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DE LA SALLE UNIVERSITY COLLEGE OF LAW

Lasallian Commission on Bar Operations 2018

LABOR LAW AND SOCIAL LEGISLATION


Justice Del Castillo Digests
Chel Sy Tet Valeza Andrei Elinzano
LCBO Chairperson Academic Affairs Labor Law and Social
Chairperson Legislation Chairperson
Nico Garcia
LCBO Vice Chair for Janine Tutanes Kella Ortega
Internals Rod Zantua Labor Law and Social
Academic Affairs Deputy Legislation Deputy
Steph Griar Chairpersons Chairperson
LCBO Vice Chair for
Externals Roman Castillo
Labor Law I Subject Head
Pat Costales
LCBO Executive Secretary AA Payad
Labor Law II Subject Head
Ces Naga
LCBO Executive Treasurer
Labor Law and Social Legislation Justice Del Castillo Digests

RECRUITMENT AND PLACEMENT

PEOPLE v. MARITESS MARTINEZ


G.R. No. 158627| 5 March 2010
Illegal Recruitment

DOCTRINE: An individual who illegally recruits another for employment abroad shall be meted the
penalty of life imprisonment and fined and could also be held liable for the crime of Estafa.

FACTS:
• Maritess Martinez and her daughter, Jenilyn, were charged with seven counts of Estafa.
• Maritess falsely represented herself to have capacity to send complainants as factory workers in
South Korea; that said complainants parted with their money as payment for placement and
processing fees.
• Together with her son, Julius, the three of them were also charged with Illegal Recruitment in large
scale. They represented themselves to have the capacity to contract, enlist and transport Filipino
workers for employment abroad for a fee recruit without the necessary license or authority from
POEA.
• Maritess claimed that she merely assisted complainants in their applications with the recruitment
agency, “JH Imperial Organization Placement Corp.”

ISSUE: Whether Maritess Martinez is guilty of illegal recruitment in large scale.

HELD: Yes, she is guilty. The elements of the crime of illegal recruitment: (a) offender has no valid license
or authority required by law to enable him to lawfully engage in recruitment and placement of workers;
(b) offender undertakes any of the activities within the meaning of “recruitment and placement” under
Article 13b of the Labor Code or any of the prohibited practices under Article 34 (now Sec. 6 of RA 8042);
and (c) offender committed the same against three or more persons, individually or as a group. Here, the
prosecution satisfactorily established that Maritess was not a licensee or holder of authority to deploy
workers abroad. By this fact alone, she is deemed to have engaged in illegal recruitment and the same was
committed in large scale because it was carried out against the four complainants.
• Although JH Imperial was a holder of a valid license to deploy workers abroad, there was no
evidence that the agency authorized Maritess to act as its agent.
• Maritess was also guilty of four counts of estafa. The elements of which are: (a) the accused
defrauded another by abuse of confidence or by means of deceit; and (b) the offended party
suffered damage or prejudice capable of pecuniary estimation.

NAHAS v. OLARTE
G.R. No. 169247 | 2 June 2014
Illegal Recruitment

DOCTRINE: If the recruitment/placement agency is a juridical being, the corporate officers and directors
and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages.

FACTS:
• Olarte was deployed as a domestic helper to Hail, Saudi Arabia for a contract term of two years.

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Labor Law and Social Legislation Justice Del Castillo Digests

• In the succeeding months, Olarte was diagnosed to be suffering from ostro-arthritis.


• Olarte requested her employer, Fahad, to allow her go home to the Philippines but such was
denied. At that point, Fahad was already frequently maltreating her since she could no longer
accomplish all the household chores due to her illness.
• Olarte had the chance to go home when she was allowed to go to Riyadh wherein she sought refuge
at the Philippine Embassy.
• Olarte filed a Complaint for illegal dismissal, damages, attorney’s fees and refund of placement
fees against her foreign employer Fahad and Nahas/PETRA/Royal Dream.

ISSUE: Whether or not Nahas, as the manager and owner of the recruitment agency, can be held liable?

HELD: Yes, if the recruitment/placement agency is a juridical being, the corporate officers and directors
and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages. Inconsistent and unsupported as they are, the labor
tribunals and the CA correctly rejected the contentions of Nahas. It is worth stating that recruitment
agencies, as part of their bounden duty to protect the welfare of the Filipino workers sent abroad from
whom they take their profit, should in conscience not add to the misery of maltreated and abused Filipino
workers by denying them the reparation to which they are entitled. Instead, they must "faithfully comply
with their government prescribed responsibilities" and be the first to ensure the welfare of the very people
upon whose patronage their industry thrives.

PEOPLE V. ABELLANOSA
G.R. No. 214340 | 19 July 2017
Illegal Recruitment

DOCTRINE: Recruitment becomes illegal when undertaken by non-licensees or non-holders of authority,


and, when committed against a minimum of three persons, then it qualifies as illegal recruitment in large
scale.

FACTS:
• Abellanosa was charged with illegal recruitment in large scale, by falsely representing herself to
possess authority to recruit job applicants for employment abroad without first having secured the
required authority from the DOLE/POEA.
• Abellanosa denied meeting any of the private complainants while she was in Iloilo and maintained
that her purpose in going there was only to assist Shirley Tabema in processing the latter’s business
license. She averred that it was Shirley who was the recruiter.
• RTC found her guilty of illegal recruitment in large scale as the prosecution was able to establish
that she engaged in recruitment activities without a valid license or authority when she represented
herself to private complainants as a recruiter and promised their deployment abroad after receipt
of processing and placement fees despite work not being given thereafter. CA affirmed.

ISSUE: Whether or not Abellanosa is guilty of illegal recruitment.

HELD: Yes, the prosecution was able to establish that Abellanosa was engaged in illegal recruitment in
large scale. Recruitment becomes illegal when undertaken by non-licensees or non-holders of authority. It
was proved that Abellanosa was a non-licensee or non-holder of authority to recruit workers for
deployment abroad; she offered or promised employment abroad to private complainants; she received
monies from private complainants purportedly as placement or processing fees; that private complainants
were not actually deployed to Brunei; that despite demands, Abelanosa failed to reimburse or refund to

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Labor Law and Social Legislation Justice Del Castillo Digests

private complainants their monies; and that she committed these prohibited acts against three or more
persons, individually or as a group. In addition, it was proved that appellant does not have any license or
authority to recruit workers for overseas employment as shown by the certification issued by the POEA.
She also recruited seven persons so it was considered illegal recruitment in large scale.

LABOR STANDARDS

PIGCAULAN v. SECURITY AND CREDIT INVESTIGATION, INC.


G.R. No. 173648 | 16 January 2012
Conditions of Employment

DOCTRINE: The employer has the burden of proving that it has paid the benefits of his employees.

FACTS:
• Canoy and Pigcaulan were both employed by SCII as security guards, and were assigned to
different clients. They filed complaints with the LA for underpayment of salaries and non-payment
of overtime, holiday, rest day, service incentive leave and 13th month pay.
• Respondent employer maintained that Canoy and Pigcaulan were paid their just salaries and other
benefits under the law. In support, copies of payroll listing and lists of employees who received
their 13th month pay were presented.
• The LA and NLRC however, ruled in favor of the petitioner employees, awarding them with
overtime pay and other benefits. Both relied on the itemized computations submitted by the
petitioners which they considered as representative of daily time records to substantiate the award
of salary differentials.

ISSUE: Whether the LA and NLRC award of salary differentials was proper

HELD: No. The Court ruled that there was no substantial evidence to support the grant of overtime pay.
The handwritten itemized computations were ruled as self-serving, unreliable, and unsubstantial evidence
to sustain the grant of salary differentials, particularly overtime pay. There was no way to verify the truth
of the handwritten entries as they were unsigned and unauthenticated. The Court found nothing in the
records which could support Pigcaulans contention that he had rendered service beyond eight hours to
entitle him to overtime pay and during Sundays to entitle him to restday pay.

• They were however adjudged to be entitled to holiday pay, service incentive leave pay, and 13 th
month pay as per Art. 94 (right to holiday pay) and Art. 95 (right to service incentive leave), due to
the failure of SCII to prove that it had already paid the claims of the petitioners. Under the LC,
Pigcaulan is entitled to his regular rate on holidays even if he doesn’t work under Art. 94. The
express provision of Art. 95 entitles him to service incentive leave benefit for he rendered service
for more than a year already. Under PD 851, he should also be paid his 13th month pay.

WESLEYAN UNIVERSITY v. WESLEYAN UNIVERSITY FACULTY AND STAFF


ASSOCIATION
G.R. No. 181806 | 12 March 2014
Wages

DOCTRINE: A collective bargaining agreement cannot be unilaterally changed.

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Labor Law and Social Legislation Justice Del Castillo Digests

FACTS:
• Wesleyan University and Union signed a 5-year CBA.
• A Memorandum providing guidelines on the implementation of vacation and sick leave credits as
well as vacation leave commutation was issued by petitioner.
• Union President wrote a letter to the president of the university informing him that respondent is
not amenable to the unilateral changes made by petitioner and questioning the guidelines for being
contrary to the existing practices and the CBA.
• Petitioner advised respondent to file a grievance complaint on the implementation of the vacation
and sick leave policy during their Labor Management Committee Meeting. Petitioner announced
therein its plan of implementing a one-retirement policy which was unacceptable to respondent.
• Unable to settle their differences at the grievance level, the parties referred the matter to a
Voluntary Arbitrator.
• Respondent submitted affidavits showing that there is an established practice of giving two
retirement benefits: one from the Private Education Retirement Annuity Association (PERAA) Plan
and another from the CBA Retirement Plan.

ISSUE: Whether or not the CBA provision regarding retirement benefits may be unilaterally amended.

HELD: No, the Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits employers
from eliminating or reducing the benefits received by their employees. This rule, however, applies only if
the benefit is based on an express policy, a written contract, or has ripened into a practice. To be considered
a practice, it must be consistently and deliberately made by the employer over a long period of time. An
exception to the rule is when “the practice is due to error in the construction or application of a doubtful or
difficult question of law.”The error, however, must be corrected immediately after its discovery; otherwise,
the rule on Non-Diminution of Benefits would still apply. In the case, the practice of giving two retirement
benefits to petitioner’s employees is supported by substantial evidence. The Memorandum dated August
16, 2005 is contrary to the existing CBA. Considering that the Memorandum dated August 16, 2005 imposes
a limitation not agreed upon by the parties nor stated in the CBA, we agree with the CA that it must be
struck down.

ETOM, JR. v. AROMA LODGING HOUSE


G.R. No. 192955| 9 November 2015
Wages

DOCTRINE: Employer must prove payment of minimum wage, 13 th month pay, and holiday pay; and
not merely deny the employee's accusation of non-payment on the basis of the latter's own declaration.

FACTS:
• Edilberto Etom filed a complaint for illegal dismissal against Aroma Lodging House and claimed
that he was employed as a roomboy in 1997, with a salary less than the minimum wage. His
working hours were from 5:00 am – 11:00pm from Monday to Saturday, including holidays.
• Accordingly, one day, Aroma refused to allow him to refused to allow him to report work, and
that he was not informed of any violation which would warrant his dismissal or given an
opportunity to defend himself against an allegation of the same.
• Aroma denies Etom’s claims, saying that they paid him minimum wage, and that there were a
number of instances where Etom was involved in fights while working. Also, they claim that they
served a memorandum on Etom to explain his act of chasing a co-employee with a knife; however,
he refused to receive the memorandum.

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Labor Law and Social Legislation Justice Del Castillo Digests

• When Aroma appealed the case to the CA, they alleged that Etom is not entitled to salary
differential, holiday pay, and 13th month pay because Etom admitted in a notarized affidavit,
submitted as evidence in a separate criminal case filed against him, that he had been receiving
wages and other benefits in accordance with law.

ISSUE: Whether or not Etom is entitled to his money claims?

HELD: Yes, Etom was legally dismissed, but he is entitled to his money claims. As a rule, once the employee
has asserted with particularity in his position paper that his employer failed to pay his benefits, it becomes
incumbent upon the employer to prove payment of the employee's money claims. In fine, the burden is on
the employer to prove payment, rather than on the employee to establish non-payment.
• While a notarized document is presumed to be regular such presumption is not absolute and may
be overcome by clear and convincing evidence to the contrary.
• The fact that a document is notarized is not a guarantee of the validity of its contents.

GRAND ASIAN SHIPPING LINES v. GALVEZ


G.R. No. 178184 | 19 January 2014
Leaves

DOCTRINE: Managerial employees are excluded from the coverage of the law regarding conditions of
employment which include hours of work, weekly rest periods, holidays, service incentive leaves and
service charges.

FACTS:
• GASLI is engaged in in transporting liquified petroleum gas (LPG) from Petron Corp.’s refinery in
Bataan to Petron’s Plant in Pasig and Petron’s Depot in Cavite.
• Respondents are crewmembers of one of GASLI’s vessels.
o Managerial employees: Galvez as Captain; Gruta as Chief Engineer
o Rank-and-file employees: Arguelles as Radio Operator; Batayola, Fresmillo and Noble as
Able Seamen; Dominico and Nilmao as Oilers; and Austral as 2nd Engineer
• It was reported that respondents were committing an illegal activity aboard the vessel.
o Substantial volume of fuel oil is unconsumed and stored in the vessel’s fuel tanks.
However, respondents would misdeclare it as consumed. Then, the saved fuel oil is
siphoned and sold to other vessels out at sea usually at nighttime. Respondents would
then divide among themselves the proceeds of the sale.
• GASLI initially placed respondents under preventive suspension; but after administrative hearing,
decided to terminate them from employment.
o GASLI claims that a prima facie case of qualified theft, and the Information for qualified
theft constituteas reasonable ground to believe that respondents were responsible for the
pilferage of diesel fuel oil, which renders them unworthy of the trust and confidence
reposed on them.
• Respondents filed separate complaints for illegal dismissal.

ISSUE: Whether or not Galvez and Gruta, who are managerial employees, are entitled to holiday pay,
service incentive leave pay and premium pay for holiday and rest day.

HELD: No, Article 82 of the Labor Code specifically excludes managerial employees from the coverage of
the law regarding conditions of employment which include hours of work, weekly rest periods, holidays,
service incentive leaves and service charges. Galvez and Gruta, as managerial employees, are not entitled
to their claims for holiday pay, service incentive leave pay and premium pay for holiday and restday.

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ISSUE: Whether or not Arguelles, Batayola, Fresnillo, Noble, Dominico, Nilmao and Austral, who are rank-
and-file employees, are entitled to holiday pay, service incentive leave pay and premium pay for holiday
and rest day.

HELD: No, their claims for holiday pay, premium pay for holiday and restday, overtimepay and service
incentive leave pay cannot be granted. In computing for their salary, GASLI use 365 days as divisor. Hence,
the rank-and-file employees are paid all the days of the month, which already include the benefits they
claim. Further, as for overtime pay and premium pay for holidays and restdays, no evidence was presented
to prove that they rendered work in excess of the regular eight working hours a day or worked during
holidays and restdays. In the absence of such proof, there could be no basis to award these benefits. For the
claim of service incentive leave pay, respondents did not specify what year they were not paid such benefit.
In addition, records show that they were paid their vacation leave benefits. Thus, in accordance with Article
95 of the Labor Code, respondents can no longer claim service incentive leave pay.

MEDLINE MANAGEMENT, INC. v. ROSLINDA


G.R. No. 168715 | September 15, 2010
Special Groups of Employees

DOCTRINE: Money claims to employer must be brought within 3 years from the time the cause of action
occurs pursuant to Article 291 – the law governing the prescription of money claims of seafarers, a class of
overseas contract workers.Also, the death of an employee should occur during the effectivity of the
employment contract in order to avail of death benefits.

FACTS
• Juliano Roslinda was hired by petitioner Medline Management, Inc. to work on board the vessel.
Months after his repatriation, Juliano consulted a Dr. complaining about abdominal distention. He
was required hemodialysis.
• Juliano died so, his wife & son filed a complaint against MMI and GSA for payment of death
compensation and reimbursement of medical expenses.
• Petitioners contended that the action has already prescribed because it was filed three years, seven
months and 22 days from the time the deceased seafarer reached the point of hire.

ISSUE: Whether or not the claim is barred by prescription as it was filed beyond the one-year prescriptive
period provided by the POEA Standard Employment Contract.

HELD: No, Article 291 is the law governing the prescription of money claims of seafarers, a class of overseas
contract workers. This law prevails over Section 28 of the Standard Employment Contract for Seafarers
which provides for claims to be brought only within 1 year from the date of the seafarer’s return to the
point of hire, which was declared null and void. The applicable provision is Article 291 of the Labor Code,
it being more favorable to the seafarers and more in accord with the State’s declared policy to afford full
protection to labor. The prescriptive period is thus,3 years from the time the cause of action accrues.
Therefore, the claim of respondents has not yet prescribed, since the complaint was filed on September 4,
2003, while the cause of action accrued on August 27, 2001 when Juliano died. Hence, the claim was filed
within the 3-year prescriptive period.

ISSUE: Whether or not respondents are entitled to the death benefits.

HELD: No, respondents are not entitled to the death benefits provided under the POEA Standard
Employment Contract. In order to avail of death benefits, the death of the employee should occur during
the effectivity of the employment contract. The death of a seaman during the term of employment makes

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Labor Law and Social Legislation Justice Del Castillo Digests

the employer liable to his heirs for death compensation benefits. Juliano did not die while he was under
the employ of petitioners. His contract of employment ceased when he was discharged in 2000. He died in
2001 or more than a year after the expiration of his contract. Thus, his beneficiaries are not entitled to the
death benefits under the Standard Employment Contract for Seafarers.

PHIL. TRANSMARINE CARRIERS, INC. (PTC) v. ALIGWAY


G.R. No. 201793 | 16 September 2015
Special Groups of Employees

DOCTRINE: Under Section 20(B) of the 2000 Philippine Overseas Employment Administration-Standard
Employment Contract (POEA-SEC), for disability to be compensable, (1) the seafarer’s injury or illness
must be work-related; and (2) the work-related injury or illness must have existed during the term of his
employment contract. A person who claims entitlement to the benefits provided by law must establish his
right thereto by substantial evidence or “such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.” The Court cannot grant a claim for disability benefits without such
substantial evidence because to do so would be offensive to due process.

FACTS:
• PTC, in behalf of its foreign principal, employed Aligway as chief cook on board the vessel Amasis.
Aligway’s employment contract was for nine months.
• Aligway alleged that before his deployment, he was declared fit to work in a preemployment
medical examination. Then, while aboard the vessel, Aligway suffered from “vomiting, anorexia,
weight loss, and palpitations followed by dizziness and lightheadedness.”
• As a result, he was medically repatriated. This condition allegedly rendered him incapacitated to
work as a seafarer, but the PTC refused to pay him disability benefits.

ISSUE: Whether or not Aligway was entitled to disability benefits.

HELD: No, because Aligway did not suffer from an occupational disease.For disability to be compensable,
(1) the seafarer’s injury or illness must be work-related; and (2) the work-related injury or illness must have
existed during the term of his employment contract. Also, a person who claims entitlement to the benefits
provided by law must establish his right thereto by substantial evidence or such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion. The Court cannot grant a claim for
disability benefits without such substantial evidence because to do so would be offensive to due process.In
this case, considering that Aligway did not suffer from an occupational disease — or such diseases listed
under Section 32-A of the 2000 POEA-SEC — it stands to reason that to be entitled to disability benefits, he
must establish that he suffered from a work related injury or illness. Here, Aligway failed to discharge this
burden. He failed to prove the required causal connection between his stomach cancer and his work as
chief cook aboard the vessel. Thus, he is not entitled.

MAGSAYSAY MARITIME CORP. (MMC) v. CRUZ


G.R. No. 204769 | 6 June 2016
Special Groups of Employees

DOCTRINE: The company-designated doctor is expected to arrive at a definite assessment of the seafarer’s
fitness to work or to determine his disability within a period of one hundred twenty (120) or two hundred
forty (240) days from repatriation. If after the lapse of the 120/240-day period the seafarer remains
incapacitated and the company-designated physician has not yet declared him fit to work or determined
his degree of disability, the seafarer is deemed totally and permanently disabled.

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FACTS:
• MMC, in behalf of its foreign principal, employed Cruz as housekeeping cleaner on board the
vessel Costa Fortuna. Cruz’s employment was for 8 months with 3 month extension upon mutual
consent of the parties.
• While lifting heavy objects in the course of performing his duties, Cruz experienced low back pain.
As a result, he was medically repatriated and was immediately referred Dr. Agbayani, the
company-designated doctor. Thereafter, Dr. Agbayani declared Cruz’s illness as work-related.
• Cruz, in turn, received sickness allowance for 120 days. Cruz filed a Complaint for permanent and
total disability benefits, sickness allowance, damages and attorney’s fees against MMC, among
others.

ISSUE: Whether or not Cruz can be presumed totally and permanently disabled thereby entitling him to
maximum benefits under the employment contract.

HELD: Yes, the presumption stands. The company-designated doctor is expected to arrive at a definite
assessment of the seafarer’s fitness to work or to determine his disability within a period of one hundred
twenty (120) or two hundred forty (240) days from repatriation. If after the lapse of the 120/240-day period
the seafarer remains incapacitated and the company-designated physician has not yet declared him fit to
work or determined his degree of disability, the seafarer is deemed totally and permanently disabled. Here,
it is undisputed that Cruz required medical treatment even after the lapse of 120 days from repatriation.
As such, Dr. Agbayani should have made his definite assessment on Cruz’s condition within the aforesaid
240-day period. Unfortunately, Dr. Agbayani failed to timely issue a declaration as he only issued an
assessment on Cruz’s disability on June 1, 2009, almost one year from the latter’s repatriation. By operation
of law, Cruz is deemed permanently and totally disabled and is thus entitled to full disability
compensation.

HERNANDEZ v. CROSSWORLD MARINE SERVICES, INC., MYKONOS


SHIPPING CO., LTD. AND DIAZ
G.R. No. 209098 | 14 November 2016
Special Groups of Employees

DOCTRINE: By affixing his signature upon the Conditional Satisfaction of Judgment, Receipt of Payment,
and Affidavit, petitioner effectively surrendered all his rights and waived all his claims and causes of action
in all jurisdictions, and in exchange for nothing. However, the law does not consider as valid any
agreement to receive less compensation than what a worker is entitled to recover nor prevent him from
demanding benefits to which he is entitled.

FACTS:
• Hernandez has been working continuously for the Respondents since 14 November 2005 under
different employment contracts covering the latters’ several ocean-going vessels.
• On 7 October 2008, Hernandez was once more engaged by the respondents to work as Chief Cook
aboard the vessel M/V Nikomarin, for a period of 9 months—which was extended for an
additional 5 months.
• With a view to serving respondents anew under a new contract, Hernandez was made to undergo
a pre-employment medical examination and he was found to be suffering from hypertension and
diabetes mellitus. He was declared fit for duty and required to take maintenance medication.
However, respondents deferred his employment on account of his state of health.

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• In 2011, Hernandez consulted two separate physicians who turned out the same diagnosis: that he
was suffering from hypertension, stage 2, and type 2 diabetes mellitus, and was therefore unfit for
sea duty in whatever capacity as seaman.
• Petitioner demanded compensation by way of disability benefits and medical expenses from
respondents, but the latter refused to pay.

ISSUE: Whether or not Hernandez is entitled to disability benefits.

HELD: Yes. By affixing his signature upon the Conditional Satisfaction of Judgment, Receipt of Payment,
and Affidavit, Hernandez effectively surrendered all his rights and waived all his claims and causes of
action in all jurisdictions, and in exchange for nothing. Indeed, in the Affidavit, Hernandez even went so
far as to certify and warrant that he will not file any other complaint or prosecute any suit or action here or
in any other country after receiving the settlement amount.In More Maritime Agencies, Inc. v. NLRC, 307
SCRA 189 (1999), however, the Court ruledthat the law does not consider as valid any agreement to
receive lesscompensation than what a worker is entitled to recover nor prevent himfrom demanding
benefits to which he is entitled.Thus, the quitclaim is invalid and Hernandez is entitled to disability
benefits.

ALPHA SHIP MANAGEMENT v. CALO


G.R. No. 192034| 13 January 2013
G.R. No. 196357 | 20 April 2015
Special Groups of Employees

DOCTRINE: An employee’s disability becomes permanent and total: (1) when so declared by the
company-designated physician; or (2)In case of absence of such a declaration either of fitness or permanent
total disability, upon the lapse of the 120- or 240-day treatment period, while the employee’s disability
continues and he is unable to engage in gainful employment during such period, and the company-
designated physician fails to arrive at a definite assessment of the employee’s fitness or disability.

FACTS:
• Calo worked for the petitioner Alpha and its foreign principal, Chuo-Kaiun Company Limited
(CKCL) as Chief Cook on board CKCL’s vessel, MV Iris.
• Calo suffered back pain on the lower part of his lumbar region and urinated with solid particles.
On checkup, the doctorfound him suffering from urinary tract infection and renal colic, and was
given antibiotics. Another doctor declared him “unfit for work” and advised him to go home to
undergo further examination and treatment.
• Calo was thus repatriated and was referred to Dr. Nicomedes Cruz, the company-designated
physician, who recommended that Calo is fit to work.
o Despite having more or less 30 checkups with Dr. Cruz (spanning over a period of more
than 1 year or for more than 120 days and even 240 days), Calo felt that his condition had
not improved so he consulted another specialist in internal medicine, Dr. Efren Vicaldo.
▪ Dr. Vicaldo diagnosed Calo with hypertension and nephrolithiasis, and declared
him unfit to work as seaman in any capacity.
• Calofiled a claim for disability benefits with petitioners, but the claim was denied.
o Thus, he filed against the petitioners a Complaint for the recovery of total permanent
disability benefits, illness allowance, reimbursement of medical expenses, etc.

ISSUE: Whether or not Calo is entitled to disability benefits despite the fact that he was declared by the
company-designated physician as fit to work.

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HELD: Yes, an employee’s disability becomes permanent and total when so declared by the company-
designated physician, or, in case of absence of such a declaration either of fitness or permanent total
disability, upon the lapse of the 120 or 240-day treatment period, while the employee’s disability continues
and he is unable to engage in gainful employment during such period, and the company-designated
physician fails to arrive at a definite assessment of the employee’s fitness or disability. This is true
“regardless of whether the employee loses the use of any part of his body.” In the case, Calo was repatriated
and underwent treatment by the company-designated physician, Dr. Cruz for a continuous period of over
one year—or for more than the statutory 120-day and even 240-day period. Therefore, the conclusive
presumption is that Calo is totally and permanently disabled, and is consequently entitled to disability
benefits.
• During said treatment period, Dr. Cruz did not arrive at a definite assessment of Calo’s fitness or
disability; thus, Calo’s medical condition remained unresolved.
• The belated declaration of Dr. Cruz that Calo is fit to work became irrelevant, for by then, Calo had
been under medical treatment and unable to engage in gainful employment for more than 240 days.

FIL-PRIDE SHIPPING CO., INC. v. BALASTA


G.R. No. 193047 | 3 March 2014
G.R. No. 196357 | 20 April 2015
Special Groups of Employees

DOCTRINE: An employee’s disability is deemed permanent and total even before the lapse of the statutory
240-day treatment period, when it becomes evident that the employee’s disability continues and he is
unable to engage in gainful employment during such period.

FACTS:
• Balasta was hired as Able Seaman by petitioner Fil-Pride Shipping Company, Inc. (Fil-Pride) for its
foreign principal, petitioner Ocean Eagle Shipmanagement Company, Pte. Ltd. (Ocean Eagle).
• While aboard the vessel, Balasta experienced chest pains, fatigue, and shortness of breath. He was
examined by a physician in China and was diagnosed as having myocardial ischemia and coronary
heart disease. He was declared unfit for duty and was recommended for repatriation.
• Balasta was thus repatriated on September 18, 2005 and was immediately referred to the company-
designated physician, Dr. NicomedesCruz, who diagnosedBalasta with hypertension and
myocardial ischemia. Consultations with Dr. Cruz lasted until April 19, 2006.
• Balasta filed a claim for permanent disability benefits with petitioners, but the latter denied the
same.
• Balasta filed against the petitioners a Complaint for the recovery of disability benefits, illness
allowance, reimbursement of medical expenses, damages and attorney’s fees.
o He argued that Dr. Cruz already knew of the gravity and serious nature of his condition,
yet he refused to make the required definite assessment of his fitness or disability.
• Before the SC, petitioners maintain that it has not been shown that Balasta’s treatment lasted for
the statutory duration of 240 days, since he filed his labor complaint even before the said maximum
240-day treatment period could be reached and a definite assessment of his condition could be
made.

ISSUE: Whether Balasta suffered permanent total disability, entitling him to the claimed disability benefits.

HELD: Yes, the company-designated physician must arrive at a definite assessment of the seafarer’s fitness
to work or permanent disability within the period of 120 or 240 days, pursuant to Article 192 (c)(1) of the
Labor Code and Rule X, Section 2 of the AREC. If he fails to do so and the seafarer’s medical condition
remains unresolved, the latter shall be deemed totally and permanently disabled.In the case, with Dr.

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Labor Law and Social Legislation Justice Del Castillo Digests

Cruz’s failure to issue a definite assessment of Balasta’s condition on May 19, 2006, or the last day of the
statutory 240-day period, respondent was thus deemed totally and permanently disabled.
• Further, an employee’s disability becomes permanent and total even before the lapse of the
statutory 240-day treatment period, when it becomes evident that the employee’s disability
continues and he is unable to engage in gainful employment during such period because, for
instance, he underwent surgery and it evidently appears that he could not recover therefrom
within the statutory period.
• In the case, Balasta was repatriated on September 18, 2005 and was examined by Dr. Cruz until
April 19, 2006. Concededly, this period is less than the statutory 240-day – or 8-month – period.
Nonetheless, it is impossible to expect that by May 19, 2006, or on the last day of the statutory 240-
day period, Balasta would be declared fit to work when just recently (or on February 24, 2006), he
underwent coronary artery bypass graft surgery; by then, Balasta would not have sufficiently
recovered. Thus, Respondent would to all intents and purposes still be unfit for sea duty.

INTERORIENT MARITIME ENTERPRISES v. CREER


G.R. No. 181921 | September 17, 2014
Special Groups of Employees

DOCTRINE: It is the oft-repeated rule that whoever claims entitlement to the benefits provided by law
should establish his right thereto by substantial evidence.

FACTS:
• InterOrient hired Victor as Galley Boy on board the vessel owned by Calidero Shipping Company,
Ltd. (Calidero) for a period of nine months.
• Prior to embarkation, Victor went through the requisite Pre-Employment Medical Examination
(PEME) and was declared fit for sea duty
• Victor alleged that when he was about to get provisions from the cold storage, he felt a sudden
pain in his chest that radiated to his back. Since then, he experienced incessant cough, nasal
congestion, difficulty in breathing, physical weakness, chills and extreme apprehension.
According to him, this condition persisted until the expiration of his contract.
• Victor arrived in Manila. He reported to the office of InterOrient and informed the company about
the pain he experienced while he was on board. Victor averred that InterOrient merely advised
him to consult a doctor without giving him any doctor's referral. He did, however, sign a Receipt
and Release. Where he acknowledged receipt of the full payment of his monetary entitlements
under the employment contract.
• Thereafter, Victor claimed that he underwent medical examination at the Fatima Medical Clinic
where he shouldered all expenses. Although he reported his condition to InterOrient, he was still
not given any medical assistance. Instead, he was merely told to continue medication and
consultation.
• Victor consulted various doctors and they declared him unfit to resume work as a seaman in any
capacity, and that his illness was considered work-aggravated.

Issue: Whether InterOrient can be held accountable for Victor's disease even if the same was diagnosed 11
months after he disembarked from the vessel upon the termination of his employment contract.

Held: No, the rationale for the rule [on mandatory post-employment medical examination within three (3)
days from repatriation by a company-designated physician] is that reporting the illness or injury within
three days from repatriation fairly makes it easier for a physician to determine the cause of the illness or
injury. Ascertaining the real cause of the illness or injury beyond the period may prove difficult. To ignore
the rule might set a precedent with negative repercussions, like opening floodgates to a limitless number

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Labor Law and Social Legislation Justice Del Castillo Digests

of seafarers claiming disability benefits, or causing unfairness to the employer who would have difficulty
determining the cause of a claimant’s illness because of the passage of time. In fine, Victor’s noncompliance
with the three-day rule on post-employment medical examination is fatal to his cause. As a consequence,
his right to claim for compensation and disability benefits is forfeited. On this score alone, his Complaint
could have been dismissed outright.
• For an illness to be compensable, Section 20(B)(6) of the 2000 Amended Standard Terms and
Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (2000
Amended Standard Terms and Conditions), deemed incorporated in the POEA Contract, requires
the concurrence of two elements: first, that the illness must be work-related; and second, that the
work--related illness must have existed during the term of the seafarer’s employment contract.
• “Work-related illness” is defined under the 2000 Amended Standard Terms and Condition “as any
sickness resulting in disability or death due to an occupational disease listed under Section 32-A of
[the said] contract[,] with the conditions set therein satisfied.” There is no question that Pulmonary
Tuberculosis is listed as an occupational disease under Section 32-A(18). However, for the disability
caused by this occupational disease to be compensable, all of the following conditions must be
satisfied:
o The seafarer’s work must involve the risks describe herein;
o The disease was contracted as a result of the seafarer’s exposure to the describe[d] risks;
o The disease was contracted within a period of exposure and under such other factors necessary to contract
it;
o There was no notorious negligence on the part of the seafarer.

MAGSAYSAY MITSUI OSK MARINE v. BENGSON


G.R. No. 198528 | 13 October 2014
Special Groups of Employees

DOCTRINE: Cardiovascular disease, coronary artery disease, and other heart ailments are work-related
and, thus, compensable.

FACTS:
• Bengson has been working as a seafarer for Magsaysay from his first position as Deck Cadet until
his present position as Third Mate Officer. At the age of 45, Bengson entered into his 22nd contract
of employment with Magsaysay, Inc. for and in behalf of its foreign principal MOL Tankship
Management (Asia) Pte., Ltd. Prior to his deployment, Bengson underwent and passed the Pre-
Employment Medical Examination (PEME) and was found to be "fit for sea duty" on August 11,
2007. Thereafter, Bengson boarded the ship and performed his assigned tasks.
• After doing his usual duties on board the vessel, Bengson suddenly experienced difficulty in
breathing and numbness on half of his body. After a few days Bengson was brought to the Izola
General Hospital in Slovenia where he was confined for three days.
• While in the hospital, Bengson had partial paralysis of the right hand and a minor partial paralysis
of the right leg. At that time, Bengson could only walk with the help of a physiotherapist and was
prohibited from lifting heavy things. Due to his incapacity to work, his immediate repatriation was
arranged.
• He was immediately brought to the Manila Doctors Hospital for confinement under the
supervision of company-designated-physician Dr. Benigno F. Agbayani, Jr. who issued an Initial
Out-Patient Consult Report which stated that Bengson’s illness of "hematoma in the cranium" was
not work-related. Thus, Magsaysay, Inc. and MOL Tankship did not anymore issue any assessment
on Bengson’s disability grade. Bengson filed his disability compensation claim against Magsaysay,
Inc. but was outrightly denied by Magsaysay, Inc.

ISSUE: Whether or not the Bengson’s diseases are compensable

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Labor Law and Social Legislation Justice Del Castillo Digests

HELD: Yes, the Court finds that Bengson’s illness is work-related. The undisputed facts indicate that
respondent has been working for petitioners since 1988; that per his service record, he has been serving as
Third Mate for twelve (12) years; and that as Third Mate, he was saddled with heavy responsibilities
relative to navigation of the vessel, ship safety and management of emergencies. It is beyond doubt that
respondent was subjected to physical and mental stress and strain: as Third Mate, he is the ship’s fourth in
command, and he is the ship’s safety officer; these responsibilities have been heavy burdens on
respondent’s shoulders all these years, and certainly contributed to the development of his illness. An
employee’s disability becomes permanent and total when so declared by the company-designated
physician, or, in case of absence of such a declaration either of fitness or permanent total disability, upon
the lapse of the 120 or 240-day treatment period under Article 192 (c) (1) of the Labor Code and Rule X,
Section 2 of the Amended Rules on Employees’ Compensation Commission, while the employee’s
disability continues and he is unable to engage in gainful employment during such period, and the
company-designated physician fails to arrive at a definite assessment of the employee’s fitness or disability.
This is true regardless of whether the employee loses the use of any part of his body or if the injury or
disability is classified as Grade 1 under the PO EA-SEC.

DELA CRUZ v. TRANSMARINE CARRIERS


G.R. No. 196357 | 20 April 2015
Special Groups of Employees

DOCTRINE: The 1996 POEA SEC clearly provides that a seafarer must submit himself to a post-
employment medical examination within three days from his arrival in the Philippines (mandatory
reporting requirement) so that his claim for disability and sickness allowance can prosper. The only
exception to this rule is when the seafarer is physically incapacitated to do so, but there must be a written
notice to the agency within the same period of three days for the seaman to be considered to have complied
with the requirement. Otherwise, he forfeits his right to claim his disability benefits and sickness allowance.

FACTS:
• Delfin De la Cruz was an oiler for Transmarine from August 2000-2001.
• Unfortunately, while on board, he was hit by a metal on his back while performing his job.
• Upon the end of his contract in 2001, he requested for medical assistance but was not extended
such.
• In 2003, he was not rehired because he is already incapacitated to do customary work. Hence, he
claimed for sickness allowance and disability compensation before the NLRC.

ISSUE: Whether or not he can claim for permanent disability claim.

HELD: No, the 1996 POEA SEC covers all injuries or illnesses occurring in the lifetime of the employment
contract. The seafarer only has to prove that his injury or illness was acquired during the term of
employment to support his claim for disability benefits and sickness allowance. Verily, his injury or illness
need not be shown to be work-related to be compensable under said employment contract. However, the
Court also reiterates the rule that "whoever claims entitlement to the benefits provided by law should
establish his right to the benefits by substantial evidence". In this case, Petitioners failed to show the steps
supposedly undertaken by Delfin to comply with the mandatory reporting requirement. To the Court's
mind, this lapse on petitioners' part only demonstrates that Delfin did not comply with what was
incumbent upon him. Therefore, at the time of his repatriation, Delfin was not suffering from any physical
disability requiring immediate medical attendance. Otherwise, and even if his request for medical
assistance went unheeded, he would have submitted himself for check-up with his personal physician.

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Labor Law and Social Legislation Justice Del Castillo Digests

• Moreover, while the rule on mandatory reporting requirement is not absolute as a seafarer may
show that he was physically incapable to comply with the same by submitting a written notice to
the agency within the same three-day period, nowhere in the records does it show that Delfin
submitted any such notice. Clearly, petitioners failed to show that Delfin complied with the
mandatory reporting requirement. Thus, he is deemed to have forfeited his right to claim disability
benefits and sickness allowance. Even assuming that there was compliance with the mandatory
reporting requirement, other factors that strongly militate against the granting of petitioners'
claims exist in this case.

DOHLE-PHILMAN MANNING AGENCY v. GAZZINGAN


G.R. No. 199568 | 17 June 2015
G.R. No. 196357 | 20 April 2015
Special Groups of Employees

DOCTRINE: Two elements must concur for an injury or illness of a seafarer to be compensable: (1) The
injury or illness must be work-related; and (2) the work-related injury or illness must have existed during
the term of the seafarer’s employment contract

FACTS:
• Gazzingan was hired by petitioners as a messman.
• Prior to his employment, Gazzingan went through a Pre-Employment Medical
Examination(PEME) wherein everything was found to be normal except a finding of left
ventricular hypertrophy.Nonetheless, we was declared fit for duty and was able to board
petitioner’vessel.
• While the vessel was in Colombia, Gazzingan experienced chest pains for which reason he was
confined in the said country where the attending physician found him to have Acute Type-B
Dissection.
• Gazzingan was medically repatriated to the Philippines where he was confined in Manila Doctor’s
Hospital.
• Meanwhile, the company-designated physician, Dr. Banaga, issued a letter to petitioners stating
that Gazzingan’s sickness was not work-related.
• Pursuant to Dr. Banaga’s letter, Petitioners refused to shoulder Gazzingan’s medical expenses
anymore which resulted to him being discharged prematurely. Before he was discharged, the final
diagnosis was that he was suffering from dissecting aneurysm.
• Gazzingan filed a complaint for non-payment of salaries/wages and other benefits.
• During the NLRC proceedings, Gazzingan died due to Dissecting Aortic Aneursym.

ISSUE: Whether or not Gazzingan’s illness was work-related and thus compensable.

HELD: Yes, the 2000 POEA-SEC Section 20(B)(6) provides that two elements must concur for an injury or
illness of a seafarer to be compensable: (1)The injury or illness must be work-related; and (2) the work-
related injury or illness must have existed during the term of the seafarer’s employment contract. The exact
cause of aortic dissection is currently unknown. However, the aggravation of this sickness is often caused
by stressful activities. As a messman, Gazzingan’s work included lifting of heavy objects, lack of sleep and
pressure of serving the entire crew with efficiency. These activities cause him physical stress and exposed
himself to the aggravation of his condition. Moreover, during his employment contract he was already
from Type-B Aortic Dissection which caused him to suffer intense chest and back pains for which reason

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Labor Law and Social Legislation Justice Del Castillo Digests

he was repatriated to the Philippines. Thus, illness of Gazzingan is compensable under the 2000 POEA-
SEC.

CENTENNIAL TRANSMARINE v. QUIAMBAO


G.R. No. 198096 | 8 July 2015
G.R. No. 196357 | 20 April 2015
Special Groups of Employees

DOCTRINE: The company-designated physician is expected to arrive at a definite assessment of the


seafarer's fitness to work or permanent disability within the period of 120 or 240 days. That should he fail
to do so and the seafarer's medical condition remains unresolved, the seafarer shall be deemed totally and
permanently disabled.

FACTS:
• Pastor was employed by Centennial Transmarine, Inc. as a messman. He was boarded in MV
Bonnie Smithwick.
• While on board, he figured in an accident while carrying heavy food provisions. This caused him
to suffer excruciating pain in his upper back.
• Pastor was prescribed with oral pain killer, but the same only offered temporary relief.
• The result of the x-ray examination conducted on him revealed that he has lumbar muscular spasm
and thoracic spondylosis.
• While the attending physician declared him fit for light duties only, he was subsequently
recommended for repatriation to Manila for further treatment.
• While undergoing treatment, Pastor filed a complaint against petitioners for permanent disability
compensation.
• Pastor claimed that the lapse of 120 days from the time of his repatriation without any disability
grading being issued by the company-designated physician, coupled by his worsening lumbar
pain despite continuous treatment, rendered him permanently unfit for sea duties.
• Petitioners aver that an illness which lasted for more than 120 days does not necessarily mean that
a seafarer is entitled to full disability benefits because a seafarer's degree of disability is not
measured by the length of time he is under treatment, but by the assessment of the company-
designated physician, who, in this case, found Pastor's illness as not work-related.

ISSUE: Whether or not Pastor is entitled to permanent disability compensation.

HELD: Yes, Pastor's disability became permanent and total as no declaration of fitness to work was issued
upon the expiration of the maximum 240-day medical treatment period. The company-designated
physician must arrive at a definite assessment of the seafarer's fitness to work or permanent disability
within the period of 120 days, which was further extended to 240 days. A temporary total disability
becomes permanent when so declared by the company-designated physician within the period allowed, or
upon expiration of the maximum 240-day medical treatment period in case of absence of a declaration of
fitness or permanent disability. In this case, Pastor was repatriated on September 18, 2006. He was given a
specific diagnosis as to his ailment by the company-designated physician, Dr. Abesamis, on October 6,
2006. Thereafter, he continuously received medical treatment from Dr. Abesamis. However and as earlier
mentioned, nowhere in the records does it show that Dr. Abesamis arrived at a definite assessment of
respondent's fitness to work or a declaration of the existence of a permanent disability before the expiration
of the maximum 240-day medical treatment period. Clearly at that time, the period of 240 days had already
lapsed without the company-designated physician issuing a declaration of Pastor's fitness to work or of the
existence of his permanent disability. This only means that his condition remained unresolved even after
the lapse of the said period and, consequently, his disability is deemed permanent and total.

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Labor Law and Social Legislation Justice Del Castillo Digests

GRACE MARINE SHIPPING CORPORATION v. ALARCON


G.R. No. 201536 | 09 September 2015
Special Groups of Employees

DOCTRINE: Fordisability to be compensable under Section 20(B) of the 2000 POEA-SEC, it is not
sufficient to establish that the seafarer's illness or injury has rendered him permanently or partially
disabled but a causal connection between the work contracted and the illness or injury must be shown.

FACTS:
• Alarcon was employed as a Messman for 9 months by Grace Marine Shipping Corporation for its
foreign principal Universal Marine Corporation. He was declared fit by the medical examiner and
went onboard the vessel.
• While onboard, he developed a skin condition characterized by recurring lesions all over his body
and was declared unfit for work as his condition was categorized as a Grade 12 disability.
• Although it was noted that he still had minimal and resolving skin lesions, he was declared fit to
work. Several medical consultations later, Alarcon sought an independent physician who declared
that he was unfit to work.
• Thus, Grace Marine Shipping offered to compensate Alarcon based on the Grade 12 disability
rating but Alarcon claimed entitlement to Grade 5 disability benefits with a higher indemnity.
• Alarcon filed a complaint against Grace Marine for permanent total disability benefits before the
NCMB, arguing that his dermatitis was an occupational disease under Section 32-A of the POEA-
SEC and that such illness was caused by his handling of chemical agents at work. On the other
hand, Grace Marine claimed that his ailment was caused by innate skin sensitivity and not his work
on board.

ISSUE: Whether or not he was entitled to permanent disability benefits?

HELD: Yes, there is a reasonable connection between the nature of one’s work and his contradicting
psoriasis when, in the performance of his duties, strong detergents, fabric conditioners, special soaps, and
other chemicals are used. Evidence shows that during Alarcon’s employment, he was exposed to chemicals
as his responsibility was to maintain the overall sanitation. For disability to be compensable under Section
20(B) of the 2000 POEA-SEC, it is not sufficient to establish that the seafarer's illness or injury has
rendered him permanently or partially disabled; it must also be shown that there is a causal connection
between the seafarer's illness or injury and the work for which he had been contracted.In the case at bar,
Alarcon’s psoriasis and nummular eczema are work connected and thus compensable. Grace Marine
Shipping did not take him back nor was there a declaration of fitness to work.
• An employee's disability becomes permanent and total when so declared by the company-
designated physician, or, in case of absence of such a declaration either of fitness or permanent
total disability, upon the lapse of the 120 or 240-day treatment period under Article 192 (c) (1) of
the Labor Code and Rule X, Section 2 of the Amended Rules on Employees' Compensation
Commission,while the employee's disability continues and he is unable to engage in gainful
employment during such period, and the company-designated physician fails to arrive at a definite
assessment of the employee's fitness or disability. This is true regardless of whether the employee
loses the use of any part of his body or if the injury or disability is classified as Grade 1 under the
POEA-SEC.

MAERSK-FILIPINAS CREWING, INC./A.P. MOLLER A/S


v. JALECO

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Labor Law and Social Legislation Justice Del Castillo Digests

G.R. No. 201945 | 21 September 2015


Special Groups of Employees

DOCTRINE: The mere lapse of the 120-day period itself does not automatically warrant the payment of
permanent total disability benefits, as said period may be extended up to 240 days.

FACTS:
• Jaleco was hired by petitioner Maersk as a seaman.
• He complained of intermittent pain on his left buttock radiating to the lower back and left groin.He
was advised to obtain an MRIscan of the lumbar spine, , and to avoid lifting heavy objects for one
week. Moreover, he was declared unfit for duty.
• Respondent was repatriated and was immediately referred to the company-designated physician,
Dr. Alegre. Dr. Alegre found respondent to be suffering from paralumbar spasm and limitation of
movement due to pain. He prescribed medication and physical therapy at three sessions per week.
• Jaleco took several tests and treatments. When examined, Dr. Alegre’s progress report contained
results that if a disability is to be assessed, a disability grade of 11 based on the POEA-SEC would
be obtained.
• Jaleco consulted another independent physician, Dr. Raymundo, who issued a Medical
Reportwhich declared him not fit for duty, with a rating of grade 6 in terms of pain and affectation
of the spinal cord
• Jaleco filed a complaint for illegal dismissal, disability claims, medical expenses, damages against
petitioners.
• Petitioners argued Jaleco is not entitled to a Grade 6 disability rating, but only Grade 11 as
determined by the company-designated physician. They argued that the company-designated
physician’s findings relative to disability grading and compensation should be upheld. That since
the opinion of a third physician was not obtained, the company-designated physician’s assessment
should prevail
• Jaleco counters that the opinion of Dr. Raymundo should prevail, as it correctly reflects his true
state of health, while the findings of the company-designated physician are inadequate and
inaccurate; that he is likewise entitled to additional reimbursement of medical expenses.

ISSUE: Whether or not Jaleco can claim permanent and total disability compensation?

HELD: No, Jaleco cannot claim permanent and total disability compensation. The company-designated
physician made a categorical declaration relative to Jaleco’s fitness to resume duty — approximately 127
days from his repatriation. Thus, in his Progress Report, Dr. Alegre declared: “If a disability is to be assessed
now, a disability grade 11[would be obtained] based on the POEA Contract.” The mere lapse of the 120-
day period itself does not automatically warrant the payment of permanent total disability benefits. If the
120-day 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 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. The seaman may be declared fit to work at any time such declaration is justified
by his medical condition.
• Moreover, pursuant to Section 20(B)(3) of the POEA-Standard Employment Contract, the parties
should have secured the opinion of a third doctor jointly appointed by them, whose decision shall
be final and binding. However, this procedure was not observed, and instead, Jaleco went on to
file his labor complaint.
• This Court ruled that for Jaleco’s disregard of the conflict-resolution procedure under the parties’
POEA-SEC, his claims against petitioners should be denied, since the company-designated
physician’s(Dr. Alegre) assessment necessarily stands. Indeed, since Jaleoc was the one pursuing a
claim, as he did by filing a labor complaint before the NLRC, then it was he — and not petitioners

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Labor Law and Social Legislation Justice Del Castillo Digests

— who should have taken the initiative to secure the opinion of a third physician prior to seeking
intervention by the labor tribunals.

SASO v. 88 ACES MARITIME SERVICE


G.R. No. 211638| 7 October 2015
Special Groups of Employees

DOCTRINE: The absence of a post-employment medical examination cannot be used to defeat a seafarer's
claim when the failure to subject him to such requirement was not due to his fault but to the inadvertence
or deliberate refusal of the employer.

FACTS:
• Saso was hired as a fisherman by 88 Aces Maritime on behalf of its principal Lin Wen Yu onboard
its fishing vessel in Taiwan. Said employment was for a period of 24 months and he was declared
fit for work after completion of the pre-employment medical examination.
• He left the Philippines on February 3, 2010 but figured in an accident which fractured his right
thigh on March 12, 2010 and was repatriated on April 20, 2010.
• On August 3, 2010, Saso then filed a complaint for disability benefits, reimbursement of medical
expenses, sickness allowance against 88 Aces and Lin Wen Yu, alleging that he was told to first
shoulder the expenses.
• On the other hand, 88 Aces averred that Saso was summoned to present himself for post-
employment medical examination, and failed to heed the same, but they still accommodated his
request for reimbursement of medical expenses.
• Labor Arbiter ruled that Saso was unable to perform his job for more than 120 days, thus entitling
him to permanent disability benefits. Claim for reimbursement was denied.
• NLRC found that the complaint was prematurely filed considering that the 120-day presumptive
disability period, reckoned from Saso's arrival in the country on April 20, 2010, was yet to lapse on
August 19, 2010.
• CA declared Saso’s complaint was filed before the lapse of the 120-day period so he had no cause
of action against 88 Aces at the time of its filing, and that he was not entitled to total and permanent
disability benefits as he failed to comply with mandatory 3-day reporting requirement.

ISSUE: Whether or not Saso is entitled to compensation and benefits.

HELD: Yes, the absence of post-employment examination does not defeat Saso’s right to claim for
compensation and benefits. Based on Section 20(b) of the 2000 POEA-SEC, 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. Failure to comply shall result in
forfeiture of the right to claim the benefits. Anent 88 Aces’s written advice wherein they requested Saso
to report to their office for medical check-up, the same cannot also be given any credence for the obvious
reason that it was made way beyond the 3-day mandatory reporting period. Thus, Saso’s allegation that he
reported to work within 3 days from his repatriation with the mandatory reporting requirement.
• Nevertheless, Saso is not entitled to total and permanent disability benefits -- only partial disability
benefits -- because he filed the complaint after 105 days from his repatriation. He then has not yet
acquired a cause of action at the time he filed his complaint. His claim for reimbursement of
medical expenses was disallowed for not being supported by receipts, but he is entitled to sickness
allowance.

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Labor Law and Social Legislation Justice Del Castillo Digests

NEW FILIPINO MARITIME AGENCY v. DATAYAN


G.R. No. 202859 | 11 November 2015
Special Groups of Employees

DOCTRINE: An employer may be exempt from liability for death benefits of its employed seafarer if it
can successfully establish that the seafarer’s death was due to a cause attributable to his own willful act.

FACTS:
• On August 2007, Simon Datayan was employed as a deck cadet on board the vessel Corona Infinity.
His employment was for nine (9) months.Prior to his deployment, Simon underwent pre-
employment medical examination (PEME) and was declared fit for sea duties.
• On December 2007, the Master authorized the conduct of an emergency fire drill in which the crew
participated. During the emergency fire drill, Datayan jumped overboard. A futile search-and-
rescue operation ensued. After a few weeks, Simon was declared missing and was presumed dead.
• Simon's father went to the New Filipino Maritime Agency, Inc. (NFMA) to claim death benefits,
but his claim went unheeded. And so, he filed a complaint for death benefits and attorney’s fees
against NFMA, claiming that because his son died during the term of his employment, the
provisions of the CBA among several seafarer's and seamen's union must be applied in the grant
of death benefits and burial assistance in his favor, as the heir of Simon Datayan.
• NFMA alleged that after the emergency fire drill had taken place, the Master had reprimanded
Simon Datayan for his poor performance. It was after this that Simon jumped overboard. They
submitted that they were not liable for death benefits because the death was due to Simon
Datayan’s own act. This was proven through the narratives of other crew in the ship that Datayan
was a “very sensitive person”, and by a suicide note that Datayan wrote himself.

ISSUE: Whether or not Vincent was entitled to death benefits.

HELD: No, NFMA had sufficiently discharged the burden to prove that Simon committed suicide. Under
the terms of the CBA, a claimant for death benefits must prove by substantial evidence that the employee's
death is work-related, and had transpired during the term of the employment contract. However, once the
claimant had dispensed with the burden of proof, as in this case, the employee must prove that the death
was a result of a willful act of the employer, as a matter of defense. In this case, petitioner has sufficiently
discharged the burden of proof that the death was a result of suicide by Simon Datayan. Under Section
20(D) of the POEA SEC, no compensation or benefits shall arise in case of death of a seafarer resulting from
his willful act, provided that the employer could prove that such death is attributable to the seafarer.

ISLAND OVERSEAS TRANSPORT CORPORATION vs. BEJA


G.R. No. 203115 | 7 December 2015
Special Groups of Employees

DOCTRINE: In disability compensation, it is not the injury which is compensated, but rather it is the
incapacity to work resulting in the impairment of one’s earning capacity.

FACTS:
• Island Overseas Transport (IOT) employed Beja as a seafarer. While on board, he injured his knee
and was advised to be medically repatriated.
• Upon arrival in Manila, he underwent an operation, and, while undergoing therapy, Beja filed a
complaint for permanent disability benefit, alleging that his knee injury resulted from an accident
while on vessel which rendered him incapable of returning to his work.
• He anchored his claim for permanent total disability benefits pursuant to the CBA.

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• The company physician issued an assessment of partial disability. Beja consulted an orthopedic
surgeon, Dr. Escutin, who certified him to be unfit for sea duty in whatever capacity. Strengthening
his claim by the certification of Dr. Escutin that he suffers from a permanent total disability.
• IOT, however, insisted that the combined disability assessment given by Dr. Cruz, who for months
continuously treated and monitored Beja’s condition, prevails over that rendered by Dr. Escutin,
who examined Beja only once
• IOT argued that since Dr. Cruz made an assessment before the lapse of the maximum 240-day
treatment period from the date of Beja’s repatriation, there was no factual basis in ruling that Beja
is entitled to full disability benefits.

ISSUE: Whether or not Beja is entitled to total and permanent disability compensation

HELD: Yes, Beja is entitled to total and permanent disability compensation under the POEA-SEC. Art.
192(1) of the Labor Codes provides that a temporary total disability shall be deemed total and permanent
if it continuously lasts for more than 120 days. Meanwhile, Section 20(B)(3) of the POEA-SEC, provides
that, only those injuries or disabilities that are classified as Grade 1 may be considered as total and
permanent. However, if those injuries with a disability grading from 2 to 14, hence, partial and permanent,
would incapacitate a seafarer from performing his usual sea duties for a period of more than 120 or 240
days, depending on the need for further medical treatment, then he is, under legal contemplation, totally
and permanently disabled. Moreover, the company-designated physician is expected to arrive at a definite
assessment of the seafarer’s fitness to work or permanent disability within the period of 120 or 240 days.
That should he fail to do so and the seafarer’s medical condition remains unresolved, the seafarer shall be
deemed totally and permanently disabled.

• The prevailing rule prior to October 6, 2008 was enunciated in Crystal Shipping, Inc. v. Natividad that
total and permanent disability refers to the seafarer’s incapacity to perform his customary sea
duties for more than 120 days, regardless of whether or not he loses the use of any part of his
body.If, on the other hand, the complaint was filed from October 6, 2008 onwards, the 240-day rule
applies. Particularly, a seafarer’s inability to work and the failure of the company-designated
physician to determine fitness or unfitness to work despite the lapse of 120 days will not
automatically bring about a shift in the seafarer’s state from total and temporary to total and
permanent, considering that the condition of total and temporary disability may be extended up
to a maximum of 240 days.

WALLEM MARITIME SERVICES, INC. v. QUILLAO


G.R. No. 202885 | 20 January 2016
Special Groups of Employees

DOCTRINE: It is premature for a seafarer, who is still undergoing treatment within the 240-day period
rule, to file a complaint for disability benefits.

FACTS:
• Wallem Maritime Services, Inc., for and in behalf of its foreign principal, hired Edwinito Quillao
as fitter aboard a vessel for 9 months. After undergoing a medical examination, he was declared fit
to work.
• 4 months after joining the vessel, Quillao started to body pains, as well as numbness and weakness
of his left hand. 6 months after, Quillao signed off from the vessel. When he arrived in the
Philippines, he was referred to the company-designated physician and was then diagnosed. As per
the doctor’s instructions, he underwent carpal tunnel surgery and physical therapy.

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Labor Law and Social Legislation Justice Del Castillo Digests

• The company-designated doctor opined that Quillao’s chance of being declared fit to work was
good, provided that he completes the remaining therapy sessions (for about 4-6 weeks). However,
Quillao reportedly failed to report to the same for almost 2 months. Later, when Quillao went back
to consult with the doctor, the doctor assessed him to have a final disability rating of Grade 10.
Quillao, then, consulted an independent orthopedic surgeon, who opined that he was not fit for
further duty and that he had a status equivalent to Grade 8 impediment.
• Quillao filed this complaint against Wallem, claiming permanent and total disability benefits.

ISSUE: Whether or notQuillao should be given disability benefits?

HELD: No, Quillao should not be given disability benefits.At the time of filing of the Complaint, Quillao
had no cause of action because the company-designated physician has notyet issued an assessment on
respondent's medical condition; moreover, the 240-day maximum period for treatment has not yet lapsed.
In the case of C.F. Sharp Crew Management v. Obligado, We ruled that the 120-day rule applies only when
the complaint was filed prior to October 6, 2008; however, if the complaint was filed from October 6, 2008
onwards, the 240-day rule applies. In this case, it is beyond dispute that the complaint for disability benefits
was filed after October 6, 2008. Hence, the 240-day rule should apply. It was thus error on the part of the
Panel of Voluntary Arbiters to reckon Quillao’s entitlement to permanent and total disability benefits based
on the 120-day rule.
• The records clearly show that Quillao was still undergoing treatment when he filed the complaint.
On November 12, 2009, the physiatrist even advised Quillao to seek the opinion of an orthopedic
specialist. Quillao, however, did not heed the advice, instead, he proceeded to file a Complaint on
November 23 for disability benefits. And, it was only a day after its filing (or on November 24) that
Quillao requested from the company-designated doctor the latter's assessment on his medical
condition.Clearly, the Complaint was premature. Moreover, he has no basis for claiming
permanent and total disability benefits because he has not yet consulted his doctor-of-choice before
instituting this action.
• Not only did Quillao prematurely file his Complaint, he reneged on his duties to continue his
treatment as necessary to improve his condition, as he was required to by Sec. 20 (D) of the POEA-
SEC. In his Report, the company-designated doctor made the pronouncement that Quillao
abandoned his treatment, since Quillao had not been reporting to him for his appointments.
Quillao’s inability to continue his treatment after November 12 until January 9, 2010, without any
valid explanation proves that he neglected his corresponding duty to continue his medical
treatment. This also caused the regress of his condition, as shown by the statement of the company-
designated doctor. Indeed, Quillao did not comply with the terms of the POEA-SEC. The failure of
the company-designated doctor to issue an assessment was not of his doing but resulted from
Quillao's refusal to cooperate and undergo further treatment. Such failure to abide with the
procedure under the POEA-SEC results in his non-entitlement to disability benefits.

DOEHLE-PHILMAN MANNING AGENCY v. HARO


G.R. No. 206522 | 18 April 2016
Special Groups of Employees

DOCTRINE: For a claim of disability benefits to be compensable, the employee must prove that first, the
injury or illness is work-related; and second, that the injury or illness has arisen during the term of the
employment contract.

FACTS:
• On May 2008, Haro was hired by DOEHLE-PHILMAN as an oiler aboard the vessel MB CMA
CGM Providencia. The employment was for a period of 9 months. He was deployed on June 2008.

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• OnNovember 2008, Haro experienced heartache and loss of energy after hammering and lifting a
120-kg machine.
o He was thereafter confined to a hospital in Rotterdam, where he was informed of having
a hole in his heart that needed medical attention.
• After Haro’s repatriation in December 2008, Haro reported to DOEHLE-PHILMAN, which
referred him to Clinico-Med. The findings were confirmed, and a doctor in the UST Hospital
recommended that Haro have a heart operation.
o Haro had not yet proceeded with the operation.
• Haro was declared unfit for work.
• In June 2009, Haro filed a Complaint for disability benefits, reimbursement of medical expenses,
moral and exemplary damages, and attorney's fees against petitioners, on the ground that he was
unable to work for more than 120 days.
• DOEHLE-PHILMAN denied that Haro had a hole in his heart, and pointed out that his condition
was instead "aortic regurgitation, moderate"; and that his condition was not work-related.

ISSUE: Whether or not the Haro is entitled to permanent and total disability benefits?

HELD: No, Haro is not entitled to such benefits, because the employer is liable for disability benefits only
when the seafarer suffers from a work-related injury or illness during the term of his contract. To be
compensable, the injury or illness must first be work-related; and second, must have arisen during the term
of the employment contract. In the present case, although the heart condition of Haro manifested while
aboard the vessel, the illness was nonetheless not work-related. There must be a reasonable link between
the employee’s work and his illness in order for a rational mind to determine that such work contributed
to, or at least aggravated, his illness.

TSM SHIPPING PHILS., INC. v. PATIÑO


G.R. No. 210289 | 20 March 2017
Special Groups of Employees

DOCTRINE:A temporary total disability only becomes permanent when the company-designated
physician, within the 240-day period, declares it to be so, or when after the lapse of the said period, he fails
to make such declaration.

FACTS:
• TSM employed Patino as a seaman. While working onboard the vessel, his right hand was
fractured while securing a mooring rope. Thereafter, he was repatriated.
• Upon arrival in Manila, Patino was referred to the company-designated physician, Dr. Cruz for
further treatment. Patino also went to an orthopedic surgeon for surgical operation.
• After extensive medical treatments, Dr. Cruz rendered an interim assessment of Patino’s disability
under the POEA-SEC at Grade 10. Eventually, Dr. Cruz declared Patino to have reached the
maximum medical cure after rendering a final disability rating of Grade 10.
• Patino consulted Dr. Escutin, who assessed him to have permanent disability unfit for sea duty in
whatever capacity as a seaman
• Patino filed a complaint against TSM for permanent and total disability benefits as attested by the
medical findings of Dr. Escutin, his own physician.
• TSM argued that an illness which lasted for more than 120 days does not necessarily mean that a
seafarer is entitled to full disability benefits, and that the company-designated physician’s partial
disability grading is still binding and controlling. Further, no third doctor was appointed to resolve
any doubts as to the true state of health of respondent.

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Labor Law and Social Legislation Justice Del Castillo Digests

ISSUE: Whether or not Patino is entitled to total and permanent disability compensation.

HELD: No, Patino is not entitled to total and permanent disability compensation. Temporary total
disability only becomes permanent when the company-designated physician, within the 240-day period,
declares it to be so, or when after the lapse of the said period, he fails to make such declaration.After the
initial interim assessment of Dr. Cruz, Patuno continued with his medical treatment. Dr. Cruz then
rendered a final assessment of Grade 10 upon reaching the maximum medical cure. Counting from the date
of repatriation up to the final assessment, such was made within the 240-day period. Clearly, before the
maximum 240-day medical treatment period expired, Patino was issued a Grade 10 disability rating which
is merely equivalent to a permanent partial disability under the POEA-SEC.
• The medical opinion of Dr. Escutin ought not to be given more weight than the disability grading
given by Dr. Cruz. The POEA-SEC clearly provides that when a seafarer sustains a work-related
illness or injury while onboard the vessel, his fitness or unfitness for work shall be determined by
the company-designated physician. However, if the doctor appointed by the seafarer makes a
finding contrary to that of the assessment of the company-designated physician, a third doctor may
be agreed jointly between the employer and the seafarer, and the latter’s decision shall be final and
binding on both of them.The Court has held that nonobservance of the requirement to have the
conflicting assessments determined by a third doctor would mean that the assessment of the
company-designated physician prevails.Dr. Cruz’s Grade 10 disability rating prevails for failure to
properly dispute it in accordance with an agreed procedure. Patino is thus entitled to the amount
corresponding to Grade 10 based on the certification issued by Dr. Cruz.

DAGASDAS V. GRAND PLACEMENT AND GENERAL SERVICES


G.R. No. 205727 | 18 January 2017
Special Groups of Employees

DOCTRINE:To allow employers to reserve a right to terminate employees without cause is violative of the
guarantee of security of tenure.

FACTS:
• Grand Placement, a licensed recruitment agency, employed Dagasdas as a network technician on
behalf of Industrial Management Technology Methods (ITM), whereby he is to be deployed to in
Saudi Arabia under a 1-year contract.
• Dagasdas contended that while the contract specified that he was employed as a network
technician, he was actually engaged as a civil engineer and said former position was only for the
purpose of securing a visa.
• When he arrived in Saudi Arabia, he signed a new employment contract with ITM which stipulated
that the latter contracted him as a Superintendent and he was placed under a 3-month probationary
period.
• He reported to the worksite but was given tasks suited for a Mechanical Engineer which were
foreign to the job applied for. He was then temporarily given the position of Civil Construction
Engineer.
• ITM gave him a termination notice indicating that he was dismissed pursuant to clause 17.4.3 of
his contract, which provided that ITM reserved the right to terminate any employee within the
three-month probationary period without need of any notice to the employee. Thus, he returned
to the PH and filed a case for illegal dismissal.

ISSUE: Whether or not Dagasdas was validly dismissed from work?

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Labor Law and Social Legislation Justice Del Castillo Digests

HELD: No, Dagasdas was not validly dismissed. Security of tenure remains even if employees, particularly
OFWs, work in a different jurisdiction. Thus, even if a Filipino is employed abroad, he or she is entitled to
security of tenure. In this case, prior to his deployment and while still in the PH, Dagasdas was made to
sign a POEA-approved contract with GPGS, on behalf of ITM; and, upon arrival in Saudi Arabia, ITM made
him sign a new employment contract. Nonetheless, this new contract, which was used as basis for
dismissing Dagasdas, is void for being in violation of his right to security of tenure. Article 297 of the Labor
Code provides for the just causes for dismissing an employee but ITM terminated Dagasdas for violating
a clause in the new contract. The clause is contrary to law because to allow employers to reserve a right to
terminate employees without cause is violative of the guarantee of security of tenure. Moreover, even if
Dagasdas was a probationary employee, his termination must still be with a valid clause. Furthermore, the
new contract was not shown to have been processed through the POEA. It also breached Dagasdas' original
contract as it was entered into even before the expiration of the original contract approved by the POEA.
• Lastly, Dagasdas, under the new contract, was not afforded procedural due process when he was
dismissed. Under the new contract, ITM reserved in its favor the right to terminate the contract
without serving any notice to Dagasdas in specified cases, which included such situation where
the employer decides to dismiss the employee within the probationary period. No prior notice of
purported infraction, and such opportunity to explain on any accusation against him was given to
Dagasdas; only a notice of termination was handed. In sum, the dismissal of Dagasdas was without
any valid cause and due process.

POST-EMPLOYMENT

ROYALE HOMES MARKETING CORPORATION v. FIDEL P. ALCANTARA


G.R. No. 195190 | July 28, 2014
Employee-Employer Relationship

DOCTRINE: Not every form of control that a hiring party imposes on the hired party is indicative of
employee-employer relationship. Rules and regulations that merely serve as guidelines towards the
achievement of a mutually desired result without dictating the means and methods of accomplishing it do
not establish employer-employee relationship
.
FACTS:
• Royale Homes, a corporation engaged in marketing real estates, appointed Alcantara as its
Marketing Director for a fixed period of one year. Alcantara’s work consisted mainly of marketing
Royale Homes’ real estate inventories on an exclusive basis. Royale Homes reappointed him for
several consecutive years, the last of which covered the period January 1 to December 31, 2003
where he held the position of Division 5 Vice President-Sales.
• Alcantara filed a complaint for illegal dismissal alleging:
o that he is a regular EE since he is performing tasks that are necessary and desirable to its
business
o The company gave him Php1.2M for the services he rendered to it
o He was dismissed in bad faith and in an oppressive manner.
• Royale Homes denied Alcanatara’s claims and argued that appointment paper of Alcantara is clear
that it engaged his services as an independent sales contractor for a fixed term of one year only;
Alcantara was paid purely on commission basis and Royale Homes had no control on how
Alcantara would accomplish his tasks and responsibilities as he was free to solicit sales at any time
and by any manner which he may deem appropriate and necessary; Alcantara is even free to recruit
his own sales personnel to assist him in pursuance of his sales target.

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Labor Law and Social Legislation Justice Del Castillo Digests

o Alcantara decided to leave the company after his wife, who was once connected with it as
a sales agent, had formed a brokerage company that directly competed with its business,
and even recruited some of its sales agents. Although this was against the exclusivity
clause of the contract, Royale Homes still offered to accept Alcantara’s wife back so she
could continue to engage in real estate brokerage, albeit exclusively for Royale Homes.

ISSUE: Whether or not Alcantara is an EE of Royale Homes.

HELD: No, in determining the existence of an employer-employee relationship, the Supreme Court (SC)
has generally relied on the four-fold test, to wit: (1) 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 with
respect to the means and methods by which the work is to be accomplished.
• As long as the level of control does not interfere with the means and methods of accomplishing the
assigned tasks, the rules imposed by the hiring party on the hired party do not amount to the labor
law concept of control that is indicative of employer-employee relationship.
• The element of payment of wages is also absent in this case. As provided in the contract, Alcantara’s
remunerations consist only of commission override of 0.5%, budget allocation, sales incentive and
other forms of company support. There is no proof that he received fixed monthly salary. No
payslip or payroll was ever presented and there is no proof that Royale Homes deducted from his
supposed salary withholding tax or that it registered him with the Social Security System (SSS),
Philippine Health Insurance Corporation, or Pag-Ibig Fund. In fact, his Complaint merely states a
ballpark figure of his alleged salary of P100,000.00, more or less.

VALEROSO v. SKYCABLE CORPORATION


G.R. No. 202015 | 13 July 2016
Employer-Employee Relationship

DOCTRINE: The most determinative factor in ascertaining the existence of employer-employee


relationship is the “right of control test.”

FACTS:
• Petitioners Valeroso and Legatona worked as account executives tasked to solicit cable
subscriptions for Skycable as evidenced by a certification issued by De la Cuesta, Skycable’s sales
manager. They receive commissions upon reaching a specific quota every month.
• From being direct hires of Skycable, they were transferred to Armada, Inc., an independent
contractor under a Sales Agency Agreement.So, they filed this case.
• Skycableclaimed that it did not terminate the services of Valeroso, et al. for there was never an
employer-employee relationship to begin with, becauseValeroso, et al. were engaged as
independent contractors. Further, when Valeroso, et al. filed their complaint they were employees
of Armada, Inc.
• Valeroso, et al. cited the following as indicators that they are under the direct control and
supervision of Skycable: 1) Skycable’s officers supervise their area of work, update them of new
promos they need to work on, inform them of meetings and penalize them for nonattendance, ask
them to train new agents/account executives, 2) Skycable’s supervisors delegate to them authority
to campaign against and legalize unlawful cable connections; 3) Skyacable’s supervisors monitor
their quota production; and 4) Skycable consistently awards them of their outstanding
performance.

ISSUE: Whether or not Valeroso et al were employees of Skycable.

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Labor Law and Social Legislation Justice Del Castillo Digests

HELD: No, Valeroso et al are not employees of Skycable. To prove the claim of an employer-employee
relationship, the following should be established by competent evidence: (1) 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 with respect to the means and methods by which the work is to be accomplished.
Among the four, the most determinative factor in ascertaining the existence of employer-employee
relationship is the “right of control test.” Under this control test, the person for whom the services are
performed reserves the right to control not only the end to be achieved, but also the means by which such
end is reached.

COLEGIO DEL SANTISIMO ROSARIO v. ROJO


G.R. No. 170388| 4 September 2013
Employer-Employee Relationship

DOCTRINE: Full-time teachers become regular or permanent employees once they have satisfactorily
completed the probationary period of three school years.

FACTS:
• Colegio del Santisimo Rosario (CSR) hired Rojo as a high school teacher on probationary basis for
the school years 1992-1993, 1993-19947 and 1994-1995.
• In 1995, CSR decided not to renew Rojo’s services.
• Rojo filed a complaint for illegal dismissal.
o He alleged that since he had served three consecutive school years which is the maximum
number of terms allowed for probationary employment, he should be extended permanent
employment. Citing paragraph 75 of the 1970 Manual of Regulations for Private Schools
(1970 Manual), Rojo asserted that “full-time teachers who have rendered three (3)
consecutive years of satisfactory services shall be considered permanent.”
• CSR argued that Rojo knew that his Teacher’s Contract for school year 1994-1995 with CSR would
expire in 1995. Accordingly, Rojo was not dismissed but his probationary contract merely expired
and was not renewed.CSR insists that a teacher hired for three consecutive years as a probationary
employee does not automatically become a regular employeeupon completion of his third year of
probation. It is the positive act of the school—the hiring of the teacher who has just completed three
consecutive years of employment on probation for the next school year—that makes the teacher a
regular employee of the school.

ISSUE: Whether or not a teacher in secondary level (high school) hired for three (3) consecutive school
years as a probationary employee automatically becomes a permanent employee upon completion of his
third year of probation.

HELD: Yes, cases dealing with employment on probationary status of teaching personnel are not governed
solely by the Labor Code as the law issupplemented, with respect to the period of probation, by special
rules found in the Manual of Regulations for Private Schools (the Manual).
• With regard to the probationary period, Section 92 of the 1992 Manual provides thatthe
probationary period for academic personnel shall not be more than three (3) consecutive years of
satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular
semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters
of satisfactory service for those in the tertiary level where collegiate courses are offered on a
trimester basis.
• That teachers on probationary employment also enjoy the protection afforded by Article 281 of the
Labor Code is supported by Section 93 of the 1992 Manual which provides thatthose who have
served the probationary period shall be made regular or permanent. Full-time teachers who have

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Labor Law and Social Legislation Justice Del Castillo Digests

satisfactorily completed their probationary period shall be considered regular or permanent.


ISSUE: Whether or not Rojo was illegally dismissed.

HELD: Yes. Tamson’s Enterprises, Inc. v. CA: “In all cases of probationary employment, the employer shall
convey 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. In the case, glaringly absent from CSR’s evidence are the reasonable standards that Rojo
was expected to meet that could have served as proper guidelines for purposes of evaluating his
performance. Nowhere in the Teacher’s Contract could such standards be found. Neither was it mentioned
that the same were ever conveyed to Rojo. Therefore, Rojo must be deemed as regular employee. If the
termination is brought about by the completion of a contract or phase thereof, or by failure of an employee
to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a
written notice is served the employee, within a reasonable time from the effective date of termination. In
the case, even assuming that Rojo failed to meet the standards set forth by CSR and made known to the
former at the time he was engaged as a teacher on probationary status, still, the termination was flawed for
failure to give the required notice to Rojo. Therefore, the dismissal was illegal.

VICMAR DEVELOPMENT CORPORATION v. ELARCOSA


G.R. No. 202215 | 09 December 2015
Employee-Employer Relationship

DOCTRINE: The test to determine whether an employee is regular is the reasonable connection between
the activity he performs and its relation to the employer's business or trade, as in the case of respondents
assigned to the boiler section. Nonetheless, the continuous re-engagement of all respondents to perform
the same kind of tasks proved the necessity and desirability of their services in the business of Vicmar.
They were shown to have performed activities necessary in the usual business for at least one year so the
presumption of regular employment should be granted in their favor.

FACTS:
• The respondents filed complaints for illegal dismissal against Vicmar Development Corporation,
alleging that Vicmar had employed them as extra workers but their assignments were necessary
and desirable to the business. In 2004, Vicmar informed them that they would be handled by
contractors who had no equipment or facilities of their own, thus resulting in a reduction of their
wages despite overtime work.
• They also claimed that 28 of them were no longer scheduled for work and that the remaining
respondents were subsequently not given any work schedule. As such, they averred that Vicmar
dismissed them from service without due process after they instituted the complaint.
• On the other hand, Vicmar contended that hiring said contractors was a cost-saving measure,
which was part of Vicmar's management prerogative. Said extra workers were employed on a
pakyaw basis.

ISSUE: Whether or not respondents are regular employees and their termination without valid cause
amounts to illegal dismissal?

HELD: Yes, the respondents were regular employees whose separation from work without valid cause
amounted to illegal dismissal. Section 280 of the Labor Code defines a regular employee as one who is 1)
engaged to perform tasks usually necessary or desirable in the usual business or trade of the employer,
unless the employment is one for a specific project or undertaking or where the work is seasonal and for
the duration of a season; or 2) has rendered at least 1 year of service, whether such service is continuous or
broken, with respect to the activity for which he is employed and his employment continues as long as

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Labor Law and Social Legislation Justice Del Castillo Digests

such activity exists. The test to determine whether an employee is regular is the reasonable connection
between the activity he performs and its relation to the employer's business or trade, as in the case of
respondents assigned to the boiler section. Nonetheless, the continuous re-engagement of all respondents
to perform the same kind of tasks proved the necessity and desirability of their services in the business of
Vicmar. They were shown to have performed activities necessary in the usual business for at least one year
so the presumption of regular employment should be granted in their favor.
• Likewise, Vicmar failed to prove that the contractors it engaged were legitimate labor
contractors. To determine the existence of independent contractorship, it is necessary to
establish that the contractor carries a distinct and independent business, and undertakes to
perform work on its own account and under its responsibility and pursuant to its own manner
and method, without the control of the principal, except as to the result; that the contractor has
substantial capital or investment; and, that the agreement between the principal and the
contractor assures the contractual employees to all labor and occupational safety and health
standards, to right to self-organization, security of tenure and other benefits. The registration
of the contractors is not conclusive of the status of a legitimate contractor; rather, it merely
prevents the presumption of being a labor-only contractor from arising, especially when no
evidence has been shown to prove that E.A. Rosales Contracting has substantial capital and
that contractors undertook performance of service contracts without the control and
supervision of Vicmar.

HERMA SHIPYARD, INC. v. OLIVEROS


G.R. No. 208936 | 17 April 2017
Employer-Employee Relationship

DOCTRINE: The test in determining whether one is a project-based employee, is whether he was assigned
to carry out a specific project or undertaking, the duration and scope of which was specified, and made
known to him, at the time of his engagement.

FACTS:
• Herma is engaged in the business of shipbuilding and repair. Oliveros, et al. were its employees
occupying positions such as welder, pipe fitter, laborer, helper, etc.
• Oliveros filed for illegal dismissal, regularization, and non-payment of service incentive leave pay.
They alleged that they are regular employees who have been continuously performing tasks
usually necessary and desirable in its business. However, Herma dismissed them from
employment.Oliveros, et al. further alleged that as a condition to their continuous and
uninterrupted employment, Herma made them sign employment contracts for a fixed period
ranging from 1 -4 months to make it appear that they were project-based employees and to defeat
their right to security of tenure, but in truth there was never a time when they ceased working for
Henna due to expiration of project-based employment contracts.
• Herma argued that Oliveros, et al. were its project-based employees in its shipbuilding projects
and that the specific project for which they were hired had already been completed.

ISSUE: Whether or not Oliveros, et al. were project-based employees?

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Labor Law and Social Legislation Justice Del Castillo Digests

HELD: Yes, Oliveros et al are project-based employees.A project-based employee under Article 294 of the
Labor Code is one whose employment has been fixed for a specific project or undertaking, the completion
or termination of which has been determined at the time of the engagement of the employee. Their services
are co-terminous with the project and may be terminated upon the end or completion of the project or a
phase for which they were hired.The principal test in determining whether particular employees were
engaged as project-based employees, as distinguished from regular employees, is whether they were
assigned to carry out a specific project or undertaking, the duration and scope of which was specified at,
and made known to them, at the time of their engagement. It is crucial that the employees were informed
of their status as project employees at the time of hiring and that the period of their employment must be
knowingly and voluntarily agreed upon by the parties, without any force, duress, or improper pressure
being brought to bear upon the employees or any other circumstances vitiating their consent.
• In this case, first, Oliveras, et al. knowingly and voluntarily entered in project-based employment
contracts. Second, even if the tasks assigned were necessary and desirable in the usual business,
the same were distinct and separate, and identifiable as such, from the other undertaking of the
company or other contract services. Such job or undertaking begins and ends at determined or
determinable times; hence, it does not automatically imply regular employment. Further, the rule
that employees initially hired on a temporary basis may become permanent employees by reason
of their length of service is not applicable to project-based employees. Considering the nature of
business, it is clear that Herma only hired workers when it has existing contracts for shipbuilding
and repair. It is not engaged in the business of building vessels for sale which would require it to
continuously construct vessels and consequently hire permanent employees. Moreover, contrary
to Oliveras, et al.’s claim, their employment was neither continuous and uninterrupted nor for a
uniform period of one month; they were intermittent with varying durations as well as gaps
ranging from a few days to several weeks or months. These gaps coincide with the completion of
a particular project and the start of a new specific and distinct project for which they were
individually rehired.

GRAND ASIAN SHIPPING LINES v. GALVEZ


G.R. No. 178184 | 19 January 2014
Employer-Employee Relationship

DOCTRINE: Field personnel refers to “non-agricultural employees who regularly perform their duties
away from the principal place of business or branch office of the employer and whose actual hours of work
in the field cannot be determined with reasonable certainty.” They are those who perform functions which
cannot be effectively monitored by the employer or his representative.

FACTS:
• GASLI is engaged in in transporting liquified petroleum gas (LPG) from Petron Corp.’s refinery in
Bataan to Petron’s Plant in Pasig and Petron’s Depot in Cavite.
• Respondents are crewmembers of one of GASLI’s vessels.
o Managerial employees: Galvez as Captain; Gruta as Chief Engineer
o Rank-and-file employees: Arguelles as Radio Operator; Batayola, Fresmillo and Noble as
Able Seamen; Dominico and Nilmao as Oilers; and Austral as 2nd Engineer
• It was reported that respondents were committing an illegal activity aboard the vessel.
o Substantial volume of fuel oil is unconsumed and stored in the vessel’s fuel tanks.
However, respondents would misdeclare it as consumed. Then, the saved fuel oil is
siphoned and sold to other vessels out at sea usually at nighttime. Respondents would
then divide among themselves the proceeds of the sale.
• GASLI initially placed respondents under preventive suspension; but after administrative hearing,
decided to terminate them from employment.

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o GASLI claims that a prima facie case of qualified theft, and the Information for qualified
theft constituteas reasonable ground to believe that respondents were responsible for the
pilferage of diesel fuel oil, which renders them unworthy of the trust and confidence
reposed on them.
• Respondents filed separate complaints for illegal dismissal.

ISSUE: Whether or not Arguelles, Batayola, Fresnillo, Noble, Dominico, Nilmao and Austral are classified
as field personnel.

HELD: No, Article 82 defines field personnel as referring to “non-agricultural employees who regularly
perform their duties away from the principal place of business or branch office of the employer and whose
actual hours of work in the field cannot be determined with reasonable certainty.” They are those who
perform functions which cannot be effectively monitored by the employer or his representative. Here,
respondents, during the entire course of their voyage, remain on board the vessel. They are not field
personnel inasmuch as they were constantly supervised and under the effective control of the GASLI
through the vessel’s ship captain.

ALVIADO v. PROCTER & GAMBLE PHILS., INC.


G.R. No. 160506 | 09 March 2010
Employer-Employee Relationship

DOCTRINE: In labor-only contracting, the contractor is merely an agent of the principal employer and the
latter is responsible to the employees of the contractor as if they were directly employed by principal
employer.

FACTS:
• Petitioners worked as merchandisers of P&G. They all individually signed employment contracts
with either Promm-Gem or SAPS, were assigned at different outlets, supermarkets and stores
where they handled all the products of P&G. They also received their wages from Promm-Gem or
SAPS.
• SAPS and Promm-Gem imposed disciplinary measures on erring merchandisers.
• P&G entered into contracts with Promm-Gem and SAPS for the promotion and merchandising of
its products.
• Petitioners filed a complaint against P&G for regularization, service incentive leave pay and other
benefits with damages and complaint was amended for their subsequent dismissal.

ISSUE: Whether P&G is the employer of petitioners.

HELD: Only those supplied by SAPS are employees of P&g. Promm-Gem is a legitimate independent
contractor: (a) its financial statements show that it has authorized capital stock of P1M and P500k as paid-
in capital; (b) maintained its own warehouse and office space; (c) has three registered vehicles; (d) has other
clients other than P&G; and (e) provided its employees with relevant materials and issued uniforms to
them. While SAPS is engaged in labor-only contracting: (a) has a paid-in capital of only P31,250 – no
substantial capital; (b) no showing of substantial investment in tools, equipment or other assets; and (c) the
workers it recruited are performing activities which are directly related to the business of P&G.

When ‘labor-only’ contracting exists, the Labor Code establishes an employer-employee relationship
between the employer and employees of the ‘labor-only contractor.’ Contractor is merely an agent of the
principal employer and the latter is responsible to the employees of labor-only contractor as if such
employees had been directly employed by the principal employer.

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Thus, those who were recruited and supplied by SAPS – which engaged in labor-only contracting- are
considered employees of P&G. Those who worked under Promm-Gem, are considered employees of the
latter, not of P&G.

ISSUE: Whether petitioners were illegally dismissed.

HELD: Yes, there was no valid cause for the dismissal or petitioners-employees of Promm-Gem: (a) they
were guilty of only simple misconduct for assailing the integrity of Promm-Gem as a legitimate and
independent promotion firm. Since the misconduct is not serious or grave, it cannot be a valid basis for
dismissing an employee; (b) they have not been shown to be occupying positions of responsibility or of
trust and confidence; (c) neither is there any evidence to show that they are unfit to continue to work as
merchandisers for Promm-Gem. Although the latter complied with procedural aspect of due process, it
failed to comply with substantive aspect as the acts complained of neither constitute serious misconduct
nor breach of trust. Hence, dismissal is illegal.

• With regard to those placed with P&G by SAPS, they were given no notice of dismissal. SAPS
dismissed its employees upon the initiation of P&G. The latter failed to discharge the burden of
proving the legality and validity of the dismissals of its employees. Hence, dismissals were not
justified and therefore illegal.

ALIVIADO ET AL v. PROCTER & GAMBLE


G.R. No. 160506| 6 June 2011
Employer-Employee Relationship

DOCTRINE: The principal of the labor-only contractor is considered the employer of the workers supplied,
and therefore can be held solidarily liable with the labor-only contractor for all the rightful claims of the
employees.

FACTS:
• Promm-Gem Inc and Sales and Promotion Services (SAPS) supplies laborers to Procter&Gamble.
• When contract with several workers were terminated, they filed a case for illegal dismissal against
P&G, claiming that Promm-Gem and SAPS are labor-only contractors, and P&G is the principal
and actual employer.
• SC ruled that Promm-Gem is a legitimate labor contractor; while SAPS is labor-only contractor and
P&G is the employer of SAPS workers who are entitled to reinstatement and moral dmgs.
• Hence, this 2nd Motion for Reconsideration with prayer to refer the case to SC En Banc, one of the
grounds is that P&G cannot be considered the employer without applying the four-fold test of
control.

ISSUE: Whether P&G can be considered the employer of the workers provided by SAPS which was
found to be a labor-only contractor.

HELD: Yes, P&G is considered the employer. A labor-only contractor is one that has no substantial
capitalization and the employees supplied are performing activities which are directly related to principal’s
main business; or the contractor does not exercise the right to control the performance of the work of the
contractual employee. In this case SAPS met at least one of the requirements, which is that it does not have
substantial capitalization, and the merchandising and promotional activities provided by the contractual
employees are directly related to P&G’s business.Substantial capital refers to capitalization used in the
performance or completion of the job, work or service contracted out.SAPS failed to show that with its very

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Labor Law and Social Legislation Justice Del Castillo Digests

low capital, it could complete the contracts entered into with P&G. Its capital is not even sufficient for one
month’s payroll. P&G can be considered as the employer without using the Control test since a labor-only
contracting is prohibited, the law clearly establishes an employer-employee relationship between the
principal employer and the contractor’s employee upon a finding that the contractor is engaged in labor-
only contracting. Because P&G is considered the principal employer, it therefore becomes solidarily liable
with the labor-only contractor for all the rightful claims of the employees.

SY v. FAIRLAND
G.R. No. 182915 | 12 December 2011
Employer-Employee Relationship

DOCTRINE: The presumption is that a contractor is a labor-only contractor unless such contractor
overcomes the burden of proving that it has substantial capital, investment, tools, and the like.

FACTS:
• Fairland is engaged in the garment business, while Susan de Leon is the owner of Weesan
Garments. The complaining workers are sewers, trimmers, helpers, a guard and a secretary hired
by Weesan—some of which filed a complaint with the NLRC for underpayment/non-payment of
wages, overtime, premium pay, 13th month, and other benefits. Fairland is impleaded by the
petitioner workers in the case as the alleged true owner of the workplace of Weesan.
• Both Weesan and Fairland were declared by the CA as solidarily liable as labor-only contractor
and principal, respectively. This was later overturned by the CA Special Ninth Division ruling that
Fairland is not liable to the workers since Weesan it a bonafide independent contractor.

ISSUE: Whether or not Weesan is a mere labor-only contractor

HELD: Yes, there is labor-only contractor when the contractor or subcontractor merely recruits, supplies,
or places workers to perform a job, work, or service for a principal. The following elements must be present:
(1) 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 (2) the workers recruited and
placed by such person are performing activities which are directly related to the principal business of the
employer.SC found that the workers, majority of whom are sewers, were recruited by Susan/Weesan and
that they performed activities which are directly related to Fairlands principal business of garments. As to
the requisite of substantial capital or investment, the SC found nothing that will show that Weesan has
investment in the form of tools, equipment or machineries. It was shown that Fairland has to furnish
Weesan with sewing machines to provide for the sewing needs of the former (Fairland). Weesan was also
unable to prove that it had substantial capital for the business. The presumption is that a contractor is a
labor-only contractor unless such contractor overcomes the burden of proving that it has substantial capital,
investment, tools, and the like. As Weesan was not able to adduce evidence that Weesan had any
substantial capital, investment, or assets the presumption that Weesan is a labor-only contractor stands.

PETRON CORPORATION v. CABERTE


G.R. No. 182255 |15 June 2015
Employer-Employee Relationship

DOCTRINE: A contractor is deemed a labor-only contractor if: (1) the contractor does not have substantial
capital or investment to actually perform the job, work or service under its own account and responsibility;
and (2) the employees recruited, supplied or placed by such contractor are performing activities which are
directly related to the main business of the principal.

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Labor Law and Social Legislation Justice Del Castillo Digests

FACTS:
• Respondents were hired to work at Petron’s Bacolod Plant as LPG/Gasul Fillers, maintenance
crew, warehousemen, utility workers and tanker receiving crew.
• On various dates from March 1, 1996 to June 30, 1999 Petron and ABC, a labor contractor entered
into a Contract of Services for LPG Assistance Services.
• On July 1, 1999, Petron no longer allowed them to enter the plant to work because of their allegation
that the service contracts with ABC had already expired.
• On July 2, 1999, Respondents filed a complaint for Illegal Dismissal and payment of wages and
benefits.
o They allege that even before Petron engaged ABC as a contractor in 1996, most of them
had already been working in Petron. However, when Petron engages a new contractor, it
would designate such new contractor as their employer
o Nevertheless, they allege that Petron exercised control over their work which is necessary
and desirable in its usual trade and business while on the other hand ABC is a mere labor
only-contractor. As such, Petron is their employer.
• Petron argues that ABC is an independent contractor. An in support of this, they presented pieces
of evidence such as ABC’s audited financial statements, performance bond, certificate of
registration etc.

ISSUE: Whether or not ABC is an independent contractor.

HELD: No, Art. 106 of the Labor Code provides for the following elements of labor-only contracting: (1)no
have substantial capital or investment in the form of tools, equipment, machineries, work premises, among
others, supplies workers to an employer and (2) the workers recruited are performing activities which are
directly related to the principal business of such employer. In this case,only ABC’s financial statements in
the years of 1992-1994 were presented and this cannot be given any weight as the service contract between
Petron were only entered into in 1996. It was also shown that the performance bond was not enough to
cover payrolls, wages, rentals, equipment and other liabilities. Thus, ABC did not have substantial
capital.Moreover, ABC did have basic equipment for the performance of respondent’s job as per the
records, they were only renting a forklift from Petron to be able to do respondents’ jobs. Also, it was shown
that the property leased by ABC in Bacolod was used in the performance of the job being contracted out.
Thus, ABC also does not have substantial investment in the form of tools, equipment etc.The works of
respondents are directly related to the principal business of the employer as they are vital in the
manufacture and distribution of petroleum products. Thus in this case, Petron is considered the real
employer of the respondents who are in turn considered as regular employees.

ISSUE: Whether respondents were illegally dismissed.

HELD: Yes, under Art. 279 of the Labor Code, regular employment can only be terminated for a just and
authorized cause. Since the reason given by Petron does not constitute either, the respondents are
considered to have been illegally dismissed. As such they are entitled to all the remedies provided by law
to a dismissed employee i.e. backwages and reinstatement or if no longer feasible, separation pay.

VALENCIA v. CLASSIQUE VINYL PRODUCTS CORP. (CLASSIQUE) AND


CANTINGAS MANPOWER (CANTINGAS)
G.R. No. 206390 | 30 January 2017
Employer-Employee Relationship

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DOCTRINE: Generally, the presumption is that the contractor is a labor-only contractor unless such
contractor overcomes the burden of proving that it has the substantial capital, investment, tools and the
like. In labor-only contracting, the statute creates an employer-employee relationship for a comprehensive
purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the
principal employer and the latter is responsible to the employees of the labor-only contractor as if such
employees had been directly employed by the principal employer. The principal employer therefore
becomes solidarily liable with the labor-only contractor for all the rightful claims of the employees.

FACTS:
• Valencia allegedly applied for work with Classique and was told by the latter’s personnel office to
proceed to Cantingas, a local manpower agency and therein submit the requirements for
employment. Upon submission, Valencia was made to sign a contract of employment but no copy
was given to him.
• Valencia then started working with Classique as felitizer operator. Five months later, he was made
to serve as extruder operator but without the corresponding increase in salary. He was neither paid
his holiday pay, service incentive leave pay, and 13th month pay. Worse, premiums were not paid
and his monthly deductions for SSS premiums were not properly remitted.
• Valencia averred that his salary was paid on a weekly basis but his pay slips neither bore the name
of Classique nor of Cantingas; that all the machineries that he was using in connection with his
work were all owned by Classique; and, that his work was regularly supervised by Classique Vinyl.
As such, Valencia averred that his true employer is Classique Vinyl, since Cantingas is a mere
labor-only contractor.

ISSUE: Whether or not Cantingas is a labor-only contractor.

HELD: No, the presumption is that the contractor is a labor-only contractor unless such contractor
overcomes the burden of proving that it has the substantial capital, investment, tools and the like. In labor-
only contracting, the statute creates an employer-employee relationship for a comprehensive purpose: to
prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal
employer and the latter is responsible to the employees of the labor-only contractor as if such employees
had been directly employed by the principal employer. The principal employer therefore becomes
solidarily liable with the labor-only contractor for all the rightful claims of the employees.Here, to prove
that Cantingas was a legitimate contractor, Classique presented the former’s Certificate of Registration with
the DTI and, License as private recruitment and placement agency from the DOLE. Indeed, these
documents are not conclusive evidence of the status of Cantingas as a contractor. However, such fact of
registration of Cantingas prevented the legal presumption of it being a mere labor-only contractor from
arising. The facts of this case, however, failed to establish that there is any circumvention of labor laws as
to call for the creation by the statute of an employer-employee relationship between Classique and
Valencia. In fact, even as against Cantingas, Valencia’s money claims has been debunked by the labor
tribunals and the CA. Again, the Court is not inclined to disturb the same.

BASAY v. HACIENDA CONSOLATION


G.R. No. 175532 | 19 April 2010
Termination of Employment

DOCTRINE: It is incumbent upon the employee to first establish the fact of his or her dismissal before
employers are burdened to prove that they did not commit illegal dismissal.

FACTS:

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• Hacienda Consolation hired Basay, Literal as tractor operators and Abueva as laborer in the sugar
cane plantation.
• Three petitioners filed a complaint for illegal dismissal with monetary claims against respondents.
o Respondents verbally informed them to stop working.
o They were not given work assignments despite being regular employees.
o Termination was done in violation of their right to due process.
• Hacienda denied the allegations.
o Abueva is not an employee; his name does not appear in the payroll.
o Literal and Basay are both regular employees and have abandoned their jobs.
o Literal was facing charges of misconduct, insubordination, damaging and taking
advantage of hacienda property and instead of explaining, he did not report for work.

ISSUE: Whether petitioners were illegally dismissed and are entitled to money claims.

HELD: No, there was no dismissal to speak of. Aside from mere allegations, no evidence was proffered by
petitioners that they were dismissed from employment. The records are bereft of any indication that
petitioners were prevented from returning to work or otherwise deprived of any work assignment by
respondents. Respondents have manifested their willingness to retain petitioners in their employ but the
latter refused to do so upon the advice of their lawyer. Court is not convinced that petitioners were told to
stop working or were prevented from working in the hacienda. The filing of illegal dismissal complaint
could not by itself be the sole consideration in determining whether they have been illegally dismissed.
• As to money claims, Basay and Literal are entitled to salary differentials for two years and
proportionate 13th month pay from January 1-29, 2001. Abueva is not an employee, thus not
entitled to his claims.

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. HONRADO


G.R. No. 189366 |December 13, 2010
Termination of Employment

DOCTRINE: The quantum of proof required in determining the legality of an employee’s dismissal is
only substantial evidence i.e. where the employerhas reasonable ground to believe that the employee is
responsible for the misconduct.

FACTS:
• Respondent Honrado was an employee of PLDT, who introduced himself in a different name as
an area inspector of PLDT and thereafter solicited and received partial payments from clients sps.
Mueda for the installation of their telephone line.
o such practice is against the policy of PLDT
• After due hearing, Honrado was notified that he was found liable as charged, hence, dismissed
from service. Consequently, he filed a complaint for illegal dismissal.

ISSUE: Whether or not respondent was illegally dismissed.

HELD: No. The requisites for a valid dismissal are: (a) the employee must be afforded due process, that is
– he must be given an opportunity to be heard and defend himself; and (b) the dismissal must be for a valid
cause as provided in Article 282 of the Labor Code or for any of the authorized causes under Articles 283
and 284 of the same code. The requisites are present in this case. Firstly, upon the identification of
respondent as the offender, he was apprised of the charges against him as well as his rights. Respondent

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Labor Law and Social Legislation Justice Del Castillo Digests

was then notified by way of an Inter-Office Memo of the formal charges against him and was required to
explain in writing why he should not be dismissed for serious misconduct. He filed a reply denying all the
allegations imputed against him and requested for a formal hearing. Subsequently, respondent received a
Notice of Termination informing him that after a careful evaluation of his case, he was found liable as
charged and dismissed from the service due to gross misconduct. Secondly, the quantum of proof required
in determining the legality of an employee’s dismissal is only substantial evidence. The standard of
substantial evidence is met where the employer, as in this case, has reasonable ground to believe that the
employee is responsible for the misconduct and his participation in such misconduct makes him unworthy
of the trust and confidence demanded by his position.

EXODUS CONSTRUCTION v. ROSLINDA


G.R. No. 166109 | February 23, 2011
Termination of Employment

DOCTRINES: In cases of illegal dismissal, the employer bears the burden of proof to prove that the
termination was for a valid or authorized caused but it must first be establish that the employees were
indeed dismissed otherwise there can be no question as to the legality or illegality thereof.Abandonment
is the deliberate and unjustified refusal of an employee to resume his employment and not mere absence
or failure to report for work.

FACTS:
• Exodus hired respondents as painters.
• Respondents filed a complaint for illegal dismissal and non-payment of holiday pay, service
incentive leave pay, 13th month pay and night-shift differential pay.
• Petitioners denied respondents' allegations averring that they were not dismissed asthey absented
themselvesthen no longer reported for work. Others did so after being reprimanded from being
caught eating during work hours or being absent without leave, and another applied as a painter
with another company.

ISSUE: Whether or not respondents were illegally dismissed.

HELD: No, before the petitioners must bear the burden of proving that the dismissal was legal, it must first
establish by substantial evidence that indeed the employees were dismissed. There was no dismissal in this
case hence, there is no question that can be entertained regarding its legality or Illegality. There was no
evidence that respondents were dismissed nor were they prevented from returning to their work. It was
only respondents’ unsubstantiated conclusion that they were dismissed. As a matter of fact, respondents
could not name the particular person who effected their dismissal and under what particular
circumstances.

ISSUE: Whether or not there was abandonment of work on the part of respondents.

HELD: No, there was no abandonment on the part of respondents that would justify their dismissal from
their employment. It is a settled rule that “mere absence or failure to report for work x x x is not enough to
amount to abandonment of work,” as abandonment is the deliberate and unjustified refusal of an employee
to resume his employment. To constitute abandonment of work, two elements must concur: (1) the
employee must have failed to report for work or must have been absent without valid or justifiable reason;
and (2) there must have been a clear intention on the part of the employee to sever the employer-employee
relationship manifested by some overt act. It is the employer who has the burden of proof to show a
deliberate and unjustified refusal of the employee to resume his employment without any intention of
returning, which petitioners failed to do so.

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QUIAMBAO v. MANILA ELECTRIC COMPANY


G.R. No. 171023 | 18 December 2009
Termination of Employment

DOCTRINE: No separation pay when employee’s dismissal is based on gross & habitual neglect of duty.

FACTS:
• Quiambao was employed as branch teller by MEC.
• He was dismissed due to excessive, unauthorized and unexcused absences which constitute:
o Abandonment of work under Company Code of Employee Discipline and;
o Gross and habitual neglect of duty under Art. 282 of the Labor Code.
• He filed a complaint for illegal dismissal which was dismissed by Labor Arbiter.
• NLRC affirmed legality of dismissal due to habitual absenteeism but awarded separation pay.
• CA reinstated Labor Arbiter’s decision of dismissing the complaint and ruled Quiambao is not
entitled to separation pay.

ISSUE: Whether validly dismissed employee is entitled to separation pay.

HELD: No, even assuming that the ground of his dismissal is gross and habitual neglect of duty, still, he is
not entitled to severance pay. In Central Philippines Bandag Retreaders, Inc. v. Diasnes, the Court
discussed the parameters of awarding separation pay to dismissed employees as a measure of financial
assistance, viz.: “to reiterate our ruling in Toyota, labor adjudicatory officials and the CA must demur the
award of separation pay based on social justice when an employee’s dismissal is based on serious
misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or
commission of a crime against the person of the employer or his immediate family - grounds under Art.
282 of the Labor Code that sanction dismissals of employees. The liberality of the law can never be extended
to the unworthy and undeserving.

MALABUNGA v. CATHAY PACIFIC STEEL


G.R. No. 198515 | 15 June 2015
Termination of Employment

DOCTRINE: 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.

FACTS:
• Malabunga was employed as a machinist by respondent.
• On July 9, 2004, an inventory of respondent’s tools and items at its warehouse was made wherein
it was found that 1 aluminum level was issued to the Fabrication Unit and one to Malabunga.
• Subsequently on July 11, 2004, Malabunga returned an aluminum level to the warehouse.
• Respondent served a written notice to Malabunga charging him with the theft of the aluminum
level issued to the Fabrication unit. They alleged he stole the same and subsequently returned it to
cover up for the loss of the one issued to him.
• Respondent relied on the statements of the warehousemen to the effect that what Malabunga
returned was an untarnished aluminum level but which was issued to the Fabrication Unit
• On the contrary, Malabunga argues that what he returned was the aluminum level issued to him
and not the one issued to the Fabrication Unit.

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Labor Law and Social Legislation Justice Del Castillo Digests

• An investigation into the matter was conducted and during the same, statements of 3 Fabrication
Unit workers were taken. All three of them stated that they noticed that sometime in June 2004,
they noticed that the unit’s aluminum level was missing.
• Management issued a decision suspending Malabunga for 30 days for the theft of the Fabrication
Unit’s aluminum level and required him to pay the value of the lost aluminum level which was
the one issued to him.

ISSUE: Whether or not respondent is guilty of illegal dismissal.

HELD: No, there were doubts as to the evidence presented which were supposedly the factual basis of the
charges of theft against petitioner. First, the testimonies of the Warehousemen and the Fabrication Unit
workers contradict each other, the former said that what they received from Malabunga was an untarnished
aluminum level and is free from any dents. Second, if it is true that the Fabrication Unit’s aluminum level
was lost sometime on June 2004 and was subsequently discovered by one employee in the warehouse all
along when he went there to borrow one. Then, it cannot be said that the Aluminum level which had the
engraved word “Fabrication”on it and had a dent was the one Malabunga had returned. 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. Thus, it can be said that Malabunga did not commit theft of the Fabrication Unit’s
Aluminum level.

BROWN v. MARSWIN MARKETING, INC. (MARSWIN)


G.R. No. 206891 | 15 March 2017
Termination of Employment

DOCTRINE: In dismissal cases, the employer bears the burden of proving that the employee was not
terminated, or if dismissed, that the dismissal was legal. Resultantly, the failure of the employer to
discharge such burden would mean that the dismissal is unjustified and thus, illegal. The employer cannot
simply discharge such burden by its plain assertion that it did not dismiss the employee; and it is highly
absurd if the employer will escape liability by its mere claim that the employee abandoned his or her work.
In fine, where there is no clear and valid cause for termination, the law treats it as a case of illegal dismissal.

In order for the employer to discharge its burden to prove that the employee committed
abandonment, which constitutes neglect of duty, and is a just cause for dismissal, the employer must prove
that the employee: 1) failed to report for work or had been absent without valid reason; and 2) had a clear
intention to discontinue his or her employment.

FACTS:
• Brown was employed as building maintenance/electrician by Marswin and was tasked to maintain
the latter’s warehouse’s sanitation and make necessary electrical repairs thereon.
• Brown averred that on 28 May 2010, he reported at Marwin’s Main Office and was told that it was
already his last day of work. Allegedly, he was made to sign a document he did not understand
and was thereafter no longer admitted back to work. As such, Brown insisted that he was
terminated without due process.
• Marswin countered that during Brown’s 8-month stay, it received negative reports about Brown’s
work ethics, competence and efficiency. Accordingly, they allegedly summoned Brown at its
Main Office to discuss the complaints and informed the latter of the charges.

ISSUE: Whether or not Brown was properly dismissed.

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Labor Law and Social Legislation Justice Del Castillo Digests

HELD: No, Brown was not properly dismissed. In this case, apart from the allegation of abandonment,
Marswin presented no evidence proving that Brown failed to return without justifiable reasons and had
clear intentions to discontinue his work.In fact, Marswin did not specify any overt act on the part of Brown
showing that he intended to cease working for it. At the same time, Marswin failed to establish that it
exerted effort to convince Brown to return for work. And neither did Marswin send any notice to Brown to
warn him that his supposed failure to report would be deemed as abandonment of work. Clearly from the
foregoing, Marswin failed to discharge the burden of proving that Brown abandoned his work.
• In addition, after Brown’s last day at work, he already filed an illegal dismissal suit against his
employer. Such filing conveys his desire to return, and strengthens his assertion that he did not
abandon his work. To add, in his Complaint, Brown prayed for reinstatement, which further
bolsters his intention to continue working for Marswin, and negates abandonment.Indeed, the
immediate filing of an illegal dismissal case especially so when it includes a prayer for
reinstatement is totally contrary to the charge of abandonment.

CANEDO v. KAMPILAN
G.R. No. 179326 | 31 July 2013
Termination of Employment

DOCTRINE: A floating status of an employee is lawful and can ripen into constructive dismissal only
when it goes beyond the six-month maximum period allowed by law.

FACTS:
• Respondent agency hired the petitioner as security guard and assigned him at NPC.
• Petitioner was then suspended from work for not wearing proper uniform while on duty.
• NPC then informed the agency that it was no longer interested in petitioner’s services and
requested for his replacement.
• Petitioner requested Arquiza to issue a certification in connection with his intended retirement
effective that month. Thus, Arquiza issued the Certification stating that Canedo was terminated
from his employment as per client’s request.
• Five days later, petitioner filed before the Labor Arbiter a Complaint for illegal dismissal, illegal
suspension and non-payment of monetary benefits against respondents

ISSUE: Whether or not there was illegal dismissal.

HELD: No, in illegal dismissal cases, "while the employer bears the burden x xx to prove that the
termination was for a valid or authorized cause, the employee must first establish by substantial evidence
the fact of dismissal from service." The burden of proving the allegations rests upon the party alleging and
the proof must be clear, positive and convincing. Petitioner relies on the word "terminated" as used in the
Certification issued him by Arquiza and argues that the same is a clear indication that he was dismissed
from service. However, petitioner cannot simply rely on this piece of document since the fact of dismissal
must be evidenced by positive and overt acts of an employer indicating an intention to dismiss. Here, aside
from this single document, petitioner proffered no other evidence showing that he was dismissed from
employment. While it is true that he was not allowed to report for work after the period of his suspension
expired, the same was due to NPC’s request for his replacement as NPC was no longer interested in his
services. And as correctly argued by respondents, petitioner from that point onward is not considered
dismissed but merely on a floating status. "Such a ‘floating status’ is lawful and not unusual for security
guards employed in security agencies as their assignments primarily depend on the contracts entered into
by the agency with third parties."A floating status can ripen into constructive dismissal only when it goes
beyond the six-month maximum period allowed by law. In this case, petitioner filed the Complaint for
illegal dismissal even before the lapse of the six-month period. Hence, his claim of illegal dismissal lacks

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basis. Moreover and as aptly observed by the NLRC, it was in fact petitioner who intended to terminate his
relationship with respondents through his planned retirement. This is further bolstered by his prayer in his
Complaint where he sought for separation pay and not for reinstatement.

MALIXI v. MEXICALI PHILIPPINES (MEXICALI)


G.R. No. 205061 | 8 June 2016
Termination of Employment

DOCTRINE: Resignation 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.

FACTS:
• Malixi was hired by Mexicali as a team leader assigned at the delivery service. In October 2008,
Mexicali informed her of its intention to transfer and appoint her as store manager at a newly
opened branch in Alabang Town Center, due to her satisfactory performance. Malixi then
submitted a resignation letter as team leader as advised by Mexicali and started working as Store
Manager, although no employment contract and ID was issued to her.
• However, in December 2008, Malixi was compelled to sigh an end-of-contract letter by reason of a
criminal complaint of sexual harassment she filed against Mexicali’s operation manager. Given her
vehement refusal to sign, Malixi was informed that it was her last day of work.
• Mexicali denied responsibility for Malixi’s dismissal and averred that Malixi has already resigned
from Mexicali by virtue of the resignation letter she was asked to make.

ISSUE: Whether or not Malixi resigned from her employment with Mexicali.

HELD: Yes, resignation 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.In this case, Malixi tendered her resignation letter preparatory to her transfer to Calexico
for a higher position and pay. In the said letter, she expressed her gratitude and appreciation for the two
months of her employment with Mexicali and intimated that she regrets having to leave the company.
Clearly, expressions of gratitude and appreciation as well as manifestation of regret in leaving the company
negate the notion that she was forced and coerced to resign. In the same vein, an inducement for a higher
position and salary cannot defeat the voluntariness of her actions. It should be emphasized that petitioner
had an option to decline the offer for her transfer, however, she opted to resign on account of a promotion
and increased pay.In termination cases, the employee is not afforded any option. The employee is
dismissed and his only recourse is to institute a complaint for illegal dismissal against his employer.
Clearly, this does not hold true for Malixi in the instant case. Further, Malixi is a managerial employee who,
by her educational background could not have been coerced, forced or induced into resigning from her
work.

STA. ANA v. MANILA JOCKEY CLUB, INC.


G.R. No. 208459 | 15 February 2017
Termination of Employment

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DOCTRINE: To legally dismiss an employee on the ground of loss of trust, the employer must establish
that a) the employee occupied a position of trust and confidence, or has been routinely charged with the
care and custody of the employer’s money or property; b) the employee committed a willful breach of trust
based on clearly established facts; and c) such loss of trust relates to the employee’s performance of duties.
It is a cardinal rule that loss of trust and confidence should be genuine, and not simulated; it must arise
from dishonest or deceitful conduct, and must not be arbitrarily asserted in the face of overwhelming
contrary evidence.

An illegally dismissed employee is entitled to two (2) separate reliefs: full backwages and
reinstatement.

FACTS:
• MJC hired Sta. Ana as outlet teller of its off-track betting station in Tayuman, Manila. Because horse
racing was not on a daily basis, Sta. Ana’s work schedule was only for 12 days per month.
• On 13 November 2008, MJC issued a Memorandum stating that its Treasury Department was
discovered to have been illegally appropriating funds and lending it out to the employees of MJC.
As a result MJC required its officers and employees to report any loan obtained from said
department or any of its personnel.
• By reason of the said anomalies, MJC formally charge Sta. Ana for dishonesty and other fraudulent
acts. In her defense, Sta. Ana contended that even prior to the takeover of the new management of
MJC, she had been engaged in the lending business to augment her income and that she did not
know anything regarding MJC’s unaccounted money. Thereafter, MJC dimissed Sta. Ana from
employment.

ISSUE: Whether or not Sta. Ana was validly dismissed on the ground of loss of trust and confidence.

HELD: No, because MJC failed to prove that Sta. Ana committed willful breach of its trust. To legally
dismiss an employee on the ground of loss of trust, the employer must establish that a) the employee
occupied a position of trust and confidence, or has been routinely charged with the care and custody of the
employer’s money or property; b) the employee committed a willful breach of trust based on clearly
established facts; and c) such loss of trust relates to the employee’s performance of duties. It is a cardinal
rule that loss of trust and confidence should be genuine, and not simulated; it must arise from dishonest or
deceitful conduct, and must not be arbitrarily asserted in the face of overwhelming contrary evidence.
• Here, MJCI failed to prove that Sta. Ana committed wilful breach of its trust. Particularly, it failed
to establish that Sta. Ana used its employee for her personal business during office hours, and used
its money, without authority, to lend money to another. Hence, to dismiss her on the ground of
loss of trust and confidence is unwarranted. Under these circumstances, Sta. Ana is entitled to
receive backwages and separation pay.

BARROGA v. DATA CENTER COLLEGE OF THE PHILIPPINES


G.R. No. 174158| 27 June 2011
Termination by Employee

DOCTRINE: There is no violation on the prohibition against diminution of benefits when there is no
showing that the grant or benefit is founded on an express policy or has ripened into a practice over a
long period which is consistent and deliberate.

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Labor Law and Social Legislation Justice Del Castillo Digests

FACTS:
• Barroga was an instructor in Data Center.
o He was later transferred to another branch as temporary Head for Education, with
additional allowance.
o The issue arose when he was later to be transferred to another branch as an Head
Instructor only.
• Barroga filed a complaint for illegal dismissal on the ground that his demotion was in violation of
the law.
• The school contends that his employment contract authorizes his transfers and that his
appointment as Head Instructor was merely temporary.

ISSUE: Whether Barroga was constructively dismissed.

HELD: No, he was not constructively dismissed.The transfer is not tantamount to constructive dismissal.
Constructive dismissal is the quitting because continued employment is rendered impossible,
unreasonable or unlikely, or because of a demotion in rank or a diminution of pay. It exists when there is a
clear act of discrimination, insensibility or disdain by an employer which becomes unbearable for the
employee to continue his employment. In this case, there is no demotion because his employment contract
allows the transfers to be made by the employer; and the appointment as Head for Education was only in
temporary capacity.
• Furthermore, there is no violation of the prohibition on diminution of benefits because the rule
against diminution of benefits is applicable only if the grant or benefit is founded on an express
policy or has ripened into a practice over a long period which is consistent and deliberate. Barroga
failed to present any other evidence that respondents committed to provide the additional
allowance or that they were consistently granting such benefit as to have ripened into a practice
which cannot be peremptorily withdrawn.

JULIES BAKESHOP v. ARNAIZ


G.R. No. 173882 | 15 February 2012
Termination by Employee

DOCTRINE: When there is a demotion or a diminution in pay; when a clear discrimination, insensibility
or disdain by an employer becomes unbearable to the employee; or when continued employment is
rendered impossible, unreasonable or unlikely, the transfer of an employee may constitute constructive
dismissal.

FACTS:
• Petitioner Reyes hired respondents as chief bakers in three branches. Respondents later filed
complaints for underpayment of wages, payment of premium pay for holiday and rest day, service
incentive leave pay, 13th month, cost of living allowance, and attorney’s fees.
• In a memorandum, Reyes later reassigned respondents as utility/security personnel. The
respondents refused to sign the memorandum, and refused to perform their new assignment.
• Reyes then directed them to report back for work and explain why they failed to assume their new
duties. The respondents did not heed to the memorandum.

ISSUE: Whether there is constructive dismissal

HELD: Yes, the employer has a burden to prove that the transfer of an employee is for a just or valid
ground, in cases of constructive dismissal. The employer must demonstrate that the transfer is not
unreasonable, inconvenient, or prejudicial and that the transfer does not involve a demotion in rank or a

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Labor Law and Social Legislation Justice Del Castillo Digests

diminution in salary and other benefits. In this case, petitioner failed to satisfy the burden of proving that
the transfer was based on just or valid ground. The allegation of imminent threats from respondents was
also unsubstantiated. The SC also found that the transfers amounted to demotion. Demotion involves a
situation in which an employee is relegated to a subordinate or less important position constituting a
reduction to a lower grade or rank, with a corresponding decrease in duties and responsibilities, and
usually accompanied by a decrease in salary.When there is a demotion or a diminution in pay; when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to the employee; or when
continued employment is rendered impossible, unreasonable or unlikely, the transfer of an employee may
constitute constructive dismissal.

APO CEMENT CORPORATION v. BAPTISMA


G.R. 176671 | 20 June 2012
Termination by Employee

DOCTRINE: In order to validly dismiss an employee on the ground of loss of trust and confidence under
Art. 282 (c), the following guidelines must be observed: 1) loss of confidence should not be simulated; 2) it
should not be used as subterfuge for causes which are improper, illegal or unjustified; 3) it may not be
arbitrarily asserted in the face of overwhelming evidence to the contrary; and 4) it must be genuine, not a
mere afterthought to justify earlier action taken in bad faith.

FACTS:
• Baptisma was employed by Apo Cement. Petitioner received information that from another
employee that some of its personnel, including Baptisma, were receiving commission or kickbacks
from suppliers. Petitioner conducted an investigation with Baptisma receiving a show cause letter
with notice of preventive suspension.
• After the investigation, Baptisma was found guilty and received the notice of termination. He then
filed a complaint for illegal dismissal with claims for non-payments of salaries, 13th month pay,
service incentive leave, damages, and attorneys fees.

ISSUE: Whether there was just cause for the dismissal of respondent

HELD: Yes, in order to validly dismiss an employee on the ground of loss of trust and confidence under
Art. 282 (c), the following guidelines must be observed: 1) loss of confidence should not be simulated; 2) it
should not be used as subterfuge for causes which are improper, illegal or unjustified; 3) it may not be
arbitrarily asserted in the face of overwhelming evidence to the contrary; and 4) it must be genuine, not a
mere afterthought to justify earlier action taken in bad faith. More important, it must be based on a willful
breach of trust and founded on clearly established facts. In the case at bar, the NLRC was correct in ruling
that the termination was justified. The testimony relied on by petitioner during its investigation was
credible and truthful. There were no inconsistencies in the witness’ affidavits; and there appears no ill
motive on the part of the witness to falsely accuse respondent of accepting commissions and/or kickbacks.

MISAMIS ORIENTAL ELECTRIC SERVICE v. CAGALAWAN


G.R. No. 174893 | 11 July 2012
Termination by Employee

DOCTRINE: While we find that the transfer of Cagalawan neither entails any demotion in rank since he
did not have tenurial security over the position of head of the disconnection crew, nor result to diminution

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Labor Law and Social Legislation Justice Del Castillo Digests

in pay as this was not sufficiently proven by him, MORESCO II’s evidence is nevertheless not enough to
show that said transfer was required by the exigency of the electric cooperative’s business interest.

FACTS:
• MORESCO II, a rural electric cooperative, hired Cagalawan as Acting Head of the disconnection
crew in Area III sub-office of MORESCO II in Balingasag, Misamis Oriental (Balingasag sub-office).
MORESCO II General Manager Amado B. Ke-e (Ke-e) transferred Cagalawan to Area I sub-office
in Gingoog City, Misamis Oriental (Gingoog sub-office) as a member of the disconnection crew.
Said memorandum stated that the transfer was done "in the exigency of the service".
• Cagalawan assailed his transfer claiming he was effectively demoted from his position as head of
the disconnection crew to a mere member thereof. He also averred that his transfer to the Gingoog
sub-office is inconvenient and prejudicial to him as it would entail additional travel expenses to
and from work.
• Ke-e explained that Cagalawan’s transfer was not a demotion since he was holding the position of
Disconnection Head only by mere designation and not by appointment. Ke-e did not, however,
state the basis of the transfer but instead advised Cagalawan to just comply with the order and not
to question management’s legitimate prerogative to reassign him. Cagalawan eventually stopped
reporting for work. On July 1, 2002, he filed a Complaint for constructive dismissal before the
Arbitration branch of the NLRC against MORESCO II and its officers, Ke-e and Danilo Subrado
(Subrado), in their capacities as General Manager and Board Chairman, respectively.

ISSUE: Whether or not the respondent constructively dismissed the petitioner.

HELD: Yes, the rule is that it is within the ambit of the employer’s prerogative to transfer an employee for
valid reasons and according to the requirement of its business, provided that the transfer does not result in
demotion in rank or diminution of salary, benefits and other privileges. This Court has always considered
the management’s prerogative to transfer its employees in pursuit of its legitimate interests. But this
prerogative should be exercised without grave abuse of discretion and with due regard to the basic
elements of justice and fair play, such that if there is a showing that the transfer was unnecessary or
inconvenient and prejudicial to the employee, it cannot be upheld. Here, while we find that the transfer of
Cagalawan neither entails any demotion in rank since he did not have tenurial security over the position
of head of the disconnection crew, nor result to diminution in pay as this was not sufficiently proven by
him, MORESCO II’s evidence is nevertheless not enough to show that said transfer was required by the
exigency of the electric cooperative’s business interest. Simply stated, the evidence sought to be admitted
by MORESCO II is not substantial to prove that there was a genuine business urgency that necessitated the
transfer.Clearly, not only was the delay in the submission of MORESCO II’s evidence not explained, there
was also failure on its part to sufficiently support its allegation that the transfer of Cagalawan was for a
legitimate purpose. This being the case, MORESCO II’s plea that its evidence be admitted in the interest of
justice does not deserve any merit.

ORCHARD GOLD COUNTRY CLUB v. AMELIA FRANCISCO


G.R. No. 180636 | 13 March 2013
Termination by Employee

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Labor Law and Social Legislation Justice Del Castillo Digests

DOCTRINE: Constructive dismissal occurs not when the employee ceases to report for work, but when
the unwarranted acts of the employer are committed to the end that the employee's continued employment
shall become so intolerable. In these difficult times, an employee may he left with no choice but to continue
with his employment despite abuses committed against him by the employer, and even during the
pendency of a labor dispute between them. This should not be taken against the employee.

FACTS:
• Orchard Golf and Country Club (the Club), operates and maintains two golf courses in
Dasmariñas, Cavite for Club members and their guests. Amelia R. Francisco (Francisco) was
employed as Club Accountant, to head the Club’s General Accounting Division and the four
divisions under it.
• Francisco was assigned to draft a letter to SGV & Co. (SGV), the Club’s external auditor, inquiring
about the accounting treatment that should be accorded property that will be sold or donated to
the Club. Francisco failed to prepare the letter, even after repeated verbal and written reminders.
• Francisco was asked by the Head of Division 4 written explanation, under pain of an
insubordination charge, relative to her failure to prepare the letter. Instead of complying with the
memorandum, Francisco went to the Club’s General Manager and personally explained to the
latter that due to the alleged heavy volume of work that needed her attention, she was unable to
draft the letter. The general manager assured her that he would discuss the matter with the
Division 4 Head personally and on this assurance, Francisco did not submit the required written
explanation. For this reason, Francisco was suspended without pay for a period of 15 days by the
Head of Division 4.
• Francisco filed a complaint for illegal suspension against the Club but proceeded to report to work.
The Club gave her a notice of forced leave without pay for the reason that there are strained
relations between her and company, after which the company permanently transferred Francisco
to another department but would receive the same benefits.

ISSUE: Whether or not Francisco was constructively dismissed.

HELD: Yes. There was constructive dismissal when Francisco was transferred to the Cost Accounting
Section. We agree with the NLRC and the CA that Francisco’s transfer to the position of Cost Controller
was without valid basis and that it amounted to a demotion in rank. Hence, there was constructive
dismissal. The Court shares the CA’s observation that when Francisco was placed on forced leave and
transferred to the Cost Accounting Section, not once was Francisco given the opportunity to contest these
company actions taken against her. When one penalty has been served by Francisco, another would
instantaneously take its place. All these happened even while the supposed case against her, the alleged
charge of "betrayal of company trust", was still pending and remained unresolved. In fact, one of the
memoranda was served even at Francisco’s residence.The fact that Francisco continued to report for work
does not necessarily suggest that constructive dismissal has not occurred, nor does it operate as a waiver.
Constructive dismissal occurs not when the employee ceases to report for work, but when the unwarranted
acts of the employer are committed to the end that the employee’s continued employment shall become so
intolerable. In these difficult times, an employee may be left with no choice but to continue with his
employment despite abuses committed against him by the employer, and even during the pendency of a
labor dispute between them.

ANG v. SAN JOAQUIN


G.R. No. 180636 | 13 March 2013
Termination By Employee

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Labor Law and Social Legislation Justice Del Castillo Digests

DOCTRINES: The test of constructive dismissal is whether a reasonable person in the employee’s position
would have felt compelled to give up his position under the circumstances.By destroying respondents’
time cards, Ang discontinued and severed his relationship with respondents. The purpose of a time record
is to show an employee’s attendance in office for work and to be paid accordingly, taking into account the
policy of "no work, no pay".

FACTS:
• Vicente Ang (Ang) is the proprietor of Virose Furniture and Glass Supply (Virose) while Ceferino
San Joaquin, Jr. (San Joaquin) and Diosdado Fernandez (Fernandez) were regular employees of
Virose: San Joaquin was hired in 1974 as helper, while Fernandez was employed in 1982 as driver.
Respondents have been continuously in Ang’s employ without any derogatory record.
• Respondents attended the court hearing relative to the 41 criminal cases filed by former Virose
employee Daniel Abrera (Abrera) against Ang for the latter’s non-remittance of Social Security
System (SSS) contributions. During that hearing, respondents testified against Ang; it was the
second time for San Joaquin to testify, while it was Fernandez’s first. After the said hearing Ang
began to treat respondents with hostility and antagonism.
• San Joaquin returned to the work, only to find out that Ang had torn his DTR to pieces that day
while the DTR of Fernandez was torn to pieces by Ang immediately after the hearing in which the
respondents testified. On the same day, Fernandez reported for work and received a memorandum
of even date issued by Ang informing him that he was placed on a one-week suspension for
insubordination. The memorandum did not specify the act of insubordination.
• Respondents filed against Ang Complaints for illegal constructive dismissal with claims for
backwages and separation pay.

ISSUES: Whether or notthe act of tearing the daily time record of the petitioners was an indicta of
constructive dismissal.

HELD: Yes, constructive dismissal exists where there is cessation of work because continued employment
is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution
in pay." It is a "dismissal in disguise or an act amounting to dismissal but made to appear as if it were
not." Constructive dismissal may likewise exist if an "act of clear discrimination, insensibility, or disdain
by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by
him except to forego his continued employment." "Constructive dismissal exists when the employee
involuntarily resigns 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 position under the circumstances."By destroying respondents’ time cards, Ang
discontinued and severed his relationship with respondents. The purpose of a time record is to show an
employee’s attendance in office for work and to be paid accordingly, taking into account the policy of "no
work, no pay". A daily time record is primarily intended to prevent damage or loss to the employer, which
could result in instances where it pays an employee for no work done; it is a mandatory requirement for
inclusion in the payroll, and in the absence of an employment agreement, it constitutes evidence of
employment. Thus, when Ang tore the respondents’ time cards to pieces, he virtually removed them from
Virose’s payroll and erased all vestiges of respondents’ employment; respondents were effectively
dismissed from work. The act may be considered an outright – not only symbolic – termination of the
parties’ employment relationship; the "last straw that finally broke the camel’s back", as respondents put it
in their Position Paper.In addition, such tearing of respondents’ time cards confirms petitioner’s vindictive
nature and oppressive conduct, as well as his reckless disregard for respondents’ rights.

ICO vs. SYSTEMS TECHNOLOGY INSTITUTE, INC.

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Labor Law and Social Legislation Justice Del Castillo Digests

G.R. No. 185100| July 9, 2014


Termination by Employee

DOCTRINE: Constructive dismissal exists where there is cessation of work because ‘continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or
a diminution in pay’ and other benefits. Hence, transfer from COO to Compliance Manager is constructive
dismissal in the guise of a transfer.

FACTS:
• Respondent STI is an educational institution.
• Ico, a masteral degree holder, was hired as Faculty Member.
• STI, in a memorandum, updated Ico’s appointed as COO. However, she was not given the salary
commensurate to her position as COO and she was not given benefits and privileges which hilders
of equivalent positions were entitled to.STI issued another memorandum which, in effect,
abolished the positions of CEO and COO and appointing Ico as Compliance Manager.
• STI placed Ico under preventive suspension and banned her from entering any of STI’s premises
citing an audit investigation being conducted for various charges against Ico based on the Faculty
Manual and Policy Manual.
• Ico was notified of a hearing and was required to submit her written explanation to the charges.
However, it appears that Ico did not receive the said letter.
• STI lifted Ico’s suspension and ordered her to go back to work with full salary from the time of her
suspension. But for some reason, Ico was not able to attend the meeting and was not able to give
her answer to the complaints against her. She was then served a Notice of termination and was
dismissed from STI.

ISSUE: Whether or not Ico was constructively dismissed.

HELD: Yes, in cases of a transfer of an employee, the rule is settled that the employer is charged with the
burden of proving that its conduct and action are for valid and legitimate grounds such as genuine business
necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the
employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful
constructive dismissal. From the May 18 conversation alone, it can be seen that petitioner’s fate in STI was
a foregone conclusion. She was threatened to accept her fate or else she would find herself without work,
either through dismissal or forced resignation.
• Evidently, she became the subject of an illegal constructive dismissal in the guise of a transfer. The
supposed audit conducted was a mere afterthought, as it was apparent that petitioner has been
found guilty of whatever transgressions she was being charged with, founded or unfounded. The
same is true with respect to her preventive suspension; it was imposed with malice and bad faith,
and calculated to harass her further, if not trick her into believing that respondents were properly
addressing her case. Needless to say, all proceedings and actions taken in regard to petitioner’s
employment and case, beginning on May 18, 2004, were all but a farce, done or carried out in bad
faith, with the objective of harassing and humiliating her, all in the fervent hope that she would
fold up and quit.
• Constructive dismissal exists where there is cessation of work because ‘continued employment is
rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a
diminution in pay’ and other benefits. Aptly called a dismissal in disguise or an act amounting to
dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act
of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part
of the employee that it could foreclose any choice by himexcept to forego his continued
employment. In cases of a transfer of an employee, the rule is settled that the employer is charged
with the burden of proving that its conduct and action are for valid and legitimate grounds such
as genuine business necessity and that the transfer is not unreasonable, inconvenient or prejudicial

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Labor Law and Social Legislation Justice Del Castillo Digests

to the employee. If the employer cannot overcome this burden of proof, the employee’s transfer
shall be tantamount to unlawful constructive dismissal.

ICT MARKETING SERVICES, INC. (NOW KNOWN AS SYKES MARKETING


SERVICES) v. SALES
G.R. No. 202090 | 9 September 2015
Termination by Employee

DOCTRINE: Constructive dismissal exists when an act of clear discrimination, insensibility or disdain by
an employer has become so unbearable to the employee leaving him with no option but to forego with his
continued employment.

FACTS:
• ICT Marketing, Inc. is a BPO. It hired Mariphil Sales as a grave shift Customer Service
Representative (CSR). Later, when she was already considered a regular employee, she was
reassigned to the Washington Mutual account. There, she was awarded for being the “Top
Coverter/Seller (2nd Place)”.
• Months after, she wrote a complaint to ICT regarding irregularities in the handling of funds
entrusted to ICT by Washington Mutual CSRs as prizes and incentives. No action was taken on her
complaint, but days after submitting the complaint, she was suddenly transferred to the Bank of
America account. In order to be able to handle calls for Bank of America, she was required to attend
training. She was only informed of the required training on the day she was transferred.
• She took part in the training, but on the 3rd day of training, she was unable to attend because she
got sick. Due to a single day of absence, she was unable to receive the certification needed to be
assigned to the Bank of America account. So, she ended being placed on “floating status” and was
not given any work assignment.
• Sales resigned from ICT stating that she did not want to resign but was forced into doing so because
she remained on floating status for 2 months, despite her repeated follow inquiry. Then, she filed
a complaint against ICT for constructive dismissal.

ISSUE: Whether or not Sales was constructively dismissed?

HELD: Yes, sales was constructively dismissed. While the management prerogative to transfer Salesto
another account belonged to ICT, it wielded the same unfairly. The evidence suggests that at the time Sales
was transferred from the Washington Mutual account to the Bank of America program, ICT was hiring
additional CSRs/TSRs. This simply means that if it was then hiring new CSRs/TSRs, then there should be
no need to transfer Sales to the Bank of America program; it could simply train new hires for that program.
Transferring Sales — an experienced employee who was already familiar with the Washington Mutual
account, and who even proved to be outstanding in handling the same — to another account means
additional expenses for ICT. This does not make sense; it is impractical and entails more expense on ICT's
part. If Sales already knew her work at the Washington Mutual account very well, then it is contrary to
experience and logic to transfer her to another account which she is not familiar with, there to start from
scratch; this could have been properly relegated to a new hire.
• In placing Sales on "floating status," ICT further acted arbitrarily and unfairly, making life
unbearable for her. In so doing, it treated Sales as if she were a new hire; it improperly disregarded
her experience, status, performance, and achievements in the company; and most importantly,
Sales was illegally deprived of her salary and other emoluments. Clearly, this was an act of
discrimination and unfairness considering that she was not an inexperienced new hire, but a
promising and award-winning employee who was more than eager to succeed within the
company.

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AUZA, JR. vs. MOL PHILIPPINES, INC.


G.R. No. 175481 | November 21, 2012

Termination by Employee

DOCTRINE: Employees who voluntarily resigned and executed quitclaims are barred from instituting an
action or claim against their employer.

FACTS:

• Respondent MOL is a common carrier. It employed Auza, Jeanjaquet and Otarra in its Cebu
Branch.
• Later, petitioner tendered their resignation due to an impending closure of the branch because of
low productivity and profitability volume. They were given their separation pay and monetary
value of leaved credits, etc. as shown in documents entitled “Remaining Entitlement Computation”
which were sign by each of them acknowledging receipt.
• After which, they executed Release and Quitclaims. After almost 15 months from severance from
employment, they filed separate complaints for illegal dismissal alleging that their consent to
resign was obtained through mistake and fraud claiming that they were led to believe that the
branch is closing.

ISSUE: Whether petitioner voluntarily resigned.

HELD: Yes, petitioner voluntarily resigned. Resignation is the formal pronouncement or relinquishment
of an office. The overt act of relinquishment should be coupled with an intent to relinquish, which intent
could be inferred from the acts of the employee before and after the alleged resignation. In the case at bar,
as proven by the email correspondences presented, petitioners acknowledged that Cebu branch has been
incurring losses and was already unprofitable to operate and that there was a substantial reduction of
workforce. They were not lured by any misrepresentation. No element of force can be deduced from their
letters of resignation as the same even contained expressions of gratitude and thus contradicting their
allegations that same were prepared by their employer. Notably, despite such knowledge, petitioners did
not immediately contest their resignations but waited for nearly 15 months before contesting them. This
negates their claim that they were victims of deceit. Moreover, no adequate proof was presented to show
that the planned downsizing of Cebu branch did not take place.

ILADAN v. LA SUERTE INTERNATIONAL


G.R. No. 203882 | 11 January 2016
Termination by Employee

DOCTRINE: It is a settled jurisprudence that it is incumbent upon an employee to prove that his
resignation is not voluntary.

FACTS:
• La Suerte hired Iladan to work as a domestic helper in Hongkong for a period of two years.
• Barely eight days into her job, Iladan executed a handwritten resignation letter.
• In consideration of P35,000.00 financial assistance given by Domestic Services, Iladan signed an
Affidavit of Release, Waiver and Quitclaim.Iladan acknowledged that her acceptance of the
financial assistance would constitute as final settlement of her contractual claims and waiver of any
cause of action against respondents and Domestic Services..

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Labor Law and Social Legislation Justice Del Castillo Digests

• Thereafter, Iladan filed a Complaint against respondents.


• Iladan alleged that she was forced to resign by her principal employer, threatened with
incarceration; and that she was constrained to accept the amount of P35,000.00 as financial
assistance as she needed the money to defray her expenses in going back to the Philippines. She
averred that the statements in the Affidavit of Release, Waiver and Quitclaim and the Agreement
were not fully explained in the language known to her; that they were considered contracts of
adhesion contrary to public policy; and were issued for an unreasonable consideration.

ISSUE: Whether or not Iladan was illegally dismissed.

HELD: No, she was not illegally dismissed. In illegal dismissal cases, the employer has the burden of
proving that the employee's dismissal was legal. However, to discharge this burden, the employee must
first prove, by substantial evidence, that he had been dismissed from employment. Iladan maintains that
she was threatened and coerced by respondents to write the resignation letter, to accept the financial
assistance and to sign the waiver and settlement. Consequently, she Insists that her act of resigning was
involuntary.The Court is not convinced as we find no proof of Iladan's allegations. It is a settled
jurisprudence that it is incumbent upon an employee to prove that his resignation is not voluntary.
However, Iladan did not adduce any competent evidence to prove that respondents used force and
threat.Iladan failed to substantiate her claim of illegal dismissal for there was no proof that her resignation
was tainted with coercion and threats, as she strongly claims."Although the Supreme Court has, more often
than not, been inclined towards the workers and has upheld their cause in their conflicts with the
employers, such inclination has not blinded it to the rule that justice is in every case for the deserving, to
be dispensed in the light of the established facts and applicable law and doctrine."

SANDEN AIRCON v. ROSALES


G.R. No. 169260| 23 March 2011
Termination by Employer

DOCTRINE: Employer has the burden of proving the existence of just cause to justify employee’s
dismissal.

FACTS:
• The marketing data of Sanden was lost. Upon investigation, Data Custodian and Coordinator
Loressa was the person who was logged into the system, after she asked marketing agents to log
out so that she can back up the system, but the back-up never occurred.
• Loressa was dismissed for acts of sabotage resulting in willful breach of trust and confidence.
• Loressa filed complaint for illegal dismissal pointing out that Sanden did not present any
documentary evidence or otherwise, showing she committed acts of sabotage.

ISSUE: Whether Loressa was validly dismissed based on willful breach of trust and confidence.

HELD: No, she was illegally dismissed. Under the labor code, Art 282 (c) Fraud or willful breach by the
employee of the trust reposed in him by his employer or duly authorized representative, as a just cause for dismissal
has two separate grounds: fraud, and willful breach by the employee of the trust reposed in hi by employer.
Breach of trust must be willful and not ordinary. Sanden failed to discharge the burden of proving elements
of willful breach of trust: that employee holds a position of trust and confidence, and an act that would
justify the loss of trust and confidence. Although Loressa is holding a position of trust and confidence, it
was not proven by clear and convincing evidence that she committed an act that would justify loss of trust
and confidence. On the other hand, Loressa was able to prove by documentary evidence that the problem
on lost data exists prior to her holding the position in question, and that the problem was caused by the

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Labor Law and Social Legislation Justice Del Castillo Digests

glitch in the system. For failure to do so, the dismissal is illegal and in violation of the constitutional
guarantee of security of tenure.

NEW PUERTO COMMERCIAL v. RODEL LOPEZ AND FELIX GAVAN


G.R. No. 169999 |July 26, 2010
Termination by Employer

DOCTRINE: The twin requirements of notice and hearing is a due process requirement in termination
proceedings.

FACTS:
• Respondent Gavan was a delivery driver and respondent Lopez was a roving salesman hired by
Petitioner. Under a rolling store scheme, respondents were assigned to sell goods stocked in a van
on cash or credit to the sari-sari stores and were duty-bound to collect the accounts receivables and
remit the same upon their return to petitioners store on a weekly basis.
• Petitioners sent respondents notices to explain why they should not be dismissed for gross
misconduct based on (1) the alleged misappropriation of their sales collections, and (2) their
absence without leave for more than a month.
o Despite notices sent by petitioner to respondents to attend hearing, respondents refused
to attend
• Petitioners served notices of termination on respondents on the grounds of gross misconduct and
absence without leave for more than one month.Respondents filed a Complaint for illegal
dismissal.

ISSUE: Whether or not respondents were illegally dismissed.

HELD: No, in termination proceedings of employees, procedural due process consists of the twin
requirements of notice and hearing.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 dismissal is sought; and (2) the second informs the employee of the
employers decision to dismiss him.The requirement of a hearing is complied with as long as there was an
opportunity to be heard, and not necessarily that an actual hearing was conducted. Respondents failed to
give their side despite receipt of several notices. For this reason, there was sufficient compliance with the
twin requirements of notice and hearing even if the notices were sent and the hearing conducted after the
filing of the labor complaint.

ST. MARY’S ACADEMY OF DIPOLOG CITY v. PALACIO


G.R. No. 164913 | September 8, 2010
Termination by Employer

DOCTRINE: An employer has no right to deny employees of privilege accorded to them by law to comply
with qualifications requirement of their employment within a specific timeframe that is provided by law.

FACTS:
• Respondents were teachers and guidance counselor hired by petitioner who were informed by
petitioner that in accordance to a DECS Memorandum pursuant to RA 7836, respondents that they
cannot be re-accepted for the school year 2000-2001 for not having passed the LET, nor can they
continue with their teaching profession.

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Labor Law and Social Legislation Justice Del Castillo Digests

• Respondents filed a complaint contesting that their termination as highly irregular and premature
invoking their right to security of tenure despite the requirements set by the PRC for they had
special permits to teach and the civil service eligibility required under the law. Also, the deadline
for teachers to register under the Memorandum was set to September 19 2000, but the petitioner
decided to terminate them as early as March 31 2000. Lastly, the acceptance of the Petitioner of
other teacher who do not also possess the required eligibility under the Memorandum showed
evident bad faith.

ISSUE: Whether or not the dismissal of the respondents were premature because it was effected prior to
the deadline set by the PRC to acquire their license.

HELD: Yes, the dismissal from service of respondents was premature. The law has provided a specific
timeframe within which respondents could comply, petitioner has no right to deny them of this privilege
accorded to them by law. That is, the law still allows those who failed the licensure examination between
1996 and 2000 to continue teaching if they obtain temporary special permits as para-teachers. Specific
periods and deadlines were fixed within which incumbent teachers must register as professional teachers
in consonance with the essential purpose of the law in promoting good quality education by ensuring that
those who practice the teaching profession are duly licensed and are registered as professional
teachers. Petitioner’s intention and desire not to put the students’ education and school operation in
jeopardy is neither a decisive consideration for respondents’ termination prior to the deadline set by
law. The prejudice that respondents’ retention would cause to the school’s operation is only trivial.

SHIMIZU PHILS. CONTRACTORS, INC.v. CALLANTA


G.R. No. 165923 |September 29, 2010
Termination by Employer

DOCTRINE: The purpose of the 1-month prior notice rule for retrenchment of an employee is to give
DOLE an opportunity to ascertain the veracity of the cause of termination and non-compliance with this
rule violates the employees right to statutory due process.

FACTS:
• Petitioner Shimizu informed respondent Callanta in a Memorandum that his services will be
terminated due to the lack of any vacancy in other projects and the need to re-align the company’s
personnel requirements brought about by the imperatives of maximum financial commitments.
• Respondent filed an illegal dismissal complaint assailing his dismissal as without any valid cause,
and it failed to comply with the requirements under the law before implementing a retrenchment
program because:
o It did not comply with the provision of the Labor Code mandating the service of notice of
retrenchment since the notice sent to him never mentioned retrenchment but only project
completion as the cause of termination. Also, that the notice sent to DOLE did not conform
to the 30-day prior notice requirement; and
o Petitioner failed to use fair and reasonable criteria in determining which employees shall
be retrenched or retained as he was singled out.
• Petitioner counters that the termination was made in accordance with a valid retrenchment
program being implemented by the company by reason of financial losses.

ISSUE: Whether there was a valid retrenchment.

HELD: No. As an authorized cause for separation from service under Article 283 of the Labor Code,
retrenchment is a valid exercise of management prerogative subject to the strict requirements set by

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Labor Law and Social Legislation Justice Del Castillo Digests

jurisprudence. One of which is that the employer served written notice both to the employees and to the
DOLE at least one month prior to the intended date of retrenchment.There was an authorized cause to
dismiss respondent from the servicehowever, petitioner did not comply with the 30-day notice requirement
(or the 1-month prior notice rule). Reports were submitted 21 days, in the case of the first notice, and 16
days, in the case of the second notice, before the intended date of respondent’s dismissal. The purpose of
the one month prior notice rule is to give DOLE an opportunity to ascertain the veracity of the cause of
termination. Non-compliance with this rule clearly violates the employee’s right to statutory due process.

EQUITABLE PCI BANK (NOW BANCO DE ORO UNIBANK) v. DOMPOR


G.R. Nos. 163293 & 163297 | December 13, 2010
Termination by Employer

DOCTRINE: The mere existence of a basis for believing that a managerial employee has breached the trust
of his employer would suffice for his dismissal thus, proof beyond reasonable doubt is not
required.Separation pay shall be allowed as a measure of social justice only in those instances where the
employee is validly dismissed for cause other than serious misconduct and willful disobedience.

FACTS:
• Respondent Dompor was employed by petitioner as a branch head, who allowed a client to open
a checking account to deposit several second-endorsed dividend checks that was later found to be
fraudulently negotiated. The audit report noted that the transactions, which were inadequately
documented, have exposed the bank to probable losses and could make the bank liable under its
endorsement as the checks drawer may claim reimbursement on the ground of wrong payment or
forgery.
• Thus, the audit committee recommended respondent’s dismissal from employment and setting up
of a contingent liability for the potential loss for violation of banks policies and failure to exercise
prudence expected of a branch head.
o Respondent was asked to explain in writing why no disciplinary action should be taken
against him for committing serious policy violations.
o Then, respondent received a Memo dismissing him from employment on the grounds of
serious policy violations, willful breach of trust, and loss of confidence.
• Respondent filed a complaint for illegal dismissal questioning legality of his dismissal for want of
substantive and procedural due process.

ISSUE: Whether or not respondent was illegally dismissed.

HELD: No, respondent was validly dismissed on the grounds of willful disobedience and willful breach of
trust under Article 282 of the Labor Code. A bank manager’s abuse of authority in implementing bank
policies is an abuse of the trust reposed in him by his employer which constitutes as a just cause for his
termination. As branch head in charge of the overall administration of the branch, respondent has the duty
to ensure that bank rules are strictly complied with not only to ensure efficient bank operation which is
imbued with public interest but also to serve the best interest of the bank as he holds a position of trust and
confidence. The mere existence of a basis for believing that a managerial employee has breached the trust
of his employer would suffice for his dismissal and proof beyond reasonable doubt is not required.
Respondent’s wanton violation of bank policies equates to abuse of authority and, therefore, abuse of the
trust reposed in him. Such intention to violate the trust of petitioner is enough for his dismissal from
service. As for due process, the two-notice requirement for dismissal was complied with.

ISSUE: Whether or not respondent is entitled to separation pay.

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Labor Law and Social Legislation Justice Del Castillo Digests

HELD:No, separation pay shall be allowed as a measure of social justice only in those instances where the
employee is validly dismissed for causeother than serious misconduct. In addition to serious misconduct,
separation pay should not be conceded to an employee who was dismissed based onwillful disobedience.
The infractions committed by the respondent constituted serious misconduct or willful disobedience
resulting to loss of trust and confidence. Thus, award of separation pay is deleted.

MAPILI v. PHILIPPINE RABBIT BUS LINES


G.R. No. 172508| 27 July 2011
Termination by Employer

DOCTRINE: Repeated commission of infractions of the same nature shows wrongful intent and
propensity to commit the same act, undeserving of compassion accorded by labor laws

FACTS:
• Mapili has been conductor of PRBL for 8 yrs.
• It was found that he gave free ride to a passenger who is the wife of a co-employee.
o During hearing where he was allowed to explain, he said that he thought relatives of
employees are entitled to free rides.
• PRBL dismissed Mapili on the ground that he has committed the same infraction 2 more times
previously.
• Hence, this complaint for illegal dismissal.

ISSUE: Whether Mapili was validly dismissed on the ground of repeated offense of failure to collect fares
and giving free rides to passengers to the prejudice of company.

HELD: Yes, he was validly dismissed.The repeated violation of company rules is intentional, willful,
serious, and a just cause for dismissal. The CBL clearly grants free rides only to employees and not their
relatives. For having served more than 8 years, and having been charged and suspended for similar offense
previously, Mapili ought to know the company rules on giving free rides. His record of offenses of same
nature justifies his dismissal.Suspension is not anymore sufficient penalty because Mapili has disregarded
previous warnings. It shows propensity to commit the same infraction and wrongful intent, undeserving
of compassion accorded by labor laws. Dismissal is proper.

MANILA ELECTRIC COMPANY v. BELTRAN


G.R. No. 173774 | 30 January 2012
Termination by Employer

DOCTRINE: The burden of proving the legality of dismissal lies with the employer. Unsubstantiated
suspicious, accusations, and conclusions of employers do not provide legal justification for dismissing
employees

FACTS:
• Beltran, employed by MERALCO as Senior Branch Clerk accepted P15k from Collection Route
Supervisor, Marcos which the latter received from customer Andy Chang, on a Saturday,
September 28, 1996.
• Beltran was hesitant as it was not part of her regular duties but was later on persuaded by
Marcos. She received the payment and issued a receipt. She dated it September 30, 1996, a Monday,
instead of September 28, 1996.

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• She failed to remit the payment , thus she was placed under preventive suspension and
investigation. She was later found to be guilty of misappropriation or withholding of company
funds, and was later dismissed.

ISSUE: Whether reinstatement is proper

HELD: Yes, there are no sufficient grounds to warrant Beltran’s dismissal. For loss of trust and confidence
to be a valid ground for dismissal, it must be based on a wilful breach of trust and founded on clearly
established facts. A breach is wilful if it is done intentionally knowingly and purposely, without justifiable
excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. In
addition, loss of trust and confidence must rest on substantial grounds and not on the employers’
arbitrariness, whims, caprices or suspicion.Also, the burden of proving the legality of dismissal lies with
the employer. Unsubstantiated suspicious, accusations, and conclusions of employers do not provide legal
justification for dismissing employees. Here, no proof was adduced by Meralco, only suspicions.Although
Beltran was remiss in her duties such negligence is not sufficient to warrant separation from employment.
To justify removal from service, the negligence should be gross and habitual. Gross negligence is the want
of even slight care, acting or omitting to act in a situation where there is duty to act, not inadvertently but
willfully and intentionally, with a conscious indifference to consequences insofar as other persons may be
affected. Habitual neglect, on the other hand, connotes repeated failure to perform ones duties for a period
of time, depending upon the circumstances.

REYES-RAYEL v. PHILIPPINE LEUN THAI HOLDINGS


G.R. No. 174893 | 11 July 2012
Termination by Employer

DOCTRINE: Loss of confidence as a ground for dismissal does not require proof beyond reasonable doubt
as the law requires only that there be at least some basis to justify it. Due process requirement is met when
there is simply an opportunity to be heard and to explain one’s side even if no hearing is conducted.

FACTS:
• PLTHC hired petitioner as Corporate Human Resources (CHR) Director for Manufacturing for its
subsidiary/affiliate company, L&T.
• Petitioner received a Prerequisite Noticefrom Sauceda and the Corporate Legal Counsel of PLTHC
stating that due to numerous occasions of her undermining the HR2 Program and her notorious
temper which alienated most of the members of her division, these acts constituted the loss of
confidence of the company in her capability to promote the interests of the company.
• In a Termination Notice, respondents, through Sauceda and Edles, dismissed petitioner from the
service for loss of confidence on her ability to promote the interests of the company. This led
petitioner to file a Complaint for illegal dismissal, payment of separation pay, 13thmonth pay,
moral and exemplary damages, attorney’s fees, and other unpaid company benefits against
respondents and its officers.

ISSUE: Whether or not the alleged valid or just cause for termination of petitioner from her employment
was proven by substantial evidence.

HELD: Yes, an employer has a distinct prerogative and wider latitude of discretion in dismissing a
managerial personnel who performs functions which by their nature require the employer’s full trust and
confidence. As distinguished from a rank and file personnel, mere existence of a basis for believing that a
managerial employee has breached the trust of the employer justifies dismissal. Loss of confidence as a
ground for dismissal does not require proof beyond reasonable doubt as the law requires only that there

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Labor Law and Social Legislation Justice Del Castillo Digests

be at least some basis to justify it. Petitioner, in the present case, was L&T’s CHR Director for
Manufacturing. As such, she was directly responsible for managing her own departmental staff. It is
therefore without question that the CHR Director for Manufacturing is a managerial position saddled with
great responsibility. Because of this, petitioner must enjoy the full trust and confidence of her superiors.
Not only that, she ought to know that she is "bound by more exacting work ethics" and should live up to
this high standard of responsibility. However, petitioner delivered dismal performance and displayed poor
work attitude which constitute sufficient reasons for an employer to terminate an employee on the ground
of loss of trust and confidence. Respondents also impute upon petitioner gross negligence and
incompetence which are likewise justifiable grounds for dismissal. The burden of proving that the
termination was for a valid cause lies on the employer. Here, respondents were able to overcome this
burden as the evidence presented clearly support the validity of petitioner’s dismissal.

ISSUE: Whether or not respondents deprived petitioner of her right to due process when the former
dismissed the latter without investigation to determine the veracity and truthfulness of the allegations
against the petitioner in violation of the respondent’s company policies.

HELD: No, the said notice properly advised petitioner to explain through a written response her failure to
perform in accordance with management directives, which deficiency resulted in the company’s loss of
confidence in her capability to promote its interest. The notice cited specific incidents from various
instances which showed petitioner’s "repeated failure to comply with work directives, her inclination to
make negative remarks about company goals and her difficult personality," that have collectively
contributed to the company’s loss of trust and confidence in her. These specified acts, in addition to her
low performance rating, demonstrated petitioner’s neglect of duty and incompetence which support the
termination for loss of trust and confidence. Neither can there be any denial of due process due to the
absence of a hearing or investigation at the company level. It has been held in a plethora of cases that due
process requirement is met when there is simply an opportunity to be heard and to explain one’s side even
if no hearing is conducted.

GRAND ASIAN SHIPPING LINES v. GALVEZ


G.R. No. 178184 | 19 January 2014
Termination by Employer

DOCTRINE: The mere existence of a basis for believing that managerial employees have breached the trust
reposed on them by their employer would suffice to justify their dismissal.

FACTS:
• GASLI is engaged in in transporting liquified petroleum gas (LPG) from Petron Corp.’s refinery in
Bataan to Petron’s Plant in Pasig and Petron’s Depot in Cavite.
• Respondents are crewmembers of one of GASLI’s vessels.
o Managerial employees: Galvez as Captain; Gruta as Chief Engineer
o Rank-and-file employees: Arguelles as Radio Operator; Batayola, Fresmillo and Noble as
Able Seamen; Dominico and Nilmao as Oilers; and Austral as 2nd Engineer
• It was reported that respondents were committing an illegal activity aboard the vessel.
o Substantial volume of fuel oil is unconsumed and stored in the vessel’s fuel tanks.
However, respondents would misdeclare it as consumed. Then, the saved fuel oil is
siphoned and sold to other vessels out at sea usually at nighttime. Respondents would
then divide among themselves the proceeds of the sale.
• GASLI initially placed respondents under preventive suspension; but after administrative hearing,
decided to terminate them from employment.

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o GASLI claims that a prima facie case of qualified theft, and the Information for qualified
theft constituteas reasonable ground to believe that respondents were responsible for the
pilferage of diesel fuel oil, which renders them unworthy of the trust and confidence
reposed on them.
• Respondents filed separate complaints for illegal dismissal.

ISSUE: Whether or not all the respondents were illegally dismissed.

HELD: No, as for loss of trust and confidence as a ground for termination, distinction should be made
between managerial and rank and file employees. With respect to rank-and-file personnel, loss of trust and
confidence, as ground for valid dismissal, requires proof of involvement in the alleged events. For
managerial employees, the mere existence of a basis for believing that such employee has breached the
trust of his employer would suffice for his dismissal. In the case, Galvez, as the ship captain, is considered
a managerial employee since his duties involve the governance, care and management of the vessel. Gruta,
as chief engineer, is also a managerial employee for he is tasked to take complete charge of the technical
operations of the vessel. As captain and as chief engineer, Galvez and Gruta perform functions vested with
authority to execute management policies and thereby hold positions of responsibility over the activities
in the vessel. Their position requires the full trust and confidence of their employer for they are entrusted
with the custody, handling and care of company property and exercise authority over it. Thus, there is
some basis for the loss of confidence reposed on Galvez and Gruta. Their failure to account for the loss of
company property betrays the trust reposed and expected of them. They had violated GASLI’s trust and
for which their dismissal is justified on the ground of breach of confidence. As for Arguelles, Batayola,
Fresnillo, Noble, Dominico, Nilmao and Austral, who are ordinary rank and file employees, proof of
involvement in the loss of the vessel’s fuel as well as their participation in the alleged theft is required. No
substantial evidence exists in the records that would establish their participation in the offense charged.
This renders their dismissal illegal.

GARZA v. COCA-COLA BOTTLERS PHILS., INC. (CCBPI)


G.R. No. 180972 | 20 January 2014
Termination by Employer

DOCTRINE: In illegal dismissal cases, the employer bears the burden of proof.

FACTS:
• Jonas Garza was an Account Specialist in CCBPI. As such, he was tasked mainly with booking
customers’ orders and collecting on their accounts. In effect, he performed the functions of a CCBPI
salesman.
• As a matter of company policy, CCBPI Account Specialists/Salesmen are obliged to remit all cash
sales and credit cash collections to the company office on the same day that payments are received
in cash or check from customers, dealers and outlets. Thus, before allowing the Account
Specialists/Salesmen to work the following day, the CCBPI Cashier shall first issue a clearance
which is given to the company security guard stating whether they incurred shortages or have not
remitted collections. If so, the Account Specialist/Salesman concerned is not allowed to leave the
company premises unless his shortages are settled. Moreover, shortages are recovered against the
monthly salary of the concerned employee.
• Garza received a memorandum from his supervisor, directing him to explain alleged past
unliquidated collections and cash shortages; and directing him to attend a formal investigation.
o Garza sought the rescheduling of the investigation.
o However, instead of approval of rescheduling, Garza received a Notice of Termination.
• Garza filed a complaint for illegal dismissal.

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o Garza denied the charges of embezzlement against him. He claimed that his dismissal was
without just cause, and he was denied due process during the proceedings leading to his
dismissal.
• CCBPI claimed that Garza was guilty of misappropriation of cash/check collections, kiting of
checks, and delayed remittances covering the customer accounts.
o Misappropriation/embezzlement is a violation of CCBPI’sInter-Office Memorandum,
which defined misappropriation, non-remittance or delayed remittance of cash/check
collections and specified outright dismissal as punishment for the first offense. It claimed
that, due toGarza’s unremitted collections, his dismissal was necessary and proper.

ISSUE: Whether or not there is just cause for Garza’s dismissal.

HELD: No, the burden is on the employer to prove that the termination was for valid cause.
Unsubstantiated accusations or baseless conclusions of the employer are insufficient legal justifications to
dismiss an employee. “The unflinching rule in illegal dismissal cases is that the employer bears the burden
of proof.” In the case, CCBPI failed to prove that Garza’s dismissal was for just cause. Within the context
of the company policy mentioned above, it can be said that since Garza continued to work for CCBPI until
his termination, this should necessarily mean that he was clear of daily cash and check accountabilities,
including those transactions covered by the charges against him. If not, the company cashier would not
have issued the required clearance and Garza would have been required to settle these shortages as soon
as they were incurred. Indeed, he would not have been allowed to leave company premises until they were
settled in accordance with company policy. And he would not have been allowed to report for work the
following day. If Garza continued to work until his termination, this meant that he committed no infraction,
going by the company policy; it could also mean that any infraction or shortage/non-remittance incurred
by Garza has been duly settled. In failing to substantiate its allegations with respect to the Garza’s alleged
embezzlement, CCBPI failed to discharge its burden to prove that Garza’s termination was for just cause.

LIBCAP MARKETING v. BAQUIAL


G.R. No. 192011 | June 30, 2014
Termination by Employer

DOCTRINE:The award of nominal damages in favor of an employee in a case where a valid cause for
dismissal exists but the employer fails to observe due process in dismissing the employee.

FACTS:
• Petitioner, Libcap, is engaged in the freight forwarding business
• Respondent Baquial was employed by Libcap as accounting clerk.
• Libcap’s Audit report showed that Baquial made a double reporting of a single deposit; such was
made to cover or account for two days’ sales of apparently identical amounts, covering the
undeposited collection.
• HRD Head required Baquial to explain in writing within 24 hours the cash sales were covered by
a single validated bank deposit slip.
• Baquial received a Notice of Administrative Investigation; the Investigation will take place in Iloilo.
However, Baquial was not able to attend such.
• Baquial was placed on Preventive Suspension and subsequently received a Notice of Termination.
• Baquial filed a complaint for illegal dismissal.

ISSUE: Whether or not the court of appeals erred when it ruled that there was noncompliance with the
procedural due process requirement when the records show that the respondent was given full opportunity
to explain the charges against her.

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HELD: No, but their reasons for arriving at such conclusion are erroneous.Baquial was adjudged guilty
even before she could be tried. The payroll deductions happened a month prior to the start of the
investigation. Hence, in doing so, Libcap (1) has made it clear that they considered respondent as the
individual responsible for the embezzlement; and (2) Libcap clearly violated her right to due process from
the very beginning, and from then on it could not be expected that she would obtain a fair resolution of her
case.

ISSUE: Whether or not the court of appeals erred when it awarded respondent the amount of Php.
100,000.00 absent any justifiable, compelling circumstance to depart from the standard p30,000.00
established by jurisprudence.

HELD: Yes, the SC reduced the amount of Nominal damages the CA awarded from Php100,000 to
Php30,000. The law and jurisprudence, on the other hand, allow the award of nominal damages in favor of
an employee in a case where a valid cause for dismissal exists but the employer fails to observe due process
in dismissing the employee.

LITEX GLASS AND ALUMINUM SUPPLY v. SANCHEZ


G.R. No. 198465 | 22 April 2015
Termination By Employer

DOCTRINE: Requisites for Abandonment: (1) Employee failed to report to work w/o any valid and
justifiable reason and (2) There is clear intent to sever employer-employee relationship.

FACTS:
• Sanchez was employed by Litex since 1994 and from that time until 2008, he has been working
diligently for his employer Ong-Sitco without any work related offense.
• On December 23, 2008, he was surprised when Sitco along with the latter’s wife, scolded him
without any reason an ordered him to go on indefinite leave.
• On December 28, 2008 and January 2 and 9, 2009, he attempted to talk to his Sitco about his
employment status but was repeatedly ignored. This prompted him to file a case for Illegal
Dismissal against petitioners
• After the filing of the Complaint, Sanchez received two memorandum-letters from petitioners.
• The first one was dated January 7, 2009 but was mailed on February 23,2009 and received by
Sanchez on February 26,2009. The said memorandum-letter instructed Sanchez to return to work
and to explain his allegedly unauthorized absence from December 22,2008-Jan 7, 2009 which was
after he was given a verbal warning for some supposed infractions against the company.
• The second one was dated January 22,2009 but was mailed on March 10, 2009 and received by
Sanchez on March 22, 2009. It contained a warning that his refusal to follow the earlier instruction
to report for work and explain his absence within 24 hours would mean abandonment of work on
his part.
• Petitioners argue that they did not dismiss Sanchez, that it was latter who abandoned his job by
now reporting for work.

ISSUE: Whether or not Sanchez abandoned his work.

HELD: No, there was no abandonment. The Requisites for Abandonment are: (1) Employee failed to report
to work w/o any valid and justifiable reason and (2) There is clear intent to sever employer-employee
relationship. The acts of Ong-Sitco belie any claim of abandonment. After asking to take an indefinite leave,
Sanchez tried several times to talk to his employer but was repeatedly ignored. Also during this instance

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Ong-Sitco did not even warn Sanchez about his continued absence and neither did he instruct him to report
back to work. This is also strengthened by the fact that the two memorandum letters were sent after Sanchez
after he filed the complaint. This would imply that this was merely an afterthought by Ong-Sitco to give
some justification for his termination. Also, the immediate filing of a complaint by Sanchez is proof of his
desire to return to work. Moreover, it has been held in a long line of cases that the filing of a complaint
negates any intention of abandoning employment.

CARIQUE v. PHILIPPINE SCOUT VETERANS SECURITY AND INVESTIGATION


AGENCY INC.
G.R. No. 197484 | 16 September 2015
Termination by Employer

DOCTRINE: Illegal dismissal must be established by positive and overt acts clearly indicative of a manifest
intention to dismiss.

FACTS:
• Carique was hired as a security guard by the Philippine Scout Veterans Security (PSV) and
Investigation Agency in 1990.
• On October 28, 2002, he was relieved from his post in National Bookstore, and was replaced by
another security guard, Juan, pursuant to a rotation policy being implemented by the security
agency.
• Carique consistently inquired about his new assignment, but no reply was given to him.
• PSV alleged, however, that there was a new assignment given to him in National Bookstore, SM
Bicutan in March 2003, as evidenced by a Special Security Detail (SSD). And that, Carique had
rejected this assignment for no known reason.
• Carique received a memorandum from PSV requiring Carique to explain his AWOL, and why he
had refused the assignments offered to him. Instead of replying to the memorandum, Carique
instead filed the present case for illegal dismissal, alleging that the SSDs, which were used as proof,
were tainted with irregularities in their issuances.

ISSUE: Whether or not refusal to follow the rotation policy constitutes an authorized cause for dismissal.

HELD: Yes, refusal to follow the rotation policy, which is willful disobedience, is a valid cause for
termination. The implementation of a rotation policy is within the ambit of management prerogative.

ISSUE: Whether or not the burden of proof in determining whether or not an employee is illegally
dismissed is on the employee?

HELD: Yes, the employee has the burden of proving that he was illegally dismissed. The employer has the
burden of proving that the employee’s termination was for a valid or authorized cause. However, before
the employer is tasked to discharge this burden, it is incumbent upon the employee to prove by substantial
evidence the fact that he was indeed illegally dismissed from employment. Illegal dismissal must be
established by positive and overt acts clearly indicative of a manifest intention to dismiss.

CAPILI vs. PHILIPPINE NATIONAL BANK


G.R. No. 204750 | 11 July 2016
Termination by Employer

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DOCTRINE: A dismissal on the ground of loss of trust and confidence must be genuine and not a mere
afterthought to justify earlier action taken in bad faith.

FACTS:
• Capili was the Assistant Vice President of the Systems and Methods Division of the PNB.
• PNB’s Fact-Finding Committee found that Capili owned a private company named SB; that Capili,
and one Hyun, a Korean national, had business negotiations which were made within PNB
premises. It also reported that the NBI record showed that Capili’s name was listed for violating
BP 22.
• Capili claimed the meetings she had with Hyun were made during her personal time at lunch; and
that she never concealed that she owned SB as she even had a PNB bank account for it. Also, Capili
confirmed that a complaint for BP 22 was filed against her but she paid the value of the checks; and
that the case did not prosper (Makati case). She further asserted that another case of BP 22 is still
pending (Bulacan case). However, she argued that it should not be taken against her as it is still
pending and that she was not convicted of any offense.
• PNB declared that Hyun’s accusation and the issue relative to Makati case were without basis.
However, with respect to the Bulacan case, the decision therein would be necessary in resolving
the issue on her character. Thus, PNB provisionally dismissed the administrative complaint against
her.
• After hearing, PNB dismissed Capili for violating its policy on Loss of Confidence.
• Capili filed a complaint for illegal dismissal. She argued that her termination was without cause
because all the charges supporting PNB’s loss of confidence had been dismissed by the proper
courts.

ISSUE: Whether or not Capili’s dismissal on the ground of loss of trust and confidence was valid?

HELD: No, Capili was illegally dismissed. PNB’s assertion — that because of the BP 22 cases, it lost its trust
on Capili — is a mere afterthought considering that in its First Decision, PNB resolved that the issue on her
questionable character lost its basis as regards the Makati BP 22 case; and the only matter remaining was
the Bulacan case. Worthy to note is that after PNB issued its Second Decision, the Bulacan case was also
dismissed with finality by the court. Thus, PNB’s loss of confidence is simulated because it represented that
the administrative case against Capili will be contingent on the resolution of the Bulacan case; nevertheless,
PNB unjustifiably changed its position to the detriment and eventual illegal dismissal of Capili.As
previously held, loss of confidence must not be simulated. It must not be used as subterfuge for improper,
illegal, or unjustified causes. It must not be arbitrarily asserted in the face of overwhelming evidence to the
contrary. Lastly, it must be genuine and not a mere afterthought to justify earlier action taken in bad faith.

• Further, PNB gave Capili a “Very Good” rating in her work performance. During this time, PNB
was well aware of the BP 22 cases and the pending administrative case against her. When PNB
gave Capili a satisfactory rating in her evaluation, it did not consider the pendency of the case to
prevent her from performing well in her work; in the process, she continually enjoyed the trust and
confidence of PNB.

LEO’S RESTAURANT AND BAR CAFE v. DENSING


G.R. No. 208535 | 19 October 2016
Termination by Employer

DOCTRINE: In order to dismiss an employee on the ground of loss of trust and confidence, the employee
must be guilty of an actual and willful breach of duty duly supported by substantial evidence.

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FACTS:
• Kimwa Construction & Dev. Corporation, allegedly operates Leo’s Restaurant and Bar Café
(RestoBar) and the Mountain Suite Business Apartelle (Apartelle). The RestoBar and the Apartelle
were managed by Leo Lua.
• Laarne Densing filed a complaint for illegal dismissal against Kimwa, the RestoBar, and the
Apartelle. She claims that she was employed by Kimwa, et al. as Administrative Officer/HR Head.
She was illegally dismissed on the ground of loss of trust and confidence for allegedly entering
into a contract with Pepsi without authorization to do so. She claims that this is without basis
because she had the authority to do so and, in the event she did not, Leo also authorized her to sign
the agreement in his behalf.
• Kimwa, et al., on the other hand, argues that it was Leo’s sister (Amelia) who owned the RestoBar
and the Apartelle, not Kimwa. They also claim that there are sufficient bases to dismiss Densing as
she signed the exclusivity contract with Pepsi as if she was the owner of the Restobar, and she did
not account for the products donated by Pepsi to the latter.

ISSUE: Whether or notKimwa ownsthe RestoBar and the Apartelle?

HELD: Yes. Kimwa owns the RestoBar and the Apartelle. It is settled that where it shows that business
entities are owned, controlled, and conducted by the same parties, law and equity will disregard the legal
faction that they are distinct and shall treat them as one entity in order to protect the rights of third persons.
Here, it appearing that Kimwa, Leo, and Amelia owned, controlled and managed the Restobar and the
Apartelle, they are treated as a single entity accountable for the dismissal of Densing.

ISSUE: Whether or not Densing was illegally dismissed?

HELD: Yes, Densing was illegally dismissed. An employer has the right to dismiss an employee for just
causes, which include willful breach of trust and confidence reposed on him or her by the employer. But to
dismiss an employee on the ground of loss of trust and confidence, two requisites must concur: (a) the
concerned employee must be holding a position of trust; and, (b) the loss of trust must be based on willful
breach of trust based on clearly established facts.As far as the first requisite is concerned, Densing is shown
to occupy a position of trust as her managerial work was directly related to management policies, and
generally required exercise of discretion and independent judgment. Nonetheless, the second requirement
is wanting since Kimwa, et al. failed to prove that their loss of trust on Densing was founded on clearly
established facts. Records show that Leo required Densing to explain her supposed infractions when she
signed, without the approval of the owner, the contract between the Restobar and Pepsi; and her failure to
account the items Pepsi donated to the Restobar. Densing aptly explained these matters to Leo. According
to her, Leo verbally authorized her to sign the agreement with Pepsi. This verbal instruction was given in
the presence of Ablanque, Sales Manager of Pepsi, who corroborated the same. Even assuming that there
was no explicit order for her to do so, Densing still acted within her authority as in-charge of all operation,
administrative and functional matters of the establishments.
• There was no malice or any fraudulent intent on the part of Densing when she signed the Pepsi
contract. There is likewise no evidence that she personally benefited therefrom. In fact, the Restobar
itself received the items donated by Pepsi, and the Restobar did not suffer any damage arising from
the Pepsi contract. Loss of trust and confidence must stem from dishonest, deceitful, or fraudulent
acts. In the absence of such malicious intent or fraud on the part of Densing, she committed no
willful breach of trust against her employer.

JAPOS v. FIRST AGRARIAN REFORM MULTI-PURPOSE COOPERATIVE


(FARMCOOP)
G.R. No. 208000 | 26 July 2017

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Termination by Employer

DOCTRINE: If the medical certificate fails to refer to the specific period of the employee's absence, then
such absences are not supported by competent proof and hence, unjustified

FACTS:
• FARMCOOP is a domestic cooperative that is doing business as a banana contract grower of DOLE
Ph. It has a Personnel Policy punishing both the 4th offense of AWOL, and the 3rd infraction of
AWOP (Absence Without Permission) with dismissal.
• Dave Japos was employed by FARMCOOP as a gardener. Within the year of 2005, he committed 3
instances of AWOL. In all instances, FARMCOOP penalized him with a written warning. On June
22 – 28, he committed AWOL once again. When he got back to work, he was asked to explain his
recent AWOL. In response to this, he made a letter saying that he suffered under the “enfluenza”.
His letter not being enough, Japos presented a medical certificate which was accomplished by a
“Dr. Cruz” on July 7, 2005.
• Due to the 4th instance of AWOL, the FARMCOOP dismissed Japos, prompting him to file a
complaint for illegal dismissal.

ISSUE: Whether or not Japos was illegally dismissed.

HELD: No, Japos was not illegally dismissed. The evidence shows that prior to his June 22-28 absences,
Jalos already incurred several unauthorized absences for 2005, for which written warnings were issued
against him. While FARMCOOP opted not to penalize Japos with suspension for the 2nd and 3rd AWOL, as
mandated under the AWOL and AWOP Rules of FARMCOOP, this does not take away the fact that these
prior absences are nonetheless infractions. This being the case, Japos' June 22-28 absences become
significant because if it is found to be unauthorized and thus inexcusable; it would constitute a 4 th infraction
which merits the penalty of dismissal under the AWOL Rule, as well as an infraction that merits dismissal
under the AWOP Rule, for being an unauthorized absence of at least 6 consecutive days.

ISSUE: Whether or not Japos’ penalty of dismissal was proper?

HELD: Yes, dismissal is the proper penalty. Japos' contention that, if at all, he should be penalized only
with suspension, considering that he was not punished for his 3 earlier unauthorized absences. No. Quite
the contrary, he was penalized with written warnings for these infractions. The fact that he was not
suspended is of no moment; FARMCOOP management merely exercised its prerogative to choose which
penalty to impose upon him. While FARMCOOP opted not to penalize Japos with suspension for his 2 nd
and 3rd AWOL as mandated under the Rules of FARMCOOP, these prior absences remain to be infractions
that may be considered in treating his unauthorized June 22 to July 5, 2005 absences as his fourth infraction.

MEATWORLD INTERNATIONAL INC. v. HECHANOVA


G.R. No. 208053 | 18 October 2017
Termination by Employer

DOCTRINE: Constructive dismissal is defined as a “cessation of work because continued employment is


rendered impossible, unreasonable or unlikely.”

FACTS:
• Hechanova was a head butcher hired by Meatworld International Inc., which operates the “Mrs.
Garcia’s Meats” brand butcher’s stores.
o Hechanova was assigned to Robinsons Place Mall in Ermita, Manila, at the time of his
termination.

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• On November 10-19, 2010, Hechanova was suspended for violating the regulation of SM
Hypermarket Muntinlupa, which prohibited employees of concessionaires from tasting food
peddled by promodisers.
• After the suspension, Hechanova reported to the office of Meatworld for reassignment, but he was
informed by an Employee Relation Supervisor that he was relieved from his assignment and was
to report to the office for a performance evaluation.
• Hechanova went to the office of Meatworld for the performance evaluation. But, in the end, he was
asked to just leave his cellphone number so that he can be messaged as to when he should come
back to the office.
o Hechanova returned to the office at 1 PM, but was scolded by the Employee Relation
Superviser for not having arrived in the morning, and was threatened that he should
resign, lest he be fired.
• Hechanova sought the aid of Tulfo, who endorsed his Single-Entry Approach (SENA) Form to the
DOLE-CAMANAVA, for illegal constructive dismissal. He alleged that he was not given any work
assignment and was forced to resign.

ISSUE: Whether or not the Hechanova was constructively dismissed?

HELD: Yes, Hechanova was constructively dismissed, because, although there was no actual dismissal, the
failure of Meatworld to assign Hecahnova to a specific branch without any justifiable reason constituted
illegal constructive dismissal. Constructive dismissal is defined as a “cessation of work because continued
employment is rendered impossible, unreasonable or unlikely”. In the present case, Hechanova was not
assigned work. Moreover, in cases of constructive dismissal, it was incumbent upon the employer to
discharge of the burden of proving that its conduct and action were for valid and legitimate grounds. In
this case, Meatworld’s allegation that Hechanova was banned from SM Hypermarke Muntinlupa, Market
Market, and all Puregold supermarkets was not sufficiently proven.

RENO FOODS, INC. vs. NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM)-


KATIPUNAN
G.R. No. 164016 | March 15, 2010
Termination by Employer

DOCTRINE: Conviction in a criminal case is not necessary to find just cause for termination of
employment.

FACTS:
• Capor, an employee of Reno Foods, stole six Reno canned goods in her bag. She was accorded
opportunities to explain her side and a Notice of Termination with another opportunity for
reconsideration through a labor-management grievance conference. Terminated.
• An Information was filed for qualified theft. Here, she was acquitted based on reasonable doubt.
• Meanwhile, the Union filed on behalf of Capor a complaint for illegal dismissal and money claims
before the NLRC. It found Capor guilty of serious misconduct which is a just cause for termination
but added an award of financial assistance in form of separation pay.
• Now, Capor claims that here acquittal in the criminal case proves that petitioners failed to present
substantial evidence to justify termination.

ISSUE: Whether conviction in a criminal case is necessary to find just cause for termination of employment

HELD: No, employee’s acquittal in a criminal case, especially one that is grounded on the existence of
reasonable doubt, will not preclude a determination in a labor case that he is guilty of acts inimical to the

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employer’s interests. Criminal cases require proof beyond reasonable doubt while labor disputes require
only substantial evidence, which means such relevant evidence as a reasonable mind might accept as
adequate to justify a conclusion. Here, both LA and NLRC found substantial evidence to conclude that
Capor had been validly dismissed for dishonesty or serious misconduct. Also, the NLRC’s award of
separation pay is not warranted under law and jurisprudence. Separation pay is only warranted when the
cause for termination is not attributable to the employee’s fault, such as those provided in Articles 283 and
284 of the Labor Code, as well as in cases of illegal dismissal in which reinstatement is no longer feasible.
Jurisprudence has classified theft of company property as a serious misconduct and denied the award of
separation pay to the erring employee. Here, Capor attempted to steal the property of her long-time
employer. For committing such misconduct, she is definitely not entitled to an award of separation pay. It
is to note that Length of service and a previously clean employment record cannot simply erase the gravity
of the betrayal exhibited by a malfeasant employee. After all, an employer-employee relationship is
symbiotic where both parties benefit from mutual loyalty and dedicated service.

NAGKAKAISANG LAKAS NG MANGGAGAWA SA KEIHIN (NLMK- OLALIA-


KMU) vs. KEIHIN PHILIPPINES CORPORATION
G.R. No. 171115| August 9, 2010
Termination by Employer

DOCTRINE: For serious misconduct to justify dismissal under the law, (a) it must be serious, (b) must
relate to the performance of the employee’s duties; and (c) must show that the employee has become unfit
to continue working for the employer.

FACTS:
• Petitioner Helen Valenzuela was a product associate of Keihin Philippines. When she was about to
leave the company premises one day, she saw a packing tape and placed it inside her bag. Guard
on duty reported the incident.
• Company issued a show cause notice for violation of company’s Code of Conduct for which the
penalty is dismissal. Later, she was terminated.
• Petitioner Union filed a case for illegal dismissal. They alleged that act of taking the packing tape
did not constitute serious misconduct, because the same was done with no malicious intent, that
the tape was not of great value and punishment was disproportionate to her infraction.

ISSUE: Whether, in taking the packing tape for her own personal use, Helen committed serious
misconduct, which is a just cause for her dismissal from service

HELD: Yes. Misconduct is defined as “the transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in
judgment.” For serious misconduct to justify dismissal under the law, (a) it must be serious, (b) must relate
to the performance of the employee’s duties; and (c) must show that the employee has become unfit to
continue working for the employer.
In the case at bar, Helen took the packing tape with the thought that
she could use it for her own personal purposes (useful in her transfer of residence). This was admitted in
writing. In other words, by her own admission, there was intent on her part to benefit herself when she
attempted to bring home the packing tape in question.
• Also, it is to note that prior to incident, there are several cases of theft and vandalism within the
company. Thus, company issued memoranda that such actions will be dealt with accordingly and
implementing intensive inspection procedure. Despite this, Helen still took the packing tape.
• On the matter of due process, the show-cause notice sufficiently informed Helen of the charge of
theft of company property against her. Such notice satisfies the due process requirement to apprise

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the employee of the particular acts or omissions for which dismissal is sought. Likewise, the
hearing requirement was complied as petitioner was asked to explain her side of the story.

JERUSALEM vs. KEPPEL MONTE BANK


G.R. No. 169564 | April 6, 2011
Termination by Employer

DOCTRINE: For breach of trust and confidence to become a valid ground for the dismissal of an employee,
the cause of loss of trust and confidence must be related to the performance of the employee’s duties.

FACTS:
• James Ben Jerusalem was employed by Keppel Monte Bank as Assistant VP assigned as Head of
the newly created VISA Credit Card Department. Later, he was reassigned as Head of the
Marketing and Operations of the Jewelry Department.
• After his reassignment, James received from Jorge Javier a sealed envelope said containing VISA
Card application forms. He handed it over and referred to the Credit Card Department where all
accounts were approved.
• As it turned out, all accounts became past due. It was discovered then that the applications are all
fictitious.
• Now, James received a Notice to Explain why no disciplinary actions should be take against him
for referring fictitious VISA card applicants. He was later served a Notice of Termination where he
was found to be guilty of breach of trust and confidence for knowingly and maliciously referring,
endorsing and vouching VISA card applications who turned out to be impostors resulting in
financial loss to Keppel.

ISSUE: Whether Keppel legally terminated James’s employment on the ground of willful breach of trust
and confidence

HELD: No, Article 282(c) of the Labor Code prescribes two separate and distinct grounds for termination
of employment, namely: (1) fraud; or (2) willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative. In order to constitute a just cause for dismissal, the act
complained of must be work-related such as would show the employee concerned to be unfit to continue
working for the employer.Employee concerned must be holding a position of trust and confidence. In this
case, there is no doubt that James held a position of trust and confidence as Assistant VP of the Jewelry
Department.

The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of
trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and
founded on clearly established facts. Here, James did nothing wrong when he handed over to Marciana the
envelope containing the applications of persons under the referred accounts of Jorge who were later found
to be fictitious. James was no longer connected with the VISA Credit Card Unit his referrals were approved.
At such time, he was already the Head of the Marketing and Operations of the Jewelry Department. His
act therefore of forwarding the already accomplished applications to the VISA Credit Card Unit is proper
as he is not in any position to act on them.

JARL CONTRUCTION vs. ATENCIO


G.R. No. 175969 | August 1, 2012
Termination by Employer

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DOCTRINE: In dismissing an employee from service, the employer has the burden of proving its
observance of the two-notice requirement and its accordance to the employee of a real opportunity to be
heard.

FACTS:

• Atencio was hired by JARL as Chief Operating Manager (COM) whose function was to direct and
manage JARL’s construction projects based on policies and contracts. Contract modification
requires the approval of the JARL’s President.
• JARL has an existing contract with Caltex which prohibits JARL from subcontracting the project.
Since JARL did not have proper facilities and personnel for the Caltex project, GM Tejada and COM
Atencio the company Safemark (Atencio’s own construction company) and DDK Steel Corporation
to perform works in the Caltex project as subcontractor.
• Later, Tejada informed Atencio and Safemark, through a letter, that JARL was terminating
Atencio’s management and supervision of the Caltex project. Atencio construed such as
termination of the subcontractor between Safemark and JARL. Atencio continued reporting for
work until he was barred from entering the company premises and served a Noitce of Termination,
Hence, this complaint for illegal dismissal.

ISSUE: Whether petitioners were able to prove substantial compliance with the procedural due process
requirements

HELD: No. The following are the requisitesfor termination of employment based on just causes:
• A written notice served on the employee specifying the ground or grounds for termination, and
giving said employee reasonable opportunity within which to explain his side.
• A hearing or conference during which the employee concerned, with the assistance of counsel if he
so desires is given opportunity to respond to the charge, present his evidence or rebut the evidence
presented against him.
• A written notice of termination served on the employee, indicating that upon due consideration of
all the circumstances, grounds have been established to justify his termination.

The first notice, which may be considered as the proper charge, serves to apprise the employee of
the particular acts or omissions for which his dismissal is sought. The second notice on the other hand seeks
to inform the employee of the employer’s decision to dismiss him. This decision, however, must come only
after the employee is given a reasonable period from receipt of the first notice within which to answer the
charge and ample opportunity to be heard and defend himself with the assistance of a representative, if he
so desires. The rule is in consonance with the express provision of the law on the protection of labor.

TABUK MULTIPURPOSE COOPERATIVE, INC. (TAMPCO) v. DUCLAN


G.R. No. 203005 | 14 March 2016
Termination by Employer

DOCTRINE: The persistent refusal of the employee to obey the employer's lawful order amounts to
willful disobedience.

FACTS:
• TAMPCO is a duly registered cooperative based in Tabuk City, Kalinga, engaged in the business
of obtaining investments from its members which are lent out to qualified member-borrowers.
• TAMPCO’s Board of Directors issued a Board Action (BA) to limit the grant of Special Investment
Loans (SILs) to PhP 5M. Later, because too many SILs were being granted, a number exceeding the

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mentioned limit, the BoD decided to issue another BA to completely halt the grant of the SILs
pending the collection of outstanding loans.
• However, despite the moratorium on granting SILs, the same was still granted, even exceeding the
amount limit placed by the BA.
• Due to the violations of the BAs, TAMPCO indefinitely suspended Duclan, the treasurer/cashier,
and a number of other involved persons. The BoD created a committee to investigate the SIL
debacle. It later recommended, which the BoD adopted, for Duclan be suspended again and for her
to collect the SILs released in violation of the BAs, on the condition that she will be dismissed if she
is unable to collect or pay for the said amount.
• So, Duclan filed a complaint for illegal dismissal.

ISSUE: Whether or not Duclan was illegally dismissed.

HELD: No, Duclan was not illegally dismissed. Under Article 282 of the Labor Code, the employer may
terminate the services ofits employee for the latter's serious misconduct or willful disobedience of its or its
representative's lawful orders. And for willful disobedience to constitute a ground, it is required that: "(a)
the conduct of the employee must be willful or intentional; and (b) the order the employee violated must
have been reasonable, lawful, made known to the employee, and must pertain to the duties that he had
been engaged to discharge.”
• The persistent refusal of the employee to obey the employer's lawful order amounts to willful
disobedience. Indeed, "[o]ne of the fundamental duties of an employee is to obey all reasonable
rules, orders and instructions of the employer. Disobedience, to be a just cause for termination,
must be willful or intentional, willfulness being characterized by a wrongful and perverse mental
attitude rendering the employee's act inconsistent with proper subordination."

ISSUE: Whether TAMPCO complied with the due process requirements.

HELD: Yes, TAMPCO observed the requirements of due process in dismissing Duclan. An investigation
was conducted by a fact-finding committee; Duclanand her colleagues were summoned and required to
explain — and they did; Duclan submitted a letter acknowledging and confessing her wrongdoing — that
despite BA No. 55, she and her colleagues continued to approve and release SILs. After the investigation
proceedings, the committee prepared a detailed Report of its findings and containing a recommendation
to suspend the Duclan, and for her to restore the amounts she wrongly disbursed; otherwise, she would be
dismissed. The Report was approved and adopted by the cooperative's BOD. When Duclanfailed to restore
the amounts in question, the BOD ordered her dismissal from employment. Duclan was informed of her
dismissal in a February 1, 2005 communication addressed to her; this is the second of the twin notices
required by law.

ISSUE: Whether Duclan is required to pay for the unpaid loans.

HELD: Yes, it is proper to require Duclan to collect or pay for the unpaid loans. There is nothing irregular
in the cooperative's decision to require from Duclanand her colleagues the collection or restoration of the
amounts that were illegally released, with a threat that in case of failure to do so, they would be dismissed
from employment. Duclan and her colleagues were simply given the opportunity to clear themselves from
the serious infractions they committed; their failure to restore the amounts lost in any manner could not
prevent the imposition of the ultimate penalty, since their commission of the serious offense has been
adequately shown. In fact, Duclanvoluntarily confessed her crime. To the mind of the Court, Duclan and
her colleagues were afforded ample opportunity to clear themselves and thus restore the confidence that
was lost, and TAMPCO was not precluded from testing their resolve.

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CELIZ v. CORD CHEMICALS, INC.


G.R. No. 200352 | 20 July 2016
Termination by Employer

DOCTRINE: When a managerial employee violates the trust and confidence reposed in her, she is not
entitled to any benefit in leaving her employer.

FACTS:
• Mary June Celiz, an employee of Cord Chemicals, Inc. with the positions of Chief of Sales and
Senior Operations Manager, filed a case for illegal dismissal against her Cord.
• She claims that her dismissal on the ground of loss and confidence was not supported by
substantial evidence in that it was not proven that she received the PhP445,000.00 out of the PhP
713,000.00 unliquidated cash advances attributed to her; that the charges against her were
fabricated by the current CEO of Cord (wife of former CEO) as revenge for the unproved claim
that she was the mistress of the former CEO; and that she was deprived of procedural due process.

ISSUE: Whether or notCeliz was illegally dismissed.

HELD: No, Celiz was not illegally dismissed. Since there is no divergence between the findings of these
three tribunals (LA, NLRC, CA), there is no need to go over the evidence once more in order to resolve the
issues relative to Celiz's failure to liquidate her cash advances and the manner by which she was
terminated. Suffice it to state that, in cases of dismissal for breach of trust and confidence, proof beyond
reasonable doubt of an employee's misconduct is not required. It is sufficient that the employer had
reasonable ground to believe that the employee is responsible for the misconduct which renders him
unworthy of the trust and confidence demanded by his position.

ISSUE: Whether or not procedural due process was accorded to Celiz.

HELD: No, it is also beyond cavil that Cord observed the requirements of procedural due process. In the
first Notice to Explain, Cerizwas properly informed of the charge against her, i.e. , failure to liquidate the
cash advances. In addition, Cord allowed Ceriz access to company records in order for the latter to
thoroughly prepare her explanation and defense. Considering the circumstances, Cord even generously
granted Ceriz more time to sift through the company records. However, Ceriz was only able to liquidate a
small portion of the cash advances; she failed to explain how and where she spent the rest. Consequently,
Cord had no other recourse but to dismiss Ceriz for loss of trust and confidence. It is on record that Cord
notified Ceriz of her termination from service.

BPI EMPLOYEES UNION- METRO MANILA v. BPI


G.R. No. 178699| 21 September 2011
Reliefs from Illegal Dismissal

DOCTRINE: The base figure in computing the award of back wages toan illegally dismissed employee is
the employee’s basic salary plus regular allowances and benefits received at thetime of dismissal,
unqualified by any wage and benefit increases granted in the interim.

FACTS:
• Uy, a bank teller of BPI, was terminated on grounds of gross disrespect/discourtesy towards an
officer, insubordination and AWOL; so she and union filed a complaint for illegal dismissal
• The VA, CA, and SC ruled that Uy was illegally dismissed and entitled to full backwages.

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• Uy filed for issuance of Writ of Execution, but another issue arose as to what comprise backwages:
based on current wage level at time of execution, including increases provided in CBA; or wage
rate at time of dismissal.

ISSUE: What comprises full backwages?

HELD: Full backwages is the basic salary plus regular allowances and benefits at time of dismissal,
unqualified by any wage and benefit increases granted in the interim.The previous SC ruling is clear that
it modified the CA decision by awarding full back wages instead of limiting the award to a period of 3
yrs.Jurisprudence in relation to Labor Code provides that full back wages is without qualifications and
deductions, that is, unqualified by any wage increases or other benefits that may have been received by co-
workers who were not dismissed. The base rate is based on the wage rate at time of dismissal. Salary
increases provided in CBA subsequently awarded to co-workers not dismissed.Full back wages is awarded
from time of dismissal to time of reinstatement. Legal interest of 12% per annum should be imposed upon
the monetary awards beginning from finality of SC’s decision until full satisfaction.

TANGA-AN v. PHILIPPINE TRANSMARINE CARRIERS


G.R. No. 174893 | 11 July 2012
Reliefs from Illegal Dismissal

DOCTRINES: It is the obligation of the employer to pay an illegally dismissed employee or worker the
whole amount of the salaries or wages, plus all other benefits and bonuses and general increases, to which
he would have been normally entitled had he not been dismissed and had not stopped working.

FACTS:
• This is a case for illegal dismissal with a claim for the payment of salaries corresponding to the
unexpired term of the contract, damages and attorney’s fees filed by private respondent Lorenzo
T. Tangga-an against the petitioners Philippine Transmarine Carriers, Inc. (PTC), Universe
Tankship Delaware LLC (UTD), and Carlos C. Salinas or herein respondents.
• Tangga-an alleged that, he entered into an overseas employment contract with Philippine
Transmarine Carriers, Inc. (PTC) for and in behalf of its foreign employer, UTD. Under the
employment contract, he was to be employed for a period of six months as chief engineer of the
vessel the S.S. "Kure".
• Tangga-an and the other Engineering Officers were ordered to disembark from the vessel on the
basis of alleged negligence and thereafter repatriated. Hence, the complaint.

ISSUES: Whether or not the CA correctly held in applying the reliefs sought by petitioners.

HELD: No. The State guarantees of protection of labor and security of tenure, labor disputes involve the
fundamental survival of the employees and their families, who depend upon the former for all the basic
necessities in life.
• Thus, petitioner must be awarded his salaries corresponding to the unexpired portion of his six-
months employment contract, or equivalent to four months. This includes all his corresponding
monthly vacation leave pay and tonnage bonuses which are expressly provided and guaranteed in
his employment contract as part of his monthly salary and benefit package.
• These benefits were guaranteed to be paid on a monthly basis, and were not made contingent. In
fact, their monetary equivalent was fixed under the contract: US$2,500.00 for vacation leave pay
and US$700.00 for tonnage bonus each month. Thus, petitioner is entitled to back salaries of
US$32,800 (or US$5,000 + US$2,500 + US$700 = US$8,200 x 4 months). "Article 279 of the Labor

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Code mandates that an employee’s full backwages shall be inclusive of allowances and other
benefits or their monetary equivalent."
• As we have time and again held, "it is the obligation of the employer to pay an illegally dismissed
employee or worker the whole amount of the salaries or wages, plus all other benefits and bonuses
and general increases, to which he would have been normally entitled had he not been dismissed
and had not stopped working."Article 111 of the Labor Code, as amended, contemplates the
extraordinary concept of attorney’s fees and that Article 111 is an exception to the declared policy
of strict construction in the award of attorney’s fees. Although an express finding of facts and law
is still necessary to prove the merit of the award, there need not be any showing that the employer
acted maliciously or in bad faith when it withheld the wages.

ANGELES v. BUCAD
G.R. No. 196249 | July 31, 2014
Reliefs from Illegal Dismissal

DOCTRINE: It is the ER who has the burden of proving payment of money claims of their EEs.

FACTS:
• Consolidated complaints for illegal dismissal and Money claims filed by respondents against
Angeles.
• Respondents claim that:
o they were underpaid workers employed by petitioner;
o payment of salaries below the minimum wage and which were oftentimes paid after much
delay;
o noncoverage under the Social Security System (SSS);
o termination from employment without giving just benefits despite long service;
o signing of blank payroll without indicating the amount;
o nonpayment of night differential, holiday pay, COLA, commutation pay for sick leave and
annual leave, 13th month pay and service charges;
o enforcing long hours of service so that stay-in employees rendered a minimum of 10 hours
of work while stay-out employees were required to work for a minimum of 9 hours;
o petitioners heaped verbal abuses upon them, and worse, maltreated them by splashing
water to wake them up when anyone fell asleep at work;
o Petitioners forced sick employees to go home to their respective provinces despite their
illness;
o Petitioners failed to provide them security of tenure.
• Angeles now argues that they submitted documentary evidence attached to their Memorandum of
Appeal with the NLRC consisting of DTR cash vouchers, signed receipts for the payment of 13th
month pay, SSS records, releases and quitclaims, and computation of monetary claims supposedly
indicating that they have settled their pecuniary obligations to respondents. Petitioners claim that
the CA failed to appreciate such evidence, which led the appellate court to an erroneous
conclusion.

ISSUE: Whether or not CA erred in concluding that EEs were illegally terminated and that petitioners have
failed to overcome the burden of payment of the money claims of private respondents.

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HELD: No, for there exists serious doubt with respect to petitioners’ proffered evidence, considering that
the relevant payroll and daily time records are missing as they were, according to petitioners, stolen. Setting
aside for a moment the Case pronouncement that the “stolen records” angle is nothing but a lame excuse,
it would nonetheless be difficult if not impossible to validate and reconcile petitioners’ documentary
evidence and unilateral claims of payment, if the official payroll and daily time records are not taken into
account. Without them, there could be no sufficient basis for this Court to overturn the assailed Decision;
the Court can only rely on the findings of the Labor Arbiter, the NLRC, and the CA. x xx The purpose of a
time record is to show an employee’s attendance in office for work and to be paid accordingly, taking into
account the policy of “no work, no pay.” A daily time record is primarily intended to prevent damage or
loss to the employer, which could result in instances where it pays an employee for no work done; it is a
mandatory requirement for inclusion in the payroll, and in the absence of an employment agreement, it
constitutes evidence of employment. x xx The punching of time card is undoubtedly work-related. It
signifies and records the commencement of one’s work for the day. It is from that moment that an employee
dons the cape of duties and responsibilities attached to his position in the workplace. It is the reckoning
point of the employer’s corresponding obligation to him · to pay his salary and provide his occupational
and welfare protection or benefits.

GOODYEAR PHILS., INC. v. ANGUS


G.R. No. 185449 | 12 November 2014
Reliefs from Illegal Dismissal

DOCTRINE: In the absence of an express or implied prohibition against it, collection of both retirement
benefits and separation pay upon severance from employment is allowed.

FACTS:
• Marina Angus was employed by Goodyear as Secretary to the Manager of Quality and Technology.
• She was terminated due to her position being redundant.
• Goodyear granted her early retirement benefits.
• Angus received the checks in protest, since she claimed for separation pay as well. She also
executed a Release and Quitclaim in favor of Goodyear.
• Angus filed with the Labor Arbiter a complaint for illegal dismissal with claims for separation
payagainst Goodyear.
o She claims that the separation pay to which she is entitled by law is entirely different from
the retirement benefits that she received; that nothing in the company’s Retirement Plan
under the CBA, the CBA itself or the Employment Contract prohibits the grant of more
than one kind of separation pay; and that she was only forced to sign a quitclaim after
accepting her retirement benefits.
• Goodyear argues Angus is no longer entitled to separation pay as she is entitled to only one kind
of pay as the recovery of both retirement benefits and separation pay is proscribed by the
company’s CBA. Further, it contends that the quitclaim is valid since it was knowingly and
voluntarily executed by Angus. And such voluntary execution, coupled with her acceptance of
separation pay computed at early retirement rate, had effectively barred Angus from demanding
for more.

ISSUE: Whether or not Angus is entitled to payment of separation pay on top of the retirement pay.

HELD: Yes, retirement benefits and separation pay are not mutually exclusive.Retirement benefits are a
form of reward for an employee’s loyalty and service to an employer and are earned under existinglaws,
CBAs, employment contracts and company policies.Separation pay is that amount which an employee

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receives at the time of his severance from employment, designed to provide the employee with the
wherewithal during the period that he is looking for another employment and is recoverable only in
instances enumerated under Articles 283 and 284 of the Labor Code or in illegal dismissal cases when
reinstatement is not feasible.An employee is entitled to recover both separation pay and retirement benefits
in the absence of a specific prohibition in the Retirement Plan or CBA.In the case, Angus presented the
parties’ 2001-2004 CBA and upon examination of the same, the Court agrees with her that it does not
contain any restriction on the availment of benefits under the company’s Retirement Plan and of separation
pay. Thus, Angus is entitled to both retirement benefits and separation pay.

ISSUE: Whether or not the quitclaim executed by Angus is valid, barring her entitlement to payment of
separation pay.

HELD: No, a quitclaim cannot bar an employee from demanding benefits to which he is legally entitled. It
was held to be “ineffective in barring claims for the full measure of the worker’s rights and the acceptance
of benefits therefrom does not amount to estoppel.” Moreover, release and quitclaims are often looked
upon with disfavor when the waiver was not done voluntarily by employees who were pressured into
signing them by unscrupulous employers seeking to evade their obligations. In the case, the quitclaim is
found to be invalid since the terms thereof authorize Angus to receive less than what she is legally entitled
to. The release and quitclaim signed by Angus cannot be used by Goodyear to legalize the denial of Angus’
rightful claims.

PEAK ADVENTURES CORP v. VILLAREAL


G.R. No. 184618 | 19November 2014
Reliefs from Illegal Dismissal

DOCTRINE: An award for separation pay must be deleted when the illegally dismissed employee is
reinstated.

FACTS:
• Peak Ventures hired Villareal as security guard and assigned him at East Greenhills Village.
• On May 14, 2002, however, he was relieved from duty without any apparent reason.
• Villareal was later informed by the management that he would no longer be given any assignment
because of his age.
• Villareal was constrained to claim his security bond deposits from petitioners.
• However, he was advised to first tender a letter of resignation before the same could be released
to him which he did. He stated therein that he was constrained to resign effective July 31, 2002.
• Villareal alleged that the tenor of his resignation letter was not acceptable to petitioners, who
required him to submit another one stating that his resignation is voluntary.
• In the first week of August 2002, petitioners released to Villareal his security bond deposits.
• The LA, NLRC, and CA ruled that he was illegally dismissed and order petitioner to reinstate him
and to pay backwages from July 3, 2002 to July 4, 2003 and separation pay.

ISSUE: Whether or not Villareal was illegally dismissed.

HELD: Yes, however, the award for backwages should be computed from the time that he was
constructively dismissed up to the time of reinstatement and the award for separation pay must be deleted.
When Villareal was relieved from duty, he was placed on floating status. The employer should prove that
there are no posts available to which the employee temporarily out of work can be assigned. As pointed
out by the labor tribunals, petitioners failed to discharge the burden of proving that there were no other
posts available for Villareal after his recall from his last assignment. What is clear instead is that Villareal

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was constructively dismissed. There is constructive dismissal when an act of clear discrimination,
insensitivity or disdain on the part of the employer has become so unbearable as to leave an employee with
no choice but to forego continued employment. Under Article 279 of the Labor Code, as amended by
Republic Act No. 6715, an employee who is unjustly dismissed shall be entitled to (1) reinstatement without
loss of seniority rights and other privileges; and, (2) full backwages, inclusive of allowances, and to other
benefits or their monetary equivalent computed from the time his compensation was withheld up to the
time of actual reinstatement. If reinstatement is no longer viable, separation pay is granted. “[S]eparation
pay is intended to provide the employee money during the period in which he will be looking for another
employment.”Backwages, on the other hand, “are granted on grounds of equity for earnings lost by an
employee due to his illegal dismissal.”

INC SHIPMANAGEMENT v. CAMPOREDONDO


G.R. No. 199931 | 7 September 2015
Reliefs from Illegal Dismissal

DOCTRINE: The employer has the burden to prove that the dismissal of an employee is based on a valid
cause. Specifically, the employer must comply with the following requisites: (1) the dismissal must be for
a just or authorized cause, and (2) the employee to be dismissed must have been afforded due process of
law.

FACTS:
• INC Shipmanagement hired Camporedondo as chief cook on board the vessel M/V Fortunia.
• The captain reprimanded respondent on a daily basis due to his inquiries about their food supplies.
• About a month and a half into his contract, respondent was given a report of dismissal, which he
refused to accept. He then filed a complaint for illegal dismissal.
• Petitioners contended that they dismissed respondent due to his stiff arm and poor performance.
• Respondent countered that he passed the medical and physical examinations.
• Petitioners also emphasized that the complaint filed against them by the respondent is barred by
the latter’s voluntary execution of a quitclaim.

ISSUE: Whether or not there was illegal dismissal.

HELD: Yes, petitioners failed to prove just or authorized cause.As a general concept, poor performance is
tantamount to inefficiency and incompetence in the performance of official duties. An unsatisfactory rating
can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties. Poor or
unsatisfactory performance of an employee does not necessarily mean that he is guilty of gross and habitual
neglect of duties. The Report of incompetent action/insubordination/ indiscipline against respondent did
not describe the specific acts that would establish his alleged poor performance, or his want of even slight
care in the performance of his official tasks as chief cook for a certain period of time; hence, even assuming
that respondent’s performance was unsatisfactory, petitioners failed to show that his poor performance
amounted to gross and habitual neglect of duties. Petitioners did not comply with the two-notice rule
required in dismissing an employee.To amount to a valid dismissal, an erring seafarer must be handed a
written notice of the charge against him and must be given the opportunity to explain himself – unless of
course there is a clear and existing danger against the safety ofthe crew or the vessel in which case notice
may be dispensed with.

ISSUE: Whether or not the quitclaim barred the respondent from filing a complaint for illegal dismissal
against the petitioner.

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HELD: No, the quitclaim that respondent executed did not bar him from filing a complaint for illegal
dismissal against petitioners. Said quitclaim was invalid because it did not fully or completely give or
grant respondent what was due him as a matter of law and justice. It only covered respondent’s accrued
leave credits and his 3-day travel pay. Such payment involved only a part or portion of the amount of
money actually and justly due him under the law; it was not a full and complete satisfaction of what is due
him under the law.

NEC SYSTEM INTEGRATED CONSTRUCTION v. CRISOLOGO


G.R. No. 201535 | 5 October 2015
Reliefs from Illegal Dismissal

DOCTRINE: Not all waivers and quitclaims are invalid as against public policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not
later be disowned simply because of a change of mind.

FACTS:
• Ralph T. Crisologo was employed by NEC System Integrated Construction Phils., Inc. (NESIC) as
Manager of its Communication Facilities Engineering Department.
• Due to his exemplary work performance, respondent was promoted several times until he became
VP.
• He was later on demoted from VP to GM in order to train a new employee with the consideration
that his salary shall remain the same.
• NESIC had a new President and it announced its Retrenchment Program.
• Crisologo received a termination letter from NESIC via registered mail and then received
P1,002,065.24 representing his separation pay and other benefits up to March 5, 2004.
• He executed a Waiver and Quitclaim and a receipt for said amount. However, on realizing that
respondent received the termination letter only on March 8, 2004 but that his termination became
effective on April 5, 2004, or less than the required one month from receipt of notice of termination,
petitioner adjusted his effective date of termination to April 10, 2004.
• Crisologo later on filed a complaint for illegal dismissal.

ISSUE: Whether or not the Waiver and Quitclaim executed by Crisologo bar the filing of a complaint for
illegal dismissal against NESIC.

HELD: Yes, it can hardly be doubted that from its end petitioner had dealt at arm’s length with respondent
in the matter of duly compensating the latter for the services he had rendered the petitioner during the 11
years or so that he had been under its employ.More than that this waiver and quitclaim is supported by a
valuable consideration; this valuable consideration being the separation pay itself in the amount of
P1,002,065.24; and of course, it is no inconsequential matter that to this amount of P1,002,065.24 should be
added the still-to-be computed "Last Pay" (net of accountabilities to the Company) spoken of in Annex "L,"
the March 31, 2004 letter to respondent.The records of the case yield no evidence that respondent had ever
been tricked or hoodwinked into affixing his signature upon the said deed of waiver-quitclaim cum
separation pay; indeed, respondent has not put forward any such claim.These impressive credentials are
of course ample proof of authentic high level academic achievement, indicative of a by-no-means middling
or common place intellectual power. For this reason, this Court cannot accept respondent's claim that he
did not thoroughly apprehend the full scope, thrust and import of the waiver-quitclaim cum separation
pay that he freely, voluntarily and intelligently forged and fashioned with petitioner. The combination of
all these circumstances thus repels the suggestion that respondent might not have fully or thoroughly
grasped or understood the plain meaning, intendment and significance of the deed/document to which he
affixed his signature, and from the obvious and inevitable effects of which he now seeks to rid or extricate

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himself. That by his free and voluntary act and deed he chose or opted to deed away his patrimonial rights
he has only himself to blame.

HERRERA v. NAPOCOR
G.R. No. 166570| 18 December 2009
Retirement

DOCTRINE: Employees who received separation benefit under RA 9136 are no longer entitled to
retirement benefits.

FACTS
• RA 9136 (EPIRA) was enacted to provide a framework for restructuring of electric power industry.
Due to the reorganization, all NPC employees, including petitioners, were separated from service.
• All employees who held permanent positions opted for and were paid separation pay.
• In addition to the separation pay under EPIRA, a number of NPC employees also claimed
retirement benefits.
• NPC claimed that grant of retirement benefits in addition to separation pay was inconsistent with
constitutional proscription on the grant of double gratuity.

ISSUE: Whether NPC employees who were separated from service because of reorganization of electric
power industry and who received separation pay under RA 9136 are still entitled to retirement benefits.

HELD: No, there must be a clear and unequivocal statutory provision to justify the grant of both separation
pay and retirement benefits to an employee. Absent an express provision of law, grant of both would
amount to double compensation from one single act of separation from employment. A careful reading of
Section 63 of the EPIRA affirms that said law did not authorize the grant of both separation pay and
retirement benefits. The option granted was either to a separation pay and other benefits or to a separation
plan the option granted was either to “a separation pay and other benefits in accordance with existing laws,
rules and regulations” or to “a separation plan which shall be one and one-half months” salary for every
year of service in the government.” The options were alternative, not cumulative. Having chosen the
separation plan, they cannot now claim additional retirement benefits under CA No. 186. Petition is denied.

MANAGEMENT PREROGATIVE

ARENO, JR. v. SKYCABLE PCC-BAGUIO


G.R. No. 180302 | 5 February 2010
Discipline

DOCTRINE: It is the prerogative of an employer to impose disciplinary measure on erring employee. The
willful disobedience of employer’s lawful orders is a just cause for dismissal.

FACTS
• Areno Jr. was employed as a cable technician by Skycable PCC-Baguio.
• Soriano alleged that Areno Jr. spread false rumors about her on three occasions.
• After issuance of Memorandum and conduct of administrative investigation, Areno Jr. was found
guilty of having made malicious statements against Soriano which is categorized as an offense
under the Company Code of Discipline.
• Areno Jr. was suspended for three days without pay; refused to sign the Memo.

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• Despite the suspension order, he still reported for work. Thus, he was dismissed from service on
the ground of insubordination or willful disobedience in complying with the suspension order.

ISSUE: Whether the suspension was valid.

HELD: Yes, the appropriate disciplinary sanction is within the purview of management imposition.
Skycable acted within its rights as an employer when it decided to exercise its management prerogative to
impose disciplinary measure on its erring employee.

ISSUE: Whether Areno Jr. was validly dismissed.

HELD: Yes, the elements for willful disobedience of employer’s lawful orders are present in this case: (1)
employee’s conduct must have been willful; 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. In
this case, upon receipt of the notice of suspension, Areno Jr. did not question such order at the first instance.
He immediately defied the order by reporting on the first day of his suspension. Deliberate disregard or
disobedience of rules by the employee cannot be countenanced. It may encourage him to do even worse
and will render a mockery of the rules of discipline that employees are required to observe. All things
considered, Skycable validly dismissed Areno Jr. after complying with the procedural requirements of the
law.

TABUK MULTIPURPOSE COOPERATIVE, INC. (TAMPCO) v. DUCLAN


G.R. No. 203005 | 14 March 2016
Discipline

DOCTRINE: The persistent refusal of the employee to obey the employer's lawful order amounts to
willful disobedience.

FACTS:
• TAMPCO is a duly registered cooperative based in Tabuk City, Kalinga, engaged in the business
of obtaining investments from its members which are lent out to qualified member-borrowers.
• TAMPCO’s Board of Directors issued a Board Action (BA) to limit the grant of Special Investment
Loans (SILs) to PhP 5M. Later, because too many SILs were being granted, a number exceeding the
mentioned limit, the BoD decided to issue another BA to completely halt the grant of the SILs
pending the collection of outstanding loans.
• However, despite the moratorium on granting SILs, the same were still granted, even exceeding
the amount limit placed by the BA.
• Due to the violations of the BAs, TAMPCO indefinitely suspended Duclan, the treasurer/cashier,
and a number of other involved persons. The BoD created a committee to investigate the SIL
debacle. It later recommended, which the BoD adopted, for Duclan be suspended again and for her
to collect the SIL released in violation of the BAs, on the condition that she will be dismissed if she
is unable to collect or pay for the said amount.
• Duclan filed a complaint for illegal dismissal, wherein one of her allegations is that her right to
equal protection was violated, because the General Manager (who was charged with the same
violations as her) was permitted to retire and collect his benefits instead of being dismissed.

ISSUE: Whether or not TAMPCO was unfair in dismissing Duclan.

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HELD: No, Duclan’s TAMPCO was fair in dismissing Duclan. Her right to equal protection was not
violated. While the CA finds that it is unfair for TAMPCO to treat respondent differently from the former
General Manager, who was permitted to retire and collect his benefits in full, the appellate court must
nonetheless be reminded that "[t]he law protects both the welfare of employees and the prerogatives of
management. Courts will not interfere with prerogatives of management on the discipline of employees,
as long as they do not violate labor laws, collective bargaining agreements if any, and general principles of
fairness and justice." Moreover, management is not precluded from condoning the infractions of its
employees; as with any other legal right, the management prerogative to discipline employees and impose
punishment may be waived. As far as Duclan is concerned, TAMPCO chose not to waive its right to
discipline and punish her; this is its privilege as the holder of such right. Finally, it cannot be said that
Duclanwas discriminated against or singled out, for among all those indicted, only the former General
Manager was accorded leniency; the rest, including Duclan, were treated on equal footing. As to why the
former General Manager was allowed to retire, this precisely falls within the realm of management
prerogative; what matters, as far as the Court is concerned, is that Duclanwas not singled out and treated
unfairly.

INUTAN ET AL v. NAPAR CONTRACTING AND ALLIED SERVICES


G.R. No. 195654 | 25 November 2015
Transfer of Employees

DOCTRINE: Management is free to regulate, according to its own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working regulations, transfer of employees, work
supervision, layoff of workers and discipline, dismissal and recall of workers. The exercise of management
prerogative, however, is not absolute as it must be exercised in good faith and with due regard to the rights
of labor.” Such “cannot be used as a subterfuge by the employer to rid himself of an undesirable worker.”

FACTS:
• Petitioners were employees of Napar, a recruitment agency. Napar assigned petitioners to work as
factory workers, machine operator, quality control inspector, selector, mixer and warehouseman
at Jonas, a corporation engaged in the manufacture of food products.
• Petitioners and respondents entered into a Joint Compromise Agreement (JCA) which required
petitioners, among others (1) to submit their respective bio-data/resume and several documents
such as Police Clearance, NBI Clearance, Barangay Clearance, Mayor’s Permit, Health Certificate,
drug test results, community tax certificate, eye test results and medical/physical examination
results; (2) to attend orientation seminars; (3) to undergo series of interviews; and (4) to take and
pass qualifying examinations, before they could be posted to their new assignments.
• These requirements, according to Napar, are needed to properly assess petitioners’ skills for new
placement with the agency’s other clients. Petitioners failed to fully comply, hence they were not
given new assignments.

ISSUE: Whether or not Napar validly exercised its management prerogative in not giving the petitioners
assignments for the latter’s failure to fully comply with the requirements in the JCA.

HELD: No, while we consider Napar’s decision to require petitioners to submit documents and
employment clearances, to attend seminars and interviews and take examinations, which according to
Napar is imperative in order for it to effectively carry out its business objective, as falling within the ambit
of management prerogative, this undertaking should not, however, deny petitioners their constitutional
right of tenure. Besides, there is no evidence nor any allegation proffered that Napar has no available clients
where petitioners can be assigned to work in the same position they previously occupied. Plainly, Napar’s

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scheme of requiring petitioners to comply with reassessment procedures only seeks to prevent petitioners’
immediate reassignment.It has been held that management is free to regulate, according to its own
discretion and judgment, all aspects of employment, including hiring, work assignments, working
methods, time, place and manner of work, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, layoff of workers and discipline, dismissal and recall
of workers. The exercise of management prerogative, however, is not absolute as it must be exercised in
good faith and with due regard to the rights of labor. Such cannot be used as a subterfuge by the employer
to rid himself of an undesirable worker.

SOCIAL WELFARE LEGISLATION

SOCIAL SECURITY COMMISSION AND SOCIAL SECURITY SYSTEM


v. TERESA G. FAVILA
G.R. No. 170195 | 28 March 2011
SSS Law

DOCTRINE: A spouse who claims entitlement to death benefits as a primary beneficiary under the Social
Security Law must establish that (a) he/she is the legitimate spouse; and that (b) he/she is dependent
upon the member for support.

FACTS:
• When Florante died, his pension benefits were given to their only minor child at that time,
Florante II, but only until his emancipation at age 21. Teresa believe that, as the surviving legal
wife,she is likewise entitled to receive Florante’s pension benefits. So, she filed her claim for said
benefits before the SSS, averring that after she was married to Florante, the latter designated her
as the sole beneficiary before SSS.
• SSS denied the claim. SSS alleged that Estelita Ramos, sister of Florante, wrote a letterstating that
her brother had long been separated from Teresa. She alleged therein that the couple lived together
for only 10 years and then decided to go their separate ways because Teresa had an affair with a
married man with whom, as Teresa herself allegedly admitted, she slept with four times a week.SSS
also averred that an interview conducted in Teresa’s neighborhood revealed that although she did
not cohabit with another man after her separation with Florante, there were rumors that she had
an affair with a police officer.
• Thus, although Teresa is the legal spouse and one of Florante’s designated beneficiaries, the SSC
ruled that she is disqualified from claiming the death benefits because she was deemed not
dependent for support from Florante due to marital infidelity.
• Under Section 8(k) of the SSS Law, the dependent spouse, until she remarries, is entitled to death
benefits as a primary beneficiary, together with the deceased member’s legitimate minor children.
o According to SSC, the word “remarry” under said provision has been interpreted as to
include a spouse who cohabits with a person other than his/her deceased spouse or is
in an illicit relationship.
• SSC therefore concluded that Teresa was not dependent upon Florante for support and
consequently disqualified her from enjoying her husband’s death benefits.
• Teresa however counters that such illicit relationship has not been sufficiently established and,
hence, as the legal wife, she is presumed to be continually dependent upon Florante for support.

ISSUE: Whether or not Teresa isa primary beneficiary in contemplation of the Social Security Law as to
be entitled to death benefits accruing from the death of Florante.

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HELD: No, Teresa is not a primary beneficiary to be entitled the death benefits. It is plain that for a spouse
to qualify as a primary beneficiary 1) he/she must not only be a legitimate spouse, but also a dependent;
2) that is, one who is dependent upon the member for support. A wife who is already separated de
facto from her husband cannot be said to be ‘dependent for support’ upon the husband, absent any
showing to the contrary. Conversely, if it is proved that the husband and wife were still living together at
the time of his death, it would be safe to presume that she was dependent on the husband for support,
unless it is shown that she is capable of providing for herself. Hence, we held therein that the wife-claimant
had the burden to prove that all the statutory requirements have been complied with, particularly her
dependency on her husband at the time of his death. And, while said wife-claimant was the legitimate wife
of the deceased, we ruled that she is not qualified as a primary beneficiary since she failed to present any
proof to show that at the time of her husband’s death, she was still dependent on him for support even if
they were already living separately.
• Teresa was misplaced in relying on the presumption of dependency by reason of her valid and
then subsisting marriage with Florante, Teresa has not presented sufficient evidence to
discharge her burden of proving that she was dependent upon her husband for support at the
time of his death.She could have done this by submitting affidavits of reputable and
disinterested persons who have knowledge that during her separation with Florante, she does
not have a known trade, business, profession or lawful occupation from which she derives
income sufficient for her support and such other evidence tending to prove her claim of
dependency.Hence, for Teresa’s failure to show that despite their separation she was
dependent upon Florante for support at the time of his death, Teresa cannot qualify as a
primary beneficiary. Hence, she is not entitled to the death benefits accruing on account of
Florante’s death.

PICOP RESOURCES v. SOCIAL SECURITY COMMISSION AND BELIZAR


G.R. No. 206936| 03 August 2016
SSS Law

DOCTRINE: The clear intent of the law is to grant condonation only to employers with delinquent
contributions or pending cases for their delinquencies and who pay their delinquencies within the 6-month
period set by the law.

FACTS:
• Belizar filed a case before the Social Security Commission (SSC) to establish his actual period of
employment with PICOP Resources and to compel the latter to remit his unpaid SSS premium
contributions so that he may collect his SSS retirement benefits.
• He was employed as a preventive maintenance mechanic from 1966 to 1978 at the mechanical and
electrical section of the company, and was paid minimum wage.
• SSC held that the repeated and continuous need for Belizar’s services constitutes evidence of
necessity of his services thus his employment is regular. As PICOP only remitted 22 monthly SSS
contributions, it is liable to pay the unremitted SSS contributions. CA affirmed.

ISSUE: Whether or not the PICOP can avail of the provisions of RA No. 9903 (condonation program)?

HELD: No. PICOP cannot avail of the condonation program under RA 9903. Any employer who is
delinquent or has not remitted all contributions due and payable to the SSS may avail of the condonation

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program under the law. In order to be covered by the program, the employer must a) remit within the
period of the Program the full amount of the delinquent contributions through any SSS Branch with
tellering facility or authorized collection agents of the SSS e.g. banks, payment centers, or b) submit a
proposal within the period of the Program to pay the delinquent contributions in installment to the SSS
Branch having jurisdiction over its place of business or household address.In PICOP's case, it paid only the
delinquent contributions corresponding to Belizar's account. The Certification issued by the SSS Bislig City
Branch showed that PICOP failed to pay the full amount of its delinquent contributions and did not submit
a proposal to pay in installments; thus, it has not placed itself under the coverage of RA 9903. It was never
the intention of RA 9903 to give the employer the option of remitting and settling only some of its
delinquencies.

GOVERNMENT SERVICE INSURANCE SYSTEM v. BESITAN


G.R. No. 178901 | 23 November 2011
GSIS Law

DOCTRINE: There must be a reasonable proof that the employees working condition increased his risk of
contracting the disease, or that there is a connection between his work and the cause of the disease.
Moreover, direct and clear evidence is not necessary to prove a claim. Strict rules of evidence do not apply,
PD 626 only requires substantial evidence.

FACTS:
1. Besitan was employed by the BSP as a Bank Examiner. He was promoted twice, and his duties
include: heading a team of examiners; submits reports of examination/memos; confers w/ head
and top management of rural banks; monitors and verifies reports; and evaluates, processes and
prepares memoranda.
2. He was later diagnosed with End Stage Renal Disease, secondary to Chronic Glomerulonephritis,
and had to undergo a kidney transplant. Besitan then filed claim for compensation with GSIS but
such was denied. The ECC affirmed his denial of the claim.

ISSUE: Whether he is entitled to compensation.

HELD: Yes, Sec. 1, Rule III of the Amended Rules on Employees Compensation provides that for sickness
or resulting disability to be compensable, claimant must prove either (1) that the employee’s sickness was
the result of an occupational disease listed under Annex A of the said rule, or (2) that the risk of contracting
the disease was increased by his working conditions. In the case at bar, Besitan’s ailment is not listed under
the rules as compensable, thus there is a need for substantial evidence that his work increase the risk of
him contracting the disease. According to the records of the case, the SC ruled that Besitan was able to show
that his working condition increased the risk of contracting his illness.
• Under the increase risked theory, there must be a reasonable proof that the employees working
condition increased his risk of contracting the disease, or that there is a connection between his
work and the cause of the disease. Only a reasonable proof of work-connection, not direct causal
relation, however, is required to establish compensability of a non-occupational disease.
Probability and not certainty is the yardstick for compensation proceedings, thus any doubt must
be ruled in favor of the employees. Moreover, direct and clear evidence is not necessary to prove a
claim. Strict rules of evidence do not apply, PD 626 only requires substantial evidence.

VALENZONA v. FAIR SHIPPING CORPORATION


G.R. No. 176884| 19 October 2011
Employee’s Compensation

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Labor Law and Social Legislation Justice Del Castillo Digests

DOCTRINE: An employee is entitled to permanent total disability if due to injury or sickness, employee
is unable to perform any gainful occupation for more than 120 days, even if after 120 days, a certification
that he is fit to work is issued.

FACTS:
• Valenzona was the 2nd Assistant Engr. On Fair Shipping’s vessel
o Upon embarkation, he was declared fit to work, but a few months later, he suffered chest
pain and diagnosed of having hypertensive, high blood pressure, by the company
physician.
o He was repatriated to Phils and was continuously treated for 6 months.
• After consultation with another physician he was diagnosed with Hypertensive Cardiovascular
disease making him unfit to work, so he demanded payment for permanent disability benefits.
• The company physician issued fit to work certification, 199 days after repatriation, so company
denied permanent disability benefits.

ISSUE: Whether Valenzona is entitled to Permanent Disability Benefits.

HELD: Yes, he is entitled because he is considered unable to work for more than 120 days. There are 3
kinds of disability benefits:
• Temporary Total Disability – if as a result of the injury or sickness the employee is unable to
perform any gainful occupation for a continuous period not exceeding 120 days, except as
otherwise provided for in the Rules. A total disability does not require that the employee be
absolutely disabled or totally paralyzed. What is necessary is that the injury must be such that the
employee cannot pursue his usual work and earn therefrom.
• Permanent Total Disability – if as a result of the injury or sickness the employee is unable to
perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise
provided for in the Rules.
• Permanent Partial Disability- if as a result of the injury or sickness the employee suffers a
permanent partial loss of the use of any part of his body.

GOVERNMENT SERVICE INSURANCE SYSTEM v. CALUMPIANO


G.R. No. 196102 | 26 November 2014
Employee’s Compensation

DOCTRINE: The right to compensation extends to disability due to disease supervening upon and
proximately and naturally resulting from a compensable injury.

FACTS:
• Calumpiano was employed as court stenographer at the CFI Samar.
• Before her retirement, she filed an application for disability retirement on account of her ailment[s],
Hypertensive Cardiovascular Disease and Acute Angle Closure Glaucoma.
• The disability claim was forwarded to GSIS which the latter denied because such causes were not
work-related.
• The CA held that while respondent’s hypertension and glaucoma are not listed as occupational
diseases under the implementing rules of the Employee Compensation Program under Presidential
Decree No. 62613, they were nonetheless contracted and became aggravated during her
employment as court stenographer; that under the "increased risk theory," a "non-occupational
disease" is compensable as long as proof of a causal connection between the work and the ailment
is established.

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ISSUE: Whether or not the respondent’s diseases are compensable under the increased risk theory.

HELD: Yes, indeed, an employee’s disability may not manifest fully at one precise moment in time but
rather over a period of time. It is possible that an injury which at first was considered to be temporary may
later on become permanent or one who suffers a partial disability becomes totally and permanently
disabled from the same cause. The right to compensation extends to disability due to disease supervening
upon and proximately and naturally resulting from a compensable injury. Where the primary injury is
shown to have arisen in the course of employment, every natural consequence that flows from the injury
likewise arises out of the employment, unless it is the result of an independent intervening cause
attributable to claimant’s own negligence or misconduct. Simply stated, all medical consequences that flow
from the primary injury are compensable. P.D. No. 626, as amended, is said to have abandoned the
presumption of compensability and the theory of aggravation prevalent under the Workmen’s
Compensation Act. Despite the abandonment of the presumption of compensability established by the old
law, the present law has not ceased to be an employees’ compensation law or a social legislation; hence,
the liberality of the law in favor of the working man and woman still prevails, and the official agency
charged by law to implement the constitutional guarantee of social justice should adopt a liberal attitude
in favor of the employee in deciding claims for compensability, especially in light of the compassionate
policy towards labor which the 1987 Constitution vivifies and enhances.

VILLAMOR v. EMPLOYEES’ COMPENSATION COMMISSION


G.R. No. 204422 | 21 November 2016
Employee’s Compensation

DOCTRINE: What the law requires for a claim of sickness benefits before the ECC is not a direct causal
relation between the sickness and the work, but a reasonable work-connection.

FACTS:
• Villamor was employed by Valle Verde Country Club, Inc. (VVCCI) as a Sports Area-In Charge,
tasked to deal with the needs and complaints of the club members and their guests who wish to
use the club's facilities.
o The SSS and the ECC characterized his responsibilities as that of a “clerk”, merely
responsible for issuance of vouchers.
• On November 2006, Villamor was brought to Our Lady of Lourdes Hospital in Manila, due to
dizziness associated with numbness and weakness on his left arm and leg. This was ruled as a
stroke.
o A CT scan revealed that Villamor had hypertension.
• Villamor filed a claim before the SSS for sickness benefits under the SSS Law. This was denied by
the SSS for lack of a causal relationship between Villamor's job as a clerk and his illness.
o The SSS also cited, among others, Villamor’s smoking history, drinking habit, and poor
compliance with anti-hypertensive medication, which increased Villamor’s risk of
hypertension.
• Villamor filed a claim before the ECC. This was also denied. The ECC ruled that the illness was a
result of complications expected from a progressive disease, enhanced by major risk factors.

ISSUE: Whether or not the Villamor is entitled to sickness benefits?

HELD: Yes, Villamor is entitled to sick benefits, because his duties and responsibilities as Sports Area In-
Charge were not merely limited to issuance of vouchers and receipts (as a clerk would do). His
responsibilities required him to deal with laborious and stressful situations, which included receiving

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Labor Law and Social Legislation Justice Del Castillo Digests

complaints and requests of club members and their guests. He was also the president of the union.
Moreover, under the Amended Rules on Employees' Compensation, cerebro-vascular accident and
essential hypertension are considered as occupational diseases. As such, a covered claimant suffering from
an occupational disease is automatically paid benefits. What the law requires in a claim of benefits before
the ECC is not a direct causal relation, but a reasonable work-connection.

LABOR RELATIONS

MONTANO vs. VERCELES


G.R. No. 168583 | 26 July 2010
Right to Self-organization

DOCTRINE: The Federation/Union’s Constitution and By-Laws govern the relationship between and
among its members. They are akin to ordinary contracts in that their provisions have obligatory force upon
the federation/union and its member. What has been expressly stipulated therein shall be strictly binding
on both.

FACTS:
• Atty. Montaño was nominated for the position of National Vice-President of Federation of Free
Workers (FFW). He won the election,
• At the time of his nomination and election for the position in the Governing Board, he is the head
of FFW Legal Center and the President of FFW Staff Association.
• A petition for the nullification of the election of Atty. Montaño as FFW National Vice-President
was filed before the BLR alleging that, as already ruled by the FFW COMELEC, Atty. Montaño is
not qualified to run for the position because Section 76 of Article XIX of the FFW Constitution and
By-Laws prohibits federation employees from sitting in its Governing Board.

ISSUE: Whether Atty. Montano is qualified.

HELD: No, Atty. Montaño is disqualified to run for the position of National Vice-President in view of the
proscription in the FFW Constitution and By-Laws on federation employees from sitting in its Governing
Board. Accordingly, the election of Atty. Montaño as FFW Vice- President is null and void. The
Federation/Union’s Constitution and By-Laws is binding.
• On issue of jurisdiction, Section 226 of the Labor Code clearly provides that the BLR and the
Regional Directors of DOLE have concurrent jurisdiction over inter-union and intra-union
disputes. Such disputes include the conduct or nullification of election of union and workers’
association officers. Thus, BLR has jurisdiction over the instant dispute involving member-unions
of a federation arising from disagreement over the provisions of the federation’s constitution and
by-laws.

SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF


UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-
SUPER) vs. CHARTER CHEMICAL AND COATING CORPORATION
G.R. No. 169717 | 16 March 2011
Right to Self-organization

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DOCTRINE: The inclusion of supervisory employees in a labor organization seeking to represent the
bargaining unit of rank-and-file employees does not divest it of its status as a legitimate labor organization.

FACTS:
• Petitioner union filed a petition for certification election among the regular rank-and-file
employees of respondent company.
• Respondent company filed an Answer with Motion to Dismiss on ground that the union failed to
comply with the documentation requirements set by law and that it is not a legitimate labor
organization due to the inclusion of some supervisory employees within the union.
• Meanwhile, petitioner union argues that its legal personality cannot be collaterally attacked in the
certification election proceedings.

ISSUE: Whether the mixture of rank-and-file and supervisory employees in petitioner union nullifies its
legal personality as a legitimate labor organization

HELD: No, the inclusion of the supervisory employees in the union does not divest it of its status as a
legitimate labor organization. The doctrine in Toyota Motor Philippines v. Toyota Motor Philippines Corporation
Labor Union, 268 SCRA 573 (1997), saying that – a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all and cannot, for any guise or purpose, be a legitimate
labor organization – no longer holds sway under the altered state of the law and rules applicable.As a
result, petition union was not divested of its status as a legitimate labor organization even if some of its
members were supervisory employees; it had the right to file the subject petition for certification election.

ISSUE: Whether labor union’s personality can be collaterally.

HELD: No, the personality cannot be attacked collaterally. As explained in Kawashima, except when it is
requested to bargain collectively, an employer is a mere bystander to any petition for certification election.
Such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which
organization will represent the employees in their collective bargaining with the employer. The choice of
their representative is the exclusive concern of the employees. The employer cannot have any partisan
interest or cannot interfere with the process by filing a motion to dismiss or an appeal from it. The
employer’s only right in the proceeding is to be notified or informed thereof.

ASIAN INSTITUTE OF MANAGEMENT v. ASIAN INSTITUTE OF


MANAGEMENT FACULTY ASSOCIATION
G.R. No. 207971 | 23 Jan 2017
Right to Self-Organization

DOCTRINE: In case of alleged inclusions of disqualified employees in a union, the proper procedure for
an employer is to directly file a petition for cancellation of the union's certificate of registration due to
misrepresentation, false statement or fraud under the circumstances enumerated in the Labor Code.

FACTS:
• Asian Institute of Management (AIM) is a duly registered non-stock, non-profit educational
institution.
• Asian Institute of Management Faculty Association (Union) is a labor organization composed of
members of the AIM faculty.
• The Union filed a petition for certification election (1st case), seeking to represent a bargaining unit
in AIM, consisting of 40 faculty members. AIM opposed this petition, claiming that the Union’s

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Labor Law and Social Legislation Justice Del Castillo Digests

members are managerial employees, who the Labor Code prohibits from being members of a
union.
• AIM also filed a petition for cancellation of the Union’s certificate of registration (2 nd case) based
on the same reason.
• Both petitions were raised to the CA for review.
o For the 1st case, the CA ruled in favor of AIM; and so, the Union elevated the same to the
SC (this remained pending while the SC disposed of herein case).
o For the 2nd case, the CA ruled in favor of the Union; and so, AIM elevated this case before
the SC. AIM reiterated that the members of the Union are managerial employees, but it
also added that, due to this fact, the Union committed misrepresentation by declaring that
its members are eligible to join, assist, or form a labor organization, which is a ground to
cancel a union’s registration.

ISSUE: Whether or not AIM’s petition for cancellation of the Union’s certificate of registration was the
proper remedy to avail of.

HELD: Yes, AIM was correct in filing a petition for cancellation of the Union’s certificate of registration.
AIM’s sole ground for seeking cancellation of the Union’s certificate of registration — that its members are
managerial employees and for this reason, its registration is thus a patent nullity for being an absolute
violation of Article 245 of the Labor Code which declares that managerial employees are ineligible to join
any labor organization — is, in a sense, an accusation that the Union is guilty of misrepresentation for
registering under the claim that its members are not managerial employees.
• The resolution of the issue of whether the Union’s members are managerial employees is still
pending resolution in the 1st case, which is still pending. The resolution of this issue cannot be pre-
empted; until it is determined with finality in the 1st case, the petition for cancellation of the Union’s
certificate of registration on the grounds alleged by petitioner cannot be resolved. As a matter of
courtesy and in order to avoid conflicting decisions, We must await the resolution of the petition
in the 1st case.

LEGEND INTERNATIONAL RESORTS LIMITED vs. KILUSANG


MANGGAGAWA NG LEGENDA (KML-INDEPENDENT)
G.R. No. 169754 | 23 February 2011
Rights of Labor Organization

DOCTRINE: The legitimacy of the legal personality may not be subject to a collateral attack but only
through a separate action instituted particularly for the purpose of assailing it.

FACTS:
• Kilusang Manggagawa ng Legenda (KML) filed a Petition for Certification Election alleging that it is
a legitimate labor organization of the rank and file employees of Legend International Resorts
Limited (LEGEND). LEGEND moved to dismiss on ground that it is not a legitimate labor
organization because its membership is a mixture of rank and file and supervisory employees in
violation of Art. 245 of the Labor Code. Meanwhile, KML argued that legitimacy as a labor union
could not be collaterally attacked in the certification election proceedings but only through a

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Labor Law and Social Legislation Justice Del Castillo Digests

separate and independent action for cancellation of union registration. Subsequently, the certificate
of registration of KML as a legitimate labor organization was cancelled.
• Now, LEGEND claims that the cancellation of KML’s certificate of registration should retroact to
the time of its issuance; that the petitioner for certification election filed during the pendency of the
petition for cancellation and its demand to enter into CBA with LEGEND should be dismissed due
to KML’s lack of legal personality.

ISSUE: Whether the petition to cancel/revoke registration is a prejudicial question to the petition for
certification election

HELD: No, an order to hold a certification election is proper despite the pendency of the petition for
cancellation of the registration certificate of the respondent union. The rationale for this is that at the time
the respondent union filed its petition, it still had the legal personality to perform such act absent an order
directing the cancellation. Likewise, the pendency of a petition for cancellation of union registration does
not preclude collective bargaining. If a certification election may still be ordered despite the pendency of a
petition to cancel the union’s registration certificate, more so should the collective bargaining process
continue despite its pendency.

• Also, it is to note that the legitimacy of the legal personality may not be subject to a collateral attack
but only through a separate action instituted particularly for the purpose of assailing it. This is
expressly stated under Sec. 5, Rule V of the Implementing Rules of Book V of the Labor Code.

MITSUBISHI MOTORS PHILIPPINES SALARIED EMPLOYEES UNION v.


MITSUBISHI MOTORS PHILIPPINES CORPORATION
G.R. No. 175773 | 17 July 2013
Rights of Labor Organization

DOCTRINE: The CBA constitutes a contract between the parties and as such, it should be strictly construed
for the purpose of limiting the amount of the employer’s liability.

FACTS:
• The CBA of the parties provides that the company shoulder the hospitalization expenses of the
dependents of covered employees subject to certain limitations and restrictions.
• Accordingly, covered employees pay part of the hospitalization insurance premium through
monthly salary deduction while the company, upon hospitalization of the covered employees’
dependents, shall pay the hospitalization expenses incurred for the same.
• 3 employees of the company were asking for the reimbursement of the hospitalization expenses of
the covered employees’ dependents that were paid/shouldered by the dependent’s own health
insurance.
• The company refused to pay the portion of the hospital expenses already shouldered by the
dependents’ own health insurance.
• The union insists that the covered employees are entitled to the whole and undiminished amount
of said hospital expenses. It avers that recovery from both the CBA and other insurance companies
is allowed under their CBA and not prohibited by law nor by jurisprudence.

ISSUE: Whether or not the employees are entitled for reimbursement of the hospitalization expenses of
their dependents based on the provision of the CBA.

HELD: Yes, but only as to the expenses that were directly paid by the employees and not those that were
already paid by the insurance companies. The condition that payment should be direct to the hospital and

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Labor Law and Social Legislation Justice Del Castillo Digests

doctor implies that MMPC is only liable to pay medical expenses actually shouldered by the employees’
dependents. It follows that MMPC’s liability is limited, that is, it does not include the amounts paid by
other health insurance providers. This condition is obviously intended to thwart not only fraudulent claims
but also double claims for the same loss of the dependents of covered employees.It is well to note at this
point that the CBA constitutes a contract between the parties and as such, it should be strictly construed
for the purpose of limiting the amount of the employer’s liability.The dependents’ group hospitalization
insurance provision in the CBA specifically contains a condition which limits MMPC’s liability only up to
the extent of the expenses that should be paid by the covered employee’s dependent to the hospital and
doctor. This is evident from the portion which states that "payment [by MMPC] shall be direct to the
hospital and doctor." The terms of the subject provision are clear and provide no room for any other
interpretation. As there is no ambiguity, the terms must be taken in their plain, ordinary and popular sense.
Consequently, MMPSEU cannot rely on the rule that a contract of insurance is to be liberally construed in
favor of the insured. Neither can it rely on the theory that any doubt must be resolved in favor of labor.

ZUELLIG PHARMACY v. SIBAL


G.R. No. 173587 | 15 July 2013
Rights of Labor Organization

DOCTRINE: The CBA is the law between the parties and they are obliged to comply with its provisions.

FACTS:
• Zuellig closed terminated the services of respondents due to redundancy.
• They were properly notified of their termination and were paid their respective separation pay in
accordance with their CBA for which, respondents individually signed Release and Quitclaim8 in
full settlement of all claims arising from their employment with Zuellig.
• Later, respondents filed before the Arbitration Branch of the NLRC separate complaints for
payment of retirement gratuity and monetary equivalent of their unused sick leave on top of the
separation pay already given them claiming that they are still entitled to retirement benefits and
that their receipt of separation pay and execution of Release and Quitclaim do not preclude
pursuing such claim.

ISSUE: Whether or not the parties may recover both separation pay and retirement gratuity since
respondents were not at fault and had nothing to do with their separation from the company by reason of
redundancy.

HELD: No, the CBA contains specific provisions which effectively bar the availment of retirement benefits
once the employees have chosen separation pay or vice versa. A collective bargaining agreement refers to
the negotiated contract between a legitimate labor organization and the employer concerning wages, hours
of work and all other terms and conditions of employment in a bargaining unit. As in all contracts, the
parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem
convenient provided these are not contrary to law, morals, good customs, public order or public policy.
Thus, where the CBA is clear and unambiguous, it becomes the law between the parties and compliance
therewith is mandated by the express policy of the law. Here, the parties’ CBA provides in no uncertain
terms that whatever amount of money the employees will receive as retirement gratuity shall be chargeable
against separation pay. It is the unequivocal manifestation of their agreement that acceptance of retirement
gratuity forecloses receipt of separation pay and vice versa. The CBA likewise exclusively enumerates
departing employees who are entitled to the monetary equivalent of their unused sick leave. These
agreements must prevail and be given full effect.

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Labor Law and Social Legislation Justice Del Castillo Digests

MENDOZA V. OFFICERS OF MANILA WATER EMPLOYEES UNION


G.R. No. 201595 | 25 January 2016
Unfair Labor Practice

DOCTRINE: Unfair labor practice relates to the commission of acts that transgress the workers’ right to
organize, which is guaranteed by the Constitution.

FACTS:
• MWEU (union) informed Mendoza, a member of MWEU, that the union was unable to fully deduct
the increased P200 union dues from his salary due to the lack of the required check-off
authorization from him. He was further warned that his failure to pay the union dues would result
in sanctions as it would violate the By-Laws.
• The President of the MWEU’s Executive Board referred the charge to the grievance committee,
which recommended that Mendoza be suspended for 30 days.
• Mendoza appealed to the General Membership Assembly but said appeal was denied.
• He was again charged with non-payment of union dues, and he again invoked his right to appeal
through the General Membership Assembly but this was not acted upon by respondents. He was
again penalized with a 30-day suspension.
• MWEU scheduled an election of officers of which Mendoza filed his certificate of candidacy for
Vice-President, but was disqualified on account of the suspension.
• He was charged for non-payment of union dues for the third time and was expelled from the union.
• During the freedom period and negotiations for a new CBA, Mendoza joined WATER-AFWC and
was elected union president.
• Mendoza then filed a complaint for unfair labor practice, alleging that he was illegally terminated.

ISSUE: Whether or not the officers of MWEU are guilty of unfair labor practices?

HELD: Yes, unfair labor practice relates to the commission of acts that transgress the workers’ right to
organize. Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to ‘interfere
with, restrain or coerce employees in the exercise of their right to self-organization.’ Similarly, Article 249
(a) makes it an unfair labor practice for a labor organization to ‘restrain or coerce employees in the exercise
of their rights to self-organization. The officers of MWEU’s repeated violations and disregard of Mendoza’s
rights as a union member -- by their inaction on his appeals which resulted in his suspension,
disqualification and expulsion without due process – connote willfulness and bad faith.

GUAGUA NATIONAL COLLEGES V. GUAGUA NATIONAL COLLEGES


FACULTY LABOR UNION
G.R. No. 204693 | 13 July 2016
Unfair Labor Practice

DOCTRINE: The question of whether or not a party has met his statutory duty to bargain in good faith
typically turns on the facts of the individual case.

FACTS:
• Guagua National Colleges (GNC) entered into a CBA which had a no-strike, no lock-out clause
with Guagua National Colleges Faculty Labor Union (Union 1) and Guagua National Colleges
Non-Teaching and Maintenance Labor Union (Union 2).
• The presidents of the two unions informed the president of GNC of their intention to open the
negotiation for the renewal of the existing CBA which was about to expire.

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Labor Law and Social Legislation Justice Del Castillo Digests

• During the meeting regarding CBA negotiations, no agreement was reached except that GNC
would notify the unions of the next negotiation meeting, but these unions thereafter only received
a letter stating that management was not inclined to grant economic proposals.
• A conference still transpired upon request but this still ultimately led to an impasse. Said unions
wanted a third party to assist them in threshing out their differences so they filed a preventive
mediation case with the NCMB.
• The unions alleged that both parties had agreed on the details regarding the grant of signing bonus,
but during the scheduled meeting, no representative of GNC appeared so they were constrained
to file a notice of strike. On the other hand, GNC contended that they asked for 10 days to submit
a comment, but the unions already submitted a notice of strike so they called or conciliation
conference.
• GNC then filed a motion to strike out the notice of strike and to refer the dispute to voluntary
arbitration and grievance machinery, as the grounds cited by the unions in the notice of strike (bad
faith bargaining, violation of duty to bargain, gross violation of provisions of CBA, gross
diminution of benefits) come within the definition of “grievance”.
• As NCMB has not yet acted on GNC’s motion to strike, it urged SOLE to assume jurisdiction. SOLE
granted this, and certified the same to NLRC for immediate compulsory arbitration.

ISSUE: Whether or not GNC is guilty of bad faith bargaining and thus violated its duty to bargain?

HELD: Yes, GNC engaged in bad faith bargaining, which violated its duty to bargain. The crucial question
whether or not a party has met his statutory duty to bargain in good faith typically turns on the facts of the
individual case. In this case, the collective conduct of GNC is indicative of its failure to meet its duty to
bargain in good faith. It failed to comply with the mandatory requirement of serving a reply/counter-
proposal within 10 calendar days from receipt of a proposal, then it led respondent unions to believe that
it was doing away with the reply/counter-proposal when it proceeded to just orally discuss the economic
terms. Thus, GNC had no genuine intention to comply with its duty to bargain but merely went through
the motions of negotiations which constituted bad faith bargaining.

SOLIDBANK UNION vs. METROPOLITAN BANK AND TRUST COMPANY


G.R. No. 153799 | 17 September 2012
Peaceful concerted activities

DOCTRINE: If reinstatement is no longer feasible, employees may be awarded separation pay.

FACTS:
• Solidbank Union (Union) was a legitimate labor organization and the duly certified sole bargaining
representative of all rank-and-file employees of Solidbank. Parties failed to reach an agreement in
the collective bargaining. Labor Secretary then issued an Order from which the Union did not
agree. Thus, union members and officers skipped work and trooped to his office in Intramuros,
Manila, not only to accompany their lawyer in filing the Union’s MR but also to stage a brief public

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demonstration. Other rank and file employees in the provincial branches of Solidbank also
absented themselves from work that day. This resulted to their dismissal by Solidbank.

ISSUE: Whether petitioner should be reinstated.

HELD: No, since reinstatement was no longer feasible due to the considerable lapse of time and the closure
of Solidbank, respondents therein were awarded separation pay equivalent to one-month salary for every
year of service. For those employees who executed quitclaims, their separation pay should be net of the
amounts they had already received. The Court dismissed the case on ground of res judicata. It was decided
in in G.R. Nos. 159460 and 159461 where the Court ruled that complainants’ concerted mass action was
actually a strike and not a legitimate exercise of their right to freedom of expression; that complainants
violated the Order of Secretary of Labor; that the union officers’ dismissal was valid; and that petitioners
therein failed to present proof that the union members participated in the commission of an illegal act
during the said strike; hence, their dismissal was unjustified. The Decision of this Court in G.R. Nos. 159460
and 159461, therefore, constitutes res judicata to the present consolidated cases.

JURISDICTION AND REMEDIES

GRAND ASIAN SHIPPING LINES v. GALVEZ


G.R. No. 178184 | 19 January 2014
Labor Arbiter

DOCTRINE: In order to perfect an appeal from the Decision of the Labor Arbiter granting monetary award,
Art. 223 of the Labor Code requires the posting of a bond, either in cash or surety bond, in an amount
equivalent to the monetary award. Nonetheless, the rules should not be applied in a very rigid and strict
sense. This is especially true in lab or cases wherein the substantial merits of the case must accordingly be
decided upon to serve the interest of justice. When there has been substantial compliance, relaxation of the
Rules is warranted.

FACTS:
• GASLI is engaged in in transporting liquified petroleum gas (LPG) from Petron Corp.’s refinery in
Bataan to Petron’s Plant in Pasig and Petron’s Depot in Cavite.
• Respondents are crewmembers of one of GASLI’s vessels.
o Managerial employees: Galvez as Captain; Gruta as Chief Engineer
o Rank-and-file employees: Arguelles as Radio Operator; Batayola, Fresmillo and Noble as
Able Seamen; Dominico and Nilmao as Oilers; and Austral as 2nd Engineer
• It was reported that respondents were committing an illegal activity aboard the vessel.
o Substantial volume of fuel oil is unconsumed and stored in the vessel’s fuel tanks.
However, respondents would misdeclare it as consumed. Then, the saved fuel oil is
siphoned and sold to other vessels out at sea usually at nighttime. Respondents would
then divide among themselves the proceeds of the sale.
• GASLI initially placed respondents under preventive suspension; but after administrative hearing,
decided to terminate them from employment.
o GASLI claims that a prima facie case of qualified theft, and the Information for qualified
theft constituteas reasonable ground to believe that respondents were responsible for the
pilferage of diesel fuel oil, which renders them unworthy of the trust and confidence
reposed on them.
• Respondents filed separate complaints for illegal dismissal.

ISSUE: Whether the rules on appeal bonds were complied with.

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HELD: Yes, in order to perfect an appeal from the Decision of the Labor Arbiter granting monetary award,
Art. 223 of the Labor Code require the posting of a bond, either in cash or surety bond, in an amount
equivalent to the monetary award. Nonetheless, rules should not be applied in a very rigid and strict sense.
This is especially true in lab or cases wherein the substantial merits of the case must accordingly be decided
upon to serve the interest of justice. When there has been substantial compliance, relaxation of the Rules is
warranted. In the case, GASLI appealed from the Decision of the Labor Arbiter awarding to crewmembers
the amount of P7,104,483.84 by filing a Notice of Appeal with a Very Urgent Motion to Reduce Bond and
posting a cash bond in the amount of P500,000.00 and a supersedeas bond in the amount of P1.5 million.
This is in substantial compliance with Article 223 of the Labor Code.

AMECOS INNOVATIONS, INC v. LOPEZ


G.R. No. 178055 | July 2, 2014
Labor Arbiter

DOCTRINE: SSS contributions necessarily flowed from the employer-employee relationship between the
parties hence, even if the complaint is based on the Civil Code, the Labor Arbiter still has jurisdiction.

FACTS:
• Amecos is a Philippine corporation engaged in the business of selling assorted products.
• SSS filed a complaint against Amecos for alleged delinquency in the remittance of SSS contributions
and penalty liabilities in violation of the SSS law.
o Amecos attributed its failure to remit the SSS contributions to Lopez (respondent). Amecos
claimed that it hired respondent a Marketing Assistant to promote its products; that upon
hiring, respondent refused to provide Amecos with her SSS Number and to be deducted
her contributions; that on the basis of the foregoing, Amecos no longer enrolled respondent
with the SSS and did not deduct her corresponding contributions up to the time of her
termination.
• Amecos settled its obligations with the SSS. As such SSS withdrew its complaint before the Office
of the City Prosecutor.
• Amecos sent a demand letter to Lopez for Php27,791.65 representing her share in the SSS
contributions and expenses for processing, but to no avail. Hence, they filed a complaint for sum
of money and damages before the MeTC.
o They alleged that because of Lopez’ misrepresentation, they suffered actual damages by
way of settlement and payment of its obligations with the SSS; they also claimed that they
suffered extreme embarrassment and besmirched reputation as a result of the complaint
by the SSS/
o Lopez answer: she was illegally dismissed and Amecosdeliberately failed to deduct and
remit her SSS contributions; and that petitioners filed the instant Complaint in retaliation
to her filing of an illegal dismissal case. Respondent also averred that the regular courts do
not have jurisdiction over the instant case as it arose out of their employer-employee
relationship.

ISSUE: Whether or not the MeTC has jurisdiction over the complaint filed by Amecos.

HELD: No, the observation that the matter of SSS contributions necessarily flowed from the employer-
employee relationship between the parties — shared by the lower courts and the CA — is correct. The
Labor Arbiter has original and exclusive jurisdiction over the claims arising from E-E relations. The Labor
Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed
by the Civil Code.

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Labor Law and Social Legislation Justice Del Castillo Digests

SOCIAL SECURITY SYSTEM v. UBANA


G.R. No. 200114 | 24 August 2015
Labor Arbiter

DOCTRINE: Where no employer-employee relationship exists between the parties and no issue is
involved which may be resolved by reference to the Labor Code, other labor statutes or any collective
bargaining agreement, the action is within the realm of civil law hence jurisdiction over the case belongs to
the regular courts.

FACTS:
• While Ubana’sservice contract with the DBP Service Corporation was never renewed, she
continued to be employed by the SSS; she was continually assured of being absorbed into the SSS;
in fact, she was qualified for the position as she passed the required training.
• Because of the oppressive and prejudicial treatment of the SSS, she was forced to resign in August
2002. The defendants conspired to exploit her and violate civil service rules and regulations and
Civil Code provisions.
• She filed a complaint and prayed for damages before the RTC.
• SSS filed MTD for lack of jurisdiction, averring that the complaint was predicated on the claims
that arose out of employer-employee relations, thus cognizable by the NLRC.

ISSUE: Whether or not RTC has jurisdiction over the case filed by Ubana?

HELD: Yes, for Article 217 of the Labor Code to apply, and in order for the Labor Arbiter to acquire
jurisdiction over a dispute, there must be an employer-employee relation between the parties thereto. It is
well settled in law and jurisprudence that where no employer-employee relationship exists between the
parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes
or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. The action is
within the realm of civil law hence jurisdiction over the case belongs to the regular courts. While the
resolution of the issue involves the application of labor laws, reference to the labor code was only for the
determination of the solidary liability of the petitioner to the respondent where no employer-employee
relation exists.
• Notably, an employer-employee relationship is an indispensable jurisdictional requisite. Since
there is no employer-employee relationship between the parties herein, then there is no labor
dispute cognizable by the Labor Arbiters or the NLRC.There being no employer-employee relation
or any other definite or direct contract between respondent and petitioner, the latter being
responsible to the former only for the proper payment of wages, respondent is thus justified in
filing a case against petitioner, based on Articles 19 and 20 of the Civil Code, to recover the proper
salary due her as SSS Processor.

ISLRIZ TRADING vs. CAPADA


G.R. No. 168501 | January 31, 2011
Labor Arbiter

DOCTRINE: Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory
on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of
appeal until reversal by the higher court or tribunal.

FACTS

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• Petitioner company imputed abandonment of work as cause of termination of Capada, et. al.
• The Labor Arbiter ruled that there was an illegal dismissal and ordered reinstatement with
backwages.
• On appeal to NLRC, it ordered reinstatement but without award of backwages.
• However, the LA still issued a Writ of Execution for reinstatement and to enforce the monetary
award. Meanwhile, CA ruled that pursuant to Article 223 of the Labor Code, what is sought to be
enforced by the subject Writ of Execution is the accrued salaries owing to respondents by reason
of the reinstatement order (from time of order of LA to reversal by NLRC) of Labor Arbiter.
• Petitioner now contends that the Writ of Execution issued by Labor Arbiter should have confined
itself to the NLRC Resolution which ordered respondents’ reinstatement without backwages.

ISSUE: Whether respondents may collect their wages during the period between the Labor Arbiter’s order
of reinstatement pending appeal and the NLRC Resolution overturning that of the Labor Arbiter

HELD: Yes, the Labor Arbiter’s order of reinstatement is immediately executory and the employer has to
either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or
to reinstate them in the payroll, and that failing to exercise the options in the alternative, employer must
pay the employee’s salaries. After the Labor Arbiter’s decision is reversed by a higher tribunal, the
employee may be barred from collecting the accrued wages, if it is shown that the delay in enforcing the
reinstatement pending appeal was without fault on the part of the employer. Two-fold test in determining
whether an employee is barred from recovering his accrued wages, to wit:
a. There must be actual delay or that the order of reinstatement pending appeal was not
executed prior to its reversal; and
b. The delay must not be due to the employer’s unjustified act or omission. If the delay is due
to the employer’s unjustified refusal, the employer may still be required to pay the salaries
notwithstanding the reversal of the Labor Arbiter’s Decision.

BEDUYA v. ACE PROMOTION AND MARKETING


G.R. No. 195513 | 22 June 2015
Labor Arbiter

DOCTRINE: Requirements relating to appeal bonds may be relaxed such as when there are valid issues
raised in the appeal and in the absence of any valid claims against the employer. The NLRC is mandated
to use every and all reasonable means to ascertain the facts in each case speedily and objectively, without
regard to technicalities of law or procedure, all in the interest of due process.

FACTS:
• Separate complaints for illegal dismissal and money claims were filed against APMC.
• The LA ruled in favor of the employees and ordered APMC to reinstate the employees and pay
monetary awards.
• APMC appealed and filed a Motion for Reduction of Bond before the NLRC.
• Complainants prayed for the dismissal of respondents’ appeal based on insufficiency of the bond
posted. This thus resulted in the non-perfection of the appeal, and consequently, the Labor
Arbiter’s Decision had become final and executory.
• Without acting on respondents’ motion for reduction of bond and the complainants’ opposition
thereto, the NLRC rendered a Decision reversing the LA.
• Petitioners contend that because of the respondents’ alleged failure to comply with the
jurisdictional requirements on appeal bonds, the NLRC did not acquire jurisdiction over
respondents’ appeal. Moreover, they claim that the NLRC erred in resolving the merits of the

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appeal without first ruling on respondents’ motion to reduce appeal bond and their opposition
thereto with motion to dismiss.

ISSUE: Whether or not NLRC erred in issuing a judgment when there is a pending motion to be resolved
regarding the appeal bond.

HELD: No, in case of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by
the Commission in the amount equivalent to the monetary award in the judgment appealed from.However,
this Court, in many cases, has relaxed this stringent requirement whenever justified. Thus, the rules,
specifically Section 6 of Rule VI of the 2005 Revised Rules of Procedure of the NLRC, allows the reduction
of the appeal bond subject to the conditions that: (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. Otherwise, the filing of a motion to reduce bond shall not stop the running of the period to
perfect an appeal. Still, the rule that the filing of a motion to reduce bond shall not stop the running of the
period to perfect an appeal is not absolute. The Court may relax the rule under certain exceptional
circumstances which include fundamental consideration of substantial justice, prevention of miscarriage
of justice or of unjust enrichment and special circumstances of the case combined with its legal merits, and
the amount and the issue involved. Indeed, in meritorious cases, the Court was propelled to relax the
requirements relating to appeal bonds such as when there are valid issues raised in the appeal and in the
absence of any valid claims against the employer.With respect to the NLRC’s failure to initially act upon
respondents’ motion to reduce bond and petitioners’ opposition thereto with motion to dismiss, suffice it
to say that the same did not divest the NLRC of its authority to resolve the appeal on its substantive matters.
After all, the NLRC is not bound by technical rules of procedure and is allowed to be liberal in the
application of its rules in deciding labor cases. Further, the NLRC is mandated to use every and all
reasonable means to ascertain the fact s in each case speedily and objectively, without regard to
technicalities of law or procedure, all in the interest of due process.

U-BIX CORPORATION v. HOLLERO


G.R. No. 199660 | 13 July 2015
Labor Arbiter

DOCTRINE: A surety bond should be accompanied by both an indemnity agreement and proof of security
deposit or collateral securing the bond, among others, that two must be presented. The submission of one
cannot be considered sufficient as to dispense with the other.

FACTS:
• The LA found respondent's dismissal to be valid; she was also ordered to reimburse the amount
spent by company for her training, with interest at the rate of 12% per annum.
• NLRC reversed LA and held that respondent was illegally dismissed.
• Petitioner company appealed before the CA.
• In the meantime, respondent filed a Supplemental Motion for Issuance of Writ of Execution.
• LA found the recomputation of the total award to be correct.
• Petitioners filed before the NLRC a Notice and Memorandum of Appeal. At the same time, they
posted a corresponding supersedeas bond issued by Mapfre Insular Insurance Corporation.
• NLRC denied ruling that the supersedeas bond posted by petitioners has no force and effect
because Mapfre only has authority to transact surety in relation to civil/special proceedings cases.

ISSUE: Whether or not the bond issued by the insurance company perfected the appeal of the petitioner.

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HELD: No, the Court still finds that petitioners failed to comply with the bond requirement in perfecting
their appeal. In case of a surety bond, the applicable Section 6, Rule VI of the 2005 Revised Rules of
Procedure of the NLRC requires that the same should be accompanied by original and certified true copies
of the following:
(1) A joint declaration under oath by the employer, his counsel and the bonding company,
attesting that the bond posted is genuine, and shall be in effect until final disposition of the
case;
(2) An indemnity agreement between the employer-appellant and bonding company;
(3) Proof of security deposit or collateral securing the bond; provided, that a check shall not
be considered as an acceptable security;
(4) A certificate of authority from the Insurance Commission;
(5) Certificate of registration from the Securities Exchange Commission;
(6) Certificate of authority to transact surety business from the Office of the President;
(7) Certificate of accreditation and authority from the Supreme Court; and
(8) Notarized board resolution or secretary's certificate from the bonding company showing
its authorized signatories and their specimen signatures.

Here, petitioners did not submit any proof of security deposit or collateral securing the bond. They
themselves admit this in their Petition by stating that they no longer attached a separate document of
security deposit or collateral securing the bond because Mapfre did not find it necessary to require them to
give a security deposit and/or collateral. According to them, Mapfre finds it sufficient that the Indemnity
Agreement attached to the Memorandum of Appeal was signed by petitioner Bravo, the president of
petitioner U-Bix, in his personal capacity.To the Court's mind, the intention in requiring a security deposit
or collateral to secure the bond, apart from the indemnity agreement between the employer-appellant and
the bonding company, is to further ensure recovery by the employee of the judgment award should the
same be affirmed, in any and all eventualities. This is also in keeping with the purpose of the bond
requirement which is to "discourage employers from using the appeal to delay, or even evade, their
obligation to satisfy their employee's possible just and lawful claims." Since Section 6, Rule VI of the 2005
NLRC Rules of Procedure requires that a surety bond should be accompanied by both an indemnity
agreement and proof of security deposit or collateral securing the bond, among others, that two must be
presented. The submission of one cannot be considered sufficient as to dispense with the other.

TURKS SHAWARMA COMPANY/GEM ZEÑAROSA


v. PAJARON
G.R. No. 207156 | 16 January 2017
Labor Arbiter

DOCTRINE: The posting of cash or surety bond is mandatory and jurisdictional; failure to comply
renders the decision of the Labor Arbiter final and executory.

FACTS:
• Turks Shawarma hired Pajaron as service crew and Carbonilla as head crew.
• Pajaron and Carbonilla filed their respective complaints for constructive and actual illegal
dismissal.
• The Labor Arbiter ruled that Pajaron et al were constructively and illegally dismissed by
petitioners. It ordered Turks/Zeñarosa to pay Pajaron et al damages, backwages, etc.
• Zeñarosa himself filed a Notice of Appeal and Motion to Reduce Bond before the NLRC. Along
with this, he posted a partial cash bond of P15,000.00,maintaining that he cannot afford to post the
full amount of the award since he is a mere backyard micro-entrepreneur, and payment of the full
amount of the award will greatly affect the company’s operations.

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• The NLRC denied Turk’s motion on the ground that the grounds cited to reduce the appeal bond
are not meritorious and that the partial bond posted is not reasonable. The posting of the remaining
balance of the bond on more than 3 months from receipt of the Labor Arbiter’s cannot be allowed;
otherwise, it will be tantamount to extending the period to appeal which is limited only to 10 days
from receipt of the assailed Decision.
• The CA affirmed the decision of the NLRC on the ground that Turks failed to comply with the
requisites in filing a motion to reduce bond, namely, the presence of a meritorious ground and the
posting of a reasonable amount of bond.

ISSUE: Whether or not the lower court should strictly apply the requirement of an appeal bond?

HELD: Yes, the appeal bond should be strictly applied. Pursuant to the Labor Code, in case of a judgment
involving a monetary award, an appeal by the employer may be perfected only upon the posting of a
cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the
amount equivalent to the monetary award in the judgment appealed from. Sections 6 of Rule VI of the
2005 Revised Rules of Procedure of the NLRC provides that no motion to reduce bond shall be entertained
except on meritorious grounds, and upon the posting of a bond in a reasonable amount. The mere filing of
a motion to reduce bond without complying with the requisites in the preceding paragraphs shall not stop
the running of the period to perfect an appeal.
• The Labor Code and the NLRC Rules of Procedure are clear that there is legislative and
administrative intent to strictly apply the appeal bond requirement. 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.
• 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.The NLRC correctly held that the supposed ground
cited in the motion is not well-taken for there was no evidence to prove Zeñarosa’s claim that the
payment of the full amount of the award would greatly affect his business due to financial setbacks.
Besides, the law does not require outright payment of the total monetary award; the appellant has
the option to post either a cash or surety bond.
• Moreover, the partial bond posted was not reasonable. The Court has set a provisional percentage
of 10% of the monetary award (exclusive of damages and attorney’s fees) as reasonable amount of
bond that an appellant should post pending resolution by the NLRC of a motion for a bond’s
reduction. Only after the posting of this required percentage shall an appellant’s period to perfect
an appeal be suspended. Applying this parameter, the P15,000.00 partial bond posted by Turks is
not considered reasonable in relation to the total monetary award of P197,936.27.

UNIVERSITY PLANS INCORPORATED v. SOLANO


G.R. No. 170416 | June 22, 2011
National Labor Relations Commission

DOCTRINE: NLRC is not precluded from conducting a preliminary determination of the merit or lack of
merit of a motion to reduce bond.

FACTS

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• Respondent-employees filed a complaint for illegal dismissal praying for some monetary award
against petitioner University Plans Incorporated.
• The Labor Arbiter found petitioner guilty of illegal dismissal and ordered respondent’s
reinstatement as well as payment of full backwages, etc.
• Petitioner filed with NLRC its Memorandum of Appeal with a Motion to Reduce Bond alleging
that it is under receivership and it cannot dispose of its assets at such short notice but it is willing
to immediately dispose P30,000; that NLRC has the discretion to reduce the appeal bond upon
motion and on meritorious grounds. NLRC denied such motion ruling that the amount of the
appeal bond is fixed by law pursuant to Art. 223 of the Labor Code.

ISSUE: Whether the NLRC is given the discretion to reduce appeal bond

HELD: Yes,under Art. 223 of the Labor Code, the posting of bond is indispensable to the perfection of an
appeal in cases involving monetary awards from the Decision of the Labor Arbiter. It must be in an amount
equal to the monetary award in the judgment appealed from. Meanwhile, Sec. 6, Rule VI of the Revised
Rules of Procedure of the NLRC provides that no motion to reduce bond shall be entertained except on
meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the
monetary award. In short, the Rules allow the NLRC to reduce the amount of the bond, the exercise
authority is not a matter of right on the part of the movant, but lies within the sound discretion fo the NLRC
upon showing of meritorious grounds. Thus, in the case at bar, the NLRC erred in not considering the merit
or lack of merit of petitioner’s Motion to Reduce Bond. Attached in such motion is the Cease and Desist
Order which prohibited the officers of the company from withdrawing from its trust funds or in making
any disposition of assets. It is possible the petitioner has no liquid assets and cannot raise the amount more
than P3 million within a 10-day period. Considering the petitioner’s state of receivership, NLRC should
have conducted preliminary determination to resolve the subject motion based on substantial compliance
and on meritorious grounds. Remanded.

TIGER CONSTRUCTION AND DEVELOPMENT v. ABAY, et.al.


G.R. 164141 | 26 February 2010
National Labor Relations Commission

DOCTRINE: Article 128 (b) of the Labor Code, as amended by RA 7730, the DOLE Secretary and her
representatives, the regional directors, have jurisdiction over labor standards violations based on findings
made in the course of inspection of an employer’s premises

FACTS:
• Abay et.al filed a complaint before the RO of DOLE against petitioner. Inspection was conducted
based on the complaint finding several labor standard violations (deficiencies in record keeping,
non-compliance with various wage orders, non-payment of holiday pay, & underpayment of 13th
month pay.
• Before the hearing could take place, RO Director Manalo issued an order which referred the case
to the NLRC on the ground that the aggregate money claim exceeds the jurisdictional amount w/c
is P5,000.
• Before the NLRC could take cognizance of the case, another inspection authority was issued by
DOLE Sec. Sto. Tomas in an apparent reversal of the regional office endorsement. The same
violations were discovered, thus the case was referred to the NLRC again. Petitioner then
questioned the inspector’s findings. It also said that the July 25 decision of the Dir. Manalo rendered
moot the recent endorsement to the NLRC. .According to petitioner, the order of Manalo was
tantamount to a dismissal on the ground of lack of jurisdiction, which dismissal had attained

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finality; hence, all proceedings before the DOLE regional office after July 25, 2002 were null and
void for want of jurisdiction.
• Dir. Manalo however ruled in favor of the respondent workers, and its decision had reached
finality.

ISSUE: Whether petitioner can still assail Dir. Manalo’s order for lack of jurisdiction

HELD: No, petitioner may not. While it is true that orders issued without jurisdiction are considered null
and void and, as a general rule, may be assailed at any time, the fact of the matter is that in this
case, Director Manalo acted within her jurisdiction.The said jurisdiction is not affected by the amount of
claim involved, as RA 7730 had effectively removed the jurisdictional limitations found in Art. 129 and 217
insofar as inspection cases, pursuant to the visitorial and enforcement powers of the DOLE Sec., are
concerned.Dir. Manalo’s initial endorsement of the case to the NLRC, on the mistaken opinion that the
claim was within the latter’s jurisdiction, did not oust or deprive her of jurisdiction over the case. She
therefore retained the jurisdiction to decide the case when it was eventually returned to her office by the
DOLE Sec. Jurisdiction or authority to try a certain case is conferred by law and not by the interested
parties, much less by one of them, and should be exercised precisely by the person in authority or body in
whose hands it has been placed by the law.

CASTILLO v. PRUDENTIALIFE PLANS, INC.


G.R. No. 196942 | 26 March 2014
National Labor Relations Commission

DOCTRINE: Rules on evidence are not strictly observed in proceedings before the NLRC because they are
summary in nature. Hence, the written statements of co-employees admitting their participation in a
scheme to defraud the employer are admissible in evidence.

FACTS:
• Prudentialife employees were granted an optical benefit allowance of P2,500.00.
• Many Prudentialife employees – petitioners included – availed thereof and Prudentialife was
flooded with requests for reimbursement for eyeglasses the employees supposedly purchased from
a single outfit/supplier, Alavera Optical.
• Suspecting fraud, Prudentialife began an investigation and found anomalies as to the legitimacy
of the optical.
• Notices were issued to employees which required the recipients to submit their written explanation
relative to acts of dishonesty and fraud which they may have committed in connivance with
Alavera Optical.
• Petitioners and the other availing employees submitted their respective written explanations.
• Prudentialife concluded that petitioners and other employees knowingly availed of the optical
benefit allowance to obtain a refund of the maximum P2,500.00 benefit even though they did not
have vision problems, or that their eyeglasses were worth less thanP2,500.00.
• Prudentialife issued individual Notices of Termination to petitioners and other employees.
• Petitioners filed a complaint for illegal dismissal.

ISSUE: Whether or not the ground for termination of the petitioners was substantially proven.

HELD: Yes, from the evidence on record, it has been sufficiently shown that petitioners actually took part
in the commission of the acts complained of, which makes them co-conspirators to the scheme. For sure, it
cannot be said that they are exceptions to the rule simply because they categorically denied participation,
or that there is no direct evidence of their complicity. Quite the contrary, there is evidence pointing to their

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participation in the fraudulent scheme. First of all, they all knew that even though they were not paying
for the eyeglasses, Alavera Optical would issue, as it did issue, an official receipt falsely showing that the
eyeglasses have beenpaidfor,which they would thenuse,astheydiduse,toobtain reimbursement from
Prudentialife. By presenting the false receipt to their employer to obtain reimbursement for an expense
which they did not in fact incur, this constituted dishonesty.The written statements of petitioners’ co-
employees admitting their participation in the scheme are admissible to establish the plan or scheme to
defraud Prudentialife; the latter had the right to rely on them for such purpose. The argument that the said
statements are hearsay because the authors thereof were not presented for cross-examination does not
persuade; the rules of evidence are not strictly observed in proceedings before the NLRC, which are
summary in nature and decisions may be made on the basis of position papers. Besides, these written
declarations do not bear directly on petitioners’ participation in the scheme; their guilt has been established
by evidence other than these statements.

MALIXI v. MEXICALI PHILIPPINES


G.R. No. 205061 | 08 June 2016
National Labor Relations Commission

DOCTRINE: The reglementary period for an appeal before the NLRC must be counted from the receipt
of the Decision by the counsel or representative on record. The NLRC may rule upon the merits of a case
in a motion for reconsideration, even when not raised, if these form part of the record attached to the
motion for reconsideration.

FACTS:
• Malixi was hired by Mexicali Philippines as a team leader assigned at the delivery service.
• In 2008, Mexicali’s training officer informed Malixi that the management intended to transfer and
appoint her as store manager in a newly opened branch in Alabang Town Center, due to her
satisfactory performance. The Alabang branch was a joint venture between Mexicali and Calexico.
• Malixi was compelled by Teves, the training officer, to sign an end-of-contract letter by reason of a
criminal complaint that Malixi filed against Pontero, Mexicali’s operations manager, for sexual
harassment.
• Malixi refused to sign the end-of-contract letter. Due to this, Mexicali’s administrative officer
personally went to the Alabang branch and sought Malixi’s signature.
• Malixi complained of illegal dismissal before the LA. The LA ruled in favor of Malixi.
• The NLRC dismissed the appeal filed by Mexicali for being filed out of time.
o The NLRC reckoned the start of the period from the time Mexicali actually received a copy
of the decision.
• The NLRC granted Mexicali’s Motion for Reconsideration of the dismissal, and reinstated the
appeal.
o The NLRC, this time, reckoned the period from the time Mexicali’s counsel received a copy
of the decision. The NLRC also ruled on the merits of the petition, and partially granted
the same.

ISSUE: Whether or not the appeal before the NLRC was filed within the 10-day reglementary period
required by the 2005 Revised Rules of Procedure of the NLRC (“2005 NLRC Rules”).

HELD: Yes, the appeal was filed on time, because under the 2005 NLRC Rules, the period of appeal shall
be counted from receipt of such decisions, resolutions or orders by the counsel or representative of record.

ISSUE: Whether or not the NLRC may decide upon an issue which was not raised in the Motion for
Reconsideration.

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HELD: Yes, the NLRC has the authority to resolve the appeal on its merits despite being a non-issue in a
Motion for Reconsideration, because these issues were raised in the position papers and other documents
offered by Mexicali in support of their Motion for Reconsideration. There is no denial of procedural due
process, when Malixi (the petitioner) had the opportunity to reply to Mexicali’s position paper filed before
the LA, and when these form part of the records. The NLRC may decide the case on the basis of position
papers and other documents without resorting to the technical rules of evidence observed in the regular
courts of justice.

GUAGUA NATIONAL COLLEGES V. GUAGUA NATIONAL COLLEGES


FACULTY LABOR UNION
G.R. No. 204693 | 13 July 2016
National Labor Relations Commission

DOCTRINE: The Secretary of Labor and Employment’s certification for compulsory arbitration of a
dispute over which he has assumed jurisdiction is an exercise of the powers granted to him by Article
263(g) of the Labor Code.

FACTS:
• Guagua National Colleges (GNC) entered into a CBA which had a no-strike, no lock-out clause
with Guagua National Colleges Faculty Labor Union (Union 1) and Guagua National Colleges
Non-Teaching and Maintenance Labor Union (Union 2).
• The presidents of the two unions informed the president of GNC of their intention to open the
negotiation for the renewal of the existing CBA which was about to expire.
• During the meeting regarding CBA negotiations, no agreement was reached except that GNC
would notify the unions of the next negotiation meeting, but these unions thereafter only received
a letter stating that management was not inclined to grant economic proposals.
• A conference still transpired upon request but this still ultimately led to an impasse. Said unions
wanted a third party to assist them in threshing out their differences so they filed a preventive
mediation case with the NCMB.
• The unions alleged that both parties had agreed on the details regarding the grant of signing bonus,
but during the scheduled meeting, no representative of GNC appeared so they were constrained
to file a notice of strike. On the other hand, GNC contended that they asked for 10 days to submit
a comment, but the unions already submitted a notice of strike so they called or conciliation
conference.
• GNC then filed a motion to strike out the notice of strike and to refer the dispute to voluntary
arbitration and grievance machinery, as the grounds cited by the unions in the notice of strike (bad
faith bargaining, violation of duty to bargain, gross violation of provisions of CBA, gross
diminution of benefits) come within the definition of “grievance”.
• As NCMB has not yet acted on GNC’s motion to strike, it urged SOLE to assume jurisdiction. SOLE
granted this, and certified the same to NLRC for immediate compulsory arbitration.

ISSUE: Whether or not the labor dispute should have been submitted to voluntary arbitration by the SOLE
pursuant to the CBA, and not certified to NLRC for compulsory arbitration?

HELD: No, the Secretary of Labor correctly certified the labor dispute to the NLRC for compulsory
arbitration. It is true that the parties through their CBA, agreed to a "no-strike, no lock-out" policy and to
resolve their disputes through grievance machinery and voluntary arbitration, but said clause is not
applicable when the strike is grounded on unfair labor practice. It may only be invoked by an employer
when the strike is economic in nature or one which is conducted to force wage or other agreements from

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the employer that are not mandated to be granted by law. In the case at bar, the reason for the filing of the
notice of strike was due to bad faith bargaining and violation of the duty to bargain collectively which both
constitute unfair labor practice.
• A charge of unfair labor practice does not fall under the definition of grievance stated in the CBA.
There is a need for an express stipulation in the CBA that unfair labor practices should be resolved
in the ultimate by the voluntary arbitrator or panel of voluntary arbitrators since the same fall
within a special class of disputes that are generally within the exclusive original jurisdiction of the
Labor Arbiter by express provision of the law. Absent such express stipulation, the phrase 'all
disputes' should be construed as limited to the areas of conflict traditionally within the jurisdiction
of Voluntary Arbitrators. In the absence here of an express stipulation in the CBA that GNC and
respondents agreed to submit cases of unfair labor practice to their grievance machinery and
eventually to voluntary arbitration, jurisdiction over the parties' dispute does not vest upon the
voluntary arbitrator. Thus, the Court therefore cannot subscribe to GNC's contention since to say
that compulsory arbitration may only be resorted to in instances agreed upon by the parties would
limit the power of the Secretary of Labor and Employment to certify cases that are proper subject
of compulsory arbitration.

HERNANDEZ v. CROSSWORLD MARINE SERVICES INC.


G.R. No. 209098 | 14 November 2016
National Labor Relations Commission

DOCTRINE: A waiver which intends to skirt the Labor Code’s requirement for mandatory execution
proceedings following a favorable judgment is void.

FACTS:
• Hernandez was working as a cook of Mykronos, Crossworld, and Diaz (Respondents) since 2005,
under different employment contracts covering the respondents’ oceangoing vessels.
• On October 2008, Hernandez was engaged by Respondents as a Chief Cook aboard M/V
Nikomarin for 9 months. The salary was inclusive of fixed overtime pay, food allowance, leave
pay, and long service bonus.
• Upon expiration of the contract, Hernandez was again engaged for an additional 5 months.
Hernandez was repatriated in December 2009.
• Hernandez was made to undergo a pre-employment medical examination prior to another
engagement under a new contract. He was diagnosed with hypertension and diabetes; however,
he was declared fit for work, and was required to take maintenance medication.
• Even after the declaration that Hernandez was fit for work, Respondents deferred Hernandez’s
employment on account of his state of health.
• Mykronos consulted two separate physicians, who diagnosed Hernandez of hypertension and
diabetes, but he was declared unfit for sea duty in whatever capacity as seaman.
• Hernandez claimed compensation by way of disability benefits before the NLRC by way of medical
expenses from Respondents, as they refused to pay.
• The NLRC declared that Hernandez is entitled to disability benefits.
• Pending the petition for certiorari before the CA, Mykronos paid Hernandez the amount of the
NLRC judgment award. In return, Hernandez was made to sign a Conditional Satisfaction of
Judgment (without prejudice to the pending petition for certiorari in the Court of Appeals).
o The Conditional Satisfaction of Judgment provided that the payment: (1) was made to
prevent imminent execution by the NLRC of its decision; that it (2) was made in the
understanding that in case of modification of judgment by the CA or SC, Hernandez shall
return the amounts due and owing to Mykronos/manning agents without need of further

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demand; and (3) that Hernandez has no further claims against the owners of M/V
Nikomarin.
• The CA granted the petition for certiorari, and ordered Hernandez to return the amount received
under the Conditional Satisfaction of Judgment on the ground of Article 19 of the Civil Code.

ISSUE: Whether or not Hernandez must return the judgment award received under the Conditional
Satisfaction of Judgment.

HELD: No, Hernandez does not need to return the judgment award her received. This is because the
Conditional Satisfaction of Judgment constituted a “waiver that amounted to nothing”. Hidden behind
these documents appears to be a convenient ploy to deprive Hernandez of all his rights to claim indemnity
from respondents under all possible causes of action and in all available fora, and effectively for nothing in
return or exchange — because in the that the NLRC ruling is reversed, then Hernandez must return what
he received, thus leaving him with the proverbial empty bag. This is fundamentally unfair, and goes against
public policy. Within the context of the constitutional, legislative, and jurisprudential guarantees afforded
to labor, such a waiver is unfair, unjust, and arbitrary, as it skirted the intended consequence of the law,
which is the mandatory execution proceedings following a favorable judgment allowed under the Labor
Code.
• Respondents could have simply paid the judgment award without attaching conditions that have
far-reaching consequences other than those intended by a simple compliance with what was
required under the circumstances — that is, the mandatory execution proceedings following a
favorable judgment allowed under the Labor Code. For what they did, the respondents herein are
held to be in bad faith, and should suffer the consequences of their actions. One is that their
payment of petitioner's claim should properly be treated as a voluntary settlement of his claim in
full satisfaction of the NLRC judgment.

MENDOZA V. OFFICERS OF MANILA WATER EMPLOYEES UNION


G.R. No. 201595 | 25 January 2016
Bureau of Labor Relations

DOCTRINE: The charge of unfair labor practice falls within the original and exclusive jurisdiction of the
Labor Arbiters, pursuant to Article 217 of the Labor Code; not the BLR.

FACTS:
• MWEU (union) informed Mendoza, a member of MWEU, that the union was unable to fully deduct
the increased P200 union dues from his salary due to the lack of the required check-off
authorization from him. He was further warned that his failure to pay the union dues would result
in sanctions as it would violate the By-Laws.
• The President of the MWEU’s Executive Board referred the charge to the grievance committee,
which recommended that Mendoza be suspended for 30 days.
• Mendoza appealed to the General Membership Assembly but said appeal was denied.
• He was again charged with non-payment of union dues, and he again invoked his right to appeal
through the General Membership Assembly but this was not acted upon by respondents. He was
again penalized with a 30-day suspension.
• MWEU scheduled an election of officers of which Mendoza filed his certificate of candidacy for
Vice-President, but was disqualified on account of the suspension.
• He was charged for non-payment of union dues for the third time and was expelled from the union.
• During the freedom period and negotiations for a new CBA, Mendoza joined WATER-AFWC and
was elected union president.
• Mendoza then filed a complaint for unfair labor practice, alleging that he was illegally terminated.

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• LA decreed that the filing of the complaint was premature as administrative remedies weren’t
exhausted.
• NLRC ruled that it does not have jurisdictional competence to act on the case as the same are
intra/inter-union disputes within the jurisdiction of BLR. CA affirmed.

ISSUE: Whether or not the case falls within the jurisdiction of the BLR.

HELD: No, this case does not fall within the BLR’s jurisdiction. An intra-union dispute refers to any conflict
between and among union members, including grievances arising from any violation of the rights and
conditions of membership, violation of or disagreement over any provision of the union’s constitution and
by-laws, or disputes arising from chartering or disaffiliation of the union. In this case, Mendoza’s charge
of unfair labor practices falls within the original and exclusive jurisdiction of the Labor Arbiters, pursuant to
Article 217 of the Labor Code. In addition, Article 247 of the same Code provides that "the civil aspects of
all cases involving unfair labor practices, which may include claims for actual, moral, exemplary and other
forms of damages, attorney’s fees and other affirmative relief, shall be under the jurisdiction of the Labor
Arbiters”. Based on MWEU’S Constitution, when an MWEU member is suspended, he is given the right to
appeal such suspension within three working days from the date of notice of said suspension, which appeal
the MWEU Executive Board is obligated to act upon by a simple majority vote. He also timely filed an
appeal and Mendoza was illegally suspended for the second time and thereafter unlawfully expelled from
MWEU due to respondents’ failure to act on his written appeals. Thus, the respondents are guilty of unfair
labor practice which falls within the original and exclusive jurisdiction of the Labor Arbiters.

ASIA BREWERY v. TUNAY NA PAGKAKAISA NG MGA MANGGAGAWA SA


ASIA
G.R. No. 171594-96 | 18 September 2013
DOLE Secretary

DOCTRINE: In cases of compulsory arbitration before the Secretary of Labor pursuant to Article 263(g) of
the Labor Code, the financial statements of the employer must be properly audited by an external and
independent auditor in order to be admissible in evidence for purposes of determining the proper wage
award.

FACTS:
• Asia Brewery and TPMA had been negotiating for a new CBA.
• After about 18 sessions or negotiations, the parties were still unable to reconcile their differences
on their respective positions on most items, particularly on wages and other economic benefits.
• TPMA declared a deadlock and filed a notice of strike with the NCMB. However, the parties did
not come to terms even before the NCMB.
• Asia Brewery then petitioned the Secretary of the Labor to assume jurisdiction over the parties’
labor dispute, invoking Article 263 (g) of the Labor Code.
• In answer, Respondent union opposed the assumption of jurisdiction, reasoning therein that the
business of petitioner corporation is not in dispensable to the national interest.
• In the meantime, Secretary of Labor Patricia Sto. Tomas resolved the deadlock between the parties
and granted arbitral awards.
• TPMA assailed the arbitral award and imputing grave abuse of discretion upon the Sec. of Labor.
• The CA partially granted the petition and remanded the case back to the Sec. of Labor the issue of
wage increase.

ISSUE: Whether or not the remand of the case to the Sec. of Labor as to the issue of wage increase was
proper.

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Labor Law and Social Legislation Justice Del Castillo Digests

HELD: Yes, in MERALCO v. Sec. Quisumbing, we had occasion to expound on the extent of our review
powers over the arbitral award of the Secretary of Labor, in general, and the factors that the Secretary of
Labor must consider in determining the proper wage award, in particular, viz:The extent of judicial review
over the Secretary of Labor's arbitral award is not limited to a determination of grave abuse in the manner
of the secretary's exercise of his statutory powers. This Court is entitled to, and must — in the exercise of
its judicial power — review the substance of the Secretary's award when grave abuse of discretion is alleged
to exist in the award, i.e., in the appreciation of and the conclusions the Secretary drew from the evidence
presented. The Secretary of Labor gravely abused her discretion when she relied on the unaudited financial
statements of petitioner corporation in determining the wage award because such evidence is self-serving
and inadmissible. Factors such as the actual and projected net operating income, impact of the wage
increase on net operating income, the company's previous CBAs, and industry trends were not discussed
in detail so that the precise bases of the wage award are not discernible on the face of the Decision. The
contending parties are effectively precluded from seeking a review of the wage award, even if proper under
our ruling in Meralco, because of the general but unsubstantiated statement in the Decision that the wage
award was based on factors like the bargaining history, trends of arbitrated and agreed awards, and
industry trends. In fine, there is no way of determining if the Secretary of Labor utilized the proper
evidence, figures or data in arriving at the subject wage award as well as the reasonableness thereof. This
falls short of the requirement of administrative due process obligating the decision-maker to adjudicate the
rights of the parties in such a manner that they can know the various issues involved and the reasons for
the decision rendered.The appellate court, thus, correctly remanded this case to the Secretary of Labor for
the proper determination of the wage award which should utilize, among others, the audited financial
statements of petitioner corporation and state with sufficient clarity the facts and law on which the wage
award is based.

PHILTRANCO v. PWU-AGLO
G.R. No. 180962 | 26 Feb 2014
DOLE Secretary

DOCTRINE: A decision from the Secretary of Labor within the coverage of Article 263 of the Labor Code
can be a proper subject of a petition for certiorari under Rule 65 of the Rules of Court. Hence, regardless of
the proscription against the filing of a motion for reconsideration, the same may be filed on the assumption
that rectification of the decision or order must be obtained, and before a petition for certiorari may be
instituted.

FACTS:
• Philtranco, a local land transportation company, entrenched 21 of its employees on the ground that
it was suffering business losses.
• Union filed a notice of strike with DOLE claiming that petitioner engaged in unfair labor practice.
• Unable to settle their differences, the case was referred to the Office of the Secretary of Labor.
• The Sec. of Labor ordered petitioner to reinstate the illegally terminated employees and pay them
backwages.
• Philtranco filed anMR to the Sec. of Labor but the latter declined to rule on the motion, citing a
DOLE regulation stating that decisions of voluntary arbitrators shall not be the subject of a motion
for reconsideration.
• A petition for certiorari was filed before the CA and the latter dismissed the petition on the ground
that petitioner erred in filing a petition for certiorari under Rule 65 when it should have filed a
petition for review under Rule 43 which properly covers decisions of voluntary arbitrators.

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ISSUE: Whether or not a decision of the Secretary of Labor is a proper subject of certiorari under Rule 65
of the Rules of Court.

HELD: Yes, the fact is undeniable that by referring the case to the Secretary of Labor, Conciliator–Mediator
Aglibut conceded that the case fell within the coverage of Article 263 of the Labor Code; the impending
strike in Philtranco, a public transportation company whose business is imbued with public interest,
required that the Secretary of Labor assume jurisdiction over the case, which he in fact did. By assuming
jurisdiction over the case, the provisions of Article 263 became applicable, any representation to the
contrary or that he is deciding the case in his capacity as a voluntary arbitrator notwithstanding. It has long
been settled that the remedy of an aggrieved party in a decision or resolution of the Secretary of Labor is
to timely file a motion for reconsideration as a precondition for any further or subsequent remedy, and
then seasonably file a special civil action for certiorari under Rule 65 of the 1997 Rules on Civil Procedure.
There is no distinction: when the Secretary of Labor assumes jurisdiction over a labor case in an industry
indispensable to national interest, “he exercises great breadth of discretion” in finding a solution to the
parties’ dispute. “[T]he authority of the Secretary of Labor to assume jurisdiction over a labor dispute
causing or likely to cause a strike or lockout in an industry indispensable to national interest includes and
extends to all questions and controversies arising therefrom. The power is plenary and discretionary in
nature to enable him to effectively and efficiently dispose of the primary dispute.” This wide latitude of
discretion given to the Secretary of Labor may not be the subject of appeal.Indeed, what needs to be realized
is that while a government office may prohibit altogether the filing of a motion for reconsideration with
respect to its decisions or orders, the fact remains that certiorari inherently requires the filing of a motion
for reconsideration, which is the tangible representation of the opportunity given to the office to correct
itself. Unless it is filed, there could be no occasion to rectify. Worse, the remedy of certiorari would be
unavailing. Simply put, regardless of the proscription against the filing of a motion for reconsideration, the
same may be filed on the assumption that rectification of the decision or order must be obtained, and before
a petition for certiorari may be instituted.

OCTAVIO VS. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY


G.R. No. 175492 | February 27, 2013
Voluntary arbitrator

DOCTRINE: Every CBA shall provide a grievance machinery to which all disputes arising from its
implementation or interpretation will be subjected to compulsory negotiations.

FACTS:
• PLDT and Gabay ng Unyon sa Telekominaksyon ng mga Superbisor (GUTS) entered into its first CBA
granting across-the-board salary increase of P2,500 for years 1999-2001. In 2000, PLDT hired
Octavio. He was regularized in 2001 and promoted as Sales System Analyst 2 in 2002. In 2002,
PLDT and GUTS entered into a second CBA which provides for salary increase of P2,000 for years
2002-2004. Claiming that he was not given the salary increases in 2001 under the first CBA and 2002
under the second CBA, he filed a claim for entitlement to it. The Grievance Committed convened
but failed to reach an agreement, in effect, denying Octavio’s demand for salary increase. Now,
petitioner claims that he when he was regularized, he became entitled to the P2,5000 increase under
the first CBA. Then, pursuant to the second CAB, he should receive additional P2,000 apart from
increase of P3,730 (by virtue of his promotion). However, PLDT unilaterally decided to deem as
included in the P3,730 the P2,000 increase in the second CBA.
• LA dismissed. NLRC affirmed ruling that it has no jurisdiction to decide the issues as the same
involved the interpretation and implementation of the CBA. CAaffirmed. Hence, this petition.
Petitioner contends that PLDT and GUTS had the duty to strictly implement the CBA salary

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Labor Law and Social Legislation Justice Del Castillo Digests

increases; hence, the Committee Resolution, which effectively resulted in the modification of the
CBA’s provision on salary increases, is void.

ISSUE: Whether the Committee’s resolution was correctly appealed to the courts.

HELD: No, under Article 260 of the Labor Code, grievances arising from the interpretation or
implementation of the parties’ CBA should be resolved in accordance with the grievance procedure
embodied therein. It also provides that all unsettled grievances shall be automatically referred for
voluntary arbitration as prescribed in the CBA. In the case at bar, the committee made up of representatives
of both the union and the management convened. Unfortunately, it failed to reach an agreement. Octavio’s
recourse pursuant to the CBA’s grievance procedure was to elevate his grievance to the Board of Arbitrators
for final decision. Instead, nine months later, Octavio filed a Complaint before the NLRC. It is settled that
when parties have validly agreed on a procedure for resolving grievances and to submit a dispute to
voluntary arbitration then that procedure should be strictly observed. Moreover, before a party is allowed
to seek the intervention of the court, it is a precondition that he should have availed of all the means of
administrative processes afforded him. The premature invocation of the court’s judicial intervention is fatal
to one’s cause of action. The underlying principle of the rule on exhaustion of administrative remedies rests
on the presumption that when the administrative body, or grievance machinery, is afforded a chance to
pass upon the matter, it will decide the same correctly.

SOUTHEASTERN SHIPPING GROUP, LTD., v. NAVARRA, JR.


G.R. No. 167678| 22 June 2010
Prescription of actions

DOCTRINE: Money claims arising from employer-employee relations prescribe within three years from
the time the cause of action accrues while for death benefits claims to prosper, the seafarer’s death must
have occurred during the effectivity of said contract.

FACTS:
• Southeastern Shipping hired Federico to work on board the vessel “George McLeod.” He worked
as a motorman.
• While on board the vessel, he complained of having a sore throat on and off fever with chills. He
developed a soft mass on the left side of his neck.
• In the Philippines, he was diagnosed at PGH to be suffering from “Hodgkin’s Disease.”
• Federico filed a complaint claiming entitlement to disability benefits, loss of earning capacity,
moral and exemplary damages, and attorney’s fees.
• During the pendency of the case, Federico died so the claim for disability benefits was then
converted into a claim for death benefits.

ISSUE: Whether the heirs of Federico are entitled to the death compensation benefits.

HELD: No, as to money claims of seafarers, the law governing the prescription is Article 291 of the Labor
Code. The prescriptive period in this case is thus three years from the time the cause of action accrues.
There is no showing of when the cause of action accrued. Nevertheless, it could not have accrued earlier
than January 21, 1998 which is the date of his last contract. Hence, the claim has not yet prescribed since
the complaint was filed on September 6, 1999. The death of a seaman during the term of employment makes
the employer liable to his heirs for death compensation benefits, but if the seaman dies after the termination
of his contract of employment, his beneficiaries are not entitled to the death benefits. Federico did not die
while he was under the employ of petitioners. His contract of employment ceased when he arrived in the
Philippines on March 30, 1998, whereas he died on April 29, 2000. Moreover, there is no showing that the

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Labor Law and Social Legislation Justice Del Castillo Digests

cancer was brought about by Federico’s stint on board the vessel. Records show that he got sick a month
after he boarded the vessel and it was more than two months after his contract had expired, that he was
diagnosed to have Hodgkin’s Disease.

PANTOLLANO v. KORPHIL SHIPPING AND MANNING CORP


G.R. No. 169575 | 30 March 2011
Prescription of Actions

DOCTRINE: A claim for death benefits under the Labor Code based on the presumption of death accrues
only after 4 years from disappearance, as provided in the Civil Code, and must be filed within 3 years
therefrom, in accordance with the prescriptive period for money claims under the Labor Code.

FACTS:
• Vedasto was an engineer on board the vessel of Korphil.
• While they were on high seas, Vedasto did not show up for duty, and despite efforts, he could not
be found in the vessel.
o He was never seen again.
• Immediately, his wife filed a claim for recovery of death benefits from Korphil. Korphil denied
saying that it is premature because under the civil code, Imelda has to wait for 4 years before
Vedasto could be declared dead.
o Upon return after 4 yrs, Korphil still denied the claim because Labor Code provides that
money claims prescribe after 3yrs.

ISSUE: Whether the claim for death benefits has prescribed.

HELD: No, it was filed within the prescriptive period. The cause of action for filing the death benefits claim
accrued only after 4 years from disappearance, in accordance with the Civil Code. At the time of
disappearance, Vedasto cannot be immediately presumed dead because the vessel was not lost and there
are many possibilities as to the state of Vedasto. Only after 4 years will the prescriptive period of 3 years
provided in the Labor Code shall begin to accrue. The claim was filed on time. It was filed after the 4 yrs
from disappearance, and within the 3yr prescription for money claims provided in the Labor Code.
Employer is liable for the death of his employee that occurred during the effectivity of the employment
contract, as in this case. Korphil is estopped from asserting that the prescriptive period should be reckoned
from the date he went missing, because it already previously represented to claimant that the claim is
premature and that she has to wait for 4 more years before the cause of action accrues.

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