Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
UNIVERSITY OF SANTO TOMAS
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
EVIC HUMAN RESOURCE MANAGEMENT, INC. FREE BULKERS S.A. AND/OR MA.
VICTORIA C. NICOLAS, vs. ROGELIO O. PANAHON
G.R. No. 206890, July 31, 2017, First Division (Caguioa, J.)
DOCTRINE
The employer has the burden of proving that the dismissal of an employee was for a just
or authorized cause, and failure to show this would necessarily mean that the dismissal was
unjustified and, therefore, illegal. Furthermore, not only must the dismissal be for a cause
provided by law, it should also comply with the requirements of due process, that is, the
opportunity to be heard and to defend one's self. Hence, for dismissal to be valid, the employer
must show through substantial evidence — or such amount of relevant evidence that a
reasonable mind might accept as adequate to support a conclusion — that (1) the dismissal
was for a just or authorized cause; and (2) the dismissed employee was afforded due process of
law.
FACTS
Petitioner EVIC, for and in behalf of its foreign principal, petitioner Free Bulkers, hired
respondent Rogelio Panahon as Chief Mate on board the vessel of M/V Free Lady for a period
of six (6) months with a basic monthly salary of US$1,088.00. Respondent boarded the
vessel. Thereafter, respondent was repatriated to the Philippines without completing the
contracted period of employment. Respondent filed a Complaint for illegal dismissal with
claims for moral and exemplary damages and attorney's fees against EVIC, Free Bulkers and
Ma. Victoria Nicolas, the owner and President of EVIC (petitioners). In his Position Paper,
respondent alleged that he has been a professional seafarer for 31 years and Chief Mate for
21 years. Since his initial deployment, he has diligently performed all his duties and
responsibilities and has never been disciplined or dismissed. He boarded M/V Free Lady and
during the voyage, the vessel's Captain Buton developed a hostile attitude towards him.
Respondent averred that he took a sip from the small flask of whisky given to him by one of
the stevedores he dealt with and went to bed; but Captain Buton had him awakened and
ordered him to make a report on some damages in the railings of the ship caused by the
stevedores. When he submitted the report to Captain Buton, the latter allegedly smelled a
faint odor of whisky and asked respondent if he had been drinking, to which respondent
truthfully replied that he drank a little whisky and was willing to take an alcohol test.
Respondent claimed that Captain Buton shrugged off his offer to take an alcohol test; but as
soon as he left respondent, Captain Buton made a logbook entry recommending
respondent's immediate replacement.
For their part, petitioners averred that respondent was dismissed for just cause. The
Crew Behavior Report prepared by Captain Buton showed that respondent was grossly
negligent as he failed to observe the safety precautions during the mooring and unmooring
operations; displayed arrogance towards his co-employees on board; and was caught
intoxicated, in violation of the company policies, instructions, and stipulations of the POEA
contract. Thus, fearing that the safety of the vessel and/or crew may be at risk with the
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Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
continued presence of respondent, petitioners were constrained to ask that respondent be
relieved invoking Section 33 of the POEA-SEC.
The Labor Arbiter dismissed respondent's complaint. Petitioners had discharged the
burden to prove the existence of just cause for respondent's termination with the submission
of the Crew Behavior Report duly attested by three officers reflecting respondent's
unjustified failure to perform his duties and adhere to company policy against intoxication.
Petitioners were justified in not furnishing respondent a notice of dismissal considering that
there was a clear and existing danger to the safety of the crew and the vessel.
While the NLRC affirmed the existence of just cause in terminating respondent's
employment, it found petitioners remiss in their duty to afford respondent the requisite
notice and hearing prior to his dismissal. The issuance of a notice and the observance of a
hearing would have been prudent as it was disputable whether respondent posed a clear and
imminent danger to the safety of the crew members. Thus, for failure to observe the
requirement of due process, petitioners were held liable to indemnify respondent nominal
damages.
The CA found that the NLRC gravely abused its discretion in holding that there was
just cause for respondent's dismissal from employment as the same is not supported by
substantial evidence. The unnotarized Crew Behavior Report, which was the sole basis of the
LA and NLRC in holding that respondent was dismissed for just cause cannot be given
credence in the absence of any other corroborative evidence. The CA further held that said
report, although signed by four (4) other crew members of the vessel, cannot be considered
credible because the charges against respondent were based on acts witnessed only by
Captain Buton.
The CA also noted that the report cited only one case of incompetence and negligence
of respondent; but the rules are explicit that negligence must not only be gross but also
habitual to warrant the employee's separation from employment. The CA further held that
petitioners failed to show that the failure of respondent to observe safety precautions during
the mooring operations was willful and deliberate and that respondent repeatedly
committed mistakes or failed to perform his duties.
As regards respondent's alleged intoxication, the CA found the same wanting of proof
and insufficient to warrant respondent's dismissal. The CA noted that the Crew Behavior
Report indicated that respondent was caught drinking after his duty; Section 33 (6),
however, requires drunkenness to be committed while on duty to warrant the dismissal of
an employee.
Lastly, the CA ruled that the award of attorney's fees of ten percent (10%) of the total
award is justified under Article 111 of the Labor Code. However, the CA found no basis for
respondent's claim for moral and exemplary damages as there is absence of clear and
convincing proof that his dismissal was attended by fraud or bad faith.
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Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
ISSUES
1. Whether petitioners were able to prove a just cause (incompetency/inefficiency or
neglect of duty) for respondent’s termination.
2. Whether respondent was accorded due process.
3. What is the correct monetary award of respondent?
RULING
1. YES. Petitioners failed to prove just cause.
In justifying respondent's dismissal, the only evidence relied upon by petitioners is
the Crew Behavior Report prepared by Captain Buton, which petitioners claim plainly
demonstrated respondent's inefficiency, incompetence and gross negligence in the
performance of his duties. The Court finds the Crew Behavior Report sorely inadequate in
meeting the required quantum of proof to discharge petitioners' burden. For one, the
statements contained therein were uncorroborated and self-serving. No other evidence was
presented to support the statements of the Captain.
While the report was signed by four crew members, the statements contained therein
were based on acts witnessed only by Captain Buton. According to Captain Buton, a crew was
injured when respondent failed to observe safety precautions in the mooring and unmooring
operations. He also mentioned that an agent informed him that respondent was hard to deal
with because of intoxication. Considering however that there were no affidavits submitted
of either the injured seaman or the concerned agent to corroborate the Captain's statements,
there can be no basis for the Court to conclude that there was truth to Captain Buton's
accusations.
The Court further finds that there exists no just or valid cause for respondent's
dismissal. Incompetence or inefficiency, as a ground for dismissal, is understood to mean
the failure to attain work goals or work quotas, either by failing to complete the same within
the allotted reasonable period, or by producing unsatisfactory results. Neglect of duty, on
the other hand, must be both gross and habitual. Gross negligence implies a lack of or
failure to exercise slight care or diligence, or the total absence of care in the performance of
duties, not inadvertently but willfully and intentionally, with conscious indifference insofar
as other persons may be affected. Habitual neglect involves repeated failure to perform
duties for a certain period of time, depending upon the circumstances, and not mere failure
to perform duties in a single or isolated instance.
Petitioners failed to show that respondent willfully or deliberately caused the alleged
accident during the mooring operations or that respondent repeatedly committed mistakes
or repeatedly failed to perform his duties. The single unverified incident on respondent's
supposed negligence is surely insufficient to warrant a finding of just cause for termination.
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Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
As regards the charge of intoxication, Section 33 (6) of the POEA-SEC provides that
drunkenness must be committed while on duty to merit dismissal from employment. Here,
respondent was admittedly off duty when he was allegedly caught by the master drinking on
board. The penalty of dismissal from employment was therefore unwarranted.
2. NO. Respondent was not accorded due process. Under Section 17 of POEA-SEC, what is
termed the Standard Format, the "two — notice rule" is indicated. An erring seaman is
given a written notice of the charge against him and is afforded an opportunity to explain
or defend himself. Should sanctions be imposed, then a written notice of penalty and the
reasons for it shall be furnished the erring seafarer. It is only in the exceptional case of
clear and existing danger to the safety of the crew or vessel that the required notices
are dispensed with; but just the same, a complete report should be sent to the manning
agency, supported by substantial evidence of the findings.
In the case at bar, the records are bereft of any evidence showing that respondent was
given a written notice of the charges against him, or that he was given an opportunity to
explain or defend himself. Neither is there proof that respondent was furnished with a
written notice of the penalty imposed against him and the reasons for its imposition. Indeed,
petitioners admit that these required notices were dispensed with because, according to
them, there was a clear and existing danger to the safety of the crew or vessel. Unfortunately
for petitioners, however, there is, again, no evidence that was presented to prove such was
the situation when respondent was terminated.
3. In the assailed Decision, the CA, after declaring respondent's dismissal to be illegal,
ordered petitioners to pay the unexpired portion of his employment contract and attorney's
fees of 10% of the award. The Court finds the necessity to modify the award rendered by the
CA to conform with Section 10 of Republic Act (RA) No. 8042, as amended by RA No. 10022.
Said provision, as modified by the Court in Serrano v. Gallant Maritime Services, Inc., which
held that the clause "or for three months for every year of unexpired term, whichever is less"
is unconstitutional. Finally, the Court affirms the grant of attorney's fees of 10% of the total
award pursuant to Article 111 of the Labor Code.
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Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
SAN FERNANDO COCA-COLA RANK-AND-FILE UNION vs. COCA-COLA BOTTLERS
PHILIPPINES, INC. (CCBPI)
G.R. No. 200499, October 4, 2017, Second Division (Caguioa, J.)
DOCTRINE
For there to be a valid implementation of a redundancy program, the following should
be present: (1) written notice served on both the employees and the Department of Labor and
Employment at least one month prior to the intended date of retrenchment; (2) payment of
separation pay equivalent to at least one month pay or at least one month pay for every year of
service, whichever is higher; (3) good faith in abolishing the redundant positions; and (4) fair
and reasonable criteria in ascertaining what positions are to be declared redundant and
accordingly abolished.
An employer's good faith in implementing a redundancy program is not necessarily
destroyed by availment of services of an independent contractor to replace the services of the
terminated employees
Unfair labor practice refers to acts that violate the workers' right to organize. There
should be no dispute that all the prohibited acts constituting unfair labor practice in essence
relate to the workers' right to self-organization. Thus, an employer may only be held liable for
unfair labor practice if it can be shown that his acts affect in whatever manner the right of his
employees to self-organize.
FACTS
Private respondent company, Coca-Cola Bottlers Philippines, Inc. ("CCBPI")issued
notices of termination to twenty seven (27) rank-and-file, regular employees and members
of the San Fernando Rank-and-File Union ("SACORU"), the"union members," on the ground
of redundancy due to the ceding out of two selling and distribution systems, the Conventional
Route System ("CRS") and Mini Bodega System ("MB") to the Market Execution
Partners ("MEPS"), better known as "Dealership System." The termination of employment
was made effective on June 30, 2009, but the union members were no longer required to
report for work as they were put on leave of absence with pay until the effectivity date of
their termination. The union members were also granted individual separation packages,
which twenty-two (22) of them accepted, but under protest.
To SACORU, the new, reorganized selling and distribution systems adopted and
implemented by CCBPI would result in the diminution of the union membership amounting
to union busting and to a violation of the CBA provision against contracting out of services
or outsourcing of regular positions; hence, they filed a Notice of Strike with the NCMB on
June 3, 2009 on the ground of unfair labor practice, among others. On June 11, 2009, SACORU
conducted a strike vote where a majority decided on conducting a strike.
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Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
On June 23, 2009, the then Secretary of the DOLE, Marianito D. Roque, assumed
jurisdiction over the labor dispute by certifying for compulsory arbitration the issues raised
in the notice of strike.
Meanwhile, pending hearing of the certified case, SACORU filed a motion for execution
of the dispositive portion of the certification order praying that the dismissal of the union
members not be pushed through because it would violate the order of the DOLE Secretary
not to commit any act that would exacerbate the situation. On August 26, 2009, however, the
resolution of the motion for execution was ordered deferred and suspended; instead, the
issue was treated as an item to be resolved jointly with the main labor dispute.
CCBPI, for its part, argued that the new business scheme is basically a management
prerogative designed to improve the system of selling and distributing products in order to
reach more consumers at a lesser cost with fewer manpower complement, but resulting in
greater returns to investment. CCBPI also contended that there was a need to improve its
distribution system if it wanted to remain viable and competitive in the business; that after
a careful review and study of the existing system of selling and distributing its products, it
decided that the existing CRS and MB systems be ceded out to the MEPs or better known
as "Dealership System" because the enhanced MEPs is a cost-effective and simplified scheme
of distribution and selling company products; that CCBPI, through the simplied system,
would derive benefits such as: (a) lower cost to serve; (b) fewer assets to manage; (c) zero
capital infusion.
SACORU maintained that the termination of the 27 union members is a circumvention
of the CBA against the contracting out of regular job positions, and that the theory of
redundancy as a ground for termination is belied by the fact that the job positions are
contracted out to a "third party provider"; that the termination will seriously affect the union
membership because out of 250 members, only 120 members will be left upon plan
implementation; that there is no redundancy because the sales department still exists except
that job positions will be contracted out to a sales contractor using company equipment for
the purpose of minimizing labor costs because contractual employees do not enjoy CBA
benefits; that the contractualization program of the company is illegal because it will render
the union inutile in protecting the rights of its members as there will be more contractual
employees than regular employees; and that the redundancy program will result in the
displacement of regular employees which is a clear case of union busting.
Further, CCBPI argued that in the new scheme of selling and distributing products
through MEPs or "Dealership [System]", which is a contract of sale arrangement, the
ownership of the products is transferred to the MEPs upon consummation of the sale and
payment of the products; thus, the jobs of the terminated union members will become
redundant and they will have to be terminated as a consequence; that the termination on the
ground of redundancy as made in good faith, and fair and reasonable criteria were
determined to ascertain what positions were to be phased out being an inherent
management prerogative; that the terminated union members were in fact paid their
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Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
separation pay benefits when they were terminated; that they executed quitclaims and
release; and that the quitclaims and release being voluntarily signed by the terminated union
members should be declared valid and binding against them.
ISSUES
1. Whether CCBPI validly implemented its redundancy program;
2. Whether CCBPI's implementation of the redundancy program was an unfair labor
practice; and
3. Whether CCBPI should have enjoined the effectivity of the termination of the
employment of the 27 affected union members when the DOLE Secretary assumed
jurisdiction over their labor dispute.
RULING
1. YES. CCBPI's redundancy program is valid. The NLRC found the all of the requisites for
a valid implementation of a redundancy program were met when it ruled that the
termination was due to a scheme that CCBPI adopted and implemented which was an
exercise of management prerogative, and that there was no proof that it was exercised in a
malicious or arbitrary manner. The termination was due to the scheme adopted and
implemented by respondent company in distributing and selling its products, to reach
consumers at greater length with greater profits, through MEPs or dealership system is
basically an exercise of management prerogative. The adoption of the scheme is basically a
management prerogative and even if it caused the termination of some 27 regular
employees, it was not in violation of their right to self-organization much more in violation
of their right to security of tenure because the essential freedom to manage business remains
with management.
CCBPI had valid grounds for implementing the redundancy program. CCBPI was able
to prove its case that from the study it conducted, the previous CRS and MB selling and
distribution schemes generated the lowest volume contribution which thus called for the
redesigning and enhancement of the existing selling and distribution strategy; that such
study called for maximizing the use of the MEPs if the company is to retain its market
competitiveness and viability; that furthermore, based on the study, the company
determined that the MEPs will enable the CCBPI to "reach more" with fewer manpower and
assets to manage; that it is but a consequence of the new scheme that CCBPI had to
implement a redundancy program structured to downsize its manpower complement.
Prior to the termination of the herein individual complainants, respondent company
has made a careful study of how to be more cost effective in operations and competitive in
the business recognizing in the process that its multi-layered distribution system has to be
simplified. Thus, it was determined that compared to other distribution schemes, the
company incurs the lowest cost-to-serve through MEPs or Dealership system. The CRS and
Mini-Bodega systems posted the highest in terms of cost-to-serve. Thus, the phasing out of
the CRS and MB is necessary which, however, resulted in the termination of the
complainants as their positions have become redundant. Be that as it may, respondent
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Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
company complied with granting them benefits that is more than what the law prescribes.
They were duly notified of their termination from employment thirty days prior to actual
termination.
On the issue of CCBPI's violation of the CBA because of its engagement of an
independent contractor, the NLRC ruled that the implementation of a redundancy program
is not destroyed by the employer availing itself of the services of an independent contractor.
2. NO. CCBPI did not commit an unfair labor practice. To prove the existence of unfair
labor practice, substantial evidence has to be presented.
Here, the NLRC found that SACORU failed to provide the required substantial
evidence. The union's mere allegation of ULP is not evidence, it must be supported by
substantial evidence. SACORU failed to proffer any proof that CCBPI acted in a malicious or
arbitrarily manner in implementing the redundancy program which resulted in the dismissal
of the 27 employees, and that CCBPI engaged instead the services of independent
contractors. As no credible, countervailing evidence had been put forth by SACORU with
which to challenge the validity of the redundancy program implemented by CCBPI, the
alleged unfair labor practice acts allegedly perpetrated against union members may not be
simply swallowed. SACORU was unable to prove its charge of unfair labor practice and
support its allegations that the termination of the union members was done with the end-inview of weakening union leadership and representation. There was no showing that the
redundancy program was motivated by ill will, bad faith or malice, or that it was conceived
for the purpose of interfering with the employees' right to self-organize.
3. YES. CCBPI violated the return-to-work order. SACORU claims that CCBPI violated the
doctrine in Metrolab Industries, Inc. v. Roldan-Confesor, when it dismissed the employees
after the DOLE Secretary assumed jurisdiction over the dispute. SACORU, argues that CCBPI
should have enjoined the termination of the employees which took effect on July 1, 2009
because the DOLE Secretary enjoined further acts that could exacerbate the situation. On the
other hand, CCBPI argued that the termination of the employment was a certainty, from the
time the notices of termination were issued, and the status quo prior to the issuance of the
assumption order included the impending termination of the employment of the 27
employees.
Metrolab did not apply to the dispute because the employees received the notice of
dismissal prior to the assumption order of the DOLE Secretary, thus CCBPI did not commit
an act that exacerbated the dispute.
To the Court, the issue really is this: whether the status quo to be maintained after the
DOLE Secretary assumed jurisdiction means that the effectivity of the termination of
employment of the 27 employees should have been enjoined. The Court rules in favor of
SACORU.
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Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
Pertinent to the resolution of this issue is Article 263 (g) of the Labor Code,which
provides the conditions for, and the effects of, the DOLE Secretary's assumption of
jurisdiction over a dispute: If one has already taken place at the time of assumption or
certification, all striking or locked out employees shall immediately return to work
and the employer shall immediately resume operations and readmit all workers
under the same terms and conditions prevailing before the strike or lockout.
Following Article 263 (g), the effects of the assumption of jurisdiction are the
following: (a) the enjoining of an impending strike or lockout or its lifting, and (b) an order
for the workers to return to work immediately and for the employer to readmit all workers
under the same terms and conditions prevailing before the strike or lockout, or the returnto-work order.
Of important consideration in this case is the return-to-work order, which the Court
characterized as "interlocutory in nature, and is merely meant to maintain status
quo while the main issue is being threshed out in the proper forum." The status quo is
simply the status of the employment of the employees the day before the occurrence of the
strike or lockout.
Based on the foregoing, from the date the DOLE Secretary assumes jurisdiction over
a dispute until its resolution, the parties have the obligation to maintain the status quo while
the main issue is being threshed out in the proper forum — which could be with the DOLE
Secretary or with the NLRC. This is to avoid any disruption to the economy and to the
industry of the employer — as this is the potential effect of a strike or lockout in an industry
indispensable to the national interest — while the DOLE Secretary or the NLRC is resolving
the dispute.
Since the union voted for the conduct of a strike on June 11, 2009, when the DOLE
Secretary issued the return-to-work order dated June 23, 2009, this means that the status
quo was the employment status of the employees on June 10, 2009. This status quo should
have been maintained until the NLRC resolved the dispute in its Resolution dated March 16,
2010, where the NLRC ruled that CCBPI did not commit unfair labor practice and that the
redundancy program was valid. This Resolution then took the place of the return-to-work
order of the DOLE Secretary and CCBPI no longer had the duty to maintain the status
quo after March 16, 2010.
Given this, the 27 employees are therefore entitled to backwages and other benefits
from July 1, 2009 until March 16, 2010, and CCBPI should re-compute the separation pay
that the 27 employees are entitled taking into consideration that the termination of their
employment shall be effective beginning March 16, 2010.
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Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
SYMEX SECURITY SERVICES, INC. and RAFAEL Y. ARCEGA vs. MAGDALINO O. RIVERA,
JR. and ROBERTO B. YAGO
G.R. No. 202613, November 8, 2017, Second Division (Caguioa, J.)
DOCTRINE
Even as the Court has acknowledged the management prerogative of security agencies
to transfer security guards when necessary in conducting its business, it likewise has repeatedly
held that this should be done in good faith.
FACTS
Respondents alleged that they had been employed as security guards by petitioner
Symex sometime in May 1999. Petitioner Symex is engaged in the business of investigation
and security services. Its President and Chairman of the Board is petitioner Arcega.
Respondents were both assigned at the offices and premises of Guevent, a client of petitioner
Symex. As security guards, they were tasked to guard the entrance and the exit of the
building, and check the ingress and egress of the visitors' vehicles going through the building.
Their tour of duty was from Monday to Saturday, from 6:00 AM to 6:00 PM, a twelve-hour
duty, but they were not paid their overtime pay. Respondents were likewise not given a rest
day, and not paid their five-day service incentive leave pay, and 13th month pay.
At the time of their employment, respondents were receiving a salary of P198.00 a
day from January 20 to March 2001. From April 2001 to March 2003, they were receiving
P250.00 a day. They were required to report for work during legal holidays, but they were
not paid holiday premium pay.
On February 25, 2003, respondents filed a complaint for nonpayment of holiday pay,
premium for rest day, 13th month pay, illegal deductions and damages. On March 13, 2003,
Capt. Cura, the Operations Manager of petitioner Symex, summoned respondents to report
to the head office the next day. Respondents went to the head office where Capt. Cura told
them that they would be relieved from the post because Guevent reduced the number of
guards on duty. Capt. Cura told them to go back on March 17, 2003 for their reassignment.
On March 17, 2003, Capt. Cura told respondents that they would not be given a duty
assignment unless they withdrew the complaint they filed before the LA. Respondents were
made to choose between resignation or forcible leave. Capt. Cura gave them a sample
affidavit of desistance for them to use as a guide. Respondents both refused to obey Capt.
Cura, who then told them that they were dismissed. The next day, respondents amended
their complaint before the LA to include illegal dismissal.
In their defense, petitioners Symex and Arcega maintained that they did not illegally
dismiss respondents. They claimed that respondents are still included in petitioner Symex's
roll of security guards. They shifted the blame to respondents, arguing that respondents
refused to accept available postings.
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ISSUES
1. Whether the floating status in which respondents were placed after their relief from
their post in Guevent was actually a dismissal, and thus, respondents were illegally
dismissed.
2. Whether respondents are guilty of abandonment.
3. Whether petitioners are liable to respondents for backwages, service incentive
leave pay, 13th month pay, separation pay, moral damages, exemplary damages and
attorney's fees.
RULING
1. YES. The security guard's right to security of tenure does not give him a vested right to the
position as would deprive the company of its prerogative to change the assignment of, or
transfer the security guard to, a station where his services would be most beneficial to the
client. Indeed, an employer has the right to transfer or assign its employees from one office
or area of operation to another, or in pursuit of its legitimate business interest, provided
there is no demotion in rank or diminution of salary, benefits, and other privileges,
and the transfer is not motivated by discrimination or bad faith, or effected as a form
of punishment or demotion without sufficient cause.
Petitioner Symex insists that Capt. Cura did not constructively dismiss respondents,
explaining that they refused to accept their new assignments on the ground that their new
postings would be inconvenient to them. Respondents, on the other hand, maintain that they
did not refuse re-assignment nor did they abandon their work.
In cases of illegal dismissal, the employees must first establish by substantial
evidence that they were dismissed. If there is no dismissal, then there can be no question as
to the legality or illegality thereof. The NLRC did not err in finding that respondents had
substantially discharged this burden. Apart from their sworn declarations, respondents
offered the sample affidavit of desistance given them by Capt. Cura to support their narration
that Capt. Cura threatened to terminate them unless they executed such affidavit of
desistance. The CA also found that petitioner Symex used its prerogative to re-assign its
security guards as leverage in the withdrawal of the labor complaint filed against petitioners
by respondents.
Petitioners, on the other hand, failed to discharge their burden of proving that the
termination of respondents was for a valid or authorized cause. In fact, they simply
maintained that respondents were not illegally dismissed because they refused their new
assignments. Yet, petitioners offered no evidence at all to prove respondents' alleged new
assignments or respondents' refusal to accept the same. All that petitioners offer as proof
that respondents were not dismissed is the argument that respondents remained in the roll
of the security guards of petitioner Symex. And yet, petitioners failed to even present said
roll of security guards to prove this assertion.
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By: USTFCL Dean’s Circle for AY 21-22
2. NO. Respondents are not guilty of abandonment. To constitute abandonment, however,
there must be a clear and deliberate intent to discontinue one's employment without
any intention of returning. In this regard, two elements must concur: (1) failure to
report for work or absence without valid or justifiable reason, and (2) a clear
intention to sever the employer-employee relationship, with the second element as
the more determinative factor and being manifested by some overt acts. Otherwise
stated, absence must be accompanied by overt acts unerringly pointing to the fact that the
employee simply does not want to work anymore. It has been ruled that the employer has
the burden of proof to show a deliberate and unjustified refusal of the employee to resume
his employment without any intention of returning.
In this case, the respondents' act of filing a complaint for illegal dismissal with prayer
for reinstatement belies any intention to abandon employment. To be sure, the immediate
filing of a complaint for illegal dismissal, more so when it includes a prayer for reinstatement,
has been held to be totally inconsistent with a charge of abandonment. To reiterate,
abandonment is a matter of intention and cannot be lightly inferred, much less legally
presumed, from certain equivocal acts.
3. YES. Separation pay is warranted when the cause for termination is not attributable to the
employee's fault, such as those provided in Articles 298 to 299 of the Labor Code, as well as
in cases of illegal dismissal where reinstatement is no longer feasible.
The payment of separation pay and reinstatement are exclusive remedies. In a case
where the employee was neither found to have been dismissed nor to have abandoned
his/her work, the general course of action is for the Court to dismiss the complaint, direct
the employee to return to work, and order the employer to accept the employee." The
circumstances in this case, however, warrant the application of the doctrine of strained
relations.
Under the doctrine of strained relations, the payment of separation pay is considered
an acceptable alternative to reinstatement when the latter option is no longer desirable or
viable. On one hand, such payment liberates the employee from what could be a highly
oppressive work environment. On the other hand, it releases the employer from the grossly
unpalatable obligation of maintaining in its employ a worker it could no longer
trust. Strained relations must be demonstrated as a fact. The doctrine of strained relations
should not be used recklessly or applied loosely nor be based on impression alone.
Here, the length of time this case has dragged has invariably resulted in a strain in the
relations between respondents and petitioners, so that reinstatement is now impossible.
Once more, this factual finding is binding on this Court. Accordingly, the award for separation
pay is proper.
With respect to the award of money claims, as well as moral and exemplary damages,
it is noteworthy to stress that respondents have presented their pay slips to prove their
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monetary claims. It is settled that once the employee has set out with particularity in his
complaint, position paper, affidavits and other documents the labor standard benefits he is
entitled to, and which the employer failed to pay him, it becomes the employer's burden to
prove that it has paid these money claims. Once more, he who pleads payment has the burden
of proving it; and even where the employees must allege nonpayment, the general rule is that
the burden rests on the defendant to prove payment, rather than on the plaintiff to prove
nonpayment. Petitioners could have easily presented pertinent company records to
disprove respondents' claims. Yet, the records of the case are bereft of such company records
thus giving merit to respondents' allegations. It is a rule that failure of employers to submit
the necessary documents that are in their possession as employers gives rise to the
presumption that the presentation thereof is prejudicial to their cause.
Moral damages are recoverable when the dismissal of an employee is attended by bad
faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to
good morals, good customs or public policy. Exemplary damages, on the other hand, are
recoverable when the dismissal was done in a wanton, oppressive, or malevolent manner.
The Court also affirms the award of moral and exemplary damages to respondents.
The acts constitutive of respondents' dismissal are clearly tainted with bad faith as they were
done to punish them for filing a complaint against petitioner Symex before the LA and for
their refusal to withdraw the same.
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CONSOLIDATED DISTILLERS OF THE FAR EAST, INC., vs. ROGEL N. ZARAGOZA
G.R. No. 229302, June 20, 2018, Second Division (Caguioa, J.)
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. 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. Backwages should be counted until the finality of
the NLRC decision awarding separation pay. When there is a supervening event that renders
reinstatement impossible, backwages is computed from the time of dismissal until the finality
of the decision ordering separation pay.
FACTS
The present case is an offshoot of the petition entitled Consolidated Distillers of the
Far East, Inc. v. Rogel N. Zaragoza and docketed as G.R. No. 196038 (Illegal Dismissal Case).
Such became final and executory on March 30, 2012. In G.R. No. 196038, the Court affirmed
the CA decision in favor of respondent therein Rogel Zaragoza which had affirmed the NLRC's
and LA's findings that Condis had illegally dismissed Rogel, and ordered his reinstatement
and payment of his backwages.
After the finality of the resolution of the Court in G.R. No. 196038 on March 30, 2012,
Rogel moved for the issuance of an alias writ of execution against Condis for his
reinstatement, and the payment of full backwages, accrued salaries and allowances as of
December 3, 2012, less the P454,986.98 that was already released to him by the LA pending
appeal (Execution Proceedings). Condis opposed the motion and argued that its execution of
the Asset Purchase Agreement with Emperador Distillers, Inc. (EDI) was a supervening event
that made it impossible to reinstate Rogel to his former position. In a Resolution dated
August 3, 2013, the LA ruled in favor of Rogel and directed Condis to pay P2,135,256.45
representing the backwages/reinstatement salaries, including allowances, from December
3, 2007, the date of Rogel's illegal dismissal, up to August 3, 2013, the date of the LA
resolution.
Condis filed a petition for extraordinary remedy with the NLRC, which granted the
petition and declared the LA's Resolution null and void in a Decision dated January 13,
2014. The NLRC ruled that the reinstatement was indeed rendered impossible because of
the Asset Purchase Agreement, but that backwages should be computed only until the
finality of the Court's Resolution in the Illegal Dismissal Case (i.e., G.R. No. 196038) on March
30, 2012.
Rogel filed a petition for certiorari under Rule 65 with the CA. In a Decision dated
March 17, 2016, the CA affirmed the NLRC but with modification that the backwages should
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be computed from the date of illegal dismissal until the finality of the decision of the CA, and
separation pay computed from the date of employment until finality of the CA Decision.
Condis moved for reconsideration but this was denied in the CA's Resolution dated
January 10, 2017. Hence, this Petition.
ISSUES
1. Whether Condis is liable for the backwages and separation pay of Rogel computed
until the finality of the decision awarding separation pay.
2. Should the allowances should be included in computing Rogel's backwages and
separation pay?
RULING
1. YES. To recall, the Decision in G.R. No. 196038 became final and executory on March 30,
2012. As modified, the Decision awarded backwages and directed Condis to reinstate Rogel.
It was only during the Execution Proceedings that the NLRC, in reversing the LA, directed the
payment of separation pay in lieu of reinstatement. Condis does not question the
propriety of the award of separation pay in lieu of reinstatement by the NLRC during
the Execution Proceedings. It only takes issue with the NLRC's and CA's computation of the
backwages and separation pay. Condis argues that it should only be liable for backwages
and separation pay until the year 2007. It claims that the execution of the Asset Purchase
Agreement and the termination of the subsequent Service Agreement with EDI was the
reason for its failure to reinstate Rogel. It claims that the foregoing were supervening events
that made Rogel's position inexistent as of 2007 and that there is no position to which Rogel
could be reinstated into.
Condis is liable for backwages and separation pay until the finality of the decision
awarding separation pay as ruled in Bani. In Bani, the decision there finding that the
employee was illegally dismissed and directing his reinstatement had also already attained
finality. During the execution proceedings, since the employees manifested that
they no longer wanted to be reinstated, the LA directed that separation pay be given to them
in lieu of reinstatement. On appeal, the NLRC affirmed the payment of separation pay but
modified the basis of the computation. This also became final and executory. The LA then
recomputed the award and ruled that backwages should only be paid until the date that the
employees manifested that they no longer wanted to be reinstated. The NLRC and the CA,
however, both ruled that the backwages should be counted until the finality of the NLRC
decision awarding separation pay. The Supreme Court held therein that when there is a
supervening event that renders reinstatement impossible, backwages is computed from the
time of dismissal until the finality of the decision ordering separation pay.
Here, the award of separation pay in lieu of reinstatement, which Condis does not
question, was made subsequent to the finality of the Decision in the Illegal Dismissal Case.
Condis cannot therefore evade its liability to Rogel for backwages and separation pay
computed until the finality of this Decision which affirms the order granting separation pay.
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Further, Condis invokes Olympia Housing, however, for it to apply, the employer must
prove the closure of its business in full and complete compliance with all statutory
requirements prior to the date of the finality of the award of backwages and separation pay.
Here, Condis failed to show that in 2007 it had closed its business and that it had
complied with all the statutory requirements for the closure. All it alleged was the execution
of the Asset Purchase Agreement and the termination of the Service Agreement with EDI —
but this does not mean, nor was it argued to mean, that Condis had closed its business. In
fact, Condis failed to submit any document which showed that in 2007, it had notified the
DOLE or its employees of the closure of its business and the reason for its closure. It also
failed to show that Rogel was affected by this purported closure of its business. In Olympia
Housing, the Court considered that the employer therein was able to prove in a separate
labor case that it had closed its business and followed all statutory requirements arising from
the closure of its business, i.e., notice to the Department of Labor and Employment (DOLE),
notice to the employees, and financial statements substantiating its claim that it was
operating at a loss. Given this, the Court therein ruled that the employer is liable for
backwages and separation pay only until the date of the closure of the business of the
employer, even if this was prior to the LA's decision finding illegal dismissal. There is
therefore no basis for it to claim that Olympia Housing is authority for its liability to pay
backwages and separation pay to only up to 2007.
2. NO. The LA's Decision awarding backwages became final and executory on March 30,
2012. The allowances should not be included in computing Rogel's backwages and
separation pay given that the decision of the LA awarding backwages had already become
final and executory; thus triggering the rule on immutability of judgment.
From the Decision of the LA that became final and executory on March 30, 2012
(G.R. No. 196038), the computation of the backwages of Rogel is composed of his basic pay,
13th month pay, and monetized vacation and sick leaves. Having attained finality, the LA,
during execution proceedings, cannot add the hotel and meal allowances and the monthly
incentive to the computation. To be sure, Rogel had an opportunity to present evidence on
these during the Illegal Dismissal Case and he should have presented them there. Having
failed to do so, he cannot claim, and the LA or even the Court cannot add, these items, which
were not contemplated in the dispositive portion of the LA's March 3, 2009 Decision. The CA
therefore erred in affirming the LA's computation of backwages and separation pay.
Finally, consistent with the Court's ruling in Bani, Condis is likewise liable to pay legal
interest at the rate of six percent (6%) per annum from the finality of this Decision until full
satisfaction. The inclusion of interest is not barred by the principle of immutability of
judgment as it is compensatory interest arising from the final judgment.
WHEREFORE, premises considered, the Petition for Review is hereby PARTLY
GRANTED. The Decision of the Court of Appeals dated March 17, 2016 and Resolution dated
January 10, 2017 are hereby AFFIRMED with MODIFICATIONS. As modified, petitioner
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Consolidated Distillers of the Far East, Inc. is ORDERED to pay respondent Rogel N. Zaragoza
the following amounts as computed in the Labor Arbiter's Decision dated March 3, 2009:
(a) backwages from the date he was illegally dismissed on November 20, 2007 until
the finality of this Decision; and
(b) separation pay computed from April 18, 1994, the first day of Rogel's
employment, until the finality of this Decision, at the rate of one (1) month salary for every
year of service.
The sum of P454,986.98 previously received by Rogel N. Zaragoza by virtue of the
release order of the Labor Arbiter must be deducted from the foregoing awards.
Further, petitioner Consolidated Distillers of the Far East, Inc. is ORDERED to pay
respondent Rogel N. Zaragoza legal interest of six percent (6%) per annum of the foregoing
monetary awards computed from the finality of this Decision until full satisfaction.
The Labor Arbiter is hereby ORDERED to make another recomputation according to
the above directives.
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YIALOS MANNING SERVICES, INC., OVERSEAS SHIPMANAGEMENT S.A., RAUL VICENTE
PEREZ, and MINERVA ALFONSO vs. RAMIL G. BORJA
G.R. No. 227216, July 4, 2018, Second Division (Caguioa, J.)
DOCTRINE
The seafarer shall submit himself to a post-employment medical examination by a
company designated physician within three working days upon his return. In case there is a
conflict between the medical findings of the company-designated physician and the seafarerappointed physician as to the disability rating of the seafarer, the parties must comply with the
conflict-resolution procedure mandated under the POEA-SEC. The seafarer must be the one to
signify his intent to refer to a third doctor as he is the party contesting the findings of the
company-designated physician. The third doctor's decision shall be final and binding on both
parties Without the opinion of the third doctor, the medical pronouncements of the companydesignated physician prevail.
Further, 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
maximum 240-day medical treatment period without a declaration of either fitness to work or
the existence of a permanent disability.
FACTS
Borja was employed as oiler by YMSI, for and on behalf of its principal OSSA, for a
period of nine (9) months. He boarded the vessel M/V Thetis on April 20, 2010. On November
9, 2010, after doing maintenance work and lifting a metal plate, he felt "pain in the buttocks
radiating down the back of his leg." He was referred to a company physician in Taixing, China,
who diagnosed him to have inter-vertebral protrusion. He was declared unfit to work for
three (3) months and was advised for "temporary palliative care" or bed rest for one month.
He was medically repatriated on November 25, 2010.
Borja reported to YMSI's office, and he was referred to MMC on November 27, 2010
and was diagnosed by Dr. Robert D. Lim to have "lumbar strain." He was advised to continue
with his medication and to undergo physical therapy in a hospital nearer to his place of
residence or at UPH-DJTMC in Biñan, Laguna, but he reported to Dr. Lim every month for reevaluation. Respondent also underwent EMG test at the UPH-DJTMC on January 27, 2011
with the following findings: "chronic bilateral L5-S1 radiculopathies probably secondary to
a lumbar canal strenosis."
On April 15, 2011, Dr. William Chuasuan of MMC issued a disability rating "grade 11
— slight rigidity of 1/3 [loss of] motion or lifting power of the trunk." Borja, nevertheless,
continued his therapy at UPH-DJTMC because he was still suffering from back pain. He then
demanded for reimbursement of his medical expenses and for payment of total permanent
disability, but YMSI denied the claims. Hence, private respondent filed a complaint for
payment of salaries/wages for the unexpired portion of the contract, disability benefits
against petitioners with the Labor Arbiter.
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During the conciliation hearing, the parties agreed to refer private respondent for a
third (3rd) medical opinion but private respondent allegedly backed out of the agreement.
On August 20, 2011, private respondent consulted Dr. Manuel C. Jacinto, Jr. at Sta.
Teresita General Hospital, Quezon City, who diagnosed him with "chronic low back pain with
L5-S1 radiculopathy (9 months)." He was advised for "continuous therapy and repeat MRI"
and declared "physically unfit to return to work" or suffering from "total permanent
disability."
ISSUE
Whether Borja is entitled to total permanent disability benefits provided under
seafarer's disability compensation when the medical pronouncements of the companydesignated physician and the seafarer-appointed physician are conflicting.
RULING
YES. The pivotal issue for resolution is the degree of disability to determine the
amount of benefits due to him. Borja claims that his disability is total and permanent, as
certified by his appointed physician. On the other hand, petitioners claim that Borja's ailment
is only "Grade 11" as diagnosed by the company-designated physician.
Borja's employment with petitioners is covered by the POEA-SEC, hence the same
is considered the law between the parties. The last paragraph of Section 20 (B) (3) of
the POEA-SEC provides that in case there are conflicting findings as to the health condition
of the seafarer, a third doctor may be jointly agreed upon by the parties whose findings
shall be final and binding. The referral to a third doctor is mandatory when: (1) there is
a valid and timely assessment by the company-designated physician and (2) the appointed
doctor of the seafarer refuted such assessment.
The NLRC in a Resolution, directs all Labor Arbiters, during mandatory conference,
to give the parties a period of fifteen (15) days within which to secure the services of a
third doctor and an additional period of thirty (30) days for the third doctor to submit
his/her reassessment. The duty to signify the intention to resolve the conflict by referral
to a third doctor is upon the seafarer as he is the one contesting the findings of the
company-designated physician. Thus, without the referral to a third doctor, there
is no valid challenge to the findings of the company-designated physician. In the absence
thereof, the medical pronouncement of the company-designated physician must be
upheld.
In the Petition, petitioners allege that the parties agreed during the mandatory
conference before the Labor Arbiter to seek the opinion of a third doctor. However, this did
not materialize because on the next scheduled conference, Borja refused to submit to a
third doctor and demanded the payment of total permanent disability benefits. Thus, the
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conciliation proceedings were terminated, and the parties were directed to submit their
position papers.
Borja reasoned that he was not obliged to comply with the conflict-resolution
procedure under Section 20 (B) (3) of the POEA-SEC because he is already considered
totally and permanently disabled by operation of law because the company-designated
physician did not declare him fit to work within the 120-day and 240-day periods.
Borja's contention is untenable. Under Section 32 of the POEA-SEC, only those
illnesses or injuries classified as Grade 1 shall constitute total permanent disability.
Thus, those from Grade 2 to Grade 14 are considered as partial permanent disability,
subject to the schedule of rates also provided in the POEA-SEC. The lapse of the 120-day or
240-day period does not automatically entitle the seafarer to a total permanent
disability. It is the company-designated physician who will certify him as either fit to work
or classify his condition as partial or total permanent disability within the said periods.
The seafarer's condition is considered to be temporary total disability for the
duration of his treatment which shall have an initial maximum period of 120 days. If the
seafarer requires further medical treatment, the period may be extended to 240 days.
Within the said periods, the company-designated physician must make an assessment of
the seafarer's condition; that is, whether he is "fit to work" or if the seafarer's disability has
become partial or total permanent.
Notably, the Section 20 (B) (6) of the POEA-SEC itself provides that the disability
shall be based on the schedule provided therein and not on the duration of the seafarer's
treatment. However, if after the lapse of 240 days, the seafarer is still incapacitated to
perform his usual sea duties and the company-designated physician has not made any
assessment at all (whether the seafarer is fit to work or whether his permanent disability
is partial or total), it is only then that the conclusive presumption that the seafarer is totally
and permanently disabled arises.
In the present case, Borja arrived in the Philippines on November 25, 2010. He had
continuous check-ups at MMC. On March 11, 2011, he had a follow-up check-up where he
was advised to continue physical therapy and medications. He was advised to return on
April 1, 2011 for re-evaluation. Thus, the 120-day period (ending on March 25, 2011) was
justifiably extended as Borja required further medical treatment. On April 15, 2011 the
company-designated physician issued a disability rating of "Grade 11 — slight rigidity of
1/3 loss of motion or lifting power of the trunk" after Borja's follow up check-up. Thus, the
company-designated physician's assessment was made within the allowed 240-day period.
Therefore, such assessment must be upheld, in the absence of a contrary finding from a
third doctor agreed upon by both parties.
As certified by the company-designated physician, Borja's disability is Grade 11,
"slight rigidity or one-third (1/3) loss of motion or lifting power of the trunk." Accordingly,
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under the Schedule of Disability of Allowances in Section 32 of the POEA-SEC, the
compensation for such disability rating is 14.93% of US$50,000.00 or US$7,465.00.
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RICKMERS MARINE AGENCY PHILS., INC., GLOBAL MANAGEMENT LIMITED and/or
GEORGE C. GUERRERO vs. EDMUND R. SAN JOSE,
G.R. No. 220949, July 23, 2018, Second Division (Caguioa, J.)
DOCTRINE
The lapse of the 120/240-day period alone does not automatically entitle the seafarer
to total permanent disability compensation. In fact, the POEA-SEC itself provides that the
disability shall be based on the schedule provided therein and not on the duration of the
seafarer's treatment. However, this presupposes that the company-designated physician issued
a valid and timely assessment. Without the assessment, there will be no other basis for the
disability rating. Thus, it is mandatory for company-designated physician to issue his
assessment within the 120/240-day periods. Otherwise, the seafarer's illness shall be deemed
total and permanent disability.
FACTS
Complainant Edmund R. San Jose was engaged by Respondent local manning agency
Rickmers Marine Agency Phil., Inc. for deployment on board the vessel MV Maersk Edinburg
under a nine (9) month Standard POEA Employment Contract for Filipino Seamen. Before
deployment, Complainant underwent the necessary medical examinations and was declared
fit for work. Thereafter, Complainant departed on June 28, 2010 to join his vessel on and
assumed his post as a wiper/seaman.
Sometime in February 2011, Complainant upon waking complained of loss
of/impaired vision in his left eye. His condition was then reported to the ship's captain and
at the port of call in Singapore allowed for a medical examination of his left eye and
prescribed eye drops. Even as his condition did not improve, Complainant continued with
his journey and upon arrival in Le Havre, France, was seen by an ophthalmologist on
February 28, 2011 who diagnosed him with retinal detachment/tear and recommended for
medical repatriation. Upon arrival in Manila sometime in March 2011, Complainant was
referred to the Respondent's designated physician and was assessed to be suffering from
rhegmatogenous retinal detachment and was recommended for eye surgery to attach the
retina. He underwent surgery and was confined for a period of three (3) days.
Since the procedure to attach a detached retina requires more than one (1) surgical
operation, a second one was scheduled for September 2011. A medical certificate dated July
4, 2011 was then issued by the Respondents' designated physician that gave the Complainant
a Partial Temporary Disability Rating. Respondents' designated physician thereafter gave
him a "fit for work" rating on November 21, 2011 in so far as the cause of repatriation is
concerned Even after undergoing more than one (1) eye surgery, the sight of the
complainant in his left eye remains blurred if not impaired, thus he instituted this Complaint
on February 14, 2012.
Petitioners argue that respondent's illness was not work-related, as he had already
been certified by the company-designated physician as "fit to work" in a certification dated
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November 21, 2011. They also claim that the mere lapse of the 120/240-day period does not
automatically entitle the seafarer to disability compensation. On the US$420.00 award,
petitioners allege that respondent is not entitled thereto as he was medically repatriated,
and he was already given his sickness allowance. They also argue that the financial assistance
of P50,000.00 has no basis, and neither is respondent entitled to attorneys' fees.
Respondent contends that he is entitled to total and permanent disability benefits
because the company-designated physician did not issue any assessment within the
120/240-day period. Respondent was repatriated on March 3, 2011 and the medical
assessment was issued only on November 21, 2011 or a total of 263 days. Thus, he is
considered to be suffering from permanent total disability. Respondent also claims that
retinal detachment is work-related; and that the illness befell him while he was onboard the
vessel and during the term of the employment contract. Moreover, retinal detachment is
listed as an occupational disease.
ISSUE
Whether respondent is entitled to total permanent disability benefits.
RULING
YES. Respondent was medically repatriated and arrived in the Philippines on
March 3, 2011. Respondent was examined by the company-designated physician and was
diagnosed with "rhegmatogenous retinal detachment with proliferative vitreoretinopathy,
lattice degeneration, myopia" in the left eye. Respondent's condition necessitated two
operations on the affected eye, which he underwent on March 16, 2011 and September 18,
2011. On November 21, 2011, the company-designated physician issued a medical
report declaring him "fit to work." On February 14, 2012, respondent instituted a
complaint before the LA for total permanent disability benefits.
The cited 120/240-day periods can be found in Article 192 (c) (1) of the Labor Code
and Section 2, Rule X of the Amended Rules on Employees' Compensation implementing
Title II, Book IV of the Labor Code, as well as the POEA-SEC. The above provisions may be
condensed into the following guidelines:
1. The seafarer shall submit himself to a post-employment medical examination by a
company-designated physician within three working days upon his return. If
physically incapacitated to do so, written notice to the agency within the same period
shall be deemed compliance.
2. The seafarer shall cooperate with the company-designated physician on his medical
treatment and regularly report for follow-up check-ups or procedures, as advised by
the company-designated physician.
3. The company-designated physician must issue a final medical assessment on the
seafarer's disability grading within 120 days from repatriation. The period may be
extended to 240 days if justifiable reason exists for its extension (e.g., seafarer
required further medical treatment or seafarer was uncooperative).
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4. If the company-designated physician fails to give his assessment within the period of
120 days or the extended 240 days, as the case may be, then the seafarer's disability
becomes permanent and total.
On this note, it must be clarified that the lapse of the 120/240-day period alone does
not automatically entitle the seafarer to total permanent disability compensation. In fact,
Section 20 (B) (6) POEA-SEC itself provides that the disability shall be based on the schedule
provided therein and not on the duration of the seafarer's treatment. However, this
presupposes that the company-designated physician issued a valid and timely assessment.
Without the assessment, there will be no other basis for the disability rating. Thus, it is
mandatory for company-designated physician to issue his assessment within the
120/240-day periods. Otherwise, the seafarer's illness shall be deemed total and
permanent disability.
In the instant case, respondent was repatriated on March 3, 2011. He underwent the
first eye operation on March 16, 2011 (13 days from repatriation). His next operation was
performed on September 18, 2011 (or 199 days from repatriation). Justifiably, the extension
of the 120-day period was in order as the respondent required further treatment.
However, the company-designated physician's assessment of fitness to work was
issued only on November 21, 2011, which was 263 days from repatriation. Thus, the medical
assessment of respondent was made beyond the maximum 240-day period prescribed under
the POEA-SEC. As such, the disability of respondent is deemed total and permanent.
Thus, the seafarer's condition is considered to be temporary total disability for the
duration of his treatment which shall have an initial maximum period of 120 days. If the
seafarer requires further medical treatment, the period may be extended to 240 days. Within
the said periods, the company-designated physician must assess and certify the seafarer's
condition; that is, whether he is "fit to work" or if the seafarer's permanent disability has
become partial or total.
However, if after the lapse of 240 days, the company-designated physician has not
made any assessment at all (whether the seafarer is fit to work or whether his permanent
disability is partial or total), it is only then that the conclusive presumption that the seafarer
is totally and permanently disabled arises. Thus, in this case, respondent is entitled to the
total and permanent disability compensation of US$60,000.00 because the companydesignated physician failed to make an assessment within the 240-day period.
The CA was thus correct in reinstating the LA decision as regards the award of total
and permanent disability compensation. However, the award of attorney's fees, salaries for
the unexpired portion of the contract of US$420.00, and financial assistance of P50,000.00 is
erroneous for having no basis.
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Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
Being compelled to litigate is not sufficient reason to grant attorney's fees. The Court
has consistently held that attorney's fees cannot generally be recovered as part of damages
based on the policy that nopremium should be placed on the right to sue. Under Article 2208
of the Civil Code, factual, legal, and equitable grounds must be presented to justify an award
for attorney's fees. Absent a showing of bad faith on the part of petitioners, the award of
attorney's fees is deemed inappropriate.
The payment of salaries for the unexpired portion of the contract and financial
assistance is also erroneous. The Section 20 of the 2000 POEA-SEC mandates the
responsibilities of the employer when the seafarer becomes ill or injured. The employer shall
be liable for salaries of an injured or ill seafarer only while the latter is onboard the vessel.
However, the seafarer shall be entitled to a sickness allowance equivalent to his basic wage
computed from the time he signed off until he is declared fit to work or the degree of
disability has been assessed by the company-designated physician. In this case, there
is no dispute that petitioners paid respondent sickness allowance and covered the cost of his
repatriation and medical treatment.
Page 25 of 174
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
RAMCHRISEN H. HAVERIA vs. SOCIAL SECURITY SYSTEM, CORAZON DE LA PAZ, and
LEONORA S. NUQUE
G.R. No. 181154, August 22, 2018, Second Division (Caguioa, J.)
DOCTRINE
The SSSEA, a labor organization, cannot be considered an employer under the law. The
Labor Code expressly excludes labor organizations from the definition of an employer, except
when they directly hire employees to render services for the union or association. Thus, the
SSSEA was not an employer and Haveria was not its employee, but merely a member or officer
thereof. As a government employee, Haveria would have been qualified for voluntary coverage
under Section 9 (b) of R.A. No. 1161, had he registered as a voluntary member while working
with the SSS. However, he was registered as a compulsory member on the mistaken claim that
he was an employee of a private entity, the SSSEA. Consequently, his compulsory coverage while
supposedly employed with the SSSEA was erroneous.
However, in the interest of justice and equity, Haveria's contributions remitted by the
SSSEA shall be considered as voluntary contributions so that his contributions can reach the
minimum 120 monthly contributions for qualification to a retirement pension. The remainder
shall be returned to Haveria, subject to offsetting of the pensions paid to him in excess, if any.
FACTS
Haveria was employed with the SSS from May 1958 to July 1984. During his
employment, he became a member of, and was elected as an officer/treasurer of the SSS
Employees' Association (SSSEA). He was reported by the SSSEA as an employee for SSS
coverage and Haveria's membership was approved. Thereafter, the SSSEA remitted his
monthly contributions from May 1966 to December 1981.
After his employment with the SSS, Haveria was employed with private entities, Stop
Light Diners from July 1989 to December 1996 and then with First Ivory Pharma Trade from
January to March 1997. He earned a total of 281 monthly contributions. Haveria reached
retirement age (60 years old) on August 8, 1997. During his coverage under the SSS, Haveria
was able to obtain salary loans, a housing loan in 1968, partial disability benefits in 1995,
and retirement benefits from August 1997 until July 2002.
In June 2002, Haveria received a letter from the SSS which ordered the suspension of
Haveria's retirement benefits. The SSS held that he was not entitled to any benefits under
the Social Security Act of 1997 or Republic Act (R.A.) No. 8282 (SS Law) as there was no
employment relationship between the two and the SSSEA.
This prompted Haveria to file a letter-petition with SSC for the declaration of validity
of his SSS membership and restoration of his monthly pension. He argued that his monthly
Page 26 of 174
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
contributions to the SSS were valid as he was an employee of the SSSEA. He also averred that
the SSS had registered him as a member and accepted his monthly contributions. Assuming
that his registration was erroneous, he held that he is entitled to retirement pension on
grounds of equity and estoppel.
The SSC held that Haveria's coverage under the SSS was erroneous. It pointed out that
Haveria was not an employee of the SSSEA, but of the SSS, a government agency. It also held
that there was no employment relationship between Haveria and the SSSEA and that labor
unions or associations are not employers with respect to its officers or members. Further,
the SSC found that Haveria had made a total of 281 monthly contributions, more than the
minimum number of 120 monthly contributions for entitlement to a monthly pension.
However, Haveria's actual coverage started only in July 1989 when he was employed by Stop
Light Diners. While employed with Stop Light Diners, he remitted 90 monthly contributions
and with First Ivory Pharma Trade, Inc., three monthly contributions, for a total of 93 valid
monthly contributions.
In the interest of justice, the SSC held that the contributions remitted by the SSSEA
may be considered as voluntary contributions after March 1997, when last employer First
Ivory Pharma Trade remitted its final contribution. Being voluntary, the SSS may credit only
such number of monthly contributions to satisfy the required 120 monthly contributions
minimum for eligibility to the monthly pension. The SSS was further ordered to refund any
remaining premiums to Haveria. The pensions prematurely paid to Haveria were also to be
offset with his future pensions.
The SSS contends that the SSSEA is not an employer but a mere labor association
within the SSS. It does not undertake any kind of business or service. It merely acts as
representative of the members of the association. Furthermore, Haveria's relationship with
the SSSEA did not pass the four-fold test. He was not hired by SSSEA but merely elected by
its members as an officer/treasurer. He was not receiving a salary but merely an honorarium.
Moreover, Haveria was employed with the SSS. He could not have been an employee of the
SSSEA at the same time as he was a full-time government employee.
ISSUE
Whether Haveria's inclusion as a compulsory member of the SSS was valid and
consequently, whether he is entitled to receive monthly pensions.
RULING
NO. SSSEA was not an employer and Haveria was not its employee, but merely a
member or officer thereof. However, in the interest of justice and equity, Haveria's
Page 27 of 174
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
contributions remitted by the SSSEA shall be considered as voluntary contributions so that
his contributions can reach the minimum 120 monthly contributions for qualification to a
retirement pension. The remainder shall be returned to Haveria, subject to offsetting of the
pensions paid to him in excess, if any.
Haveria was registered with the SSS in May 1966 when R.A. No. 1161 was still
effective. Under R.A. No. 1161, there are two kinds of coverage: compulsory coverage and
voluntary coverage. Compulsory members are those employees in the private sector
between the ages of 18 to 60 years old whose employer is required to register under the SSS.
Voluntary coverage applies to employees of private employers who volunteer to be
members although not required by the law, and employees of government agencies and
corporations, and any individual employed by a private entity not subject to compulsory
membership.
Voluntary coverage was expanded by R.A. No. 8282 to include spouses who devote
full time to management of the household and overseas Filipino workers. Compulsory
membership was likewise expanded to include self-employed professionals, partners and
single proprietors of business, actors, actresses, news correspondents, professional athletes,
coaches, trainers, jockeys, and individual farmers and fishermen.
For compulsory members, both the employer and employee contribute to the
employee's monthly premium contributions. Voluntary members pay for their own
monthly premiums; as such, they are required to pay twice the amount of the employee's
contribution prescribed in Section 19 of R.A. No. 1161.
Here, Haveria was reported by the SSSEA as an employee, and he claims coverage as
a compulsory member of the SSS. As correctly held by the SSC and CA, the SSSEA, a labor
organization, cannot be considered an employer under the law. The Labor Code expressly
excludes labor organizations from the definition of an employer, except when they directly
hire employees to render services for the union or association. Aside from his bare allegation
that he was an employee of the SSSEA, Haveria did not present any other fact to substantiate
his claim of employment with the SSSEA. He did not state his day-to-day duties or
responsibilities and work hours; he did not even present proof of employment such as pay
slips and contract of employment. Thus, the SSSEA was not an employer and Haveria was not
its employee, but merely a member or officer thereof.
As a government employee, Haveria would have been qualified for voluntary
coverage under Section 9 (b) of R.A. No. 1161, had he registered as a voluntary member
while working with the SSS. However, he was registered as a compulsory member on the
Page 28 of 174
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
mistaken claim that he was an employee of a private entity, the SSSEA. Consequently, his
compulsory coverage while supposedly employed with the SSSEA was erroneous.
Thus, Haveria's compulsory coverage with the SSS validly started only in 1989 when
he was reported as an employee of private employer, Stop Light Diners until his retirement
with his second private employer, First Ivory Pharma Trade, Inc. in 1997.
On the issue of estoppel, the Court holds that the principle cannot be invoked against
the SSS. It was the SSSEA and Haveria who made the incorrect representation to the SSS that
an employment relationship existed between them. As a result of said representation, the
SSS erroneously registered Haveria as a compulsory member. Thus, Haveria cannot claim
estoppel against the SSS as the latter merely relied on the former's representation.
Thus, the Court agrees with the ruling of the SSC, as affirmed by the CA, that, in the
interest of justice and equity, Haveria's contributions remitted by the SSSEA shall be
considered as voluntary contributions so that his contributions can reach the
minimum 120 monthly contributions for qualification to a retirement pension. The
remainder shall be returned to Haveria, subject to offsetting of the pensions paid to
him in excess, if any. The SSS shall make a recomputation of all paid monthly pensions of
Haveria and make necessary adjustment thereto.
Page 29 of 174
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
AMALIA S. MENEZ (In behalf of the late JONATHAN E. MENEZ) vs. STATUS MARITIME
CORPORATION, NAFTOTRADE SHIPPING AND COMMERCIAL S.A., and MOILEN
ALOYSIUS VILLEGAS,
G.R. No. 227523, August 29, 2018, Second Division (Caguioa, J.)
DOCTRINE
In order for the beneficiaries of a seafarer to be entitled to death compensation from the
employer, it must be proven that the death of the seafarer (1) is work-related; and (2) occurred
during the term of his contract."
FACTS
Petitioner is the surviving spouse of deceased seafarer, Jonathan, with whom she has
three (3) children. On February 20, 2009, Jonathan was hired by Status Maritime
Corporation (private respondent), a local manning agency engaged in the recruitment
and/or deployment of Filipino seafarers for its foreign principal, Naftotrade. Jonathan
passed the pre-employment medical examination (PEME) and had been declared fit for sea
service.
On February 25, 2009, Jonathan was deployed and embarked on the M/V
Naftocement II, a vessel carrying cement. As 2nd engineer, Jonathan was exposed to undue
pressure and strain as he was required to be on call twenty-four (24) hours a day to monitor
the condition of the vessel's engine. Such pressure and strain was aggravated by being away
from his family for months on end. Due to long hours of duty in the engine room, Jonathan
felt dizzy and nauseous; however, he just ignored it, thinking that it was only due to fatigue.
Jonathan also experienced redness of his eyes and purple patches on his skin, but he did not
mind it as it was not painful. He also suffered bleeding gums, prolonged nosebleed and severe
urinary and gastrointestinal hemorrhage, but these were not entered in the ship's logbook
despite the knowledge of the ship master.
On September 11, 2009, Jonathan disembarked and arrived in the Philippines on
September 12, 2009. Thinking that his illness was not serious, Jonathan immediately went
to his hometown in Bacolod City. He did not submit to a post-employment medical
examination in anticipation of another deployment with private respondents.
Upon Jonathan's arrival, petitioner was shocked at Jonathan's hemorrhage. Jonathan
rested to recover his strength, but his health deteriorated. Days after, Jonathan noticed traces
of blood in his urine which prompted petitioner to bring him to Dr. Togle, an internistnephrologist. The medical result showed that Jonathan had "Borde[r]line Prostatic Size
(23gms). Symmetrical Small Cystic Dilatation of the Ejaculatory Duct. Tiny Right Renal Cortical
Cyst. Negative for Urinary Tract Stone or Obstruction."
Page 30 of 174
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Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
On October 29, 2009, Jonathan was admitted at The Doctors' Hospital, Inc., Bacolod
City for gum bleeding and redness of the eye. He underwent hematology examination,
roentgenoscopy and chest PA. The examinations revealed that Jonathan had acute
myelogenous leukemia and was recommended for bone marrow aspiration. Jonathan was
discharged from the hospital on the same day. He went home to recuperate while taking his
medicines.
On November 4, 2009, Jonathan was admitted to the Bacolod Our Lady of Mercy
Specialty Hospital, Bacolod City, for the same complaint of epigast[r]ic pain and there, he was
diagnosed with: (a) uncal herniation 2 to the parenchymal hemorrhages, right frontal and
temporal cortical areas; (b) upper GI bleed; and (c) acute myelogenous leukemia. On
November 11, 2009, Jonathan died from his illness at the Bacolod Our Lady of Mercy
Specialty Hospital, Bacolod City.
Petitioner argues that Jonathan's death due to acute myelogenous leukemia is
compensable because it is work-related, and that Jonathan's death occurred during the term
of his employment as his symptoms manifested during the term of his employment.
ISSUE
Whether Jonathan's death is compensable under the 2000 POEA-SEC.
RULING
NO. Here, petitioner failed to comply with the requirement under Section 20 (B) of
the 2000 POEA-SEC that he should appear before the company-designated doctor.
Although this rule is not absolute, petitioner failed to provide a reason for Jonathan's failure
to report within three (3) days from repatriation. If Jonathan, as petitioner claims, was
already experiencing bleeding gums, prolonged nosebleed and severe urinary and
gastrointestinal hemorrhage even before his repatriation, then it was imperative that he
reported this to his employer as soon as he arrived in the Philippines and have himself
checked by the company-designated physician.
Even if the Court were to excuse Jonathan's failure to comply with the reporting
requirement, petitioner failed to prove that Jonathan's death was work-related and
compensable.
Here, petitioner failed to prove by substantial evidence the causal connection
between Jonathan's death and the nature of his work. Absent any medical report or any
relevant document showing that Jonathan contracted the illness during the term of his
employment, such claim is just a mere allegation.
Page 31 of 174
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
Further, the death of Jonathan occurred two (2) months after the expiration of his
contract, thus, there was a failure to comply with the requirement that the death should have
occurred during the term of the contract. The only exception to this rule is when the death
occurs after the employee's medical repatriation, which is absent in this case as Jonathan
was repatriated because of the expiration of his contract.
Page 32 of 174
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
CHRISTIAN ALBERT A. CARIÑO, vs. MAINE MARINE PHILS., INC., MISUGA KAIUN CO.
LTD., AND CORAZON GUESE-SONGCUYA,
G.R. No. 231111, October 17, 2018, Second Division (Caguioa, J.)
DOCTRINE
The POEA-SEC contemplates three liabilities of the employer when a seafarer is
medically repatriated: (a) payment of medical treatment of the employee, (b) payment of
sickness allowance, both until the seafarer is declared fit to work or when his disability rating
is determined, and (c) payment of the disability benefit (total or partial), in case the seafarer is
not declared fit to work after being treated by the company-designated physician.
FACTS
A complaint for permanent and total disability benefits, payment of sickness
allowance, reimbursement of medical and related expenses, damages and attorney's fees
was filed by Christian Albert Cariño, against Maine Marine before the labor arbiter.
Complainant Cariño alleged that he was hired by respondents as deck boy aboard
"M/V Raga". On August 9, 2013, while performing his duties, he accidentally slipped into a
manhole; due to said accident, he experienced severe pain [in] his right ankle and was
immediately brought to the ship hospital. On August 14, 2013, he was brought to Vishwa
Sanjivani Health Center in Mormogao, India for medical treatment; his x-ray examination
showed that he sustained multiple fractures, thus, he underwent an emergency operation.
He was discharged [on] August 15, 2013 and was advised to rest at the ship's cabin.
He was repatriated for medical reasons on August 17, 2013. After his arrival, he was
referred to Dr. Tacata of Manila Doctors Hospital who merely removed the suture from [the]
operation and advised him of the next schedule for a follow-up. On September 10, 2013, he
reported to the NGC Medical Clinic and his feet [were] cleaned and [the] dressing changed.
During said visit, he was informed by NGC Medical Clinic that Respondent Maine Marine
withheld approval of further treatment and was advised to await approval. Despite his
persistent demands and repeated follow-ups, the schedule of his next treatment never came.
He sent a Letter dated October 28, 2013 to Respondent [Maine Marine] requesting for
approval of further treatment and release of his sickness allowance. As result of
respondents' continuing refusal to provide him medical attention, he was constrained to
consult an independent doctor. It was found that due to a problem [with] his right ankle, he
cannot perform strenuous and vigorous activities of a seaman therefore, he is unfit to be a
seaman in whatever capacity. Further, it was found that as his injury is work-related and
given the failure of the company-designated physician to make an assessment of his
condition after the lapse of 120 days, he is entitled to permanent and total disability benefits,
sickness allowance, damages and attorney's fees.
Page 33 of 174
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Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
On the other hand, respondents argue that complainant is not entitled to permanent
and total disability benefits because he abandoned his medical treatment with the companydesignated physician.
ISSUES
1. Whether Cariño had abandoned his treatment with the company-designated
physician so as to deny him permanent and total disability benefits.
2. Whether Cariño is entitled to benefits under the CBA.
3. Whether Cariño is entitled to moral and exemplary damages.
RULING
1. NO. Petitioner did not abandon his treatment.
Indeed, Cariño failed to appear during his September 17, 2013 appointment with the
company-designated physician. But, he cannot be faulted for this because it was his
employer that failed to pay his sickness allowance and to confirm the approval of his
medical treatment, causing him to fail to appear during the September 17, 2013
appointment.
The employer has the duty to provide all the medical treatment to a medically
repatriated seafarer. It also has to pay the sickness allowance based on his daily wage until
the seafarer is declared fit. This is clear from Section 20 (A) (2) and (3) of the POEA-SEC.
Here, even though the company-designated physician scheduled a check-up on
September 17, 2013, Cariño's failure to attend the same was not because he abandoned his
treatment; rather, it was because Maine Marine, as confirmed by Talavera, had not approved
his medical examination and the reimbursement of expenses. Cariño even sent a letter to
Maine Marine where he informed Maine Marine that he needed the sickness allowance to
cover the expenses of his travel to go to Manila, and that Maine Marine should approve the
continuation of his treatment.
As a principle, the POEA-SEC is imbued with public interest; and "its provisions must
be construed fairly, reasonably and liberally in favor of the seafarer in the pursuit of his
employment on board ocean-going vessels." In reading the provisions of POEA-SEC, the full
protection of labor, both local and overseas must be guaranteed. Thus, following the
foregoing, the provision of Section 20 (A) of the POEA-SEC should be read reasonably and
favorably in favor of the seafarer.
Page 34 of 174
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
The duty of the seafarer to be present during the appointments with the companydesignated physician should be viewed together with the duty of the employer to provide
medical treatment and pay the sickness allowance of the seafarer. Here, Cariño had a reason
for his failure to appear during the scheduled check-up on September 17, 2013: he
had no money to pay for his travel expenses from La Union to Manila as Maine Marine had
not paid his sickness allowance, and based on his conversation with Talavera, Maine Marine
had yet to approve his treatment with the company-designated physician. Cariño had also
consistently followed-up with Talavera and even wrote the letter to Maine Marine
requesting for the payment of his sickness allowance and the approval of his treatment. Far
from abandoning his treatment, he made every effort to ensure his treatment would
continue. It was Maine Marine that failed to pay his sickness allowance and to ensure he
received medical treatment.
It is therefore imperative that companies like Maine Marine provide medical
treatment and reimburse medical expenses as soon as possible following the POEA-SEC. The
sickness allowance should also be timely and regularly paid while the seafarer is sick as this
takes the place of the seafarer's wages. To delay in providing the foregoing would be
tantamount to a breach of the employer's obligations under the POEA-SEC, especially if this
delay is the very reason for a seafarer's failure to attend a scheduled appointment with the
company-designated physician.
What is apparent from the record is that Maine Marine's failure to provide Cariño's
sickness allowance, to reimburse his medical expenses, and to ensure that he would be
treated, was the reason he failed to appear during the appointment. Cariño could not risk
travelling to Manila after having been informed by Talavera that his treatment had yet to be
approved, and without any money because of the non-payment of his sickness allowance. To
fault him for this, despite all his efforts before and after September 17, 2013 to get approval
of his treatment and for the payment of his sickness allowance, is oppressive and unjust.
The company-designated physician and the employer cannot therefore use Cariño's
non-appearance during the September 17, 2013 appointment as an excuse for failing to
arrive at an assessment within 120 days from the time Cariño reported for assessment. As
the company-designated physician's failure to arrive at a final assessment is considered
without any justifiable reason, making Cariño's disability total and permanent.
2. YES. Cariño is entitled to benefits under the CBA. Under Section 20 (A) (3) of the POEASEC, a seafarer is entitled to sickness allowance equivalent to his basic daily wage until he
is declared fit to work or the degree of permanent disability has been assessed by the
company-designated physician.
Page 35 of 174
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Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
Here, it is also beyond dispute that Maine Marine had not paid Cariño's sickness
allowance. For purposes of computing his sickness allowance, Cariño is entitled to sickness
allowance for 120 days, as after the lapse thereof, his disability became total and
permanent because of the company-designated physician's failure to issue an assessment
of his fitness to work or degree of permanent disability.
Further, since Cariño's disability is deemed total and permanent, he is also entitled to
the total and permanent disability benefit following the CBA of the Associated Marine
Officers' and Seamen's Union of the Philippines (AMOSUP). To allow Maine Marine to escape
liability on the simple ground that the CBA had been belatedly submitted, when the
employment contract which it also signed clearly states that Cariño is covered by the CBA,
would be the height of injustice.
3. YES. The Court agrees with the LA but increases the moral and exemplary damages to
P100,000.00 each because of Maine Marine's incredibly callous treatment of Cariño's
situation. Indeed, Maine Marine reneged on its obligation to pay Cariño's sickness allowance,
and failed to provide medical treatment, even if Cariño was medically repatriated due to an
accident that occurred during the existence of an employment contract with Maine Marine.
Cariño repeatedly asked Maine Marine to approve his treatment, but this never came. Worse,
despite reneging on its obligation to pay sickness allowance, Maine Marine feigned ignorance
of the applicability of the AMOSUP's CBA despite the clear stipulation in Cariño's
employment contract.
Again, in work-related injuries resulting in a medical repatriation, companies such as
Maine Marine should consider the significance of the payment of sickness allowance and the
medical treatment of the seafarer. These benefits are to aid a seafarer whose source of
income is cut short because of an event that is usually beyond their control. Companies like
Maine Marine should strictly comply with their contractual obligations and not give
seafarers the run-around, as what happened in this case. Given Cariño's injury and the
manner by which he was treated by Maine Marine, he is entitled to moral and exemplary
damages.
As the LA correctly ruled, Cariño is likewise entitled to attorney's fees at ten percent
(10%) of the total monetary awards following Article 2208 of the New Civil Code, "which
allows its recovery in actions for recovery of wages of laborers and actions for indemnity
under the employer's liability laws."
Finally, Maine Marine is likewise liable for legal interest at the rate of six percent (6%)
per annum from the finality of this Decision until full satisfaction.
Page 36 of 174
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By: USTFCL Dean’s Circle for AY 21-22
Following Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995, as
amended, respondents are jointly and severally liable for the foregoing monetary awards.
Page 37 of 174
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By: USTFCL Dean’s Circle for AY 21-22
HENRY R. ESPOSO vs. EPSILON MARITIME SERVICES, INC., W-MARINE, INC. AND MR.
ELPIDIO C. JAMORA
G.R. No. 218167, November 7, 2018, Second Division (Caguioa, J.)
DOCTRINE
Considering the allegations of Esposo that he had been suffering the symptoms of his
illness while he was onboard the vessel, he should have then submitted himself to Epsilon for
referral to a company-designated physician who could have conducted the necessary postemployment medical examination within 3 days from his repatriation.
Esposo still failed to show that his illness was work-related and compensable. For
disability to be compensable under Section 20-B of the POEA-SEC, two (2) elements must
concur: (1) the injury or illness must be work-related; and (2) the work-related injury or illness
must have existed during the term of the seafarer's employment contract.
FACTS
Esposo had been continuously hired by respondent Epsilon, for and in behalf of WMarine, Inc. as Chief Engineer since September 8, 2011.
Prior to this, Esposo underwent a Pre-Employment Medical Examination on October
19, 2012 and on October 25, 2012, wherein he was declared fit to work albeit with the
recommendation, "Hypertension Controlled with medication." On November 22, 2012,
Esposo boarded the vessel M/V W-ACE. On June 20, 2013, he returned to the Philippines
after his contract expired. On October 2, 2013, he filed the present complaint for payment of
disability benefits with the LA.
According to Esposo, sometime in the last week of April 2013, while in the
performance of his duties onboard the vessel, he felt uncomfortable and experienced severe
chest pains, dizziness, difficulty of breathing, severe headache and persistent perspiration.
He reported the matter to the Master of the vessel but was advised to just wait for his
repatriation since his contract was then about to end. His discomfort continued and he was
repatriated on June 20, 2013. The following day, he reported to Epsilon for his postemployment medical examination. However, Epsilon merely informed him to take a rest and
to wait for their call.
Due to his deteriorating condition, Esposo was not able to wait for Epsilon's call and
instead sought medical examination and treatment from an independent physician. Esposo
was diagnosed with Coronary Heart Disease with a recommendation that he undergo further
tests. He was declared unfit to work from October 1, 2013-December 31, 2013.
Page 38 of 174
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By: USTFCL Dean’s Circle for AY 21-22
Esposo claims that Epsilon never communicated with him nor provided him with the
necessary medical attention or financial assistance. Hence, he was compelled to shoulder all
expenses for his examinations, medications and hospitalization. Thus, alleging that his health
condition did not improve despite the lapse of more than one hundred twenty (120) days
and having been found unfit for seafaring duties in any capacity by his independent
physician, Esposo filed the present complaint, against respondents, for disability benefits,
permanent disability compensation in accordance with his Collective Bargaining Agreement
(CBA), sickness allowance for 130 days, reimbursement of medical and hospitalization
expenses especially the cost of his coronary artery by-pass, moral and exemplary damages
and attorney's fees and other benefits provided by law and his CBA.
On the other hand, respondents aver that during the entire stay of Esposo on board
the vessel, he never complained of, suffered from, nor requested for, medical assistance for
any health concerns except for one incident on December 17, 2012 involving "skin burn" as
reflected in the vessel logbook. Towards the expiration of his contract, Esposo executed a
Resignation Report requesting to be repatriated due to the impending expiration of his
contract on May 21, 2013. After completion of his contract, Esposo signed off from the vessel
and arrived in Manila on June 20, 2013. Without submitting himself for mandatory postemployment medical examination within three (3) days from his arrival in the Philippines,
Esposo filed the present complaint.
ISSUES
1. Whether Esposo reneged on his duty to submit to a post-employment medical
examination within 3 working days from his repatriation.
2. Whether Esposo failed to present substantial evidence that his illness was work
related and was existing during the time of his employment; hence the same is not
compensable.
RULING
1. YES. The company was not at all able to assess Esposo's illness because he failed to
submit himself for medical examination within the required three-day post-repatriation
period under Section 20-B (3) of the POEA-SEC.
Hence, considering the allegations of Esposo that he had been suffering the symptoms
of his illness while he was onboard the vessel, he should have then submitted himself to
Epsilon for referral to a company-designated physician who could have conducted the
necessary post-employment medical examination within three (3) days from his
repatriation on June 20, 2013 or until June 22, 2013.
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Esposo's claim that, upon his repatriation, he immediately reported to Epsilon for
medical examination but that the latter failed to provide him with any medical attention,
does not inspire belief. The records are bereft of any proof that he reported to Epsilon. Being
a veteran seafarer knowledgeable in the employers' obligations under compensation laws.
Having failed to comply with the mandatory reporting requirements, Esposo's claim
for disability benefits must fail. This holds true notwithstanding that he was examined by a
private physician within the three-day period. Under the POEA-SEC, it is the companydesignated physician who is required to assess a seaman's disability.
Hence, for failing to comply with the three-day reporting requirement, Esposo
effectively had forfeited his right to claim disability benefits as expressly provided under
Section 20-B (3) of the POEA-SEC.
2. YES. Even if the requirement as discussed above is dispensed with, Esposo still failed to
show that his illness was work-related and compensable. For disability to be compensable
under Section 20-B of the POEA-SEC, two (2) elements must concur: (1) the injury or
illness must be work-related; and (2) the work-related injury or illness must have
existed during the term of the seafarer's employment contract.
Relevantly, the 2000 POEA-SEC defines "[w]ork-[r]elated illness" as "any sickness
resulting to disability or death as a result of an occupational disease listed under
Section 32-A of [the] Contract with the conditions set therein satisfied."
Hence, although cardio-vascular diseases are listed as occupational diseases, still, to
be compensable under the POEA-SEC, all of the four (4) general conditions for occupational
diseases under Section 32, plus any one (1) of the conditions listed under Section 32-A
for cardio-vascular diseases, must nonetheless be proven to have obtained and/or be
obtaining. Moreover, the same must be work-related and must have existed during the term
of the seafarer's employment.
In the present case, Esposo failed to substantially prove his claim that his illness was
work-related or that it was existing during the time of his employment with Epsilon. He failed
to show that his illness was known to have been present during his employment or that the
nature of his work brought an acute exacerbation thereof as required under Section 32-A
(11) (a).
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Although there is no dispute that he was suffering from a cardio-vascular disease at
the time that he filed the complaint, no proof was presented that such illness subsisted prior
to the expiration of his employment contract or even up to the day of his repatriation. Much
as he claims that as early as in April 2013, during his employment, he was already feeling
severe chest pains and other discomfort, Esposo never presented any written note, request
or record about any medical condition to that effect or any medical check-up, consultation
or treatment prior to his repatriation.
On the other hand, respondents submitted in evidence a copy of the Medical Vessel
Logbook which shows that the only time Esposo complained of a medical condition was on
December 17, 2012 when he reported experiencing "skin burn."
Indeed, the fact alone that Esposo was repatriated due to the termination of his
contract and not due to a medical condition already weighs strongly against his claims. The
Court had, in the past, ruled that repatriation for an expired contract belies a seafarer's
submission that his ailment was aggravated by his working conditions and that it was
existing during his term of employment.
Further, Esposo’s medical certificate does not prove the work-causation or workaggravation of Esposo's disease. Neither does it prove that Esposo, prior to proceeding to a
private doctor, asked for, and was refused, medical attention by respondents. This holds
especially true in light of the substantial documentary evidence of respondents against
which Esposo's medical certificate issued by a private physician cannot stand.
Hence, given Esposo's utter lack of evidence to support his claim that he was already
suffering his illness when he was onboard respondents' vessel and that his illness was workrelated as against the undisputed documentary evidence of respondents belying such claims
coupled with the established fact that he was not medically repatriated, he cannot be
compensated for his illness.
In sum, Esposo cannot be awarded the total and permanent disability benefits that he
seeks. His complaint was filed prematurely, he was in breach of his contractual obligation to
submit to a company-designated physician within the required period, and he failed to prove
by substantial evidence the compensability of his illness.
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MARVIN O. DAGUINOD vs. SOUTHGATE FOODS, INC., represented by MAUREEN O.
FERRER and GENERATION ONE RESOURCE SERVICE AND MULTI-PURPOSE
COOPERATIVE, *represented by RESTY CRUZ
G.R. No. 227795, February 20, 2019, Second Division (Caguioa, J.)
DOCTRINE
Under Section 4 (a) of DO 18-02, legitimate labor contracting or subcontracting refers
to an arrangement whereby a principal agrees to put out or farm out with a contractor or
subcontractor the performance or completion of a specific job, work or service within a definite
or predetermined period, regardless of whether such job, work or service is to be performed or
completed within or outside the premises of the principal. The "principal" refers to any
employer who puts out or farms out a job, service or work to a contractor or subcontractor.
Further, the "right to control" must be exercised by the contractor, otherwise, the
arrangement shall be considered to be labor only contracting.
FACTS
Petitioner Marvin O. Daguinod was assigned as counter crew/cashier of a Jollibee
Alphaland pursuant to a Service Agreement between Generation One and the franchise
operator Southgate (collectively respondents). Under the Service Agreement, Generation
One was contracted by Southgate to provide "specified non-core functions and operational
activities" for its Jollibee Alphaland branch.
Daguinod also executed a Service Contract dated September 9, 2010 with Generation
One which stated that Generation One was contracted by Southgate to perform "specified
peripheral and support services." The specific work responsibilities to be performed by
Daguinod were left blank.
Petitioner's version of events
Daguinod alleges that on April 10, 2011, he was given a cash fund of P5,000.00. After
serving one of the customers, Security Guard Rivero approached him and asked for the
receipt of the last customer who had ordered a longanisa breakfast meal. Daguinod realized
that he had put the customer's payment inside the cash register without the corresponding
receipt so he had it "punched in." Thereafter, Rivero took the receipt and told Daguinod that
he had committed a "pass out" of transaction. Rivero asked for assistance from the manager
on duty, Jane Geling. The latter conducted an audit and verification of the sales which
revealed that the cash in the register was in excess of P106.00.
Daguinod was then brought into a function room inside Jollibee Alphaland with
Rivero keeping guard over him. Geling went into the room and accused Daguinod of theft.
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Daguinod reasoned that he did not commit any theft as in fact there was an overage of cash
in the register. Geling did not believe him and told him that if he confessed, he would be
forgiven and he could continue working. Daguinod was given two Notices to Explain (NTE).
In the first NTE, he was made to explain the overage in the cash register. In the second NTE,
he was charged with using the manager's swipe card without authority. Daguinod was
directed to immediately answer the two NTEs. In the first NTE, Daguinod alleges that he was
instructed to write the sentence: "Opo Mam, inaamin ko na po na nagpassout po ako, 2nd
week po ng March, [P]5,500.00." In the second NTE, Daguinod wrote: "Di ko po alam, mam,
nalito na po ako kaya di ko nabilang ang 50's. Nakita ko po yung [unintelligible] ni S' Aldrin
tapos ginamit ko po. Isang buwan ko na pong ginagamit."
Daguinod was then brought to the Police Station where he was accused of Qualified
Theft and put in jail. He was made to write a confession letter in exchange for his release
from jail. He did not want to write the confession but he acceded as he had already spent two
days in jail.
Respondents' counter-allegations
Generation One admitted that Daguinod was its employee. The cooperative alleged
that Southgate had discovered the attempted act of dishonesty of Daguinod on April 10,
2011. For its part, Southgate asserted that Daguinod was an employee of Generation One and
not Southgate. Southgate further alleged that the complaint for illegal dismissal was merely
retaliatory as it was Southgate employees who discovered that Daguinod was attempting to
steal funds from Southgate. On the issue of labor-only contracting, both Generation One and
Southgate averred that Generation One is a legitimate labor contractor and that the Service
Agreement between the two companies was valid.
ISSUES
1. Whether Generation One is a legitimate labor contractor.
2. Whether Daguinod's dismissal was valid.
3. Whether Daguinod is entitled to full backwages, separation pay, moral and exemplary
damages, and attorney's fees.
RULING
1. NO. Generation One is not a legitimate labor contractor. Daguinod is a regular
employee of Southgate.
The outsourcing of services is not prohibited in all instances. In fact, Article
106 of the Labor Code provides the legal basis for legitimate labor contracting. This
provision is further implemented by DO 18-02.
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Meanwhile, labor-only contracting is prohibited and defined under Section 5 of DO
18-02. There is labor-only contracting where: (a) the person supplying workers to an
employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others; and (b) the workers recruited
and placed by such person are performing activities which are directly related to the
principal business of the employer. When there is labor-only contracting, Section 7 of DO
18-02 describes the consequences thereof as “the principal shall be deemed the employer
of the contractual employee in any of the following case, as declared by a competent.
Based on the foregoing, one of the factors in determining whether there is labor-only
contracting is the nature of the employee's job, i.e., whether the work he performs is
necessary and desirable to the business of the principal.
In this particular case, it was established that Daguinod was assigned as a counter
crew/cashier in Jollibee Alphaland. The Service Contract of Daguinod with Generation One
does not disclose the specific tasks and functions that he was assigned to do as counter
crew/cashier. Thus, the Court must refer to the Service Agreement between Generation One
and Southgate which lists the "non-core" functions contracted out by Southgate.
Daguinod was assigned to perform cash control activities which entails gathering of
orders and assembling food on the tray for dine-in customers or for take-out. As cashier,
Daguinod was also tasked to receive payments and give change. These tasks are
undoubtedly necessary and desirable to the business of a fast food restaurant such as
Jollibee. The service of food to customers is the main line of business of any restaurant.
It is not merely a non-core or peripheral activity as Generation One and Southgate claim. It
is in the interest of Southgate, franchise owner of Jollibee, that its customers be served food
in a timely manner. Respondents' position that the gathering of orders and service of food to
customers are "non-core" functions or peripheral activities is simply preposterous and is
contrary to the basic business model of a fast food restaurant. These circumstances lead
to no other conclusion than that Daguinod was a regular employee of Southgate and that
Generation One was a mere agent of Southgate.
The ownership of substantial capital in the form of tools, equipment, machineries,
work premises, and other properties, by the contractor is another factor in establishing
whether it is legitimate. The NLRC held that Generation One was able to prove that it had
substantial capital, proving that it was a legitimate labor contractor. The Court disagrees.
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Generation One submitted only one Income Tax Return for the year ended December
2010 showing a gross income of P9,564,065.00. The submission of one ITR for one fiscal
year can hardly be considered substantial evidence to prove that the cooperative has
substantial capital. Furthermore, the Court cannot give credence to the ITR as it does not
appear to have been submitted to the Bureau of Internal Revenue. Generation One likewise
did not submit any Audited Financial Statements to show its assets, liabilities, and equity. It
only submitted the Notes to the AFS for the year ended 2010 which does not show a complete
picture of its financial standing. In fine, the documents submitted are insufficient to prove
that Generation One possesses substantial capital to be considered a legitimate labor
contractor.
Further, the CA also relied on the Certificate of Registration as an independent
contractor issued by the DOLE to Generation One. However, the Court has previously ruled
that said registration is not conclusive evidence of legitimate status. The fact of
registration simply prevents the legal presumption of being a mere labor-only
contractor from arising. In distinguishing between permissible job contracting and
prohibited labor-only contracting, the totality of the facts and the surrounding
circumstances of the case are to be considered.
Thus, registration with DOLE as an independent contractor does not
automatically vest it with the status of a legitimate labor contractor, it is merely
presumptive proof. In the instant case, the totality of circumstances reveals that Generation
One, despite its DOLE registration, is not a legitimate labor contractor.
Further, Section 5 of DO 18-02 speaks of a second instance, where the "right to
control" must be exercised by the contractor, otherwise, the arrangement shall be
considered to be labor only contracting. The Court notes that the administrative
investigation was conducted by Jollibee Alphaland's manager-on-duty Geling, in the
presence of security guard Rivero. The handwritten NTEs, although bearing the header and
name of Generation One were served upon Daguinod by Southgate manager Geling. Thus,
Southgate took it upon itself to discipline Daguinod for an alleged violation of its company
rules, regulations, and policies, validating the presence of its right to control Daguinod.
A perusal of Daguinod's Service Contract shows that the specific work responsibilities
were unspecified, leaving the "[o]ther requirements to perform the services [to] be part of
the orientation at the designated place of assignment," thus, suggesting that the right to
determine not only the end to be achieved, but also the manner and means to achieve that
end, was reposed in Southgate. Consequently, Southgate shall be deemed as the direct
employer of Daguinod. The Court holds that it was erroneous for the CA to place reliance on
the contracts as the provisions therein are not the sole determining factor in ascertaining the
true nature of the relationship between the principal, contractor, and employees.
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In the instant case, the badges of labor-only contracting are too blatant to ignore and
the Court cannot blindly rely on the contractual declarations of respondents. With the finding
that Generation One is a labor-only contractor, Daguinod is considered a regular employee
of Southgate, as provided under Section 7 of DO 18-02.
2. YES. There was non-compliance with procedural due process as the NTEs did not contain
the specific information required under the law. Moreover, Daguinod was not given a
reasonable opportunity to submit his written explanation as he was ordered to immediately
answer the NTEs.
The CA and labor tribunals no longer discussed the above requirements as it accepted
Generation One's assertion that Daguinod was not dismissed from service as its investigation
of the incident was ongoing and it was Daguinod who wrongly presumed that he was
dismissed and prematurely filed the complaint. The Court cannot countenance such a
simplistic explanation. It was reasonable for Daguinod to believe that he had been dismissed
from service due to the events of April 10, 2011. On the said date, Daguinod was accused of
theft after having an overage in the cash register of P106.00. He was served two NTEs which
he had to answer on the same day. He was not given time to prepare a proper defense or was
not informed of his right to seek representation and counsel. He was, to the contrary,
immediately arrested and imprisoned without warrant from April 10 to April 13, 2011.
Thereafter, when he called Generation One to inquire about the status of his employment
and his back pay, he was told by Cruz, Generation One's Resource Area Coordinator, that his
employment was terminated effective May 13, 2011. Thus, Daguinod cannot be faulted for
believing that his employment had been terminated.
Generation One claimed that it was conducting an investigation of the incident but
did not submit any proof of the investigation or the results thereof. The Court notes that
Generation One did not deny the phone call between Cruz and Daguinod but merely posited
Cruz to be a mere employee of Generation One who has nopart in the recruitment process.
Again, the Court is unconvinced. Cruz does not appear to be an ordinary employee of
Generation One as he was the signatory of Daguinod's Service Contract. As well, Generation
One did not send a Return-to-Work Order to Daguinod if indeed it still considered him an
employee.
The haphazard way in which the accusations were thrown against Daguinod and how
the investigation was conducted shows bad faith on the part of Southgate and Generation
One. Daguinod spent three days in jail for an alleged attempted theft of P106.00. There was
a pre-judgment of guilt without a proper investigation. Thus, Daguinod was constructively
dismissed effective on April 10, 2011.
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3. YES. Article 294 of the Labor Code provides that an employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other
privileges, full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld from him up
to the time of his actual reinstatement. When reinstatement is no longer viable such as when
the parties have strained relations, separation pay may be awarded as an alternative.
Undeniably, reinstatement is no longer feasible due to the strained relations of the
parties and considering as well the length of time that has passed since the filing of this case.
Thus, separation pay is awarded in lieu thereof.
Daguinod is likewise entitled to moral and exemplary damages as his dismissal was
attended with bad faith. Moral damages are awarded in illegal termination cases when the
employer acted (a) in bad faith or fraud; (b) in a manner oppressive to labor; or (c) in a
manner contrary to morals, good customs, or public policy. In addition to moral damages,
exemplary damages may be imposed by way of example or correction for the public good. In
contracts and quasi-contracts, the court may award exemplary damages if the defendant
acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.
In the instant case, Southgate and Generation One clearly acted in bad faith. The
respondents created a subterfuge of legitimate labor contracting to avoid the regularization
of Daguinod. More significantly, respondents haphazardly accused Daguinod of theft without
sufficient proof which resulted in his incarceration for three days. Thus, Daguinod is entitled
to moral and exemplary damages of P200,000.00 and P100,000.00, respectively.
The Court also awards Daguinod attorney's fees of 10% of the total monetary award.
Daguinod was compelled to litigate to enforce his rights which had been unjustly and
blatantly violated by Generation One and Southgate, thus, he is entitled to attorney's fees.
Finally, the monetary award herein granted shall earn legal interest of 12% per
annum from April 10, 2011, the date of constructive dismissal, until June 30, 2013 in line
with the Court's ruling in Nacar v. Gallery Frames. The liability of Generation One and
Southgate shall be joint and solidary.
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BIGG’S, INC. v. JAY BONCACAS
G.R. No. 200487 & 200636, March 6, 2019, Second Division (Caguioa, J.)
DOCTRINE
The Labor Code and the IRR limit the grounds for a valid strike to: (1) a bargaining
deadlock in the course of collective bargaining, or (2) the conduct of unfair labor practices by
the employer. Only a certified or duly recognized bargaining representative may declare a
strike in case of a bargaining deadlock. However, in cases of unfair labor practices, the strike
may be declared by any legitimate labor organization. In both instances, the union must
conduct a “strike vote” which requires that the actual strike is approved by majority of the total
union membership in the bargaining unit concerned. The union is required to notify the
regional branch of the NCMB of the conduct of the strike vote at least 24 hours before the
conduct of the voting. Thereafter, the union must furnish the NCMB with the results of the voting
at least seven (7) days before the intended strike or lockout. This seven-day period has been
referred to as the “seven-day strike ban” or “seven-day waiting period.”
The union did not file the requisite Notice of Strike and failed to observe the cooling-off
period. In an effort to legitimize the strike on February 16, 1996, the union filed a Notice of
Strike on the same day. This cannot be considered as compliance with the requirement, as the
cooling-off period is mandatory.
FACTS
Bigg’s, Inc. was the employer of Jay Boncacas and the other respondents, collectively,
the union members. Bigg’s operates a chain of restaurants with principal place of business
in Naga City, Camarines Sur. Its employees formed a labor union named Bigg’s Employees
Union which was issued a Certificate of Registration by the DOLE.
Bigg’s alleges that on February 16, 1996, around 50 union members staged an illegal
“sit-down strike” in Bigg’s restaurant. The union did not comply with the requirements of
sending Notice of Strike to the National Conciliation and Mediation Board (NCMB). Neither
did the union obtain the “strike vote” from its members. Bigg’s alleged that the union
belatedly filed a Notice of Strike with the NCMB on the same day to conceal the illegality of
the sit-down strike. In a memorandum, Bigg’s placed the striking union members under
preventive suspension and required them to explain within 24 hours from notice, but the
union members did not comply. Hence, termination was imposed by Bigg’s against them on
February 19, 1996.
On the other hand, the union members accused Bigg’s of interfering with union
activities. In February 1996, union members alleged that they were asked to withdraw their
membership under threat of losing their employment. On February 16, 1996, the day of the
alleged sit-down strike, union president Boncacas and other union members were prevented
from entering the premises of Bigg’s. On the same day, they filed a Notice of Strike with the
NCMB. They attempted to return to work on February 17, 1996, but they were informed to
obtain their respective memoranda from the main office in Naga City. Some union members
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tried to talk with the Bigg’s management, but they were told not to report for work the next
day.
The union members filed a complaint before the NCMB for unfair labor practices,
illegal dismissal, and damages. Bigg’s also filed a complaint before the NCMB for illegal strike
against the union members. The two complaints were consolidated and the NCMB conducted
mediation proceedings. When mediation reached an impasse, the union conducted another
strike on March 5, 1996
Bigg’s further alleges that during the strike on March 5, 1996, the union members
were disruptive and violent. They prevented ingress and egress of employees and customers
to and from the company’s premises. They also stopped Bigg’s vans from making deliveries
by throwing stones at the vans which caused injury to the driver as well as damage to
vehicles and to the guardhouse. They shouted at customers using megaphones to prevent
them from going to Bigg’s Diner. The strike was later stopped when both parties agreed to
compulsory arbitration.
The LA ruled in favor of Bigg’s that both strikes were illegal. The first strike failed to
comply with the procedural requirements for a valid strike under Art. 236 of the Labor Code
and its IRR, specifically the cooling-off period. For the second strike, union members
performed prohibited acts of violence, aggression and obstruction of the free ingress and
egress from company premises. As to illegal dismissal, the LA found that the dismissal of
union officers was valid as it was proven that they instigated and participated in the illegal
strikes. As to union members, the LA found no evidence of illegal acts during the strikes and
thus ordered their reinstatement. On the allegation of unfair labor practice and union
busting, the LA held that the union members were unable to prove the same with substantial
evidence.
On MR, the NLRC reversed its earlier decision and held that the two strikes staged by
the union were illegal.
The CA overturned the findings of the NLRC and held that Bigg’s failed to adduce
substantial evidence showing that the union conducted a sit-down strike on February 16,
1996. On the other hand, the union clearly established that some of its members were barred
from entering the premises or threatened with dismissal by reason of their union
membership. This, said the CA, was a clear manifestation of unfair labor practice. With
respect to the March 5, 1996 strike, the Court ruled that it was illegal for having been
conducted with violence and aggression. The dismissal of union officers was upheld by the
CA for their illegal acts during the strike. However, the CA exonerated union president
Boncacas as it was not shown that he initiated or participated in any of the illegal acts.
ISSUES
1. Whether the strikes held on February 16, 1996 and March 5, 1996 were illegal.
2. Whether the union officers and employees were validly dismissed
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3. Whether the award of backwages should be granted to dismissed employees who
participated in an illegal strike even if later reinstated.
RULING
1. YES. The Labor Code and the IRR limit the grounds for a valid strike to: (1) a
bargaining deadlock in the course of collective bargaining, or (2) the conduct of
unfair labor practices by the employer. Only a certified or duly recognized
bargaining representative may declare a strike in case of a bargaining deadlock.
However, in cases of unfair labor practices, the strike may be declared by any
legitimate labor organization. In both instances, the union must conduct a “strike
vote” which requires that the actual strike is approved by majority of the total union
membership in the bargaining unit concerned. The union is required to notify the
regional branch of the NCMB of the conduct of the strike vote at least 24 hours before
the conduct of the voting. Thereafter, the union must furnish the NCMB with the
results of the voting at least seven (7) days before the intended strike or lockout. This
seven-day period has been referred to as the “seven-day strike ban” or “seven-day
waiting period.”
In a strike due to bargaining deadlocks, the union must file a notice of strike
or lockout with the regional branch of the NCMB at least thirty (30) days before the
intended date of the strike and serve a copy of the notice on the employer. This is the
so-called “cooling-off period” when the parties may enter into compromise
agreements to prevent the strike. In case of unfair labor practice, the period of notice
is shortened to 15 days; in case of union busting, the “cooling-off period” does not
apply and the union may immediately conduct the strike after the strike vote and after
submitting the results thereof to the regional arbitration branch of the NCMB at least
seven days before the intended strike.
In a strike grounded on unfair labor practice, the following are the
requirements: (1) the strike may be declared by the duly certified bargaining agent
or legitimate labor organization; (2) the conduct of the strike vote in accordance with
the notice and reportorial requirements to the NCMB and subject to the seven-day
waiting period; (3) notice of strike filed with the NCMB and copy furnished to the
employer, subject to the 15-day cooling-off period. In cases of union busting, the 15day cooling-off period shall not apply.
In this case, the SC reinstated and affirmed the ruling of the NLRC, which had,
for its part, affirmed the findings of the LA that the union conducted an illegal sitdown strike on February 16, 1996, for failure of the union to comply with the
prerequisites for a valid strike. The union did not file the requisite Notice of Strike
and failed to observe the cooling-off period. In an effort to legitimize the strike
on February 16, 1996, the union filed a Notice of Strike on the same day. This
cannot be considered as compliance with the requirement, as the cooling-off
period is mandatory. The cooling-off period is not merely a period during which the
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union and the employer must simply wait. The purpose of the cooling-off period is to
allow the parties to negotiate and seek a peaceful settlement of their dispute to
prevent the actual conduct of the strike. In other words, there must be genuine
efforts to amicably resolve the dispute.
2. The dismissal of union officers was valid, but dismissal of employees who did
not commit prohibited acts during the strike was invalid.
For union members, what is required is that they knowingly participated in
the commission of illegal acts during the strike for there to be sufficient ground for
termination of employment. For union officers, however, it suffices that they
knowingly participated in an illegal strike.
In this case, Boncacas not only knowingly participated but was the one who
principally organized two illegal strikes on February 16, 1996 and March 5, 1996.
Thus, the dismissal of Boncacas and the other union officers after the illegal strike on
February 16, 1996 as well as the March 5, 1996 strike was valid. However, as to the
union members who did not participate in any prohibited act during the strikes, their
dismissal was invalid.
3. NO. The Court deletes the award of backwages in conformity with jurisprudence that
backwages are not granted to dismissed employees who participated in an illegal
strike even if they are later reinstated.
In Escario v. NLRC, the Court held: Conformably with the long honored
principle of a fair day’s wage for a fair day’s labor, employees dismissed for joining an
illegal strike are not entitled to backwages for the period of the strike even if they are
reinstated by virtue of their being merely members of the striking union who did not
commit any illegal act during the strike.
As prayed for by Bigg’s, considering that 23 years have passed since the
dismissal of the union members on February 19, 1996, and bearing in mind Bigg’s
manifestation that they could no longer trust the striking employees especially as the
company is in the food service industry, separation pay may be more appropriate in
lieu of reinstatement.
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PARDILLO v. BANDOJO
G.R. No. 224854, March 27, 2019. Second Division (Caguioa, J.)
DOCTRINE
Under Art. 294 of P.D. No. 442 or the Labor Code, the employer shall not terminate the
services of an employee except for a just or authorized cause. Anent the procedural aspect, the
employer must comply with the two-notice rule, as mandated under the Implementing Rules of
Book VI of the Labor Code. The employer must serve the erring employee a first notice which
details the ground/s for termination, giving the employee a reasonable opportunity to explain
his side. In practice, this is commonly referred to as the notice to explain (NTE). The second
notice pertains to the written notice of termination indicating that upon due consideration of
all circumstances, the employer has decided to dismiss the employee.
In illegal dismissal cases, the burden to prove that the termination of employment was
for a just and valid cause is on the employer. In this case, the Court holds that the CA committed
reversible error in overturning the findings of the NLRC. After a judicious review of the facts as
borne by the records, the Court finds that Dr. Bandojo failed to prove with substantial evidence
Pardillo’s alleged acts which led to loss of trust and confidence.
FACTS
Lucita S. Pardillo was hired as midwife of E & R Hospital and Pharamcy in Iligan City,
owned and managed by spouses Prof. Rogelio B. Bandojo and Dr. Evelyn D. Bandojo. In 1991,
Pardillo was transferred to a new position as Billing Clerk/Cashier. In 2001, she was
promoted and became the Business Office Manager and held such position until November
18, 2010 when her employment was terminated by Dr. Bandojo.
Pardillo was surprised when she received a Notice of Termination on November 18,
2010 stating that this was due to loss of confidence, habitual tardiness, texting insulting
words to her employer, uttering offensive words against employer, and threatening to kill
me or any of my family. Dr. Bandojo alleged that Pardillo’s termination was brought about
by several infractions she committed and her habitual tardiness totaling to about 16,000
minutes. Dr. Bandojo alleged E & R Hospital suffered losses due to the negligence of Pardillo
in failing to process and send the records of certain patients to PhilHealth for refund of their
paid claims. Also, sometime on August 2010, Pardillo allegedly tried to borrow, for her
personal use the hospital’s “Pay to Cash” check which was intended for the payment of the
newborn screening kits. On September 27, 2010 when Pardillo reported very late for work;
specifically at past ten in the morning. Dr. Bandojo caught Mrs. Natividad Labadan, Pardillo’s
subordinate, punching her time card in the bundy clock located at the pharmacy area. In an
administrative investigation, Pardillo denied the accusations against her. Dr. Bandojo then
issued a memorandum terminating employment of Pardillo on November 18, 2010. On April
5, 2011, Pardillo filed a complaint for illegal dismissal.
The LA dismissed the complaint for lack of merit. The LA held that Pardillo was a
managerial employee whose employment may be terminated on the ground of loss of trust
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and confidence. The LA also found that Dr. Bandojo had observed procedural due process in
dismissing Pardillo as an administrative hearing was conducted.
On appeal the NLRC, reversed and set aside the ruling of the LA in its Decision and
held that Pardillo was dismissed without substantive and procedural due process. The NLRC
held that while such act, of Pardillo’s subordinate punching in her time card, was a violation
of the hospital’s policies, it did not amount to the willful breach of trust that would justify
dismissal from employment. The NLRC ordered Pardillo’s reinstatement with full
backwages, inclusive of allowances and other benefits and attorney’s fees. The NLRC also
denied the MR of Dr. Bandojo but reversed its ruling and granted separation pay in lieu of
reinstatement.
The CA held that Dr. Bandojo was able to prove with substantial evidence that
Pardillo’s termination was for a just cause as she was able to prove the habitual tardiness of
Pardillo which resulted in her neglect of duties and poor work performance. As a managerial
employee, the CA held that Pardillo should be a sterling example of honesty, trustworthiness
and efficiency in the workplace. Pardillo’s act of ordering her subordinate to punch in her
time card was an act of falsification. The CA held that Dr. Bandojo was able to comply with
the two-notice rule. Pardillo was given a chance to present her side, numerous memoranda
and warnings were issued to her due to tardiness, as well as a separate memorandum
regarding the time-card incident. Two administrative conferences were held where Pardillo
was given a chance to explain her side. Finally, a notice of termination was sent to Pardillo
on November 18, 2010. Thus, the CA overturned the findings of the NLRC and reinstated
the LA’s Decision.
Pardillo filed the instant petition alleging that there were no valid grounds for
her dismissal. Pardillo claims that Dr. Bandojo failed to comply with procedural due
process. She did not receive any notice to explain prior to receiving the notice of
termination. Dr. Bandojo filed her Comment praying for the dismissal of the petition.
ISSUE
Whether the dismissal of Pardillo from employment was illegal for failure to comply
with substantive and procedural due process.
RULING
YES. There was no compliance with substantive due process as Dr. Bandojo failed to
prove with substantial evidence the acts constituting willful breach of company policy,
resulting to loss of trust and confidence.
Under Art. 294 of P.D. No. 442 or the Labor Code, the employer shall not terminate the
services of an employee except for a just or authorized cause. The just causes for dismissal
are listed under Article 297:
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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.
Anent the procedural aspect, the employer must comply with the two-notice
rule, as mandated under the Implementing Rules of Book VI of the Labor Code. The
employer must serve the erring employee a first notice which details the ground/s for
termination, giving the employee a reasonable opportunity to explain his side. In practice,
this is commonly referred to as the notice to explain (NTE). The second notice pertains to
the written notice of termination indicating that upon due consideration of all
circumstances, the employer has decided to dismiss the employee.
Art. 297(c) allows an employer to terminate the services of an employee on the
ground of loss of trust and confidence. There are two requisites for this ground; first, the
employee must be holding a position of trust and confidence; and second, there must
be a willful act that would justify the loss of trust and confidence which is based on
clearly established facts. In Etcuban, Jr. v. Sulpicio Lines, the Court held that with respect to
rank-and-file personnel, loss of trust and confidence as ground for valid dismissal requires
proof of involvement in the alleged events in question, and that mere uncorroborated
assertions and accusations by the employer will not be sufficient. But as regards a
managerial employee, the mere existence of a basis for believing that such employee
has breached the trust of his employer would suffice for his dismissal. Hence, in the
case of managerial employees, proof beyond reasonable doubt is not required, it being
sufficient that there is some basis for such loss of confidence, such as when the
employer has reasonable ground to believe that the employee concerned is
responsible for the purported misconduct, and the nature of his participation therein
renders him unworthy of the trust and confidence demanded by his position.
In illegal dismissal cases, the burden to prove that the termination of employment
was for a just and valid cause is on the employer. In this case, the Court holds that the CA
committed reversible error in overturning the findings of the NLRC. After a judicious
review of the facts as borne by the records, the Court finds that Dr. Bandojo failed to
prove with substantial evidence Pardillo’s alleged acts which led to loss of trust and
confidence.
The NTE given to Pardillo was made to explain her alleged tardiness to which she
replied and apologized. However, in the notice of termination dated November 18, 2010, Dr.
Bandojo indicated several new allegations. This was not explained by Dr. Bandojo. The notice
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does not also state the alleged acts purportedly committed by Pardillo which resulted in loss
of trust and confidence. Pardillo was not served with any NTE so that she could proffer her
defense with regard to the new allegations. The Court also affirmed the findings of the NLRC
as to the allegation of habitual tardiness. Pardillo was able to explain the reason why she
could not come to the office on the scheduled time because it was necessary for her to go
directly to the bank or to the PhilHealth office to perform official business for the hospital.
Also, a letter sent by Dr. Bandojo to Pardillo supports the latter’s claim that she had flexible
work schedule.
Also, Pardillo was sent a document entitled “Warning: This is your nth offense”
regarding her tardiness. In said warning, it was stated that “Suspension to Termination will
be meted out to erring personnel who incurred tardiness beyond the allowable limit unless
you can prove to management that your tardiness was due to laudable acts beneficial
to [the] hospital business and service.” The Court found that this confirms the hospital
policy that there may be reasonable grounds for an employee’s tardiness, which includes
performing tasks beneficial to the hospital outside of its premises. The Court also observes
that the warning did not contain a notice to explain but was merely a notice to Pardillo that
she had been tardy on specific dates. If the less serious offense of tardiness merited the
sending of several NTEs to Pardillo, why was it that Dr. Bandojo did not send any NTEs
for the more serious allegations?
As to derogatory text messages, Dr. Bandojo did not submit these text messages to
the labor tribunals or courts. All in all, it is quite apparent that the loss of trust and
confidence in this case was not genuine and was merely used as a convenient means
to dismiss Pardillo. Hence, the Court finds that Dr. Bandojo failed to prove with substantial
evidence the acts constituting willful breach of company policy, resulting to loss of trust and
confidence. Thus, Pardillo’s dismissal was illegal.
The additional grounds cited in the notice of termination which were not mentioned in
the NTE violated Pardillo’s right to be informed of the administrative charges against her.
The NTE and the notice of termination did not state the specific acts that constituted breach
of company policies resulting in loss of trust and confidence and the specific company
policies that were violated. The Court notes that there was an earlier memorandum
addressed to Pardillo and other officers requesting them to attend a conference to explain
the incident in which Pardillo’s subordinate, Mrs. Natividad Ladaban, was caught punching
Pardillo’s time card in the bundy clock. However, this cannot be considered the NTE required
under the Labor Code. The memorandum did not state the grounds for dismissal or
disciplinary action, the specific acts of Pardillo constituting breach of company policy, and
the actual company policy violated. The memorandum did not also direct Pardillo to submit
a written explanation within a reasonable period of time. Thus, the said memorandum was
not a proper NTE.
In fine, Dr. Bandojo failed to comply with the requirements of procedural and
substantive due process in effecting the termination of Pardillo’s employment. There
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was no substantial evidence to prove that she committed serious breaches of company policy
resulting in loss of trust and confidence. Moreover, Pardillo was not afforded procedural due
process. Hence, the Court granted Pardillo the award of backwages and separation pay.
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AIRBORNE MAINTENANCE AND ALLIED SERVICES, INC. v. ARNULFO M. EGOS
G.R. No. 222748, April 3, 2019, Second Division (Caguioa J.)
DOCTRINE
The suspension of employment under Article 301 of the Labor Code is only temporary
and should not exceed six months, as the Court explained in PT & T Corp. v. National Labor
Relations Commission: The temporary lay-off wherein the employees likewise cease to work
should also not last longer than six months. After six months, the employees should either be
recalled to work or permanently retrenched following the requirements of the law, and that
failing to comply with this would be tantamount to dismissing the employees and the employer
would thus be liable for such dismissal.
The employer should notify the DOLE and the affected employee, at least one month
prior to the intended date of suspension of business operations. An employer must also prove
the existence of a clear and compelling economic reason for the temporary shutdown of its
business or undertaking and that there were no available posts to which the affected employee
could be assigned.
FACTS
Petitioners Airborne Maintenance and Allied Services, Inc. and Francis T. Ching, a
company engaged in providing manpower services to various clients, hired the services of
private respondent as Janitor. He was assigned at the Balintawak Branch of Meralco, a client
of Airborne. After 20 years, the client of Airborne and Meralco expired and a new contract
was awarded to Landbees Corporation and the latter absorbed all employees of Airborne
except private respondent, who allegedly had a heart ailment. Private respondent consulted
another doctor and, based on the medical result, he was declared in good health and fit to
work. He showed the duly issued medical certificate to Airborne but the same was
disregarded. Private respondent also reported for work but was just ignored by Airborne
and was told that there was no work available for him. Feeling aggrieved, he filed a complaint
for constructive/illegal dismissal.
Airborne, on the other hand, insisted that Egos was never dismissed from service. It
claimed that when its contract with Meralco-Balintawak Branch was terminated, it directed
all its employees including private respondent to report to its office for reposting; that when
private respondent failed to do so, it sent a letter dated at private respondent's last known
address directing him to report to his new assignment at Meralco Commonwealth Business
Center; that said letter, however, was returned to sender with a notation "RTS unknown";
that another letter was sent to private respondent at his last known address reiterating the
previous directive; and that the same was again returned with a notation "RTS unknown."
Before the NLRC, Egos argued that the letters were mere afterthoughts since Airborne
was already aware of the illegal dismissal complaint prior to the sending of the said letters;
that the same could not possibly reach him because his address was incomplete and such
mistake was intentionally done for him not to receive the letters; and that he left his
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cellphone number with one Christine Solis, Airborne's Administrative Officer, but he never
received a call from Airborne. The NLRC rendered a decision reversing the findings of the
Labor Arbiter and declaring private respondent to have been constructively/illegally
dismissed. The CA affirmed the NLRC decision. MR of Airborne was denied.
ISSUE
Whether Arnulfo Egos was constructively dismissed by Airborne.
RULING
YES. the CA was correct in affirming the NLRC's ruling that respondent was
constructively dismissed. As ruled by the CA: In cases of termination of employees, the wellentrenched policy is that no worker shall be dismissed except for just or authorized cause
provided by law and after due process. Dismissals of employees have two facets: first, the
legality of the act of dismissal, which constitutes substantive due process; and second, the
legality in the manner of dismissal, which constitutes procedural due process. In this case, it
is beyond cavil that none of the foregoing mandatory provisions of the labor law were
complied with by Airborne. As correctly observed by public respondent NLRC, the
letters/notices were mere afterthoughts since Airborne was already aware of the filing of
the illegal dismissal complaint prior to the sending of the said letters/notices. Egos made
several follow-ups, but Airborne did not give him a new assignment. Moreover, he gave his
cellphone number with Christine Solis, Airborne's Administrative Officer, but to no avail.
Petitioner, however, argues that there was no dismissal to speak of as it had placed
respondent on floating status when the contract with Meralco was terminated. petitioner
claims that it had valid grounds to suspend its business operation or undertaking for a period
of six months and place its employees in a floating status during that period in accordance
with Article 301, formerly Article 286, of the Labor Code. The Court finds that petitioner
failed to prove that the termination of the contract with Meralco resulted in a bona
fide suspension of its business operations so as to validly place respondent in a
floating status.
The suspension of employment under Article 301 of the Labor Code is only
temporary and should not exceed six months, as the Court explained in PT & T Corp. v.
National Labor Relations Commission: The temporary lay-off wherein the employees likewise
cease to work should also not last longer than six months. After six months, the employees
should either be recalled to work or permanently retrenched following the
requirements of the law, and that failing to comply with this would be tantamount to
dismissing the employees and the employer would thus be liable for such dismissal.
In implementing this measure, jurisprudence has set that the employer should
notify the DOLE and the affected employee, at least one month prior to the intended
date of suspension of business operations. An employer must also prove the existence
of a clear and compelling economic reason for the temporary shutdown of its business
or undertaking and that there were no available posts to which the affected employee
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could be assigned. In this case, a review of the submissions of the parties shows that
Airborne failed to show compliance with the notice requirement to the DOLE and respondent
Egos.
Airborne also failed to prove that after the termination of its contract with Meralco it
was faced with a clear and compelling economic reason to temporarily shut down its
operations or a particular undertaking. It also failed to show that there were no available
posts to which respondent could be assigned. Also, not only did Airborne fail to prove it had
valid grounds to place respondent on a floating status, but the NLRC and the CA both
correctly found that respondent even had to ask for a new assignment from petitioner, but
this was unheeded. Further, when Egos filed the complaint Airborne, as an afterthought,
subsequently sent notices/letters to respondent directing him to report to work. These,
however, were not received by respondent as the address was incomplete.
In Morales v. Harbour Centre Port Terminal, Inc., the Court defined constructive
dismissal as a dismissal in disguise as it is an act amounting to dismissal but made to
appear as if it were no petitioner's acts of not informing respondent and the DOLE of
the suspension of its operations, failing to prove the bona fide suspension of its
business or undertaking, ignoring respondent's follow-ups on a new assignment, and
belated sending of letters/notices which were returned to it, were done to make it
appear as if respondent had not been dismissed. These acts clearly amounted to a
dismissal, for which petitioner is liable.
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BELTRAN v. AMA COMPUTER COLLEGE-BIÑAN
G.R. No. 223795, April 3, 2019, Second Division (Caguioa J.)
DOCTRINE
With regard to the length of time the company practice should have been exercised to
constitute voluntary employer practice which cannot be unilaterally withdrawn by the
employer, jurisprudence has not laid down any hard and fast rule. The common denominator
in these cases appears to be the regularity and deliberateness of the grant of benefits over a
significant period of time.
FACTS
Petitioner Beltran started as Mathematics and CAD Instructor at AMA Education
System's Quezon City Campus in June 1990. On June 15, 1998, Beltran was promoted as
School Registrar. He served as such until April 1999. While serving as School Registrar, he
was promoted as School Administrator/COO of AMA-Biñan in January 1999. Beltran alleged
that sometime in 2008, he applied for an early retirement pursuant to a long-standing policy
of AMA Education System in granting early retirement benefits to its employees. While the
said application for early retirement was being processed, Mr. Azanza requested Beltran to
continue his employment until after the enrollment at AMA-Biñan was already finished and
to further continue all the marketing and promotion programs being done among feeder
schools in the Biñan area so as not to compromise the number of enrollees in the said school.
Beltran was informed by Mr. Azanza and the then Area Director in Biñan, Mr. Henry Cabrera
that his application was approved, and the payment of his benefits was already being
processed. Nonetheless, since Beltran was compelled to leave immediately for the USA, lest
being sanctioned with the penalty of cancellation of his visa as a permanent resident, he left
for Honolulu, Hawaii on 3 June 2008. On 3 September 2010, while on vacation, Petitioner
filed a Complaint for payment of retirement benefits/separation pay and other monetary
claims.
Private Respondents alleged that Beltran filed a request for early retirement
manifesting his desire to reside abroad with his family. His request was however
disapproved. Before the denial could be communicated to him, Petitioner had already left
the country. Petitioner failed to submit his resignation letter and to follow the standard
company policy on proper turnover of work and accomplishment of clearance. Private
respondents further contended that they were willing and ready to release to Petitioner his
last salary/incentive/allowance/recurring income and 13th month pay in the total amount
of Php 28,046.34
The LA dismissed the complaint of petitioner Beltran for failure to prove that AMA
has an existing corporate policy of granting early retirement benefits to employees less than
sixty (60) years old and less than twenty (20) years in service. Petitioner also failed to prove
his entitlement to other monetary claims except for his unpaid salary which AMA did not
refute. The NLRC partly granted with respect to the amount of his unpaid salary and
13th month pay. Before the NLRC, Beltran attached two affidavits of former employees who
attested that they availed of and been granted the early retirement program of AMA in 2004
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and 2005. The NLRC ruled that proof that two employees had been allowed to retire
early does not exactly establish a "policy", one which can be enforced even in the
absence of a CBA or statutory provision. The CA ruled that in the absence of any applicable
contract or any evolved company policy, that petitioner should have met the age and tenure
requirements set forth under Article 302 of the Labor Code to be entitled to retirement
benefits. At the time of petitioner's application for retirement, he fell short of the age
requirement as he was only 47 years old. Petitioner's prayer for separation pay was also
denied by the CA as petitioner's employment was not terminated due to illegal dismissal. The
CA also denied petitioner's prayer for moral and exemplary damages. However, the CA
awarded attorney's fees as he was compelled to litigate to protect his rights.
Petitioner maintains that while AMA does not have a written retirement program, it
had been the longstanding company policy to grant early retirement benefits to its
employees even if they had not reached retirement age or rendered 20 years of service. In
his 18 years of service when he rose from the ranks until he was appointed as School Director
of AMA-Biñan, petitioner had personal knowledge of his subordinates, such as faculty
members and non-teaching staff, who were granted early retirement benefits. Respondents
insist that AMA has no company policy in granting early retirement to its employees. Even if
early retirement was granted to former employees Catolico and Creencia, the grant thereof
has not ripened into a company practice. The giving of said benefit was not proven to be
consistent and deliberate.
ISSUE
Whether Petitioner is entitled to early retirement program of AMA.
RULING
YES. Article 302 (formerly Article 287) of the Labor Code provides for the
voluntary retirement age of 60 years old and mandatory retirement age of 65 years old. In
addition to the age requirements, the employee must have served at least five years in the
company. The statutory retirement benefit is pegged at one-half month salary for every year
of service or a fraction thereof. The employer however, is free to grant other retirement
benefits and impose different age or service requirements, provided that the benefits shall
not be lesser than those provided in Article 302.
Article 100 of the Labor Code expressly prohibits the elimination or reduction of
benefits received by employees. However, the basis for the grant of said benefit must be
shown through an express policy, written contract, or an unwritten policy that has ripened
into a company practice. To be considered a practice, it must be consistently and deliberately
made by the employer over a significant period of time.
The Court has not defined what constitutes a "significant period of time." In
Metropolitan Bank and Trust Co. v. NLRC, the SC held that: “With regard to the length of
time the company practice should have been exercised to constitute voluntary
employer practice which cannot be unilaterally withdrawn by the employer,
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jurisprudence has not laid down any hard and fast rule. The common denominator in
these cases appears to be the regularity and deliberateness of the grant of benefits
over a significant period of time.”
In this case, petitioner was able to prove the existence of an established company
practice of granting early retirement to its employees who have rendered at least 10 years
of service, regardless of age, with substantial evidence.
Both Catolico and Creencia attested in their affidavits that AMA granted an early
retirement program to its employees who had rendered at least 10 years of service. They
both received early retirement benefits of one-month salary for every year of service
pursuant to the early retirement program of AMA. They also listed eight other employees
who were able to avail of the early retirement program. It is also worth mentioning that
Catolico and petitioner occupied similar positions of School Director and Administrator.
Moreover, petitioner and Creencia both served the school for 18 years. Yet, unlike Catolico
and Creencia, petitioner was denied the grant of early retirement benefits without any
explanation.
Contrary to the findings of the NLRC and CA, the Court holds that the affidavits and
other supporting documents submitted by petitioner substantially proved that AMA
had a consistent company practice of granting early retirement to its employees who
have rendered at least 10 years of service. Thus, petitioner is entitled to the same.
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QUE v. ASIA BREWERY, INC.
G.R. No. 202388, April 10, 2019 (Caguioa J.)
DOCTRINE
Constructive dismissal has been defined as the cessation of work because ‘continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion
in rank or a diminution in pay’ and other benefits. It may exist if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable on the part of the employee that
it could foreclose any choice by him except to forego his continued employment.
FACTS
Que had been the Regional Sales Manager (RSM) of Asia Brewery, Inc. for eight (8)
years and stationed in Northern Luzon covering the areas of Ilocos Sur, Ilocos Norte, Abra,
Cagayan, Kalinga Apayao, Isabela, Nueva Vizcaya, Ifugao and Quirino Province. As RSM, his
compensation package consisted of a monthly salary amounting to P67,000.00 and P250.00
a day per diem allowance.
Previously, there were twelve (12) sales offices comprising the North Central Luzon
Region (NCLR). However, in February of 2004, the management of private respondent split
the said region into two to spur a better growth rate in its income and to give a more direct
and focused handling of the areas covered by these sales offices. On May 2, 2005 or one year
and three months after the split of the NCLR, Raymundo T. Gatmaitan, the vice president for
sales of private-respondent made an evaluation of the experimental split of the NCLR and
recommended the reversion to the old setup of putting the NCLR under one RSM. Since the
remerger would result to redundancy in the office of a Regional Sales Manager the office of
the petitioner should be abolished on the ground of redundancy.
Que averred that he was informed by Gatmaitan that the latter talked to Tan, COO of
Asia Brewery, Inc that his performances were no longer effective and Tan wishes to extend
him an offer. He was asked to submit his resignation letter as demanded by Tan but he
persisted that he was neither retiring nor resigning. He explained that he deserves to receive
a higher package from the management. He was also asked to surrender the company vehicle
that he was then using. Thereafter, he was not allowed entry to the premises of Asia Brewery
offices.
According to Asia brewery, Que was verbally informed about the privaterespondent’s move to consolidate the North and Central Luzon areas under one (1) Regional
Sales Manager which will result to the abolition of his position once the reorganization is
implemented. The petitioner was shown an initial computation of his separation pay in the
amount of Php 536,000.00. The petitioner, thence, started to negotiate for a higher
separation pay. In his meeting with private-respondent’s COO, Michael Tan, he verbally
informed the latter that he decided to voluntarily tender his resignation and started
discussing with him the matter of his separation pay and the possibility of getting
distributorship agreement with the company for its products in Vigan City. He was shown an
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increased amount of separation pay in line with his plea for the rounding off of the first
computation showed to him. However, instead of being pleased, the petitioner showed
displeasure and further negotiated for higher separation pay in the amount of Php
888,888.00 in addition to the service vehicle he had earlier asked. Thus, no agreement was
reached.
The LA ruled that Que was constructively dismissed. The NLRC reversed the LA and
found that instead of being pressured to relinquish his employment, Que actually negotiated
for a suitable separation package after he was informed that he was being retrenched
because his position had become redundant. The NLRC gave weight to a letter of Que dated
May 18, 2005 which showed that he was not against the plan to ease him out from being RSM
of North Luzon or the re-merging of such area with the Central Luzon sales office under one
RSM. The CA affirmed the NLRC decision and ruled that the letter of Que showed that
he was not coerced and that Asia Brewery complied with the formal and substantial
requirements for termination of employment due to redundancy.
ISSUES
1. Whether Asia Brewery validly terminate the employment of Que due to redundancy.
2. Whether there was constructive dismissal.
RULING
1. YES, the termination of Que was validly made by Asia Brewery.
Article 298 of the Labor Code states that an employer may terminate the
employment of any employee on the ground of redundancy. As defined, “redundancy
exists when the service of an employee is in excess of what is reasonably demanded by the
actual requirements of the business. A redundant position is one rendered superfluous by
any number of factors, such as overhiring of workers, decreased volume of business,
dropping of a particular product line previously manufactured by the company or phasing
out of a service activity formerly undertaken by the enterprise.”
In Lowe, Inc. v. Court of Appeals, the Court laid down the requirements for the valid
implementation of a redundancy program, as follows:
(1) written notice served on both the employee and the DOLE at least one month prior
to the intended date of termination;
(2) payment of separation pay equivalent to at least one month pay or at least one
month pay for every year of service, whichever is higher;
(3) good faith in abolishing the redundant position; and
(4) fair and reasonable criteria in ascertaining what positions are to be declared
redundant.
The Court likewise ruled that “the determination of the continuing necessity of a
particular officer or position in a business corporation is a management prerogative, and the
courts will not interfere unless arbitrary or malicious action on the part of management is
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shown.” “It is also within the exclusive prerogative of management to determine the
qualification and fitness of an employee for hiring and firing, promotion or reassignment.
Indeed, an employer has no legal obligation to keep more employees than are necessary for
the operation of its business.” In determining who among the employees should be retained
or separated, the Court explained in Lowe that preferred status, efficiency and seniority are
among the accepted criteria in implementing a redundancy program.
Here, Que’s only argument against the implementation of the redundancy program
was that there was no supporting documents that the business was performing poorly. The
NLRC found that Asia Brewery based its decision to terminate Que’s employment on an
Evaluation Report which showed the need to revert to the original setup of having one RSM
for Northern Luzon.
The CA made its own review of the facts and also found that Asia Brewery complied
with the written notice requirement, the payment of separation pay, good faith in abolishing
Que’s position, and the use of fair and reasonable criteria in choosing Que as the one whose
employment will be terminated. As found by the CA, a written notice to both petitioner and
the DOLE were properly complied with. Second, the payment of separation pay was never
denied by the petitioner. In fact, he had consistently negotiated with the private respondents
for a higher compensation package but his ever changing position on the amount to be given
resulted in the failure of the negotiations. Third, there is good faith in abolishing the position
of the petitioner, and fourth, the fairness and reasonableness of the criteria in choosing who
between the petitioner and Mr. Jimmy Uy will be retained as RSM for North Central Luzon
Sales Office were all done regularly and without any taint.
“Substantial evidence, as amply explained in numerous cases, is that amount of
‘relevant evidence which a reasonable mind might accept as adequate to support a
conclusion.” Here, the May 2, 2005 Report and the proof of sending of notices to Que and the
DOLE show that the CA was correct in affirming the NLRC’s finding of a valid implementation
of a redundancy program since the findings were supported by substantial evidence. This
negates a finding of grave abuse of discretion.
2. NO. There was no constructive dismissal.
Constructive dismissal has been defined as the “cessation of work because
‘continued employment is rendered impossible, unreasonable or unlikely, as an offer
involving a demotion in rank or a diminution in pay’ and other benefits.” It may exist
“if an act of clear discrimination, insensibility, or disdain by an employer becomes so
unbearable on the part of the employee that it could foreclose any choice by him except to
forego his continued employment.”
Here, there was no constructive dismissal. The LA found Que was subjected to
persistent pressures to resign from his post and these amounted to constructive dismissal.
The NLRC, however, found that Asia Brewery specifically denied the allegations of Que of
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harassment and coercion. In fact, when Que was informed of the planned implementation of
a redundancy program, he accepted the decision and negotiated for a separation package
that would be more than what the law required. When the parties failed to agree on the
separation package primarily because of the demands of Que, Asia Brewery had no choice
but to implement the redundancy program. The NLRC further ruled that Que failed to prove
the work environment became hostile thus making it unbearable for him to remain an
employee of Asia Brewery.
Que’s claim that he was pressured to resign was belied by his May 18, 2005 letter. It
would seem that Que had initially accepted this but had hoped to get a separation package
that was higher than what the law provided. And when he failed to get his demands, his
attitude turned sour and he refused to communicate with the head office. What Que claims
as pressures to make him resign were actually a result of his disobedience to orders for him
to report to work at the head office. He even insisted on visiting the sales offices where he
used his connections in order to force the sales offices to give him access to the premises.
Any embarrassment he might have experienced was not because Asia Brewery acted
maliciously and arbitrarily in terminating his employment but because he failed in getting
what he wanted. Absent proof of malicious and arbitrary conduct of Asia Brewery,
there can be no basis for a finding that Que was constructively dismissed. Hence,
Petition is denied.
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JEBSENS MARITIME, INC. and/or STAR CLIPPERS, LTD. v. EDGARDO M. MIRASOL
G.R. No. 213874, June 19, 2019 (Caguioa, J.)
DOCTRINE
The company-designated physicians’ failure to issue a final and definite assessment
within the 120-day period makes respondent entitled to permanent and total disability benefits.
It was no longer necessary for respondent to present evidence that his illness is work-related
and compensable because the law operates to declare respondent entitled to total and
permanent disability benefits after the company-designated physicians’ failure to issue a final
and definite assessment within the 120-day period.
FACTS
Edgardo Malate Mirasol filed a complaint against Jebsens Maritime, Inc Star Clippers
Ltd., and/or Maria Theresa Lunzaga for total and permanent disability benefits, moral and
exemplary damages, four months basic wages, and attorney’s fees. Mirasol alleged that he is
entitled to total permanent disability benefits of US$60, 000.00 under the POEA-Standard
Employment Contract. That his illness is work-related and it was not pre-existing as he was
found to be fit and given a clean bill of health prior to employment. That the law does not
require a seafarer to be totally paralyzed to claim total permanent disability benefits and
that he is entitled to moral and exemplary damages and attorney’s fees.
Herein petitioners averred that Mirasol is not entitled to disability compensation
under the POEA-Standard Employment Contract because his testicular cancer is not workrelated. They argued that Section 32-A of the POEA-Standard Employment Contract
provides that for an occupational disease and the resulting disability or death to be
compensable, four conditions must be satisfied; none of these conditions have been met;
1. Mirasol’s work did not involve the risks inherent in acquiring epidydimitis and
testicular cancer and none of his duties as a First Cook was a contributing factor in
the development of epidydimitis which is an illness pertaining to the male
reproductive organ in relation to sexual intercourse;
2. Mirasol has the burden of proving the reasonable connection between his ailments
and his working conditions;
3. Mirasol was onboard the Royal Clipper for ten days before he started complaining of
pain in his right testicle and it is medically impossible for him to have developed his
epidydimitis and testicular cancer in such a short period of time;
4. Mirasol’s epidydimitis, which became testicular cancer, is not work-related, and not
compensable and he is not entitled to sickness allowance and reimbursement of
medical expenses, damages and attorney’s fees.
The LA found that petitioners were liable to pay respondent permanent and total
disability benefits and sickness allowance for 120 days, as well as attorney’s fees. The NLRC
ruled that respondent’s testicular cancer is not work-related because respondent
complained of pain in his right testicle on his 10th day onboard the vessel and that cancer
cannot happen in just 10 days. Having failed to show proof of payment of sickness allowance
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to respondent, the NLRC affirmed the LA’s award of sickness allowance to respondent. The
CA reinstated the LA’s decision.
ISSUE
Whether or not Respondent is entitled to permanent and total disability benefits and
attorney’s fees.
RULING
YES. Petitioners argued that respondent Mirasol’s illness was not work-related as he
only experienced his symptoms 10 days after joining the crew’s vessel and that he failed to
present substantial evidence to prove that his illness was work-related. The SC ruled that
this is baseless in light of the undisputed fact that the company-designated physicians failed
to arrive at a final and definite assessment of respondent’s fitness to work or the degree of
his disability.
In Elburg Shipmanagement Phils., Inc. v. Quiogue, Jr., the Court summarized the
rules when a seafarer claims total and permanent disability benefits, as follows:
1. The company-designated physician must issue a final medical assessment on the
seafarer’s disability grading within a period of 120 days from the time the seafarer
reported to him;
2. If the company-designated physician fails to give his assessment within the period of
120 days, without any justifiable reason, then the seafarer’s disability becomes
permanent and total;
3. If the company-designated physician fails to give his assessment within the period of
120 days with a sufficient justification (e.g., seafarer required further medical
treatment or seafarer was uncooperative), then the period of diagnosis and treatment
shall be extended to 240 days. The employer has the burden to prove that the
company-designated physician has sufficient justification to extend the period; and
4. If the company-designated physician still fails to give his assessment within the
extended period of 240 days, then the seafarer’s disability becomes permanent and
total, regardless of any justification.
A final, conclusive, and definite medical assessment must clearly state whether the
seafarer is fit to work or the exact disability rating, or whether such illness is workrelated, and without any further condition or treatment. It should no longer require any
further action on the part of the company designated physician and it is issued by the
company-designated physician after he or she has exhausted all possible treatment options
within the periods allowed by law.
In this case, the last medical assessment issued by the company-designated physician
was on August 29, 2012. The 5th Medical Report does not reflect a definite and final
assessment of Mirasol’s fitness to work or disability rating or whether his illness was
work-related. The report was merely an interim report as it specifically stated a date for
the next appointment. Further, it indicates that respondent’s treatment was “in progress.”
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Hence, the company-designated physicians’ failure to issue a final and definite
assessment within the 120-day period makes respondent entitled to permanent and
total disability benefits. It was no longer necessary for respondent to present evidence
that his illness is work-related and compensable because the law operates to declare
respondent entitled to total and permanent disability benefits after the company-designated
physicians’ failure to issue a final and definite assessment within the 120-day period.
As to the LA and the CA’s award of ten percent (10%) attorney’s fees, the Court affirms
the same. Attorney’s fees may be recovered by an employee in actions for indemnity under
the employer’s liability laws.
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JOSE ASPIRAS MALICDEM v. ASIA BULK TRANSPORT PHILS., INC., INTER-OCEAN
COMPANY LIMITED (formerly OCEAN SHIPPING COMPANY) and ERNESTO T. TUVIDA
G.R. No. 224753, June 19, 2019, Second Division (Caguioa, J.)
DOCTRINE
Section 20(A)(3) of the POEA-SEC requires a claiming seafarer to submit himself for
medical examination within a three-day period post repatriation. Malicdem reneged on his
duty to submit to a post-employment medical examination within three (3) working days from
his repatriation. As a consequence, he effectively forfeited his right to claim disability benefits
under the POEA-SEC.
FACTS
On June 1, 2011, Malicdem was hired by respondent local manning agent Asia Bulk
Transport Phils., Inc. (ABTPI), in behalf of its foreign principal, SKM Korea Co., Ltd., to board
the vessel MV Yushio Princess II for a period of three (3) months. Prior to embarkation,
Malicdem underwent a Pre-Employment Medical Examination where it was noted that he
had a medical history of high blood pressure and hypertension. Nevertheless, he was
declared “fit to work.” On the second week of his duty onboard MV Yushio Princess II,
Malicdem suffered from blurring vision and headache. Upon the doctor’s recommendation,
Malicdem was repatriated to Manila and he was referred to a company-designated hospital,
Sachly International Health Partners, particularly to a company-designated physician, Dr.
Susannah Ong-Salvador who eventually issued a medical report that Malicdem was suffering
from glaucoma. Another medical report was issued by Dr. Salvador stating that Malicdem
was under medical treatment and recommending surgical procedure. However, the report
clarified that Malicdem’s glaucoma was not work-related. Malicdem underwent a PEME and
was eventually issued a medical certification with recommendation that he was fit to work.
He was given maintenance medicines for his hypertension.
On December 31, 2011, Malicdem embarked on MV Nord Liberty as Chief Engineer.
On October 12, 2012, he was repatriated to the Philippines. On March 25, 2014, Malicdem
filed a complaint for disability benefits, claiming that he is entitled to permanent and total
disability benefits because his illnesses, which consist of hypertension and glaucoma, are
work-related, as he was exposed to risk factors that aggravated these conditions while
onboard respondents’ vessel. On the other hand, respondents essentially aver that the
conditions suffered by Malicdem are not work-related. Moreover, Malicdem failed to comply
with the mandatory reporting to a company-designated physician within three (3) days from
disembarkation, thus, resulting to forfeiture of his claims.
ISSUE
Whether or not Malicdem is entitled to total and permanent disability benefits.
RULING
NO. For disability to be compensable under Section 20(A) of the Amended Standard
Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board
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Ocean-Going Ships issued on October 26, 2010 (2010 POEA-SEC), two (2) elements must
concur:
1. the injury or illness must be work-related; and
2. the work-related injury or illness must have existed during the term of
the seafarer’s employment contract.
The 2010 POEA-SEC defines “work-related illness” as “any sickness as a result of an
occupational disease listed under Section 32-A of the Contract with the conditions set therein
satisfied.” As for those diseases not listed as occupational diseases, jurisprudence mandates
that the same may be compensated if it is shown that they are work-related and the
conditions for compensability are satisfied.
Section 20(A)(3) of the POEA-SEC commands that the employee seeking disability
benefits submit himself to post-employment medical examination by a company-designated
physician within three (3) working days from his repatriation. Thus, in situations where
the seafarer seeks to claim the compensation and benefits that Section 20(A) of the
POEA-SEC grants to him, the law requires the seafarer to prove that:
(1) he suffered an illness;
(2) he suffered this illness during the term of his employment contract;
(3) he complied with the procedures prescribed under Section 20(A)(3);
(4) his illness is one of the enumerated occupational disease or that his illness or
injury is otherwise work-related; and
(5) he complied with the four conditions enumerated under Section 32(A) for an
occupational disease or a disputably-presumed work-related disease to be
compensable.
The rule is that whoever claims entitlement to the benefits provided by law should
establish his or her right thereto by substantial evidence. Applying the foregoing guidelines,
the Court cannot grant Malicdem’s Petition. He failed to discharge his burden to prove, by
substantial evidence, satisfaction of items (3), (4) and (5) of the above mandatory
requirements for compensability. Malicdem reneged on his duty to submit to a postemployment medical examination within three (3) working days from his
repatriation. As a consequence, he effectively forfeited his right to claim disability
benefits under the POEA-SEC. The LA found that Malicdem failed to report to ABPTI within
three (3) working days from his repatriation for post-employment medical examination by
ABPTI’s designated physician. This was not contested by Malicdem.
Section 20(A)(3) of the POEA-SEC requires a claiming seafarer to submit
himself for medical examination within a three-day period post repatriation.
According to Malicdem, his failure to report to ABPTI for the mandatory post-employment
medical examination within three (3) working days from repatriation does not prejudice his
claim for disability benefits as this pertains only to the entitlement of the seafarer to sickness
allowances and nothing more. The SC ruled that this argument is untenable.
Jurisprudence abounds holding that failure to comply with the mandatory reporting
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requirement under the POEA-SEC results in the forfeiture of the right to claim
compensation and disability benefits of a seafarer. In fact, a belated submission of the
seafarer to the company for post-employment medical examination has been held to
be insufficient compliance with the reporting requirement and, hence, fatal to the
seafarer’s case.
The rationale for the three-day mandatory period was explained in Jebsens
Maritime, Inc. and/or Alliance Marine Services, Ltd. v. Undag: “Within three days from
repatriation, it would be fairly easier for a physician to determine if the illness was
work-related or not. After that period, there would be difficulty in ascertaining the
real cause of the illness.” To ignore the rule would set a precedent with negative
repercussions because it would open the floodgates to a limitless number of seafarers
claiming disability benefits. Hence, it is clear that the reporting requirement is
indispensable, not only in claiming sickness allowance, as Malicdem suggests, but likewise
in claiming compensation and disability benefits under the POEA-SEC. The mandatory
requirement does admit of exceptions, namely: (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. None of these, however, is proven or even alleged to obtain
in the present case.
Malicdem failed to present substantial evidence that his glaucoma and
hypertension are compensable. Even if the Court excuses Malicdem’s failure to comply
with the reporting requirement as discussed above, the petition must still fail because he
failed to substantially prove that his illnesses are compensable. Both of Malicdem’s
claimed illnesses — hypertension and glaucoma — are non-listed occupational diseases
under the applicable contract, i.e., the 2010 POEA-SEC. Section 20(A)(4) of the 2010 POEASEC creates a disputable presumption that illnesses not listed as an occupational disease in
Section 32 are work-related.
The claimant must prove, not that his illness is work-related, but that the same
is ultimately compensable by satisfying the conditions for compensability under
Section 32(A) of the 2000 POEA-SEC, to wit:
For an occupational disease and the resulting disability or death to be
compensable, all of the following conditions must be satisfied:
1) The seafarers work must involve the risks described herein;
2) The disease was contracted as a result of the seafarer’s exposure to the described
risks;
3) The disease was contracted within a period of exposure and under such other
factors necessary to contract it; and
4) There was no notorious negligence on the part of the seafarer.
Applying the foregoing, the Court finds that the CA, NLRC, and LA were correct in
finding that Malicdem is not entitled to disability benefits for his hypertension and glaucoma.
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On his hypertension, Malicdem failed to substantially prove that the same was contracted
due to, or aggravated by, the conditions of his work onboard the vessel. As for Malicdem’s
glaucoma, he claims that his duties and responsibilities as Chief Engineer, his exposure to
the sea breeze and other elements of nature while the vessel is in open seas, the stress from
his strenuous job and his emotional strain from homesickness aggravated his glaucoma.
What he has are bare allegations which fall far short of the substantial evidence required of
him by law. Likewise weighing against Malicdem’s case is the medical report of the companydesignated physician, Dr. Salvador, issued soon after Malicdem’s first repatriation in 2011,
that his glaucoma was not work-related.
In sum, Malicdem cannot be awarded the total and permanent disability benefits that
he seeks. He breached his contractual obligation to submit to a company-designated
physician within the required period and failed to prove, by substantial evidence, the
compensability of his illnesses.
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ARNULFO M. FERNANDEZ v. KALOOKAN SLAUGHTERHOUSE,
INCORPORATED/ERNESTO CUNANAN
G.R. No. 225075, June 19, 2019, Second Division (Caguioa, J.)
DOCTRINE
It is settled that “[t]o determine the existence of an employer-employee relationship,
four elements generally need to be considered, namely: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control
the employee’s conduct. These elements or indicators comprise the so-called ‘four-fold’ test of
employment relationship.”
FACTS
Petitioner was hired in 1994 as a butcher by Kalookan Slaughterhouse, Inc. He
claimed that he worked from Monday to Sunday, from 6:30PM to 7:30AM, with a daily wage
of P700.00, which was later reduced to P500.00. He further claimed that he met an accident
while driving Kalookan Slaughterhouse’s truck in December 2013 and that deductions were
made from his wages. He questioned these deductions in July 2014, and thereafter he was
treated unreasonably. Petitioner further claimed that on July 21, 2014, he suffered from a
headache and did not report for work. The next day, however, he was shocked when he only
received P200.00 due to his previous undertime and was informed that he could no longer
report for work due to his old age.
Kalookan Slaughterhouse asserted that petitioner is an independent butcher working
under its Operation Supervisor, Cirilo Tablit . He received payment based on the number of
hogs he butchered and was only required to be in the slaughterhouse when customers
brought hogs to be slaughtered. Kalookan Slaughterhouse alleged that it imposed policies on
the entry to the premises, which applied to employees, dealers, independent butchers, hog
and meat dealers and trainees. According to Kalookan Slaughterhouse, petitioner violated
the policies and he misconstrued the disallowance to enter the slaughterhouse as an act of
dismissal.
Petitioner filed the complaint for illegal dismissal before the LA. The LA ruled that
petitioner was illegally dismissed as a regular employee. The LA found that the requisites of
an employer-employee relationship were established. The NLRC ruled that although there
was a semblance of employer-employee relationship as the work of a butcher is necessary
and desirable in the usual trade and business of a slaughterhouse, the facts and
circumstances in this case showed that there was no employer-employee relationship. The
CA ruled that petitioner’s claim of the existence of an employer-employee relationship is not
supported by substantial evidence as he failed to submit salary vouchers, pay slips, daily
work schedule and even a certificate of withholding tax on compensation income.
ISSUE
1. Whether Petitioner is an employee of Kalookan Slaughterhouse.
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2. Whether Petitioner was illegally dismissed and entitled to money claims.
RULING
1. YES. Petitioner was an employee of Kalookan Salughterhouse.
It is settled that “to determine the existence of an employer-employee relationship,
four elements generally need to be considered, namely: (1) the selection and engagement
of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
power to control the employee’s conduct. These elements or indicators comprise the socalled ‘four-fold’ test of employment relationship.”
The Court finds that the NLRC and the CA committed a grave error and agrees with
the LA. The LA found that petitioner was engaged by Kalookan Slaughterhouse itself since
petitioner submitted log sheets and gate passes.
Here, the totality of petitioner’s evidence and the admissions of Kalookan
Slaughterhouse convinces the Court that petitioner was indeed an employee of Kalookan
Slaughterhouse. Petitioner was able to present an I.D., gate passes, log sheets, and a trip
ticket. Kalookan Slaughterhouse even admitted through De Guzman that uniforms were
given to all personnel, including petitioner. Further, petitioner was able to submit an I.D. in
addition to the gate passes. The trip ticket and the log sheets also showed that Kalookan
Slaughterhouse engaged petitioner. These are sufficient to prove that petitioner was
engaged by Kalookan Slaughterhouse.
Kalookan Slaughterhouse, however, attempts to show that even if petitioner worked
in the slaughterhouse, he was Tablit’s employee. Tablit was not shown to possess substantial
capital and investment to have an independent business, be petitioner’s employer and pay
his salaries. Even worse for Kalookan Slaughterhouse, while Tablit claimed to be petitioner’s
employer, he also admitted that he did not exercise any control over the means and methods
of petitioner in rendering butchering services. Kalookan Slaughterhouse, through Tablit, was
the one who engaged petitioner, paid for his salaries, and in effect had the power to dismiss
him. Further, Kalookan Slaughterhouse exercised control over petitioner’s conduct through
De Guzman.
2. YES. Petitioner was illegally dismissed and entitled to his money claims.
The Court finds that the LA was correct in ruling that petitioner was illegally
dismissed. Indeed, Kalookan Slaughterhouse failed to specifically deny that on July 22, 2014,
petitioner was informed that he could no longer report for work. De Guzman only alleged
that he merely barred petitioner from entering the slaughterhouse in several instances
because of his failure to wear his I.D. and uniform but he failed to state that this was done on
July 22, 2014. De Guzman’s silence on this matter is deemed as an admission by
Kalookan Slaughterhouse that petitioner was indeed dismissed on July 22, 2014.
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Having been illegally dismissed, the LA was correct in awarding backwages and
separation pay. The LA’s award of service incentive leave pay, night shift differential pay, and
13th month pay is also proper as Kalookan Slaughterhouse failed to prove that it had paid
petitioner such benefits under the law. Finally, Kalookan Slaughterhouse is likewise liable
for legal interest at the rate of six percent (6%) per annum from the finality of this Decision
until full satisfaction.
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ALVIN M. DE LEON v. PHILIPPINE TRANSMARINE CARRIERS, INC. AND ANNA MARIA
MORALEDA
G.R. No. 232194, June 19, 2019, Second Division (Caguioa, J.)
DOCTRINE
Thus, as it is recognized that company policies and regulations, unless shown to be
grossly oppressive or contrary to law, are generally valid and binding on the parties and must
be complied with until finally revised or amended, the dismissal of de Leon — hinged on a rule
that provides for dismissal even on the first instance of violation — should therefore be upheld.
In this case, the Court holds that PTC was well within its management prerogative in
terminating de Leon's employment upon a finding of violation of its company rules.
FACTS
Petitioner de Leon began as a Hotel Personnel Planner for the Crewing Department
of respondent PTC, a manning agency acting as agent for foreign principals and engaged in
the business of sending Filipino seafarers on board ocean-going ships or vessels. At the start
of his employment, de Leon was given PTC's old company handbook. De Leon's first few
years with PTC went well, and he was, in fact, promoted to Hotel Personnel Officer in 2008. In
December 2010, he was seconded by PTC to First Maritime Shared Services, Inc. (FMSSI),
PTC's offshore processing unit, where he was given the position of "Scheduler." During his
time with PTC, he was given several awards. Meanwhile, during his secondment with FMSSI,
he received four Top Performer of the Month awards, three Top Performer of the Quarter
awards, and a Top Performer of the Year Award in 2012.
However, in 2010, he was served with two written memoranda by the Human
Resources Department of PTC regarding a supposed violation of PTC's Code of Discipline,
particularly Section 3, Number 2. He was caught on PTC's CCTV where he appeared to have
violated the policy of receiving "pasalubong" which was prohibited under the written
instruction of the company. He explained that he merely assisted a crewmember in giving a
gift to a relative. PTC found his explanations honest and justified, so he was given a mere
verbal reprimand to discourage any similar suspicious behavior.
In 2012, PTC revised its Code of Discipline, in which it indicated more clearly its
prohibition against accepting gifts. De Leon was served a copy of PTC’s revised Code of
Discipline. Incidentally, FMSSI —the PTC-owned company where de Leon was seconded —
also had the exact same policy. Petitioner de Leon, along with a co-employee Aaron T.
Brillante was caught on the CCTV accepting a brown bag from another employee Fred Rikko
B. Adefuin. The brown bag — which contained two bottles of Jack Daniel's Whiskey — came
from Mr. Mustafa Acar, a friend and co-employee of de Leon when he was still working in
another vessel, the Oasis of the Seas. The next day, he was confronted about the incident and
he readily admitted that he and Brillante did accept a gift. Petitioner de Leon and Brillante
were served with a memorandum to explain the incident. They were also served a 30-day
Suspension Notice. Petitioner admitted to receiving the bottles of liquor, but insisted that it
was not a violation of the company policy for it did not come from a crewmember but from
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an outsider. In the administrative hearing, Brillante testified that de Leon told Adefuin "not
here, there are cctv and others might have a wrong idea about it," and de Leon then advised
Adefuin to proceed to the rear section of the crewing operations office. Petitioner received a
written resolution from PTC notifying him of the termination of his employment. de Leon
filed a case for illegal dismissal with the Labor Arbiter.
The LA dismissed the case for lack of merit. The NLRC found the penalty of dismissal
too harsh and not commensurate to the act committed, more so because it was done without
wrongful intent and held that de Leon was illegally dismissed by PTC. However, the NLRC
reversed its earlier decision and held that as the penalty provided under PTC's Code of
Discipline was dismissal, de Leon's dismissal was therefore justified. As de Leon's duties and
responsibilities made him a member of the managerial staff, and this violation made him lose
the trust and confidence of PTC. All in all, the NLRC held that de Leon was validly dismissed.
The CA dismissed de Leon's Petition for Certiorari primarily for allegedly being filed out of
time. The CA nevertheless sieved through the records, and found no grave abuse of
discretion in the NLRC's Resolution.
ISSUE
Whether the dismissal of de Leon was justified.
RULING
YES. De Leon was validly dismissed by PTC. Despite the finding, however, that the
CA erred in ruling that the petition was filed out of time, the Court nevertheless upholds the
ruling of the CA as regards the merits of the case.
De Leon's dismissal was anchored on his violation of PTC's Code of Discipline. A
plain reading of the rule would reveal that what is punished are two separate acts:
(1) offering or accepting, whether directly or indirectly, any gift with a collective value of
P500.00 or more, regardless of who it came from, and
(2) acceptance by an employee of any gift — regardless of value — from a crew member, excrew member, or representative of a crew member.
It is likewise clear from the said rule that a violation, even on the first instance, merits
the dismissal of the employee from his employment. It is without question that de Leon
received a gift during his tenure with PTC — his only contentions are: (1) that it did not
constitute a violation of the foregoing rule as he did not receive it from a crew member, excrew member, or representative of a crew member, and (2) that the rule was vague,
unreasonable, and unfair.
De Leon's contention is untenable for his act clearly falls under the first act
punished by the rule. He received a gift with a value of $36, which was clearly above the
P500.00 threshold under the rule.
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The Court's reading of the relevant rule from PTC's Code of Conduct is that it is not
vague, nor is it unreasonable. The fact that it did not specify the origin of the gift or the
purpose for which the gift was given did not automatically mean that the rule was vague. It
simply means that this "no-gift" policy of PTC was absolute, that is, the origin or the purpose
of the gift was irrelevant. In simple terms, the mere act of offering or receiving a gift
constitutes a violation.
The rule is likewise not unreasonable. In light of the strict provisions of the
POEA Rules, it was reasonable for PTC to protect itself by crafting its Code of Discipline
that imposes the supreme penalty of dismissal for those who commit acts that, if
construed to be PTC's, would merit the cancellation of its license. Thus, as it is
recognized that company policies and regulations, unless shown to be grossly oppressive or
contrary to law, are generally valid and binding on the parties and must be complied with
until finally revised or amended, the dismissal of de Leon — hinged on a rule that provides
for dismissal even on the first instance of violation — should therefore be upheld. In this
case, the Court holds that PTC was well within its management prerogative in
terminating de Leon's employment upon a finding of violation of its company rules.
By his own admission in the present petition, Petitioner instructed Adefuin to give
the gift in question to Brillante in the far end of the office, as he knew that there was a CCTV
camera in their work area. He thus knew that he was at risk of getting caught doing an act he
should not do. Despite this, he still received the gift and did not return the same to Acar or
even turned over the same to the Human Resources Department as instructed by the Code
of Discipline. This therefore constitutes willful misconduct or disobedience of company
rules that further justifies PTC's decision to terminate de Leon's employment.
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THE HERITAGE HOTEL, MANILA v. LILIAN SIO
G.R. No. 217896, June 26, 2019, Second Division (Caguioa, J.)
DOCTRINE
It is axiomatic that appropriate disciplinary sanction is within the purview of
management imposition. What should not be overlooked is the prerogative of an employer
company to prescribe reasonable rules and regulations necessary for the proper conduct of its
business and to provide certain disciplinary measures in order to implement said rules to assure
that the same would be complied with. An employer has a free reign and enjoys wide latitude
of discretion to regulate all aspects of employment, including the prerogative to instill discipline
in its employees and to impose penalties, including dismissal, upon erring employees.
FACTS
Petitioner employed Sio as a Service Agent on September 1, 1995. She was last
assigned at the hotel’s restaurant, Le Café. Her tasks included assisting in the serving of food
and beverages to Heritage’s guests. The case involves two separate penalties of suspension
imposed upon Sio for incidents occurring on two different dates. The first subject incident
occurred on April 29, 2011 , at around 11:00 in the evening. One of Heritage’s guests, Tiozon
ordered food and beverage using Heritage’s Player Tracking System (PTS), a system where
clients earn points while playing at the casino inside Heritage’s premises, which points may
be used to purchase food and beverages. The parties dispute what happened thereafter.
Heritage averred that Tiozon was a VIP guest of PAGCOR, one of Hertige’s biggest
clients which draws several guests for Heritage because of its casino operations inside the
hotel. After an investigation, Heritage discovered that Tiozon requested Sio to get her PTS
Card at the slot machines area so that the former could order food and beverage. Instead of
answering Tiozon politely, Sio arrogantly and sarcastically said, “Di ako pwede kumuha ng
PTS card sa slot machine basement area.” The impolite response irked Tiozon. Bumatay asked
Sio if there were slot machine supervisors in Sio’s area who could approve her orders, as per
standard operating procedure. But the latter sarcastically answered, “Pupunta pa ba ako dito
sa SM main area kung mayroong supervisor doon sa HBC?!” After Tiozon complained of her
encounter with Sio to Bumatay and because of his own experience, Bumatay submitted to
Heritage a written report/complaint. Heritage issued a memorandum requiring Sio to
submit her written explanation on the following violations of Heritage’s Code of Conduct. Sio
submitted her written explanation denying Bumatay’s narration in his report/complaint.
After finding her guilty of the charges, Heritage imposed upon Sio the penalty of one-week
suspension.
Another Heritage client, Mussa Mendoza together with a companion, ordered a
clubhouse sandwich from Sio. Mendoza’s companion cancelled the order. Sio then
approached Mendoza’s companion and, in a strong voice, remarked, “Ikaw na magexplain sa
kanya at baka maghanap pa siya.” Embarrassed and offended by Sio’s arrogant remark as
she felt “like she was a dog looking for a food to eat,” Mendoza lodged a complaint against
Sio on September 22, 2011 with Heritage’s HR Department. Sio was issued a second
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memorandum requiring her to explain in writing why no disciplinary action should be
imposed on her for violating the same provisions of the company rules. Sio submitted her
explanation stating that Mendoza’s allegations in her complaint were purely hearsay
because Sio was not talking to Mendoza but to the latter’s companion. Heritage issued a
memorandum and a Report finding Sio guilty of the new charges and imposing upon her the
penalty of suspension for two (2) weeks. Sio filed a complaint for Unfair Labor Practice,
illegal suspension and other monetary claims before the arbitration branch of the NLRC.
The LA ruled that Sio failed to refute Heritage’s allegations and even apologized to
her complainants during the hearings. The LA concluded that Sio’s suspension was based on
valid and legitimate grounds and that such act of Heritage was not tantamount to illegal
suspension, being a legitimate exercise of management prerogative. The NLRC affirmed the
LA ruling.
The CA found Heritage guilty of illegal suspension. According to the CA, the
complaining guests were not adduced by Heritage to corroborate the latter’s charges. Sio’s
alleged statements could hardly be considered arrogant and as sufficient grounds for her
suspension.
ISSUE
Whether the suspensions of Sio were valid and legal.
RULING
YES. Sio was involved in two separate incidents which led to the questioned
suspensions. For the first incident, the labor tribunals found that she arrogantly talked to the
VIP client, Tiozon and the PAGCOR employee, Bumatay. For the second incident, she made
utterances which embarrassed another client, Mendoza. Moreover, the labor tribunals found
that Sio was afforded procedural due process. In both instances, she submitted her
explanations. During the administrative hearings, she failed to refute the allegations and to
present evidence to controvert them. Instead, she even apologized to the complainants.
On the findings of the CA that the statements of Sio “can hardly be considered words
of arrogance, nor obscene, offensive, insulting or scandalous” and that Sio did not harm
Heritage’s image, interest or reputation, the Court agrees with Heritage that the CA, in so
holding, seemingly focused merely on the words spoken and their literal sense without
considering the manner in which these statements were made. The gravity of the statements
made must not only be gauged against the words uttered but likewise on the relations
between the parties involved and the circumstances of the case. As Heritage had explained,
the persons who were on the receiving end of Sio’s improper expressions were valued guests
and an employee of one of their largest clients — PAGCOR. The conduct of Sio did not just
violate Heritage’s Code of Conduct but was likewise inimical to its business relations
with PAGCOR, and thus, prejudicial to the hotel’s interest.
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It bears to emphasize that Sio was not dismissed. She was only suspended for a week
for the first subject offense, and two (2) weeks for the second, after notice, hearing and an
investigation. The Court finds that the penalties of suspension imposed upon Sio were not
without valid bases and were reasonably proportionate to the infractions committed.
It is axiomatic that appropriate disciplinary sanction is within the purview of
management imposition. What should not be overlooked is the prerogative of an employer
company to prescribe reasonable rules and regulations necessary for the proper conduct of
its business and to provide certain disciplinary measures in order to implement said rules to
assure that the same would be complied with. An employer has a free reign and enjoys wide
latitude of discretion to regulate all aspects of employment, including the prerogative to
instill discipline in its employees and to impose penalties, including dismissal, upon erring
employees.
In sum, there is substantial evidence to show that Sio was guilty of the charges
against her and was afforded procedural due process. Hence, the act of Heritage of
imposing upon her the penalties of suspension was a valid exercise of an employer’s
management prerogative.
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RODESSA QUITEVIS RODRIGUEZ v. SINTRON SYSTEMS, INC. AND/OR JOSELITO
CAPAQUE
G.R. No. 240254, July 24, 2019, Second Division (Caguioa J.)
DOCTRINE
In illegal dismissal cases, before the employer must bear the burden of proving that the
dismissal was legal, the employee must first establish by substantial evidence the fact of his
dismissal from service. Bare allegations of dismissal, when uncorroborated by the evidence on
record, cannot be given credence. Moreover, the evidence to prove the fact of dismissal must be
clear, positive and convincing.
Abandonment of employment is a deliberate and unjustified refusal of an employee to
resume his employment, without any intention of returning. While it is not expressly
enumerated under Article 297 of the Labor Code as a just cause for dismissal of an employee, it
has been recognized by jurisprudence as a form of, or akin to, neglect of duty.
FACTS
Petitioner Rodriguez was hired by respondent Sintron Systems, Inc. (SSI) as Sales
Coordinator on July 4, 2001. The conflict between the parties arose when SSI received an
invitation letter for a factory visit with training from its supplier in Texas, USA scheduled on
October 22-24, 2013. The parties had different versions of the events succeeding this.
According to Rodriguez, she attended the training in the USA without any condition
imposed upon her attendance. However, when she returned for work, SSI asked her to sign
a training agreement which required her to remain with SSI for three years, otherwise, she
was to pay a penalty of ₱275,500.00. She refused to sign the agreement, arguing that she
should have been informed of the same prior to her departure for the training. In a meeting,
Capaque humiliated Rodriguez and shouted at her vindictive words such as "mayabang" and
"mahadera." Rodriguez then went on absences for which she filed requests for leave. When
she reported back to work on November 21, 2013, she was surprised to learn that Capaque
sent emails to clients stating that Rodriguez had abandoned her job and accused her of
intentionally hurting the reputation of SSI to the latter's clients. The following day, Capaque
sent Rodriguez an email stating that he did not receive any request for leave and that her
absence was "a ground of abandonment of work." Embarrassed, Rodriguez filed for leave to
be absent from November 22 to 29, 2013 and from December 2, 2013 to January 2, 2014.
Rodriguez filed the present complaint for constructive illegal dismissal, non-payment of
Service Incentive Leave pay, separation pay, damages and attorney's fees. Rodriguez alleges
that she was forced to go on absences in order to avoid the abusive words of Capaque.
According to SSI, Rodriguez was never maltreated, verbally or otherwise, and she
failed to adduce proof thereof. In contrast, SSI offered in evidence affidavits of employees
present in the November 18, 2013 meeting, who all claimed that there was no shouting that
took place. In truth, it was Rodriguez who was tardy, inefficient and disrespectful to clients.
She failed to respond to emails of clients, forcing Capaque to personally send replies. SSI
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reorganized the Sales Department and hired an executive assistant and sales manager. When
Rodriguez reported back to work on SSI required her to give the newly appointed EA copies
of sales documents as well as to share the password to her company-provided email
account. She was likewise told not to tamper with the files in her assigned computer.
Rodriguez failed to follow these instructions Hence, Rodriguez was not constructively
dismissed. She merely preempted what would have been a valid dismissal by going on
unapproved absences. In a letter, SSI informed Rodriguez that the act of deleting information
and files from her company-issued computer and the removal of company documents
constitute serious misconduct, willful disobedience to a lawful order and dishonesty or
breach of trust which are just causes for dismissal under the Labor Code.
The LA dismissed Rodriguez’s complaint for lack of merit as he failed to prove by
substantial evidence the unbearable working environment which supposedly forced her to
go on several absences. Hence, there was no constructive dismissal. Instead, it appeared that
Rodriguez simply did not want to report to the newly appointed EA. The NLRC affirmed the
LA’s decision with the modification that Rodriguez was held to be entitled to SIL pay. The CA
agreed with the labor tribunals as to the lack of substantial evidence presented that
Rodriguez was constructively dismissed. The CA concluded that since there was neither
dismissal nor abandonment, the remedy would have been reinstatement without payment
of backwages. However, the CA noted that the relationship between the parties is already
strained. Hence, reinstatement may no longer be ordered.
ISSUE
Whether the CA correctly ruled that the NLRC did not gravely abuse its discretion and
affirming the latter’s findings that Rodriguez was not dismissed.
RULING
YES. Rodriquez was not dismissed. In illegal dismissal cases, before the employer
must bear the burden of proving that the dismissal was legal, the employee must first
establish by substantial evidence the fact of his dismissal from service. Bare allegations of
dismissal, when uncorroborated by the evidence on record, cannot be given credence.
Moreover, the evidence to prove the fact of dismissal must be clear, positive and convincing.
Here, the Labor Arbiter, NLRC and CA unanimously found that Rodriguez failed
to discharge her burden of proving, with substantial evidence, her allegation that she
was dismissed by SSI, constructively or otherwise. There was no evidence to prove that
indeed Capaque shouted invectives at Rodriguez during the November 18, 2013 meeting.
Also, her allegation that the root cause of Capaque's mistreatment towards her was because
of her refusal to sign an agreement to work for SSI for a period of three years or pay a penalty
of PhP 275,000.00 in lieu of the training she participated in, remains an allegation as even
the complaint she filed before the PNP-CIDG, Camp Crame, Quezon City did not mention of
any invectives allegedly uttered by Capaque to humiliate and insult her. Indeed, it is evident
that Rodriguez was not dismissed. As the Labor Arbiter likewise found, it appears that she
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stopped reporting to work and successively filed applications for leave of absence (which
were not approved) because she did not want to report to the newly appointed EA.
Rodriguez is not guilty of abandonment. Abandonment of employment is a
deliberate and unjustified refusal of an employee to resume his employment, without any
intention of returning. While it is not expressly enumerated under Article 297 of the Labor
Code as a just cause for dismissal of an employee, it has been recognized by jurisprudence as
a form of, or akin to, neglect of duty. It requires the concurrence of two elements: 1) failure
to report for work or absence without valid or justifiable reason; and 2) a clear intention to
sever the employer-employee relationship as manifested by some overt acts.
Here, respondents failed to prove that Rodriguez abandoned her work. To be specific,
they failed to prove the second element of abandonment — that she had intent to abandon.
As found by the CA: Rodriguez wrote in the attached exchange of e-mail that she was
surprised that Capaque said to SSI's clients that she abandoned her work. Also, the continued
filing of applications for leave of absence by Rodriguez even without awaiting SSI's approval
indicate that she did not intend to leave her work in SSI for good.
Rodriguez prayed for the payment of separation pay in lieu of reinstatement,
evidently relying on the alleged strained relations between her and SSI. Under the doctrine
of strained relations, such payment of separation pay is considered an acceptable alternative
to reinstatement when the latter option is no longer desirable or viable. However, the
doctrine presupposes that the employee was dismissed. This factor is clearly absent in
Rodriguez's case. There is no compelling evidence to support the conclusion that the parties'
relationship has gone so sour so as to render reinstatement impracticable.
As regards the prayer for payment of backwages, the same must likewise be denied
because there was no dismissal. Article 279 provides for the payment of full backwages,
among others, to unjustly dismissed employees. The grant of backwages allows the
employee to recover from the employer that which he had lost by way of wages as a result
of his dismissal.
This being the case, SSI must be ordered to reinstate Rodriguez to her former
position without payment of backwages. If Rodriguez voluntarily chooses not to return to
work, she must then be considered as having resigned from employment.
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EFREN J. JULLEZA v. ORIENT LINE PHILIPPINES, INC., ORIENT NAVIGATION
CORPORATION AND MACARIO DELA PEÑA
G.R. No. 225190, July 29, 2019, En Banc (Caguioa, J.)
DOCTRINE
The seafarer's non-compliance with the mandated conflict-resolution procedure under
the POEA-SEC and the CBA militates against his claims, and results in the affirmance of the fit
to work certification of the company-designated physician. With regard to the procedure for
referral to a third doctor, jurisprudence has set that it is the duty of the seafarer to signify his
intent to refer the conflict between the findings of the company-designated physician and that
of his own doctor to a third doctor.
FACTS
Petitioner was employed by respondents as a bosun on board MV Orient Phoenix.
After undergoing the pre-employment medical examination (PEME), he was certified as fit
for sea duty and hence, signed a contract on 21 November 2011 for a period of nine (9)
months, which employment was covered by the IBF-JSU/PSU-IMMAJ Collective Bargaining
Agreement (CBA). Meanwhile, for lack of a replacement, the employment of petitioner was
extended.
Petitioner allegedly slipped while cleaning the cargo hold under bad weather
condition. AB Rolen Magalona wanted to bring him to the hospital for medical attention;
however, the ship master advised private respondent to just wait a while until his extended
contract ends on 25 December 2012 and thereafter have his medical check up. In the
meantime, private respondent was given medication to alleviate the pain on his lower back.
Petitioner went to the company-designated physician on 27 December 2012. Several
tests and therapy sessions were done until February 2013 when the company-designated
physician certified that private respondent was suffering from bilateral nephrolithiasis and
lumbar spondylosis, and informed respondents that the disability grading of private
respondent is Grade 8, i.e. loss of 2/3 lifting power of the trunk.
Petitioner consulted an independent physician, Dr. Rogelio Catapang, Jr., whose
medical report stated that petitioner is unfit for further strenuous duties. Petitioner filed a
complaint for illness allowance, disability benefits, reimbursement of medical expenses and
damages.
Respondents countered that the lumbar spondylosis was classified as Grade 8
disability only, and that the illness or injury did not result from an accident, as there was no
confirmation or validation of such incident except only the self-serving statements of private
respondent and his peer, AB Magalona. Consequently, private respondents are not entitled
to the disability compensation granted under the CBA.
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The LA ruled that petitioner was entitled to permanent total disability benefits
following the CBA. The NLRC found that respondents failed to refute the fact that petitioner
slipped while he and AB Rolen M. Magalonga were washing the cargo hold; thus petitioner is
entitled to permanent total disability benefits under the CBA for having met an accident
while on board the ship, and because his incapacity exceeded 120 days.
In reversing the NLRC, the CA ruled that the failure to consult a third doctor, which is
part of the conflict-resolution procedure, ties the hands of the Court and therefore the
certification of the company-designated physician must be upheld. Petitioner filed a MR but
this was denied by the CA. Hence, this Petition.
ISSUES
1. Whether the findings of the company-designated physician be upheld?
2. Whether Petitioner's injury was a result of an accident?
RULING
1. YES. The company-designated and the independent physicians arrived at different
findings. The company-designated physician, who saw petitioner for medical check-up for at
least 10 instances found that his final suggested disability grading is Grade 8 – loss of 2/3
lifting power of the trunk. His own doctor who saw him twice found that he has lost his preinjury capacity and is UNFIT to work back at his previous occupation.
Given the conflict between the findings of the two doctors, the provision of the CBA
regarding the resolution of such conflict applies. The CBA states that a third doctor may be
nominated jointly between the Company and the Union and the decision of this doctor shall
be final and binding on both parties. In the recent case of Veritas Maritime Corporation v.
Gepanaga, Jr., involving an almost identical provision of the CBA, the Court reiterated that
the seafarer's non-compliance with the mandated conflict-resolution procedure under the
POEA-SEC and the CBA militates against his claims, and results in the affirmance of the fit to
work certification of the company-designated physician.
With regard to the procedure for referral to a third doctor, jurisprudence has set that
it is the duty of the seafarer to signify his intent to refer the conflict between the findings of
the company-designated physician and that of his own doctor to a third doctor. After notice
from the seafarer, the company must then commence the process of choosing the third
doctor. Here, after receipt of his own doctor's medical report, petitioner did not show any
proof that he sent the medical report to respondents and signify to respondents that he
would like to refer the conflicting medical findings to a third doctor.
2. NO. Support for petitioner's claim that he met an accident comes only from his own
handwritten statement and that of AB Magalonga who issued an unnotarized statement, both
of which state that petitioner slipped and fell, with his butt, leg and back hitting the floor.
However, the Medical Report for Seafarer signed by Capt. Jeremias S. Ferrer, indicated that
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during the same time from the unnotarized statement, petitioner complained of back pain
above the waistline but that this arose from sickness.
The fact that petitioner simply complained of lower back pain was confirmed by the
initial medical report of the company-designated physician. Even petitioner's own doctor
stated that petitioner experienced gradual onset of low back pain after lifting heavy objects.
Hence, Petitioner was not involved in an accident. The Court gives more weight to the reports
of the ship captain, company-designated physician, and petitioner's own doctor, all of which
are silent on the fact that he slipped and fell.
The back pain, which he had been experiencing as far back as August 2010, and which
worsened while he was carrying heavy objects, was not an unlooked for mishap, occurrence,
or fortuitous event. It did not arise from an unusual circumstance. It did not arise from a
calamity, casualty, catastrophe, disaster, or an undesirable or unfortunate happening as it
would seem to have developed through time given the nature of his work. Hence, petitioner
is entitled to benefits under the POEA-SEC, and not under the CBA since his injury did not
arise from an accident.
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JULIETA T. VERZONILLA v. EMPLOYEES' COMPENSATION COMMISSION
G.R. No. 232888, August 14, 2019, En Banc (Caguioa, J.)
DOCTRINE
In determining the compensability of an illness, it is not necessary that the employment
be the sole factor in the growth, development, or acceleration of a claimant's illness to entitle
him to compensation benefits. It is enough that his employment contributed, even in a small
degree, to the development of the disease. Moreover, the degree of proof in establishing at least
a small work-connection is merely substantial evidence.
FACTS
Reynaldo I. Verzonilla was employed as a Special Operations Officer (SOO) III in the
Quezon City Department of Public Order and Safety since June 1, 1999 until his death on July
5, 2012. He performed the following functions, among others: 1. assist in conducting
seminars and trainings, 2. conduct hazard, vulnerability, and risk assessment, 3. attend
meetings, seminars, and trainings on disaster preparedness, and 4. render fieldwork.
Reynaldo attended the training "on the use of the Rapid Earthquake Damage
Assessment System (REDAS) software" on July 1-6, 2012 in Tagaytay City. On July 5, 2012,
Reynaldo died due to "cardio pulmonary arrest, etiology undetermined" at UniHealthTagaytay Hospital and Medical Center, Inc. His Discharge Summary/Clinical Abstract shows
that he complained of abdominal pain and chest pain. Records show that Reynaldo was
previously diagnosed with hypertension in 2002.
Petitioner Julieta Verzonilla (Julieta), the surviving spouse of Reynaldo, filed a claim
for compensation benefits before the GSIS under P.D. No. 626. Julieta hinges her claim on par.
(a) and (b) of item number 18 of the ECC Board Resolution. She does not dispute that
Reynaldo had a pre-existing hypertension, having been diagnosed with such in 2002.
However, she claims that this illness, as well as the abdominal pain that Reynaldo suffered,
was aggravated by the strenuous conditions of his work as SOO III, which ultimately led to
his
death.
To support her claim, Julieta lays down the series of alleged strenuous work Reynaldo
was subjected to: Mr. Verzonilla had to travel in perhaps about 2 hours or more including
traffic, to get to Tagaytay. Starting July 1, he started attending that day-long seminar. Such
seminars, especially one for earthquake assessment, would also involve some physical
activities. Inclusive of travel, this activity lasted for at least 2 1/2 hours. Thereafter, he
continued on with attending the lectures for that day until 7:30 p.m. and then this was
followed by a program which lasted at least until 10:00 p.m. Not long after, he suffered a
cardiac arrest and at 1:25 a.m. of July 5, 2012, he died. And prior to this particular seminar,
Mr. Verzonilla was also made to attend a Seminar on Partnership Build for Disaster, Risk
Reduction and Management Climate Change also in Tagaytay City which lasted from June 1820, 2012.
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By: USTFCL Dean’s Circle for AY 21-22
The GSIS denied the claim of Julieta, on the ground that the ailment of Reynaldo was
not connected to his work and that no evidence was found that his duties as SOO III increased
the risk of contracting said ailment. Julieta filed a MR but the same was denied in the GSIS
decision.
Julieta elevated her claims to the Employees' Compensation Commission (ECC),
which affirmed the GSIS’ decision, noting that while cardiovascular disease is listed as an
occupational disease under the Amended Rules on Employees Compensation (EC), it is still
subject to the conditions therein set. According to the ECC, Julieta failed to satisfy these
conditions. Further, the ECC held that Julieta failed to provide substantial evidence to show
reasonable connection between the cause of death of Reynaldo and his work and working
conditions.
Hence, Julieta filed a Petition for Review with the CA. In the Assailed Decision, the CA
agreed with the ECC and ruled that while Reynaldo was diagnosed to be hypertensive, no
evidence was submitted to show that this hypertension was controlled or that his heart
disease worsened by the nature of his work. Julieta filed a MR but the same was denied.
Hence, this petition.
ISSUE
Whether Julieta's claim for EC benefits in connection with the death of her late
husband Reynaldo should be granted?
RULING
YES. Art. 165 (1) of Title II, Book IV on Employees' Compensation and State Insurance
Fund of the Labor Code, as amended by Section 1, PD 626, as amended, defines "sickness" as
"any illness definitely accepted as an occupational disease listed by the Commission, or any
illness caused by employment, subject to proof that the risk of contracting the same is
increased by working conditions."
Under the Amended Rules on EC, which implements PD 626, to be entitled to
compensation, a claimant must show that the sickness is either: (1) a result of an
occupational disease listed under Annex "A" of the Amended Rules on EC under the
conditions Annex A sets forth; or (2) if not so listed, that the risk of contracting the disease
is increased by the working conditions.
Annex "A" of the Amended Rules on EC lists cardiovascular disease as an
"Occupational and Work-Related Disease" subject to certain conditions, thus:
18. CARDIO-VASCULAR 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.
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b. The strain of work that brings about an acute attack must be of sufficient
severity and must be followed within 24 hours by the clinical signs of a cardiac
insult to constitute causal relationship.
xxxx
The first law on workmen's compensation, Act No. 3428, worked upon the
presumption of compensability which means that if the injury or disease arose out of and in
the course of employment, it was presumed that the claim for compensation fell within the
provisions of the law. PD 626 abandoned this presumption. Hence, for the sickness and
resulting disability or death to be compensable, the claimant has the burden of proof to show,
by substantial evidence, that the conditions for compensability is met. In the present case,
the fact that cardiovascular disease is listed as an occupational disease does not mean
automatic compensability. Julieta must show, by substantial evidence, that any of the
conditions in item number 18 of the Amended Rules on EC was satisfied or that the risk of
Reynaldo in contracting his disease was increased by his working conditions.
Moreover, the CA erred in ruling that Julieta is bound to prove the concurrence of ALL
of the conditions in item number 18. A simple reading of the law shows that a claimant is
required to prove merely the existence of "any" of the conditions mentioned in the subject
item, hence, only at least one thereof. Indeed, it appears that the CA failed to appreciate
whether Reynaldo's case falls under the paragraphs of Item 18 other than paragraph (c)
thereof. Of particular importance is paragraph (b) which speaks of a situation wherein the
strain of work of the employee which caused an attack was severe and was followed within
24 hours by signs of a cardiac insult.
Julieta makes a valid point that from the evidence presented, substantial proof was
shown that Reynaldo's cardiac arrest falls under, at least, paragraph (b) of item 18. This
merely requires that: 1) the strain of work that brings about an acute attack must be of
sufficient severity and 2) it must be followed within 24 hours by the clinical signs of a cardiac
insult. The series of strenuous activities Reynaldo underwent prior to his heart attack is
undisputed. Likewise, that the cardiac arrest and the resulting death happened within 24
hours
from
such
strain
of
work
is
clearly
shown.
There is likewise substantial proof to support that Reynaldo's pre-existing heart
disease was exacerbated by the stresses of his work. Part of Reynaldo's job was to conduct
and attend trainings and seminars and conduct hazard, vulnerability and risk assessments.
His job required him to render several hours of field work and, hence, spend stressful and
long hours travelling. Barely two weeks prior to his death, he attended a two-day out-oftown seminar. He, in fact, died while in Tagaytay City, on the last day of a five-day seminar.
He spent his last living hours going to five different places and enduring hours of travel time.
Upon his return to the hotel, he had to conduct another lecture and attend a program which
ended at about 10:00 p.m. About three hours thereafter, he suffered the cardiac arrest which
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Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
took his life. Hence, up to his death, Reynaldo was continuously exposed to stresses of his
work which, at least, contributed to his death.
The Court stresses that in determining the compensability of an illness, it is not
necessary that the employment be the sole factor in the growth, development, or
acceleration of a claimant's illness to entitle him to compensation benefits. It is enough that
his employment contributed, even in a small degree, to the development of the
disease. Moreover, the degree of proof in establishing at least a small work-connection is
merely substantial evidence. In sum, the Court is convinced that Julieta was able to adduce
substantial evidence to support her claims for compensation benefits in relation to her late
husband's death.
On a final note, it is well to recall that the constitutional guarantee of social justice
towards labor demands a liberal attitude in favor of the employee in deciding claims for
compensability. This holds true despite PD 626's abandonment of the presumption of
compensability under the previous Workmen's Compensation Act.
Page 92 of 174
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Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
CELSO S. MANGUBAT, JR. v. DALISAY SHIPPING CORPORATION, WEALTH SHIPPING
LIMITED AND DANNY DADILA
G.R. No. 226385, August 19, 2019, En Banc (Caguioa, J.)
DOCTRINE
Petitioner's doctor issued a certification that merely stated that he was "Unfit to work
for a year yet. Needs physical therapy because of muscle atrophy." The Court finds that the
assessment of the seafarer's doctor is not definite because it failed to state the seafarer's fitness
to work or indicate his disability grade. The assessment is invalid. Given the lack of a valid and
definite assessment from the seafarer's doctor, the definite and valid assessment of the
company-designated physician stands and is binding on the seafarer.
FACTS
Petitioner was contracted by the respondents to work as an oiler on board the vessel
M.V. SG Capital for a period of 10 months. He joined the vessel on February 19, 2014. A week
after, petitioner and the 4th Engineer performed maintenance work on the motor of a purifier
situated at a narrow area. While they were trying to lift the motor, petitioner took a step but
went out of balance and fell off with his right leg hitting the deck floor. He was brought to a
hospital in Australia and was repatriated for medical treatment on March 14, 2014.
Petitioner was referred to the company-designated physician and specialist at the
Marine Medical Services of the Cardinal Santos Medical Center, and was diagnosed to have a
depressed fracture at the lateral tibial plateau of his right leg. He underwent Diagnostic
Arthroscopy and Synovectomy in the knee joint and Percutaneous Screw Fixation of Sagittal
Split Fracture at the Proximal Tibia of his right leg and thereafter underwent physical
rehabilitation program. As of August 8, 2014, the company-designated physician noted that
there was neither swelling nor instability in the joint and that petitioner is ambulatory
without difficulty and has no pain on weight bearing. On the same day, the companydesignated surgeon, who further noted that petitioner has no calf atrophy and needed no
further physical therapy, declared complainant as fit to work.
Meanwhile, petitioner presented a medical certificate dated September 23, 2014
issued by the San Geronimo General Hospital in Morong, Rizal indicating that complainant
was "treated" thereat from "July 9, 2014 up to present 9/23/2014" with the remarks that
complainant needs further physical therapy, probably another year of intense therapy,
because of muscle atrophy in right lower extremity.
Due to this conflict in the findings of the company-designated physician and
petitioner’s own physician, petitioner moved for the referral of the matter to a third doctor
during the conciliation proceedings under the Single-Entry Approach (SEnA) of the
DOLE. The conciliator-mediator, however, denied the request claiming it was not the SEnA's
jurisdiction to rule on such matter. Thus, petitioner filed the complaint against respondents
Dalisay Shipping Corporation, Wealth Shipping Limited and Danny Dadila.
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By: USTFCL Dean’s Circle for AY 21-22
The LA ruled that petitioner is not entitled to disability benefits, and found that
respondents provided petitioner with medical care by addressing his injury through surgical
procedures, physical therapy, medical tests, and monitoring. The LA also found that the
findings of the company-designated physician can be relied upon because the physician
acquired a detailed familiarity with petitioner's medical condition and the medical treatment
that he underwent to. Meanwhile, petitioner's own doctor failed to indicate the treatment
provided to him and the tests conducted. Given this, the LA relied on the findings of the
company-designated physician that petitioner was already fit to work and was therefore not
entitled to disability benefits.
The NLRC affirmed the LA Decision but directed the payment of financial assistance
in the amount of USD7,000, as an equitable concession. Petitioner filed a petition for
certiorari before the CA, which dismissed it for lack of merit. Petitioner filed a MR but this
was denied by the CA. Hence, this Petition, where he argued that the failure to refer to a third
doctor should be taken against respondents.
ISSUE
Whether petitioner is entitled to disability benefits because of the respondents’
failure to refer to a third doctor.
RULING
NO. The NLRC and the LA were both correct in ruling that petitioner was fit to work
based on the findings of the company-designated physician and that petitioner failed to
prove that he was entitled to disability benefits.
Under Section 20(A) of the 2010 Philippine Overseas Employment Administration
Standard Employment Contract28 (POEA-SEC), after medical repatriation, the companydesignated physician must assess the seafarer's fitness to work or the degree of his disability.
After this, the seafarer may choose his own doctor to dispute the findings of the companydesignated physician, and if there is conflict, the matter is referred to a third doctor, whose
findings shall be binding on the parties.
For the company-designated physician's assessment to be considered valid, it must
be timely made and must state the fitness or degree of disability of the seafarer. Once the
company-designated physician has issued the valid assessment, the seafarer may dispute it
by referring to his own doctor. The seafarer has then the duty to signify his intent to
challenge the company-designated physician's assessment and, in turn, the employer must
respond by setting into motion the process of choosing the third doctor. It is required for
both the company-designated physician and the third doctor to arrive at a definite and
conclusive assessment of the fitness or disability rating of the seafarer for their assessment
to be considered as valid. The same standards to determine the validity of the assessment
should be the same for the company-designated physician, seafarer's physician, and the third
doctor. Thus, in order for the seafarer to dispute the assessment of the company-designated
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By: USTFCL Dean’s Circle for AY 21-22
physician, the assessment of the seafarer's doctor should state the seafarer's fitness to work
or the disability rating.
In this case, the company-designated physician found that petitioner was fit to work.
This was a valid assessment and the seafarer may dispute this by referring to his own doctor,
which he did. Petitioner's doctor, on the other hand, issued a certification that merely stated
that he was "Unfit to work for a year yet. Needs physical therapy because of muscle atrophy."
The Court finds that the assessment of the seafarer's doctor is not definite because it failed
to state the seafarer's fitness to work or indicate his disability grade. The assessment is
invalid.
Similarly, in Sunit v. OSM Maritime Services, Inc., the Court found that an assessment
that indicated a need for further rehabilitation is deemed an indefinite assessment and is
therefore invalid. The assessment of petitioner's own doctor merely stated that he was unfit
to work for a year and that he needed to undergo physical therapy. The assessment is
inconclusive and indefinite and therefore not considered a valid assessment.
Given the foregoing, although petitioner indeed moved for the referral to a third
doctor during the conciliation and mediation stage, and respondents failed to heed such
request, such failure to heed the request cannot be taken against respondents because the
assessment of petitioner's own doctor was invalid. Given the lack of a valid and definite
assessment from the seafarer's doctor, the definite and valid assessment of the companydesignated physician stands and is binding on the seafarer.
Page 95 of 174
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
MAGSAYSAY MARITIME CORPORATION, PRINCESS CRUISE LINES LTD., AND/OR GARY
M. CASTILLO v. ALLAN F. BUICO
G.R. No. 230901, December 05, 2019, En Banc (Caguioa, J.)
DOCTRINE
In
case
of
non-observance
by
the
seafarer
of
the
third doctor referral provision in the contract, the employer can insist on the companydesignated physician's assessment even against the contrary opinion by another doctor, unless
the seafarer expresses his disagreement by asking for a referral to a third doctor who shall
make a determination and whose decision shall be final and binding on the parties.
Securing a third doctor's opinion is the duty of the seafarer, who must actively or
expressly request for it.
FACTS
Petitioner Magsaysay Maritime Corporation, a local manning agency, in behalf of its
principal, petitioner Princess Cruise Lines Ltd., entered into a contract of employment
with respondent Allan F. Buico as Second Pantryman aboard the vessel Star Princess. While
on board, Buico met an accident which caused him an injury on his right leg and ankle. First
aid treatment was initially given to Buico and he was thereafter transferred to a hospital in
Canada where he underwent an Open Reduction Internal Fixation (ORIF) surgery
procedure. Thereafter, he was repatriated to the Philippines on July 9, 2014 for further
treatment.
After examination, the company-designated physician initially diagnosed Buico to
have "ORIF for Fracture, lateral and posterior malleolus with talar shift, right", and
recommended an orthopedic follow-up checkup and continued wound care. Upon
examination again, he recommended 12 sessions of physical therapy. All in all, Buico
underwent therapy for a total of 36 sessions August 19, 2014 until November 28, 2014, as
shown by his certificate of attendance. On December 1, 2014, the companydesignated physician gave a Final Medical Report and a Disability Grading of Grade 10
disability
in
accordance
with
the
POEA-SEC.
Unhappy with this assessment, Buico consulted his own physician who diagnosed
Buico unfit to perform sea duty in whatever capacity with a permanent disability
status.Buico then filed a Complaint 16 with the Labor Arbiter (LA) against petitioners for
permanent
and
total
disability
benefits.
Petitioners argued that Buico was not entitled to permanent and total disability
benefits because the company-designated physician had already assessed his disability at
Grade 10 pursuant to the POEA-SEC. Buico failed to follow the third doctor rule and the
company-designated physician had knowledge of Buico's actual medical condition, hence,
he was more qualified to assess his disability.
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By: USTFCL Dean’s Circle for AY 21-22
The LA found that Buico suffered from Grade 10 disability, and ruled
that Buico's physician's assessment was not done as thoroughly as that of the companydesignated physician who had continuously attended to him for a period of more than four
(4) months. The NLRC reversed the LA's findings, ruling that the referral to a third doctor
was not mandatory and that the company-designated physician's assessment was not
accurate
and
precise,
pointing
out
that
the
companydesignated physician even admitted in the Final Medical Report that Buico was not
restored to his previous condition. Hence, his disability should therefore be considered as
total and permanent.
The CA denied the petition and affirmed the NLRC rulings. The CA held that the
Disability Grading given by the company-designated physician was not accurate and
precise as to Buico's actual medical condition; hence, the company-designated physician
failed to arrive at a definite assessment of Buico's fitness or disability within the statutory
periods/ Petitioners filed a MR, but this was denied by the CA. Aggrieved, petitioners filed
the instant Petition
ISSUE
Whether Buico is entitled to the award of total and permanent disability benefits.
RULING
NO. Contrary to the findings of the NLRC and the CA, the company-designated
physician had issued a final, accurate, and precise disability grading within the prescribed
statutory periods. Hence, Buico is not entitled to the award of total and permanent
disability benefits.
The seafarer's entitlement to disability benefits is governed by law, the parties'
contracts, and by medical findings. Pursuant to Section 20(A) of the 2010 POEA-SEC, the
governing rule when he was injured, when a seafarer suffers a work-related injury, the
employer is obligated to refer the seafarer to a company-designated physician who has to
arrive at a definite assessment of the seafarer's fitness or degree of disability within a period
of 120 days from repatriation.
However,
if there is no definitive declaration because the seafarer required further medical
attention, then the 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.
In the case at bar, while the company-designated physician had issued both the Final
Medical Report and Disability Grading on December 1, 2014 - beyond the initial 120day period from repatriation (July 9, 2014) which ended on November 6, 2014 - there
was sufficient justification for such failure to give a timely medical assessment and to extend
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the period of diagnosis and treatment because Buico had required further medical
treatment.
As found by the CA, Buico had religiously undergone therapy from August 19, 2014
until November 28, 2014. The Final Medical Report and Disability Grading was thus
timely issued by the company-designated physician within the extended 240-day period
which ended on March 6, 2015.
The Final Medical Report issued by the company-designated physician shows
that the findings of the company-designated physician as to Buico's disability were final,
accurate, and precise, especially since there was a specific disability grading and since it
stated that there was no other treatment intervention indicated for Buico.
Also, the disability grading given by the company-designated physician was a result
of several months of diagnosis and treatment. In fact, this Grade 10 disability rating was
already given to Buico at least twice as an interim disability grading.
In the face of such final disability grading given by the company designated
physician within the prescribed period, the seafarer who intends to contest such assessment
has the duty to observe the third doctor provision under the 2010 POEA-SEC.
In
case
of
non-observance
by
the
seafarer
of
the
third doctor referral provision in the contract, the employer can insist on the
company-designated physician's assessment even against the contrary opinion by another
doctor, unless the seafarer expresses his disagreement by asking for a referral to a third
doctor who shall make a determination and whose decision shall be final and binding on the
parties. Securing a third doctor's opinion is the duty of the seafarer, who must actively
or expressly request for it.
Contrary to the pronouncement made by the NLRC, the referral to a third doctor is
mandatory. Without referral to a third doctor, there is no valid challenge to the companydesignated
physician's
findings.
Ultimately,
therefore,
the
companydesignated physician's findings in such a situation must be upheld over the findings of the
personal doctor of the seafarer. In the instant case, after the companydesignated physician gave a final Grade 10 disability assessment, Buico consulted his own
physician who opined that he was unfit to perform sea duty in whatever capacity with a
permanent disability status. Thereafter, Buico filed a complaint against his employers
without first expressly requesting the company for the referral of the matter to a third
doctor.
This failure by Buico to comply with the requirement of referral to a third doctor is
tantamount to a violation of terms under the POEA-SEC. Consequently, without a binding
third-party opinion, the final, accurate and precise findings of the company-designated
physician prevail over the conclusion of the seafarer's personal doctor.
Page 98 of 174
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
NEREN VILLANUEVA v. GANCO RESORT AND RECREATION, INC., PETER MARASIGAN,
BENJIE MARASIGAN, LUZ MARASIGAN, BOYA MARASIGAN, AND SERGE BERNABE
G.R. No. 227175, January 08, 2020, En Banc (Caguioa, J.)
DOCTRINE
In Merin v. National Labor Relations Commission, the Court explained the principle of
"totality of infractions" in this wise:
The totality of infractions or the number of violations committed during the period of
employment shall be considered in determining the penalty to be imposed upon an
erring employee. The offenses committed by petitioner should not be taken singly and
separately. Fitness for continued employment cannot be compartmentalized into tight
little cubicles of aspects of character, conduct and ability separate and independent of
each other.
xxxx
After all, the record of an employee is a relevant consideration in determining the
penalty that should be meted out since an employee's past misconduct and present
behavior must be taken together in determining the proper imposable penalty.
FACTS
Respondent Ganco Resort and Recreation, Inc. (GRRI) hired petitioner as a part-time
employee in its resort, La Luz Beach Resort and Spa. She eventually became the head of the
Housekeeping Department in 2005 and as head of the Front Desk Department in 2008.
Sometime in 2013, petitioner was found guilty of violating company policies, i.e.,
abuse of authority, when she rejected walk-in guests without management approval, and
threat to person in authority, when she threatened the assistant resort manager, respondent
Serge Bernabe, with physical harm. She was meted the penalty of two days suspension
without pay for abuse of authority and a five-day suspension without pay subject to the
agreement that petitioner would be under strict performance monitoring and that any
further violation which would warrant suspension would be elevated to immediate
dismissal. After serving her suspension, petitioner resumed her task as a receptionist. She
was transferred to the Team Building Department upon the advice of respondent Bernabe.
Thereafter, in March 2014, GRRI implemented a reorganization in La Luz Resort and
issued a Notice to Transfer to five of its employees, including petitioner, where they were
informed of the reorganization and were advised that they would be laterally transferred to
another department effective immediately. Petitioner was transferred from the Reception
Department to Storage Department without diminution in rank and benefits. However,
petitioner refused to sign the Notice to Transfer and remained at the reception area for two
days before reporting to her new station. Petitioner also sent an e-mail addressed to the
management asking questions regarding her transfer.
A Memorandum was issued to petitioner directing her to explain within 24 hours
from notice why she should not be penalized for insubordination for her repeated failure to
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By: USTFCL Dean’s Circle for AY 21-22
sign the Notice to Transfer. Petitioner explained that she refused to sign the Notice to
Transfer pending answers to the questions she sent to the management via e-mail. GRRI also
issued petitioner a Notice of Preventive Suspension on March 14, 2014 placing her under
preventive suspension until March 21, 2014 pending resolution of the charge against
her. Petitioner, however, failed to report back to work after the lapse of the period of her
preventive suspension on March 22, 2014 until March 26, 2014. Thus, on March 26, 2014,
GRRI's Human Resource (HR) department issued petitioner another Memorandum directing
her to report to the HR department within 24 hours and to explain her absences without
leave.
Upon reporting thereat, petitioner was handed the Termination Notice advising her
that the management found her guilty of "inhuman and unbearable treatment to person in
authority; abuse of authority; serious misconduct - insubordination by not accepting her
memorandum of re-assignment by the Executive Committee; and gross and habitual neglect
of duties AWOL" and had decided to terminate her from employment effective immediately.
Petitioner filed a complaint for illegal dismissal and money claims (i.e., underpayment
of wages, non-payment of overtime pay, rest day premium and service incentive leave pay,
unfair labor practice, damages, and separation pay).
The Labor Arbiter (LA) found that petitioner was illegally dismissed and directed
respondents to pay petitioner full backwages, separation pay, and unpaid service incentive
leave. The LA held that petitioner's failure to sign the Notice to Transfer does not in itself
constitute serious misconduct and willful disobedience for her act is neither willful in
character nor does it imply a wrongful intent.
The NLRC affirmed the LA's findings but modified the award of damages by deleting
the award of separation pay. The NLRC held that while the totality of infractions may justify
an employee's dismissal, past infractions for which an employee has already been penalized,
as in this case, can no longer be cited as bases for the present offense and cannot be
collectively taken to justify an employee's termination. However, the NLRC held that
petitioner cannot be left completely unaccountable for the two-day delay in complying with
the transfer; thus, the NLRC found it just and proper to impose a penalty of three months
suspension without pay on petitioner
Aggrieved, respondents sought reconsideration but this was denied so they filed a
petition for certiorari before the CA. The CA reversed and set aside the NLRC ruling and
upheld the validity of petitioner's dismissal. The CA found petitioner's refusal to sign the
Notice to Transfer as amounting to insubordination or willful disobedience. Thus, her
previous infraction of refusal to accept walk-in guests, taken in conjunction with her
manifest refusal to accept her new assignment pursuant to the Notice to Transfer, served as
valid grounds for her dismissal from employment. Petitioner filed a MR but the same was
denied. Hence, this Petition where she argued that her past infractions cannot be used as
basis for her dismissal and that the CA erred in applying the principle of totality of infractions
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ISSUES
1. Whether petitioner was validly dismissed from employment on the ground of
insubordination.
2. Whether petitioner was validly dismissed from employment on the ground of gross and
habitual neglect.
3. Whether petitioner's dismissal is tainted with numerous procedural lapses.
4. Whether petitioner is entitled to Service Incentive Leave Pay (SILP).
RULING
In an illegal dismissal case, the onus probandi rests on the employer to prove that the
employee's dismissal was for a valid cause. A valid dismissal requires compliance with both
substantive and procedural due process - that is, the dismissal must be for any of the just or
authorized causes enumerated in Article 297 [282] and Article 298 [283], respectively, of the
Labor Code, and only after notice and hearing.
1. NO. GRRI charged petitioner with insubordination for her refusal to sign the Notice of
Transfer which amounts to a non-compliance with procedure. Insubordination or willful
disobedience requires the concurrence of the following requisites: (1) the employee's
assailed conduct must have been willful or intentional, the willfulness being characterized
by a "wrongful and perverse attitude"; and (2) the order violated must have been reasonable,
lawful, made known to the employee and must pertain to the duties which he had been
engaged to discharge. Both requirements are not present in this case.
As stated by petitioner in her handwritten explanation, she withheld her signature on
the Notice to Transfer because she was awaiting answers to the questions she raised to the
management via e-mail. She cannot be forced to affix her signature thereon if she does not
really fully understand the reasons behind and the consequences of her transfer.45 While her
action is willful and intentional, it is nonetheless far from being "wrongful and perverse." In
addition, respondents failed to prove that there is indeed an order or company procedure
requiring a transferee's written conformity prior to the implementation of the transfer, and
that such order or procedure was made known to petitioner.
Relevantly, there is also no basis to impose a penalty of three-month suspension
without pay on petitioner for her delay in assuming her new role at the Storage Department
considering that she was not even cited by GRRI for said act. GRRI is already deemed to have
waived its right to terminate or discipline petitioner on such ground.
2. YES. Anent the charge of habitual neglect for petitioner's absences without leave, in order
to constitute a valid cause for dismissal, the neglect of duties must be both gross and
habitual. Gross negligence has been defined as "the want or absence of or failure to exercise
slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them."49 On the other hand, habitual
neglect "imparts repeated failure to perform one's duties for a period of time, depending on
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the circumstances." A single or isolated act of negligence does not constitute a just cause for
the dismissal of the employee.
Petitioner's four-day absence without leave is not gross nor habitual. Even so,
petitioner's absences are still not justified. Petitioner alleged that she did not report back to
work after serving her preventive suspension because the management did not reply to her
query as to when she needed to report. This reasoning does not justify her absences. The
Notice of Preventive Suspension served on her clearly stated that the period of her
preventive suspension was from March 14 to March 21, 2014. Thus, she was expected to
report back to work on her next working day. Yet, she reported only on March 26, 2014.
Therefore, while there may be no basis to dismiss her on the ground of gross and habitual
neglect, petitioner is still guilty of having committed a violation. It is here that totality of
infractions may be considered to determine the imposable sanction for her current
infraction.
In Merin v. National Labor Relations Commission, the Court explained the principle of
"totality of infractions" in this wise:
The totality of infractions or the number of violations committed during the period of
employment shall be considered in determining the penalty to be imposed upon an
erring employee. The offenses committed by petitioner should not be taken singly
and separately. Fitness for continued employment cannot be compartmentalized into
tight little cubicles of aspects of character, conduct and ability separate and
independent of each other.
xxxx
After all, the record of an employee is a relevant consideration in determining the
penalty that should be meted out since an employee's past misconduct and present
behavior must be taken together in determining the proper imposable penalty.
The totality of an employee's infractions is considered and weighed in determining
the imposable sanction for the current infraction. It presupposes that the employee is
already found guilty of the new violation, as in this case. Apropos, it is also worth mentioning
that GRRI had already previously warned petitioner that the penalty for her next infraction
would be elevated to dismissal. Thus, the dismissal of petitioner, on the basis of the principle
of totality of infractions, is justified.
3. YES. The Court delineated the requirements of procedural due process in King of Kings
Transport, Inc. v. Mamac:
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.
xxxx
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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.
The records show that GRRI failed to observe the foregoing requirements. First, while
the Termination Notice cited four grounds for petitioner's dismissal, the Memorandum dated
March 10, 2014 only charged petitioner with insubordination for her refusal to sign the
Notice to Transfer. Second, petitioner was only given 24 hours to submit an
explanation. Third, no administrative hearing was held, or even scheduled. Lastly, the
Termination Notice already cited petitioner's absences without leave as ground for her
dismissal even before she was even given any opportunity to be heard. Considering that a
valid cause for petitioner's dismissal exists but the requirements of procedural due process
were not observed, the award of nominal damages in the amount of P30,000.00 is in order.
4. YES. In RTG Construction, Inc. v. Facto, the Court awarded money claims, particularly SILP,
despite the validity of the employee's dismissal. The first paragraph of Article 95 of the Labor
Code provides that every employee who has rendered at least one year of service shall be
entitled to a yearly incentive leave of five days with pay. In the present case, petitioner had
been in the employ of GRRI since 2002, or for 12 years, hence she is entitled to SILP.
Considering that petitioner is claiming non-payment, the burden also rests on GRRI, as the
employer, to prove payment.60 Since, GRRI has not shown any proof that it has paid
petitioner SILP or that it is exempted from paying the same, the CA erred in deleting the
award of SILP.
The LA's computation of SILP due to petitioner is limited only to three years, citing
Article 291 of the Labor Code which provides for the three-year prescriptive period for
money claims. However, in Auto Bus Transport Systems, Inc. v. Bautista, the Court held that
the three-year prescriptive period commences not at the end of the year when the employee
becomes entitled to the commutation of his service incentive leave, but only from the time
the employee becomes entitled to the commutation of his service incentive leave, i.e., from
the time he demands its commutation or upon termination of his employment, as the case
may be. Thus, the computation of petitioner's SILP should cover the period from the
beginning of her employment until its termination, as follows:
P10,000.00 (12) / 365 (5 days) (12 years) = P19,726.02
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SEVENTH FLEET SECURITY SERVICES, INC. v. RODOLFO B. LOQUE
G.R. No. 230005, January 22, 2020, En Banc (Caguioa, J.)
DOCTRINE
While there is no specific provision in the Labor Code governing the "floating status" or
temporary "off-detail" of employees, the Court, applying Article 301 [286] of the Labor Code by
analogy, considers this situation as a form of temporary retrenchment or lay-off. Conformably
with Article 301, the placement of an employee on "floating status" must not exceed six months.
Otherwise, the employee may be considered constructively dismissed.
FACTS
Respondent Rodolfo B. Loque was hired as a security guard by petitioner Seventh
Fleet Security Services, Inc. and its President, Medy Lastica.
Loque filed a complaint for constructive dismissal, and payment of separation pay
and full backwages against the two. He argued that since he was placed on floating status
from January 7, 2014 to July 28, 2014, or a period of more than six months, he is deemed to
have been constructively dismissed. Loque alleged that he was treated with hostility after he
filed a complaint for underpayment of wages and other money claims against Seventh Fleet
and Lastica in September 2013. Loque claimed that he was suddenly relieved from his post
upon request of Second Midland Offices Condominium Corp., Seventh Fleet's client and
Loque's place of assignment. The next day, Loque received an order suspending him for 10
days. After the lapse of his 10-day suspension, or on January 7, 2014, Loque allegedly
reported for work, but he was informed that he was placed on "floating status" and was
advised to wait for a call from Seventh Fleet.
To avoid liability for constructive dismissal, Seventh Fleet asserted that it had
directed Loque "to report to Seventh Fleet's office for posting within forty eight (48)
hours" through the letters dated May 14, 2014 and May 28, 2014. Seventh Fleet faulted
Loque for not complying with its directive. On the other hand, Loque claimed that he went to
Seventh Fleet's office to report for work on two occasions — on May 19, 2014 and July 11,
2014, as shown by his even dated letters. Loque further alleged that he was barred from
entering the premises of Seventh Fleet on those dates and, thus, was constrained to write
those letters instead. Before leaving the premises, Loque handed the first letter to security
guard Dario Amores, Jr., informing Seventh Fleet that he was ready to report for duty on the
same day. In the second letter, Loque inquired with Seventh Fleet regarding the status of his
employment as he was refused to return to work again.
The Labor Arbiter found Seventh Fleet and Lastica guilty of illegal constructive
dismissal and ruled that Loque was not given any work assignment after his 10-day
suspension, or from January 7, 2014 until he filed the complaint for constructive dismissal
on July 28, 2014. In other words, Loque was on floating status for more than six months. The
LA also rejected Seventh Fleet's argument that Loque was guilty of abandonment, noting that
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Loque was repeatedly refused entry to Seventh Fleet's office and was ignored every time he
would attempt to report for duty.
The NLRC reversed the ruling of the LA, and held that placing Loque on floating status
was a valid exercise of Seventh Fleet's management prerogative. Instead, the NLRC gave
credence to the sworn statement of Amores, the security guard stationed at the gate of the
village where Seventh Fleet's office is located, who narrated that Loque did not proceed to
Seventh Fleet's office but only left a copy of his letter with him at the village guardhouse.
The CA granted the petition for certiorari, annulling and setting aside the NLRC
Resolution, and reinstated the LA’s Decision with modification. The CA also stated that Loque
could not have afforded to turn down any job posting while waiting to be recalled to work
considering that he had been without a regular job since January 7, 2014, and was only able
to work on a reliever basis. Seventh Fleet sought reconsideration of the CA Decision but was
denied in a Resolution dated February 16, 2017. Hence, this Petition.
ISSUE
Whether Loque was constructively dismissed from employment and, thus, entitled to his
money claims.
RULING
YES. The instant controversy centers on the legality of Loque's "floating status." In
security services, the "floating status" or temporary "off-detail" of an employee may take
place when there are no available posts to which the employee may be assigned — which
may be due to the non-renewal of contracts with existing clients of the agency, or from a
client's request for replacement of guards assigned to it.
While there is no specific provision in the Labor Code governing the "floating status"
or temporary "off-detail" of employees, the Court, applying Article 301 [286] of the Labor
Code by analogy, considers this situation as a form of temporary retrenchment or lay-off.
Conformably with Article 301, the placement of an employee on "floating status" must
not exceed six months. Otherwise, the employee may be considered constructively
dismissed.17 Furthermore, the burden of proving that there are no posts available to which
the security guard can be assigned rests on the employer.18 However, the mere lapse of six
months in "floating status" should not automatically result to constructive dismissal. The
peculiar circumstances of the employee's failure to assume another post must still be
inquired upon.
In this case, Loque was placed on floating status beginning on the lapse of his 10-day
suspension on January 7, 2014. Thus, at the time he filed the complaint for constructive
dismissal and money claims on July 28, 2014, he has been on "floating status" for six months
and 21 days. As with the CA, the Court is likewise inclined to believe the allegations of Loque
that he was barred from entering the premises of Seventh Fleet. The Court notes that other
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than bare denials, Seventh Fleet was not able to show that Loque was not barred from
entering its premises. Thus, Loque could not be faulted for merely leaving the letter dated
May 19, 2014 with security guard Amores, and for sending the letter dated July 11, 2014
through private courier. Also noteworthy, Seventh Fleet did not dispute the July 11, 2014
letter but merely attempted to discredit Loque by saying that the letter was merely
"crafted" in preparation to the filing of the complaint. Then again, Seventh Fleet did not
respond nor refute the contents of said letter.
At any rate, the letters dated May 14, 2014 and May 28, 2014 sent by Seventh Fleet to
Loque are in the nature of general return to work orders. Such general return to work orders
will not absolve Seventh Fleet since jurisprudence requires not only that the employee be
recalled to the agency's office, but that the employee be deployed to a specific client before
the lapse of six months.
Considering that Loque was placed on floating status for more than six months
without being deployed to a specific assignment, and that the letters dated May 14, 2014 and
May 28, 2014 are bereft of any reference to any specific client or indication that he would be
assigned to a specific client, Loque is therefore deemed constructively dismissed. It follows
then that Loque could not have abandoned his employment with Seventh Fleet, for
abandonment is incompatible with constructive dismissal.
Abandonment, as a just cause for termination, requires "a deliberate and unjustified
refusal of an employee to resume his work, coupled with a clear absence of any intention of
returning to his or her work." The following elements must therefore concur: (1) the failure
to report for work or absence without valid or justifiable reason, and (2) a clear intention to
sever the employer-employee relationship, with the second element as the more
determinative factor and being manifested by some overt acts.
There is no showing that Loque intended to sever his employment with Seventh Fleet.
On the contrary, there is strong indication that Loque wanted to resume work. After serving
his 10-day suspension, Loque reported for work but was instead told that he was being
placed on floating status and instructed to wait for Seventh Fleet's call. Loque also sent
Seventh Fleet the letter dated May 19, 2014 to inform the latter that he was ready to report
for duty, and a letter dated July 11, 2014 to inquire on the status of his employment. He also
filed the instant complaint for constructive dismissal shortly after the lapse of his six-month
floating status. His immediate filing of the complaint is proof enough of his desire to return
to work and negates any suggestion of abandonment. In addition, Loque has been in the
service of Seventh Fleet since 2006, or for eight years already before his dismissal in
2014 and, thus, could not have had such intention to abandon his work.33 The totality of
these circumstances negates the existence of a clear intention to sever the employeremployee relationship on the part of Loque.
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Having been illegally dismissed from employment, Loque is, therefore, entitled to the
twin reliefs of full backwages and reinstatement. If reinstatement is not viable, separation
pay may be awarded in lieu of reinstatement.
Considering that Loque no longer asked to be reinstated, the Court takes it as
an indicia of strained relations between Loque and Seventh Fleet which makes
reinstatement no longer appropriate. Thus, the award of backwages and separation pay in
lieu of reinstatement is proper in this case.
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PACIFIC OCEAN MANNING, INC. AND/OR INDUSTRIA ARMAMENTO MERIDIONALE
AND/OR CAPT. AMADOR P. SERVILLON v. ROGER P. SOLACITO
G.R. No. 217431, February 19, 2020, En Banc (Caguioa, J.)
DOCTRINE
If the findings of the company-designated physician and the seafarer's doctor of choice
are conflicting, the matter is then referred to a third doctor, whose findings shall be binding on
both parties. The seafarer has then the duty to signify his intent to challenge the companydesignated physician's assessment and, in turn, the employer must respond by setting into
motion the process of choosing the third doctor.
FACTS
Petitioner Pacific Ocean Manning, Inc. hired respondent Roger P. Solacito as an Able
Seaman on board M/V Eurocardo Salerno on behalf of its principal, petitioner Industria
Armamento Meridionale. Solacito was deployed on March 22, 2009 after being declared fit
to work following his pre-employment medical examination (PEME). As an able seaman,
Solacito was expected to do routine chores including pirate watch duty during the night.
Solacito alleged that while he was on pirate watch on the night of June 10, 2009, an
insect entered and lodged itself inside his left ear which caused pain, itchiness, and dizziness.
He tried to remove it with his fingers but failed. The pain and irritation persisted for several
days. Thus, on June 18, 2009, Solacito was off-boarded, treated and diagnosed with otite
externa at the Clinica da Climed in Luanda, Africa. When his condition did not improve, he
was again off-boarded for treatment in a Moroccan hospital, and then at a clinic in Leixoes,
Portugal, where he was advised to be medically repatriated for treatment.
Solacito was repatriated on July 3, 2009, and was referred to Vizcarra Diagnostic
Center for examination and treatment by the company-designated physician, who diagnosed
him with an ear infection which became aggravated chronic otitis media. He was given
medication and recommended for surgery.
Solacito underwent a surgical procedure at St. Luke's Medical Center. On January 7,
2010, Dr. Elizabeth Tan-Tin issued a Medical Report finally declaring Solacito fit to work. On
February 10, 2010, Dr. Frederick Hawson, the attending ear-nose-throat (ENT) consultant,
and Dr. Tan-Tin prepared another medical report which states:
“Based on his latest hearing evaluation as compared to established criteria, Mr.
Solacito does not have hearing disability. His moderate hearing loss at the level of 50
dB on the left ear is a hearing impairment and may affect certain aspect of his job
description. But overall as far as hearing is concerned he should still be FIT TO WORK
as a seafarer.”
In January 2010, Solacito filed a complaint for total and permanent disability benefits.
In March 2010, Solacito consulted Dr. Manuel C. Jacinto, his personal physician, who issued
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a Medical Certificate which states that he is physically unfit to go back to work as a seafarer
in any capacity because of hearing loss (L) ear, which is a total and permanent disability.
The Labor Arbiter (LA) ruled in favor of Solacito and awarded him total and
permanent disability benefits in accordance with the CBA. The LA held that the independent
medical assessment of Solacito's personal physician must be upheld as accurate, fair, and
neutral medical assessment and that the medical assessment of the company-designated
physicians expectedly downplayed Solacito's chronic otitis which was undisputedly caused
by his perforated eardrum and which resulted to hearing loss.
The NLRC concurred with the LA that the medical assessment made by Solacito's
personal physician must prevail over that of the company-designated physicians. The NLRC
likewise stated that no maritime company aware of Solacito's ear problem will likely hire
him considering that the duties of an able seaman do not only entail an almost perfect
eyesight but also superior sense of hearing. However, the NLRC found that Solacito's contract
of employment was executed more than two months after the expiration of the CBA; hence,
the benefits should be based on the provisions of the Philippine Overseas Employment
Administration Standard Employment Contract (POEA-SEC).
The CA granted the petition made by petitioners and instead awarded permanent
partial disability benefits to Solacito, The CA explained that under the POEA-SEC and
prevailing jurisprudence, the medical assessment of the company-designated physicians
should be recognized when the seafarer, as in this case, did not submit himself to the
assessment of a third doctor. The CA further held that Solacito is suffering permanent and
partial disability with a Grade 12 disability rating. Both parties filed their MRs, which were
denied. Hence, this Petition where petitioners insisted that Solacito is not suffering from any
disability, as shown by the Medical Report dated January 7, 2010 and Solacito's subsequent
re-deployment, and therefore, not entitled to any disability benefits.
ISSUE
the CA.
Whether Solacito is entitled to permanent and partial disability benefits awarded by
RULING
NO. Even if the Court gives due course to the complaint despite it having been filed
prematurely, Solacito failed to rebut the findings of the company-designated physicians.
Section 20(B)(3) of the POEA-SEC requires that, after medical repatriation, the companydesignated physician must assess the seafarer's fitness to work or the degree of his disability.
Thereafter, the seafarer may choose his own doctor to dispute the findings of the companydesignated physician.
If the findings of the company-designated physician and the seafarer's doctor of
choice are conflicting, the matter is then referred to a third doctor, whose findings shall be
binding on both parties. The seafarer has then the duty to signify his intent to challenge the
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company-designated physician's assessment and, in turn, the employer must respond by
setting into motion the process of choosing the third doctor.
Based on the foregoing, following the disability assessment issued by his personal
physician which conflicted with that of the company-designated physicians, it was
incumbent on Solacito to refer the findings of his own doctor to his employer who would
then have had the obligation to commence the process of the selection of the third doctor.
The records of the case reveal, however, that Solacito (1) consulted his personal physician
only on March 18, 2010, or about three months after the filing of the complaint, and (2) did
not submit to or notify his employer the conflicting findings of his own doctor and give notice
of his intention to have the conflicting findings referred to a third doctor.
In this regard, jurisprudence is likewise settled that non-referral to a third doctor,
whose decision shall be considered as final and binding, constitutes a breach of the POEASEC and the assessment of the company-designated physician shall prevail. Hence, on the
basis of the medical assessment issued by the company-designated physicians, Solacito
should be considered able and fit to work, and therefore not entitled to any disability benefit
— not even a partial disability benefit.
Again, the assessment of the company-designated physicians is already binding on
Solacito given his premature filing of the complaint and his failure to observe the procedure
under Section 30(B)(3) of the POEA-SEC. There is, therefore, no basis to ascribe a disability
rating to Solacito. Moreover, as explained by the Court in Caredo v. Maine Marine Philippines,
Inc., the determination of the fitness of a seafarer for sea duty is the province of the companydesignated physician. It is therefore beyond the courts' authority, nay expertise, to prescribe
a disability rating to Solacito in contravention of the valid and binding findings of the
company-designated physicians.
The records also bear that the company-designated physicians issued said final and
definitive medical assessment within 240 days. Particularly, the Medical Report dated
January 7, 2010 was issued after 188 days from his medical repatriation. Even the
subsequent medical report dated February 10, 2010 of the company-designated physicians
was issued within the 240-day window. Thus, following the "120/240-day rule" on claims
for permanent and total disability benefits, Solacito had no basis to insist that he is suffering
from total or partial permanent disability.
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PEOPLE OF THE PHILIPPINES v. ANA ESPIRITU, ELLEN MABBORANG, and ISABEL
RIOS Y CATAGBUI
G.R. No. 226140, February 26, 2020, En Banc (Caguioa, J.)
DOCTRINES
In Illegal Recruitment, a corporate officer or director may be held personally liable for
corporate acts if it is proven that he or she assented to patently unlawful acts of the corporation
or that the said officer or director was guilty of gross negligence and bad faith.
Section 6(m) of RA 8042 criminalizes the failure to reimburse documentation and
processing expenses incurred by the applicant in case of non-deployment, and not the failure to
deploy, which is covered by a different provision.
FACTS
To prove its case, the prosecution presented the following witnesses: Elmer Q. De
Mata, Mylene Arevalo, Liwayway M. Tiglao, Rico H. Dacillo, Eduardo Milanes, Michael B.
Custodio, and Marlone Papio.
Elmer testified that Ellen Espiritu had informed him about Isabel’s recruitment
agency (Green Pastures International Staffing Services Corp.) deploying people for Taiwan.
Sometime in 2007, Ellen brought Elmer to Isabel's agency located at 1991 Jayward Lee
Building, Buendia, Pasay City wherein Elmer was required to fill up an application form and
bio-data. Thereafter, Ellen asked Elmer to submit a medical certificate and required him to
pay the amount of P4,000.00 for the medical examination. Elmer also paid the placement fee
of P90,000 in two installments. Elmer regularly visited the agency to follow up his
application until June 2008 when he was required to undergo another medical examination
where he paid P4,000 again. Elmer thought that Ellen was just cheating him so he decided to
go to the POEA to file a complaint. At the POEA, Elmer found out that the agency of Isabel is
of good standing but the job order for Taiwan was only good for two persons and not for ten
persons as claimed by Ellen. When Elmer went to the agency of Isabel to withdraw his money
since Ellen failed to reimburse him the amount, he was shocked to learn that Ellen only
remitted Php35,000.00 to Isabel's agency.
Mylene testified that sometime in 2007, she applied for employment in an electronic
company in Taiwan with Green Pastures. Mylene paid Ellen P60,000 for placement fee, but
she was not able to get its refund. Meanwhile, Liwayway testified that she applied with the
same agency but paid Isabel and Ana a placement fee of P90,000, which she was not able to
reimburse. Rico and Eduardo testified that they came to know Isabel through Ana. They paid
the sum Php95,000 each as placement fee with the agency, but they still remained
unreimbursed. Michael testified that he was accompanied by Ellen to Green Pastures to apply
for overseas employment, and he paid P140,000 as placement fee to Ellen. Like the others,
he remained unreimbursed. Marlone testified that he knew both Isabel and Ellen when he
applied with the agency. Marlone paid the placement fee of Php145,000.00 to Ellen. He also
remained unreimbursed.
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Because of non-deployment and non-reimbursement, the eight applicants, including
Victoriano Agcaoili Jr. who did not testify, filed a criminal case for violation of Sec. 6(l) and
6(m) of RA 8042 and estafa against Isabel, Ana and Ellen. The two remained at large.
In her defense, Isabel Rios admitted that she is the President and Manager of Green
Pastures. Green Pastures received Php70,000.00 from private complainant Liwayway Tiglao,
Php 70,000.00 from private complainant Rico Dacillo, Php80,000.00 from Eduardo Milanes,
Php55,000.00 from Marlone Papio, and Php60,000.00 from Micheal Custodio, for which
Green Pastures was willing to give reimbursement. However, Isabel maintained that despite
having a job order, they were not able to deploy private complainants during that time
because Taiwan was experiencing economic problems wherein employers were forced to
stop with the hiring. Also, Isabel denied having received money from Victoriano Agcaoili, Jr.,
Mylene Arevalo, and Elmer de Mata.
The RTC found Rios guilty of Section 6(l) and (m) of RA 8042, and Article 315(2)(a)
of the RPC (estafa). Rios was convicted as the principal in Large Scale Illegal Recruitment and
sentenced to Life Imprisonment and to pay a fine of P500,000. The RTC ruled that the fact
that Green Pastures was a holder of a valid license at the time to deploy workers abroad did
not serve to benefit herein accused, as she was positively pointed to as one of the persons
who enticed the complainants to part with their money upon the fraudulent representation
that they would be able to secure for them employment abroad.
The CA affirmed the RTC Decision with modification. The CA maintained Rios'
conviction for violation of Section 6(m) of RA 8042 and for estafa, but removed Rios'
conviction for violation of Section 6(l) of RA 8042. The CA held that under Section 6(l) of RA
8042, there must be independent evidence from the DOLE to establish the reason for nondeployment, such as the absence of a proper job order. The prosecution did not present any
document from DOLE during trial to establish the reason for the failure to deploy the private
complainants. Thus, Rios could not be held liable for violation of Sec. 6(l). Rios filed a Notice
of Appeal, which was given due course by the CA.
ISSUES
1.Whether corporate officers can be held criminally liable for Illegal Recruitment.
2. Whether Rios is liable for Illegal Recruitment under Section 6(m) of RA 8042.
RULING
1. YES. Rios was convicted by the RTC in her capacity as president and general manager of
Green Pastures, Inc. While corporate officers are generally not held personally liable for
corporate acts as corporations have separate and distinct legal personality from the persons
comprising it, they may be found liable when a specific provision of law makes them
personally liable for a corporate action. This is the case here as the last paragraph of Section
6 of RA 8042 specifically provides that when Illegal Recruitment is committed by a juridical
entity, the persons liable shall be the officers having control, management or direction of the
business.
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In Illegal Recruitment, a corporate officer or director may be held personally liable
for corporate acts if it is proven that he or she assented to patently unlawful acts of the
corporation or that the said officer or director was guilty of gross negligence and bad faith.
As president and general manager of Green Pastures, Rios had control, management,
and direction of the business. She knew, or ought to have known, of the failure to deploy the
applicants without their fault and the need to reimburse their documentation and placement
fees. Despite this, Rios and Green Pastures did not reimburse the applicants, prompting the
latter to file the present cases. While partial reimbursements were made to Tigalo, Dacillo,
Milanes, Papio and Custodio, the reimbursements were made only after the case had been
filed in court. There was thus no genuine effort on the part of Green Pastures and Rios to
comply with the law and immediately reimburse the complainants for all their
documentation and processing expenses after they were not deployed for work abroad.
2. YES. Accused-appellant Rios was charged and convicted of the Illegal Recruitment as
penalized under Section 6(m) of RA 8042. Section 6(m) of RA 8042 pertains to Illegal
Recruitment committed through the failure of any person (whether or not a holder of license
or authority) to reimburse documentation and processing expenses incurred by the worker
when the deployment did not occur without the worker's fault. This provision also defines
Syndicated Illegal Recruitment as being committed by three or more persons and Illegal
Recruitment in Large Scale as being committed against three or more persons.
Based on the language of Section 6(m) of RA 8042, the elements of Illegal Recruitment
through failure to reimburse documentation and processing expenses, are:
1. The offender (whether or not a POEA-licensed or authorized recruiter or agency),
promises or gives the distinct impression that he or she has the capacity to deploy
workers for employment abroad;
2. The applicant pays money to the offender in connection with documentation and
processing fees for purposes of deployment;
3. The deployment does not take place without the applicant's fault; and,
4. The offender fails to reimburse the documentation and processing expenses
incurred by the applicant.
The Court affirms Rios' conviction for Large Scale Illegal Recruitment under Section
6(m) of RA 8042 committed against Tiglao, Dacillo, Milanes, Papio and Custodio. As regards
the offense purportedly committed by Rios against complainants De Mata, Arevalo and
Agcaoili, the Court holds that Rios' guilt was not proven beyond reasonable doubt.
Both De Mata and Arevalo testified that they transacted with Mabborang and they
were aware that she was not an employee of Green Pastures. They also both attested that
they gave their payments directly to Mabborang and not to Green Pastures. It was also
Mabborang who failed to reimburse the money they paid. Accordingly, Rios cannot be held
liable for any offense against De Mata and Arevalo as she had no direct involvement in the
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transactions between them and Mabborang. Arevalo even admitted that she only came to
know Rios during the trial of the case.
With regard to complainant Agcaoili, the prosecution did not present him as a witness
and did not submit any documentary evidence to prove charges in connection to him. There
was not an iota of evidence presented as regards the offense allegedly committed against the
complainant Agcaoili. Thus, Rios cannot likewise be held liable for any alleged offense
committed against him.
As to Rios' conviction in connection with the complainants Tiglao, Dacillo, Milanes,
Papio and Custodio, the Court affirms the CA Decision. Rios herself admitted that said
complainants applied for deployment with Green Pastures agency but they were not
deployed. Rios herself admitted in her testimony that Green Pastures agency received
varying amounts from complainants Tiglao, Dacillo, Milanes, Papio and Custodio for
purposes of deployment but their deployment did not take place. Complainants Tiglao,
Dacillo, Milanes, Papio and Custodio consistently testified that they were not reimbursed for
the amounts they had paid despite their non-deployment.
Section 6(m) of RA 8042 criminalizes the failure to reimburse documentation and
processing expenses incurred by the applicant in case of non-deployment, and not the failure
to deploy, which is covered by a different provision. The law thus makes it incumbent upon
recruitment agencies, under pain of criminal sanction, to promptly reimburse applicants
when they are not deployed without their fault, as it is the agency itself that knows of the
schedule of deployment, persons to be deployed, failure to deploy, and the reasons therefor.
Also, the lack of official receipts is not fatal to prove the existence of Illegal
Recruitment as long as there is testimony from convincing and credible witnesses, as in this
case. Notably, the duty to issue official receipts is on the recruitment agency and the
recruiter's failure to issue receipts should not be taken against the applicants or claimants.
Thus, the Court affirms Rios' conviction for Illegal Recruitment committed under
Section 6(m) of RA 8042, against complainants Tiglao, Dacillo, Milanes, Papio and Custodio.
As the offense was committed against three or more persons, the Court also affirms that the
same was committed in Large Scale.
Page 114 of 174
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Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
VENTIS MARITIME CORPORATION, K-LINE SHIPMANAGEMENT CO., LTD., JOSE
RAMON GARCIA, AND CAPT. WILFRED D. GARCIA v. EDGARDO L. SALENGA
G.R. No. 238578, June 08, 2020, En Banc (Caguioa, J.)
DOCTRINE
Section 20(A) of the 2010 Philippine Overseas Employment Administration Standard
Employment Contract (POEA-SEC) is irrelevant if the seafarer did not suffer from an illness
or injury during the term of his contract.
Even if Salenga's illnesses manifested or were discovered after the term of the contract,
and even if Section 20(A) finds no application to him, he may still claim disability benefits. In
instances where the illness manifests itself or is discovered after the term of the seafarer's
contract, the illness may either be (1) an occupational illness listed under Section 32-A of the
POEA-SEC, in which case, it is categorized as a work-related illness if it complies with the
conditions stated in Section 32-A, or (2) an illness not listed as an occupational illness under
Section 32-A but is reasonably linked to the work of the seafarer.
FACTS
Salenga was engaged by petitioner Ventis Maritime Corporation for its principal KLine Shipmanagement Co., Ltd., as Chief Cook for nine months on board the vessel MT Viking
River. On October 31, 2015, Salenga's contract expired and he disembarked in South Korea.
After his arrival in the Philippines, he went to Ventis to get his unpaid wages and
asked to be referred to a company physician for medical consultation. He was advised to wait
for Ventis's call for his medical examination. He, however, executed a Debriefing Sheet
stating, among others, that he had no complaints regarding the vessel and offered no
suggestions to improve the working conditions therein. Likewise, Salenga executed a
Clearance Form, certifying that he had worked inside the ship under normal conditions and
that he was declared physically fit thereafter.
Salenga was referred to PMP Diagnostic Center in preparation for his line-up on board
his next embarkation and it was there that he was diagnosed by the company physicians with
Type II Diabetes Mellitus and Hypertension. As such, his documents for line-up were
withdrawn and he executed a Release and Quitclaim, releasing petitioners from all claims.
After he suffered from dizziness and chest pains, Salenga consulted a private
physician, Dr. Erlinda Bandong-Reyes, who eventually issued a certification that Salenga had
cardiovascular disease and Type II Diabetes Mellitus, and that he was permanently unfit for
further sea duties and "entitled under POEA Disability Grade 1."
Salenga filed a complaint for disability benefits. Another private physician, Dr.
Wenceslao Llauderes, confirmed Dr. Bandong-Reyes's findings.
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The LA gave due course to the complaint and awarded Salenga with permanent and
total disability benefits amounting to US$96,909.00 and moral and exemplary damages.
According to the LA, the Clearance Form or the Quitclaim executed by Salenga cannot be used
to deprive him of the benefits due him. These were against public policy as they were signed
by Salenga who was not a medical practitioner. The LA ruled that Salenga was able to prove
that he reported to the company within three days from repatriation, but that they treated
Salenga as a signed-off employee and not one who was medically repatriated. The LA also
ruled that since the medical reports confirm that Salenga was ill, it is reasonable to conclude
that they were acquired or were aggravated on board the vessel as they could not only have
been contracted upon his disembarkation.
The NLRC partially granted the appeal of petitioners, and deleted the award for moral
and exemplary damages as well as reducing the amount of disability benefits to
US$60,000.00. The CA dismissed the petition and affirmed the rulings of the NLRC. The CA
concluded that Salenga's illnesses existed during the term of the contract on the basis of the
medical findings of Dr. Bandong-Reyes and Dr. Llauderes where they stated that Salenga’s
illnesses are work related since he was exposed to toxic and hazardous materials. The MR
was denied; hence, this petition.
ISSUES
1. Whether Section 20(A) of the 2010 POEA-SEC applies to Salenga.
2. Whether an illness suffered after the term of the contract may still be considered workrelated.
RULING
1. NO. Section 20(A) of the 2010 Philippine Overseas Employment Administration Standard
Employment Contract (POEA-SEC) is irrelevant if the seafarer did not suffer from an illness
or
injury
during
the
term
of
his
contract.
The seafarer's complaints for disability benefits arise from (1) injury or illness that
manifests or is discovered during the term of the seafarer's contract, which is usually while
the seafarer is on board the vessel or (2) illness that manifests or is discovered after the
contract, which is usually after the seafarer has disembarked from the vessel. As further
explained below, it is only in the first scenario that Section 20(A) of the POEA-SEC applies.
Nothing from the medical findings of Dr. Bandong-Reyes and Dr. Llauderes, which is
the basis of the CA that indicates, or even implies, that Salenga suffered from the illnesses
during
the
term
of
his
contract.
To the contrary, the evidence supports the conclusion that Salenga suffered from his
illnesses after the term of his contract. After his arrival in the Philippines on November 1,
2015, Salenga executed a Debriefing Sheet stating, among others, that he had no complaints
regarding the vessel and offered no suggestions to improve the working conditions
therein, and a Clearance Form certifying that he had worked inside the ship under normal
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By: USTFCL Dean’s Circle for AY 21-22
conditions and that he was declared physically fit thereafter. Given these admissions by
Salenga that he had no complaints while he was on board the vessel and even declared that
he was working under normal conditions, his illnesses cannot therefore be considered as
illnesses
that
arose
during
the
term
of
his
contract.
Accordingly, it was an error for the CA to rely on Section 20(A) of the POEA-SEC.
Section 20(A) applies only if the seafarer suffers from an illness or injury during the term of
his contract, i.e., while he is employed. In Sec. 20(A), the employer is obliged to continue to
pay the seafarer's wages, and to cover the cost of treatment and medical repatriation, if
needed. After medical repatriation, the seafarer has the duty to report to the companydesignated physician within three days upon his return. The employer shall then pay
sickness allowance while the seafarer is being treated.
The disputable presumption of work-relatedness in Sec. 20(A)(4) arises only if or
when the seafarer suffers from an illness or injury during the term of the contract and the
resulting disability is not listed in Section 32 of the POEA-SEC.
Here, Salenga was repatriated because his contract had already ended. Further, based
on his own admissions, he did not suffer any illness while he was on board the ship, and in
fact, he failed to present any proof that his illnesses manifested while he was on board the
vessel. Hence, Section 20(A) of the POEA-SEC does not apply to him. Indeed, because he
disembarked at the end of his contract, he was not required to submit to the companydesignated physician within three days from repatriation. Petitioners also had no obligation
to
pay
him
sickness
allowance.
2. YES. Even if Salenga's illnesses manifested or were discovered after the term of the
contract, and even if Section 20(A) finds no application to him, he may still claim disability
benefits. In instances where the illness manifests itself or is discovered after the term of the
seafarer's contract, the illness may either be (1) an occupational illness listed under Section
32-A of the POEA-SEC, in which case, it is categorized as a work-related illness if it complies
with the conditions stated in Section 32-A, or (2) an illness not listed as an occupational
illness under Section 32-A but is reasonably linked to the work of the seafarer.
For the first type, the POEA-SEC has clearly defined a work-related illness as "any
sickness as a result of an occupational disease listed under Section 32-A of this Contract with
the conditions set therein satisfied." What this means is that to be entitled to disability
benefits, a seafarer must show compliance with the conditions under Section 32-A.
As to the second type of illness — one that is not listed as an occupational disease in
Section 32-A instructs that the seafarer may still claim provided that he suffered a disability
occasioned by a disease contracted on account of or aggravated by working conditions. For
this illness, "[i]t 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 pre-existing
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condition he might have had". Operationalizing this, to prove this reasonable linkage, it is
imperative that the seafarer must prove the requirements under Section 32-A: the risks
involved in his work; his illness was contracted as a result of his exposure to the risks; the
disease was contracted within a period of exposure and under such other factors necessary
to contract it; and he was not notoriously negligent.
Here, it is not disputed that Salenga was lined-up for re-deployment and during his
pre-employment medical examination for such re-deployment, he was found to have been
suffering from cardiovascular disease and Type II Diabetes Mellitus. In order to be
considered as work-related illnesses, Salenga was required to present substantial evidence
of how his illnesses are work-related.
For his cardiovascular disease, Section 32-A, on the list of occupational illnesses, finds
no application. Although cardiovascular and cerebro-vascular events are listed as
occupational illnesses in paragraphs 11 and 12 of Section 32-A, the conditions stated therein
show that such events, in order to be considered as work-related, should manifest
themselves while the seafarer was at work. Salenga's cardiovascular disease cannot be
considered as a cardiovascular or cerebro-vascular event under Section 32-A because his
cardiovascular disease did not manifest itself while he was performing his work. There was
no proof that Salenga was suffering from heart disease during his employment and that a
cardiovascular or cerebro-vascular event had occurred that was precipitated by reasons of
the nature of his work. As to Salenga's diabetes, it is not listed in Section 32-A.
Since his cardiovascular disease and his Type II Diabetes Mellitus both manifested
themselves after he had already disembarked from the vessel, Section 32-A on the list of
occupational illnesses does not apply.
Hence, Salenga was required to prove that there was a reasonable linkage between
his cardiovascular disease and diabetes, and his work as Chief Cook to lead a rational mind
to conclude that his work might have contributed to the establishment of his illnesses. He
had the burden to prove the risks involved in his work, his illness were contracted as a result
of his exposure to the risks, the diseases were contracted within a period of exposure and
under such other factors necessary to contract it, and he was not notoriously negligent.
However, he failed to do this. There was no proof or explanation in the findings of his
doctors as to how he acquired his illnesses as a result of his work as a Chief Cook. There was
no proof that as Chief Cook, he was exposed to toxic and hazardous materials. These
materials were tot even specified. It was also not explained how these materials caused
Salenga's cardiovascular disease and diabetes. There was no proof that he contracted his
illnesses as a result of his exposure to risks involved in his work, and that he was not
notoriously
negligent.
It was incumbent upon Salenga to prove the requirements above because it is only
upon presentation of substantial evidence of the reasonable linkage between his work and
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his illnesses will his illnesses be considered as work-related illnesses and therefore
compensable.
Given this, the LA, NLRC, and CA all erred in awarding/total and permanent disability
benefits to Salenga when he failed to present substantial evidence to prove that his illnesses
were work-related.
Page 119 of 174
Case Digests
Ponencias of J. Caguioa in Labor Law
By: USTFCL Dean’s Circle for AY 21-22
HENRY ESPIRITU PASTRANA v. BAHIA SHIPPING SERVICES, CARNIVAL CRUISE LINES,
NORTH SEA MARINE SERVICES CORPORATION, v. SHIP LEISURE, INC., ELIZABETH
MOYA AND FERDINAND ESPINO
G.R. No. 227419, June 10, 2020, En Banc (Caguioa, J.)
DOCTRINE
The duty of the company-designated physician to issue a final and definitive assessment
of the seafarer's disability within the prescribed periods is imperative. His failure to do so will
render his findings nugatory and transform the disability suffered by the seafarer to one that is
permanent and total.
FACTS
Petitioner Henry Espiritu Pastrana entered into a Contract of Employment with
respondent Bahia Shipping Services (BSS) as an Environmental Team Leader on board the
vessel Carnival Fascination. Sometime in November 2012, while on board the vessel,
Pastrana lifted a red bin full of food waste to free up space for other bins. However, he
miscalculated the weight of the bin and dropped it midway. After said incident, Pastrana
experienced lower back pain which radiated to his right buttock. He visited the infirmary
where he was injected with steroid and advised to take pain relievers. However, he became
alarmed of his condition when the pain extended from his right buttock down to his right leg,
and it became difficult for him to get up from a sitting position. Pastrana was examined by
Dr. Edward Dees who diagnosed him with sciatiform pain/plantar fasciitis and prescribed
him medicines. Despite the medication and physiotherapy, the pain persisted and even
worsened. Thus, on December 10, 2012, Pastrana was repatriated to the Philippines for
medical treatment.
Two days after his repatriation, Pastrana reported to the company-designated
physician, Dr. Robert Lim, and underwent MRI scan of his lumbo sacral spine. He was given
medication and advised to undergo rehabilitation. He underwent physical therapy sessions
for almost four months, but this only resulted to minimal improvement. On April 2, 2013, Dr.
Lim advised Pastrana that he is already fit to work. Trusting the assessment of the companydesignated physician and eager to resume sea duty, Pastrana signed the fit to work
declaration. However, the Medical Director of respondent Carnival Cruise Lines declared him
unfit to return to his usual work on board the vessel after observing that he still has stiff
trunk and painful gait.
On April 11, 2013, the company-designated physician issued a final assessment which
states that, “If patient is entitled to a disability, his suggested disability grading is Grade 11 1/3 loss of lifting power." Respondents offered to pay Pastrana $7,000.00 corresponding to
a Grade 11 disability rating. Pastrana refused the offer and instead sought the opinion of his
personal doctor, Dr. Manuel Fidel M. Magtira, who declared him "permanently unfit in any
capacity to resume his duties as a Seaman." On the basis of the medical assessment of Dr.
Magtira, Pastrana demanded total and permanent disability benefits from respondents, but
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By: USTFCL Dean’s Circle for AY 21-22
his demand went unheeded. Thus, Pastrana filed a Complaint for payment of total and
permanent disability benefits.
The LA ruled that Pastrana is entitled to total and permanent disability benefits given
that his condition "has rendered him unfit to continue working as a seafarer, which is his
primary source of gainful employment." Thus, he is considered to be suffering from a Grade
1 Disability and entitled to permanent and total disability benefits. The NLRC affirmed the
LA's ruling. The NLRC further applied the "120 day rule" which states that a seafarer who is
unable to perform his job for 120 days is deemed permanently disabled.
The CA reversed the NLRC ruling and found that Pastrana failed to observe the
procedure outlined in Section 20(A)(3) of the POEA-SEC, which requires the referral to and
appointment of a third doctor whose medical assessment shall be binding on both parties.
Thus, the complaint is dismissible for being premature, and the opinion of the companydesignated physician becomes controlling. Thus, Pastrana 's disability is only partial, and
that he is only entitled to disability benefits corresponding to Grade 11 disability rating in
the amount of $7,465.00.
Hence, this Petition where Pastrana argues that the medical assessment by the
company-designated physician is not valid and binding for it lacked any categorical
statement as to his fitness to return to work, and it failed to comply with guidelines on the
assessment of seafarers issued by the DOH and the International Labor Organization. Thus,
in effect, there is failure to issue a final medical assessment within the periods provided by
law, and he is under no obligation to comply with the conflict-resolution procedure under
Sec. 20(B)(3) of the POEA-SEC which mandates the referral of the matter to a third doctor.
ISSUE
Whether the company-designated physician failed to issue a final medical assessment
within the periods provided by law.
RULING
YES. The Court cited Elburg Shipmanagement, Inc. v. Quiogue, Jr. in summarizing the
rules if there is a claim for total and permanent disability benefits by a seafarer:
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
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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.
While Elburg states that the 120 or 240-day periods shall be reckoned "from the time
the seafarer reported to the company-designated physician," subsequent cases consistently
counted said periods from the date of the seafarer's repatriation for medical treatment. This
is true even in cases where the date of repatriation of the seafarer does not coincide with the
date of his first consultation with the company-designated physician. This reckoning period
is consistent with Section 20(A)(3) which provides for the repatriation of the seafarer in case
of work-related illness or injury, and the obligation of the employer to give the seafarer
sickness allowance from the time he signed off until he is declared fit to work or the degree
of his or her disability has been assessed, but not exceeding 120 days. Thus, Elburg should
be read as requiring the company-designated physician to issue a final and definitive
disability assessment within 120 or 240 days from the date of the seafarer's repatriation.
As held by the Court in Vergara and Elburg, the initial 120 days within which the
company-designated physician must issue a final and definitive disability assessment may
be extended for another 120 days. The extended period, however, may only be availed of by
the company-designated physician under justifiable circumstances. The Court stressed,
however, that to avail of the extended 240-day period, the company-designated physician
must perform some complete and definite medical assessment to show that the illness still
requires medical attendance beyond 120 days, but not to exceed 240 days.74 The employer
bears the burden of proving that the company-designated physician had a reasonable
justification to invoke the 240-day period.
The duty of the company-designated physician to issue a final and definitive
assessment of the seafarer's disability within the prescribed periods is imperative. His
failure to do so will render his findings nugatory and transform the disability suffered by the
seafarer to one that is permanent and total.
Applying the foregoing rules in the present case, the Court finds that Dr. Lim was
unable to timely issue a final assessment of Pastrana's disability. Pastrana was repatriated
on December 10, 2012. He reported to Dr. Lim two days thereafter, or on December 12, 2012.
After a series of treatment and consultations, Dr. Lim issued his final assessment of
Pastrana's disability on April 11, 2013. At the time of its issuance, 122 days had already
lapsed since Pastrana's repatriation. Clearly, the assessment dated April 11, 2013 was issued
beyond the mandated 120-day period.
While this initial 120-day period may be extended to 240 days, the Court finds no
sufficient justification to apply the extended period in this case. The records of the case are
bereft of any indication that such extension was needed, or even intended, to provide
Pastrana further medical treatment. On the contrary, it was found that his treatment was
discontinued and he was given a partial disability grading. Dr. Lim was bound to issue a final
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disability assessment within 120 days from Pastrana's repatriation — but, he failed to do so.
Such failure rendered his opinion on Pastrana's disability irrelevant. The law had already
stepped in, and considered Pastrana permanently and totally disabled. He is, therefore,
entitled to disability benefits corresponding to Grade 1 disability rating.
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ZALDY C. RAZONABLE v. MAERSK-FILIPINAS CREWING, INC. AND/OR A.P.
MOLLER A/S
G.R. No. 241674, June 10, 2020, En Banc (Caguioa, J.)
DOCTRINE
Despite the issuance of a purportedly "final disability grading" in the Disability Report,
Razonable was still required to return almost a month later for "re-evaluation with results" in
the Medical Report issued on the same day. This cannot be deemed as a valid and definite
medical assessment. A final, conclusive, and definite medical assessment must clearly state
whether the seafarer is fit to work or the exact disability rating, or whether such illness is workrelated, and without any further condition or treatment. It should no longer require any further
action on the part of the company-designated physician and it is issued by the companydesignated physician after he or she has exhausted all possible treatment options within the
periods allowed by law.
FACTS
Zaldy C. Razonable signed a Contract of Employment with A.P. Moller through Maersk
to work as an Ordinary Seaman on board the vessel MN Maren Maersk. Razonable was
already on board when he suddenly felt a click on his back accompanied by mild to moderate
pain while carrying a heavy ripper motor aboard the vessel, he was given first aid and was
confined to his cabin. He was brought to a hospital where he was diagnosed with "Prolapse
Lumbar Disc L4-L5 and L5-S1, back pain with Sciatica". The foreign doctor also reported that
Razonable needed further treatment, might need surgery if there was no improvement, and
should be advised light duty.
After Razonable's repatriation on June 17, 2015 and upon his arrival in Manila, he was
placed in the care of company-designated physicians at respondents' accredited medical
facility, Marine Medical Services, where he was given a full physical
examination.10 Razonable was also referred to a company-designated orthopedic surgeon,
Dr. Rodolfo P. Bergonio among others, who carried out the Laminectomy L-4 L-5 and
Discectomy L-5 procedure for Razonable’s back. Razonable was thereafter given a lumbar
corset for back support, as well as continued regular physical therapy and rehabilitation
until October 9, 2015. Dr. Mylene Cruz-Balbon gave a follow-up report. Dr. Bergonio gave a
final disability assessment, finding Razonable unfit for work with Disability Grade 11 - 1/3
loss of lifting power of the trunk, but also required Razonable to return almost a month later
for
"re-evaluation
with
results."
Respondents informed Razonable of the final disability assessment and offered to him
the commensurate disability benefits. However, Razonable refused and insisted on obtaining
total and permanent disability benefits. Thus, Razonable consulted another orthopedic
expert, Dr. Manuel Fidel Magtira, who issued a Medical Report concluding that Razonable
was permanently unfit in any capacity to resume his sea duties as a seaman.
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Razonable's counsel informed the respondents about Dr. Magtira's opinion and that
(1) Razonable was willing to be referred to a third doctor to confirm his present disability
which had incapacitated him from resuming work as a seaman; and (2) Razonable was
claiming total and permanent disability benefits. Respondents, however, ignored this letter
and did not initiate the process of seeking the opinion of a third doctor as required by law.
Thus, Razonable filed a complaint for total and permanent disability benefits before the
National Conciliation and Mediation Board (NCMB), which ordered respondents to jointly
and solidarily pay Razonable permanent and total disability benefits amounting to
US$80,000.00 pursuant to the CBA.
The CA set aside the NCMB Decision based on the following grounds: (1) contrary to
the NCMB findings, Razonable's injury was not due to an accident; (2) the award of
US$80,000.00 as total and permanent disability benefits was erroneous and without legal
basis because this amount pertained to the CBA for Filipino ship officers and not the CBA for
Filipino crew members or "ratings," which only awarded a maximum of US$60,000.00; and
(3) Razonable was only entitled to Disability Grade 11 benefits, as assessed by the companydesignated physician.
Razonable filed a MR, but this was denied by the CA. Thus, Razonable filed the instant
Rule 45 Petition.
ISSUE
Whether Razonable is entitled to total and permanent disability benefits.
RULING
YES. The Court ruled that the company-designated physicians failed to issue a valid
medical assessment within the prescribed periods. Since Razonable's contract of
employment with respondents was executed in 2015, the 2010 Philippine Overseas
Employment Administration-Standard Employment Contract (POEA-SEC) governs the
procedure for his claim of disability benefits and provides for the period when the companydesignated physician must issue a final medical assessment. The Court cited the case
of Jebsens Maritime, Inc. v. Mirasol, where it summarized the rules governing the seafarers'
claim for disability benefits, thus:
“
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
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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.
A final, conclusive, and definite medical assessment must clearly state whether the
seafarer is fit to work or the exact disability rating, or whether such illness is workrelated, and without any further condition or treatment. It should no longer require
any further action on the part of the company-designated physician and it is issued
by the company-designated physician after he or she has exhausted all possible
treatment options within the periods allowed by law.”
Here, the CA gave more credence to the findings of the company-designated
physicians. However, an examination of the medical assessment by the company-designated
physicians - that is, the follow-up report36 (Medical Report) given by Dr. Cruz-Balbon and the
disability grading (Disability Report) given by Dr. Bergonio, the orthopedic surgeon-would
reveal that said assessment was neither final nor definite because it required Razonable to
return for further treatment. Despite the issuance of a purportedly "final disability grading"
in the Disability Report, Razonable was still required to return almost a month later for "reevaluation with results" in the Medical Report issued on the same day. Taking these two
documents together, the medical assessment was clearly not a final one because it still
required further action on the part of the company-designated physicians. Further, a cursory
reading of the Disability Report would reveal that it was not definitive and was, in fact,
conflicting. While it indicated the supposed disability grading of Razonable, it likewise stated
that he was unfit for work. This cannot be deemed as a valid and definite medical assessment.
In Olidana v. Jebsens Maritime, the company-designated physicians issued two
medical reports, one stated that the seafarer's disability grading is Grade 10 and the other
stated that the seafarer was "not fit for duty". The Court in Olidana struck down medical
reports of company-designated physicians for being tardy, incomplete, and doubtful and
ruled that, “it cannot be conclusively stated that a seafarer merely suffered a partial
permanent disability when, at the same time, he was declared unfit for duty. A partial
disability, which signifies a continuing capacity to perform his customary tasks, is starkly
incompatible with the finding that a seafarer is unfit for duty.”
Thus, taking the two reports together - the Medical Report, which required Razonable
to return at a later date, and the Disability Report, which was in itself unclear and
contradictory - the company-designated physicians indeed failed to discharge their
obligation of issuing a valid and final medical assessment within the prescribed periods.
Given this, it was unnecessary for Razonable to even refer the findings of the
company-designated doctors to his own doctor. Such conflict resolution mechanism only
takes into effect if the company-designated physician had issued a valid and definite medical
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assessment. Without such valid final and definitive assessment from the companydesignated physicians, the law already steps in to consider the seafarer's disability as total
and permanent.
Instead of awarding partial disability benefits, the CA should have awarded total and
permanent disability benefits to Razonable in the amount of US$60,000.00, in accordance
with the POEA-SEC and the CBA pertaining to Filipino crew members or "ratings" because
the company-designated physicians failed to issue a final and definitive medical assessment.
Page 127 of 174
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KARJ GLOBAL MARKETING NETWORK, INC. v. MIGUEL P. MARA
G.R. No. 190654, July 28, 2020, First Division (Caguioa, J.)
DOCTRINE
The Court deems the existence of the insolvency proceedings as an exceptional
circumstance to warrant the liberal application of the rules requiring an appeal bond. The
failure to file an appeal bond did not contradict the need to ensure that respondent, if his claim
is deemed valid, will receive the money judgment.
FACTS
On 6 July 2006, Respondent Miguel Mara instituted a complaint before the Labor
Arbiter against the Petitioner Karj Global for non-payment of 14th month pay and refund of
his car's maintenance expenditures, damages, and attorney's fees.
In March 2004, Respondent commenced his employment with the Petitioner as
Assistant General Manager. In his complaint, Respondent alleged that the Petitioner agreed
to grant him with a "retention incentive 14th month bonus" pursuant to the Offer Sheet
purportedly executed by the Petitioner and that the Petitioner likewise undertook to provide
Respondent with a brand-new Isuzu Fuego or its equivalent including Respondent's car's
repairs and maintenance costs.
Petitioner contested that the 14th month bonus being claimed by the latter is
discretionary in nature and that there is no document that would show that such gratuity is
part of the regular compensation of the employees. Likewise, Petitioner rejected
Respondent's claim for reimbursements of car repairs alleging that per the company car
policy, in order that the Respondent could be entitled to such benefit, he should have used a
brand new or secondhand Toyota Altis and not a 1999 Black BMW used by the Respondent.
Hence, Respondent's claim for such reimbursements failed to comply with the procedure
laid down by the company car policy.
The Labor Arbiter ordered Karj Global pay Mara P198,800.00 or 14th month pay
benefit for the years 2004 and 2005. They are also ordered to refund to Mara the amount of
P289,000.00 as company car maintenance costs. Aggrieved thereby, Petitioner filed an
appeal before the NLRC.
It came to pass that prior to the issuance of the aforesaid Labor Arbiter's decision,
three creditors of the Petitioner instituted before the RTC of Parañaque City a Petition for
Involuntary Insolvency against the Petitioner. As a consequence of the filing of the petition,
respondent corporation in the petition is enjoined from disposing, in any manner, of its
property except in so far as it concerns the ordinary operations of commerce or industry in
which it is engaged in and furthermore, from making any payments outside of necessary or
legitimate expenses of its business or industry so long as the proceeding is pending.
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On appeal, the NLRC dismissed the appeal for non-perfection, having been filed
without the required bond.
A petition for certiorari was filed with the CA arguing that the NLRC committed grave
abuse of discretion amounting to lack or excess of jurisdiction when it dismissed petitioner's
appeal. The CA affirmed the NLRC, ruling that an appeal bond is an indispensable
requirement in perfecting an appeal before the NLRC. That an appeal is a statutory privilege,
petitioner should have complied strictly with the rules on appeal. The NLRC therefore did
not commit grave abuse of discretion when it ruled that petitioner failed to perfect its appeal.
ISSUE
Whether the CA was correct in affirming the NLRC's strict adherence to the
requirement for the posting of an appeal bond to perfect an appeal before it.
RULING
NO. The CA erred in affirming the NLRC. Article 223 of the Labor Code requires the
posting of a cash or surety bond when the judgment appealed from involves a monetary
award.
Art. 223. Appeal. - Decisions, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders, x x x.
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.
Indeed, as the CA ruled, the posting of the bond is an indispensable requisite for the
perfection of an appeal by the employer. As against this rule, the Court has recognized
exceptional circumstances where it relaxed the requirement for an appeal bond. To
determine whether to allow a liberal application of the rule on bonds, it is crucial to
understand, especially in this case, whether respondent stands to lose the security provided
by the appeal bond as the purpose of the appeal bond, as held in Viron, is to ensure that when
the workers prevail, they will receive the money judgment in their favor:
The requirement that the employer post a cash or surety bond to perfect its/his
appeal is apparently intended to assure the workers that if they prevail in the case,
they will receive the money judgment in their favor upon the dismissal of the
employer's appeal. It was intended to discourage employers from using an appeal to
delay, or even evade, their obligation to satisfy their employees' just and lawful
claims.
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Here, the Court deems the existence of the insolvency proceedings as an exceptional
circumstance to warrant the liberal application of the rules requiring an appeal bond.
The failure to file an appeal bond did not contradict the need to ensure that
respondent, if his claim is deemed valid, will receive the money judgment.
The rule on a requirement of an appeal bond cannot operate in a vacuum. "When the
law does not clearly provide a rule or norm for the tribunal to follow in deciding a question
submitted but leaves to the tribunal the discretion to determine the case in one way or
another, the judge must decide the question in conformity with justice, reason and equity, in
view of the circumstances of the case." Here, there seems to be an absence of rule or norm to
follow on whether to require an appeal bond when the appealing employer is subject of
involuntary liquidation proceedings. But the NLRC, mandated to act with justice, reason, and
equity, should have allowed the appeal and ruled on the merits considering the
circumstances of the case.
It is beyond dispute that money claims arising from employer-employee
relationship are within the original and exclusive jurisdiction of the LA and the NLRC.
Following Article 217 of the Labor Code and given the LA's and NLRC's exclusive and original
jurisdiction to rule on money claims of an employee, such case may only be filed and ruled
upon by the LA and NLRC. However, when an employer is undergoing insolvency
proceedings, Article 217 of the Labor must be read together with Section 60 of the Insolvency
Law which states that a creditor may be allowed to proceed with the suit to ascertain the
amount due to it but the execution of which shall be stayed. Further, during the pendency of
the insolvency proceedings, the measure of protection for the employee is to have the claim
considered as a contingent claim before the insolvent court following Section 55 of the
Insolvency Act.
Thus, like any other contingent claim, the employee may prosecute his case before
the labor tribunals, and exhaust other remedies, until he or she obtains a final and executory
judgment. Assuming the employee obtains a favorable money judgment, the execution will
be stayed following Section 60 of the Insolvency Act because, as will be discussed below, the
insolvency proceedings is the only proceeding where all creditors of the employer may
establish their claims. Assuming the insolvent corporation undergoes liquidation, the
measure of protection given to employees is stated in Article 110 of the Labor Code, which
provides for preference for unpaid wages and monetary claims even before the payment of
claims of the government and other creditors.
The foregoing therefore shows that an employee of an employer who is undergoing
insolvency proceedings has many layers of protection starting from being allowed to
prosecute his claim, registering a contingent claim before the insolvency court, and finally,
enjoying a preference in case the assets of the corporation are ordered liquidated to pay for
its debts. Here, petitioner informed the labor tribunals of the pendency of the insolvency
proceedings. In fact, it also informed the NLRC that it had apprised the insolvency court of
the pendency of the case in its Motion to Suspend Proceedings. Even as it wanted a
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suspension of the proceedings, it still filed a Notice of Appeal and Memorandum of Appeal
Ad Cautelam. It was therefore an error for the NLRC to dismiss the appeal outright when the
foregoing shows that the law itself provides many measures of protection for the employee,
such that an appeal before the NLRC may be allowed to proceed despite the lack of an appeal
bond.
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ALBERT B. DEL ROSARIO v. ABS-CBN BROADCASTING CORPORATION
G.R. NO. 202481, September 08, 2020, En Banc (Caguioa, J.)
DOCTRINE
Notably, an essential characteristic of regular employment as defined in Article 280 of
the Labor Code is the performance by the employee of activities considered necessary and
desirable to the overall business or trade of the employer. The necessity of the functions
performed by the workers and their connection with the main business of an employer shall be
ascertained "by considering the nature of the work performed and its relation to the scheme of
the particular business or trade in its entirety."
FACTS
This case involves 8 consolidated Petitions for Review on Certiorari under Rule 45 of
the Revised Rules of Court involving regularization and illegal dismissal cases. ABS-CBN
hired the services of workers. Upon their engagement, the workers were required to undergo
various training seminars and workshops to equip them with the skills and knowledge
necessary in their respective fields of assignment. After completing their seminars, they were
assigned to render services in the self-produced, co-produced, and live-coverage programs
of ABS-CBN. Their presence was strictly required in each program.
Customarily, during the production of shows and the live coverage of events, ABSCBN hired 3 different groups of employees to work in such productions. These consisted of
the technical crew, production staff, and outside broadcast (OB) van drivers and production
assistance (PA) van drivers.
Sometime in 2002, ABS-CBN adopted a system known as the Internal Job Market (IJM)
System, a database which provided the user with a list of accredited technical or creative
manpower and/or talents who offered their services for a fee. This database indicated the
competency rating of the individuals and their corresponding professional fees. The system
allowed the producer to easily obtain information on the talent and his availability for
projects. Should the producer desire to hire an individual from the system, the latter shall be
notified of the particular project for which his/her services are sought and will be ordered
to report on the scheduled shooting date.
According to ABS-CBN, the IJM scheme led to the creation of a work pool of accredited
technical or creative manpower who offered their services for a fee. Under this system, the
workers were regarded as independent contractors, not regular employees. An accreditation
under the IJM System did not in any way create an employment relationship between the socalled talents and the company. Most importantly, the IJM System eliminated the rigors of
recruiting or negotiating with independent contractors. Due to the creation of the IJM
System, the workers were asked to sign a contract that would place them all under the IJM
Work Pool. They were included in the pool without their consent or over their vehement
objections. Upon the implementation of the IJM System, each of the workers was given an
hourly rate. Consequently, beginning January 2002, they were paid based on the actual hours
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they worked, multiplied by their specified hourly rate. They did not receive overtime pay,
premium pay, and holiday pay for the work they rendered during rest days, special holidays,
and regular holidays.
From a series of summary dismissals sprung numerous complaints filed before the
LA for illegal dismissal with claims for monetary benefits, ranging from overtime pay, holiday
pay, holiday premium, rest day premium, 13th month pay, night shift differential, and
payment of moral, exemplary damages and attorney's fees.
ISSUE
Whether or not the workers are regular employees of ABS-CBN.
RULING
YES. The workers are employees of ABS-CBN. In ascertaining the existence of an
employer-employee relationship, the Court has invariably adhered to the four-fold test,
which pertains to: (i) the selection and engagement of the employee; (ii) the payment of
wages; (iii) the power of dismissal; and (iv) the power of control over the employee's
conduct, or the so-called "control test.”
The records show that the workers were hired by ABS-CBN through its personnel
department. In fact, the workers presented certificates of compensation, payment/tax
withheld, Social Security System, Pag-ibig Fund documents, and Health Maintenance Cards,
which all indicate that they are employed by ABS-CBN. In the same vein, the workers
received their salaries from ABS-CBN twice a month, as proven through the pay slips bearing
the latter's corporate name. Their rate of wages was determined solely by ABS-CBN. ABSCBN likewise withheld taxes and granted the workers PhilHealth benefits. These clearly
show that the workers were salaried personnel of ABS-CBN, not independent contractors.
Likewise, ABS-CBN wielded the power to discipline, and correspondingly dismiss, any errant
employee. The workers were continuously under the watch of ABS-CBN and were required
to strictly follow company rules and regulations in and out of the company premises.
Finally, consistent with the most important test in determining the existence of an
employer-employee relationship, ABS-CBN wielded the power to control the means and
methods in the performance of the employees' work. The workers were subject to the
constant watch and scrutiny of ABS-CBN, through its production supervisors who strictly
monitored their work and ensured that their end results are acceptable and in accordance
with the standards set by the company. In fact, the workers were required to comply with
ABS-CBN's company policies which entailed the prior approval and evaluation of their
performance. They were further mandated to attend seminars and workshops to ensure
their optimal performance at work. Likewise, ABS-CBN controlled their schedule and work
assignments (and re-assignments). Furthermore, the workers did not have their own
equipment to perform their work. ABS-CBN provided them with the needed tools and
implements to accomplish their jobs.
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The fact that the workers signed a "Talent Contract and/or Project Assignment Form"
does not ipso facto make them talents. It is settled that a talent contract does not necessarily
prevent an employee from acquiring a regular employment status. The nature of the
employment does not depend on the will or word of the employer or on the procedure for
hiring and the manner of designating the employee, but on the activities performed by the
employee in relation to the employer's business. Accordingly, ABS-CBN's Talent Contract,
which deprives the workers of regular employment, cannot stand.
The workers are regular employees. There can be no employer-employee
relationship between the production staff of the "block-timers," and owners of the foreign
shows and licensed programs, on the one hand, and ABS-CBN, on the other. This is based on
the obvious reason that ABS-CBN had no hand in the production of the said shows. However,
this same ratiocination does not apply to the workers hired in the self-produced, lineproduced, co-produced shows, and live coverages of ABS-CBN.
Notably, an essential characteristic of regular employment as defined in Article 280
of the Labor Code is the performance by the employee of activities considered necessary and
desirable to the overall business or trade of the employer. The necessity of the functions
performed by the workers and their connection with the main business of an employer shall
be ascertained "by considering the nature of the work performed and its relation to the
scheme of the particular business or trade in its entirety."
Again, this is not the first time the Court has determined that certain workers of ABSCBN are regular employees given the tasks that they were engaged in. In ABS-CBN
Broadcasting Corporation v. Nazareno, the workers involved were production assistants
who were repeatedly hired but treated as talents. The Court therein ruled that the
production assistants were regular employees. The principal test is whether the project
employees were assigned to carry out a specific project or undertaking, the duration and
scope of which were specified at the time the employees were engaged for that project.
In this case, it is undisputed that respondents had continuously performed the same
activities for an average of five years. Their assigned tasks are necessary or desirable in the
usual- business or trade of the petitioner. The persisting need for their services is sufficient
evidence of the necessity and indispensability of such services to petitioner's business or
trade. While length of time may not be a sole controlling test for project employment, it can
be a strong factor to determine whether the employee was hired for a specific undertaking
or in fact tasked to perform functions which are vital, necessary and indispensable to the
usual trade or business of the employer. We note further that petitioner did not report the
termination of respondents' employment in the particular "project" to the Department of
Labor and Employment Regional Office having jurisdiction over the workplace within 30
days following the date of their separation from work, using the prescribed form on
employees' termination/dismissals/suspensions.
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The IJM System of ABS-CBN is a work pool of regular employees. The creation of
a work pool is a valid exercise of management prerogative. It is a privilege inherent in the
employer's right to control and manage its enterprise effectively, and freely conduct its
business operations to achieve its purpose. However, to ensure that the work pool
arrangement is not used as a scheme to circumvent the employees' security of tenure, the
employer must prove that (i) a work pool in fact exists, and (ii) the members therein are free
to leave anytime and offer their services to other employers. These requirements are critical
in defining the precise nature of the workers' employment.
By analogy, and as applied to the members of the IJM System work pool, even if they
are allowed to offer their services to other employers during the lulls in the production
business, they shall still be regarded as regular employees who are simply "on leave" during
such periods of suspension in production. On the part of ABS-CBN, it shall not be obliged to
pay the employees during such temporary breaks.
However, the continuous rehiring of the members of the DM System work pool from
one program to another bestowed upon them regular employment status. As such, they
cannot be separated from the service without cause as they are considered regular, at least
with respect to the production of the television programs. This holds true notwithstanding
the fact that they were allowed to offer their services to other employers.
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ALBAY ELECTRIC COOPERATIVE, INC. v. ALECO LABOR EMPLOYEES ORGANIZATION
G.R. NO. 241437, September 14, 2020, En Banc (Caguioa, J.)
DOCTRINE
In illegal dismissal cases, back wages refer to the employee's supposed earnings had
he/she not been illegally dismissed. As applied in this case, back wages correspond to the
amount ought to have been received by the affected employees if only they had been reinstated
following the Assumption Order. This shall similarly include not only the employee's basic salary
but also the regular allowances being received, such as the emergency living allowances and
the 13th month pay mandated by the law, as well as those granted under a CBA, if any.
FACTS
ALECO is an electric cooperative which holds a franchise for the retail distribution of
electricity for the province of Albay, while ALECO Labor Employees Organization is the
collective bargaining agent of ALECO 's employees. During the Special General Membership
Assembly, it was reported that ALECO was suffering from financial distress with its current
payables to the PEMC already amounting to Php134 million. In addition, it has unpaid
obligations to the NGCP, PHILRECA, other suppliers and contractors, as well as its retirees,
in the aggregate amount of Php87 million. Overall, ALECO then had long term obligations to
the foregoing creditors of Php3.1 billion. Thus, efforts were undertaken to rehabilitate the
struggling electric cooperative.
ALECO was pushing for Private Sector Participation as its appropriate rehabilitation
strategy, while ALEO was insisting on the Cooperative-to-Cooperative (C2C) rehabilitation
scheme. Under the PSP, the current employees of ALECO shall be required to tender their
courtesy resignation to give flexibility to the incoming private sector concessionaire, but
they shall receive separation pay based on the existing collective bargaining agreement
(CBA) with ALEO and shall have priority in rehiring based on the standards set by the
concessionaire.
ALEO sought preventive mediation before the NCMB for unfair labor practices. The
parties, however, failed to settle their differences which constrained ALEO to file a notice of
strike. It conducted a strike vote on May 10, 17 and 20, 2013 with 217 out of 235 members
voting for a strike. Subsequently, in a referendum to determine the appropriate
rehabilitation measure to be undertaken by ALECO, the PSP was eventually chosen. In a
public bidding held earlier, the San Miguel Power Holdings Corporation emerged as the
winning bidder and was awarded the concession under the PSP. Still, ALEO went on strike.
Nonetheless, with the PSP adopted, Notices of Retrenchment were served on all
ALECO's employees. As the labor dispute continued without any of the parties yielding,
ALECO formally requested the Secretary of Labor to assume jurisdiction over the
controversy. ALEO concurred with ALECO. The Secretary of Labor assumed jurisdiction and
correspondingly issued a Return-to-Work Order of even date.
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The Secretary of Labor upheld the validity of the retrenchment of ALECO's employees
and ordered ALECO to pay them back wages and other benefits computed from January
10,2014 until the finality of the said Resolution. The Secretary of Labor also ordered ALECO
to pay the retrenched employees their separation benefits in accordance with the CBA. The
CA affirmed the Resolutions of the Secretary of Labor with modification on the computation
of the back wages.
ISSUE
Whether the CA erred in sustaining the Secretary of Labor's award of back wages.
RULING
NO. Even in the absence of illegal dismissal in this case, the Secretary of Labor has the
authority to award and was not mistaken in awarding backwages. The Secretary of Labor
assumed jurisdiction over the labor dispute between the parties on January 10, 2014 and
issued a return-to-work order on even date pursuant to Article 278 [263] (g) of the Labor
Code.
The effects of an assumption order issued by the Secretary of Labor are two-fold: (a)
it enjoins an impending strike on the part of the employees, and (b) it orders the employer
to maintain the status quo. In cases where a strike has already taken place, as in this case,
the assumption order shall have the effect of: (a) directing all striking workers to
immediately return to work (return-to-work order), and (b) mandating the employer to
immediately resume operations and readmit all workers under the same terms and
conditions prevailing before the strike.
The status quo to be maintained under Article 278 [263] of the Labor Code refers to
that which was prevailing the day before the strike. From the date the DOLE Secretary
assumes jurisdiction over a dispute until its resolution, the parties have the obligation to
maintain the status quo while the main issue is being threshed out in the proper forum which could be with the DOLE Secretary or with the NLRC. This is to avoid any disruption to
the economy and to the industry of the employer - as this is the potential effect of a strike or
lockout in an industry indispensable to the national interest - while the DOLE Secretary or
the NLRC is resolving the dispute.
Since the union voted for the conduct of a strike on June 11, 2009, when the DOLE
Secretary issued the return-to-work order dated June 23, 2009, this means that the status
quo was the employment status of the employees on June 10, 2009. This status quo should
have been maintained until the NLRC resolved the dispute in its Resolution dated March
16,2010, where the NLRC ruled that CCBPI did not commit unfair labor practice and that the
redundancy program was valid. This Resolution then took the place of the return-to-work
order of the DOLE Secretary and CCBPI no longer had the duty to maintain the status quo
after March 16, 2010.
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The Court also held in the above case that the purpose of maintaining the status quo
is to avoid any disruption to the economy while the labor dispute is being resolved in the
proper forum. The objective is to minimize, if not totally avert, any damage that such labor
dispute might cause upon the national interest by occasion of any work stoppage or slowdown. It follows then, as also demonstrated by the Court in the above case, that the directive
to maintain the status quo extends only until the labor dispute has been resolved. Thus, as
applied in this case, the status quo mandated by the Assumption Order extends from the date
of its issuance until the Secretary of Labor's resolution of the dispute between the parties on
April 29, 2016.
During this period, the striking employees should report back to work, and the
employer should readmit them "under the same terms and conditions prevailing before the
strike." Particularly, in this case, the Assumption Order required "all striking employees, who
have not accepted separation benefits, shall, within 24 hours from, receipt of this Order,
immediately return to work, and the employer shall immediately resume all operations and
readmit all workers under the same terms and conditions prevailing before the strike." This
obligation on the part of the employer generally requires actual reinstatement.
Here, ALECO claims that it complied with the Assumption Order when it admitted the
striking employees to its premises on January 14, 2014. ALECO alleges that no less that the
Regional Director of DOLE Region V witnessed the re-admission of these employees, and that
this is further evidenced by the attendance sheets signed by the returning employees and
the photographs taken on January 14, 2014. However, as pointed out by ALEO, and admitted
by ALECO, no actual work was given to the returning employees. Instead, they were merely
"confined in a room for over three weeks." Although ALECO claimed that it tendered the
salaries of the employees who actually reported back for work, ALECO also admitted that the
employees refused to receive the amounts it supposedly tendered because of the parties'
failure to agree on the figures.
In other words, to date, the affected employees are still not paid their wages and
benefits for the period they were supposed to be reinstated. In consideration of the
foregoing, the award of back wages is proper-not as a penalty for non-compliance with the
Assumption Order as argued by ALEO-but as satisfaction of ALECO's obligation towards the
employees covered by the Assumption Order. On said date, the obligation of the employer to
re-admit the striking employees and/or pay them their respective salaries and benefits
arose. However, there is no proof that the affected employees were in fact paid by ALECO
their corresponding salaries and benefits. Because of ALECO's failure to perform this
obligation, and to give the affected employees what has become due to them as of January
10, 2014, back wages should be awarded.
In illegal dismissal cases, back wages refer to the employee's supposed earnings had
he/she not been illegally dismissed. As applied in this case, back wages correspond to the
amount ought to have been received by the affected employees if only they had been
reinstated following the Assumption Order. This shall similarly include not only the
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employee's basic salary but also the regular allowances being received, such as the
emergency living allowances and the 13th month pay mandated by the law, as well as those
granted under a CBA, if any. Applying the foregoing discussion, the Court finds that the CA
did not err in affirming the award of back wages.
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GIL SAMBU JARABELO v. HOUSEHOLD GOODS PATRONS, INC. AND SUSAN
DULALIA,
G.R. No. 223163, December 02, 2020, First Division (Caguioa, J.)
DOCTRINE
It is settled that "in illegal dismissal cases, before the employer must bear the burden of
proving that the dismissal was legal, the employee must first establish by substantial evidence
the fact of his dismissal from service."
FACTS
Jarabelo was the booking salesman for respondent Household Goods Patrons, Inc.
since July 2007. From May 2012 to August 2013, Jarabelo was subject of several disciplinary
proceedings because of unaccounted amounts, low sales output, unremitted collections,
"Poor Performance" rating during evaluation for failing to meet sales target, and late
remittance of sales proceeds.
On August 29, 2013, Jarabelo claims that respondent Susan Dulalia directed him to
report to her office and to his surprise told him: "Mr. Jarabelo, magresign ka na, magsubmit
kana ng resignation letter sapagkat ikaw ang isa sa mga nagpabagsak ng kumpanya! Wala
kang ginawa kundi maghintay ng sahod." Jarabelo denied the accusation claiming that in the
past he was even awarded Salesman of the Year. This made Dulalia angrier and ordered
Jarabelo to leave her office.
The following day, Jarabelo claims that he was confronted by HR/Audit Supervisor
Susan Soriano for his resignation letter as ordered by Dulalia. Jarabelo was presented with
the computation of his final pay. He opposed the decision, but it proved futile, and he was
ordered to surrender all documents and properties the following day.
Respondents, on the other hand, claim that Jarabelo was not dismissed. According to
respondents, Dulalia talked to Jarabelo about the latter's shortages and poor performance.
Dulalia informed Jarabelo that the shortages are considered as theft, which is a valid ground
for his immediate termination. But considering his prior good sales performance and the
stigma of being terminated from employment, Dulalia offered the option for Jarabelo to just
resign, and the management would not file a criminal charge against him for the unremitted
amounts. After this conversation, respondents claim that Jarabelo never returned to work.
The LA ruled that Jarabelo was illegally dismissed when he was abruptly told not to
report for work anymore and file a resignation letter. The LA further ruled that respondents
failed to prove that Jarabelo abandoned his work. THE NLRC, partly granted respondents'
appeal. The NLRC ruled that Jarabelo failed to establish the fact of his dismissal by substantial
evidence and that his allegations were not supported by corroborative evidence. Jarabelo
filed a motion for reconsideration, but this was denied. Jarabelo then filed a petition for
certiorari before the CA. THE CA affirmed the NLRC.
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ISSUE
Whether the NLRC committed grave abuse of discretion amounting to lack or excess
of jurisdiction in ruling that the petitioner failed to prove the fact of his dismissal.
RULING
NO. The CA was correct that there was no proof of dismissal. It is settled that "in illegal
dismissal cases, before the employer must bear the burden of proving that the dismissal was
legal, the employee must first establish by substantial evidence the fact of his dismissal from
service."
In Rodriguez v. Sintron Systems, Inc., the Court ruled that the petitioner failed to
prove she was constructively dismissed because she failed to present any evidence that the
President of the company shouted invectives at her and that she was mistreated. The Court
ruled in Rodriguez:
“Obviously, if there is no dismissal, then there can be no question as to its legality or
illegality. As an allegation is not evidence, it is elementary that a party alleging a
critical fact must support his allegation with substantial evidence. Bare allegations of
dismissal, when uncorroborated by the evidence on record, cannot be given credence.
Moreover, the evidence to prove the fact of dismissal must be clear, positive, and
convincing.”
Rodriguez applies here. Other than his allegation, Jarabelo failed to present any proof
that he was dismissed from employment. He failed to present any proof of dismissal or that
he was prohibited from returning to work. On the other hand, respondents were able to show
that Jarabelo was not dismissed from work. Given his poor performance, he was given the
option to resign instead of being dismissed. And the CA correctly ruled that giving such an
option may be done at the discretion of the employer. As the Court ruled in Willi Hahn
Enterprises v. Maghuyop:
“The failure of petitioner to pursue the termination proceedings against respondent
and to make her pay for the shortage incurred did not cast doubt on the voluntary
nature of her resignation. A decision to give a graceful exit to an employee rather than
to file an action for redress is perfectly within the discretion of an employer. It is not
uncommon that an employee is permitted to resign to save face after the exposure of
her malfeasance. Under the circumstances, the failure of petitioner to file action
against the respondent should be considered as an act of compassion for one who
used to be a trusted employee and a close member of the household.”
The CA was correct in ruling that giving the option to gracefully exit considering his
prior good sales performance and out of compassion did not constitute dismissal, legal or
illegal. Jarabelo, however, did not resign and take the separation pay offered to him, but
neither did Household Goods initiate disciplinary proceedings to terminate his employment.
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Separation pay awarded. Given the foregoing, generally, when there is no dismissal,
"the Court merely declares that the employee may go back to his work and the employer
must then accept him because the employment relationship between them was never
actually severed." There have been instances, however, where the Court directed the
payment of separation pay even if there was no dismissal of the employee instead of a
directive for the employee to return to work and for the employer to accept him.
Here, considering that Household Goods had from the outset offered to pay
separation pay to Jarabelo, and which even Jarabelo himself does not dispute, and that more
than seven years had passed since Jarabelo reported for work on September 1, 2013, the
Court deems it just to award separation pay in lieu of the directive for him to return to work
and for Household Goods to accept him. As to the other claims of Jarabelo, the Court finds no
reason to disturb the factual findings of the NLRC as affirmed by the CA, the same being
supported by substantial evidence.
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By: USTFCL Dean’s Circle for AY 21-22
DEL MONTE LAND TRANSPORT BUS COMPANY v. CARLITO T. ABERGOS
G.R. No. 245344, December 02, 2020, First Division (Caguioa, J.)
DOCTRINE
It is settled that a motion for reconsideration, when allowed to be filed, is an
indispensable condition to the filing of a petition for certiorari. Under Rule 65, the remedy of
filing a special civil action for certiorari is available only when there is no appeal; or any plain,
speedy, and adequate remedy in the ordinary course of law. A "plain" and "adequate remedy"
is a motion for reconsideration of the assailed order or resolution, the filing of which is an
indispensable condition to the filing of a special civil action for certiorari. This is to give the
lower court the opportunity to correct itself.
FACTS
A complaint for constructive dismissal and payment of damages and attorney's fees
was filed before the Labor Arbiter by Carlito Torres Abergos against Del Monte Land
Transport Bus Company and Narciso Morales.
Abergos claimed that he was hired by DLTB Co. as a bus driver on September 12,
2011, with a daily average income of PhP1,800.00. Sometime on August 28, 2016, at around
11:00 p.m., he drove the DLTB Co. bus and arrived at Matnog Port, Sorsogon, en route to
Southern Leyte. The bus was arranged to be ferried by a FastCat Ferry at 3:00 a.m. but DLTB
Co.'s facilitator or fixer gathered all the passengers so they can ride the 9:00 a.m. trip instead.
The passengers got angry and confused and asked him why they were taking the later trip
when they could already board the 3:00 a.m. trip. Because of the confusion, they were forced
to take the 3:00 a.m. trip of Star Ferry.
Abergos alleged that after he got back from the trip, he was summoned to Mr. Sabino's
office to explain why the passengers were not able to immediately board the Star Ferry. After
he submitted his written explanation, he was handed a memorandum suspending him for
15. When he reported back for work on September 16, 2016, he was told by Mr. Sabino that
he was already dismissed from his employment. Hence, the instant complaint praying that
he be declared as illegally dismissed from work and that DLTB Co. and Morales be ordered
to reinstate him to his former position with payment of full back wages and other benefits,
moral and exemplary damages, and attorney's fees.
The Labor Arbiter declared the dismissal of complainant Abregos illegal. Petitioners
sought a reconsideration contending that Abergos was assigned to operate and manage a
passenger bus that transported passengers from Batangas. As a common carrier, DLTB Co.
encouraged its employees to exhibit the highest degree of discipline in the performance of
their duties. Notwithstanding his awareness of the DLTB Co. Code of Conduct, his
performance and work attitude left much to be desired on account of the numerous
infractions he committed during his assignment at DLTB Co.'s Eastern Visayas-Tacloban
Operation Center.
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Petitioners asserted that on September 16, 2016, Abergos was served an order
reassigning him to DLTB Co.'s Batangas Operation Center in Nasugbu, Batangas. Instead of
complying with the return-to-work order, Abergos refused to report for work. As a
consequence, DLTB Co. sent him a notice to explain on September 27, 2016 directing him to
submit within 5 days from notice a written explanation for his unauthorized absences. To
their surprise, petitioners found that Abergos filed a complaint for constructive illegal
dismissal and payment of his monetary claims.
Taking into consideration the documentary evidence presented by petitioners, the
NLRC rendered the now assailed Resolution reinstating the payment of separation pay in
lieu of reinstatement. Without moving for reconsideration, Abergos filed a petition for
certiorari under Rule 65 before the CA. In the assailed Decision, the CA found that the NLRC
committed grave abuse of discretion when it considered the belated evidence submitted by
petitioners in ruling that strained relations existed.
ISSUE
1) Whether the CA erred in entertaining Abergos's petition for certiorari despite his
failure to move for the reconsideration of the NLRC's Resolution dated May 24, 2017;
2) Whether the CA erred in reversing the NLRC's award of separation pay in lieu of
reinstatement.
RULING
1) YES. A motion for reconsideration is required before filing a petition for certiorari.
The records show that Abergos failed to file a motion for reconsideration prior to filing the
petition for certiorari assailing the NLRC's Resolution dated May 24, 2017. The 2011 NLRC
Rules of Procedure, as amended, allows the filing of a motion for reconsideration of the NLRC
decision, as follows:
SECTION 15. Motions for Reconsideration. – Motion for reconsideration of any
decision, resolution or order of the Commission shall not be entertained except when
based on palpable or patent errors; provided that the motion is filed within ten (10)
calendar days from receipt of decision, resolution or order, with proof of service that
a copy of the same has been furnished, within the reglementary period, the adverse
party; and provided further, that only one such motion from the same party shall be
entertained.
It is settled that a motion for reconsideration, when allowed to be filed, is an
indispensable condition to the filing of a petition for certiorari. As the Court held in Sim v.
National Labor Relations Commission:
Under Rule 65, the remedy of filing a special civil action for certiorari is available only
when there is no appeal; or any plain, speedy, and adequate remedy in the ordinary
course of law. A "plain" and "adequate remedy" is a motion for reconsideration of the
assailed order or resolution, the filing of which is an indispensable condition to the
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filing of a special civil action for certiorari. This is to give the lower court the
opportunity to correct itself.
Here, Abergos failed to provide any reason in his petition for certiorari for his failure
to file a motion for reconsideration. Curiously, despite being apparent in the CA's narration
of facts that Abergos did not file a motion for reconsideration before filing the petition for
certiorari, the CA did not discuss how the failure to move for reconsideration affected the
propriety of the petition for certiorari. The CA even proceeded to rule on the merits and
nullify the NLRC's Resolution. This is error.
The CA should have dismissed the petition for certiorari outright. There is nothing on
record to justify a relaxation of the rules. Abergos failed to provide any justification for not
filing a motion for reconsideration or that his case falls under any of the exceptions. Abergos,
who sought the extraordinary writ of certiorari, must apply for it in the manner and strictly
in accordance with the provisions of the law and the Rules of Court. He failed to show any
concrete, compelling and valid reason for dispensing with the motion for reconsideration.
Likewise, the CA disregarded a requirement without any explanation for such action.
A relaxation of the rules may be done only in the most persuasive of reasons and strict
compliance is always enjoined to facilitate the orderly administration of justice. It is in the
context of the foregoing that the only remedy available to a party aggrieved in a decision of
the NLRC is a petition for certiorari before the CA, and for which the petitioner must show
that such remedy is the only plain, speedy, and adequate remedy. As shown above, Abergos's
failure to file a motion for reconsideration meant that when he filed his petition for certiorari,
it was not the only plain, speedy, and adequate remedy available. Having failed to perfect the
remedy available to him, the Court is constrained to reinstate the NLRC Resolution dated
May 24, 2017, which, following the 2011 NLRC Rules as quoted above, should have already
attained finality and executed, as there is no indication in the records that the CA had issued
any injunction.
If the NLRC Resolution dated May 24, 2017 has not yet been executed, interest on the
monetary awards shall earn interest at six percent (6%) per annum counted from finality of
the NLRC Resolution until fully paid. And even if the Court were to excuse Abergos's failure
to file a motion for reconsideration and the CA's failure to dismiss it outright, the NLRC did
not commit grave abuse of discretion when it received evidence on appeal.
2. YES. Important to note as well, the LA had awarded separation pay in lieu of
reinstatement and to which petitioners did not file an appeal. Petitioners, in effect, already
admitted to their liability to Abergos for backwages, separation pay, and attorney's fees.
However, when the NLRC modified the LA Decision to direct reinstatement, it was then that
petitioners submitted the pieces of evidence to show the existence of strained relations. And
to the mind of the Court, the NLRC did not commit grave abuse of discretion when it received
evidence, as enumerated above, as these were timely submitted when petitioners moved for
the reconsideration of the NLRC's directive to reinstate Abergos. Further, the NLRC did not
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commit grave abuse of discretion in its ruling on the existence of strained relations, as this
was supported by substantial evidence.
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By: USTFCL Dean’s Circle for AY 21-22
BSM CREW SERVICE CENTRE PHILIPPINES, INC. v. ROY JASON P. JONES
G.R. No. 240518, December 09, 2020, First Division (Caguioa, J.)
DOCTRINE
In claims for disability benefits for illnesses that manifest after a seafarer's employment,
the procedure to be followed was outlined in Ventis, as follows: In instances where the illness
manifests itself or is discovered after the term of the seafarer's contract, the illness may either
be (1) an occupational illness listed under Section 32-A of the POEA-SEC, in which case, it is
categorized as a work-related illness if it complies with the conditions stated in Section 32-A,
or (2) an illness not listed as an occupational illness under Section 32-A but is reasonably linked
to the work of the seafarer.
FACTS
Petitioner BSM Crew Service Centre Philippines, Inc. hired Jones as Messman on
board the vessel Al Gattara under a nine-month contract covered by a CBA. In February 2015,
while loading food provisions on board the vessel, Jones felt a sudden snap in his back
followed by pain which radiated to his lower extremities. When his pain did not subside, he
was medically repatriated on March 17, 2015, and immediately referred to the companydesignated physician. He underwent tests and a rehabilitation program, which included
injection of epidural steroid for pain management. On July 1, 2015, Jones undertook a
functional capacity evaluation where the company-designated physician certified that Jones
is "pain free with full range of motion." Jones signed a certificate declaring that he was
"cleared to return to work."
According to Jones, he reported to BSM for re-employment but he was not re-engaged.
In 2016, as his back pain recurred, he consulted another doctor, Dr. Francis Pimentel, who
concluded, in a Medical Report that he was "not fit for work with permanent disability”
because his "facet joint hypertrophy has encroached on the exiting nerve root." Jones
consulted another physician who likewise found him to be unfit for sea duty.
The parties then underwent grievance proceedings before the Associated Marine
Officers and Seamen's Union of the Philippines, but no settlement was reached. Conciliation
proceeding were likewise commenced before the NCMB, but this also failed. After
conciliation proceedings proved futile, the case was sent to voluntary arbitration before the
PVA-NCMB. The PVA-NCMB ordered BSM to pay Jones permanent total disability
compensation amounting to US$96,909.00, sickness allowance totaling US$1,928.00, and
attorney's fees. BSM filed a motion for reconsideration, which was partly granted. The PVANCMB deleted the award of sickness allowance as the same had already been paid.
BSM then filed a petition for review under Rule 43 before the CA. The CA dismissed
the petition and affirmed the PVA-NCMB's findings.
ISSUE
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Whether the CA was correct in affirming the findings of the PVA-NCMB which
awarded permanent and total disability benefits to Jones following the CBA.
RULING
Jones is entitled to total and permanent disability benefits. As to the CA and the
PVA-NCMB's finding that Jones is entitled to total and permanent disability benefits, the
Court affirms the same but on a different basis.
As the CA found, Jones was cleared to return to work by the company-designated
physicians on July 1, 2015, and he even signed a certificate to this effect. It appears, however,
that just about eight months after having been cleared to return to work, Jones experienced
low back pain. Mr. Jones's work demands are heavy; as a seafarer, he may be called on to use
emergency, lifesaving, damage control, and safety equipment. He must perform all
operations connected with the launching of lifesaving equipment. He is also expected to be
able to operate deck machinery, such as the windlass or winches while mooring or
unmooring, and to operate cargo gear or other tasks directed by his superiors. These are
activities which may require lifting heavy equipment or objects. Mr. Jones states that he
cannot perform these activities. These are restrictions placed on the patient's activities to
prevent further injuries from occurring; he is UNFIT for further sea duties.
The PVA-NCMB and the CA ruled that Jones's referral to his doctor of choice eight
months after being declared fit to work is still part of the dispute resolution mechanism
under Section 20(A) of the 2010 Philippine Overseas Employment Administration Standard
Employment Contract (POEA-SEC). Unfortunately, this is erroneous.
Section 20(A) of the POEA-SEC finds no application to Jones's claim for disability
benefits because his illness manifested after the term of his employment contract. As the
Court held in Ventis Maritime Corporation v. Salenga: "Section 20(A) applies only if the
seafarer suffers from an illness or injury during the term of his contract, i.e., while he is
employed.”
Here, it is undisputed that on July 1, 2015, Jones was already cleared to return to
work, and he even signed a certificate acknowledging this. Jones himself admitted to
reporting to BSM for re-employment but he was not re- employed. Therefore, his claim for
disability benefits because of his illness is no longer covered by Section 20(A) of the POEASEC. That said, Jones may still claim for disability benefits but following a different set of
rules and procedures not covered by Section 20(A).
In claims for disability benefits for illnesses that manifest after a seafarer's
employment, the procedure to be followed was outlined in Ventis, as follows: In instances
where the illness manifests itself or is discovered after the term of the seafarer's contract,
the illness may either be (1) an occupational illness listed under Section 32-A of the POEASEC, in which case, it is categorized as a work-related illness if it complies with the conditions
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stated in Section 32-A, or (2) an illness not listed as an occupational illness under Section 32A but is reasonably linked to the work of the seafarer.
Applying Ventis, because Jones's low back pain is not listed in Section 32-A of the
POEA-SEC, he should prove that there is reasonable linkage between his low back pain and
his work. He should prove the risk involved in his work, his illness was a result of his
exposure to the risks, the disease was contracted within a period of exposure and under such
other factors necessary to contract it, and he was not notoriously negligent. Here, Jones, in
his Affidavit dated June 30, 2016, stated that his work as a Messman included considerable
use of his back.
The March 6, 2016 Report of his doctor stated that his low back pain was not
responsive to physical therapy and epidural steroid injection. As quoted above, the doctor
found that the facet joint hypertrophy has encroached on the exiting nerve root and that the
encroachment will not be resolved by steroid injection nor physical therapy and surgery was
required to resolve it. Further, the March 14, 2016 Medical Report states risk factors for
developing low back pain including an occupation that requires heavy lifting, a history of
back injuries, lack of exercise and carrying excess body weight.
The Court finds that Jones was able to prove through substantial evidence that
he was suffering from low back pain and that this was reasonably linked to his work.
Substantial evidence is such amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion even if other equally reasonable minds might
conceivably opine otherwise.
The foregoing convinces the Court that the nature of Jones's work as a Messman or
an "all-around man" exposed him to the risk of developing low back pain as he was required
to perform physical activities that required considerable use of his back. His doctors also
confirm that such activities exposed him to the risk of developing low back pain and given
his undisputed low back pain, he would no longer be able to perform activities that require
the lifting of heavy equipment. Finally, there is nothing on record to show that Jones was
notoriously negligent. Given this, Jones is entitled to total and permanent disability benefits.
The Court also affirms the CA's findings that the CBA is applicable as it is supported
by substantial evidence. The Court likewise affirms the award of attorney's fees as Jones was
indeed compelled to litigate due to BSM's failure to satisfy his valid claim.
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BAUTISTA v. ELI LILLY PHILIPPINES
G.R. No. 235865, February 03, 2021, First Division (Caguioa, J.)
DOCTRINE
It is settled that the employer has the right to terminate the services of an employee for
a just or authorized cause. The dismissal of employees must, however, be made within the
parameters of law and pursuant to the tenets of fair play. In termination disputes, the burden
of proof is always on the employer to prove that the dismissal was for a just or authorized cause.
Where there is no showing of a clear, valid and legal cause for termination of employment, the
law considers the case a matter of illegal dismissal.
FACTS
Bautista was hired by respondent Eli Lilly Philippines, Inc. (ELPI) in 1998 as a
Professional Sales Representative. After several promotions, he was retrenched in 2003. He
was rehired in 2005 and last held the position of Sales and Marketing Services Manager in
2011.
On November 4, 2011, ELPI issued a Show-Cause Letter, charging Bautista with
violation of the company rules and breach of trust and confidence. Allegedly, on May 14,
2008, Bautista simulated the purchase of four tires from Babila Tire Supply (BTS) and
claimed reimbursement for the cost. He was placed under preventive suspension for 30 days.
ELPI did not reveal the source of the damning information against Bautista.
Bautista submitted his explanation and questioned ELPI's failure to identify the
source of the damaging information. In response, ELPI attached a copy of Official Receipt No.
000475 issued by BTS, Sales Invoice No. 27274, and Car Repairs Request No. 8911. Bautista
then submitted a certification dated December 7, 2011 issued by Lilia C. Babila (Lilia),
proprietress of BTS, stating that she issued Official Receipt No. 000475 dated May 14, 2008
under the name of ELPI for the purchase of four tires. ELPI, during the formal investigation,
confronted Bautista with a notarized certification dated December 17, 2011 from Arnulfo,
husband of Lilia, stating that Bautista did not purchase tires from BTS. Arnulfo would,
however, issue another statement acknowledging that he lacked knowledge of the sale and
that it was his wife who issued the official receipt.
On December 21, 2011, Bautista was issued a Notice of Termination, prompting him
to file a Complaint for illegal dismissal and suspension before the Labor Arbiter (LA).
ISSUE
Whether Bautista’s dismissal was valid.
RULING
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NO. It is settled that the employer has the right to terminate the services of an
employee for a just or authorized cause. The dismissal of employees must, however, be made
within the parameters of law and pursuant to the tenets of fair play. In termination disputes,
the burden of proof is always on the employer to prove that the dismissal was for a just or
authorized cause. Where there is no showing of a clear, valid and legal cause for termination
of employment, the law considers the case a matter of illegal dismissal.
The NLRC did not act with grave abuse of discretion in ruling that ELPI had failed to
prove through substantial evidence that Bautista simulated the sale of the tires and was
therefore guilty of dishonesty resulting in ELPI's loss of trust and confidence in him.
The NLRC was correct in its observation that when ELPI issued its Show-Cause Letter,
the affidavits of ELPI's witnesses were not shown to Bautista. In fact, Bautista did not know
who ELPI's source was for his alleged violation of company rules. This prompted Bautista to
submit the certification of Lilia affirming that she had indeed issued Official Receipt No.
000475. In response, ELPI confronted Bautista with a certification of Arnulfo, stating that
Bautista did not purchase tires from BTS. The records undisputedly show, however, that
Arnulfo had issued another statement stating that he lacked knowledge of the sale and that
it was his wife who had issued the official receipt.
Thus, during the administrative proceedings that ELPI conducted, it had in its
possession, the official receipt, the sales invoice, the repairs request, Lilia's statement, and
the two contradicting statements of Arnulfo, as basis for its decision that Bautista committed
dishonesty. The Court finds that these pieces of evidence fail to prove that Bautista simulated
the sale. To the mind of the Court, there was no anomaly in Bautista's claim for
reimbursement as this was supported by documents.
As to the affidavits of Ong and Du, the Court agrees with the NLRC that they cannot be
relied on given the circumstances under which they were executed. The affidavits and their
contents were only made known to Bautista when ELPI submitted its Position Paper.
As already summarized above, at the time Bautista was dismissed, he was charged
with having simulated the purchase of the tires. But at the time of the filing of the Position
Papers, ELPI claimed that not only did Bautista simulate the purchase of the tires, he also
directed Ong to personally obtain the simulated receipt from BTS. Further, Du would narrate
that a year after obtaining the receipt from BTS, Ong would confide to Du about obtaining
the receipt and that Ong was still visibly afraid of Bautista. cSEDTC
To the eyes of the Court, this is but an attempt to validate Bautista's termination post
facto. These new allegations contained in the affidavits of Ong and Du were not available at
the time ELPI conducted the administrative hearing. It could therefore not have been its basis
for dismissing Bautista.
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All told, ELPI failed to show a clear, valid and legal cause to dismiss Bautista. The
pieces of evidence it presented are riddled with inconsistencies and unexplained material
facts that leave much to be desired — leading the Court to arrive at the same
conclusion arrived at by the NLRC, that is, that Bautista's dismissal was indeed illegal.
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JEBSENS MARITIME, INC. V. GUTIERREZ
G.R. 244098, March 3, 2021, First Division (Caguioa, J.)
DOCTRINE
Section 20 (A) (3) of the POEA-SEC mandates that when there are conflicting findings
by the company-designated physician and the seafarer's personally appointed physician, the
parties may refer to a third doctor mutually agreed upon, whose decision shall be final and
binding on both parties.
FACTS
Lordelito B. Gutierrez (respondent) was hired on March 27, 2014 as Third Cook for
the vessel MV Mein Schiff I by Jebsens Maritime, Inc. for its foreign principal, Sea Chefs
Cruises Ltd. (collectively, petitioners). On June 19, 2014, while on board, respondent
experienced severe pain on the right paralumbar area, accompanied by paresthesia on the
lower right extremity, and difficulty in movement. He consulted with the ship doctor and
underwent magnetic resonance imaging (MRI) scan of the lumbosacral spine while the ship
was docked in Kiel, Germany, on June 27, 2014. Thereafter, respondent was diagnosed with
Disc Prolapse L4-L5 and medically repatriated on July 2, 2014.
On July 4, 2014, respondent was examined by the company-designated physician at
Shiphealth, Inc. On July 9, 2014, he was diagnosed with L4-L5 Herniated Nucleos Pulposus
and was recommended to undergo 18 sessions of physical therapy which he completed on
September 9, 2014. On the same day, respondent was given his Final Medical Report which
diagnosed that his condition had become asymptomatic and declared that he was "FIT TO
WORK FOR THE CONDITION REFERRED, CASE CLOSURE."
After receiving the fit to work diagnosis, respondent applied for re-engagement
sometime in October 2014, but his application was denied by petitioners because he failed
the pre-employment medical examination (PEME). The examining physician during the
PEME declared that there was a "'high probability of recurrence' of [respondent's] previous
illness." On November 7, 2014, respondent underwent an x-ray of the lumbar spine which
showed a mild dextroscoliosis of the lumbar vertebrae.
respondent continued his medical treatment and sought the opinion of a personally
appointed physician, Dr. Renato P. Runas (Dr. Runas). On January 29, 2015, Dr. Runas issued
a Medical Evaluation Report finding that respondent was "permanently unfit for sea duty in
whatever capacity with a [recommendation for] permanent disability.”
On January 4, 2016, LA Sosito directed the parties to submit the findings of a third
doctor. Respondent submitted the Medical Evaluation Report dated January 29, 2016 of Dr.
Jason Paul P. Santiago (Dr. Santiago) who opined that respondent was "presently impaired
and might not be able to perform his duty as a Chief cook which involves carrying heavy food
pan, cooking utensils, standing for long hours. Physical [t]herapy might lessen the pain
whoever (sic) higher chance that it will come back again. Surgery might improved (sic) but
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will not guarantee a full recovery and he might not be able to go back to his present job.
Lifestyle and work modification should be highly considered to prevent further aggravation
of low back pain at (sic) prevent other serious complications."
ISSUE
Whether Respondent is entitled to total and permanent disability benefits.
RULING
YES. Petitioners do not dispute that respondent's illness is work-related but they
maintain that respondent is not entitled to total and permanent disability benefits because
he was already declared fit to work by the company-designated physician. However, under
the POEA-SEC, the seafarer is not absolutely bound by the opinion of the companydesignated physician. He has a right to seek a second medical opinion which respondent
obtained in this case.
The company-designated physician issued a Final Medical Report which states: “FIT
TO WORK FOR THE CONDITION REFERRED, CASE CLOSURE.”
Dr. Runas, respondent's personally appointed physician, declared, to the contrary,
that respondent was permanently unfit for sea duty in his Medical Evaluation Report.
Section 20 (A) (3) of the POEA-SEC mandates that when there are conflicting findings
by the company-designated physician and the seafarer's personally appointed physician, the
parties may refer to a third doctor mutually agreed upon, whose decision shall be final and
binding on both parties.
In the instant case, both parties agreed to refer respondent's condition to a third
doctor during the conference before LA Sosito on July 23, 2015. The third doctor, Dr. Santiago
issued a Medical Evaluation Report on January 29, 2016, with the following findings:
“Seaman Gutierrez is presently impaired and might not be able to perform his duty as
a Chief cook which involves carrying heavy food pan, cooking utensils, standing for
long hours. Physical Therapy might lessen the pain whoever (sic) higher chance that it
will come back again. Surgery might improved (sic)but will not guarantee a full
recovery and he might not be able to go back to his present job. Lifestyle and work
modification should be highly considered to prevent further aggravation of low back
pain at (sic) prevent other serious complications.”
Thus, the third doctor's findings were consistent with the findings of respondent's
personally appointed physician, that respondent's illness in the lumbar spine or lower back,
rendered him unfit for sea duty and for his specific duties as Third Cook. Both Dr. Runas and
Dr. Santiago opined that physical therapy and surgery may improve respondent's condition
but do not guarantee full recovery. Notably, the findings of Dr. Runas and Dr. Santiago are
also consistent with the PEME results which found that there was a high probability of
recurrence of respondent's illness. Petitioners also do not deny that respondent was not rePage 2 of 174
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hired after he failed the PEME. Dr. Santiago's and Dr. Runas' medical findings, taken with the
fact that petitioners themselves did not hire and re-deploy respondent for his having failed
the PEME, points to no other conclusion than that respondent is suffering from a workrelated illness that rendered him unfit for sea duty and for which he is entitled to total and
permanent disability benefits.
Petitioners attempt to discredit Dr. Santiago's valid and binding report by asserting
that they did not consent, participate, or accept the medical assessment and it was
respondent alone who obtained the same. Petitioners' claim has no merit. Both parties had
agreed to refer to a third doctor during the conference on July 23, 2015. Petitioners' refusal
or failure to actively participate in the process of choosing the third doctor was a waiver of
their right to do so, and cannot be used to challenge the third doctor's final and binding
opinion.
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EBUS V. THE RESULTS CO., INC.
G.R. No. 244388, March 3, 2021, First Division (Caguioa, J.)
DOCTRINE
TRCI cannot hide behind the argument that its conduct was an exercise of management
prerogative as its actions prejudiced Ebus and it failed to provide a legitimate ground to put
him on TLO. Although the exercise of management prerogative will ordinarily not be interfered
with, it is not absolute and it is limited by law, collective bargaining agreement, and general
principles of fair play and justice. "Indeed, having the right should not be confused
with the manner in which that right is exercised."
FACTS
Ebus has been an employee of respondent The Results Company, Inc. (TRCI),a
business process outsourcing company, since August 13, 2012. He was hired as a sales
representative and was promoted several times until he became a Team Leader in 2014. As
a Team Leader, Ebus had the duty of supervising agents assigned to a program handling
TRCI's US-based telecommunication service provider. During Ebus's employment, he was
recognized for his accomplishments and was given various awards and travel incentives.
On December 30, 2014, Ebus received an email from John Christopher P. David
(David),a consultant of TRCI, informing him of two company infractions allegedly committed
by one of Ebus's agents — Ruby De Leon (De Leon). Allegedly, based on a quality call
monitoring, De Leon incorrectly processed a customer's order and failed to fully
apprise the customer of the products that TRCI offers. David recommended that coaching be
provided to De Leon. Several program managers, one of whom was Operations Manager
Summer Dombrowski (Dombrowski),were furnished a copy of the email.
On the same day, Dombrowski replied to the group email that a final written warning
must be given to De Leon, stating that De Leon's employment should be terminated if it
would be later found out that the same process has become a trend in past transactions.
However, the other program managers disagreed with Dombrowski and recommended only
coaching as there seemed to have been no fraud committed.
One program manager — Maria Aguilar (Aguilar) — likewise recommended
coaching, after having listened to the calls, but advised that De Leon would not be receiving
her commission pursuant to TRCI's Zero Tolerance Policy (ZTP) which
authorizes the imposition of automatic penalty. Ebus answered the email of Aguilar and
clarified that De Leon did not have any intention to defraud and that her infraction is not
covered by the ZTP .
On January 1, 2015, Ebus issued a Notice to Explain to De Leon, pursuant to
Dombrowski's instructions, but without mentioning any sanctions as Ebus was still
awaiting the recommendation of Aguilar who was his immediate supervisor. He gave Aguilar
a copy of the Notice to Explain and De Leon's explanation and informed Aguilar that he had
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yet to convey the sanction to De Leon as he was not yet sure of the corrective measure to
impose.
Later, Ebus was also handed a Notice to Explain with Preventive Suspension, stating
that he committed the following acts inimical to TRCI: (1) failure to act on an infraction by a
supervisor; (2) gross negligence in the performance of an assigned task; (3) willful
disobedience of the orders of a superior; and (4) serious misconduct. The same notice placed
him under preventive suspension for 30 days and summoned him to an administrative
hearing.
Ebus submitted his explanation, stating that all the support staff concurred that
coaching was the sanction to be imposed on De Leon and that he was not grossly negligent
as he fulfilled his duty to issue the Notice to Explain to De Leon.
Administrative proceedings ensued on January 13, 2015. Subsequently, on February
9, 2015, TRCI issued a Notice of Decision, wherein Ebus was admonished with a warning that
another similar violation of TRCI's Code of Discipline might lead to his dismissal. He was
found to have committed insubordination for failing to issue a Notice to Explain to De Leon
and to inform her that it should be deemed a final warning for the infractions she committed.
The notice likewise informed Ebus that he would be re-profiled to another account. Hence,
along with the Notice of Decision, the HR Department issued a Redeployment Notice,
placing Ebus on temporary lay-off (TLO) until he was re-assigned to another account after
being processed and after having qualified therefor. During thelay-off, which should not
exceed six months, Ebus would not receive any compensation.
Ebus thus filed a Complaint for constructive dismissal and other monetary claims and
damages on March 20, 2015 before the Labor Arbiter (LA).
ISSUE
Whether Ebus was not constructively dismissed.
RULING
YES. To recall, TRCI, as a result of Ebus's transgressions, found it proper to penalize
him with an admonition with a warning and re-profiling. It is the latter that gave rise
to the issuance of the Redeployment Notice.
Ebus argues that he was constructively dismissed when he was issued his
Redeployment Notice as it constituted a demotion, his employment status was placed in a
vague and indefinite status, and the transfer was invalid.
On the other hand, TRCI argues that it was a valid exercise of management
prerogative when it transferred, redeployed, and placed Ebus on TLO. TRCI argues that it
was only validly regulating the employment of Ebus and putting him on TLO was an
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opportunity for TRCI to assess Ebus's qualifications and re-assign him to other accounts, if
needed.
The Court agrees with Ebus. The CA erred in ruling that the NLRC did not commit
grave abuse of discretion when the NLRC's ruling contradicts settled jurisprudence on
determining whether a transfer results in constructive dismissal.
The Court discussed in Morales v. Harbour Centre Port Terminal, Inc. (Morales),that
in cases of transfer of an employee, the employer has the burden to prove that its conduct is
valid and legitimate and that it would not be prejudicial to the employee; otherwise, it will
be deemed as constructive dismissal.
Here, Ebus's infraction that led to his re-profiling was his failure to inform his
subordinate of the penalty imposable on her because of her error during a call. But there is
nothing on record to show that Ebus's infraction was detrimental to the account he was
handling such that TRCI had no choice but to re-profile him.
In fact, Ebus was in reality not even transferred to any account. Using TRCI's term, he
was temporarily laid-off, and was treated like a new applicant where he would be assessed
for other accounts to see if he was qualified. In the interim, Ebus's economic circumstances
were murky. His salaries and benefits, save for accrued vacation leave, were all stopped for
a period not to exceed six months as he awaited being accepted into a new account. Worse,
he had no assurance whether he would be considered for another account.
Measured against the standard for a valid transfer as stated in Morales,the Court is
convinced that TRCI failed to prove any valid and legitimate ground to re-profile Ebus as its
drastic action was not commensurate to Ebus's transgressions. This action
prejudiced Ebus as his salaries and benefits were stopped and he was treated like a new
applicant. TRCI just made it appear on paper that Ebus was still its employee but in reality
he received none of the benefits of one and was placed in such a situation without any
legitimate ground. This is clearly a dismissal in disguise and is tantamount to constructive
dismissal.
TRCI cannot hide behind the argument that its conduct was an exercise of
management prerogative as its actions prejudiced Ebus and it failed to provide a legitimate
ground to put him on TLO. Although the exercise of management prerogative will ordinarily
not be interfered with, it is not absolute and it is limited by law, collective bargaining
agreement, and general principles of fair play and justice. "Indeed, having the right should
not be confused with the manner in which that right is exercised."
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UNITED PHILIPPINE LINES INC v. RAMOS
G.R. No. 225171, March 18, 2021, First Division (Caguioa, J.)
DOCTRINE
The Court in Gere v. Anglo-Eastern Crew Management Phils., Inc. was explicit in its
ruling that "the company-designated physician is mandated to issue a medical
certificate, which should be personally received by the seafarer, or, if not practicable,
sent to him/her by any other means sanctioned by present rules. For indeed, proper notice
is one of the cornerstones of due process, and the seafarer must be accorded the same especially
so in cases where his/her well-being is at stake."
FACTS
Petitioner United Philippine Lines, Inc. (UPL) hired Ramos on March 13, 2013 as
Assistant Cook for its foreign principal, petitioner Holland America Line Westours, Inc. His
contract was for a period of 10 months with a basic monthly salary of US$300.00.
On March 27, 2013, Ramos embarked on the vessel "MS ZUIDERDAM" but soon
thereafter was medically repatriated and arrived on April 10, 2013. This gave rise to Ramos's
complaint for disability benefits. Ramos claimed that while performing his tasks as Assistant
Cook, he felt severe pain on his left shoulder, prompting him to report this to his superior.
He was advised to visit the infirmary where the ship doctor gave him pain relievers and
advised him to take a few days' rest. Ramos then requested for off-shore consult but Holland
America opted for his medical repatriation.
Upon his arrival, Ramos reported to UPL for his post disembarkation medical checkup and he was referred to Shiphealth, Inc., where he was advised to undergo physical therapy
sessions. Since his condition did not improve, he was referred to the University Physicians
Medical Center, Inc. He underwent medical tests but he was not given the results of his
medical examinations. He then went back to Shiphealth, Inc. but he was told to get his
medical records from UPL. He was told verbally that he was fit to work but he was unable to
get any record of his medical assessment from UPL.
Ramos then sought medical consult from Seamen's Hospital where it was
recommended that he underwent arthroscopic surgery. He also consulted with Dr. Cesar H.
Garcia who specializes in Orthopedic Surgery/Bone and Joint Diseases who opined that
Ramos was unfit to work as a seaman due to his shoulder injury.
Ramos claimed that he is entitled to permanent and total disability benefits because
he has not returned to his seafaring job after, and even recalled that he was already
previously employed by petitioners and medically repatriated in May 2011 for an injury on
the same left shoulder. Although he was eventually cleared for duty, he rested for more than
a year and embarked on his second contract. However, he again experienced pain on his left
shoulder, which led to his medical repatriation.
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For their part, petitioners claimed that Ramos was assessed by the companydesignated physician with "Grade 10 — ankylosis of the shoulder joint not permitting arm
to be raised above a level with a shoulder and/or irreducible fracture or faulty union collar
bone," and that Ramos is therefore only entitled to US$12,090.00.
Labor Arbiter (LA) Decision
The LA found that Ramos is entitled to total and permanent disability benefits
considering that it was the second time for Ramos to be medically repatriated for the same
physical infirmity. Since Ramos could not resume his work as a seaman, the LA ruled that a
Grade 10 disability rating was incorrect and believed the findings of Ramos's doctors. The
LA also found that Ramos was entitled to attorney's fees following Article 2208 of the Civil
Code which allows recovery of attorney's fees in actions for recovery of wages and actions
for indemnity under the employer's liability laws.
Petitioners thereafter filed an appeal before the NLRC.
NLRC Decision
The NLRC affirmed the LA. Since Ramos was unduly deprived of the opportunity to
contest the assessment of the company-designated physician, the NLRC affirmed the LA's
reliance on the assessments of Ramos's doctors.
Aggrieved, petitioners filed a petition for Certiorari before the CA.
CA Decision
The CA affirmed the NLRC and denied the petition. The CA ruled that total and
permanent disability meant disablement of an employee to earn wages in the same kind of
work, or work of a similar nature that a seafarer is accustomed to perform, or any kind of
work which a person of his mentality and attainment could do. And since it appears that
Ramos was still suffering from his injuries well beyond the 120 or 240 days for the companydesignated physician to arrive at a definite assessment, and in fact even after extensive
treatment, he was still suffering from his injuries, Ramos is entitled to total and permanent
disability benefits.
Hence, this Petition for Review on Certiorari.
ISSUE
Whether Ramos is entitled to the award of permanent/total disability benefits.
RULING
YES. Ramos is deemed entitled to total and permanent disability benefits.
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The conflict resolution procedure under Section 20 (A) (3) of the Philippine Overseas
Employment Administration-Standard Terms and Conditions Governing the Overseas
Employment of Filipino Seafarers On- board Ocean-going Ships (POEA-SEC) is clear that "in
the event that a seafarer suffers a [work-]related/aggravated illness or an injury during the
course of his/her employment, it is the company-designated physician's medical assessment
that shall control the determination of the seafarer's disability grading. Should the seafarer's
personal physician disagree, then the matter shall be referred to a neutral third-party
physician, who shall then issue a final and binding assessment."
Further, it is settled that should the seafarer fail to initiate the process to have the
conflicting assessments of the company-designated physician and his own doctor referred
to a third doctor, the assessment of the company-designated physician will prevail.
But the seafarer's failure to refer the conflicting findings of the company-designated
physician and that of his own doctor is only taken against him if it is first shown that the
seafarer had been notified of the assessment of the company-designated physician. It is only
when the seafarer is duly and properly informed of the medical assessment can he determine
whether or not he agrees with the assessment. If he does not agree, he can commence the
process of referring the assessment to his personal physician, and thereafter the conflicting
assessments are referred to a third doctor.
The Court in Gere v. Anglo-Eastern Crew Management Phils., Inc. was explicit in its
ruling that "the company-designated physician is mandated to issue a medical
certificate, which should be personally received by the seafarer, or, if not practicable,
sent to him/her by any other means sanctioned by present rules. For indeed, proper
notice is one of the cornerstones of due process, and the seafarer must be accorded the same
especially so in cases where his/her well-being is at stake."
Here, the NLRC found that Ramos was shown the assessment of his impediment only
when and after petitioners had filed their position paper, which petitioners did not deny.
Petitioners' argument that Ramos failed to prove that he requested for the assessment does
not exempt them from the requirement that the company-designated physician should have
provided Ramos with the assessment. It also does not negate the fact that Ramos only
received the assessment of the company-designated physician when petitioners filed their
position paper. Petitioners cannot pass the fault onto Ramos when it is clear that the
company-designated physician is required to provide the medical certificate to the seafarer
personally or to ensure it is received through other sanctioned means. Petitioners could have
easily shown that Ramos received the assessment as soon as the company-designated
physician issued the same, but they failed to present any proof of this.
Thus, given that Ramos only received a copy of the assessment from the companydesignated physician when petitioners filed their position paper, his referral to his own
doctor was actually a superfluity. As the Court held in Gere, if the seafarer is not notified of
the evaluation of the company- designated physician after the lapse of the 120 or 240-day
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period for the company-designated physician to issue the final and valid assessment of the
seafarer's condition, then, by operation of law, the seafarer is deemed entitled to total
permanent disability benefits.
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SATURNINO A. ELEVERA vs. ORIENT MARITIME SERVICES, INC.
G.R. No. 240054, March 18, 2021, First Division, Caguioa, J.
DOCTRINE
The seafarer shall be entitled to reimbursement of the cost of medicines prescribed by
the company-designated physician. In case treatment of the seafarer is on an out-patient basis
as determined by the company-designated physician, the company shall approve the
appropriate mode of transportation and accommodation. The reasonable cost of actual
traveling expenses and/or accommodation shall be paid subject to liquidation and submission
of official receipts and/or proof of expenses. For this purpose, the seafarer shall submit himself
to a post-employment medical examination by a company-designated physician within three
working days upon his return except when he is physically incapacitated to do so, in which case,
a written notice to the agency within the same period is deemed as compliance. In the course of
the treatment, the seafarer shall also report regularly to the company-designated physician
specifically on the dates as prescribed by the company-designated physician and agreed to by
the seafarer. Failure of the seafarer to comply with the mandatory reporting requirement shall
result in his forfeiture of the right to claim the 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.
FACTS
Elevera worked as a 3rd Engineer on board the vessel "Normand Baltic" for OSM
Maritime, under a three-month employment contract. He was deployed on January 30, 2013.
However, sometime in March 2013, Elevera complained of "ringing sensation on his left ear
and dizziness characterized as swirling of the surrounding." He was brought to Changi
General Hospital due to loss of hearing, where he was diagnosed with "Ear-Vertigo and other
Vestibular Disorder-Stress Related." Elevera was repatriated to the Philippines for medical
treatment. The company-designated physician diagnosed him with "Mild Sensorineural
Hearing Loss, Right Ear; Moderate Sensorineural Hearing Loss, Left Ear; Vestibular
Neuronitis, Hypertensive Cardiovascular Disease, and Blepharitis of Both Eyes."
Another company-designated physician, Dr. Rosales, issued a medical report
diagnosing Elevera with Vestibular Neuronitis and recommending a Grade 10 disability
rating: His suggested disability grading is Grade 10 — slight brain functional disturbance
that requires little attendance or aid and which interferes to a slight degree with the working
capacity of the patient. Dr. Rosales issued yet another medical report this time diagnosing
Elevera with Meniere's Disease and declaring him permanently unfit for sea duties. Elevera
filed a complaint for permanent total disability benefits.
LA: dismissed the complaint for lack of merit. Elevera failed to prove that his illness
is work-related or work aggravated. Although he alleged that his "work on board the vessel
was confined mainly in the engine room where he was exposed to continuous and deafening
engine noise," he still failed to establish that the nature of his work contributed to the
development or aggravation of his illness. The LA gave no credence to the Medical Evaluation
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of Dr. Vicaldo because it was issued after only a single consultation and without any
indication that appropriate tests were conducted to arrive at such opinion.
NLRC: granted Elevera's appeal and awarded him permanent total disability benefits
in the amount of US$60,000.00. Contrary to the findings of the LA, the NLRC held that
Elevera's illness is work-related.
CA: partially granted Elevera's petition for certiorari by awarding attorney's fees
equivalent to 10% of the total judgment award, but reduced the amount of partial disability
benefits. On the other hand, the CA denied respondents' petition for certiorari for lack of
merit. The CA concurred with the NLRC that Elevera's medical condition is work-related.
ISSUE
Whether his disability is total or partial.
RULING
Elevera is entitled to total and permanent disability benefits under the POEASEC. The work-relatedness of Elevera's illness is beyond dispute, and so is his entitlement to
disability benefits. It must be stressed that in disability compensation, what is compensated
is not the injury or illness, but the incapacity to work resulting in the impairment of one's
earning capacity. Moreover, the determination of the fitness of a seafarer for work is the duty
of the company-designated physician, the seafarer's personal doctor, or the third doctor, as
the case may be.
The seafarer shall be entitled to reimbursement of the cost of medicines prescribed
by the company-designated physician. In case treatment of the seafarer is on an out-patient
basis as determined by the company-designated physician, the company shall approve the
appropriate mode of transportation and accommodation. The reasonable cost of actual
traveling expenses and/or accommodation shall be paid subject to liquidation and
submission of official receipts and/or proof of expenses.
For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three working days upon his return
except when he is physically incapacitated to do so, in which case, a written notice to the
agency within the same period is deemed as compliance. In the course of the treatment, the
seafarer shall also report regularly to the company-designated physician specifically on the
dates as prescribed by the company-designated physician and agreed to by the seafarer.
Failure of the seafarer to comply with the mandatory reporting requirement shall result in
his forfeiture of the right to claim the 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.
It is, therefore, beyond the labor tribunals' or the court's authority, nay expertise, to
make its own medical determination of a seafarer's fitness to work and/or prescribe a
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disability rating. The POEA-SEC has provided a dispute mechanism wherein the seafarer's
fitness to work and/or disability rating may be determined by the company-designated
physician, the seafarer's own doctor, or the appointed third doctor, as the case may
be. Hence, the NLRC committed grave abuse of discretion when it gave a Grade 3 disability
rating for Elevera's medical condition even if none of the doctors had prescribed such a
rating. Further, the wording itself of the Medical Report dated August 30, 2013 is already
sufficient basis to award permanent and total disability benefits. It states that Elevera is
permanently unfit for sea duties.
Here, although the Medical Report of the company-designated physician states that
Elevera is "permanently unfit for sea duties," it failed to indicate the appropriate rating
corresponding to Elevera's disability. It cannot, therefore, be determined with certainty
whether he is suffering from total or mere partial permanent disability. This makes the
Medical Report fatally defective for being incomplete and indefinite. This accordingly results
in a failure of the company-designated physician to issue a final and definitive medical
assessment within the 120-day period set by law. Because of this, Elevera is deemed in law
to be suffering from total and permanent disability.
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GREGORIO F. ABELLA vs. ABOSTA SHIPMANAGEMENT CORPORATION
G.R. No. 249358, April 28, 2021, First Division, Caguioa, J.
DOCTRINE
A final, conclusive, and definite medical assessment must clearly state whether the
seafarer is fit to work or the exact disability rating, or whether such illness is work-related, and
without any further condition or treatment. It should no longer require any further action on
the part of the company-designated physician and it is issued by the company-designated
physician after he or she has exhausted all possible treatment options within the periods
allowed by law.
FACTS
Abella worked as an oiler for respondent Abosta Shipmanagement Corporation on
board M/V Sino Trader under a 10-month employment contract. Abella and his crewmates
were ordered to carry the ship's supplies and food provisions. While carrying a sack of rice,
Abella allegedly felt a sudden snap on his left lower back with a sharp pain radiating down
to his thigh/leg. The incident was immediately reported to his superiors, and Abella was
given pain relievers and a waist protector. Because his condition did not improve, he was
brought to the Maritime Medical Centre in Singapore where he was diagnosed with "Lumbar
spondylosis with discopathy" and prescribed medication. Due to persistent pain, he was
again brought to a hospital in Brazil. Abella was repatriated to the Philippines for further
medical treatment.
When Abella arrived in the Philippines, he immediately reported to the companydesignated physician at NGC Medical Specialist Clinic. After running a series of laboratory
tests on Abella, the company-designated physician diagnosed him with Herniated Nucleus
Pulpos and recommended that he undergo physical therapy. Abella claimed, however, that
respondents ceased his treatment and rehabilitation.
During a conference respondents informed Abella that he is suffering from Grade 8
disability and offered him the corresponding disability benefits in the amount of
US$16,795.00. Abella allegedly requested for further treatment or an improved monetary
offer, but his requests were denied. Abella consulted an orthopedic surgeon, Dr. Garcia, who
diagnosed him with Disc Protrusion & Radiculopathy and declared him permanently unfit
for sea duty in any capacity.
Abella instituted a complaint for payment of total and permanent disability benefits,
medical expenses, damages, and attorney's fees following respondents' alleged refusal to pay
him total and permanent disability benefits.
LA: dismissed Abella's complaint and ordered respondents to pay Abella disability
benefits corresponding to Grade 8 rating.
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NLRC: denied Abella's appeal. The NLRC acknowledged that the company-designated
physician arrived at a final medical assessment of Abella's condition or 108 days from his
repatriation. Thus, Abella's insistence that there was no such assessment and that he should
be deemed totally and permanently disabled cannot be sustained.
CA: denied Abella's petition for certiorari. The CA held that Abella failed to establish
his claim by substantial evidence. In the absence of a medical assessment from a third doctor,
it is more logical to give credence to the medical assessment issued by the companydesignated physician. The CA explained that the company-designated physician had
familiarity of Abella's medical status considering that he attended to and monitored his
condition from the time he was repatriated. On the other hand, Dr. Garcia issued a medical
assessment of Abella only after seeing him once, and by merely relying on the existing
medical examination results.
ISSUE
SEC.
Whether Abella is entitled to total and permanent disability benefits under POEA-
RULING
The Petition is partly meritorious. Claims for disability benefits for injuries suffered
by seafarers on board or during the term of their employment contract are governed by the
provisions of the POEA-SEC, particularly Section 20 (A) thereof, which provides that: The
liabilities of the employer when the seafarer suffers work-related injury or illness during the
term of his contract are as follows:
1. The employer shall continue to pay the seafarer his wages during the time he is on
board the vessel.
2. If the injury or illness requires medical and/or dental treatment in a foreign port, the
employer shall be liable for the full cost of such medical, serious dental, surgical and
hospital treatment as well as board and lodging until the seafarer is declared fit to
work or to be repatriated. However, if after repatriation, the seafarer still requires
medical attention arising from said injury or illness, he shall be so provided at cost to
the employer until such time he is declared fit or the degree of his disability has been
established by the company-designated physician.
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 same period is deemed as compliance. Failure of the seafarer to comply
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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.
Accordingly, the seafarer has the obligation to report to the company-designated
physician within three days from his repatriation, while the company-designated physician
has the corresponding obligation to issue a final assessment of the seafarer's disability
within the periods mandated by law.
It is, however, not enough for the company-designated physician to issue a medical
assessment within 120 or 240 days from the seafarer's repatriation. In order to be binding,
the medical assessment must be final, definite, and conclusive, otherwise, the law will step
in and consider the seafarer totally and permanently disabled.
A final, conclusive and definite medical assessment is described by the Court as
follows: A final, conclusive, and definite medical assessment must clearly state whether the
seafarer is fit to work or the exact disability rating, or whether such illness is work-related,
and without any further condition or treatment. It should no longer require any further
action on the part of the company-designated physician and it is issued by the companydesignated physician after he or she has exhausted all possible treatment options within the
periods allowed by law.
Apart from issuing a final, conclusive, and definite medical assessment, the companydesignated physician and/or the company must also furnish the seafarer a copy thereof.
In this regard, the company-designated physician is mandated to issue a medical
certificate, which should be personally received by the seafarer, or, if not practicable, sent to
him/her by any other means sanctioned by present rules. For indeed, proper notice is one of
the cornerstones of due process, and the seafarer must be accorded the same especially so
in cases where his/her well-being is at stake. A company-designated physician who fails to
"give" an assessment as herein interpreted and defined fails to abide by due process, and
consequently, fails to abide by the foregoing guidelines.
As borne out by the records of the case, respondents and the company-designated
physician failed to furnish Abella with a copy of the November 22, 2016 Medical Assessment
within the periods mandated by law. Instead, respondents merely informed Abella of his
Grade 8 disability rating during the conference. In fact, respondents admitted in their
Comment that they only furnished Abella a copy of the November 22, 2016 Medical
Assessment through his counsel during one of the mandatory conferences before the LA.
Hence, Abella cannot be expected to make an informed decision on whether he agrees with
the medical assessment of the company-designated physician or not on the basis of a mere
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verbal declaration of his purported disability. Insofar as he is concerned, there is no final
medical assessment issued by the company-designated physician to contest. As such, he need
not seek the opinion of an independent physician, more so refer the matter to a third doctor.
Without proper notice of the November 22, 2016 Medical Assessment to Abella, he is already
deemed totally and permanently disabled by operation of law, and therefore entitled to the
corresponding disability benefits under the POEA-SEC. The medical assessment of Dr. Garcia
as well as the absence of a medical assessment from a third doctor become immaterial.
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Case Digests
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PACIFIC OCEAN MANNING, INC., BARKER HILL ENTERPRISES, S.A. AND ELMER
PULUMBARIT v. FELICIANO M. CASTILLO
G.R. No. 230527, June 14, 2021, First Division (Caguioa, J.)
DOCTRINE
As correctly held by the NLRC, Dr. Arandia's medical report must be viewed and upheld
in its entirety. Dr. Arandia's medical report does not indicate that Castillo was suffering from
total and permanent disability. If so, Dr. Arandia would have rated his disability as Grade 1. The
phrase "unfit to work as a seaman" should be understood in the context of Dr. Arandia having
also given a Grade 7 rating. Thus, the rational understanding of this phrase is that it merely
indicates that Castillo is suffering from a disability which renders him physically incapable for
sea duties. The report clearly did not declare that Castillo was suffering from total and
permanent disability but rather, that he was suffering only from Grade 7 partial permanent
disability.
FACTS
Respondent Feliciano Castillo was hired as a fitter by petitioner Pacific Ocean
Manning, Inc., for its foreign principal, Barker Hill. His employment was covered by the
Philippine Overseas, Employment Administration Standard Employment Contract (POEASEC) and ITF IBF TCC AMOSUP Collective Bargaining Agreement (CBA). Castillo boarded the
vessel MT Tequila on May 9, 2012. Castillo consulted the on-board doctor on October 25,
2012 due to pain in his right knee. The on-board doctor diagnosed Castillo with "Damage of
the Meniscus of the Right Knee." He was referred to a doctor in Poland, who made the same
diagnosis, and he was subsequently repatriated to the Philippines on October 28, 2012.
Upon arrival in Manila, Castillo reported to Pacific Ocean Manning's office and was
referred to company-designated physicians, namely: Dr. Fidel Chua (Dr. Chua), Dr. Tiong Sam
Lim (Dr. Lim), an orthopedic surgeon, and Dr. Antonio Periquet, a rehabilitation doctor. On
October 30, 2012, Castillo consulted with Dr. Lim and was diagnosed with chondromalacia
patella, right or patellofemoral syndrome. He was prescribed medications and advised to
undergo physical rehabilitation.
On March 27, 2013, Castillo consulted a personally-appointed physician, Dr. Manuel
Magtira, who issued a medical report which stated that Castillo was unfit for sea duties as he
was suffering from partial permanent disability with a disability rating of Grade 10. On April
11, 2013, Castillo had a check-up with the company-designated physician Dr. Chua, who
issued an interim disability assessment also of Grade 10, and advised Castillo to continue
physiotherapy. Castillo had another check-up on May 8, 2013, after which, Castillo's
condition was declared to be work-related with a final disability rating of Grade 10. During
the last consultation on August 2, 2013, Dr. Chua advised that Castillo's physiotherapy be
stopped and for Castillo to continue on a home exercise program. On October 2, 2013, Castillo
consulted a different personally-appointed physician, Dr. Venancio Garduce, who gave a
disability rating of Grade 6.
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Castillo filed a complaint before the Labor Arbiter (LA) for total and permanent
disability compensation. During the preliminary conference, the parties agreed to refer
Castillo to a third and independent physician, Dr. Edsel Arandia (Dr. Arandia), who
diagnosed Castillo with valgus knee 2° to moderate-severe degenerative osteoarthritis and
declared him unfit to work as a seafarer, with a disability rating of Grade 7. Petitioners
offered to pay US$20,900.00, equivalent to Grade 7 disability rating under the POEA-SEC but
Castillo refused the offer. Thus, the parties were unable to reach an amicable settlement and
they submitted their respective Position Papers and Replies.
The LA rendered a Decision granting total and permanent disability compensation to
Castillo under the CBA in the total amount of US$93,154.00 and ten percent (10%) attorneys'
fees. The LA held that Castillo was suffering from total and permanent disability despite the
partial disability rating of Grade 7 because the third doctor had also declared him "unfit to
work as a seaman."
On appeal, however, the NLRC reversed and set aside the LA Decision. The NLRC held
that Castillo was entitled only to Grade 7 disability compensation of US$ 20,900.00 under the
POEA-SEC. The NLRC ruled that the medical report of the third doctor is final and binding.
Thus, Dr. Arandia's diagnosis of Grade 7 partial permanent disability must be upheld in its
entirety. The NLRC also held that the higher rate under the CBA was not applicable because
Castillo's condition was not the result of an accident.
Castillo filed a Petition for Certiorari to the CA maintaining that he was entitled to the
total and permanent disability compensation with the higher rate under the CBA and not
merely Grade 7 disability compensation under the POEA-SEC. The CA granted Castillo's
Petition for Certiorari, reversed and set aside the NLRC Resolutions, and reinstated the LA
Decision. The CA agreed with the LA that despite the Grade 7 disability rating given by Dr.
Arandia, Castillo's disability is total and permanent based on Dr. Arandia's medical report
which stated that Castillo is "unfit to work as a seaman." Petitioners filed a Motion for
Reconsideration of the CA Decision, but this was denied
ISSUE
Whether the CA correctly ruled that Castillo is entitled to the full amount of total and
permanent disability compensation under the CBA and attorney's fees.
RULING
NO. Castillo is entitle only to the amount of partial permanent disability
compensation. The last paragraph of Section 20(A)(3) of the POEA-SEC provides the
mandatory conflict resolution procedure when the findings of the company-designated
physicians and the seafarer's appointed physician are different:
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.
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In the instant case, the company-designated physician and seafarer's appointed
physician were consistent in their diagnoses that Castillo was suffering from partial
permanent disability. They differed only as to the disability rating. On the one hand, Dr. Chua,
the company-designated physician issued a disability rating of Grade 10. On the other hand,
the seafarer-appointed physician, Dr. Garduce, gave a disability rating of Grade 6. The Court
notes however, that the first seafarer-appointed physician consulted by Castillo, Dr. Magtira,
also gave a disability rating of Grade 10, consistent with the disability rating given by the
company-designated physician. In any event, the parties agreed to refer Castillo's condition
to a third independent doctor in compliance with the mandatory conflict resolution
procedure under the POEA-SEC. The parties' jointly chosen doctor, Dr. Arandia, issued a
medical report. As certified by Dr. Arandia, Castillo's condition is a Grade 7 disability which
is a partial permanent disability under the POEA-SEC.
Only disabilities classified as Grade 1 are considered total permanent disability. Thus,
disabilities with a rating from Grade 2 to Grade 14 are classified as partial permanent
disability. The CA and LA focused only on the phrase "unfit to work as a seaman" and
interpreted this as total and permanent disability and completely disregarded the Grade 7
rating given by Dr. Arandia.
The CA committed reversible error in its interpretation of Dr. Arandia's medical
report. As correctly held by the NLRC, Dr. Arandia's medical report must be viewed and
upheld in its entirety. Dr. Arandia's medical report does not indicate that Castillo was
suffering from total and permanent disability. If so, Dr. Arandia would have rated his
disability as Grade 1. The phrase "unfit to work as a seaman" should be understood in the
context of Dr. Arandia having also given a Grade 7 rating. Thus, the rational understanding
of this phrase is that it merely indicates that Castillo is suffering from a disability which
renders him physically incapable for sea duties. The report clearly did not declare that
Castillo was suffering from total and permanent disability but rather, that he was suffering
only from Grade 7 partial permanent disability.
The CA also erred in holding that Castillo's condition is deemed total and permanent
disability because he had not been redeployed within 240 days. Section 20(A)(6) of the
POEA-SEC expressly states that the disability shall be based exclusively on the disability
ratings under Section 32 and shall not be measured or determined by the number of days a
seafarer is under treatment or the number of days in which sickness allowance is paid.
As clearly stated in Dr. Arandia's medical report, Castillo is suffering from a Grade 7
disability which is a partial permanent disability. Under Section 20(A)(3) of the POEA-SEC,
Dr. Arandia's medical report is final and binding. There can be no other basis for the
seafarer's medical condition as the third doctor's medical report is final and conclusive on
the parties. Thus, the Grade 7 disability rating must be respected and upheld by the Court.
Page 20 of 174
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By: USTFCL Dean’s Circle for AY 21-22
JOHN N. CELESTE, EDGAR M. BUTED, DANILO V. GOMEZ, LUZVIMINDO CAGUIOA,
LELITO VALDEZ, RENATO P. MILLAN, CATALINA DE LEON, ROBERTO Q. ABULE
v. COMMISSION ON AUDIT
G.R. No. 237843, June 15, 2021, En Banc (Caguioa, J.)
DOCTRINE
When the CNAI subject of this case was granted to employees, the necessary rules
mandated by Item l7(b) of JR 4 had not yet been issued. NIA did not yet have any legal basis to
grant CNAI to its managerial employees.
FACTS
Petitioners John N. Celeste, Edgar M. Buted, Danilo V. Gomez, and Luzvimindo Caguioa
are employees of NIA Region I who were assigned to the NIA Office in Urdaneta City,
Pangasinan at the time of the controversy. During the periods of March to October 2010,
February 2011, and May 2011, NIA Region I paid Collective Negotiation Agreement Incentive
(CNAI) to its managerial and rank-and-file employees in the amounts of P460,000.00,
P72,000.00, and Pl92,000.00, respectively. On December 2, 2010, an Audit Observation
Memorandum was issued by the Audit Team Leader for NIA Region I concerning the grant
and payment of CNAI. Subsequently, three notices of disallowance (ND) were issued on the
basis of a COA Decision. Appeals were filed by petitioners to the COA Director. COA issued
Decisions affirming the NDs.
Petitioners appealed the Decisions of the COA RO I to the COA Adjudication and
Settlement Board (ASB). In light of the abolition of the ASB per COA Resolution No. 2012001, the COA-CP decided the appeals, affirming the disallowances. In the Assailed Decision,
the COA-CP agreed with the COA RO I that CNAI may be granted only to rank-and-file
employees. It further found that NIA's reliance on Item 4(h)(ii)(aa) of Joint Resolution No. 4,
s. 2009 of the Senate and House of Representatives is misplaced.
Before the Court, petitioners argue that JR 4 is in the nature of a law, and that its Item
4(h)(ii)(aa) should be given effect to allow the grant of CNAI to managerial employees. On
the other hand, respondent COA argues that JR 4, Item 4(h)(ii)(aa) is not an automatic grant
of CNAI to both rank-and-file and managerial employees, as it is dependent on the guidelines
to be issued jointly by the CSC and the DBM.
ISSUE
Whether COA committed grave abuse of discretion when it affirmed the disallowance
of CNAI paid to managerial employees of NIA.
RULING
NO. COA's disallowance of the CNAI granted to managerial employees of NIA is based
on AO 135 and BC 2006-1. Section 2 of AO 135 provides that the CNA incentive shall be
granted only to rank-and-file employees. Petitioners failed to consider that JR 4, Item
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4(h)(ii)(aa) is not an automatic grant of CNAI to managerial employees. JR 4 itself subjects
the grant of CNAI to the necessary rules and guidelines to be issued by the CSC and the DBM.
When the CNAI subject of this case was granted to employees of NIA during the
periods of March to October 2010, February 2011, and May 2011, the necessary rules
mandated by Item l7(b) of JR 4 had not yet been issued. It was only on September 29, 2011
that the DBM issued Circular Letter No. 2011-9, acknowledging that JR 4, Item 4(h)(ii)(aa)
had extended the authority to grant CNAI to managerial employees of government agencies.
Prior to that, the provisions of AO 135 and BC 2006-1 allowing the grant only to rank-andfile employees were still in effect, and NIA did not yet have any legal basis to grant CNAI to
its managerial employees. Hence, the COA was correct in disallowing the same.
Petitioners-payees of the CNAI are liable to return the amounts they received. Being
civil in nature, the liability of officers and payees for unlawful expenditures provided in the
Administrative Code of 1987 will have to be consistent with civil law principles such
as solutio indebiti and unjust enrichment. These civil law principles support the propositions
that (1) the good faith of payees is not determinative of their liability to return; and (2) when
the Court excuses payees on the basis of good faith or lack of participation, it amounts to a
remission of an obligation at the expense of the government. In this case, the defect in the
payment of CNAI to managerial employees of NIA was not merely procedural; there was, at
the time that these incentives were paid out, no legal basis therefor.
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