Compilation of Digest Recent Jurisprudence

Case Digest on Recent Jurisprudence
In Labor Law
(2017 and 2018 )
Submitted to:
Atty. Dean Porfirio DG. Panganiban Jr.
Submitted by:
Thursday 6 – 9 PM CLASS
A.Y. 2018 2019, 1ST SEM
October 4, 2018
I. 2018 Cases
a. Retirement (Laya, vs. CA, et al., G.R. No. 205813, January 10, 2018)
i. Refusal to retire
ii. Retirement plan vs. Labor Code
1. Philippine Airlines, Inc. vs. Arjan T. Hassaram
G.R. No. 217730, June 5, 2017
b. Redundancy (American Power Conversion Corporation vs. Lim, G.R. No. 214291,
January 11, 2018)
i. Redundancy carried out by persons belonging to related companies; Labor claims
against related companies
c. Employment contract (De Roca vs. Dabuyan, et al., G.R. No. 215281, March 5,
2018)
i. Employment contract cannot take effect outside of the contracting parties
d. FASAP Case: Retrenchment (G.R. No. 178083/A.M. No. 11-10-1-SC, March 13,
2018)
i. Audited financial statement (AFS); AFS may not be presented;
ii. Judicial notice of losses;
iii. Rehiring of some of the retrenched employees; Rehabilitation;
iv. Quitclaim
II. 2017 Cases
a. Employer-Employee Relationship (Nestle Philippines, Inc. vs. Puedan, G.R. No.

220617, January 30, 2017)
i. Valencia vs. Classique Vinyl Products Corporation, G.R. No. 206390, January 30,
2017
ii. Element of Control
1. Lu vs. Enopia, G.R. No. 197899, March 6, 2017
iii. Remittance with SSS as proof of employment
1. Lu vs. Enopia, G.R. No. 197899, March 6, 2017
iv. Imposition of disciplinary action; company policy
1. Sumifru (Philippines) Corp. vs. Nagkahiusang Mamumuo sa Suyapa Farm
(Namasufa-Naflu-Kmu), G.R. No. 202091, June 7, 2017
b. Due Process in Labor Cases
c. Labor-Only Contracting
i. Valencia vs. Classique Vinyl Products Corporation, G.R. No. 206390, January 30,
2017
d. Serious misconduct
i. Maula vs. Ximex Delivery Express, Inc., G.R. No. 207838, January 25, 2017
ii. No serious misconduct but there is loss of trust
i
1. Bravo vs. Urios College (Now Father Saturnino Urios University), G.R. No.
198066, June 7, 2017
iii. No serious misconduct
1. BDO Unibank, Inc. vs. Nerbes, G.R. No. 208735, July 19, 2017
iv. Disrespect towards superior
1. Sterling Paper Products Enterprises, Inc. vs. KMM-Katipunan, G.R. No.
221493, August 2, 2017
e. Willful disobedience
i. Disobedience is not willful
ii. Penalty is too harsh
f. Totality of Infractions
i. Maula vs. Ximex Delivery Express, Inc., G.R. No. 207838, January 25, 2017
g. Disability Benefits
i. Scanmar Maritime Services, Inc. Crown Ship management Inc. vs. De Leon, G.R.
No. 199977, January 25, 2017
ii. Compensation for disability
1. Maersk Filipinas Crewing Inc., and Maersk Co. IOM Ltd. vs. Ramos, G.R. No.
184256, January 18, 2017
iii. Disability refers to loss or impairment of earning capacity and not to pain or
injury
184256, January 18, 2017
iv. Permanent Total Disability
1. Hoegh Fleet Services Phils., Inc., vs. Turallo, G.R. No. 230481, July 26, 2017
2. 120-day rule; 240-day rule
a. Crystal Shipping doctrine
i. Atienza vs. Orophil Shipping International Co., Inc., et al., G.R. No. 191049,
August 7, 2017
b. Filing before the lapse of 120 days
i. Status Maritime Corporation and Admibros Ship management Co., Ltd. vs.
Doctolero, G.R. No. 198968, January 18, 2017
c. Caderao vs. Senator Crewing (Manila), Inc., et al./Senator Crewing (Manila),
Inc., et al. vs. Caderao, G.R. No. 224532/G.R. No. 224565, June 21, 2017
d. Hoegh Fleet Services Phils., Inc., vs. Turallo, G.R. No. 230481, July 26, 2017
e. TSM Shipping Phils., Inc. vs. Patino, G.R. No. 210289, March 20, 2017
f. Aldaba vs. Career Philippines, Ship management, Inc., Columbia Ship
management Ltd., and/or
g. Verlou Carmelito, G.R. No. 218842, June 21, 2017

h. Gomez vs. Crossworld Marine Services, Inc., G.R. No. 220002, August 2,
2017
3. When findings of company physician prevail
ii
a. Jebsens Maritime, Inc., et al. vs. Rapiz, G.R. No. 218871. January 11, 2017
4. Findings of company physician vs. private doctor
a. Espere vs. NFD International Manning Agents, Inc., G.R. No. 212098, July
26, 2017
b. Perea vs. Elburg Ship management Philippines, Inc., et al., G.R. No. 206178,
August 9, 2017
5. Return of award
a. Espere vs. NFD International Manning Agents, Inc., G.R. No. 212098, July
26, 2017
6. Vergara doctrine
a. TSM Shipping Phils., Inc. vs. Patino, G.R. No. 210289, March 20, 2017
7. Third doctor
a. Caderao vs. Senator Crewing (Manila), Inc., et al./Senator Crewing (Manila),
Inc., et al. vs. Caderao,
G.R. No. 224532/G.R. No. 224565, June 21, 2017
b. North Sea Marine Services Corporation vs. Enriquez, G.R. No. 201806,
August 14, 2017
8. Ailment not complained of at the time of repatriation
a. Maunlad Trans Inc., Carnival Cruise Lines vs. Isidro, G.R. No. 222699, July
24, 2017
v. Temporary total disability
1. TSM Shipping Phils., Inc. vs. Patino, G.R. No. 210289, March 20, 2017
vi. Partial Permanent Disability
1. Gomez vs. Crossworld Marine Services, Inc., G.R. No. 220002, August 2, 2017
h. Backwages
i. Computation
1. C.I.C.M. Mission Seminaries School of Theology, Inc., Fr. Romeo Nimez, CICM
vs. Perez, G.R. No. 220506, January 18, 2017
2. United Coconut Chemicals, Inc. vs. Valmores, G.R. No. 201018, July 12, 2017
ii. Not due when dismissal is for just cause
1. Bravo vs. Urios College (Now Father Saturnino Urios University), G.R. No.
198066, June 7, 2017
i. Affidavit of service
i. Effect of failure to append
vs. Perez, G.R. No. 220506, January 18, 2017
j. Immutability of judgment
i. Re-computation of award
vs. Perez, G.R. 220506, January 18, 2017
k. Supersedeas Bond
i. Motion to reduce bond
1. Turks Shawarma Company vs. Pajaron, G.R. No. 207156. January 16, 2017
iii
l. Compensability of illness
i. No automatic compensability
1. Barsolo vs. Social Security System, G.R. No. 187950. January 11, 2017
ii. Grieg Philippines, Inc. Grieg Shipping Group vs. Gonzales, G.R. No. 228296, July
26, 2017
m. Work-related Death
i. Barsolo vs. Social Security System, G.R. No. 187950. January 11, 2017
ii. Death compensation
1. Marlow Navigation Philippines, Inc. vs. Heirs of Ganal, G.R. No. 220168, June
7, 2017
iii. Suicide of seafarer
7, 2017
2. Burden of proof; Strange behavior
a. Seapower Shipping, Ent., Inc. vs. Heirs of Warren M. Sabanal, G.R. No.
198544, June 19, 2017
iv. Notorious negligence; "in the course of"
7, 2017
2. Atienza vs. Orophil Shipping International Co., Inc., et al., G.R. No. 191049,
August 7, 2017
n. Resignation
i. Defense of resignation by employer
1. Grande vs. Philippine Nautical Training College, G.R. No. 213137, March 1,
2017
ii. Clear and convincing evidence
1. Grande vs. Philippine Nautical Training College, G.R. No. 213137, March 1,
2017
iii. Forced resignation
1. Doble vs. ABB, Inc., G.R. No. 215627, June 5, 2017
iv. Option to resign
1. Cosue vs. Ferritz Integrated Development Corporation, et al., G.R. No. 230664,
July 24, 2017
o. Abandonment of work
i. Immediate filing of illegal dismissal
1. Brown vs. Marswin Marketing, Inc., et al., G.R. No. 206981, March 15, 2017
2. Spectrum Security Services, Inc. vs. Grave, G.R. No. 196650, June 7, 2017
ii. Premature filing of labor case
1. Claudia's Kitchen, Inc. vs. Tanguin, G.R. No. 221096, June 28, 2017
p. Petition for Certiorari

i. Reglementary period vs. Petition for review on certiorari
1. Nueva Ecija II Electric Cooperative, Inc., et al. vs. Mapagu, G.R. No. 196084,
iv
February 15, 2017
ii. Consideration of errors not assigned; opening entire case for review
1. Javines vs. Xlibris a.k.a. Author Solutions, Inc., G.R. No. 214301, June 7, 2017
iii. Execution pending certiorari
11. Espere vs. NFD International Manning Agents, Inc., G.R. No. 212098, July 26,
2017
iv. Filing Motion for Reconsideration
1. Genpact Services, Inc. vs. Santosfalceso, G.R. No. 227695, July 31, 2017
v. Extension to file
1. Heavy workload of counsel
a. Adtel, Inc. vs. Valdez, G.R. No. 189942, August 9, 2017
q. Loss of trust and confidence / Willful breach of trust

i. Failure to establish breach of trust
1. Sta. Ana vs. Manila Jockey Club, Inc., G.R. No. 208459, February 15, 2017
ii. Actual and willful breach supported by substantial evidence
1. Panaligan vs. Phyvita Enterprises Corporation, G.R. No. 202086, June 21,
2017
iii. Managerial employee
1. PJ Lhuillier, Inc. vs. Camacho, G.R. No. 223073, February 22, 2017
2. Must be exercised without abuse of discretion
a. Bravo vs. Urios College (Now Father Saturnino Urios University), G.R. No.
198066, June 7, 2017
r. Project employment
i. Usually necessary and desirable
1. E. Ganzon, Inc. (EGI) vs. Ando, G.R. No. 214183, February 20, 2017
2. Herma Shipyard, Inc. vs. Oliveros, G.R. No. 208936, April 17, 2017
ii. Length of service
iii. Repeated and successive re-hiring
s. Retirement
i. Continued engagement after retirement
1. De La Salle Araneta University vs. Bernardom, G.R. No. 190809, February 13,
2017
ii. Estoppel
1. De La Salle Araneta University vs. Bernardom, G.R. No. 190809, February 13,
2017
iii. Retirement plan vs. Labor Code
1. Philippine Airlines, Inc. vs. Arjan T. Hassaram
G.R. No. 217730, June 5, 2017
t. MCLE Compliance of counsel

i. Doble vs. ABB, Inc., G.R. No. 215627, June 5, 2017
v
u. Certified true copy vs. certified photocopy
v. Work-related illness
i. No automatic compensability
1. Madridejos vs. Nyk-Fil Ship Management, Inc., G.R. No. 204262, June 7, 2017
ii. Reasonable connection
1. Espere vs. NFD International Manning Agents, Inc., G.R. No. 212098, July 26,
2017
iii. Presumption of work-relatedness; presumption of compensability
1. Atienza vs. Orophil Shipping International Co., Inc., et al., G.R. No. 191049,
August 7, 2017
2. Romana vs. Magsaysay Maritime Corporation, G.R. No. 192442, August 9, 2017
w. SSS Contributions
i. Acquittal from criminal case and extinguishment of civil liability
1. Ambassador Hotel, Inc. vs. Social Security System, G.R. No. 194137, June 21,
2017
x. Closure of business
i. Piercing the veil; alter ego doctrine
1. Zambrano vs. Philippine Carpet Manufacturing Corporation/Pacific Carpet
Manufacturing Corporation, et al., G.R. No. 224099, June 21, 2017
y. Redundancy
i. Philippine National Bank vs. Dalmacio/ Dalmacio vs. Philippine National Bank,
G.R. No. 202308/G.R. No. 202357, July 5, 2017
z. Burden of proof in illegal dismissal case

i. Cosue vs. Ferritz Integrated Development Corporation, et al., G.R. No. 230664,
July 24, 2017
aa. Graceful exit

i. Cosue vs. Ferritz Integrated Development Corporation, et al., G.R. No. 230664,
July 24, 2017
bb. Expulsion or impeachment of union officer

i. No loss of union membership
1. United Polyresins, Inc. vs. Pinuela, G.R. No. 209555, July 31, 2017
cc. Testimony
i. Recantation
1. Sterling Paper Products Enterprises, Inc. vs. KMM-Katipunan, G.R. No.
221493, August 2, 2017
dd. Post-Employment Medical Examination

i. Scanmar Maritime Services, Inc. Crown Shipmanagement Inc. vs. De Leon, G.R.
No. 199977, January 25, 2017
vi
ee. Cancellation of union registration
i. Asian Institute of Management vs. Asian Institute of Management Faculty
Association, G.R. No. 207971,
January 23, 2017
ii. De Ocampo Memorial Schools, Inc. vs. Bigkis Manggagawa sa De Ocampo
Memorial School, Inc., G.R. No. 192648, March 15, 2017
ff. Security of tenure
gg. Management prerogative

i. Transfer of employee
1. Chateu Royale Sports and Country Club, Inc. vs. Balba, G.R. No. 197492,
January 18, 2017
hh. Termination of employment

i. Stipulation to terminate is void
1. Dagasdas vs. Grand Placement and General Services Corporation, G.R. No.
205727, January 18, 2017
ii. Employment contract

i. Lex loci contractus
1. Dagasdas vs. Grand Placement and General Services Corporation, G.R. No.
205727, January 18, 2017
jj. Release, Waiver and Quitclaim

i. Dagasdas vs. Grand Placement and General Services Corporation, G.R. No.
205727, January 18, 2017
ii. Improperly notarized release and quitclaim; effects
iii. Allegation of "forced to sign"
1. Philippine National Bank vs. Dalmacio/ Dalmacio vs. Philippine National Bank,
G.R. No. 202308/G.R. 202357, July 5, 2017
kk. Appeal
i. One-day late due to unforeseen events; Perfection
184256, January 18, 2017
ii. Finality of decision for failure to appeal
iii. Consideration of errors not assigned on appeal
ll. Authority of counsel

i. Presumed authorized
184256, January 18, 2017
vii
mm. Separation benefits
i. Acceptance; Estoppel
nn. Constructive dismissal

ii. Constructive dismissal in relation to off-detail period
1. Spectrum Security Services, Inc. vs. Grave, G.R. No. 196650, June 7, 2017
oo. Off-detail status

i. Return to work order should indicate specific assignment
1. Ibon vs. Genghis Khan Security Services and/or Marietta Vallespin, G.R. No.
221085, June 19, 2017
pp. Separation pay

i. Separation pay where there is no dismissal
1. Claudia's Kitchen, Inc. vs. Tanguin, G.R. No. 221096, June 28, 2017
qq. Post employment medical examination for seafarers

i. Mandatory reporting upon repatriation
1. Andres vs. Diamon H Marine Services & Shipping Agency, Inc., et al., G.R. No.
217345, July 12, 2017
rr. Res judicata

i. Issue preclusion rule; collateral estoppel; law of the case doctrine; supervening
event
1. Philtranco Service Enterprises, Inc., et al. vs. Cual, G.R. No. 207684, July 17,
2017
viii
LABOR LAW>Labor Standards>Retirement
ALFREDO F. LAYA, JR., Petitioner

vs.
COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION,
PHILIPPINE VETERANS BANK and RICARDO A. BALBIDO, JR., Respondents
G.R. No. 205813, January 10, 2018
(En Banc)
DOCTRINE: An employee in the private sector who did not expressly agree to the terms of an early
retirement plan cannot be separated from the service before he reaches the age of 65 years. The
employer who retires the employee prematurely is guilty of illegal dismissal, and is liable to pay his
backwages and to reinstate him without loss of seniority and other benefits, unless the employee has
meanwhile reached the mandatory retirement age under the Labor Code, in which case he is entitled to
separation pay pursuant to the terms of the plan, with legal interest on the backwages and separation pay
reckoned from the finality of the decision.
FACTS: Petitioner Alfredo F. Laya, Jr. was hired by respondent Philippine Veterans Bank as its Chief
Legal Counsel with a rank of Vice President. On 14 June, 2007, petitioner was informed thru letter by the
private respondent of his retirement effective on 1 July 2007. He then requested for an extension of his
tenure for two (2) more years pursuant to the Bank's Retirement Plan (Late Retirement). On 26 June
2008, private respondent issued a memorandum directing the petitioner to continue to discharge his
official duties and functions as chief legal counsel pending his request. However on 18 July 2007,
petitioner was informed thru its president Ricardo A. Balbido Jr. that his request for an extension of tenure
was denied.
According to the petitioner, he was made aware of the retirement plan of respondent Philippine Veterans
Bank (PVB) only after he had long been employed and was shown a photocopy of the Retirement Plan
Rules and Regulations, but PVB's President Ricardo A. Balbido, Jr. had told him then that his request for
extension of his service would be denied "to avoid precedence." He sought the reconsideration of the
denial of the request for the extension of his retirement, but PVB certified his retirement from the service
as of July 1, 2007 on March 6, 2008.
On December 24, 2008, the petitioner filed his complaint for illegal dismissal against PVB and Balbido, Jr.
in the NLRC to protest his unexpected retirement. The Labor Arbiter dismissed the petitioner’s complaint
for illegal dismissal. This was confirmed by the Court of Appeals and the National Labor Relations
Commission (NLRC). Hence, the petitioner elevated the matter to the Supreme Court.
ISSUE: Whether the petitioner was validly retired by PVB at age 60?
HELD: No.
The retirement of employees in the private sector is governed by Article 287 of the Labor Code. Under
this provision, acceptance by the employees of an early retirement age option must be explicit, voluntary,
free, and uncompelled. While an employer may unilaterally retire an employee earlier than the legally
permissible ages under the Labor Code, this prerogative must be exercised pursuant to a mutually
instituted early retirement plan. In other words, only the implementation and execution of the option may
be unilateral, but not the adoption and institution of the retirement plan containing such option. For the
option to be valid, the retirement plan containing it must be voluntarily assented to by the employees or at
least by a majority of them through a bargaining representative.
In this case, the retirement plan was in the nature of a contract of adhesion, in respect to which the
petitioner was reduced to mere submission by accepting his employment, and automatically became a
member of the plan. With the plan being a contract of adhesion, to consider him to have voluntarily and
freely given his consent to the terms thereof as to warrant his being compulsorily retired at the age of 60
years is factually unwarranted.
With the petitioner having been thus dismissed pursuant to the retirement provision that he had not
knowingly and voluntarily agreed to, PVB was guilty of illegal dismissal as to him. Being an illegally
dismissed employee, he was entitled to the reliefs provided under Article 279 of the Labor Code.
Submitted by: Aguilar, Cherry Kerr

LABOR LAW > Labor Standards > Retirement plan
PHILIPPINE AIRLINES, INC, Petitioner

vs
ARJAN T. HASSARAM, Respondent
G.R. No. 217730, June 5, 2017
(First Division)
DOCTRINE: Retirement plan of company that is superior to the provisions of Article 287 shall apply to a
retiring employee.
FACTS: Harassam had applied for retirement from PAL in August 2000 after rendering 24 years of
service as a pilot, but his application was denied. Instead, PAL informed him that he had lost his
employment in the company as of 9 June 1998, in view of his failure to comply with the Return to Work
Order issued by the Secretary of Labor against members of the Airline Pilots Association of the
Philippines (ALPAP) on 7 June 1998.
Hence, Hassaram filed a complaint against PAL for illegal dismissal and the payment of retirement
benefits, damages, and attorney's fees.
PAL contended that if at all, Hassaram was entitled only to retirement benefits of ₱5,000 for every year of
service pursuant to the Collective Bargaining Agreement (CBA) between PAL and ALPAP.
LA awarded retirement benefits and attorney's fees to Hassaram. PAL appealed the LA's Decision to the
NLRC. PAL contended that Hassaram was not entitled to retirement benefits, because he had earlier
been terminated from employment for defying the Return to Work Order. It further claimed that the LA's
Decision contradicted the ruling in PAL v. ALPAP, in which this Court awarded retirement benefits to
qualified PAL pilots under the company's own retirement plans, instead of the Labor Code.
The NLRC granted PAL's Motion for Reconsideration. Reversing its earlier Decision, it set aside the ruling
of the LA on account of Hassaram's receipt of retirement benefits under the Plan. This payment,
according to the NLRC, was sufficient to discharge his claim for retirement pay.
The CA issued the assailed Decision reversing the NLRC and reinstating the ruling of the LA. The
appellate court declared that the funds received under the Plan were not the retirement benefits
contemplated by law. Hence, it ruled that Hassaram was still entitled to receive retirement benefits in the
amount of ₱2, 111,984.60 pursuant to Article 287 of the Labor Code.
PAL sought reconsideration of the ruling, but its motion was denied.
ISSUE: Whether or not Hassaram is entitled to receive retirement benefits under Article 287 of the Labor
Code despite availment of benefit under the company’s retirement plan.
HELD: The Supreme Court granted the petition.
In Philippine Airlines, Inc. v. Airline Pilots Association of the Phils. the Court utilized these provisions to
explain the nature of the Plan: The PAL Pilots' Retirement Benefit Plan is a retirement fund raised from
contributions exclusively from [PALI of amounts equivalent to 20% of each pilot's gross monthly pay.
Based on the foregoing characterization, the Court included the amount received from the Plan in the
computation of the retirement pay of the pilot involved in that case. The same rule was later applied
to Elegir v. Philippine Airlines, Inc.: Apart from the abovementioned benefit, the petitioner is also entitled
to the equity of the retirement fund under PAL Pilots' Retirement Benefit Plan, which pertains to the
retirement fund raised from contributions exclusively from PAL of amounts equivalent to 20% of each
pilot's gross monthly pay.
Considering that the very same retirement plan is involved in this petition, we adopt the pronouncements
in the above cases. We therefore rule that the amount of ₱4,456,8l7.75 received by Hassaram from the
PAL Plan formed part of his retirement pay.
As held in Elegir v. Philippine Airlines, Inc., Art. 287 of the Labor Code is applicable only to a situation
where (l) there is no CBA or other applicable employment contract providing for retirement benefits for an
employee, or (2) there is a CBA or other applicable employment contract providing for retirement benefits
for an employee, but it is below the requirement set by law.
It is clear from the records that Hassaram is a member of ALP AP and as such, is entitled to benefits from
both the retirement plans under the 196 7 PAL-ALPAP CBA and the Plan. In contrast, Article 287 would
entitle a retiring pilot to the equivalent of only 22.5 days of his monthly salary for every year of service
1 This scheme was thus considered by the Court as inferior to the retirement plans granted by PAL to the
latter's pilots in Elegir and PAL.
One-half (112) month salary means 22.S days: 15 days plus 2.5 days representing one-twelfth (1/12) of
the 13th month pay and the remaining 5 days for service incentive leave. Comparing the benefits under
the two (2) retirement schemes, it can readily be perceived that the 22.5 days worth of salary for every
year of service provided under Article 287 of the Labor Code cannot match the 240% of salary or almost
two and a half worth of monthly salary per year of service provided under the PAL Pilots' Retirement
Benefit Plan, which will be further added to the ₱125,000.00 to which the petitioner is entitled under the
PAL-ALP AP Retirement Plan.
Following the above pronouncement, we therefore declare that Hassaram's retirement benefits must be
computed based on the retirement plans of PAL, and not on Article 287 of the Labor Code. In view of the
undisputed fact that Hassaram has received his benefits under the Plan, he is now entitled to claim only
his remaining benefits under the CBA, i.e. the amount of ₱l20,000 (24 years x ₱5,000) for his 24 years of
service to the company.
Submitted by: Alarcon, Maria Teresa

L.
LABOR LAW> Labor Standards> Redundancy
AMERICAN POWER CONVERSION CORPORATION; AMERICAN POWER CONVERSION

SINGAPORE PTE. LTD.; AMERICAN POWER CONVERSION (A.P.C.), B.V.; AMERICAN POWER
CONVERSION (PHILS.) B.V.; DAVID W. PLUMER, JR.; GEORGE KONG; and ALICIA HENDY,
Petitioner
vs.
JAYSON YU LIM, Respondent
G.R. No. 214291, January 11, 2018
(First Division)
DOCTRINE: Redundancy exists where the services of an employee are in excess of what is reasonably
demanded by the actual Requirements of the enterprise. Succinctly put, a position is redundant where it
is superfluous, and superfluity of a position or positions may be the outcome of a number of factors. such
as over hiring of workers, decreased volume of business, or dropping of a particular product line or
service activity previously manufactured or undertaken by the enterprise.
FACTS: Respondent Jason Yu Lim was hired to serve as the Country Manager of American Power
Conversion Philippine Sales Office, which was not registered with the Securities and Exchange
Commission (SEC) but whose function then was to act as a liaison office for American Power Conversion
Corporation (APCC) –an American corporation -and provide sales, marketing, and service support to the
local distributor and consumers of APCC in the Philippines.
APCC is engaged in designing, developing, manufacturing and marketing of power protection and
management solutions for computer, communication, and electronic applications.
The only SEC-registered corporation then was American Power Conversion (Phils.), Inc. (APCPI) with
manufacturing and production facilities in Cavite and Laguna. Since American Power Conversion
Philippine Sales Office was unregistered but doing business in the country, Lim was included in the list of
employees and payroll of APCPI. He was also instructed to create a petty cash fund using his own
personal bank account to answer for the day-to-day operations of American Power Conversion Philippine
Sales Office.
Thereafter. American Power Conversion (Phils.) B.V. (APCP By) was established in the country and it
acquired APCPI and continued the latter's business here. Later. Lim was promoted as Regional Manager
for APC North ASEAN. a division of APC ASEAN.
As Regional for APC North ASEAN, Lim handled sales and marketing operations for Thailand, the
Philippines, Vietnam, Myanmar, Cambodia, Laos, and Guam, and reported directly to Larry Truong
(Truong), Country General Manager for the entire APC ASEAN and officer of APCC. Truong was not
connected in any way with APCP By per its SEC registration, is licensed to engage only in the
manufacture of computer-related products.
In an electronic mail (e-mail) message, Truong announced Lim's appointment together with the
appointment of David Shao (Shao) as Manager for South ASEAN which covered Singapore, Malaysia,
Indonesia, and Brunei. Truong noted Lim's steady and principled leadership since he joined APC
Philippines in 1998 that "doubled the revenue despite the fact that the country economy has improved
little since the Financial Crisis."
Afterwards, Truong was replaced by APCC, et al. George Kong. During their stint with Kong, Lim and
Shao supposedly discovered irregularities committed by Kong, which they reported to Leanne Cunnold
(Cunnold), General Manager for APC- South and Kong's immediate superior. Cunnold took up the matter
with APCC, et al. Alicia Hendy (Hendy), Human Resource Director for APCP By. Lim and Shao also took
the matter directly to David Plumer (Plumer), Vice President for Asia Pacific of APC Japan, who advised
them to discuss the matter directly with Kong.
Upon being apprised of the issues against him, Kong sent three e-mail messages to Lim and the other six
members of the sales and marketing team indicating his displeasure and that he took the matter quite
personally. In the last of his e-mail messages, he remarked -―'and finally, thank you for the 7 knives in my
back."
Kong and Hendy met with Shao, where the latter was asked to resign. When he refused, he was right
then and there terminated from employment with immediate effect. The Letter of Termination handed to
him did not specify any reason why he was being fired from work, and was written on the official
stationery of American Power Conversion Singapore Pte, Ltd. (APCS) and signed by its Human Resource
Manager, Samantha Phang (Phang).
Thereafter, Kong arrived in the country and met with Lim on where he informed the latter of a supposed
company restructuring which rendered his position as Regional Manager for North ASEAN redundant.
Lim was furnished by the Human Resource Manager ofAPCP By Maximo del Ponso, Jr. (Del Ponso) with
a Termination Letter of even date.
The reason behind the redundancy as stated in the letter is that the changing directions of the business,
and pursuant to need to realign and streamline the APAC Sales organization, the management decided
to reconfigure APAC Sales function and as a result of such, it declared the position of Regional Manager -
North ASEAN as redundant.
Lim's counsel proceeded to the Department of Labor and Employment (DOLE) to verify if APCC, et al.
gave the requisite notice of termination due to redundancy. In a Certification, the DOLE confirmed that
there was no record on file of a notice of termination filed by any of APCC, et al.
Lim was paid severance pay, but in a written demand, he sought reinstatement, the payment of
backwages and allowances/benefits, and damages for his claimed malicious and illegal termination. In a
written reply by APCC's counsel, APCC, et al. refused to accede.
Likewise, APCP By through Hendy acknowledged to Lim that should he be questioned about the use by
APCC of his private bank account, APCC, et al. will offer the fullest possible accounting of APCC's past
actions.
Lim filed a labor case against APCC, et al. for illegal dismissal and recovery of money claims. He claimed
that he was illegally dismissed by APCC, et al. using a fabricated and contrived
restructuring/reorganization/redundancy program. The truth according to him was that his dismissal was
motivated by bad faith and malice out of Kong's desire to retaliate after he questioned Kong's
irregularities. APCC, et al. conspired and acted together to illegally remove him from his position through
a fabricated redundancy.
Lim further alleged that in effecting the purported redundancy program, APCC, et al. did not comply with
the requirements laid down by the Labor Code, particularly the giving of notice to the DOLE. which thus
renders the dismissal null and void. Lim demanded payment for moral and exemplary damages and
attorney's fees. He also prayed for reinstatement with full backwages, allowances and other benefits.
APCC, et al. averred that Lim should have impleaded only APCP By, as it is with the latter that Lim
entered complaint against the other APCC, et al. should thus be dismissed.
Further, APCC, et al. alleged that when Plumer was appointed Vice President for APC Asia Pacific
operations, a reorganization/restructuring of the APC Asia Pacific sales organization was undertaken, in
that its operations were divided into I) Enterprise Sales -which shall be responsible for selling directly to
customers, and 2) Transactional Sales -which shall be tasked to handle distributions. network. and
channels accounts. For this reason, there was a need to abolish the positions of Regional Manager -
North ASEAN and Regional Manager South ASEAN because they were no longer aligned with the new
business model -and in their stead, the positions of Enterprise Sales Manager and Transactional
Business Manager were created.
APCC, et al. posited that these two new positions required a different
set of functions including job description, qualifications, and experience, which Lim did not possess. Two
new employees with the requisite qualifications have been appointed to these two new positions.
According to APCC, et al., in effecting the redundancy program, they complied with the requirements of
law. APCP By's del Ponso sent to DOLE Region IV at Calamba, Laguna a written notice of the
redundancy program to be implemented, but it did not contain the number and names of workers
intended to be terminated from work, including that of Lim's.
For APCC, et al.. Lim's dismissal was thus for cause. Lim is not entitled to his monetary claims on
account of his valid dismissal due to redundancy. Reinstatement is no longer feasible since his former
position has been abolished. Lim is not entitled to the rest of his claims and that the individual officers
named in the complaint cannot be held personally liable as they acted in their official capacity and without
bad malice. Thus, they prayed for the dismissal of Lim's complaint.
ISSUE: Whether or not redundancy is effective if carried out by persons belonging to related companies
but not by the company that hired the employee?
HELD: The SC denied the petition. According to the SC, when Lim was hired directly by APCC, an
American entity that was not registered to
conduct business here, to sell its products and services here, he was tossed over to another APC
corporation, APCPI (now APCP By), a Philippine-registered manufacturing corporation, where he was
ostensibly included in the list of employees and the payroll.
In other words. APCC sanctioned the use of APCP By as Lim's cover, from where he conducted his sales
operations for APCC. To further conceal and promote APCC's covert sales operations here, Lim was
required to create a petty cash fund using his own personal bank account to answer for the daily
expenses and operations of the American Power Conversion Philippine Sales Office. Thus, APCC
conducted business in the Philippines as an unregistered and unregulated enterprise. Consequently, it
did not pay taxes despite doing business here and earning income as a result. APCP By was not
engaged in sales, as it is licensed to engage only in the manufacture of computer-related products -yet, it
holds Lim in its payroll.
Meanwhile. Lim took orders from and came under the supervision and control of APCS and Kong from
Singapore. This arrangement and manner of conducting business by APCC, et al. is illegal. Being illegal,
this should have been early on remedied by APCC, et al., including Plumer, Kong, and Hendy, who are
presumed to know, by the very nature of their positions and business, how legitimate business is
supposed to be conducted in this country, that is, by registering the business to allow regulation and
taxation by the authorities. Yet they did not. and continued with this illegal arrangement to further their
business here and avoid their legal obligations to the public and the government.
Everything seemed to go well for APCC, et al. with their illegitimate business arrangement. For his part,
Lim-who was at the losing end of the bargain given that it was his name and reputation on the line as he
was working for an unregistered, unregulated, and untaxed foreign enterprise and doing business with the
public -prodded APCC to formalize and declare its existence in order to free himself from the precarious
position that APCC has placed him in. The SC found the situation unique in that Lim was hired directly by
APCC of the but was being paid his remuneration by a separate entity- APCP By of the Philippines, and
is supervised and controlled by APCS from Singapore and APCJapan -all in furtherance ofAPCC's
objective of doing business here unfettered by government regulation. The SC concluded that APCC, et
al. are, for all practical purposes, Lim’s employers. He was selected and engaged by APCC. His salaries
and benefits were paid by APCP By and he is under the supervision and control of APCS and APCJapan.
The SC observed that there is no such thing in legitimate employment arrangements.
For the SC, such bizarre labor relation was made possible and necessary only by APCC, et al.’s common
objective: to enable APCC to skirt the law. For all legal purposes, APCC is Lim's employer.
Therefore, the SC declared the subject redundancy scheme a sham, the same being an integral part of
APCC, et al.'s illegitimate scheme to defraud the public -including Lim - and the State.
Submitted by: Austria, Don Rodel A.

LABOR LAW >Labor Standards>Employment Contract
ROLANDO DE ROCA, petitioner

vs.
EDUARDO C. DABUYAN, JENNIFER A. BRANZUELA, JENNYLYN A. RICARTE, and
HERMINIGILDO F. SABANATE,respondents.
G.R. No. 215281, March 5, 2018
(First Division)
DOCTRINE: "Contracts take effect only between the parties, their assigns and heirs, except in case
where the rights and obligations arising from the contract are not transmissible by their nature, or by
stipulation or by provision of law." The contract of employment between respondents, on the one hand,
and Oceanic and Ewayan on the other, is effective only between them; it does not extend to petitioner,
who is not a party thereto.
FACTS: In 2012, private respondents filed a complaint for illegal dismissal against "RAF Mansion Hotel
Old Management and New Management and Victoriano Ewayan." Later, private respondents amended
the complaint and included petitioner Rolando De Roca as [co]-respondent.
Petitioner De Roca filed his motion to dismiss on the ground of lack of jurisdiction. He alleged that, while
he was the owner of RAF Mansion Hotel building, the same was being leased by Victoriano Ewayan, the
owner of Oceanics Travel and Tour Agency.
Petitioner claims that Ewayan was the employer of private respondents. Consequently, he asserted that
there was no employer-employee relationship between him and private respondents and the labor arbiter
had no jurisdiction.
Thereafter, the labor arbiter rendered a decision directing petitioner De Roca to pay backwages and
other monetary award to private respondents.
Petitioner De Roca argues that the Labor Arbiter's decision is null and void; that he was not at any time
the respondents' employer, but merely the owner-lessor of the premises where Ewayan and his
Oceanic Travel and Tours Agency operated the RAF Mansion Hotel where respondents were employed
as hotel staff; that he was impleaded in the case only because respondents could no longer trace the
whereabouts of their true employer, Ewayan, who appears to have absconded; that the labor tribunals
and the CA strictly applied the labor procedural laws and rules, when the rule in labor cases is that
technical rules of procedure are not binding and must yield to the merits of the case and the interests of
justice and due process;
ISSUE: Whether or not petitioner De Roca is solidarily liable with EWAYAN/OCEANIC TRAVEL AND
TOUR AGENCY to private respondents, despite the patent lack of employer-employee relationship
between the petitioner and private respondents.
HELD: NO.
All throughout the proceedings, petitioner has insisted that he was not the employer of respondents;
that he did not hire the respondents, nor pay their salaries, nor exercise supervision or control over
them, nor did he have the power to terminate their services. In support of his claim, he attached copies
of a lease agreement — a Contract of Lease of a Building — executed by him and Oceanic Tours and
Travel Agency represented by Ewayan. The agreement would show that petitioner was the owner of a
building called the RAF Mansion Hotel in Roxas Boulevard, Baclaran, Parañaque City; that on
September 25, 2007, Oceanic agreed to lease the entire premises of RAF Mansion Hotel except for
certain portions of the building where petitioner conducted his personal business and which were
leased out to other occupants, including a bank; that the lease would be for a period of five years
Thus, it would appear from the facts on record and the evidence that petitioner's building was an
existing hotel called the "RAF Mansion Hotel," which Oceanic agreed to continue to operate under the
same name. There is no connection between petitioner and Oceanic other than through the lease
agreement executed by them; they are not partners in the operation of RAF Mansion Hotel. It just so
happens that Oceanic decided to continue operating the hotel using the original name — "RAF Mansion
Hotel."
"Contracts take effect only between the parties, their assigns and heirs, except in case where the rights
and obligations arising from the contract are not transmissible by their nature, or by stipulation or by
provision of law." The contract of employment between respondents, on the one hand, and Oceanic
and Ewayan on the other, is effective only between them; it does not extend to petitioner, who is not a
party thereto. His only role is as lessor of the premises which Oceanic leased to operate as a hotel; he
cannot be deemed as respondent's employer.
Submitted by: Bacurio, Kenneth

Bernard
LABOR LAW >Labor Standards>Retrenchment
FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THE PHILIPPINES (FASAP), Petitioner

vs.
PHILIPPINE AIRLINES, INC., PATRIA CHIONG and THE COURT OF APPEALS, Respondents
IN RE: LETTERS OF ATTY. ESTELITO P. MENDOZA RE: G.R. NO. 178083 - FLIGHT ATTENDANTS
AND STEWARDS ASSOCIATION OF THE PHILIPPINES (F ASAP) vs. PHILIPPINE AIRLINES, INC.,
ETAL.
G.R. No. 178083,March 13, 2018
(EN BANC)
DOCTRINE: Article 298. Closure of Establishment and Reduction of Personnel. - The employer may also
terminate the employment of any employee due to the installation of labor saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a
written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of labor saving devices or redundancy,
the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month
pay or to at least one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closure or cessation of operations of establishment or
undertaking not due to serious business losses or financial reverses, the separation pay shall be
equivalent to one (1) month pay or to at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.
FACTS: Resolving the appeal of FASAP, the Third Division of the Court promulgated its decision on July
22, 2008 reversing the decision promulgated on August 23, 2006 by the Court of Appeals (CA) and
entering a new one finding PAL guilty of unlawful retrenchment.The Third Division thereby differed from
the decision of the Court of Appeals (CA), which had pronounced in its appealed decision promulgated on
August 23, 20066 that the remaining issue between the parties concerned the manner by which PAL had
carried out the retrenchment program. Instead, the Third Division disbelieved the veracity of PAL’s claim
of severe financial losses, and concluded that PAL had not established its severe financial losses
because of its non-presentation of audited financial statements. It further concluded that PAL had
implemented the retrenchment program in bad faith, and had not used fair and reasonable criteria in
selecting the employees to be retrenched.
ISSUE: Whether the grounds for retrenchment were established.
HELD: PAL implemented a valid retrenchment program
Retrenchment or downsizing is a mode of terminating employment initiated by the employer through no

fault of the employee and without prejudice to the latter, resorted to by management during periods of
business recession, industrial depression or seasonal fluctuations or during lulls over shortage of
materials. It is a reduction in manpower, a measure utilized by an employer to minimize business losses
incurred in the operation of its business.
Anent retrenchment, Article 29886 of the Labor Code provides as follows:
Article 298. Closure of Establishment and Reduction of Personnel. - The employer may also terminate the
employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the
workers and the Ministry of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closure or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay
or to at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least
six (6) months shall be considered one (1) whole year.
Accordingly, the employer may resort to retrenchment in order to avert serious business losses. To justify
such retrenchment, the following conditions must be present, namely:
1. The retrenchment must be reasonably necessary and likely to prevent business losses;
2. The losses, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or,
if only expected, are reasonably imminent;
3. The expected or actual losses must be proved by sufficient and convincing evidence;
4. The retrenchment must be in good faith for the advancement of its interest and not to defeat or
circumvent the employees’ right to security of tenure; and
5. There must be fair and reasonable criteria in ascertaining who would be dismissed and who would be
retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial
hardship for certain workers.87
Based on the July 22, 2008 decision, PAL failed to: (1) prove its financial losses because it did not submit
its audited financial statements as evidence; (2) observe good faith in implementing the retrenchment
program; and (3) apply a fair and reasonable criteria in selecting who would be terminated.
Upon a critical review of the records, we are convinced that PAL had met all the standards in effecting a
valid retrenchment.
PAL’s serious financial losses were duly established
PAL was discharged of the burden to prove serious financial losses in view of FASAP’s admission
PAL laments the unfair and unjust conclusion reached in the July 22, 2008 decision to the effect that it
had not proved its financial losses due to its non-submission of audited financial statements. It points out
that the matter of financial losses had not been raised as an issue before the Labor Arbiter, the NLRC,
the CA, and even in the petition in G.R. No. 178083 in view of FASAP’s admission of PAL having
sustained serious losses; and that PAL’s having been placed under rehabilitation sufficiently indicated the
financial distress that it was suffering.
It is quite notable that the matter of PAL’s financial distress had originated from the complaint filed by
FASAP whereby it raised the sole issue of ―Whether or not respondents committed Unfair Labor
Practice." FASAP believed that PAL, in terminating the 1,400 cabin crew members, had violated Section
23, Article VII and Section 31, Article IX of the 1995-2000 PAL-FASAP CBA. Interestingly, FASAP
averred in its position paper therein that it was not opposed to the retrenchment program because it
understood PAL’s financial troubles; and that it was only questioning the manner and lack of standard in
carrying out the retrenchment, thus:
At the outset, it must be pointed out that complainant was never opposed to the retrenchment program
itself, as it understands respondent PAL’s financial troubles. In fact, complainant religiously cooperated
with respondents in their quest for a workable solution to the company-threatening problem. Attached
herewith as Annexes ―A‖ to ―D‖ are the minutes of its meetings with respondent PAL’s representatives
showing complainant’s active participation in the deliberations on the issue.
What complainant vehemently objects to are the manner and the lack of criteria or standard by which the
retrenchment program was implemented or carried out, despite the fact that there are available criteria or
standard that respondents could have utilized or relied on in reducing its workforce. In adopting a
retrenchment program that was fashioned after the evil prejudices and personal biases of respondent
Patria Chiong, respondent PAL grossly violated at least two important provisions of its CBA with
complainant-Article VII, Section 23 and Article IX, Sections 31 and 32.
Submitted by: Siquian,Celine

LABOR LAW >Labor Standards> Employer-Employee Relationship
Nestlé Philippines, Inc., petitioner

vs.
Puedan, Jr., respondents
G.R. No. 220617. January 30, 2017
(First Division)
DOCTRINE: The imposition of minimum standards concerning sales, marketing, finance and
operations are nothing more than an exercise of sound business practice to increase sales and maximize
profits.
FACTS: The instant case arose from a complaint for illegal dismissal, damages, and attorney’s fees filed
by respondents against ODSI and NPI.
ODSI averred that it is a company engaged in the business of buying, selling, distributing, and
marketing of goods and commodities of every kind and it enters into all kinds of contracts for the
acquisition thereof.
Respondents alleged that on various dates, ODSI and NPI hired them to sell various NPI
products in the assigned covered area. After some time, respondents demanded that they be considered
regular employees of NPI, but they were directed to sign contracts of employment with ODSI instead.
When respondents refused to comply with such directives, NPI and ODSI terminated them from their
position. Thus, they were constrained to file the complaint, claiming that: (a) ODSI is a labor-only
contractor and, thus, they should be deemed regular employees of NPI; and (b) there was no just or
authorized cause for their dismissal.
For its part, ODSI admitted that on various dates, it hired respondents as its employees and
assigned them to execute the Distributorship Agreement10 it entered with NPI. However, the business
relationship between NPI and ODSI turned sour when the former’s sales department badgered the latter
regarding the sales targets. Eventually,
NPI downsized its marketing and promotional support from ODSI which resulted to business reverses and
in the latter’s filing of a petition for corporate rehabilitation and, subsequently, the closure of its Nestlé unit
due to the termination of the Distributorship Agreement and the failure of rehabilitation. Under the
foregoing circumstances, ODSI argued that respondents were not dismissed but merely put in floating
status.
Labor Arbiter:
It dismissed the complaint for lack of merit, but awarded nominal and attorney’s fees. It found that
(a) respondents were unable to prove that they were NPI employees; and (b) respondents were not
illegally dismissed as ODSI had indeed closed down its operations due to business losses.
NLRC:
It reversed and set aside the LA ruling. It found that while ODSI indeed shut down its operations,
it failed to prove that such closure was due to serious business losses as it did not present evidence, e.g.,
financial statements, to corroborate its claims. Further, the NLRC found ODSI to be a labor-only
contractor of NPI, considering that: (a) ODSI had no substantial capitalization or investment; (b)
respondents performed activities directly related to NPI’s principal business; and (c) the fact that
respondents’ employment depended on the continuous supply of NPI products shows that ODSI had not
been carrying an independent business according to its own manner and method. Consequently, the
NLRC deemed NPI to be respondents’ true employer, and thus, ordered it jointly and severally liable with
ODSI to pay the monetary claims of respondents.
CA:
It affirmed the NLRC’s ruling. It ruled that that despite ODSI and NPI’s contract being
denominated as a ―Distributorship Agreement,‖ it contained provisions demonstrating a labor-only
contracting arrangement between them, as well as NPI’s exercise of control over the business of ODSI.
Moreover, the CA pointed out that: (a) there was nothing in the records which showed that ODSI had
substantial capital to undertake an independent business; and (b) respondents performed tasks essential
to NPI’s business. Hence, this petition.
ISSUE: Whether or not ODSI is a labor-only contractor of NPI, and consequently, NPI is respondents’
true employer and, thus, deemed jointly and severally liable with ODSI for respondents’ monetary claims?
HELD: No.
The Court held in Steelcase Inc. v. Design International Selections Inc. that the imposition of
minimum standards concerning sales, marketing, finance and operations are nothing more than an
exercise of sound business practice to increase sales and maximize profits.
In the case at hand, a closer examination of the Distributorship Agreement reveals that the
relationship of NPI and ODSI is not that of a principal and a contractor (regardless of whether labor-only
or independent), but that of a seller and a buyer/reseller. As stipulated in the Distributorship Agreement,
NPI agreed to sell its products to ODSI at discounted prices,52 which in turn will be resold to identified
customers, ensuring in the process the integrity and quality of the said products based on the standards
agreed upon by the parties.
Thus, the stipulations in the Distributorship Agreement hardly demonstrate control on the part of
NPI over the means and methods by which ODSI performs its business, nor were they intended to dictate
how ODSI shall conduct its business as a distributor. Otherwise stated, the stipulations in the
Distributorship Agreement do not operate to control or fix the methodology on how ODSI should do its
business as a distributor of NPI products, but merely provide rules of conduct or guidelines towards the
achievement of a mutually desired result which in this case is the sale of NPI products to the end
consumer.
Thus, the foregoing circumstances show that ODSI was not a labor only contractor of NPI; hence,
the latter cannot be deemed the true employer of respondents. As a consequence, NPI cannot be held
jointly and severally liable to ODSI’s monetary obligations towards respondents.
Submitted by: Bayot, Kristine Valerie

S.Anjell L.
JACK C. VALENCIA, Petitioner,

vs.
CLASSIQUE VINYL PRODUCTS CORPORATION, JOHNNY CHANG (Owner) and/or CANTINGAS
MANPOWER SERVICES, Respondents.
G.R. No. 206390, January 30, 2017
(First Division)
DOCTRINE: It does not necessarily follow that where the duties of the employee consist of activities
usually necessary or desirable in the usual business of the employer, the parties are forbidden from
agreeing on a period of time for the performance of such activities. There is thus nothing essentially
contradictory between a definite period of employment and the nature of the employee's duties.
In Order to determine the existence of an employer-employee relationship, the following yardstick had
been consistently applied: (l) the selection and engagement; (2) payment of wages; (3) power of
dismissal and; (4) the power to control the employee[']s conduct.
FACTS: Valencia filed with the Labor Arbiter a Complaint for Underpayment of Salary and Overtime Pay;
th
Non-Payment of Holiday Pay, Service Incentive Leave Pay, 13 Month Pay; Regularization; Moral and
Exemplary Damages; Attorney's Fees and for illegal dismisal Fees against respondents Classique Vinyl
Products Corporation (Classique Vinyl) and its owner Johnny Chang (Chang) and/or respondent
Cantingas Manpower Services (CMS).
Valencia averred that he already attained a regular status having employed by Classique Vinyl thru
Cantingas Manpower Services (CMS) and performed his work regularly under the supervision and control
of the respondent which lasted for four years until his dismissal.
Classique Vinyl denied having employer-employee relationship with Valencia and instead pointed to CMS
as his principal employer being the one who actually selected, engaged, and contracted out Valencia's
services. It averred that CMS would only deploy Valencia to Classique Vinyl whenever there was an
urgent specific task or temporary work which was intermittent and limited to three to four months only in
each specific year. Classique Vinyl further contended that Valencia's performance was exclusively and
directly supervised by CMS and that his wages and other benefits were also paid by the said agency. It
likewise denied dismissing Valencia from work and instead averred that on April 16, 2010, while deployed
with Classique Vinyl, Valencia went on a prolonged absence from work for reasons only known to him. In
sum, Classique Vinyl asserted that there was no employer-employee relationship between it and
Valencia, hence, it could not have illegally dismissed the latter nor can it be held liable for Valencia's
monetary claims. Even assuming that Valencia is entitled to monetary benefits, Classique Vinyl averred
that it cannot be made to pay the same since it is an establishment regularly employing less than 10
workers. As such, it is exempted from paying the prescribed wage orders in its area and other benefits
under the Labor Code.
The LA dismissed the complaint for lack of merit. Valencia appealed the decision to the National Labor
Relations Commission (NLRC) and to the CA, which both denied the appeal subsequently.
ISSUE: Whether there exists an employer-employee relationship between Classique Vinyl and Valencia
HELD: No.
Indeed, there is no hard and fast rule designed to establish the aforementioned elements of employer-
employee relationship. "Any competent and relevant evidence to prove the relationship may be admitted."
In this case, however, Valencia failed to present competent evidence, documentary or otherwise, to
support his claimed employer-employee relationship between him and Classique Vinyl. All he advanced
were mere factual assertions unsupported by proof.
Submitted by: Bodopol, Adolf Jr.
JOAQUIN LU, petitioner

vs.
TIRSO ENOPIA, et al., respondents
G.R. No. 197899, March 6, 2017
(Second Division)
DOCTRINE: It is settled that no particular form of evidence is required to prove the existence of an
employer-employee relationship. Any competent and relevant evidence to prove the relationship may be
admitted.
FACTS: Respondents were hired as crew members of F/B MG-28 owned by petitioner who is the sole
proprietor of Mommy Gina Tuna Resources [MGTR]. Petitioner proposed the signing of a Joint Venture
Fishing Agreement between them, but respondents refused to sign the same as they opposed the one-
year term provided in the agreement. According to the respondents, petitioner terminated their services
and then because of their refusal to sign the agreement. Respondents filed their complaint for illegal
dismissal. In their Position Paper, petitioners alleged that their refusal to sign the Joint Venture Fishing
Agreement is not a just cause for their termination. On the other hand, petitioner denied having dismissed
respondents, claiming that their relationship was one of joint venture where he provided the vessel and
other fishing paraphernalia, while petitioners, as industrial partners, provided labor by fishing in the high
seas.
ISSUE: Whether or not an employer-employee relationship existed between petitioner and respondents.
HELD: YES.
In determining the existence of an employer-employee relationship, the following elements are

considered: (1) the selection and engagement of the workers; (2) the power to control the worker's
conduct; (3) the payment of wages by whatever means; and (4) the power of dismissal. All these
elements are present in this case.
In this case, petitioner contends that it was the piado who hired respondents, however, it was shown by
the latter's evidence that the employer stated in their Social Security System (SSS) online inquiry system
printouts was MGTR, which is owned by petitioner. We have gone over these printouts and found that the
date of the SSS remitted contributions coincided with the date of respondents' employment with
petitioner. Petitioner failed to rebut such evidence. Thus, the fact that petitioner had registered the
respondents with SSS is proof that they were indeed his employees. The coverage of the Social Security
Law is predicated on the existence of an employer-employee relationship.
It was established that petitioner exercised control over respondents. It should be remembered that the
control test merely calls for the existence of the right to control, and not necessarily the exercise thereof.
It is not essential that the employer actually supervises the performance of duties by the employee. It is
enough that the former has a right to wield the power.
Submitted by: Bonquin, Jezrael

B.Jr.S.Anjell L.
LABOR LAW >Labor Standards>Four Fold Test
SUMIFRU (PHILIPPINES) CORP. (surviving entity of a merger with Fresh Banana Agricultural
Corporation and other corporations), Petitioner
vs.
NAGKAHIUSANG MAMUMUO SA SUYAPA FARM1 (NAMASUFA-NAFLU-KMU), Respondent
G.R. No. 202091, June 7, 2017
(First Division)
DOCTRINE: As defined, substantial evidence is "that amount of relevant evidence as a reasonable mind
might accept as adequate to support a conclusion, even if other minds, equally reasonable, might
conceivably opine otherwise." Here, the Med-Arbiter found, based on documents submitted by the
parties, that Sumifru gave instructions to the workers on how to go about their work, what time they were
supposed to report for work, required monitoring sheets as they went about their jobs, and provided the
materials used in the packing plant.
In affirming the Med-Arbiter, the DOLE Secretary relied on the documents submitted by the parties and
ascertained that Sumifru indeed exercised control over the workers in PP 90. The DOLE Secretary found
that the element of control was present because Sumifru required monitoring sheets and imposed
disciplinary actions for non-compliance with "No Helmet - No Entry" "No ID - No Entry" policies.
FACTS: SUMIFRU is a domestic corporation and is engaged in the buying marketing and exportation of
Cavendish bananas. Respondent Nag kahiusang Mamumumuo sa Suyapa Farm is a labor organization
affiliated with the National Federation of Labor Unions and Kulusang Maya Uno. Respondent filed a
petition for certification election before the Department of Labor and Employment in Davao they sought to
represent all the rank and file employees of the packing plant 90 of Fresh Banana Agricultural
Corporation SUMIFRU they claimed that there was no employer employee relationship between them
and the employees of packing plant 90 because they were merely contractualize
ISSUE: Whether there exist a employee employer relationship
HELD: Yes there exist an employee employer relationship SUMIFRU gave instructions to the workers on
how to go about their work what time they were supposed to report for work they provided the employees
with the materials used in the packing plant. Moreover they even imposed disciplinary actions for non
compliance with the ―No helmet No Entry‖ and the ― No ID no Entry‖
Submitted by: Chen, Timothy

B.Jr.S.Anjell L.
LABOR LAW >Labor Standards> Labor-Only Contracting
JACK C. VALENCIA, Petitioner,

vs.
CLASSIQUE VINYL PRODUCTS CORPORATION, JOHNNY CHANG (Owner) and/or CANTINGAS
MANPOWER SERVICES, Respondents.
G.R. No. 206390, January 30, 2017
(First Division)
DOCTRINE: It is an oft-repeated rule that in labor cases, as in other administrative and quasi-judicial
proceedings, 'the quantum of proof necessary is substantial evidence, or such amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion.The burden of proof
rests upon the party who asserts the affirmative of an issue.
FACTS: Petitioner Valencia filed with the Labor Arbiter a Complaint for Underpayment of Salary and
th
Overtime Pay; Non-Payment of Holiday Pay, Service Incentive Leave Pay, 13 Month Pay;
Regularization; Moral and Exemplary Damages; Attorney's Fees; and illegal dismaissal against
respondents Classique Vinyl Products Corporation (Classique Vinyl) and its owner Johnny Chang
(Chang) and/or respondent Cantingas Manpower Services (CMS). Valencia alleged that he applied for
work with Classique Vinyl but was told by the latter's personnel office to proceed to CMS, a local
manpower agency, and therein submit the requirements for employment. Upon submission thereof, CMS
made him sign a contract of employment but no copy of the same was given to him. He then proceeded
to Classique Vinyl for interview and thereafter started working for the company. He further averred that he
worked for Classique Vinyl for four years until his dismissal. Hence, by operation of law, he had already
attained the status of a regular employee of his true employer, Classique Vinyl, since according to him,
CMS is a mere labor-only contractor. Valencia, therefore, argued that Classique Vinyl should be held
guilty of illegal dismissal for failing to comply with the twin-notice requirement when it dismissed him from
the service and be made to pay for his monetary claims.
Classique Vinyl, for its part, denied having hired Valencia and instead pointed to CMS as the one who
actually selected, engaged, and contracted out Valencia's services. It averred that CMS would only
deploy Valencia to Classique Vinyl whenever there was an urgent specific task or temporary work and
these occasions. It stressed that Valencia's deployment to Classique Vinyl was intermittent and limited to
three to four months only in each specific year. Classique Vinyl further contended that Valencia's
performance was exclusively and directly supervised by CMS and that his wages and other benefits were
also paid by the said agency. It likewise denied dismissing Valencia from work and instead averred that
while deployed with Classique Vinyl, Valencia went on a prolonged absence from work for reasons only
known to him. In sum, Classique Vinyl asserted that there was no employer-employee relationship
between it and Valencia, hence, it could not have illegally dismissed the latter nor can it be held liable for
Valencia's monetary claims. Even assuming that Valencia is entitled to monetary benefits, Classique Vinyl
averred that it cannot be made to pay the same since it is an establishment regularly employing less than
10 workers. As such, it is exempted from paying the prescribed wage orders in its area and other benefits
under the Labor Code. At any rate, Classique Vinyl insisted that Valencia's true employer was CMS, the
latter being an independent contractor as shown by the fact that it was duly incorporated and registered
not only with the Securities and Exhange Commission but also with the Department of Labor and
Employment; and, that it has substantial capital or investment in connection with the work performed and
services rendered by its employees to clients.
CMS, on the other hand, denied any employer-employee relationship between it and Valencia. It
contended that after it deployed Valencia to Classique Vinyl, it was already the latter which exercised full
control and supervision over him. Also, Valencia's wages were paid by Classique Vinyl only that it was
CMS which physically handed the same to Valencia. The Labor Arbiter dismissed the case which was
affirmed by the NLRC and Court of Appeals. Hence this petition.
ISSUE: Whether or not there is employer-employee relationship between Classique Vinyl and Valencia.
HELD: NO.
The court held that it is not a trier of facts and will not review the factual findings of the lower tribunals as
these are generally binding and conclusive. While there are recognized exceptions, none of them applies
in this case. Even if otherwise, the Court is not inclined to depart from the uniform findings of the Labor
Arbiter, the NLRC and the CA. "It is an oft-repeated rule that in labor cases, as in other administrative and
quasi-judicial proceedings, 'the quantum of proof necessary is substantial evidence, or such amount of
relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.The burden
of proof rests upon the party who asserts the affirmative of an issue’. Since it is Valencia here who is
claiming to be an employee of Classique Vinyl, it is thus incumbent upon him to proffer evidence to prove
the existence of employer-employee relationship between them. He "needs to show by substantial
evidence that he was indeed an employee of the company against which he claims illegal dismissal.
Corollary, the burden to prove the elements of an employer-employee relationship, viz.: (1) the selection
and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
power of control, lies upon Valencia. In this case, however, Valencia failed to present competent
evidence, documentary or otherwise, to support his claimed employer-employee relationship between him
and Classique Vinyl. All he advanced were mere factual assertions unsupported by proof. In fact, most of
Valencia's allegations even militate against his claim that Classique Vinyl was his true employer. For one,
Valencia stated in his Sinumpaang Salaysay that his application was actually received and processed by
CMS which required him to submit the necessary requirements for employment. Upon submission
thereof, it was CMS that caused him to sign an employment contract, which upon perusal, is actually a
contract between him and CMS. It was only after he was engaged as a contractual employee of CMS that
he was deployed to Classique Vinyl. Clearly, Valencia's selection and engagement was undertaken by
CMS and conversely, this negates the existence of such element insofar as Classique Vinyl is concerned.
For another, Valencia himself acknowledged that the pay slips he submitted do not bear the name of
Classique Vinyl. A clear showing of the element of payment of wages by Classique Vinyl is therefore
absent. As for his claim that his work was supervised by Classique Vinyl, the Court finds the same as a
self-serving assertion unworthy of credence. On the other hand, the employment contract which Valencia
signed with CMS categorically states that the latter possessed not only the power of control but also of
dismissal over him. The facts of this case 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 Vinyl
and Valencia. Thus the petition is denied and the ruling in the LA, NLRC and CA is affirmed
Submitted by: De Guzman, Joey

Albert P.
LABOR LAW>Labor Standards>Serious Misconduct
LEO T. MAULA,petitioner
v.
XIMEX DELIVERY EXPRESS, INC.,respondent
G.R. No. 207838, January 25, 2017
(Second Division)
DOCTRINE: In cases of termination for a just cause, an employee must be given "ample opportunity to
be heard and to defend himself." Thus, the opportunity to be heard afforded by law to the employee is
qualified by the word "ample" which ordinarily means "considerably more than adequate or sufficient." In
this regard, the phrase "ample opportunity to be heard" can be reasonably interpreted as extensive
enough to cover actual hearing or conference. To this extent, Section 2(d), Rule I of the Implementing
Rules of Book VI of the Labor Code is in conformity with Article 277(b).
FACTS: Petitioner was hired by the respondent as Operation Staff on March 23, 2002. As Operation
Staff, he performed a variety of duties such as but not limited to documentation, checker, dispatcher or
airfreight coordinator. He was on call anytime of the day or night. He was rendering night duty which
started at 6:00p.m. More often it went beyond the normal eight hour schedule such that he normally
rendered duty until 6:00 or 7:00 the following morning. This was without payment of the corresponding
night shift differential and overtime pay.
Petitioner's employment was uneventful until came February 18, 2009 when the [respondent's] HRD
required him and some other employees to sign a form sub-titled "Personal Data for New Hires." When he
inquired about it he was told it was nothing but merely for the twenty peso increase which the company
owner allegedly wanted to see. He could not help but entertain doubts on the scheme as they were
hurriedly made to sign the same. It also [appeared] from the form that the designated salary/wage [was]
daily instead of on a monthly basis. x x x.
On March 4, 2009, petitioner filed a complaint before the National Conciliation and Mediation Board.
During the hearing held on March 25, 2009, it was stipulated/agreed upon that:
(1) Company's counsel admits that petitioner is a regular employee;
(2) There shall be no retaliatory action between petitioner and the company arising from this complaint;
(3) Issues anent BIR and SSS shall be brought to the proper forum.
xxx
Not long thereafter, or on March 25, 2009, in the evening, a supposed problem cropped up. A misroute of
cargo was reported and the company [cast] the whole blame on the petitioner. It was alleged that he
erroneously wrote the label on the box - the name and destination, and allegedly [was] the one who
checked the cargo. The imputation is quite absurd because it was the client who actually wrote the name
and destination, whereas, it was not the petitioner but his co-employee who checked the cargo. The
following day, he received a memorandum charging him with "negligence in performing duties."
On April 2, 2009 at 4:00 p.m., he received another memorandum of '"reassignment" wherein he was
directed to report effective April 2, 2009 to Richard Omalza and Ferdinand Marzan in another department
of the company. But then, at around 4:30 p.m. of the same day, he was instructed by the HR manager to
proceed to his former office for him to train his replacement. He went inside the warehouse and at around
6:00 p.m. he began teaching his replacement. At 8:00 p.m.[,] his replacement went outside. He waited for
sometime and came to know later when he verified outside that the person already went straight home.
When he went back inside, his supervisor insisted [to] him to continue with his former work, but due to the
"reassignment paper" he had some reservations. Sensing he might again be framed up and maliciously
accused of such as what happened on March 25, 2009, he thus refused. Around 10:30 p.m., he went
home. x x x.
The following day, an attempt to serve another memorandum was made on him. This time he was made
to explain by the HR Manager why he did not perform his former work and not report to his reassignment.
It only [validated] his apprehension of a set-up. For how could he be at two places at [the same] time (his
former work is situated in Sucat, Parafiaque, whereas, his new assignment is in FTI, Taguig City). It bears
emphasizing that the directive for him to continue discharging his former duties was merely verbal. At this
point, petitioner lost his composure. Exasperated, he refused to receive the memorandum and thus
retorted "Seguro na abnormal na ang utak mo" as it dawned on him that they were out looking for every
means possible to pin him down.
Nonetheless, he reported to his reassignment in FTI Taguig on April3, 2009. There he was served with
the memorandum suspending him from work for thirty (30) days effective April 4, 2009 for alleged
"Serious misconduct and willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work." His apprehension was thus confirmed. x x x.
Respondent countered that: it is a duly registered domestic corporation engaged in the business of cargo
forwarding and truck-hauling; petitioner and several other employees misinterpreted the use of its old
form "For New Hires," that they were relegated to the status of new employees when in fact they have
been employed for quite some time already; after the conciliation conference before the NCMB, it relied
on his promise that he would not disturb the peace in the company premises, which proved to be wishful
thinking; as to the misdelivered cargo of Globe Telecoms, initial investigation disclosed that he was
tasked to check the correct information in the package to ensure prompt delivery, hence, a Memorandum
dated March 27, 2009 was issued to him to explain his side; thereafter, it was learned from his co-
employees that he abandoned his work a few hours after logging in, which was a serious disobedience to
the HR Head's order for him to teach the new employees assigned to his group; also, he refused to
accept a company order with respect to his transfer of assignment to another client, Fullerlife; for the
series of willful disobedience, a Memorandum dated April 3, 2009 was personally served to him by
Gorospe, but he repeatedly refused to receive the memorandum and howled at her, "Seguro na abnormal
ang utak mo!"; his arrogant actuations, which were directed against a female superior who never made
any provocation and in front of many employees, were contemptuous, gravely improper, and breeds
disrespect, even ignominy, against the company and its officers; on April 3, 2009, another memorandum
was issued to give him the opportunity to explain his side and to inform him of his preventive suspension
for thirty (30) days pending investigation; and the management, after evaluating the gravity of the charges
and the number of infractions, decided to dismiss him from employment through a notice of dismissal
dated April 27, 2009.
The LA ruled for petitioner, opining that:[Petitioner] had cause for alarm and exasperation it appearing
that, after he joined a complaint in the NCMB, in a brief period from [March 27, 2009] to [April 3, 2009],
[he] was served with a memo on alleged mishandling which turned out to be baseless, he was reassigned
with no clear explanation and was being charged for disobedience of which was not eventually acted
upon. There is no indication that the altercation between [him] and the HR Manager was of such
aggravated character as to constitute serious misconduct.
As an illegally dismissed employee[,] is entitled to the twin relief of reinstatement with backwages.
However, considering the attendant circumstances, it would not be to the best interest of the [petitioner] to
be reinstated as he would be working under an unjustified suspicion from his employer. Thus, this office
finds the award of full backwages from the time of dismissal on [April27, 2009] up to [the] date of this
decision and separation pay of one month pay per year of service in order.
On appeal, the NLRC affirmed in toto the LA's decision.
Still aggrieved, respondent elevated the case to the CA, which reversed and set aside the December 15,
2010 Resolution and the July 20, 2011 Decision of the NLRC.
ISSUE: WON MAULA WAS ILLEGALLY DISMISSED.

HELD: YES. Respondent manifestly failed to prove that petitioner's alleged act constitutes serious
misconduct. Misconduct is improper or wrong conduct; it is the transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent
24
and not mere error in judgment. The misconduct, to be serious within the meaning of the Labor Code,
25
must be of such a grave and aggravated character and not merely trivial or unimportant. Thus, for
misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) it must relate
to the performance of the employee's duties; and (c) it must show that the employee has become unfit to
26
continue working for the employer.
While this Court held in past decisions that accusatory and inflammatory language used by an employee
to the employer or superior can be a ground for dismissal or termination, the circumstances peculiar to
this case find the previous rulings inapplicable. The admittedly insulting and unbecoming language
uttered by petitioner to the HR Manager on April 3, 2009 should be viewed with reasonable leniency in
light of the fact that it was committed under an emotionally charged state. We agree with the labor arbiter
and the NLRC that the on-the-spur-of-the-moment outburst of petitioner, he having reached his breaking
point, was due to what he perceived as successive retaliatory and orchestrated actions of respondent.
Indeed, there was only lapse in judgment rather than a premeditated defiance of authority.
Further, petitioner's purported "thug-like" demeanor is not serious in nature. Despite the "grave
embarassment" supposedly caused on Gorospe, she did not even take any separate action independent
of the company. Likewise, respondent did not elaborate exactly how and to what extent that its "nature of
business" and "industrial peace" were damaged by petitioner's misconduct. It was not shown in detail that
he has become unfit to continue working for the company and that the continuance of his services is
patently inimical to respondent's interest.
This Court finds the penalty of dismissal too harsh. Not every case of insubordination or willful
disobedience by an employee reasonably deserves the penalty of dismissal because the penalty to be
32
imposed on an erring employee must be commensurate with the gravity of his or her offense. Petitioner's
termination from employment is also inappropriate considering that he had been with respondent
company for seven (7) years and he had no previous derogatory record. It is settled that notwithstanding
the existence of a just cause, dismissal should not be imposed, as it is too severe a penalty, if the
employee had been employed for a considerable length of time in the service of his or her employer, and
33
such employment is untainted by any kind of dishonesty and irregularity.
Manner of dismissal
The procedural due process requirement was not complied with. King of Kings Transport, Inc. v.
34
Mamac, provided for the following rules m terminating the services of employees:
(1) The first written notice to be served on the employees should contain the specific causes or grounds
for termination against them, and a directive that the employees are given the opportunity to submit their
written explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules
means every kind of assistance that management must accord to the employees to enable them to
prepare adequately for their defense. This should be construed as a period of at least five (5) calendar
days from receipt of the notice to give the employees an opportunity to study the accusation against
them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will
raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their
explanation and defenses, the notice should contain a detailed narration of the facts and circumstances
that will serve as basis for the charge against the employees. A general description of the charge will not
suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or
which among the grounds under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct
a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify
their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut
the evidence presented against them by the management. During the hearing or conference, the
employees are given the chance to defend themselves personally, with the assistance of a representative
or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an
opportunity to come to an amicable settlement.
(3) After determining that termination of employment is justified, the employers shall serve the employees
a written notice of termination indicating that: (1) all circumstances involving the charge against the
employees have been considered; and (2) rounds have been established to justify the severance of their
35
employment.
In sum, the following are the guiding principles in connection with the hearing requirement in dismissal
cases:
(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the
employee to answer the charges against him and submit evidence in support of his defense, whether in a
hearing, conference or some other fair, just and reasonable way.
(b) a formal hearing or conference becomes mandatory only when requested by the employee in writing
or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar
circumstances justify it.
(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or
37
conference" requirement in the implementing rules and regulations.
In this case, Memorandum dated April 3, 2009 does not contain the following: a detailed narration of facts
and circumstances for petitioner to intelligently prepare his explanation and defenses, the specific
company rule violated and the corresponding penalty therefor, and a directive giving him at least five (5)
calendar days to submit a written explanation. No ample opportunity to be heard was also accorded to
petitioner. Instead of devising a just way to get the side of petitioner through testimonial and/or
documentary evidence, respondent took advantage of his "refusal" to file a written explanation. This
should not be so. An employer is duty-bound to exert earnest efforts to arrive at a settlement of its
differences with the employee. While a full adversarial hearing or conference is not required, there must
40
be a fair and reasonable opportunity for the employee to explain the controversy at hand. Finally, the
termination letter issued by respondent miserably failed to satisfy the requisite contents of a valid notice
of termination. Instead of discussing the facts and circumstances to support the violation of the alleged
company rule that imposed a penalty of dismissal, the letter merely repeats the self-serving accusations
stated in Memorandum dated April 3, 2009.
Preventive Suspension
41
Similar to a case, no hearing or conference was called with respect to petitioner's alleged misconduct.
Instead, he was immediately placed under preventive suspension for thirty (30) days and was dismissed
while he was still serving his suspension. According to respondent, it is proper to suspend him pending
investigation because his continued employment poses serious and imminent threat to the life of the
company officials and also endanger the operation of the business of respondent, which is a common
42
carrier duty bound to observe extra ordinary diligence.
Preventive suspension may be legally imposed against an employee whose alleged violation is the
subject of an investigation. The purpose of suspension is to prevent harm or injury to the company as well
43
as to fellow employees. The pertinent rules dealing with preventive suspension are found in Sections 8
and 9 of Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, which read:
SEC. 8. Preventive suspension. - The employer may place the worker concerned under preventive
suspension if his continued employment poses a serious and imminent threat to the life or property of the
employer or of his co-workers.
SEC. 9. Period of suspension. - No preventive suspension shall last longer than thirty (30) days. The
employer shall thereafter reinstate the worker in his former or in a substantially equivalent position or the
employer may extend the period of suspension provided that during the period of extension, he pays the
wages and other benefits due to the worker. In such case, the worker shall not be bound to reimburse the
amount paid to him during the extension if the employer decides, after completion of the hearing, to
dismiss the worker.
As succinctly stated above, preventive suspension is justified where the employee's continued
employment poses a serious and imminent threat to the life or property of the employer or of the
44
employee's co-workers. Without this kind of threat, preventive suspension is not proper. Here, it cannot
be said that petitioner posed a danger on the lives of the officers or employees of respondent or their
properties. Being one of the Operation Staff, which was a rank and file position, he could not and would
not be able to sabotage the operations of respondent. The difficulty of finding a logical and reasonable
connection between his assigned tasks and the necessity of his preventive suspension is apparent from
the fact that even respondent was not able to present concrete evidence to support its general allegation.
Submitted by: Escol, Hanzel Grace

LABOR LAW>Labor Standards> No serious misconduct but there is loss of trust
YOLANDO T. BRAVO, Petitioner

vs.
URIOS COLLEGE (NOW FATHER SATURNINO URI OS UNIVERSITY) and/or FR. JOHN CHRISTIAN
U. YOUNG,, Respondents
G.R. No. 198066, June 7, 2017
(Second Division)
DOCTRINE: A dismissal based on willful breach of trust or loss of trust and confidence under Article 297
of the Labor Code entails the concurrence of two (2) conditions.
FACTS: Bravo was employed as a part-time teacher in 1988 by Urios College, now called Father
Saturnino Urios University. When Urios College organized committee to formulate a new "ranking system
for non-academic employees for school year 2001-2002. Bravo was designated as the school's
comptroller from June 1, 2002 to May 31, 2002.
The Comptroller and the Vice-President for Finance performed similar functions, which included follow up
of payroll preparation, verification of daily cash vouchers, and certification of checks issued by the school.
Bravo further suggested that since he assumed the duties of Comptroller and Vice-President for Finance,
his salary scale should be upgraded. The recommendations were accepted by the committee and
directed a salary adjustment schedule for the new ranking system.
Meanwhile, Urios College decided to undertake a structural reorganization. During this period, Bravo
occupied the Comptroller position in a "hold-over" capacity until May 31, 2003. He was reappointed to the
same position, which expired on May 31, 2004. Bravo was then designated as a full-time teacher in the
college department for school year 2004-2005.
The committee found that the ranking system for school year 2001-2002 caused salary distortions among
several employees. There were also discrepancies in the salary adjustments of Bravo and of two (2) other
employees, namely, Nena A. Turgo and Cherry I. Tabada. The committee discovered that "the
Comptroller's Office solely prepared and implemented the salary adjustment schedule" without prior
approval from the Human Resources Department.
The committee recommended, among others, that Bravo be administratively charged for serious
misconduct or willful breach of trust under Article 282 of the Labor Code.Bravo allegedly misclassified
several positions and miscomputed his and other employees' salaries.
The committee found that Bravo floated the idea of his salary adjustment, which Urios College never
formally approved. The committee also discovered an irregularity in the implementation of the ranking
system for school year 2001—2002. Flordeliz V. Rosero (Rosero) of the Human Resources Department
attested that Bravo failed to follow the school's protocol in computing employees' salaries.
According to Rosero, the Human Resources Department would prepare a summary table for each
department containing the names of employees, their respective ranks, and the points they earned from
their regular evaluation. The accomplished summary tables were forwarded to the Comptroller's Office,
which would then designate each employee's salary based on a salary scale. When the ranking system
for school year 2001-2002 was implemented, the Comptroller's Office prepared its own summary table,
which did not indicate each employee's rank or bear the signature of the Human Resources Department
Head.
Bravo was found guilty of serious misconduct for which he was ordered to return the sum of P179,319.16,
representing overpayment of his monthly salary. He received a copy of the investigation committee's
decision on July 15, 2005.
On July 25, 2005, Urios College notified Bravo of its decision to terminate his services for serious
misconduct and loss of trust and confidence. Upon receipt of the termination letter, Bravo immediately
filed before Executive Labor Arbiter Benjamin E. Pelaez a complaint for illegal dismissal with a prayer for
the payment of separation pay, damages, and attorney's fees.
PRINCIPLES
Article 297. [282] Termination by Employer. — An employer may terminate an employment for any of the
following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representatives; and
(e) Other causes analogous to the foregoing.
ISSUE/S:
1. Whether petitioner's employment was terminated for a just cause;
2. Whether petitioner was deprived of procedural due process; and
3. Whether petitioner is entitled to the payment of separation pay, back wages, and attorney's fees.
HELD:
1. Yes, in termination based on just causes, the employer must comply with procedural due process by
furnishing the employee a written notice containing the specific grounds or causes for dismissal. The
notice must also direct the employee to submit his or her written explanation within a reasonable period
from the receipt of the notice. Afterwards, the employer must give the employee ample opportunity to be
heard and defend himself or herself. A hearing, however, is not a condition sine qua non. A formal
hearing only becomes mandatory in termination cases when so required under company rules or when
the employee requests for it.
In this case, respondent complied with all the requirements of procedural due process in terminating
petitioner's employment. Respondent furnished petitioner a show cause memo stating the specific
grounds for dismissal. The show cause memo also required petitioner to answer the charges by
submitting a written explanation. Respondent even informed petitioner that he may avail the services of
counsel. Respondent then conducted a thorough investigation. Three (3) hearings were conducted on
separate occasions. The findings of the investigation committee were then sent to petitioner. Lastly,
petitioner was given a notice of termination containing respondent's final decision.
2. Yes. Ordinarily, employees play no part in selecting the members of the investigating committee. That
petitioner was not given the chance to comment on the selection of the members of the investigating
committee does not mean that he was deprived of due process. In addition, there is no evidence
indicating that the investigating committee was biased against petitioner. Hence, there is no merit in
petitioner's claim that he was deprived of due process.
3. No, Under Article 294 of the Labor Code, the reliefs of an illegally dismissed employee are
reinstatement and full back wages. "Back wages is a form of relief that restores the income that was lost
by reason of [the employee's] dismissal" from employment. It is "computed from the time that [the
employee's] compensation was withheld . . . [until] his [or her] actual reinstatement. ―However, when
reinstatement is no longer feasible, separation pay is awarded.
Considering that there was a just cause for terminating petitioner from employment, there is no basis to
award him separation pay and back wages. There are also no factual and legal bases to award attorney's
fees to petitioner.
Submitted by: Elauria, J. Paulo

Relunia
LABOR LAW>Labor Standards> No serious misconduct
BDO UNIBANK, INC. (FORMERLY EQUITABLE PCI BANK), Petitioner,

vs.
NESTOR N. NERBES AND ARMENIA F. SURAVILLA, Respondents.
G.R. No. 208735, July 19, 2017
(Third Division)
DOCTRINE: Not every case of insubordination or willful disobedience by an employee reasonably

deserves the penalty of dismissal because the penalty to be imposed on an erring employee must be
commensurate with the gravity of his or her offense. It is settled that notwithstanding the existence of a
just cause, dismissal should not be imposed, as it is too severe a penalty, if the employee had been
employed for a considerable length of time in the service of his or her employer, and such employment is
untainted by any kind of dishonesty and irregularity.
FACTS: Respondents were employees of the Petitioner bank and members of EPCIBEU (Union). An
election of officers of EPCIBEU was held wherein Respondents won as President and Executive VP. The
protest of the losing candidates was effectively dismissed by DOLE-NCR.
After taking their oath, Respondents notified the bank of their decision to exercise their privilege under the
CBA which allows the President and the Executive Vice President to be on full-time leave for the duration
of their term of office in order to devote their time in maintaining industrial peace. They anchored their
right to immediately assume their respective positions on Rule XV, Section 5 of DO No. 09, Series of
1997 which, in part, provides that "Upon resolution of the protest, the committee shall immediately
proclaim the winners and the latter may assume their positions immediately."
Losing candidates appealed to the BLR and due to the pendency of said appeal, the bank disapproved
the Respondent’s union leaves and were directed to refrain from being absent and to report back to work,
in which the Respondents failed to comply. Consequently, the bank issued show cause Memoranda
directing the Respondents to explain why no disciplinary action should be imposed against them.
Administrative hearings were then conducted wherein the bank found Respondents guilty of serious
misconduct and willful disobedience and imposed upon them the penalty of dismissal. Nerbes and
Suravilla then filed before the LA a complaint for ULP, illegal dismissal and money claims.
ISSUE: Whether or not Respondents’ refusal to report to work despite the bank's order for them to do so
constitutes disobedience of such a willful character as to justify their dismissal from service.
HELD: NO
Refusal to return to work was not characterized by a wrongful and perverse attitude to warrant
dismissal
Misconduct is defined as an improper or wrong conduct. It is a transgression of some established and

and not mere error in judgment. To be a valid cause for dismissal, such misconduct must be of grave and
aggravated character and not merely trivial or unimportant. The misconduct must also be related to the
performance of the employee's duties showing him to be unfit to continue working for the employer and
41
that the employee's act or conduct was performed with wrongful intent.
On the other hand, valid dismissal on the ground of willful disobedience requires the concurrence of twin
requisites: (1) the employee's assailed conduct must have been willful or intentional, the willfulness being
characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable,
lawful, made known to the employee and must pertain to the duties which he had been engaged to
discharge.
As correctly held by the CA, the return to work order made by the bank is reasonable and lawful, and the
act required for Nerbes and Suravilla relates to the performance of their duties. The point of contention is
whether their refusal to return to work was willful or intentional and, if so, whether such willful or
intentional conduct is attended by a wrongful and perverse attitude.
In this case, Nerbes and Suravilla's failure to report for work despite the disapproval of their application
for leave was clearly intentional. However, though their refusal to do so may have been intentional, such
was not characterized by a wrongful and perverse attitude or with deliberate disregard of their duties as
such. At the time Nerbes and Suravilla notified the bank of their intent to avail of their union leaves, they
were already proclaimed as winners and in fact took their respective oaths of office. x x x
Nerbes and Suravilla's belief that they are entitled to immediately assume their positions as union officers
and thereby entitled to union leaves is not completely bereft of basis. For one, they based the exercise of
such privilege on the existing CBA, the terms of which the bank has not demonstrated to be inapplicable.
For another, it was only upon being proclaimed as winners did they assume their respective positions
which, under Department Order No. 09, take place immediately.
On the other hand, the bank's disapproval of union leaves and return to work order were essentially
based on the pendency of the appeal filed by Nerbes and Suravilla's opponents before the BLR. To the
bank, the appeal before the BLR defeated the immediately executory nature of Nerbes and Suravilla's
proclamation. Even then, their failure to report for work can hardly be equated as a perverse defiance of
the bank's orders as they believed that such appeal could not have stayed their immediate proclamation
and assumption to office for, after all, a doubtful or difficult question of law may be the basis of good faith.
As to which interpretation is correct is beside the point and, hence, should be addressed at a more
appropriate forum at a proper time.
So too, the Court finds that the penalty of dismissal in this case is harsh and severe. Not every case of
insubordination or willful disobedience by an employee reasonably deserves the penalty of dismissal
because the penalty to be imposed on an erring employee must be commensurate with the gravity of his
or her offense. It is settled that notwithstanding the existence of a just cause, dismissal should not be
imposed, as it is too severe a penalty, if the employee had been employed for a considerable length of
time in the service of his or her employer, and such employment is untainted by any kind of dishonesty
and irregularity. We note that aside from the subject incident, Nerbes and Suravilla were not previously
charged with any other offense or irregularity. Considering the surrounding facts, termination of Nerbes
and Suravilla's services was a disproportionately heavy penalty.
Submitted by: Del Rosario, Eunice

LABOR LAW > Labor Standards > Disrespect towards superior
STERLING PAPER PRODUCTS ENTERPRISES, INC., petitioner

vs.
KMM-KATIPUNAN and RAYMOND Z. ESPONGA, respondents.
G.R. No. 221493, August 2, 2017
(Second Division)
DOCTRINE: A recantation does not necessarily cancel an earlier declaration. The rule is settled that in
cases where the previous testimony is retracted and a subsequent different, if not contrary, testimony is
made by the same witness, the test to decide which testimony to believe is one of comparison coupled
with the application of the general rules of evidence.
FACTS: Sterling Paper Products Enterprises, Inc. (Sterling) hired respondent Raymond Z. Esponga,
as machine operator.
Sterling averred that on June 26, 2010, their supervisor Mercy Vinoya (Vinoya), found Esponga and his
co-employees about to take a nap on the sheeter machine. She called their attention and prohibited
them from taking a nap thereon for safety reasons.
Esponga and his co-employees then transferred to the mango tree near the staff house. When Vinoya
passed by the staff house, she heard Esponga utter,"Huwag maingay, puro bawal." She then
confronted Esponga, who responded in a loud and disrespectful tone, "Puro kayo bawal, bakit bawal ba
magpahinga?"
When Vinoya turned away, Esponga gave her the "dirty finger" sign in front of his co-employees and
said "Wala ka pala eh, puro ka dakdak. Baka pag ako nagsalita hindi mo kayanin." The incident was
witnessed by Mylene Pesimo (Pesimo), who executed a handwritten account thereon.
Esponga was found guilty of gross and serious misconduct, gross disrespect to superior and habitual
negligence, Sterling sent a termination notice. This prompted Esponga and KMM-Katipunan to file a
complaint for illegal dismissal, unfair labor practice, damages, and attorney's fees against Sterling.
ISSUE: Whether or not the recantation of a witness’ testimony will necessarily cancel an earlier
declaration
HELD: NO.
In cases of illegal dismissal, the employer bears the burden of proof to prove that the termination was
for a valid or authorized cause. In support of its allegation, Sterling submitted the handwritten
statement of Pesimo who witnessed the incident between Esponga and Vinoya on June 26, 2010.
Pesimo, however, recanted her statement.
A recantation does not necessarily cancel an earlier declaration. The rule is settled that in cases where
the previous testimony is retracted and a subsequent different, if not contrary, testimony is made by the
same witness, the test to decide which testimony to believe is one of comparison coupled with the
application of the general rules of evidence. A testimony solemnly given in court should not be set aside
and disregarded lightly, and before this can be done, both the previous testimony and the subsequent
one should be carefully compared and juxtaposed, the circumstances under which each was made,
carefully and keenly scrutinized, and the reasons and motives for the change discriminately analysed.
In this case, Pesimo's earlier statement was more credible as there was no proof, much less an
allegation, that the same was made under force or intimidation. It must be noted that Pesimo's recantation
was made only after Esponga came to see her. Nevertheless, in a text message she sent to Vinoya,
Pesimo did not deny the contents of her earlier statement. She merely expressed concern over
Esponga's discovery that she had executed a sworn statement corroborating Vinoya's narration of the
incident. Thus, her earlier statement

LABOR LAW>Labor Standards> No serious misconduct
BDO UNIBANK, INC. (FORMERLY EQUITABLE PCI BANK), Petitioner,

vs.
NESTOR N. NERBES AND ARMENIA F. SURAVILLA, Respondents.
G.R. No. 208735, July 19, 2017
(Third Division)
DOCTRINE: Not every case of insubordination or willful disobedience by an employee reasonably

deserves the penalty of dismissal because the penalty to be imposed on an erring employee must be
commensurate with the gravity of his or her offense. It is settled that notwithstanding the existence of a
just cause, dismissal should not be imposed, as it is too severe a penalty, if the employee had been
employed for a considerable length of time in the service of his or her employer, and such employment is
untainted by any kind of dishonesty and irregularity.
FACTS: Respondents were employees of the Petitioner bank and members of EPCIBEU (Union). An
election of officers of EPCIBEU was held wherein Respondents won as President and Executive VP. The
protest of the losing candidates was effectively dismissed by DOLE-NCR.
After taking their oath, Respondents notified the bank of their decision to exercise their privilege under the
CBA which allows the President and the Executive Vice President to be on full-time leave for the duration
of their term of office in order to devote their time in maintaining industrial peace. They anchored their
right to immediately assume their respective positions on Rule XV, Section 5 of DO No. 09, Series of
1997 which, in part, provides that "Upon resolution of the protest, the committee shall immediately
proclaim the winners and the latter may assume their positions immediately."
Losing candidates appealed to the BLR and due to the pendency of said appeal, the bank disapproved
the Respondent’s union leaves and were directed to refrain from being absent and to report back to work,
in which the Respondents failed to comply. Consequently, the bank issued show cause Memoranda
directing the Respondents to explain why no disciplinary action should be imposed against them.
Administrative hearings were then conducted wherein the bank found Respondents guilty of serious
misconduct and willful disobedience and imposed upon them the penalty of dismissal. Nerbes and
Suravilla then filed before the LA a complaint for ULP, illegal dismissal and money claims.
ISSUE: Whether or not Respondents’ refusal to report to work despite the bank's order for them to do so
constitutes disobedience of such a willful character as to justify their dismissal from service.
HELD: NO
Refusal to return to work was not characterized by a wrongful and perverse attitude to warrant
dismissal
Misconduct is defined as an improper or wrong conduct. It is a transgression of some established and

and not mere error in judgment. To be a valid cause for dismissal, such misconduct must be of grave and
aggravated character and not merely trivial or unimportant. The misconduct must also be related to the
performance of the employee's duties showing him to be unfit to continue working for the employer and
41
that the employee's act or conduct was performed with wrongful intent.
On the other hand, valid dismissal on the ground of willful disobedience requires the concurrence of twin
requisites: (1) the employee's assailed conduct must have been willful or intentional, the willfulness being
characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable,
lawful, made known to the employee and must pertain to the duties which he had been engaged to
discharge.
As correctly held by the CA, the return to work order made by the bank is reasonable and lawful, and the
act required for Nerbes and Suravilla relates to the performance of their duties. The point of contention is
whether their refusal to return to work was willful or intentional and, if so, whether such willful or
intentional conduct is attended by a wrongful and perverse attitude.
In this case, Nerbes and Suravilla's failure to report for work despite the disapproval of their application
for leave was clearly intentional. However, though their refusal to do so may have been intentional, such
was not characterized by a wrongful and perverse attitude or with deliberate disregard of their duties as
such. At the time Nerbes and Suravilla notified the bank of their intent to avail of their union leaves, they
were already proclaimed as winners and in fact took their respective oaths of office. x x x
Nerbes and Suravilla's belief that they are entitled to immediately assume their positions as union officers
and thereby entitled to union leaves is not completely bereft of basis. For one, they based the exercise of
such privilege on the existing CBA, the terms of which the bank has not demonstrated to be inapplicable.
For another, it was only upon being proclaimed as winners did they assume their respective positions
which, under Department Order No. 09, take place immediately.
On the other hand, the bank's disapproval of union leaves and return to work order were essentially
based on the pendency of the appeal filed by Nerbes and Suravilla's opponents before the BLR. To the
bank, the appeal before the BLR defeated the immediately executory nature of Nerbes and Suravilla's
proclamation. Even then, their failure to report for work can hardly be equated as a perverse defiance of
the bank's orders as they believed that such appeal could not have stayed their immediate proclamation
and assumption to office for, after all, a doubtful or difficult question of law may be the basis of good faith.
As to which interpretation is correct is beside the point and, hence, should be addressed at a more
appropriate forum at a proper time.
So too, the Court finds that the penalty of dismissal in this case is harsh and severe. Not every case of
insubordination or willful disobedience by an employee reasonably deserves the penalty of dismissal
because the penalty to be imposed on an erring employee must be commensurate with the gravity of his
or her offense. It is settled that notwithstanding the existence of a just cause, dismissal should not be
imposed, as it is too severe a penalty, if the employee had been employed for a considerable length of
time in the service of his or her employer, and such employment is untainted by any kind of dishonesty
and irregularity. We note that aside from the subject incident, Nerbes and Suravilla were not previously
charged with any other offense or irregularity. Considering the surrounding facts, termination of Nerbes
and Suravilla's services was a disproportionately heavy penalty.

LABOR LAW>Labor Standards> Disability Benefits
SCANMAR MARITIME SERVICES, INC., CROWN SHIPMANAGEMENT INC., AND VICTORIO Q.

ESTA, Petitioners, vs.
WILFREDO T. DE LEON, Respondent.
G.R. No. 199977, January 25, 2017
(First Division)
DOCTRINE: Labor Law; Seafarers; Post-employment Medical Examination; Three-day Rule; The
Supreme Court (SC) has consistently held that the three (3)-day rule must be observed by all those
claiming disability benefits, including seafarers who disembarked upon the completion of contract
Facts: The seafarer was engaged by the company for 22 years under different employment contracts.
His last employment was as Third Mate which he completed and eventually repatriated. For 22 years,
there was no account of any ailment he had contracted.
Prior to his next deployment, the seafarer underwent pre-employment examination (PEME). Noticing that
seafarer dragged his right leg, the PEME doctor referred him to a neurologist for consultation and
clearance. However, seafarer did not attend such consultation.
Two years after, the seafarer demanded payment for disability benefits and filed a complaint with the
NLRC.
He alleged that during his last employment, he felt something wrong with his body and that he
experienced abdominal pain and saw blood in his stool. He also claimed that after repatriation, he
underwent a series of medical check-ups with his private doctors, which revealed that he was suffering
from L5-S 1 radiculopathy.
The Labor Arbiter awarded the seafarer with full disability benefits of US$60,000 which was affirmed by
the NLRC and the Court of Appeals. The appellate court even pronounced that the causative
circumstances leading to seafarer's permanent disability must have transpired during the 22 years of his
employment.
The company petitioned the Supreme Court which was granted and the claim was dismissed.
Seafarer reneged on his obligation to submit himself to a post-employment medical examination within 3
days.
The Court noted that there was no dispute on the fact that seafarer failed to submit to a post- employment
medical examination by a company-designated physician within 3 working days from disembarkation. The
Labor Arbiter, the NLRC, and the appellate court excused the seafarer from complying with this
requirement, reasoning that he had not been medically repatriated.
Issue: Whether the respondent in entitled to disability benefits?
Held: No. the three-day rule must be observed by all those claiming disability benefits, including seafarers
who disembarked upon the completion of contract. The rationale for the rule is that reporting the illness
or injury within 3 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 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. The
employer would then have no protection against unrelated disability claims
No proof that seafarer suffered his condition during the term of his employment and is work-related
Claimants for disability benefits must first discharge the burden of proving, with substantial evidence, that
their ailment was acquired during the term of their contract. They must show that they experienced health
problems while at sea, the circumstances under which they developed the illness, as well as the
symptoms associate with it.
In this case, seafarer did not produce sufficient proof that he experienced his injury or its symptoms
during the term of his contract. What the seafarer submitted were medical reports which were all dated
well past his disembarkation from the vessel. None of the medical reports prove the symptoms of
radiculopathy he alleged to have experienced during the term of his contract. In contrast, the company
submitted a Checklist/Interview Sheet for Disembarked Crew indicating that seafarer had no medical
check-up in foreign ports; did not report any illness or injury to the master of the vessel or the ship doctor;
and did not request a post-medical examination after disembarkation. Also, based on the records, there
is no documentation that seafarer had bouts of sickness, injury, or illness associated with radiculopathy in
his 22 years of employment. Hence, based on the evidence, it cannot be reasonably concluded that
seafarer contracted radiculopathy during the term of his contract.
Seafarer assessed with a final disability assessment within 120 days; POEA Contract specifies that
disability not based on number of days of treatment but by disability grading
The Court noted that the NLRC and the CA's award of permanent and total disability benefits in
seafarer's favor was heavily anchored on his failure to obtain any gainful employment for more than 120
days after his medical repatriation.
Here, records reveal that 102 days from repatriation, the company-designated physician had already
given his final assessment on seafarer when he diagnosed the latter with "Flexor Carpi Radialis
Tendinitis, Right; Sprain, Right thumb; Extensor Carpi Ulnaris Tendinitis, Right" and gave a final disability
rating of "Grade 11" pursuant to the disability grading provided in the 2010 POEA-SEC. In view of the
final disability rating made by the company-designated physician classifying seafarer's disability as merely
permanent and partial - which was not refuted by seafarer’s physician except that seafarer's condition
was classified as a Grade 10 disability - it is plain error to award permanent and total disability benefits to
seafarer.
Moreover, it bears noting that as per respondent's contract with the company, his employment is covered
by the 2010 POEA-SEC. It is well settled that the POEA-SEC is the law between the parties and, as such,
its provisions bind both of them. Under Section 20 (A) (6) of the 2010 POEASEC, the determination of
the proper disability benefits to be given to a seafarer shall depend on the grading system provided by
Section 32 of the said contract, regardless of the actual number of days that the seafarer underwent
treatment.
In this case, seafarer's disability was already determined as only permanent and partial, in view of its
classification as Grade 11 by the company-designated physician and Grade 10 by his chosen physician.
As such, the award of full disability benefits in favor of respondent clearly has no basis and, consequently,
must be struck down.
Also, the seafarer failed to show work-relation of his medical condition. He merely alleged that in his last
stint as a Third Mate, he was a watchstander. His job entailed that he was responsible to the captain for
keeping the ship, its crew, and its cargo safe for eight hours a day. Still, he did not particularize the
laborious conditions of his work that would cause his condition.
The appellate court mentioned that seafarer was consistently engaged in stressful physical labor
throughout his 22 years of employment. But it did not define these purported stressful physical activities,
nor did it point to any piece of evidence detailing his work.
Number of years of employment does not automatically mean that condition was brought about by
employment
For the Labor Arbiter, the NLRC and the Court of Appeals, they ruled that whatever causative
circumstances led to his permanent disability must have transpired during his 22 years of employment.
This reasoning was debunked by the Supreme Court as such blanket speculation alone will not rise to the
level of substantial evidence. While the degree of determining whether the illness is work-related requires
only probability, the conclusions of the courts must be still be based on real, and not just apparent,
evidence. The tribunals should have gone beyond their inferences. They should have determined the
duties of the seafarer and the nature of his injury, so that they could validly draw a conclusion that he
labored under conditions that would cause his purported permanent and total disability
Submitted by: Jabal, Joel Malcolm D.

LABOR LAW>Labor Standards>Compensation for disability
MAERSK FILIPINAS CREWING INC., and MAERSK CO. IOM LTD.

vs.
JOSELITO R. RAMOS
G.R. No. 184256, January 18, 2017
(First Division)
DOCTRINE: Disability does not refer to the injury or the pain that it has occasioned, but to the loss or
impairment of earning capacity. There is disability when there is a diminution of earning power because of
actual absence from work. This absence must be due to the injury or illness arising from, and in the
course of, employment. Thus, the basis of compensation is reduction of earning power.
FACTS: On October 3, 2001, petitioner Maersk ltd., through its local manning agent petitioner Maersk
Inc., employed private respondent as able-seaman of M/V NKOSSA II for a period of four (4) months.
Within the contract period and while on board the vessel, on November 14, 2001, private respondent’s left
eye was hit by a screw. He was repatriated to Manila on November 21, 2001 and was referred to Dr.
Salvador Salceda, the company-designated physician, for a check-up.
Private respondent was examined by Dr. Anthony Martin S. Dolor at the Medical Center Manila on
November 26, 2001 and was diagnosed with "corneal scar and cystic macula, left, post-traumatic." On
November 29, 2001, he underwent a "repair of corneal perforation and removal of foreign body to anterior
chamber, left eye." He was discharged on December 2, 2001 with prescribed home medications and had
regular check-ups. He was referred to another ophthalmologist who opined that "no more improvement
can be attained on the left eye but patient can return back to duty with the left eye disabled by 30%."
On May 22, 2002, he was examined by Dr. Angel C. Aliwalas, Jr. at the Ospital ng Muntinlupa (ONM),
Alabang, Muntinlupa City, and was diagnosed with "corneal scar with post-traumatic cataract formation,
left eye." On May 28, 2002, he underwent [an] eye examination and glaucoma test at the Philippine
General Hospital (PGH), Manila.
Since private respondent's demand for disability benefit[s] was rejected by petitioners, he then filed with
the NLRC a complaint for total permanent disability, illness allowance, moral and exemplary damages
and attorney's fees. The parties filed with the NLRC their respective position papers, reply, and rejoinder.
Meanwhile, in his medical report dated July 31, 2002, Dr. Dolor stated that although private respondent's
left eye cannot be improved by medical treatment, he can return to duty and is still fit to work. His normal
right eye can compensate for the discrepancy with the use of correctional glasses. On August 30, 2002,
petitioners paid private respondent's illness allowance equivalent to one hundred twenty (120) days
salary.
On October 5, 2002, private respondent was examined by Dr. Roseny Mae Catipon-Singson of Casa
Medica, Inc. (formerly MEDISERV Southmall, Inc.), Alabang, Muntinlupa City and was diagnosed to have
''traumatic cataract with corneal scaring, updrawn pupil of the anterior segment of maculapathy OS. His
best corrected vision is 20/400 with difficulty." Dr. Catipon-Singson opined that private respondent "cannot
be employed for any work requiring good vision unless condition improves."
On November 19, 2002, private respondent visited again the ophthalmologist at the Medical Center
Manila who recommended "cataract surgery with intra-ocular lens implantation," after evaluation of the
retina shall have been done."
In his letter dated January 13, 2003 addressed to Jerome de los Angeles, General Manager of petitioner
Maersk Inc., Dr. Dolor answered that the evaluation of the physician from ONM could not have
progressed in such a short period of time, which is approximately one month after he issued the medical
report dated April 13, 2002, and a review of the medical reports from PGH and the tonometry findings on
the left and right eye showed that they were within normal range, hence, could not be labeled as
glaucoma. 6
On 15 May 2003, the labor arbiter (LA) rendered a Decision dismissing the Complaint.
In the meantime, on 30 July and 12 September 2003, respondent underwent cataract extraction on both
eyes. 13 On 7 January 2004, he was fitted with correctional glasses and evaluated. Dr. Dolor found that
the former's "right eye is 20/20, the left eye is 20/70, and when both eyes are being used, his best
corrected vision is 20/20." On the basis of that report, respondent was pronounced fit to work.
On 31 January 2006, the NLRC issued a Resolution 15 granting respondent's appeal and setting aside
the LA's decision. The CA affirmed the findings of the NLRC.
ISSUE: Whether respondent is partially disabled and therefore entitled to disability compensation.
HELD: YES. Respondent suffers from permanent partial disability and is entitled to disability
compensation.
Section 2 of Rule VII of the Amended Rules on Employees' Compensation provides:
(c) A disability is partial and permanent 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.
Permanent partial disability occurs when an employee loses the use of any particular anatomical part of
his body which disables him to continue with his former work.
In this case, while petitioners' own company-designated physician, Dr. Dolor, certified that respondent
was still fit to work, the former admitted in the same breath that respondent's left eye could no longer be
improved by medical treatment. As early as 13 April 2002, Dr. Dolor had in fact diagnosed respondent's
left eye as permanently disabled, to wit:
Present ophthalmologic examination showed corneal scar and a cystic macula at the left eye. Vision on
the right eye is 20/20 and JI while the left showed only 20/60 and J6. Our ophthalmologist opined that no
more improvement can be attained on the left eye but patient can return back to duty with left eye
disabled by 30%.
Petitioners' argument that the injury was curable because respondent underwent cataract extraction in on
both eyes in 2003, and Dr. Dolor issued a medical evaluation finding that respondent's best corrected
vision for both eyes was 20/20 (with correctional glasses), are thus inconsequential. The curability of the
injury "does not preclude an award for disability because, in labor laws, disability need not render the
seafarer absolutely helpless or feeble to be compensable; it is enough that it incapacitates him to perform
his customary work."
Indeed, the operation, which supposedly led to the correction of respondent's vision, took place in 2003.
Respondent sustained his injury way back in 2001. During the span of roughly two years, he was not able
to reassume work as a seaman, resulting in the loss and impairment of his earning capacity. It is also
interesting to note that despite petitioners' contentions that respondent had been diagnosed as fit to
return to work, no reemployment offer was ever extended to him.
As to the extent and amount of compensation, petitioners stress that
Section 3254 of the POEA Standard Terms and Conditions Governing the Employment of Filipino
Seafarers on Board Ocean Going Vessels (Standard Employment Contract) only provides disability
compensation benefits for at least 50% loss of vision in one eye. Since the schedule does not include the
injury suffered by respondent, they assert that the award of disability benefits is unwarranted.
The Court finds no merit in this argument.
The POEA Standard Employment Contract was designed primarily for the protection and benefit of
Filipino seamen in the pursuit of their employment on board ocean-going vessels. In resolving disputes
regarding disability benefits, its provisions must be "construed and applied fairly, reasonably, and liberally
in the seamen's favor, because only then can the provisions be given full effect."
Besides, the schedule of disabilities under Section 32 is in no way exclusive. Section 20.B.4 of the same
POEA Standard Employment Contract clearly provides that "[t]hose illnesses not listed in Section 32 of
this Contract are disputably presumed as work related." This provision only means that the disability
schedule also contemplates injuries not explicitly listed under it.
We therefore sustain the computational findings of the NLRC as affirmed by the CA, to wit:
Relative to the amount of disability compensation, Section 20.1.4.4 of the applicable CBA between
AMOSUP and Maersk Company (IOM) provides that the rate of compensation for 100% disability for
Ratings is US$60,000.00, with any differences, including less than 10% disability, to be pro-rata. Section
20.1.5 of said CBA further provides that "xxx any seafarer assessed at less than 50% disability under the
Contract but certified as permanently unfit for further sea service in any capacity by the company doctor,
shall also be entitled to 100% compensation" (Pages 48-49, Records). It is clear from the latter provision
that for a seafarer to be entitled under said CBA to 100% compensation for less than 50% disability, it
must be the company doctor who should certify that the seafarer is permanently unfit for further sea
service in any capacity.
In the case at bar, Complainant had corneal scar, a cystic macula and 30% loss of vision on his left eye.
Thus, applying Section 3056 of the standard contract, We hold that Complainant's impediment grade is
Grade 12. Under Section 30-A 57 of the standard contract, a seafarer who suffered an impediment grade
of Grade 12 is entitled to 10.45% of the maximum rate. Significantly, the company physician did not
certify Complainant as permanently unfit for further sea service in any capacity. The company physician
certified that'' xxx patient can return back to duty with the left eye disabled by 301Y.1" (Page 39,
Records). Complainant, therefore, is not entitled to 100% disability compensation benefit, but merely
10.451Yo of US$60,000.00, which is computed as follows: US$60,000.00 x 10.45% = US$6,270.00.
Respondents, therefore, are liable to Complainant for US$6,270.00 as compensation benefit for his
permanent partial disability, to be paid in Philippine Currency equivalent at the exchange rate prevailing
during the time of payment.

LABOR LAW> LABOR STANDARDS> Disability Benefits> Permanent Total Disability>120 days
and 240 days
HOEGH FLEET SERVICES PHILS., INC., and/or HOEGH FLEET SERVICES AS, Petitioners
vs.
BERNARDO M. TURALLO, Respondent
G.R. No. 230481 July 26, 2017
THIRD DIVISION
DOCTRINE: Indeed, under Section 32 of the POEA-SEC, only those injuries or disabilities that are
classified as Grade 1 may be considered as total and permanent. However, if those injuries or disabilities
with a disability grading from 2 to 14, hence, partial and permanent, would incapacitate a seafarer from
performing his usual sea duties for a period of more than 120 or 240 days, depending on the need for
further medical treatment, then he is, under legal contemplation, totally and permanently disabled. In
other words, an impediment should be characterized as partial and permanent not only under the
Schedule of Disabilities found in Section 32 of the POEA-SEC but should be so under the relevant
provisions of the Labor Code and the Amended Rules on Employee Compensation (AREC) implementing
Title II, Book IV of the Labor Code. That while the seafarer is partially injured or disabled, he is not
precluded from earning doing the same work he had before his injury or disability or that he is
accustomed or trained to do. Otherwise, if his illness or injury prevents him from engaging in gainful
employment for more than 120 or 240 days, as the case may be, he shall be deemed totally and
permanently disabled.
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.
FACTS: Hoegh Fleet hired BernardoTurallo as a Messman on board vessel "Hoegh Tokyo" for 9 months.
He was deemed as "fit for sea duty" in the Pre-Employment Medical Examination (PEME). While on
board the vessel, Turallo felt pain on the upper back of his body and chest pain. Due to said condition, he
was referred to a company designated physician upon his arrival in Manila and was diagnose of
"Acromioclavicular Joint Arthritis; Bicep Tear and Cuff Tear, Left Shoulder; Cervical Spondylosis
Secondary to C4-C5, C5-C6; Disc Protrusion; Rule Out Ischemic Heart Disease". He then underwent a
C4-C5, C5-C6 Discectomy Fusion with PEEK Prevail surgery and that the estimated length of treatment
after surgery is 3 months of rehabilitation and was deemed by the doctor to be entitled to disability, Grade
8 for one shoulder and Grade 10 for neck. In a second opinion, he was found to be "partially and
permanently disabled with separate impediments for the different affected parts of body of Grade 8,
Grade 10 and Grade 11, based on the POEA contract" but was declared to be "permanently unfit in any
capacity for further sea duties". During the grievance proceeding, Turallo was offered by Hoegh Fleet
US$30,231.00 but was refused by Turallo. Turallo filed in the NCMB a notice to arbitrate to which the
offer was increased to US$50,000.00 with allowance but the same was still refused by Turallo. The
arbitrators ruled in favor of Turallo and ordered payment of the amount of US$90,000.00 and Sickness
Allowance. Hoegh Fleet assailed the decision and argued that Turallo is entitled to total and permanent
disability benefits, finding that he was not issued a final disability grade. It averred that the final
assessment of Grade 8 disability was given by the company-designated physician but was not attached
to their Position Paper before the Panel, hence, it was not considered. Both Hoegh Fleet and Turallo filed
separate petitions for review on certiorari..
ISSUE: Whether or not Turallo is entitled for a claim for total and permanent disability compensation?
HELD: YES.
The POEA-SEC governs in this case. Under Section 32 thereof, Turallo is entitled to a total and
permanent disability compensation. In Kestrel Shipping Co., Inc. v. Munar, the Court reads Section 32 of
POEA-SEC in harmony with the Labor Code and explained, viz: Under Section 32 of the POEA-SEC,
only those injuries or disabilities that are classified as Grade 1 may be considered as total and
permanent. However, if those injuries or disabilities with a disability grading from 2 to 14, hence, partial
and permanent, would incapacitate a seafarer from performing his usual sea duties for a period of more
than 120 or 240 days, depending on the need for further medical treatment, then he is, under legal
contemplation, totally and permanently disabled. In other words, an impediment should be characterized
as partial and permanent not only under the Schedule of Disabilities found in Section 32 of the POEA-
SEC but should be so under the relevant provisions of the Labor Code and the Amended Rules on
Employee Compensation (AREC) implementing Title II, Book IV of the Labor Code. That while the
seafarer is partially injured or disabled, he is not precluded from earning doing the same work he had
before his injury or disability or that he is accustomed or trained to do. Otherwise, if his illness or injury
prevents him from engaging in gainful employment for more than 120 or 240 days, as the case may be,
he shall be deemed totally and permanently disabled. 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. It cannot be any clearer that
the company-designated physician's failure to arrive at a definite assessment of the seafarer's fitness to
work or permanent disability within the prescribed periods would hold the seafarer's disability total and
permanent. Hence, under the contemplation of the law abovementioned, Turallo is considered as totally
and permanently disabled
Submitted by: Mamangon, Fatima C.

LABOR LAW>Labor Standards> Filing before the lapse of 120 days
STATUS MARITIME CORPORATION, AND ADMIBROS SHIPMANAGEMENT CO., LTD., Petitioners,

v.
RODRIGO C. DOCTOLERO, Respondent.
G.R. No. 198968, January 18, 2017
(Third Division)
FACTS: On July 28, 2006, Status Maritime hired Doctolero as Chief Officer on board the vessel M/V
Dimitris Manios II for a period of nine months. Doctolero underwent the required Pre- Employment
Medical Examination (PEME) prior to his embarkation, and was declared "fit to work". However, he later
on experienced a series of chest and abdominal pains. During his initial check ups, he was diagnosed to
be suffering from "Esophago-Gastritis-Duodenitis." As this continued, his physician recommended that he
be repatriated. While waiting for his, return flight schedule, he again experienced pain but there was no
assistance extended to him. Thus, he went to the hospital by himself and he was the one who paid for
his bills.
On account of the illness suffered while working on board the M/V Dimitris Manios II, Doctolero
filed in the NLRC his complaint demanding payment of total and permanent disability benefits,
reimbursement of medical and hospital expenses, sickwage allowance, moral and exemplary damages,
and legal interest on his claims.hanroblesvi
The NLRC ruled that there is no basis for the award of sickness allowance and disability pay but
he may reimburse from the company the cost of his medical treatment. NLRC posited that there being no
declaration as yet of complainant-appellant's fitness to return to work or degree of disability made by the
company designated physician, entitlement to the benefits has not attached. It is to be noted that the fact
that the initial evaluation of the company designated physician was that the Gastroscopy was normal and
after such evaluation there had been no other assessment on his condition made. There had been no
other assessment made by any other doctor of complainant-appellant's condition that would controvert
the findings of the company designated physician and that this complaint has been filed before the 120
days period given to company designated physician to make a fitness to return to work assessment or a
disability grading in the latter case. It is clear therefore that the instant case has been prematurely filed
and that the cause of action for disability claims has not arisen.
ISSUE: Is there a premature filing making the cause of action for disability claims to have not arisen?
HELD: Yes.
Section 2, Rule X, of the Rules and Regulations implementing Book IV of the Labor Code must
be read together with the POEA-SEC Section 20(3). This states that, ―Upon sign-off from the vessel for
medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is
declared fit to work or the degree of permanent disability has been assessed by the company-designated
physician but in no case shall this period exceed one hundred twenty (120) days‖.
In order for a seafarer's claim for total and permanent disability benefits to prosper, any of the
following conditions should be present:
(a) The company-designated physician failed to issue a declaration as to his fitness to
engage in sea duty or disability even after the lapse of the 120-day period and there is no indication that
further medical treatment would address his temporary total disability, hence, justify an extension of the
period to 240 days;
(b) 240 days had lapsed without any certification issued by the company designated
physician;
(c) The company-designated physician declared that he is fit for sea duty within the 120-day
or 240-day period, as the case may be, but his physician of choice and the doctor chosen under Section
20-8(3) of the POEA-SEC are of a contrary opinion;
(d) The company-designated physician acknowledged that he is partially permanently
disabled but other doctors who he consulted, on his own and jointly with his employer, believed that his
disability is not only permanent but total as well;
(e) The company-designated physician recognized that he is totally and permanently
disabled but there is a dispute on the disability grading;
(f) The company-designated physician determined that his medical condition is not
compensable or work-related under the POEA-SEC but his doctor-of-choice and the third doctor selected
under Section 20-B(3) of the POEA-SEC found otherwise and declared him unfit to work;
(g) The company-designated physician declared him totally and permanently disabled but
the employer refuses to pay him the corresponding benefits; and
(h) The company-designated physician declared him partially and permanently disabled
within the 120-day or 240-day period but he remains incapacitated to perform his usual sea duties after
the lapse of said periods.16
In this case, while Doctolero suffered the disability during the term of his contract, it was evident
that he had filed his complaint for disability benefits before the company-designated physician could
determine the nature and extent of his disability, or before even the lapse of the initial 120-day period.
With Doctolero still undergoing further tests, the company-designated physician had no occasion to
determine the nature and extent of his disability upon which to base Doctolero's "fit to work" certification
or disability grading. Hence, Doctolero had no cause of action for disability pay and sickness allowance at
the time of the filing of his complaint.
Submitted by: Nacilla, Nica Jenine O.

LABOR LAW>Labor Standards> DISABILITY BENEFITS
CONSTANCIO CADERAO BALATERO, Petitioner

vs.
SENATOR CREWING (MANILA) INC., AQUANAUT SHIPMANAGEMENT LTD., ROSE AARON and
CARLOS BONOAN, MV MSC FLAMINIA, Respondents
G.R. No. 224532, June 21, 2017
(Third Division)
DOCTRINE: The schedule of disabilities in the CBA, if there is one, or the POEA-SEC, should be the
primary basis for the determination of a seafarer's degree of disability. However, the POEA-SEC and the
CBA cannot be read in isolation from the Labor Code and the AREC.
Seafarer is partially injured or disabled, he is not precluded from earning [or] doing the same work he had
before his injury or disability or that he is accustomed or trained to do. Otherwise, if his illness or injury
prevents him from engaging in gainful employment for more than 120 or 240 days, as the case may be,
he shall be deemed totally and permanently disabled.
FACTS: SCMI is a local manning agency while Aquanaut is among SCMI's foreign principals. Balatero
was initially engaged by the respondents as an able-bodied seaman. He had worked his way up to
become 2nd Officer and had boarded 18 of the respondents' ships. after having been found as ''fit to
work' upon compliance with the required Pre-Employment Medical Examination (PEME), Balatero
boarded MV MSC Flaminia for a six-month contract as 3rd Officer, with a basic monthly salary of
US$1,120.00, plus overtime pay and subsistence allowance. He accepted a lower post merely out of
loyalty to SCMI and Aquanaut.
On December 22, 2013, Balatero, diagnosed to have an elevated blood pressure, prescribed anti-
hypertensive medicines. Upon return to Manila on 2014, he reported to SCMI's office for post-medical
examination under company-designated physician, Dr. Olalia. Dr. Olalia diagnosed petitioner with
theetiologies of which were multi-factorial but not work-related. Several test and check-ups were
subsequently made. He was subsequently declared fit to work, but with medical maintenance for the rest
of his life.
Unconvinced about his fitness to resume sea duties, Balatero consulted Orencia. Orencia found Balatero
to be suffering from "HypertensiveCardiovascular Disease," which was ''precipitated by the stressful
nature of his work." Further, under Item No. 1 l(c) of the Philippine OverseasEmployment Agency's
(POEA) Standard Employment Contract (SEC) for Seafarers, CAD is a compensable illness. Under Item
No. 13, Uncontrolled Hypertension, arising from exposure to extreme physical and psychological stress at
work, is an occupational illness. Dr. Lara-Orencia then concluded that Balatero cannot return to his
employment as 3rd Officer due to the latter's on and off chest pains, "easy fatigability" and continuous
intake of five maintenance medicines.
Balatero demanded permanent total disability benefits, which the respondents denied on the ground that
after treatment and rehabilitation, the company-designated doctor had assessed Balatero with a disability
of Grade 7. Balatero filed before the NLRC a complaint for permanent total disability compensation. The
Labor Arbiter (LA) found him to be entitled to total and permanent disability benefits under the POEA
Contract. The NLRC affirmed the Las decision. The Court of Appeals, however modified the decision.
ISSUE: Whether or not Balatero was entitled to permanent total disability compensation.
HELD: Yes.
Under Section 32 of the POEA-SEC, only those injuries or disabilities that are classified as Grade 1 may
be considered as total and permanent. However, if those injuries or disabilities with a disability grading
from 2 to 14, hence, partial and permanent, would incapacitate a seafarer from performing his usual sea
duties for a period of more than 120 or 240 days, depending on the need for further medical treatment,
then he is, under legal contemplation, totally and permanently disabled. In other words, an impediment
should be characterized as partial and permanent not only under the Schedule of Disabilities found in
Section 32 of the POEA-SEC but should be so under the relevant provisions of the Labor Code and the
Amended Rules on Employee Compensation (AREC) implementing Title II, Book IV of the Labor Code.
That while the seafarer is partially injured or disabled, he is not precluded from earning [or] doing the
same work he had before his injury or disability or that he is accustomed or trained to do. Otherwise, if his
illness or injury prevents him from engaging in gainful employment for more than 120 or 240 days, as the
case may be, he shall be deemed totally and permanently disabled.
The Court reinstated LA and NLRC' s ruling granting Balatero permanent total disability compensation,
and set aside the CA's disquisition that only benefits pertaining to Grade 7 Disability Rating should be
awarded on the basis of the following: (1) Dr. Lara-Orencia's ample explanation on how she had arrived
at a permanent total disability assessment; (2) the recommendations of DOH A.O. No. 2007-0025 on the
issuance of fit-to-work certificates; and (3) jurisprudence granting permanent total disability compensation
to seafarers suffering from hypertensive cardiovascular diseases, who were either under the treatment of,
or issued fit-to-work certifications by company-designated doctors beyond 120 or 240 days from their
repatriation.
Submitted by: Ocampo, Rhonald S.

LABOR LAW>Labor Standards>Temporary Total Disability>Vergara Doctrine
TSM SHIPPING PHILS., INC. and/or DAMPSKIBSSELSKABET NORDEN A/S. and/or CAPT.
CASTILLO, Petitioners
vs.
LOUIE L. PATIÑO, Respondent
G.R. No. 210289, March 20, 2017
(First Division)
DOCTRINE: In Vergara v. Hammonia Maritime Services, Jnc., the Court ruled that the aforequoted
provisions should be read in harn1ony with each other. The Court held: As these provisions operate, the
seafarer, upon sign-off from his vessel, must report to the company-designated physician within three (3)
days from arrival for diagnosis and treatment. For the duration of the treatment but in no case to exceed
120 days, the seaman is on temporary total disability as he is totally unable to work. He receives his basic
wage during this period until he is declared fit to work or his temporary disability is acknowledged by the
company to be permanent, either partially or totally, as his condition is defined under the POEA Standard
Employment Contract and by applicable Philippine laws. If the 120 days initial period is exceeded and no
such declaration is made because the seafarer requires further medical attention, then the temporary total
disability period may be extended up to a 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 of
course also be declared fit to work at any time such declaration is justified by his medical condition.
FACTS: Petitioner TSM, for and in behalf of its foreign principal, DNAS, entered into a Contract of
6
Employment with respondent for a period of six months as an ordinary seaman for the vessel Nord
Nightingale. While working on board, respondent injured his right hand. Upon return to the Philippines, he
was found to be no longer fit to perform the job as a seaman after several medical procedures and tests.
Respondent then asked for permanent total disability benefits in the sum of US$80,000.00 under the
AMOSUP CBA since, according to him, he never recovered completely nor returned to his usual duties
and responsibilities, as attested by the medical findings of his own physician. Petitioners, however,
claimed that respondent failed to show that he is a member of AMOSUP and thus is only entitled to
US$10,075.00 corresponding to a Grade 10 disability under the POEA-SEC, as assessed by the
company-designated physician who made an extensive evaluation of respondent's injury. The Labor
Arbiter awarded respondent total and permanent disability benefits under the AMOSUP CBA. The Labor
Arbiter observed that respondent is indeed suffering from a total and permanent disability since his
rehabilitation took five months or more than 120 days and there was no offer on the part of petitioners to
rehire him. Petitioner filed a motion for reconsideration to the NLRC and 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. The NLRC agreed with the Labor Arbiter that respondent is entitled to permanent total
disability benefits because his injury had rendered him incapable of using his right hand, based on the
last medical report but reduced the award to US$60,000.00. The CA on appeal agreed with the findings of
both the NLRC and Labor Arbiter that respondent is entitled to a Grade 1 or total permanent disability
benefits under the POEA-SEC and that the assessment of respondent’s chosen physician, is credible.
ISSUE: Whether or not respondent is entitled to total and permanent disability compensation
HELD: NO.
The Supreme Court ruled that because of lack of proof that respondent is covered by the AMOS
UP CBA, settled is the finding that his entitlement to disability benefits is governed by the POEA-SEC and
relevant labor laws, which are deemed written in the contract of employment with petitioners.
Section 20 B(3) of the POEA-SEC provides that:
3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance
equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been
assessed by the company-designated physician but in no case shall this period exceed one hundred
twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment medical examination by a
company-designated physician within three working days upon his return except when he is physically
incapacitated to do so, in which case, a written notice to the agency within the san1e period is deemed as
compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his
forfeiture of the right to claim the above benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a THIRD Doctor may be agreed
jointly between the employer and the seafarer. The THIRD Doctor's decision shall be final and binding on
both parties.
The POEA-SEC clearly provides that when a seafarer sustains a work-related illness or injury
while on board the vessel, his fitness or unfitness for work shall be determined by the company-
designated physician. 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 ofthem. The
Court has held that non-observance of the requirement to have the conflicting assessments determined
by a THIRD Doctor would mean that the assessment of the company-designated physician prevails. In
the absence of a third and binding opinion, the Court has no option but to hold the company-designated
physician’s assessment of respondent's disability final and binding.
Submitted by: Paeste, Sonny

Lybenson
LABOR LAW>Labor Standards>Permanent and Total Disability Benefits
PAULINO M. ALDABA
versus
CAREER PHILIPPINES SHIP-MANAGEMENT
G.R. No. 218242, 21 June 2017
DOCTRINE: Mere inability to work for a period of 120 days does not entitle a seafarer to permanent and
total disability benefits; that the determination of the fitness of a seafarer for sea duty is within the
province of the company-designated physician, subject to the periods prescribed by law.
FACTS: Petitioner was hired by respondent as a seafarer on one of its ships. In the performance of his
duties, petitioner was accidentally hit by metal chains where he fell and sustained back injuries. Petitioner
was examined in Hongkong where he was declared unfit to work and was repatriated. Upon his arrival to
Manila, he was referred to the company-designated physician and was given a grade 8 disability.
Petitioner sought an orthopedic surgeon and was diagnosed of permanent disability. Petitioner demanded
for benefits of permanent disability but respondents did not heed the demands. Petitioner filed to the
courts praying for permanent disability benefits. The LA decided in favor of respondents limiting the
disability benefits to Grade 8 disability under the POEA Contract. On appeal, the NLRC ruled that
petitioner is entitled to a permanent total disability compensation. After which, CA reversed the Decision
of the NLRC and reinstated the Decision of the Labor Arbiter.
ISSUE: Whether or not petitioner is entitled permanent disability benefits.
HELD: Yes, petitioner is entitled to permanent disability benefits.
In Elburg Shipmanagement Phils., Inc. v. Quiogue, Jr., the SC set forth the following guidelines, to wit: 1.
The company-designated physician must issue a final medical assessment on the seafarer's disability
grading within a period of 120 days from the time the seafarer reported to him; 2. If the company-
designated physician fails to give his assessment within the period of 120 days, without any justifiable
reason, then the seafarer's disability becomes permanent and total; 3. If the company-designated
physician fails to give his assessment within the period of 120 days with a sufficient justification (e.g.
seafarer required further medical treatment or seafarer was uncooperative), then the period of diagnosis
and treatment shall be extended to 240 days. The employer has the burden to prove that the company-
designated physician has sufficient justification to extend the period; and 4. If the company-designated
physician still fails to give his assessment within the extended period of 240 days, then the seafarer's
disability becomes permanent and total, regardless of any justification.
In the present case, the company-designated physician was only able to issue a certification declaring
respondent to be entitled to a disability rating of Grade 8 on the 163rd day that petitioner was undergoing
continuous medical treatment, which is beyond the period of 120 days, without justifiable reason. It must
be remembered that the employer has the burden to prove that the company-designated physician has
sufficient justification to extend the period. In this case, the respondents failed to do so. Therefore, the
company-designated physician, failing to give his assessment within the period of 120 days, without
justifiable reason, makes the disability of petitioner permanent and total.
Submitted by: Quevedo, Anah Svellana

T.
Labor Law> Labor Standards>Disability Benefits
EUGENIO M. GOMEZ
vs
CROSSWORLD MARINE SERVICES, INC et al
G.R. Nos. 220002, August 2, 2017
(Second Division)
DOCTRINE: A temporary total disability only becomes permanent when so declared by the company-
designated physician within the periods he/she is allowed to do so, or upon the expiration of the
maximum 240-day medical treatment period without a declaration of either fitness to work or the
existence of a permanent disability..
FACTS: On February 29, 2012, at about 8:00 a.m., the Chief Officer of the vessel told petitioner to
remove the ice from the lower and upper decks of the ship. While performing this task, petitioner
accidentally slipped and hit his lower back on the steel deck. Petitioner was immediately in pain, but
thought it was just temporary. He rested a moment and then continued to work despite the pain. He
reported the incident to his superior when he asked for pain relievers. After 15 days or on March 15,
2012, petitioner could no longer bear the pain on his back and went to the vessel's master and requested
for medical examination. He was told to go to the hospital the next day.
Petitioner was examined and treated in Belgium; x-ray was done, intravenous fluid was administered, and
medicine was injected twice on his back. He was diagnosed with Lumbago. The doctor-in-charge
recommended petitioner's repatriation for further treatment. Petitioner was repatriated to the Philippines
on March 18, 2012.
ISSUE: Whether or not the Petitioner's injury is permanent total disability?
HELD: No.
In this case, the treatment of petitioner's injury required spine surgery and physical therapy which
extended beyond the initial 120-day period into the maximum 240-day treatment period. The company-
designated doctor's medical report dated September 11, 2017 (made 195 days from the time petitioner
was injured on February 29, 2012) stated that petitioner failed the functional capacity test and
recommended that petitioner continue therapy for two to three months. Petitioner filed his complaint on
September 13, 2012 or 197 days from the date he was injured, and, therefore, before the lapse of the
maximum 240-day treatment period within which the company-designated physician should assess the
fitness of petitioner to return to work. Since the company-designated doctor has not declared that
petitioner is not fit to work within the 240-day period, and the 240-day period has not lapsed when
petitioner filed his complaint, the petitioner cannot be legally presumed as permanently and totally
disabled to be entitled to permanent total disability.
However, considering that the Labor Arbiter, the NLRC, and the Court of Appeals all found petitioner
Gomez to be disabled due to a work-related injury, this fact is now binding on the respondents and this
Court. The Court concurs with the Court of Appeals' finding that petitioner suffers from a partial
permanent disability grade of 8 given by the company-designated doctor based on the POEA SEC
Schedule of Disability. The disability grade is in accordance with Section 20-A (6) of the POEA SEC,
which states: "The disability shall be based solely on the disability gradings provided under Section 32 of
this Contract, and shall not be measured or determined by the number of days a seafarer is under
treatment or the number of days in which sickness allowance is paid.‖
Submitted by: Vardeleon, Crizedhen

LABOR LAW>Labor Standards> When findings of company physician prevail
* **
JEBSENS MARITIME, INC.,SEA CHEFS LTD., AND ENRIQUE M. ABOITIZ, Petitioners
vs.
.FLORVIN G. RAPIZ, Respondent.
G.R. No. 218871 January 11, 2017
(First Division)
DOCTRINE: A temporary total disability only becomes permanent when so declared by the
company physician within the periods he is allowed to do so, or upon the expiration of the
existence of a permanent disability. In the present case, while the initial 120-day treatment or
temporary total disability period was exceeded, the company-designated doctor duly made a declaration
well within the extended 240-day period that the petitioner was fit to work.
FACTS: On March 16, 2011, Jebsens, on behalf of its foreign principal, Sea Chefs, engaged the services
of respondent to work on board the M/V Mercury as a buffet cook for a period of nine (9) months with a
basic monthly salary of US$501.00. On March 30, 2011, respondent boarded the said vessel. Sometime
in September 2011, respondent experienced excruciating pain and swelling on his right wrist/forearm
while lifting a heavy load of meat. A consultation with the ship doctor revealed that respondent was
suffering from severe "Tendovaginitis DeQuevain" which caused his medical repatriation since it was not
possible for him to work without using his right forearm.
On October 14, 2011, respondent was repatriated to the Philippines and underwent consultation,
medication, and therapy with the company-designated physician. After a lengthy treatment, the company-
th
designated physician issued a 7 and Final Summary Medical Report and a Disability Grading both dated
January 24, 2012, diagnosing respondent with "Flexor Carpi Radialis Tendinitis, Right; Sprain, Right
thumb; Extensor Carpi Ulnaris Tendinitis, Right," and classifying his condition as a "Grade 11" disability
pursuant to the disability grading provided for in the 2010 Philippine Overseas Employment Association-
Standard Employment Contract (POEA-SEC). Dissatisfied, respondent consulted an independent
physician, who classified his condition as a Grade 10 disability. Thereafter, respondent requested
petitioners to pay him total and permanent disability benefits, which the latter did not heed, thus,
constraining the former to file a Notice to Arbitrate before the NCMB. As the parties failed to amicably
settle the case, the parties submitted the same to the VA for adjudication.
Respondent argued, inter alia, that while both the company designated and independent physicians gave
him disability ratings of Grade 11 and 10, respectively, he is nevertheless entitled to permanent and total
disability benefits as he was unable to work as a cook for a period of 120 days from his medical
repatriation. On the other hand, petitioners maintained that respondent is only entitled to Grade 11
disability benefits pursuant to the classification made by the company-designated physician.
ISSUE: Whether or not the CA correctly held that respondent is entitled to permanent and total disability
benefits?
HELD: NO. Here, records reveal that on October 14, 2011, respondent was medically repatriated for
what was initially diagnosed by the ship doctor as "Tendovaginitis DeQuevain." As early as January 24,
2012, or just 102 days from repatriation, the company-designated physician had already given his final
assessment on respondent when he diagnosed the latter with "Flexor Carpi Radialis Tendinitis, Right;
Sprain, Right thumb; Extensor Carpi Ulnaris Tendinitis, Right" and gave a final disability rating of "Grade
32
11" pursuant to the disability grading provided in the 2010 POEA-SEC. In view of the final disability
rating made by the company-designated physician classifying respondent's disability as
33
merely permanent and partial - which was not refuted by the independent physician except that
respondent's condition was classified as a Grade 10 disability - it is plain error to award permanent and
total disability benefits to respondent.
Moreover, it bears noting that as per respondent's contract with Jebsens, his employment is covered by
the 2010 POEA-SEC. It is well-settled that the POEA-SEC is the law between the parties and, as such, its
provisions bind both of them. Under Section 20 (A) (6) of the 2010 POEA SEC, the determination of the
proper disability benefits to be given to a seafarer shall depend on the grading system provided by
treatment:
SECTION20. COMPENSATION AND BENEFITS
A. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
The liabilities of the employer when the seafarer suffers work-related injury or illness
during the term of his contract are as follows:
6. In case of permanent total or partial disability of the seafarer caused by either

injury or illness, the seafarer shall be compensated in accordance with the schedule
of benefits enumerated in Section 32 of this Contract. Computation of his benefits
arising from an illness or disease shall be governed by the rates and the rules of
compensation applicable at the time the illness or disease was contracted.
The disability shall be based solely on the disability gradings provided under Section
32 of this Contract, and shall not be measured or determined by the number of days
a seafarer is under treatment or the number of days in which sickness allowance is
paid.
In this case, respondent's disability was already determined as only permanent and partial, in view of its
classification as Grade 11 by the company-designated physician and Grade 10 by the independent
physician. As such, the award of US$60,000.00 representing Grade 1 (i.e., permanent and total disability)
benefits in favor of respondent clearly has no basis and, consequently, must be struck down.
Submitted by: Regalado, Dustin

LABOR LAW>Labor Standards> Work-related illness > Reasonable connection
JULIO C. ESPERE, Petitioner

vs.
NFD INTERNATIONAL MANNING AGENTS, INC./TARGET SHIP MANAGEMENT PTE LTD./CYNTHIA
SANCHEZ, Respondents
G.R. No. 212098, July 26, 2017
(Second Division)
DOCTRINE: For disability to be compensable under the above POEA-SEC, two elements must concur:
(1) the injury or illness must be work-related; and (2) the work-related injury or illness must have existed
during the term of the seafarer's employment contract. To be entitled to compensation and benefits under
the governing 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.
FACTS: Petitioner Julio C. Espere was hired as a Bosun by respondent NFD International Manning
Agents, Inc. (NFD) for and in behalf of its foreign principal Target Ship Management Pte Ltd. on board the
vessel M V. Kalpana Prem, for a period of nine (9) months, with a basic monthly salary of
US$730.00. Around five (5) months into his deployment, petitioner complained that he was feeling dizzy,
had body malaise and chills. In the case report prepared by Dr. Frances Hao-Quan (Dr. Hao-Quan) it was
stated that petitioner was suffering from hypertension. He was given medication for his condition and
advised to come back for re-evaluation. In all these follow-up evaluations, petitioner was continually
diagnosed to be suffering from hypertension and was given the appropriate medications to address his
medical condition. Moreover, during the time he was undergoing treatment, petitioner received sickness
allowance which amounted to Two Thousand Eight Hundred Eighty-Seven US dollars and Three Cents
(US$2,887.03) from respondent. Meanwhile, on February 16, 2012, the Marine Medical Services of the
Metropolitan Medical Center issued a report stating that the cause of petitioner's hypertension was not
work-related and that the cause of his hypertension is multifactorial in origin, which includes genetic
predisposition, poor lifestyle, high salt intake, smoking, diabetes mellitus, age, and increased sympathetic
activity. In a subsequent report dated April 24, 2012, one of the company doctors stated that petitioner's
hypertension "is not a contraindication to resume work as long as patient will be compliant with taking his
anti-hypertensive medications and we are able to achieve adequate blood pressure control." Not satisfied
with the findings of the company-designated physicians, petitioner consulted Dr. Manuel C. Jacinto,
Jr. (Dr. Jacinto), who specializes in Orthopedic Surgery and Traumatology/Disease of Bones and Joints.
Dr. Jacinto marked petitioner's condition as "work-related/work-aggravated." Petitioner filed a
Complaint against respondents claiming disability benefits for permanent disability and damages.
The LA dismiss the case and held that petitioner failed to prove by substantial evidence that his
hypertension was work-related. Petitioner sought recourse before the NLRC. NLRC rules in favor of
petitioner. NLRC held that the nature of petitioner's stressful work on board the vessel was a factor in the
aggravation of his hypertension. The CA annulled and set aside the decision of the NLRC and dismissed
petitioner's complaint. CA held that petitioner failed to establish by adequate proof that his hypertension
was work-related.
ISSUE: Whether or not CA has committed palpable error when it rendered that illness of
hypertension is not work related although petitioner was employed by respondent consistently
and continuously without interruption since 1989 and that prior to his deployment he was found to
be fit for work.
HELD:
PROCEDURAL MATTERS
0
Univac Development, Inc. v. Soriano is instructive. Thus, this Court has held that:
x x xIn other words, the CA is empowered to evaluate the materiality and

significance of the evidence which is alleged to have been capriciously,
whimsically, or arbitrarily disregarded by the NLRC in relation to all other evidence
on record. The CA can grant a petition when the factual findings complained of are
not supported by the evidence on record; when it is necessary to prevent a
substantial wrong or to do substantial justice; when the findings of the NLRC
contradict those of the LA; and when necessary to arrive at a just decision of the
case. Thus, contrary to the contention of petitioner, the CA can review the finding
of facts of the NLRC and the evidence of the parties to determine whether the
NLRC gravely abused its discretion x x x.
NO. The opinion of petitioner's physician, that his hypertension is essential and work-related, is
diametrically opposed to the evaluation made by the company doctors which found that
petitioner's hypertension is not work-related. The question then is, whose assessment or finding
should prevail?
In Andrada v. Agemar Manning Agency, Inc., et al., this Court held that:
it is the company-designated physician who is entrusted with the task of assessing the
seaman's disability, whether total or partial, due to either injury or illness, during the term
of the latter's employment. It is his findings and evaluations which should form the basis
of the seafarer's disability claim. His assessment, however, is not automatically final,
binding or conclusive on the claimant, the labor tribunal or the courts, as its inherent
merits would still have to be weighed and duly considered. The seafarer may dispute
such assessment by seasonably exercising his prerogative to seek a second opinion and
consult a doctor of his choice. In case of disagreement between the findings of the
company-designated physician and the seafarer's doctor of choice, the employer and the
seaman may agree jointly to refer the latter to a third doctor whose decision shall be final
and binding on them.
The Court agrees with the conclusion of the CA that, unlike the evaluation made by the company
physicians, there is no evidence to prove that Dr. Jacinto's findings were reached based on an extensive
or comprehensive examination of petitioner. In the Medical Certificate he issued, Dr. Jacinto diagnosed
petitioner as suffering from "Uncontrolled Essential Hypertension, Hypertensive Cardiomyopathy and
Malaise," that his condition did not improve "despite management and medications" and, by reason of
which, he is "physically unfit to go back to work." However, as found by the LA and the CA, aside from the
above Medical Certificate, petitioner failed to present competent evidence to prove that he was thoroughly
examined by Dr. Jacinto. In fact, Dr. Jacinto did not specify the medications he prescribed and the type of
medical management he made to treat petitioner's condition. Dr. Jacinto did not even explain nor justify
his conclusions that petitioner's hypertension started at work, is essential and work-related and that, by
reason of such illness, petitioner is no longer fit to work. Dr. Jacinto also indicated therein that petitioner
"was under [his] service during the period from May 2012 to present." However, a cursory reading of the
said Medical Certificate would show that the same was issued on May 7, 2012. This only proves that, at
the time the said Medical Certificate was issued, petitioner was under the care of Dr. Jacinto for not more
than one week, without any indication as to the number of instances petitioner consulted him during that
short period of time.
In contrast, the various medical certificates and reports by the company-designated physicians
were issued in a span of five (5) months of closely monitoring petitioner's medical condition and
progress, and after careful analysis of the results of the diagnostic tests and procedures
administered to petitioner while in consultation with his cardiologist.
In the recent case of Dalusong v. Eagle Clare Shipping Philippines, Inc., we ruled that "the
findings of the company-designated doctor, who, with his team of specialists ... periodically
treated petitioner for months and monitored his condition, deserve greater evidentiary weight than
the single medical report of petitioner's doctor, who appeared to have examined petitioner only
once."
For disability to be compensable under the above POEA-SEC, two elements must concur: (1) the injury
or illness must be work-related; and (2) the work-related injury or illness must have existed during
the term of the seafarer's employment contract. To be entitled to compensation and benefits under the
governing 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 this case, however, petitioner relied on the presumption that his illness is work-related but he was
unable to present substantial evidence to show that his work conditions caused or, at the least, increased
the risk of contracting his illness. Neither was he able to prove that his illness was preexisting and that it
was aggravated by the nature of his employment. Thus, the LA and the CA correctly ruled that he is not
entitled to any disability compensation.
As to petitioner's argument that, since he was found fit for work in his Pre-Employment Medical
Examination(PEME) prior to his deployment, there can be no other conclusion than that his employment
with respondents was the primary cause of his illness. The PEME is nothing more than a summary
examination of the seafarer's physiological condition; it merely determines whether one is "fit to work" at
sea or "fit for sea service" and it does not state the real state of health of an applicant. The "fit to work"
declaration in the PEME cannot be a conclusive proof to show that he was free from any ailment prior to
his deployment.
Finally, in view of respondents' prior satisfaction of the writ of execution issued by the LA while
the case was pending with the CA, coupled with petitioner's admission that he "had already
received the full judgment award of this case," the latter, having been proven not entitled to such
an award, should, thus, return the same to respondents.
Submitted by: Sarmiento, Majesca M

LABOR LAW>Labor Standards>Findings of company physician vs. private doctor
PEDRO C. PEREA
vs.
ELBURG SHIPMANAGEMENT PHILIPPINES, INC. et al.
G.R. No. 206178, August 9, 2017
(Second Division)
DOCTRINE: The physician who has personal knowledge of a seafarer's actual medical condition after
closely monitoring and regularly treating that seafarer is more credible than another physician who only
saw such seafarer once.
FACTS: On October 28, 2009, Perea entered into a Contract of Employment with Elburg under its
principal Augustea Atlantica SRL/Italy. Perea was hired as a fitter for a period of nine (9) months.
Perea was welding when the oxygen and acetylene torch he was holding exploded. He hit his left
shoulder and twisted his fingers in trying to avoid the explosion. He took a pain reliever to ease the pain
but three (3) days later, he found that two (2) of his fingers had grown numb.
On May 27, 2010, Perea was sent to a medical facility in Tuzla, Turkey because of continued chest pains.
He was pronounced to have soft tissue trauma and was told to rest, avoid exertion, and avoid using his
right arm. The following day, he was transferred to SEMA Hospital where he was declared to be suffering
from Cubital Tunnel Syndrome (mainly due to swelling and bleeding), soft, tissue injury of the right elbow.
The treatment proposed was to put his right arm in a sling and to rest for recovery for 10 days. He was
soon repatriated to the Philippines.
On June 3, 2010, after conducting laboratory examinations and other medical procedures on Perea,
company-designated physicians gave an initial impression, "To Consider Cubital Tunnel Syndrome,
Right; Hypertension; Rule Out Ischemic Heart Disease" and recommended that a Dipyridamole Thallium
Scan be conducted.
On July 31, 2010, in a letter to Elburg, Dr. Hao-Quan stated that the cause of hypertension was not work-
related and opined that Perea's estimated length of treatment would be approximately three (3) to four (4)
months.
On October 21, 2010, Perea consulted Dr. Antonio C. Pascual (Dr. Pascual), an internist, cardiologist,
and echocardiographer, who diagnosed him with "Uncontrolled Hypertension and Coronary Artery
Disease." Dr. Pascual found Perea to be medically unfit to work as a seafarer.
On November 5, 2010, after a series of examinations, Dr. Hao-Quan and Dr. Lim certified that Perea was
cleared of the injuries that caused his repatriation.
ISSUES: Whether or not the doctor who have had a personal knowledge of the actual medical condition,
having closely, meticulously and regularly monitored and actually treated the seafarer's illness, is more
qualified to assess the seafarer's disability
HELD: The company-designated physicians' findings that petitioner has been cleared for work should
prevail.
It is not disputed that petitioner was treated for injuries and hypertension during the term of his contract.
Soon after his repatriation, petitioner was seen by the company-designated physicians, who gave the
initial impression, "To Consider Cubital Tunnel Syndrome, Right; Hypertension; Rule Out Ischemic Heart
Disease."
Dr. Hao-Quan and Dr. Lim monitored petitioner and subjected him to laboratory exams, chest CT scan,
MRI, Dipyridamole Thallium Scan, and a coronary angiography.
This Court sees no reason to distrust Dr. Hao-Quan and Dr. Lim's assessment of Perea's condition
considering that they were able to monitor Perea's condition over a prolonged period. As the Court of
Appeals discussed:
As between the findings made by the company-designated physicians who conducted an extensive
examination on the petitioner and Dr. Pascual who saw petitioner on only one (1) occasion and did not
even order that medical tests be done to support his declaration that petitioner is unfit to work as a
seaman, the company-designated physicians' findings that petitioner has been cleared for work should
prevail.
Submitted by: Sison, Aldous Francis

P.
LABOR LAW>Labor Standards> Work-related illness > Return of award

vs.
G.R. No. 212098, July 26, 2017
(Second Division)
DOCTRINE: For disability to be compensable under the above POEA-SEC, two elements must concur:
(1) the injury or illness must be work-related; and (2) the work-related injury or illness must have existed
during the term of the seafarer's employment contract. To be entitled to compensation and benefits under
the governing 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.
FACTS: Petitioner Julio C. Espere was hired as a Bosun by respondent NFD International Manning
Agents, Inc. (NFD) for and in behalf of its foreign principal Target Ship Management Pte Ltd. on board the
vessel M V. Kalpana Prem, for a period of nine (9) months, with a basic monthly salary of
US$730.00. Around five (5) months into his deployment, petitioner complained that he was feeling dizzy,
had body malaise and chills. In the case report prepared by Dr. Frances Hao-Quan (Dr. Hao-Quan) it was
stated that petitioner was suffering from hypertension. He was given medication for his condition and
advised to come back for re-evaluation. In all these follow-up evaluations, petitioner was continually
diagnosed to be suffering from hypertension and was given the appropriate medications to address his
medical condition. Moreover, during the time he was undergoing treatment, petitioner received sickness
allowance which amounted to Two Thousand Eight Hundred Eighty-Seven US dollars and Three Cents
(US$2,887.03) from respondent. Meanwhile, on February 16, 2012, the Marine Medical Services of the
Metropolitan Medical Center issued a report stating that the cause of petitioner's hypertension was not
work-related and that the cause of his hypertension is multifactorial in origin, which includes genetic
predisposition, poor lifestyle, high salt intake, smoking, diabetes mellitus, age, and increased sympathetic
activity. In a subsequent report dated April 24, 2012, one of the company doctors stated that petitioner's
hypertension "is not a contraindication to resume work as long as patient will be compliant with taking his
anti-hypertensive medications and we are able to achieve adequate blood pressure control." Not satisfied
with the findings of the company-designated physicians, petitioner consulted Dr. Manuel C. Jacinto,
Jr. (Dr. Jacinto), who specializes in Orthopedic Surgery and Traumatology/Disease of Bones and Joints.
Dr. Jacinto marked petitioner's condition as "work-related/work-aggravated." Petitioner filed a
Complaint against respondents claiming disability benefits for permanent disability and damages.
The LA dismiss the case and held that petitioner failed to prove by substantial evidence that his
hypertension was work-related. Petitioner sought recourse before the NLRC. NLRC rules in favor of
petitioner. NLRC held that the nature of petitioner's stressful work on board the vessel was a factor in the
aggravation of his hypertension. The CA annulled and set aside the decision of the NLRC and dismissed
petitioner's complaint. CA held that petitioner failed to establish by adequate proof that his hypertension
was work-related.
ISSUE: Whether or not CA has committed palpable error when it rendered that illness of
hypertension is not work related although petitioner was employed by respondent consistently
and continuously without interruption since 1989 and that prior to his deployment he was found to
be fit for work.
HELD:
PROCEDURAL MATTERS
0
Univac Development, Inc. v. Soriano is instructive. Thus, this Court has held that:
x x xIn other words, the CA is empowered to evaluate the materiality and

significance of the evidence which is alleged to have been capriciously,
whimsically, or arbitrarily disregarded by the NLRC in relation to all other evidence
on record. The CA can grant a petition when the factual findings complained of are
not supported by the evidence on record; when it is necessary to prevent a
substantial wrong or to do substantial justice; when the findings of the NLRC
contradict those of the LA; and when necessary to arrive at a just decision of the
case. Thus, contrary to the contention of petitioner, the CA can review the finding
of facts of the NLRC and the evidence of the parties to determine whether the
NLRC gravely abused its discretion x x x.
NO. The opinion of petitioner's physician, that his hypertension is essential and work-related, is
diametrically opposed to the evaluation made by the company doctors which found that
petitioner's hypertension is not work-related. The question then is, whose assessment or finding
should prevail?
In Andrada v. Agemar Manning Agency, Inc., et al., this Court held that:
it is the company-designated physician who is entrusted with the task of assessing the
seaman's disability, whether total or partial, due to either injury or illness, during the term
of the latter's employment. It is his findings and evaluations which should form the basis
of the seafarer's disability claim. His assessment, however, is not automatically final,
binding or conclusive on the claimant, the labor tribunal or the courts, as its inherent
merits would still have to be weighed and duly considered. The seafarer may dispute
such assessment by seasonably exercising his prerogative to seek a second opinion and
consult a doctor of his choice. In case of disagreement between the findings of the
company-designated physician and the seafarer's doctor of choice, the employer and the
seaman may agree jointly to refer the latter to a third doctor whose decision shall be final
and binding on them.
The Court agrees with the conclusion of the CA that, unlike the evaluation made by the company
physicians, there is no evidence to prove that Dr. Jacinto's findings were reached based on an extensive
or comprehensive examination of petitioner. In the Medical Certificate he issued, Dr. Jacinto diagnosed
petitioner as suffering from "Uncontrolled Essential Hypertension, Hypertensive Cardiomyopathy and
Malaise," that his condition did not improve "despite management and medications" and, by reason of
which, he is "physically unfit to go back to work." However, as found by the LA and the CA, aside from the
above Medical Certificate, petitioner failed to present competent evidence to prove that he was thoroughly
examined by Dr. Jacinto. In fact, Dr. Jacinto did not specify the medications he prescribed and the type of
medical management he made to treat petitioner's condition. Dr. Jacinto did not even explain nor justify
his conclusions that petitioner's hypertension started at work, is essential and work-related and that, by
reason of such illness, petitioner is no longer fit to work. Dr. Jacinto also indicated therein that petitioner
"was under [his] service during the period from May 2012 to present." However, a cursory reading of the
said Medical Certificate would show that the same was issued on May 7, 2012. This only proves that, at
the time the said Medical Certificate was issued, petitioner was under the care of Dr. Jacinto for not more
than one week, without any indication as to the number of instances petitioner consulted him during that
short period of time.
In contrast, the various medical certificates and reports by the company-designated physicians
were issued in a span of five (5) months of closely monitoring petitioner's medical condition and
progress, and after careful analysis of the results of the diagnostic tests and procedures
administered to petitioner while in consultation with his cardiologist.
In the recent case of Dalusong v. Eagle Clare Shipping Philippines, Inc., we ruled that "the
findings of the company-designated doctor, who, with his team of specialists ... periodically
treated petitioner for months and monitored his condition, deserve greater evidentiary weight than
the single medical report of petitioner's doctor, who appeared to have examined petitioner only
once."
For disability to be compensable under the above POEA-SEC, two elements must concur: (1) the injury
or illness must be work-related; and (2) the work-related injury or illness must have existed during
the term of the seafarer's employment contract. To be entitled to compensation and benefits under the
governing 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 this case, however, petitioner relied on the presumption that his illness is work-related but he was
unable to present substantial evidence to show that his work conditions caused or, at the least, increased
the risk of contracting his illness. Neither was he able to prove that his illness was preexisting and that it
was aggravated by the nature of his employment. Thus, the LA and the CA correctly ruled that he is not
entitled to any disability compensation.
As to petitioner's argument that, since he was found fit for work in his Pre-Employment Medical
Examination(PEME) prior to his deployment, there can be no other conclusion than that his employment
with respondents was the primary cause of his illness. The PEME is nothing more than a summary
examination of the seafarer's physiological condition; it merely determines whether one is "fit to work" at
sea or "fit for sea service" and it does not state the real state of health of an applicant. The "fit to work"
declaration in the PEME cannot be a conclusive proof to show that he was free from any ailment prior to
his deployment.
Finally, in view of respondents' prior satisfaction of the writ of execution issued by the LA while
the case was pending with the CA, coupled with petitioner's admission that he "had already
received the full judgment award of this case," the latter, having been proven not entitled to such
an award, should, thus, return the same to respondents.
Submitted by: Sarmiento, Majesca M

LABOR LAW>Labor Standards> Permanent Total Disability
CONSTANCIO CADERAO BALATERO, Petitioner

vs.
SENATOR CREWING (MANILA) INC., AQUANAUT SHIPMANAGEMENT LTD., ROSE AARON and
CARLOS BONOAN, MV MSC FLAMINIA, Respondents
G.R. No. 224532 June 21, 2017
Third Division
DOCTRINE: Jurisprudence is replete with doctrines granting permanent total disability compensation to
seafarers, who suffered from either cardiovascular diseases or hypertension, and were under the
treatment of or issued fit-to-work certifications by company-designated doctors beyond 120 or 240 days
from their repatriation.
FACTS: Balatero was initially engaged by the respondents as an able-bodied seaman. He had worked
his way up to become 2nd Officer and had boarded 18 of the respondents' ships. After having been found
as ''fit to work' upon compliance with the required Pre-Employment Medical Examination (PEME),
7
Balatero boarded MV MSC Flaminia for a six-month contract as 3rd Officer. Balatero experienced chest
pains, with palpitations and shortness of breath. He was taken to Odense University Hospital (Odense) in
Denmark, diagnosed to have an elevated blood pressure, prescribed anti-hypertensive medicines, and
discharged thereafter. When Balatero disembarked from the ship and arrived in Manila, he reported to
SCMI's office for post-medical examination and was referred to Metropolitan Medical Center under the
care of company-designated physician, Dr. Richard Olalia. In the Medical Report, Dr. Olalia found
Balatero to be suffering from "Uncontrolled Hypertension; Unstable Angina; To Consider Coronary Artery
Disease [CAD]; Dyslipidemia," the etiologies of which were multi-factorial but not work-related. Balatero
was later referred to Cardinal Santos Medical Center under the care of Dr. Roy Garrido (Dr. Garrido), an
interventional cardiologist. Balatero underwent Coronary Angiogram and Aortogram, which revealed that
he had "Severe [CAD] ofthe [Left Anterior Descending], D2 and [RightPosterior Descending Artery]; and
Moderate [CAD] LCx."
He underwent Percutaneous Transluminal Coronary Angioplasty (2 stents of the Mid Left Anterior
Descending and Ostio Proximal Right Posterior Descending Artery). In Balatero's subsequent medical
check-ups, Dr. Garrido prescribed maintenance medicines, which totalled five. The medical expenses
were shouldered by the respondents, and Balatero was also paid his sickness allowance. He was
subsequently declared fit to work, but with medical maintenance for the rest of his life. Unconvinced about
his fitness to resume sea duties, Balatero consulted Dr. Li-Ann Lara-Orencia (Dr. Lara-Orencia), an
occupational doctor. As indicated in the Medical Certificate, Dr. Lara-Orencia found Balatero to be
suffering from "Hypertensive Cardiovascular Disease," which was ''precipitated by the stressful nature of
his work." Further, under Item No. 1 l(c) of the Philippine Overseas Employment Agency's (POEA)
Standard Employment Contract (SEC) for Seafarers, CAD is a compensable illness. Under Item No. 13,
Uncontrolled Hypertension, arising from exposure to extreme physical and psychological stress at work, is
an occupational illness. Dr. Lara-Orencia then concluded that Balatero cannot return to his employment
as 3rd Officer due to the latter's on and off chest pains, "easy fatigability" and continuous intake of five
maintenance medicines.
Balatero demanded permanent total disability benefits, which the respondents denied on the ground that
after treatment and rehabilitation, the company-designated doctor had assessed Balatero with a disability
of Grade 7 (Moderate Residuals of Disorders) under the POEA SEC.
ISSUE: WON, Balatero only suffers from Grade 7 Disability, hence only entitled to benefits corresponding
thereto.
HELD: The company-designated doctor assessed Balatero to be suffering from Grade 7 Disability under
Section 32 of the POEA SEC, to wit, "Moderate residuals of disorder of the intra-abdominal organs
secondary to trauma resulting to impairment of nutrition, moderate tenderness, nausea, vomiting,
constipation or diarrhea." On the other hand, Dr. Lara-Orencia found Balatero's Hypertensive
8 9
Cardiovascular Disease as an occupational disease under Section 32(A), Items 1 l(c)5 and 13(bf of the
POEA SEC. Due to Balatero's recurrent chest pains, "easy fatigability," and continuous intake of five
maintenance medicines, he was no longer fit to resume sea duties as 3rd Officer.
It bears stressing that the parties did not refer the divergent medical assessments of their respective
doctors to a third doctor, whose findings should have been final and binding pursuant to Section 20(A)(3)
of the 2010 POEA SEC. For failure to refer the two conflicting medical findings to a third doctor mutually
agreed upon by the parties, the CA ruled that Balatero breached a contractual obligation. Consequently,
the assessment of the company-designated doctor was held as binding.
The Court examined the pleadings filed by the respondents and notes that nowhere did they categorically
state the date when the company-designated doctor had issued Balatero's final disability rating. Further,
the respondents did not attach or completely quote the medical report of the company-designated doctor.
Hence, in the LA, NLRC and CA decisions, specific references to, and details about the aforecited date
and medical report are conspicuously absent as well.
From the herein assailed decision, however, it can be inferred that the company-designated doctor
declared Balatero fit for sea duties upon the conclusion of the Percutaneous Transluminal Coronary
60
Angioplasty on February of 2014 and successive consultations thereafter. To this, Balatero disagreed,
61
thus, he sought the opinion of Dr. Lara-Orencia, who issued a Medical Certificate, dated June 3, 2014,
refuting the company-designated doctor's fit-to-work assessment of Balatero. On account of Dr. Lara-
Orencia's findings, Balatero demanded for total and permanent disability compensation, which the
62
respondents denied contending that only a Grade 7 Disability rating was proper.
Viewed in the foregoing context, it can be concluded that as of June 3, 2014, which was more than 120
days from Balatero' s repatriation, no final disability rating was yet issued by the respondents, sans proof
too that the latter sought for an extension to further determine the seafarer's fitness to work. Dr. Olalia's
Medical Report, dated January 8, 2014, which negated the work-relatedness of Balatero's medical
condition, was issued merely in the interim considering that tests and procedures were still to be
performed. The said report cannot be considered as the final disability rating issued by the company-
designated doctor.
The Court notes too that as pointed out by Balatero, Department of Health (DOH) Administrative Order
(A.O.) No. 2007-0025 recommends non-issuance of fit-to-work certifications to seafarers "with acute or
chroniccardiovascular condition limiting physical activity, requiring more than two (2) maintenance oral
medicines and close monitoring, or causing significant disability," specifically those(1)suffering from
CAD,(2)has undergoneCoronary Angioplasty within six months, with history of Uncontrolled Diabetes
Mellitus, Hypertension and Dyslipidemia, and (3) Hypertension requiring three or more drugs, among
others. Balatero falls within the foregoing category.
70
It also bears stressing that jurisprudence is replete with doctrines granting permanent total disability
compensation to seafarers, who suffered from either cardiovascular diseases or hypertension, and were
under the treatment of or issued fit-to-work certifications by company-designated doctors beyond 120 or
240 days from their repatriation.
In precis, the Court is compelled to reinstate the LA and NLRC' s ruling granting Balatero permanent total
disability compensation, and set aside the CA's disquisition that only benefits pertaining to Grade 7
Disability Rating should be awarded on the basis of the following: (1) Dr. Lara-Orencia's ample
explanation on how she had arrived at a permanent total disability assessment; (2) the recommendations
of DOH A.O. No. 2007-0025 on the issuance of fit-to-work certificates; and (3) jurisprudence granting
permanent total disability compensation to seafarers suffering from hypertensive cardiovascular diseases,
who were either under the treatment of, or issued fit-to-work certifications by company-designated doctors
beyond 120 or 240 days from their repatriation.
Submitted by: Tamayo, Jumen G.

LABOR LAW>Labor Standards> Third doctor
NORTH SEA MARINE SERVICES CORPORATION, MS. ROSALINDA CERDINA AND/OR CARNIVAL
CRUISE LINES, Petitioners
vs.
SANTIAGO S. ENRIQUEZ, Respondent
G.R. No. 201806, August 14, 2017
(First Division)
DOCTRINE: Third doctor must be referred to by the seafarer to address the conflicting assessments in
accordance with the mandated procedure. Failure to observe the procedure will make the company-
designated physician’s findings final and binding.
FACTS: Seafarer was engaged as Assistant Plumber. During employment, seafarer experienced back
pain. The ship doctor diagnosed him to be suffering from mechanical back pains and prescribed him with
medicines. However, due to the worsening of his back pains, he was medically repatriated. Upon
repatriation, seafarer was immediately referred to the company-designated physicians. Tests revealed
that he was suffering from Cervical Spondylosis with Thickening of the Posterior Longitudinal Ligament
from C2-3 to C5-6; Mild Disc Bulging from C3-4 to T2-E; and Superimposed Left Paracentral Disc
Protrusion at C5-6. Seafarer underwent Anterior Disectomy, Spinal fusion C5-C6 Ciliac Bone Graft, and
Anterior Plating. After his discharge from the hospital, seafarer continuously reported to the company-
designated physician for medical treatment and evaluation. Thereafter, he underwent physical
therapy.After treatment, seafarer was declared fit to resume sea duties by the company-designated
physician and the specialists. Seafarer thereafter signed a Certificate of Fitness to Work, releasing the
company from all liabilities. Two months after, the seafarer consulted another orthopedic surgeon who
certified his unfitness to work as a seaman and assessing him with a grade ―3‖ disability. This served as
basis for the seaman in claiming disability benefits against the company based on an alleged collective
bargaining agreement (CBA). The Labor Arbiter denied the claim and upheld the findings of the company-
designated physician. No proof shown that the alleged CBA presented covers the parties. Moreover,
and assuming that there is a CBA in place, the seafarer is not entitled to disability benefits therein as the
same is only provided if the disability was a result of an injury arising from an accident.
On appeal, the NLRC awarded the seafarer full disability benefits under the CBA relying on the medical
opinion of seafarer’s personal doctor. The NLRC held that the CBA is applicable as the seafarer’s spinal
column ―cracked‖ while lifting heavy pipes. The Court of Appeals affirmed the award of disability benefits
to the seafarer.
ISSUE: Whether or not the second opinion or medical findings can overthrow the company-designated
physician’s findings despite failure of seafarer to refer to a third doctor.
HELD: NO. It is clearly provided in the POEA-SEC that in order to claim disability benefits, it is the
company-designated physician who must proclaim that the seafarer suffered a permanent disability,
whether total or partial, due to either injury or illness, during the term of his employment. 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 seafarer whose assessment
shall be binding on both of them. While a seafarer has the right to seek a second and even a third
opinion, the final determination of whose assessment must prevail must be done in accordance with this
agreed procedure. Failure to observe this will make the company-designated physician's assessment final
and binding. The seafarer did not refer the conflicting assessments of the company-designated
physicians and his chosen doctor to a third doctor in accordance with the mandated procedure. In fine,
the company-designated physicians’ assessment was not effectively disputed; hence, the Court has no
option but to declare the fit to work declaration as final and binding. In any event, the Court found the
company-designated physicians’ assessment to be credible considering their close monitoring and
extensive treatment of seafarer's condition. The fit to work assessment was supported by the findings of
the orthopedic surgeon and physiatrist who both opined, after making a thorough evaluation of seafarer's
condition, that seafarer was already physically fit to resume work without any restrictions. The extensive
medical attention and treatment given to the seafarer for more than two months were clearly supported by
medical reports.
Submitted by: Tanghal, Noelle

Christine
LABOR LAW>Labor Standards>Permanent Total Disability
MAUNLAD TRANS INC., CARNIVAL CRUISE LINES and/or AMADO CASTRO, Petitioners
vs.
GABRIEL ISIDRO, Respondent
G.R. No. 222699. July 24, 2017
(Third Division)
DOTRINE: In a case of claims for disability benefits, the onus probandi falls on the seafarer as claimant to
establish his claim with the right quantum of evidence; and as such, it cannot rest on mere speculations,
presumptions or conjectures. Awards of compensation depend on the presentation of evidence to prove a
positive proposition. The quantum of proof required is substantial evidence.
FACTS: Respondent Gabriel Isidro, a bartender hired by Petitioner Maunlad Trans Inc., for and in behalf
of its foreign principal, Carnival Cruise Lines, was on board the vessel M/S Miracle, when he had an
accident while lifting heavy food provisions. He was diagnosed with right knee synovitis, meniscal, and
chondromalacia given medication, and advised to continue working. He was later diagnosed with
psoriasis by the ship's physician, which was likewise concluded by the company-designated doctor upon
respondent Isidro’s repatriation back to the Philippines. During his series of check-ups, however, there
was no mention of his knee synovitis.
Upon consultation with a private doctor, he was told to be suffering from psoriasis,
chondromalacia (medial femoral condy/ tibial plateaus) right, grade II injury medial collateral ligament
right knee, sprain, medial head of gastrocnemus with hemarthrosus and was advised to undergo MRI and
surgery. He was also found to be unfit to go back to work. He filed a complaint for full disability benefits.
The attending dermatologist issued a disability grading of Grade 12 for slight residual or disorder, which
was the basis of the LA’s award of US$5,225 while the NLRC granted full disability compensation benefits
of US$60,000.00. The CA disregarded the issuance of a disability grading for having been haphazardly
issued without the benefit of a thorough physical examination; hence, the appeal.
ISSUES: Whether or not respondent Isidro is entitled to full and permanent disability benefits
HELD: NO.
The Court held that respondent Isidro is entitled only to partial disability compensation equivalent to
Grade 12 as certified to by the company-designated physician. While the facts, as found by the CA and
the NLRC, point to the existence of a knee injury which respondent suffered during the term of his
employment contract and while on board the vessel, such knee injury was not the ailment complained of
by respondent upon repatriation to the Philippines and is, likewise, not the illness for which he was given
medical treatment.
That respondent did not complain of, and was not treated for, the alleged knee injury is evident from the
medical reports submitted by the company-designated physician detailing the progress of respondent's
skin condition. The CA's observations that petitioners knew of respondent's knee injury and that the
company-designated physician was cognizant of the same are off-tangent as it may very well happen that
the swelling of respondent's knee had been resolved; hence, the absence of further medical complaint
from respondent.
The findings of the company-designated doctor, together with a dermatologist, presumably an expert in
skin conditions, who periodically treated respondent for months and monitored his condition, deserve
greater evidentiary weight than the single medical report of respondent's doctor of choice. Indeed, ―the
doctor who have had a personal knowledge of the actual medical condition, having closely, meticulously
and regularly monitored and actually treated the seafarer's illness, is more qualified to assess the
seafarer's disability.‖
Submitted by: Valdez, Suzette P.

Labor Law> Labor Standards> Partial Permanent Disability
EUGENIO M. GOMEZ
vs
CROSSWORLD MARINE SERVICES, INC et al
G.R. Nos. 220002, August 2, 2017
(Second Division)
DOCTRINE: A temporary total disability only becomes permanent when so declared by the company-
designated physician within the periods he/she is allowed to do so, or upon the expiration of the
existence of a permanent disability..
FACTS: On February 29, 2012, at about 8:00 a.m., the Chief Officer of the vessel told petitioner to
remove the ice from the lower and upper decks of the ship. While performing this task, petitioner
accidentally slipped and hit his lower back on the steel deck. Petitioner was immediately in pain, but
thought it was just temporary. He rested a moment and then continued to work despite the pain. He
reported the incident to his superior when he asked for pain relievers. After 15 days or on March 15,
2012, petitioner could no longer bear the pain on his back and went to the vessel's master and requested
for medical examination. He was told to go to the hospital the next day.
Petitioner was examined and treated in Belgium; x-ray was done, intravenous fluid was administered, and
medicine was injected twice on his back. He was diagnosed with Lumbago. The doctor-in-charge
recommended petitioner's repatriation for further treatment. Petitioner was repatriated to the Philippines
on March 18, 2012.
ISSUE: Whether or not the Petitioner's injury is permanent total disability?
HELD: No.
In this case, the treatment of petitioner's injury required spine surgery and physical therapy which
extended beyond the initial 120-day period into the maximum 240-day treatment period. The company-
designated doctor's medical report dated September 11, 2017 (made 195 days from the time petitioner
was injured on February 29, 2012) stated that petitioner failed the functional capacity test and
recommended that petitioner continue therapy for two to three months. Petitioner filed his complaint on
September 13, 2012 or 197 days from the date he was injured, and, therefore, before the lapse of the
maximum 240-day treatment period within which the company-designated physician should assess the
fitness of petitioner to return to work. Since the company-designated doctor has not declared that
petitioner is not fit to work within the 240-day period, and the 240-day period has not lapsed when
petitioner filed his complaint, the petitioner cannot be legally presumed as permanently and totally
disabled to be entitled to permanent total disability.
However, considering that the Labor Arbiter, the NLRC, and the Court of Appeals all found petitioner
Gomez to be disabled due to a work-related injury, this fact is now binding on the respondents and this
Court. The Court concurs with the Court of Appeals' finding that petitioner suffers from a partial
permanent disability grade of 8 given by the company-designated doctor based on the POEA SEC
Schedule of Disability. The disability grade is in accordance with Section 20-A (6) of the POEA SEC,
which states: "The disability shall be based solely on the disability gradings provided under Section 32 of
this Contract, and shall not be measured or determined by the number of days a seafarer is under
treatment or the number of days in which sickness allowance is paid.‖

N.
Labor Law > Labor Standards > Termination of Employment > Illegal Dismissals
C.I.C.M. MISSION SEMINARIES (MARYHURST, MARYHEIGHTS, MARYSHORE AND MARYHILL)

SCHOOL OF THEOLOGY, INC., FR. ROMEO NIMEZ, CICM, Petitioners
vs.
MARIA VERONICA C. PEREZ, Respondent
G.R. No. 220506, January 18, 2017
(Second Division)
DOCTRINE : When there is an order of separation pay (in lieu of reinstatement or when the reinstatement
aspect is waived or subsequently ordered in light of a supervening event making the award of
reinstatement no longer possible), the employment relationship is terminated only upon the finality of the
decision ordering the separation pay.
FACTS : This controversy is an offshoot of an illegal dismissal case filed by the respondent against the
petitioners. In its June 16, 2008 Decision, the Labor Arbiter recognized respondent's right to receive from
the petitioners backwages and separation pay in lieu of reinstatement. The decision became final and
executory on October 4, 2012, as evidenced by the Entry of Judgment. Consequently, respondent moved
for the issuance of a writ of execution. The petitioners opposed and moved for the issuance of a
certificate of satisfaction of judgment, alleging that their obligation had been satisfied by the release of the
cash bond in the amount of ₱272,337.05 to respondent. Labor Arbiter ruled that the cash bond posted by
the petitioners was insufficient to satisfy their obligation. Thus, it ordered the issuance of a writ of
execution. CA dismissed the petition filed by the petitioners. The petitioners moved for reconsideration. In
its September 7, 2015 Resolution, the CA denied their motion.
ISSUE : Whether the CA erred in not finding grave abuse of discretion when the NLRC affirmed the LA' s
findings that the separation pay in lieu of reinstatement as well as backwages due to respondent should
be recomputed until the finality of the Court's, despite the fact that the delay in the resolution of the said
case was brought about by respondent herself.
HELD : NO.
The decision of the CA is based on long standing jurisprudence that in the event the aspect of
reinstatement is disputed, backwages, including separation pay, shall be computed from the time of
dismissal until the finality of the decision ordering the separation pay. In Gaco v. NLRC, 230 SCRA 260
(1994), it was ruled that with respect to the payment of backwages and separation pay in lieu of
reinstatement of an illegally dismissed employee, the period shall be reckoned from the time
compensation was withheld up to the finality of this Court’s decision. This was reiterated in Surima v.
NLRC, 291 SCRA 260 (1998) and Session Delights Ice Cream and Fast Foods v. CA, 612 SCRA 10
(2010).
The reason for this was explained in Bani Rural Bank, Inc. v. De Guzman, 709 SCRA 330 (2013). When
there is an order of separation pay (in lieu of reinstatement or when the reinstatement aspect is waived or
subsequently ordered in light of a supervening event making the award of reinstatement no longer
possible), the employment relationship is terminated only upon the finality of the decision ordering the
separation pay. The finality of the decision cuts-off the employment relationship and represents the final
settlement of the rights and obligations of the parties against each other. Hence, backwages no longer
accumulate upon the finality of the decision ordering the payment of separation pay because the
employee is no longer entitled to any compensation from the employer by reason of the severance of his
employment. One cannot, therefore, attribute patent error on the part of the CA when it merely affirmed
the NLRC’s conclusion, which was clearly based on jurisprudence.
The Court disagrees with the petitioners’ assertion that a recomputation would violate the doctrine of
immutability of judgment. It has been settled that no essential change is made by a recomputation as this
step is a necessary consequence that flows from the nature of the illegality of dismissal declared in that
decision. By the nature of an illegal dismissal case, the reliefs continue to add on until full satisfaction
thereof. The recomputation of the awards stemming from an illegal dismissal case does not constitute an
alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only
the computation of the monetary consequences of the dismissal is affected and this is not a violation of
the principle of immutability of final judgments.
Submitted by: Veloso, Jocelyn

Labor Law >Labor Standards> Acquittal from criminal case and extinguishment of civil liability
Ambassador Hotel, Inc.

vs.
Social Security System,
G.R. No. 194137, June 21, 2017
(Second Division)
DOCTRINE: Remittance of SSS contributions under the aforesaid provision is mandatory. Any
divergence from this rule subjects the employer not only to monetary sanctions, that is, the payment of
penalty of three percent (3%) per month, but also to criminal prosecution if the employer fails to: (a)
register its employees with the SSS; (b) deduct monthly contributions from the salaries/wages of its
employees; or (c) remit to the SSS its employees' SSS contributions and/or loan payments after
deducting the same from their respective salaries/wages.
FACTS: Sometime in September 2001, the SSS filed a complaint with the City Prosecutor's Office of
Quezon City against Ambassador Hotel, Inc. (Ambassador Hotel) and its officers for non-remittance of
SSS contributions and penalty liabilities for the period from June 1999 to March 2001 in the aggregate
amount of ₱769,575.48. After preliminary investigation, the City Prosecutor's Office filed an
Information, dated January 28, 2004, before the RTC charging Ambassador Hotel, Inc.'s Yolanda
Chan (Yolanda), as President and Chairman of the Board; and Alvin Louie Rivera, as Treasurer and
Head of the Finance Department, with violation of Section 22(a), in relation to Section 22(d) and Section
28(e) of Republic Act (R.A.) No. 1161, as amended by R.A. No. 8282. Only Yolanda was arrested. Upon
arraignment, she pleaded not guilty. Thereafter, trial ensued.
The prosecution presented Maria Rezell C. De Ocampo (De Ocampo), Accounts Officer of SSS and
Simeon Nicolas Chan (Simeon), former President of Ambassador Hotel. Their combined testimonies
tended to establish the following: De Ocampo was assigned to investigate the account of Ambassador
Hotel. In the course of her investigation, she discovered that the hotel was delinquent in its payment of
contributions for the period from June 1999 to March 2001, as an examination of the hotel's records
revealed that its last payment was made in May 1999. Thereafter, De Ocampo prepared a delinquency
assessment and a billing letter for Ambassador Hotel. On April 17, 2001, she visited Ambassador Hotel,
where a certain Guillermo Ciriaco (Ciriaco) assisted her. De Ocampo then informed Ciriaco of the hotel's
delinquency. She showed him the assessment, billing letter, and letter of authority. De Ocampo also
requested for the records of previous SSS payments, but the same could not be produced. Thus, she told
Ciriaco that Ambassador Hotel had to comply with the said request within fifteen (15) days. De Ocampo
concluded that based on the actual assessment and documents submitted, the unpaid contributions of
Ambassador Hotel from June 1999 to March 2001 amounted to ₱303,459.00. Further, as of January 2,
2005, the hotel is liable for penalties in the amount of ₱531,341.44.
Yolanda argued that because she was not performing the functions as the President of Ambassador
Hotel from April 25, 1998 until April 10, 2001, she could not be held criminally liable for the non-payment
of SSS contributions from June 1999 to March 2001.
The RTC held that Yolanda could not be held criminally liable for the non-payment of SSS contributions
because she was not performing the duties of the hotel's president from June 1999 to March 2001. The
CA affirmed the RTC.
ISSUE: Whether or not the petitioner is liable for the alleged unremitted SSS Contribution
HELD: YES.
Ambassador Hotel is obligated to remit SSS contributions
Under Section 8(c) of R.A. No. 8282, an employer is defined as "any person, natural
or juridical, domestic or foreign, who carries on in the Philippines any trade, business, industry,
undertaking, or activity of any kind and uses the services of another person who is under his orders as
regards the employment, except the Government and any of its political subdivisions, branches or
instrumentalities, including corporations owned or controlled by the Government." Ambassador Hotel, as
a juridical entity, is still bound by the provisions of R.A. No. 8282. Section 22 (a) thereof states:
Remittance of Contributions. (a) The contributions imposed in the preceding section shall be remitted to
the SSS within the first ten (10) days of each calendar month following the month for which they are
applicable or within such time as the Commission may prescribe. Every employer required to deduct and
to remit such contributions shall be liable for their payment and if any contribution is not paid to the SSS
as herein prescribed, he shall pay besides the contribution a penalty thereon of three percent (3%) per
month from the date the contribution falls due until paid. If deemed expedient and advisable by the
Commission, the collection and remittance of contributions shall be made quarterly or semiannually in
advance, the contributions payable by the employees to be advanced by their respective
employers: Provided, that upon separation of an employee, any contribution so paid in advance but not
due shall be credited or refunded to his employer.
Verily, prompt remittance of SSS contributions under the aforesaid provision is mandatory. Any
divergence from this rule subjects the employer not only to monetary sanctions, that is, the payment of
penalty of three percent (3%) per month, but also to criminal prosecution if the employer fails to: (a)
register its employees with the SSS; (b) deduct monthly contributions from the salaries/wages of its
employees; or (c) remit to the SSS its employees' SSS contributions and/or loan payments after
deducting the same from their respective salaries/wages.
Submitted by: Villanueva, Emilio Jan

D.
Labor Law >Labor Standards>Backwages Computation
UNITED COCONUT CHEMICALS,INC., Petitioner

vs.
VICTORIANO B. V ALMORES, Respondent
G.R. No. 201018, July 12, 2017
(Third Division)
DOCTRINE: The base figure in the determination of full backwages is fixed at the salary rate received by
the employee at the time he was illegally dismissed. The award shall include the benefits and allowances
regularly received by the employee as of the time of the illegal dismissal, as well as those granted under
the Collective Bargaining Agreement (CBA), if any.
FACTS: UCCI hired the respondent as its Senior Utilities Inspector with a monthly salary of ₱11,194.00.
He then became a member of the United Coconut Chemicals, Inc. Employees' Labor Organization
(UELO) until his expulsion sometime in 1995. Due to the expulsion, UELO formally demanded that UCCI
terminate the services of the respondent pursuant to the union security clause of the CBA. UCCI
dismissed him on February 22, 1996. He then filed a complaint for illegal dismissal in the NLRC. After due
proceedings, the Labor Arbiter dismissed his complaint for lack of merit. On appeal, however, the NLRC
reversed the Labor Arbiter, finding respondents liable for illegal dismissal and ordered them to reinstate
complainant to his former position without loss of seniority rights and with full backwages.
In excuting the order, the Labor Arbiter opined that the backwages due to the respondent should be
computed by excluding the benefits under the CBA. The National Labor Relations Commission (NLRC)
issued its resolution remanding the case to the Labor Arbiter for the recomputation of the backwages
inclusive of the benefits granted under the CBA, which was upheld by the Court of Appeals, and
prompted the petitioner to elevate the matter to the Supreme Court.
ISSUES: Whether or not the backwages should be based on the basic salary prevailing at the time of his
dismissal, unqualified by deductions or increases?
HELD: No.
The extent of the backwages to be awarded to an illegally dismissed employee has been set in Article
279. The base figure for the computation of backwages should include not only the basic salary but also
the regular allowances being received, such as the emergency living allowances and the 13th month pay
mandated by the law. The purpose for this is to compensate the worker for what he has lost because of
his dismissal, and to set the price or penalty on the employer for illegally dismissing his employee.
Howeveer, The amount does not include the increases or benefits granted during the period of his
dismissal because time stood still for him at the precise moment of his termination, and move forward
only upon his reinstatement. Hence, the respondent should only receive backwages that included the
amounts being received by him at the time of his illegal dismissal but not the benefits granted to his co-
employees after his dismissal.
In this case, CBA allowances and benefits that the respondent was regularly receiving before his illegal
dismissal on February 22, 1996 should be added to the base figure of ₱11, 194.00. This is because
Article 279 of the Labor Code decrees that the backwages shall be "inclusive of allowances, and to his
other benefits or their monetary equivalent." Considering that the law does not distinguish between the
benefits granted by the employer and those granted under the CBA, he should not be denied the latter
benefits.

LABOR LAW>Labor Standards> Backwages>Not due when dismissal is for just cause

vs.
G.R. No. 198066, June 7, 2017
(Second Division)
DOCTRINE: A dismissal based on willful breach of trust or loss of trust and confidence under Article 297
of the Labor Code entails the concurrence of two (2) conditions.
First, the employee whose services are to be terminated must occupy a position of trust and confidence.
There are two (2) types of positions in which trust and confidence are reposed by the employer, namely,
managerial employees and fiduciary rank-and-file employees. Managerial employees are considered to
occupy positions of trust and confidence because they are "entrusted with confidential and delicate
matters." On the other hand, fiduciary rank-and-file employees refer to those employees, who, "in the
normal and routine exercise of their functions, regularly handle significant amounts of [the employer's]
money or property." Examples of fiduciary rank-and-file employees are "cashiers, auditors, property
custodians," selling tellers, and sales managers. It must be emphasized, however, that the nature and
scope of work and not the job title or designation determine whether an employee holds a position of trust
and confidence. The second condition that must be satisfied is the presence of some basis for the loss of
trust and confidence. This means that "the employer must establish the existence of an act justifying the
loss of trust and confidence." Otherwise, employees will be left at the mercy of their employers.
FACTS:
Petitioner Bravo was employed as a part-time teacher by Urios College. In addition to his duties
as a part-time teacher, Bravo was also designated as the school's comptroller. As the school’s
comptroller petitioner Bravo was then directed to arrange a salary adjustment schedule for a new ranking
system adopted by the school. Two years later, Urios College organized a committee to review the
ranking system previously implemented. In its report, the committee found that the ranking system caused
salary distortions among several employees. There were also discrepancies in the salary adjustments of
Bravo and of two other employees. The committee also discovered that "the Comptroller's Office solely
prepared and implemented the salary adjustment schedule" without prior approval from the Human
Resources Department. The committee then recommended, among others, that Bravo be administratively
charged for serious misconduct or willful breach of trust under Article 282 of the Labor Code. Bravo
allegedly misclassified several positions and miscomputed his and other employees' salaries. Petitioner
Bravo received a show cause memo requiring him to explain in writing why his services should not be
terminated for his alleged acts of serious misconduct. After hearings were conducted, Bravo was found
guilty of serious misconduct and was terminated. Upon receipt of the termination letter, Bravo immediately
filed before the Executive Labor Arbiter a complaint for illegal dismissal. The Labor Arbiter dismissed the
complaint for lack of merit and ruled that Bravo's act of "assigning to himself an excessive and
unauthorized salary rate while working as a comptroller" constituted serious misconduct and willful breach
of trust and confidence for which he may be dismissed. On appeal the National Labor Relations
Commission found that Bravo's dismissal from service was illegal. There was no clear showing that Bravo
violated any school policy. Moreover, Bravo received the increased salary in good faith. The National
Labor Relations Commission also found that Urios College failed to afford Bravo the opportunity to be
heard and to defend himself with the assistance of a counsel. The CA on appeal by Urios College ruled
that the College had substantial basis to dismiss Bravo from service on the ground of serious misconduct
and loss of trust and confidence. Bravo occupied a highly sensitive position as the school's Comptroller.
"in the course of his duties, he granted himself additional salaries" without proper authorization. Rank-
and-file employees may only be dismissed from service for loss of trust and confidence if the employer
presents proof that the employee participated in the alleged misconduct. However, for managerial
employees, it is sufficient that the employer has reasonable ground to believe that the employee is
responsible for the alleged misconduct.
ISSUE: Whether or not petitioner’s employment was validly terminated
HELD: Yes.
Due to the nature of his occupation, petitioner's employment may be terminated for willful breach
of trust under Article 297(c), not Article 297(a), of the Labor Code.
Article 297. [282] Termination by Employer - An employer may terminate an employment for any
of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representatives; and
(e) Other causes analogous to the foregoing.
A dismissal based on willful breach of trust or loss of trust and confidence under Article 297 of the
Labor Code entails the concurrence of two (2) conditions.
First, the employee whose services are to be terminated must occupy a position of trust and
confidence. There are two (2) types of positions in which trust and confidence are reposed by the
employer, namely, managerial employees and fiduciary rank-and-file employees. Managerial employees
are considered to occupy positions of trust and confidence because they are "entrusted with confidential
and delicate matters." On the other hand, fiduciary rank-and-file employees refer to those employees,
who, "in the normal and routine exercise of their functions, regularly handle significant amounts of [the
employer's] money or property." Examples of fiduciary rank-and-file employees are "cashiers, auditors,
property custodians," selling tellers, and sales managers. It must be emphasized, however, that the
nature and scope of work and not the job title or designation determine whether an employee holds a
position of trust and confidence. The second condition that must be satisfied is the presence of some
basis for the loss of trust and confidence. This means that "the employer must establish the existence of
an act justifying the loss of trust and confidence." Otherwise, employees will be left at the mercy of their
employers.
The court holds that petitioner was validly dismissed based on loss of trust and confidence.
Petitioner was not an ordinary rank-and-file employee. His position of responsibility on delicate financial
matters entailed a substantial amount of trust from respondent. The entire payroll account depended on
the accuracy of the classifications made by the Comptroller. It was reasonable for the employer to trust
that he had basis for his computations especially with respect to his own compensation. The preparation
of the payroll is a sensitive matter requiring attention to detail. Not only does the payroll involve the
company's finances, it also affects the welfare of all other employees who rely on their monthly salaries.
Petitioner's act in assigning to himself a higher salary rate without proper authorization is a clear
breach of the trust and confidence reposed in him. In addition, there was no reason for the Comptroller's
Office to undertake the preparation of its own summary table because this was a function that exclusively
pertained to the Human Resources Department. Petitioner offered no explanation about the Comptroller's
Office's deviation from company procedure and the discrepancies in the computation of other employees'
salaries. Petitioner's position made him accountable in ensuring that the Comptroller's Office observed the
company's established procedures. It was reasonable that he should be held liable by respondent on the
basis of command responsibility.

L.
Labor Law > Labor Standards > Termination of Employment > Illegal Dismissals

vs.
G.R. No. 220506, January 18, 2017
(Second Division)
DOCTRINE : When there is an order of separation pay (in lieu of reinstatement or when the reinstatement
aspect is waived or subsequently ordered in light of a supervening event making the award of
reinstatement no longer possible), the employment relationship is terminated only upon the finality of the
decision ordering the separation pay.
FACTS : This controversy is an offshoot of an illegal dismissal case filed by the respondent against the
petitioners. In its June 16, 2008 Decision, the Labor Arbiter recognized respondent's right to receive from
the petitioners backwages and separation pay in lieu of reinstatement. The decision became final and
executory on October 4, 2012, as evidenced by the Entry of Judgment. Consequently, respondent moved
for the issuance of a writ of execution. The petitioners opposed and moved for the issuance of a
certificate of satisfaction of judgment, alleging that their obligation had been satisfied by the release of the
cash bond in the amount of ₱272,337.05 to respondent. Labor Arbiter ruled that the cash bond posted by
the petitioners was insufficient to satisfy their obligation. Thus, it ordered the issuance of a writ of
execution. CA dismissed the petition filed by the petitioners. The petitioners moved for reconsideration. In
its September 7, 2015 Resolution, the CA denied their motion.
ISSUE : Whether the CA erred in not finding grave abuse of discretion when the NLRC affirmed the LA' s
findings that the separation pay in lieu of reinstatement as well as backwages due to respondent should
be recomputed until the finality of the Court's, despite the fact that the delay in the resolution of the said
case was brought about by respondent herself.
HELD : NO.
The decision of the CA is based on long standing jurisprudence that in the event the aspect of
dismissal until the finality of the decision ordering the separation pay. In Gaco v. NLRC, 230 SCRA 260
(1994), it was ruled that with respect to the payment of backwages and separation pay in lieu of
reinstatement of an illegally dismissed employee, the period shall be reckoned from the time
compensation was withheld up to the finality of this Court’s decision. This was reiterated in Surima v.
NLRC, 291 SCRA 260 (1998) and Session Delights Ice Cream and Fast Foods v. CA, 612 SCRA 10
(2010).
The reason for this was explained in Bani Rural Bank, Inc. v. De Guzman, 709 SCRA 330 (2013). When
there is an order of separation pay (in lieu of reinstatement or when the reinstatement aspect is waived or
subsequently ordered in light of a supervening event making the award of reinstatement no longer
possible), the employment relationship is terminated only upon the finality of the decision ordering the
separation pay. The finality of the decision cuts-off the employment relationship and represents the final
settlement of the rights and obligations of the parties against each other. Hence, backwages no longer
accumulate upon the finality of the decision ordering the payment of separation pay because the
employee is no longer entitled to any compensation from the employer by reason of the severance of his
employment. One cannot, therefore, attribute patent error on the part of the CA when it merely affirmed
the NLRC’s conclusion, which was clearly based on jurisprudence.
The Court disagrees with the petitioners’ assertion that a recomputation would violate the doctrine of
immutability of judgment. It has been settled that no essential change is made by a recomputation as this
step is a necessary consequence that flows from the nature of the illegality of dismissal declared in that
decision. By the nature of an illegal dismissal case, the reliefs continue to add on until full satisfaction
thereof. The recomputation of the awards stemming from an illegal dismissal case does not constitute an
alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only
the computation of the monetary consequences of the dismissal is affected and this is not a violation of
the principle of immutability of final judgments.

LABOR LAW > Labor Standards > Motion to Reduce Bond
TURKS SHAWARMA COMPANY/GEM ZEÑAROSA, petitioners

vs.
FELICIANO Z. PAJARON and LARRY A. CARBONILLA, respondents.
G.R. No. 207156. January 16, 2017
(First Division)
DOCTRINE: The Court, in special and justified circumstances, has relaxed the requirement of posting a
supersedeas bond for the perfection of an appeal on technical considerations to give way to equity and
justice. 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.
FACTS: Petitioners hired. Pajaron in May 2007 as service crew and Carbonilla in April 2007 as head
crew. On April 15, 2010, Pajaron and Carbonilla filed their respective complaints for constructive and
actual illegal dismissal against petitioners. Both Complaints were consolidated. Both Pajaron and
Carbonilla claimed that there was no just or authorized cause for their dismissal and that petitioners
also failed to comply with the requirements of due process. As such, they prayed for separation pay in
lieu of reinstatement due to strained relations with petitioners and backwages as well as nominal, moral
and exemplary damages.
Petitioners denied having dismissed Pajaron and Carbonilla; they averred that they actually abandoned
their work.
The Labor Arbiter found credible Pajaron and Carbonilla's version and held them constructively and
illegally dismissed by petitioners. Pajaron and Carbonilla were thus awarded the sum of P148,753.61
and P49,182.66, respectively, representing backwages, separation pay in lieu of reinstatement.
Due to alleged non-availability of counsel, Zeñarosa himself filed a Notice of Appeal with Memorandum
and Motion to Reduce Bond with the NLRC. Along with this, Zeñarosa posted a partial cash bond in the
amount 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. He begged the NLRC to reduce the bond. The NLRC denied
the motion to reduce bond.
ISSUE: Whether or not there is meritorious ground to reduce the appeal bond
HELD: NO
The Court has time and again held that the right to appeal is neither a natural right nor is it a component
of due process. It is a mere statutory privilege, and may be exercised only in the manner and in
accordance with the provisions of the law." "The party who seeks to avail of the same must comply with
the requirements of the rules. Failing to do so, the right to appeal is lost.
Article 223 of the Labor Code, which sets forth the rules on appeal from the Labor Arbiter's monetary
award, provides: 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.
The posting of cash or surety bond is mandatory and jurisdictional; failure to comply with this
requirement renders the decision of the Labor Arbiter final and executory. This indispensable requisite
for the perfection of an appeal "is to assure the workers that if they finally prevail in the case[,] the
monetary award will be given to them upon the dismissal of the employer's appeal [and] is further
meant to discourage employers from using the appeal to delay or evade payment of their obligations to
the employees."
However, the Court, in special and justified circumstances, has relaxed the requirement of posting a
supersedeas bond for the perfection of an appeal on technical considerations to give way to equity and
justice. Thus, under Section 6 of Rule VI of the 2005 NLRC Revised Rules of Procedure, the reduction
of the appeal bond is allowed, subject to the following conditions: (1) the motion to reduce the bond
shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award
is posted by the appellant. Compliance with these two conditions will stop the running of the period to
perfect an appeal.
In the case at bar, petitioners filed a Motion to Reduce Bond together with their Notice of Appeal and
posted a cash bond of P15,000.00 within the 10-day reglementary period to appeal. The CA correctly
found that the NLRC did not commit grave abuse of discretion in denying petitioners' motion to reduce
bond as such motion was not predicated on meritorious and reasonable grounds and the amount
tendered is not reasonable in relation to the award.

Bernard
LABOR LAW>Labor Standards> Compensability of illness
CRISTINA BARSOLO, Petitioner,

vs.
SOCIAL SECURITY SYSTEM, Respondent.
G.R. No. 187950, January 11, 2017
(Second Division)
DOCTRINE: It is worthy to note that this Court has already ruled on the compensability of Myocardial
Infarction as an occupational disease. Rañises v. Employees Compensation Commission, is instructive:
Section l(h), Rule III of the ECC Amended Rules on Employees Compensation, now considers cardio-
vascular disease as compensable occupational disease. Included in Annex "A" is cardio-vascular
disease, which cover myocardial infarction. However, it may be considered as compensable occupational
disease only when substantial evidence is adduced to prove any of the following conditions: a) If the heart
disease was known to have been present during employment there must be proof that an acute
exacerbation clearly precipitated by the unusual strain by reason of the nature of his work; b) The strain of
work that brings about an acute attack must be of sufficient severity and must be followed within twenty-
four (24) hours by the clinical signs of a cardiac assault to constitute causal relationship. c) If a person
who was apparently asymptomatic before subjecting himself to strain of work showed signs and
symptoms of cardiac injury during the performance of his work and such symptoms and signs persisted, it
is reasonable to claim a causal relationship. (Emphasis supplied.) In Rañises, we held that for myocardial
infarction to be considered a compensable occupational disease, any of the three conditions must be
proven by substantial evidence.
FACTS: Cristina Barsolo's (Cristina) deceased husband, Manuel M. Barsolo (Manuel), "was employed as
a seaman by various companies from 1988 to 2002." From July 2, 2002 to December 6, 2002, Manuel
served as a Riding Gang/ Able Seaman onboard MT Polaris Star with Vela International Marine Ltd.,
(Vela). Vela was his last employer before he died in 2006.
After his separation from employment with Vela, Manuel was diagnosed with hypertensive cardiovascular
disease, coronary artery disease, and osteoarthritis. 7 He was examined and treated at the Philippine
Heart Center as an outpatient from April 2, 2003 to October 22, 2004. When he died on September 24,
2006, the autopsy report listed myocardial infarction as his cause of death.
Believing that the cause of Manuel's death was work-related, Cristina filed a claim for death benefits
under Presidential Decree No. 626, as amended, with the Social Security System. 10 The Social Security
System, on June 27, 2007, denied her claim on the ground that there was no longer an employer-
employee relationship at the time of Manuel's death and that "[h]is being a smoker increased his risk of
contracting the illness." Cristina appealed her case to the Employees' Compensation Commission
(Commission), which, in a Decision12 dated December 17, 2007, denied the appeal for lack of merit.
ISSUE: Whether or not Cristina is entitled to compensation for the death of her husband Manuel.
HELD: The Amended Rules on Employee Compensation provide the guidelines before a beneficiary can
claim from the state insurance fund. Rule III, Section l(b) states:
For the sickness and the resulting disability or death to be compensable, the sickness must be the result
of an occupational disease listed under Annex "A" of these Rules with the conditions set therein satisfied,
otherwise, proof must be shown that the risk of contracting the disease is increased by the working
conditions.
The pertinent portions of Annex A of the Amended Rules on Employee Compensation read:
For an occupational disease and the resulting disability or death to be compensable, all of the following
conditions must be satisfied:
(1) The employee's work must involve the risks described herein;
(2) The disease was contracted as a result of the employee's exposure to the described risks;
(3) The disease was contracted within a period of exposure and under such other factors necessary to
contract it;
(4) There was no notorious negligence on the part of the employee.
....
The following diseases are considered as occupational when contracted under working conditions
involving the risks described herein:
....
18. CARDIO-V ASCULAR DISEASES. ** Any of the following conditions -
a. If the heart disease was known to have been present during employment, there must be proof that an
acute exacerbation was clearly precipitated by the unusual strain by reasons of the nature of his/her work.
b. The strain of work that brings about an acute attack must be of sufficient severity and must be followed
within 24 hours by the clinical signs of a cardiac assault to constitute causal relationship.
c. If a person who was apparently asymptomatic before being subjected to strain at work showed signs
and symptoms of cardiac injury during the performance of his work and such symptoms and signs
persisted, it is reasonable to claim a causal relationship. (Emphasis supplied)
Submitted by: Balbarino, Cherry

Anjell L.
LABOR LAW>Labor Standards> No automatic compensability
Grieg Philippines, Inc., petitioners

vs.
Gonzales, respondent
G.R. No. 228296. July 26, 2017
(Second Division)
DOCTRINE: Settled is the rule that for illness to be compensable, it is not necessary that the nature of
the employment be the sole and only reason for the illness suffered by the seafarer. It is sufficient that
there is a reasonable linkage between the disease suffered by the employee and his work to lead a
rational mind to conclude that his work may have contributed to the establishment or, at the very least,
aggravation of any preexisting condition he might have had.
FACTS: Gonzales was first hired by Grieg, a shipping agent, sometime in 2010. On April 20, 2013,
Gonzales was deployed to the general cargo vessel Star Florida after he was rehired for a nine (9)-month
contract. This was his third contract with Grieg.
Gonzales’ employment contract was covered by the Associated Marine Officers’ and Seaman’s
Union of the Philippines Collective Bargaining Agreement. Before being deployed, Gonzales underwent
Pre-Employment Medical Examination and was certified to be fit for sea duty.
In August 2013, while aboard Star Florida, Gonzales was advised to take paracetamol and to rest
after he experienced ―shortness of breath, pain in his left leg, fatigue, fever and headaches.‖ A week later,
Gonzales sought medical attention in South Korea after he experienced the same symptoms. With his
medical tests showing normal results, he was given medications and sent back to work in Star Florida.
The following month, his past symptoms returned with the added symptom of black tarry stools.
Gonzales was confined in a hospital in Indonesia where he was initially diagnosed with ―pancytopenia
suspect aplastic anemia.‖ Gonzales was declared unfit for sea duty and was repatriated.
After his medical repatriation, Gonzales was admitted at the Metropolitan Medical Center. The
company physicians diagnosed him with acute promyelocytic leukemia. They opined that Gonzales’
leukemia was not work-related; although, for humanitarian reasons, Grieg continued to pay for his
treatment.
Grieg claimed that Gonzales suddenly stopped consulting the company physicians. Gonzales
denied this, countering that he informed Grieg that he would be unable to attend the scheduled
appointment because he was still raising money to travel from his hometown to Manila. He claimed that
his request to reschedule his appointment was granted, and thus, was surprised with the notification that
Grieg had discontinued his treatment.
Meanwhile, Gonzales sought a second opinion from an independent physician, Dr. Emmanuel
Trinidad, who certified that his leukemia was work-related.
After his disability claims were refused, Gonzales filed a complaint against Grieg before the Labor
Arbiter.
LA:
It found that Gonzales’ leukemia was work-related and that it had permanently incapacitated him
to work as a seafarer.
National Labor Relations Commission:

It affirmed the Labor Arbiter’s ruling.
CA:
It upheld the findings of the National Labor Relations Commission. It ruled that with the inclusion
of leukemia among the occupational diseases in Section 32-A of the Philippine Overseas Employment
Administration-Standard Employment Contract, the burden of proving that it was work-related was no
longer with the employee. Instead, the employer must prove otherwise that Gonzales’ leukemia was not
work-related. It asserted that even if it was assumed that leukemia was not an occupational disease,
Section 20-A, paragraph 4 of the Philippine Overseas Employment Administration-Standard Employment
Contract made a disputable presumption favoring seafarers. Section 20-A, paragraph 4 holds that all
illnesses not listed as an occupational disease in Section 32-A are deemed work-related.
It upheld the findings of the National Labor Relations Commission that Gonzales was entitled to
the sickness allowance under the Collective Bargaining Agreement and the permanent disability benefits
of US$90,000.00. Hence, this Petition for Review on Certiorari.
ISSUE:
Whether or not National Labor Relations Commission committed grave abuse of discretion in
awarding Gonzales’ claim for disability benefits and attorney’s fees?
HELD: No.
Settled is the rule that for illness to be compensable, it is not necessary that the nature of the
employment be the sole and only reason for the illness suffered by the seafarer. It is sufficient that there
is a reasonable linkage between the disease suffered by the employee and his work to lead a rational
mind to conclude that his work may have contributed to the establishment or, at the very least,
aggravation of any preexisting condition he might have had.
In the case at bench, Gonzales was able to satisfy the conditions under Section 32-A and
establish a reasonable linkage between his job as an Ordinary Seaman and his leukemia. He has
submitted his official job description, which involved constant exposure to chemicals. It is also not
disputed that he contracted leukemia only while he was onboard Star Florida since he was certified to be
fit for sea duty prior to boarding and his leukemia was not genetic in nature. Moreover, both labor
tribunals found sufficient evidence to support Gonzales’ claim of work-related illness.

S
LABOR LAW>Labor Standards> Death compensation
MARLOW NAVIGATION PHILIPPINES, INC./MARLOW NAVIGATION CO., LTD. and/or MS. EILEEN
MORALES,, Petitioners
vs.
HEIRS OF RICARDO S. GANAL, GEMMA B. BORAGAY, for her behalf and in behalf of her minor
children named: RIGEM GANAL & IVAN CHARLES GANAL; and CHARLES F. GANAL, represented
by SPOUSES PROCOPIO & VICTORIA GANAL, Respondents
DOCTRINE: No compensation and benefits shall be payable in respect of any injury, incapacity, disability
or death of the seafarer resulting from his willful or criminal act or intentional breach of his duties,
provided however, that the employer can prove that such injury, incapacity, disability or death is directly
attributable to the seafarer.
FACTS: On April 15, 2012, a party was organized for the crewmen of MV Stadt Hamburg while the ship
was anchored at Chittagong, Bangladesh, which was also attended by Ricardo Ganal, an oiler abard the
vessel after his shift at 12 midnight. After several directives of the ship captain for Ganal to take a rest
since he was already drunk, the latter kept on refusing. Other ship members were asked to look after him
but the latter continuously refused until, without hesitation, jumped overboard and straight into the sea.
Several measures were undertaken to save Ganal but to no awal, he was later found dead and floating in
the water. The subsequent medico-legal report issued by the Philippine National Police showed that the
cause of his death was asphyxia by drowning.
Gemma Boragay (Boragay), for herself and in behalf of their minor children, filed a claim for death
benefits with petitioners, but the latter denied the claim. Boragay, then filed with the NLRC a complaint for
recovery of death and other benefits, unpaid salaries for the remaining period of Ganal's contract, as well
as moral and exemplary damages which the Labor Arbiter dismissed for lack of merit. An appeal was filed
to the NLRC, but the same was denied and affirmed the Labor Arbiter’s decision. The NLRC ruled that
petitioners have duly proven that Ganal's death is not compensable as it was the result of the deliberate
and willful act of Ganal and, thus, is directly attributable to him.
Respondents then filed a petition for certiorari with the CA, which the latter granted and reversed earlier
decisions of the LA and the NLRC finding that Ganal jumped into the sea while he was overcome by
alcohol and completely intoxicated and deprived of his consciousness and mental faculties to
comprehend the consequence of his own actions and keep in mind his own personal safety. The
petitioners filed for motion for reconsideration but was ultimately denied. Hence, this petition.
ISSUE: Whether or not Ganal's death, which resulted from his act of jumping overboard, be considered
as directly attributable to him.
HELD: Yes.
The Court agrees with the LA and the NLRC that the pieces of evidence presented by petitioners,
consisting of the testimony of the crew members present at the time of the unfortunate incident,as well as
the accident report made by the master of the vessel, prove the willfulness of Ganal's acts which led to
his death. The term "willful" means "voluntary and intentional", but not necessarily malicious.In the case
of MabuhayShipping Services, Inc. v. National Labor Relations Commission, the seaman, in a state of
intoxication, ran amuck and committed an unlawful aggression against another, inflicting injury on the
latter, so that in his own defense the latter fought back and in the process killed the seaman. This Court
held that the circumstances of the death of the seaman could be categorized as a deliberate and willful
act on his own life directly attributable to him. In the same manner, in the instant case, Ganal's act of
intentionally jumping overboard, while in a state of intoxication, could be considered as a deliberate and
willful act on his own life which is directly attributable to him.
Submitted by: Bodopol, Adolf

Jr.S.Anjell L.
LABOR LAW>Labor Standards> Burden of proof; Strange behavior
SEAPOWER SHIPPING ENT., INC., petitioner

vs.
HEIRS OF WARREN M. SABANAL, represented by ELVIRA ONG-SABANAL, respondents.
G.R. No. 198544, June 19, 2017
(Third Division)
DOCTRINE: The Philippine Overseas Employment Agency (POEA) standard employment contract for
Filipino seafarers exempts the employer from liability for death or injury resulting from the seafarer's willful
act.
FACTS: Petitioner hired Warren M. Sabanal as Third Mate onboard MT Montana. After undergoing the
routine pre-employment medical examination and being declared fit to work, Sabanal boarded the ship
and commenced his duties. Sabanal started exhibiting unusual behavior. When the ship captain checked
on him, he responded incoherently, though it appeared that he had problems with his brother in the
Philippines. This prompted the captain to set double guards on Sabanal. The sailors watching over
Sabanal reported that he wanted to board a life boat, citing danger in the ship's prow. Because of
Sabanal’s condition, the captain relieved him of his shift and allowed him to sleep in the cabin guarded.
Sabanal requested the sailor-on-guard that he be allowed to return to the deck for some fresh air. Once
on deck, Sabanal suddenly ran to the stem and jumped to the sea. The ship's rescue attempts proved
futile, and Sabanal's body was never recovered. Seapower informed Sabanal's wife, Elvira, regarding the
incident. According to Elvira, Seapower was noncommittal regarding Sabanal's contractual benefits that
would accrue to her and their two children. She alleged that Seapower told her that she has to wait for a
period of seven to ten years before Sabanal can be declared dead. Relying on Seapower's
representation, Elvira went back to Seapower to claim whatever benefits she was entitled to. Seapower
informed her that she was only entitled to the death benefits under the Social Security System;
Seapower, allegedly for the first time, categorically disclaimed any liability for Sabanal's death. Thus,
Elvira was able to file a complaint for payment of Sabanal' s death benefits.
ISSUE: Whether or not Warren Sabanal’s death is compensable.
HELD: NO.
The relationship between Seapower and Sabanal is governed by the 1989 POEA "Revised Standard
Employment Contract Governing the Employment of All Filipino Seamen On-Board Ocean-Going
Vessels" (POEA-SEC) which was in force on July 20, 1995, the date Seapower hired Sabanal. Under the
POEA-SEC, the employer is generally liable for death compensation benefits when a seafarer dies during
the term of employment. This rule, however, is not absolute. Part II, Section C (6) of the POEA-SEC
exempts the employer from liability if it can successfully prove that the seafarer's death was caused by an
injury directly attributable to his deliberate or willful act. No compensation shall be payable in respect of
any injury, incapacity, disability or death resulting from a willful act on his own life by the seaman,
provided, however, that the employer can prove that such injury, incapacity, disability or death is directly
attributable to him.
While it is true that labor contracts are impressed with public interest and the provisions of the POEA-SEC
must be construed logically and liberally in favor of Filipino seafarers in the pursuit of their employment on
board ocean-going vessels, still, the rule is that justice is in every case for the deserving, to be dispensed
with in the light of established facts, the applicable law, and existing jurisprudence.

B.Jr.S.Anjell L.
LABOR LAW>Labor Standards> Defense of resignation by employer
FLORDALIZA LLANES GRANDE, Petitioner

vs
PHILIPPINE NAUTICAL TRAINING COLLEGE, Respondent
G.R. No. 213137, March 1, 2017
(Second Division)
DOCTRINE: While indeed there was no employment of force from the language used by Pios, We are
convinced that there was the presence of undue influence exerted on petitioner for her to leave her
employment. The conversation showed that respondent wanted to terminate petitioner's employment but
would want it to appear that she voluntarily resigned. Undue influence is defined under Article 1337 of the
Civil Code, thus:
Art. 1337. There is undue influence when a person takes improper advantage of his power over the will of
another, depriving the latter of a reasonable freedom of choice. The following circumstances shall be
considered: the confidential, family, spiritual, and other relations between the parties, or the fact that the
person alleged to have been unduly influenced was suffering from mental weakness, or was ignorant or in
financial distress.
FACTS: Respondent Philippine Nautical Training College, or PNTC, is a private entity engaged in the
business of providing maritime training and education. In 1988, respondent employed petitioner as
Instructor for medical courses like Elementary First Aid and Medical Emergency. Shortly thereafter, she
became the Course Director of the Safety Department. Later in 2002, she was appointed Course Director
for the Training Department of respondent school.
In November 2007, she resigned as she had to pursue graduate studies and carry on her plan to
immigrate to Canada. However, in July 2009, petitioner was again employed by respondent as Director
for maritime Training upon the latter’s invitation. As such, she was responsible for the development,
revisions and execution of training programs. In September 2010, petitioner was given the additional post
of Assistant Vice-President (VP) for Training Department.
In February 2011, several employees of respondent's Registration Department, including the VP for
Training Department were placed under preventive suspension in view of the anomalies in the enlistment
of students.On March 1, 2011, the VP for Corporate Affairs, Frederick Pios (Pios), called petitioner for a
meeting. Pios relayed to petitioner the message of PNTC's President, Atty. Hernani Fabia, for her to
tender her resignation from the school in view of the discovery of anomalies in the Registration
Department that reportedly involved her. Pios assured petitioner of absolution from the alleged anomalies
if she would resign.
Petitioner then prepared a resignation letter, signed it and filed it with the Office of the PNTC President.
The respondent accomplished for her the necessary exit clearance.
In the evening of the same date, petitioner, accompanied by counsel, filed a police blotter for a complaint
for unjust vexation against Pios. The next day, March 2, 2011, petitioner accompanied by counsel, filed a
complaint for illegal dismissal with prayer for reinstatement with full backwages, money claims, damages,
and attorney's fees against respondent.
In her position paper, petitioner alleged that she was forced to resign from her employment. On the other
hand, respondent claimed that petitioner voluntarily resigned to evade the pending administrative charge
against her.
ISSUE: Whether Grande voluntarily resigned and not illegally dismissed by respondent school.
HELD: For the resignation of an employee to be a viable defense in an action for illegal dismissal, an
employer must prove that the resignation was voluntary, and its evidence thereon must be clear, positive
and convincing. The employer cannot rely on the weakness of the employee's evidence.
Resignation is a formal declaration of voluntary relinquishment of an office, and must be made with the
intention of dissociating oneself from employment A resignation must be unconditional and with the intent
to operate as such.Not a scintilla of evidence was adduced to prove that respondent was not illegally
terminated.
"We concur with the findings of the NLRC that the acts of petitioner before and after she tendered her
resignation would show that undue force was exerted upon petitioner: (1) the resignation letter of
petitioner was terse and curt, giving the impression that it was hurriedly and grudgingly written; (2) she
was in the thick of preparation for an upcoming visit and inspection from the Maritime Training Council; it
was also around that time that she had just requested for the acquisition of textbooks and teaching aids, a
fact which is incongruent with her sudden resignation from work; (3) in the evening, she filed an incident
report/police blotter before the Intramuros Police Station; and (4) the following day she filed a complaint
for illegal dismissal".
While indeed there was no employment of force, there was the presence of undue influence exerted on
petitioner for her to leave her employment. The conversation showed that respondent wanted to terminate
petitioner's employment but would want it to appear that she voluntarily resigned. With an order coming
from the President of PNTC, no less, undue influence and pressure was exerted upon petitioner.
Also, as a sign that respondent really wanted petitioner to go is the fact that the former immediately
issued the latter her clearance showing the signatures from different departments of the school.
In the case at bar, petitioner's letter of resignation and the circumstances antecedent and
contemporaneous to the filing of the complaint for illegal dismissal are substantial proof of petitioner's
involuntary resignation. Taken together, the above circumstances are substantial proof that petitioner's
resignation was voluntary.
Submitted by: De Guzman, Joey

Albert P.
LABOR LAW>Labor Standards> Resignation>Forced Resignation
LUIS S. DOBLE, JR., Petitioner

vs.
ABB, INC./NITIN DESAI, Respondents
G.R. No. 215627 June 5, 2017
Second Division
DOCTRINE: Even if the option to resign originated from the employer, what is important for resignation to
be deemed voluntary is that the employee's intent to relinquish must concur with the overt act of
relinquishment.
FACTS: As a matter of policy, ABB, Inc. conducts the yearly Performance and Development Appraisal of
all its employees. In all years prior to 2008, Doble was rated with grades three (3) or four (4), which are
equivalent to Strong Performance or Superior Results. In the years 2008, 2009, and 2010, he received a
performance rating of 4 for superior results.
On March 2, 2012, Doble was called by respondent ABB, Inc. Country Manager and President Nitin
Desai, and was informed that his performance rating for 2011 is one (1) which is equivalent to
unsatisfactory performance. On March 13, 2012, a company Executive Assistant informed Doble that he
has a meeting with ABB, Inc. President Desai and Country Human Resource (HR) Manager Marivic
Miranda. During the meeting, ABB, Inc. President Desai explained to Doble that the Global and Regional
Management have demanded for a change in leadership due to the extent of losses and level of
discontent among the ranks of the PS Division. Desai then raised the option for Doble to resign as Local
Division Manager of the PS Division. Thereafter, HR Manager Miranda told Doble that he would be paid
separation pay equivalent to 75% of his monthly salary for every year of service, provided he would
submit a letter of resignation, and gave him until 12:45 p.m. within which to decide.
Doble filed a Complaint for illegal dismissal with prayer for reinstatement and payment of backwages,
other monetary claims and damages.
ISSUE: WON, Doble was illegally dismissed.
HELD: On the substantive issue of whether Doble was illegally dismissed, the Court holds that he
voluntarily resigned, and was not constructively dismissed.
In illegal dismissal cases, the fundamental rule is that when an employer interposes the defense of
resignation, the burden to prove that the employee indeed voluntarily resigned necessarily rests upon the
24
employer. The concepts of constructive dismissal and resignation are discussed in Gan v. Galderma
25
Philippines, Inc., thus:
To begin with, constructive dismissal is defined as quitting or cessation of work because continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a
diminution of pay and other benefits. It exists if an act of clear discrimination, insensibility, or disdain by
an employer becomes so unbearable on the part of the employee that it could foreclose any choice by
him except to forego his continued employment. There is involuntary resignation due to the harsh, hostile,
and unfavorable conditions set by the employer. The test of constructive dismissal is whether a
reasonable person in the employee's position would have felt compelled to give up his
employment/position under the circumstances.
On the other hand, "[r]esignation is the voluntary act of an employee who is in a situation where one
believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has
no other choice but to dissociate oneself from employment. It is a formal pronouncement or
relinquishment of an office, with the intention of relinquishing the office accompanied by the act of
relinquishment. As the intent to relinquish must concur with the overt act of relinquishment, the acts of the
employee before and after the alleged resignation must be considered in determining whether he or she,
26
in fact, intended to sever his or her employment."
Guided by these principles, the Court agrees with the NLRC that ABB, Inc. and Desai were able to prove
by substantial evidence that Doble voluntarily resigned, as shown by the following documents (1) the
27 28
affidavit of ABB, Inc. 's HR Manager Miranda; (2) the resignation letter; the letter of intent to purchase
29 30
service vehicle; and ABB, Inc. 's acceptance letter, all dated March 13, 2012, (3) the Employee
31 32
Clearance Sheet; (4) the Certificate of Employment dated March 23, 2012; (5) photocopy of Bank of
33
the Philippine Islands manager's check in the amount of ₱2,009,822.72, representing the separation
34
benefit; (6) Employee Final Pay Computation, showing payment of leave credits, rice subsidy and
bonuses, amounting to ₱805,399.35; and (7) the Receipt, Release and Quitclaim for a consideration of
35
the total sum of ₱2,815,222.07.
For his part, Doble insisted that he was constructively dismissed because he was threatened, detained as
if he were a prisoner, unreasonably pressured and compelled to write a resignation letter for more than
eight (8) hours inside the company office. Because of the incident, which supposedly besmirched his
reputation, he claimed to have suffered embarrassment before his staff and other personnel, sleepless
nights, moral shock and anxiety. He even claimed to have received calls and text messages from
customers, competitors, colleagues and friends because of what the company did to him. Apart from his
bare and self-serving allegations, however, Doble failed to present substantial documentary or testimonial
evidence to corroborate the same. It is well settled that bare allegations of constructive dismissal, when
36
uncorroborated by the evidence on record, cannot be given credence. Neither can it be held that Doble
was constructively dismissed because there is no evidence on record of any act of clear discrimination,
insensibility, or disdain towards him which rendered his continued employment unbearable or forced him
to terminate his employment from ABB, Inc., much less a claim of demotion in rank or a diminution of pay
and other benefits.
Since Doble claims to have been forced to submit a resignation letter, it is incumbent upon him to prove
with clear and convincing evidence that his resignation was not voluntary, but was actually a case of
37
constructive dismissal, i.e., a product of coercion or intimidation. Coercion exists when there is a
reasonable or well-grounded fear of an imminent evil upon a person or his property or upon the person or
38
property of his spouse, descendants or ascendants. The requisites for intimidation to vitiate one's
39
consent are stated in St. Michael Academy v. NLRC, thus:
.... (1) that the intimidation caused the consent to be given; (2) that the threatened act be unjust or
unlawful; (3) that the threat be real or serious, there being evident disproportion between the evil and the
resistance which all men can offer, leading to the choice of doing the act which is forced on the person to
do as the lesser evil; and (4) that it produces a well-grounded fear from the fact that the person from
whom it comes has the necessary means or ability to inflict the threatened injury to his person or property
x x x.
On the other hand, the Court disagrees with the findings of the Labor Arbiter that Doble's resignation was
not voluntary based on the following events, to wit: (1) on March 2, 2012, Doble's Performance and
Development Approval rating in 2011 is unsatisfactory; (2) there are no prior circumstances that may
show his intention to resign; (3) on March 13, 2012, Desai raised the option for him to resign, after
explaining that due to the extent of losses and level of discontent among the ranks of the PS Division, the
Global and Regional management have demanded for a change in leadership; (4) from the
circumstances surrounding his resignation, the option to resign did not originate from Doble but from
Desai, whose actuations was not a mere suggestion but a directive or order that was effected on the
same day of March 13, 2012; (5) HR Manager Miranda's affidavit clearly show that Doble underwent
pressure to resign because starting 11 :00 a.m. until 6:00 p.m. of even date, the option to resign was
reiterated and repeated until he handed a revised resignation letter; and (6) Doble was not given the
opportunity or option to stay in the service.
Even if the option to resign originated from the employer, what is important for resignation to be deemed
voluntary is that the employee's intent to relinquish must concur with the overt act of relinquishment.
There can be no doubt as to the drastic and shocking nature of the abrupt decision of ABB, Inc. to let
Doble resign on March 13, 2012 after almost 19 years of dedicated and satisfactory service, on account
of the extent of losses, the level of discontent among the ranks of PS Division, and the ABB, Inc. Global
and Regional management's demand for a change in leadership. It bears emphasis, however, that
between the start of the conference at around 11:00 a.m. and about eight (8) hours later in the evening
when he left the company premises, Doble negotiated for a higher separation pay, i.e., from 7 5o/o of the
monthly salary for every year of service allowed under the company retirement plan up to double that
amount, or 1.5 month's pay for every year of service. In fact, Doble tendered a resignation letter only after
being offered a better separation benefit of 1-month pay for every year of service, and even submitted a
separate letter expressing his intent to buy his service vehicle. After considering the acts of Doble before
and after his resignation, the Court is convinced of Doble's clear intention to sever his employment with
ABB, Inc.

LABOR LAW > Labor Standards > Resignation > Option to resign
EDWARD M. COSUE, Petitioner,

v.
FERRITZ INTEGRATED DEVELOPMENT CORPORATION, Respondents.
G.R. No. 230664, July 24, 2017
(THIRD DIVISION)
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. 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 him except to forego his continued employment.
FACTS: Petitioner, COSUE, is a regular employee as a janitor and maintenance staff of of Respondent,
FERRITZ (FDIC).
On October 9, 2014, Petitioner filed a Complaint against Respondent, for actual illegal dismissal and
underpayment of salaries, with prayer for moral and exemplary damages and attorney's fees.
Respondent was summoned by Germino, Head of FIDC, who VERBALLY informed him that he was
suspended from July 16, 2014 to August 13, 2014 on suspicion that he stole the electrical wires.
Beginning July 16, 2014 until August 13, 2014, he was no longer allowed to work. ???
Respondents alleged that petitioner was suspended for twenty-five (25) days from July 16, 2014 to
August 13, 2014, pending further investigation (for stealing electric wires).
Petitioner returned to FIDC on August 13, 2014, but was told to come back as Germino was on leave.
When petitioner came back on August 27, 2014, he was able to speak to Germino and they agreed that
he would voluntarily resign. However, petitioner did not file his resignation, and eventually instituted his
Complaint for illegal dismissal.
LABOR ARBITER (LA) – dismissed the complaint for lack of evidence. The LA held that other than
petitioner's general assertion that he was dismissed, no evidence was presented to support such claim.
Petitioner was admittedly suspended from July 16, 2014 to August 13, 2014. Thus, as of July 27, 2014,
the date of dismissal as averred in petitioner's Complaint, he was still serving his preventive suspension.
In fact, he was not barred from the premises or categorically informed that he was already dismissed from
work.
NLRC and CA agreed with LA.
ISSUE: Whether or not, the rule that the employer bears the burden of proof in illegal dismissal cases
applies in this case.
HELD: The rule is that one who alleges a fact has the burden of proving it; thus, petitioner was burdened
to prove his allegation that respondents dismissed him from his employment. It must be stressed that the
evidence to prove this fact must be clear, positive and convincing. The rule that the employer bears the
burden of proof in illegal dismissal cases finds no application here because the respondents deny having
dismissed the petitioner. In illegal dismissal cases, while the employer bears the burden 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.

Relunia
LABOR LAW > Labor Standards > Termination of Employment > Dismissal from Employment
ERNESTO BROWN, Petitioner,

vs.
MARSWIN MARKETING, INC., AND SANY TAN, REPRESENTED BY BERNADETTE S.
AZUCENA, Respondents.
G.R. No. 206891, March 15, 2017
(FIRST DIVISION)
DOCTRINE: x x x 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 fee 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.
FACTS: Brown filed a Complaint for illegal dismissal against Marswin/Tan praying for reinstatement with
full backwages and payment of his other monetary claims. Brown alleged that Marswin employed him as
building maintenance/electrician and that a few months later, he was asked to report at the Main Office of
Marswin, and was told that it was already his last day of work. Allegedly, he was made to sign a
document that he did not understand; and, thereafter, he was no longer admitted back to work. Thus, he
insisted that he was terminated without due process of law.
Marswin/Tan argued that in Brown’s eight-month stay, Marswin received negative reports anent Brown's
work ethics, competence, and efficiency. They summoned him at its Main Office to purportedly discuss
the complaints of the Warehouse Manager and Supervisor. Marswin/Tan stated that during the meeting,
Brown excused himself purportedly to get in touch with his wife; however, he never returned and no
longer reported for work.
According to Marswin/Tan, Brown's work as electrician did not involve an activity usually necessary or
desirable in the usual business of Marswin; thus, he was not its regular employee. They also contended
that during the meeting, Azucena, its Accounting Supervisor and HR Head, only admonished Brown but
he left the meeting and no longer returned to work. They attached in their Position Paper the Sinumpaang
Salaysay executed by Azucena stating the alleged complaints she received against Brown.
ISSUE: Whether or not there is no abandonment of work by petitioner, thus he was illegally dismissed by
the respondents.
HELD: YES
x x x 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 fee 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.
Thus, 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. The second requirement must be manifested by
overt acts and is more determinative in concluding that the employee is guilty of abandonment. This is
because abandonment is a matter of intention and cannot be lightly presumed from indefinite acts.
Here, Brown contends that on May 28, 2010, his employer informed him that it was already his last day of
work; and, thereafter, he was no longer admitted back to work. On the other hand, Marswin/Tan
confirmed having summoned Brown on May 28, 2010 but they denied that he was dismissed, but that he
left the meeting and since then never returned for work.
Nonetheless, apart from the allegation of abandonment, Marswin/Tan presented no evidence proving that
Brown failed to return without justifiable reasons and had clear intentions to discontinue his work.
In fact, in her affidavit, Azucena did not specify any overt act on the part of Brown showing that he
intended to cease working for Marswin. At the same time, Azucena did not establish feat Marswin, on its
end, exerted effort to convince Brown to return for work, if only to show that Marswin did not dismiss him
and it was Brown who actually refused to return to 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, on June 7, 2010, or just ten days after Brown's last day at work (May 28, 2010), 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.
Furthermore, Marswin/Tan presented the affidavit of Azucena, their Accounting Supervisor and HR Head,
as proof that Brown committed abandonment. However, aside from being insufficient, self-serving, and
unworthy of credence, such affidavit did not allege any actual complaint against Brown, when Marswin
summoned him on May 28, 2010. In said affidavit, Azucena did not at all specify the name of any officer
or employee against whom Brown allegedly committed an infraction, and neither did any of these persons
submit their own affidavits to prove that Brown should be disciplined by his employer. x x x
Given all these, there is clearly no showing that Brown committed abandonment instead, evidence proved
that he was illegally dismissed from work.

LABOR LAW>Labor Standards> Premature filing of labor case
CLAUDIA'S KITCHEN, INC. and ENZO SQUILLANTINI, Petitioners

vs.
MA. REALIZA S. TANGUIN, Respondent
G.R. No. 221096,June 28, 2017
(Second Division)
DOCTRINE: The payment of separation pay and reinstatement are exclusive remedies. The payment of
separation pay replaces the legal consequences of reinstatement to an employee who was illegally
dismissed. To award separation pay in lieu of reinstatement to an employee who was never dismissed by
his employer would only give imprimatur to the unacceptable act of an employee who is facing charges
related to his employment, but instead of addressing the complaint against him, he opted to file an illegal
dismissal case against his employer.
FACTS: Respondent Ma. Realiza S. Tanguin (Tanguin) was employed by petitioner Claudia’s Kitchen,
Inc. (Claudia’s Kitchen) on June 20, 2001. Tanguin averred that on October 26, 2010, she was placed on
preventive suspension by Marivic Lucasan (Lucasan), Human Resources Manager, for allegedly forcing
her co-employees to buy silver jewelry from her during office hours and inside the company premises. On
the same date, she was directed by Lucasan to submit her written explanation on the matter. Tanguin
admitted that she was selling silver jewelry, but she denied that she did so during office hours. On
October 30, 2010, she was barred by a security guard from entering the company premises. For their
part, Claudia’s Kitchen and Enzo Squillantini, its President, (petitioners) denies the allegations of Tanguin
and stated that they placed her under preventive suspension in order to conduct a thorough investigation.
Petitioners also sent notice to Tanguin for her to report for hearing but the latter did not comply. The CA
ruled for the payment of separation pay for Tanguin. Hence the controversy was appealed to the High
Court.
ISSUE: Whether separation pay in lieu of reinstatement may be awarded to an employee who was not
dismissed from employment.
HELD: No, Tanguin is not entitled to separation pay
Respondent was not dismissed from employment. The rule is that one who alleges a fact has the
burden of proving it; thus, petitioners were burdened to prove their allegation that respondents dismissed
them from their employment. It must be stressed that the evidence to prove this fact must be clear,
positive and convincing. Tanguin miserably failed to discharge this burden. She simply alleged that a
security guard barred her from entering her workplace. Yet, she offered no evidence to prove the same.
On the other hand, the petitioners were able to prove that they did not dismiss Tanguin from employment
because she was still under investigation as evidenced by several notices.
The payment of separation pay and reinstatement are exclusive remedies. The payment of
dismissal case against his employer. The circumstances in this case, however, does not warrant an
application of the exception. Thus, the general rule that no separation pay may be awarded to an
employee who was not dismissed obtains in this case. In this regard, it is only proper for Tanguin to report
back to work and for the petitioners to accept her, without prejudice to the on-going investigation against
her.
At this time, her plea for reinstatement, backwages and/or separation pay cannot be granted.
Respondent should return to work and answer the complaints against her and the petitioners should
accept her, without prejudice to the result of the investigation against her.
Submitted by: Gonzales, Van Angelo

G.
LABOR LAW>Labor Standards> Overlap with Remedial Law Certiorari
Reglementary period vs. Petition for review on certiorari
Nueva Ecija II Electric Cooperative, Inc., et al.petitioners

Vs. Elmer B. Mapagu,respondent
G.R. No. 196084. February 15, 2017
(Third DIvision)
DOCTRINE: The right to appeal is a mere statutory privilege and must be exercised only in the manner
and in accordance with the provisions of the law. One who seeks to avail of the right to appeal must
strictly comply with the requirement of the rules.
A party litigant wishing to file a petition for review on certiorari must do so within 15 days from notice of
the judgment, final order or resolution sought to be appealed.
FACTS:
Mapagu was employed with NEEC as a data processor since 1983. NEEC is an electric cooperative which
supplies electricity to households in Nueva Ecija, including where Mapagu resides. The National
Electrification Administration (NEA) conducted a special audit on the power bills and accounts
receivables of the consumers which revealed Mapagu's electric consumption was found to be under-
read and under-billed. As a result, petitioners sent a Notice of Charges against Mapagu, charging him
with grave violations of the NEEC Code of Ethics and Discipline (NEEC Code).
In his answer, Mapagu denied under oath the charges and argued that he availed of the amnesty offered
and given by the NEEC Officer in Charge General Manager in connection with employees' meter
problems. NEEC created an Investigation and Appeals Committee (IAC). It issued its findings that while
the charges of under-reading and under-billing were not established, Mapagu failed to observe the
highest degree of honesty as an employee because he did not take action to correct his consumption
despite knowledge that he has no reading from 2002 to 2005. On account of his failure to protect the
interest of NEEC, the IAC found him guilty of the charges against him. Nevertheless, and for
humanitarian reasons, the IAC recommended that Mapagu only be suspended for two years, on the
condition that he execute a waiver in favor of NEEC management against the filing of any legal action
regarding his suspension. He was also ordered to pay his unbilled consumption.
However, Mapagu received a Notice of Dismissal from service. Hence, he filed a Complaint for illegal
dismissal and non-payment of allowances against petitioners. NEEC countered that Mapagu was
dismissed due to valid and legal causes.
Labor Arbiter (LA) ruled in favor of petitioners. Mapagu appealed to the National Labor Relations
Commission (NLRC), which reversed and set aside the ruling of the LA. The NLRC concluded that Mapagu
is entitled to the twin relief of reinstatement and backwages. Considering, however, that the trust
reposed on Mapagu can no longer be restored, and reinstatement is no longer feasible, the NLRC
ordered the payment of separation pay reckoned from the time of Mapagu's employment up to the
finality of the Decision.
Petitioners sought reconsideration but this was denied by the NLRC. Petitioners elevated the case to the
CA but the CA dismissed the petition outright. It found that petitioners failed to sign the attached
Verification and Certification against Forum Shopping and held that a defective verification and
certification is equivalent to non-compliance with the Rules. Petitioners filed a Motion for
Reconsideration which the CA denied.
Petitioners filed their Reply and insist that they have 60 days to file the petition for review on certiorari.
ISSUE:
1. Whether the petition for review on certiorari was, filed before the CA within the reglementary period;
and
2. Whether the CA erred in dismissing the petition for certiorari for non-compliance with the Rules.
HELD: We deny the petition.
The facts and material dates are undisputed.
The right to appeal is a mere statutory privilege and must be exercised only in the manner and in
accordance with the provisions of the law. One who seeks to avail of the right to appeal must strictly
comply with the requirement of the rules. Failure to do so leads to the loss of the right to appeal. The
case before us calls for the application of the requirements of appeal under Rule 45, to wit:
Sec. 1. Filing of petition with Supreme Court. - A party desiring to appeal by certiorari from a judgment
or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other
courts whenever authorized by law, may file with the Supreme Court a verified petition for review on
certiorari. The petition shall raise only questions of law which must be distinctly set forth.
Sec. 2. Time for filing; extension. - The petition shall be filed within fifteen (15) days from notice of the
judgment or final order or resolution appealed from, or of the denial of the petitioner's motion for new
trial or reconsideration tiled in due time after notice of the judgment. On motion duly filed and served,
with full payment of the docket and other lawful fees and the deposit for costs before the expiration of
the reglementary period, the Supreme Court may for justifiable reasons grant an extension of thirty (30)
days only within which to file the petition.
Petitioners failed to comply with the foregoing provisions. They confuse petitions for review on
certiorari under Rule 45 with petitions for certiorari under Rule 65. It is the latter which is required to be
filed within a period of not later than 60 days from notice of the judgment, order or resolution. If a
motion for new trial or reconsideration is filed, the 60-day period shall be counted from notice of the
denial of the motion. Sections 1 and 4 of Rule 65 read:
Sec. 1. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law
and justice may require.
The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject
thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification
of non-forum shopping as provided in the third paragraph of section 3, Rule 46.
xxx
Sec. 4. When and where petition filed. - The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely
filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of
the denial of said motion.
A party litigant wishing to file a petition for review on certiorari must do so within 15 days from notice of
the judgment, final order or resolution sought to be appealed. Here, petitioners received the Resolution
of the CA denying their Motion for Reconsideration on March 17, 2011. Under the Rules, they have until
April 1, 2011 to file the petition. However; they filed the same only on May 6, 2011. This was 50 days
beyond the 15-day period provided under Section 2, Rule 45 and 30 days beyond the extension asked
for. Even if petitioners were given the maximum period of extension of 30 days, their petition before us
still cannot stand. The Rules allow only for a maximum period of 45 days within which an aggrieved
party may file a petition for review on certiorari. By belatedly filing their petition with the CA, petitioners
have clearly lost their right to appeal
After a decision is declared final and executory, vested rights are acquired by the winning party. Just as a
losing party has the right to appeal within the prescribed period, the winning party has the correlative
right to enjoy the finality of the decision on the case.
WHEREFORE, the petition is DENIED.
Submitted by: Gumtang, Lianne G.

LABOR LAW>Labor Standards> Consideration of errors not assigned>Opening entire case for
review
RAMON MANUEL T. JAVINES, Petitioner

vs.
XLIBRIS a.k.a. AUTHOR SOLUTIONS, INC., JOSEPH STEINBACH, and STELLA MARS OUANO,,
Respondents
G.R. No. 214301, January 25, 2017
(Third Division)
DOCTRINE: For failure to file the requisite petition before the CA, the NLRC decision had attained finality
and had been placed beyond the appellate court's power of review. Although appeal is an essential part
of judicial process, the right thereto is not a natural right or a part of due process but is merely a statutory
privilege. Settled are the rules that a decision becomes final as against a party who does not appeal the
same and an appellee who has not himself appealed cannot obtain from the appellate court any
affirmative relief other than those granted in the decision of the court below.
FACTS: Javines was hired by Xlibris as Operations Manager on September 1, 2011. Approximately 10
months after, Javines was terminated for falsifying/tampering three meal receipts.The falsification was
discovered when Javines submitted the meal receipts for reimbursement to the finance department.
Prompted by said discovery, the company's Finance Officer prepared an incident report on the same day.
On July 27, 2012, Xlibris terminated Javines' employment through an "end of employment notice.‖Javines
then filed a complaint for illegal dismissal. The complaint was, however, dismissed by the Labor Arbiter
who found that Javines' dismissal was for just cause and with due process.
Javines failed to move for reconsideration of the NLRC’s decision while Xlibris’ motion for partial
reconsideration was denied. Only Xlibris elevated the case to the Court of Appeals (CA) on certiorari on
the sole issue that the NLRC gravely abused its discretion in holding that it failed to comply with the
requirements of procedural due process.
The CA partially granted the petition. It however reduced the award of nominal damages from P10,000 to
P1,000. Only Javines moved for reconsideration of the CA decision, arguing that he was not dismissed
for just cause. Xlibris opposed the motion on the ground that the issue as to whether or not Javines was
dismissed for cause was never raised before the CA nor discussed in its decision.
ISSUE: Whether or not there is merit to Xlibris’ opposition?
HELD: Yes.
The Labor Arbiter and the NLRC uniformly held that Javines’ employment was terminated for just cause
under Article 297 (formerly Article 282) of the Labor Code. It is undisputed that from this unanimous
finding, Javines failed to move for reconsideration nor challenged said ruling before the CA.
Consequently, the NLRC decision finding Javines to have been dismissed for just cause became final.
For failure to file the requisite petition before the CA, the NLRC decision had attained finality and had
been placed beyond the appellate court’s power of review.
Although appeal is an essential part of judicial process, the right thereto is not a natural right or a part of
due process but is merely a statutory privilege.
Settled are the rules that a decision becomes final as against a party who does not appeal the same and
an appellee who has not himself appealed cannot obtain from the appellate court any affirmative relief
other than those granted in the decision of the court below. Hence, the finding that Javines was dismissed
for just cause must be upheld.
Javines’ insistence that the petition for certiorari filed by Xlibris throws open the entire case for review
such that the issue of whether or not he was dismissed for just cause ought to have been addressed by
the CA is entirely misplaced.
While it is true that the appellate court is given broad discretionary power to waive the lack of proper
assignment of errors and to consider errors not assigned, it has authority to do so in the following
instances: (a) when the question affects jurisdiction over the subject matter; (b) matters that are evidently
plain or clerical errors within contemplation of law; (c) matters whose consideration is necessary in
arriving at a just decision and complete resolution of the case, or in serving the interests of justice or
avoiding dispensing piecemeal justice; (d) matters raised in the trial court and are of record having some
bearing on the issue submitted that the parties failed to raise or that the lower court ignored; (e) matters
closely related to an error assigned; and (f) matters upon which the determination of a question properly
assigned is dependent.
None of the aforesaid instances exists in the instant case. Thus, the CA cannot be faulted for no longer
discussing the issue of whether indeed there exists just cause for his dismissal.
Instead, in the petition for certiorari filed before the CA, Xlibris only questioned the award of nominal
damages for failure to comply with procedural due process.
Emphatically, neither Xlibris nor Javines further questioned the CA’s award on this point. As such, the
issue as to whether the requirements of procedural due process to constitute a valid dismissal were
complied with has been resolved with finality. x x x
Submitted by: Gusi, Audrey Rose B.

LABOR LAW>Labor Standards>Overlap with Remedial law> Execution pending certiorari

vs.
G.R. No. 212098, July 26, 2017
(Second Division)
DOCTRINE: In view of respondents’ prior satisfaction of the writ of execution issued by the Labor Arbiter
(LA) while the case was pending with the Court of Appeals (CA), coupled with petitioner’s admission that
he ―had already received the full judgment award of this case,‖ the latter, having been proven not entitled
to such an award, should, thus, return the same to respondents.
FACTS: On June 21, 2011, petitioner Julio C. Espere was hired as a Bosun, a ship's officer in charge of
equipment and the crew by respondent NFD International Manning Agents, Inc. (NFD) for and in behalf of
its foreign principal Target Ship Management Pte Ltd. on board the vessel M V. Kalpana Prem, for a
period of nine (9) months, with a basic monthly salary of US$730.00.
Prior to his employment and embarkation, petitioner underwent a Pre-Employment Medical Examination
where he was pronounced "Fit For Sea Duty."
Around five (5) months into his deployment, petitioner complained that he was feeling dizzy, had body
malaise and chills.
In Vancouver, Canada, he was diagnosed of suffering from "uncontrolled hypertension", "malaise NYD",
and "psychosomatic illness". He was also declared unfit for duty and was repatriated back to the
Philippines.
On May 16, 2012, petitioner filed a Complaint against respondents claiming disability benefits for
permanent disability and damages.
LA dismissed the complaint. NLRC favored the employee.
During the pendency of the petition before the CA, the LA, on July 30, 2013, issued a Writ of Execution.
In compliance with the writ, respondents deposited the judgment award before the NLRC Cashier .
ISSUE: Whether or not the employee should restitute the executed award to the employer.
HELD: YES.
SC held that the employee was unable to present substantial evidence to show that his work conditions
caused or, at the least, increased the risk of contracting his illness. Neither was he able to prove that his
illness was preexisting and that it was aggravated by the nature of his employment. Thus, the LA and the
CA correctly ruled that he is not entitled to any disability compensation. In view of respondents' prior
satisfaction of the writ of execution issued by the LA while the case was pending with the CA, coupled
with petitioner's admission that he "had already received the full judgment award of this case,"
The latter, having been proven not entitled to such an award, should, thus, return the same to
respondents. This is in consonance with Section 18, Rule XI of the 2011 NLRC Rules of Procedure, as
amended by En Banc Resolution Nos. 11-12, Series of 2012 and 05-14, Series of 2014, which provides:
RESTITUTION. - Where the executed judgment is totally or partially reversed or annulled by the Court of
Appeals or the Supreme Court with finality and restitution is so ordered, the Labor Arbiter shall, on
motion, issue such order of restitution of the executed award, except reinstatement wages paid pending
appeal.

Labor Law>Petition for Certiorari>Filing Motion for Reconsideration
Overlap with
Remedial Law>Special Civil Action>Rule 65
GENP ACT SERVICES, INC., and DANILO SEBASTIAN REYES, Petitioners

vs.
*
MARIA KATRINA SANTOSFALCESO, JANICE ANN M. MENDOZA, and JEFFREY S. MARIANO,
Respondents
G.R. No. 227695, July 31, 2017
(First Division)
DOCTRINE: Otherwise worded, the highlighted portion explicitly warns the litigating parties that the NLRC
shall no longer entertain any further motions for reconsideration. Irrefragably, this circumstance gave
petitioners the impression that moving for reconsideration before the NLRC would only be an exercise in
futility in light of the tribunal's aforesaid warning. Moreover, Section 15, Rule VII37 of the 2011 NLRC
Rules of Procedure, as amended, provides, among others, that the remedy of filing a motion for
reconsideration may be availed of once by each party. In this case, only respondents had filed a motion
for reconsideration before the NLRC. Applying the foregoing provision, petitioners also had an opportunity
to file such motion in this case, should they wish to do so. However, the tenor of such warning effectively
deprived petitioners of such opportunity, thus, constituting a violation of their right to due process.
All told, petitioners were completely justified in pursuing a direct recourse to the CA through a petition for
certiorari under Rule 65 of the Rules of Court. To rule otherwise would be clearly antithetical to the tenets
of fair play, not to mention the undue prejudice to petitioners' rights.38 Thus, in light of the fact that the CA
dismissed outright the petition for certiorari before it solely on procedural grounds, a remand of the case
for a resolution on the merits is warranted.
FACTS: Genpact, BPO, hired respondents to service its Allstate account. On 2012, Allstate ended its
account with Genpact, resulting in respondents being placed on floating status, and eventually,
terminated from service. This prompted respondents to file a complaint for illegal dismissal. Respondents
alleged that termination of Genpact and Allstate's agreement did not justify their retrenchment and
Genpact failed to observe the requirements of proper notice to the DOLE 30 days before they were
terminated from service. Petitioners alleged that the redundancy was reported to the DOLE and resorted
to in the exercise of management prerogative with utmost good faith.
LA dismissed the complaint. The LA found that there was an authorized cause in terminating
respondents' services, and that Gen pact complied with DOLE's reportorial requirements.
NLRC affirmed the LA ruling. It held that Genpact's acts of placing respondents on floating status, and
thereafter, terminating their employment were made in the exercise of its management prerogative in
good faith and in accordance with internal hiring procedures.
Respondents moved for reconsideration. The NLRC held that since respondents were terminated on
account of redundancy they should be paid separation pay amounting to 1 month salary for every year of
service, instead of ½ month salary for every year of service. Notably, the NLRC Resolution explicitly
stated that "[n]o further motion of similar import shall be entertained."
Petitioners filed a petition for certiorari before the CA. CA dismissed outright the petition for petitioners'
failure to file a motion for reconsideration before the NLRC prior to elevating the case to the CA.
ISSUE: Whether or not the CA correctly dismissed outright the certiorari petition filed by petitioners before
it on procedural grounds?
HELD: NO.
Section 15, Rule VII of the 2011 NLRC Rules of Procedure, as amended, provides, among others, that
the remedy of filing a motion for reconsideration may be availed of once by each party. In this case, only
respondents had filed a motion for reconsideration before the NLRC. Applying the foregoing provision,
petitioners also had an opportunity to file such motion in this case, should they wish to do so. However,
the tenor of such warning effectively deprived petitioners of such opportunity, thus, constituting a violation
of their right to due process.
Submitted by: Lim, Anton Kristoffer

M.
LABOR LAW>Labor Standards> Heavy workload of counsel
ADTEL, INC. and/or REYNALDO T. CASAS, Petitioners,

vs.
MARIJOY A. VALDEZ,, Respondent
G.R. No. 189942, August 9, 2017
(Second Division)
DOCTRINE: In Yutingco v. Court of Appeals, 30 this Court held that the circumstance of heavy workload
alone, absent a compelling or special reason, is not a sufficient justification to allow an extension of the
60-day period to file a petition for certiorari, to wit:
Heavy workload, which is relative and often self serving, ought to be coupled with more compelling
reasons such as illness of counsel or other emergencies that could be substantiated by affidavits of merit.
Standing alone, heavy workload is not sufficient reason to deviate from the 60-day rule. Thus, we are
constrained to state that the Court of Appeals did not err in dismissing the petition for having been filed
late.
FACTS: Adtel, Inc. (Adtel) hired Marijoy A. Valdez as an accountant and later on promoted her as the
company's purchasing and logistics supervisor. Adtel then entered into a dealership agreement with
Marijoy’s husband, Angel Valdez, to distribute Adtel's television antennas. Mr. Valdez later filed a civil
case against Adtel for specific performance and damages for the execution of the terms of the dealership
agreement and a criminal complaint for libel against Adtel's chairman, president, and officers. Later on,
Adtel issued a memorandum directing Marijoy to show cause in writing why she should not be terminated
for conflict of interest and/or serious breach of trust and confidence since she had access to vital
information that can be used against Adtel. She denied said charges and afterwards, Adtel terminated
her. A case for illegal dismissal was filed by Marijoy in the Labor Arbiter who ruled in favor of Adtel and
found the existence of a conflict of interest. On appeal, NLRC reversed the decision of LA. On the last
day for filing petition for certiorari with the CA, Adtel filed a motion for extension of time but was denied by
CA and dismissed Adtel's petition for certiorari for being filed beyond the reglementary period. The CA
ruled that Adtel had until 7 April 2009 to file its petition for certiorari. Instead of filing the petition
for certiorari, Adtel filed a motion for extension of time on 7 April 2009 and subsequently filed its petition
for certiorari on 22 April 2009, the last day of the extended period prayed for by Adtel. The CA held that
the reglementary period to file a petition for certiorari can no longer be extended pursuant to A.M. No. 07-
7-12-SC which amended Section 4, Rule 65 of the Rules of Court.
ISSUE: Whether or not the extension to file a petition for certiorari should be granted and not dismissed
on sole basis of technicality for reason of heavy workload of counsel?
HELD: NO.
A.M. No. 07-7-12-SC states that in cases where a motion for reconsideration was timely filed, the filing of
a petition for certiorari questioning the resolution denying the motion for reconsideration must be made
not later than sixty (60) days from the notice of the denial of the motion. In Laguna Metts
Corporation v. Court of Appeals, this Court held that following A.M. No. 07-7-12-SC, petitions
for certiorari must be filed strictly within 60 days from the notice of judgment or from the order denying a
motion for reconsideration and such 60-day period was non-extendible and the CA no longer had the
authority to grant the motion for extension. The reason for such ruling is that 60-day period is deemed
reasonable and sufficient time for a party to mull over and to prepare a petition asserting grave abuse of
discretion by a lower court. The period was specifically set to avoid any unreasonable delay that would
violate the constitutional rights of the parties to a speedy disposition of their case.
However in exceptional or meritorious cases, the Court may grant an extension anchored on special or
compelling reasons. Adtel anchored its motion for extension to the heavy workload of its counsel.
In Yutingco v. Court of Appeals, this Court held that the circumstance of heavy workload alone, absent a
compelling or special reason, is not a sufficient justification to allow an extension of the 60-day period to
file a petition for certiorari, to wit:
Heavy workload, which is relative and often self serving, ought to be coupled with more compelling
reasons such as illness of counsel or other emergencies that could be substantiated by affidavits of merit.
Standing alone, heavy workload is not sufficient reason to deviate from the 60-day rule. Thus, we are
constrained to state that the Court of Appeals did not err in dismissing the petition for having been filed
late.
Submitted by: Mamangon, Fatima C.

LABOR LAW>Labor Standards> Loss of trust and confidence / Willful breach of trust
JULIETA B. STA. ANA, Petitioner

vs.
MANILA JOCKEY CLUB, INC., Respondent
G.R. No. 208459,February 15, 2017
(First Division)
FACTS: Julieta Sta. Ana was hired by MJCI as outlet teller of its off-track betting (OTB) station in
Tayuman, Manila. It was found out by MJCI that its treasury department has been illegally appropriating
funds and lending it out to the employees of the latter corporation. The Special Disciplinary Committee of
MJCI found Sta. Ana conducting her lending business during office hours and using the funds and
personnel of MJCI; thus, she was found guilty of dishonesty and other fraudulent acts by the said
committee.
On her defense, she alleged that she started her lending business 15 years ago prior to the takeover of
the new management of MJCI and she sold her fishing vessels 2 years ago to finance her lending
business.She was eventually terminated by MJCI. Consequently, she filed a complaint for illegal
dismissal. Note that Sta. Ana was dismissed for willful breach of trust and confidence.
ISSUE: Whether or not Sta. Ana was legally dismissed by MJCI.
HELD: The Supreme Court enumerated the elements to legally dismiss an employee on the ground of
loss and trust, to wit:
―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.‖
In the case at bar, only the first element was proven by MCJI. The SC ruled that nowhere in the evidence
presented by MJCI that Sta. Ana utilized the funds of the corporation for her lending business. Also, Sta.
Ana was able to present documents to show her capability to engage in loan operations.
Quoting the words of the SC:
―Particularly, it [MJCI] 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‖ (bracket mine)
Submitted by: Mayoralgo, Remy

LABOR LAW>Labor Standards> Actual and willful breach supported by substantial evidence
NORMAN PANALIGAN, IRENEO VILLAJIN, and GABRIEL PENILLA, Petitioners

vs.
PHYVITA ENTERPRISES CORPORATION, Respondent
G.R. No. 202086, June 21, 2017
(First Division)
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.
Substantial evidence is that amount of evidence which a reasonable mind might accept as adequate to
support a conclusion.
FACTS: Phyvita Enterprises Corporation is a domestic corporation engaged in the business of health
club massage parlor, spa and other related services under the name and style of Starfleet Reflex Zone
("Starfleet"). Norman Panaligan, Ireneo Villajin, and Gabriel Penilla were employees of Phyvita assigned
as Roomboys at Starfleet.
Sometime on 25 January 2005, the Finance Assistant of Phyvita for Starfleet Girly Enriquez
discovered that the amount of One Hundred Eighty Thousand Pesos (Php180,000.00) representing their
sales for 22nd, 23rd and 24th of January 2005 was missing including receipts, payrolls, credit card
receipts and sales invoices. She immediately reported the same but the search remained futile.
On 28 April 2005, individual Office Memoranda were issued by Starfleet's Assistant Operations
Manager Jerry Rafols against the employees, directing them to explain in writing why no disciplinary
action shall be imposed against them for alleged violation of Class Dl.14 of Starfleet's rules and
regulations, particularly for the alleged involvement in a theft wherein important documents and papers
including cash were lost at Phyvita's establishment. The employees refused to receive the memorandum.
The employees did not participate both at the administrative hearing and investigation proceedings
conducted by Phyvita. Hence, they were terminated from their employment on the ground that they
violated the company's rules and regulations by stealing company documents and cash. They were also
informed that such termination is without prejudice to the filing of criminal charges against them.
On 28 June 2005, the company filed a criminal complaint for theft against the employees but this
was dismissed there being no sufficient evidence submitted by the parties to warrant the finding of the
crime of theft against aforesaid employees. With this, the employees filed a complaint against the
company for illegal dismissal and payment of separation pay.
ISSSE: Is there a valid and just cause for the termination of Panaligan and the other employees?
HELD: No.
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. Substantial
evidence is that amount of evidence which a reasonable mind might accept as adequate to support a
conclusion.
In termination cases, the burden of proof rests on the employer to show that the dismissal is for a
just cause. In here, the company failed to state how the alleged theft was committed by them and it failed
to adduce substantial evidence that would clearly demonstrate that the employees have committed
serious misconduct or have performed actions that would warrant the loss of trust and confidence
reposed upon them by their employer.
Contrary to the findings of the Court of Appeals and the Labor Arbiter, no substantial evidence
supports the allegation of theft leveled by the company against them - the said criminal act being the
underlying reason for the dismissal of the latter from being employees of the former.
Submitted by: Nacilla, Nica Jenine O.

LABOR LAW>Labor Standards>Termination by Employer
PJ LHUILLIER, INC., Petitioner

vs.
HECTOR OREIL CIMAGALA CAMACHO, Respondent
G.R. No. 223073, February 22, 2017
(Second Division)
DOCTRINE: Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to
the contrary. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith." For
loss of trust and confidence to be valid ground for termination, the employer must establish that: (1) the
employee holds a position of trust and confidence; and (2) the act complained against justifies the loss of
trust and confidence.
Management Prerogative - own judgment and discretion, all aspects of employment, including hiring,
work assignments, working methods, time, place and manner of work, tools to be used, processes to be
followed, supervision of workers, working regulations, transfer of employees, worker supervision, layoff of
workers and the discipline, dismissal and recall of workers. As a general proposition, an employer has
free reign over every aspect of its business, including the dismissal of his employees as long as the
exercise of its management prerogative is done reasonably, in good faith, and in a manner not otherwise
intended to defeat or circumvent the rights of workers.
FACTS: On July 25, 2011, petitioner P.J. Lhuillier, Inc. (PJLI), the owner and operator of the "Cebuana
Lhuillier" chain of pawnshops, hired petitioner Feliciano Vizcarra (Vizcarra) as PLJI's Regional Manager
for Northern and Central Luzon pawnshop operations and respondent Hector Oriel Cimagala Camacho
(Camacho) as Area Operations Manager (AOM) for Area 213, covering the province of Pangasinan.
Camacho was assigned to administer and oversee the operations of PJLI's pawnshop branches in the
area.
On May 15, 2012, Vizcarra received several text messages from some personnel assigned in Area 213,
reporting that Camacho brought along an unauthorized person, a non-employee, during the QTP
operation (pull-out of "rematado" pawned items) from the different branches of Cebuana Lhuillier
Pawnshop in Pangasinan. On May 18, 2012, Vizcarra issued a show cause memorandum directing
Camacho to explain why no disciplinary action should be taken against him for violating PJLI's Code of
Conduct and Discipline which prohibited the bringing along of non-employees during the QTP operations.
Camacho, in his Memorandum, apologized and explained that the violation was an oversight on his part
for lack of sleep and rest. With busy official schedules on the following day, he requested his mother's
personal driver, Jose Marasigan (Marasigan) to drive him back to Pangasinan. He admitted that
Marasigan rode with him in the service vehicle during the QTP operations.
On June 14, 2012, the Formal Investigation Committee issued the Report of Formal Investigation. The
committee concluded that Camacho was clearly violated the company’s policy designed to safeguard the
pawnshop against robberies and untoward incidents. Moreover, his act was a "willful neglect of duty
which cause[d] prejudice to the Company.
ISSUE: Whether or not Hector Camacho was illegally dismissed.
HELD: No
Article 282(c) of the Labor Code authorizes the employer to dismiss an employee for committing fraud or
for willful breach of trust reposed by the employer on the employee. Loss of confidence, however, is
never intended to provide the employer with a blank check for terminating its employees. "
For loss of trust and confidence to be valid ground for termination, the employer must establish that: (1)
the employee holds a position of trust and confidence; and (2) the act complained against justifies the
loss of trust and confidence.
The law contemplates two (2) classes of positions of trust. The first class consists of managerial
employees. They are as those who are vested with the power or prerogative to lay down management
policies and to hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees or
effectively recommend such managerial actions. The second class consists of cashiers, auditors, property
custodians, etc. who, in the normal and routine exercise of their functions, regularly handle significant
amounts of money or property.
Camacho was primarily responsible for administering and controlling the operations of branches in his
assigned area, ensuring cost efficiency, manpower productivity and competitiveneness. He was also
responsible for overseeing/monitoring the overall security and integrity in the area, including branch
personnel safety, in coordination with PJLI's Security Services Division. In fact, as stated by the CA, his
position required the utmost trust and confidence as it entailed the custody, handling, or care and
protection of PJLI's property. Furthermore, as AOM, he was among those employees authorized to
participate in the QTP operations. He was tasked in overseeing the safe transport and handling of
company assets during the said operations.
Camacho held a managerial position and, therefore, enjoyed the full trust and confidence of his superiors.
As a managerial employee, he was "bound by more exacting work ethics" and should live up to this high
standard of responsibility."
On the second requisite, Camacho admitted that he had committed a breach of trust when he brought
along his mother's driver, an unauthorized person, during the QTP operation, a very sensitive and
confidential operation. Simply put, his act was without justification. For this transgression, petitioner P JLI
was placed in a difficult position of withdrawing the trust and confidence that it reposed on respondent
Camacho and eventually deciding to end his employment. "Unlike other just causes for dismissal, trust in
an employee, once lost is difficult, if not impossible, to regain." P JLI cannot be compelled to retain
Camacho who committed acts inimical to its interests. A company has the right to dismiss its employees if
only as a measure of self-protection.
Finally, although it may be true that PJLI did not sustain damage or loss on account of Camacho's action,
this is not reason enough to absolve him from the consequence of his misdeed. The fact that an employer
did not suffer pecuniary damage will not obliterate the respondent's betrayal of trust and confidence
reposed on him by his employer.
Submitted by: Ocampo, Rhonald S.

LABOR LAW > Labor Standards > Serious Misconduct

vs.
G.R. No. 198066, June 7, 2017
(Second Division)
DOCTRINE: Mere existence of a basis for believing that the employee has breached the trust and
confidence of the employer is sufficient for managerial employees to be dismissed.
FACTS: Bravo was employed as a part-time teacher in 1988 by Urios College, now called Father
Satumino Urios University. In addition to his duties as a part-time teacher, Bravo was designated as the
school's comptroller.
Urios College organized a committee to formulate a new "ranking system for non-academic employees‖.
Under the proposed ranking system, the position of Comptroller was classified as an office head while the
position of Vice- President for Finance was classified as middle management.
The proposed ranking system was presented to Bravo for comments. Bravo recommended that "the
position of Comptroller should be classified as a middle management position because it was informally
merged with the position of Vice President for Finance.
Bravo was then directed to arrange a salary adjustment schedule for the new ranking system. Later,
Bravo obtained his employee ranking slip which showed his evaluation score and the change of his rank
"from office head to middle manager-level IV."
The committee discovered that "the Comptroller's Office solely prepared and implemented the salary
adjustment schedule" without prior approval from the Human Resources Department.
The committee recommended, among others, that Bravo be administratively charged for serious
misconduct or willful breach of trust under Article 282 of the Labor Code. Bravo allegedly misclassified
several positions and miscomputed his and other employees' salaries.The committee found that Bravo
34
floated the idea of his salary adjustment, which Urios College never formally approved. The committee
35
also discovered an irregularity in the implementation of the ranking system for school year 2001-2002.
ISSUE: Whether or not an employee who cannot be dismissed for serious misconduct cannot also be
dismissed for wilful breach of trust.
HELD: Yes. Due to the nature of his occupation, Bravo’s employment may be terminated for willful breach
of trust under Article 297(c), not Article 297(a), of the Labor Code.
A dismissal based on willful breach of trust or loss of trust and confidence under Article 297 of the Labor
Code entails the concurrence of two (2) conditions. First, the employee whose services are to be
terminated must occupy a position of trust and confidence. The second condition that must be satisfied is
the presence of some basis for the loss of trust and confidence. This means that "the employer must
107
establish the existence of an act justifying the loss of trust and confidence." Otherwise, employees will
be left at the mercy of their employers.
Although a less stringent degree of proof is required in termination cases involving managerial
employees, employers may not invoke the ground of loss of trust and confidence arbitrarily. The
prerogative of employers in dismissing a managerial employee "must be exercised without abuse of
discretion.
Bravo was validly dismissed based on loss of trust and confidence. Petitioner was not an ordinary rank-
and-file employee. His position of responsibility on delicate financial matters entailed a substantial amount
of trust from respondent. The entire payroll account depended on the accuracy of the classifications made
by the Comptroller. It was reasonable for the employer to trust that he had basis for his computations
especially with respect to his own compensation. The preparation of the payroll is a sensitive matter
requiring attention to detail. Not only does the payroll involve the company's finances, it also affects the
welfare of all other employees who rely on their monthly salaries.
Petitioner's act in assigning to himself a higher salary rate without proper authorization is a clear breach
of the trust and confidence reposed in him. In addition, there was no reason for the Comptroller's Office to
undertake the preparation of its own summary table because this was a function that exclusively
pertained to the Human Resources Department. Petitioner offered no explanation about the Comptroller's
Office's deviation from company procedure and the discrepancies in the computation of other employees'
salaries. Petitioner's position made him accountable in ensuring that the Comptroller's Office observed
the company's established procedures. It was reasonable that he should be held liable by respondent on
the basis of command responsibility.
Submitted by: Paeste, Sonny

Lybenson
LABOR LAW>Labor Standards>Project Employment> Usually necessary and desirable> Length of
service> Repeated and successive re-hiring
E. GANZON, INC. (EGI)AND EULALIO GANZON, Petitioners

vs.
FORTUNATO B. ANDO, JR., Respondent.
G.R. No. 214183, February 20, 2017
(Special En Banc)
DOCTRINE: Under Art. 280, project employment is one which "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." To be considered as project-based, the employer has the burden of proof to show that:
(a) the employee was assigned to carry out a specific project or undertaking and (b) the duration and
scope of which were specified at the time the employee was engaged for such project or undertaking. It
must be proved that the particular work/service to be performed as well as its duration are defined in the
employment agreement and made clear to the employee who was informed thereof at the time of hiring.
FACTS: Respondent Fortunato B. Ando, Jr. (Ando) filed a complaint against petitioner E. Ganzon, Inc.
(EGI) and its President, Eulalio Ganzon, for illegal dismissal and money claims for: underpayment of
salary, overtime pay, and 13th month pay; non-payment of holiday pay and service incentive leave; illegal
deduction; and attorneys fees. He alleged that he was a regular employee working as a finishing
carpenter in the construction business of EGI; he was repeatedly hired from January 21, 2010 until April
30, 2011 when he was terminated without prior notice and hearing; his daily salary of 292.00 was below
the amount required by law; and wage deductions were made without his consent, such as rent for the
barracks located in the job site and payment for insurance premium. EGI countered that, as proven by the
three (3) project employment contract, Ando was engaged as a project worker in Bahay Pamulinawen
Project in Laoag, Ilocos Norte from June 1, 2010 to September 30,2010 and from January 3, 2011 to
February 28,2011 as well as in EGI¬ West Insula Project in Quezon City, Metro Manila from February 22,
2011 to March 31, 2011;he was paid the correct salary based on the Wage Order applicable in the region;
he already received the 13th month pay for 2010 but the claim for 2011 was not yet processed at the time
the complaint was filed; and he voluntarily agreed to pay 500.00 monthly for the cost of the barracks,
beds, water, electricity, and other expenses of his stay at the job site.
The Labor Arbiter declared Ando a project employee of EGI but granted some of his money claims.
Both parties elevated the case to the NLRC which dismissed the appeals filed and affirmed in toto the
Decision of the Labor Arbiter. Ando filed a motion for reconsideration, but it was denied. Still aggrieved,
he filed a Rule 65 petition before the CA, which granted the same.
ISSUE: Whether or not CA erred in ruling that Ando is a regular employee.
HELD: In labor disputes, grave abuse of discretion may be ascribed to the NLRC when its findings and
conclusions reached are not supported by substantial evidence or are in total disregard of evidence
material to or even decisive of the controversy; when it is necessary to prevent a substantial wrong or to
do substantial justice; when the findings of the NLRC contradict those of the LA; and when necessary to
arrive at a just decision of the case. In the case at bar, We hold that the CA erred in ruling that the NLRC
gravely abused its discretion when it sustained the Labor Arbiter's finding that Ando is not a regular
employee but a project employee of EGI.
YES. The terms regular, project, seasonal and casual employment are taken from Article 280 of the Labor
Code, as amended. Under Art. 280, project employment is one which "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." To be considered as project-based, the employer has the burden of proof
to show that: (a) the employee was assigned to carry out a specific project or undertaking and (b) the
duration and scope of which were specified at the time the employee was engaged for such project or
undertaking. It must be proved that the particular work/service to be performed as well as its duration
are defined in the employment agreement and made clear to the employee who was informed thereof at
the time of hiring.
The activities of project employees may or may not be usually necessary or desirable in the usual
business or trade of the employer. In ALU-TUCP v. National Labor Relations Commission, two (2)
categories of project employees were distinguished:
In the realm of business and industry, we note that "project" could refer to one or the other of at least two
(2) distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is
within the regular or usual business of the employer company, but which is distinct and separate, and
identifiable as such, from the other undertakings of the company. Such job or undertaking begins and
ends at determined or determinable times. The typical example of this first type of project is a particular
construction job or project of a construction company. x x x. Employees who are hired for the carrying
out of one of these separate projects, the scope and duration of which has been determined and
made known to the employees at the time of employment, are properly treated as "project employees,"
and their services may be lawfully terminated at completion of the project.
The term "project" could also refer to, secondly, a particular job or undertaking that is not within the
regular business of the corporation. Such a job or undertaking must also be identifiably separate and
distinct from the ordinary or regular business operations of the employer. The job or undertaking also
begins and ends at determined or determinable times. x x x
Records show that Ando's contracts for Bahay Pamulinawen Project were extended until December 31,
2010 (from the original stated date of September 30, 2010) and shortened to February 15,2011(from the
original stated date of February 28, 2011) while his services in West Insula Project was extended until
April 30, 2011[34] (from the original stated date of March 31, 2011). These notwithstanding, he is still
considered as a project, not regular, employee of EGI.
A project employment contract is valid under the law.
The Court has upheld the validity of a project-based contract of employment provided that the period was
agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure
being brought to bear upon the employee and absent any other circumstances vitiating his consent; or
where it satisfactorily appears that the employer and employee dealt with each other on more or less
equal terms with no moral dominance whatever being exercised by the former over the latter; and it is
apparent from the circumstances that the period was not imposed to preclude the acquisition of tenurial
security by the employee. Here, Ando was adequately notified of his employment status at the time his
services were engaged by EGI for the Bahay Pamulinawen and the West Insula Projects. The contracts
he signed consistently stipulated that his services as a project worker were being sought. There was an
informed consent to be engaged as such. His consent was not vitiated. As a matter of fact, Ando did not
even allege that force, duress or improper pressure were used against him in order to agree.
There was no attempt to frustrate Ando's security of tenure. His employment was for a specific project or
undertaking because the nature of EGI's business is one which will not allow it to employ workers for an
indefinite period. As a corporation engaged in construction and residential projects, EGI depends for its
business on the contracts it is able to obtain. Since work depends on the availability of such contracts,
necessarily the duration of the employment of its work force is not permanent but coterminous with the
projects to which they are assigned and from whose payrolls they are paid.
Project employment should not be confused and interchanged with fixed-term employment:
x x x While the former requires a project as restrictively defined above, the duration of a fixed-term
employment agreed upon by the parties may be any day certain. which is understood to be "that which
must necessarily come although it may not be known when." The decisive determinant in fixed-term
employment is not the activity that the employee is called upon to perform but the day certain agreed
upon by the parties for the commencement and termination of the employment relationship.
The decisive determinant in project employment is the activity that the employee is called upon to perform
and not the day certain agreed upon by the parties for the commencement and termination of the
employment relationship. In this case, the duration of the specific/identified undertaking for which Ando
was engaged was reasonably determinable. The fact that Ando was required to render services
necessary or desirable in the operation of EGI's business for more than a year does not in any way impair
the validity of his project employment contracts. Time and again, We have held that the length of service
through repeated and successive rehiring is not the controlling determinant of the employment tenure of
a project employee. The rehiring of construction workers on a project-to-project basis does not confer
upon them regular employment status as it is only dictated by the practical consideration that experienced
construction workers are more preferred. In Ando's case, he was rehired precisely because of his
previous experience working with the other phases of the project. EGI took into account similarity of
working environment. Finally, the second paragraph of Article 280, stating that an employee who has
rendered service for at least one (1) year shall be considered a regular employee, is applicable only to a
casual employee and not to a project or a regular employee referred to in paragraph one thereof.
The foregoing considered, EGI did not violate any requirement of procedural due process by failing to
give Ando advance notice of his termination. Prior notice of termination is not part of procedural due
process if the termination is brought about by the completion of the contract or phase thereof for which
the project employee was engaged. Such completion automatically terminates the employment and the
employer is, under the law, only required to render a report to the Department of Labor and Employment
(DOLE) on the termination of employment.
Submitted by: Quevedo, Anah

Svellana T.
LABOR LAW>Labor Standards>Retirement
DE LA SALLE UNIVERSITY, Petitioner

vs.
JUANITO C. BERNDARDO, Respondent
G.R. No. 190809, February 13, 2017
(First Division)
DOCTRINE: RA 7641 or the Retirement Law shall apply to all employees in private sector, regardless of
theirs position, designation or status and irrespective of the method by which their wages are paid. They
shall include part timer employees. Employees of service and other job contractors and domestic helpers
or persons in the personal service of another except employees of retail, service and agricultural
establishments or operations employer not more than ten (10) or workers and employees of national
governments and its political subdivisions including government owned or controlled corporation if they
are covered by the Civil Service Commission law and regulation.
FACTS: Certain Bernardo, a part time faculty/lecturer at DLSU. Bernado teaching contract was renewed
at the start of every semester and summer. On November 8, 2003, DLSU informed Bernardo through a
telephone call that he could not teach at the school anymore as the school was implementing the
retirement age limit for its faculty members as he was already 75 years old. Bernardo had no choice but
to retire.
Bernardo filed his retirement benefit but DLSU averred that he is not entitled because he was merely a
part time employees which based on their manual of teaching that only regular employee entitles of
retirement benefits.
Aggrieved with the assertion of DLSU, Bernardo filed a complaint before Labor Arbiter for the retirement
claim to which the LA denied because of the prescription.
On appeal, NLRC reversed the decision of LA which is affirmed by the CA.
ISSUE: Whether or not a part time faculty is entitle of retirement of benefits.
HELD: Yes a part time employee is entitled of retirement benefits.
The Court declared in Aquino v. National Labor Relations Commission that retirement benefits are
intended to help the employee enjoy the remaining years of his life, lessening the burden of worrying for
his financial support, and are a form of reward for his loyalty and service to the employer. Retirement
benefits, where not mandated by law, may be granted by agreement of the employees and their employer
or as a voluntary act on the part of the employer.
RA 7641 is a curative social legislation. It precisely intends to give the minimum retirement benefits to
employees not entitled to the same under collective bargaining and other agreements. It also applies to
establishments with existing collective bargaining or other agreements or voluntary retirement plans
whose benefits are less than those prescribed in said law.
RA 7641 states that any employee may be retired upon reaching the retirement age and in case of
retirement, the employee shall be entitled to receive such retirement benefits as he may have earned
under existing laws and any collective bargaining agreement and other agreements. The Implementing
Rules provide that RA 7641 applies to all employees in the private sector, regardless of their position,
designation or status and irrespective of the method by which their wages are paid, except to those
specifically exempted. And Secretary Quisumbing' s Labor Advisory further clarifies that the employees
covered by RA 7641 shall "include part-time employees, employees of service and other job contractors
and domestic helpers or persons in the personal service of another."
Submitted by: Sison, Aldous Francis

P.
LABOR LAW > Labor Standards > Retirement plan
PHILIPPINE AIRLINES, INC, Petitioner

vs
ARJAN T. HASSARAM, Respondent
G.R. No. 217730, June 5, 2017
(First Division)
DOCTRINE: Retirement plan of company that is superior to the provisions of Article 287 shall apply to a
retiring employee.
FACTS: Harassam had applied for retirement from PAL in August 2000 after rendering 24 years of
service as a pilot, but his application was denied. Instead, PAL informed him that he had lost his
employment in the company as of 9 June 1998, in view of his failure to comply with the Return to Work
Order issued by the Secretary of Labor against members of the Airline Pilots Association of the
Philippines (ALPAP) on 7 June 1998.
Hence, Hassaram filed a complaint against PAL for illegal dismissal and the payment of retirement
benefits, damages, and attorney's fees.
PAL contended that if at all, Hassaram was entitled only to retirement benefits of ₱5,000 for every year of
service pursuant to the Collective Bargaining Agreement (CBA) between PAL and ALPAP.
LA awarded retirement benefits and attorney's fees to Hassaram. PAL appealed the LA's Decision to the
NLRC. PAL contended that Hassaram was not entitled to retirement benefits, because he had earlier
been terminated from employment for defying the Return to Work Order. It further claimed that the LA's
Decision contradicted the ruling in PAL v. ALPAP, in which this Court awarded retirement benefits to
qualified PAL pilots under the company's own retirement plans, instead of the Labor Code.
The NLRC granted PAL's Motion for Reconsideration. Reversing its earlier Decision, it set aside the ruling
of the LA on account of Hassaram's receipt of retirement benefits under the Plan. This payment,
according to the NLRC, was sufficient to discharge his claim for retirement pay.
The CA issued the assailed Decision reversing the NLRC and reinstating the ruling of the LA. The
appellate court declared that the funds received under the Plan were not the retirement benefits
contemplated by law. Hence, it ruled that Hassaram was still entitled to receive retirement benefits in the
amount of ₱2, 111,984.60 pursuant to Article 287 of the Labor Code.
PAL sought reconsideration of the ruling, but its motion was denied.
ISSUE: Whether or not Hassaram is entitled to receive retirement benefits under Article 287 of the Labor
Code despite availment of benefit under the company’s retirement plan.
HELD: The Supreme Court granted the petition.
In Philippine Airlines, Inc. v. Airline Pilots Association of the Phils. the Court utilized these provisions to
explain the nature of the Plan: The PAL Pilots' Retirement Benefit Plan is a retirement fund raised from
contributions exclusively from [PALI of amounts equivalent to 20% of each pilot's gross monthly pay.
Based on the foregoing characterization, the Court included the amount received from the Plan in the
computation of the retirement pay of the pilot involved in that case. The same rule was later applied
to Elegir v. Philippine Airlines, Inc.: Apart from the abovementioned benefit, the petitioner is also entitled
to the equity of the retirement fund under PAL Pilots' Retirement Benefit Plan, which pertains to the
retirement fund raised from contributions exclusively from PAL of amounts equivalent to 20% of each
pilot's gross monthly pay.
Considering that the very same retirement plan is involved in this petition, we adopt the pronouncements
in the above cases. We therefore rule that the amount of ₱4,456,8l7.75 received by Hassaram from the
PAL Plan formed part of his retirement pay.
As held in Elegir v. Philippine Airlines, Inc., Art. 287 of the Labor Code is applicable only to a situation
where (l) there is no CBA or other applicable employment contract providing for retirement benefits for an
employee, or (2) there is a CBA or other applicable employment contract providing for retirement benefits
for an employee, but it is below the requirement set by law.
It is clear from the records that Hassaram is a member of ALP AP and as such, is entitled to benefits from
both the retirement plans under the 196 7 PAL-ALPAP CBA and the Plan. In contrast, Article 287 would
entitle a retiring pilot to the equivalent of only 22.5 days of his monthly salary for every year of service
1 This scheme was thus considered by the Court as inferior to the retirement plans granted by PAL to the
latter's pilots in Elegir and PAL.
One-half (112) month salary means 22.S days: 15 days plus 2.5 days representing one-twelfth (1/12) of
the 13th month pay and the remaining 5 days for service incentive leave. Comparing the benefits under
the two (2) retirement schemes, it can readily be perceived that the 22.5 days worth of salary for every
year of service provided under Article 287 of the Labor Code cannot match the 240% of salary or almost
two and a half worth of monthly salary per year of service provided under the PAL Pilots' Retirement
Benefit Plan, which will be further added to the ₱125,000.00 to which the petitioner is entitled under the
PAL-ALP AP Retirement Plan.
Following the above pronouncement, we therefore declare that Hassaram's retirement benefits must be
computed based on the retirement plans of PAL, and not on Article 287 of the Labor Code. In view of the
undisputed fact that Hassaram has received his benefits under the Plan, he is now entitled to claim only
his remaining benefits under the CBA, i.e. the amount of ₱l20,000 (24 years x ₱5,000) for his 24 years of
service to the company.

L.

vs.
G.R. No. 215627 June 5, 2017
(Second Division)
relinquishment.
employer.The concepts of constructive dismissal and resignation are discussed in Gan v. Galderma
affidavit of ABB, Inc. 's HR Manager Miranda;(2) the resignation letter; the letter of intent to purchase
30
Clearance Sheet; (4) the Certificate of Employment dated March 23, 2012;(5) photocopy of Bank of the
Philippine Islands manager's checkin the amount of ₱2,009,822.72, representing the separation benefit;
(6) Employee Final Pay Computation, showing payment of leave credits, rice subsidy and bonuses,
amounting to ₱805,399.35; and (7) the Receipt, Release and Quitclaim for a consideration of the total
sum of ₱2,815,222.07.
and other benefits.
property of his spouse, descendants or ascendants. The requisites for intimidation to vitiate one's consent
are stated in St. Michael Academy v. NLRC,thus:
x x x.
ABB, Inc.
Submitted by: Tamayo, Jumen G.

LABOR LAW>Labor Standards> Work-related illness>No automatic compensability
MARIO C. MADRIDEJOS, Petitioner

vs.
NYK-FIL SHIP MANAGEMENT INC., Respondent
G.R. No. 204262, June 7, 2017
(Second Division)
DOCTRINE: Disputable presumption implies ―that the non-inclusion in the list of compensable
disease/illnesses does not translate to an absolute exclusion from disability benefits.‖ The disputable
presumption does not signify an automatic grant of compensation and/or benefits claim. There is still a
need for the claimant to establish, through substantial evidence, that his illness is work-related.
FACTS: The seafarer was engaged to work as Demi Chef on-board a passenger cruise vessel. Just two
(2) weeks into his employment, the seafarer claimed that he suddenly slipped on a metal stairway and fell
down, hitting his abdomen and chest on a metal pipe. He was brought to the ship doctor and was
diagnosed to have a "sebaceous cyst to the right of the umbilicus." The next day, the seafarer was treated
at a shore medical facility and under a local anesthesia, his cyst was removed, and the lesion was closed
with three (3) stitches. After two (2) months, the engagement of the seafarer was terminated in
accordance with the probationary employment clause in the employment agreement and he was
immediately repatriated. The seafarer further argued that he requested for medical referral upon returning
to the company’s office but was denied because his condition was not work-related. Due to persistent
symptoms, the seafarer sought medical examination with his personal doctor and was certified to be
permanently unfit for sea service. The seafarer argued that he did not finish his employment with the
company because of his unwanted medical condition and demanded payment of disability benefits.
Subsequently, a complaint was filed with the NLRC. The Labor Arbiter awarded the seafarer with partial
disability as the medical condition occurred during the term of employment. On appeal, the NLRC
dismissed the claim as there was no showing that the condition was work-related and that the same was
just a minor one which was already resolved when he underwent removal of the cyst. The decision of the
NLRC was affirmed by the Court of Appeals.
ISSUE: Whether or not illness acquired during employment by seafarer though not included in POEA list
is presumed work-related, thus automatically compensable without proof
HELD: NO. The Court noted that the employment of the seafarer was terminated in accordance with the
probationary employment clause under the employment agreement. The allegation of the seafarer that
his employment was terminated because of his medical condition is undermined by the fact that after he
underwent excision of the cyst, he was able to work for 2 more months without any complaints
whatsoever. Moreover, the medical report furnished by the shore doctor who conducted the excision of
the cyst would show that only a minor operation was done and after the excision, only three stitches were
required to be done and seafarer was immediately discharged back to the ship to return to work.
Sebaceous cyst is not work-related. The seafarer insists that his sebaceous cyst was work-related and
compensable since the risk of acquiring it increased due to his working conditions on board. The Court
held that a sebaceous cyst is not included in the list of occupational disease under the POEA Contract.
However, the contract expressly provides that those illnesses not listed are disputably presumed as work-
related. The disputable presumption implies that the non-inclusion in the list of compensable
diseases/illnesses does not translate to an absolute exclusion from disability benefits. Similarly, the
disputable presumption does not signify an automatic grant of compensation and/or benefits claim. There
is still a need for the claimant to establish, through substantial evidence, that his illness is work-related
which in this case, the seafarer failed to establish. The seafarer cannot solely rely on the disputable
presumption clause in the contract as he still needs to establish with substantial evidence wok-relation of
his condition. The seafarer has not enumerated either the scope of his job or his regular tasks as a Demi
Chef that would supposedly show the correlation of his employment to the development of his cyst.
Similarly, he failed to provide an overview of significant working conditions that might have possibly
contributed to the acquisition or aggravation of his illness. Instead, he merely made sweeping assertions
about it for which the claim should be denied.
Submitted by: Tanghal, Noelle

Christine
LABOR LAW>Labor Standards>Permanent Total Disability> Findings of Company Physician vs.
Private Doctor

vs.
NFD INTERNATIONAL MANNING AGENTS, INC./TARGET SHIP MANAGEMENT PTE LTD./
CYNTHIA SANCHEZ, Respondents
G.R. No. 212098. July 26, 2017
(Second Division)
DOTRINE: In several cases, the Court held that the doctor who have had a personal knowledge of the
actual medical condition, having closely, meticulously and regularly monitored and actually treated the
seafarer's illness, is more qualified to assess the seafarer's disability. The findings of the company-
designated doctor, who, with his team of specialists periodically treated petitioner for months and
monitored his condition, deserve greater evidentiary weight than the single medical report of petitioner's
doctor, who appeared to have examined petitioner only once.
FACTS: Petitioner Julio C. Espere, a Bosun hired by respondent NFD International Manning Agents, Inc.,
was declared ―fit for sea duty.‖ He was on board the vessel M.V. Kalpana Prem when he suffered from
uncontrolled hypertension, malaise NYD, and psychosomatic illness; thus, prompting the company-
designated physicians to declare him unfit for duty causing his repatriation back to the Philippines, but
was given the appropriate medications and sickness allowance amounting to US$2,887.03.
The physicians also reported that the cause of petitioner's hypertension was not work-related, but due to
multifactorial in origin, which includes genetic predisposition, poor lifestyle, high salt intake, smoking,
diabetes mellitus, age, and increased sympathetic activity. Unsatisfied, petitioner Espero consulted with a
private doctor who confirmed petitioner's condition as ―work-related or work-aggravated.‖
The Labor Arbiter dismissed the complaint filed by petitioner Espero, which was later revered by the
National Labor and Relations Commission. On appeal, the Court of Appeals ruled in favour of respondent
NFD; hence, the petition.
ISSUES: Whether or not petitioner Espero’s hypertension is work-related or work-aggravated
HELD: NO.
Jurisprudence is replete with pronouncements that it is the company-designated physician who is

entrusted with the task of assessing the seaman's disability, whether total or partial, due to either injury or
illness, during the term of the latter's employment. It is his findings and evaluations which should form the
basis of the seafarer's disability claim. His assessment, however, is not automatically final, binding or
conclusive on the claimant, the labor tribunal or the courts, as its inherent merits would still have to be
weighed and duly considered. The seafarer may dispute such assessment by seasonably exercising his
prerogative to seek a second opinion and consult a doctor of his choice. In case of disagreement between
the findings of the company-designated physician and the seafarer's doctor of choice, the employer and
the seaman may agree jointly to refer the latter to a third doctor whose decision shall be final and binding
on them. In the present case, there is no evidence to show that the parties jointly sought the opinion of a
third physician in the determination and assessment of petitioner's disability or the absence of it.
Unlike the evaluation made by the company physicians, there is no evidence to prove that the private
doctor’s findings were reached based on an extensive or comprehensive examination of petitioner. Aside
from the Medical Certificate issued by the private doctor, petitioner failed to present competent evidence
to prove that thorough examinations were done by the said doctor. In contrast, the various medical
certificates and reports by the company-designated physicians were issued in a span of five (5) months of
closely monitoring petitioner's medical condition and progress, and after careful analysis of the results of
the diagnostic tests and procedures administered to petitioner while in consultation with his cardiologist.
Submitted by: Valdez, Suzette P.

Labor Law> Labor Standards>Disability Benefits
TOMAS P. ATIENZA
vs
OROPHIL SHIPPING INTERNATIONAL CO. INC ET AL
G.R. Nos. 191049, August 7 2017
(First Division)
DOCTRINE: The seafarer effectively discharges his own burden of proving compliance with the first three
conditions of compensability under Section 32-A of the 2000 POEA-SEC, i.e., that (1) the seafarer's work
must involve the risks described herein; (2) the disease was contracted as a result of the seafarer's
exposure to the described risks; and (3) the disease was contracted within a period of exposure and
under such other factors necessary to contract it.
FACTS: In the course of his employment contract, petitioner complained of severe headaches, nausea,
and double vision which the foreign port doctors diagnosed to be right cavernous sinus inflammation or
Tolosa Hunt Syndrome (THS). As a result, petitioner was repatriated on February 4, 2005 and referred to
a company-designated physician, Doctor Nicomedes G. Cruz (Dr. Cruz), who confirmed the findings and
advised him to continue the medication prescribed by the foreign doctors. On June 28, 2005, Dr. Cruz
issued a certification declaring petitioner fit to resume work. Dissatisfied, petitioner consulted an
independent physician, Dr. Paul Matthew D. Pasco (Dr. Pasco), who, on the other hand, assessed his
illness as a Grade IV disability and declared him unfit for sea duty.
ISSUE: Whether or not petitioner’s disability is compensable?
HELD: Yes
In the case at bar, petitioner was found by both the company-designated and independent physicians to
have THS during the term of his employment contract that caused his eventual repatriation on February
4, 2005. THS is a rare neurologic disorder characterized by severe headache and pain often preceding
weakness and painful paralysis of certain eye muscles. Its exact cause was unknown but the disease was
thought to be associated with inflammation of the area behind the eyes. A possible risk factor for THS is
a recent viral infection.
Considering further his constant exposure to different temperature and unpredictable weather conditions
that accompanied his work on board an ocean-going vessel, the likelihood to suffer a viral infection -a
possible risk factor -is not far from impossible, more so when no less than petitioner's independent
physician, Dr. Pasco, diagnosed him to be suffering from cavernous sinus.
In this case, the NLRC failed to account for the foregoing rules on seafarers' compensation and instead,
cavalierly dismissed petitioner's claim on the supposition that petitioner failed to show a reasonable
connection between his illness and his work as an Able Seaman, even if the records show otherwise.
More significantly, the NLRC did not account for the employer's failure to comply with the 120 day-rule, by
virtue of which the law conclusively presumes the seafarer's disability to be total and permanent. Thus, for
these reasons, the Court finds that the NLRC's ruling is tainted with grave abuse of discretion and hence,
should have been corrected by the CA through certiorari. Accordingly, the CA's ruling must be reversed
and set aside.

N.
LABOR LAW > Labor Standards > Disability Benefits
BENEDIT N. ROMANA, Petitioner

vs
MAGSAYSAY MARITIME CORPORATION, EDUARDO U. MANESE and/or PRINCESS CRUISE LINE,
LTD., Respondents.
G.R. No. 192442, August 09, 2017
(First Division)
DOCTRINE : Any sickness resulting to disability or death as a result of an occupational disease listed
under Section 32-A of this Contract with the conditions set therein satisfied" is deemed to be a "work-
related illness.
FACTS : Petitioner was employed by respondents Magsaysay Maritime Corporation, Eduardo Manese
and/or Princess Cruise Lines, Ltd. (respondents) as a Mechanical Fitter and boarded the vessel M/V
Golden Princess. He claimed that while he and fellow shipmates Alexander Mapa and Rogelio Acdal
were walking along the ship alley, the metal ceiling fell and wounded his head. A few days thereafter, he
experienced persisting headache and blurring of vision and consulted the ship's doctor who prescribed
him medicines. As his condition did not improve, he was referred to a specialist in Barbados, West Indies,
and was found to have a tumor (or hemangioblastoma) at the left side of his brain, for which he
underwent left posterior fossa craniectomy. He was repatriated the company-designated physician issued
a finding that petitioner's illness is not work-related given that the same is an "abnormal growth of tissues
in the brain's blood vessels. Ptitioner consulted an independent physician, who on the other hand,
declared his illness to be work-related and gave him a Grade 1 impediment after finding him unfit to
resume work as a . seaman and incapable of landing a gainful employment because of his medical
background. Ptitioner filed a complaint, seeking payment of his disability benefits, illness allowance,
reimbursement of medical expenses, damages, and attorney's fees. Labor Arbiter (LA) dismissed the
complaint, finding that petitioner failed to establish that his illness is work-related LA gave more credence
to the findings of the company-designated physician that his employment did not increase the risk of
contracting his illness, nor did his working conditions contribute to his illness. NLRC affirmed the LA
ruling, holding that there was no evidence to support petitioner's claim that the nature of his work exposed
him to risks of contracting a brain tumor.
ISSUE : Whether not petitioner is entitled to disability benefits pursuant to the 2000 POEA-SEC.
HELD : NO.
Under the 2000 POEA-SEC, "any sickness resulting to disability or death as a result of an occupational
disease listed under Section 32-A of this Contract with the conditions set therein satisfied" is deemed to
be a "work-related illness." On the other hand, Section 20 (B) (4) of the 2000 POEA-SEC declares that
"[t]hose illnesses not listed in Section 32 of this Contract are disputably presumed as work related." The
legal presumption of work-relatedness was borne out from the fact that the said list cannot account for all
known and unknown illnesses/diseases that may be associated with, caused or aggravated by such
working conditions, and that the presumption is made in the law to signify that the non-inclusion in the list
of occupational diseases does not translate to an absolute exclusion from disability benefits. Given the
legal presumption in favor of the seafarer, he may rely on and invoke such legal presumption to establish
a fact in issue. "The effect of a presumption upon the burden of proof is to create the need of presenting
evidence to overcome the prima facie case created, thereby which, if no contrary proof is offered, will
prevail."
Court held that the legal presumption of work-relatedness of a non-listed illness should be overturned
only when the employer's refutation is found to be supported by substantial evidence, which, as
traditionally defined, is "such relevant evidence as a reasonable mind might accept as sufficient to
support a conclusion.
To address this apparent confusion, the Court thus clarifies that there lies a technical demarcation
between work-relatedness and compensability relative to how these concepts operate in the realm of
disability compensation. As discussed, work-relatedness of an illness is presumed; hence, the seafarer
does not bear the initial burden of proving the same. Rather, it is the employer who bears the burden of
disputing this presumption. If the employer successfully proves that the illness suffered by the seafarer
was contracted outside of his work (meaning, the illness is pre-existing), or that although the illness is
pre-existing, none of the conditions of his work affected the risk of contracting or aggravating sucli illness,
then there is no need to go into the matter of whether or not said illness is compensable. As the name
itself implies, work-relatedness means that the seafarer's illness has a possible connection to one's work,
and thus, allows the seafarer to claim disability benefits therefor, albeit the same is not listed as an
occupational disease. The established work-relatedness of an illness does not, however, mean that the
resulting disability is automatically compensable. As also discussed, the seafarer, while not needing to
prove the work-relatedness of his illness, bears the burden of proving compliance with the conditions of
compensability under Section 32 (A) of the 2000 POEA-SEC. Failure to do so will result in the dismissal
of his claim. Notably, it must be pointed out that the seafarer will, in all instances, have to prove
compliance with the conditions for compensability, whether or not the work-relatedness of his illness is
disputed by the employer.
When the presumption of work-relatedness is contested by the employer, the factors which the seafarer
needs to prove to rebut the employer's contestation would necessarily overlap with some of the conditions
which the seafarer needs to prove to establish the compensability of his illness and the resulting disability.
In this regard, the seafarer, therefore, addresses the refutation of the employer against the work-
relatedness of his illness and, at the same time, discharges his burden of proving compliance with certain
conditions of compensability.
Claim for disability benefits should be denied, considering that respondents were able to successfully
debunk the presumption of work-relatedness and concomitantly, petitioner failed to prove by substantial
evidence his compliance with the conditions for compensability set forth under Section 32-A of the 2000
POEA-SEC.

LABOR LAW>Labor Standards>Closure of business> alter ego doctrine
ROMMEL M. ZAMBRANO, ROMEO O. CALIPAY, JESUS L. CHIN, LYNDON B. APOSAGA,

BONIFACIO A. CASTANEDA, ROSEMARIE P. FALCUNIT, ROMEO A. FINALLA, LUISITO G.
GELLIDO, JOSE ALLI L. MABUHAY, VICENTE A. MORALES, RAUL L. REANZARES, DIODITO I.
TACUD, ERNAN D. TERCERO, LARRY V. MUTIA, ROMEO A. GURON, DIOSDADO S. AZUSANO,
BENEDICTO D. GIDAYAWAN, LOWIS M. LANDRITO, NARCISO R. ASI, TEODULO BORAC,
SANTOS J. CRUZADO, JR., ROLANDO DELA CRUZ, RAYMUNDO, MILA Y. ABLAY, ERMITY F.
GABUCAY, PABLITO M. LACANARIA, MELCHOR PENAFLOR, ARSENIO B. PICART III, ROMEO M.
SISON, JOSE VELASCO JR., ERWIN M. VICTORIA, PRISCO J. ABILO, WILFREDO D. ARANDIA,
ALEXANDER Y. HILADO, JAIME M. CORALES, GERALDINE C. MAUHAY, MAURO P. MARQUEZ,
JONATHAN T. BARQUIN, RICARDO M. CALDERON JR., RENA TO R. RAMIREZ, VIVIAN P.
VIRTUDES, DOMINGO P. COSTANTINO JR., RENATO A. MANAIG, RAFAEL D. CARILLO,
Petitioners
vs.
PHILIPPINE CARPET MANUFACTURING CORPORATION/ PACIFIC CARPET MANUFACTURING
CORPORATION, DAVIDE. T. LIM, and EVELYN LIM FORBES, Respondents
G.R. No. 224099, June 21, 2017
(Second Division)
DOCTRINE: Closure of business is the reversal of fortune of the employer whereby there is a complete
cessation of business operations and/or an actual locking-up of the doors of establishment, usually due to
financial losses. Closure of business, as an authorized cause for termination of employment, aims to
prevent further financial drain upon an employer who cannot pay anymore his employees since business
has already stopped. In such a case, the employer is generally required to give separation benefits to its
employees, unless the closure is due to serious business losses.
FACTS: The petitioners averred that they were employees of private respondent Philippine Carpet
Manufacturing Corporation (Phil Carpet). On January 3, 2011, they were notified of the termination of
their employment effective February 3, 2011 on the ground of cessation of operation due to serious
business losses. They were of the belief that their dismissal was without just cause and in violation of due
process because the closure of Phil Carpet was a mere pretense to transfer its operations to its wholly
owned and controlled corporation, Pacific Carpet Manufacturing Corporation (PacificCarpet). They
claimed that the job orders of some regular clients of PhilCarpet were transferred to Pacific Carpet; and
that from October to November 2011, several machines were moved from the premises of Phil Carpet to
Pacific Carpet. They asserted that their dismissal constituted unfair labor practice as it involved the mass
dismissal of all union officers and members of the Philippine Carpet Manufacturing Employees
Association (PHILCEA).
In its defense, Phil Carpet countered that it permanently closed and totally ceased its operations because
there had been a steady decline in the demand for its products due to global recession, stiffer
competition, and the effects of a changing market.
The Labor Arbiter dismissed the complaints for illegal dismissal. It ruled that the termination of the
petitioners' employment was due to total cessation of manufacturing operations of Phil Carpet because it
suffered continuous serious business losses from 2007 to 2010. On appeal, the NLRC affirmed the
findings of the Labor Arbiter. The CA affirmed the decision of the NLRC
ISSUE: Whether the petitioners were dismissed from employment for a lawful cause
HELD: Yes
The petitioners were terminated from employment for an authorized cause
Under Article 298 (formerly Article 283) of the Labor Code, closure or cessation of operation of the
establishment is an authorized cause for terminating an employee, viz.:
Article 298. Closure of establishment and reduction of personnel. -The employer may also terminate the
employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operations of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the
workers and the Department of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closure or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to at least one (1)
month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of
at least six (6) months shall be considered as one (1) whole year.
Closure of business is the reversal of fortune of the employer whereby there is a complete cessation of
business operations and/or an actual locking-up of the doors of establishment, usually due to financial
losses. Closure of business, as an authorized cause for termination of employment, aims to prevent
further financial drain upon an employer who cannot pay anymore his employees since business has
already stopped. In such a case, the employer is generally required to give separation benefits to its
employees, unless the closure is due to serious business losses.
under Article 283 of the Labor Code, three requirements are necessary for a valid cessation of business
operations: (a) service of a written notice to the employees and to the DOLE at least one month before
the intended date thereof; (b) the cessation of business must be bona fide in character; and (c) payment
to the employees of termination pay amounting to one month pay or at least one-half month pay for every
year of service, whichever is higher.
Submitted by: Villanueva, Emilio Jan

D.
LABOR LAW >Labor Standards>Resignation>Option to resign
EDWARD M. COSUE, Petitioner

v.
FERRITZ INTEGRATED DEVELOPMENT CORPORATION, Respondents.
G.R. No. 230664, July 24, 2017
(Third Division)
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. 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 him except to forego his continued employment.
FACTS: Petitioner, COSUE, is a regular employee as a janitor and maintenance staff of of Respondent,
FERRITZ (FDIC).
On October 9, 2014, Petitioner filed a Complaint against Respondent, for actual illegal dismissal and
underpayment of salaries, with prayer for moral and exemplary damages and attorney's fees.
Respondent was summoned by Germino, Head of FIDC, who VERBALLY informed him that he was
suspended from July 16, 2014 to August 13, 2014 on suspicion that he stole the electrical wires.
Beginning July 16, 2014 until August 13, 2014, he was no longer allowed to work. ???
Respondents alleged that petitioner was suspended for twenty-five (25) days from July 16, 2014 to
August 13, 2014, pending further investigation (for stealing electric wires).
Petitioner returned to FIDC on August 13, 2014, but was told to come back as Germino was on leave.
When petitioner came back on August 27, 2014, he was able to speak to Germino and they agreed that
he would voluntarily resign. However, petitioner did not file his resignation, and eventually instituted his
Complaint for illegal dismissal.
LABOR ARBITER (LA) – dismissed the complaint for lack of evidence. The LA held that other than
petitioner's general assertion that he was dismissed, no evidence was presented to support such claim.
Petitioner was admittedly suspended from July 16, 2014 to August 13, 2014. Thus, as of July 27, 2014,
the date of dismissal as averred in petitioner's Complaint, he was still serving his preventive suspension.
In fact, he was not barred from the premises or categorically informed that he was already dismissed from
work.
NLRC and CA agreed with LA.
ISSUE: Whether or not, the rule that the employer bears the burden of proof in illegal dismissal cases
applies in this case.
HELD: The rule is that one who alleges a fact has the burden of proving it; thus, petitioner was burdened
to prove his allegation that respondents dismissed him from his employment. It must be stressed that the
evidence to prove this fact must be clear, positive and convincing. The rule that the employer bears the
burden of proof in illegal dismissal cases finds no application here because the respondents deny having
dismissed the petitioner. In illegal dismissal cases, while the employer bears the burden 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.

L.
LABOR LAW >Labor Standards>Redundancy> Allegation of "forced to sign
PHILIPPINE NATIONAL BANK, Petitioner

vs.
JUMELITO T. DALMACIO, Respondent
G.R. No. 202308, July 5, 2017
(Third Division)
DOCTRINE: Redundancy exists when the service capability of the workforce is in excess of what is
reasonably needed to meet the demands of the business enterprise. A position is redundant when it is
superfluous, and superfluity of a position or positions could be the result of a number of factors, such as
the overhiring of workers, a decrease in the volume of business or the dropping of a particular line or
service previously manufactured or undertaken by the enterprise.
FACTS: The case stemmed from a complaint for illegal dismissal, underpayment of separation pay and
retirement benefits, illegal deduction, nonpayment of provident fund with prayer for damages and
4
attorney's fees filed by Jumelito T. Dalmacio (Dalmacio) and Emma R. Martinez (Martinez) as a result of
their separation from PNB way back September 15, 2005 due to PNB's implemention of its redundancy
program. Dalmacio and · Martinez were hired as utility worker and communication equipment operator,
respectively, by the National Service Corporation, a subsidiary of PNB. Years later, Dalmacio became an
Information Technology (IT) officer of PNB, while Martinez became a Junior IT Field Analyst.
The Labor Arbiter found that the Philippine National Bank (PNB) effected a valid redundancy program.
This was affirmed by the National Labor Relations Commission, which was then affirmed in part by the
Court of Appeals (CA). The CA ruled, among others, that, "principles of justice and fair play call for the
modification of the separation package already received by herein petitioner. x x x the subtraction of the
GSIS Gratuity Pay is inappropriate, therefore the same should be returned to the petitioner. Aggrieved,
both parties appealed the Decision of the CA before the Supreme Court.
ISSUE: Whether or not PNB validly implemented its redundancy program?
HELD: Yes.
Time and again, it has been ruled that an employer has no legal obligation to keep more employees than
are necessary for the operation of its business. Redundancy exists when the service capability of the
workforce is in excess of what is reasonably needed to meet the demands of the business enterprise. A
position is redundant when it is superfluous, and superfluity of a position or positions could be the result
of a number of factors, such as the overhiring of workers, a decrease in the volume of business or the
dropping of a particular line or service previously manufactured or undertaken by the enterprise.
For the implementation of a redundancy program to be valid, however, the employer must comply with
the following requisites: (1) written notice served on both the employees and the Department of Labor and
Employment (DOLE) at least one month prior to the intended date of termination of employment; (2)
payment of separation pay equivalent to at least one month pay for every year of service; (3) good faith in
abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are
to be declared redundant and accordingly abolished, taking into consideration such factors as (a)
preferred status; (b) efficiency; and (c) seniority, among others.
In this case, PNB's redundancy program was neither unfair nor unreasonable considering that it was
within the ambit of its management prerogative to upgrade and enhance the computer system of the bank
has become patently redundant upon PNB's engagement of theSubmitted contract by: Aguilar,
service withCherry Kerr
Technopaq
Moreover, records have it that PNB faithfully complied with the legal procedures provided under Article
283 of the Labor Code as evidenced by the individual notices of termination served and received by the
petitioner as well as the Establishment Termination Report filed by PNB with the Department of Labor.
LABOR LAW >Labor Standards> expulsion or impeachment of union officer
UNITED POLYRESINS, INC., ERNESTO UY SOON, JR., and/or JULITO UY SOON, Petitioners
vs.
MARCELINO PINUELA, Respondent
G.R. No. 209555, July 31, 2017
(First Division)
DOCTRINE: Expulsion or impeachment from being a union officer may not be used as a ground to
terminate respondent’s employment.
FACTS: Petitioner United Polyresins, Inc. (UPI) is a registered domestic corporation doing business in
San Pedro, Laguna, while petitioners Ernesto Uy Soon, Jr. and Julito Uy Soon are its corporate officers.
Respondent Marcelino Pinuela was employed by UPI in 1987. He became a member of the labor union,
Polyresins Rank and File Association (PORFA), and was elected President thereof in May, 2005 and
slated to serve until the end of 2007.
The collective bargaining agreement (CBA) then existing between UPI and PORFA provided that:
―Section 3. The Company shall grant to the Union the amount of Three Hundred Thousand Pesos
(₱300,000.00) free of interest as the union's capital for establishing a cooperative to meet the needs of its
members. Said loan shall fall due and become payable at the same date that this Bargaining Agreement
expires, to wit - December 31, 2007. In the event of non-payment, all officers and members will be
personally accountable. In case of additional funds, they can make a written request [addressed] to the
President of the company.‖
Praying that the assailed CA dispositions be set aside and that respondent's case be dismissed instead,
petitioners maintain in their Petition and Reply34 that substantive and procedural due process were
observed in respondent's case; that respondent was apprised of the charges against him and given the
opportunity to refute them; that the evidence points to the conclusion that he misappropriated the union's
funds and was unable to explain the dissipation thereof; that for what he has done, respondent violated
Article XV, Section 1, paragraphs (e) and (f) of the union's Constitution; that respondent's dismissal on the
basis of the union security clause in the CBA was thus valid, based on substantial proof, and in accord
with the pronouncement in Carino v. National Labor Relations Commission, where the dismissal of an
employee was upheld on the basis of the union security and expulsion clauses contained in the CBA; and
that since his dismissal is valid, then he is not entitled to his monetary claims.
In his Comment, respondent maintains that the CA did not err in finding that the evidence against him
was insufficient; that the CA was correct in ruling that his right to procedural due process was violated
when he was not properly informed of the charges against him; and that for these reasons, he was
illegally dismissed and thus entitled to his monetary claims.
ISSUE: Whether or there was a valid dismissal of employement.

HELD: NO. However, these provisions refer to impeachment and recall of union officers, and not
expulsion from union membership. This is made clear by Section 2(e) of the same Article XV, which
provides that "(t)he union officers impeached shall 'IPSO FACTO' to [sic] be considered resigned or
ousted from office and shall no longer be elected nor appointed to any position in the union." In short, any
officer found guilty of violating these provisions shall simply be removed, impeached or recalled, from
office, but not expelled or stripped of union membership.
Contrary to petitioners' claim, Carino v. National Labor Relations Commission is not applicable here. In
that case, the employee was terminated on the basis of existing suspension and expulsion provisions
contained in the CBA and rules on discipline found in the union's Constitution. There are no such
provisions in PORFA's Constitution; neither has it been shown that there are similar stipulations in the
parties' CBA.
The matter of respondent's alleged failure to return petitioners' ₱300,000.00 which was lent to PORFA is
immaterial as well. It may not be used as a ground to terminate respondent's employment; under the
Labor Code, such a contribution by petitioners to PORFA is illegal and constitutes unfair labor practice.

LABOR LAW >Labor Standards >Recantation
STERLING PAPER PRODUCTS ENTERPRISES, INC., petitioner

vs.
KMM-KATIPUNAN and RAYMOND Z. ESPONGA, respondents.
G.R. No. 221493, August 2, 2017
(Second Division)
DOCTRINE: A recantation does not necessarily cancel an earlier declaration. The rule is settled that in
cases where the previous testimony is retracted and a subsequent different, if not contrary, testimony is
made by the same witness, the test to decide which testimony to believe is one of comparison coupled
with the application of the general rules of evidence.
FACTS: Sterling Paper Products Enterprises, Inc. (Sterling) hired respondent Raymond Z. Esponga,
as machine operator.
Sterling averred that on June 26, 2010, their supervisor Mercy Vinoya (Vinoya), found Esponga and his
co-employees about to take a nap on the sheeter machine. She called their attention and prohibited
them from taking a nap thereon for safety reasons.
Esponga and his co-employees then transferred to the mango tree near the staff house. When Vinoya
passed by the staff house, she heard Esponga utter,"Huwag maingay, puro bawal." She then
confronted Esponga, who responded in a loud and disrespectful tone, "Puro kayo bawal, bakit bawal ba
magpahinga?"
When Vinoya turned away, Esponga gave her the "dirty finger" sign in front of his co-employees and
said "Wala ka pala eh, puro ka dakdak. Baka pag ako nagsalita hindi mo kayanin." The incident was
witnessed by Mylene Pesimo (Pesimo), who executed a handwritten account thereon.
Esponga was found guilty of gross and serious misconduct, gross disrespect to superior and habitual
negligence, Sterling sent a termination notice. This prompted Esponga and KMM-Katipunan to file a
complaint for illegal dismissal, unfair labor practice, damages, and attorney's fees against Sterling.
ISSUE: Whether or not the recantation of a witness’ testimony will necessarily cancel an earlier
declaration
HELD: NO.
In cases of illegal dismissal, the employer bears the burden of proof to prove that the termination was
for a valid or authorized cause. In support of its allegation, Sterling submitted the handwritten
statement of Pesimo who witnessed the incident between Esponga and Vinoya on June 26, 2010.
Pesimo, however, recanted her statement.
A recantation does not necessarily cancel an earlier declaration. The rule is settled that in cases where
the previous testimony is retracted and a subsequent different, if not contrary, testimony is made by the
same witness, the test to decide which testimony to believe is one of comparison coupled with the
application of the general rules of evidence. A testimony solemnly given in court should not be set aside
and disregarded lightly, and before this can be done, both the previous testimony and the subsequent
one should be carefully compared and juxtaposed, the circumstances under which each was made,
carefully and keenly scrutinized, and the reasons and motives for the change discriminately analysed.
In this case, Pesimo's earlier statement was more credible as there was no proof, much less an
allegation, that the same was made under force or intimidation. It must be noted that Pesimo's
recantation was made only after Esponga came to see her. Nevertheless, in a text message she sent
to Vinoya, Pesimo did not deny the contents of her earlier statement. She merely expressed concern

Bernard
over Esponga's discovery that she had executed a sworn statement corroborating Vinoya's narration of
the incident. Thus, her earlier statement prevails over her subsequent recantation.
LABOR LAW>Labor Standards> Disability Benefits
SCANMAR MARITIME SERVICES, INC., CROWN SHIPMANAGEMENT INC., AND VICTORIO Q.

ESTA, Petitioners, vs.
WILFREDO T. DE LEON, Respondent.
G.R. No. 199977, January 25, 2017
(First Division)
DOCTRINE: Labor Law; Seafarers; Post-employment Medical Examination; Three-day Rule; The
Supreme Court (SC) has consistently held that the three (3)-day rule must be observed by all those
claiming disability benefits, including seafarers who disembarked upon the completion of contract
FACTS: The seafarer was engaged by the company for 22 years under different employment contracts.
His last employment was as Third Mate which he completed and eventually repatriated. For 22 years,
there was no account of any ailment he had contracted.
Prior to his next deployment, the seafarer underwent pre-employment examination (PEME). Noticing that
seafarer dragged his right leg, the PEME doctor referred him to a neurologist for consultation and
clearance. However, seafarer did not attend such consultation.
Two years after, the seafarer demanded payment for disability benefits and filed a complaint with the
NLRC.
He alleged that during his last employment, he felt something wrong with his body and that he
experienced abdominal pain and saw blood in his stool. He also claimed that after repatriation, he
underwent a series of medical check-ups with his private doctors, which revealed that he was suffering
from L5-S 1 radiculopathy.
The Labor Arbiter awarded the seafarer with full disability benefits of US$60,000 which was affirmed by
the NLRC and the Court of Appeals. The appellate court even pronounced that the causative
circumstances leading to seafarer's permanent disability must have transpired during the 22 years of his
employment.
The company petitioned the Supreme Court which was granted and the claim was dismissed.
Seafarer reneged on his obligation to submit himself to a post-employment medical examination within 3
days.
The Court noted that there was no dispute on the fact that seafarer failed to submit to a post- employment
medical examination by a company-designated physician within 3 working days from disembarkation. The
Labor Arbiter, the NLRC, and the appellate court excused the seafarer from complying with this
requirement, reasoning that he had not been medically repatriated.
ISSUE: Whether the respondent in entitled to disability benefits.
HELD: No. the three-day rule must be observed by all those claiming disability benefits, including
seafarers who disembarked upon the completion of contract. The rationale for the rule is that reporting
the illness or injury within 3 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 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. The employer would then have no protection against unrelated disability claims
No proof that seafarer suffered his condition during the term of his employment and is work-related
Claimants for disability benefits must first discharge the burden of proving, with substantial evidence, that
their ailment was acquired during the term of their contract. They must show that they experienced health
problems while at sea, the circumstances under which they developed the illness, as well as the
symptoms associate with it.
In this case, seafarer did not produce sufficient proof that he experienced his injury or its symptoms
during the term of his contract. What the seafarer submitted were medical reports which were all dated
well past his disembarkation from the vessel. None of the medical reports prove the symptoms of
radiculopathy he alleged to have experienced during the term of his contract. In contrast, the company
submitted a Checklist/Interview Sheet for Disembarked Crew indicating that seafarer had no medical
check-up in foreign ports; did not report any illness or injury to the master of the vessel or the ship doctor;
and did not request a post-medical examination after disembarkation. Also, based on the records, there
is no documentation that seafarer had bouts of sickness, injury, or illness associated with radiculopathy in
his 22 years of employment. Hence, based on the evidence, it cannot be reasonably concluded that
seafarer contracted radiculopathy during the term of his contract.
Seafarer assessed with a final disability assessment within 120 days; POEA Contract specifies that
disability not based on number of days of treatment but by disability grading
The Court noted that the NLRC and the CA's award of permanent and total disability benefits in
seafarer's favor was heavily anchored on his failure to obtain any gainful employment for more than 120
days after his medical repatriation.
Here, records reveal that 102 days from repatriation, the company-designated physician had already
given his final assessment on seafarer when he diagnosed the latter with "Flexor Carpi Radialis
Tendinitis, Right; Sprain, Right thumb; Extensor Carpi Ulnaris Tendinitis, Right" and gave a final disability
rating of "Grade 11" pursuant to the disability grading provided in the 2010 POEA-SEC. In view of the
final disability rating made by the company-designated physician classifying seafarer's disability as merely
permanent and partial - which was not refuted by seafarer’s physician except that seafarer's condition
was classified as a Grade 10 disability - it is plain error to award permanent and total disability benefits to
seafarer.
Moreover, it bears noting that as per respondent's contract with the company, his employment is covered
by the 2010 POEA-SEC. It is well settled that the POEA-SEC is the law between the parties and, as such,
its provisions bind both of them. Under Section 20 (A) (6) of the 2010 POEASEC, the determination of
the proper disability benefits to be given to a seafarer shall depend on the grading system provided by
treatment.
In this case, seafarer's disability was already determined as only permanent and partial, in view of its
classification as Grade 11 by the company-designated physician and Grade 10 by his chosen physician.
As such, the award of full disability benefits in favor of respondent clearly has no basis and, consequently,
must be struck down.
Also, the seafarer failed to show work-relation of his medical condition. He merely alleged that in his last
stint as a Third Mate, he was a watchstander. His job entailed that he was responsible to the captain for
keeping the ship, its crew, and its cargo safe for eight hours a day. Still, he did not particularize the
laborious conditions of his work that would cause his condition.
The appellate court mentioned that seafarer was consistently engaged in stressful physical labor
throughout his 22 years of employment. But it did not define these purported stressful physical activities,
nor did it point to any piece of evidence detailing his work.
Number of years of employment does not automatically mean that condition was brought about by
employment
For the Labor Arbiter, the NLRC and the Court of Appeals, they ruled that whatever causative
circumstances led to his permanent disability must have transpired during his 22 years of employment.
This reasoning was debunked by the Supreme Court as such blanket speculation alone will not rise to the
level of substantial evidence. While the degree of determining whether the illness is work-related requires
only probability, the conclusions of the courts must be still be based on real, and not just apparent,
evidence. The tribunals should have gone beyond their inferences. They should have determined the
duties of the seafarer and the nature of his injury, so that they could validly draw a conclusion that he
labored under conditions that would cause his purported permanent and total disability.

LABOR LAW>Labor Standards> Cancellation of union registration
Asian Institute of Management, petitioner

vs.
Asian Institute of Management Faculty Association, respondent
G.R. No. 207971. January 23, 2017
(First Division)
DOCTRINE: The Supreme Court (SC) declared that ―[i]n case of alleged inclusion of disqualified
employees in a union, the proper procedure for an employer like petitioner 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 Article 239 of the Labor Code, as amended.‖
FACTS:Petitioner Asian Institute of Management (AIM) is a duly registered non-stock, nonprofit

educational institution. Respondent Asian Institute of Management Faculty Association (AFA) is a labor
organization composed of members of the AIM faculty, duly registered Certificate of Registration No.
NCR-UR-12-4076-2004.
On May 16, 2007, respondent filed a petition for certification election6 seeking to represent a
bargaining unit in AIM consisting of forty (40) faculty members. Petitioner opposed the petition, claiming
that respondent’s members are neither rank-and-file nor supervisory, but rather, managerial employees.
Thereafter, petitioner filed a petition for cancellation of respondent’s certificate of registration on

the grounds of misrepresentation in registration and that respondent is composed of managerial
employees who are prohibited from organizing as a union.
Med-Arbiter of DOLE:
It issued an Order9 denying the petition for certification election on the ground that AIM’s faculty
members are managerial employees.
Secretary of the Department of Labor and Employment (DOLE):
It reversed the order of the Med-Arbiter of DOLE.
DOLE NCR Regional Director Raymundo G. Agravante:
It granted AIM’s petition for cancellation of respondent’s certificate of registration and ordering its
delisting from the roster of legitimate labor organizations.
Bureau of Labor Relations15 (BLR):
It reversed the decision of the DOLE NCR Regional Director and ordered respondent’s retention
in the roster of legitimate labor organizations. The BLR held that the grounds relied upon in the petition for
cancellation are not among the grounds authorized under Article 239 of the Labor Code, and that
respondent’s members are not managerial employees.
Meanwhile, petitioner filed a Petition for Certiorari before the CA, questioning the DOLE
Secretary’s Decision and Resolution relative to DOLE Case No. NCR-OD-M-0705-007, or respondent’s
petition for certification election. Docketed as C.A.-G.R. S.P. No. 109487, the petition is based on the
arguments that 1) the bargaining unit within AIM sought to be represented is composed of managerial
employees who are not eligible to join, assist, or form any labor organization, and 2) respondent is not a
legitimate labor organization that may conduct a certification election. Thereafter, the petition was
GRANTED. Respondent sought reconsideration, but was denied. As a result, respondent instituted a
Petition for Review on Certiorari before the CA. However, said Petition remains pending to date.
In the meantime, relative to DOLE Case No. NCR-OD-0707- 001-LRD or petitioner AIM’s petition
for cancellation of respondent’s certificate of registration, petitioner a Petition for Certiorari before the CA,
questioning the BLR’s decision and resolution. The petition, docketed as C.A.-G.R. S.P. No. 114122,
alleged that the BLR committed grave abuse of discretion in granting respondent’s appeal and affirming
its certificate of registration notwithstanding that its members are managerial employees who may not
join, assist, or form a labor union or organization.
CA:
It denied the petition and affirmed the BLR’s ruling. Hence, the instant Petition.
ISSUE: Whether or not CA seriously erred in affirming the dispositions of the BLR and thus validating the
respondent’s certificate of registration notwithstanding the fact that its members are all managerial
employees who are disqualified from joining, assisting, or forming labor organization?
HELD: The court held in Holy Child Catholic School v. Hon. Sto. Tomas that ―[i]n case of alleged inclusion
of disqualified employees in a union, the proper procedure for an employer like petitioner 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 Article 239 of the Labor Code, as amended.‖
On the basis of the ruling in the above cited case, it can be said that petitioner was correct in filing
a petition for cancellation of respondent’s certificate of registration. Petitioner’s sole ground for seeking
cancellation of respondent’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 respondent is guilty of misrepresentation for registering under the claim that its
members are not managerial employees.
However, the issue of whether respondent’s members are managerial employees is still pending
resolution by way of petition for review on certiorari in G.R. No. 197089, which is the culmination of all
proceedings in DOLE Case No. NCR-OD-M-0705-007, where the issue relative to the nature of
respondent’s membership was first raised by petitioner itself and is there fiercely contested. The
resolution of this issue cannot be preempted; until it is determined with finality in G.R. No. 197089, the
petition for cancellation of respondent’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, the court must
await the resolution of the petition in G.R. No. 197089.

S.
LABOR LAW>Labor Standards> Management prerogative> Transfer of employee
CHATEAU ROYALE SPORTS AND COUNTRY CLUB, INC., Petitioner,

vs.
RACHELLE G. BALBA and MARINEL N. CONSTANTE, Respondents
G.R. No. 197492, January 18, 2017
(Third Division)
DOCTRINE: In this case of constructive dismissal, the burden of proof lies in the petitioner as the
employer to prove that the transfer of the employee from one area of operation to another was for a valid
and legitimate ground, like genuine business necessity. We are satisfied that the petitioner duly
discharged its burden, and thus established that, contrary to the claim of the respondents that they had
been constructively dismissed, their transfer had been an exercise of the petitioner's legitimate
management prerogative.
FACTS: Petitioner Chateau Royale hired respondents as Account Executives. They were then promoted
to Account Managers after almost a year. As part of their duties, respondents were instructed by the
Director of Sales and Marketing to forward all proposals, event orders and contracts for an orderly and
systematic bookings in the operation of the petitioner’ s business. However, they failed to comply with the
directive. Accordingly, a notice to explain was served on them, to which they promptly responded.
After investigation, respondents were found to have committed acts of insubordination, and that they
were suspended for seven (7) days. However, said suspension order was lifted before its implementation.
Respondents then filed a complaint for illegal suspension and non-payment of allowances and
commissions. Respondents amended their complaint to include constructive dismissal based on their
information from the Chief Financial Officer of the petitioner on the latter’s plan to transfer them to the
Manila Office. The proposed transfer was prompted by the shortage of personnel at the Manila Office as
a result of the resignation of three account managers and the director of sales and marketing. Despite
attempts to convince them to accept the transfer to Manila, they declined because their families were
living in Nasugbu, Batangas.
LA found that respondents had been constructively dismissed. NLRC reversed the same and
dismissed the complaint for lack of merit. CA granted the petition for certiorari and set aside NLRC’s
decision.
ISSUE: Whether or not the transfer of respondents constitutes constructive dismissal.
HELD: NO.
The Supreme Court held that the petitioner was able to discharge its burden, and thus established
that, contrary to the claim of the respondents that they had been constructively dismissed, their transfer
had been an exercise of the petitioner’s legitimate management prerogative.
First, the resignations of the account managers and the director of sales and marketing in the
Manila office brought about the immediate need for their replacements with personnel having
commensurate experiences and skills. With the positions held by the resigned sales personnel being
undoubtedly crucial to the operations and business of the petitioner, the resignations gave rise to an
urgent and genuine business necessity that fully warranted the transfer from the Nasugbu, Batangas
office to the main office in Manila of the respondents, undoubtedly the best suited to perform the tasks
assigned to the resigned employees because of their being themselves account managers who had
recently attended seminars and trainings as such.
Secondly, although the respondents’ transfer to Manila might be potentially inconvenient for them
because it would entail additional expenses on their part aside from their being forced to be away from
their families, it was neither unreasonable nor oppressive. The petitioner rightly points out that the transfer
would be without demotion in rank, or without diminution of benefits and salaries. Instead, the transfer
would open the way for their eventual career growth, with the corresponding increases in pay.
Thirdly, the respondents did not show by substantial evidence that the petitioner was acting in
bad faith or had ill-motive in ordering their transfer. In contrast, the urgency and genuine business
necessity justifying the transfer negated bad faith on the part of the petitioner.
Lastly, the respondents, by having voluntarily affixed their signatures on their respective letters of
appointment, acceded to the terms and conditions of employment incorporated therein. One of the terms
and conditions thus incorporated was the prerogative of management to transfer and re-assign its
employees from one job to another ―as it may deem necessary or advisable.‖
Submitted by: Bodopol, Adolf Jr.


vs.
G.R. No. 215627 June 5, 2017
Second Division
relinquishment.
24
employer. The concepts of constructive dismissal and resignation are discussed in Gan v. Galderma
25
26
27 28
affidavit of ABB, Inc. 's HR Manager Miranda; (2) the resignation letter; the letter of intent to purchase
29 30
31 32
Clearance Sheet; (4) the Certificate of Employment dated March 23, 2012; (5) photocopy of Bank of
33
the Philippine Islands manager's check in the amount of ₱2,009,822.72, representing the separation
34
benefit; (6) Employee Final Pay Computation, showing payment of leave credits, rice subsidy and
bonuses, amounting to ₱805,399.35; and (7) the Receipt, Release and Quitclaim for a consideration of
35
the total sum of ₱2,815,222.07.
36
and other benefits.
37
38
property of his spouse, descendants or ascendants. The requisites for intimidation to vitiate one's
39
consent are stated in St. Michael Academy v. NLRC, thus:
x x x.
ABB, Inc.

LABOR LAW >Labor Standards>Redundancy> Allegation of "forced to sign
PHILIPPINE NATIONAL BANK, Petitioner

vs.
JUMELITO T. DALMACIO, Respondent
G.R. No. 202308, July 5, 2017
(Third Division)
DOCTRINE: Redundancy exists when the service capability of the workforce is in excess of what is
reasonably needed to meet the demands of the business enterprise. A position is redundant when it is
superfluous, and superfluity of a position or positions could be the result of a number of factors, such as
the overhiring of workers, a decrease in the volume of business or the dropping of a particular line or
service previously manufactured or undertaken by the enterprise.
FACTS: The case stemmed from a complaint for illegal dismissal, underpayment of separation pay and
retirement benefits, illegal deduction, nonpayment of provident fund with prayer for damages and
4
attorney's fees filed by Jumelito T. Dalmacio (Dalmacio) and Emma R. Martinez (Martinez) as a result of
their separation from PNB way back September 15, 2005 due to PNB's implemention of its redundancy
program. Dalmacio and · Martinez were hired as utility worker and communication equipment operator,
respectively, by the National Service Corporation, a subsidiary of PNB. Years later, Dalmacio became an
Information Technology (IT) officer of PNB, while Martinez became a Junior IT Field Analyst.
The Labor Arbiter found that the Philippine National Bank (PNB) effected a valid redundancy program.
This was affirmed by the National Labor Relations Commission, which was then affirmed in part by the
Court of Appeals (CA). The CA ruled, among others, that, "principles of justice and fair play call for the
modification of the separation package already received by herein petitioner. x x x the subtraction of the
GSIS Gratuity Pay is inappropriate, therefore the same should be returned to the petitioner. Aggrieved,
both parties appealed the Decision of the CA before the Supreme Court.
ISSUE: Whether or not PNB validly implemented its redundancy program?
HELD: Yes.
Time and again, it has been ruled that an employer has no legal obligation to keep more employees than
are necessary for the operation of its business. Redundancy exists when the service capability of the
workforce is in excess of what is reasonably needed to meet the demands of the business enterprise. A
position is redundant when it is superfluous, and superfluity of a position or positions could be the result
of a number of factors, such as the overhiring of workers, a decrease in the volume of business or the
dropping of a particular line or service previously manufactured or undertaken by the enterprise.
For the implementation of a redundancy program to be valid, however, the employer must comply with
the following requisites: (1) written notice served on both the employees and the Department of Labor and
Employment (DOLE) at least one month prior to the intended date of termination of employment; (2)
payment of separation pay equivalent to at least one month pay for every year of service; (3) good faith in
abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are
to be declared redundant and accordingly abolished, taking into consideration such factors as (a)
preferred status; (b) efficiency; and (c) seniority, among others.
In this case, PNB's redundancy program was neither unfair nor unreasonable considering that it was
within the ambit of its management prerogative to upgrade and enhance the computer system of the bank
has become patently redundant upon PNB's engagement of the contract service with Technopaq
Moreover, records have it that PNB faithfully complied with the legal procedures provided under Article
283 of the Labor Code as evidenced by the individual notices of termination served and received by the
petitioner as well as the Establishment Termination Report filed by PNB with the Department of Labor.

LABOR LAW>Labor Standards>Compensation for disability
MAERSK FILIPINAS CREWING INC., and MAERSK CO. IOM LTD.

vs.
JOSELITO R. RAMOS
G.R. No. 184256, January 18, 2017
(First Division)
DOCTRINE: Disability does not refer to the injury or the pain that it has occasioned, but to the loss or
impairment of earning capacity. There is disability when there is a diminution of earning power because of
actual absence from work. This absence must be due to the injury or illness arising from, and in the
course of, employment. Thus, the basis of compensation is reduction of earning power.
FACTS: On October 3, 2001, petitioner Maersk ltd., through its local manning agent petitioner Maersk
Inc., employed private respondent as able-seaman of M/V NKOSSA II for a period of four (4) months.
Within the contract period and while on board the vessel, on November 14, 2001, private respondent’s left
eye was hit by a screw. He was repatriated to Manila on November 21, 2001 and was referred to Dr.
Salvador Salceda, the company-designated physician, for a check-up.
Private respondent was examined by Dr. Anthony Martin S. Dolor at the Medical Center Manila on
November 26, 2001 and was diagnosed with "corneal scar and cystic macula, left, post-traumatic." On
November 29, 2001, he underwent a "repair of corneal perforation and removal of foreign body to anterior
chamber, left eye." He was discharged on December 2, 2001 with prescribed home medications and had
regular check-ups. He was referred to another ophthalmologist who opined that "no more improvement
can be attained on the left eye but patient can return back to duty with the left eye disabled by 30%."
On May 22, 2002, he was examined by Dr. Angel C. Aliwalas, Jr. at the Ospital ng Muntinlupa (ONM),
Alabang, Muntinlupa City, and was diagnosed with "corneal scar with post-traumatic cataract formation,
left eye." On May 28, 2002, he underwent [an] eye examination and glaucoma test at the Philippine
General Hospital (PGH), Manila.
Since private respondent's demand for disability benefit[s] was rejected by petitioners, he then filed with
the NLRC a complaint for total permanent disability, illness allowance, moral and exemplary damages
and attorney's fees. The parties filed with the NLRC their respective position papers, reply, and rejoinder.
Meanwhile, in his medical report dated July 31, 2002, Dr. Dolor stated that although private respondent's
left eye cannot be improved by medical treatment, he can return to duty and is still fit to work. His normal
right eye can compensate for the discrepancy with the use of correctional glasses. On August 30, 2002,
petitioners paid private respondent's illness allowance equivalent to one hundred twenty (120) days
salary.
On October 5, 2002, private respondent was examined by Dr. Roseny Mae Catipon-Singson of Casa
Medica, Inc. (formerly MEDISERV Southmall, Inc.), Alabang, Muntinlupa City and was diagnosed to have
''traumatic cataract with corneal scaring, updrawn pupil of the anterior segment of maculapathy OS. His
best corrected vision is 20/400 with difficulty." Dr. Catipon-Singson opined that private respondent "cannot
be employed for any work requiring good vision unless condition improves."
On November 19, 2002, private respondent visited again the ophthalmologist at the Medical Center
Manila who recommended "cataract surgery with intra-ocular lens implantation," after evaluation of the
retina shall have been done."
In his letter dated January 13, 2003 addressed to Jerome de los Angeles, General Manager of petitioner
Maersk Inc., Dr. Dolor answered that the evaluation of the physician from ONM could not have
progressed in such a short period of time, which is approximately one month after he issued the medical
report dated April 13, 2002, and a review of the medical reports from PGH and the tonometry findings on
the left and right eye showed that they were within normal range, hence, could not be labeled as
glaucoma. 6
On 15 May 2003, the labor arbiter (LA) rendered a Decision dismissing the Complaint.
In the meantime, on 30 July and 12 September 2003, respondent underwent cataract extraction on both
eyes. 13 On 7 January 2004, he was fitted with correctional glasses and evaluated. Dr. Dolor found that
the former's "right eye is 20/20, the left eye is 20/70, and when both eyes are being used, his best
corrected vision is 20/20." On the basis of that report, respondent was pronounced fit to work.
On 31 January 2006, the NLRC issued a Resolution 15 granting respondent's appeal and setting aside
the LA's decision. The CA affirmed the findings of the NLRC.
ISSUE: Whether respondent is partially disabled and therefore entitled to disability compensation.
HELD: YES. Respondent suffers from permanent partial disability and is entitled to disability
compensation.
Section 2 of Rule VII of the Amended Rules on Employees' Compensation provides:
(c) A disability is partial and permanent 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.
Permanent partial disability occurs when an employee loses the use of any particular anatomical part of
his body which disables him to continue with his former work.
In this case, while petitioners' own company-designated physician, Dr. Dolor, certified that respondent
was still fit to work, the former admitted in the same breath that respondent's left eye could no longer be
improved by medical treatment. As early as 13 April 2002, Dr. Dolor had in fact diagnosed respondent's
left eye as permanently disabled, to wit:
Present ophthalmologic examination showed corneal scar and a cystic macula at the left eye. Vision on
the right eye is 20/20 and JI while the left showed only 20/60 and J6. Our ophthalmologist opined that no
more improvement can be attained on the left eye but patient can return back to duty with left eye
disabled by 30%.
Petitioners' argument that the injury was curable because respondent underwent cataract extraction in on
both eyes in 2003, and Dr. Dolor issued a medical evaluation finding that respondent's best corrected
vision for both eyes was 20/20 (with correctional glasses), are thus inconsequential. The curability of the
injury "does not preclude an award for disability because, in labor laws, disability need not render the
seafarer absolutely helpless or feeble to be compensable; it is enough that it incapacitates him to perform
his customary work."
Indeed, the operation, which supposedly led to the correction of respondent's vision, took place in 2003.
Respondent sustained his injury way back in 2001. During the span of roughly two years, he was not able
to reassume work as a seaman, resulting in the loss and impairment of his earning capacity. It is also
interesting to note that despite petitioners' contentions that respondent had been diagnosed as fit to
return to work, no reemployment offer was ever extended to him.
As to the extent and amount of compensation, petitioners stress that
Section 3254 of the POEA Standard Terms and Conditions Governing the Employment of Filipino
Seafarers on Board Ocean Going Vessels (Standard Employment Contract) only provides disability
compensation benefits for at least 50% loss of vision in one eye. Since the schedule does not include the
injury suffered by respondent, they assert that the award of disability benefits is unwarranted.
The Court finds no merit in this argument.
The POEA Standard Employment Contract was designed primarily for the protection and benefit of
Filipino seamen in the pursuit of their employment on board ocean-going vessels. In resolving disputes
regarding disability benefits, its provisions must be "construed and applied fairly, reasonably, and liberally
in the seamen's favor, because only then can the provisions be given full effect."
Besides, the schedule of disabilities under Section 32 is in no way exclusive. Section 20.B.4 of the same
POEA Standard Employment Contract clearly provides that "[t]hose illnesses not listed in Section 32 of
this Contract are disputably presumed as work related." This provision only means that the disability
schedule also contemplates injuries not explicitly listed under it.
We therefore sustain the computational findings of the NLRC as affirmed by the CA, to wit:
Relative to the amount of disability compensation, Section 20.1.4.4 of the applicable CBA between
AMOSUP and Maersk Company (IOM) provides that the rate of compensation for 100% disability for
Ratings is US$60,000.00, with any differences, including less than 10% disability, to be pro-rata. Section
20.1.5 of said CBA further provides that "xxx any seafarer assessed at less than 50% disability under the
Contract but certified as permanently unfit for further sea service in any capacity by the company doctor,
shall also be entitled to 100% compensation" (Pages 48-49, Records). It is clear from the latter provision
that for a seafarer to be entitled under said CBA to 100% compensation for less than 50% disability, it
must be the company doctor who should certify that the seafarer is permanently unfit for further sea
service in any capacity.
In the case at bar, Complainant had corneal scar, a cystic macula and 30% loss of vision on his left eye.
Thus, applying Section 3056 of the standard contract, We hold that Complainant's impediment grade is
Grade 12. Under Section 30-A 57 of the standard contract, a seafarer who suffered an impediment grade
of Grade 12 is entitled to 10.45% of the maximum rate. Significantly, the company physician did not
certify Complainant as permanently unfit for further sea service in any capacity. The company physician
certified that'' xxx patient can return back to duty with the left eye disabled by 301Y.1" (Page 39,
Records). Complainant, therefore, is not entitled to 100% disability compensation benefit, but merely
10.451Yo of US$60,000.00, which is computed as follows: US$60,000.00 x 10.45% = US$6,270.00.
Respondents, therefore, are liable to Complainant for US$6,270.00 as compensation benefit for his
permanent partial disability, to be paid in Philippine Currency equivalent at the exchange rate prevailing
during the time of payment.

LABOR LAW>Labor Standards> Consideration of errors not assigned>Opening entire case for
review
RAMON MANUEL T. JAVINES, Petitioner

vs.
XLIBRIS a.k.a. AUTHOR SOLUTIONS, INC., JOSEPH STEINBACH, and STELLA MARS OUANO,,
Respondents
G.R. No. 214301, January 25, 2017
(Third Division)
FACTS: Javines, an operations manager of Xlibris, approximately 10 months after, or on July 27, 2012,
Javines was terminated for falsifying/tampering three meal receipts.
It was discovered when Javines submitted the meal receipts for reimbursement to the finance department
on July 5, 2012.
A Notice to Explain was issued on July 6, 2012 to Javines for alleged violation of Sections 9.5 and 9.6 of
the Employee's Code of Conduct and charging him with acts constituting dishonesty. Xlibris obtained
certified copies of the meal receipts from the fast food chains concerned and Javines was notified that the
following receipts were tampered:
a. Franckfort, Inc. (KFC) O.R. No. 3452 dated 3/31/12 from PhP 540.00 to PhP 5,450.00;
b. McDonald's O.R. No. 027900 from PhP 107.00 to PhP 2,207.00; and
c. McDonald's O.R. No. 027822 dated 4/3/12 from PhP 164.00 to PhP 3,164.00.
On July 10, 2012, Javines submitted his written explanation, denying having tampered the receipts. He
explained that the receipts are from the supervisor under him which is only a part of her job as an
operations manager to reimburse such receipts without him knowing of it being tampered.
On July 13, 2012, an administrative hearing was held. Javines failed to explain why and how the incident
transpired. Instead, Javines requested for further investigation since, at that time, he allegedly could not
recall who submitted the receipts to him. Consequently, on the same day, notices to explain were sent to
the supervisors under Javines. In their written accounts, the supervisors· denied participation in the
tampered receipts.
On July 27, 2012, Xlibris terminated Javines' employment through an "end of employment notice."
Javines then filed a complaint for illegal dismissal. The complaint was, however, dismissed by the Labor
Arbiter who found that Javines' dismissal was for just cause and with due process.
PRINCIPLE
The appellate court is given broad discretionary power to waive the lack of proper assignment of errors
and to consider errors not assigned, it has authority to do so in the following instances: (a) when the
question affects jurisdiction over the subject matter; (b) matters that are evidently plain or clerical errors
within contemplation of law; (c) matters whose consideration is necessary in arriving at a just decision and
complete resolution of the case, or in serving the interests of justice or avoiding dispensing piecemeal
justice; (d) matters raised in the trial court and are of record having some bearing on the issue submitted
that the parties failed to raise or that the lower court ignored; (e) matters closely related to an error
assigned; and (f) matters upon which the determination of a question properly assigned is dependent.
ISSUE: Whether or not the CA erred in affirming the NLRC'S finding that Javines was dismissed for just
cause.
HELD: Yes. The Labor Arbiter and the NLRC uniformly held that Javines' employment was terminated
for just cause under Article 297 (formerly Article 282) of the Labor Code. It is undisputed that from this
unanimous finding, Javines failed to move for reconsideration nor challenged said ruling before the CA.
Consequently, the NLRC decision finding Javines to have been dismissed for just cause. became final.
For failure to file the requisite petition before the CA, the NLRC decision had attained finality and had
been placed beyond the appellate court's power of review. Although appeal is an essential part of judicial
process, the right thereto is not a natural right or a part of due process but is merely a statutory privilege.
Settled are the rules that a decision becomes final as against a party who does not appeal the same and
an appellee who has not himself appealed cannot obtain from the appellate court any affirmative relief
other than those granted in the decision of the court. Hence, the finding that Javines was dismissed for
just cause must be upheld.
The decision’s finding Petitioner Ramon Manuel T. Javines to have been dismissed for just cause and
awarding nominal damages in the amount of PhPl,000 in his favor.

Relunia
LABOR LAW > Labor Standards > Termination of Employment > Dismissal from Employment
SPECTRUM SECURITY SERVICES, INC., Petitioner

vs.
DAVID GRAVE, ARIEL V. AROA, TOMASINO R. DE CHAVEZ, JR., LUCITO P. SAMARITA,
SAIDOMAR M. MAROHOM, LITO V. MAHILOM AND OLIVER N. MARTIN, Respondents.
G.R. No. 196650, June 07, 2017
(THIRD DIVISION)
DOCTRINE: A security guard placed on reserved or off-detail status is deemed constructively dismissed
only if the status should last more than six months. Any claim of constructive dismissal must be
established by clear and positive evidence.
FACTS: The petitioner employed and posted the respondents at the premises of Ibiden Philippines, Inc.
(Ibiden) located in Batangas. The controversy started when the petitioner implemented an action plan as
part of its operational and manpower supervision enhancement program geared towards the gradual
replacement of security guards at Ibiden. Pursuant to the action plan, it issued separate "Notice(s) to
Return to Unit" to the respondents in July and August 2008 directing them to report to its head office and
to update their documents for re-assignment.
Respondents filed their complaint against the petitioner for constructive dismissal in NLRC, claiming that
the implementation of the action plan was a retaliatory measure against them for bringing several
complaints along with other employees of the petitioner to recover unpaid holiday pay and 13th month
pay.
ISSUE: Whether or not Petitioner was guilty of illegally dismissing the Respondents by implementing the
action plan and sending notice for their re-assignment.
HELD: NO.
Security guards, like other employees in the private sector, are entitled to security of tenure. However,
their situation should be differentiated from that of other employees or workers. The employment of
security guards generally depends on their employers' contracts with clients who are third parties to the
employment relationship, and the requirements of the latter for security services and what will be
beneficial to them dictate the posting of the security guards. It is also relevant to mention that their
employers retain the management prerogative to change their assignments and postings, and to decide
to temporarily relieve them of their assignments. In other words, their security of tenure, though it shields
them from demotions in rank or diminutions of salaries, benefits and other privileges, does not vest them
with the right to their positions or assignments that will prevent their transfers or re-assignments (unless
the transfers or re-assignments are motivated by discrimination or bad faith, or effected as a form of
punishment or demotion without sufficient cause). Such peculiar conditions of their employment render
inevitable that some of them just have to undergo periods of reserved or off-detail status that should not
by any means equate to their dismissal. Only when the period of their reserved or off-detail status
exceeds the reasonable period of six months without re-assignment should the affected security guards
be regarded as dismissed.
x x x Under DOLE Department Order No. 014-01, the tenure of security guards in their employment is
ensured by guaranteeing that their services are to be terminated only for just or authorized causes
expressly recognized by the Labor Code after due process.
The respondents insist that they were constructively dismissed when they were relieved from their posts
at Ibiden. However, the Labor Arbiter found that such insistence was unsupported by any factual
foundation because there was no evidence showing that they had been dismissed. x x x Moreover, their
complaint for illegal dismissal was even prematurely filed on August 14, 2008 because the notices were
sent to each of them only in the period from July 3, 2008 to August 2, 2008.
Nor was the CA justified to simply dismiss the right of the petitioner to implement the action plan and
thereby effect the rotation and replacement of the respondents as their security guards posted at Ibiden.
We have already recognized the management prerogative of the petitioner as their employer to change
their postings and assignments without severing their employment relationship. Although the CA might
have regarded the implementation of the action plan as dubious because the petitioner had relieved the
respondents from their posts at Ibiden just 16 days after they had brought their complaint for the recovery
of certain money claims from the former, thereby imputing bad faith to the petitioner would be bereft of
factual or legal basis considering the failure of the respondents to sufficiently establish the fact of their
dismissal from their employment. In illegal dismissal cases, the general rule is that the employer has the
burden of proving that the dismissal was legal. To discharge this burden, the employee must first prove,
by substantial evidence, that he had been dismissed from employment. In this case, we find otherwise.
Respondents failed to properly establish that they were dismissed by the petitioner. Aside from the
respondents' plain allegation that they were illegally dismissed by the petitioner, no other evidence was
presented by the respondents to support their contentions.
We can only uphold the Labor Arbiter's conclusion that the respondents had actually abandoned their
employment and had severed their employment relationship with the petitioner themselves. Despite
having been notified of the need for them to appear before the petitioner's head office to update their
documents for purposes of reposting, the respondents, except Lucito P. Samarita and Saidomar M.
Marohom, refused to receive the notices, and did not sign the same, without first knowing the contents of
the memo.
Furthermore, assuming arguendo that when respondents reported to the human resource office and the
company did not provide them with new assignments at that time, the six-month period had not yet
lapsed.x x x
Lastly, the CA erred in holding that the petitioner was guilty of providing the respondents with new
assignments during the pendency of the proceedings. It appears, indeed, that by the time the
respondents appealed their case in the NLRC, some of them had already gained regular employment as
security guards elsewhere during their reserved status with the petitioner and prior to the lapse of the six-
month period.
The act of some of the respondents of gaining employment as security guards elsewhere constituted
abandonment of their employment with the petitioner. Abandonment requires the concurrence of two
elements, namely: one, the employee must have failed to report for work or must have been absent
without valid or justifiable reason; and, two, there must have been a clear intention on the part of the
employee to sever the employer-employee relationship manifested by some overt act. Although mere
absence or failure to report for work, even after notice to return, does not necessarily amount to
abandonment, the law requires that there be clear proof of deliberate and unjustified intent on the part of
the employee to sever the employer-employee relationship. Abandonment is a matter of intention and
cannot be lightly presumed from certain equivocal acts. In other words, the operative act is still the
employee's ultimate act of putting an end to his employment.
Contrary to the findings of the CA, the respondents intended to sever their employer-employee
relationship with the petitioner because they applied for and obtained employment with other security
agencies while they were on reserved status. Their having done so constituted a clear and unequivocal
intent to abandon and sever their employment with the petitioner. Thereby, the filing of their complaint for
illegal dismissal was inconsistent with the established fact of their abandonment.

LABOR LAW>Labor Standards>Off-detail Status> Return to work order should indicate specific
assignment
RAVENGAR G. IBON., petitioner

vs.
GENGHIS KHAN SECURITY SERVICES., respondents
G.R. No. 221085, June 19, 2017
(Second Division)
DOCTRINE: Temporary displacement or temporary off-detail of security guard is, generally, allowed in a
situation where a security agency's client decided not to renew their service contract with the agency and
no post is available for the relieved security guard. Such situation does not normally result in a
constructive dismissal. Nonetheless, when the floating status lasts for more than six (6) months, the
employee may be considered to have been constructively dismissed. No less than the Constitution
guarantees the right of workers to security of tenure, thus, employees can only be dismissed for just or
authorized causes and after they have been afforded the due process of law
FACTS: Ravengar G. Ibon (petitioner) was employed as a security guard by Genghis Khan Security
Services (respondent) sometime in June 2008. He was initially assigned to a certain Mr. Solis in New
th
Manila, Quezon City. In July 2008, he was transferred to the 5 Avenue Condominium in Fort Bonifacio,
Taguig City, in September 2008 and was posted there until May 2009. In June 2009, petitioner was
transferred to the Aspen Tower Condominium until his last duty on October 4, 2010. Thereafter,
respondent promised to provide him a new assignment, which, however, did not happen. On May 10,
2011, petitioner filed a Complaint against respondent for illegal dismissal. The LA ruled in favor of the
petitioner that there was constructive illegal dismissal. The NLRC reversed the decision in favor of the
respondents. The Court of Appeals affirmed the NLRC. Hence recourse to the High Court.
ISSUE: Whether or not Petitioner was constructively dismissed
HELD: Yes, petitioner was constructively dismissed
Temporary displacement or temporary off-detail of security guard is, generally, allowed in a

situation where a security agency's client decided not to renew their service contract with the agency and
no post is available for the relieved security guard. Such situation does not normally result in a
constructive dismissal. Nonetheless, when the floating status lasts for more than six (6) months, the
employee may be considered to have been constructively dismissed. No less than the Constitution
guarantees the right of workers to security of tenure, thus, employees can only be dismissed for just or
authorized causes and after they have been afforded the due process of law.
In the case at bench, petitioner was last deployed on October 4, 2010. Thus, it was incumbent
upon respondent to show that he was redeployed within six (6) months from the said date. Otherwise,
petitioner would be deemed to have been constructively dismissed.
A holistic analysis of the Court’s disposition in the case of Tatel v JLFP Investigation reveals that:
[1] an employer must assign the security guard to another posting within six (6) months from his last
deployment, otherwise, he would be considered constructively dismissed; and [2] the security guard must
be assigned to a specific or particular client. A general return-to-work order does not suffice.
Respondent should have deployed petitioner to a specific client within six (6) months from his
last assignment. The correspondences allegedly sent to petitioner merely required him to explain why he
did not report to work. He was never assigned to a particular client. Thus, even if petitioner actually
received the letters of respondent, he was still constructively dismissed because none of these letters
indicated his reassignment to another client.
G.
LABOR LAW>Labor Standards> Separation pay
CLAUDIA’S KITCHEN, INC., petitioners

vs.
MA. REALIZA S. TANGUIN., respondent
G.R. No. 221096, June 28, 2017
(Second Division)
DOCTRINE: The payment of separation pay and reinstatement are exclusive remedies. The payment of
dismissal case against his employer.
FACTS: Respondent Ma. Realiza S. Tanguin (Tanguin) was employed by petitioner Claudia’s Kitchen,
Inc. (Claudia’s Kitchen) on June 20, 2001. Tanguin averred that on October 26, 2010, she was placed on
preventive suspension by Marivic Lucasan (Lucasan), Human Resources Manager, for allegedly forcing
her co-employees to buy silver jewelry from her during office hours and inside the company premises. On
the same date, she was directed by Lucasan to submit her written explanation on the matter. Tanguin
admitted that she was selling silver jewelry, but she denied that she did so during office hours. On
October 30, 2010, she was barred by a security guard from entering the company premises. For their
part, Claudia’s Kitchen and Enzo Squillantini, its President, (petitioners) denies the allegations of Tanguin
and stated that they placed her under preventive suspension in order to conduct a thorough investigation.
Petitioners also sent notice to Tanguin for her to report for hearing but the latter did not comply. The CA
ruled for the payment of separation pay for Tanguin. Hence the controversy was appealed to the High
Court.
ISSUE: Whether separation pay in lieu of reinstatement may be awarded to an employee who was not
dismissed from employment.
HELD: No, Tanguin is not entitled to separation pay
Respondent was not dismissed from employment. The rule is that one who alleges a fact has the
burden of proving it; thus, petitioners were burdened to prove their allegation that respondents dismissed
them from their employment. It must be stressed that the evidence to prove this fact must be clear,
positive and convincing. Tanguin miserably failed to discharge this burden. She simply alleged that a
security guard barred her from entering her workplace. Yet, she offered no evidence to prove the same.
On the other hand, the petitioners were able to prove that they did not dismiss Tanguin from employment
because she was still under investigation as evidenced by several notices.
The payment of separation pay and reinstatement are exclusive remedies. The payment of
dismissal case against his employer. The circumstances in this case, however, does not warrant an
application of the exception. Thus, the general rule that no separation pay may be awarded to an
employee who was not dismissed obtains in this case. In this regard, it is only proper for Tanguin to report
back to work and for the petitioners to accept her, without prejudice to the on-going investigation against
her.
At this time, her plea for reinstatement, backwages and/or separation pay cannot be granted.
Respondent should return to work and answer the complaints against her and the petitioners should
accept her, without prejudice to the result of the investigation against her.

G.
LABOR LAW>Labor Standards> Project employment
HERMA SHIPYARD, INC, and MR. HERMINIO ESGUERRA, Petitioner

vs.
DANILO OLIVEROS, JOJIT BASA ARNEL SABAL, CAMILO OLIVEROS, ROBERT NARIO,
FREDERJCK CATIG, RICARDO ONTALAN, RUBEN DELGADO, SEGUNDO LABOSTA, EXEQUIEL
OLlVERIA, OSCAR TIROL and ROMEO TRINIDAD, Respondent.
G.R. No. 208936 April 17, 2017
(First Division)
DOCTRINE: 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.
FACTS: Herma Shipyard, Inc. is a domestic corporation engaged in the business of shipbuilding and
repair. The respondents were its employees occupying various positions such as welder, leadman, pipe
fitter, laborer, helper, etc.
On June 17, 2009, the respondents filed before the Regional Arbitration Branch III, San Fernando City,
Pampanga a complaint for illegal dismissal, regularization, and non-payment of service incentive leave
pay with prayer for the payment of full back wages and attorney's fees against petitioners. Respondents
alleged that they are Herma Shipyard's regular employees who have been continuously performing tasks
usually necessary and desirable in its business. On various dates, however, petitioners dismissed them
from employment.
Resoondents further alleged that as a condition to their continuous and uninterrupted employment,
petitioners made them sign employment contracts for a fixed period ranging from one to four months to
make it appear that they were project-based employees. Per respondents, petitioners resorted to this
scheme to defeat their right to security of tenure, but in truth there was never a time when they ceased
working for Henna Shipyard due to expiration of project-based employment contracts. In fact, if they were
indeed project employees, petitioners should have reported to the Department of Labor and Employment
(DOLE) the completion of such project. But petitioners have never submitted such report to the DOLE.
For their defense, petitioners argued that respondents were its project-based employees in its
shipbuilding projects and that the specific project for which they were hired had already been completed.
In support, thereof, Herma Shipyard presented contracts of employment, some of which are written in the
vernacular and denominated as Kasuduang Paglilingkod (Pang-Proyektong Kawani)
ISSUE: Whether or not the respondents were project-based employees and not regular employees?
HELD: Who are project-based employees?
Art, 280. Regular and Casual Employment. The provisions of written agreement for the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been fixed for
a specific project or undertaking the completion or termination of which has been determined at the time
of the engagement of the employee or where the work or service to be performed is seasonal in nature
and the employment is for the duration of the season.
The services of project-based employees are co-terminous with the project and may be terminated upon
the end or completion of the project or a phase thereof 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. It is settled, however, that project-based employees may or may not
be performing tasks usually necessary or desirable in the usual business or trade of the employer. The
fact that the job is usually necessary or desirable in the business operation of the employer does not
automatically imply regular employment; neither does it impair the validity of the project employment
contract stipulating ~ fixed duration of employment. As this Court held in ALU-TUCP vs National Labor
Relations Commission:
In the realm of business and industry, we note that 'project' could refer to one or the other of at least two
(2) distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is
within the regular or usual business of the employer company, but which is distinct and separate, and
identifiable as such, from the other undertakings of the company. Such job or undertaking begins and
ends at determined or determinable times. The typical example of this first type of project is a particular
construction job or project of a construction company. A construction company ordinarily carries out two
or more discrete identifiable construction projects: e.g., a twenty-five-storey hotel in Makati; a residential
condominium building in Baguio City; and a domestic air terminal in Iloilo City. Employees who are hired
for the carrying out of one of these separate projects, the scope and duration of which has been
determined and made known to the employees at the time of employment are properly treated as 'project
employees,' and their services may be lawfully terminated at completion of the project.
The term ―project‖ could also refer to, secondly, a particular job or undertaking that is not within the
regular business of the corporation. Such a job or undertaking must also be identifiably separate and
distinct from the ordinary or regular business operations of the employer. The job or undertaking also
begins and ends at determined or determinable times.
In sum, the CA erred in disregarding the project employment contracts and in concluding that
respondents have become regular employees because they were performing tasks necessary and
desirable to the business of Henna Shipyard and were repeatedly rehired. The Labor Arbiter and the
NLRC, which have expertise in their specific and specialized jurisdiction, did not err, much less commit
grave abuse of discretion in holding that respondents were project-based employees. Their uniform
conclusion is supported by substantial evidence and should, therefore, be accorded not only respect, but
even finality.
Submitted by: Regalado, Dustin G.

Labor Law > Labor Standards >Backwages

vs.
G.R. No. 220506, January 18, 2017
(Second Division)
DOCTRINE: Backwages, including separation pay, shall be computed from the time of dismissal until the
finality of the decision ordering the separation pay.
FACTS: This controversy is an offshoot of an illegal dismissal case filed by the respondent against the
petitioners. In its June 16, 2008 Decision, the LA recognized respondent's right to receive from the
petitioners backwages and separation pay in lieu of reinstatement.
The petitioners, therefore, ask this Court to determine "what should be the legal basis for the computation
of the backwages and separation pay of an illegally dismissed employee in a case where reinstatement
was not ordered despite appeals made by said employee which [delayed] the final resolution of the issue
on reinstatement.‖
ISSUE: How to compute backwage.
HELD: The decision of the CA is based on long standing jurisprudence that in the event the aspect of
dismissal until the finality of the decision ordering the separation pay. In Gaco v. NLRC, it was ruled that
with respect to the payment of backwages and separation pay in lieu of reinstatement of an illegally
dismissed employee, the period shall be reckoned from the time compensation was withheld up to the
finality of this Court's decision. This was reiterated in Surima v. NLRC and Session Delights Ice Cream
and Fast Foods v. CA.
The reason for this was explained in Bani Rural Bank, Inc. v. De Guzman. When there is an order of
separation pay (in lieu of reinstatement or when the reinstatement aspect is waived or subsequently
ordered in light of a supervening event making the award of reinstatement no longer possible), the
employment relationship is terminated only upon the finality of the decision ordering the separation pay.
The finality of the decision cutsoff the employment relationship and represents the final settlement of the
rights and obligations of the parties against each other. Hence, backwages no longer accumulate upon
the finality of the decision ordering the payment of separation pay because the employee is no longer
entitled to any compensation from the employer by reason of the severance of his employment. One
cannot, therefore, attribute patent error on the part of the CA when it merely affirmed the NLRC's
conclusion, which was clearly based on jurisprudence.

LABOR LAW>Labor Standards>Termination of Employment
RUTCHER T. DAGASDAS, petitioner,

vs.
GRAND PLACEMENT AND GENERAL SERVICES CORPORATION, respondent.
G.R. No. 205727, January 18, 2017
(First Division)
DOCTRINE: To ensure that employers will not abuse their prerogatives, the same is tempered by security
of tenure whereby the employees are guaranteed substantive and procedural due process before they
are dismissed from work.
FACTS: Respondent is a licensed recruitment or placement agency in the Philippines while Saudi
Aramco (Aramco) is its counterpart in Saudi Arabia. On the other hand, Industrial & Management
Technology Methods Co. Ltd. (ITM) is the principal of the respondent a company existing in Saudi Arabia.
Respondent employed petitioner as Network Technician. He was to be deployed in Saudi Arabia under a
one-year contract. He signed with ITM a new employment contract. There, he was allegedly given tasks
suited for a Mechanical Engineer, which were foreign to the job he applied for and to his work experience.
Seeing that he would not be able to perform well in his work, petitioner raised his concern to his
Supervisor in the Mechanical Engineering Department. Consequently, he was transferred to the Civil
Engineering Department, was temporarily given a position as Civil Construction Engineer, and was issued
an identification card good for one month. Petitioner averred that he was directed to exit the worksite but
Rashid H. Siddiqui (Siddiqui), the Site Coordinator Manager, advised him to remain in the premises, and
promised to secure him the position he applied for. However, before petitioner’s case was investigated,
Siddiqui had severed his employment with ITM. Later, ITM gave him a termination notice indicating that
his last day of work was on April 30, 2008, and 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. Petitioner returned to the Philippines and
he filed an illegal dismissal case against respondent, ITM, and Aramco.
ISSUE: Whether or not petitioner was validly dismissed from work.
HELD: NO.
Security of tenure remains even if employees, particularly the overseas Filipino workers (OFW), work in a
different jurisdiction. Since the employment contracts of OFWs are perfected in the Philippines, and
following the principle of lex loci contractus (the law of the place where the contract is made), these
contracts are governed by our laws, primarily the Labor Code of the Philippines and its implementing
rules and regulations. At the same time, our laws generally apply even to employment contracts of OFWs
as our Constitution explicitly provides that the State shall afford full protection to labor, whether local or
overseas. Thus, even if a Filipino is employed abroad, he or she is entitled to security of tenure, among
other constitutional rights.
Here, no prior notice of purported infraction, and such opportunity to explain on any accusation against
him was given to Dagasdas.1âwphi1 He was simply given a notice of termination. In fact, it appears that
ITM intended not to comply with the twin notice requirement. As above-quoted, under the new contract,
ITM reserved in its favor the right to terminate the contract without serving any notice to the petitioner in
specified cases, which included such situation where the employer decides to dismiss the employee
within the probationary period. Without doubt, ITM violated the due process requirement in dismissing an
employee.

B.Jr.S.Anjell L.
LABOR LAW>Labor Standards> Post employment medical examination for seafarers> Mandatory
reporting upon repatriation
WILMER 0. DE ANDRES, Petitioner

vs.
DIAMOND H MARINE SERVICES & SHIPPING AGENCY, INC., WU CHUN HUA and RUBEN J.
TURINGAN, Respondents
G.R. No. 217345, January 25, 2017
(Second Division)
DOCTRINE: A seafarer claiming disability benefits is required to submit himself to a post-employment

medical examination by a company-designated physician within three (3) working days from repatriation.
Failure to comply with such requirement results in the forfeiture of the seafarer's claim for disability
benefits. There are, however, exceptions to the rule: (1) when the seafarer is incapacitated to report to
the employer upon his repatriation; and (2) when the employer inadvertently or deliberately refused to
submit the seafarer to a post-employment medical examination by a company-designated physician
FACTS: Wilmer O. De Andres was hired by agency Diamond H Marine Services & Shipping Agency, Inc.
for and in behalf of its Taiwanese principal, Wu Chun Hua. On February 1, 2008, he entered into an
Employment Contract, wherein it was stipulated that he would be working in the fishing vessel, Yi Man En
No. 2; that he would receive a monthly salary of NT$17 ,280.00; and that the duration of the contract was
for two years. De Andres claimed that before he departed for Taiwan, he was made to sign a Contract of
Agreement. At the vessel, he was tasked to work as a wiper, messman and bosun, and was also required
to throw the fishnet, dive in the sea, and repair the nets. De Andres added that he and his Filipino
crewmates were made to work for almost twenty-four hours a day. They later discovered that the
document they signed before leaving for Taiwan set aside the POEA-approved contract. He averred that
this agreement reduced their salaries, increased their workload, and showed that the Filipino crewmates
were abused and taken advantage of.
On February 27, 2009, at around 10:00 o'clock in the evening, De Andres was tasked by the master to
lower the nets for the shipping operation. While he was lowering the nets, he was accidentally hit by big
waves, which caused him to be thrown out of the vessel together with the fishing nets. While struggling
from the big waves, De Andres was pulled by the moving vessel with his left leg entangled by the fishing
nets. As a consequence, he sustained an open fracture of the distal tibia and fibula. De Andres was
brought to Keelong Hospital in Taiwan and underwent surgical operation. De Andres averred that he
repeatedly asked for repatriation as no one would attend to his needs in Taiwan, but his plea fell on deaf
ears.almost a year after his accident, De Andres was informed by the respondents that he was free to go
home. He was surprised by this decision because he had been requesting for his repatriation since his
injury. De Andres later discovered that his repatriation was not due to his medical condition, but due to
the expiration of his employment contract.
Before he was repatriated, De Andres was made to sign a Memorandum of Agreement (MOA), stipulating
that the respondents agreed to pay him NT$40,000.00 and gave him a plane ticket back to the
Philippines, and that, in return, he would not file any complaint against the respondents in the future. De
Andres claimed, however, that he was forced to sign the agreement as he would not be able to return to
the Philippines if he would not sign it. On February 5, 2010, he arrived in Manila, but no representatives
from Diamond H fetched him. De Andres filed the subject complaint against the respondents before the
LA for permanent and total disability benefits, sickness allowances, salary differentials, labor insurance as
provided in the contract, moral damages, exemplary damages, and attorney's fees.
In its Decision, the LA ruled in favor of De Andres. It explained that even though his contract expired, the
respondents still had the obligation to provide medical attention because he suffered permanent and total
disability. NLRC reversed and set aside the LA ruling. It stated that De Andres failed to comply with the
mandatory reportorial requirement. CA affirmed the NLRC ruling. It wrote that De Andres indeed failed to
comply with the mandatory reportorial requirement. De Andres moved for reconsideration, but his motion
was denied by the CA. Hence, this petition.
ISSUE: Whether or not petitioner failed to comply with the reportorial requirement under the POEA
Contract.
HELD: Yes.
The respondents failed to provide a post-employment medical examination by a company-designated

physician.In this case, De Andres' accident occurred on February 27, 2009. He sustained an open
fracture injury over his left lower leg with an 8 cm. open wound, which resulted in .bone exposure and
active bleeding. Instead of immediately repatriating him when his condition permitted, the respondents
kept him in Taiwan for almost a year and they waited for his contract to expire. Obviously, the delayed
repatriation was intended to show that he returned due to his expired contract, and not for medical
reasons. Nonetheless, even if a seafarer's contract expired, it does not release the employer from its
obligations under the POEA-SEC when there is a claim for disability benefits due to an injury suffered
during the term of the employment contract. Accordingly, Section 20 (B) (3) must still be complied with.
The Court is of the view that the account of De Andres is more credible. The fact that he reported to
Diamond H on the next working day from his repatriation and met Purification show that he was sincere in
asserting his claim against the respondents for disability benefits. Before he could even commence the
procedure laid down under Section 20 (B) (3), however, Purification pre-empted him and bluntly told him
that Diamond H would not entertain any of his claims and that he should find a lawyer instead. Thus, De
Andres was no longer given an opportunity to submit himself to a post-employment medical examination
by a company-designated physician.
In fine, the exception to the reportorial requirement applies in this case because the seafarer was
prevented by the employer from submitting himself to a post-employment medical examination by a
company-designated physician. Thus, the disability claim of De Andres is not forfeited.
Under Section 20 (B) (3), the first procedure to determine the validity of a seafarer's claim for disability
benefits is to refer him to a company-designated physician of the employer who shall conduct the medical
examination. As earlier mentioned, the respondents did not comply with the initial stage because they
failed to refer De Andres to a company-designated physician despite his timely reporting. They blindly
relied on the MOA to cast away De Andres even though he was clearly asserting his disability claim. As
discussed earlier, the MOA was an invalid quitclaim. Thus, the respondents cannot shield themselves
from liability. Moreover, they could not present any medical assessment of a company-designated
physician. The respondents have no legitimate means to refute his claim for permanent and total disability
benefits.
The Court laments that the employer of a seafarer resorted to insensitive quitclaims to avoid any disability
claims. Section 20 (B) (3) specifically outlines the procedure in determining the proper compensation of a
seafarer's disability. The rigorous process therein aims to provide a fair and definitive assessment on the
seafarer's medical condition and to ensure that they will receive a just compensation for their injuries. At
the same time, it protects the interest of the employer by ensuring that only genuine disability or injuries
shall be entitled to compensation.
Submitted by: Gusi, Audrey

PHILTRANCO SERVICE ENTERPRISES, INC., AND/OR JOSE PEPITO ALVAREZ ARSENIO YAP
AND CENTURION SOLANO, Petitioners
vs.
FRANKLIN CUAL, NOEL PORMENTO, RAMIL TIMOG, WILFREDO PALADO, ROBERTO
VILLARAZA, JOSE NERIO ARTISTA, CESAR SANCHEZ, RENERIO MATOCINOS, VALENTINO
SISCAR, LARRY ACASIO, GERARDO NONATO, JOSE SAFRED, JUAN LUNA, GREGORIO MEDINA,
NESTOR ZAG ADA, FRANCISCO MIRANDA, LEON MANUEL VILLAFLOR, RODOLFO NOLASCO,
REYNALDO PORTES, GERARDO CALINYAO, LUTARDO DAYOLA, VICENTE BALDOS, ROGELIO
MEJARES, RENIE SILOS AND SERV ANDO PETATE, Respondents
G.R. No. 207684, July 17, 2017
THIRD DIVISION
DOCTRINE: Law of the case doctrine has been defined as that principle under which determinations of
questions of law will generally be held to govern a case throughout all its subsequent stages where such
determination has already been made on a prior appeal to a court of last resort.
FACTS: Respondents were members of Philtranco Union which were retrenched under the retrenchment
program of the said company.
They filed a case for illegal dismissal on the ground that they were not absorbed by the company despite
the fact that the company hired new employees. It was also alleged that the retrenchment program was
not valid as the company did not submit audited financial statements.
The Labor Arbiter held that there was illegal dismissal with regard to Olivar, the union president.
However, the complaint of the respondents was dismissed for failure to comply with the verification and
certificate of non-forum shopping.
The respondents re-filed the case as they believed that the dismissal was without prejudice. This time,
the company submitted their audited financial statements.
Labor Arbiter Quintin Cueto III (LA Cueto) rendered a decision finding respondents to have been illegally
dismissed. In so deciding, LA Cueto applied the law of the case principle, stating that the first NLRC case
is binding upon Philtranco. The dispositive portion of LA Cueto's April 15, 2011 decision reads:
WHEREFORE, premises considered, respondents are hereby declared guilty of illegal dismissal and
ordered to reinstate complainants immediately to their former positions and to pay them, jointly and
severally, full backwages from date of dismissal until actual reinstatement plus their 13th month pay and
attorney's [fees] equivalent to 10% of all the monetary award.
ISSUE: Whether Law of the case doctrine will apply in this case?
HELD: NO.
We find the law of the case doctrine not applicable in the cases under consideration.
The doctrine has been defined as "that principle under which determinations of questions of law will
generally be held to govern a case throughout all its subsequent stages where such determination has
already been made on a prior appeal to a court of last resort. It is merely a rule of procedure and does not
go to the power of the court, and will not be adhered to where its application will result in an unjust
decision. It relates entirely to questions of law, and is confined in its operation to subsequent
proceedings in the same case."
The second NLRC case is certainly not a continuation of the first NLRC case from which respondents
were excluded. It is a separate case instituted anew by respondents because the prior case was only
given due course with respect to the parties who signed the complaint and position paper.

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Case Digest on Recent Jurisprudence

II. 2017 Cases

a. Employer-Employee Relationship (Nestle Philippines, Inc. vs. Puedan, G.R. No.

b. Due Process in Labor Cases

g. Verlou Carmelito, G.R. No. 218842, June 21, 2017

p. Petition for Certiorari

q. Loss of trust and confidence / Willful breach of trust

t. MCLE Compliance of counsel

z. Burden of proof in illegal dismissal case

aa. Graceful exit

bb. Expulsion or impeachment of union officer

dd. Post-Employment Medical Examination

ff. Security of tenure

gg. Management prerogative

hh. Termination of employment

ii. Employment contract

jj. Release, Waiver and Quitclaim

ll. Authority of counsel

nn. Constructive dismissal

oo. Off-detail status

pp. Separation pay

qq. Post employment medical examination for seafarers

rr. Res judicata

ALFREDO F. LAYA, JR., Petitioner

Submitted by: Aguilar, Cherry Kerr

PHILIPPINE AIRLINES, INC, Petitioner

HELD: The Supreme Court granted the petition.

Submitted by: Alarcon, Maria Teresa

AMERICAN POWER CONVERSION CORPORATION; AMERICAN POWER CONVERSION

Submitted by: Austria, Don Rodel A.

ROLANDO DE ROCA, petitioner

Submitted by: Bacurio, Kenneth

FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THE PHILIPPINES (FASAP), Petitioner

ISSUE: Whether the grounds for retrenchment were established.

HELD: PAL implemented a valid retrenchment program

Retrenchment or downsizing is a mode of terminating employment initiated by the employer through no

PAL’s serious financial losses were duly established

Submitted by: Siquian,Celine

Nestlé Philippines, Inc., petitioner

Submitted by: Bayot, Kristine Valerie

JACK C. VALENCIA, Petitioner,

JOAQUIN LU, petitioner

In determining the existence of an employer-employee relationship, the following elements are

Submitted by: Bonquin, Jezrael

ISSUE: Whether there exist a employee employer relationship

Submitted by: Chen, Timothy

JACK C. VALENCIA, Petitioner,

Submitted by: De Guzman, Joey

On appeal, the NLRC affirmed in toto the LA's decision.

ISSUE: WON MAULA WAS ILLEGALLY DISMISSED.

Submitted by: Escol, Hanzel Grace

YOLANDO T. BRAVO, Petitioner

(b) Gross and habitual neglect by the employee of his duties;

(e) Other causes analogous to the foregoing.

1. Whether petitioner's employment was terminated for a just cause;

2. Whether petitioner was deprived of procedural due process; and

Submitted by: Elauria, J. Paulo

BDO UNIBANK, INC. (FORMERLY EQUITABLE PCI BANK), Petitioner,

DOCTRINE: Not every case of insubordination or willful disobedience by an employee reasonably

Misconduct is defined as an improper or wrong conduct. It is a transgression of some established and

Submitted by: Del Rosario, Eunice

STERLING PAPER PRODUCTS ENTERPRISES, INC., petitioner

Submitted by: Bacurio, Kenneth

BDO UNIBANK, INC. (FORMERLY EQUITABLE PCI BANK), Petitioner,