Green Notes 2016
Labor Law
Pre-week Labor Updates
Prof. Benedict G. Kato, LA
(former professor)
SUPPLEMENT NO. 001
EMPLOYEE COMPENSATION
Bartolome vs. Social Security System,
G.R. No. 192531, November 12, 2014
1. Rule limiting entitlement to death
benefit claims to legitimate parents is
contrary to law.
In Commissioner of Internal Revenue v.
Fortune Tobacco Corporation, the SC held:
Administrative regulations must always
be in harmony with the provisions of the law
because any resulting discrepancy between the
two will always be resolved in favor of the basic
law.
Guided by this doctrine, Rule XV of
the Amended Rules on Employees
Compensation is patently a wayward restriction
of and a substantial deviation from Article 167
(j) of the Labor Code when it interpreted the
phrase dependent parents to refer to
legitimate parents. Article 167 (j), as
couched, clearly shows that Congress did not
intend to limit the phrase dependent parents
to solely legitimate parents. .. The manner by
which the provision in question was crafted
undeniably shows that the phrase dependent
parents was intended to cover all parents
legitimate, illegitimate or parents by nature or
adoption.
2. Biological parent who earlier gave up
child for adoption considered a
dependent parent; death of adopter
results in parental authority reverting to
biological parent.
Johns minority at the time of his
adopters death is a significant. Under such
circumstance, parental authority should be
deemed to have reverted in favor of the
biological parents. Moreover, John, in his SSS
application, named petitioner as one of his
beneficiaries for his benefits under RA 8282,
otherwise known as the Social Security Law.
While RA 8282 does not cover compensation
for work-related deaths or injury and expressly
allows the designation of beneficiaries who are
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not related by blood to the member unlike in
PD 626, Johns deliberate act of indicating
petitioner as his beneficiary at least evinces that
he, in a way, considered petitioner as his
dependent. Consequently, the confluence of
circumstances from Cornelios death during
Johns minority, the restoration of petitioners
parental authority, the documents showing
singularity of address, and Johns clear intention
to designate petitioner as a beneficiary -
effectively made petitioner, to Our mind,
entitled to death benefit claims as a secondary
beneficiary under PD 626 as a dependent
parent.
RETIREMENT
Goodyear Philippines, Inc. vs. Angus,
G.R. No. 185449, November 12, 2014
1. When employee is entitled to both
separation pay and early retirement
benefit in the absence of a provision in
the CBA prohibiting recovery of both.
Retirement benefits and separation pay
are not mutually exclusive. Retirement benefits
are a form of reward for an employee's loyalty
and service to an employer and are earned
under existing laws, CBAs, employment
contracts and company policies. On the other
hand, separation pay is that amount which an
employee receives at the time of his severance
from employment, designed to provide the
employee with the wherewithal during the
period that he is looking for another
employment and is recoverable only in
instances enumerated under Articles 283 and
284 of the Labor Code or in illegal dismissal
cases when reinstatement is not feasible. In the
case at bar, Article 283 clearly entitles Angus to
separation pay apart from the retirement
benefits she received from petitioners.
TERMINATION CONSEQUENCES
FVR Skills and Services Exponents, Inc. vs.
Seva, et. al.,
G.R. No. 200857, October 22, 2014
1. When corporate officers are not
solidarily liable with the corporation.
A director or officer shall only be
personally liable for the obligations of the
corporation, if the following conditions concur:
(1) the complainant alleged in the complaint
that the director or officer assented to patently

unlawful acts of the corporation, or that the
officer was guilty of gross negligence or bad
faith; and (2) the complainant clearly and
convincingly proved such unlawful acts,
negligence or bad faith.
SUPPLEMENT NO. 002
EMPLOYEE COMPENSATION
1. When death of seafarer considered
work-related.
Racelis vs. United Philippine Lines, Inc.,
G.R. No. 198408, November 12, 2014
While it is true that Brainstem (pontine)
Cavernous Malformation is not listed as an
occupational disease under Section 32-A of the
2000 POEA-SEC, Section 20 (B) (4) of the same
explicitly provides that [t[he liabilities of the
employer when the seafarer suffers work-
related injury or illness during the term of his
contract are as follows: (t)hose illnesses not
listed in Section 32 of this Contract are
disputably presumed as work related. This
presumption should be overturned only when
the employers refutation is found to be
supported by substantial evidence.
2. Seafarers death occurred during period
of employment even if he was
medically repatriated.
While it is true that a medical
repatriation has the effect of terminating the
seafarers contract of employment, it is,
however, enough that the work-related illness,
which eventually becomes the proximate cause
of death, occurred while the contract was
effective for recovery to be had.
Consistent with the States avowed
policy to afford full protection to labor as
enshrined in Article XIII of the 1987 Philippine
Constitution, the POEA-SEC was designed
primarily for the protection and benefit of
Filipino seafarers in the pursuit of their
employment on board ocean-going vessels. As
such, it is a standing principle that its provisions
are to be construed and applied fairly,
reasonably, and liberally in their favor.
Guided by this principle, the Court, in
the recent case of Canuel, recognized that a
medical repatriation case constitutes an
exception to the second requirement under
Section 20 (A) (1) of the 2000 POEA-SEC, i.e.,
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that the seafarers death had occurred during
the term of his employment, in view of the
terminative consequences of a medical
repatriation under Section 18 (B) of the same. In
essence, the Court held that under such
circumstance, the work-related death need not
precisely occur during the term of his
employment as it is enough that the seafarers
work-related injury or illness which eventually
causes his death had occurred during the term
of his employment.
3. Seafarer not immediately repatriated
after his contract expired, thus his injury
incurred after his contract expired was
work-related.
Bahia Shipping Services, Inc. vs. Hipe, Jr.,
G.R. No. 204699, November 12, 2014
The issue of whether the seafarer can
legally demand and claim disability benefits
from the employer/manning agency for an
injury or illness suffered may be determined
from the pertinent provisions of the 2000
POEA-SEC. Hipe was made to continuously
perform work aboard the vessel beyond his six-
month contract without the benefit of a formal
contract. Considering that any extension of his
employment is discretionary on the part of
respondents and that the latter offered no
explanation why Hipe was not repatriated
when his contract expired on June 5, 2008, the
CA correctly ruled that he was still under the
employ of respondents when he sustained an
injury on June 22, 2008. Consequently, the
injury suffered by Hipe was a work-related
injury and his eventual repatriation on August
5, 2008, for which he was treated/rehabilitated
can only be considered as a medical
repatriation.
4. When fit-to-work certification of the
company-designated physician stands;
opinion of the seafarers physician was
not supported by any diagnostic tests
and/or procedures as would adequately
refute the fit-to-work assessment, but
merely relied on a review of Hipes
medical history and his physical
examination.
Nonetheless, Hipe was subsequently
declared fit to work by the company-designated
physician on October 9, 2008, or merely 65
days after his repatriation, thus negating the
existence of any permanent disability for which

compensability is sought. Said fit-to-work
certification must stand for two (2) reasons:
First, while Hipes personal doctor
disagreed with the abovementioned
assessment, opining that it would be
impossible for him to work as seaman-plumber
and recommending a disability grade of five,
records show, however, that such opinion was
not supported by any diagnostic tests and/or
procedures as would adequately refute the fit-
to-work assessment, but merely relied on a
review of Hipes medical history and his
physical examination; and
Second, Hipe failed to comply with the
procedure laid down under Section 20 (B) (3)
of the 2000 POEA-SEC with regard to the joint
appointment by the parties of a third doctor
whose decision shall be final and binding on
them in case the seafarers personal doctor
disagrees with the company-designated
physicians fit-to-work assessment. In Philippine
Hammonia Ship Agency, Inc. v. Dumadag
(Philippine Hammonia), the Court held that the
seafarers non-compliance with the said conflict-
resolution procedure results in the affirmance of
the fit-to-work certification of the company-
designated physician.
EMPLOYEE STATUS
1. Employee occupied a fiduciary position
and thus held a position of trust and
confidence.
P.J. Lhuillier Inc. vs. Velayo,
G.R. No. 198620, November 12, 2014
The respondent was first hired by the
petitioners as an accounting clerk on June 13,
2003, for which she received a basic monthly
salary of 9,353.00. On October 29, 2007, the
date of the subject incident, she performed the
function of vault custodian and cashier in the
petitioners Branch 4 pawnshop in Capistrano,
Cagayan de Oro City. In addition to her
custodial duties, it was the respondent who
electronically posted the days transactions in
the books of accounts of the branch, a function
that is essentially separate from that of cashier
or custodian. It is plain to see then that when
both functions are assigned to one person to
perform, a very risky situation of conflicting
interests is created whereby the cashier can
purloin the money in her custody and
effectively cover her tracks, at least temporarily,
by simply not recording in the books the cash
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receipt she misappropriated. This is commonly
referred to as lapping of accounts. Only a most
trusted clerk would be allowed to perform the
two functions, and the respondent enjoyed this
trust.
SUPPLEMENT NO. 003
APPEAL
Michelin Asia Pacific Application Support
Center, Inc. vs. Ortiz,
G.R. No. 189861, November 19, 2014
1. Appeal properly dismissed by the NLRC
due to complainants failure to attach a
certificate of non-forum shopping, in
filing a motion for reconsideration
beyond the 10-day period, and in filing
a prohibited second motion for
reconsideration.
2. Filing of a prohibited second motion for
reconsideration did not toll the running
of the 60-day period for filing a petition
for certiorari under Rule 65, thus
petition filed out of time.
JUDGMENTS
University of Pangasinan, Inc. vs. Florentino
Fernandez and Heirs of Nilda Fernandez,
G.R. No. 211228, November 12, 2014
1. Updating the computation of awards to
include as well backwages and
separation pay corresponding to the
period after the rendition of LA
Gambitos decision on November 6,
2000 up to its finality on July 11, 2005
is not violative of the principle of
immutability of a final and executory
judgment.
2. When inclusion of 13th month pay into
the computation proper even though it
was not exclusively provided for in the
CA decision.
RETIREMENT
University of Pangasinan, Inc. vs. Florentino
Fernandez and Heirs of Nilda Fernandez,
G.R. No. 211228, November 12, 2014
1. Computation of backwages and
separation pay should not be up to the
dates when complainants turned 60, as
this age is only for optional retirement
 Green Notes 2016
and there is no showing that 60 was the
provided mandatory age for faculty
members.
SUPPLEMENT NO. 004
EMPLOYEE COMPENSATION
Government Service Insurance System vs.
Calumpiano,
G.R. No. 196102, November 26, 2014
1. When court stenographers
hypertension and resulting glaucoma
considered compensable.
In Government Service Insurance
System v. Baul, it was held:
Cerebro-vascular
accident and essential
hypertension are considered as
occupational diseases under
Nos. 19 and 29, respectively, of
Annex A of the Implementing
Rules of P.D. No. 626, as
amended. Thus, it is not
necessary that there be proof of
causal relation between the
work and the illness which
resulted in the respondents
disability. The open-ended
Table of Occupational Diseases
requires no proof of causation.
In general, a covered claimant
suffering from an occupational
disease is automatically paid
benefits.
However, although
cerebro-vascular accident and
essential hypertension are listed
occupational diseases, their
compensability requires
compliance with all the
conditions set forth in the Rules.
In short, both are qualified
occupational diseases. For
cerebro-vascular accident, the
claimant must prove the
following: (1) there must be a
history, which should be
proved, of trauma at work (to
the head specifically) due to
unusual and extraordinary
physical or mental strain or
event, or undue exposure to
noxious gases in industry; (2)
there must be a direct
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connection between the trauma
or exertion in the course of the
employment and the cerebro-
vascular attack; and (3) the
trauma or exertion then and
there caused a brain
hemorrhage. On the other
hand, essential hypertension is
compensable only if it causes
impairment of function of body
organs like kidneys, heart, eyes
and brain, resulting in
permanent disability, provided
that, the following documents
substantiate it: (a) chest X-ray
report; (b) ECG report; (c)
blood chemistry report; (d)
funduscopy report; and (e) C-T
scan.
EMPLOYEE STATUS
Manalo, et. al. vs. TNS Philippines, Inc.,
G.R. No. 208567, November 26, 2014
1. Regular employees, not project
employees; project employment
scheme circumvented the law and
prevented employees from attaining
regular status.
In Maraguinot, Jr. v. NLRC, the Court
held that once a project or work pool employee
has been: (1) continuously, as opposed to
intermittently, rehired by the same employer
for the same tasks or nature of tasks; and (2)
these tasks are vital, necessary and indispensable
to the usual business or trade of the employer,
then the employee must be deemed a regular
employee.
Granting arguendo that petitioners
were rehired intermittently, a careful review of
the project employment contracts of petitioners
reveals some other vague provisions. Oddly,
one of the terms and conditions in the said
contract stated that:
1. The need for your services
being determinable and for a
specific project starting
____________ your
employment will be for the
duration of said project of
the Company, namely
Project ___________ which is
expected to be finished on
_____________. The

Company shall have the
option of renewing or
extending the period of this
agreement for such time as it
may be necessary to
complete the project or
because we need further
time to determine your
competence on the job.
To the Court, the phrase because we
need further time to determine your
competence on the job would refer to a
probationary employment. Such phrase
changes the tenor of the contract and runs
counter to the very nature of a project
employment. TNS can, therefore, extend the
contract which was already fixed when it
deemed it necessary to determine whether or
not the employee was qualified and fit for the
job. Corollarily, TNS can likewise pre-terminate
the contract not because the specific project was
completed ahead of time, but because of failure
to qualify for the job. Consistently, the terms
and conditions of the contract read:
4. It is expressly agreed
and understood that the
Company may terminate your
employment after compliance
with procedural requirements
of law, without benefit of
termination pay and without
any obligation on the part of
the Company, in the event of
any breach of any conditions
hereof:
a) If the project is completed
or cancelled before the
expected date of
completion as specified in
paragraph 1 hereof;
b) If we should find that you are
not qualified, competent or
efficient in the above-stated
positions for which you are
hired in accordance with
the company standards
made known to you at the
start of your employment;
xxx
For said reason, at the outset, the
supposed project employment contract was
highly doubtful. In determining the true nature
of an employment, the entirety of the contract,
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not merely its designation or by which it was
denominated, is controlling. Though there is a
rule that conflicting provisions in a contract
should be harmonized to give effect to all, in
this case, however, harmonization is impossible
because project employment and probationary
employment are distinct from one another and
cannot co-exist with each other. Hence, should
there be ambiguity in the provisions of the
contract, the rule is that all doubts,
uncertainties, ambiguities and insufficiencies
should be resolved in favor of labor. This is in
consonance with the constitutional policy of
providing full protection to labor.
EXECUTION
Philippine Airlines, Inc. vs. Paz,
G.R. No. 192924, November 26, 2014
1. When delay in execution of
reinstatement pending appeal not
attributable to the employer but
because of the constraints of corporate
rehabilitation, thus pilot not entitled to
reinstatement salaries.
The rule is that the employee is entitled
to reinstatement salaries notwithstanding the
reversal of the LA decision granting him said
relief. In Roquero v. Philippine Airlines, the
Court underscored that it is obligatory on the
part of the employer to reinstate and pay the
wages of the dismissed employee during the
period of appeal until reversal by the higher
court. This is so because the order of
reinstatement is immediately executory. Unless
there is a restraining order issued, it is ministerial
upon the LA to implement the order of
reinstatement. The unjustified refusal of the
employer to reinstate a dismissed employee
entitles him to payment of his salaries effective
from the time the employer failed to reinstate
him.
In light of the fact that PAL's failure to
comply with the reinstatement order was
justified by the exigencies of corporation
rehabilitation, the respondent may no longer
claim salaries which he should have received
during the period that the LA decision ordering
his reinstatement is still pending appeal until it
was overturned by the NLRC. Thus, the CA
committed a reversible error in recognizing the
respondent's right to collect reinstatement
salaries albeit suspending its execution while
PAL is still under corporate rehabilitation.

TERMINATION CONSEQUENCES
Manalo, et. al. vs. TNS Philippines, Inc.,
G.R. No. 208567, November 26, 2014
1. Illegally dismissed employees entitled to
backwages and separation pay.
Accordingly, as correctly ruled by the
NLRC, each petitioner is entitled to backwages
from the time of their dismissal up to the finality
or this decision plus separation pay, following
their prayer for such relief in lieu of
reinstatement, computed as follows as of May
29, 2009:
a) Backwages:
October 21, 2008 to May 29, 2009 =
7.27 mos.
P382.00 x 26 days x 7.27 mos.
= P72, 205.64
b) Separation Pay:
December 1, 2008 to May 29, 2009 =
5.93 mos.
P382.00 x 26 days x 5.03 mps./12
= P4 908.10
SUPPLEMENT NO. 005
ATTORNEYS FEES
Montierro vs. Rickmers Marine Agency Phils.
Inc.,
G.R. No. 210634, January 14, 2015
1. Seafarer not entitled to any attorneys
fees as there was no unlawful
withholding of benefits; he jumped the
gun when he filed his complaint one
month before the company-designated
doctor issued the final disability
grading.
On the premise that there was no
showing of bad faith on the part of the
employer, forcing Montierro to litigate, the CA
dropped the award of attorneys fees. We
arrive at the same conclusion by using another
route.
Indeed, the general rule is that
attorney's fees may not be awarded where
there is no sufficient showing of bad faith in a
party's persistence in a case other than an
erroneous conviction of the righteousness of
ones cause. The rule, however, takes a turn
when it comes to labor cases.
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The established rule in labor law is that
the withholding of wages need not be coupled
with malice or bad faith to warrant the grant of
attorneys fees under Article 111 of the Labor
Code. All that is required is that lawful wages
be not paid without justification, thus
compelling the employee to litigate.
The CA thus relied on a wrong
consideration in resolving the issue of attorneys
fees. Be that as it may, Montierro is not entitled
to attorneys fees, even if we apply the correct
rule to this case.
EMPLOYEE COMPENSATION
Montierro vs. Rickmers Marine Agency Phils.
Inc.,
G.R. No. 210634, January 14, 2015
1. 240-day rule applicable over the 120-
day rule as complaint was filed after
promulgation of the Vergara vs.
Hammonia Maritime case; final
disability assessment issued before the
expiry of the 240 day period, thus the
seafarers
P condition cannot be
considered total permanent disability.
The Court has already delineated the
effectivity of the Crystal Shipping and Vergara
rulings in the 2013 case Kestrel Shipping Co. Inc.
v. Munar, by explaining as follows:
Nonetheless, Vergara
was promulgated on October
6, 2008, or more than two (2)
years from the time Munar filed
his complaint and observance
of the principle of prospectivity
dictates that Vergara should not
operate to strip Munar of his
cause of action for total and
permanent disability that had
already accrued as a result of his
continued inability to perform
his customary work and the
failure of the company-
designated physician to issue a
final assessment.
Thus, based on Kestrel, if the maritime
compensation complaint was filed prior to 6
October 2008, the 120-day rule applies; if, on
the other hand, the complaint was filed from 6
October 2008 onwards, the 240-day rule
applies.

2. Assessment of company-designated
physician upheld over the one (1) page
assessment of the seafarers personal
physician (Dr. Jacinto).
Vergara ruled that the procedure in the
2000 POEA-SEC must be strictly followed;
otherwise, if not availed of or followed strictly
by the seafarer, the assessment of the company-
designated physician stands.
xxx
Having extensive
personal knowledge of the
seafarer's actual medical
condition, and having closely,
meticulously and regularly
monitored and treated his
injury for an extended period,
the company-designated
physician is certainly in a better
position to give a more accurate
evaluation of Montierro's
health condition. The disability
grading given by him should
therefore be given more weight
than the assessment of
Montierro's physician of choice.
SUPPLEMENT NO. 006
ABANDONMENT
Manarpiis vs. Texan Philippines, Inc.,
G.R. No. 197011, January 28, 2015
1. When there is no abandonment.
While the introduction of additional
evidence before the NLRC is not proscribed, the
said tribunal was still not persuaded by the
company closure purportedly averted only by
the alleged fresh funding procured by
respondent Tan, for the latter claim remained
unsubstantiated. The CAs finding of serious
business losses is not borne by the evidence on
record. The financial statements supposedly
bearing the stamp mark of BIR were not signed
by an independent auditor. Besides, the non-
compliance with the requirements under Article
283 of the Labor Code, as amended, gains
relevance in this case not for the purpose of
proving the illegality of the company closure or
cessation of business, which did not materialize,
but as an indication of bad faith on the part of
respondents in hastily terminating petitioners
employment. Under the circumstances, the
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subsequent investigation and termination of
petitioner on grounds of dishonesty, loss of
confidence and abandonment of work, clearly
appears as an afterthought as it was done only
after petitioner had filed an illegal dismissal case
and respondents have been summoned for
hearing before the LA.
Abandonment in this case was a
trumped up charge, apparently to make it
appear that petitioner was not yet terminated
when she filed the illegal dismissal complaint
and to give a semblance of truth to the belated
investigation against the petitioner. Petitioner
did not abandon her work but was told not to
report for work anymore after being served a
written notice of termination of company
closure on July 27, 2000 and turning over
company properties to respondent Rialubin-
Tan.
APPEAL
One Shipping Corp. vs. Penafiel,
G.R. No. 192406, January 21, 2015
1. Court of Appeals properly ruled on the
merits of the case even if the NLRC
decision had already become final after
the lapse of ten days, as the petition was
filed within the sixty (60) day period
for filing a petition for certiorari under
Rule 65.
In Aliviado v. Procter and Gamble
Phils., Inc., it was held:
It is a hornbook rule
that once a judgment has
become final and executory, it
may no longer be modified in
any respect, even if the
modification is meant to correct
an erroneous conclusion of fact
or law, and regardless of
whether the modification is
attempted to be made by the
court rendering it or by the
highest court of the land, as
what remains to be done is the
purely ministerial enforcement
or execution of the judgment
The only exceptions to the rule
on the immutability of final
judgments are (1) the correction
of clerical errors, (2) the so-
called nunc pro tunc entries
which cause no prejudice to any

party, and (3) void judgments.
Nunc pro tunc judgments have
been defined and characterized
by the Court in the following
manner:
Section A of Rule VII of the NLRC Rules
of Procedure provides that except as provided
in Section 9 of Rule X, the decisions, resolutions
or orders of the Commission shall become final
and executory after ten (10) calendar days from
receipt thereof by the parties. Section B of the
same Rules provides that upon the expiration
of the ten (10) calendar days period provided
in paragraph (a) of this Section, the decision,
resolution, or order shall be entered in a book
of entries of judgment.
2. Filing of petition for certiorari does not
interrupt the course of the principal
case.
Section 7 of Rule 65 provides:
Sec. 7. Expediting
proceedings; Injunctive relief. -
The court in which the petition
is filed may issue orders
expediting the proceedings, and
it may also grant a temporary
restraining order or a writ of
preliminary injunction for the
preservation of the rights of the
parties pending such
proceedings. The petition shall
not interrupt the course of the
principal case unless a attributable to the seafarer.
temporary restraining order or
a writ of preliminary injunction
has been issued enjoining the
public respondent from further
proceeding with the case.
The public respondent
shall proceed with the principal
case within ten (10) days from
the filing of a petition for
certiorari with a higher court or
tribunal absent a temporary
restraining order or a 1.
preliminary injunction, or upon
its expiration.
EMPLOYEE COMPENSATION
Unicol Management Services, Inc. vs. Malipot,
G.R. No. 206562, January 21, 2015
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1. Seafarer proven to have committed
suicide.
The Medico-Legal Report and the
Death Certificate, together with the
Investigation Report, log book extracts, and
Masters Report substantially prove that seaman
Glicerios death was attributable to his
deliberate act of killing himself by committing
suicide.
2. Seafarers heirs not entitled to any
death benefits as the seafarer
committed suicide.
Section 20 of the POEA Standard
Terms and Conditions Governing the Overseas
Employment of Filipino Seafarers On-Board
Ocean-Going Ships, provides:
x x x
B. COMPENSATION AND BENEFITS
FOR DEATH
xxx
D. No compensation and
benefits shall be payable in
respect of any injury,
incapacity, disability or
death of the seafarer
resulting from his willful or
criminal act or intentional
breach of his duties,
provided however, that the
employer can prove that
such injury, incapacity,
disability or death is directly
Clearly, the employer is liable to pay
the heirs of the deceased seafarer for death
benefits once it is established that he died during
the effectivity of his employment contract.
However, the employer may be exempt from
liability if it can successfully prove that the
seamans death was caused by an injury directly
attributable to his deliberate or willful act.
EVIDENCE
NLRC may receive evidence even on
appeal.
In Sasan, Sr. v. National Labor Relations
Commission 4th Division, it was held that
jurisprudence is replete with cases allowing the
NLRC to admit evidence, not presented before
the Labor Arbiter, and submitted to the NLRC
for the first time on appeal. The submission of
 Green Notes 2016
additional evidence before the NLRC is not
prohibited by its New Rules of Procedure
considering that rules of evidence prevailing in
courts of law or equity are not controlling in
labor cases. The NLRC and Labor Arbiters are
directed to use every and all reasonable means
to ascertain the facts in each case speedily and
objectively, without regard to technicalities of
law and procedure all in the interest of
substantial justice. In keeping with this directive,
it has been held that the NLRC may consider
evidence, such as documents and affidavits,
submitted by the parties for the first time on
appeal.
Moreover, among the powers of the
Commission as provided in Section 218 of the
Labor Code is that the Commission may issue
subpoenas requiring the attendance and
testimony of witnesses or the production of
such books, papers, contracts, records,
statement of accounts, agreements, and others.
In addition, the Commission may, among other
things, conduct investigation for the
determination of a question, matter or
controversy within its jurisdiction, proceed to
hear and determine the disputes in the absence
of any party thereto who has been summoned
or served with notice to appear, conduct its
proceedings or any part thereof in public or in
private, adjourn its hearings to any time and
place, refer technical matters or accounts to an
expert and to accept his report as evidence after
hearing of the parties upon due notice. From
the foregoing, it can be inferred that the NLRC
can receive evidence on cases appealed before
the Commission, otherwise, its factual
conclusions would not have been given great
respect, much weight, and relevance when an
adverse party assails the decision of the NLRC
via petition for certiorari under Rule 65 of the
Rules of Court before the CA and then to this
Court via a petition for review under Rule 45.
SUPPLEMENT NO. 007
APPEAL
Leus vs. St. Scholasticas College Westgrove,
G.R. No. 187225, January 28, 2015
1. Issue on the validity of the 1992 Manual
of Regulations for Private Schools (1992
MRPS) cannot be raised for the first
time before the Supreme Court.
The petitioner contends that the CA, in
ruling that there was a valid ground to dismiss
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her, erred in applying Section 94 of the 1992
MRPS. Essentially, she claims that the 1992
MRPS was issued by the Secretary of Education
as the revised implementing rules and
regulations of Batas Pambansa Bilang 232 (BP
232) or the Education Act of 1982. That there
is no provision in BP 232, which provides for
the grounds for the termination of employment
of teaching and non-teaching personnel of
private schools. Thus, Section 94 of the 1992
MRPS, which provides for the causes of
terminating an employment, is invalid as it
widened the scope and coverage of BP 232.
The Court does not agree.
The Court notes that the argument
against the validity of the 1992 MRPS,
specifically Section 94 thereof, is raised by the
petitioner for the first time in the instant
petition for review. Nowhere in the
proceedings before the LA, the NLRC or the CA
did the petitioner assail the validity of the
provisions of the 1992 MRPS.
It is well established that issues raised
for the first time on appeal and not raised in the
proceedings in the lower court are barred by
estoppel. Points of law, theories, issues, and
arguments not brought to the attention of the
trial court ought not to be considered by a
reviewing court, as these cannot be raised for
the first time on appeal. To consider the alleged
facts and arguments belatedly raised would
amount to trampling on the basic principles of
fair play, justice, and due process.
ATTORNEYS FEES
Eyana vs. Philippine Transmarine Carriers, Inc.,
G.R. No. 193468, January 28, 2015
1. When seafarer entitled to attorneys
fees, but the same is reduced to P1,
000.00 as the acts of respondents did
not evince bad faith and they did not
completely shirk from their duties to the
seafarer.
The petitioner is entitled to attorneys
fees pursuant to Article 2208(8) of the Civil
Code. The Court, however, notes that the
respondents provided the petitioner with
medical treatment and offered to pay him
disability benefits, albeit in the reduced amount.
In other words, the acts of the respondents did
not evince bad faith. The respondents did not
completely shirk from their duties to the

petitioner. Although the petitioner was still thus
compelled to litigate to be entitled to total and
permanent disability compensation, the Court
finds the award of attorneys fees in the amount
of US$1,000.00 as reasonable.
DAMAGES
Leus vs. St. Scholasticas College Westgrove,
G.R. No. 187225, January 28, 2015
1. When damages are not awarded in the
absence of bad faith.
A dismissed employee is entitled to
moral damages when the dismissal 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 may be
awarded if the dismissal is effected in a wanton,
oppressive or malevolent manner.
Bad faith, under the law, does not
simply connote bad judgment or negligence. It
imports a dishonest purpose or some moral
obliquity and conscious doing of a wrong, or a
breach of a known duty through some motive
or interest or ill will that partakes of the nature
of fraud.
It must be noted that the burden of
proving bad faith rests on the one alleging it
since basic is the principle that good faith is
presumed and he who alleges bad faith has the
duty to prove the same. Allegations of bad
faith and fraud must be proved by clear and
convincing evidence.
The records of this case are bereft of any
clear and convincing evidence showing that the
respondents acted in bad faith or in a wanton
or fraudulent manner in dismissing the
petitioner. That the petitioner was illegally
dismissed is insufficient to prove bad faith. A
dismissal may be contrary to law but by itself
alone, it does not establish bad faith to entitle
the dismissed employee to moral damages. The
award of moral and exemplary damages cannot
be justified solely upon the premise that the
employer dismissed his employee without
cause.
EMPLOYEE COMPENSATION (NOTE: 2010
POEA-SEC VS. 1996 POEA-SEC)
C.F. Sharp Crew Management, Inc. vs. Perez,
G.R. No. 194885, January 26, 2015
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1. Under the 1996 POEA Standard
Employment Contract, it is enough that
the seafarer suffered his illness or injury
during the term of his employment
contract for the same to be
compensable.
The 1996 POEA-SEC reads:
SECTION 20.
COMPENSATION AND
BENEFITS
xxx
B. COMPENSATION AND
BENEFITS FOR INJURY OR
ILLNESS
The liabilities of the
employer when the seafarer
suffers injury or illness during
the term of his contract are as
follows:
xxx
We have ruled that under the 1996
POEA-SEC, it is enough that the seafarer proves
that his or her injury or illness was acquired
during the term of employment to support a
claim for disability benefits.
Note: Under the 2010 POEA-SEC,
injury or illness must be (a) work-connected; (b)
acquired during the term of employment.
2. No provision in the 1996 POEA
Standard Employment Contract on
concealment of pre-existing medical
condition.
C.F. Sharp Crew Management, Inc. vs. Perez,
G.R. No. 194885, January 26, 2015
We disagree with petitioners that
respondent is not entitled to disability benefits
because he is guilty of fraud in concealing his
pre-existing medical condition. Petitioners
cannot rely on Section 20(E) of the 2000 POEA-
SEC since, as discussed above, it is the 1996
POEA-SEC that is applicable to the instant case.
Section 20(E) of the 1996 POEA-SEC provides:
E. When requested, the seafarer
shall be furnished a copy of
all pertinent medical
reports or records at no cost
to the seafarer.
The above-quoted provision does not
mention concealment. It only requires that the
seafarer be furnished a copy of all pertinent

medical records upon request. On this point,
the NLRC appears to have been misled in ruling
that respondent is guilty of concealment.
Note: Under the 2010 POEA-SEC, there is a
provision of concealment.
3. Seafarers psychotic disorder
considered a permanent total disability
under the 1996 POEA Standard
Employment Contract as there is no
finding that he was fit to work nor a
declaration as to his disability grading.
The evidence on record likewise belies
petitioners claim that respondent was
eventually declared fit to work by their
designated doctors. Notably, Dr. Reyes and Dr.
Abesamis both found respondent to be suffering
from recurrent acute psychotic disorder. Dr.
Reyes said that respondents psychotic disorder
will become manifest once triggered by an
outside factor, while Dr. Abesamis said that
recurrence of the same psychotic disorder is
possible. Dr. Abesamis even signed a medical
certificate, SSS Form MMD-102, supporting
respondents claim for disability benefits before
the SSS. In said medical certificate, Dr. Abesamis
indicated her final diagnosis: respondent has
acute psychotic disorder, recurrent. Hence,
petitioners cannot claim that their designated
doctors declared respondent as fit to work after
his repatriation and treatment.
Without a declaration that respondent
is already fit to work or an assessment of the
degree of respondents disability by petitioners
own doctors, respondents disability is therefore
permanent and total. This is equivalent to a
Grade 1 impediment/disability entitling
respondent to US$60,000 as permanent and
total disability benefits under the 1996 POEA-
SEC.
4. Seafarers psychotic disorder not a
result of an accident, thus the CBA is
not applicable and the seafarer is
entitled only to US$60,000.00 under
the 1996 POEA Standard Employment
Contract.
Accident is an unintended and
unforeseen injurious occurrence; something that
does not occur in the usual course of events or
that could not be reasonably anticipated; an
unforeseen and injurious occurrence not
attributable to mistake, negligence, neglect or
misconduct. Accident is that which happens by
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chance or fortuitously, without intention and
design, and which is unexpected, unusual and
unforeseen.
IMMORALITY
Leus vs. St. Scholasticas College Westgrove,
G.R. No. 187225, January 28, 2015
1. The labor tribunals respective
conclusions that the petitioners
pregnancy is a disgraceful or immoral
conduct were arrived at arbitrarily.
The CA and the labor tribunals affirmed
the validity of the petitioners dismissal
pursuant to Section 94(e) of the 1992 MRPS,
which provides that
Sec. 94. Causes of Terminating
Employment In addition to
the just causes enumerated in
the Labor Code, the
employment of school
personnel, including faculty,
may be terminated for any of
the following causes:
xxx
e. Disgraceful or immoral conduct;
xxx
The labor tribunals concluded that the
petitioners pregnancy out of wedlock, per se,
is disgraceful and immoral considering that
she is employed in a Catholic educational
institution. In arriving at such conclusion, the
labor tribunals merely assessed the fact of the
petitioners pregnancy vis--vis the totality of
the circumstances surrounding the same.
However, the Court finds no substantial
evidence to support the aforementioned
conclusion arrived at by the labor tribunals. The
fact of the petitioners pregnancy out of
wedlock, without more, is not enough to
characterize the petitioners conduct as
disgraceful or immoral. There must be
substantial evidence to establish that pre-marital
sexual relations and, consequently, pregnancy
out of wedlock, are indeed considered
disgraceful or immoral.
2. The totality of the circumstances
surrounding the conduct alleged to be
disgraceful or immoral must be assessed
against the prevailing norms of
conduct.

In Chua-Qua v. Clave, the Court
stressed that to constitute immorality, the
circumstances of each particular case must be
holistically considered and evaluated in light of
the prevailing norms of conduct and applicable
laws. Otherwise stated, it is not the totality of
the circumstances surrounding the conduct per
se that determines whether the same is
disgraceful or immoral, but the conduct that is
generally accepted by society as respectable or
moral. If the conduct does not conform to what
society generally views as respectable or moral,
then the conduct is considered as disgraceful or
immoral. Tersely put, substantial evidence must
be presented, which would establish that a
particular conduct, viewed in light of the
prevailing norms of conduct, is considered
disgraceful or immoral.
Thus, the determination of whether a
conduct is disgraceful or immoral involves a
two-step process: first, a consideration of the
totality of the circumstances surrounding the
conduct; and second, an assessment of the said
circumstances vis--vis the prevailing norms of
conduct, i.e., what the society generally
considers moral and respectable.
3. Public and secular morality should
determine the prevailing norms of
conduct, not religious morality.
In Estrada v. Escritor , an administrative
case against a court interpreter charged with
disgraceful and immoral conduct, the Court
stressed that in determining whether a particular
conduct can be considered as disgraceful and
immoral, the distinction between public and
secular morality on the one hand, and religious
morality, on the other, should be kept in mind.
That the distinction between public and secular
morality and religious morality is important
because the jurisdiction of the Court extends
only to public and secular morality.
4. The petitioners pregnancy out of
wedlock is not a disgraceful or immoral
conduct since she and the father of her
child have no impediment to marry
each other.
Viewed against the prevailing norms of
conduct, the petitioners conduct cannot be
considered as disgraceful or immoral; such
conduct is not denounced by public and secular
morality. It may be an unusual arrangement,
but it certainly is not disgraceful or immoral
within the contemplation of the law. To stress,
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pre-marital sexual relations between two
consenting adults who have no impediment to
marry each other, and, consequently,
conceiving a child out of wedlock, gauged from
a purely public and secular view of morality,
does not amount to a disgraceful or immoral
conduct under Section 94(e) of the 1992 MRPS.
5. There is no substantial evidence to
prove that the petitioners pregnancy
out of wedlock caused grave scandal to
SSCW and its students.
Other than the SSCWs bare allegation,
the records are bereft of any evidence that
would convincingly prove that the petitioners
conduct indeed adversely affected SSCWs
integrity in teaching the moral doctrines, which
it stands for. The petitioner is only a non-
teaching personnel; her interaction with SSCWs
students is very limited. It is thus quite
impossible that her pregnancy out of wedlock
caused such a grave scandal, as claimed by
SSCW, as to warrant her dismissal.
SUPPLEMENT NO. 008
POEA-SEC
Veritas Maritime Corporation vs. Gepanaga,
Jr.,
G.R. No. 206285, February 4, 2015
1. In Philippine Hammonia v. Dumadag, it
was held:
Given the circumstances
under which Dumadag pursued
his claim, especially the fact that
he caused the non-referral to a
third doctor, Dr. Dacanays fit-
to-work certification must be
upheld. In Santiago v. Pacbasin
Ship Management, Inc., the
Court declared: "[t]here was no
agreement on a third doctor
who shall examine him anew
and whose finding shall be final
and binding. x x x [T]his Court
is left without choice but to
uphold the certification made
by Dr. Lim with respect to
Santiagos disability."
2. Seafarers claims premature as when he
filed his complaint, he had yet to
consult his own physician.

A seafarer may have basis to pursue an
action for total and permanent disability
benefits, if any of the following conditions is
present:
(a) The company-designated
physician failed to issue a
declaration as to his fitness to
engage in sea duty or disability
even after the lapse of the 120-
day period and there is no
indication that further medical
treatment would address his
temporary total disability,
hence, justify an extension of
the period to 240 days;
(b) 240 days had lapsed
without any certification issued
by the company designated
physician;
(c) The company-designated
physician declared that he is fit
for sea duty within the 120-day
or 240-day period, as the case
may be, but his physician of
choice and the doctor chosen
under Section 20-B(3) of the
POEA-SEC are of a contrary
opinion;
(d) The company-designated
physician acknowledged that he
is partially permanently
disabled but other doctors who
he consulted, on his own and
jointly with his employer,
believed that his disability is not
only permanent but total as
well;
(e) The company-designated
physician recognized that he is
totally and permanently
disabled but there is a dispute
on the disability grading;
(f) The company-designated
physician determined that his
medical condition is not
compensable or work-related
under the POEA-SEC but his
doctor-of-choice and the third
doctor selected under Section
20-B(3) of the POEA-SEC found
otherwise and declared him
unfit to work;
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(g) The company-designated
physician declared him totally
and permanently disabled but
the employer refuses to pay him
the corresponding benefits; and
(h) The company-designated
physician declared him partially
and permanently disabled
within the 120-day or 240-day
period but he remains
incapacitated to perform his
usual sea duties after the lapse
of said periods.
When Gepanaga filed his complaint on
March 25, 2009, he had yet to consult his own
physician, Dr. Villa. Indeed, the Court has
observed that when Gepanaga filed his
complaint, he was armed only with the belief
that he had yet to fully recover from his injured
finger because of the incident that occurred on
board the M.V. Melbourne Highway. It was
only on June 9, 2009, a few days before he filed
his position paper on June 15, 2009, that
Gepanaga sought the services of Dr. Villa.
3. Seafarers physician only examined him
for one (1) day and failed to state the
basis of his assessment and conclusion of
permanent disability.
It bears pointing out that even worse
than the case in Dumadag, Gepanaga's personal
physician examined him for only one (1) day,
that is, on June 9, 2009, two and a half months
(2 ) after he had filed his claim for permanent
disability benefits. Furthermore, the medical
certificate issued by Dr. Villa after examining the
respondent failed to state the basis of his
assessment and conclusion of permanent
disability, more than three (3) months after the
respondent was declared fit to work by Dr.
Cruz, the company-designated physician.
4. Seafarers inability to resume his work
after the lapse of 120 days is not a magic
wand that automatically warrants the
grant of total and permanent disability
benefits in his favor.
Let it be stressed that the seafarer's
inability to resume his work after the lapse of
more than 120 days from the time he suffered
an injury and/or illness is not a magic wand that
automatically warrants the grant of total and
permanent disability benefits in his favor. Both
law and evidence must be on his side.

SUPPLEMENT NO. 009
APPEAL
Milan, et. al. vs. National Labor Relations
Commission,
G.R. No. 202961, February 4, 2015
1. Claim for retirement benefits was not
included in the complaint and hence
cannot be raised on appeal.
Teodora Mahiloms claim for
retirement benefits was not included in her
complaint filed before the Labor Arbiter.
Hence, it may not be raised in the appeal.
2. Employer has the right to require
clearance before the release of last
payments to the employee; an
employer is allowed to withhold
terminal pay and benefits pending the
employee's return of its properties;
employers withholding of terminal pay
and other benefits pending the
employees vacating properties it owns
thus valid.
As an exception to the general rule that
wages may not be withheld and benefits may
not be diminished, the Labor Code provides:
Art. 113. Wage deduction. No
employer, in his own behalf or
in behalf of any person, shall
make any deduction from the
wages of his employees, except:
1. In cases where the worker is
insured with his consent by
the employer, and the
deduction is to recompense
the employer for the
amount paid by him as
premium on the insurance;
2. For union dues, in cases
where the right of the
worker or his union to
check-off has been
recognized by the employer
or authorized in writing by
the individual worker
concerned; and
3. In cases where the
employer is authorized by
law or regulations issued by
the Secretary of Labor and
Employment.
(Emphasis supplied)
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The Civil Code provides that the
employer is authorized to withhold wages for
debts due:
Article 1706. Withholding of
the wages, except for a debt
due, shall not be made by the
employer.
Debt in this case refers to any
obligation due from the employee to the
employer. It includes any accountability that the
employee may have to the employer. There is
no reason to limit its scope to uniforms and
equipment, as petitioners would argue.
4. The preferential treatment given by
our law to labor is not a license for
abuse; it is not a signal to commit
acts of unfairness that will
unreasonably infringe on the
property rights of the company.
Our laws provide for a clear preference
for labor. This is in recognition of the
asymmetrical power of those with capital when
they are left to negotiate with their workers
without the standards and protection of law. In
cases such as these, the collective bargaining unit
of workers are able to get more benefits and in
exchange, the owners are able to continue with
the program of cutting their losses or wind
down their operations due to serious business
losses. The company in this case did all that was
required by law.
JURISDICTION
1. The National Labor Relations
Commission has jurisdiction to
determine, preliminarily, the parties
rights over a property, when it is
necessary to determine an issue related
to rights or claims arising from an
employer-employee relationship; the
return of its properties in petitioners
possession by virtue of their status as
employees is an issue that must be
resolved to determine whether benefits
can be released immediately and thus
said issue is intertwined with employer-
employee relationship and the labor
tribunals thus have jurisdiction.
Claims arising from an employer-
employee relationship are not limited to claims
by an employee. Employers may also have

claims against the employee, which arise from
the same relationship.
2. Employee no longer entitled to any
separation benefits as she retired long
before the closure of the company.
SUPPLEMENT NO. 010
DUE PROCESS
Maersk-Filipinas Crewing, Inc. vs. Avestruz,
G.R. No. 207010, February 18, 2015
1. Invalidly dismissed seafarer not
afforded due process.
Similarly, the Court affirms the finding
of the CA that Avestruz was not accorded
procedural due process, there being no
compliance with the provisions of Section 17 of
the POEA-SEC as above-cited, which requires
the two-notice rule. As explained in Skippers
Pacific, Inc. v. Mira:
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.
The statement given by Captain
Woodward requiring him to explain in writing
the events that transpired at the galley in the
morning of June 22, 2011 hardly qualifies as a
written notice of the charge against him, nor
was it an opportunity for Avestruz to explain or
defend himself. While Captain Woodward
claimed in his e-mail that he conducted a
disciplinary hearing informing Avestruz of his
inefficiency, no evidence was presented to
support the same. Neither was Avestruz given
a written notice of penalty and the reasons for
its imposition. Instead, Captain Woodward
verbally informed him that he was dismissed
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from service and would be disembarked from
the vessel.
EMPLOYEE STATUS
Basan, et. al. vs. Coca-Cola Bottlers
Philippines,
G.R. No. 174365-66, February 4, 2015
1. Route helpers hired by Coca Cola
Bottlers Philippines, Inc. considered
regular employees.
The argument of petitioner that its usual
business or trade is softdrink manufacturing and
that the work assigned to respondent workers
as sales route helpers so involves merely
"postproduction activities," one which is not
indispensable in the manufacture of its
products, scarcely can be persuasive. If, as so
argued by petitioner company, only those
whose work are directly involved in the
production of softdrinks may be held
performing functions necessary and desirable in
its usual business or trade, there would have
then been no need for it to even maintain
regular truck sales route helpers. The nature of
the work performed must be viewed from a
perspective of the business or trade in its
entirety and not on a confined scope.
The repeated rehiring of respondent
workers and the continuing need for their
services clearly attest to the necessity or
desirability of their services in the regular
conduct of the business or trade of petitioner
company. The Court of Appeals has found each
of respondents to have worked for at least one
year with petitioner company. While this Court,
in Brent School, Inc. vs. Zamora, has upheld the
legality of a fixed-term employment, it has
done so, however, with a stern admonition that
where from the circumstances it is apparent that
the period has been imposed to preclude the
acquisition of tenurial security by the employee,
then it should be struck down as being contrary
to law, morals, good customs, public order and
public policy. The pernicious practice of having
employees, workers and laborers, engaged for
a fixed period of few months, short of the
normal six-month probationary period of
employment, and, thereafter, to be hired on a
day-to-day basis, mocks the law. Any obvious
circumvention of the law cannot be
countenanced.

2. Doctrine of stare decisis et non quieta
movere.
In fact, in Pacquing, et. al. v. Coca-Cola
Philippines, Inc., this Court applied the ruling
cited above under the principle of stare decisis
et non quieta movere (follow past precedents
and do not disturb what has been settled). It
was held therein that since petitioners, as route
helpers, were performing the same functions as
the employees in Magsalin, which are necessary
and desirable in the usual business or trade of
Coca Cola Philippines, Inc., they are considered
as regular employees entitled to security of
tenure.
3. When all the petitioners share a
common interest and invoke a common
cause of action or defense, the signature
of only one of them in the certification
against forum shopping substantially
complies with the certification
requirement.
Jurisprudence is replete with rulings that
the rule on verification is deemed substantially
complied with when one who has ample
knowledge to swear to the truth of the
allegations in the complaint or petition signs the
verification, and when matters alleged in the
petition have been made in good faith or are
true and correct. Similarly, this Court has
consistently held that when under reasonable or
justifiable circumstances, as when all the
petitioners share a common interest and invoke
a common cause of action or defense, as in this
case, the signature of only one of them in the
certification against forum shopping
substantially complies with the certification
requirement.
TERMINATION
Maersk-Filipinas Crewing, Inc. vs. Avestruz,
G.R. No. 207010, February 18, 2015
1. No insubordination on the part of the
seafarer proven.
Petitioners maintain that Avestruz was
dismissed on the ground of insubordination,
consisting of his repeated failure to obey his
superiors order to maintain cleanliness in the
galley of the vessel as well as his act of
insulting a superior officer by words or deeds.
(Insubordination) In support of this contention,
petitioners presented as evidence the e-mails
sent by Captain Woodward, both dated June
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22, 2011, and time-stamped 10:07 a.m. and
11:40 a.m., respectively, which they claim
chronicled the relevant circumstances that
eventually led to Avestruzs dismissal.
In this case, the contents of Captain
Woodwards e-mails do not establish that
Avestruzs conduct had been willful, or
characterized by a wrongful and perverse
attitude. The Court concurs with the CAs
observation that Avestruzs statement regarding
the incident in the galley deserves more
credence, being corroborated by Kong, a
messman who witnessed the same.
SUPPLEMENT NO. 011
ATTORNEYS FEES
Hocheng Philippines Corporation vs. Farrales,
G.R. No. 211497, March 18, 2015
1. When attorneys fees are awarded.
But concerning the award of attorneys
fees, Farrales was dismissed for a flimsy charge,
and he was compelled to litigate to secure what
is due him which HPC unjustifiably withheld.
2. When damages are not awarded.
There is no satisfactory proof that the
concerned officers of HPC acted in bad faith or
with malice in terminating Farrales.
Notwithstanding the LAs assertion to this
effect, Farrales bare allegations of bad faith
deserve no credence, and neither is the mere
fact that he was illegally dismissed sufficient to
prove bad faith on the part of HPCs officers.
But concerning the award of attorneys fees,
Farrales was dismissed for a flimsy charge, and
he was compelled to litigate to secure what is
due him which HPC unjustifiably withheld.
EMPLOYEE STATUS
Fonterra Brands Phils. Inc. vs. Largado,
G.R. No. 205300, March 18, 2015
1. Fixed term employee status valid.
Foremost, respondents were fixed-term
employees. As previously held by this Court,
fixed-term employment contracts are not
limited, as they are under the present Labor
Code, to those by nature seasonal or for specific
projects with predetermined dates of
completion; they also include those to which

the parties by free choice have assigned a
specific date of termination. The determining
factor of such contracts is not the duty of the
employee but the day certain agreed upon by
the parties for the commencement and
termination of the employment relationship.
In the case at bar, it is clear that
respondents were employed by A.C. Sicat as
project employees. In their employment
contract with the latter, it is clearly stated that
[A.C. Sicat is] temporarily employing
[respondents] as TMR[s] effective June 6[,
2006] under the following terms and
conditions: The need for your service being
only for a specific project, your temporary
employment will be for the duration only of
said project of our client, namely to promote
FONTERRA BRANDS products x x x which is
expected to be finished on or before Nov. 06,
2006.
2. Contractor considered a legitimate job
contractor.
A person is considered engaged in
legitimate job contracting or subcontracting if
the following conditions concur:
1. The contractor or subcontractor
carries on a distinct and
independent business and
undertakes to perform the job,
work or service on its own account
and under its own responsibility
according to its own manner and
method, and free from the control
and direction of the principal in all
matters connected with the
performance of the work except as
to the results thereof;
2. The contractor or subcontractor has
substantial capital or investment;
and
3. The agreement between the
principal and contractor or
subcontractor assures the
contractual employees entitlement
to all labor and occupational safety
and health standards, free exercise
of the right to self-organization,
security of tenure, and social and
welfare benefits.
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A.C. Sicat was able to prove its status as
a legitimate job contractor for having presented
the following evidence, to wit:
1) Certificate of Business Registration
2) Certificate of Registration with the
Bureau of Internal Revenue;
3) Mayors Permit;
4) Certificate of Membership with the
Social Security System;
5) Certificate of Registration with the
Department of Labor and
6) Employment;
7) Company Profile; and
8) Certifications issued by its clients.
Furthermore, A.C. Sicat has substantial
capital, having assets totaling _5,926,155.76 as
of December 31, 2006. Too, its Agreement with
Fonterra clearly sets forth that A.C. Sicat shall be
liable for the wages and salaries of its employees
or workers, including benefits, premiums, and
protection due them, as well as remittance to
the proper government entities of all
withholding taxes, Social Security Service, and
Medicare premiums, in accordance with
relevant laws.
The appellate court further correctly
held that Fonterras issuance of Merchandising
Guidelines, stock monitoring and inventory
forms, and promo mechanics, for compliance
and use of A.C. Sicats employees assigned to
them, does not establish that Fonterra exercises
control over A.C. Sicat. These were imposed
only to ensure the effectiveness of the
promotion services to be rendered by the
merchandisers as it would be risky, if not
imprudent, for any company to completely
entrust the performance of the operations it has
contracted out.
EVIDENCE
Montero, et. al. vs. Times Transportation Co.,
Inc., G.R. No. 190828, March 16, 2015
1. It does not necessary follow that every
labor dispute will be automatically
decided in favor of labor, as
management also has its own rights.
Although the Constitution is
committed to the policy of social justice and the
protection of the working class, it does not
necessary follow that every labor dispute will
be automatically decided in favor of labor. The
management also has its own rights. Out of

concern for the less privileged in life, this Court,
has more often than not inclined, to uphold the
cause of the worker in his conflict with the
employer. Such leaning, however, does not
blind the Court to the rule that justice is in every
case for the deserving, to be dispensed in the
light of the established facts and applicable law
and doctrine.
DOUBTS
Hocheng Philippines Corporation vs. Farrales,
G.R. No. 211497, March 18, 2015
1. If doubts exist between the evidence
presented by the employer and that of
the employee, the scales of justice must
be tilted in favor of the latter.
But 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. If doubts exist
between the evidence presented by the
employer and that of the employee, the scales
of justice must be tilted in favor of the latter.
The employer must affirmatively show
rationally adequate evidence that the dismissal
was for a justifiable cause.
PRESCRIPTION
Montero, et. al. vs. Times Transportation Co.,
Inc.,
G.R. No. 190828, March 16, 2015
1. When action already considered
prescribed; case filed but later
withdrawn; prescriptive period
continues even after the withdrawal of
the case as though no action has been
filed at all.
Settled is the rule that when one is
arbitrarily and unjustly deprived of his job or
means of livelihood, the action instituted to
contest the legality of ones dismissal from
employment constitutes, in essence, an action
predicated upon an injury to the rights of the
plaintiff, as contemplated under Article 1146 of
the New Civil Code, which must be brought
within four years.
While the filing of the complaint for
illegal dismissal before the LA interrupted the
running of the prescriptive period, its voluntary
withdrawal left the petitioners in exactly the
same position as though no complaint had been
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filed at all. The withdrawal of their complaint
effectively erased the tolling of the
reglementary period.
RESIGNATION
Fonterra Brands Phils. Inc. vs. Largado,
G.R. No. 205300, March 18, 2015
1. When there is resignation and not
illegal dismissal as employees no longer
renewed their contracts and applied
with another company rendering
services to the first companys former
client.
By refusing to renew their contracts
with Zytron, respondents effectively resigned
from the latter. Resignation is the voluntary act
of employees who are compelled by personal
reasons to dissociate themselves from their
employment, done with the intention of
relinquishing an office, accompanied by the act
of abandonment.
Here, it is obvious that respondents
were no longer interested in continuing their
employment with Zytron. Their voluntary
refusal to renew their contracts was brought
about by their desire to continue their
assignment in Fonterra which could not happen
in view of the conclusion of Zytrons contract
with Fonterra. Hence, to be able to continue
with their assignment, they applied for work
with A.C. Sicat with the hope that they will be
able to continue rendering services as TMRs at
Fonterra since A.C. Sicat is Fonterras new
manpower supplier.
TERMINATION CONSEQUENCES
Metroguards Security Agency Corporation vs.
Hilongo,
G.R. No. 215630, March 9, 2015
1. Recomputation of monetary awards
until finality of the decision of the Court
of Appeals proper and does not
constitute an alteration or amendment
of the final decision being
implemented.
In Nacar v. Gallery Frames, the SC held
that:
x x x no essential change is made
by a recomputation as this step is
a necessary consequence that

flows from the nature of the
illegality of dismissal declared by
the Labor Arbiter in that
decision. A recomputation (or an
original computation, if no
previous computation has been
made) is a part of the law
specifically, Article 279 of the
Labor Code and the established
jurisprudence on this provision
that is read into the decision. By
the nature of an illegal dismissal
case, the reliefs continue to add
up until full satisfaction, as
expressed under Article 279 of
the Labor Code. The
recomputation of the
consequences of illegal dismissal
upon execution of the decision
does not constitute an alteration
or amendment of the final
decision being implemented.
The illegal dismissal ruling
stands; only the computation of
monetary consequences of this
dismissal is affected, and this is
not a violation of the principle
of immutability of final
judgments.
Nacar reiterated the Courts ruling in
the earlier cases of Session Delights and
Gonzales.
We thus cannot agree with petitioners
contention that a decision that has acquired
finality becomes immutable and unalterable.
The recomputation of the consequences of
illegal dismissal upon execution of the decision
does not constitute an alteration or amendment
of the final decision being implemented. The
illegal dismissal ruling stands; only the
computation of monetary consequences of this
dismissal is affected, and this is not a violation
of the principle of immutability of final
judgments.
LEGAL INTEREST
Metroguards Security Agency Corporation vs.
Hilongo,
G.R. No. 215630, March 9, 2015
1. Legal interest of 12% per annum on the
monetary award.
Further, the payment of legal interest of
12% per annum should also be from April 26,
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2013 up to June 30, 2013. Thereafter, in
accordance with Bangko Sentral ng Pilipinas
Monetary Boards Circular No. 799, series of
2013, the legal interest computed from July 1,
2013 until the monetary awards were fully
satisfied will be 6% per annum.
SUPPLEMENT NO. 012
APPEAL
Waterfront Cebu City Casino Hotel, Inc. vs.
Ledesma,
G.R. No. 197556, March 25, 2015
1. Petition for certiorari should have been
dismissed for being filed beyond the 60-
day reglementary period; merits of the
case not sufficient to excuse defect.
In the subsequent case of Domdom v.
Third & Fifth Divisions of the Sandiganbayan,
the absence of a specific prohibition in Section
4 of Rule 65, as amended, for the extension of
the 60-day period to file a petition for certiorari
was construed as a discretionary authority of
the courts to grant an extension.
Republic v. St. Vincent De Paul
Colleges, Inc. clarified the "conflict' between
the rulings in Laguna Metts Corporation and
Domdom, in that the former is the general rule
while the latter is the exception, thus:
What seems to be a "conflict" is
actually more apparent than
real. A reading of the foregoing
rulings leads to- the simple
conclusion that .Laguna Metts
Corporation involves a strict
application of the general rule
that petitions for certiorari must
be filed strictly within sixty (60)
days from notice of judgment
or from the order denying a
motion for reconsideration.
Domdom, on the other hand,
relaxed the rule and allowed an
extension of the sixty (60)-day
period subject to the Court's
sound discretion.
PLEADINGS
Waterfront Cebu City Casino Hotel, Inc. vs.
Ledesma,
G.R. No. 197556, March 25, 2015

1. Flaw in the verification, being only a
formal and not jurisdictional
requirement, not a fatal defect.
2.
The procedural infirmities pointed out
by Ledesma are not adequate to cause the
dismissal of the present petition. Gaye Maureen
Cenabre presented to the Notary Public a
Community Tax Certificate numbered
27401128 to prove her identity instead of a
current identification document issued by an
official agency bearing her photograph and
signature as required by A.M. No. 02-8-13-SC.
This rendered the jurat in the
verification/certification of non-forum
shopping of Waterfront as defective.
Nonetheless, any flaw in the verification, being
only a formal, not a jurisdictional requirement,
is not a fatal defect. In like manner, there is no
need to attach the certified true copy of the
Board Resolution quoted in the Secretary's
Certificate attached to the petition. Only the
judgment, order or resolution assailed in the
petition are the attachments required under
Section 4, Rule 45 of the Rules of Court to be
duplicate originals or certified true copies.
TERMINATION
1. Valid termination due to lascivious
conduct.
Waterfront Cebu City Casino Hotel, Inc. vs.
Ledesma,
G.R. No. 197556, March 25, 2015
The CA ruled in favor of Ledesma since
it believed his version that the complainants
merely invented the accusations against him
because Waterfront failed to present as
evidence the CCTV footages of the alleged
lascivious conduct of Ledesma inside the
elevator and the conference room. But this
argument was not even raised by Ledesma
himself and it was only the CA which utilized
this as a justification to bolster its findings that
Ledesma did not commit any infraction. This
being a labor case, the evidence required is only
substantial evidence which was adequately
established here by the positive and credible
testimonies of the complainants.
Notably, Ledesma never refuted, at the
administrative investigation level at Waterfront,
and even at the proceedings before the LA,
NLRC, and the CA, the allegations leveled
against him by Rosanna Lofranco that, after
deluding her to perform a massage on him,
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Ledesma exhibited to her his penis and
requested that he be masturbated while inside
the conference room of the hotel. If not for the
position of Ledesma as a House Detective, he
will not have access to the conference room nor
will he know that the premises is not monitored
through a closed-circuit television, thus giving
him the untrammeled opportunity to
accomplish his lewd design on the unsuspecting
victim. Such acts of Ledesma constituted
misconduct or improper behavior which is a just
cause for his dismissal.
WILLFUL DISOBEDIENCE
The Coffee Bean and Tea Leaf Philippines, Inc.
vs. Arenas,
G.R. No. 208908, March 11, 2015
1. No willful disobedience proven;
alleged infractions do not amount to a
wrongful and perverse attitude.
2. Three counts of tardiness do not
constitute gross or habitual neglect of
duty.
Gross negligence implies a want or
absence of, or failure to exercise even a slight
care or diligence, or the entire absence of care.
It evinces a thoughtless disregard of
consequences without exerting any effort to
avoid them. There is habitual neglect if based
on the circumstances, there is a repeated failure
to perform ones duties for a period of time.
In light of the foregoing criteria, we rule
that Arenas three counts of tardiness cannot be
considered as gross and habitual neglect of
duty. The infrequency of his tardiness already
removes the character of habitualness. These
late attendances were also broadly spaced out,
negating the complete absence of care on
Arenas part in the performance of his duties.
Even CBTL admitted in its notice to explain that
this violation does not merit yet a disciplinary
action and is only an aggravating circumstance
to Arenas other violations.
3. No serious misconduct proven as there
was no active dishonesty on the part of
the employee.
For misconduct or improper behavior
to be a just cause for dismissal, (a) it must be
serious; (b) it must relate to the performance of
the employees duties; and (c) it must show that

the employee has become unfit to continue
working for the employer.
However, the facts on record reveal
that there was no active dishonesty on the part
of Arenas. When questioned about who placed
the bottled iced tea inside the ice bin, his
immediate reaction was not to deny his
mistake, but to remove the bottle inside the bin
and throw it outside. More importantly, when
he was asked to make a written explanation of
his action, he admitted that the bottled iced tea
was his.
Thus, even if there was an initial
reticence on Arenas part, his subsequent act of
owing to his mistake only shows the absence of
a deliberate intent to lie or deceive his CBTL
superiors. On this score, we conclude that
Arenas action did not amount to serious
misconduct.
SUPPLEMENT NO. 013
APPEAL
Wallem Philippines Services, Inc. vs. Heirs of
the late Peter Padrones,
G.R. No. 183212, March 16, 2015
1. Party not allowed to change his theory
on appeal.
In their Comment to petitioners'
Motion for Reconsideration of the CA Decision,
as well as in their Comment to the present
petition, respondents abandoned their claim for
death benefits and focused solely on Padrones'
supposed entitlement to disability benefits.
However, nowhere in respondents' Comment
did they refute petitioners' basic contention that
they are not entitled to disability benefits on the
ground that this issue was never litigated before
the lower tribunals. Respondents argue as if the
issue of their entitlement to disability benefits
was a matter which was raised at the first
instance. Respondents have, in effect, changed
their theory of the case.
DAMAGES
Hacienda Cataywa vs. Lorezo,
G.R. No. 179640, March 18, 2015
1. Should the employer misrepresent the
true date of the employment of the
employee member, such employer shall
pay to the SSS damages equivalent to
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the difference between the amount of
benefit to which the employee member
or his beneficiary is entitled had the
proper contributions been remitted to
the SSS and the amount payable on the
basis of the contributions actually
remitted.
The law provides that should the
employer misrepresent the true date of the
employment of the employee member, such
employer shall pay to the SSS damages
equivalent to the difference between the
amount of benefit to which the employee
member or his beneficiary is entitled had the
proper contributions been remitted to the SSS
and the amount payable on the basis of the
contributions actually remitted. However,
should the employee member or his beneficiary
is entitled to pension benefits, the damages shall
be equivalent to the accumulated pension due
as of the date of settlement of the claim or to
the five years' pension, whichever is higher,
including the dependent's pension.
2. The imposition upon and payment by
the delinquent employer of the three
percent (3%) penalty for the late
remittance of premium contributions is
mandatory and cannot be waived by
the System.
The imposition upon and payment by
the delinquent employer of the three percent
(3%) penalty for the late remittance of
premium contributions is mandatory and
cannot be waived by the System. The law
merely gives to the Commission the power to
prescribe the manner of paying the premiums.
Thus, the power to remit or condone the
penalty for late remittance of premium
contributions is not embraced therein.
Petitioners erred in alleging that the imposition
of penalty is not proper.
EMPLOYEE STATUS
Hacienda Cataywa vs. Lorezo,
G.R. No. 179640, March 18, 2015
1. Farm seasonal worker, not casual
worker.
Jurisprudence has identified the three
types of employees mentioned in the provision
of the Labor Code: (1) regular employees or
those who have been engaged to perform
activities that are usually necessary or desirable

in the usual business or trade of the employer;
(2) project employees or those whose
employment has been fixed for a specific
project or undertaking, the completion or
termination of which has been determined at
the time of their engagement, or those whose
work or service is seasonal in nature and is
performed for the duration of the season; and
(3) casual employees or those who are neither
regular nor project employees.
Farm workers generally fall under the
definition of seasonal employees. It was also
consistently held that seasonal employees may
be considered as regular employees when they
are called to work from time to time. They are
in regular employment because of the nature of
the job, and not because of the length of time
they have worked. However, seasonal workers
who have worked for one season only may not
be considered regular employees.
The nature of the services performed
and not the duration thereof, is determinative
of coverage under the law. To be exempted on
the basis of casual employment, the services
must not merely be irregular, temporary or
intermittent, but the same must not also be in
connection with the business or occupation of
the employer. Thus, it is erroneous for the
petitioners to conclude that the respondent was
a very casual worker simply because the SSS
form revealed that she had 16 months of
contributions. It does not, in any way, prove
that the respondent performed a job which is
not in connection with the business or
occupation of the employer to be considered as
casual employee.
2. No particular form of evidence required
to prove the existence of the employer-
employee relationship.
It was settled that there is no particular
form of evidence required to prove the
existence of the employer-employee
relationship. Any competent and relevant
evidence to prove such relationship may be
admitted. This may entirely be testimonial. If
only documentary evidence would be required
to demonstrate the relationship, no scheming
employer would be brought before the bar of
justice. Petitioners erred in insisting that, due to
passage of time, SSS Form R-1A is the only
remaining source of information available to
prove when respondent started working for
them. However, such form merely reflected the
time in which the petitioners reported the
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respondent for coverage of the SSS benefit.
They failed to substantiate their claim that it was
only in 1978 that respondent reported for
work.
3. When veil of corporate fiction not
pierced.
It was held in Rivera v. United
Laboratories, Inc. that _
While a corporation may exist
for any lawful purpose, the law
will regard it as an association
of persons or, in case of two
corporations, merge them into
one, when its corporate legal
entity is used as a cloak for
fraud or illegality. This is the
doctrine of piercing the veil of
corporate fiction. The doctrine
applies only when such
corporate fiction is used to
defeat public convenience,
justify wrong, protect fraud, or
defend crime, or when it is
made as a shield to confuse the
legitimate issues, or where a
corporation is the mere alter
ego or business conduit of a
person, or where the
corporation is so organized and
controlled and its affairs are so
conducted as to make it merely
an instrumentality, agency,
conduit or adjunct of another
corporation. To disregard the
separate juridical personality of
a corporation, the wrongdoing
must be established clearly and
convincingly. It cannot be
presumed.
This Court has cautioned against the
inordinate application of this doctrine,
reiterating the basic rule that the corporate veil
may be pierced only if it becomes a shield for
fraud, illegality or inequity committed against a
third person.
The Court has expressed the language
of piercing doctrine when applied to alter ego
cases, as follows: Where the stock of a
corporation is owned by one person whereby
the corporation functions only for the benefit
of such individual owner, the corporation and
the individual should be deemed the same.

This Court agrees with the petitioners
that there is no need to pierce the corporate
veil. Respondent failed to substantiate her claim
that Mancy and Sons Enterprises, Inc. and
Manuel and Jose Marie Villanueva are one and
the same.
SUPPLEMENT NO. 014
EMPLOYEE COMPENSATION
Dohle-Philman Manning Agency, Inc. vs. Heirs
of Andres Gazzingan,
G.R. No. 199568, June 17, 2015
1. Aortic dissection, also called dissecting
aneurysm, considered compensable
under the disputable presumption of
compensability.
Gazzingans work as a messman is not
confined mainly to serving food and beverages
to all officers and crew; he was likewise tasked
to assist the chief cook/chef steward, and thus
performed most if not all the duties in the ships
steward department. In the performance of his
duties, he is bound to suffer chest and back
pains, which could have caused or aggravated
his illness. As aptly observed by the CA,
Gazzingans strenuous duties caused him to
suffer physical stress which exposed him to
injuries. It is therefore reasonable to conclude
that Gazzingans employment has contributed
to some degree to the development of his
disease.
It must also be pointed out that
Gazzingan was in good health and fit to work
when he was engaged by petitioners to work
on board the vessel M/V Gloria. His PEME
showed essentially normal findings with no
hypertension and without any heart problems.
It was only while rendering duty that he
experienced symptoms. This is supported by a
medical report issued by Cartagena de Indias
Hospital in Colombia stating that Gazzingan
suffered intense chest and back pains, shortness
of breath and a slightly elevated blood pressure
while performing his duties. Therefore, even
assuming that Gazzingan had a pre-existing
condition, as alleged by petitioners, this does
not totally negate the probability and the
possibility that his aortic dissection was
aggravated by his work conditions.
More importantly, the 2000 POEA-SEC
has created a presumption of compensability
for those illnesses which are not listed as an
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occupational disease. Section 20 (B), paragraph
(4) states that those illnesses not listed in
Section 32 of this Contract are disputably
presumed as work-related. Concomitant with
this presumption is the burden placed upon the
claimant to present substantial evidence that his
work conditions caused or at least increased the
risk of contracting the disease and only a
reasonable proof of work-connection, not
direct causal relation is required to establish
compensability of illnesses not included in the
list of occupational diseases.
2. Company-designated physicians
opinion not conclusive as to non-work-
relatedness of seafarers illness.
While petitioners were quick to point
out that Dr. Banaga is a company-designated
physician, the latter, however, could not have
possibly arrived at a reliable diagnosis of
Gazzingans condition. His assessment, based
merely on Gazzingans PEME, did not reflect the
true state of health of the seafarer. As the Court
has previously ruled, a PEME is not exploratory
in nature and cannot be relied upon to arrive at
a seafarers true state of health.
MEDICAL CERTIFICATE
Ace Navigation Company vs. Garcia,
G.R. No. 207804, June 17, 2015
1. Company-designated physicians
findings upheld over the single medical
certificate of Dr. Escutin.
It is clear from the CBA stipulation that
should there be a discrepancy between the
findings of the company-designated physician
and the seafarers independent physician, it is
necessary to appoint a third physician whose
findings shall be controlling. The use of the
word shall in said stipulation indicates the
mandatory nature of such requirement. More
so, the CBA is the law between the parties,
hence they are obliged to comply with its
provisions.
As earlier stated, Dr. Cruz, the
company-designated physician, found Garcia to
be suffering from a Grade 10 disability rating, as
opposed to that of Garcias own physician, Dr.
Escutin, who diagnosed him with a work-
related total and permanent injury on his
cervical spine, rendering him unfit to be a
seaman in whatever capacity. In view of such
contrasting diagnoses, Garcia should have

resorted to the conflict-resolution mechanism
provided under the VELA-AMOSUP CBA. His
non-compliance with the same would
necessarily result in the affirmance of the
findings of the company-designated physician.
2. Claims for compensation cannot be
based on whims and caprices; when the
evidence presented negates
compensability, the claim must fail, lest
it causes injustice to the employer.
As a final note, it must be stressed that
while the Court adheres to the principle of
liberality in favor of the seafarer, it cannot
allow claims for compensation based on whims
and caprices. When the evidence presented
negates compensability, the claim must fail, lest
it causes injustice to the employer.
SECOND OPINION
Cagatin vs. Magsaysay Maritime Corporation,
G.R. No. 175795, June 22, 2015
1. Opinion of seafarers physician not as
reliable as that of the company-
designated physician as it did not
contain supporting tests and
examinations and was obtained seven
(7) months after he was declared fit to
work; seafarer failed to prove that the
company-designated physician was in
bad faith for declaring him fit to work;
company-designated physician treated
seafarer several times for a period of
five (5) months while the seafarers
physician examined him only once.
Petitioner failed to meet the standard of
substantial evidence when he not only failed to
present his own physician's report, that of Dr.
Collantes, with supporting tests and
examinations which would have objectively
established his supposed permanent disability,
but he was also unable to substantiate his claim
of bad faith, malice and abuse or manifest
partiality on the findings of the company-
designated physician, Dr. Cruz.
To illustrate, it is on record that Dr.
Cruz's earlier finding was supported by tests and
opinions of experts. Dr. Cruz has stated in his
report and affidavit that petitioner's treatment
was conducted not just by him alone, but by his
other colleagues who specialize in orthopedic
surgery and rehabilitation medicine. Then, as
stated in Dr. Cruz's January 15, 2002 report, it
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was these same experts who evaluated and
allowed petitioner to resume his previous
activities. Also, Dr. Cruz's findings are
supported by the latest results of an EMG-NCV
test, which was normal. Dr. Cruz then
personally found that petitioner had no low
back pain and radiculopathy; had a full
range of motion in his trunk; had improved
tolerance to prolonged sitting, standing and
walking; and had improved lifting capacity to
40 kilos. Petitioner never immediately
protested such findings. He also does not deny
that he was seen and treated by orthopedic
surgeons and rehabilitation specialists who
worked along with Dr. Cruz, or that he went
through an EMG-NCV test.
In contrast, petitioner presents the
report of his own physician, Dr. Collantes, who
examined him almost seven (7) months after he
was declared fit to work by Dr. Cruz. The
Court finds, however, that this later report by
petitioner's chosen doctor is not as reliable as
that of the company-designated physician.
As respondents contend, it is unknown
what transpired between January 15, 2002
(when petitioner was declared fit to work by
the company-designated physician) and August
9, 2002 (when he was declared unfit to work
at sea by his own physician). It was petitioner's
duty as claimant to enlighten the labor tribunals
as well as the courts as to what transpired in
these seven (7) months.
240-DAY RULE
Cagatin vs. Magsaysay Maritime Corporation,
G.R. No. 175795, June 22, 2015
1. Seafarer declared fit to work well
within the 240-day period.
And in jurisprudence interpreting the
afore-quoted provision of the POEA-SEC, a
temporary total disability only becomes
permanent when so declared by the company-
designated 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. The
240-day period is meant to harmonize the
provision of the POEA-SEC above with the
provisions of the Rules and Regulations
Implementing Book IV of the Labor Code,
specifically Rule X, Section 2, on disability
benefits. Where before it was held that

permanent disability is the inability of a seafarer
to perform his work for more than 120 days,
regardless of whether or not he loses the use of
any part of his body, now the rule is that if the
injury or sickness still requires medical
attendance beyond 120 days, the company-
designated physician has, including the initial
120 days, up to a maximum of 240 days to
declare either fitness to work or permanent
disability, beyond which and with or without
any declaration, the disability is considered total
and permanent.
In the case at bar, the declaration by Dr.
Cruz that petitioner was fit to work went
beyond the 120-day period; however, as the
reason therefor was that petitioner still required
additional medical treatment, his declaration as
fit to work was made within the maximum
240 days which therefore forestalls the
automatic classification of petitioner's injury as
total and permanent and, thus, entitled to the
pertinent disability benefits.
2. No breach of contract proven.
Cagatin vs. Magsaysay Maritime Corporation,
G.R. No. 175795, June 22, 2015
The transfer of a seafarer to another
vessel is not proscribed but allowed by the
parties' contract, which is the POEA-SEC. The
following provision of the POEA-SEC states:
Section 15. Transfer Clause. The
seafarer agrees to be transferred
at any port to any vessel owned
or operated, manned or
managed by the same
employer, provided it is
accredited to the same manning
agent and provided further that
the position of the seafarer and
the rate of his wages and terms
of service are in no way inferior
and the total period of
employment shall not exceed
that originally agreed upon.
Any form of transfer shall be
documented and made
available when necessary.
3. No proof that seafarers
adenocarcinoma was contracted during
the term of the last employment
contract; seafarer was repatriated not
for medical reasons but for finished
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Green Notes 2016
Labor Law
contract and died one year after the
termination of his last employment
contract.
EMPLOYER-EMPLOYEE RELATIONSHIP
Reyes vs. Glaucoma Research Foundation, Inc.,
G.R. No. 189255, June 17, 2015
1. Employer-employee relationship not
proven; consultant, not employee.
Petitioner contends that, as evidence of
respondents' supposed control over him, the
organizational plans he has drawn were subject
to the approval of Respondent Corporations
Board of Trustees. However, the Court agrees
with the disquisition of the CA on this matter,
to wit:
[Respondents'] power
to approve or reject the
organizational plans drawn by
[petitioner] cannot be the
control contemplated in the
control test. It is but logical
that one who commissions
another to do a piece of work
should have the right to accept
or reject the product. The
important factor to consider in
the control test is still the
element of control over how
the work itself is done, not just
the end result thereof.
Well settled is the rule
that where a person who works
for another performs his job
more or less at his own
pleasure, in the manner he sees
fit, not subject to definite hours
or conditions of work, and is
compensated according to the
result of his efforts and not the
amount thereof, no employer-
employee relationship exists.
What was glaring in the present case is
the undisputed fact that petitioner was never
subject to definite working hours. He never
denied that he goes to work and leaves
therefrom as he pleases. In fact, on December
1-31, 2004, he went on leave without seeking
approval from the officers of respondent
company. On the contrary, his letter simply
informed respondents that he will be away for
a month and even advised them that they have

the option of appointing his replacement during
his absence. This Court has held that there is no
employer-employee relationship where the
supposed employee is not subject to a set of
rules and regulations governing the
performance of his duties under the agreement
with the company and is not required to report
for work at any time, nor to devote his time
exclusively to working for the company.
In this regard, this Court also agrees
with the ruling of the CA that:
Aside from the control
test, the Supreme Court has also
used the economic reality test in
determining whether an
employer-employee
relationship exists between the
parties. Under this test, the
economic realities prevailing
within the activity or between
the parties are examined, taking
into consideration the totality
of circumstances surrounding
the true nature of the
relationship between the
parties. This is especially
appropriate when, as in this
case, there is no written
agreement or contract on which
to base the relationship. In our
jurisdiction, the benchmark of
economic reality in analyzing
possible employment
relationships for purposes of
applying the Labor Code ought
to be the economic dependence
of the worker on his employer.
In the instant case, as shown by the
resume of [petitioner], he concurrently held
consultancy positions with the Manila
International Airport Authority (from 04 March
2001 to September 2003 and from 01
November 2004 up to the present) and the
Anti-Terrorist Task Force for Aviation and Air
Transportation Sector (from 16 April 2004 to
30 June 2004) during his stint with the Eye
Referral Center (from 01 August 2003 to 29
April 2005). Accordingly, it cannot be said that
the [petitioner] was wholly dependent on
[respondent] company.
2. Alleged payslips or designation of
payments as salaries not determinative
of the existence of an employer-
employee relationship.
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Labor Law
In bolstering his contention that there
was an employer-employee relationship,
petitioner draws attention to the pay slips he
supposedly received from Respondent
Corporation. However, he does not dispute the
findings of the CA that there are no deductions
for SSS and withholding tax from his
compensation, which are the usual deductions
from employees' salaries. Thus, the alleged pay
slips may not be treated as competent evidence
of petitioner's claim that he is respondents'
employee.
3. Designation as administrator and
issuance of ID card are not adequate
proof of employer-employee
relationship.
4. Affidavits not hearsay.
Additional evidence of the fact that
petitioner was hired as a consultant and not as
an employee of respondent corporation are
affidavits to this effect which were executed by
Roy Oliveres and Aurea Luz Esteva, who are
Medical Records Custodian and Administrative
Officer, respectively, of respondent
corporation. Petitioner insists in its objection of
the use of these affidavits on the ground that
they are, essentially, hearsay. However, this
Court has ruled that although the affiants had
not been presented to affirm the contents of
their affidavits and be cross-examined, their
affidavits may be given evidentiary value; the
argument that such affidavits were hearsay was
not persuasive. Likewise, this Court ruled that
it was not necessary for the affiants to appear
and testify and be cross-examined by counsel
for the adverse party. To require otherwise
would be to negate the rationale and purpose
of the summary nature of the proceedings
mandated by the Rules and to make mandatory
the application of the technical rules of
evidence.
5. Claims for compensation cannot be
based on whims and caprices; when the
evidence presented negates
compensability, the claim must fail, lest
it causes injustice to the employer. (see
EMPLOYEE COMPENSATION)
Ace Navigation Company vs. Garcia,
G.R. No. 207804, June 17, 2015
As a final note, it must be stressed that
while the Court adheres to the principle of
liberality in favor of the seafarer, it cannot

allow claims for compensation based on whims
and caprices. When the evidence presented
negates compensability, the claim must fail, lest
it causes injustice to the employer.
Cagatin vs. Magsaysay Maritime Corporation,
G.R. No. 175795, June 22, 2015
As a final note, the Court is wary of the
principle that provisions of the POEA-SEC must
be applied with liberality in favor of the
seafarers, for it is only then that its beneficent
provisions can be fully carried into effect.
However, on several occasions when disability
claims anchored on such contract were based
on flimsy grounds and unfounded allegations,
the Court never hesitated to deny the same.
Claims for compensation based on surmises
cannot be allowed; liberal construction is not a
license to disregard the evidence on record or
to misapply the laws. This Court abides by the
principle that justice is in every case for the
deserving, to be dispensed with in the light of
established facts, the applicable law, and
existing jurisprudence.
6. In a case of claims for disability benefits,
the onus probandi falls on the seafarer
as claimant to establish his claim with
the right quantum of evidence; it
cannot rest on speculations,
presumptions or conjectures; seafarer
has to prove assertion of permanent
disability and bad faith on the part of
the employer.
Cagatin vs. Magsaysay Maritime Corporation,
G.R. No. 175795, June 22, 2015
In labor cases, as in all cases which
require the presentation and weighing of
evidence, the basic rule is that the burden of
evidence lies with the party who asserts the
affirmative of an issue. In particular, in a case
of claims for disability benefits, the onus
probandi falls on the seafarer as claimant to
establish his claim with the right quantum of
evidence; it cannot rest on speculations,
presumptions or conjectures. Such party has the
burden of proving the said assertion with the
quantum of evidence required by law which, in
a case such as this of a claim for disability
benefits arising from one's employment as a
seafarer, is substantial evidence. Substantial
evidence is not one that establishes certainty
beyond reasonable doubt, but only such
relevant evidence as a reasonable mind might
accept as adequate to support a conclusion,
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Labor Law
even if other minds, equally reasonable, might
conceivably opine otherwise. It is more than a
mere scintilla of evidence.
It is against this standard that
petitioner's assertion that he was declared
permanently unfit to return to sea duty in
whatever capacity must be measured,
especially since petitioner levels such assertion
against an earlier finding by the company-
designated physician that he was fit to work.
Likewise, he accuses respondents of bad faith in
declaring him fit to work. Both assertions need
substantive proof.
7. Good faith is always presumed and he
who alleges the contrary on his
opponent has the burden of proving
that the latter acted in bad faith, with
malice, or with ill motive; allegations
are not proof; seafarer failed to prove
bad faith on the part of the company-
designated physician.
Cagatin vs. Magsaysay Maritime Corporation,
G.R. No. 175795, June 22, 2015
The allegation of petitioner that the
allegedly contradicting reports of Dr. Cruz were
the result of respondents' malice, bad faith and
abuse is not supported by him with substantial
evidence. It is consistently held that good faith
is always presumed and he who alleges the
contrary on his opponent has the burden of
proving that the latter acted in bad faith, with
malice, or with ill motive. Mere allegation is
not equivalent to proof. Although strict rules of
evidence are not applicable in claims for
compensation and disability benefits, the
seafarer must still prove his claim with
substantial evidence, otherwise, injustice will be
done to his employer. Other than petitioner's
bare allegations, nothing on record supports his
assertion of malice and bad faith.
8. Competent evidence of identity is not
required in cases where the affiant is
personally known to the notary public.
TERMINATION
Naguit vs. San Miguel Corporation,
G.R. No. 188839, June 22, 2015
1. Valid termination for serious
misconduct by assaulting co-worker in
the workplace; penalty of dismissal not
 Green Notes 2016
Labor Law
too harsh despite long years of service
and this being his first offense.

If petitioner's long years of service

would be regarded as a justification for
moderating the penalty of dismissal, it will
actually become a prize for disloyalty,
perverting the meaning of social justice and
undermining the efforts of labor to cleanse its
ranks of all undesirables. In addition, where the
totality of the evidence was sufficient to
warrant the dismissal of the employees, the law
warrants their dismissal without making any
distinction between a first offender and a
habitual delinquent. In the present case, all the
more should petitioner's years of service be
taken against him in light of the finding of the
lower tribunals that his violation of an
established company rule was shown to be
willful and such willfulness was characterized by
a wrongful attitude. Moreover, petitioner has
never shown any feelings of remorse for what
he has done, considering that the lower
tribunals found no justification on his part in
inflicting injury upon a co-employee. To make
matters worse, petitioner even exhibited a
seemingly arrogant attitude in insisting to
remain silent and rejecting requests for him to
explain his side despite having been given
numerous opportunities to do so.

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