LABOR LAW CASE DIGEST PART 1
Callanta vs Carnation Philippines
Facts:
> Petitioner Virgilio Callanta was employed by private
respondent Carnation Philippines, Inc. [Carnation, for brevity]
in January 1974 as a salesman in the Agusan del Sur area.
> Five [5] years later or on June 1, 1979, respondent
Carnation filed with the Regional Office No. X of the Ministry
of Labor and Employment [MOLE], an application for
clearance to terminate the employment of Virgilio Callanta on
the alleged grounds of serious misconduct and
misappropriation of company funds amounting to P12,000.00,
more or less.
> Upon approval on June 26, 1979 by MOLE Regional
Director Felizardo G. Baterbonia, of said clearance
application, petitioner Virgilio Callanta's employment with
Carnation was terminated effective June 1, 1979.
> On July 5, 1982, Virgilio Callanta filed with the MOLE,
Regional Office No. X, a complaint for illegal dismissal with
claims for reinstatement, backwages, and damages against
respondent Carnation.
1 dismissal is a more serious violation of the rights of an
> On March 24, 1983, Labor Arbiter Pedro C. Ramos
rendered a decision finding the termination of Callanta's
employment to be without valid cause.
> Respondent Carnation was therefore ordered to reinstate
Virgilio Callanta to his former position with backwages of one
[1] year without qualification including all fringe benefits
provided for by law and company policy, within ten [10] days
from receipt of the decision. It was likewise provided that
failure on the part of respondent to comply with the decision
shall entitle complainant to full backwages and all fringe
benefits without loss of seniority rights.
> On April 18, 1983, respondent Carnation appealed to
respondent National Labor Relations Commission [NLRC]
which in a decision which set aside the decision of the Labor
Arbiter. It declared the complaint for illegal dismissal filed by
Virgilio Callanta to have already prescribed.
> Petitioner contends that since the Labor Code is silent as
to the prescriptive period of an action for illegal dismissal with
claims for reinstatement, backwages and damages, the
applicable law, by way of supplement, is Article 1146 of the
New
Civil Code which provides a four [4]year
prescriptive period for an action predicated upon "an injury to
the rights of the plaintiff" considering that an action for illegal
dismissal is neither a "penal offense" nor a mere "money
claim," as contemplated under Articles 291 and 292,
respectively, of the Labor Code. Petitioner further claims that
an action for illegal
employee as it deprives him of his means of livelihood thus,
it should correspondingly have a prescriptive period longer
than the three 13] years provided for in "money claims."
Issue: whether or not an action for illegal dismissal
prescribes in three [3] years pursuant to Articles 291 and 292
of the Labor Code
Held:
>the instant case, the action for illegal dismissal was filed by
petitioners on July 5, 1982, or three [3] years, one
[1] month and five [5] days after the alleged effectivity date of
his dismissal on June 1, 1979 which is well within
the four [4]year prescriptive period under Article 1146 of the
New Civil Code.
>Even on the assumption that an action for illegal dismissal
falls under the category of "offenses" or "money
claims" under Articles 291 and 292, Labor Code, which
provide for a three year prescriptive period, still, a strict
application of said provisions will not destroy the enforcement
of fundamental rights of the employees.
>As a statutory provision on limitations of actions, Articles 291
and 292 go to matters of remedy and not to the destruction of
fundamental rights. 13 As a general rule, a statute of
limitation extinguishes the remedy only.
>Although the remedy to enforce a right may be barred, that
right may be enforced by some other available remedy which
is not barred. More so, in the instant case, where the delay in
filing the case was with justifiable cause. The threat to
petitioner that he would be charged with estafa if he filed a
complaint for illegal dismissal, which private respondent did
after all on June 22,1981, justifies, the delayed filing of the
action for illegal dismissal with the Regional Office No. X,
MOLE on July 5, 1982.

>Laches will not in that sense strengthen the cause of public
respondent. Besides, it is deemed waived as it was never
alleged before the Labor Arbiter nor the NLRC.
>Public respondent dismissed the action for illegal dismissal
on the sole issue of prescription of actions. It did not
resolve the case of illegal dismissal on the merits.
Nonetheless, to resolve once and for all the issue of the
legality of the dismissal, We find that petitioner, who has
continuously served respondent Carnation for five [5] years
was, under the attendant circumstances, arbitrarily dismissed
from his employment. The alleged shortage in his
accountabilities should have been impartially investigated
with all due regard for due process in view of the admitted
enmity between petitioner and E.L. Corsino, respondent's
auditor. Absent such an impartial investigation, the alleged
shortage should not have been attended with such a drastic
consequence as termination of the employment relationship.
Outright dismissal was too severe a penalty for a first offense,
considering that the alleged shortage was explained to
respondent's Auditor, E.L. Corsino, in accordance with
respondent's accounting and auditing
policies.
Catan VS NLRC
Facts:
2
> Petitioner, a duly licensed recruitment agency, as agent of
Ali and Fahd Shabokshi Group, a Saudi Arabian firm,
recruited private respondent to work in Saudi Arabia as a
steelman
LABOR LAW CASE DIGEST PART 1
> The term of the contract was for one year, from May
15,1981 to May 14, 1982. However, the contract provided for
its automatic renewal
>The contract was automatically renewed when private
respondent was not repatriated by his Saudi employer but
instead was assigned to work as a crusher plant operator. On
March 30, 1983, while he was working as a crusher
plant operator, private respondent's right ankle was crushed
under the machine he was operating
> On May 15, 1983, after the expiration of the renewed term,
private respondent returned to the Philippines. His
ankle was operated on at the Sta. Mesa Heights Medical
Center for which he incurred expenses.
> On September 9, 1983, he returned to Saudi Arabia to
resume his work. On May 15,1984, he was repatriated
> Upon his return, he had his ankle treated for which he
incurred further expenses. On the basis of the provision in the
employment contract that the employer shall compensate the
employee if he
is injured or permanently disabled in the course of
employment, private respondent filed a claim against
petitioner with respondent Philippine Overseas Employment
Administration.
> On April 10, 1986, the POEA rendered judgment in favor of
private respondent.
> On appeal, respondent NLRC affirmed the decision of the
POEA.
> Not satisfied with the resolution of the POEA, petitioner
instituted the instant special civil action for certiorari,
alleging grave abuse of discretion on the part of the NLRC.
> Petitioner claims that the NLRC gravely abused its
discretion when it ruled that petitioner was liable to private
respondent for disability benefits since at the time he was
injured his original employment contract, which
petitioner facilitated, had already expired. Further, petitioner
disclaims liability on the ground that its agency
agreement with the Saudi principal had already expired when
the injury was sustained.
Issue: W/N Petitioner is liable to respondent for disability
benefits despite the renewal of the original contract.
Held:
> Private respondents contract of employment can not be
said to have expired on May 14, 1982 as it was automatically
renewed since no notice of its termination was given by either
or both of the parties at least a month before its expiration, as
so provided in the contract itself. Therefore, private
respondent's injury was sustained during the lifetime of the
contract.
> A private employment agency may be sued jointly and
solidarily with its foreign principal for violations of the
recruitment agreement and the contracts of employment:

Sec. 10. Requirement before recruitment. Before
recruiting any worker, the private employment agency
shall submit to the Bureau the following documents:
(a) A formal appointment or agency contract
executed by a foreign based employer in favor of the
license holder to recruit and hire personnel for the former
...
xxx xxx xxx
2. Power of the agency to sue and be sued jointly and
solidarily with the principal or foreignbased employer for
any of the violations of the recruitment agreement and
the contracts of employment. [Section 10(a) (2) Rule V,
Book I, Rules to Implement the Labor Code].
> Even if indeed petitioner and the Saudi principal had
already severed their agency agreement at the time private
respondent was injured, petitioner may still be sued for a
violation of the employment contract because no notice of the
agency agreement's termination was given to the private
respondent:
> Art 1921. If the agency has been entrusted for the purpose
of contra with specified persons, its
revocation shall not prejudice the latter if they were not given
notice thereof.
3 medical expenses when the said
>affirmed the award of
expenses were the consequence of private respondent's
negligence in returning to work in Saudi Arabia when he knew
that he was not yet medically fit to do so.
Again, there is no merit in this contention.
LABOR LAW CASE DIGEST PART 1
>No evidence was introduced to prove that private
respondent was not medically fit to work when he returned to
Saudi Arabia. Exhibit "B", a certificate issued by Dr. Shafquat
Niazi, the camp doctor, on November 1, 1983,
merely stated that private respondent was "unable to walk
properly, moreover he is still complaining [of] pain
during walking and different lower limbs movement" [Annex
"B", Reply Rollo, p. 51]. Nowhere does it say that he
was not medically fit to work.
> 5. Because of its financial difficulties, AlgosaibiBison,
Further, since petitioner even assisted private respondent in
returning to work in Saudi Arabia by purchasing his
ticket for him [Exhibit "E" Annex "A", Reply to Respondents'
Comments], it is as if petitioner had certified his
fitness to work.
Feagle Construction Corp. Vs.Gayda et. Al
Facts:
1.Private respondents have been employed with Algosaibi
Bison,Ltd. in Saudi Arabia for three to five years working on
construction projects for the Kingdom of Saudi Arabia.
2. Sometime in 1983, Algosaibi Bison,
Ltd. started encountering financial difficulties because of the
drop in the price of oil. As a result, the Kingdom of Saudi
Arabia encountered financial difficulties in paying Algosaibi
Bison, Ltd. for its construction projects.
3. Starting in 1983, the remittance of the allotments of the
beneficiaries of Filipino workers employed with Algosaibi
Bison, Ltd. was delayed. Although all the allotments for 1983
and 1984 were eventually paid, all these payments were
delayed.
4. During all these years petitioner never charged Filipino
workers like private respondents a single centavo for sending
them to work for Algosaibi Bison,Ltd. Petitioner advanced all
mobilization expenses out of its funds.
Ltd. could not even reimburse petitioner for the mobilization
expenses petitioner advanced, such as passport fees,
medical fees, and visa application fees. Petitioner insisted
that AlgosaibiBison, Ltd. should give top
priority to the payment of the wages and the allotments of the
Filipino workers employed with it.
6. Because of this development, petitioner decided to stop
sending back Filipino workers to work with AlgosaibiBison,
Ltd. Workers are given a one month vacation after a year with
reentry visa.
7. Sometime in July, 1984, the Filipino workers employed with
AlgosaibiBison,Ltd. who had returned to Manila, including
private respondents, requested for a meeting with the
management of petitioner. About forty (40) Filipino workers
attended the meeting. During the meeting, the workers
requested petitioner to return them to their job site in Saudi
Arabia. Mr. Florentino B. Aguila, the president of petitioner,
informed the workers that petitioner did not

want to send back any workers to Saudi Arabia because of
the big risk due to the financial difficulties of Algosaibi Bison,
Ltd.
8. However, the workers pleaded with Mr. Florentino B. Aguila
to send them back to Saudi Arabia. They explained that they
were jobless in the Philippines, because of the depressed
economic condition of the country. Rather than remain
jobless, they would rather to take a chance in Saudi Arabia.
They assured petitioner that they were willing to assume the
risk in case the remittance of their salaries would be delayed.
They emphasized that they were willing to sign a written
statement indicating that they would not hold petitioner liable
for any delay or nonpayment of their salaries and any
amounts due them from AlgosaibiBison, Ltd. In accordance
with their commitment, the said workers, including private
respondents, signed a Statement .... Moreover, the workers
stated they would seek the help of Saudi labor
authorities individually in the event they would not be paid.
9. It was under the foregoing circumstances that petitioner
reluctantly agreed to send back private respondents to Saudi
Arabia to help them in their dire financial need if they would
sign the aforementioned 'Statement' ... before they leave for
Saudi Arabia.
10. While the Filipino workers were in Saudi Arabia, they
received their salaries directly from AlgosaibiBison, Ltd.
4 14. On October 3, 1986, private respondents filed with the
11. When AlgosaibiBison, Ltd. went into bankruptcy in 1986,
all the Filipino workers in its employ, including private
respondents dealt with the liquidator directly and in their
individual capacities. They filed their claims with the liquidator,
and the liquidator issued to each of
LABOR LAW CASE DIGEST PART 1
them a certificate stating the amount payable to each of them
as soon as funds are available. The said Filipino workers,
including private respondents, agreed that the liquidator
would pay them directly and individually through their bank
accounts in the Philippines. ...
12. Just the same, to assist the workers, petitioner has written
the liquidator to follow up the claims of the Filipino workers,
and the liquidator has replied to it. The reply of the liquidator
confirmed the individual agreement of the said workers,
including private respondents, that they would be paid by the
liquidator directly and individually. Thus, petitioner has
nothing to do with the remittance of the payments due private
respondents. In fact, the liquidator even refused to furnish the
petitioner a list of their individual claims and corresponding
amounts
due each of them. The liquidator considered these
information confidential and privy to said workers. ...
13. Under the law of Saudi Arabia, the claims of the Filipino
workers of AlgosaibiBison, Ltd. has first priority for payment in
the bankruptcy proceeding. Article 15 of the Labor Law of
Saudi Arabia provides:
The amounts to which the workman or his dependents are
entitled under the provisions of this Law shall be considered
first class privileged debts, and for the recovery thereof the
workman or his heirs shall have a priority rights over all the
employer's property.'
Philippine Overseas Employment Administration a Complaint
against petitioner for the payment of their claims with the
liquidator of AlgosaibiBison, Ltd.
15. On December 2, 1986, petitioner filed its Answer. In its
Answer, it pointed out that it was never furnished with a copy
of any Complaint from private respondent Artemio Hulingnga.
16. On July 20, 1987, the Philippine Overseas Employment
Administration rendered a Decision in favor of private
respondents, including respondent Artemio Hulingnga,
although petitioner was never furnished with a copy of his
Complaint.
17. On August 7, 1987, petitioner appealed to respondent
National Labor Relations Commission (hereinafter referred to
as respondent Commission).
18. On January 29, 1988, respondent Commission rendered
a Decision affirming the Decision of the Philippine Overseas
Employment Administration with the modification that the
'president' and the 'vice president for administration and
finance' of petitioner were exempted
from liability for the claims of private respondents. ...
18. On February 11, 1988, petitioner filed a Motion for
Reconsideration. ...
19. On February 29, 1988, respondent Commission issued a
Resolution denying the Motion for Reconsideration. ...
20. On March 8, 1988, before receipt of the aforementioned
Resolution of respondent Commission, petitioner filed a
Supplemental Motion for Reconsideration. Petitioner received
the said Resolution of respondent Commission only after
petitioner had filed its

Supplemental Motion for Reconsideration."
Issue:
whether or not petitioner may be held solidarily liable with the
foreign employer for any unpaid claims of private respondents
against their foreign principal employer for any unpaid claims
of private respondents against their foreign principal employer
even as they have a stipulation to this effect
Held:
We agree with Public Respondents that the general rule as
provided for in Section 1, Rule II of the rules and regulations
of the Philippine Overseas Employment Administration is that
every licensed private recruitment agency shall be jointly and
solidarity liable with the employer for all claims and liabilities
which may arise in connection with the implementation of the
contract of employment.
In this case, however, We find it necessary to deviate from
the general rule. First, because of changed
circumstances, and second, because of individual
agreements between petitioner and private
respondents which cannot be considered void because the
same cannot be considered contrary to law.
It is the uncontradicted contention of petitioner that 13 of
private respondents filed
5 their claims for
salaries due in January, February and March of 1986, when
their contracts of employment expired in
1985.
LABOR LAW CASE DIGEST PART 1
It is also clear that private respondents executed new and
different contracts of employment directly
with AlgosaibiBison, Ltd. without the participation and consent
of the petitioner. The former contracts
with the petitioner expired and private respondents entered
into new contracts of employment with the
AlgosaibiBison,Ltd., without the participation of petitioner.
The claims of private respondents were made directly with
the liquidator of AlgosaibiBison,Ltd. And they agreed to wait
for the promised payment. Again the petitioner had nothing to
do with those claims.
We simply cannot ignore that petitioner was reluctant to send
the private respondents back to Saudi
Arabia because as early as 1983, the AlgosaibiBison,
Ltd. started encountering financial difficulties
because of the drop in the price of oil.
Private respondents were the ones who insisted that they be
allowed to resume employment. They were informed of the
risks involved relating to the financial reverses of the
employer. They insisted to return to Saudi Arabia and they
agreed to sign individual statements, which they did, to the
effect that each one of them did not hold petitioner
responsible for delay or nonpayment of their salaries and any
amounts due them from AlgosaibiBison, Ltd.
GSIS vs Valenciano
Facts:
>The [respondent], Jaime Valenciano, started his career in
government on November 8, 1977 as Clerk II of the Philippine
Ports Authority (PPA), South Harbor, Port Area, Manila. He
was promoted to Clerk B, Traffic Systems Implementation
Specialist, Terminal Operations Officer, Terminal Operations
Officer A, and, finally, as Senior Terminal Operations Officer in
1993.
>On March 8, 1999, the [respondent] was confined at Medical
Center Manila, Ermita, Manila due to
cough, fever and hemoptysis (the coughing out of blood)
where his ailment was diagnosed as
Pulmonary Tuberculosis III.
>Sometime in April, 2001, the [respondent] felt chest pain.
Immediate consultative diagnosis taken at
The Doctors Hospital, Bacolod City found him to be suffering
from Bronchial Asthma, Chronic
Intermittent Infero Lateral Wall, Non ST elevation Myocardial
Infarction Dyslipidemia.
>Respondent filed with petitioner Government Service
Insurance System (GSIS), a claim for
compensation benefits under PD No. 626.
>However, petitioner denied the respondents claim on
theground that the ailments, Hypertension, Cerebrovascular
Accident (CVA), Diabetes Mellitus type
II are not considered occupational diseases neither is there
any showing that his duties have increased the risk of
contracting said ailments.
>Respondents appeal to the ECC was dismissed for lack of
merit on the grounds that hypertension, pneumonia and

pulmonary tuberculosis are mere complications of his primary
ailment, diabetes mellitus, which is not an occupational
disease hence, not compensable. Even if
cerebrovascular accident is an occupational disease under
Annex A of the Amended Rules on Employees
Compensation, the ECC held that its compensability requires
compliance with all the conditions set forth in the rules which
respondent failed to show.
>Court of Appeals upheld the ruling of the ECC however,
according to the appellate tribunal, pneumonia and
pulmonary tuberculosis are respiratory diseases which may
be caused by the environment or occupation
depending on the level of sanitation of the surroundings.
>In the course of his employment,
respondent was stationed in the Port of Manila which is
located in an area where sanitation is
questionable. His work required him to mingle with people
from different walks of life. His job also demanded a lot of
mental work thereby making him susceptible to stress and
fatigue that could weaken his resistance and cause
hypertension which in turn could trigger a cerebrovascular
accident or stroke.
LABOR LAW CASE DIGEST PART 1
>The Court of Appeals thus held that respondent is entitled to
claim compensation benefits because pneumonia, pulmonary
tuberculosis and hypertension are among the occupational
diseases listed in Annex A of the Amended Rules on
Employees Compensation.
Issue:
whether respondents hypertension, pneumonia or pulmonary
tuberculosis is compensable under the Employees
Compensation Act.
Held:
Section 1 (b), Rule III of the Rules Implementing PD No. 626,
as amended, states that for the sickness and the resulting
disability or death to be compensable, the same must be the
result of an occupational disease listed under Annex A with
the conditions set therein satisfied otherwise, proof must be
shown that the risk of contracting the disease is increased by
the working conditions.
We find that respondents hypertension is a complication of
his primary ailment which is diabetes mellitus, a
nonoccupational disease, hence not compensable
As regards pneumonia, and pulmonary tuberculosis,
both are listed in Annex A of the Amended Rules on
Employees Compensation as occupational diseases and are
deemed compensable. As found by the appellate court, the
possible cause of these diseases may be environmental or
occupational depending on the level of sanitation of the
surroundings and the health condition of the persons he
mingles with.
>Respondents work entailed that he be stationed in the Port
of Manila and the South Harbor, areas whose sanitation and
overall environmental condition are suspect. Moreover,
respondents duties required that he mingle with numerous
persons who may have been carriers of the diseasecausing
virus. The nature of his job demanded long working hours to
maintain the efficient and systematic release of outgoing
vessels and the reception of incoming vessels.
People vs Turda
Facts:
>