There is
involuntary resignation due to the harsh, hostile, and unfavorable conditions set by the employer.
The test of constructive dismissal is whether a reasonable person in the employee's position
would have felt compelled to give up his employment/position under the circumstances." It is a
"dismissal in disguise or an act amounting to dismissal but made to appear as if it were not.” In
this regard, case law instructs that in constructive dismissal cases, the employer is charged with
the burden of proving that its conduct was based on valid and legitimate grounds.

In this case, Traveloka claims that respondent was validly terminated on the grounds of
serious misconduct and loss of trust and confidence. As evidence, Traveloka submitted four (4)
affidavits executed by its employees to attest to respondent's poor work behavior and
management style.

However, aside from the self-serving assertions contained in these affidavits, there is
nothing on record to further corroborate the imputations therein stated.
xxx

More significantly, it has not been denied that respondent was already relieved of his
duties prior to the disciplinary hearings by the immediate hiring of his replacement. He was even
explicitly promised by his superior an alternative but unguaranteed position in Indonesia, and
was, without prior warning, demanded to return his assigned company paraphernalia in full view

12
of his subordinates. To repeat, constructive dismissal exists "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." The foregoing
unrebutted circumstances sufficiently demonstrate that respondent was constructively dismissed.

Loss of trust and serious misconduct to be a valid cause for dismissal from employment

Loss of trust and confidence, to be a valid cause for dismissal, must be work related such
that the employee concerned is shown to be unfit to continue working for the employer; it must
also be based on a willful breach of trust and founded on clearly established facts. In the same
vein, the misconduct, to be serious within the meaning of the Labor Code, must be of such a
grave and aggravated character and not merely trivial or unimportant. Thus, for misconduct or
improper behavior to be a just cause for dismissal: (a) it must be serious; (b) it must relate to the
performance of the employee's duties; and (c) it must show that the employee has become unfit
to continue working for the employer.

Doubts shall be resolved in favor of the employee

In addition, certain imputations in the affidavits, such as respondent's disregard for the
proper reimbursement of receipts, his irregular signing of a job order, the insistence that his
girlfriend be covered by the company's HMO, his disregard of cost-saving recommendations,
and failure to meet KPI objectives, were-outside of bare assertions - not substantiated by any
other evidence. It is well-settled that doubts shall be resolved in the employee's favor in line with
the policy under the Labor Code to afford protection to labor and construe doubts in favor of
labor. The consistent rule is that if doubts exist between the evidence presented by the employer
and the employee, the scales of justice must be tilted in favor of the latter, as in this case.

Labor tribunals should have resolved complainant’s motion for production, in the interest
of due process

And finally, it has not escaped the Court's attention that both labor tribunals never
addressed respondent's claim that he was deprived of due process when his motion for
production and request for subpoena remained unresolved. As the CA correctly held, the L A, at
the very least, should have conducted a preliminary hearing on these matters considering
respondent's insistence that his defense against the subjective assertions on his behavior and
management style was largely dependent on the documents/examinations sought for.

Accordingly, aside from the lack of substantial evidence to justify respondent's

termination on the alleged grounds of serious misconduct and loss of trust and confidence, as
well as the labor tribunals' wanton disregard of the circumstances leading to his constructive
dismissal, this due process violation equally taints the NLRC's ruling with grave abuse of
discretion. As such, the CA correctly granted respondent's certiorari petition filed before it.

Payment of separation pay in lieu of reinstatement

13
 According to jurisprudence, reinstatement means restoration to a state or condition from
which one had been removed or separated. The person reinstated assumes the position he had
occupied prior to his dismissal. Reinstatement presupposes that the previous position from
which one had been removed still exists, or that there is an unfilled position which is
substantially equivalent or of similar nature as the one previously occupied by the employee."
In the event that reinstatement is no longer possible, separation pay is awarded to the employee."
Here, it is undisputed that respondent's position as country manager was already filled up with
the hiring of Yonathan. Since respondent's reinstatement is no longer viable, then the payment of
separation pay in lieu of reinstatement is warranted.

SRL International Manpower Agency, represented by Sevilla Sarah Sorita and Akkila Co.,
Ltd, UAE and/or Al Salmeen Vs. Pedro S. Yarza, Jr.
G.R. No. 207828. February 14, 2022

Elements of employer-employee relationship;

Employer-employee relationship exists notwithstanding the absence of a valid POEA-
approved contract

Absent a valid employment contract, the Court must then consider the attendant
circumstances to determine if there is an employer-employee relationship between Akkila and
Yarza. To ascertain the existence of this association, the following elements should be evident:
"(l) the selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the employer's power to control the employee's conduct. The most important
element is the employer's control of the employee's conduct, not only as to the result of the work
to be done, but also as to the means and methods to accomplish it. However, the power of control
refers merely to the existence of the power, and not to the actual exercise thereof. No particular
form of evidence is required to prove the existence of an employer-employee relationship. Any
competent and relevant evidence to prove the relationship may be admitted. However, a finding
that such relationship exists must still rest on some substantial evidence."

For the first element, Akkila selected and engaged the services of Yarza, precisely
because he was deployed through a visit visa under Akkila's instruction and endorsement. For the
second element, Akkila did not deny that it paid Yarza's wages with the "Offer of Employment"
as reference. Likewise, the third element exists since Akkila has the power to dismiss Yarza. In
fact, it did so when it issued the termination letter dated May 22, 2011. Lastly, the fourth element
is present since Akkila had control over Yarza's work conduct, which included the means and
methods he would employ to produce the results required by the company. Akkila did not show
proof that it took no part in directing Yarza's job output. More importantly, Akkila did not appeal
the finding of employer-employee relationship before the CA. Hence, it is bound by such
conclusion. Thence, an employer-employee relationship was established notwithstanding the
absence of a valid and POEA-approved contract.

Disease as an authorized cause to terminate the services of an employee

14
 To be considered valid, the dismissal on the ground of disease must satisfy two requisites:
"(a) the employee suffers from a disease which cannot be cured within six months and his/her
continued employment is prohibited by law or prejudicial to his/her health or to the health of
his/her co-employees, and (b) a certification to that effect must be issued by a competent public
health authority."

Akkila did not present any certification from a competent public health authority citing
that Yarza's disease cannot be cured within six months, or that his employment is prejudicial to
his health or that of his co-employees. Absent this certification, Akkila failed to comply with
Article 299 [284] of the Labor Code as well as Section 8, Title 1, Book Six of the Omnibus Rules
Implementing the Labor Code. In other words, Yarza's dismissal was not based on a just cause.

Solidary liability of recruitment agencies

In the case at bench, even if Yarza's employment contract was not previously approved by
the POEA, he should still be protected by our labor laws precisely because an employer-
employee relationship was established. As found by the NLRC, which the CA quoted with
approval, SRL participated in Yarza's initial deployment despite its insistence that it ceased to
process his documents after discovering that a visit visa was secured instead of a work visa.
According to the time stamps and the contents of the e-mail correspondence, SRL participated,
one way or another, and acted as Akkila's local manning agent. Based on substantial evidence,
Yarza proved SRL's solidary liability with its foreign principal, Akkila/Al Salmeen. This is
notwithstanding Yarza's undocumented status or SRL's insistence on its supposed non-
participation. SRL cannot evade liability by simply refusing to process an overseas worker's
documentation yet at the same time admit to being the local manning agent of a foreign principal
which invalidly dismissed an employee. The CA correctly found that Yarza's predicament was
caused by SRL and Akkila, which should not be countenanced. As the local placement agency,
SRL should have employed measures to ensure that Yarza's deployment would be in accordance
with existing policies, from the beginning of the employment until its end.

OFW’s entitlement to salaries for the unexpired portion of contract, not the cap of 3-month
pay for every year of service

Relevantly, both the NLRC and the CA rendered their rulings before the Court resolved
anew the issue on the constitutionality of the cap of three-month pay for every year of service on
an overseas worker's money claims. To recall, the Court, in Serrano, already declared such
provision unconstitutional. Yet, Congress enacted RA 10022 which reinstated the same
notwithstanding the Court's earlier pronouncement in Serrano. Specifically, Section 7 of RA
10022 amended Section 10 of RA 8042 xxx

Hence, the Court, in Sameer Overseas Placement Agency, Inc. v. Cabiles (Sameer), again
"declared unconstitutional the cap of three-month pay for every year of service. It also upheld the
imposition of interest rate of 12% per annum on the placement fee specifically set by law, nay,
unaffected by Bangko Sentral ng Pilipinas Circular No. 799 setting the rate of interest at 6% per
annum."

15
 Sameer stresses that "when a law or a provision of law is null because it is inconsistent
with the Constitution, the nullity cannot be cured by reincorporation or reenactment of the same
or a similar law or provision. A law or provision of law that was already declared
unconstitutional remains as such unless circumstances have so changed as to warrant a reverse
conclusion. However, there are no noted relevant changes in the surrounding circumstances, as
RA 10022 merely reinstated the provision after the Court already declared it unconstitutional in
Serrano.

Additionally, the Court declared that an unconstitutional clause in the law, being
inoperative at the outset, confers no rights, imposes no duties and affords no protection. Withal,
even if Yarza's dismissal became effective on May 22, 2011, or when RA 10022 was already in
force, "the declaration of unconstitutionality found in the Serrano case promulgated in March
2009 [and subsequently the Sameer case promulgated in August 5, 2014] shall retroactively
apply."

Thus, Yarza should receive his unpaid salaries corresponding to the unexpired portion of
his contract (based on the "Offer of Employment") at the rate of AED 8,000.000 per month.

Rommel S. Alenaje Vs. C.F. Sharp Crew Management, Inc., Reederei Claus-Peter Offen
(GMBH & Co.) and Roberto B. Davantes
G.R. No. 249195. February 14, 2022

Resignation vis-à-vis constructive dismissal

As petitioner admittedly resigned, it is incumbent upon him to prove that his resignation
was involuntary and that it was actually a case of constructive dismissal with clear, positive, and
convincing evidence. Bare allegations of constructive dismissal, when uncorroborated by the
evidence on record, cannot be given credence. The issue of whether petitioner's resignation was
involuntary that constitutes constructive dismissal is a question of fact. Xxx

In Gan v. Galderma Philippines, Inc., the Court elucidated on the meaning of constructive
dismissal and resignation as follows:

x x x [C]onstructive dismissal is defined as quitting or cessation of work

because continued employment is rendered impossible, unreasonable or unlikely;
when there is a demotion in rank or a diminution of pay and other benefits. It
exists 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. There is involuntary
resignation due to the harsh, hostile, and unfavorable conditions set by the
employer. The test of constructive dismissal is whether a reasonable person in the
employee's position would have felt compelled to give up his
employment/position under the circumstances.

16
 On the other hand, "[r]esignation is the voluntary act of an employee who
is in a situation where one believes that personal reasons cannot be sacrificed in
favor of the exigency of the service, and one has no other choice but to dissociate
oneself from employment. It is a formal pronouncement or relinquishment of an
office, with the intention of relinquishing the office accompanied by the act of
relinquishment. 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."

After a careful review of the evidence presented and applying the foregoing principles as
a guide, the Court finds that the CA committed no reversible error in upholding the findings of
the NLRC that there was voluntary resignation on the part of petitioner. The Court finds that
petitioner failed to prove his allegations of constructive dismissal with clear and positive
evidence.

In his letter of resignation dated April 21, 2015, petitioner wrote:

“In as much as you forced me to work not in accordance with my duties

and responsibilities under my contract of employment and due to unbearable
working condition/and or atmosphere and in consideration of my safety, I am
tendering my resignation effective today (April 21, 2015). Hence, I am requesting
my repatriation to my home country.”

It had been established that petitioner was instructed by Chief Mate Kucharz, on behalf of
the captain, to strip and wax the navigational bridge floor. However, petitioner alleged that such
job was not part of his work as a steward. Notably, Section l (B)(3) of the POEA Standard
Contract provides that the seafarer has the duty to be obedient to the lawful commands of the
master or any person who shall lawfully succeed him and to comply with company policy
including the safety policy and procedures and any instructions given him in connection
therewith. The order to strip and wax the navigational bridge floor was a lawful command of
Chief Mate Kucharz, on behalf of the captain, and it concerned the safety policy in the ship; thus
petitioner had the duty to follow such order.

In fact, respondents had attached the Affidavits of three seafarers who had worked on-
board international container ships as stewards for years where they all stated that stripping and
waxing or cleaning of navigational bridge floor was an occasional duty which may be assigned
to them by the chief officer on behalf of the master and that such work was not unlawful nor
beyond their duties as steward. Therefore, the assigned task may also be done occasionally by a
steward, if the need arises, as instructed by the Master or the Chief Officer. Petitioner, however,
tendered his resignation because he did not want to do the waxing or cleaning of navigational
bridge floor as ordered by Chief Mate Kucharz, citing that it was not part of his duty. Moreover,
the fact that petitioner did not want to do the assigned task was also proved by the Minutes of
Hearing held on April 18, 2015.

17
Philippine Bank of Communications Vs. Philippine Bank of Communications Employees
Association (PBCOMEA)
G.R. No. 254021. February 14, 2022

The CBA is the law between the parties;

When the terms of CBA are clear, the literal meaning of its stipulations shall prevail

The wordings of the CBA are clear and unequivocal. Petitioner could revise the service
award policy only with the knowledge and participation of respondent. Indeed, the CBA must be
construed in the context in which it is negotiated and the purpose for which it is intended to
serve. Here, the CBA aims to allow respondent to provide its input on how the standards and
procedure for the grant of the service award shall be made. It follows that petitioner cannot
unilaterally alter its terms without consulting respondent. Thus, when petitioner decided to
require that only those who are "on board" at the time of awarding can be granted the service
award, without consulting respondent with the change in policy, petitioner violated the CBA
which is not allowed by the law.
The right of petitioner to ascertain who among its employees are entitled to a service
award is not totally eliminated but it is limited by the express provision of the CBA. Verily,
considering that the CBA is the law between the parties, petitioner is obliged to comply with its
provisions. Stated differently, where the CBA is clear and unambiguous, it becomes the law
between the parties and compliance with it is mandated by the express policy of the law.
xxx

In sum, parties are bound by the terms and conditions, stipulations and clauses under the
CBA, with the sole limitation that they are not contrary to law, morals, public order, or public
policy. Therefore, where the terms of the CBA are clear, its literal meaning must prevail.
Accordingly, finding no sufficient reasons shown for petitioner not to comply with its obligations
under the CBA, the Court sustains the decision of the CA to affirm the ruling of the OVA that
the requirement for employees to be "on board" on the date of the release of the service award is
void.

MARCH
NELSON M. CELESTINO, Petitioner, versus BELCHEM PHILIPPINES, INC.,
BELCHEM SINGAPORE PTE., and/or JASMIN D. SALVADOR, Respondents. G.R. No.
246929, March 2, 2022

18
 Total and Permanent Disability Benefits Assessment

Verily, if the company-designated physician still fails to give their assessment within the
extended period of 240 days, then the seafarer's disability becomes permanent and total,
regardless of any justification, as in this case.

Here, petitioner got repatriated and referred to one of the company-designated physicians
on December 14, 2012. He was told to return regularly during the succeeding months, which he
heeded conscientiously. Thus, he went and consulted with at least three company-designated
physicians on the same days set by the latter for that purpose. Thereafter, he was eventually told
that his "ongoing treatment" shall last until August 31, 2013. Notably, however, the 240-day
maximum period for assessment of petitioner's disability grading started on December 14, 2012,
and already ended on August 11, 2013. The advice therefore of the company-designated
physicians for petitioner to undergo further treatment to last until August 31, 2013, or 20 days
beyond the 240-day period, was an effective declaration that his "Diabetes Mellitus and
Ureterolithiasis" are permanent, and his disability, total.

All told, petitioner cannot be faulted for filing his complaint on the 199th day of his
ongoing treatment even before the lapse of the 240-day period, nor can he be faulted for
acquiring a second opinion from his own physician only after he had already initiated his
complaint. For even prior to such date, he was already deemed to be suffering from total and
permanent disability when the company-designated physicians assessed that his treatment shall
last well-beyond the 240-day maximum period.

Magsaysay Maritime Corporation and/or Princess Cruises Lines, Ltd., a Bermuda

Company, Petitioner, versus Edmel C. Cornelia, Respondent. G.R. No. 257029, March 2,
2022

Work-Related and Total and Permanent Illness

As correctly ruled by the CA, respondent's illness should be deemed work-related and
compensable in view of the unrebutted presumption of work-relation under Section 20 (A)(4)4 of
the Philippine Overseas Employment Administration Standard Employment Contract and the
sufficient showing of a causal connection between respondent's illness, on the one hand, and his
work for petitioners, on the other. In this regard, it is well to note that by law, the burden is on
petitioners, as the employer, to prove that respondent's illness was not work-related. As the
former failed to do so in this case, the presumption of work-relation must stand. Apart from this,
petitioners also failed to give a full, complete, and definite medical assessment of respondent's
illness within the period provided by law and likewise failed to observe the mandatory
requirement of referring respondent's case to a third doctor. Hence by operation of law,
respondent's illness must be deemed total and permanent. X x x.

19
MARLOW NAVIGATION PHILS.,* MARLOW NAVIGATION CO. LTD. and/or MR.
ANTONIO GALVEZ, JR., LEOPOLDO C. TENORIO, PAUL BERNHARD GALVEZ,
ANDREAS NEOPHYTOU, NIDA C. ABARQUEZ, JERRY P. AGNES and JOANNE B.
VITOBINA, Petitioners, versus HEIRS OF THE LATE ANTONIO 0. BEATO,
represented by his wife JONABEL D. BEATO, Respondents. G.R. No. 233897, March 09,
2022

A seafarer is entitled to disability benefit claims in accordance with law, his employment
contract and medical findings

By law, the seafarer's disability benefits claim is governed by Articles 191 to 193,
Chapter VI (Disability Benefits) of the Labor Code, in relation to Rule X, Section 2 of the Rules
and Regulations Implementing the Labor Code. By contract, it is governed by the employment
contract which the seafarer and his employer or local manning agency executes prior to
employment, and the applicable Philippine Overseas Employment Administration-Standard
Employment Contract (POEA-SEC) deemed incorporated in the employment contract. Lastly,
the medical findings of the company-designated physician, the seafarer's personal physician, and
those of the mutually-agreed third physician, pursuant to the POEA-SEC, govern.
Since Antonio was employed in 2012, Section 20-A of the 2010 POEA-SEC applies in
determining the factual issues of compensability of his pancreatic cancer, and compliance with
the POEA-SEC prescribed procedure for disability determination. X x x.
x x x x x
Thus, to be entitled to benefits under Section 20-A, the seafarer must show that (1) he
suffered an illness; (2) during the term of his employment contract; (3) he complied with the
procedures prescribed under Section 20-A of the applicable POEA-SEC; (4) his illness is one of
the enumerated occupational diseases or that his illness or injury is otherwise work-related; and
(5) he complied with the four conditions enumerated under Section 32-A of the POEA-SEC for
an occupational disease or a disputably-presumed work-related disease to be compensable, which
are as follows:

1. The seafarer's work must involve the risks described herein;

2. The disease was contracted as a result of the seafarer's exposure to the described risks;
3. The disease was contracted within a period of exposure and under such other factors necessary
to contract it; and
4. There was no notorious negligence on the part of the seafarer.

Buena M. Celis and Richard A. Barros, Petitioner, versus Wonderfoods, Inc. and Caroline
T. Sy, Respondents. G.R. No. 252443, March 9, 2022

Loss of Trust and Confidence

20
 Under the Labor Code of the Philippines, among the just causes for dismissal from work
is the employer's loss of trust and confidence in the employee. In order to properly invoke this
ground, the employer must prove that: (1) the concerned employee is holding a position of trust
and confidence; and (2) there is an act committed by the employee justifying the loss of the trust
and confidence reposed upon him or her by the employer.

Notably, there are two categories of positions of trust. "[T]here are managerial employees
whose primary duty consists of the management of the establishment in which they are employed
or of a department or a subdivision thereof, and to other officers or members of the managerial
staff; on the other hand, there are fiduciary rank-and-file employees x x x [who] are routinely
charged with the care and custody of the employer's money or property, and are thus classified
as occupying positions of trust and confidence."

Blue Chips Human Resource and * Manpower, Inc., Petitioner vs. Josemyr P. Reyes,
Marvin A. Castillo, Jezebel D. Ramirez, Rosanna S. Mabilangan, Jenalyn A. Anlap, Arlene
A. Redeiia, and Aljon M Llames, Respondents. G.R. No. 255974, March 15, 2022; Josemyr
P. Reyes, Marvin A. Castillo, Jezebel D. Ramirez, Rosanna S. Mabilangan, Jenalyn A.
Anlap, and Arlene A. Redeiia, petitioners vs. Sagara Metro Plastics Industrial Corp.,**
Blue Chips Human Resource and Manpower, lnc./Masafumi Inoue ***;Joaquin SB.
Chipeco Ill/Ernesto C. Bihis, Respondents. G.R. No. 256231, March 15, 2022

Labor-Only Contracting

Art. 106 of the Labor Code defines "labor-only contracting" as an arrangement where a
person, "does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers recruited and placed by such person
are performing activities which are directly related to the principal business of such employer."
x x x x x
From the foregoing, it is clear that job contracting is not absolutely prohibited. An
employer is allowed to farm out the performance or completion of a specific job, work, or
service, within a definite or specified period. In summary, for job contracting to be legal, the
following must concur: (1) a person must have substantial capital or investment in the form of
tools, equipment, machineries, and work premises; (2) workers recruited and placed by such
person should not perform activities which are usually necessary or desirable to the operation of
the company or directly related to the principal business of such employer within a definite or
predetermined period, regardless of whether such job, work or service is to be performed or
completed within or outside the premises of the principal; and (3) the contractor should exercise
the right to control the performance of the work of the employee.

Separation Pay in lieu of Reinstatement

The accepted doctrine is that separation pay may be availed in lieu of reinstatement if
reinstatement is no longer practical or in the best interests of the parties. Separation pay in lieu of

21
reinstatement may likewise be awarded if the employee decides not to be reinstated. The general
prayer provided by petitioners in their petition and the evidence presented regarding the
incompatibility of reinstating petitioners to Blue Chips would justify the grant of separation pay
in lieu of reinstatement. Thus, petitioners must be awarded separation pay in lieu of
reinstatement equivalent to one month salary for every year of service.

GEROME B. GINTA-ASON, Petitioner, versus J.T.A. PACKAGING CORPORATION

and JON TAN ARQUILLA, Respondents. G.R. No. 244206, March 16, 2022

Employer-Employee Relationship / Four-Fold Test

Settled is the rule that allegations in the complaint must be duly proven by competent
evidence and the burden of proof is on the party making the allegation. In an illegal dismissal
case, the onus probandi rests on the employer to prove that its dismissal of an employee was for
a valid cause. However, before a case for illegal dismissal can prosper, an employer-employee
relationship must first be established. In this instance, since it is petitioner here who is claiming
to be an employee of JTA, the burden of proving the existence of an employer-employee
relationship lies upon him. Unfortunately, petitioner failed to discharge this burden.

Applying 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, the NLRC, as
affirmed by the CA, found that petitioner failed to prove, by competent and relevant evidence
that he is an employee of JTA.

CELESTINO M. JUNIO, Petitioner, versus PACIFIC OCEAN MANNING, INC., MEGA

CHEMICAL TANKER, and ERLINDA S. AZUCENA, Respondents. G.R. No. 220657,
March 16, 2022

Three-Day Mandatory Reporting Requirement under the POEA-SEC

In our jurisdiction, a seafarer may claim disability benefits arising from (1) an injury or
illness that manifests or is discovered during the term of the seafarer's contract, which is usually
while the seafarer is still on board the vessel or (2) an illness that manifests or is discovered after
the contract, which is when the seafarer has disembarked from the vessel. If the illness or injury
falls under the first scenario, as in this case, the procedure on how the seafarer can legally
demand and claim disability benefits from the employer/manning agency is found in Section 20
(A) of the 2010 POEA-SEC.

Section 20 (A) of the 2010 POEA-SEC is deemed incorporated in every seafarer's

contract of employment, x x x.
x x x x x

22
 It is undisputed that Celestino reported to Pacific Manning within two (2) days from
repatriation. He asserted that he asked to be referred to a company-designated physician but his
request was rejected. Respondents denied this allegation, insisting that they were not informed of
Celestino's medical condition.

In several instances, the Court has ruled that whenever confronted by a positive assertion
from the seafarer that he was able to comply with the three (3)-day obligation to report to the
manning agency but was not referred to a company-designated physician and a plain denial of
the manning agency, the seafarer's position is entitled more weight. This is because the
requirements under the POEA-SEC are reciprocal in nature - the seafarer is obliged to be present
for the post-employment medical examination within three (3) working days upon return, while
the employer is required to conduct a meaningful and timely examination of the seafarer.

Compensability of Work-related Medical Condition

Based on Section 20 (A) of the POEA-SEC, there are two (2) elements on compensability
of a seafarer's injury or illness: (a) the injury or illness must be work-related; and (b) that the
work-related injury or illness must have existed during the term of the seafarer's employment
contract.
x x x x x
In sum, Celestino was medically repatriated and was able to report to the employer within
the mandatory three (3)-day period under the POEA-SEC. He has proven that he suffered an eye
injury while onboard MCT Monte Rosa. The absence of a valid post-employment medical
examination due to respondents' refusal to refer Celestino to a company-designated physician
cannot shield his employers from liability. Thus, the grant of permanent total disability benefits,
sickness allowance, and attorney's fees are warranted. Further, the total monetary award shall
earn legal interest of six percent (6%) per annum from the finality of this Resolution until fully
satisfied.

ARIEL M. REYES, Petitioner, versus RURAL BANK OF SAN RAFAEL (BULACAN)

INC., FLORANTE VENERACION, CELERINA SABARIAGA, ALICA FLOR
KABILING, FIDELA MANAGO, CEFERINO DE GUZMAN, and RIZALINO
QUINTOS, Respondents. G.R. No. 230597, March 23, 2022

Liberal Interpretation of Procedural Rules

While the Court commends the NLRC and the CA in upholding substantial justice, such
principle must always be balanced with respect and honest efforts to comply with procedural
rules. It cannot always be about substantial justice, especially to the point of disrespect and utter
disregard to procedural rules. X x x.
x x x x x
In the present case, we have already extensively discussed how respondents failed to
adequately explain and justify their non-participation in the proceedings before the arbiter. Thus,
the application of a more liberal policy is unwarranted, contrary to the rulings of the NLRC and

23
the CA. Besides, the policy of relaxed procedural rules in labor proceedings is mainly for the
benefit of the employee, and not the employer, as will be discussed below.
x x x x x
In any case, respondents in the present case are not entitled to be accorded a liberal
interpretation of the rules; the same being primarily granted for the employee's favor, and not the
employer. The principles embodied by all prevailing labor rules, legislations, and regulations are
derived from the Constitution, which intensely protects the working individual and deeply
promotes social justice. X x x.
x x x x x
In certain cases, of course, a liberal approach to the rules may be had even if it favors the
employer. Such allowance, however, must be measured against standards stricter than that
imposed against the worker, and only in compelling and justified cases where the employer will
definitely suffer injustice should such liberal interpretation be disallowed. Unfortunately for
respondents, this is not the situation in the present case.

Requirements for Valid Termination of Employment

Book Five, Rule XXIII, Section 2 of the Omnibus Rules Implementing the Labor Code
provides:

SECTION 2. Standards of due process: requirements of notice. - In all cases of

termination of employment, the following standards of due process shall be substantially
observed:

I. For termination of employment based on just causes as defined in Article 282 of the
Code:

(a) A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to
explain his side;
(b) A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the charge, present
his evidence or rebut the evidence presented against him; and
(c) A written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been substantially established to
justify his termination.

In King of Kings Transport, Inc. v. Mamac, this concept of procedural due process in
labor proceedings is further expounded: To clarify, the following should be considered in
terminating the services of employees:

(l) 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

24
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 explanation
and defenses, the notice should contain a detailed narration of facts and circumstances that will
serve as basis for the charge against the employees. A general description of the charge will not
suffice. 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.

(2) After serving the first notice, the employers should schedule and conduct a hearing or
conference wherein the employees will be given the opportunity to: (l) explain and clarify their
defenses to the charge against them; (2) present evidence in support of their defenses; and (3)
rebut the evidence presented against them by the management. During the hearing or conference,
the employees are given the chance to defend themselves personally, with the assistance of a
representative or counsel of their choice. Moreover, this conference or hearing could be used by
the parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the
employees a written notice of termination indicating that: (1) all circumstances involving the
charge against the employees have been considered; and (2) grounds have been established to
justify the severance of their employment.

COLEGIO SAN AGUSTIN-BACOLOD and/or FR. FREDERICK C. COMENDADOR,

Petitioners, versus MELINDA M. MONTAÑO, Respondent. G.R. No. 212333, March 28,
2022

Substantive and Procedural Due Process Requirements

For the dismissal from employment to be valid, substantive and procedural due process
must be observed. Substantive due process provides that the employee must not be dismissed
without just or authorized cause as provided by law. Procedural due process on the other hand
provides for the employer’s compliance with procedure set out by the Labor Code and related
rules.
x x x x x
Absent a just cause, or broadly, failure to comply with substantive due process, an
employer’s dismissal of an employee becomes illegal and entitles the employee to reinstatement
without loss of seniority rights and other privileges, full backwages inclusive of allowances, and
to other benefits or their monetary equivalent computed from the time compensation was
withheld up to the time of actual reinstatement.

Diminution of Benefits

There is diminution of benefits when the following are present: (1) the grant or benefit is
founded on a policy or has ripened into a practice over a long period of time; (2) the practice is

25
consistent and deliberate; (3) the practice is not due to error in the construction or application of
a doubtful or difficult question of law; and (4) the diminution or discontinuance is done
unilaterally by the employer. In addition to policy or company practice, the grant or benefit may
also be founded on a written contract. Consistent with the constitutional mandate of protecting
the rights of workers and promoting their welfare, benefits enjoyed by employees cannot be
reduced, diminished, discontinued or eliminated.

Jennifer B. Nofies, Petitioner, versus Comodo Security Philippines, Inc., Mark Martillan,
and Cyzel Marie Santiago, Respondents. G. R. No. 257728, March 28, 2022

Neglect of Duty

As the CA correctly held, petitioner's habitual tardiness and absenteeism were forms of
neglect of duty which violated the company's rules and accordingly justified her termination
from employment. Gross neglect of duty becomes serious in character due to frequency of
instances xxx . Indeed, there can be no good faith in intentionally and habitually incurring
unexcusable absences. Here, petitioner failed to advance any acceptable reasons to explain her
many absences which evince a clear disregard of her duties as an employee, especially since the
labor tribunal and the CA unanimously found that petitioner failed to prove her allegation that
she was subjected to unbearable working conditions. Moreover, an examination of the instant
petition shows that petitioner is asking this Court to re-evaluate the evidence presented which is
beyond the purview of a Rule 45 petition. lt is settled that factual findings of labor tribunals
especially when affirmed by the CA, are generally accorded not only with respect, but even with
finality, and are thus binding on the Court, as in this case.

BENHUR SHIPPING CORPORATION/SUN MARINE SHIPPING S.A. and EDGAR B.

BRUSELAS, Petitioners, versus ALEX PEÑAREDONDA RIEGO, Respondent. G.R. No.
229179, March 29, 2022

Extension of the 120-Day Period to 240 Days

The seafarers' employment is governed by the contracts they signed at the time of
engagement. As long as the stipulations therein are not contrary to law, morals, public order, or
public policy, they have the force of law between the parties. Nonetheless, while the seafarer and
his employer are governed by their mutual agreement, the POEA Rules and Regulations require
that the POEA-SEC be integrated in every seafarer's contract.
x x x x x
To reiterate, for a company-designated physician to avail of the extended 240-day period,
he or she must perform some complete and definite medical assessment to show that the illness
still requires medical attendance beyond the 120 days, but not to exceed 240 days. In such case,
the temporary total disability period is extended to a maximum of 240 days. Without sufficient
justification for the extension of the treatment period, a seafarer's disability shall be conclusively

26
presumed to be permanent and total. The seaman may, of course, also be declared fit to work at
any time such declaration is justified by his medical condition. Further, even if the 120-day
period was extended to 240 days, 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.

Referral to a Third Doctor

The referral to a third doctor has been held by this Court to be a mandatory procedure as
a consequence of the provision under the POEA-SEC that the company-designated doctor's
assessment should prevail. In other words, the company could insist on its disability rating even
against a contrary opinion by another doctor, unless the seafarer expresses his disagreement by
asking for the referral to a third doctor who shall make his or her determination and whose
decision is final and binding on the parties.
x x x x x
Verily, it is the duty of the seafarer to notify his employer that he or she intends to refer
the conflict to a third doctor. Once notified, the burden shifts to the employer to complete the
process of referral to a third doctor so that, once and for all, the medical assessment of the
seafarer will be put to rest.

Analyzing Sec. 20(A)(3) of the POEA-SEC and Carcedo, it was neither stated nor
required therein that when the seafarer sends a request for a referral to a third doctor to the
employer, the seafarer must mandatorily attach the medical report of his own medical doctor to
such request. Notably, it is not the employer who will assess the medical report of the seafarer's
chosen physician; rather, it will be the labor tribunals where the complaint for disability benefits
is filed that would assess the medical report. As the record shows, the medical report of
respondent's chosen physician was indeed attached to his position paper before the LA, thus, it
could be fully assessed by the labor tribunals. Succinctly, the argument of petitioners that the
letter-request of respondent was improper, because the medical report of his chosen physician
was not attached, deserves scant consideration.
x x x x x
Accordingly, what is required from the medical opinion of the seafarer's chosen physician
is that there be a statement regarding the seafarer's fitness to work OR the disability rating.
Consequently, as long as the seafarer's letter-request for referral to a third doctor sent to the
employer indicates the seafarer's doctor's assessment of the seafarer's fitness to work or the
disability rating, which is contrary to the company-designated physician's assessment, then that
suffices to set in motion the process of choosing a third doctor. Indeed, the seafarer is merely a
layman and not a medical professional; thus, he is not expected to indicate every medical term in
his letter-request for referral to a third doctor. Stating the seafarer's fitness to work or the
disability rating in the letter-request for referral to a third doctor would constitute as adequate
compliance.

Pursuant to Carcedo, when the letter-request for referral to a third doctor indicates the
seafarer's fitness to work or the disability rating according to his own physician, then the seafarer
is deemed to have duly and fully disclosed the contrary assessment of his own doctor, and the
seafarer can signify his intention to resolve the conflict through referral of the conflicting

27
assessments to a third doctor whose ruling, under the POEA-SEC, shall be final and binding on
the parties.
x x x x x
As stated in Carcedo, upon notification, the employer carries the burden of initiating the
process for referral to a third doctor commonly agreed on between the parties. However, in this
case, upon receipt of the letter-requests from respondent for referral to a third doctor, petitioners
did absolutely nothing. Petitioners simply ignored said letters despite the fact that these
documents expressly stated that respondent was declared permanently unfit by his chosen
physician, referring to his fitness to work, and that the medical opinions of their respective
doctors differ.

If petitioners genuinely believed that respondent should have attached the medical
opinion of his chosen physician in his letter-requests, they could have simply replied to those
letters and relayed such. However, petitioners chose inaction. Evidently, the Court cannot reward
petitioners' apathy towards respondent's plight. X x x.
x x x x x
Indeed, when the employer fails to act on the seafarer's valid request for referral to a third
doctor, the tribunals and courts are empowered to conduct its own assessment to resolve the
conflicting medical opinions of the company-designated physician and the seafarer's chosen
physician based on the totality of evidence. The employer simply cannot invoke the
conclusiveness of the company-designated physician's medical opinion vis-a-vis the seafarer's
chosen physician's medical opinion when it is because the employer's own inaction and neglect
that the medical assessment was not referred to a third doctor.

NOEL G. GUINTO, Petitioner, versus STO. NIÑO LONG-ZENY CONSIGNEE,

ANGELO SALANGSANG, and ZENAIDA SALANGSANG, Respondents. G.R. No.
250987, March 29, 2022

Burden of Proof in Illegal Dismissal Cases

The rule is that "in illegal dismissal cases, the burden of proof is on the employer in
proving the validity of dismissal. However, the fact of dismissal, if disputed, must be duly
proven by the complainant."
x x x x x
Thus, in illegal dismissal cases, it follows that when the employer fails to specifically
deny the complainant employee's material averments as to the circumstances of his dismissal, the
employer is deemed to have admitted the fact of dismissal and must then discharge his burden of
proving that the dismissal of the employee was valid.

Doctrine of Strained Relations

As a general rule, an employee who has been illegally dismissed is entitled to

reinstatement. An exception to this rule is the doctrine of strained relations. The Court, in

28
Rodriguez v. Sintron Systems, Inc., explained the doctrine of strained relations, the reason
behind it, and the limitations of its appreciation in each and every case, viz.:

Under the doctrine of strained relations, such payment of separation pay is considered an
acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On
the one hand, it 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. x x x.

Besides, the doctrine of strained relations cannot be applied indiscriminately since every
labor dispute almost invariably results in "strained relations;" otherwise, reinstatement can never
be possible simply because some hostility is engendered between the parties as a result of their
disagreement. That is human nature. Strained relations must be demonstrated as a fact. The
doctrine should not be used recklessly or loosely applied, nor be based on impression alone.

Here, petitioner should have proven the existence of strained relations between him and
respondents before the lower tribunals. However, he failed to do so. As such, the Court is
constrained to deny petitioner's prayer for the award of separation pay in lieu of reinstatement as
his illegal dismissal alone does not justify a finding of strained relations.

EDNA LUISA B. SIMON, Petitioner, versus THE RESULTS COMPANIES and

JOSELITO SUMCAD, Respondents. G.R. Nos. 249351-52, March 29, 2022

Probationary Employment

A probationary employee is one who is placed on trial by an employer, during which the
employer determines whether such employee is fit for regularization.

During the period of probationary employment, the objective of the employer is to

observe the fitness of the employee, while the purpose of the latter is to prove his or her
qualification for permanent employment. To accomplish these goals, it is essential in
probationary employment that the employer informs the employee of the reasonable standards
for his or her regularization at the time of engagement. An employer is deemed to have made
known the regularization standards when it has exerted reasonable efforts to apprise the
employee of what he or she is expected to do or accomplish during the trial period of probation.
Otherwise, the probationary employee shall be considered a regular employee.

Burden of Proof in Illegal Dismissal Cases

While it is an established rule that the employer bears the burden of proof to prove that
the employee's dismissal was for a valid or authorized cause, the employee must first establish by
substantial evidence that indeed he or she was dismissed. If there is no dismissal, then there can
be no question as to the legality or illegality thereof.

29
 Backwages vis-a-vis Separation Pay in Illegal Dismissal Cases

From the foregoing, employees who are illegally dismissed are entitled to full backwages,
inclusive of allowances and other benefits, computed from the time their actual compensation
was withheld from them up to the time of their actual reinstatement. But if reinstatement is no
longer possible, the backwages shall be computed from the time of their illegal termination up to
the finality of the decision.

Still separation pay may be awarded to an illegally dismissed employee in lieu of

reinstatement when reinstatement can no longer be effected in view of the long passage of time
or because of the realities of the situation.

SERVFLEX, INC., Petitioner, versus LOVELYNN* M. URERA, SHERRYL I.

CABRERA, PRECIOUS** C. PALANCA and JOCO JIM L. SEVILLA, Respondents.
G.R. No. 246369, March 29, 2022

Labor-only Contracting

Labor-only contracting refers to an arrangement whereby a person who does not have
substantial capital or investment deploys workers to the employer for them to perform tasks that
are directly necessary to the employer's principal business. It is present where: (1) a person who
supplies workers to an employer does not possess substantial capital or investment in the form of
tools, pieces of equipment or machinery, work premises, among others; and (2) the workers are
made to perform tasks which are directly related to the employer's principal business. Under the
circumstances, the intermediary or the person who assigned the workers to the employer shall be
deemed as the latter's agent, and the employer shall be responsible for the workers, as if it
directly hired them.

Overall, the presence of a labor-only contracting is evident in such a situation where the
contractor merely recruits, supplies, and assigns workers to perform a job for a principal, as in
the present case.

Kaunlaran Agricultural Producer Cooperative (KAPCO) and Gary Cheng, Petitioner,

versus Roderick M. Verdera, Respondent. G.R. No. 256821, March 30, 2022

Constructive Dismissal

30
 Constructive dismissal is a dismissal in disguise. There is cessation of work in
constructive dismissal 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. To
be considered as such, an act must be a display of utter discrimination or insensibility on the part
of the employer so intense that it becomes unbearable for the employee to continue with his
employment. The law recognizes and resolves this situation in favor of employees in order to
protect their rights and interests from the coercive acts of the employer.

Petitioners' refusal to give respondent driving assignments and his transfer from being a
trailer driver to a helper-mechanic amounted to a constructive dismissal. As aptly pointed out
by the CA, his new assignment as part-time helper-mechanic is evidently a demotion. A part-
time helper-mechanic does not have the same status and importance as a trailer truck driver,
which requires a different skill set and whose duties include responsibility for valuable
equipment and cargo. Moreover, respondent's assignment as helper-mechanic evidently resulted
in substantial diminution of pay. As helper-mechanic, respondent was paid P350.00 per actual
day worked, or about P8,400.00 per month. This is about one-third (1/3) of respondent's average
monthly income of P24,000.00 as a trailer truck driver. From the time respondent worked as a
helper-mechanic on 28 April 2015 until 10 August 2015 when he filed the complaint, KAPCO
did not assign him to drive a trailer truck. Instead, KAPCO assumed respondent had gone
AWOL, disregarded his explanation that he was driving a tricycle only to supplement his
income while waiting for a driving assignment, and posted a public notice that respondent had
resigned.

In addition, prior to the change in his work assignment, respondent was being assigned to
drive trucks requiring more maintenance than others. The work environment had already turned
difficult for respondent with the departure of his former immediate supervisor, Juniel Yu (Yu).
Respondent was often in conflict with Yu's replacement, a certain Engr. Puno, whom he claims
poorly handled the maintenance and repair of KAPCO's trucks. In fact, Puno ordered him to
contribute to the repair costs of one of the trucks, leaving respondent with no choice but to accept
the position of helper-mechanic instead of driver so he would not pay for the repairs. To avoid
responsibility, petitioners claim that respondent was negligent and blamed him for the
breakdown of the trucks assigned to him. However, as pointed out by the LA, it was petitioners'
responsibility to ensure that the trucks are in good condition. Based on these facts, the inevitable
conclusion is that respondent had been constructively dismissed.
Abandonment

The CA also correctly found that the respondent did not abandon his employment.
Abandonment, as a just cause for termination, requires a deliberate and unjustified refusal of an
employee to resume his work, coupled with a clear absence of any intention of returning to his or
her work. The following elements must therefore concur: (1) the failure to report for work or
absence without valid or justifiable reason; and (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.

31
Benedict Q. Magalong, Petitioner, versus Expedition Construction Corporation, Roderick
M. Verdera, Respondent. G.R. No. 255499, March 30, 2022

Constructive Dismissal

In constructive dismissal cases, the employer has the burden of proving that its conduct
and action, or the transfer of an employee, are for valid and legitimate grounds such as genuine
business necessity. However, it is likewise true that in constructive dismissal cases, the employee
has the burden to first prove the fact of dismissal by substantial evidence. Only when the
dismissal has been established will the burden shift to the employer to prove that the dismissal
was for just and/or authorized cause. The logic is simple: if there is no dismissal, there can be no
question as to its legality or illegality.
In this case, there is no evidence to support petitioner's claim of dismissal, not even
constructively. Similarly, ECC's claim that petitioner abandoned his work has no leg to stand on.
The mere absence of an employee is not sufficient to constitute abandonment. The intent to
discontinue the employment must be shown by clear proof that it was deliberate and unjustified.

Abandonment

Abandonment is a defense available against an employee who alleges a dismissal. Thus,

for the employer "to successfully invoke abandonment, whether as a ground for dismissing an
employee or as a defense, the employer bears the burden in proving the employee's unjustified
refusal to resume his employment." The burden, of course, proceeds from the general rule that
places the burden on the employer to prove the validity of the dismissal. In this case, petitioner's
institution of the complaint belies any intention to abandon his employment.

Instead, this is clearly a situation where the petitioner was neither dismissed from
employment, nor did he abandon his work. The general course of action in such a case is to
direct the employee to return to work and order the employer to accept the employee. However,
in the recent case of Gososo v. Leyte Lumber Yard and Hardware Inc., (Gososo), the Court ruled
that when an employee was neither found to have been dismissed nor to have abandoned,
separation pay in lieu of reinstatement may be awarded if there be strained relations between the
parties or a considerable length of time has passed from the filing of the complaint and the
decision of the case. Here, the petitioner alleged, and the labor tribunals found, that the parties
now suffer from strained relations. Thus, the award of separation pay in lieu of reinstatement is
justified.

APRIL
Edgardo M. Paglinawan Vs. DOHLE Philman Agency, Inc., and/or DOHLE-IOM
(Limited) and/or Manolo T. Gacuta
G.R. No. 230735. April 4, 2022

32
 Seafarer’s Disability Benefits

xxx

Section 20 (A) of the 2010 POEA-SEC provides that for an illness to be compensable,
two elements must concur: (a) the injury or illness must be work-related; and (b) the work-
related injury or illness must have existed during the term of the seafarer’s employment contract.
The first element is the one in contention in this case.

The 2010 POEA-SEC defines a work-related illness as “any sickness as a result of an

occupational disease listed under Section 32-A of this Contract with the conditions set therein
satisfied. Section 20 (A) further provides that “illnesses not listed in Section 32 of this Contract
are disputably presumed as work-related. In other words, illnesses not listed in the POEA-SEC
may still be compensable as they are treated as disputably presumed to be work-related. There is
no automatic compensation, however, as the seafarer has to prove the correlation of his illness to
the nature of his work and the conditions for compensability should be satisfied.

Section 32-A provides for the conditions of compensability for listed occupational
diseases: (a) the seafarer’s work must involve risks described therein; (b) the disease was
contracted as a result of the seafarer’s exposure to the described risks; (c) the disease was
contracted within a period of exposure and under such other factors necessary to contract it; and,
(d) there was no notorious negligence on the part of the seafarer. The seafarer must prove by
substantial evidence that “there is a reasonable causal connection between his illness and the
work for which he has been contracted.” Case law teaches that these conditions apply to those
illnesses not listed as an occupational disease in the 2010 POEA-SEC.

In the instant case, it is undisputed that petitioner’s illness, ulcerative colitis, is not listed
as an occupational disease in the 2010 POEA-SEC. Thus, there is a disputable presumption that
it is work-related. Petitioner, however, still bears the burden and must still prove by substantial
evidence the reasonable causal connection between his ulcerative colitis and the nature of his
work as engine and deck fitter. In this regard, he failed.

The Court agrees with the CA that petitioner failed to prove by substantial evidence the
work-relatedness of his illness. Records do not show how his work in the vessel caused the
development of his illness. There is no evidence of the link or relatedness between the illness and
his work. Petitioner merely relied on bare allegations that the work conditions and diet onboard
made him sick. It is settled that awards of disability compensation cannot be based on mere
general averments of speculation. The same analysis applies to the allegation that his illness was
work-aggravated. Petitioner failed to show by substantial evidence that his illness was related to
or was aggravated by his work.

Premature Filing of Disability Benefits

xxx

33
 In this connection, the Court likewise agrees that petitioner’s claim is premature. For a
seafarer to have basis to pursue an action for total and permanent disability benefits, any of the
following instances must be present:

(a) the company-designated physician failed to issue a declaration as to his fitness to engage
in sea duty or disability even after the lapse of the 120-day period and there is no
indication that further medical treatment would address his temporary disability, hence,
justify an extension of the period to 240 days;

(b) 240 days had lapsed without any certification being issued by the company-designated
physician;

(c) The company-designated physician declared that he is fit for sea duty within the 120-day
or 240-day period, as the case may be, but his physician of choice and the doctor chosen
under Section 20-B (3) of the POEA-SEC are of a contrary opinion;

(d) The company-designated physician acknowledged that he is partially permanently

disabled but other doctors who he consulted, on his own and jointly with his employer,
believed that his disability is not only permanent but total as well;

(e) The company-designated physician recognized that he is totally and permanently disabled
but there is a dispute on the disability grading;

(f) The company-designated physician determined that his medical condition is not
compensable or work-related under the POEA-SEC but his doctor-of-choice and the third
doctor selected under Section 20-B (3) of the POEA-SEC found otherwise and declared
him unfit to work;

(g) The company-designated physician declared him totally and permanently disabled but the
employer refuses to pay him the corresponding benefits;

(h) The company-designated physician declared him partially and permanently disabled
within the 120-day or 240-day period but he remains incapacitated to perform his usual
sea duties after the lapse of the said periods.

In Philippine Transmarine Carrier, Inc. v. San Juan1, the Court stated that the seafarer’s
claim therein is prematurely filed because at the time of filing, the seafarer is under the belief
that he is totally and permanently disabled from rendering work as he was unable to resume work
since his repatriation, and that he was not yet armed with a medical certificate from his physician
1
G.R. No. 207511, October 05, 2020

34
of choice. It was only after the filing of the complaint where the seafarer sought the opinion of
his own physician, which became the basis of his claiming for permanent total disability benefits.
Items (a) to (c) in the enumeration were referred to in this case.

Further, in Daraug v. KGJS Fleet Management Manila, Inc.2, the Court stated that the
seafarer’s claim was likewise prematurely filed as he had yet to consult his own physician; on the
contrary, he was armed with the company-designated physician’s report that he is fit to work,
and his own conclusion that the injury was work-related. Item (c) in the enumeration was
referred to in this case.

As can be gleaned from these cases, a claim for total and permanent disability benefits may
be considered prematurely filed if there is no contrary opinion from the seafarer’s physician of
own choice, and a third doctor as required depending on the applicable scenario in the
enumeration provided above.

Relevant to the instant case is item (f) which provides that the cause of action accrues when
the company-designated physician issues a finding that the seafarer’s illness is not work-related,
but the physician of choice and a third doctor found otherwise that the seafarer is unfit to work.
As stated, the company-designated physician in this case has issued a medical certification that
petitioner’s illness is not work-related. However, petitioner did not have the required contrary
opinion as he only availed of a second opinion after he filed the complaint.

To recall the events based on the records: (a) September 27, 2013 – the company-designated
physician issued a medical report, which clearly stated that petitioner’s illness is not work-
related; (b) January 7, 2014 – petitioner filed the instant complaint for the recovery of permanent
and total disability benefits, sickness allowance, and attorney’s fees; (c) February 19, 2014 – date
of the medical certificate issued by petitioner’s physician of choice (Dr. Galvez) stating that he is
unfit to work as a seafarer. It is thus clear that petitioner had already filed his complaint before
he sought the opinion of a second physician. When he filed his complaint, he was not armed with
a contrary or different opinion as required to refute the opinion of the company-designated
physician; he merely relied on his bare allegations and speculations. Thus, and considering the
Court’s pronouncements in various case law as cited, the CA is correct in holding that
petitioner’s claim is premature.

xxx

DMCI Project Developers, Inc. v. Nelia Bernadas, Noel Batanes, Eduardo Nonsol, Jose
Balde, Elmor Mabatan and Lilio M. Rebueno
G.R. No. 221978. April 4, 2022

Regular Courts have no Jurisdiction to Hear and Decide Questions Arising from and are
Incidental to the Enforcement of Decisions, Orders, or Awards Rendered in Labor Cases
by Officers and Tribunals of the Department Of Labor And Employment
2
750 Phil. 949 (2015)

35
 xxx

In determining the significance of a writ of execution in enforcing orders of the NLRC,

the NLRC Manual shall govern any question regarding the execution of a judgment of that body.
It is well settled that regular courts have no jurisdiction to hear and decide questions arising from
and are incidental to the enforcement of decisions, orders, or awards rendered in labor cases by
officers and tribunals of the Department of Labor and Employment. The Rules of Court shall
then only apply by analogy or in a suppletory character. As emphasized in Balais v. Velasco,3 "to
hold otherwise would be to sanction split jurisdiction which is obnoxious to the orderly
administration of justice.

Section 4(6), Rule 1 of the NLRC Manual defines a writ of execution as "an order
directing the sheriff to enforce, implement, or satisfy the final decisions, orders, or awards of the
National Labor Relations Commission or any of its Labor Arbiters. The writ of execution is valid
only for a period of 180 days from receipt thereof by the sheriff or the duly designated officer."

Furthermore, Section 4, Rule III instructs that such writs of execution shall only be issued
upon an order, resolution, or decision that finally disposes of the actions or proceedings and after
the counsel and the parties have been duly furnished with the copies of the same in accordance
with the NLRC Rules of Procedure. The NLRC, or the LA, is clothed with the power to motu
proprio, or upon motion of any interested party, issue a writ of execution on a judgment only
within five (5) years from the date it becomes final and executory. Notably, no motion for
execution shall be entertained nor a writ be issued unless the NLRC or the LA is in possession of
the records of the case which shall include an entry of judgment where the case has been
appealed, except in certain cases.

xxx

Cattleya R. Cambil v. Kabalikat Para Maunlad na Buhay, Inc.

G.R. No. 245938, April 5, 2022

Valid Termination of a Probationary Employee

A probationary employee under Article 296 of the Labor Code is one "who for a given
period oftime, is being observed and evaluated to determine whether or not he is qualified for
permanent employment." Although probationary employees enjoy security of tenure, they do not
enjoy permanent status and thus may be terminated on two grounds: (1) just cause; and (2) when
they fail to qualify as a regular employee in accordance with reasonable standards prescribed by
the employer.

3
322 Phil. 790, 807 (1996).

36
 In Dusit Hotel Nikko v. Gatbonton4, the Court clarified the requisites for a valid
termination of a probationary employee on the basis of failure to meet the employer's reasonable
standards: (1) this power must be exercised in accordance with the specific requirements of the
contract; (2) the dissatisfaction on the part of the employer must be real and in good faith, not
feigned so as to circumvent the contract or the law; and (3) there must be no unlawful
discrimination in the dismissal.

xxx

Section 6(d), Rule I, Book VI of the Implementing Rules and Regulations of the Labor
Code provides as follows:

Section 6. Probationary Employment. -xxxx (d) In all cases of probationary

employment, the employer shall make known to the employee the standards under which
he will qualify as a regular employee at the time of his engagement. Where no standards
are made known to the employee at that time, he shall be deemed a regular employee.
(Italics supplied.)

Ideally, employers should immediately inform probationary employees of the standards

for their regularization from day one; however, strict compliance thereof is not required.

In the case of Alcira v. National Labor Relations Commission,5 the Court ruled that an
employer would have substantially complied with the rule on notification of standards if it
apprises its employee that they will be subjected to a performance evaluation on a particular date.
xxx

An Employer is not Precluded from Terminating the Probationary Employment if it is

Evident that its Standards are not Attainable during the Trial Period

In International Catholic Migration Commission v. NLRC6, the Court held that if the
purpose sought by the employer is neither attained nor attainable within the trial period, the
employer is not precluded from terminating the probationary employment on justifiable causes.

Considering petitioner's poor performance, KMBI cannot be compelled to keep petitioner

in its employ until the end of the six-month probationary period. Notably, petitioner was not able
to create a new center or disburse a single loan from May 30, 2016 to July 28, 2016. In addition,
petitioner's propensity to defy company rules as gleaned from the records is a sufficient ground
for the termination of her probationary employment. Her argument on the insufficiency of
KMBI's one-page Code of Ethics is a strained justification of her unacceptable conduct towards
her superiors. Probationary employees who refuse to behave in accordance with a simple code of
ethics have no right to expect, much less demand permanent employment.

From the foregoing, KMBI was able to show that petitioner's dismissal is not arbitrary,
fanciful, or whimsical and that its dissatisfaction with petitioner is real and in good faith. Thus,
4
523 Phil. 338 (2006).
5
475 Phil. 455 (2004).
6
251 Phil. 560 ( 1989).

37
the Court rules that the CA is correct in finding that the NLRC gravely abused its discretion in
sustaining the LA and ordering the payment of petitioner's salary for the unexpired portion of her
probationary employment in view of the validity of her dismissal. Petitioner's dismissal
predicated on her failure to meet the standards made known to her negates the award of salary
for the unexpired portion of her probationary employment.

Westminster Seafarer Management Philippines, Inc. v. Arnulfo C. Raz

G.R. No. 249344. April 5, 2022

Imposition of 6% Legal Interest on the Total Monetary Award

In Nacar v. Gallery Frames7, the Court laid down the rule that when the judgment of the
court awarding a sum of money becomes final and executory, the rate of legal interest shall be
6% per annum from such finality until its satisfaction, this interim period being deemed
equivalent to a forbearance of credit.

In the case, petitioner alleges that the NCMB Decision dated June 20, 2017 was already
executed; that pursuant thereto, petitioner paid respondent the amount of P7,548,241.7048 on
December 6, 2017;49 and, that consequently, it should no longer be liable for the 6% legal
interest. However, apart from its bare allegations, petitioner did not adduce any proof nor attach
in the petition relevant documents in support thereof.

Relevant at this point is Section 4, Rule 45 of the Rules of Court, which provides:

SEC. 4. Contents of petition. -The petition shall be filed in eighteen (18) copies,
with the original copy intended for the court being indicated as such by the petitioner
and shall (a) state the full name of the appealing party as the petitioner and the adverse
party as respondent, without impleading the lower courts or judges thereof either as
petitioners or respondents; (b) indicate the material dates showing when notice of the
judgment or final order or resolution subject thereof was received, when a motion for
new trial or reconsideration, if any, was filed and when notice of the denial thereof was
received; ( c) set forth concisely a statement of the matters involved, and the reasons or
arguments relied on for the allowance of the petition; ( d) be accompanied by a clearly
legible duplicate original, or a certified true copy of the judgment or final order or
resolution certified by the clerk of court of the court a quo and the requisite number of
plain copies thereof, and such material portions of the record as would support the
petition; and (e) contain a sworn certification against forum shopping as provided in
the last paragraph of section 2, Rule 42. (Italics supplied.)

Section 5, Rule 45 of the Rules of Court further states that the failure of petitioner to
comply with any of the foregoing requirements, including the documents which should
accompany the petition, shall be sufficient ground for the dismissal thereof. The Court
emphasizes that the documents which were not attached to the petition are pivotal in the case and
7
716 Phil. 267 (2013).

38
form part of the crux of petitioner's arguments. While petitioner claims having paid the judgment
award, it did not attach any document that would prove such claim or even a document that
makes a reference thereto. It only averred in the petition that the judgment amount of
US$153,133.20 was released to respondent and his counsel "in January 2018." Verily, the Court
cannot render a competent judicial pronouncement without any clear basis on record. This is
especially true in the case which involves a factual claim regarding an amount of money
purportedly paid and a judgment allegedly executed before the NCMB, as these are matters that
cannot be based on bare allegations, surmises, or presumptions.

Thus, for lack of basis, the Court sees no reason to modify the ruling of the CA insofar as
the imposition of 6% legal interest is concerned.

Attorney’s Fees

Anent the award of attorney's fees, considering that respondent was forced to litigate to
protect his rights and interests, he is entitled to a reasonable amount pursuant to Article
2208(8)52 of the Civil Code of the Philippines. The Court agrees with the NCMB and the CA
that payment of attorney's fees is warranted in an amount equivalent to 10% of the total amount
awarded to respondent

Richard N. Wahing, Ronald L. Calago and Pablo P. Mait v. Spouses Amador Daguio and
Esing Daguio
G.R. No. 219755. April 18, 2022

The Existence of Agricultural Employment May Be Determined by the Four-Fold Test

xxx

De Los Reyes8 then teaches that the existence of agricultural employment may be
determined by the same four elements of: "(l) the selection and engagement of the employee; (2)
the payment of wages; (3) the power of dismissal; and (4) the employer's power to control the
employee's conduct. Thus, De Los Reyes examined the following circumstances in determining
the existence of an employment relationship:

Since the relationship between farm employer and agricultural laborer is that of
employer and employee, the decisive factor is the control exercised by the former over
the latter. On the other hand, the landholder has the "right to require the tenant to follow
those proven farm practices which have been found to contribute towards increased
agricultural production and to use fertilizer of the kind or kinds shown by proven farm
practices to be adapted to the requirements of the land " This is but the right of a partner
to protect his interest, not the control exercised by an employer. If landholder and tenant
disagree as to farm practices, the former may not dismiss the latter. It is the court that
shall settle the conflict according to the best interests of both parties.

8
141 Phil. 247 (1969) [Per J. Castro, En Banc].

39
 The record is devoid of evidentiary support for the notion that the respondents
are farm laborers. They do not observe set hours of work. The petitioner has not laid
down regulations under which they are supposed to do their work. The argument
tendered is that they are guards. However, it does not appear that they are under
obligation to report for duty to the petitioner or his agent. They do not work in shifts.
Nor has the petitioner prescribed the manner by which the respondents were and are to
perform their duties as guards. We do not find here that degree of control and
supervision evincive of an employer-employee relationship. (Emphasis supplied,
citations omitted)

Both parties submitted testimonial evidence in support of their respective positions on the
existence of the employer-employee relationship. Petitioners submitted testimonies from their
co-workers -detailing: (1) their daily wages for their required hours of work; (2) respondents'
constant supervision of their workers during work hours; and (3) the possibility of dismissal from
work for failing to serve three consecutive work days. On the other hand, respondents submitted
the testimonies of their "former caretaker," a local rubber merchant, and several local
government officials, who all testified that petitioners "only share[d] in the proceeds" of rubber
sales and were not engaged as agricultural employees.

From the foregoing, there is sufficient corroborating testimony to support petitioners'

claim that they served as employees on respondents' rubber plantation. Testimonies from
petitioners' colleagues, who were similarly asked to leave the plantation,49 illustrate that they:
(1) were required to work at set hours per day; (2) were paid a set rate per day of work; (3)
worked under the respondents' constant supervision; and (4) could be dismissed for violating the
work standards set by respondents.

Two-tiered Test; Economic Reality Test

As to the element of control, rubber tapping does not lend itself to the usual standard of
assessing an employer's control over the "means and methods" of an employee's work. As
discussed in the Court of Appeals Decision, petitioners' work only required the collection of
"rubber lumps from the ‘bagol’ or small containers attached to the trunk" and their placement in
another container. The activity may be better assessed for employer control through an
alternative test, as provided by Francisco v. National Labor Relations Commission9:

There are instances when, aside from the employer's power to control the
employee with respect to the means and methods by which the work is to be
accomplished, economic realities of the employment relations help provide a
comprehensive analysis of the true classification of the individual, whether as employee,
independent contractor, corporate officer or some other capacity.

The better approach would therefore be to adopt a two-tiered test involving: (1)
the putative employer's power to control the employee with respect to the means and

9
532 Phil. 399 (2006) [Per J. Ynares-Santiago, First Division].

40
 methods by which the work is to be accomplished: and (2) the underlying economic
realities of the activity or relationship.

This two-tiered test would provide us with framework of analysis, which would
take into consideration the totality of circumstances surrounding the true nature of the
relationship between the parties. This is especially appropriate in this case where there is
no written agreement or terms of reference to base the relationship on; and due to the
complexity of the relationship based on the various positions and responsibilities given to
the worker over the period of the latter's employment. (Emphasis supplied)

The "economic reality" test discussed in Francisco requires proof of the "the totality of
economic circumstances of the worker" in order to determine the existence of an employer-
employee relationship:

Thus, the determination of the relationship between employer and employee

depends upon the circumstances of the whole economic activity, such as: (1) the extent to
which the services pe1formed are an integral part of the employer's business,· (2) the
extent of the worker's investment in equipment and facilities; (3) the nature and degree of
control exercised by the employer; (4) the worker's opportunity for profit and loss; (5)
the amount of initiative, skill, judgment or foresight required for the success of the
claimed independent enterprise; (6) the permanency and duration of the relationship
between the worker and the employer; and (7) the degree of dependency of the worker
upon the employer for his continued employment in that line of business.

The proper standard of economic dependence is whether the worker is dependent

on the alleged employer for his continued employment in that line of business. In the
United States, the touchstone of economic reality in analyzing possible employment
relationships for purposes of the Federal Labor Standards Act is dependency. By analogy,
the benchmark of economic reality in analyzing possible employment relationships for
purposes of the Labor Code ought to be the economic dependence of the worker on his
employer. (Emphasis supplied, citations omitted)

Here, the testimonies submitted by petitioners establish the totality of economic

circumstances required by Francisco's economic reality test. Petitioners perform services integral
to respondents' business of running a rubber plantation. While there was no proof on record of
petitioners' investment in their own work tools and facilities, the simplicity of the physical labor
involved in their work renders this element inconclusive.

Likewise, the lack of proof of other plantations willing to employ petitioners cannot
discount the proof presented that: (1) respondents exercised control over petitioners by
constantly supervising them during their required work hours; (2) petitioners had no opportunity
to exercise initiative or control their own profit or loss from their work, as they were paid a set
daily wage; and (3) petitioners could be dismissed for repeatedly violating their required daily
work engagements.

The foregoing circumstances, when applied to the two-tier test in Francisco, show that
respondents exercised control over petitioners' hours, means, and methods of work. Petitioners

41
were also shown to be economically dependent upon respondents for their livelihood. Thus, there
exists an employer-employee relationship between the parties.

x x x When the evidence between employer and laborer are of equal weight, the scales
must tip in favor of labor, consistent with Philippine National Bank v. Bulatao10:

Moreover, jurisprudence states that "[w]hen the evidence of the employer and the
employee are in equipoise, doubts are resolved in favor of labor. Th1s is in line with the
policy of the State to afford greater protection to labor."57 (Citation omitted)

Affording protection to labor and construing doubt in favor of the laborer are not only
statutorily required under the Labor Code, 58 but are also consistent with the "social justice
suppositions underlying labor laws.

Our laws on labor, foremost of which is the Labor Code, are pieces of social legislation.
They have been adopted pursuant to the constitutional recognition of "labor as a primary social
economic force" and to the constitutional mandates for the state to "protect the rights of workers
and promote their welfare" and for Congress to "give highest priority to the enactment of
measures that protect and enhance the right of all the people to human dignity, [and] reduce
social, economic, and political inequalities." They are means for effecting social justice, i.e., the
"humanization of laws and the equalization of social and economic forces by the State so that
justice in the rational and objectively secular conception may at least be approximated." Article
XIII, Section 3 of the 1987 Constitution guarantees the right of workers to security of tenure.
"One's employment, profession, trade or calling is a "property right," of which a worker may be
deprived only upon compliance with due process requirements:

It is the policy of the state to assure the right of workers to "security of

tenure" (Article XIII, Sec. 3 of the New Constitution, Section 9, Article II of the
1973 Constitution). The guarantee is an act of social justice. When a person has
no property, his job may possibly be his only possession or means of livelihood.
Therefore, he should be protected against any arbitrary deprivation of his job.
Article 280 of the Labor Code has construed security of tenure as meaning that
"the employer shall not terminate the services of an employee except for a just
cause or when authorized by" the code. Dismissal is not justified for being
arbitrary where the workers were denied due process and a clear denial of due
process, or constitutional right must be safeguarded against at all times.

Conformably, liberal construction of Labor Code provisions in favor of

workers is stipulated by Article 4 of the Labor Code:

Art. 4. Construction in favor of labor. All doubts in the implementation

and interpretation of the provisions of this Code, including its implementing rules
and regulations, shall be resolved in favor of labor.60 (Citations omitted)

The Appeal Bond Requirement May be Relaxed In Pursuit of Substantial Justice

10
G.R. No. 200972, December 11, 2019

42
 Petitioners insist that procedural defects in respondents' appeal before the National Labor
Relations Commission, such as respondents' alleged failure to post the full appeal bond required
by the rules, should have barred the case's remand for receipt of respondent's evidence. However,
Tres Reyes v. Maxim's Tea House11 provides guidance on the extent to which procedural rules
may determine outcomes before the labor tribunals:

In labor cases, rules of procedure should not be applied in a very rigid and
technical sense. They are merely tools designed to facilitate the attainment of justice, and
where their strict application woulrid result in the frustration rather than promotion of
substantial justice, technicalities must be avoided. Technicalities should not be permitted
to stand in the way of equitably and completely resolving the rights and obligations of the
parties. Where the ends of substantial justice shall be better served, the application of
technical rules of procedure may be relaxed. (Emphasis supplied, citations omitted)

As to petitioners' contentions regarding the posting of an appeal bond, Tres Reyes also
deems this requirement as a procedural matter that may be relaxed in pursuit of substantial
justice Further, Turks Shawarma Company v. Fajaron12 discusses when compliance with the
appeal bond requirement may be given leniency:

"It is clear from both the Labor Code and the NLRC Rules of Procedure that
there is legislative and administrative intent to strictly apply the appeal bond requirement,
and the Court should give utmost regard to this intention." The posting of cash or surety
bond is therefore mandatory and jurisdictional; failure to comply with this requirement
renders the decision of the Labor Arbiter final and executory. This indispensable requisite
for the perfection of an appeal "is to assure the workers that if they finally prevail in the
case[,] the monetary award will be given to them upon the dismissal of the employer's
appeal [and] is further meant to discourage employers from using the appeal to delay or
evade payment of their obligations to the employees."

However, the Court, in special and justified circumstances, has relaxed the
requirement of posting a supersedeas bond for the perfection of an appeal on technical
considerations to give way to equity and justice. Thus, under Section 6 of Rule VI of the
2005 NLRC Revised Rules of Procedure, the reduction of the appeal bond is allowed,
subject to the following conditions: (1) the motion to reduce the bond shall be based on
meritorious grounds; and (2) a reasonable amount in relation to the monetary award is
posted by the appellant. Compliance with these two conditions will stop the running of
the period to perfect an appeal. 34 (Emphasis supplied, citations omitted)

Allan S. Navarette v. Ventis Maritime Corporation

G.R. No. 246871, April 19, 2022

The Laws and Rules that Govern Permanent Total Disability Benefits of Seafarers

11
446 Phil. 389 (2003) [Per J. Quisimbing, Second Division]
12
803 Phil. 315 (2017) [Per J. Del Castillo, First Division].

43
 The law that governs a seafarer's disability benefits claim is Article 198 [Formerly Article
192] (c) (1) of the Labor Code of the Philippines. It provides:

ART. 198. [192] Permanent Total Disability. -xxxx

(c) The following disabilities shall be deemed total and permanent:

(1) Temporary total disability lasting continuously for more than one
hundred twenty days, except as otherwise provided for in the Rules;
Xxxx

Moreover, Section 2(b) of Rule VII of the Amended Rules on Employees' Compensation
(AREC) defines disability as follows:

Section 2. Disability. -x x x x

(b) A disability is total and permanent if as a result of the injury or sickness the employee
is unable to perform any gainful x x x

For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three working days upon his return
except when he is physically incapacitated to do so, in which case, a written notice to the
agency within the same period is deemed as compliance. In the course of the treatment, the
seafarer shall also report regularly to the company-designated physician specifically on the dates
as prescribed by the company-designated physician and agreed to by the seafarer. Failure of the
seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the
right to claim the above benefits. If a doctor appointed by the seafarer disagrees with the
assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The
third doctor's decision shall be final and binding on both parties.

The Court in Elburg Shipmanagement Phils., Inc. v. Quiogue 13 explained the foregoing
rules governing a claim for total and permanent disability benefits, viz.:

In summary, if there is a claim for total and permanent disability benefits by a seafarer,
the following rules (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
13
765 Phil. 341 (2015).

44
 to 240 days. The employer has the burden to prove that the company-designated
physician has sufficient justification to extend the period; and

In the case, petitioner entered into a Contract of Employment with respondent on January
21, 2015 for a period of four months. He was repatriated for medical reasons on June 11, 2015
and respondent referred him to its company-designated physician for further management.
Petitioner was initially diagnosed to be suffering from hypertension and acute gastritis. After a
series of tests and work-ups, the company-designated physician diagnosed him with "ischemic
heart disease, hypertension and acute gastritis."

The Medical Reports reveal that petitioner was regularly seen and managed by the
company-designated physicians from June 24, 2015 to November 20, 2015 for at least 18 times.
In his Medical Report dated November 20, 2015, it was stated that his ischemic heart disease and
acid peptic ulcer disease were treated while his hypertension was controlled. It was thus
recommended that he was already fit to resume sea duties effective November 20, 2015. In fact,
petitioner signed a Certificate of Fitness for Work on the same day stating, among others, that he
was releasing respondent "of all claims, demands, etc. in connection with my being released on
this date as fit for duty" and holding respondent free from any and all liabilities as a
consequence thereof.

Petitioner thereafter underwent another PEME on January 19, 2016 and he was again
declared fit for sea duty. He was issued medical clearances by Dr. Jane Campos, Liver and
Gastrointestinal Disease Specialist, on January 22, 2016 and Dr. Sison, a Cardiologist, on
January 25, 2016. Both doctors assessed petitioner as fit to work with advice from Dr. Sison to
continue with his medication.

Marlon Butial Agapito v. Aeroplus Milti-Services, Inc. and Mitzi Therese P. De Guzman
G.R. No. 248304, April 20, 2022

In Labor Cases, Strict Adherence to Technical Rules Is Not Required. This Liberal Policy,
However, Should Still Conform to the Basic Principles of Fair Play, Justice, and Due
Process

In labor cases, strict adherence to the technical rules of procedure is not required. Time
and again, we have allowed evidence to be submitted for the first time on appeal with the NLRC
in the interest of substantial justice. We have consistently supported the rule that labor officials
should use all reasonable means to ascertain the facts in each case speedily and objectively,
without regard to technicalities of law or procedure, in the interest of due process.

But this liberal policy must still conform to the basic principles of fair play, justice, and
due process. In Wilgen Loon, et al. v. Power Master, Inc., et al. 14, the Court ordained that "the
liberality of procedural rules is qualified by two requirements: (1) a party should adequately
explain any delay in the submission of evidence; and (2) a party should sufficiently prove the
14
See Wilgen Loon, et al. v. Power Master, Inc., et al, citing Casimiro v. Stern Real Estate, Inc., 519 Phil. 438, 454-
455 (2006); and Iran v. NLRC, 352 Phil. 264-265, 273-274 (1998).

45
allegations sought to be proven." For the liberal application of the rules before quasi-judicial
agencies cannot be used to perpetuate injustice and hamper the just resolution of the case.
Neither is the rule on liberal construction a license to disregard the rules of procedure.

Guided by these principles, we hold that the Court of Appeals committed reversible error
when it affirmed the admission of and the weight assigned to the belatedly submitted sworn
statements of Constantino and Mendoza against petitioner.

Burden of Proof in Illegal Dismissal Cases

We now resolve the issue of illegal dismissal based on the remaining untainted evidence
on record. 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. Obviously, if there is no dismissal, then there can be no question as to its
legality or illegality.

Here, as found by the labor arbiter, petitioner categorically recounted the circumstances
surrounding the unlawful termination of his employment by Aeroplus. The words spoken by
Aeroplus OIC-Personnel Mendoza to petitioner -"Wala na tiwala sayo ang Management kaya
tanggal ka na!" and "Basta tanggal ka na!," immediately followed by an unequivocal order for
petitioner to get out of the office, speak for themselves. It was an outright termination of
employment without just cause and due process.

Consequences of Illegal Dismissal

Gimalay v. Court of Appeals15 aptly discussed the consequences of illegal dismissal,

viz.:

On the consequences of the illegality of petitioner's dismissal, Noblado v.

Alfonso held:

In fine, respondent's lack of just cause and non-compliance with the procedural
requisites in terminating petitioners' employment taints the latter's dismissal with
illegality.

Where the dismissal was without just or authorized cause and there was no due
process, Article 279 of the Labor Code, as amended, mandates that the employee is
entitled to reinstatement without loss of seniority rights and other privileges and full
backwages, inclusive of allowances, and other benefits or their monetary equivalent
computed from the time the compensation was not paid up to the time of actual
reinstatement. However, if reinstatement is no longer possible, the backwages shall be
computed from the time of the employee's illegal termination up to the finality of the
decision.

15
G.R. No. 240123 & G.R. No. 240125, June 17, 2020 citing Noblado v. Alfonso, 773 Phil. 271, 286-287 (2015).

46
 Thus, an illegally dismissed employee is ordinarily entitled to: (a) reinstatement without
loss of seniority rights and other privileges, or in lieu thereof, separation pay equivalent to one
(1) month pay for every year of service, with a fraction of at least six (6) months considered as
one (1) whole year, from the time of the employee's illegal dismissal up to the finality of the
judgment; and (b) full backwages inclusive of allowances and other benefits or their monetary
equivalent computed from the time compensation was not paid to the time of his or her actual
reinstatement.

Here, Aeroplus is liable for petitioner's full backwages from March 4, 2015 up to the
finality of this Decision. It is also liable for petitioner's service incentive leave pay and 13th
month pay reckoned three (3) years back from March 3, 2015 as it failed to prove that it already
paid these benefits to petitioner.

xxx

As for reinstatement, while it is a normal consequence of illegal dismissal, where

reinstatement, however, is no longer viable as an option, separation pay equivalent to one (1)
month pay for every year of service should be awarded as an alternative. The payment of
separation pay is in addition to the payment of backwages.47 As correctly ruled by the labor
arbiter, petitioner is entitled to separation pay of one (1) month pay per year of service in lieu of
reinstatement due to the parties' strained relation considering the manner by which petitioner got
dismissed from his employment.

Non-Interference in Disposal of Wages

xxx

Articles 112 and 113 of the Labor Code are clear. Aeroplus cannot interfere with the
freedom of any employee to dispose of his or her wages. More, it cannot unilaterally make any
deductions except in the three (3) instances provided by law. Here, Aeroplus illegally deducted
P200.00 as monthly cash bond from petitioner's wages. Thus, petitioner is entitled to a
reimbursement of the total of this monthly deduction from February 2004 to February 2015 plus
six percent (6%) legal interest corresponding to this period.

Award of Moral and Exemplary Damages and Attorney’s Fees

On the award of damages, Leus v. St. Scholastica 's College Westgrove16 bears the
ground rules, viz.:

x x x x A dismissed employee is entitled to moral damages when the dismissal is

attended by bad faith or fraud or constitutes an act oppressive to labor, or is done
in a manner contrary to good morals, good customs[,] or public policy.
Exemplary damages may be awarded if the dismissal is effected in a wanton,
oppressive[,] or malevolent manner.
16
752 Phil. 186-220 (2015)

47
 "Bad faith, under the law, does not simply connote bad judgment or negligence.
It imports a dishonest purpose or some moral obliquity and conscious doing of a
wrong, or a breach of a known duty through some motive or interest or ill will
that partakes of the nature of fraud."
"It must be noted that the burden of proving bad faith rests on the one alleging it
since basic is the principle that good faith is presumed and he who alleges bad
faith has the duty to prove the same. Allegations of bad faith and fraud must be
proved by clear and convincing evidence."

The records of this case are bereft of any clear and convincing evidence showing
that the respondents acted in bad faith or in a wanton or fraudulent manner in
dismissing the petitioner. That the petitioner was illegally dismissed is
insufficient to prove bad faith. A dismissal may be contrary to law but by itself
alone, it does not establish bad faith to entitle the dismissed employee to moral
damages. The award of moral and exemplary damages cannot be justified solely
upon the premise that the employer dismissed his employee without cause.

However, the petitioner is entitled to attorney's fees in the amount of 10% of the
total monetary award pursuant to Article 111 of the Labor Code. It is settled that
where an employee was forced to litigate and, thus, incur expenses to protect his
rights and interest, the award of attorney's fees is legally and morally justifiable

Petitioner showed the requisite elements for award of moral and exemplary damages in
his favor. He adduced evidence that his dismissal was done in a wanton, oppressive, or
malevolent manner. As correctly found by the labor arbiter, the spiteful and wanton manner by
which petitioner was illegally dismissed entitles him to moral and exemplary damages in the
amount of 20,000.00 each. Following both statutory and case law, petitioner should be paid
attorney's fees equivalent to ten percent (10%) of the total monetary award. This is because he
was forced to litigate and incur expenses to protect his rights and interest.

xxx

Systems and Plan Integrator and Development Corporation and/or Engr. Julieta Cunanan
v. Michelle Elvi C. Ballesteros
G.R. No. 217119. April 25, 2022

Substantial Due Process: Just Cause for a Valid dismissal from Employment

For a dismissal from employment to be valid, it must be pursuant to either a just, or an

authorized cause, under Articles 297, 298, or 299 of the Labor Code, as amended. 31
Furthermore, the burden of proving that the termination of an employee was for a just or
authorized cause lies with the employer. If the employer fails to meet this burden, the dismissal
is unjustified, thus, illegal. To discharge this burden, the employer must present substantial
evidence, or the amount of relevant evidence which a reasonable mind might accept as adequate
to justify a conclusion, and not based on mere surmises or conjectures.

48
 Here, the company dismissed Ballesteros based on three just causes: (a) habitual leaves of
absence or gross habitual neglect of duty; (b) open and willful disobedience; and ( c) money
shortage, thus, loss of trust and confidence.

Gross and Habitual Neglect of Duty

SPID Corp. dismissed Ballesteros based on gross neglect of duty because of her habitual
leaves of absence, habitual tardiness, and undertime.

As to her habitual leaves of absence, the CA ruled that the company failed to present
substantial evidence to prove that Ballesteros, indeed, was habitually absent, thus, neglected her
duty. The CA found that Ballesteros only incurred 1.5 vacation leaves and 11 sick leaves from
January 2008 to July 7, 2008, the period covered by the notice of termination, which were also
deducted from her earned leave credits.

The Court agrees with the CA. Robustan, Inc. v. Court of Appeals 17 provides the standard
for establishing gross neglect of duty as a just cause for terminating employment:

Thus, under the Labor Code, to be a valid ground for dismissal, the
negligence must be gross and habitual. Gross negligence has been defined as the
want or absence of even slight care or diligence as to amount to a reckless
disregard of the safety of the person or property. It evinces a thoughtless disregard
of consequences without exerting any effort to avoid them. Put differently, gross
negligence is characterized by want of even slight care, acting or omitting to act in
a situation where there is a duty to act, not inadvertently, but willfully and
intentionally with a conscious indifference to consequences insofar as other
persons may be affected.

The presentation of the certified true copies of Ballesteros' leave ledger does not
sufficiently establish the required habituality of neglect that would merit her dismissal. For one,
all the leaves she incurred were deducted from earned leave credits, meaning, credits she was
entitled to over the course of her work. This Court has held that only habitual absenteeism
without leave constitutes gross negligence. Secondly, such leaves were so few to be
characterized as a reckless disregard for the safety of the company. It could not be said that she
repeatedly neglected her duty for she was only absent for a total of 12.5 days over the period of
six months and a week (January 2008 to July 7, 2008).

As to her habitual tardiness and undertime for the years of 2010 and 2011, the CA found
that the company only charged Ballesteros in her notice of termination with habitual leaves of
absence from January 2008 to July 7, 2008, not for the years 2010 and 2011.

The rudimentary requirements of due process require that an employer dismissing an

employee must furnish the latter with two written notices before the termination of employment
can be effected: (1) the first notice apprises the employee of the particular acts or omissions for
17
G.R. No. 223854, March 15, 2021.

49
which the dismissal is sought; and (2) the second notice informs the employee of the employer's
decision to dismiss him or her. Case law has not been strict with this two-notice rule, however.
Failure to observe or to prove compliance of the same would still make the dismissal valid, as
long as a just or authorized cause for dismissal exists, with the employer, however, being held
liable for nominal damages.

A perusal of the records of the case would show that the first notice, which is the "Notice
to Explain Why [Ballesteros] Should Not be Terminated" dated February 21, 2011, enumerated
as Ballesteros' fourth offense "Habitual tardiness and undertime for more than one hour and more
than ten days in a month for the last 6 months resulting to gross neglect of duty."

However, the second notice, which is the Notice of Termination dated June 3, 2011,
showed that the company failed to include the habitual tardiness and undertime of Ballesteros
from 20l0 to 2011. Habitual tardiness alone is a just cause for termination. Punctuality is a
reasonable standard imposed on every employee, whether in government or private sector,
whereas habitual tardiness is a serious offense that may very well constitute gross or habitual
neglect of duty, a just cause to dismiss a regular employee. Habitual tardiness manifests lack of
initiative, diligence and discipline that are inimical to the employer's general productivity and
business interest.

Here, the Court finds that although habitual tardiness is a just cause for termination, the
company failed again to substantiate Ballesteros' habitual tardiness and undertime, as the
generated print-outs presented to the NLRC were mere photocopies and unauthenticated. The
Court had previously disregarded unsigned listings and computer printouts presented in evidence
by the employer to prove its employee's absenteeism and tardiness, holding thus:

In the case at bar, there is paucity of evidence to establish the charges of

absenteeism and tardiness. We note that the employer company submitted mere
handwritten listing and computer print-outs. The handwritten listing was not
signed by the one who made the same. As regards the print-outs, while the listing
was computer generated, the entries of time and other annotations were again
handwritten and unsigned.

We find that the handwritten listing and unsigned computer print-

outs were unauthenticated and, hence, unreliable. Mere self-serving evidence
of which the listing and print-outs are of that nature should be rejected as
evidence without any rational probative value even in administrative
proceedings. (Emphasis supplied)

Similarly, absent reliable and reasonable proof that Ballesteros was indeed habitually
tardy, and habitually incurred undertime for more than 10 days in a month for six months, the
Court cannot conclude that she is guilty of gross and habitual neglect of duty.

Open and Willful Disobedience

50
 For willful disobedience to be a valid cause for dismissal, these two elements must
concur: (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.

Again, the CA held that no substantial evidence would show that Ballesteros willfully
violated the verbal instructions. There is lack of substantial evidence that would show that the
company gave clear verbal instructions regarding the preparation of deposit slips.

The Court agrees. The records show no proof that the company made known to
Ballesteros instructions on preparation of deposit slips, except the February 11, 2009
Memorandum reprimanding her for her negligence. Neither did the company present proof that
Ballesteros' transgression was coupled with a wrongful intent, or a wrongful and perverse
attitude, both very different from mere simple negligence, or a mere error in judgment. Again,
the burden is on the employer to present substantial evidence, or the amount of relevant evidence
which a reasonable mind might accept as adequate to justify a conclusion.

Even if the company presented proof of both the instruction, and Ballesteros' violation of
the instruction, her failure "to text the [concerned] employee [regarding] their deposit slips while
waiting for the scanner to be fixed"55 cannot be said to be a product of a wrongful and perverse
attitude. It was merely a momentary lapse of judgment on her part, rather than some design to
circumvent the company's policy regarding deposit slips. The requirement of willfulness or
wrongful intent in the appreciation of the aforementioned just causes, in turn, underscores the
intent of the law to reserve only to the gravest infractions the ultimate penalty of dismissal. It is
essential that the infraction committed by an employee is serious, not merely trivial, and be
reflective of a certain degree of depravity or ineptitude on the employee's part, in order for the
same to be a valid basis for the termination of his employment.

Loss of Trust and Confidence

xxx

Loss of trust and confidence may be a just case for termination of employment only upon
proof that: (1) the dismissed employee occupied a position of trust and confidence; and (2) the
dismissed employee committed "an act justifying the loss of trust and confidence."

The first element was met because Ballesteros, an administrative officer at the time of her
termination, held a position of trust and confidence. Her tasks included "answering/endorsement
of telephone calls, preparation of deposit slips, handling of petty cash fund, front-lining duties,
and other related tasks." However, the second element, pertaining to the act that breached the
company's trust and confidence, was never established in the NLRC and CA proceedings. For
loss of trust and confidence to be a valid ground for dismissal, it must be substantial, and not
arbitrary, whimsical, capricious, and concocted. It demands that a degree of severity attends the
employee's breach of trust.

51
 The Court agrees with the CA that Ballesteros' monetary shortage in the amount of
Pl,100.00 cannot be considered substantial and severe, as to justify the company's loss of trust
and confidence in her. Furthermore, not only did Ballesteros admit that she was negligent in not
counting the money before returning the same, the amount was even deducted from her salary
and returned to the company.60 To dismiss Ballesteros over such an insignificant amount which
she duly returned would amount to a clear injustice.

Procedural Due Process

Finally, the Court agrees with the CA that the company exercised procedural due process
in accordance with Philippine labor laws which was elaborated in the case of Dela Rosa v. ABS-
CBN Corporation, as follows:

As a rule, the employer is required to furnish the employee with two (2)
written notices before termination of employment can be effected: a first written
notice that informs the employee of the particular acts or omissions for which his
or her dismissal is sought, and a second written notice which informs the
employee of the employer's decision to dismiss him. Anent the second notice, the
written notice of termination should indicate that: (a) all circumstances involving
the charge against the employees have been considered; and (b) grounds have
been established to justify the severance of their employment.

In this case, the Court agrees with the CA that two notices were validly served upon
Ballesteros, despite the fact that she refused to receive the first notice "because she wanted to
talk to Mr. Ronnie! Cunanan. The CA correctly found and held that:

[T]he notice to explain (February 21, 2011 memorandum) was validly

served upon the [Ballesteros]. Kristine Castro, Personnel Officer of [the
company], indicated on the said notice that the private respondent "refused to
receive because she wanted to talk to Mr. Ronniel Cunanan." Castro also executed
an Affidavit dated April 24, 2012 attesting that she personally served the February
21, 2011 memorandum to [Ballesteros] but the latter refused to receive it, but she
xx x got a copy anyway. The handwritten notation and Castro's affidavit are
substantial pieces of evidence proving that the notice to explain was validly
served upon [Ballesteros]. Accordingly, the requirement of procedural due
process, particularly, the two-notice rule, was observed. Hence, there is no basis
to award nominal damage in the amount of P20,000.00.

Jules King M. Paiton, James C. Adriatico, Isagani M. Ubalde, Roland A. Agustin, Mario S.
Manahan, Jr., and Jesrome C. Siega v. ARMSCOR Global Defense, Inc. [Formerly, ARMS
Corporation of the Philppines], Martin Tuason (Owner/President), Atty. Ermilando O.
Villafuerte (HR-Head/In-House Counsel), Manpower Outsourcing Services, Inc., and
Diogenes Jaurique (President/Owner)
G.R. No. 255656. April 25, 2022

52
Forum Shopping; Employees Did Not Commit Forum Shopping in Filing the Instant Illegal
Dismissal Case Despite the Pendency of the Regularization Cases

xxx

Forum shopping exists "when one party repetitively avails of several judicial remedies in
different courts, simultaneously or successively, all substantially founded on the same
transactions and the same essential facts and circumstances, and all raising substantially the same
issues either pending in, or already resolved adversely, by some other court." What is truly
important to consider in determining whether it exists or not is the vexation caused the courts and
parties-litigants by a party who asks different courts and/or administrative agencies to rule on the
same or related causes and/or grant the same or substantially the same reliefs, in the process
creating the possibility of conflicting decisions being rendered by different fora upon the same
issues.

Thus, case law instructs that forum shopping exists where the elements of litis pendentia
are present, namely: (a) identity of parties, or at least such parties who represent the same
interests in both actions; (b) identity of rights asserted and relief prayed for, the relief being
founded on the same facts; and (c) the identity with respect to the two preceding particulars in
the two (2) cases is such that any judgment that may be rendered in the pending case, regardless
of which party is successful, would amount to res judicata in the other case. Verily, the test to
determine whether the causes of action are identical is to ascertain whether the same evidence
would support both actions, or whether there is an identity in the facts essential to the
maintenance of the two actions. If the same facts or evidence would support both actions, then
they are considered the same; a judgment in the first case would be a bar to the subsequent
action.

In this regard, the Court takes particular note of the case of Del Rosario v. ABS-CBN
Broadcasting Corporation (Del Rosario),18 which involved a group of employees who filed an
illegal dismissal case against their employer during the pendency of a regularization case which
they earlier filed against the latter. In ruling that the employees are not guilty of forum shopping,
the Court explained that the reliefs sought and the causes of action, as well as the evidence to
be presented, in the earlier filed regularization case is different from the illegal dismissal
case which was filed at a later time, viz.:

xxx

Here, although it is true that the parties in the regularization and the
illegal dismissal cases are identical, the reliefs sought and the causes of action
are different. There is no identity of causes of action between the first set of
cases and the second set of cases.

18
See Del Rosario v. ABS-CBN Broadcasting Corporation, G.R. No. 202481, September 8, 2020.

53
 The test to determine whether the causes of action are identical is to
ascertain whether the same evidence would support both actions, or whether there
is an identity in the facts essential to the maintenance of the two actions. If the
same facts or evidence would support both actions, then they are considered the
same; a judgment in the first case would be a bar to the subsequent action. This is
absent here. The facts or the pieces of evidence that would determine whether the
workers were illegally dismissed are not the same as those that would support
their clamor for regularization.

Besides, it must be remembered that the circumstances obtaining at the

time the workers filed the regularization cases were different from when they
subsequently filed the illegal dismissal cases. Before their illegal dismissal,
the workers were simply clamoring for their recognition as regular
employees, and their right to receive benefits concomitant with regular
employment. However, during the pendency of the regularization cases, the
workers were summarily terminated from their employment. This
supervening event gave rise to a cause of action for illegal dismissal, distinct
from that in the regularization case. This time, the workers were not only
praying for regularization, but also for reinstatement by questioning the
legality of their dismissal. The issue turned into whether or not ABS-CBN had
just or authorized cause to terminate their employment. Clearly, it was ABS-
CBN's action of dismissing the workers that gave rise to the illegal dismissal
cases. And it is absurd for it to now ask the Court to fault the workers for
questioning ABS-CBN's actions, which were done while the regularization cases
were pending. The Court cannot allow this.

Simply stated, in a regularization case, the question is whether the

employees are entitled to the benefits enjoyed by regular employees even as
they are treated as talents by ABS-CBN. On the other hand, in the illegal
dismissal case, the workers likewise need to prove the existence of employer-
employee relationship, but ABS-CBN must likewise prove the validity of the
termination of the employment. Clearly, the evidence that will be submitted
in the regularization case will be different from that in the illegal dismissal
case. (emphases and underscoring supplied)

Applying Del Rosario, which is on all fours to the instant case, then the Court reaches the
conclusion that petitioners did not commit forum shopping in filing the instant illegal
constructive dismissal case despite the pendency of the regularization cases which they filed
earlier. Pursuant to Del Rosario, there is no identity of causes of action between petitioners'
regularization cases and the instant illegal constructive dismissal case, considering that the
regularization cases involved a determination of whether petitioners are regular employees of
Armscor as respondents were alleged to be engaged in labor-only contracting, and as such,
petitioners prayed for the award of payment of benefits from the first day of engagement with
Armscor. On the other hand, the instant illegal constructive dismissal case questioned the
propriety of petitioners' dismissal and prays for their reinstatement with Armscor. Notably, while
the latter case will also inevitably touch upon the issue of whether or not petitioners are indeed

54
regular employees of Armscor, the issue it ultimately seeks to address is whether or not
petitioners were constructively dismissed without any just or authorized cause under the law.
Otherwise stated, the issue in the regularization cases is merely limited to whether or not
petitioners should be deemed as regular employees of Armscor, and hence, entitled to the
benefits accorded to regular employees; whereas in the instant illegal constructive dismissal case,
the issue is whether or not Armscor constructively dismissed petitioners without any just or
authorized causes. It is apparent that the evidence to be presented in these two (2) cases are
distinct even if they may overlap in certain points.

More importantly, at the time the regularization cases were initiated, the facts which
spawned the instant illegal cons1ructive dismissal case have not yet occurred, and therefore,
petitioners' only existing cause of action during that time was their entitlement to benefits
enjoyed by regular employees. It was only after Armscor refused to allow them entry into the
work premises as MOSI had pulled them out from the company after the expiration and non-
renewal of the service contract between Arsmcor and MOSI that petitioners were constrained to
file the instant illegal constructive dismissal case. Under the foregoing circumstances, petitioners
had no choice but to avail of different fora.
xxx

MAY
-No posting as of 21 November 2022

JUNE
NANCY CLAIRE PIT CELIS, Petitioner, versus BANK OF MAKATI (A SAVINGS
BANK), INC., Respondent. G.R. No. 250776, June 15, 2022.

Knowingly Giving False or Misleading Information in Applications for Employment

To be liable under the subject infraction, i.e., "knowingly giving false or misleading
information in applications for employment as a result of which employment is secured," the
employee must have performed an overt or positive act, i.e., giving false information in the
application for employment. Considering that petitioner did not actually state any false
information in her job application but merely omitted to reflect her past employment with the
Bank of Placer, she could not have committed the alleged infraction.

At any rate, it is of no moment that petitioner had omitted to reflect her past employment
with the Bank of Placer or was allegedly implicated in the purported embezzlement case thereat.

55
Significantly, the Bank of Placer neither found petitioner liable nor meted out any disciplinary
action against her in the case. In fact, the record is bereft of any information about the incidents
of petitioner's implication in the embezzlement case. What the record actually shows is that the
Bank of Placer allowed petitioner to gracefully exit from the company without any derogatory
record.

From the foregoing, the labor tribunals aptly held that this is merely a case of an omission
to disclose former employment in a job application, a fault which does not justify petitioner's
suspension and eventual termination from employment. It is well settled that "there must be a
reasonable proportionality between the offense and the penalty. The penalty must be
commensurate to the offense involved and to the degree of the infraction." To dismiss petitioner
on account of her omission to disclose former employment is just too harsh a penalty.

Respondent now posits that it could not have hired petitioner had it known that she was
once implicated in an embezzlement case.

Notably, petitioner had been working with respondent for almost five years already when
it raised, out of the blue, the issue regarding her undisclosed past employment. To the Court,
such matter is already water under the bridge. Likewise, the fact that respondent suddenly
created an issue about petitioner's undisclosed past employment lends credence to her allegation
that the charge against her was only precipitated by her discovery of the corrupt practices
involving her division head and her department head. x x x.

Principle of Totality of Infractions

Previous offenses may be used to aggravate a subsequent infraction to justify an

employee's dismissal only if they are related to the subsequent offense upon which termination is
decreed.
x x x x x
While petitioner had committed two previous offenses, the Principle of Totality of
Infractions cannot be utilized against her as she committed no subsequent violation of
respondent's Code of Conduct. As earlier discussed, petitioner did not commit the subject
infraction. Simply put, there is no subsequent offense which petitioner's previous infractions
could aggravate.

But even assuming that petitioner had committed the subject infraction, the CA still erred
in applying the Principle of Totality of Infractions considering that petitioner's previous
infractions and the subject offense upon which her termination was decreed were in no way
related to each other.

United Philippine Lines, Inc., Carnival Cruise Lines and/or Eduardo B. San Juan,
Petitioners versus Ramil R. Dereza, Respondent. G.R. No. 249276, June 15, 2022

Disability Benefits

56
 An employee who sustains an injury or contracts an illness in relation to the conduct of
his work may be entitled to three types of disability benefits under the Labor Code: temporary
total disability (Article 197 [191]); permanent total disability (Art. 198 [192]); and permanent
partial disability (Art. 199 [193]).

In the case of Filipino seafarers, the POEA-SEC sets forth the following obligations of
the employer upon the seafarer's medical repatriation:

In fact, in The Late Alberto B. Javier v. Philippine Transmarine Carriers, Inc., the Court
ruled that the POEA-SEC contemplates three liabilities of the employer when a seafarer is
medically repatriated: (a) payment of medical treatment of the employee, (b) payment of
sickness allowance, both until the seafarer is declared fit to work or when his disability rating is
determined, and (c) payment of the disability benefit (total or partial), in case the seafarer is not
declared fit to work after being treated by the company-designated physician.

The employer is given a 120-day or 240-day period within which to make a final and
definite assessment as to the extent of a seafarer's disability and fitness to return to work. During
this period, a seafarer is entitled to receive sickness allowance and obligated to report to the
company-designated physician.

In Talaroc v. Arpaphil Shipping Corporation, the Court summarized the following

guidelines to be observed when a seafarer claims permanent and total disability benefits:

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.
x x x x x
Sec. 20(A) of the PO EA-SEC provides the guidelines in case of the seafarer's disagreement with
the findings and recommended disability rating of the company-designated physician, to wit:
For this purpose, the seafarer shall submit himself to a post-employment medical examination by
a company-designated physician within three working days upon his return except when he is
physically incapacitated to do so, in which case, a written notice to the agency within the same
period is deemed as compliance. In the course of the treatment, the seafarer shall also report
regularly to the company-designated physician specifically on the dates as prescribed by the
company-designated physician and agreed to by the seafarer. Failure of the seafarer to comply

57
with the mandatory reporting requirement shall result in his forfeiture of the right to claim the
above benefits.

If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be
agreed jointly between the Employer and the seafarer. The third doctor's decision shall be final
and binding on both parties.

The Court has recognized the right of the seafarer to seek the opinion of an independent
physician of his choice. Thus, while it is the company-designated physician who must declare
that the seaman suffered a permanent disability during employment, it does not deprive the
seafarer of his right to seek a second opinion. But when the seaferer's doctor disagrees with the
assessment of the company-designated physician, referral to a third doctor is mandatory.
x x x x x
In this light, respondent's failure to comply with the requirement of third-doctor referral
will not prejudice his claim for total and permanent disability benefits. Without a final and
definitive assessment from the company-designated physician, a seafarer's temporary and total
disability, by operation of law, becomes permanent and total.
Under the POEA-SEC, it is the primary responsibility of a company-designated physician to
determine the disability grading or fitness to work of seafarers. "To be conclusive, a medical
assessment must be complete and definite to reflect the seafarer's true condition and give the
correct corresponding disability benefits." x x x.
x x x x x
It is thus settled that a definite declaration by the company-designated physician is an
obligation, the abdication of which transforms the temporary total disability to permanent total
disability, regardless of the disability grade.

CATHERINE DELA CRUZ-CAGAMPAN, Petitioner, versus ONE NETWORK BANK,

INC., (ONE NETWORK BANK)/ or ALEX V. BUENAVENTURA, President/MYRNA S.
VIADO, HR HEAD, G.R. No. 217414, June 22, 2022

Illegal Dismissal

Respondents implemented a policy stating that “when two employees working for One
Network Bank are subsequently married through Church or Civil Court rites, one must terminate
employment immediately after marriage.” They then terminated petitioner’s employment for her
violation of the company policy. Interestingly, her husband’s employment was retained.

Apart from the couple’s supposed transgression when they married, respondents did not
state any other reason why they dismissed petitioner. Further, respondents consistently argued
that the couple willingly violated the company policy despite their knowledge of it. While
respondents maintain that petitioner and her husband both knowingly transgressed the rule,
nothing in the records show why respondents dismissed petitioner in particular. To stress, they
opted to terminate petitioner’s employment sans any reason why she must leave, in lieu of her
husband. An employer’s dismissal of a female employee solely because of her marriage is

58
precisely the discrimination that the Labor Code expressly prohibits. This Court cannot
countenance respondents’ unlawful act.

Management Prerogative

Indeed, employers may freely conduct their affairs and employ discretion and judgment
in managing all aspects of employment. However, their exercise of this right to management
prerogative must be in accord with justice and fair play.
x x x x x
In determining whether an employer’s policy prohibiting spouses from working in the
same company or a “no-spouse employment policy” is unlawful, Star Paper Corp. v. Simbol
discussed the bona fide occupational qualification that may possibly justify it.

x x x x x
Thus, a bona fide occupational qualification requires the concurrence of two elements:
“(1) that the employment qualification is reasonably related to the essential operation of the job
involved; and (2) that there is a factual basis for believing that all or substantially all persons
meeting the qualification would be unable to properly perform the duties of the job.”
Star Paper Corp. continued that in this jurisdiction, the standard of reasonableness is employed in
determining whether an otherwise discriminatory practice may be excused.
x x x x x
Substantial evidence is the quantum of proof required in labor cases. It is “such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion.” To justify their
otherwise discriminatory policy, respondents have the burden to establish by substantial evidence
the reasonable necessity for it. They must show that no other alternative to the policy exists.

Weighed against the constitutionally mandated full protection to labor and the various
statutory protections accorded to the sector, this Court finds that respondents failed to
demonstrate the reasonable business necessity for its no-spouse employment policy.

PHILIPPINE PIZZA, INC., Petitioner, versus ELVIS C. TUMPANG, JOEL L. RAMO,

RUEL C. FENIS, AND CONSOLIDATED BUILDING MAINTENANCE, INC.,
Respondents. G.R. No. 231090, June 22, 2022.

Principle of Stare Decisis

That CBMI is a legitimate job contractor had long been resolved in the cases of Asprec
and Cayetano.
x x x x x
In Asprec, the Court explained the circumstances as to why CBMI is considered as a
legitimate job contractor, x x x.
x x x x x
Similarly, the Court in Cayetano held the following: (1) CBMI has complied with all the
requirements of a legitimate job contractor, given the certificates of registration issued to it by

59
the Department of Labor and Ernployment; (2) CBMI has substantial capital to properly carry
out its obligations with petitioner, and to sufficiently cover its own operational expenses; (3)
CBMI retained control over respondents, as shown by the deployment of at least one CBMI
supervisor in each petitioner branch to regularly oversee, monitor, and supervise the employees'
attendance and performance; (4) CBMI subjected therein respondents to disciplinary sanctions
for violations of company rules and regulations as shown by the various offense notices and
memoranda issued to them; (5) respondents applied for work with CBMI and were consequently
selected and hired by the latter; and (6) during the course of their employment, CBMI paid their
wages and remitted/paid their SSS, PhilHealth, and Pag-IBIG contributions.

With the foregoing findings, the Court in Cayetano similarly concluded that CBMI is a
legitimate job contractor, and thus, the employer of therein respondents.

The allegation that herein respondents were not the same employees involved in Asprec
and Cayetano does not negate the application of stare decisis in the case. It suffices that
respondents are similarly situated with the employees in Asprec and Cayetano, and that the facts
and issues at bar are similar to those obtaining in the case laws.

JULY
Musahamat Workers Labor Union-1-Alu v. Musahamat Farms, Inc. Farm 1
G.R. No. 240184, July 6, 2022

The Concept of Circumstantial Evidence in Labor Cases

The concept of circumstantial evidence finds usual application in criminal cases, where
Section 4, Rule 133 of the Revised Rules of Evidence43 provides that conviction based on the
same would suffice if (a) there is more than one circumstance; (b) the facts from which the
inferences are derived are proven; and (c) the combination of all the circumstances is such as to
produce a conviction beyond reasonable doubt. But considering again that the quantum of
evidence required in labor cases is mere substantial evidence and is lower than that of
proof beyond reasonable doubt or moral certainty required in criminal cases, there is no
reason why the concept of circumstantial evidence should be inapplicable in labor cases.

Circumstantial evidence is "proof of collateral facts and circumstances from which the
existence of the main fact may be inferred according to reason and common experience." Here,
respondent relied on the sworn affidavits of three witnesses to establish circumstantial evidence
against the watchmen. These affidavits, however, lack credibility and conclusiveness.

In his sworn statement dated July 19, 2016, the Security Officer of respondent, Anthony,
testified on the outbursts of the watchmen when they were informed in the morning of February
14, 2016 about their reassignment to farm operations effective the next day. Anthony described
them to be visibly angry about the reassignment, questioning the decision of the management,

60
and insisting that as children of the landowners, they should not work as farmhands. Anthony
also testified that on February 19, 2016, a conference was held at HKJ 2 Farm which was
attended by the management representatives of respondent and the watchmen. During the said
conference, Ranel appeared and pinpointed the watchmen as the same persons he saw and heard
plotting about cutting down the banana plants on the evening of February 14, 2016 in Lawigan
Beach.

For his part, Ranel testified in his sworn affidavit about purportedly overhearing the
watchmen on the night of February 14, 2016 talking in the vernacular: "Demonyo ning
Musahamat kay [w]atchman ta ug [I'Jandowner pa Jud human ibalhin ta nila sa production.
Pamutlon nato unyang gabii ang mga saging sa Musahamat para makabalo sila [unsa ang] epekto
mawad-an ug watchman ilang sagingan (Musahamat is evil, for we are [w]atchmen and also
[l]andowners[,] yet they transferred us to production. We are going to cut down their banana
trees later tonight so they will know the effect of losing watchmen in their banana plantation.)"
He further testified that on February 19, 2016, through his conversation with the operation
manager of the security agency of respondent, he learned about the chopping incident. Ranel
then allegedly recounted what he saw and heard on February 14, 2016 and consequently, he was
invited to the company premises to attend a meeting between the management and all the
watchmen. It was there where he allegedly positively identified the herein watchmen.

Another witness, Florentino, corroborated Ranel's testimony on overhearing the

watchmen on February 14, 2016 in Lawigan Beach. Florentino's testimony translated into:
"Musahamat Management is really evil for transferring us to production. [W]e are going to
retaliate, we will cut down their trees later.

It bears pointing out, however, how glaring it is that the above testimonies of the three
witnesses were only reduced into affidavits on the same day, July 19, 2016, when the hearing
before the Voluntary Arbitrator was apparently underway. While there is nothing wrong with this
per se, for as long as the facts and issues in the affidavits were discussed during the investigation
and submitted to the management before the decision to dismiss the watchmen was made, this
was not the case here, as will be explained below.

Firstly, the affidavits of Anthony, Ranel, and Florentino were the only affidavits on
record, yet none of these was conspicuously discussed or, at the very least, adverted to in the
notices of preventive suspension, which simply read in verbatim:

March 03, 2016

xxxx
Based on the incident happened Last February 15, 2016 of slashing of bearing fruits at
Block 6A and 7 A right after in effect of man power alignment movement of all company
guard (watchmen) transfer to direct farm operation.
With the ongoing investigation of the case you are hereby noticed for PREVENTIVE
SUSPENSION for 15 Days effective March 8 to 24, 2016.
Hoping for your kind cooperation and presence every conference/investigation needed.
xxxx

61
 March 23, 2016
xxxx
With the ongoing investigation of the case last February 15, 2016 slashing incident.
You are hereby noticed for another days of PREVENTIVE SUSPENSION for 15 Regular
working Days effective March 26 to April 13, 2016.

Hoping for your kind cooperation and presence every conference/investigation needed.

Likewise, given the date when they were all similarly executed, July 19, 2016, none of
these affidavits could possibly be the one categorically referred to in the notices of termination
sent to the watchmen on April 12, 2016. These notices read in verbatim:

xxxx
Based on the incident happened last February 15, 2016 fall down of bearing fruits at
Block 6A and 7 A right after in effect of man power alignment movement of all company
guard (watchmen) transfer to direct farm operation. A sworn affidavit of witness
identified you as prime suspect planning for retaliation to MUSAHAMAT FARMS
INC (HKJ2) for re aligning of assignment to Engineering.

Therefore, the offense you committed against the Company Policy for grieve malicious
mischief, damaged to property and industrial sabotage, Management had decided to
discontinue your employment as Irrigation Crew effective April 14, 2016.
x x x x (Emphasis supplied)

The notices of termination ostensibly speak of an affidavit of a certain unnamed witness

that was then already sworn to and duly executed. This purported sworn affidavit and the
observations of Anthony about the watchmen's demeanor about their new assignment were the
only pieces of circumstantial evidence respondent had against the watchmen at the time that they
were terminated.

More importantly, the credibility of the sworn affidavits is questionable.

Even assuming arguendo that Ranel and Florentino heard a plot to chop down the trees,
there was no substantial evidence that it was the watchmen whom they overheard on the night of
February 14, 2016. As sharply observed by the Voluntary Arbitrator, Ranel and Florentino do not
personally know the watchmen and were unfamiliar with them. Indeed, the circumstances of
their acquaintances with the watchmen were nowhere alleged or established. Respondent, in its
Comment, merely made a bare and conclusory statement that "it is neither unlikely nor
unquestionable that Ranel x x x knows the faces and names of the five dismissed employees. The
CA, even as it overturned the findings of the Voluntary Arbitrator, failed to address the matter
and simply accorded weight and credence to the testimonies of Ranel and Florentino. Obviously,
the CA arrived at a different conclusion too, because unlike with the Voluntary Arbitrator, it
found that the February 19, 2016 meeting or conference between the parties really happened.

To be sure, the existence of the February 19, 2016 meeting is crucial since this was when
Ranel supposedly positively identified the watchmen as the ones he overheard plotting on the

62
night of February 14, 2016. In other words, the existence of the said meeting would tie any loose
ends as regards what he and Florentino allegedly heard and who he saw on February 14, 2016.
Without any explanation or reason, the CA found that the said meeting took place; the Voluntary
Arbitrator, on the other hand, found otherwise. The Court is more inclined to agree with the
latter.

The Court affirms the apt observation of the Voluntary Arbitrator that the alleged
existence of the February 19, 2016 meeting was not supported by any document, such as a letter
inviting the watchmen to attend the same, an attendance sheet, or any minutes. What are only left
to prove the claim are the mere belatedly submitted affidavits of Ranel and Anthony.

Equally important, the Court finds a patent inconsistency between the alleged February
19, 2016 meeting and how the events of the case played out.

Under pain of repetition, during the said conference, Ranel allegedly positively identified
the watchmen as the persons he saw and overheard talking angrily and plotting on cutting down
respondent's banana plants on the evening of February 14, 2016 in one of the cottages in
Lawigan Beach. Yet, it does not escape the Court's attention that at both the grievance meetings
in March and April 2016, the watchmen adamantly wanted to face or be confronted with the
purported witnesses of respondent. During the first grievance meeting on March 22, 2016,
Anthony informed the watchmen that there was a lead by a witness who pinned them as suspects
in the whole incident. Petitioner, on behalf of the watchmen, then suggested that the witness be
presented so the case can be resolved. This was an odd exchange if the claims of Ranel and
Anthony were true that a previous meeting and identification of the watchmen really took place
beforehand, or on February 19, 2016. Rather, there is no indication at all in the minutes of the
March 22, 2016 meeting that Ranel or anybody else had already positively and openly identified
the watchmen then.

Similarly, during the second grievance meeting held on April 15, 2016, petitioner again
asked for the presentation of the alleged witnesses of respondent against the watchmen. The
representative of respondent merely replied with "as per top management to not present
witnesses and or affidavit to this meeting and opt to present them [in] other venue." Again, the
minutes of this April 15, 2016 meeting reveal no mention of the purported open and positive
identification made by Ranel during the conference on February 19, 2016.

The only conclusion to all of the foregoing is that either the meeting on February 19,
2016 was imaginary, or that even if it indeed happened, Ranel could not have then positively and
openly identified the watchmen. If it were otherwise, there should have been no reason why
Ranel should still remain anonymous during the subsequent grievance meetings, or why the
crucial positive identification he allegedly made was not even brought up. It would have been
easy or natural to remind petitioner when it was requesting that witnesses be presented, that
Ranel had, in fact, already come forward on February 19, 2016. Simply put, there was no logical
explanation why Ranel continued to be anonymous during these grievance meetings when his
participation in the entire matter was very critical.

63
 Given the significance or materiality of the February 19, 2016 meeting as regards the
supposed positive identification made by Ranel against the watchmen on that day, this cannot be
divorced from the rest of his affidavit with respect to what he had allegedly overheard on
February 14, 2016. Finding that such part about the February 19, 2016 meeting is false leads to a
finding of falsity in the entire testimony of Ranel, owing to the doctrine of falsus in uno, falsus
in omnibus ( false in part, false in everything). While the maxim is not an absolute rule of law
and is in fact rarely applied in modem jurisprudence, Ranel' s credibility has been severely
tarnished by said portion of his testimony. Thus, the Court should likewise take with a grain of
salt the part of his testimony on overhearing the watchmen about their plot, which aims to
establish the circumstantial evidence against them.

In the same vein, the part in Anthony's testimony which corroborates the February 19,
2016 meeting and the identification made by Ranel of the watchmen should also be disbelieved.
What would be then left from his testimony would be his account of the angry demeanor of the
watchmen when apprised of their reassignment. While this may stand as motive against the
watchmen, it is, however, weak and insufficient to stand, on its own, as proof of their culpability.

Neither would Florentino's testimony suffice as another circumstance to link the

watchmen to the chopping incident as it also relies heavily on the questionable February 19,
2016 meeting. In criminal cases, it is essential that the circumstantial evidence presented must
constitute an unbroken chain, which leads one to a fair and reasonable conclusion pointing to the
accused, to the exclusion of others, as the guilty person. This principle finds relevance in non-
criminal cases as well.

In light of the foregoing, with neither direct nor circumstantial evidence to establish
substantial evidence against the watchmen, the charges against them for serious misconduct or
loss of trust and confidence crumble.

Procedural Due Process

In termination proceedings of employees, procedural due process consists of the twin

requirements of notice and hearing. As for the notice requirement, the employer must furnish the
employee with two written notices before the termination of employment can be effected: (1) the
first apprises the employee of the particular acts or omissions for which his/her dismissal is
sought; and (2) the second informs the employee of the employer's decision to dismiss him/her.
As for the requirement of a hearing, this is complied with as long as there was an opportunity to
be heard, and not necessarily that an actual hearing was conducted.

It is undisputed that what were given to the watchmen prior to the notice of their
termination were two separate notices of their preventive suspension. Respondent claimed that
the first notice of preventive suspension served as the first written notice under the law. The CA
agreed that this would suffice, especially since previously or on February 19, 2016, a witness
already came forth against the watchmen and thus, they could no longer feign ignorance about
the accusations against them.

64
 The Court finds that there was substantial compliance with the twin notice requirements
under the law.

Separation Pay and Backwages

An illegally dismissed employee is entitled to reinstatement without loss of seniority

rights and other privileges, and to full backwages, inclusive of allowances and other benefits or
their monetary equivalent. In case the reinstatement is no longer possible, however, an award of
separation pay, in lieu of reinstatement, will be justified. The Court has ruled that reinstatement
is no longer possible: (a) when the former position of the illegally dismissed employee no longer
exists; or (b) when the employer's business has closed down; or (c) when the employer-employee
relationship has already been strained as to render the reinstatement impossible. The Court
likewise considered reinstatement to be non-feasible because a "considerable time" has lapsed
between the dismissal and the resolution of the case, and when the employee himself/herself
does not want to be reinstated.

Insofar as strained employer-employee relationships are concerned, the Court in Globe-

Mackay Cable and Radio Corporation v. National Labor Relations Commission19 has discussed
the limitations and qualifications of the exception in this wise:

x x x If in the wisdom of the Court, there may be a ground or grounds

for non-application of the above-cited provision, this should be by way of
exception, such as when the reinstatement may be inadmissible due to ensuing
strained relations between the employer and the employee.

In such cases, it should be proved that the employee concerned occupies a

position where he enjoys the trust and confidence of his employer; and that it is
likely that if reinstated, an atmosphere of antipathy and antagonism may be
generated as to adversely affect the efficiency and productivity of the employee
concerned.

A few examples will suffice to illustrate the Court' s application of the

above principle: where the employee is a Vice-President for Marketing and as
such, enjoys the full trust and confidence of top management; or is the Officer-In-
Charge of the extension office of the bank where he works; or is an organizer of a
union who was in a position to sabotage the union's efforts to organize the
workers in commercial and industrial establishments; or is a warehouseman of a
non-profit organization whose primary purpose is to facilitate and maximize
voluntary gifts by foreign individuals and organizations to the Philippines; or is a
manager of its Energy Equipment Sales.

Obviously, the principle of "strained relations" cannot be applied

indiscriminately. Otherwise, reinstatement can never be possible simply because
some hostility is invariably engendered between the parties as a result of
litigation. That is human nature.
19
283 Phil. 649 (1992).

65
 Besides, no strained relations should arise from a valid and legal act of
asserting one's right; otherwise, an employee who shall assert his right could be
easily separated from the service, by merely paying his separation pay on the
pretext that his relationship with his employer had already become strained.

To be sure, the doctrine of strained relations may be invoked only against employees
whose positions demand trust and confidence, or whose differences with their employer are of
such nature or degree as to preclude reinstatement. The watchmen certainly held positions of
trust and confidence, where greater trust was placed by management and from whom greater
fidelity to duty was correspondingly expected. It cannot be gainsaid that in the normal and
routine exercise of their functions, a watchman regularly handles the delicate matter of caring for
and protecting the property and assets of his/her employer. This is all the more true in this case
where the watchmen were tasked to guard a huge banana plantation.

Finally, the watchmen are also entitled to backwages and other benefits from the time of
their dismissal until finality of this judgment. The basis for the payment of backwages is
different from the award of separation pay. Separation pay is granted where reinstatement is no
longer advisable because of strained relations between the employee and the employer.
Backwages represent compensation that should have been earned but were not collected because
of the unjust dismissal. The basis for computing separation pay is usually the length of the
employee's past service, while that for backwages is the actual period when the employee was
unlawfully prevented from working.

Adstratworld Holdings, Inc. Judito B. Callao and Judito Dei R. Callao Vs. Chona A.
Magallones and Pauline Joy M. Lucino
G.R. No. 233679. July 6, 2022

Due Process in Terminating a Regular and a Probationary Employee

Under Article 295 of the Labor Code, a regular employee is one who has been engaged to
perform tasks usually necessary or desirable in the employer's usual business or trade -without
falling within the category of either a fixed, project, or seasonal employee; or one who has
rendered at least a year of service, with respect to the activity he or she is engaged, and the work
of the employee remains while such activity exists.

Meanwhile, Article 296 of the Labor Code defines probationary employment in the
following manner:

ARTICLE 296.[281] Probationary Employment. Probationary employment

shall not exceed six (6) months from the date the employee started working,
unless it is covered. by art apprenticeship agreement stipulating a longer period.
The services of an employee who has been engaged on a probationary basis may
be terminated for a just cause or when he fails to qualify as a regular employee in

66
 accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work
after a probationary period shall be considered a regular employee.

In the case, pieces of substantial evidence support the finding of the CA that from the
time they were employed, respondents were regular employees of Adstratworld.

One, respondents performed tasks necessary and desirable in the usual business of
Adstratworld. As pointed out by the CA, Adstratworld needs the expertise of marketing
personnel whose primary task is to conceptualize advertising products and services to promote
its advertising business and products. For this reason, respondents' work as events marketing and
logistics officers is vital in the advertising business of Adstratworld making them its regular
employees from the very beginning of their employment.

Two, even assuming that the engagement of respondents in January 2012 was merely
probationary, by July 16, 2013 (or at the time their probationary contracts were issued), they
were already regular employees. As above-mentioned, the employment for at least one year, with
respect to the activity that the employee had been engaged, makes one a regular employee.
Considering that respondents were in the service of Adstratworld for more than a year doing the
usual tasks that they were engaged to perform, then they are regular employees of the company.

At the same time, substantial evidence supports the finding of the CA that respondents
were illegally dismissed from work.

It is settled that in illegal dismissal cases, the employer has the burden to prove that the
termination of the employee is with a valid cause. This means that "the employer must
affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause."
Here, petitioners failed to discharge their burden as they failed to establish compliance with the
substantive and procedural due process m terminating respondents.

To validly dismiss a regular employee, the employer must observe substantive and
procedural due process. Substantive due process requires that the dismissal must be pursuant to
any of the just or authorized causes under the law. Specifically, a "dismissal based on a just cause
implies that the employee has committed some violation against the employer, hence, it can be
said that the employee initiated the dismissal process." Article 297 of the Labor Code provides
for the instances when the employer may dismiss the employee due to a just cause. Meanwhile,
procedural due process requires that the employee must be given notice of the reason for one's
dismissal, an opportunity to be heard and defend himself or herself, and a notice of the
employee's termination.

These requirements were not complied in the case.

To recall, Adstratworld dismissed respondents on the latter's alleged failure to adhere to

the standards set forth at the time of hiring and which standards would determine whether
respondents would qualify as regular employees. However, as above-discussed, respondents
were employed as regular employees from the commencement of their work in January 2012. It

67
is thus inconsistent and absurd that Adstratworld would rehire respondents as probationary
employees on July 16, 2013 and expect them to do the very same tasks they were already
performing since January 2012.

The alleged decline in the performance of respondents and the imputed violations against
them (unauthorized distribution and bringing in of items in the company premises, and tardiness
on the part of Lucino) while respondents were under the supposed probationary period would not
justify their termination from work. To reiterate, Adstratworld anchored its dismissal on
respondents' failure to qualify for regular employment. However, respondents were already
regular employees and there was no reason for them to be placed under probationary status after
already attaining regular employment status. In fine, there was no apparent and sufficient reason
supporting petitioners' view that respondents were validly dismissed for failure to abide by the
requirements necessary to attain regular employment status.

Even granting, for the sake of argument, that respondents were employed as mere
probationary employees on July 16, 2013, there was no evidence that Adstratworld set forth
reasonable standards for respondents' regularization which were made known at the time of their
engagement. Let it be underscored that the probationary contracts only contained the changes in
employment status and salary and did not mention any terms and conditions as qualification for
the regularization of respondents.

In Agustin v. Alphaland Corp.20, the Court elucidated that in probationary employment, it

is indispensable that the employer informs the employee at the time of engagement the
reasonable standards by which he or she will be evaluated for regularization. In case the
employer fails to comply with this requirement, the employee shall be deemed a regular
employee. The absence of any clear standards set forth and communicated by Adstratworld at the
inception of the supposed probationary employment of respondents proved that they were regular
employees of Adstratworld.

Further, the alleged unsatisfactory performance during the supposed probationary period
does not by itself prove that respondents were validly dismissed. As discussed above,
Adstratworld did not distinctly identify and communicate to respondents the parameters as to
what would constitute a satisfactory and/or unsatisfactory performance required for the purported
regularization of respondents. Moreover, respondents did not sign the evaluation slips which,
according to petitioners, established the unsatisfactory performance of respondents. At the same
time, Adstratworid failed to show that it afforded respondents the opportunity to be heard and
explain themselves prior to being dismissed from work.

In view of all the foregoing, it is beyond cavil that Adstratworld dismissed respondents
without observing substantive and procedural due process required under the law. In this regard,
the ruling of the NLRC which dismissed the complaint was without factual and legal
justifications. Thus, the CA properly found that the NLRC committed grave abuse of its
discretion when it affirmed the LA decision dismissing the case.

20
G .R. No. 218282, September 9, 2020

68
C.F. Sharp Crew Management, Inc. and/or Reederei Claus-Peter Offen (GMBH & Co.)
G.R. No. 243399. July 6, 2022 

CBA prevails over the POEA-SEC Provisions When the Same Provide for Better Benefits
to Laborers; Respondent’s Position as a Chief Cook Falls Under “Ratings”

xxx
The Court has recognized the application of the CBA over the POEA-SEC provisions on
disability compensation when the same provide for better benefits to laborers. This is so because
a contract of labor is so impressed with public interest that the more beneficial conditions must
be endeavored in favor of the laborer.

Here, the parties' employment contract is clear that the current ITF Collective Agreement
(ITF Berlin IMEC IBF Collective Bargaining Agreement CBA) shall be considered incorporated
to, and shall form part of the contract. Notably, petitioners do not question the existence of the
CBA, or deny having signed the same.

In this light, Clause 25.l of the parties' CBA provides compensation for permanent
disability caused by accidents occurring on board, or when travelling from or to, the vessel, thus:

Article 25: Disability

25 .1 A seafarer who suffers [ from ] permanent disability as a result of an
accident whilst in the employment of the Company regardless of fault, including
accidents occurring while travelling to or from the ship, and whose ability to work as
a seafarer is reduced as a result thereof, but excluding permanent disability due to
willful acts, shall in addition to sick pay, be entitled to compensation according to the
provisions of this Agreement.

Clause 25.2 of the same Article provides that the disability of the seafarer shall be
determined by a doctor appointed by the Company. If a doctor appointed by or on behalf of the
seafarer disagrees with the assessment, a third doctor may be nominated jointly between the
Company and the Union, and the decision of this doctor shall be final and binding on both
parties.

Meanwhile, Clause 25.4 of the said CBA states that a seafarer, whose disability is
assessed by the Company-nominated doctor at 50% or more, shall be regarded as permanently
unfit for further sea service in any capacity and shall be entitled to 100% compensation; on the
other hand, any seafarer assessed at less than 50% disability but ce1iified as permanently unfit
for further sea service in any capacity by the Company-nominated doctor, shall also be entitled to
100% compensation. Any disagreement as to the assessment or entitlement shall be resolved by a
third doctor appointed in accordance with Clause 25.2.

As borne by the records, the company-designated physician gave respondent a Grade l 1-

slight rigidity or 1/3 loss of lifting power of the trunk rating without any indication as to his

69
capacity to work. On the other hand, respondent, armed with the certification by his own doctor
that he was permanently disabled and no longer fit to return to work as a seafarer, informed
petitioners through a letter dated August 14, 2015, that he is willing to undergo another
examination by a third doctor. Notably, petitioners did not rebut or deny this letter request or
present any proof that there was an effort on their part to nominate a third doctor.

As there was no final assessment on respondent's disability in accordance with Clause

25 .2 of their CBA, the rules in determining what constitutes total and permanent disability under
the Labor Code, as amended, its implementing rules and regulation (IRR), the POEA-SEC, and
prevailing jurisprudence should be instructive.

Article 198(c)(l) of the Labor Code provides:

The following disabilities shall be deemed total and permanent:
(1) Temporary total disability lasting continuously for more than one
hundred twenty days, except as otherwise provided in the Rules; xx xx
(Underscoring Ours)
(2)
Meanwhile, Rule X, Section 2 of the Rules and Regulations implementing Title II, Book
IV of the Labor Code states:

Period of entitlement. - (a) The income benefit shall be paid beginning on

the first day of such disability. If caused by an injury or sickness it shall not be
paid longer than 120 consecutive days except where such injury or sickness still
requires medical attendance beyond 120 days but not to exceed 240 days from
onset of disability in which case benefit for temporary total disability shall be
paid. However, the System may declare the total and permanent status at any time
after 120 days of continuous temporary total disability as may be warranted by the
degree of actual loss or impairment of physical or mental functions as determined
by the System.

These provisions are to be read hand in hand with the POEA-SEC, Section 20(3) of
which states in part:

Upon sign-off from the vessel for medical treatment, the seafarer is entitled to
sickness allowance equivalent to his basic wage until he is declared fit to work or
the degree of permanent disability has been assessed by the company-designated
physician but in no case shall this period exceed one hundred twenty (120) days.

The application of these rules was clearly explained by this Court in Pastrana v. Bahia
Shipping Services21 (Pastrana), citing Vergara v. Hammonia Maritime Services, Inc. (Vergara)
viz.:22
As these provisions operate, the seafarer, upon sign-off from his vessel,
must report to the company-designated physician within three (3) days from
arrival for diagnosis and treatment. For the duration of the treatment but in no

21
G.R. No. 227419, June IO, 2020).
22
588 Phil. 895, 912 (2008).

70
 case to exceed 120 days, the seaman is on temporary total disability as he is
totally unable to work. He receives his basic wage during this period until he is
declared fit to work or his temporary disability is acknowledged by the company
to be permanent, either partially or totally, as his condition is defined under the
[POEA-SEC] and by applicable Philippine laws. If the 120 days initial period is
exceeded and no such declaration is made because the seafarer requires further
medical attention, then the temporary total disability period may be extended up
to a maximnm of240 days, subject to the right of the employer to declare within
this period that a permanent partial or total disability already exists. The seaman
may of course also be declared fit to work at any time such declaration is justified
by his medical condition.

The Court likewise cited Elburg Shipmanagement, Inc. v. Quiogue, Jr.23 (Elburg), which
outlined the rules with respect to the period within which the company-designated physician
must issue a final and definitive disability assessment, to wit:

In summary, if there is a claim for total and permanent disability benefits

by a seafarer, the following rules (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 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.

As the Court aptly observed in Pastrana, while Elburg states that the 120 or 240-day
periods shall be reckoned "from the time the seafarer reported to [the company-designated
physician]," subsequent cases consistently counted said periods from the date of the seafarer's
repatriation for medical treatment and this is true even in cases where the date of repatriation of
the seafarer does not coincide with the date of his first consultation with the company-designated
physician.
23
765 Phil.34l (2015).

71
 This is also consistent with Section 20(A)(3) of the POEA-SEC, which provides for the
repatriation of the seafarer in case of work-related illness or injury, and the obligation of the
employer to give the seafarer sickness allowance from the time he signed off until he is declared
fit to work, or the degree of his or her disability has been assessed, but not exceeding 120 days,
viz.:

SECTION 20. COMPENSATION AND BENEFITS

A. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
The liabilities of the employer when the seafarer suffers work-related injury or
illness during the term of his contract are as follows:
xxxx
3. In addition to the above obligation of the employer to provide medical
attention, the seafarer shall also receive sickness allowance from his employer in
an amount equivalent to his basic wage computed from the time he signed off
until he is declared fit to work or the degree of disability has been assessed by the
company-designated physician. The period within which the seafarer shall be
entitled to his sickness allowance shall not exceed 120 days. Payment of the
sickness allowance shall be made on a regular basis, but not less than once a
month.

Thus, as held in Pastrana, the rules laid down in Elburg should be read as requiring the
company-designated physician to issue a final and definitive disability assessment within 120 or
240 days from the date of the seafarer's repatriation. Consistent with Vergara and El burg, the
extended period of 240 days must be justified, and it is the employer's burden to prove the need
for such extension. Failure to issue such assessment within 120 or 240 days, as the case may be,
will render the disability of the seafarer as permanent and total.

Applying the abovementioned rules, We find and so hold that respondent suffered from a
total and permanent disability.

xxx xxx xxx

We find petitioners' claim that respondent should only be entitled to the benefits
corresponding to "Ratings" as he is not a Junior Officer impressed with merit.

A perusal of the CBA discloses that the scale of compensation for disability is classified
into three groups, namely, ratings, junior officers, and senior officers, with the last group to
compose of Master, Chief Officer, Chief Engineer, and 2nd Engineer. No similar compositions
were made with respect to the remaining two classifications. Meanwhile, based on the 1997
Philippine Merchant Marine Rules and Regulations, "ratings" are those members of the ship's
crew other than the master or officers. No evidence was presented by respondent to prove that
his rank is that of a Junior Officer. Respondent likewise failed to deny or rebut petitioners' claim
that his position falls under "Ratings.

72
 The Court can also be guided by the rulings in Teodoro v. Teekay Shipping Philippines,24
as well as in Marlow Navigation Phils., Inc. v. Quijano,25 where the CBA Degree of Disability
Rate for Ratings was applied to the seafarers therein who were employed as chief cook, as
respondent in this case.

Thus, consistent with these rulings, while respondent is entitled to total and permanent
disability benefits, the Court deems it proper to adjust the award to correspond to his rank under
the CEA. Allowing respondent to take home the amount of USD 121,176.00 (the rate for Junior
Officers), as opposed to USD 95,949.00 under Appendix 3 of their CBA for Ratings to which he
belongs, would be unjust enrichment on his part and would clearly be unfair to petitioners.

Philippine Transmarine Carriers, Inc. and/or Seaspan Crew Management Ltd. and/or
Carlos Salinas v. Allan N. Tena-E
G.R. No. 234365. July 6, 2022

Total and Permanent Disability Benefits; Seafarer's Duty to Attend Regular Check-Ups

xxx

In Elburg Shipmanagement Phils., Inc. v. Quiogue 26, the rules governing claims for total
and permanent disability benefits are summarized as follows:

In summary, 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 employer has the

24
G.R. No. 244721, February 5, 2020.
25
G.R. No. 234346, August 14, 2019.
26
765Phil.341 (2015).

73
 4. burden to prove that the company-designated physician has sufficient
justification to extend the period; and

5. 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.

In the case at bar, Allan was placed under the care of the company-designated doctors
from October 2014 to March 2015. During this time, he underwent therapy and rehabilitation
under the supervision of ShiptoShore's Orthopedic Shoulder Specialist. In fact, he had good
callus formation and showed improvement from displaying a limited range of motion after his
injury to showing full range motion during his January 2015 checkup. By February, Allan was
able to carry objects with his right upper extremity with level at one to two out of 10. He was
scheduled for another re-evaluation with possible clearance on March 2, 2015. In the last
Medical Report issued by the company-designated doctors dated March 16, 2015, Allan
continued to show improvement but still continued to feel pain. Dr. Sañez reiterated that Allan's
projected return to full load capacity would be four to six months from October. Dr. Sañez also
gave Allan an interim assessment of "Disability Grade 12 -collarbone fracture, but able to raise
arm above shoulder level" with a re-evaluation tentatively scheduled on April 13, 2015. It was
also explicitly stated in the medical report that Allan will be "further observed as he was advised
to continue with his usual activities while using the prescribed medicated patch." At this point,
Allan's treatment already went beyond 120-day period, and the doctor's findings and schedule for
re-evaluation clearly constitute a significant act that justified the extension of petitioner's
treatment period to 240 days.

Notably, Dr. Sañez only issued an interim assessment, which is not the final and
definitive assessment required under the law. A final and definitive disability assessment is
required in order to truly reflect the extent of the illness of the seafarer, and his or her capacity to
resume work as such. To be conclusive, the medical assessments or reports should be complete
and definite to afford the appropriate disability benefits to seafarers. However, We cannot fault
PTCI for its company-designated physician's failure to issue a final and definitive disability
assessment. Dr. Sañez had until June 17, 2015, or before the lapse of 240 days from repatriation,
within which to issue his final assessment. However, Allan did not appear on the scheduled re-
evaluation on April 13, 2015 making it impossible for Dr. Sañez to examine him.

As to Allan's contention that he wrote a letter through his counsel to confirm the need for
continued treatment without receiving a reply from Dr. Sañez, We cannot take such fact against
PTCI. Under Section20 (A) of the 2010 POEA-SEC, it is the seafarer's duty to submit himself to
a post-employment medical examination by a company-designated physician within three
working days upon his return, except when he is physically incapacitated to do so and he shall
also regularly report to the company-designated physician specifically on the dates as prescribed
by the company-designated physician and agreed to by the seafarer. Failure of the seafarer to
comply with the mandatory reporting requirement shall result in his forfeiture of the right to
claim the above benefits.51 Here, Allan regularly appeared for his monthly check-ups from
November 2014 to March 2015. It was only during his April 2015 schedule that he suddenly did

74
not show up. Notably, in the last medical report issued, it was clearly stated that Allan was still
under further observation as he was advised to continue his usual activities with the medical
patch and scheduled for re-evaluation the following month. Thus, it behooves Allan to appear on
his scheduled April 13, 2015 appointment as it is the seafarer's duty and burden to report to his
regular check-ups. Here, he did not even attempt to appear on his scheduled check-up nor did he
even exert any effort to call Dr. Sañez' office if he really wanted to find out if his check-up
would push through. It has also not escaped this Court's mind that Allan's counsel wrote to Dr.
Sañez on March 26, 2015 to confirm if further treatment was needed beyond the 120-day period,
and not to confirm if the April 13, 2015 schedule would push through. To consider such letter
as an act of confirming the April 13, 2015 appointment would be too speculative. Moreover, the
120-day period from Allan's repatriation fell on February 17, 2015. Nevertheless, Allan
continued to show up during his check-up for the month of March as scheduled, which was
already beyond the 120-day period. It is quite baffling why Allan had to engage the services of a
counsel as early as March 26, 2015 to confirm if further treatment was needed when: (1) he was
already continuing treatment beyond the 120-day period; (2) the 240-day period had not yet
lapsed and he was informed that he still needed further evaluation; and (3) he had not yet sought
the opinion of a physician of his own choice. Accordingly, this Court deems Allan's March 26,
2015 letter redundant because he has already been continuing treatment beyond the 120-day
period. In any case, the last medical report issued clearly stated that he needed to be further
observed and re-evaluated after using the prescribed medicated patch.

While the date written in the March 16, 2015 Medical Report had the word "tentative"
written, it only meant that the date was not fixed, or still subject to change. However, the
nomenclature is not at issue because whether or not the date was tentative or fixed, what is clear
is that Allan still needed further treatment. Thus, to the mind of this Court, April 13, 2015 was
the date of Allan's re-evaluation, unless otherwise changed by Dr. Sañez. There being no change
in the date communicated to Allan, he should have appeared during the date of his re-evaluation.
To stress, it is the seafarer's responsibility to report to his regular check-ups.

The case of Lerona v. Sea Power Shipping Enterprises, Inc.27 is instructive:

In C.F Sharp Crew Management, Inc. v. Orbeta, We held that a seafarer

commits medical abandonment when he fails to complete his treatment before the
lapse of the 240-day period, which prevents the company physician from declaring
him fit to work or assessing his disability. Section 20 (D) of the 2000 POEA-SEC
provides that "[n]o compensation and benefits shall be payable in respect of any
injury, incapacity, disability or death of the seafarer resulting from his willful or
criminal act or intentional breach of his duties.x x x" A seafarer is duty-bound to
complete his medical treatment until declared fit to work or assessed with a
permanent disability rating by the company-designated physician.

In this case, after undergoing several tests, petitioner was placed under
observation. Dr. Gonzales advised him to return for his medical clearance on
October 23, 2009, or 71 days from his repatriation, but petitioner did not do
so. He argues that he could still feel the symptoms of his ailment despite having
27
G.R. No. 210955, August 14, 2019.

75
 been cleared by respondents' cardiologist from coronary arterial disease on October
15, 2009. Hence, he was prompted to consult another doctor. However, while
indeed a seafarer has the right to seek the opinion of other doctors under Section 20
(B) (3) of the 2000 POEA-SEC, this is on the presumption that the company-
designated physician had already issued a certification on his fitness or disability
and he finds this disagreeable. As case law holds, the company-designated
physician is expected to arrive at a definite assessment of the seafarer's fitness
to work or to determine his disability within a period of 120 or 240 days from
repatriation. The 120-day period applies if the duration of the seafarer's treatment
does not exceed 120 days. On the other hand, the 240-day period applies in case the
seafarer requires further medical treatment after the lapse of the initial 120-day
period. In case the company-designated doctor failed to issue a declaration within
the given periods, the seafarer is deemed totally and permanently disabled. When
petitioner chose not to show up at the appointed date of consultation,
effectively preventing Dr. Gonzales from making a fitness or disability
assessment, he breached his duty under the 2000 PO EA-SEC. Without any
final assessment from the company-designated physician, petitioner's claim for
permanent total disability benefits must fail. (Citations omitted, emphasis
supplied)

In New Filipino Maritime Agencies, Inc. v. Despabeladeras,28 We held:

The CA even cited one of the instances enumerated in the case of C.F.
Sharp Crew Management, Inc. v. Taok (C.F. Sharp Crew Management) when a
seafarer may be allowed to pursue an action for permanent disability benefits. In
the said case, the failure of the company-designated physician to issue a
declaration as to a seafarer's fitness to engage in sea duty or disability even after
the lapse of the 120-day period with no indication that further medical treatment
would address his temporary total disability justified an extension of the period to
240 days. The citation, however, finds no application in this case, where the
company-designated physician cannot be faulted for not issuing disability
assessment or fit-to-work declaration. At that time, which was within the 240-day
period, Michael was still undergoing treatment by the company doctors. The
orthopedic surgeon noted that Michael's fracture was healing and there was
greater probability of a fit for work declaration. After the lapse of 120 days, the
treatment period was considered extended as Michael was advised to continue
medical therapy to improve his condition to which he agreed. There was, thus, an
indication that further therapy sessions would address his temporary disability. He
was expected to return for his therapy session, but he failed to do so. Clearly,
under the circumstances, the 240-day extension period was justified.

There being no assessment, Michael's condition cannot be considered a

permanent total disability. Temporary total disability only becomes permanent
when declared by the company physician within the period he is allowed to do so,

28
747 Phil. 626,640 (2014)

76
 or upon the expiration of the maximum 240-day medical treatment period without
a declaration of either fitness to work or permanent disability.

Based on the foregoing, Allan breached his duty by not showing up on his scheduled
April 13, 2015 appointment thereby effectively preventing Dr. Sañez from making a final
disability assessment. Since Allan was still undergoing treatment by the company doctor and has
been showing signs of improvement, and was even asked to come back for possible clearance,
there was an indication that further treatment would address his temporary disability. This Court
emphasizes that a temporary total disability only becomes permanent if the company-designated
physician declares it to be so within the 120-day period, or 240-day period, provided the
extension was justified in the latter case, or after the lapse of such periods, and no declaration is
made by · the company-designated physician. The mere lapse of the 120/240-day period does not
automatically entitle a seafarer to total and permanent disability benefits.

xxx

Crown Shipping Services/Dolphin Shipmanagement Inc. and/or Carisbrooke Shipping Ltd.

and/or Mr. Emmanuel P. Gomez and/or Ms. Susan Agustin v. John P. Cervas
G.R. No. 214290. July 6, 2022

Permanent and Total Disability Benefits; Seafarer’s Duty to Continue Medical Treatment

Disability benefits are granted to an employee who sustains an injury or contracts a

sickness resulting in temporary total, permanent total, or permanent partial, disability. For the
injury and the resulting disability to be compensable, they must have necessarily resulted from
an accident arising out of and in the course of employment. It was undisputed that the injury was
sustained by Cervas while he was doing his job as an Abled Seaman on board the vessel. It is
clear that Cervas injury is work-related and such being the case, the injury is compensable.

Pursuant to Section 20 (A) of the 2010 [Philippine Overseas Employment

Administration-Standard Employment Contract (POEA-SEC)], when a seafarer
suffers a work-related injury or illness in the course of employment, the company-
designated physician is obligated to arrive at a definite assessment of the former's
fitness or degree of disability within a period of 120 days from repatriation. During
the said period, the seafarer shall be deemed on temporary total disability and shall
receive his basic wage until he is declared fit to work or his temporary disability is
acknowledged by the company to be permanent, either partially or totally, as his
condition is defined under the PO EA-SEC and by applicable Philippine laws.
However, if the 120-day period is exceeded and no definitive declaration is made
because the seafarer requires, further medical attention, then the temporary total
disability period may be extended up to a maximum of 240 days, subject to the
right of the employer to declare within this period that a permanent partial or total
disability already exists. But before the company-designated physician may avail of
the allowable 240-day extended treatment period, he must perform some significant

77
 act to justify the extension of the original 120-day period. Otherwise, the law grants
the seafarer the relief of permanent total disability benefits due to such
noncompliance.

Thus, the rules regarding the duty of the company-designated physician to issue a final
medical assessment on the seafarer's disability grading is 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.

Based thereon, two requisites must concur for a determination of a seafarer's medical
condition: 1) an assessment must be issued within the 120/240 window, and 2) the assessment
must be final and definitive. Case law states that without a valid final and definitive assessment
from the company-designated physician within the 120/240-day period, the law already steps in
to consider petitioner's disability as total and permanent. Thus, a temporary total disability
becomes total and permanent by operation of law.

Following the cited jurisprudence, the employer must give an assessment of the seafarer
disability within one hundred twenty (120) days or two hundred forty (240) days as the case
maybe, otherwise the disability shall be deemed total and permanent. The 120/240 days shall be
counted from the time of the seafarer's repatriation. In the case at bar, Cervas was repatriated on
January 23, 2013. He was first seen by the company-designated doctor on January 28, 2013.
Cervas claimed that he religiously followed the course of his treatment until his last consultation
with the company-designated doctor on April 15, 2013. It was stated in his medical report on
April 15, 2013 that there was already bone growth though he was still feeling some tenderness
on his leg. Cervas was advised to return on May 20, 2013, however, he did not do so. Instead,
Cervas filed a complaint on May 2, 2013. Based on these facts, Cervas filed his claim on the
ninety-ninth (99th) day. It was clear that the 120-days period wherein employer is to give an
assessment has not yet expired. Admittedly, Cervas opted to no longer continue his treatment due

78
to financial constraints. Cervas, based on these facts, abandoned his treatment and petitioners
should not be held liable if they were not able to give a definite disability rating.

Medical abandonment by a seafarer carries with it serious consequences. Under Section

20(D) of the PO EA-SEC "[n]o compensation and benefits shall be payable in respect of any
injury, incapacity, disability or death of the seafarer resulting from his willful or criminal act or
intentional breach of his duties, provided however, that the employer can prove that such
injury, incapacity, disability or death is directly attributable to the seafarer." It is but the
seafarer's duty to comply with the medical treatment as provided by the company-designated
physician, otherwise, when a sick or injured seafarer abandons his or her treatment, such may
result to the forfeiture of his/her right to claim disability benefits.

In Lerona v. Sea Power Shipping Enterprises, Inc.,29 citing CF. Sharp Crew
Management, Inc. v. Orbeta,30 this Court held that a seafarer commits medical abandonment
when he fails to complete his treatment before the lapse of the 240-day period, which prevents
the company physician from declaring him fit to work or assessing his disability.

It was clear that Cervas is remiss of his duty to complete his medical treatment. Although
his reason for discontinuing treatment may be valid, this must still be clearly presented and
proven before the Court. Mere allegation will not suffice. As recently held in the case of
Antolino v. Hanseatic Shipping Phils., Inc., financial incapacity to travel to and from the place of
treatment may serve as an acceptable justification for failure to attend a check-up. That said, an
allegation of financial incapacity, like all allegations, must be supported by clear and convincing
evidence. This is especially true in situations where the manning agency has consistently
provided the seafarer with sickness allowance during the treatment period.

Verily, it was Cervas who abandoned his treatment. Because of his action, petitioners
were not able to finish its obligation to have Cervas treated and finally give a definitive disability
rating. Further, the second paragraph of Section 20(A)(3) provides:

xxxx

The seafarer shall be entitled to reimbursement of the cost of medicines

prescribed by the company-designated physician. In case treatment of the seafarer
is on an out-patient basis as determined by the company-designated physician,
the company shall approve the appropriate mode of transportation and
accommodation. The reasonable cost of actual traveling expenses and/or
accommodation shall be paid subject to the liquidation and submission of
official receipts and/or proof of expenses. (Emphasis supplied)

Significantly, in the case at bar, Cervas neither requested for the approval for payment
nor reimbursement of his travel and accommodation expenses and that said request had been
denied by petitioners.

29
G.R. No. 210955. August 14, 2019
30
818 Phil. 710 (2017).

79
 While it is true that our jurisprudence also provides that absence of final assessment and
definitive disability rating does not prevent the seafarer from claiming total and permanent
disability, this must still be reconciled with the periods provided by the rules. In Wallem
Maritime Services, Inc. v. Tanawan,31 it was held that:

Disability should be understood more on the loss of earning capacity rather

than on the medical significance of the disability. Even in the absence of an official
finding by the company-designated physician to the effect that the seafarer suffers a
disability and is unfit for sea duty, the seafarer may still be declared to be suffering
from a permanent disability if he is unable to work for more than 120 days. What
clearly determines the seafarer's entitlement to permanent disability benefits is his
inability to work for more than 120 days. Although the company-designated
physician already declared the seafarer fit to work, the seafarer's disability is still
considered permanent and total if such declaration is made belatedly (that is, more
than 120 days after repatriation). (Citations omitted, emphasis supplied)

Clearly, the declaration of permanent and total disability must still observe the 120/240
day-period provided by the rules. A seafarer may only be declared to be permanently
incapacitated if he is still unable to work for more than 120 days. Not only that, the seafarer must
provide substantial proof that his injury caused him to be incapacitated to do his usual work. In
the instant case, there was no clear finding that Cervas was not able to work for more than 120
days. To reiterate, he stopped his treatment prior the expiration of the 120-days period. Also,
records show that Cervas did not provide any medical reports or findings to support his claim
that his injury is permanent. There were also no record showing that Cervas consulted or sought
a doctor of his choice who diagnosed him that he can no longer work or that his present
condition incapacitates him to engage in a gainful employment. It is an established principle that
these allegations must be substantiated by evidence in order for it to be recognized by this Court.
While it is true that what is important in disability cases is not the medical findings but the
capacity of the employee to be gainfully employed in the same line of employment, 50 these
facts must still be established and supported by substantial evidence before ruling that the
employee is entitled to the benefits he is seeking. Thus, Cervas' claim that his injury was total
and permanent merely on the basis of his incomplete medical trea1ment will not suffice. It was
Cervas' decision not to continue with his treatment and thus, it would be impossible to determine
the degree of disability Cervas suffered or whether he could have fully recover as such facts can
no longer be established at this juncture. At most, the rules provides that Cervas is entitled to
sickness benefit and medical allowance which herein petitioners had already provided in the span
of his treatment.

Financial Assistance as a Measure of Social and Compassionate Justice

However, this Court recognized the plight Cervas underwent and the injury he sustained
during his employment. Thus, We find that a grant of financial assistance as a measure of social
and compassionate justice is proper. For the balancing the interest of the employer and the
worker, financial assistance may be allowed as a measure of social justice and exceptional
circumstances, and as an equitable concession.
31
693 Phil. 4I6, (2012).

80
 xxx

Oceanmarine Resources Corporation v. Jenny Rose G. Nedic, on behalf of her minor son,
Jerome Nedic Ellao
G.R. No. 236263. July 19, 2022

Implied Repeal of Article 1711 of the Civil Code by the Labor Code

In the absence of an express repeal of the provisions of the Civil Code on employees'
compensation and claims, confusion arose as to the effect of acceptance of benefits under the
Workmen's Compensation Act (now, the Labor Code) on the right to sue for additional amounts
under the Civil Code.

The Court, in Robles v. Yap Wing32 (Robles), initially held that claims for damages
sustained by employees in the course of their employment could only be filed under the
Workmen's Compensation Act to the exclusion of all further claims under any other law.

However, the Court later abandoned Robles through Floresca v. Philex Mining Corp.33
(Floresca), and categorically gave the worker a choice to invoke either the prevailing worker's
compensation law or the provisions of the Civil Code, subject to the consequence that the choice
of one remedy will exclude the other. Save for recognized exceptions, the acceptance of
compensation under the remedy chosen will preclude a claim for additional benefits under the
other remedy. The Court also discussed the difference between "compensation" and "damages"
and the corresponding claims under the then-Workmen's Compensation Act and the Civil Code:

The rationale in awarding compensation under the Workmen's

Compensation Act differs from that in giving damages under the Civil Code. The
compensation acts are based on a theory of compensation distinct from the
existing theories of damages, payments under the acts being made as
compensation and not as damages (99 C.J.S. 53). Compensation is given to
mitigate the harshness and insecurity of industrial life for the workman and
his family. Hence, an employer is liable whether negligence exists or not since
liability is created by law. Recovery under the Act is not based on any theory
of actionable wrong on the part of the employer (99 C.J.S. 36).

In other words, under the compensation acts, the employer is liable to

pay compensation benefits for loss of income, as long as the death, sickness or
injury is work-connected or work-aggravated, even if the death or injury is
not due to the fault of the employer (Murillo vs. Mendoz3o 66 Phil. 689). On
the other hand, damages are awarded to one as a vindication of the wrongful
invasion of his rights. It is the indemnity recoverable by a person who has

32
148-B Phil. 743 (1971).
33
220 Phil. 533 (1985).

81
 sustained injury either in his person, property or relative rights, through the
act or default of another (25 C.J.S. 452).

The claimant for damages under the Civil Code has the burden of
proving the causal relation between the defendant's negligence and the
resulting injury as well as the damages suffered. While under the Workmen's
Compensation Act, there is a presumption in favor of the deceased or injured
employee that the death or injury is work-connected or work-aggravated;
and the employer has the burden to prove otherwise (De los Angeles vs. GSIS,
94 SCRA 308; Carino vs. WCC, 93 SCRA 551; Maria Cristina Fertilizer Corp. vs.
wee, 60 SCRA 228).

xxxx

Moreover, under the Workmen's Compensation Act, compensation benefits

should be paid to an employee who suffered an accident not due to the facilities or
lack of facilities in the industry of his employer but caused by factors outside the
industrial plant of his employer. Under the Civil Code, the liability of the employer,
depends on breach of contract or tort. The Workmen's Compensation Act was
specifically enacted to afford protection to the employees [.] It is a social legislation
designed to give relief to the [employee] who has been the victim of an accident causing
his [or her] death or ailment or injury in the pursuit of his [or her] employment (Abong
vs. WCC, 54 SCRA 379).68 (Emphasis supplied)

The ruling in Floresca providing the injured workers or their heirs a choice of
remedy was reiterated in Ysmael Maritime Corporation v. Avelino34 (Ysmael Maritime).
The Court addressed the exclusivity provision of Section 5 of the Workmen's
Compensation Act as restated in Article 179 (formerly Article 173) of the Labor Code,
hence:

At issue is the exclusory provision of Section 5 of the Workmen's

Compensation Act reiterated in Article 173 of the Labor Code.

"Sec. 5. Exclusive right to compensation. -The rights and

remedies granted by this Act to an employee by reason ()f a personal
injury entitling him to compensation shall exclude all other rights and
remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil
Code and other laws, because of said injury.

"Art. 173. Exclusive of liability. --· Unless otherwise

provided, the liability of the State Insurance Fund under this Title
shall he exclusive and in place of all other liabilities of the employer
to the employee, his dependents or anyone otherwise entitled to
receive damages on behalf of the employee or his dependents. The
34
235 Phil. 324 (1087).

82
 payment of compensation under this Title shall bar the recovery of
benefits as provided for in Section 699 of the Revised Administrative
Code, Republic Act No. 1161, as amended, Commonwealth Act No.
186, as amended, Republic Act No. 610, as amended, Republic Act
No. 4864 as amended, and other laws whose benefits are administered
by the System, during the period of such payment fo1 the same
disability or death, and conversely."

Petitioner invokes the case of Robles vs. Yap Wing, L-20442,

October 4, 1971, 4 J SCRA. -267, to support its contention that all claims
for death or inJ1iries by employees against employers are exclusively
cognizable by the Workmen's Compensation Commission regardless of the
causes of said death or injuries. That case no longer controls.

In the recent case of Floresca vs. Philex Mining Company, L-30642,

April 30, 1985, 136 SCRA 141, involving a complaint for damages for the
death of five miners in a cave-in on June 28, 1967, this Court was
confronted with three divergent opinions on the exclusivity rule as
presented by several amici curiae. One view is that the injured employee or
his [or her] heirs, in case of-death, may initiate an action to recover
damages [not compensation under the Workmen's Compensation Act] with
the regular courts on the basis of negligence of the employer pursuant to the
Civil Code. Another view, as enunciated in the Robles case, is that the
remedy of an employee for work-connected injury or accident is exclusive
in accordance with Section 5 of the WCA. A third view is that the action
is selective and the employee or his [or her] heirs have a choice of
availing themselves of the benefits under the WCA or of suing in the
regular courts under the Civil Code for higher damages from the
employer by reason of his negligence. But once the election has been
exercised, the employee[s] or [their] heirs are no longer free to opt for
the other remedy. In other words, the employee cannot pursue both
actions simultaneously. This latter view was adopted by the majority in
the Floresca case, reiterating as main authority its earlier decision in
Pacana vs. Cebu Autobus Company, L-25382, April 30, 1982, 32 SCRA
442. In so doing, the Court rejected the doctrine of exclusivity of the
rights and remedies granted by the WCA as laid down in the Robles
case. Three justices dissented.

It is readily apparent from the succession of cases dealing with the

matter at issue * * that this Court has vacillated from one school of thought
to the other. Even now, the concepts pertaining thereto have remained fluid.
But unless and until the Floresca ruling is modified or superseded, and We
are not so inclined, it is deemed to be the controlling jurisprudence vice the
Robles case. (Emphasis supplied)

83
 In Marcopper Mining Corp. v. Abeleda,35 the Court restated the exception when a
claimant paid under the compensation laws may still sue under the Civil Code, thus:

In the Robles case, it was held that claims for damages sustained by
workers in the course of their employment could be filed only under the
Workmen's Compensation Law, to the exclusion of all further claims under
other laws. In Floresca, this doctrine was abrogated in favor of the new rule
that the claimants may invoke either the Workmen's Compensation Act or
the provisions of the Civil Code, subject to the consequence that the choice
of one remedy will exclude the other and that the acceptance of
compensation under the remedy chosen will preclude a claim for additional
benefits under the other remedy. The exception is where a .claimant who
has already been paid under the Workmen's Compensation Act may
still sue for damages under the Civil Code on the basis of supervening
facts or developments occurring after he opted for the first remedy.
(Emphasis supplied)

Later, in Limquiaco, Jr. v. Judge Ramolete,36 the Court reaffirmed the rule now obtaining
in workmen's compensation cases, which is for the employee or his or her heirs, in case of death,
to have the option to claim compensation from the employer under the Labor Code or proceed
against the employer as a tortfeasor in an ordinary action for damages before the regular courts.
Once an election has been exercised, the employee, or his or her heirs, are no longer free to opt
for the other remedy. Both remedies cannot also be pursued simultaneously.

From the foregoing cases, the Court takes this opportunity to clarify that the intent in
Floresca was to allow the choice of recovery of damages under the Civil Code based on
negligence or breach of contract despite the exclusivity provision in Article 179 (formerly
Article 173) of the Labor Code, viz:

Article 173 of the New Labor Code does not repeal expressly nor impliedly the
applicable provisions of the New Civil Code, because said Article 173 provides:

"Art. 173. Exclusiveness of liability. -Unless otherwise provided, the

liability of the State Insurance Fund under this Title shall be exclusive and
in place of all other liabilities of the employer to the employee, his
dependents or anyone otherwise entitled to receive damages on behalf of
the employee or his dependents. The payment of compensation under this
Title shall bar the recovery-of benefits as provided for in Section 699 of
the Revised Administrative Code, Republic Act Numbered Eleven
hundred sixty-one, as amended, Commonwealth Act Numbered One
hundred eighty-six, as amended, Commonwealth Act Numbered Six
hundred ten as amended, Republic Act Numbered Forty-eight hu~dred
Sixty-four, as amended, and other laws whose benefits are administered by

35
Supra note 67.
36
240 Phil. 165 (I 987).

84
 the System, during the period of such payment for the same disability or
death, and conversely."

As above-quoted, Article 173 of the New Labor Code expressly repealed only
Sect10n 699 of the Revised Administrative Code, RA 1161, as amended, C.A. No. 186,
as amended., RA 610, as amended, RA4864, as amended, and all other laws whose
benefits are administered by the System (referring to the GSIS or SSS).

Unlike Section 5 of the Workmen's Compensation Act as afore-quoted, Article

173 of the New Labor Code does not even remotely, much less expressly repeal the New
Civil Code provisions heretofore quoted Decision 21 G.R. No. 236263.

It is patent, therefore, that recovery under the New Civil Code for damages
arising from negligence, is not barred by Article 173 of the New Labor Code. And the
damages recoverable under the New Civil Code are not administered by the System
provided for by the New Labor Code, which defines the "System" as referring to the
Government Service Insurance System or the Social Security System (Art. 167 [ c ], [ d]
and [ e] of the New Labor Code).
xxxx

The afore-quoted provisions of Section 5 of the Workmen's Compensation Act,

before and after it was amended by Commonwealth Act No. 772 on June 20, 1952,
limited the right of recovery in favor of the deceased, ailing or injured employee to the
compensation provided for therein. Said Section 5 was not accorded controlling
application by the Supreme Court in the 1970 case of Pacana vs. Cebu Autobus Company
(32 SCRA 442) when WE ruled that an injured worker has a choice of either to
recover from the employer the fixed amount set by the Workmen's Compensation
Act or to prosecute an ordinary civil action against the tortfeasor for greater
damages; but he cannot pursue both courses of action simultaneously. Said Pacana
case penned by Mr. Justice Teehankee, applied Article 1711 of the Civil Code as against
the Workmen's Compensation Act, reiterating the 1969 ruling in the case of Valencia vs.
Manila Yacht Club (28 SCRA 724, June 30, 1969) and the 1958 case of Esguerra vs.
Munoz Palma (I 04 Phil. 582), both penned by Justice J.RL. Reyes. Said Pacana case was
concurred in by Justices J.B.L. Reyes, Dizon, Makalintal, Zaldivar, Castro, Fernando and
Villamor.

Since the first sentence of Article 173 of the New Labor Code is merely a re-
statement of the first paragraph of Section 5 of the Workmen's Compensation Act, as
amended, and does not even refer, neither expressly nor impliedly, to the Civil Code as
Section 5 of the Workmen's Compensation Act did, with greater reason said Article 173
must be subject to the Same interpretation adopted in the cases of Pacafia, Valencia and.
Esguerra aforementioned as the doctrine in the aforesaid three (3) cases is faithful to and
advances the social justice guarantees enshrined in both the 1935 and 1973 Constitutions.

It should be stressed likewise that there is no similar provision on social justice in

the American Federal Constitution, nor in the various state constitutions of the American

85
 Union. Consequently, the restrictive nature of the American decisions on the Workmen's
Compensation Act cannot limit the range and compass of OUR interpretation of our own
laws, especially Article 1711 of the New Civil Code, vis-a-vis Article 173 of the New
Labor Code, in relation to Section 5 of Article II and Section 6 of Article XIV of the
1935 Constitution then, and now Sections 6, 7 and 9 of the Declaration of Principles and
State Policies of Article II of the 1973 Constitution. (Emphasis supplied)

However, the Court notes that Floresca unwittingly digressed in the above analysis of
Article 1711 of the Civil Code vis-a-vis the applicable provisions of the Labor Code on
Employees Compensation and State Insurance Fund. Floresca's discussion on Article 1711 of
the Civil Code was sparked by the case of Pacana v. Cebu Auto-Bus Co., (Pacana) wherein the
plaintiff driver had eyesight issues that caused him to be permanently disabled to work. Said
plaintiff filed a case in the ordinary civil courts for separation pay, sick leave pay, vacation leave
pay, overtime pay, permanent disability compensation benefits, moral damages, and attorney's
fees against his employer. The Court, in upholding the jurisdiction of the lower court to decide
plaintiff's claim under Article 1711, stated that there may be cases where a claimant may be
constrained to invoke the provisions of Article 1711 "due to his prosecution of various other
money claims, such as separation pay, accrued sick and vacation leave pay, and overtime pay
during his employment, which do not fall under the purview of the Workmen's Compensation
Act."

Suffice to say that, based on the ruling in Pacana, filing a case for "various other money
claims" under Article 1711 of the Civil Code is now unsuited due to the enactment of the Labor
Code, which vested the Labor Arbiter with authority to hear and decide employment-related
cases and claims." Moreover, the concept of compensation and damages, as previously
discussed, are essentially different insofar as labor is concerned. Article 1711 of the Civil Code
1nvolves the payment of compensation, which is now Decision 23 G.R. No. 236263 effectively
remunerated through the State Insurance Fund as mandated by the Labor Code. Said provision
has nothing to do with compensatory damages, which is recoverable in an action at law for
breach of contract or for a tort. Indeed, petitioner-heirs in Floresca filed their claim for actual,
moral, and exemplary damages against the employer of the deceased miners citing Articles 2176,
21 78, 220l and 2231 of the Civil Code, and not Article 1711 of the same Code.

Moreover, PD 1368, which further amended certain provisions of Title II, Book IV of the
Labor Code, also added Article 208-A (now, Article 215) to said title providing for the repeal of
inconsistent laws, hence:

SECTION 9. A new article is hereby added after Art. 208 of the Labor Code, as
ame;,nded, to read as follows:

"Art. 208-A. Repeal of laws. -All existing laws, Presidential

Decrees and Letters of Instructions which are inconsistent with
or contrary to this Decree, are hereby repealed: Provided, That in
the case of GSIS, conditions for entitlement to benefits shall be
governed by the Labor Code, as amended: Provided, However, That
the formulas for computation of benefits shall be those provided for

86
 under Commonwealth Act numbered one hundred eighty-six, as
amended by Presidential Decree No. 1146, plus fifteen percent
thereof. (Emphasis supplied)

This article is a general repealing provision, which is a clause predicating the

intended repeal under the condition that a substantial conflict must be found in existing or
prior acts. Since there was no specific or express repealing clause found in Title H, Book
IV of the Labor Code, the intent was not to repeal any existing law, unless an
irreconcilable inconsistency and repugnancy exists in the terms of the new and old
laws.

The concept of a repeal by implication was discussed by the Court in Alliance of

Non-Life Insurance Workers of the Philippines v. Mendoza,37 in the following manner:

Repeal by implication proceeds on the premise that where a statute ·

of later date clearly reveals an intention on the part of the. legislature to
abrogate a prior act on the subject, that intention must be given effect.
Hence, before there can be a repeal, there must be a clear showing on the
part of the lawmaker that the intent in enacting the new law was to abrogate
the old one. The intention to repeal must be clear and manifest; otherwise,
at least, as a general rule, the later act is to be construed as a continuation
of, and not a substitute for, the first act and will continue so far as the two
acts are the same from the time of the first enactment.

There are two categories of repeal by implication. The first is where

provisions in the two acts on the same subject matter are in an irreconcilable
conflict, the later act to the extent of the conflict constitutes an implied
repeal of the earlier one. The second is if the later act covers the whole
subject of the earlier one and is clearly intended as a substitute, it will
operate to repeal the earlier law.

Implied repeal by irreconcilable inconsistency takes place when the

two statutes cover the same subject matter; they are so clearly inconsistent
and incompatible with each other that they cannot be reconciled or
harmonized; and both cannot be given effect, that is, that one law cannot he
enforced without nullifying the other.

Comparing Article 1 711 of the Civil Code and Title II, Book IV of the Labor
Code, it is apparent that both kinds of implied repeal exist. The Labor Code, as amended
by PD 626, covers the whole subject matter of compensation for work-related injury or
death of an employee and provides the system for which an injured or deceased worker is
compensated. The provisions in Title II, Book IV were clearly intended as the controlling
law for payment of compensation for all work-related injury or death as even specific
rules, such as the Amended Rules on Employees' Compensation, was issued in support
thereto.
37
G.R. No. 206159, 26 August 2020.

87
 Moreover, Article 1711 of the Civil Code and Title II, Book IV of the Labor Code
are · irreconcilably inconsistent. The former law makes the employer directly liable for
the payment of compensation for work-related injuries or death, which occurs through no
fault of the employer, while the latter law has effectively shifted the liability for said
injury or death to the State Insurance Fund.

In fact, the Court, in Alarcon v. Alarcon, asserted that Article 1711 of the Civil
Code merely states the philosophy underlying the Workmen's Compensation Act and
must be interpreted in relation thereto by virtue of Article 2196 of the Civil Code, which
states:

Art. 2196. The rules under this Title are without prejudice to
special provisions on damages formulated elsewhere in this Code.
Compensation for workmen and other employees in case of death,
injury or illness is regulated by special laws. Rules governing damages
laid down in other laws shall be observed insofar as they are not in conflict
with this Code. (Emphasis supplied)

Further, in Generoso v. Universal Textile Mills Inc., the Court stated that the special law
regulating compensation for working men in case of death referred to under Article 2196 of the
Civil Code "used to be Act No. 3428 as amended but which are now found in the Labor
Code."

The above analysis espouses the understanding that Article 1711 of the Civil Code must
give way to the law on Employees Compensation and State Insurance Fund established by the
Labor Code. This interpretation is in accordance with the basic tenet in statutory construction
decreeing the prevalence of a special law over a general law, regardless of the laws' respective
dates of passage.90 Here, not only was Title II, Book IV of the Labor Code enacted later than
Article 1711 of the Civil Code, but it is also a special law covering employee compensation for
work-related injury or death.

Given the irreconcilable inconsistency between the aforesaid laws and their nature as
special law and general law, the Court declares that Title II, Book IV of the Labor Code has
impliedly repealed Article 1711 of the Civil Code.

The Abandonment of Candano insofar as it Sanctions Awarding Indemnity for Loss

of Future Income Based on Artfcle 1711 of the Civil Code

Based on the principles discussed above, a claim for compensation for work-related
injury or death, regardless of the existence of negligence of the employer, is granted through the
prevailing compensation act, which is now the Labor Code of the Philippines, particularly Title
II, Book IV of the Labor Code focusing on Employees Compensation and State Insurance Fund.

Meanwhile, a claim for damages is filed under the provisions of the Civil Code on torts
wherein the causal relationship between the act or negligence of the employer and the injury or

88
death of the worker should be established. "While the damages recoverable under the Civil Code
are much more extensive than the compensation set by the Labor Code, the amounts obtained
under the latter course is balanced by the relief of burden to prove a causal connection between
the employer's negligence and the resulting injury or death, and of having to establish the extent
of the damage suffered.

Thus, respondent should not have relied on Article 1711 of the Civil Code, a provision
granting compensation, for her claim of damages by way of loss of future income. Again,
compensation and damages refer to different awards in the field of labor - the former being given
to mitigate the harshness and insecurity of industrial life of a laborer and his or her family
regardless of the existence of negligence of the employer, while the latter is awarded as
vindication of the wrongful invasion of a worker's right or an employer's breach of its duties.

Further, an award under Article 1711 of the Civil Code would be inconsistent with the
very nature of damages. Damages may be defined as the pecuniary compensation, recompense,
or satisfaction for an injury sustained, or as otherwise expressed, the pecuniary consequences
imposed by the law for the breach of some duty or the violation of some right. Particularly, a
claim for loss of earning capacity or loss of future income, which is a form of actual damages, is
a relief resulting from a quasi-delict or a similar cause within the realm of civil law. Thus, it was
incumbent upon respondent to prove that petitioner committed a breach of its duty, or that
petitioner's acts resulted in the violation of Romeo's right, such as when it was negligent in the
performance of its duties as employer under the law. The mere fact that death arose out of or in
the course of employment is insufficient to award damages by way of loss of future income.

Most significantly, Article 1 711 of the Civil Code has already been repealed by the
Labor Code and cannot be used as basis for respondent's claim. Damages may not be adjudicated
based on an inexistent law.

Nonetheless, while an award of damages under Article 1711 of the Civil Code has no
statutory basis, it still finds jurisprudential mooring in the 2007 case of Candano. This is the
same case cited by the CA to support its application of Article 1711, calling the ruling as "a
definitive source for the principle that the .employer's obligation for indemnity automatically
attaches when the employee died or was injured in the occasion of employment.

The assailed decision further reads as follows:

Accordingly, when an employee dies or is injured in the occasion of

employment, very much like Romeo S. Ellao here in this present case, the
obligation of the employer for indemnity, automatically attaches. The
indemnity may partake the form of actual, moral, nominal, temperate,
liquidated or exemplary damages, as the case may be depending on the
factual milieu of the case and considering the criterion for the award of
these damages as outlined by our jurisprudence. Here, only the award of
actual damages, specifically the award for loss of earning capacity is
warranted by the circumstances since it has been duly proven that the cause
of Romeo S. Ellao's death was a fortuitous event.

89
 A reading of all cases referencing Article 1711 of the Civil Code shows that they, except
for Sulit v. Employees' Compensation Commission38 (Sulit) and Candano, pertain to injuries or
death of a worker occurring before the effectivity of Title II, Book IV of the Labor Code.
However, with the enactment of the Labor Code providing for a new system of payment of
compensation, the filing of cases under Article 1711 became unnecessary or dispensable.

In Sulit, the mention of Article 1711 of the Civil Code was made merely to clarify the
phrase "arose out of and in the course of the employment." The issues therein do not involve the
application of Article 1711 for work-related injury or death of an employee.

However, in Candano, the institution of a civil suit for indemnity under Article· 1711 of
the Civil Code by the heir of a deceased worker was upheld. In that case, Melquiades Sugata-on
(Melquiades), husband of therein respondent Florentina Sugata-on (Florentina), was employed
by Candano Shipping as Third Marine Engineer on board its cargo vessel, which sank together
with its cargo in Surigao del Sur on 27 March 1996. Melquiades was among the missing crew
members. Florentina claimed the death benefits of her husband from Candano Shipping, but it
refused to pay. Thus, Florentina filed before the RTC an action seeking indemnity for the death
of her husband grounded on Article 1711, and prayed for actual, moral, and exemplary damages,
including attorney's fees.

When Candano Shipping elevated the case to this Court, it was held that jurisprudence
recognizes the remedy availed by Florentina in filing the claim under the Civil Code. Citing
Floresca and Ysmael Maritime, the Court reiterated that "employees may invoke either the
Workmen's Compensation Act or the Civil Code, subject to the consequence that the choice of
one remedy will exclude the other and that the acceptance of compensation under the remedy
chosen will exclude the other remedy. The exception is where the claimant who was paid under
the Workmen's Compensation Act may still sue for damages under the Civil Code based on
supervening facts or developments occurring after he [or she] opted for the first remedy." Said
doctrine is "rooted on the theory that the basis of compensation under the Workmen's
Compensation Act is separate and distinct from the award of damages under the Civil Code.

xxx

However, consistent with and as a logical consequence of the discussions above, the
Court sees the need to overturn the doctrine laid down in Candano upholding the applicability of
Article 1711 of the Civil Code and the consequent application of the provisions on damages
under the same Code. Again, Floresca did not sanction the filing of an action under Article l 711
of the Civil Code as an alternative remedy for filing compensation claims under the Workmen's
Compensation Act, now the Labor Code. Rather, the alternative remedy is an action for damages
based on the provisions of the Civil Code. Since Article 1711 is a law on compensation and not
damages, then said article cannot be considered as an option that may be invoked by injured
workers or their heirs in an action for damages against the employer.

38
187 Phil 317 (1980)

90
 In view of all the foregoing, Candano, in so far as it sanctions the filing of an action for
work-related compensation under Article 1711 of the Civil Code and applies the formula for
computation of loss of income in Villa Rey for such action, is hereby abandoned. Article 1711 of
the Civil Code can no longer be used by employees against their employers for purposes of
claiming compensation for work-related injury or death, which is exclusively regulated by Title
II, Book IV of the Labor Code.

The Abandonment of Candano Should Be Applied Prospectively

The Court clarifies, however, that the abandonment of Candano should be prospective in
application. The Court has ruled that, "while the future may ultimately uncover a doctrine's error,
it should be, as a general rule, recognized as a 'good law' prior to its abandonment." This stems
from the precept that "judicial decisions applying or interpreting the laws or the Constitution,
until reversed, shall form part of the legal system of the Philippines.

xxx

Thus, while Article 1711 of the Civil Code had been repealed by the Labor Code,
Candano seemingly revived the provision and validated its continued effectivity. In that case, the
Court adjudged Florentina's entitlement to damages on the premise that "[t]he remedy availed by
[Florentina] in filing the claim under the New Civil Code has been validly recognized by the
prevailing jurisprudence on the matter. As emphasized by Associate Justice Amy C. Lazaro-
Javier during the deliberations of this case, the Court cannot fault litigants for relying on such
pronouncement, even if it is inconsistent with the laws then controlling.

With the foregoing, and following similar parameters adopted by the Court in Henson,
Jr. v. UCPB General Insurance Co .. Inc.,39 the Court sets guidelines on the application of
Candano and the transition to its abandonment:

(]) For actions filed prior to the finality of Candano on 06 Au-gust 2007, Article
1711 of the Civil Code shall be considered to have been impliedly repealed by Title II,
Book IV of the Labor Code. Thus, Article 171] of the Civil Code cannot sustain any ac-
tion for, or award of; indemnity. Candano was not yet a binding precedent at the time
these actions were filed. In Candano's ab-sence, there is no legal basis to give effect to a
repealed provision of the Civil Code.

(2) For actions filed during the applicability of Candano, i.e., from its finality on
06 August 2007 until the finality of this Deci-sion, Article 1711 of the Civil Code shall
be given effect based on the Candano ruling.

(3) For actions filed after the finality of this Decision, Article 1711 of the Civil
Code shall not be given any effect since Article 1711 has been repealed by the Labor
Code. Thus, Article 1711 of the Civil Code can no longer be used against employers to
claim indemnity for work-related injury or death.

39
G.R. No. 22313-14 August2019.

91
 As applied to this case, respondent filed her Complaint on 16 April 2012. Hence, the
Candano ruling should apply to respondent's claim. It bears stressing that respondent had good
reasons to assume that she may file a claim under Article 1711 of the Civil Code, especially
since her lawyer was also Florentina’s counsel in Cardano. 1 Even in the proceedings before the
trial court, respondent had consistently relied on Candano to argue for the soundness and
viability of her claim. Fairness demands that the Court adjudicate respondent's claim based on
the prevailing doctrine at the time her Complaint was filed. Thus, applying Candano and Article
1711 of the Civil Code, indemnity for loss of earning capacity may be awarded in light of
Romeo's death in the course of employment.

Election of Remedies Under the Labor Code and the Civil Code

Having established that Candano erroneously gave effect to Article 1711 of the Civil
Code, We now resolve whether respondent may still recover a monetary award despite her
receipt of death benefits from the SSS. Petitioner argues that the choice of action between
compensation and damages is selective, and resort to one bars pursuit of the other. Thus, the
issue turns on the application of the doctrine of election of remedies.

In ascertaining the interplay of reliefs available to respondent and others similarly

situated, views were advanced questioning the continued validity and soundness of the prevailing
rule, as laid down in Floresca. Justice Lazaro-Javier opines that the remedies of damages and
compensation are cumulative; employees or their heirs may pursue a cause of action for tort or
breach of contract and a claim for compensation. On the other hand, Associate Justice Alfredo
Benjamin S. Caguioa submits that the remedy of compensation under the Labor Code is
exclusive. Recovery of damages under the Civil Code, based on breach of contract, quasi-delict,
or violation of rights, is no longer an available remedy for work-related injury, illness, or death.

Our re-examination of Floresca is highly consequential. As elucidated, since 1985, the

main jurisprudential authority sanctioning actions for damages under the Civil Code is the
Floresca ruling. Even Candano relied on Floresca to support the conclusion that damages
enumerated in the Civil Code may be awarded to workers or their heirs. Ultimately, actions like
respondent's are viable because of Floresca. Nonetheless, almost forty (40) years since the Court
laid down the doctrine, We are confronted anew with the issue of whether the action of
employees or their heirs under the Labor Code is exclusive, selective, or cumulative.

While the conclusion reached in Floresca is correct and consistent with prevailing laws,
the legal bases therefor were misapplied. We take this opportunity to clarify the errors in
Floresca and the legal framework that should have supported its conclusion.

Despite the misapplication of certain provisions and principles, the conclusion arrived at
in Floresca is still good law. The choice of action of employees and their heirs should be
selective, not cumulative or exclusive.

The remedies of compensation and damages could not be cumulative because of Article
179 of the Labor Code, in relation to the rule on inconsistent remedies and the doctrine of
election of remedies.

92
 xxx

Article 179 operates to bar simultaneous pursuit of both compensation and damages. A
claim for compensation under the Labor Code triggers the application of the exclusivity principle
in Article 179-the liability of the State Insurance Fund shall be "exclusive", and compensation
under the State Insurance Fund shall be "in place of all other liabilities of the employer.

The only exceptions, where benefits may be recovered on top of compensation, are
specifically enumerated in Article 179, 120 and the Civil Code is not among them. Necessarily,
therefore, a claim for compensation under the Labor Code shall be "in place of”, and preclude, a
claim under the Civil Code and other pertinent laws. A litigant may not claim both damages and
compensation.

Similarly, since one who has opted to claim compensation may no longer file a complaint
for damages, it follows that the reverse should also be true. One who has availed of the remedy
of damages under the Civil Code may no longer recover compensation under the Labor Code.
Otherwise, an absurd situation would arise where the proscription under Article 179 may be
circumvented by first pursuing a complaint for damages, so as not to trigger the exclusivity
provision, then filing a claim for compensation. What cannot be done directly cannot be done
indirectly Moreover, the best method of interpretation is that which makes laws consistent with
other laws. 123 Every statute must be so interpreted and brought in accord with other laws as to
form a uniform syem of jurisprudence -interpretere et concordare legibus est optimus
interpretendi. Our construction here harmonizes the Civil Code with Article l 79 of the Labor
Code.

As Article 179 of the Labor Code provides for liability to the exclusion of others, a claim
for compensation under the Labor Code and a claim for damages under the Civil Code are, under
the current state of laws, inconsistent remedies. Resort to one would necessarily exhaust the
other.

xxx

The -application of the doctrine of election of remedies in Floresca is likewise in accord

with the legal principles enjoining the multiplicity of suits and the splitting of a cause of action.

Indeed, while jurisprudence has acknowledged the differences between compensation and
damages, the seeming synergism between the two is only in principle. In adopting the exclusivity
provision in Article 179, the executive, through PD 1921, treated compensation and damages as
inconsistent remedies. As it stands; therefore, the availment of benefits from the State Insurance
Fund would bar a claim for damages under the Civil Code. These two remedies are not
cumulative.

Similarly, however, Article 179 does not support the conclusion that the compensation
remedy is exclusive. The Floresca ruling on the availability of a remedy for damages, despite the

93
exclusivity provision in the Workmen's Compensation Act and the Labor Code, still rests on
sound foundation.

xxx

Here, the changes in the law show that the compensation remedy under the Labor Code
was not intended to supersede the remedy of damages under the Civil Code. Absent clear
language to the contrary, both remedies must be deemed to co-exist. The remedy itself is not
exclusive. It is the availment of the remedy, which results in the invocation of the employer's
liability, that triggers the application of Article 179 of the Labor Code.

xxx

Consistent with the foregoing, We have held that in the interpretation of labor legislation,
courts "will be guided by more than just an inquiry into the letter of the law as against its spirit
and will ultimately resolve grave doubts in favor of the tenant and worker."153 Thus, in
interpreting and applying the laws, We must take into account the constitutional principles of
social justice. "The constitutional mandate on social justice is addressed not only to the
legislature but also to the two other branches of government."

All considered, We rule that the conclusion reached in Floresca is still good law. The
remedies of compensation and damages are selective. Employees or ilieir heirs may choose
between an action for damages under the Civil Code or a claim for compensation under the
Labor Code. Upon electing a remedy, the employees or their heirs shall be deemed to have
waived the other remedy, save for recognized exceptions, such as when " [t]he choice of the first
remedy was based on ignorance or mistake of fact, which nullifies the choice as it was not an
intelligent choice," or when there are "supervening facts or developments occurring after [the
claimant] opted for the first remedy."

Receipt of Benefits under Social Security laws

We stress, however, that the barring effect under Article 179 of the Labor Code only
pertains to compensation claimed and given pursuant to Title II, Book IV of the Labor Code. As
emphasized by Justice Caguioa during the deliberations of this case, it is necessary to distinguish
if the benefits were received by way of pension under the Social Security Act, or by way of
compensation under Article 200 of the Labor Code, especially since the latter is likewise paid
through the SSS.

Article 179 shall apply if the money was paid as compensation under the Labor Code.
Notably, by express exception, the receipt of such compensation would not bar the recovery of
benefits under other laws whose benefits are administered by the SSS. Hence, the employee's
dependents may receive both.

The nature and purpose of the sickness or disability benefits to which a member of the
System may be entitled under the Social Security Act are not the same as the compensation

94
claimed against the employer under the Labor Code or the Civil Code. The pertinent provisions
of the Labor Code control and specify the compensability of work-related injury or death. On the
other hand, the benefits under the Social Security Act are intended to provide insurance or
protection against the hazards or risks of disability, sickness, old age or death, irrespective of
whether they arose from or in the course of the employment.

xxx

Accordingly, payment to the member employee of social security benefits will not
extinguish the employer's liability under the Civil Code or a claim for compensation under the
Labor Code.

AUGUST
Cornworld Breeding Systems Corporation and/or Laureano C. Domingo Vs. Hon. Court of
Appeals and Lucena M. Alvaro-Ladia
G.R. No. 204075. August 17, 2022

Abandonment and Constructive dismissal;

Immediate filing by the employee of an illegal dismissal complaint negates abandonment

In Demex Rattancraft, Inc. v. Leron, the Court held that although abandonment of work is
not expressly enumerated as a just cause under Article 297 of the Labor Code, jurisprudence has
recognized it as a form of or akin to neglect of duty.

In the instant case, Cornworld contends that that there was no constructive dismissal of
Lucena since she was guilty of abandonment of work, and therefore she is not entitled to any
monetary award.

The Court disagrees.

In Diamond Taxi v. Llamas, Jr., abandonment was characterized as "the deliberate and
unjustified refusal of an employee to resume his employment. It is a form of neglect of duty that
constitutes just cause for the employer to dismiss the employee." In Tamblot Security & General
Services, Inc. v. Item, this Court reiterated that to constitute abandonment of work, two elements
must concur, to wit:

[F]or abandonment of work to exist, it is essential (l) that the employee

must have failed to report for work or must have been absent without valid or
justifiable reason; and (2) that there must have been a clear intention to sever the

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 employer-employee relationship manifested by some overt acts .... Absence must
be accompanied by overt acts unerringly pointing to the fact that the employee
simply does not want to work anymore. And the burden of proof to show that
there was unjustified refusal to go back to work rests on the employer.
(Underscoring in the original)

Guided by the foregoing parameters, We find that Cornworld failed to adduce evidence
of Lucena's alleged abandonment. There was no showing by the company that she committed
overt acts that clearly and unequivocally showed her intention to abandon her job.

On the contrary, sufficient proof was presented by Lucena which indicated that she had
no intention to sever her employment with Cornworld. These consisted of her filing of three
separate applications for sick leave covering the period of January 24, 2009 to March 16, 2009.
Also, Lucena lost no time in filing the instant illegal dismissal case against Cornworld on June
23, 2009, or barely a month from the time she discovered on May 25, 2009 during the Meeting
of the Private Seeds Company in Laguna that two other employees were sent by Cornworld to
represent the company in her stead. Jurisprudence holds that "the immediate filing by the
employee of an illegal dismissal complaint is proof enough of his[/her] intention to return to
work and negates the employer's charge of abandonment. To reiterate and emphasize,
abandonment is a matter of intention that cannot lightly be presumed from certain equivocal acts
of the employee.

xxx

In constructive dismissal cases, the employer is, concededly, charged with the burden of
proving that its conduct and action were for valid and legitimate grounds. Here, Cornworld failed
to overcome its burden to prove that Lucena was validly dismissed.

Loss of trust and confidence as a just cause for termination of employment

Loss of trust and confidence is a just cause for dismissal as provided under Article 282
(c) of the Labor Code. Thus, an employer may terminate an employment for "[f]raud or willful
breach by the employee of the trust reposed in him by his employer or duly authorized
representative." The requisites to validly terminate an employee on this ground are: (i) the
employer must show that the employee holds a position of trust and confidence; and (ii) the
employer must establish the existence of an act justifying the loss of trust and confidence. Thus,
said act must be real, founded on clearly established facts, and the employee's breach of trust
must be willful, intentional, knowingly and purposely done without justifiable excuse.

Therefore, termination of employees on the ground of loss of trust and confidence

likewise requires compliance of procedural and substantive due process. However, We find that
Cornworld failed to substantiate its claim. In particular, this Court finds that the company failed
to show that the act of Lucena was willful, intentional, knowingly and purposely done without
justifiable excuse that would have justified the company's loss of trust and confidence in her.

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 SEPTEMBER

G & S TRANSPORT CORPORATION, Petitioner, versus REYNALDO A. MEDINA,

Respondent. G.R. No. 243768, September 5, 2022

Misconduct as a Just Cause for Termination of Employment

In labor cases, misconduct, as a ground for dismissal, must be serious or of such grave and
aggravated character and not merely trivial or unimportant. To justify termination on the ground of
serious misconduct, the following requisites must concur: (1) the misconduct must be serious; (2) it must
relate to the performance of the employee's duties, showing that the employee has become unfit to
continue working for the employer; and (3) it must have been performed with wrongful intent.
Here, none of the requisites for serious misconduct is present. To reiterate, the CA found that
only a petty quarrel involving shoving or slight pushing transpired between Medina and Pogoy. The same
was "nipped in the bud by the intervention of the security guards on duty and Viggayan. It did not cause
work stoppage nor posed a threat to the safety of the other employees. [G&S] did not show how
[Medina's] misconduct has adversely affected its business, or how [Medina] has become unfit to continue
working for the company." Thus, there was no just cause for the termination of Medina's employment
with G&S.

Procedural Due Process

In the case at bar, the requirements of procedural due process were complied with by G & S. The
records show that Medina was provided several notices to explain, was given the opportunity to submit
his written explanations, and thereafter an administrative hearing was conducted where he was able to
narrate his version of the incident. Medina was even served a second notice of termination in compliance
with the law. Nonetheless, compliance with procedural due process did not validate the termination of
Medina because of the absence of just cause.

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