COMPILATION OF SC DECISIONS FOR LABOR LAW (2014-2015)

8/9/2019 COMPILATION OF SC DECISIONS FOR LABOR LAW (2014-2015)

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COMPIL TION OF SUPREME COURT DECISIONS

(MARCH 2014-MARCH 2015)

Prepared by : ATTY. RESCI ANGELLI RIZADA, RNAteneo de Davao University

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LABOR LAW ANDSOCIAL LEGISLATION

• G.R. No. 193047. March 3, 2014 Fil-Pride

Shipping Company, Inc., et al. Vs. EdgarA. Balasta• Compensability• Regarding the issue of compensability, it

has been the Court’s consistent ruling thatin disability compensation, “it is not theinjury which is compensated, but rather itis the incapacity to work resulting in theimpairment of one’s earning capacity.”Moreover, “the list of illnesses/diseases inSection 32-A does not preclude otherillnesses/diseases not so listed from beingcompensable. The POEA-SEC cannot be

presumed to contain all the possibleinjuries that render a seafarer unfit forfurther sea duties.”

• Just the same, in several cases,cardiovascular disease, coronary arterydisease, as well as other heart ailmentswere held to be compensable. Likewise,petitioners failed to refute respondent’sallegations in his Position Paper that in theperformance of his duties as AbleSeaman, he inhaled, was exposed to, andcame into direct contact with various

injurious and harmful chemicals, dust,fumes/ emissions, and other irritantagents; that he performed strenuoustasks such as lifting, pulling, pushingand/or moving equipment and materialson board the ship; that he was constantlyexposed to varying temperatures ofextreme hot and cold as the ship crossedocean boundaries; that he was exposed aswell to harsh weather conditions; that inmost instances, he was required toperform overtime work; and that the workof an Able Seaman is both physically and

mentally stressful. It does not requiremuch imagination to realize or concludethat these tasks could very well cause theillness that respondent, then already 47years old, suffered from six months intohis employment contract with petitioners.

• Notably, it is “a matter of judicial noticethat an overseas worker, having to wardoff homesickness by reason of beingphysically separated from his family for

the entire duration of his contract, bears agreat degree of emotional strain whilemaking an effort to perform his work well.The strain is even greater in the case of aseaman who is constantly subjected to the

perils of the sea while at work abroad andaway from his family.”•

Assessment by company-designated physician

• The company-designated physician mustarrive at a definite assessment of theseafarer's fitness to work or permanentdisability within the period of 120 or 240days pursuant to Article 192 (c)(l) oftheLabor Code and Rule X, Section 2 oftheAmended Rules on EmployeesCompensation (AREC). Ifhe fails to do soand the seafarer's medical conditionremains unresolved, the latter shall bedeemed totally and permanently disabledOn the other hand, an employee'sdisability becomes permanent and totaeven before the lapse ofthe statutory 240-day treatment period, when it becomesevident that the employee's disabilitycontinues and he is unable to engage ingainful employment during such period

because, for instance, he underwentsurgery and it evidently appears that hecould not recover therefrom within thestatutory period.

Respondent was repatriated on September 18,2005. He was further examined by the company-designated physician Dr. Cruz on September 2123 and 30, 2005; October 6, 2005; February 2,13 and 17, 2006; March 6 and 20, 2006; and onApril 19, 2006. And beginning from the February2, 2006 medical report, respondent wasdiagnosed by Dr. Cruz with severe 3-vessecoronary artery disease, and was scheduled forcoronary artery bypass surgery on February 24,2006. After surgery, respondent continued histreatment with Dr. Cruz, who on the other handcontinued to diagnose respondent with severecoronary artery disease even on respondent’s lastconsultation on April 19, 2006.

Concededly, the period September 18, 2005 to

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April 19, 2006 is less than the statutory 240-day– or 8-month – period. Nonetheless, it isimpossible to expect that by May 19, 2006, or onthe last day of the statutory 240-day period,respondent would be declared fit to work when

just recently – or on February 24, 2006 – heunderwent coronary artery bypass graft surgery;by then, respondent would not have sufficientlyrecovered. In other words, it became evident asearly as April 19, 2006 that respondent waspermanently and totally disabled, unfit to returnto work as seafarer and earn therefrom, given hisdelicate post-operative condition; a definitiveassessment by Dr. Cruz before May 19, 2006 wasunnecessary. Respondent would to all intents andpurposes still be unfit for sea- duty. Even then,with Dr. Cruz’s failure to issue a definiteassessment of respondent’s condition on May 19,

2006, or the last day of the statutory 240-dayperiod, respondent was thus deemed totally andpermanently disabled pursuant to Article 192(c)(1) of the Labor Code and Rule X, Section 2 ofthe AREC.

Premature labor complaint

Neither may it be argued by the petitioners thatrespondent’s filing of the labor complaint onFebruary 10, 2006 should affect the outcome ofthe case. It is difficult to blame respondent for

deciding to sue, considering that he has beendiagnosed by no less than three separatephysicians – Drs. Dizon, Vicaldo, and Cruz – withsevere three-vessel coronary artery diseasewhich required bypass procedure. Respondentmay have been acting under a sense of extremeurgency given the life-threatening nature of hisillness. The filing of the labor complaint may havebeen designed to pressure petitioners into takingaction to address his condition, or to recoverexpenses should he decide to proceed with thebypass procedure on his own. Either way, theCourt cannot subscribe to the view that there was

a premature resort to litigation since respondentwas still undergoing treatment for his illness andthe company-designated physician has notcompleted treatment and made a definiteassessment of his condition.• G.R. No. 188828. March 5, 2014 Co Say

Products Phils., et al. Vs. BenjaminBaltasar, et al.

• The crucial issue in the resolution

of the instant petition concerns thetimely posting of the appeabond. The pertinent rule on thematter is Article 223 of the LaborCode, as amended, which sets

forth the rules on appeal from theLabor Arbiter’s monetary award

These statutory and regulatory provisionsexplicitly provide that an appeal from theLabor Arbiter to the NLRC must beperfected within ten calendar daysfrom receipt of such decisions,awards or orders of the Labor Arbiter.In a judgment involving a monetaryaward, the appeal shall be perfected onlyupon; (1) proof of payment of therequired appeal fee; (2) posting of a

cash or surety bond issued by areputable bonding company; and (3)filing of a memorandum of appeal.

No appeal was perfected by the petitionerswithin the 10-day period under Article 223of the Labor Code.

The petitioners received the 7 August2003 Decision of the Labor Arbiter on 15September 2003, hence, they had until 25September 2003 to perfect their appeal. A

perusal of the records reveals an apparentcontrariety on the date of the posting ofthe appeal bond, a material fact decisiveof the instant controversy. While the FirstCertification indicated that no appeal bondhas been posted as of 2 October 2003, theSecond Certification and the TransmittaLetter stated that a surety bond wasposted on 24 September 2003.

The conclusion that the First Certificationnecessarily leads to is the lateness of theperfection of the appeal to the NLRCOstensibly, the Second Certification putsthe appeal within the required perfectionperiod of ten days from receipt of thedecision of the Labor Arbiter. However,the fact behind what seems to be is thatboth certifications state, directly by thefirst while distortedly by the second, thatthe appeal by petitioners to the NLRC wasperfected beyond the provided period. In



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a seeming attempt to avoid the direct factof untimeliness in the First Certificate, theSecond Certificate mentions two dates,one which is within the 10-day period andthe other, the late date of 28 October

2003 which is even beyond the 2 October2003 issuance of the First Certificate. Thefirst date, 24 September 2003 wasdepicted in the Second Certificate as thedate of posting while the date 28 October2003 was described as the date of receiptby the DOLE-RAB. Apart from saying thatthe appeal bond was timely “posted” on24 September 2003, the SecondCertification would also justify why on thedate of the First Certification, 2 October2003, there was yet no posted appealbond on record, the reason, although

unstated being that the “posted” bond was “received” only on 28 October 2003.

The Second Certificate is not a documentof timeliness of petitioners’ appeal bond.It is even confirmatory of the fact oftardiness that the First Certification stateddoubtlessly. The NLRC gravely abused itsdiscretion when it considered as correctthe statement in the Second Certificatethat “x x x respondent in re: RAB-V CaseNo. 10-004860-02 x x x posted Surety

Bond x x x dated on September 24,2003.”

That the posting of the surety bondrequires as necessary addition the sevenenumerated documents is underscored bythe provision that the appellant shallfurnish the appellee with a certified truecopy of the said surety bond with all theabove-mentioned supporting documents.The appellee shall verify the regularity andgenuineness thereof and immediatelyreport any irregularity to the Commission.

The rule gives the appellee the authorityand opportunity, even the duty, to verifythe regularity and genuineness not only ofthe surety bond but also of the sevenattachments. To reiterate, even if theissuance of the surety bond on 24September 2003 is considered as theposting of the bond, the certification

cannot furthermore be considered as theposting of the other seven requireddocuments.

Without a straight statement, the Second

Certification seems to consider posting asmailing such that the date 24 September2003 should be the reckoning date thatdetermines timeliness and not the date 28October 2003 which was the date ofreceipt of the surety bond. Even suchinsinuation, strained and all, isunacceptable considering the absence ofproof of mailing, it being the fact thatthere was no mention at all in any of thepleadings below that the surety bond wasmailed.

The Court of Appeals therefore, correctlyruled that petitioners failed to perfect theirappeal on time. In holding so, theappellate court only applied the appeabond requirement as already welexplained in our previous pronouncementsthat there is legislative and administrativeintent to strictly apply the appeal bondrequirement, and the Court should giveutmost regard to this intention. The clearintent of both statutory and proceduralaw is to require the employer to post a

cash or surety bond securing the fulamount of the monetary award within theten 10-day reglementary period. Rules onperfection of an appeal, particularly inlabor cases, must be strictly construedbecause to extend the period of theappeal is to delay the case, acircumstance which would give theemployer a chance to wear out the effortsand meager resources of the worker tothe point that the latter is constrained togive up for less than what is due him. Thisis to assure the workers that if they finally

prevail in the case the monetary awardwill be given to them both upon dismissaof the employer’s appeal. It is furthermeant to discourage employers from usingthe appeal to delay or evade payment oftheir obligations to the employees. Theappeal bond requirement precisely aims toprevent empty or inconsequential victoriessecured by laborers in consonance withthe protection of labor clause ensconced


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and zealously guarded by ourConstitution.

It is entrenched in our jurisprudence thatperfection of an appeal in a manner and

within the period prescribed by law is notonly mandatory but jurisdictional, andfailure to perfect an appeal has theeffect of making judgment final andexecutory. While dismissal of an appealon technical grounds is frowned upon,Article 223 of the Labor Code whichprescribes the appeal bond requirement,however, is a rule of jurisdiction and notof procedure.

All considered then, the finding of theLabor Arbiter holding the petitioners liablefor illegal dismissal is binding on them.Not having been timely appealed, thisissue is already beyond our jurisdiction toresolve, and the finding of the LaborArbiter can no longer be disturbed withoutviolating the fundamental principle thatfinal judgment is immutable andunalterable and may no longer bemodified in any respect, even if themodification is meant to correct erroneousconclusion of fact and law.

• G.R. No. 199344. March 5, 2014 Vetyard

Terminals & Shipping Services, Inc./MiguelS. Perez, Seafix, Inc. Vs. Bernardino D.Suarez

• The sole issue in this case iswhether or not the CA erred infailing to hold that the NLRCgravely abused its discretion whenit found that Suarez’s eyeailment is compensable.

The contractual liability of an employer topay disability benefits to a seafarer whosuffers illness or injury during the term ofhis contract is governed by Section20(B)(6) of the Philippine OverseasEmployment Administration-StandardEmployment Contract (POEA-SEC).

Based on the above, an injury or illness iscompensable when, first, it is work-relatedand, second, the injury or illness existedduring the term of the seafarer’s

employment contract. Section 32(A) ofthe 2000 POEA Amended Standard Termsand Condition further provides that for anoccupational disease and the resultingdisability to be compensable, the following

need to be satisfied: (1) the seafarer'swork must involve the risks described; (2)the disease was contracted as a result ofthe seafarer's exposure to the describedrisks; (3) the disease was contractedwithin a period of exposure and undersuch other factors necessary to contractit; and (4) there was no notoriousnegligence on the part of the seafarer.

Suarez had been diagnosed to suffer from posterior subscapsular cataract on hisright eye and pseudophakia, and posterior

capsule opacification on his left eye. Forthese to be regarded as occupationadiseases, Suarez had to prove that therisk of contracting the disease wasincreased by the conditions under whichhe worked. The evidence must be real andsubstantial, and not merely apparent. Itmust constitute a reasonable basis forarriving at a conclusion that the conditionsof his employment caused the disease orthat such conditions aggravated the risk ofcontracting the illness.

Here, Suarez did not present substantiaproof that his eye ailment was work-related. Other than his bare claim thatpaint droppings accidentally splashed onan eye causing blurred vision, he adducedno note or recording of the supposedaccident. Nor did he present any record ofsome medical check-up, consultation, ortreatment that he had undergoneBesides, while paint droppings can causeeye irritation, such fact alone does notipso facto establish compensable

disability. Awards of compensation cannotrest on speculations or presumptions;Suarez must prove that the paintdroppings caused his blindness.

The Court is inclined to accept the findingsof Dr. Caparas, the company-designatedphysician, that it was cataract extraction,not paint droppings that caused Suarez’s



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ailment. The definitions of the imputedmedical conditions plainly do not indicatework-relatedness.

Besides, even if the Court were to assume

that Suarez’s eye ailment was work-related, he still cannot claim disabilitybenefits since he concealed his truemedical condition. The records show thatwhen Suarez underwent pre-employmentmedical examination (PEME), herepresented that he was merely wearingcorrective lens. He concealed the fact thathe had a cataract operation in 2005. Hetold the truth only when he was beingexamined at the Medical City on May 18,2007. This willful concealment of a vitalinformation in his PEME disqualifies him

from claiming disability benefits pursuantto Section 20(E) of the POEA-SEC whichprovides that “a seafarer who knowinglyconceals and does not disclose pastmedical condition, disability and history inthe pre-employment medical examinationconstitutes fraudulent misrepresentationand shall disqualify him from anycompensation and benefits.”

The CA has no basis in holding thatSuarez's PEME is sufficiently exhaustive as

to excuse his non-disclosure of a previouscataract operation. The fact that he wasphysically and psychologically ascertainedto be fit for sea duties does not rule outmisrepresentation. A PEME is generallynot exploratory in nature, nor is it a totallyin-depth and thorough examination of anapplicant's medical condition. It does notreveal the real state of health of anapplicant. Since it is not exploratory, itsfailure to reveal or uncover Suarez's eyedisability cannot shield him from theconsequences of his willful concealment.

•

G.R. No. 181806. March 12, 2014

WesleyanUniversity-Philippines Vs. WesleyanUniversity-Philippines Faculty and StaffAssociation• A Collective Bargaining Agreement

(CBA) is a contract entered into byan employer and a legitimate labororganization concerning the termsand conditions of employment. Like

any other contract, it has the forceof law between the parties andthus, should be complied with ingood faith. Unilateral changes orsuspensions in the implementation

ofthe provisions ofthe CBAtherefore, cannot be allowedwithout the consent o f bothparties.

The Non-Diminution Rule found in Article100 of the Labor Code explicitly prohibitsemployers from eliminating or reducingthe benefits received by their employeesThis rule, however, applies only if thebenefit is based on an express policy, awritten contract, or has ripened into apractice. o be considered a practice, it

must be consistently and deliberatelymade by the employer over a long periodof time.

An exception to the rule is when “thepractice is due to error in the constructionor application of a doubtful or difficultquestion of law.” The error, howevermust be corrected immediately after itsdiscovery; otherwise, the rule on Non-Diminution of Benefits would still apply.

The practice of giving two retirementbenefits to petitioner’s employees is supported by substantial evidence.

In this case, respondent was able topresent substantial evidence in the formof affidavits to support its claim that thereare two retirement plans. Based on theaffidavits, petitioner has been giving tworetirement benefits as early as 1997Petitioner, on the other hand, failed topresent any evidence to refute theveracity of these affidavits. Petitioner’scontention that these affidavits are self-serving holds no water. The retiredemployees of petitioner have nothing tolose or gain in this case as they havealready received their retirement benefitsThus, they have no reason to perjurethemselves. Obviously, the only reasonthey executed those affidavits is to bringout the truth. As we see it then, their



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affidavits, corroborated by the affidavits ofincumbent employees, are more thansufficient to show that the granting of tworetirement benefits to retiring employeeshad already ripened into a consistent and

deliberate practice.• G.R. No. 190724. March 12, 2014 Diamond

Taxi and/or Bryan Ong Vs. Felipe Llamas,Jr.

• The NLRC committed graveabuse of discretion in

dismissing Llamas’ appeal onmere technicality

Article 223 (now Article 229) of the LaborCode states that decisions (or awards ororders) of the LA shall become final andexecutory unless appealed to the NLRCwithin ten (10) calendar days from receiptof the decision. Consistent with Article223, Section 1, Rule VI of the 2005 NLRCRules also provides for a ten (10)-dayperiod for appealing the LA’s decision.Under Section 4(a), Rule VI of the 2005NLRC Rules, the appeal shall be in theform of a verified memorandum of appealand accompanied by proof of payment ofthe appeal fee, posting of cash or suretybond (when necessary), certificate ofnon-forum shopping, and proof of

service upon the other parties. Failure ofthe appealing party to comply with any orall of these requisites within thereglementary period will render the LA’sdecision final and executory.

Indisputably, Llamas did not file amemorandum of appeal from the LA’sdecision. Instead, he filed, within the ten(10)-day appeal period, a motion forreconsideration. Under Section 15, Rule Vof the 2005 NLRC Rules, motions forreconsideration from the LA’s decision arenot allowed; they may, however, betreated as an appeal provided they complywith the requirements for perfecting anappeal. The NLRC dismissed Llamas’motion for reconsideration treated as anappeal for failure to attach the requiredcertificate of non-forum shopping perSection 4(a), Rule VI of the 2005 NLRC

Rules.

Ordinarily, the infirmity in Llamas’ appeawould have been fatal and would have justified an end to the case. A carefu

consideration of the circumstances of thecase, however, convinces us that theNLRC should, indeed, have given duecourse to Llamas’ appeal despite the initiaabsence of the required certificate. Wenote that in his motion for reconsiderationof the NLRC’s May 30, 2006 resolution,Llamas attached the required certificate ofnon-forum shopping.

Moreover, Llamas adequately explained, inhis motion for reconsideration, theinadvertence and presented a clear justifiable ground to warrant therelaxation of the rules. To recall, Llamaswas able to file his position paper, throughhis new counsel, only on December 20,2005. He hired the new counsel onDecember 19, 2005 after severarepeated, albeit failed, pleas to his formercounsel to submit, on or before October25, 2005 per the LA’s order, the requiredposition paper. On November 29, 2005,however, the LA rendered a decision thatLlamas and his new counsel learned and

received a copy of only on January 5,2006. Evidently, the LA’s findings andconclusions were premised solely on thepetitioners’ pleadings and evidence. And,while not the fault of the LA, Llamas,nevertheless, did not have a meaningfuopportunity to present his case, refute thecontents and allegations in the petitionersposition paper and submit controvertingevidence.

Faced with these circumstances, i.e.,Llamas’ subsequent compliance with thecertification-against-forum-shoppingrequirement; the utter negligence andinattention of Llamas’ former counsel tohis pleas and cause, and his vigilance inimmediately securing the services of anew counsel; Llamas’ filing of his positionpaper before he learned and received acopy of the LA’s decision; the absence of ameaningful opportunity for Llamas to



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present his case before the LA; and theclear merits of his case (that oursubsequent discussion will show), theNLRC should have relaxed the applicationof procedural rules in the broader

interests of substantial justice. Indeed,while the requirement as to the certificateof non-forum shopping is mandatory, thisrequirement should not, however, beinterpreted too literally and thus defeatthe objective of preventing theundesirable practice of forumshopping.

Under Article 221 (now Article 227) of theLabor Code, “the Commission and itsmembers and the Labor Arbiters shall useevery and all reasonable means toascertain the facts in each case speedily

and objectively and without regard totechnicalities of law or procedure, all inthe interest of due process.”

Then, too, we should remember that “thedismissal of an employee’s appeal onpurely technical ground is inconsistentwith the constitutional mandate onprotection to labor.” Under theConstitution

and the Labor Code, the State is bound to

protect labor and assure the rights ofworkers to security of tenure – tenurialsecurity being a preferred constitutionalright that, under these fundamentalguidelines, technical infirmities in laborpleadings cannot defeat.

In this case, Llamas’ action against thepetitioners concerned his job, his securityof tenure. This is a property right of whichhe could not and should not be deprivedof without due process. But, moreimportantly, it is a right that assumes apreferred position in our legal hierarchy.

Under these considerations, we agree thatthe NLRC committed grave abuse ofdiscretion when, in dismissing Llamas’appeal, it allowed purely technicalinfirmities to defeat Llamas’ tenurialsecurity without full opportunity to

establish his case’s merits.

Llamas did not abandon his work; hewas constructively dismissed

“abandonment is the deliberate andunjustified refusal of an employee toresume his employment. It is a form ofneglect of duty that constitutes just causefor the employer to dismiss the employee.

To constitute abandonment of work, twoelements must concur: “(1)

x x x the employee must have failed toreport for work or must have been absentwithout valid or justifiable reason; and (2)

x x x there must have been a clearintention [on the part of the employee] tosever the employer- employee relationshipmanifested by some overt act. Theemployee’s absence must be accompaniedby overt acts that unerringly point to theemployee’s clear intention to sever theemployment relationship.

And, to successfully invoke abandonment,whether as a ground for dismissing anemployee or as a defense, the employerbears the burden of proving the

employee’s unjustified refusal to resumehis employment. Mere absence of theemployee is not enough.

Guided by these parameters, we agreethat the petitioners unerringly failed toprove the alleged abandonment. They didnot present proof of some overt act oLlamas that clearly and unequivocallyshows his intention to abandon his jobWe note that, aside from their bareallegation, the only evidence that the

petitioners submitted to proveabandonment were the photocopy of theirattendance logbook and the July 15, 2005memorandum that they served on Llamasregarding the July 13, 2005 incidentThese pieces of evidence, even whenconsidered collectively, indeed failed toprove the clear and unequivocal intentionon Llamas’ part, that the law requires todeem as abandonment Llamas’ absence


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from work. Quite the contrary, thepetitioners’ July 15, 2005 memorandum,in fact, supports, if not strengthens,Llamas' version of the events that led tohis filing of the complaint, i.e., that as a

result of the July 13, 2005 incident, thepetitioners refused to give him the key tohis assigned taxi cab unless he would signthe resignation letter.

Moreover, and as the CA pointed out,Llamas lost no time in filing the

illegal dismissal case against them. Torecall, he filed the complaint on July

18, 2005 or only two days from the thirdtime he was refused access to his

assigned taxi cab on July 16, 2005.Clearly, Llamas could not be deemed to

have abandoned his work for, as we havepreviously held, the immediate

filing by the employee of an illegaldismissal complaint is proof enough of

his intention to return to work andnegates the employer's charge of

abandonment.

To reiterate and emphasize, abandonmentis a matter of

intention that cannot lightly be presumedfrom certain equivocal acts of theemployee.

The CA, therefore, correctly regarded

Llamas as constructively

dismissed for the petitioners' failure toprove the alleged just cause -

abandonment - for his dismissal.Constructive dismissal exists when there

is cessation of work because continued

employment is rendered impossible,

unreasonable or unlikely. Constructivedismissal is a dismissal in disguise or

an act amounting to dismissal but made toappear as if it were not. In

constructive dismissal cases, the employeris, concededly, charged with the

burden of proving that its conduct andaction were for valid and legitimategrounds. The petitioners' persistentrefusal to give Llamas the key to hisassigned taxi cab, on the condition that heshould first sign the resignation letter,

rendered, without doubt, his continuedemployment impossible, unreasonable andunlikely; it, thus, constituted constructivedismissal.

• G.R. No. 186621. March 12, 2014 South

East International Rattan, Inc. and/orEstanislao Agbay Vs. Jesus Coming

• Resolution of the first issue isparamount in view of petitionersdenial of the existence ofemployer-employee relationship.

To ascertain the existence of an employer-employee relationship jurisprudence hasinvariably adhered to the four-fold test, towit: (1) the selection and engagement ofthe employee; (2) the payment of wages;(3) the power of dismissal; and (4) thepower to control the employee’s conduct,or the so-called “control test.”

In Tan v. Lagrama, the Court held that thefact that a worker was not reported as anemployee to the SSS is not conclusiveproof of the absence of employer-

employee relationship. Otherwise, anemployer would be rewarded for hisfailure or even neglect to perform hisobligation.

Nor does the fact that respondent’s namedoes not appear in the payrolls and payenvelope records submitted by petitionersnegate the existence of employer-employee relationship. For a payroll to be



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utilized to disprove the employment of aperson, it must contain a true andcomplete list of the employee. In thiscase, the exhibits offered by petitionersbefore the NLRC consisting of copies of

payrolls and pay earnings records are onlyfor the years 1999 and 2000; they do notcover the entire 18-year period duringwhich respondent supposedly worked forSEIRI.

In their comment to the petition filed byrespondent in the CA, petitionersemphasized that in the certificationsissued by Mayol and Apondar, it wasshown that respondent was employed andworking for them in those years heclaimed to be working for SEIRI. However,

a reading of the certification by Mayolwould show that while the latter claims tohave respondent under his employ in1997, 1998 and 1999, respondent’sservices were not regular and that heworks only if he wants to. Apondar’scertification likewise stated thatrespondent worked for him since 1999through his brother Vicente as “sideline”but only after regular working hours and “off and on” basis. Even assuming thetruth of the foregoing statements, these

do not foreclose respondent’s regular orfull-time employment with SEIRI. Ineffect, petitioners suggest that respondentwas employed by SEIRI’s suppliers, Mayoland Apondar but no competent proof waspresented as to the latter’s status asindependent contractors.

Petitioners’ admission that the five affiantswere their former employees is bindingupon them. While they claim thatrespondent was the employee of theirsuppliers Mayol and Apondar, they did not

submit proof that the latter were indeedindependent contractors; clearly,petitioners failed to discharge their burdenof proving their own affirmative allegation.There is thus no showing that the fiveformer employees of SEIRI weremotivated by malice, bad faith or any ill-motive in executing their affidavit

supporting the claims of respondent.

In any controversy between a laborer andhis master, doubts reasonably arisingfrom the evidence are resolved in favor of

the laborer.

As a regular employee, respondent enjoysthe right to security of tenure underArticle 279 of the Labor Code and mayonly be dismissed for a just or authorizedcause, otherwise the dismissal becomesillegal.

Respondent, whose employment wasterminated without valid cause bypetitioners, is entitled to reinstatementwithout loss of seniority rights and otherprivileges and to his full back wages,inclusive o f allowances and other benefitsor their monetary equivalent, computedfrom the time his compensation waswithheld from him up to the time of hisactual reinstatement. Wherereinstatement is no longer viable as anoption, back wages shall be computedfrom the time of the illegal termination upto the finality of the decision. Separationpay equivalent to one month salary forevery year of service should likewise be

awarded as an alternative in casereinstatement is not possible.

• G.R. No. 191455. March 12, 2014

Dreamland Hotel Resort and Westley JPrentice Vs. Stephen B. Johnson

• At its inception, the Court takesnote of the Resolutions datedDecember 14, 2009 and February11, 2010 of the CA dismissing thePetition for Certiorari due to thefollowing infirmities:

• 1. The affiant has no proof ofauthority to file the petition inbehalf of petitioner Dreamland.

2. The petition has no appended affidavitof service to show proof of service of filingas required by Sec. 13 of the 1997 Rulesof Civil Procedure.

“While it is desirable that the Rules ofCourt be faithfully observed, courts should



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not be so strict about procedural lapsesthat do not really impair the properadministration of justice. If the rules areintended to ensure the proper and orderlyconduct of litigation, it is because of the

higher objective they seek which are theattainment of justice and the protection ofsubstantive rights of the parties. Thus, therelaxation of procedural rules, or saving aparticular case from the operation oftechnicalities when substantial justicerequires it, as in the instant case, shouldno longer be subject to cavil.”

Brushing aside technicalities, in theutmost interest of substantial justice andtaking into consideration the varying andconflicting factual deliberations by the LA

and the NLRC, the Court shall now delveinto the merits of the case.

The petitioners contend that theemployment of Johnson as operationsmanager commenced only on October 8,2007 and not on August 1, 2007.However, the employment contractcategorically stated that the “term ofemployment shall commence on [August1, 2007].” Furthermore, the factualallegations of Johnson that he actually

worked from August 1, 2007 were neithersufficiently rebutted nor denied by thepetitioners.

Notably, it was only in their Motion forReconsideration of the NLRC decisionwhere the petitioners belatedly disagreedthat Johnson performed theabovementioned tasks and argued thathad Johnson done the tasks heenumerated, those were tasks foreign andalien to his position as operationsmanager and [were done] without theirknowledge and consent. Nevertheless,Prentice did not deny that he orderedJohnson to speak with potential guests ofthe hotel. In fact, the petitioners admittedand submitted documents which showedthat Johnson has already taken hisresidence in the hotel as early as July2007—a part of Johnson’s remunerationas the hotel operations manager. In

presenting such documents, thepetitioners would want to impress uponthe Court that their act of accommodatingJohnson was merely due to his being afellow Australian national.

As it could not be determined withabsolute certainty whether or not Johnsonrendered the services he mentionedduring the material time, doubt must beconstrued in his favor for the reason that “the consistent rule is that if doubt existsbetween the evidence presented by theemployer and that by the employee, thescales of justice must be tilted in favor ofthe latter.”

What is clear upon the records is thatJohnson had already taken his place in thehotel since July 2007.

For the petitioners’ failure to disprove thatJohnson started working on August 12007, as stated on the employmentcontract, payment of his salaries on saiddate, even prior to the opening of thehotel is warranted.

Another argument posited by thepetitioners is that the employment

contract executed by the parties isinefficacious because the employmentcontract is subject to the presentation ofJohnson of his Alien Employment Permit(AEP) and Tax Identification Number(TIN).

Again, this statement is wanting of merit.

Johnson has adduced proof that as apermanent resident, he is exempted fromthe requirement of securing an AEP as

expressed under Department Order No75-06, Series of 2006 of the Departmentof Labor and Employment (DOLE),

Furthermore, Johnson submitted aCertification from DOLE Regional OfficeIII, stating that he is exempted fromsecuring an AEP as a holder of PermanentResident Visa. Consequently, the conditionimposed upon Johnson’s employment, if


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there is any, is in truth without effect toits validity.

Anent the requirement of securing a TINto make the contract of employment

efficacious, records show that Johnsonsecured his TIN only on December 2007after his resignation as operationsmanager. Nevertheless, this does notnegate the fact that the contract ofemployment had already become effectiveeven prior to such date.

In addition to the foregoing, there is nostipulation in the employment contractitself that the same shall only be effectiveupon the submission of AEP and TIN. Thepetitioners did not present any proof tosupport this agreement prior to theexecution of the employment contract.

As regards the NLRC findings that Johnsonwas constructively dismissed and did notabandon his work, the Court is inconsonance with this conclusion with thefollowing basis:

Even the most reasonable employee wouldconsider quitting his job after working forthree months and receiving only an

insignificant fraction of his salaries. Therewas, therefore, not an abandonment ofemployment nor a resignation in the realsense, but a constructive dismissal, whichis defined as an involuntary resignationresorted to when continued employment isrendered impossible, unreasonable orunlikely x x x.

The petitioners aver that considering thatJohnson tendered his resignation andabandoned his work, it is his burden to

prove that his resignation was notvoluntary on his part. It is impossible,unreasonable or unlikely that anyemployee, such as Johnson wouldcontinue working for an employer whodoes not pay him his salaries.

Since Johnson was constructivelydismissed, he was illegally dismissed. Inthe present case, the NLRC found that due

to the strained relations between theparties, separation pay is to be awardedto Johnson in lieu of his reinstatement.

• G.R. No. 171482. March 12, 2014 Ashmo

M. Tesoro, Pedro Ang and Gregorio Sharp

Vs. Metro Manila Retreaders, Inc(BANDAG) and/or Northern LuzonRetreaders, Inc (BANDAG) and/or PowerTire and Rubber Corp. (BANDAG)Dissenting Opinion J. Leonen

• This case concerns the effect onthe status of employment ofemployees who entered into aService Franchise Agreement withtheir employer.

Franchising is a business method ofexpansion that allows an individual orgroup of individuals to market a productor a service and to use of the patent,trademark, trade name and the systemsprescribed by the owner. In this case,Bandag’s SFAs created on their faces anarrangement that gave petitioners theprivilege to operate and maintain Bandagbranches in the way of franchises,providing tire repair and retreadingservices, with petitioners earning profitsbased on the performance of theirbranches.

The question is: did petitioners remain tobe Bandag’s employees after they beganoperating those branches? The tests fordetermining employer- employeerelationship are: (a) the selection andengagement of the employee; (b) thepayment of wages; (c) the power ofdismissal; and (d) the employer’s powerto control the employee with respect tothe means and methods by which thework is to be accomplished. The last iscalled the “control test,” the mostimportant element.

When petitioners agreed to operateBandag’s franchise branches in differentparts of the country, they knew that thissubstantially changed their formerrelationships. They were to cease workingas Bandag’s salesmen, the positions theyoccupied before they ventured into

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running separate Bandag branches. Theywere to cease receiving salaries orcommissions. Their incomes were todepend on the profits they made. Yet,petitioners did not then complain of

constructive dismissal. They took theirchances, ran their branches, GregorioSharp in La Union for several months andAshmor Tesoro in Baguio and Pedro Ang inPangasinan for over a year. Clearly, theirbelated claim of constructive dismissal isquite hollow.

It is pointed out that Bandag continued,like an employer, to exercise control overpetitioners’ work. It points out thatBandag: (a) retained the right to adjustthe price rates of products and services;

(b) imposed minimum processed tirerequirement (MPR); (c) reviewed andregulated credit applications; and (d)retained the power to suspend petitioners’services for failure to meet servicestandards.

But uniformity in prices, quality ofservices, and good business practices arethe essence of all franchises. A franchiseewill damage the franchisor’s business if hesells at different prices, renders different

or inferior services, or engages in badbusiness practices. These businessconstraints are needed to maintaincollective responsibility for faultless andreliable service to the same class ofcustomers for the same prices.

This is not the “control” contemplated inemployer-employee relationships. Controlin such relationships addresses the detailsof day to day work like assigning theparticular task that has to be done,monitoring the way tasks are done andtheir results, and determining the timeduring which the employee must reportfor work or accomplish his assigned task.

Franchising involves the use of anestablished business expertise, trademark,knowledge, and training. As such, thefranchisee is required to follow a certainestablished system. Accordingly, the

franchisors may impose guidelines thatsomehow restrict the petitioners’ conductwhich do not necessarily indicate “control.” The important factor to consideris still the element of control over how the

work itself is done, not just its end result.

Petitioners cannot use the revolving fundsfeature of the SFAs as evidence of theiremployer-employee relationship withBandag. These funds do not representwages. They are more in the nature ofcapital advances for operations thatBandag conceptualized to attractprospective franchisees. Petitionersincomes depended on the profits theymake, controlled by their individuaabilities to increase sales and reduce

operating costs.• G.R. No. 150326. March 12, 2014 The

National Wages and ProductivityCommission (NWPC), et al. Vs. TheAlliance of Progessive Labor (APL), et al.• This case concerns the authority of

the National Wages andProductivity Commission (NWPC)and the Regional Tripartite Wagesand Productivity Board (RTWPB)created under Republic Act No6727 otherwise known as the Wage

Rationalization Act, to issue wageorders, and to receive, process andact on applications for exemptionfrom the prescribed wage rates

•

Restated, the issues are: (a) whether ornot the RTWPB-NCR had the authority toprovide additional exemptions from theminimum wage adjustments embodied inWage Order No. NCR-07; and (b) whetheror not Wage Order No. NCR-07 compliedwith the requirements set by NWPCGuidelines No. 01, Series of 1996.

Under the guidelines, the RTWPBs couldissue exemptions from the application ofthe wage orders as long as theexemptions complied with the rules of theNWPC. In its rules, the NWPC enumeratedfour exemptible establishments, but thelist was not exclusive. The RTWPBs had

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the authority to include in the wage ordersestablishments that belonged to, or toexclude from the four enumeratedexemptible categories. If the exemptedcategory was one of the listed ones, the

RTWPB issuing the wage order must seeto it that the requisites stated in Section 3and Section 4 of the NWPC Guidelines No.01, Series of 1996 were complied withbefore granting fully or partially theapplication of an establishment seeking toavail of the exemption,

On the other hand, if the exemption wasoutside of the four exemptible categories,like here, the exemptible category shouldbe: (1) in accord with the rationale forexemption; (2) reviewed/approved by the

NWPC; and (3) upon review, the RTWPBissuing the wage order must submit astrong and justifiable reason or reasonsfor the inclusion of such category. It is thecompliance with the second requisite thatis at issue here.

The CA reversed the decisions of theNWPC dated February 28, 2000 and July17, 2000 mainly on the ground that WageOrder No. NCR-07, specifically its Section2(A) and Section 9(2), had not been

reviewed or approved by the NWPC.However, the NWPC stated that it hadreviewed and approved the challengedsections when it upheld the validity ofWage Order No. NCR-07 in its decisions ofFebruary 28, 2000 and July 17, 2000.

We rule in favor of petitioners.

The wage orders issued by the RTWPBscould be reviewed by the NWPC motu proprio or upon appeal. Any partyaggrieved by the wage order issued by theRTWPBs could appeal. Here, APL andTNMR appealed on October 26, 1999,submitting to the NWPC precisely theissue of the validity of the Section 2(A)and Section 9(2) of Wage Order No. NCR-07. The NWPC, in arriving at its decision,weighed the arguments of the parties andruled that the RTWPB-NCR had substantialand justifiable reasons in exempting the

sectors and establishments enumerated inSection 2(A) and Section 9(2) based onthe public hearings and consultations,meetings, social-economic data andinformations gathered prior to the

issuance of Wage Order No. NCR-07. Thevery fact that the validity of the assailedsections of Wage Order No. NCR-07 hadbeen already passed upon and upheld bythe NWPC meant that the NWPC hadalready given the wage order itsnecessary legal imprimatur. Accordinglythe requisite approval or review wascomplied with.

In creating the RTWPBs, Congressintended to rationalize wages, firstly, byestablishing full time boards to police

wages round-the-clock, and secondly, bygiving the boards enough powers toachieve this objective. In EmployersConfederation o f the Phils. v. NationalWages and Productivity Commission, thisCourt all too clearly pronounced thatCongress meant the RTWPBs to becreative in resolving the annual questionof wages without Labor and Managementknocking on the doors of Congress atevery turn. The RTWPBs are the thinkinggroup of men and women guided by

statutory standards and bound by therules and guidelines prescribed by theNWPC. In the nature of their functions,the RTWPBs investigate and study all thepertinent facts to ascertain the conditionsin their respective regions. Hence,

they are logically vested with thecompetence to determine the applicableminimum wages to be imposed as well asthe industries and sectors to exempt fromthe coverage of their wage orders.

Lastly, Wage Order No. NCR-07 ispresumed to be regularly issued in theabsence of any strong showing of graveabuse of discretion on the part of RTWPB-NCR. The presumption of validity is madestronger by the fact that its validity wasupheld by the NWPC upon review.

• G.R. No. 177493. March 19, 2014 Eric

Godfrey Stanley Livesey Vs. Binswanger



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Philippines, Inc. and Keith Elliot• The NLRC committed no grave

abuse of discretion in reversing LALaderas’ ruling as there issubstantial evidence in the records

that Livesey was prevented fromfully receiving his monetaryentitlements under the compromiseagreement between him and CBB,with Elliot signing for CBB as itsPresident and CEO. Substantialevidence is more than a scintilla; itmeans such relevant evidence as areasonable mind might accept asadequate to support a conclusion.

Shortly after Elliot forged the compromiseagreement with Livesey, CBB ceased

operations, a corporate event that was notdisputed by the respondents. ThenBinswanger suddenly appeared. It wasestablished almost simultaneously withCBB’s closure, with no less than Elliot asits President and CEO. Through theconfluence of events surrounding CBB’sclosure and Binswanger’s suddenemergence, a reasonable mind wouldarrive at the conclusion that Binswanger isCBB’s alter ego or that CBB andBinswanger are one and the same

corporation. There are also indications ofbadges of fraud in Binswanger’sincorporation. It was a business strategyto evade CBB’s financial liabilities,including its outstanding obligation toLivesey.

The respondents impugned the probativevalue of Livesey’s documentary evidenceand insist that the NLRC erred in applyingthe doctrine of piercing the veil ofcorporate fiction in the case to avoidliability. They consider the NLRC

conclusions as mere assumptions.

We disagree.

It has long been settled that the law vestsa corporation with a personality distinctand separate from its stockholders ormembers. In the same vein, acorporation, by legal fiction and

convenience, is an entity shielded by aprotective mantle and imbued by law witha character alien to the personscomprising it. Nonetheless, the shield isnot at all times impenetrable and cannot

be extended to a point beyond its reasonand policy. Circumstances might deny aclaim for corporate personality, under the “doctrine of piercing the veil ofcorporate fiction.”

Piercing the veil of corporate fiction is anequitable doctrine developed to addresssituations where the separate corporatepersonality of a corporation is abused orused for wrongful purposes. Under thedoctrine, the corporate existence may bedisregarded where the entity is formed or

used for non-legitimate purposes, such asto evade a just and due obligation, or to justify a wrong, to shield or perpetratefraud or to carry out similar or inequitableconsiderations, other unjustifiable aims orintentions, in which case, the fiction wilbe disregarded and the individualscomposing it and the two corporations wilbe treated as identical.

In the present case, we see anindubitable link between CBB’s

closure and Binswanger’sincorporation. CBB ceased to existonly in name; it re-emerged in theperson of Binswanger for an urgentpurpose — to avoid payment by CBBof the last two installments of itsmonetary obligation to Livesey, aswell as its other financial liabilities.Freed of CBB’s liabilities, especiallythat owing to Livesey, Binswangercan continue, as it did continue, CBB’s

real estate brokerage business.

Livesey’s evidence, whose existence therespondents never denied, converged toshow this continuity of businessoperations from CBB to Binswanger. Itwas not just coincidence that Binswangeris engaged in the same line of businessCBB embarked on: (1) it even holds officein the very same building and on the verysame floor where CBB once stood; (2)


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CBB’s key officers, Elliot, no less, andCatral moved over to Binswanger,performing the tasks they were doing atCBB; (3) notwithstanding CBB’s closure,Binswanger’s Web Editor (Young), in an e-

mail correspondence, supplied theinformation that Binswanger is “nowknown” as either CBB (ChestertonBlumenauer Binswanger or as ChestertonPetty, Ltd., in the Philippines; (4) the useof Binswanger of CBB’s paraphernalia(receiving stamp) in connection with alabor case where Binswanger wassummoned by the authorities, althoughElliot claimed that he bought the item withhis own money; and (5) Binswanger’stakeover of CBB’s project with the PNB.

While the ostensible reason forBinswanger’s establishment is to continueCBB’s business operations in thePhilippines, which by itself is not illegal,the close proximity between CBB’sdisestablishment and Binswanger’s cominginto existence points to an unstated buturgent consideration which, as we earliernoted, was to evade CBB’s unfulfilledfinancial obligation to Livesey under thecompromise agreement.

With CBB’s closure, Livesey asked whypeople would buy into a corporation andsimply close it down immediatelythereafter? The answer — to pave the wayfor CBB’s reappearance as Binswanger.Elliot’s “guiding hand,” as Livesey puts it, is very much evident in CBB’s demise andBinswanger’s creation. Elliot knew thatCBB had not fully complied with itsfinancial obligation under the compromiseagreement. He made sure that it wouldnot be fulfilled when he allowed CBB'sclosure, despite the condition in the

agreement that "unless and until theCompromise Amount has been fullysettled and paid by the Company in favorof Mr. Livesey, the Company shall not x xx suspend, discontinue, or cease its entireor a substantial portion of its operations.

What happened to CBB, we believe,supports Livesey's assertion that De

Guzman, CBB's former Associate Director,informed him that at one time Elliot toldher of CBB's plan to close the corporationand organize another for the purpose ofevading CBB's liabilities to Livesey and its

other financial liabilities. This wrongfuintent we cannot and must not condonefor it will give a premium to an iniquitousbusiness strategy where a corporation isformed or used for a non-legitimatepurpose, such as to evade a just and dueobligation. We, therefore, find Elliot asliable as Binswanger for CBB's unfulfilledobligation to Livesey.

• G.R. No. 193628. March 19, 2014 Splash

Philippines, Inc., et al. Vs. Ronulfo G.Ruizo

• A. The 120-day rule

•

As in many other maritimecompensation cases which reachedthe Court, the CA’s award ofpermanent total disability benefitsto Ruizo is anchored on the 120-day rule often invoked through theCourt’s pronouncement in CrystaShipping. The CA declared: “Thetrue test of whetherrespondent suffered from a permanent disability is whether

there is evidence that he was

unable to perform hiscustomary work as chief cookfor more than 120 days.”

Under the above Court pronouncement, itis clear that the degree of a seafarer’sdisability cannot be determined on thebasis solely of the 120-day rule or in totadisregard of the seafarer’s employmentcontract (executed in accordance with thePOEA-SEC), the parties’ CBA if there isone, and Philippine law and rules in caseof any unresolved dispute, claim or

grievance arising out of or in connectionwith the POEA-SEC, as the Courtexplained in Vergara. Thus, in everymaritime disability compensationclaim, it is important to bear in mindthat under Section 20(B)3 of the

POEA-SEC, in the event a seafarer

suffers a work-related injury orillness, the employer is liable only for

the resulting disability that has been



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assessed or evaluated by the

company-designated physician. If adoctor appointed by the seafarer

disagrees with the assessment, athird doctor may be agreed jointly

between the employer and the seafarer whose decision shall be final

and binding on both parties. Further,

the parties’ supposed CBA (thecomplete copy belatedly submitted by

Ruizo to the CA ) contains an almostidentical provision (as the POEA-SEC)in its Article 20.1.4.2.

Relatedly, there is one other POEA-SECprovision that is often overlooked orignored, but which should be given dueconsideration in the determination of the

seafarer’s disability compensation, andthis is found in Section 20(B)6 whichstates:

6. In case of permanent total orpartial disability of the seafarercaused by either injury or illness[,]the seafarer shall be compensated inaccordance with the schedule ofbenefits arising from an illness ordisease shall be governed by the ratesand the rules of compensation

applicable at the time the illness ordisease was contracted.

In light of the above-cited provisions ofthe POEA-SEC which is the lawbetween the parties, we cannot find abasis for the award of permanent totaldisability benefits to Ruizo, except themuch belabored 120-day rule. The rule, asearlier emphasized, had already beenmodified pursuant to the Court’spronouncement in Vergara. It cannotsimply “be xxx applied as a general rulefor all cases and in all contexts.”

In short, it cannot be used as a cure-all formula for all maritimecompensation cases. Its applicationmust depend on the circumstances ofthe case, including especiallycompliance with the parties’

contractual duties and obligations as

laid down in the POEA-SEC and/ortheir CBA, if one exists. Thus, the CAruled outside of legal contemplationand thus committed grave abuse ofdiscretion.

Significantly, Ruizo himself recognized therelevance of the POEA- SEC in his casewhen he acknowledged that under thecontract, “a medically repatriated seafareris subject for examination and treatmentby the company designated physician fora period not exceeding 120 days. Afterwhich the company designated physicianwill make [an] assessment whether theseafarer had already become fit for workor not.” Ruizo, however, was notmedically repatriated; he went home for

a finished contract. In any event, as wesaid in Vergara: “a temporary totaldisability only becomes permanent

when so declared by the company physician within the periods he is

allowed to do so, or upon theexpiration of the maximum 240-day

medical treatment period without a

declaration of either fitness to workor the existence of a permanentdisability .”

Although the 240-day maximumtreatment period under the rules hadalready expired, counted from hisrepatriation on December 21, 2005, it canbe said that Ruizo and the petitionersagreed to have the treatment periodextended as it was obvious that he stilneeded treatment. In fact, he agreedafter some trepidation, to be subjected toan ultrasound procedure (ESWL) in theeffort of the petitioners to improve hiscondition; he was expected to return afterFebruary 5, 2007 to Dr. Cruz for a repeat

ESWL, but he failed to do so. Clearly,under the circumstances, the 120-day rulehad lost its relevance.

B. Compliance with the POEA-SEC

As earlier emphasized, under the POEA-SEC, the employer is liable for a seafarer’sdisability, resulting from a work-connected


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injury or illness, only after the degree ofdisability has been established by thecompany- designated physician and, ifthe seafarer consulted with aphysician of his choice whose

assessment disagrees with that of thecompany- designated physician, thedisagreement must be referred to athird doctor for a final assessment.

In the present dispute, no showing existsthat the relevant POEA-SEC provisions hadbeen observed or complied with. WhileRuizo reported to Dr. Cruz upon hisrepatriation for examination andtreatment, he cut short his sessions withthe doctor and missed an importantmedical procedure (ESWL) which could

have improved his health condition andhis capability to work. Ruizo’s explanationthat he did not return for further ESWLbecause Dr. Cruz told him that he wouldalready be forwarding his assessment tothe petitioners is belied by the doctor’sreport to the agency dated March 19,2007, stating that he did not return forfurther ESWL. The reason for Ruizo’sfailure to return and continue histreatment with Dr. Cruz was, as the LAaptly saw it, his awareness of the

possibility that he could be declared fit towork after treatment.

Thus, the facts of the case show that theabsence of a disability assessment by Dr.Cruz was not of the doctor’s making, butwas due to Ruizo’s refusal to undergofurther treatment. In the absence of anydisability assessment from Dr. Cruz,Ruizo’s claim for disability benefits mustfail for his obvious failure to comply withthe procedure under the POEA-SEC whichhe was duty bound to follow

•

G.R. No. 190053. March 24, 2014

NavotasShipyard Corporation and Jesus VillaflorVs. Innocencio Montallana, et al.ISSUE: AWARD OF separation pay andbackwages notwithstanding theclosure of the company’s businessoperations.

It appears from the records that the

company was compelled to shut down itsoperations due to serious businessreverses during the period material to thecase. It also appears that the petitionersinitially intended the shutdown to be

temporary as it expected to resumeoperations before the expiration of sixmonths or on April 22, 2004,

As we earlier stated, the petitionersundertook a temporary shutdown. In fact,the company notified the DOLE of theshutdown and filed an EstablishmentTermination Report containing the namesof the affected employees. The petitionersexpected the company to recover beforethe end of the six-month shutdown periodbut unfortunately, no recovery took place

Thus, the shutdown became permanentAccording to the petitioners, they gave thecompany’s employees their separationpay.

We disagree with the company’s positionthat it resorted to a retrenchment underArticle 283 of the Labor Code; it was atemporary shutdown under Article 286where the employees are considered onfloating status or whose employment istemporarily suspended.

Were the respondents illegallydismissed and entitled to the CAaward?

1. The illegal dismissal ruling

Under the circumstances, we cannotsay that the company’s employeeswere illegally dismissed; rather, theylost their employment because thecompany ceased operations after

failing to recover from their financiareverses. The CA itself recognized whathappened to the company when itobserved: “The temporary shutdown hasripened into a closure or cessation ofoperations. In this situation[,] privaterespondents are definitely entitled to thecorresponding benefits of separation.”

In these lights, the CA was not only



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incorrect from the point of law; it likewisedisregarded, or at the very least, grosslymisappreciated the evidence on record – that the petitioner was in distress and hadtemporarily suspended its operations,

and duly reflected these circumstances tothe DOLE.

2. The award of backwages/nominaldamages

Since there was no illegal dismissal,the respondents are not entitled tobackwages. The term “backwages”presupposes illegal termination ofemployment. It is restitution of earningsunduly withheld from the employeebecause of illegal termination. Hence,where there is no illegal termination, thereis no basis for claim or award ofbackwages.

Pursuant to existing jurisprudence, ifthe dismissal is by virtue of a just orauthorized cause, but without dueprocess, the dismissed workers areentitled to an indemnity in the form ofnominal damages.

In the present case, the evidence on hand

substantially shows that the companyclosed down due to serious businessreverses, an authorized cause fortermination of employment. The failure tonotify the respondents in writing of theclosure of the company will not invalidatethe termination of their employment, butthe company has to pay them nominaldamages for the violation of their right toprocedural due process.

In Jaka Food Processing Corp. v. Pacot ,

the Court made a distinction between “just” and “authorized” cause in relation tothe award of nominal damages. Thus, theCourt said: “if the dismissal is based on a just cause under Article 282 but theemployer failed to comply with the noticerequirement, the sanction to be imposedupon him should be tempered because thedismissal process was, in effect, initiatedby an act imputable to the employee; and

(2) if the dismissal is based on anauthorized cause under Article 283 but theemployer failed to comply with the noticerequirement, the sanction should be stifferbecause the dismissal process was

initiated by the employer’s exercise of hismanagement prerogative.” The Courtawarded P50,000.00 nominal damages in Jaka.

Further, in Industrial Timber Corp. v Ababon, the Court emphasized that in thedetermination of the amount of nominadamages, “several factors are taken intoaccount: (1) the authorized cause invoked– whether it was a retrenchment or aclosure or cessation of operation of theestablishment due to serious business

losses or financial reverses or otherwise;(2) the number of employees to beawarded; (3) the capacity of theemployers to satisfy the awards, takinginto account their prevailing financiastatus as borne by the records; (4) theemployer’s grant of other terminationbenefits in favor of the employees; and(5) whether there was a bona fide attemptto comply with the notice requirements asopposed to giving no notice at all.” In thiscited case, the Court, in considering the

circumstances obtaining in the casedeemed it wise and just to reduce theamount of nominal damages to beawarded to each employee, to P10,000.00instead of P50,000.00 each.

In the present case, there is no questionthat the company failed to resumeoperations anymore as it had beensaddled with serious financial obligationsdue to unpaid debts for diesel fuel and iceand other indebtedness, and because ofthis it had to dispose of its fishing vessels

The respondents themselves were awareof the company’s heavy financial burdensince Villaflor told them about it at themeeting on October 20, 2003. Then therewas Villaflor’s undertaking to give themseparation pay of which he also told themAlthough the respondents were notindividually served written notice of thetermination of their employment, thecompany, nonetheless, filed an


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Establishment Termination Report whichincluded the names of the respondents.The filing of the report indicates that thecompany made the bona fide effort tocomply with the notice requirement under

the law and the rules. Given thecircumstances surrounding thecompany’s closure and guided by the

ruling in Industrial Timber , we find itreasonable to award the respondentsP10,000.00 in nominal damages.

3. The award of separation pay, service incentive leave pay and 13th month pay

Under Article 283 of the Labor Codequoted earlier, the employer mayterminate the employment of anyemployee due to, among other causes,the closure or cessation of operations ofthe establishment or undertaking. In suchan eventuality, the employee may or maynot be entitled to separation pay. On thispoint, Article 283 provides: in cases ofclosures or cessation of operations ofestablishment or undertaking not due

to serious business losses or financial

reverses, the separation pay shall beequivalent to one (1) month pay or to

at least one-half (1/2) month pay forevery year of service, whichever is

higher. A fraction of least six months shall be considered one (1) wholeyear.

Considering that the company’sclosure was due to serious financialreverses, it is not legally bound togive the separated employeesseparation pay.

• G.R. No. 193107. March 24, 2014

Sutherland Global Serives (Philippines),Inc. and Janette G. Lagazo Vs. Larry S.Labrador

• Sutherland insists that the failureto state the material dates is fatalto

• Salvador’s appeal to the NLRC andto his present position in this case.

• We do not find Sutherland’sargument meritorious as technical

rules are not necessarily fatal inlabor cases; they can be liberallyapplied if – all things being equal –any doubt or ambiguity would beresolved in favor of labor.

The same reasoning applies to the failureto attach a certificate of non- forumshopping. We can likewise relax ourtreatment of the defect. Additionallywhile the 2005 NLRC Rulesspecifically stated that a certificate ofnon-forum shopping should beattached, the 2011 NLRC Rules ofProcedure no longer requires itJurisprudence, too, is replete withinstances when the Court relaxed therules involving the attachment of the

certificate of non-forum shopping.

We, however, do not agree with thefindings of the NLRC, as affirmed bythe CA, that Labrador was illegallydismissed.

The failure to faithfully comply with thecompany rules and regulations isconsidered to be a just cause interminating one’s employment, dependingon the nature, severity and circumstances

of non-compliance. “An employer ‘has theright to regulate, according to itsdiscretion and best judgment, all aspectsof employment, including workassignment, working methods, processesto be followed, working regulations,transfer of employees, work supervision,lay-off of workers and the discipline,dismissal and recall of workers.’”

Thus, it was within Sutherland’sprerogative to terminate Labrador’semployment when he committed a seriousinfraction and, despite a previous warning,repeated it. To reiterate, he openedanother client account without the latter’sconsent, with far-reaching and costlyeffects on the company. For one, therepeated past infractions would haveresulted in negative feedbacks onSutherland’s performance and reputationIt would likewise entail additiona



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administrative expense since Sutherlandwould have to address the complaints – an effort that would entail investigationcosts and the return of the doubly-delivered merchandise. As a rule, “an

employer cannot be compelled to continuewith the employment of workers whencontinued employment will prove inimicalto the employer's interests.”

To Sutherland’s credit, it duly compliedwith the procedural requirement indismissing an employee; it clearlyobserved both substantive and proceduraldue process. Its action was based on a just and authorized cause, and thedismissal was effected after due noticeand hearing.

• G.R. No. 196142. March 26, 2014 Venus B.

Castillo, et al. Vs. Prudentiallife Plans, Inc.et al.

• In a labor case, the writtenstatements of co-employeesadmitting their

• participation in a scheme todefraud the employer areadmissible in evidence. The

• argument by an employee that thesaid statements constitute hearsay

because the• authors thereof were not presentedfor their cross-examination doesnot persuade,

• because the rules of eviden~e arenot strictly observed in proceedingsbefore the

• National Labor RelationsCo)Illnission (NLRC), which aresummary in nature and

• decisions may be made on thebasis ofposition papers.

For their dishonesty, the penalty ofdismissal is justified pursuant to Section2.6 (i) of the Prudentialife PersonnelManual which prescribes the penalty ofdismissal for acts of padding receipts forreimbursement or liquidation of advancesor expenses. Dishonesty is a seriousoffense, and “no employer will take to itsbosom a dishonest employee.” Acts of

dishonesty have been held to be sufficientgrounds for dismissal as a measure ofself-protection on the part of theemployer.

G.R. No. 201663. March 31, 2014 Emmanue

M. Olores Vs. Manila Doctors College and/orTeresita O. TurlaEssentially, the issues are: (1) whetherrespondent’s appeal with the NLRC was perfecteddespite its failure to post a bond;

At the outset, it must be emphasized that Article223 of the Labor Code states that an appeal bythe employer to the NLRC from a judgment of aLabor Arbiter, which involves a monetary awardmay be perfected only upon the posting of a cashor surety bond issued by a reputable bondingcompany duly accredited by the NLRC, in anamount equivalent to the monetary award in the judgment appealed from.

The posting of a bond is indispensable to theperfection of an appeal in cases involvingmonetary awards from the decisions of the LaborArbiter. The lawmakers clearly intended to makethe bond a mandatory requisite for the perfectionof an appeal by the employer as inferred from theprovision that an appeal by the employer may beperfected “only upon the posting of a cash orsurety bond.” The word “only” makes it clear that

the posting of a cash or surety bond by theemployer is the essential and exclusive means bywhich an employer’s appeal may be perfectedMoreover, the filing of the bond is not onlymandatory, but a jurisdictional requirement aswell, that must be complied with in order toconfer jurisdiction upon the NLRC. Non-compliance therewith renders the decision of theLabor Arbiter final and executory. Thisrequirement is intended to assure the workersthat if they prevail in the case, they will receivethe money judgment in their favor upon thedismissal of the employer’s appeal. It is intendedto discourage employers from using an appeal todelay or evade their obligation to satisfy theiremployees’ just and lawful claims.

Here, it is undisputed that respondent’s appeawas not accompanied by any appeal bond despitethe clear monetary obligation to pay petitionerhis separation pay in the amount of P100,000.00Since the posting of a bond for the perfection of

http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/march2014/196142.pdfhttp://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/march2014/196142.pdfhttp://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/march2014/201663.pdfhttp://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/march2014/201663.pdfhttp://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/march2014/201663.pdfhttp://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/march2014/196142.pdf


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an appeal is both mandatory and jurisdictional,the decision of the Labor Arbiter sought to beappealed before the NLRC had already becomefinal and executory. Therefore, the NLRC had noauthority to entertain the appeal, much less to

reverse the decision of the Labor Arbiter.• G.R. No. 204761. April 2, 2014 Emeritus

Security and Maintenance Systems, Inc.Vs. Janrie C. Dailig

The issues are (1) whether respondentwas illegally dismissed by respondent and(2) if he was, whether respondent isentitled to separation pay, instead ofreinstatement.

The Court agrees with the ruling of theLabor Arbiter, NLRC and Court of Appealsthat a floating status of a security guard,such as respondent, for more than sixmonths constitutes constructive dismissal.

Petitioner admits relieving respondentfrom his post as security guard on 10December 2005. There is also no disputethat respondent remained on floatingstatus at the time he filed his complaintfor illegal dismissal on 16 June 2006. Inother words, respondent was on floatingstatus from 10 December 2005 to 16 June

2006 or more than six months.

x x x the temporary inactivity or “floatingstatus” of security guards should continueonly for six months. Otherwise, thesecurity agency concerned could be liablefor constructive dismissal. The failure ofpetitioner to give respondent a workassignment beyond the reasonable six-month period makes it liable forconstructive dismissal.

On whether respondent is entitled to separation pay

Article 279 of the Labor Code of thePhilippines mandates the reinstatement ofan illegally dismissed employee,

Respondent admits receiving areinstatement notice from petitioner.Thereafter, respondent was assigned to

one of petitioner's clients. However,respondent points out that he was notreinstated by petitioner Emeritus Securityand Maintenance Systems, Inc. but wasemployed by another company, Emme

Security and Maintenance Systems, Inc(Emme). Thus, according to respondent,he was not reinstated at all.

Petitioner counters that Emeritus andEmme are sister companies with the sameBoard of Directors and officers, arguingthat Emeritus and Emme are in effect oneand the same corporation.

Considering petitioner's undisputed claimthat Emeritus and Emme are· one and thesame, there is no basis in respondent'sallegation that he was not reinstated tohis previous employment. Besides,respondent assails the corporatepersonalities of Emeritus and Emme onlyin his Comment filed before this Court.Further, respondent did not appeal theLabor Arbiter's reinstatement order.

Contrary to the Court of Appeals' ruling,there is nothing in the records showingany strained relations between the partiesto warrant the award of s~paration pay

There is neither allegation nor proof thatsuch animosity existed between petitionerand respondent. In fact, petitionercomplied with the Labor Arbiter'sreinstatement order.

Considering that (1) petitioner reinstatedrespondent in compliance with the LaborArbiter's decision, and (2) there is noground, particularly strained relationsbetween the parties, to justify the grant ofseparation pay, the Court of Appeals erredin ordering the payment thereof, in lieu ofreinstatement.

• G.R. No. 201072. April 2, 2014 United

Philippine Lines, Inc. and Holland AmericaLine Vs. Generoso E. Sibug

• Essentially, the issues for ourresolution are as follows: (1)whether Sibug is entitled topermanent and total disabilitybenefits for his Volendam and

http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april2014/204761.pdfhttp://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april2014/204761.pdfhttp://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april2014/201072.pdfhttp://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april2014/201072.pdfhttp://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april2014/201072.pdfhttp://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april2014/204761.pdf


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Ryndam injuries and (2) whetherhe is entitled to attorney’s fees.

After our own review of the case, we findthe petition partly meritorious. We rule

that Sibug is not entitled to permanentand total disability benefit for hisVolendam injury. But he is entitled topermanent and total disability benefit forhis Ryndam injury and to attorney’s fees.

Sibug is not entitled to permanent andtotal disability benefit for his Volendaminjury since he became already fit to workagain as a seaman. He even admitted inhis position paper that he was declared fitto work. He was also declared fit for seaservice after his pre-employment medicalexamination when he soughtreemployment with petitioners. Themedical certificate declaring Sibug fit forsea service even bears his signature. Andhe was able to work again in the samecapacity as waste handler in Ryndam. Onthis point, the Labor Arbiter’s ruling isamply supported by substantial evidence.On the other hand, the CA erred in rulingthat Sibug is entitled to permanent andtotal disability benefit for the injury hesuffered at the Volendam. The facts

clearly show that he is not.

As regards his Ryndam injury, we agreewith the CA that Sibug is entitled topermanent and total disability benefitamounting to US$60,000.

In Millan v. Wallem Maritime Services,Inc., we listed the following circumstanceswhen a seaman may be allowed to pursuean action for permanent and totaldisability benefits:

1. (a) The company-designatedphysician failed to issue adeclaration as to his fitness toengage in sea duty or disabilityeven after the lapse of the 120-day period and there is noindication that further medicaltreatment would address histemporary total disability,

hence, justify an extension ofthe period to 240 days;

2. (b) 240 days had lapsedwithout any certification issuedby the company-designated

physician;3. (c) The company-designatedphysician declared that he is fit forsea duty within the 120-day or240-day period, as the case maybe, b

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COMPILATION OF SC DECISIONS FOR LABOR LAW (2014-2015)

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