Last Minute Pointers in Labor and Social Legislation

based on 2017 Labor Cases and Labor Cases

penned by Justice Del Castillo
Prepared by Attorney Victoria V. Loanzon
with the assistance of Attorneys Gio Consunji,
Den De Silva, Norman Manalo, and Wendell Oasan,
(DLSU - College of Law – BGC Campus,
Admitted to the Bar, June 2018)

Part I – 2017 Cases

Preliminaries
Fundamental Principles and Concepts
A. Legal basis
1. 1987 Constitution (State policies, Bill of Rights & Social Justice)
Labor Rights protected (and guaranteed):
o Under the 1987 Constitution: (Sec. 3, Art. XIII, 1987
Constitution)
 Right to self-organization;
 Right to collective bargain;
 Right to collectively negotiate;
 Right to peaceful concerted activities;
 Right to strike in accordance with law;
 Right to participate in policy and decision-making
processes;
 Right to security of tenure;
 Right to human condition of work;
 Right to a living wage;
 Right to a just share in the profits.
Under the Labor Code: (Art. 3, Labor Code)
 `Right to self-organize;
 Right to collectively bargain;
 Right to security of tenure; and
 Right to just and humane work condition.
State policies on:
Labor Code: (Art. 3, Labor Code): The State shall afford protection to labor,
promote full employment, ensure equal work opportunities regardless of sex, race
or creed and regulate the relations between workers and employers. The State
shall assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work.

Employee’s Compensation (Art. 166, LC): The State shall promote and develop a
tax-exempt employees’ compensation program whereby employees and their
dependents, in the event of work-connected disability or death, may promptly
secure adequate income benefit and medical related benefits.

Labor Relations (Art. 211, LC): To promote and emphasize the primacy of free
collective bargaining and negotiations, including voluntary arbitration, mediation
and conciliation, as modes of settling labor or industrial disputes;
To promote free trade unionism as an instrument for the enhancement of
democracy and the promotion of social justice and development;
To foster the free and voluntary organization of a strong and united labor
movement;

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To promote the enlightenment of workers concerning their rights and obligations
as union members and as employees;
To provide an adequate administrative machinery for the expeditious settlement
of labor or industrial disputes;
To ensure a stable but dynamic and just industrial peace; and
To ensure the participation of workers in decision and policy-making processes
affecting their rights, duties and welfare.
To encourage a truly democratic method of regulating the relations between the
employers and employees by means of agreements freely entered into through
collective bargaining, no court or administrative agency or official shall have the
power to set or fix wages, rates of pay, hours of work or other terms and
conditions of employment, except as otherwise provided under this Code.
Worker’s representation and participation in policy and decision-making (Art. 255,
LC): The labor organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit shall be the exclusive
representative of the employees in such unit for the purpose of collective
bargaining. However, an individual employee or group of employees shall have the
right at any time to present grievances to their employer.
Any provision of law to the contrary notwithstanding, workers shall have the right,
subject to such rules and regulations as the Secretary of Labor and Employment
may promulgate, to participate in policy and decision-making processes of the
establishment where they are employed insofar as said processes will directly
affect their rights, benefits and welfare. For this purpose, workers and employers
may form labor-management councils: Provided, that the representatives of the
workers in such labor-management councils shall be elected by at least the
majority of all employees in said establishment. (As amended by Section 22,
Republic Act No. 6715, March 21, 1989)
To encourage a truly democratic method of regulating the relations between the
employers and employees by means of agreements freely entered into through
collective bargaining, no court or administrative agency or official shall have the
power to set or fix wages, rates of pay, hours of work or other terms and
conditions of employment, except as otherwise provided under this Code.
Tripartism and tripartite conferences (Art. 275, LC): Tripartism in labor relations is
hereby declared a State policy. Towards this end, workers and employers shall, as
far as practicable, be represented in decision and policy-making bodies of the
government.
The Secretary of Labor and Employment or his duly authorized representatives
may, from time to time, call a national, regional, or industrial tripartite conference
of representatives of government, workers and employers for the consideration
and adoption of voluntary codes of principles designed to promote industrial peace
based on social justice or to align labor movement relations with established
priorities in economic and social development. In calling such conference, the
Secretary of Labor and Employment may consult with accredited representatives
of workers and employers. (As amended by Section 32, Republic Act No. 6715,
March 21, 1989)
Articles1700, Civil Code: Nature of relationship between employer and employee:
It is not merely contractual. Their relation is impressed with public interest that
labor contracts entered into between them must yield to the common good.
Therefore, such contracts are subject to the special laws on labor unions,
collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects. (Art. 1700, Civil Code)

B. Construction in favor of labor: Labor contracts are construed as how the parties

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intended it to be. But in case of doubt, it shall be construed in favor of the labor.
(Art. 1702, Civil Code)
The Labor Code shall be construed verba legis. But in case of doubt in its
implementation and interpretation, all doubts shall be construed in favor of labor.
(Art. 4, Labor Code)

I. Labor Standards

A. Special Group of Employees

1. Migrant Workers (Claims for compensability of work related death, sickness, or
disability)

Question: Can the temporary disability period be extended?

Answer: Yes. If the 120 days initial period is exceeded and no such declaration is
made because the seafarer requires further medical attention, then the temporary
total disability period may be extended up to a maximum of 240 days, subject to
the right of the employer to declare within this period that a permanent partial or
total disability already exists. The seaman may of course also be declared fit to
work at any time such declaration is justified by his medical condition. (Jebsens
Maritime Inc. vs. Rapiz, G.R. No. 218871, 11 January 2017)

Question: Can a cardio-vascular disease be considered as one of the compensable

occupational disease?

Answer: Yes. Section l(h), Rule III of the ECC Amended Rules on Employees
Compensation, now considers cardio-vascular disease as compensable
occupational disease. Included in Annex "A" is cardio-vascular disease, which
covers myocardial infarction. However, it may be considered as compensable
occupational disease only when substantial evidence is adduced to prove any of
the following conditions:
a) If the heart disease was known to have been present during employment there
must be proof that an acute exacerbation clearly precipitated by the unusual strain
by reason of the nature of his work;
b) The strain of work that brings about an acute attack must be of sufficient
severity and must be followed within twenty-four (24) hours by the clinical signs
of a cardiac assault to constitute causal relationship.
c) If a person who was apparently asymptomatic before subjecting himself to
strain of work showed signs and symptoms of cardiac injury during the
performance of his work and such symptoms and signs persisted, it is reasonable
to claim a causal relationship. (Barsolo vs. SSS, G.R. No. 187950, 11 January
2017)

Question: In what conditions can a seafarer claim for total and permanent
disability?
Answer: A seafarer can claim for total and permanent disability under the
following conditions:
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;

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b) 240 days had lapsed without any certification issued by the company
designated physician;
c) The company-designated physician declared that he is fit for sea duty within the
120-day or 240-day period, as the case may be, but his physician of choice and the
doctor chosen under Section 20-8(3) of the POEA-SEC are of a contrary opinion;
d) The company-designated physician acknowledged that he is partially
permanently disabled but other doctors who he consulted, on his own and jointly
with his employer, believed that his disability is not only permanent but total as
well;
e) The company-designated physician recognized that he is totally and
permanently disabled but there is a dispute on the disability grading;
f) The company-designated physician determined that his medical condition is not
compensable or work-related under the POEA-SEC but his doctor-of-choice and the
third doctor selected under Section 20-B(3) of the POEA-SEC found otherwise and
declared him unfit to work;
g) The company-designated physician declared him totally and permanently
disabled but the employer refuses to pay him the corresponding benefits; and
h) The company-designated physician declared him partially and permanently
disabled within the 120-day or 240-day period but he remains incapacitated to
perform his usual sea duties after the lapse of said periods. (Status Maritime
Corporation vs. Doctolero, G.R. No. 198968, 18 January 2017)

Question: Can a POEA Standard Employment Contract be liberally construed?

Answer: Yes. The POEA Standard Employment Contract was designed primarily for
the protection and benefit of Filipino seamen in the pursuit of their employment on
board ocean-going vessels. In resolving disputes regarding disability benefits, its
provisions must be “construed and applied fairly, reasonably, and liberally in the
seamen’s favor, because only then can the provisions be given full effect.”
Besides, the schedule of disabilities under Section 32 is in no way exclusive.
Section 20.B.4 of the same POEA Standard Employment Contract clearly provides
that “[t]hose illnesses not listed in Section 32 of this Contract are disputably
presumed as work related.” This provision only means that the disability schedule
also contemplates injuries not explicitly listed under it. (Maersk Filipinas Crewing
Inc. vs. Ramos, G.R. No. 184256, 18 January 2017)

Question: What are the requirements for compensability of disability?

Answer: To be entitled to disability benefits, this Court refers to the provisions of
the POEA Contract, as it sets forth the minimum rights of a seafarer and the
concomitant obligations of an employer. Under Section 20 (B) thereof, these are
the requirements for compensability: (1) the seafarer must have submitted to a
mandatory post-employment medical examination within three working days upon
return; (2) the injury must have existed during the term of the seafarer’s
employment contract; and (3) the injury must be work-related.

Question: Who has the burden to prove that the injury was suffered during the
term of the contract?
Answer: The claimant has the burden. The three-day rule must be observed by all
those claiming disability benefits, including seafarers who disembarked upon the
completion of contract. Claimants for disability benefits must first discharge the
burden of proving, with substantial evidence, that their ailment was acquired
during the term of their contract. There must be a reasonable causal connection
between the ailment of seafarers and the work for which they have been

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contracted. (Scanmar Maritime Services Inc., vs. De Leon, G.R. No. 199977, 25
January 2017)

Question: Is the 3-day rule mandatory?

Answer: Yes. A seafarer claiming disability benefits is required to submit himself
to a post-employment medical examination by a company-designated physician
within 3 working days from repatriation. Failure to comply with such requirement
results in the forfeiture of the seafarer's claim for disability benefits. Exception to
this are: (1) when the seafarer is incapacitated to report to the employer upon his
repatriation; and (2) when the employer inadvertently or deliberately refused to
submit the seafarer to a post-employment medical examination by a company-
designated physician. (De Andres vs. Diamon H Marine Services & Shipping
Agency, Inc., G.R. No. 217345, 12 July 2017)

Question: What are the elements for a disability to be compensable?

Answer: For disability to be compensable two elements must concur: (1) the
injury or illness must be work-related; and (2) the work-related injury or illness
must have existed during the term of the seafarer's employment contract. (De
Leon vs. Maunlad Trans. Inc. vs. G.R. No. 215293, 08 February 2017)

Question:Can a third-party physician be appointed to make an assessment on the

disability of the claimant?
Answer: Yes. Generally, it is the company-designated doctor who is given the
responsibility to make a conclusive assessment on the degree of the seafarer's
disability and his capacity to resume work within 120/240 days. The parties,
however, are free to disregard the findings of the company doctor, as well as the
chosen doctor of the seafarer, in case they cannot agree on the disability gradings
issued and jointly seek the opinion of a third-party doctor pursuant to Section 20
(A)(3) of the 2010 POEA-SEC.

Nonetheless, similar to what is required of the company-designated doctor, the

appointed third-party physician must likewise arrive at a definite and conclusive
assessment of the seafarer's disability or fitness to return to work before his or
her opinion can be valid and binding between the parties. (Sunit vs. OSM Maritime
Services, G.R. No. 223035, 27 February 2017)

Other relevant rulings:

The POEA-SEC clearly provides that when the seafarer disagrees with the findings
of the company-designated physician, he has the opportunity to seek a second
opinion from the physician of his choice. If the physician appointed by the seafarer
disagrees with the assessment of the company-designated physician, the parties
may agree to jointly refer the matter to a third doctor, whose decision shall be
binding between them. Ultimately, the failure of the Respondent to follow this
procedure is fatal and renders conclusive disability rating issued by the company-
designated physician. (Oriental Shipmanagement Co., Inc. vs. Ocangas, G.R. No.
226766, 27 September 2017)

As between the findings made by the company-designated physicians who

conducted an extensive examination on the petitioner and a doctor who saw
petitioner on only one occasion and did not even order that medical tests be done
to support his declaration that petitioner is unfit to work as a seaman, the
company-designated physicians’ findings that petitioner has been cleared for work

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should prevail. (Perea vs. Elburg Ship Management Philippines Inc., G.R. No.
206178, 09 August 2017)

Under the POEA Seafarer’s Employment Contract, in order to claim disability

benefits, it is the company-designated physician who must proclaim that the
seafarer suffered a permanent disability, whether total or partial, due to either
injury or illness, during the term of his employment. If the doctor appointed by the
seafarer makes a finding contrary to that of the assessment of the company-
designated physician, a third doctor may be agreed jointly between the employer
and seafarer whose decision shall be binding on both of them. (North Sea Marine
Services Corp vs. Enriquez, G.R. No. 201806, 14 August 2017, DEL CASTILLO, J.)

Question: Does all injury/illness suffered during the term of the contract
compensable?
Answer: No. Permanent total or partial disability suffered by a seafarer during the
term of his contract must be caused by work-related illness or injury. In other
words, to be entitled to compensation and benefits under said provision, it is not
sufficient to establish that the seafarer's illness or injury has rendered him
permanently or partially disabled, but it must also be shown that there is a causal
connection between the seafarer's illness or injury and the work for which he had
been contracted for. (Doroteo vs. Philimare Inc., G.R. No. 184917, 13 March 2017)
(Philimare Inc. vs. Doroteo, G.R. No. 184932, 13 March 2017
Question: When can temporary disability be deemed as permanent disability?
Answer: The rule is that a temporary total disability only becomes permanent
when the company-designated physician, within the 240-day period, declares it to
be so, or when after the lapse of the said period, he fails to make such declaration.
(MST Marine Services (Philippines), Inc. vs. Asuncion, G.R. No. 211335, 27 March
2017, DEL CASTILLO, J.)

Other relevant rulings:

The declaration by the company-designated physician is an obligation, the

abdication of which transforms the temporary total disability to permanent total
disability, regardless of the disability grade. (Balatero vs. Senator Crewing
(Manila) Inc., G.R. No. 224532, 21 June 2017)

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. (C.F.
Sharp Crew Management Inc., vs. Castillo, G.R. No. 208215, 19 April 2017)

The mere lapse of the 120-day period itself does not automatically warrant the
payment of permanent total disability benefits. (C.F. Sharp Crew Management
Inc., vs. Orbeta, G.R. No. 211111, 25 September 2017, DEL CASTILLO, J.)

Under the law, a seafarer is declared to be on temporary total disability during the
120-day period within which he is unable to work. However, a temporary total
disability lasting continuously for more than 120 days, except as otherwise
provided in the Rules, is considered as a total and permanent disability. This
exception pertains to a situation when the sickness “still requires medical
attendance beyond the 120 days but not to exceed 240 days” in which case, the
temporary total disability period is extended up to a maximum of 240 days.

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(Atienza vs. Orophil Shipping International Co., Inc., G.R. No. 191049, 07 August
2017)

If injuries or disabilities, even if partial but permanent, would incapacitate a

seafarer from performing his usual sea duties for a period of more than 120 or 240
days, depending on the need for further medical treatment, then he is totally and
permanently disabled under legal contemplation. (Cutanda vs. Marlow Navigation
Phils., Inc., G.R. No. 219123, 11 September 2017)

The failure of company-designated physicians to arrive at a final and definite

assessment of a seafarer’s fitness to work or level of disability within the
prescribed periods means that the seafarer shall be deemed to be totally and
permanently disabled. (Sharpe Sea Personnel, Inc., vs. Mabuhay Jr., G.R. No.
206113, 06 November 2017)

Question: Can the 120 day period be extended?

Answer: Yes. It is only fitting that the company-designated physician must provide
a sufficient justification to extend the original 120-day period. Otherwise, under
the law, the seafarer must be granted the relief of permanent and total disability
benefits due to such non-compliance. (Career Philippines Ship Management, Inc.
vs. Acub, G.R. No. 215595, 26 April 2017)

Question: Can the heirs of a seafarer who committed suicide while onboard claim
his death benefits?
Answer: Under the POEA-SEC, the employer is generally liable for death
compensation benefits when a seafarer dies during the term of employment. This
rule, however, is not absolute. Part II, Section C (6) of the POEA-SEC exempts the
employer from liability if it can successfully prove that the seafarer's death was
caused by an injury directly attributable to his deliberate or willful act

Since it is undisputed that seafarer's death happened during the term of the
employment contract, the burden rests on the employer to prove by substantial
evidence that seafarer's death was directly attibutable to his deliberate or willful
act. (Seapower Shipping Ent. Inc. vs. Heirs of Sabanal, G.R. No. 198544, 19 June
2017)

Question: Can honest mistake of the claimant in the giving accounts of their state
of health negate compensability?
Answer: No. As laypersons, seafarers cannot be expected to make completely
accurate accounts of their state of health. Unaware of the nuances of medical
conditions, they may, in good faith, make statements that tum out to be false.
These honest mistakes do not negate compensability for disability arising from
pre-existing illnesses shown to be aggravated by their working conditions.
However, when a seafarer's proper knowledge of pre-existing conditions and
intent to deceive an employer are established, compensability is negated.
(Manansala vs. Marlow Navigation Phils., Inc., G.R. No. 208314, 23 August 2017)

Question: Can failure to declare a prior procedure in connection to a pre-existing

illness or condition be held as misrepresentation?
Answer: No. Failure to declare a procedure in connection to a pre-existing illness
or condition cannot be considered as misrepresentation and failure to declare a
pre-existing illness or condition, especially when the employer already had prior
that its employee is already suffering from an illness or condition. The court noted

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that Section 20(E) of the POEA-SEC refers to concealment of a pre-existing illness
or condition. This does not refer to a medical procedure undergone by a seafarer in
connection with an illness or condition already known to the employer. (Leoncio
vs. MST Marine Services, Inc., G.R. No. 230357, 06 December 2017)

Question: Will an ITF Agreement govern the death benefits claimed by Rosemary,
despite the terms provided for in the CBA and the POEA-SEC?
Answer: No. It is the CBA which must govern the claim for death benefits. The
entitlement to disability benefits of seafarers on overseas work is a matter
governed not only by medical findings, but also by law and contract. By contract,
the POEA-SEC and the CBA bind seafarers and their employers. An overriding
instrument, such as the instant ITF Agreement, also forms part of the covenants of
the parties to each other. Given that the ITF Agreement is not an overriding
instrument in this case, the Court may apply either the terms in a seafarer's
employment contract provided by the POEA-SEC or under the CBA, if such CBA
prevails over and is more beneficial to the employee, in the award of death
benefits. (Maersk-Filipinas Crewing, Inc. vs. Malicse, G.R. No. 200576, 20
November 2017)

II. POST-EMPLOYMENT

A. Employer-employee Relationship

1. Test to determine employer-employee relationship

Question: What are the elements of an employer-employer relationship?
The elements of an employer-employee relationship are: (1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power of control. (Valencia vs. Classique Vinyl Products
Corporation, G.R. NO. 206390, 30 January 2017, DEL CASTILLO, J.)

Question: Can a Distributorship Agreement which imposed minimum standards

concerning sales, marketing, finance and operations considered under the power
of control?
Answer: No. A closer examination of the Distributorship Agreement reveals that
the relationship of NPI and ODSI is not that of a principal and a contractor
(regardless of whether labor-only or independent), but that of a seller and a
buyer/re-seller. As stipulated in the Distributorship Agreement, NPI agreed to sell
its products to ODSI at discounted prices, which in turn will be re-sold to identified
customers, ensuring in the process the integrity and quality of the said products
based on the standards agreed upon by the parties. As aptly explained by NPI, the
goods it manufactures are distributed to the market through various distributors,
e.g., ODSI, that in turn, re-sell the same to designated outlets through its own
employees such as the complainants. Therefore, the reselling activities allegedly
performed by the complainants properly pertain to ODSI, whose principal business
consists of the “buying, selling, distributing, and marketing goods and
commodities of every kind” and “[entering] into all kinds of contracts for the
acquisition of such goods [and commodities].”The imposition of minimum
standards concerning sales, marketing, finance and operations are nothing more
than an exercise of sound business practice to increase sales and maximize
profits. It was only reasonable for the seller to require its distributors to meet
various conditions for the grant and continuation of a distributorship agreement
for as long as these conditions do not control the means and methods on how the

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distributor does its distributorship business. (Nestle Philippines, Inc. vs. Puedan
et. Al, G.R. No. 220617, 30 January 2017)

Question: Does the control test require actual control of the employees?
Answer: No. The control test merely calls for the existence of the right to control,
and not necessarily the exercise thereof. It is not essential that the employer
actually supervises the performance of duties by the employee. It is enough that
the former has a right to wield the power. (Lu vs. Enopia, G.R. No. 197899, 06
March 2017)

Other relevant ruling:

The element of control under the four-fold test refers merely to the existence of
the power and not to the actual exercise thereof. In illegal dismissal cases, while
the employer has the burden of proving that the dismissal was for cause and with
due process, the employee has to first establish that fact of dismissal from
employment by positive and overt acts of the employer indicating the intention to
dismiss. (Expedition Construction Corporation vs. Africa, G.R. No. 228671, 14
December 2017, DEL CASTILLO, J.)

2. Kinds of Employment

Question: Distinguish project employment from fixed-term employment

Answer: Project employment should not be confused and interchanged with fixed-
term employment. While the former requires a project as restrictively defined
above, the duration of a fixed-term employment agreed upon by the parties may
be any day certain, which is understood to be "that which must necessarily come
although it may not be known when." The decisive determinant in fixed-term
employment is not the activity that the employee is called upon to perform but the
day certain agreed upon by the parties for the commencement and termination of
the employment relationship. The decisive determinant in project employment is
the activity that the employee is called upon to perform and not the day certain
agreed upon by the parties for the commencement and termination of the
employment relationship. (E. Ganzon, Inc., vs. Ando, JR., G.R. No. 214183, 20
February 2017)

Other relevant ruling:

Fixed term employees include 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 the engagement of the employee. The
duration of a fixed-term employment, on the other hand, is agreed upon by the
parties may be any day certain, which is understood to be "that which must
necessarily come although it may not be known when." The decisive determinant
in fixed-term employment is not the activity that the employee is called upon to
perform but the day certain agreed upon by the parties for the commencement
and termination of the employment relationship. (Innodata Knowledge Services,
Inc. vs. Inting, G.R. No. 211892, 06 December 2017)

Question: What are the two (2) types of regular employees?

Answer: The law provides for two (2) types of regular employees, namely: (a)
those who are engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer (first category); and (b)
those who have rendered at least one year of service, whether continuous or

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broken, with respect to the activity in which they are employed (second category).
(UST vs. Samahang Manggagawa ng UST, G.R. No. 184262, 24 April 2017)

Question: What is the principal test in determining whether a particular employee

was engaged as project-based employee?
Answer: The principal test in determining whether particular employees were
engaged as project-based employees, as distinguished from regular employees, is
whether they were assigned to carry out a specific project or undertaking, the
duration and scope of which was specified at, and made known to them, at the
time of their engagement. It is crucial that the employees were informed of their
status as project employees at the time of hiring and that the period of their
employment must be knowingly and voluntarily agreed upon by the parties,
without any force, duress, or improper pressure being brought to bear upon the
employees or any other circumstances vitiating their consent. (Herma Shipyard
Inc., vs. Oliveros, G.R. No. 208936, 17 April 2017, DEL CASTILLO, J.)

B. Termination of Employment

Question: What are the requisites for a valid dismissal from employment?
Answer: To constitute valid dismissal from employment, two requisites must
concur: (1) the dismissal must be for a just or authorized cause; and (2) the
employee must be afforded an opportunity to be heard and to defend himself.
(Reyes vs. Global Beer Below Zero, Inc., G.R. No. 222816, 04 October 2017)

Question: Can an employee be terminated by reason of his/her non-compliance

with work standards?
Answer: Yes. It is well-settled that employers have the prerogative to impose
standards on the work quantity and quality of their employees and provide
measures to ensure compliance therewith. Non-compliance with work standards
may thus be a valid cause for dismissing an employee. Nonetheless, to ensure that
employers will not abuse their prerogatives, the same is tempered by security of
tenure whereby the employees are guaranteed substantive and procedural due
process before they are dismissed from work. (Dagasdas vs. Grand Placement and
General Services Corporation, G.R. No. 205727, 18 January 2017, DEL CASTILLO,
J.)

Question: What are the two facets of dismissal from employment?

Answer: Dismissal from employment have two facets: first, the legality of the act
of dismissal, which constitutes substantive due process; and, second, the legality
of the manner of dismissal, which constitutes procedural due process. The burden
of proof rests upon the employer to show that the disciplinary action was made for
lawful cause or that the termination of employment was valid. In administrative
and quasi-judicial proceedings, the quantum of evidence required is substantial
evidence or “such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.” Thus, unsubstantiated suspicions, accusations,
and conclusions of the employer do not provide legal justification for dismissing
the employee. When in doubt, the case should be resolved in favor of labor
pursuant to the social justice policy of our labor laws and the 1987 Constitution.
(Maula vs. Ximex Delivery Express, Inc., G.R. No. 207838, 25 January 2017)

Question: What are guiding principles in connection with the hearing requirement
in dismissal cases?

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Answer: In sum, the following are the guiding principles in connection with the
hearing requirement in dismissal cases:
(a) “ample opportunity to be heard” means any meaningful opportunity (verbal or
written) given to the employee to answer the charges against him and submit
evidence in support of his defense, whether in a hearing, conference or some
other fair, just and reasonable way.
(b) a formal hearing or conference becomes mandatory only when requested by
the employee in writing or substantial evidentiary disputes exist or a company
rule or practice requires it, or when similar circumstances justify it.
(c) the “ample opportunity to be heard” standard in the Labor Code prevails over
the “hearing or conference” requirement in the implementing rules and
regulations. (Maula vs. Ximex Delivery Express, Inc., G.R. No. 207838, 25
January 2017)

Other relevant rulings:

In cases of illegal dismissal, who has the burden to prove that the termination was
for a valid or authorized cause?
Answer: In cases of illegal dismissal, the employer bears the burden of proof to
prove that the termination was for a valid or authorized cause. But before the
employer must bear the burden of proving that the dismissal was legal, the
employees must first establish by substantial evidence that indeed they were
dismissed. If there is no dismissal, then there can be no question as to the legality
or illegality thereof. (Claudia’s Kitchen, Inc. vs. Tanguin, G.R. No. 221096, 28 June
2017)

In illegal dismissal cases, while the burden is on the employer to prove that
dismissal was done for cause and with due process, the employee must first
establish the fact of dismissal through overt acts by the employer showing
intention to sever relations. (Mehitabel, Inc., vs. Alcuizar, G.R. No. 228701-02, 13
December 2017)

In dismissal cases, the employer bears the burden of proving that the employee
was not terminated, or if dismissed, that the dismissal was legal. Resultantly, the
failure of the employer to discharge such burden would mean that the dismissal is
unjustified and thus, illegal. (Brown vs. Marswin Marketing, Inc., G.R. No. 206891,
15 March 2017, DEL CASTILLO J.)

Question: What is the quantum of proof in labor cases?

Answer: In cases filed before quasi-judicial bodies, the quantum of proof required
is substantial evidence. This means that “amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.” (PNB vs.
Gregorio, G.R. No. 194944, 18 September 2017)

Question: Does the technical rules of procedure strictly applies in labor cases?
Answer: No. The application of technical rules of procedure may be relaxed to
serve the demands of substantial justice, particularly in labor cases. (Reyes vs.
Global Beer Below Zero, Inc., G.R. No. 222816, 04 October 2017)

Question: Does lack of authorized or just cause in the termination of employees

mean bad faith on the part of the employer?
Answer: No. The lack of authorized or just cause to terminate one's employment
and the failure to observe due process do not ipso facto mean that the corporate
officer acted with malice or bad faith. There must be independent proof of malice

11 | P a g e
or bad faith. (Philtranco Service Enterprises, Inc., vs. Cual, G.R. No. 207684, 17
July 2017)

C. Termination by Employee

Question: What are requisites to have a valid termination by reason of

abandonment of work?
Answer: For abandonment to exist, two factors must be present: (1) the failure to
report for work or absence without valid or justifiable reason; and (2) a clear
intention to sever employer-employee relationship, with the second element as
the more determinative factor being manifested by some overt acts. (Reyes vs.
Global Beer Below Zero, Inc., G.R. No. 222816, 04 October 2017)

Other relevant ruling:

In order for there to be abandonment, the elements of [i] failure to report for
work or absence without justifiable reason; and [ii] clear intention to sever
employer-employee relationship, must be present. Mere absence is insufficient.
Moreover, abandonment is incompatible with constructive dismissal. (Borja vs.
Minoza, G.R. No. 218384, 03 July 2017)

Question: Is an employee who voluntarily resigns entiltle to a separation pay?

Answer: As a general rule, an employee who voluntarily resigns from employment
is not entitled to separation pay, except when it is stipulated in the employment
contract or CBA, or it is sanctioned by established employer practice or policy. To
be considered as a regular company practice, the employee must prove by
substantial evidence that the giving of the benefit is done over a long period of
time, and that it has been made consistently and deliberately. On this note, it is
well to emphasize that not every employee who stands to lose his job for valid
cause is entitled to receive separation pay or financial assistance from his/her
employer. The Court distinguishes between an employee who deserves the same
and one who does not; to merit the application of social justice and equity, such
employee must not be dismissed by reason of serious misconduct or causes
reflective of his lack of moral character. Otherwise, it will have the effect of
rewarding rather than punishing the erring employee for his offense. (Coseteng &
Diliman Prep School vs. Perez, G.R. No. 185938, 06 September 2017)

1. Resignation versus Constructive Dismissal

Question: Does inconveniency because of the transfer to different location posits

contrastive dismissal?
Answer: No. Although the respondents' transfer to Manila might be potentially
inconvenient for them because it would entail additional expenses on their part
aside from their being forced to be away from their families, it was neither
unreasonable nor oppressive. The petitioner rightly points out that the transfer
would be without demotion in rank, or without diminution of benefits and salaries.
Instead, the transfer would open the way for their eventual career growth, with
the corresponding increases in pay. It is noted that their prompt and repeated
opposition to the transfer effectively stalled the possibility of any agreement
between the parties regarding benefits or salary adjustments. (Chateau Royale
Sports and Country Club Inc. vs. Balba, G.R. No. 197492, 18 January 2017)

Question: What are characteristics of a valid resignation?

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Answer: In order to withstand the test of validity, resignations must be made
voluntarily and with the intention of relinquishing the office, coupled with an act
of relinquishment. Therefore, in order to determine whether the employees truly
intended to resign from their respective posts, we must take into consideration
the totality of circumstances in each particular case. (Grande vs. Philippine
Nautical Training College, G.R. No. 213137, 01 March 2017)

Other relevant ruling:

Even if the option to resign originated from the employer, what is important for
resignation to be deemed voluntary is that the employee's intent to relinquish
must concur with the overt act of relinquishment. (Doble vs. ABB, Inc./Nitin Desai,
G.R. No. 215627, 05 June 2017)

Question: When can a termination be considered as constructive dismissal?

Answer: There is constructive dismissal when an employer's act of clear
discrimination, insensibility or disdain becomes so unbearable on the part of the
employee so as to foreclose any choice on his part except to resign from such
employment. It exists where there is involuntary resignation because of the harsh,
hostile and unfavorable conditions set by the employer. (Rodriguez vs. Park N Ride
Inc., G.R. No. 222980, 20 March 2017)

Other relevant rulings:

Constructive dismissal exists where there is cessation of work, because continued
employment is rendered impossible, unreasonable or unlikely, as an offer
involving a demotion in rank or a diminution in pay and other benefits. (SIMIFRU
Corporation Philippines vs. Baya, G.R. No. 188269, 17 April 2017)

In constructive dismissal cases, the employer is charged with the burden of

proving that its conduct and action were for valid and legitimate grounds.
(Meatworld International, Inc. vs. Hechanova, G.R. No. 229746, 11 October 2017)

Question: When does the three (3)-year prescriptive period to claim for service
incentive leave commence?
Answer: The three (3)-year prescriptive period commences, not at the end of the
year when the employee becomes entitled to the commutation of his service
incentive leave, but from the time when the employer refuses to pay its monetary
equivalent after demand of commutation or upon termination of the employee's
services, as the case may be. (Rodriguez vs. Park N Ride Inc., G.R. No. 222980, 20
March 2017)

Question: When can reserved or floating/off-detail status be deemed as

constructive dismissal?
Answer: A security guard placed on reserved or off-detail status is deemed
constructively dismissed only if the status should last more than six months. Any
claim of constructive dismissal must be established by clear and positive evidence.
(Spectrum Security Services, Inc. vs. Grave, G.R. No. 196650, 07 June 2017)

Other relevant rulings:

[1] an employer must assign the security guard to another posting within six ( 6)
months from his last deployment, otherwise, he would be considered
constructively dismissed; and [2] the security guard must be assigned to a specific
or particular client. A general return-to-work order does not suffice. (Ibon vs.
Genghis Khan Security Services, G.R. No. 221085, 19 June 2017)

13 | P a g e
An employer who alleges an employee’s voluntary resignation bears the burden of
proving such allegation by clear, positive and convincing evidence. On the other
hand, an employee who works as a security guard carries the burden of proving
his allegation that he was placed on indefinite floating status, or was
constructively dismissed. (FCA Security and General Services, Inc. vs. Academia,
G.R. No. 189493, 02 August 2017)

D. Termination by Employer

1. Just Causes

Question: What are the characteristics of a valid termination on the ground of loss
of trust and confidence?
Answer: For an employer to validly dismiss an employee on the ground of loss of
trust and confidence under Article 282(c) of the Labor Code, the employer must
observe the following guidelines:
(1) loss of confidence should not be simulated;
(2) it should not be used as subterfuge for causes which are improper, illegal or
unjustified;
(3) it may not be arbitrarily asserted in the face of overwhelming evidence to the
contrary; and
(4) it must be genuine, not a mere afterthought to justify earlier action taken in
bad faith. (Panaligan vs. PHYVITA Enterprises Corporation, G.R. No. 202086, 21
June 2017)

Other relevant rulings:

It is a cardinal rule that loss of trust and confidence should be genuine, and not
simulated; it must arise from dishonest or deceitful conduct, and must not be
arbitrarily asserted in the face of overwhelming contrary evidence. While proof
beyond reasonable doubt is not required, loss of trust must have some basis or
such reasonable ground for one to believe that the employee committed the
infraction, and the latter's participation makes him or her totally unworthy of the
trust demanded by the position. (Sta. Ana vs. Manila Jockey Club, Inc., G.R. No.
208459, 15 February 2017, DEL CASTILLO, J.)

For loss of trust and confidence to be valid ground for termination, the employer
must establish that: (1) the employee holds a position of trust and confidence; and
(2) the act complained against justifies the loss of trust and confidence. Loss of
confidence should not be simulated. It should not be used as a subterfuge for
causes which are improper, illegal, or unjustified. Loss of confidence may not be
arbitrarily asserted in the face of overwhelming evidence to the contrary. The fact
that an employer did not suffer pecuniary damage will not obliterate the
respondent's betrayal of trust and confidence reposed on him by his employer. (PJ
Lhuillier, Inc. vs. Camacho, G.R. No. 223073, 22 February 2017)

The employer must adduce proof of actual involvement in the alleged misconduct
for loss of trust and confidence to warrant the dismissal of fiduciary rank-and-file
employees. However, "mere existence of a basis for believing that the employee
has breached the trust and confidence of the employer" is sufficient for
managerial employees. (Bravo vs. Urios College, G.R. No. 198066, 07 June 2017)

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Question: What are the two conditions that the employer must satisfy in order to
invoke loss of trust and confidence a valid just cause for dismissal?
Answer: Loss of trust and confidence is a just cause for dismissal. However, in
order for the employer to properly invoke this ground, the employer must satisfy
two conditions:
(1) the employer must show that the employee concerned holds a position of trust
and confidence; and
(2) the employer must establish the existence of an act justifying the loss of trust
and confidence. (Distribution & Control Products Inc., vs. Santos, G.R. No. 212616,
10 July 2017)

Question: When can strained relations be invoked in termination of employment?

Answer: Strained relations may only be invoked against employees whose
positions demand trust and confidence. It must be demonstrated as fact and
should not be used recklessly or applied loosely nor be based on impression alone.
(ADVAN Motor, Inc., vs. Veneracion, G.R. No. 190944, 13 December 2017)

Question: What are the requisites in order to invoke willful disobedience as a valid
ground for dismissal?
Answer: Valid dismissal on the ground of willful disobedience requires the
concurrence of twin requisites:
(1) the employee's assailed conduct must have been willful or intentional, the
willfulness being characterized by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known to the employee
and must pertain to the duties which he had been engaged to discharge. (BDO
Unibank, Inc. vs. Nerbes, G.R. No. 208735, 19 July 2017)

Exception to the ruling cited above:

** Not every case of insubordination or willful disobedience by an employee of a
lawful work connected order of the employer or its representative is reasonably
penalized with dismissal. For one thing, Article 282 (a) refers to "serious
misconduct or willful disobedience". There must be reasonable proportionality
between, on the one hand, the willful disobedience by the employee and, on the
other hand, the penalty imposed therefor. (Transglobal Maritime Agency, Inc., vs.
Chua, G.R. No. 222430, 30 August 2017)

Question: What are the requisites in order to invoke serious misconduct as a valid
ground for dismissal?
Answer: To constitute serious misconduct, the elements must concur: (1) the
misconduct must be serious, not merely trivial or unimportant; (2) it must relate
to the performance of the employee’s duties showing that the employee has
become unfit to continue working for the employer; and (3) it must have been
performed with wrongful intent. (Sterling Paper Products Enterprises vs. KMM-
KATIPUNAN, G.R. No. 221493, 02 August 2017)

Question: Can a single incident of serious misconduct be the subject of two

disciplinary proceedings?
Answer:No. It is well to stress that on July 13, 2011, petitioner already issued an
order suspending respondent for a period of three (3) days on account of her
misconduct. Thus, petitioner could no longer subject respondent to another
disciplinary proceeding based on the same act of misconduct. Clearly, respondent

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could not have been validly terminated from work. (Fabricator Philippines, Inc. vs.
Estolas, G.R. No. 224308-09, 27 September 2017)

2. Authorized Causes

Question: Distinguish return-to-work order vs. reinstatement order

Answer: Return-to-work and reinstatement orders are both immediately
executory; however, a return-to work order is interlocutory in nature, and is
merely meant to maintain status quo while the main issue is being threshed out in
the proper forum. In contrast, an order of reinstatement is a judgment on the
merits handed down by the Labor Arbiter pursuant to the original and exclusive
jurisdiction provided for under Article 224(a) 118 of the Labor Code. (Manggawa
ng Komunikasyon sa Pilipinas vs. PLDT, G.R. No. 190389 & 190390, 19 April 2017)

Question: What is the quantum of evidence to prove the selection criteria of the
employees to be terminated by a redundancy program?
Answer: The element of fair and reasonable criteria in the selection of the
employees to be dismissed as part of the application of a redundancy program
needs to be proven with substantial evidence. (Abbott Laboratories, Inc. vs.
Torralma, G.R. No. 229746, 11 October 2017)

Question: What are the requirements in order to invoke cessation of business

operations as a valid ground for dismissal?
Answer: Under Article 283 of the Labor Code, three requirements are necessary for
a valid cessation of business operations:
(a) service of a written notice to the employees and to the DOLE at least one
month before the intended date thereof;
(b) the cessation of business must be bona fide in character; and
(c) payment to the employees of termination pay amounting to one month pay or
at least one-half month pay for every year of service, whichever is higher.
(Zambrano vs. Philippine Carpet Manufacturing Corporation, G.R. No. 224099, 21
June 2017)

3. Due Process

i. Twin-notice requirement

Question: Describe the due process requirement in order to have a valid dismissal
Answer: It is well settled that a valid dismissal necessitates compliance with
substantive and procedural requirements. Specifically, in Mantle Trading Services,
Inc. and/or Del Rosario v. NLRC, et al., the Court emphasized that (a) there should
be just and valid cause as provided under Article 282 of the Labor Code; and
(b) the employee be afforded an opportunity to be heard and to defend himself.
(Ortiz vs. DHL Philippines Corporation, G.R. No. 183399, 20 March 2017)

E. Reliefs from Illegal Dismissal

Question: Does the re-computation of the awards constitute amendment or

alteration of the final decision of the court?
Answer: It has been settled that no essential change is made by a re-computation
as this step is a necessary consequence that flows from the nature of the illegality
of dismissal declared in that decision. By the nature of an illegal dismissal case,
the reliefs continue to add on until full satisfaction thereof. The re-computation of

16 | P a g e
the awards stemming from an illegal dismissal case does not constitute an
alteration or amendment of the final decision being implemented. The illegal
dismissal ruling stands; only the computation of the monetary consequences of
the dismissal is affected and this is not a violation of the principle of immutability
of final judgments. (C.I.C.M. Mission Seminaries School of Theology, Inc., vs.
Perez, G.R. No. 220506, 18 January 2017)

Question: What salary rate would be the basis of the computation of backwages?
Answer: The base figure in the determination of full backwages is fixed at the
salary rate received by the employee at the time he was illegally dismissed. The
award shall include the benefits and allowances regularly received by the
employee (such as the emergency living allowances and the 13th month pay) as of
the time of the illegal dismissal, as well as those granted under the CBA, if any.
(United Coconut Chemicals Inc. vs. Valmores, G.R. No. 201018, 12 July 2017)

F. Retirement

Question: Is a part-time employee is entitled to retirement benefits?

Answer: YES. Retirement benefits are intended to help the employee enjoy the
remaining years of his life, lessening the burden of worrying for his financial
support, and are a form of reward for his loyalty and service to the employer.
Retirement benefits, where not mandated by law, may be granted by agreement of
the employees and their employer or as a voluntary act on the part of the
employer. (De La Salle Araneta University vs. Bernardo, G.R. No. 190809, 13
February 2017)

Question: In the grant of retirement benefits, should the employer first consult the
employee prior to his actual retirement?
Answer: NO. Retirement is the result of a bilateral act of the parties, a voluntary
agreement between the employer and the employee whereby the latter, after
reaching a certain age, agrees to sever his or her employment with the former. We
already had the occasion to strike down the added requirement that an employer
must first consult its employee prior to retiring him, as this requirement unduly
constricts the exercise by management of its option to retire the said employee.
Due process only requires that notice of the employer's decision to retire an
employee be given to the employee. (Catotocan vs. Lourdes School of Quezon City,
G.R. No. 213486, 26 April 2017)

If the CBA also provides for retirement benefits, is there a need to invoke the
provision of the Labor Code on the grant of retirement benefits?
Answer: The determining factor in choosing which retirement scheme to apply is
still superiority in terms of benefits provided. Thus, even if there is an existing
CBA but the same does not provide for retirement benefits equal or superior to
that which is provided under Article 287 of the Labor Code, the latter will apply.
(PAL vs. Hassaram, G.R. No. 217730, 05 June 2017)

Other relevant ruling:

Retirement laws are liberally construed and administered in favor of the persons
intended to be benefited, and all doubts are resolved in favor of the retiree to
achieve their humanitarian purpose. (PNB vs. Dalmacio, G.R. No. 202308, 05 July
2017)

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III. Social Welfare Legislation

A. GSIS Law (R.A. No. 8291)

1. Coverage and Exclusions

Question: Should the GSIS include claimant’s first fourteen (14) years in
government service as a casual employee for the calculation of the latter’s
retirement benefits claim?
Answer: NO. Indubitably, compulsory coverage under the GSIS had previously and
consistently included regular and permanent employees, and expressly excluded
casual, substitute or temporary employees from its retirement insurance plan. A
permanent appointment is one issued to a person who has met the requirements
of the position to which appointment is made, in accordance with the provisions of
the Civil Service Act and the Rules. Here, the primordial reason why there were no
deductions during those fourteen (14) years was because the claimant was not yet
a GSIS member at that time. There was thus no legal obligation to pay the
premium as no basis for the remittance of the same existed. And since only
periods of service where premium payments were actually made and duly remitted
to the GSIS shall be included in the computation of retirement benefits, said
disputed period of fourteen (14) years must corollarily be removed from
claimant’s creditable service. (GSIS vs. Pauig, G.R. No. 210328, 30 January 2017)

Question: What should the claimant prove in order to claim compensation for
cerebro-vascular accident?
Answer: 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 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. (GSIS vs.
Esteves, G.R. No. 182297, 21 June 2017)

IV. Labor Relations

A. Right to self-organization

1. Who may/may not exercise the right

Question: What is the proper remedy of the employer if there is an inclusion of

disqualified employees in a union?
Answer: In case of alleged inclusion of disqualified employees in a union, the
proper procedure for an employer is to directly file a petition for cancellation of
the union’s certificate of registration due to misrepresentation, false statement or
fraud under the circumstances enumerated in Article 239 of the Labor Code, as
amended. (Asian Institute of Management vs. Asian Institute of Management
Faculty, G.R. No. 207971, 23 January 2017, DEL CASTILLO, J.)

B. Rights of Labor Organization

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Question: What kind of fraud and misrepresentation can be a ground for
cancellation of union registration?
Answer: For fraud and misrepresentation to constitute grounds for cancellation of
union registration under the Labor Code, the nature of the fraud and
misrepresentation must be grave and compelling enough to vitiate the consent of
a majority of union members. (De Ocampo Memorial Schools, Inc., vs. Bigkis
Manggawa sa De Ocampo, G.R. No. 192648, 15 March 2017)

C. Unfair Labor Practices

1. By employers

Question: Does employer’s offer of wage increase in exchange of signing a waiver

foregoing CBA negotiations constitute unfair labor practice?
Answer: Yes. Granting benefits to employees to induce them to waive their
collective bargaining rights constitutes unfair labor practice. The Supreme Court
held that URC-SONEDCO is guilty of unfair labor practice for failing to bargain with
SWOFLU in good faith. URC-SONEDCO restricted SWOFLU’s bargaining power when
it asked the rank-and-file employees to sign a waiver foregoing CBA negotiations
in exchange for wage increases. Thus, this Court ordered URC-SONEDCO to grant
the union members the 2007 and 2008 wage increases. (SONEDCO Workers Free
Labor Union (SWOLFU) vs. Universal Robina Corporation, G.R. No. 220383, 05 July
2017)

Other relevant ruling:

Under Article 248 of the Labor Code, the giving of financial or other support to any
labor organization by the employer is unlawful and constitutes Unfair Labor
Practice. (United Polyresins, Inc., vs. Pinuela, G.R. No. 209555, 31 July 2017, DEL
CASTILLO, J.)

D. Peaceful concerted activities

1. By Labor Organization
i. Strike

a. Valid versus Illegal Strikes

Question: What are the procedural requirements of valid strike?

Answer: A strike to be valid must comply with certain procedural requirements, to
wit:
(1) notice of strike filed 30 days before intended date thereof, or 15 days when
the ground is unfair labor practice;
(2) a strike vote; and
(3) notice to be given to the NCMB of the results of the vote at least 7 days before
the strike. Failure to comply with these requirements renders the strike illegal.
(Ergonomic Systems Philippines, Inc., vs. Enaje, G.R. No. 195163, 13 December
2017)

Question: What are the consequences of illegal strike?

Answer: In the determination of the consequences of illegal strikes, the law makes
a distinction between union members and union officers. The services of an
ordinary union member cannot be terminated for mere participation in an illegal
strike; proof must be adduced showing that he or she committed illegal acts
during the strike. A union officer, on the other hand, may be dismissed, not only
when he actually commits an illegal act during a strike, but also if he knowingly

19 | P a g e
participates in an illegal strike. (Ergonomic Systems Philippines, Inc., vs. Enaje,
G.R. No. 195163, 13 December 2017)

2. Assumption of Jurisdiction

Question: What is the effect of assumption of jurisdiction over a labor dispute?

Answer: Assumption of jurisdiction over a labor dispute always co-exists with an
order for workers to return to work immediately and for employers to readmit all
workers under the same terms and conditions prevailing before the strike or
lockout. The return-to-work order is merely meant to maintain status quo while
the main issue is being threshed out in the proper forum." The status quo is simply
the status of the employment of the employees the day before the occurrence of
the strike or lockout. (San Fernando Coca Cola Rank-and-File Union (SACORU) vs.
Coca Cola Bottlers Philippines, Inc., G.R. No. 200499, 04 October 2017)

V. Jurisdiction and Remedies

A. Labor Arbiter
1. Requirement to perfect appeal to NLRC

Question: Is the posting of cash or surety bond mandatory to perfect an appeal?

Answer: Yes. The posting of cash or surety bond is therefore mandatory and
jurisdictional; failure to comply with this requirement renders the decision of the
Labor Arbiter final and executory. This indispensable requisite for the perfection of
an appeal "is to assure the workers that if they finally prevail in the case, the
monetary award will be given to them upon the dismissal of the employer's appeal
and is further meant to discourage employers from using the appeal to delay or
evade payment of their obligations to the employees.
However, the Court, in special and justified circumstances, has relaxed the
requirement of posting a supersedeas bond for the perfection of an appeal on
technical considerations to give way to equity and justice. Thus, under Section 6 of
Rule VI of the 2005 NLRC Revised Rules of Procedure, the reduction of the appeal
bond is allowed, subject to the following conditions: (1) the motion to reduce the
bond shall be based on meritorious grounds; and (2) a reasonable amount in
relation to the monetary award is posted by the appellant.
Compliance with these two conditions will stop the running of the period to perfect
an appeal. (Turks Shawarma Company vs. Pajaron, G.R. NO. 207156, 16 January
2917, DEL CASTILLO, J.)

B. Court of Appeals

1. Petition for Review under Rule 65 of the Rules of Court

Question: Is the decision of NLRC subject of Petition for Review under Rule 65 of
the Rules of Court?
Answer: Yes. In labor disputes, grave abuse of discretion may be ascribed to the
NLRC when, inter alia, its findings and conclusions are not supported by
substantial evidence, or that amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion. (Talaroc vs. Arpaphil
Shipping Corporation, G.R. No. 223731, 30 August 2017)

Other relevant ruling:

The decision of the NLRC is appealable to the Court of Appeals through a petition
for certiorari under Rule 65 of the Rules of Court. Parties wishing to appeal an

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NLRC decision to the Supreme Court via Rule 65 have 60 days from the denial of
the motion for reconsideration to file their appeal. No extension of time to file the
petition shall be granted except for compelling reason and in no case exceeding
fifteen (15) days. (Concejero vs. Court of Appeals, G.R. No. 223262, 11 September
2017)

C. Jurisdiction of the Supreme Court in Labor Cases

1. Rule 45 of the Rules of Court

In labor cases, this Court’s review power under Rule 45 of the Rules of Court
involves the determination of the legal correctness of the CA Decision. This means
that this Court must ascertain whether the CA had properly determined the
presence or absence of grave abuse of discretion in the NLRC Decision. Simply put,
in testing for legal correctness, this Court views the CA Decision in the same
context that the Rule 65 petition for certiorari it adjudicated was presented to that
court. It entails a limited review of the acts of the NLRC, viz., whether the NLRC
committed errors of jurisdiction. (TSM Shipping (Phils.) Inc. vs. De Chavez, G.R.
No. 198225, September 2017, DEL CASTILLO, J.)

D. Jurisdiction of the National Conciliation and Mediation Board

Question: What mode of appeal should be used to review NCMB’s decision?

Answer: The NCMB Procedural Guidelines provide that awards or decisions of the
voluntary arbitrator become final and executory after 10 days from receipt of
copies of the award or decision by the parties. The Labor Code echoes the same.
The proper remedy to reverse or modify a voluntary arbitrators’ or panel of
voluntary arbitrators’ decision is to appeal the award or decision via a petition
under Rule 43 of the Rules of Civil Procedure. (NYK-FIL Management, Inc. vs.
Dabu, G.R. No. 225142, 13 September 2017)

E. Jurisdiction of the DOLE Secretary

The factual findings by quasi-judicial agencies, such as the Department of Labor

and Employment, when supported by substantial evidence, are entitled to great
respect in view of their expertise in their respective fields. (Agricultural Corp vs.
NAMASUFA-NAFLU-KMU, G.R. No. 202091, 07 June 2017)

F. Jurisdiction of a Voluntary Arbitrator

Question: Is the award or decision of a voluntary arbitrator appealable?

Answer: Yes. A Voluntary Arbitrator's award or decision shall be appealed before
the Court of Appeals within 10 days from receipt of the award or decision. Should
the aggrieved party choose to file a motion for reconsideration with the Voluntary
Arbitrator, the motion must be filed within the same 10- day period since a motion
for reconsideration is filed "within the period for taking an appeal.” (NYK-FIL
Management, Inc. vs. Dabu, G.R. No. 225142, 13 September 2017)

G. Other relevant 2017 Labor Law rulings

Question: Can a final decision of the NLRC be rendered unenforceable?

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Answer: Yes. The Court held that the principle of immutability of judgment, or the
rule that once a judgment has become final and executory, the same can no longer
be altered or modified and the court's duty is only to order its execution, is not
absolute. One of its exceptions is when 143 there is a supervening event occurring
after the judgment becomes final and executory, which renders the decision
unenforceable. To note, a supervening event refers to facts that transpired after
judgment has become final and executory, or to new situation that developed after
the same attained finality. Supervening events include matters that the parties
were unaware of before or during trial as they were not yet existing during that
time. Similarly, supervening events transpired in this case after the NLRC Decision
became final and executory, which rendered its execution impossible and unjust.
(Edutch Movers Inc. vs. Lequin, G.R. No. 210032, 25 April 2017)

Question: What is the requirement of a valid quit claim?

Answer: For a waiver or quitclaim to be valid, the following requirements must be
met:
(1) there was no fraud or deceit on the part of any of the parties;
(2) the consideration is sufficient and reasonable; and
(3) the contract is not contrary to law, public order, public policy, morals or good
customs, or prejudicial to a third person with a right recognized by law.

If the waiver or quitclaim is not valid, it will not bar the recovery of the full
measure of the worker’s right. But where it is shown that the waiver or quitclaim
was voluntarily signed with full understanding of the consequence, and the
consideration is sufficient and reasonable, then the waiver shall be valid and
binding.

Question: What is the effect of an invalid quit claim

Answer: When a quitclaim or waiver is invalid, the one who received the
compensation must return or offset the compensation given. And since respondent
already received 150, 000 and such amount was more than the total monetary
awards as determined by the labor arbiter, the respondent already satisfied the
unpaid wages and other labor benefits concerned. (Arlo Aluminum Inc. vs. Pinon,
G.R. No. 215874, 05 July 2017)

Part II -LABOR LAW Q & A (Justice Del Castillo Labor Cases)

1. Q: Jack Valencia (Valencia) filed a Complaint for underpayment and non-

payment of labor standards benefits, damages and attorney’s fees against
Classique Vinyl and its owner Chan and/or Cantingas Manpower Services
(CMS). When Valencia, however, asked permission from Chang to attend the
hearing in connection with the said complaint, the latter allegedly scolded
him and told him not to report for work anymore. Hence, Valencia amended
his complaint to include illegal dismissal. Was Valencia an employee of
Classique Vinyl?

A: No. It is an oft-repeated rule that in labor cases, 'the quantum of proof

necessary is substantial evidence, or such amount of relevant evidence
which a reasonable mind might accept as adequate to justify a conclusion.’
‘The burden of proof rests upon the party who asserts the affirmative of an
issue’. Since it is Valencia here who is claiming to be an employee of
Classique Vinyl, it is thus incumbent upon him to proffer evidence to prove
the existence of employer-employee relationship between them. He "needs

22 | P a g e
 to show by substantial evidence that he was indeed an employee of the
company against which he claims illegal dismissal." Corollary, he has the
burden to prove the elements of an employer-employee relationship, viz.:
(1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power of control. JACK
VALENCIA v. CLASSIQUE VINYL PRODUCTS CORPORATION, JOHNNY CHANG
(Owner) and/or CANTINGAS MANPOWER SERVICES, G.R. No. 206390,
January 30, 2017, DEL CASTILLO, J.

2. Q: MORESCO II, a rural electric cooperative, hired Cagalawan as a

Disconnection Lineman. Thereafter, he was designated as Acting Head of
the disconnection crew in Area III sub-office of MORESCO II in Balingasag,
Misamis Oriental (Balingasag sub-office). In a Memorandum, MORESCO II
General Manager Amado B. Ke-e (Ke-e) transferred Cagalawan to Area I
sub-office in Gingoog City, Misamis Oriental (Gingoog sub-office) as a
member of the disconnection crew. In a letter, Cagalawan assailed his
transfer claiming he was effectively demoted from his position as head of
the disconnection crew to a mere member thereof.
Cagalawan eventually stopped reporting for work. He then filed a Complaint
for constructive dismissal before the Labor Arbiter. The Labor Arbiter
rendered a Decision declaring that Cagalawan’s transfer constituted illegal
constructive dismissal for failure to MORESCO II to file its Position Paper.
MORESCO II appealed the Labor Arbiter’s Decision. Should the position
paper of MORESCO II be allowed?

A: No. In labor cases, strict adherence with the technical rules is not
required. This literal policy, however, should still conform with the
rudiments of equitable principles of law. For instance, belated submission of
evidence may only be allowed if the delay is adequately justified and the
evidence is clearly material to establish the party's cause. In the present
case, MORESCO II did not cite any reason why it had failed to file its
position paper or present its cause before the Labor Arbiter despite
sufficient notice and time given to do so. Only after an adverse decision was
rendered did it present its defense and rebut the evidence of Cagalawan by
alleging that his transfer was made in response to the letter-request of the
area manager of the Gingoog sub-office asking for additional personnel to
meet its collection quota. To our mind, however, the belated submission of
the said letter-request without any valid explanation casts doubt on its
credibility, especially so when the same is not a newly discovered evidence.
MISAMIS ORIENTAL II ELECTRIC SERVICE COOPERATIVE (MORESCO II) v.
VIRGILIO M. CAGALAWAN, G.R. No. 175170, September 5, 2012, DEL
CASTILLO, J.

3. Q: Cathay Pacific Steel Corporation hired Dominador Malabunga, Jr. on as

one of its machinists. Cathay served a written Notice charging Dominador of
stealing the aluminum level issued to the Fabrication Unit and returning the
passing it off as the one that was issued to him previously. In his statement,
warehouse foreman Salvador Narvasa claimed that on July 13, 2004, he
discovered an untarnished ("malinis") aluminum level which Dominador
apparently returned and is not the same one allegedly stolen because the
reported missing item had a dent in it. Is Dominador guilty of theft?

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 A: No. The consistent rule is that if doubts exist between the evidence
presented by the employer and the employee, the scales of justice must be
tilted in favor of the latter. Narvasa positively declare, d that what
Dominador returned, and what he and co-warehouseman Dennis Zapanta
actually received from Dominador, was an untarnished (malinis) and unique
aluminum level. In other words, it did not contain any engraving nor bear
any dent, damage or scratch. This directly contradicted the claims of the
Fabrication Unit workers. DOMINADOR MALABUNGA, JR. v. CATHAY PACIFIC
STEEL CORPORATION, G.R. No. 198515, June 15, 2015, DEL CASTILLO, J.

4. Q: St. Mary’s Academy hired respondents Calibod, Laquio, Santander, Saile,

and Montederamos as classroom teachers, and Palacio, as guidance
counselor. In separate letters dated March 31, 2000, however, St. Mary’s
informed all the Calibod et.al that their re-application for school year 2000-
2001 could not be accepted because they failed to pass the Licensure
Examination for Teachers (LET). Calibod et.al, together with four other
classroom teachers namely Padilla, Andalahao, Decipulo, and Marlyn Palacio
(similarly dismissed on the same ground), filed a complaint contesting their
termination as highly irregular and premature.
Was the dismissal of Calibod et al. valid?

A: No. The Court will not hesitate to defend the worker’s constitutional right
to security of tenure. After all, the interest of the workers is paramount as
they are regarded with compassion under the policy of social justice. The
dismissal of Calibod, Laquio, Santander, and Montederamos was premature
and it defeated their right to security of tenure, while that of Saile has legal
basis for lack of the required qualification needed for continued practice of
teaching.
Pursuant to RA 7836 and DECS Memorandum No. 10, S. 1998, effective
September 20, 2000, only holders of valid certificates of registration, valid
professional license, and valid special/temporary permits can engage in
teaching in both public and private schools. Clearly, Calibo et.al had until
September 19, 2000 to comply with the mandatory requirement to register
as professional teachers by taking and passing the LET. However, the law
still allows those who failed the licensure examination between the years
1996 to 2000 to continue teaching if they obtain temporary or special
permits as para-teachers. In other words, the law has provided a specific
timeframe within which the teachers could comply, and St. Mary’s has no
right to deny them of this privilege. (ST. MARY'S ACADEMY of DIPOLOG CITY
v. PALACIO, ET AL., G.R. No. 164913, September 8, 2010, DEL CASTILLO, J.)

5. Q: GPGS is a licensed recruitment or placement agency in the Philippines

while Saudi Aramco is its counterpart in Saudi Arabia. On the other hand,
Industrial & Management Technology Methods Co. Ltd. (ITM), a company
existing in Saudi Arabia, is the principal of GPGS.
GPGS employed Rutcher Dagasdas (Dagasdas) as Network Technician to be
deployed in Saudi Arabia under a one-year contract. However, he was only
recruited as such "on paper" since he was in fact accepted as
Superintendent in the field of Civil Engineering. Dagasdas arrived in Saudi
Arabia. Thereafter, he signed with ITM a new contract which stipulated that
he was hired as Superintendent. The new contract stipulated new conditions
and Dagasdas was eventually repatriated to the Philippines. Was Dagasdas
validly dismissed?

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 A: No. Since the employment contracts of OFWs are perfected in the
Philippines, and following the principle of lex loci contractus, these
contracts are governed by our laws, primarily the Labor Code of the
Philippines and its implementing rules and regulations. Thus, even if a
Filipino is employed abroad, he or she is entitled to security of tenure,
among other constitutional rights. The new contract between ITM and
Dagasdas is void. The contract is in clear violation of Dagasdas’ right to
security of tenure. There is no clear justification for the dismissal of
Dagasdas other than the exercise of ITM's right to terminate him within the
probationary period without notice. To allow employers to reserve a right to
terminate employees without cause violates the guarantee of security of
tenure. RUTCHER DAGASDAS v. GRAND PLACEMENT AND GENERAL
SERVICES, G.R. No. 205727, January 18, 2017, DEL CASTILLO, J.

6. Q: Maritess Martinez and her daughter, Jenilyn Martinez, were charged with
seven counts of Estafa before the RTC of Manila. On even date, appellant
together with her children Jenilyn Martinez and Julius Martinez, were also
charged with the crime of Illegal Recruitment in large scale.
Martinez maintains that she could not be convicted of Illegal Recruitment in
a large scale because she merely assisted complainants in their applications
with the recruitment agency. Is Martinez guilty of Illegal Recruitment in a
large scale?

A: Yes. Even conceding that appellant merely referred the complainants to

JH Imperial Organization Placement Corp., the same still constituted an act
of recruitment. As explicitly enumerated in Article 13(b) of the Labor Code,
"recruitment and placement" includes the act of making referrals, whether
for profit or not. PEOPLE OF THE PHILIPPINES v. MARITESS MARTINEZ Y
DULAY, G.R. No. 158627, March 05, 2010, DEL CASTILLO, J.

7. Q: Five complainants, met with Angel and Vicenta on separate occasions at

Plaza Ferguzon, Malate, Manila to apply for overseas employment. Vicenta
representing himself to have a tie-up with some Japanese firms, promised
them employment in Japan as conversion mechanics, welders, or fitters for
a fee. They also promised that they could facilitate private complainants'
employment as direct hires and assured their departure within three weeks.
However, after the private complainants paid the required fees ranging from
P18,555.00 to P25,000.00, appellants failed to secure any overseas
employment for them. Are Angel and Vicenta guilty of illegal recruitment in
large scale?

A: Yes. The offense of illegal recruitment in large scale has the following
elements: (1) the person charged undertook any recruitment activity as
defined under Section 6 of RA 8042; (2) accused did not have the license or
the authority to lawfully engage in the recruitment of workers; and, (3)
accused committed the same against three or more persons individually or
as a group. These elements are obtaining in this case. Suffice it to say that
money is not material to a prosecution for illegal recruitment considering
that the definition of "illegal recruitment" under the law includes the phrase
"whether for profit or not." PEOPLE OF THE PHILIPPINES v. ANGEL MATEO Y
JACINTO AND VICENTA LAPIZ Y MEDINA, G.R. No. 198012, April 22, 2015,
DEL CASTILLO, J.

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 8. Q: Olarte was deployed as a domestic helper to Hail, Saudi Arabia for a
contract term of two years. Per her employment contract, she was to serve
her employer, (Fahad) for a basic monthly salary of US$200.00. Fahad’s
information sheet, on the other hand, provides that there are two adults and
three children living in his household and that no disabled or sick person is
to be put under Olarte’s care.
Upon arriving in Fahad’s home, Olarte was surprised that there were four
children with one suffering from serious disability. She was paid her
monthly salary and her health condition deteriorated due to her work
conditions. She was maltreated but she finally escaped from her employer.
Olarte filed a Complaint for illegal dismissal, damages, attorney’s fees and
refund of placement fees against her foreign employer Fahad and
Nahas/PETRA/Royal Dream. Whether Royal Dream is solely responsible for
Olarte’s deployment?

A: NO. Nahas’ solidary liability with Royal Dream is in accordance with

Section 64 of the Omnibus Rules and Regulations Implementing the Migrant
Workers and Overseas Filipinos Act of1995 (RA 8024). Under Section 64 of
the Omnibus Rules and Regulations Implementing the Migrant Workers and
Overseas Filipinos Act of1995 (RA 8024), the liability of the
principal/employer and the recruitment placement agency on any and all
claims under this Rule shall be joint and solidary. If the
recruitment/placement agency is a juridical being, the corporate officers
and directors and partners as the case may be, shall themselves be jointly
and solidarily liable with the corporation or partnership for the aforesaid
claims and damages. MA. CONSOLACION M. NAHAS, doing business under
the name and style PERSONNEL EMPLOYMENT AND TECHNICAL
RECRUITMENT AGENCY v. JUANITA L. OLARTE, G.R. No. 169247, June 2,
2014, DEL CASTILLO, J.

9. Q: Canoy and Pigcaulan were both employed by SCII as security guards and
were assigned to SCIIs different clients. Subsequently, however, Canoy and
Pigcaulan filed with the Labor Arbiter separate complaints for
underpayment of salaries and non-payment of overtime, holiday, rest day,
service incentive leave and 13th month pays. TheLabor Arbiter awarded
them their monetary claims and held that the payroll listings presented by
the respondents did not prove that Canoy and Pigcaulan were duly paid as
same were not signed by the latter or by any SCII officer. Is Canoy entitled
to payment of their monetary claims?

A: Yes, it is not for an employee to prove non-payment of benefits to which

he is entitled by law. Rather, it is on the employer that the burden of
proving payment of these claims rests. The burden of proving payment of
these monetary claims rests on SCII, being the employer. It is a rule that
one who pleads payment has the burden of proving it. Even when the
plaintiff alleges non-payment, still the general rule is that the burden rests
on the defendant to prove payment, rather than on the plaintiff to prove
non-payment. Since SCII failed to provide convincing proof that it has
already settled the claims, Pigcaulan should be paid his holiday pay, service
incentive leave benefits and proportionate 13th month pay for the year
2000. ABDULJUAHID R. PIGCAULAN v. SECURITY AND CREDIT

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 INVESTIGATION, INC. and/or RENE AMBY REYES, G.R. No. 173648, January
16, 2012, DEL CASTILLO, J.

10. Q: The late Delfin Dela Cruz was contracted for the position of oiler by
Philippine Transmarine Carriers, Inc., a local manning agent for and in
behalf of the latter’s principal, Tecto Belgium N.V. As required by law and by
the employment contract, Delfin underwent a Pre-Employment Medical
Examination (PEME) and was declared Fit for Sea Service. He immediately
embarked the vessel “Lady Hilde” while performing his regular duties on
board, he was hit by a metal board on his back. He, thereafter, requested
medical attention and was given medications and advised to be given light
duties for the rest of the week. He was eventually signed off but his health
deteriorated after two years.
Believing that he contracted the said disease during the time that he was on
board, he filed a complaint before the NLRC to claim payment for sickness
allowance and disability compensation.. During the pendency of the case.
Delfin passed away. Are the heirs of Delfin entitled to permanent disability
benefits and sickness allowance?

A: No, the petitioners are not entitled. First, the fact that Delfin passed his
PEME is of no moment in this case. The Pre-Employment Medical
Examination (PEME) merely determines whether one is “fit to work” at sea
or “fit for sea service,” it does not state the real state of health of an
applicant. In short, the “fit to work” declaration in the respondent’s PEME
cannot be a conclusive proof to show that he was free from any ailment
prior to his deployment
Second, while Section 20 (B) of the 1996 POEA SEC demonstrates that the
1996 POEA SEC covers all injuries or illnesses occurring in the lifetime of
the employment contract, the seafarer still has to prove that his injury or
illness was acquired during the term of employment to support his claim for
disability benefits and sickness allowance. The burden of proving
entitlement to disability benefits lies on petitioners for whoever claims
entitlement to the benefits provided by law should establish his right to the
benefits by substantial evidence. Absent a showing thereof, any decision set
forth will only be based on unsubstantiated allegations. Thus, they must
establish that Delfin suffered or contracted his injury or illness which
resulted in his disability during the term of the employment contract. An
examination of the records, however, shows that petitioners failed to
discharge such burden. THE HEIRS OF THE LATE DELFIN DELA CRUZ,
represented by his SPOUSE, CARMELITA DELACRUZ v. PHILIPPINE
TRANSMARINE CARRIERS, INC., represented by MR. CARLOS C. SALINAS
and/or TECTO BELGIUM N.V., G.R. No. 196357, April 20, 2015, DEL
CASTILLO, J.

11.Q: Dohle-Philman Manning Agency Inc (DOHLE), employed Andres

Gazzingan as messman on board the vessel M/V Gloria. Prior to his
employment, Gazzingan underwent pre-employment medical examination
which yielded normal results except for a finding of left ventricular
hypertrophy in his ECG test. Gazzingan was pronounced fit for sea duty.
During his employment, Gazzingan experienced chest pains which required
him to be medically repatriated back to the Philippines. A company-
designated physician declared that Gazzingan is suffering from a non-work-
related illness. This prompted DOHLE to cease from shouldering Gazzingan’s

27 | P a g e
 medical bills, causing his discharge from the hospital. Gazzingan filed a
complaint with the LA for non-payment or under payment of wages,
sickness allowance, disability benefits and reimbursement of medical
expenses and attorney’s fees. Whether the illness is work-related and
therefore compensable?

A: Yes. Gazzingan’s 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 performed most duties in the ship’s
steward department. He is bound to suffer chest and back pains, which
could have caused or aggravated his illness. Gazzingan’s strenuous duties
caused him to suffer physical stress which exposed him to injuries. His
employment has contributed to some degree to the development of his
disease. Under the Philippine Overseas Employment Administration-
Standard Employment Contract (POEA-SEC), an illness suffered by a
seafarer during the term of his contract is presumed compensable. DOHLE-
PHILMAN MANNING AGENCY, INC., DOHLE (IOM) LIMITED v. HEIRS of
ANDRES G. GAZZINGAN, represented by LENIE L. GAZZINGAN, G.R. No.
199568, June 17, 2015, DEL CASTILLO, J.

12. Q: New Filipino Maritime Agencies, Inc. (NFMA), for and on behalf of St.
Paul Maritime Corp. (SPMC) hired Simon Vincent Datayan II as deck cadet
on board Corona Infinity. Sometime thereafter the Master conducted an
emergency fire drill in which the crew participated. After that, a crew
meeting was held in which he was reprimanded for his poor performance.
Just before the meeting was concluded, Simon left and apparently jumped
overboard. The vessel retraced its course to where he fell. The Master also
informed the Japan Coast Guard about the incident. Simon was declared
missing and was presumed dead.
His father, Vincent, filed a complaint for death benefits and attorney’s fees
against NFMA, Taiyo Nippon Kisen Co., Ltd., and Angelina T. Rivera
contending that Simon’s death was due to the master’s negligence and
instruction in conducting the emergency fire drill at the time when the
water temperature was expected to cause hypothermia. Is Datayan entitled
to death benefits?

A: NO, the death of a seafarer during the term of his employment makes his
employer liable for death benefits. However, no compensation or benefits
shall arise in case of death of a seafarer resulting from his willful act,
provided that the employer could prove that such death is attributable to
the seafarer. The fact that Simon committed suicide is bolstered by the
suicide note that he executed. The suicide note is informative as to why
Simon committed suicide. He declined to join the party held prior to the drill
and was reprimanded for his poor performance in said drill. It can, thus, be
inferred from the note that he blamed himself for the difficulties he
assumed to have caused his colleagues. As such, to refute NFMA’ position
that Simon committed suicide, the burden of evidence shifts to Vincent.
NEW FILIPINO MARITIME AGENCIES, INC. TAIYO NIPPON KISEN CO., LTD.
and ANGELITA T. RIVERA v. VINCENT DATAYAN G.R. No. 202859, November
11, 2015, DEL CASTILLO, J.

13. Q: Wallem Maritime Services, Inc. (WMS), for and in behalf of its foreign
principal Wallem Shipmanagement Ltd. (WSL), hired respondent Edwinito

28 | P a g e
 Quillao as fitter aboard the vessel Crown Garnet for a period of 9 months.
He joined the vessel on October 4, 2008. In April 2009, he purportedly
noticed numbness and weakness of his left hand. Respondent stated that he
signed off from the vessel on July 13, 2009.
Upon arrival in the Philippines on July 15, 2009, he was referred to the
company-designated physician Dr. Estrada. He underwent carpal tunnel
surgery on his left hand, and physical therapy (PT) sessions for his cervical
and lumbar condition. Because of complaint for low back pain, Dr. Estrada
advised respondent to defer PT sessions and seek the opinion of an
orthopedic specialist. He was also advised to continue his PT sessions until
March 15, 2010.
Respondent claimed for disability benefits. Dr. Estrada gave the respondent
a final disability rating of Grade 10 on March 12, 2010. In August 2011,
respondent consulted Dr. Runas, an independent orthopedic surgeon, who
opined that respondent "is not fit for further sea duty permanently in
whatever capacity with a status equivalent to Grade 8" Impediment.
Hence, respondent claims that he was entitled to permanent and total
disability benefits. Is Quillao is entitled to permanent and total disability
benefits?

A: No. At the time of the filing of the complaint, the respondent has no
cause of action because the company-designated physician has not yet
issued an assessment on respondent's medical condition; moreover the
240-day maximum period for treatment has not yet lapsed. The records
clearly show that respondent was still undergoing treatment when he filed
the complaint on November 23, 2009 for disability benefits. And, it was only
a day after its filing that respondent requested from the company-
designated doctor the latter's assessment on his medical condition. In other
words, he filed the complaint within the 240-day period while he was still
under the care of Dr. Estrada and has not even consulted his doctor-of-
choice before instituting his complaint for disability benefits. Thus, the
complaint was premature. (WALLEM MARITIME SERVICES, INC.,
REGINALDO A. OBEN AND WALLEM SHIPMANAGEMENT, LTD. v. EDWINITO
V. QUILLAO G.R. No. 202885, January 20, 2016, DEL CASTILLO, J.)

14. Q: Petitioner Medline Management, Inc. (MMI), hired Juliano Roslinda

(Juliano) to work on board the vessel MV Victory. His contract was approved
by POEA. After several months of extension, was discharged. Months after
his repatriation, Juliano consulted Dr. Pamela R. Lloren (Dr. Lloren) of
Metropolitan Hospita. In a Medical Certificate issued by Dr. Lloren, the
condition of Juliano required hemodialysis which was initially done twice a
week for a period of two months and then once every 10 days. Thereafter,
Juliano died. Subsequently, his wife and son (respondents herein), filed a
complaint against MMI for payment of death compensation, reimbursement
of medical expenses, damages, and attorney's fees before the Labor
Arbitration.
Instead of filing an answer, MMI filed a Motion to Dismiss on the grounds of
lack of jurisdiction, inter alia. They opined that the Labor Arbiter had no
jurisdiction because there exists no employer-employee relationship
between the parties. Are the respondent-heirs entitled to the death benefits
provided under the POEA Standard Employment Contract?

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 A: NO. If a seafarer dies after the termination of his contract of
employment, the Court can only commiserate with his heirs because it has
no alternative but to declare that his beneficiaries are not entitled to the
death benefits provided in the Philippine Overseas Employment
Administration (POEA) Standard Employment Contract (SEC). (MEDLINE
MANAGEMENT INC. and GRECOMAR SHIPPING AGENCY v. GLICERIA
ROSLINDA and ARIEL ROSLINDA, G.R. No. 168715, September 15, 2010,
DEL CASTILLO, J.)

15. Q: Saso (Saso) was engaged by 88 Aces Maritime Services, Inc. (88 Aces)
as a fisherman on board the latter's fishing vessel in Taiwan. The
employment was for a period of 24 months. Not long after his deployment,
Saso figured in an accident on board the vessel. He was thereafter
repatriated and arrived in the country in crutches.
Saso claimed that upon his arrival in the Philippines, respondents
already left him on his own. He then filed before the Labor Arbiter (LA) a
Complaint for Disability Benefits, Reimbursement of Medical Expenses,
Sickness Allowance, Damages and Attorney's Fees against 88 Aces.
Questions:
(1) Whether or not the absence of post-employment
examination defeats Saso's right to claim for compensation
and benefits.
(2) Whether or not Saso is entitled to toted and permanent
disability benefits.
(3) Whether or not Saso's non-entitlement to total and
permanent disability benefit rules out his right to the other
benefits provided for by the POEA-SEC.

A: (1) NO. As per the portions of Section 20(B) of the 2000 Philippine
Overseas Employment Administration-Standard Employment Contract
(POEA-SEC), the seafarer shall submit himself to a post-employment
medical examination by a company-designated physician within three
working days upon his return except when he is physically incapacitated to
do so, in which case, a written notice to the agency within the same period
is deemed as compliance. Failure of the seafarer to comply within the
mandatory reporting requirement shall result in the forfeiture of the right to
claim the above benefits. Saso's willingness to undergo a post-medical
examination despite being told by respondents to just shoulder his medical
expenses, contrary to the claim of respondents, is shown by the fact that on
the same day, he had himself medically examined in the Philippine
Orthopedic Center. Also, none other than respondents' own evidence
bolsters his allegation. One of their evidence was an acknowledgment
receipt showing that respondents reimbursed Saso for the medical expenses
he incurred the same date that he claims to have reported to the office of 88
Aces for post-medical examination.

(2) NO. As the relevant provisions of the Labor Code and the POEA SEC
operate, the seafarer, upon sign-off from his vessel, must report to the
company-designated physician within three (3) days from arrival for
diagnosis and treatment. For the duration of the treatment but in no case to
exceed 120 days, the seaman is on temporary total disability as he is totally
unable to work. He receives his basic wage during this period until he is
declared fit to work or his temporary disability is acknowledged by the

30 | P a g e
 company to be permanent, either partially or totally, as his condition is
defined under the POEA Standard Employment Contract and by applicable
Philippine laws. If the 120 days initial period is exceeded and no such
declaration is made because the seafarer requires further medical attention,
then the temporary total disability period may be extended up to a
maximum of 240 days, subject to the right of the employer to declare within
this period that a permanent partial or total disability already exists. The
seaman may of course also be declared fit to work at any time such
declaration is justified by his medical condition.
Unfortunately for Saso, none of the above instances justifies his claim
for total and permanent disability benefits. As may be recalled, he filed his
Complaint after a mere 105 days from his repatriation. Clearly, the 120-day
period had not yet lapsed at that time. Moreover, the company-designated
physician had not yet issued any declaration as to his fitness or disability.

(3) NO. Where a seafarer suffers work-related injury or illness during the
term of his contract, the employer under the POEA-SEC has three separate
and distinct liabilities to the former, to wit: (1) provide, at its cost, for the
medical treatment of the repatriated seafarer for the illness or injury that
he suffered on board the vessel until the seafarer is declared fit to work or
the degree of his disability is finally determined by the company-designated
physician, conditioned upon the 3-day mandatory reporting requirement;
(2) provide the seafarer with sickness allowance that is equivalent to his
basic wage until the seafarer is declared fit to work or the degree of his
permanent disability is determined by the designated physician within the
period of 120 days or 240 days as the case may be; and, (3) once a finding
of permanent total or partial disability is made within the aforementioned
period, to pay the seafarer disability benefits for his permanent total or
partial disability caused by the work-related illness or injury.
While Saso is not entitled to total and permanent disability benefits,
this does not rule out his right to the other benefits provided for under the
POEA-SEC such as reimbursement for medical expenses, sickness allowance
and benefit for partial disability caused by a work-related injury. However,
before the Court dwells on Saso's entitlement to the said benefits, it must
first be emphasized that the company-designated physician already issued
an assessment of Saso's injury as Impediment Grade 13. (MARK ANTHONY
SASO v. 88 ACES MARITIME SERVICE, INC. AND/OR CARMENCITA A.
SARREAL AND LIN WEN YU, G.R. No. 211638, October 07, 2015, DEL
CASTILLO, J.)

16. Q: Philippine Transmarine Carriers, Inc. (PTC) employed Demetrio as chief

cook on board the vessel Amasis. Demetrio alleged that prior to his
deployment, he underwent pre-employment medical examination (PEME)
and was declared fit to work. Thereafter, while aboard the vessel, he
suffered from "vomiting, anorexia, weight loss, and palpitations followed by
dizziness and a feeling of lightheadedness.” As a result, he was medically
repatriated.
Demetrio claimed that despite medical examinations by the company-
designated physician, his illness persisted beyond 120 days. The PTC, the
NCM, and their officers contended that Demetrio's work involved food
preparation and not food intake; that the company-designated doctor found
that the cause of his illness was not work-related; that there was no
evidence to indicate that his working conditions increased the risk of

31 | P a g e
 contracting it; that there was no evidence that his illness was caused by the
food being served on the vessel; and, that no causal connection was
established between Demetrio's work as chief cook and his gastric or
stomach cancer. Is Demetrio entitled to disability benefits?

A: NO. Entitlement of seafarers to disability benefits is governed by medical

findings, law and contract. Considering that Demetrio did not suffer from an
occupational disease - or such diseases listed under Section 32-A of the
2000 POEA-SEC, he must establish that he suffered from a work-related
injury or illness to be entitled to disability benefits.
Under Section 20(B) of the 2000 POEA SEC, for disability to be
compensable, (1) the seafarer's injury or illness must be work-related; and
(2) the work-related injury or illness must have existed during the term of
his employment contract. Hence, the seafarer must not only show that he
suffers from an illness or injury that rendered him permanently or partially
disabled, but he must also prove that there is a causal relation between his
illness or injury and the work for which he had been engaged. The burden is
on the seafarer to prove that he suffered from a work-related injury or
illness during the term of his contract. (PHILIPPINE TRANSMARINE
CARRIERS, INC/NORWEGIAN CREW MANAGEMENT v. JULIA T. ALIGWAY (AS
SUBSTITUTE FOR HER DECEASED HUSBAND, DEMETRIO ALIGWAY, JR.), G.R.
No. 201793, Sep 16, 2015, DEL CASTILLO, J.)

17. Q: Doehle-Philman, in behalf of its foreign principal, Dohle Ltd., hired

respondent as oiler aboard the vessel MV CMA CGM Providencia. Before
deployment, respondent underwent pre-employment medical examination
(PEME) and was declared fit for sea duty. On June 1, 2008, he boarded the
vessel and in November 2008, he experienced heartache and loss of energy
after hammering and lifting a 120-kilogram machine. He was confined at a
hospital in Rotterdam where he was informed of having a hole in his heart.
On April 24, 2009, respondent’s personal doctor declared him not fit to
work. Respondent filed a Complaint for disability benefits.
Is the CA correct in setting aside the NLRC Resolutions denying
respondent’s claim for permanent and total disability benefits?

A: No. The Standard Terms and Conditions Governing the Employment of

Filipino Seafarers On- Board Ocean-Going Vessels (POEA-SEC), particularly
Section 20(B) thereof, provides that the employer is liable for disability
benefits when the seafarer suffers from a work-related injury or illness
during the term of his contract. To emphasize, to be compensable, the injury
or illness 1) must be work-related and 2) must have arisen during the term
of the employment contract.
In this case, considering that respondent did not suffer from any
occupational disease listed under Section 32-A of the POEA-SEC, then to be
entitled to disability benefits, the respondent has the burden to prove that
his illness is work-related. Unfortunately, he failed to discharge such
burden. "The constitutional policy to provide full protection to labor is
not meant to be a sword to oppress employers. The commitment of this
Court to the cause of labor does not prevent us from sustaining the
employer when it is in the right. We should always be mindful 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." DOEHLE-
PHILMAN MANNING AGENCY INC., DOHLE (IOM) LIMITED AND CAPT.

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 MANOLO T. GACUTA v. HENRY C. HARO, G.R. No. 206522, April 18, 2016, DEL
CASTILLO, J.

18. Q: Respondent Aron S. Alarcon was hired by petitioner Grace Marine

Shipping Corporation for its foreign principal and was assigned as Messman
onboard the vessel M/V Sunny Napier II. After undergoing PEME, he was
declared fit to work. As Messman, respondent maintained messroom
sanitation but he developed a skin condition. Respondent was repatriated.
He was referred to the company-designated physician and was
subsequently diagnosed with "nummular eczema by the company-
designated dermatopathologist. Respondent filed a complaint against
petitioners for the recovery of US$60,000.00 permanent total disability
benefits before the NCMB.
NCMB ruled that complainant’s illness can be reasonably related to
his work as messman and he suffered permanent disability. It awarded
Grade 5 disability and ordered the payment of US$29,480.00 to
complainant. Is complainant entitled to disability benefit?

A: Yes. Adopting the pronouncement in Maersk in its entirety and applying

it to the present case, the Court finds that respondent’s psoriasis and
nummular eczema, which have not been cured, are work-connected and
thus compensable. He is unfit to continue his duties as messman, as his
illness prevents him from performing his functions as such. Since
respondent is entitled to a declaration of permanent total disability, the
corresponding benefit attached thereto in the amount of US$60,000.00
should be given to him and not US$29,480.00.
An employee’s disability becomes permanent and total when so
declared by the company-designated physician, or, in case of absence of
such a declaration either of fitness or permanent total disability, upon the
lapse of the 120 or 240-day treatment period, while the employee’s
disability continues and he is unable to engage in gainful employment
during such period, and the company-designated physician fails to arrive at
a definite assessment of the employee’s fitness or disability. (GRACE
MARINE SHIPPING CORPORATION and/or CAPT. JIMMY BOADO, v. ARONS.
ALARCON, G.R. No. 201536, September 9, 2015, DEL CASTILLO, J.)

19. Q: Respondent Edgar A. Balasta was hired by petitioner Fil-Pride Shipping

Company and assigned as Able Seaman onboard M/V Eagle Pioneer.
Respondent was declared fit to work after undergoing PEME but during his
deployment, he experienced chest pains, fatigue, and shortness of breath.
He was examined by a physician in China, and was diagnosed as having
myocardial ischemia and coronary heart disease. He was declared unfit for
duty and was recommended for repatriation.
Respondent filed a claim for permanent disability benefits with
petitioners, but the latter denied the same, thus he filed a complaint. The LA
ruled that the claim should be granted as his illness was work-
related/aggravated and while respondent was under the care of Dr. Cruz
from September 18, 2005 until April 19, 2006, the latter could have come up
with a declaration of fitness or disability, yet he did not.
NLRC reversed ruling that it is not work-related. However, the CA
held that respondent suffered permanent disability as a result of Dr. Cruz’s
failure to make a definite assessment of his condition within the statutory
120-day period prescribed under the labor laws, or a total of 213 days. The

33 | P a g e
 CA added that respondent’s illness was work-related. Whether or not the
illness is compensable and consequently, whether the respondent is entitled
to permanent disability benefits?

A: YES. In disability compensation, "it is not the injury which is

compensated, but rather it is the incapacity to work resulting in the
impairment of one’s earning capacity." Cardiovascular disease, coronary
artery disease, as well as other heart ailments was held to be compensable.
The company-designated physician must arrive at a definite
assessment of the seafarer's fitness to work or permanent disability within
the period of 120 or 240 days, pursuant to Article 192 (c)(l) of the Labor
Code and Rule X, Section 2 of the Amended Rules on Employees
Compensation (AREC). If he fails to do so and the seafarer's medical
condition remains unresolved, the latter shall be deemed totally and
permanently disabled. On the other hand, an employee's disability becomes
permanent and total even before the lapse of the statutory 240-day
treatment period, when it becomes evident that the employee's disability
continues and he is unable to engage in gainful employment during such
period because, for instance, he underwent surgery and it evidently appears
that he could not recover there from within the statutory period. FIL-PRIDE
SIDPPING COMPANY, INC., CAPTAIN NICOLAS T. DOLLOLASA and OCEAN
EAGLE SIDPMANAGEMENT COMPANY, PTE.LTD. v. EDGAR A. BALASTA, G.R.
No. 193047, March 3, 2014, DEL CASTILLO, J.:

20. Q: Respondent Jaleco was hired by Maersk-Filipinas Crewing, Inc.

(Maersk), on behalf of its foreign principal A.P. Moller A/S (Moller), as
Seaman on board the vessel "M/T Else Maersk." In February 2007,
respondent complained of intermittent pain on the left buttock radiating to
the lower back and left groin. In April 2007, respondent was examined in
Dubai, UAE, where the doctor diagnosed him with "acute lumbago." He was
declared unfit for duty.
Respondent was repatriated. Based on the test protocol and
interview, there are indicators that Mr. Jaleco is malingering and
exaggerating his symptoms. The essential feature is the intentional
production of exaggerated physical symptoms motivated by external
incentives - obtaining financial compensation and avoiding work.
Respondent filed a complaint for illegal dismissal, non-payment of
salaries/wages and other benefits, disability claims, medical expenses,
damages, and attorney's fees before the NLRC. The LA rendered a Decision
granting permanent total disability benefits in favor of respondent by
reason of his continued medical condition that rendered him incapacitated
for work for more than 120 days from the date he was medically
repatriated. Is respondent entitled to permanent total disability benefits?

A: No. The evidence indicates that the company-designated physician made

a categorical declaration relative to respondent's fitness to resume duty -
approximately one hundred and twenty-seven (127) days from his
repatriation. In his September 4, 2007 Progress Report, Dr. Alegre declared:
If a disability is to be assessed now, a disability grade 11 [would be
obtained] based on the POEA Contract. In addition, Dr. Alegre concluded -
after conducting extensive tests - that respondent was malingering or
feigning his illness.

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 Pursuant to Section 20(B)(3) of the POEA Standard Employment
Contract, the parties should have secured the opinion of a third doctor
jointly appointed by them, whose decision shall be final and binding.
However, this procedure was not observed, and instead, respondent went
on to file his labor complaint. Such misstep should prove costly for him.
(MAERSK-FILIPINAS CREWING, INC./A.P. MOLLER A/S, v. ROMMEL RENE O.
JALECO, G.R. No. 201945, September 21, 2015, DEL CASTILLO, J.)

21. Q: TSM Shipping Phils., for and in behalf of its foreign principal,
Dampskibsselskabet Norden A/S (DNAS), hired Louie Patiño as seaman for
the vessel Nord Nightingale. while working on board the vessel, Louie
injured. After extensive treatments and examinations, Dr. Cruz made his
interim assessment of Louie's disability under the POEA - Standard
Employment Contract at Grade 10, or loss of grasping power for small
objects of one hand.
Louie then filed on September 8, 2010 a complaint with the NLRC
against TSM for total and permanent disability benefits damages, and
attorney's fees. Louie consulted Dr. Escutin,an independent physician, who
assessed him to have permanent disability unfit for sea duty in whatever
capacity as a seaman.
Louie prayed for permanent total disability benefits in the sum of
US$80,000 under the Associated Marine Officers and Seamen's Union of the
Philippines Collective Bargaining Agreement (AMOSUP CBA) The Labor
Arbiter ruled in favor of Louie. On appeal, the NLRC agreed with the LA that
Louie is entitled to permanent total disability benefits but held that he
cannot claim benefits under the CBA there being no evidence that he was a
member of AMOSUP. It, thus, awarded him of total and permanent disability
benefits in the amount of US$60,000 under the POEA-SEC. The CA affirmed
NLRC’s decision. Is Louie entitled to total and permanent disability
compensation?

A: NO. The Louie failed to prove that he is covered by the AMOSUP CBA
hence his entitlement to disability benefits is governed by the POEA-SEC
and relevant labor laws, which are deemed written in his contract of
employment.
The rule is that a temporary total disability only becomes permanent
when the company-designated physician, within the 240-day period,
declares it to be so, or when after the lapse of the said period, he fails to
make such declaration.

The Court has held that non-observance of the requirement to have the
conflicting assessments determined by a third doctor would mean that the
assessment of the company-designated physician prevails. TSM SHIPPING
PHILS., INC. and/or DAMPSKIBSSELSKABET NORDEN A/S. and/or CAPT.
CASTILLO v. LOUIE PATIÑO, G.R. No. 210289, March 20, 2017, DEL
CASTILLO, J.

22. Q: Beosis Calo is an employee of Alpha Ship Management Corp, (Alpha),

Junel Chan and their foreign principal, Chuo-kaiun company limited (CKCL).
When they were in Chile, Calo was found to have kidney problems and
urinary tract infection. Due to these circumstances, he was declared fit for
work on light duty basis.

35 | P a g e
 When the ship reached to Japan, Calo was diagnosed with suspected renal
and/or ureter calculus and was declared unfit for work. Accordingly, Calo
was repatriated and was refereed to Dr. Cruz diagnosed Calo with a stone in
his left kidney. Calo consulted Dr. Vicaldo who claims that Calo was unfit for
work and that the illness was caused by Calo’s work as seaman.
The Labor Arbiter ruled that Calo suffered permanent disability
entitling him for disability benefits. NLRC reversed the decision arguing that
it permanent disability should be determined by Dr. Cruz who was the
company-designated physician and not Dr. Vicaldo. CA sought the reversal
of the Decision of the NLRC, arguing that Dr. Cruz’s findings are not
conclusive. Is Calo entitled to disability benefits?

A: YES, Calo is entitled to disability benefits. The treatment to Calo’s illness

lasted for more than a year, or the statutory period of 120 or 240-day period
provided for by the Labor Code. A day later than the statutory period raises
the presumption that the employee is permanently disabled.
Permanent total disability, provided for by the Labor Code, is the
temporary total disability for more than 120 days except as provided for in
the Rules. However, this is not the sole basis for determining employees’
rights as regards work-related injury, illness or death.
(ALPHA SHIP MANAGEMENT CORPORATION et al. v. ELEOSIS CALO, G.R.
No. 192034, January 13, 2014, DEL CASTILLO, J.)

23. Q: Petitioner Magsaysay Maritime Corporation employed respondent Rodel

Cruz as housekeeping cleaner on board the vessel Costa Fortuna. While
lifting heavy objects in the course of performing his duties, respondent
experienced low back pain. As a result, he was repatriated and was
immediately referred to Dr. Benigno A. Agbayani, the company-designated
doctor. Respondent's MRI scan revealed that he was afflicted with "Mild L4-
5 disc bulge but with no evidence of a focal disc herniation." Dr. Agbayani
diagnosed respondent with an interim disability rating.
After almost one year from respondent's repatriation, Dr.
Agbayani gave respondent a disability rating of Grade 8 for "moderate
rigidity or two third loss of motion or lifting power of the trunk."
Consequently, respondent filed a Complaint for permanent and total
disability benefits, sickness allowance, damages and attorney's fees against
petitioners. Respondent's physician-of-choice, Dr. Venancio P. Garduce (Dr.
Garduce), opined that it would be impossible for respondent to work as a
seaman and recommended a disability rating of Grade 3. Is respondent
entitled to disability compensation?

A: YES. The September 5, 2008 Report of the company-designated doctor

cannot be considered as material evidence that would support petitioners'
position. Dr. Agbayani’s Interim’s declaration is an initial determination of
respondent's condition for the time being.
The Court also gave emphasis to the finding of the CA that Dr.
Agbayani in fact issued his disability rating on June 1, 2009, almost a year
from respondent's repatriation. The company-designated doctor is expected
to arrive at a definite assessment of the seafarer's fitness to work or to
determine his disability within a period of 120 or 240 days from
repatriation.
The company-designated doctor is expected to arrive at a definite
assessment of the fitness of the seafarer to work or to determine the degree

36 | P a g e
 of his disability within a period of 120 or 240 days from repatriation, as the
case may be. If after the lapse of the 120/240-day period the seafarer
remains incapacitated and the company-designated physician has not yet
declared him fit to work or determined his degree of disability, the seafarer
is deemed totally and permanently disabled. (MAGSAYSAY MARITIME
CORPORATION v. RODEL A. CRUZ, GR No. 204769, June 06, 2016, DEL
CASTILLO, J.)

24. Q: Respondent hired petitioner as 2nd Assistant Engineer for nine months
aboard its vessel M/V Morelos. Before his embarkation on he was declared
medically fit to work. Petitioner complained of chest pain. He was confined
to a hospital in Mexico and was diagnosed with hypertensive crisis and high
blood pressure. Upon his expatriation , he was exmined by Dr. Nicomedes
Cruz, the company-designated physician, and treated him since then.
At a later time, petitioner consulted Dr. Mapapala of Jose Reyes
Memorial Medical Center and diagnosed him with Hypertensive
Cardiovascular Disease.
Dr. Cruz issued a certification declaring petitioner fit to work.
Unconvinced, petitioner consulted Dr. Rodrigo Guanlao from the Philippine
Heart Center who diagnosed him with Ischemic Heart Disease, and also
declared him unfit to work in any capacity.
Petitioner filed a complaint for recovery of disability benefits,
sickness allowance, attorney’s fees, and moral damages. The Labor Arbiter
ruled in favor of petitioner and awarded to the latter the remainder of his
sickness allowanceIs petitioner entitled to receive permanent disability
benefits?

A: Yes. Permanent disability is the inability of a worker to perform his job

for more than 120 days, regardless of whether or not he lose[s] the use of
any part of his body. Total disability, on the other hand, means the
disablement of an employee to earn wages in the same kind of work of
similar nature that he was trained for, or accustomed to perform, or any
kind of work which a person of his mentality and attainments could do. It
does not mean absolute helplessness. In disability compensation, it is not
the injury which is compensated, but rather it is the incapacity to work
resulting in the impairment of one's earning capacity. Thus, petitioner’s
disability is considered permanent and total because the fit to work
certification was issued by Dr. Cruz only on April 25, 2002, or more than 120
days after he was medically repatriated on October 8, 2001.
There is no merit in respondents' contention that the company-
designated physician's assessment that petitioner is fit to work makes him
ineligible to claim permanent disability benefits. In United Philippine Lines,
Inc. vs. Beseril, it was ruled that “[E]ven in the absence of an official finding
by the company-designated physicians that respondent is unfit for sea duty,
respondent is deemed to have suffered permanent disability.”

(CARMELITO N. VALENZONA v. FAIR SHIPPING CORPORATION and/or

SEJIN LINES COMPANY LIMITED, G.R. No. 176884, October 19, 2011, DEL
CASTILLO, J.)

25. Q: Pastor was repatriated was given a specific diagnosis as to his ailment
by the company-designated physician, Dr. Abesamis. Thereafter, he
continuously received medical treatment from Dr. Abesamis. He did not

37 | P a g e
 arrive at a definite assessment of respondent’s fitness to work or a
declaration of the existence of a permanent disability before the expiration
of the maximum 240-day medical treatment period. If the company-
designated physician failed to arrive a definite assessment of the seafarer’s
fitness within the period required, is the seafarer entitled to benefits?

A: Pastor’s disability became permanent and total as no declaration of

fitness to work was issued upon the expiration of the maximum 240-day
medical treatment period. Based on Article 192(c)(1) of the Labor Code and
Rule X, Section 2 of the Amended Rules on Employees Compensation, the
company-designated physician must arrive at a definite assessment of the
seafarer’s fitness to work or permanent disability within the period of 120
days, which was further extended to 240 days. The Court pronounced in
Vergara v. Hammonia Maritime Services, Inc., et al. that a temporary total
disability becomes permanent when so declared by the company-designated
physician within the period allowed, or upon expiration of the maximum
240-day medical treatment period in case of absence of a declaration of
fitness or permanent disability. (Centennial Transmarine vs. Pastor
Quiambao, 2015)

26. Q: Can Article 280 of the Labor Code (that hired party perform functions
necessary and desirable to the business operation of the hiring party) be
used as a yardstick for determining the existence of an employment
relationship?

A: No. Article 280 is not the yardstick for determining the existence of an
employment relationship because it merely distinguishes between two kinds
of employees, i.e., regular employees and casual employees, for purposes of
determining their rights to certain benefits, such as to join or form a union,
or to security of tenure. Article 280 does not apply where the existence of
an employment relationship is in dispute. (Valeroso vs. Skycable
Corporation, 2016)

27. Q: Hired party was engaged in the marketing rela estates, appointed as
marketing director for several years. Hired party is performing tasks, which
is subject to company rules, regulations, code of ethics, and periodic
evaluation. However, the contract conspicuously provides that “no
employer- employee relationship exists between” Hiring Party and the hired
party, as well as his sales agents. Is there an employer-employee
relationship?

A: None. The Agreement’s legal characterization of the nature of the

relationship cannot be conclusive and binding on the courts; x x x the
characterization of the juridical relationship and the Agreement embodied is
a matter of law that is for the courts to determine. At the same time,
though, the characterization the parties gave to their relationship in the
Agreement cannot simply be brushed aside because it embodies their intent
at the time they entered the Agreement, and they were governed by this
understanding throughout their relationship.

Not every form of control is indicative of employer-employee relationship. A

person who performs work for another and is subjected to its rules,
regulations, and code of ethics does not necessarily become an employee.

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 As long as the level of control does not interfere with the means and
methods of accomplishing the assigned tasks, the rules imposed by the
hiring party on the hired party do not amount to the labor law concept of
control that is indicative of employer-employee relationship. (Royal Homes
marketing vs. Alcantara, 2014)

28. Q: When is one considered a regular employee?

A: A regular employee 1) is engaged to perform tasks usually necessary or

desirable in the usual business or trade of the employer, unless the
employment is one for a specific project or undertaking or where the work
is seasonal and for the duration of a season; or 2) has rendered at least 1
year of service, whether such service is continuous or broken, with respect
to the activity for which he is employed and his employment continues as
long as such activity exists.

29. Q: Hiring party, manufacturer of plywood, employed the hired party as

“extra workers” but their assignments were necessary and desirable in the
business of the hiring party – they were assigned to boilers to manufacture
plywood for export and local sale. Hired party was eventually informed that
contractors who have no equipment and facilities of its own would handle
them. Is hired party a regular employee?

A: Yes. The test to determine whether an employee is regular is the

reasonable connection between the activities he performs and its relation to
the employer's business or trade, as in the case of respondents assigned to
the boiler section. Nonetheless, the continuous re-engagement of all
respondents to perform the same kind of tasks proved the necessity and
desirability of their services in the business of hiring party. Likewise,
considering that respondents appeared to have been performing their duties
for at least one year is sufficient proof of the necessity, if not the
indispensability of their activities in hiring party’s business. (Vicmar vs.
Elarcosa, 2015)

30.Q: Who is a project employee?

A: A project employee under Article 280 (now Article 294) of the Labor
Code, as amended, is one whose employment has been fixed for a specific
project or undertaking, the completion or termination of which has been
determined at the time of the engagement of the employee.

31.Q: Hired party is being made to sign employment contracts for a fixed
period as project employees, but never ceased to work for the hiring party
for several years. Is hired party a regular employee?

A: No. By voluntarily entering into the project employment contracts, hired

party is deemed to have understood that its employment is coterminous
with the particular project indicated therein. It cannot expect to be
employed continuously beyond the completion of such project because a
project employment terminates as soon as it is completed. The fact that the
job for which the hired party was employed is usually necessary or desirable
in the business operation of the hiring party does not automatically imply
regular employment. While the tasks assigned to the hired party were

39 | P a g e
 indeed necessary and desirable in the usual business of hiring party, the
same were distinct, separate, and identifiable from the other projects or
contracts services.
The repeated and successive rehiring of hired party as project-based
employees does not also by and of it qualify them as regular employees.
Jurisprudence states that length of service (through rehiring) is not the
controlling determinant of the employment tenure of project- based
employees but, as earlier mentioned, whether the employment has been
fixed for a specific project or undertaking, with its completion having been
determined at the time of their engagement. Stated otherwise the rule that
employees initially hired on a temporary basis may become permanent
employees by reason of their length of service is not applicable to project-
based employees. (Herma Shipyard vs. Oliveros, 2017)

32. Q: If an employee is placed on a “floating status,” is he considered

constructively dismissed?

A: A floating status can ripen into constructive dismissal only when it goes
beyond the six-month period allowed by law.

33. Q: A security guard, petitioner was suspended from not wearing uniform
while on duty. His retirement certification indicates that he was terminated
by his agency. Was the security guard illegally dismissed by his security
agency?

A: No. Petitioner was suspended effective May 8, 2003. On June 2, 2003,

principal requested for his replacement. He then intimated his desire to
retire from service on June 17, 2003. These circumstances negate
petitioner’s claim that his services were terminated on May 7, 2003. Clearly,
there is no dismissal to speak of in this case. The security guard was only in
a floating status. Security guard cannot simply rely on this piece of
document since the fact of dismissal must be evidenced by positive and
overt acts of an employer indicating an intention to dismiss. “Such a
‘floating status’ is lawful and not unusual for security guards employed in
security agencies as their assignments primarily depend on the contracts
entered into by the agency with third parties. (Canedo vs. Kampilan
Security, 2013)

34. Q: Miss Q was hired as a private high school teacher on probationary basis
for three consecutive school years. Thereafter, the school did not renew
Miss Q’s contract. Was Miss Q illegally dismissed?
A: Yes. The completion of the three-year probationary period requirement of
teaching personnel are governed by Article 281 of the Labor code and
supplemented by Section 93 of the 1992 Manual of Regulations for Private
Schools. Here, reasonable standard as proper guidelines for performance
evaluation is necessary to be communicated and given to the teaching
personnel not only as evidence but also serves as its right to due process. In
this case, the absence of the proof that there are standards provided and
communicated to the teaching personnel violated its right to due process,
hence, dismissal is illegal. (CSR vs. Rojo, 2013)

35. Q: What are the factors to consider if one is a labor-only contractor?

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

36. Q: In a pending case, the contractor did not overcome the presumption that
it is a labor-only contractor, as it did not submit conclusive evidence of
financial capability, failed to show that it possessed substantial investment
as required by the elements, and hired personnel were performing activities
directly related to the main business of the principal. What is the status of
the contractor’s hired personnel?

A: The contractor is presumed to be labor-only contractor and their hired

personnel are considered as regular employees. (Petron Corporation vs.
Caberte et al., 2015)

37. Q: Who bears the burden of proof to prove that employee was not
terminated or dismissed or dismissal was legal?

A: The employer bears the burden. The employer cannot simply discharge
such burden by its plain assertion that it did not dismiss the employee; and
it is highly absurd if the employer will escape liability by its mere claim that
the employee abandoned his or her work. In fine, where there is no clear
and valid cause for termination, the law treats it as a case of illegal
dismissal.

38. Q: If the employer alleges abandonment, what does he need to prove?

A: Employer needs to prove by substantial evidence that employee had 1)

failed to report for work or had been absent without valid reason; and 2)
had a clear intention to discontinue his or her employment.

39. Q: What does the employee need to prove, in relation to its alleged
dismissal?

A: it is incumbent upon the employee to prove by substantial evidence the

fact that he was indeed illegally dismissed from employment. Illegal
dismissal must be established by positive and overt acts clearly indicative of
a manifest intention to dismiss. (Carique vs. Philippine Scout, 2015)

40. Q: Company policy dictates that on a daily basis, Salesmen/Account

Specialist is not allowed to leave the company premises until he settles the
account. Meanwhile, the company dismissed an employee for alleged past
unliquidated collections and cash shortages. Was the employee illegally
dismissed?

A: Yes. Within the context of said policy, it can be said that since petitioner
continued to work for CCBPI until June 2004, this should necessarily mean
that he was clear of daily cash and check accountabilities, including those
transactions covered by the charges against him. If not, the company
cashier would not have issued the required clearance and petitioner would

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 have been required to settle these shortages as soon as they were incurred.
Indeed, he would not have been allowed to leave company premises until
they were settled in accordance with company policy. And he would not
have been allowed to report for work the following day. (Garza vs. Coca
Cola Bottlers, 2014)

41. Q: Employee received substantial amount of money representing his

separation pay and other benefits and executed waiver and quitclaim. Is a
waiver and quitclaim valid?

A: Yes. The waiver and quitclaim is supported by a valuable consideration;

this valuable consideration being the separation pay itself. Not all waivers
and quitclaims are invalid as against public policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is
binding on the parties and may not later be disowned simply because of a
change of mind. It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of settlement
are unconscionable on its face, that the law will step in to annul the
questionable transaction. But where it is shown that the person making the
waiver did so voluntarily, with full understanding of what he was doing, and
the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as a valid and binding undertaking. (NESIC
vs Crisologo, 2015)

42.Q: Can a validly dismissed employee claim separation pay?

A: No. Parameters of awarding separation pay as a measure of financial

assistance was lain down in a case. The liberality of the law can never be
extended to the unworthy and undeserving. In several instances, the policy
of social justice has compelled this Court to accord financial assistance in
the form of separation pay to a legally terminated employee. This liberality,
however, is not without limitations. Thus, when the manner and
circumstances by which the employee committed the act constituting the
ground for his dismissal show his perversity or depravity, no sympathy or
mercy of the law can be invoked. (Quiambao vs Manila Electric, 2009)

43. Q: What constitutes abandonment?

A: To constitute abandonment, it is essential that an employee failed to

report for work without any valid and justifiable reason and that he had a
clear intention to sever the employment relationship by some overt act.
Mere failure to report for work after notice to return does not constitute
abandonment.

44. Q: What constitutes resignation?

A: Resignation is the voluntary act of an employee who is in a situation

where one believes that personal reasons cannot be sacrificed in favor of
the exigency of the service, and one has no other choice but to dissociate
oneself from employment. It is a formal pronouncement or relinquishment
of an office, with the intention of relinquishing the office accompanied by
the act of relinquishment. As the intent to relinquish must concur with the
overt act of relinquishment, the acts of the employee before and after the

42 | P a g e
 alleged resignation must be considered in determining whether he or she, in
fact, intended to sever his or her employment.

45. Q: Does expressions of gratitude and appreciation as well as manifestation

of regret in leaving the company gives the notion that an employee
voluntarily resigned?

A: Yes. (Malixi vs Mexicali Philippines, 2016)

46. Q: Is there constructive dismissal when a chief baker was reassigned as

utility/security personnel tasked to clean the outside vicinity of his
bakeshops and to maintain peace and order in the area?

A: Yes. There was constructive dismissal because the reassignment/transfer

amounted to demotion. Although there was no diminution in pay, there is
disparity between the duties and functions of chief baker to that of utility
personnel. There is change in the nature of the work that is demeaning and
humiliating work condition. (Julies Bakeshop v. Arnaiz, 2012)

47. Q: What constitutes demotion?

A: Demotion involves a situation in which an employee is relegated to a

subordinate or less important position constituting a reduction to a lower
grade or rank, with a corresponding decrease in duties and responsibilities,
and usually accompanied by a decrease in salary. When there is a demotion
in rank and/or a diminution in pay; when a clear discrimination,
insensibility or disdain by an employer becomes unbearable to the
employee; or when continued employment is rendered impossible,
unreasonable or unlikely, the transfer of an employee may constitute
constructive dismissal. (Julies Bakeshop vs Arnaiz, 2012)

48. Q: What is the test to determine the existence of constructive dismissal?

A: The test of constructive dismissal is whether a reasonable person in the

employee’s position would have felt compelled to give up his position under
the circumstances.

49. Q: Is the tearing of daily time records of employees by the employer

constitute constructive dismissal?

A: Yes, when Ang tore the respondents’ time cards to pieces, he virtually
removed them from Virose’s payroll and erased all vestiges of respondents’
employment; respondents were effectively dismissed from work. The act
may be considered an outright – not only symbolic – termination of the
parties’ employment relationship; the “last straw that finally broke the
camel’s back”, as respondents put it in their Position Paper. In addition,
such tearing of respondents’ time cards confirms petitioner’s vindictive
nature and oppressive conduct, as well as his reckless disregard for
respondents’ rights. (Vicente Ang vs. San Joaquin, Jr. and Fernandez, 2013)

50. Q: Is there a case of illegal constructive dismissal where an employee is

reassigned to a work station which makes the work condition unbearable?

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 A: Yes. Constructive dismissal exists where there is cessation of work
because continued employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank or a diminution in pay’ and
other benefits. Aptly called a dismissal in disguise or an act amounting to
dismissal but made to appear as if it were not, constructive dismissal may,
likewise, exist if an act of clear discrimination, insensibility, or disdain by an
employer becomes so unbearable on the part of the employee that it could
foreclose any choice by him except to forego his continued employment. In
cases of a transfer of an employee, the rule is settled that the employer is
charged with the burden of proving that its conduct and action are for valid
and legitimate grounds such as genuine business necessity and that the
transfer is not unreasonable, inconvenient or prejudicial to the employee. If
the employer cannot overcome this burden of proof, the employee’s transfer
shall be tantamount to unlawful constructive dismissal. (Ico vs. Systems
Technology Institute, 2014)

51. Q: Is there a guideline in the transfer of employee from one position to

another in order to avoid commission of illegal constructive dismissal?

A: Yes. Concerning the transfer of employees, these are the following

jurisprudential guidelines: (a) a transfer is a movement from one position to
another of equivalent rank, level or salary without break in the service or a
lateral movement from one position to another of equivalent rank or salary;
(b) the employer has the inherent right to transfer or reassign an employee
for legitimate business purposes; (c) a transfer becomes unlawful where it
is motivated by discrimination or bad faith or is effected as a form of
punishment or is a demotion without sufficient cause; (d) the employer
must be able to show that the transfer is not unreasonable, inconvenient, or
prejudicial to the employee. (ICT Marketing Services. Vs. Sales, 2015)

52. Q: In the employment contract, the respondents indicated that they have
the prerogative to assign the petitioner in any of its branch schools as
necessity demands. Petitioner instructor was given administrative functions
as head of education in one of the school’s branch. The instructor was
aware of the temporary nature of his work assignment. Is the transfer of
petitioner to one of the respondent’s school branches or tie-up schools
constitute constructive dismissal?

A: No. It is management prerogative for employers to transfer employees on

just and valid grounds such as genuine business necessity - financial
constraints. (Barroga vs. Data center College, 2011)

53. Q: Petitioners tendered their resignation. They were then given their
separation pay and other benefits. After which, they executed Release and
Quitclaims and then issued Separation Clearances. Almost 15 months after
their severance from employment, petitioners filed separate Complaints for
illegal dismissal, which were consolidated. Petitioners insist that they were
not given any choice but to resign after respondents informed them of the
impending closure of the branch and that they would not receive any
separation pay if the closure would precede their resignation. Were the
petitioners illegally dismissed?

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 A: No. Petitioners voluntarily resigned from employment. It appears that
petitioners, on their own volition, decided to resign from their positions
after being informed of the management’s decision that the Cebu branch
would eventually be manned by a mere skeletal force. As proven by the
email correspondences presented, petitioners were fully aware and had, in
fact, acknowledged that Cebu branch has been incurring losses and were
already unprofitable to operate. The employees who voluntarily resigned
and executed quitclaims are barred from instituting an action or claim
against their employer.
Justice is in every case for the deserving, to be dispensed in the light
of the established facts and the applicable law and doctrine, “Although we
are committed to protect the working class, it behooves us to uphold the
rights of management too if only to serve the interest of fair play. As applied
in this case, the employees who voluntarily resigned and executed
quitclaims are barred from instituting an action or claim against their
employer. (Auza vs. MOL Philippines, 2012)

54. Q: Iladan executed a resignation letter in her own handwriting. She also
accepted the amount of P35,000.00 as financial assistance and executed an
Affidavit of Release, Waiver and Quitclaim and an Agreement, as settlement
and waiver of any cause of action against respondents. The affidavit of
waiver and the settlement were acknowledged/subscribed before Labor
Attache Romulo on August 6, 2009, and duly authenticated by the Philippine
Consulate. Is there a voluntary resignation?

A: Yes. As the intent to relinquish must concur with the overt act of
relinquishment, the acts of the employee before and after the alleged
resignation must be considered in determining whether in fact, he or she
intended to sever from his or her employment. Absent any extant and clear
proof of the alleged coercion and threats Iladan allegedly received from
respondents that led her to terminate her employment relations with
respondents, it can be concluded that Iladan resigned voluntarily. (Iladan
vs. La Suerte International, 2016)

55. Q: Is loss of trust and confidence a valid ground for dismissal?

A: Yes. For loss of trust and confidence to be a valid ground for dismissal, it
must be based on a willful breach of trust and founded on clearly
established facts. A breach is willful if it is done intentionally, knowingly
and purposely, without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently. In addition, loss of
trust and confidence must rest on substantial grounds and not on the
employers’ arbitrariness, whims, caprices or suspicion. (Manila Electric vs.
Beltran, 2012)

56. Q: Is a selling teller a position of trust and confidence? If so, may he or she
be dismissed on the ground of loss of trust and confidence?

A: Yes. The position of a selling teller is a position of trust and confidence

since it requires the handling and custody of tickets issued and bets made in
the teller's station. To legally dismiss an employee on the ground of loss of
trust, the employer must establish that a) the employee occupied a position
of trust and confidence, or has been routinely charged with the care and

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 custody of the employer's money or property; b) the employee committed a
willful breach of trust based on clearly established facts; and, c) such loss of
trust relates to the employee's performance of duties. In fine, there must be
actual breach of duty on the part of the employee to justify his or her
dismissal on the ground of loss of trust and confidence. (JULIETA STA. ANA
v. MANILA JOCKEY CLUB, INC. G.R. No. 208459, February 15, 2017, First
Division, DEL CASTILLO, J)

Other relevant rulings:

It bears emphasizing that the right of an employer to dismiss its
employees on the ground of loss of trust and confidence must not be
exercised arbitrarily. For loss of trust and confidence to be a valid ground
for dismissal, it must be substantial and founded on clearly established
facts. Loss of confidence must not be used as a subterfuge for causes which
are improper, illegal or unjustified; it must be genuine, not a mere
afterthought, to justify earlier action taken in bad faith. Because of its
subjective nature, this Court has been very scrutinizing in cases of dismissal
based on loss of trust and confidence because the same can easily be
concocted by an abusive employer. (INTERADENT ZAHNTECHNIK
PHILIPPINES, INC., BERNARDINO G. BANTEGUI, JR. AND SONIA J.
GRANDEA. v. REBECCA F. SIMBILLO, G.R. No. 207315, November 23, 2016,
Second Division, DEL CASTILLO, J.)

In cases of dismissal for breach of trust and confidence, proof beyond

reasonable doubt of an employee's misconduct is not required. It is
sufficient that the employer had reasonable ground to believe that the
employee is responsible for the misconduct which renders him unworthy of
the trust and confidence demanded by his position. (MARY JUNE CELIZ, v.
CORD CHEMICALS, INC., LEONOR G. SANZ, AND MARIAN ONTANGCO, G.R.
No. 200352, July 20, 2016, Second Division, DEL CASTILLO, J.)

57. Q: What are the requisites for an employer to terminate the services of its
employee for the latter's misconduct or wilful disobedience of the lawful
orders of the employer or its representatives?

A: For wilful disobedience to constitute as a ground, it is required that: “(a)

the conduct of the employee must be wilful or intentional; and (b) the order
the employee violated must have been: (1) reasonable and lawful, (2)
sufficiently known to the employee, and (3) connected with the duties
which the employee has been engaged to discharge. Wilfulness must be
attended by a wrongful and perverse mental attitude rendering the
employee’s act inconsistent with proper subordination. The persistent
refusal of the employee to obey the employer’s lawful order amounts to
wilful disobedience. (TABUK MULTI-PURPOSE COOPERATIVE, INC.
(TAMPCO), JOSEPHINE DOCTOR and WILLIAM BAO-ANGAN v. MAGDALENA
DUCLAN G.R. No. 203005, March 14, 2016, Second Division, DEL CASTILLO,
J)

Other relevant ruling:

To justify wilful disobedience or insubordination as a valid ground for
termination, "the employee’s assailed conduct must have been willful [or]
characterized by a wrongful or perverse attitude and the order violated
must have been reasonable, lawful, made known to the employee, and must

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 pertain to the duties which he had been engaged to discharge." (EQUITABLE
PCI BANK (Now Banco De Oro Unibank, Inc.) vs. CASTOR A. DOMPOR, G.R.
Nos. 163293 & 163297, December 8, 2010, First Division, DEL CASTILLO, J.)

58. Q: May courts interfere with the dismissal of an employee?

A: Yes. Disciplinary action against an erring employee is a management

prerogative which, generally, is not subject to judicial interference.
However, this policy can be justified only if the disciplinary action is
dictated by legitimate business reasons and is not oppressive, as in this
case. (JIMMY ARENO, JR. vs. SKYCABLE PCC-BAGUIO, G.R. No. 180302,
February 5, 2010, Second Division, DEL CASTILLO, J)

Other relevant ruling:

Jurisprudence provides that an employer has a distinct prerogative
and wider latitude of discretion in dismissing a managerial personnel who
performs functions which by their nature require the employer’s full trust
and confidence. As distinguished from a rank and file personnel, mere
existence of a basis for believing that a managerial employee has breached
the trust of the employer justifies dismissal. Petitioner, in the present case,
was the CHR Director for Manufacturing. As such, she was directly
responsible for managing her own departmental staff. It is therefore
without question that hers is a managerial position saddled with great
responsibility. Because of this, petitioner must enjoy the full trust and
confidence of her superiors. (FLORDELIZA MARIA REYES-RAYEL v.
PHILIPPINE LUEN THAI HOLDINGS, CORPORATION/L&T INTERNATIONAL
GROUP PHILIPPINES, INC., G.R. No. 174893, July 11, 2012, First Division,
DEL CASTILLO, J.)

59. Q: Does a bus conductor hold a position of trust and confidence?

A: Yes. His position is imbued with trust and confidence because it involves
handling of money and failure to collect the proper fare from riding public
constitutes a grave offense which justifies his dismissal. (JERRY MAPILI v.
PHILIPPINE RABBIT BUS LINES, INC./NATIVIDAD NICSE, G.R. No. 172506,
July 27, 2011, First Division, DEL CASTILLO, J.)

60. Q: What are the requisites for an employee to be dismissed on the ground
of gross neglect of duty?

A: Gross neglect of duty denotes a flagrant and culpable refusal or

unwillingness of a person to perform a duty. It refers to negligence
characterized by the want of even slight care, acting or omitting to act in a
situation where there is a duty to act, not inadvertently but willfully and
intentionally, with a conscious indifference to consequences insofar as other
persons may be affected. To warrant removal from service, the negligence
should be gross and habitual. (PHILIPPINE NATIONAL BANK v. MARY
SHEILA ARCOBILLAS, G.R. No. 179648. August 7, 2013, Second Division,
DEL CASTILLO, J.)

61. Q: What is misconduct? What are the requisites to dismiss an employee on

the ground of serious misconduct?

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 A: Misconduct is defined as the transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment. For
serious misconduct to justify dismissal under the law, (a) it must be
serious, (b) must relate to the performance of the employees duties; and (c)
must show that the employee has become unfit to continue working for the
employer. (NAGKAKAISANG LAKAS NG MANGGAGAWA SA KEIHIN (NLMK-
OLALIA-KMU) v. KEIHIN PHILIPPINES CORPORATION, G.R. No. 171115,
August 9, 2010, First Division, DEL CASTILLO, J.)

62. Q: Does the mere filing of a criminal case justify the dismissal of an
employee on the ground of serious misconduct? How about an acquittal?

A: No. "[T]he quantum of proof which the employer must discharge is

substantial evidence. Substantial evidence is that amount of relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion, even if other minds, equally reasonable, might conceivably
opine otherwise." The mere filing of a formal charge, to our mind, does not
automatically make the dismissal valid. Evidence submitted to support the
charge should be evaluated to see if the degree of proof is met to justify
respondents’ termination. "Unsubstantiated suspicions, accusations, and
conclusions of employers do not provide for legal justification for dismissing
employees.” (GRAND ASIAN SHIPPING LINES, INC., EDUARDO P.
FRANCISCO and WILLIAM HOW vs. WILFREDO GALVEZ, JOEL SALES, et. al.,
G.R. No. 178184, January 29, 2014, Second Division, DEL CASTILLO, J.)

Conviction in a criminal case is not necessary to find just cause for

termination of employment. In Nicolas v. National Labor Relations
Commission, we held that an employee’s acquittal in a criminal case,
especially one that is grounded on the existence of reasonable doubt, will
not preclude a determination in a labor case that he is guilty of acts inimical
to the employer’s interests. Criminal cases require proof beyond reasonable
doubt while labor disputes require only substantial evidence. (RENO FOODS,
INC., and/or VICENTE KHU v. Nagkakaisang Lakas ng Manggagawa (NLM)-
Katipunan on behalf of its member, NENITA CAPOR, G.R. No. 164016, March
15, 2010, Second Division, DEL CASTILLO, J.)

63. Q: What is retrenchment? Explain.

A: Retrenchment is the termination of employment initiated by the employer

through no fault of and without prejudice to the employees. It is resorted to
during periods of business recession, industrial depression, seasonal
fluctuations, or during lulls occasioned by lack of orders, shortage of
materials, conversion of the plant to a new production program, or
automation. It is a management prerogative resorted to avoid or minimize
business losses, and is recognized by Article 283 of the Labor Code. To
effect a valid retrenchment, the following elements must be present: (1) the
retrenchment is reasonably necessary and likely to prevent business losses
which, if already incurred, are not merely de minimis, but substantial,
serious and real, or only if expected, are reasonably imminent as perceived
objectively and in good faith by the employer; (2) the employer serves
written notice both to the employee/s concerned and the DOLE at least one
month before the intended date of retrenchment; (3) the employer pays the

48 | P a g e
 retrenched employee separation pay in an amount prescribed by the Code;
(4) the employer exercises its prerogative to retrench in good faith; and (5)
the employer uses fair and reasonable criteria in ascertaining who would be
retrenched or retained. The losses must be supported by sufficient and
convincing evidence. The normal method of discharging this is by the
submission of financial statements duly audited by independent external
auditors. (LAMBERT PAWNBROKERS and JEWELRY CORPORATION v. HELEN
BINAMIRA, G.R. No. 170464, 12 July 2010, First Division, DEL CASTILLO, J.)

64. Q: What is redundancy? Explain.

A: Redundancy, on the other hand, exists when the service capability of the
workforce is in excess of what is reasonably needed to meet the demands of
the enterprise. A redundant position is one rendered superfluous by any
number of factors, such as over hiring of workers, decreased volume of
business, dropping of a particular product line previously manufactured by
the company, or phasing out of a service activity previously undertaken by
the business. Under these conditions, the employer has no legal obligation
to keep in its payroll more employees than are necessary for the operation
of its business. For the implementation of a redundancy program to be valid,
the employer must comply with the following requisites: (1) written notice
served on both the employees and the DOLE at least one month prior to the
intended date of termination of employment; (2) payment of separation pay
equivalent to at least one month pay for every year of service; (3) good
faith in abolishing the redundant positions; and (4) fair and reasonable
criteria in ascertaining what positions are to be declared redundant and
accordingly abolished. (LAMBERT PAWNBROKERS and JEWELRY
CORPORATION v. HELEN BINAMIRA, G.R. No. 170464, 12 July 2010, First
Division, DEL CASTILLO, J.)

65. Q: May the admission of a co-conspirator be used in the dismissal against

an employee?

A: In a labor case, the written statements of co-employees admitting their

participation in a scheme to defraud the employer are admissible in
evidence. The argument by an employee that the said statements constitute
hearsay because the authors thereof were not presented for their cross-
examination does not persuade, because the rules of evidence are not
strictly observed in proceedings before the NLRC, which are summary in
nature and decisions may be made on the basis of position papers. (VENUS
B. CASTILLO, ET AL. vs. PRUDENTIALLIFE PLANS, INC. ET AL., G.R. No.
196142, 26 March 2014, Second Division, DEL CASTILLO, J.)

66. Q: May the employer still be held liable for damages even if the employee is
dismissed for cause,?

A: Yes. Failure to comply strictly with the requirements of procedural due

process for dismissing an employee will not render such dismissal
ineffectual if it is based on a just or an authorized cause. The employer,
however, must be held liable for nominal damages for non-compliance with
the requirements of procedural due process. The existence of a just cause to
terminate an employment is one thing; the manner and procedure by which
such termination should be effected is another. If the dismissal is based on

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 a just cause under Article 282 of the Labor Code, as in this case, the
employer must give the employee two written notices and conduct a
hearing. The first written notice is intended to apprise the employee of the
particular acts or omissions for which the employer seeks her dismissal;
while the second is intended to inform the employee of the employer's
decision to terminate him. The employer bears the burden of proving
compliance with the above two-notice requirement. (ROWENA A. SANTOS v.
INTEGRATED PHARMACEUTICAL, INC. AND KATHERYN TANTIANSU, G.R. No.
204620, July 11, 2016, Second Division, DEL CASTILLO, J.)

Other relevant rulings:

In order to validly dismiss an employee, he must be accorded both

substantive and procedural due process by the employer. Procedural due
process requires that the employee be given a notice of the charge against
him, an ample opportunity to be heard, and a notice of termination. Even if
the aforesaid procedure is conducted after the filing of the illegal dismissal
case, the legality of the dismissal, as to its procedural aspect, will be upheld
provided that the employer is able to show that compliance with these
requirements was not a mere afterthought. (NEW PUERTO COMMERCIAL
and RICHARD LIM v. RODEL LOPEZ and FELIX GAVAN, G.R. No. 169999, July
26, 2010, First Division, DEL CASTILLO, J.)

In termination proceedings of employees, procedural due process

consists of the twin requirements of notice and hearing. The employer must
furnish the employee with two written notices before the termination of
employment can be effected: (1) the first apprises the employee of the
particular acts or omissions for which his dismissal is sought; and (2) the
second informs the employee of the employer’s decision to dismiss him. The
requirement of a hearing is complied with as long as there was an
opportunity to be heard, and not necessarily that an actual hearing was
conducted. (NEW PUERTO COMMERCIAL and RICHARD LIM v. RODEL LOPEZ
and FELIX GAVAN, G.R. No. 169999, July 26, 2010, First Division, DEL
CASTILLO, J.)

67. Q: May an employee who entered into a compromise agreement rescind the
same?

68. A: A compromise agreement, once approved, has the effect of res judicata
between the parties and should not be disturbed except for vices of consent,
forgery, fraud, misrepresentation, and coercion. A judgment upon
compromise is therefore not appealable, immediately executory, and can be
enforced by a writ of execution. However, this broad precept enunciated
under Article 2037 of the Civil Code has been qualified by Article 2041 of the
same Code which recognizes the right of an aggrieved party to either (1)
enforce the compromise by a writ of execution, or (2) regard it as rescinded
and insist upon his original demand, upon the other party’s failure or refusal
to abide by the compromise. In a plethora of cases, the Court has
recognized the option of rescinding a compromise agreement due to non-
compliance with its terms. (REYNALDO INUTAN, HELEN CARTE, NOEL
AYSON, IVY CABARLE, NOEL JAMILI, MARITES HULAR, ROLITO AZUCENA,
RAYMUNDO TUNOG, ROGER BERNAL, AGUSTIN ESTRE, MARILOU SAGUN,
and ENRIQUE LEDESMA, JR. v. NAPAR CONTRACTING & ALLIED SERVICES,

50 | P a g e
 NORMAN LACSAMANA, JONAS INTERNATIONAL, INC., and PHILLIP YOUNG,
G.R. No. 195654, November 25, 2015, Second Division, DEL CASTILLO, J.)

69. Q: May respondents collect their wages during the period between the
Labor Arbiter’s order or reinstatement pending appeal and the NLRC
Resolution overturning that of the Labor Arbiter?

70. A: Even if the order of reinstatement of the Labor Arbiter is reversed on

appeal, it is obligatory on the part of the employer to reinstate and pay the
wages of the dismissed employee during the period of appeal until reversal
by the higher court or tribunal. It likewise settled the view that the Labor
Arbiters order of reinstatement is immediately executory and the employer
has to either re-admit them to work under the same terms and conditions
prevailing prior to their dismissal, or to reinstate them in the payroll, and
that failing to exercise the options in the alternative, employer must pay the
employees’ salaries. After the Labor Arbiters decision is reversed by a
higher tribunal, the employee may be barred from collecting the accrued
wages, if it is shown that the delay in enforcing the reinstatement pending
appeal was without fault on the part of the employer. It then provided for
the two-fold test in determining whether an employee is barred from
recovering his accrued wages, to wit: (1) there must be actual delay or that
the order of reinstatement pending appeal was not executed prior to its
reversal; and (2) the delay must not be due to the employer’s unjustified act
or omission. If the delay is due to the employer’s unjustified refusal, the
employer may still be required to pay the salaries notwithstanding the
reversal of the Labor Arbiter’s Decision. (ISLRIZ TRADING/VICTOR HUGO
LU v. EFREN CAPADA, LAURO LICUP, NORBERTO NIGOS, RONNIE ABEL,
GODOFREDO MAGNAYE, ARNEL SIBERRE, EDMUNDO CAPADA, NOMERLITO
MAGNAYE and ALBERTO DELA VEGA, G.R. No. 168501, January 31, 2011,
First Division, DEL CASTILLO, J.)

71. Q: What must be awarded to an illegally dismissed employee?

A: Article 279 of the Labor Code mandates that an employee’s full

backwages shall be inclusive of allowances and other benefits or their
monetary equivalent. It is the obligation of the employer to pay an illegally
dismissed employee or worker the whole amount of the salaries or wages,
plus all other benefits and bonuses and general increases, to which he
would have been normally entitled had he not been dismissed and had not
stopped working. This well-defined principle has likewise been lost on the
CA in the consideration of the case. In case the Court finds illegal dismissal,
two factors are to be considered in the award: 1) the unexpired portion of
the contract and 2) the computation of the monthly salaries to be awarded.
It is the obligation of the employer to pay an illegally dismissed employee or
worker the whole amount of the salaries or wages, plus all other benefits
and bonuses and general increases, to which he would have been normally
entitled had he not been dismissed and had not stopped working. (LORENZO
T. TANGGA-AN vs. PHILIPPINE TRANSMARINE CARRIERS, INC., ET AL., G.R.
No. 180636. March 13, 2013, Second Division, DEL CASTILLO, J.)

72. Q: May an employer be entitled to both separation and retirement pay?

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 A: Yes. In the absence of an express or implied prohibition against it,
collection of both retirement benefits and separation pay upon severance
from employment is allowed. This is grounded on the social justice policy
that doubts should always be resolved in favor of labor rights. In Aquino v.
National Labor Relations Commission, citing Batangas Laguna Tayabas Bus
Company v. Court of Appeals and University of the East v. Hon. Minister of
Labor, the Court held that an employee is entitled to recover both
separation pay and retirement benefits in the absence of a specific
prohibition in the Retirement Plan or CBA. Concomitantly, the Court ruled
that an employee's right to receive separation pay in addition to retirement
benefits depends upon the provisions of the company's Retirement Plan
and/or CBA. (GOODYEAR PHILIPPINES, INC. and REMEGIO M. RAMOS vs.
MARINA L. ANGUS, G.R. No. 185449, November 12, 2014, Second Division,
DEL CASTILLO, J.)

Other relevant rulings:

In the present case, the CBA contains specific provisions which
effectively bar the availment of retirement benefits once the employees
have chosen separation pay or vice versa. As the law between the parties,
the CBA must be strictly complied with. Moreover, the complaining
employees are not entitled to the monetary equivalent of their unused sick
leave credits because the CBA, the existing company policies, and the
quitclaims do not cover them. (ZUELLIG PHARMA CORPORATION v. ALICE M.
SIBAL, ET AL., G.R. No. 173587. July 15, 2013, Second Division, DEL
CASTILLO, J.)

73.Q: What are the requisites to make an illness compensable?

A: For an illness to be compensable, it requires the concurrence of two

elements: (1) that the illness must be work-related; and (2) that the work-
related illness must have existed during the term of the seafarer’s
employment contract. Work-related illness is defined as any sickness
resulting in disability or death due to an occupational disease listed under
Section 32-A. For the disability caused by this occupational disease to be
compensable, the POEA Contract provides that all of these conditions must
be satisfied: (1) The seafarer’s work must involve the risks described
herein; (2) The disease was contracted as a result of the seafarer’s
exposure to the described risks; (3) The disease was contracted within a
period of exposure and under such other factors necessary to contract it;
(4) There was no notorious negligence on the part of the seafarer.
(INTERORIENT MARITIME ENTERPRISES, INC. vs. VICTOR M. CREER III,
G.R. No. 181921, September 17, 2014, Second Division, DEL CASTILLO, J.)

The SC ruled that hypertension is a listed occupational disease, such

being the case it is not necessary that there be proof of causal relation
between the work and the illness which resulted in the Calumpiano’s
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. As to her glaucoma, the SC ruled that
since there appears to be a link between blood pressure and the
development of glaucoma, the Court concluded that respondent’s glaucoma
developed as a result of her hypertension. Such being the case, the latter is
likewise compensable under the New GSIS Act. (GOVERNMENT SERVICE

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 INSURANCE SYSTEM vs. AURELIA Y. CALUMPIANO, G.R. No. 196102,
November 26, 2014, Second Division, DEL CASTILLO, J.)

Probability and not ultimate degree of certainty is the test of proof in

compensation proceedings. (JESUS B. VILLAMOR v. EMPLOYEES’
COMPENSATION COMMISSION (ECC) AND SOCIAL SECURITY SYSTEM (SSS),
G.R. No. 204422, November 21, 2016, Second Division, DEL CASTILLO, J.)

74. Q: Does the mixture of rank-and-file and supervisory employees in a labor

organization nullify its legal personality?

A: No. The right to file a petition for certification election is accorded to a

labor organization provided that it complies with the requirements of law
for proper registration. The inclusion of supervisory employees in a labor
organization seeking to represent the bargaining unit of rank-and-file
employees does not divest it of its status as a legitimate labor organization.
The Court abandoned the view in Toyota and Dunlop and reverted to its
pronouncement in Lopez that while there is a prohibition against the
mingling of supervisory and rank-and-file employees in one labor
organization, the Labor Code does not provide for the effects thereof. Thus,
the Court held that after a labor organization has been registered, it may
exercise all the rights and privileges of a legitimate labor organization. Any
mingling between supervisory and rank-and-file employees in its
membership cannot affect its legitimacy for that is not among the grounds
for cancellation of its registration, unless such mingling was brought about
by misrepresentation, false statement or fraud under Article 239 of the
Labor Code. (SMCC-SUPER v. CHARTER CHEMICAL and COATING
CORPORATION, G.R. No. 169717, March 16, 2011, First Division, DEL
CASTILLO, J.)

75. Q: May a certification election be conducted during the pendency of the

cancellation proceedings?

A: Yes. A certification election may be conducted during the pendency of the

cancellation proceedings. This is because at the time the petition for
certification was filed, the petitioning union is presumed to possess the
legal personality to file the same. (LEGEND INTERNATIONAL RESORTS
LIMITED v. KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT),
G.R. No. 169754, February 23, 2011, First Division, DEL CASTILLO, J.)

76. Q: May an employer unilaterally amend a CBA?

A: No. A Collective Bargaining Agreement (CBA) is a contract entered into

by an employer and a legitimate labor organization concerning the terms
and conditions of employment. Like any other contract, it has the force of
law between the parties and, thus, should be complied with in good faith.
Unilateral changes or suspensions in the implementation of the provisions
of the CBA, therefore, cannot be allowed without the consent of both
parties. (WESLEYAN UNIVERSITY-PHILIPPINES v. WESLEYAN UNIVERSITY-
PHILIPPINES FACULTY and STAFF ASSOCIATION, G.R. No. 181806, March
12, 2014, Second Division, DEL CASTILLO, J.)

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 77. Q: May grievances arising from the interpretation or implementation of a
CBA be resolved without a grievance machinery?

A: No. Under Article 260 of the Labor Code, grievances arising from the
interpretation or implementation of the parties’ CBA should be resolved in
accordance with the grievance procedure embodied therein. It also provides
that all unsettled grievances shall be automatically referred for voluntary
arbitration as prescribed in the CBA. Every CBA shall provide a grievance
machinery to which all disputes arising from its implementation or
interpretation will be subjected to compulsory negotiations. This essential
feature of a CBA provides the parties with a simple, inexpensive and
expedient system of finding reasonable and acceptable solutions to disputes
and helps in the attainment of a sound and stable industrial peace. (CARLOS
L. OCTAVIO v. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY (PLDT),
G.R. No. 175492, February 27, 2013, Second Division, DEL CASTILLO, J.)

78. Q: May a claim for SSS contributions be determined by the Labor Arbiter?

A: Yes. The Court holds that as between the parties, Article 217 (a) (4) of
the Labor Code is applicable. Said provision bestows upon the Labor Arbiter
original and exclusive jurisdiction over claims for damages arising from
employer-employee relations. The observation that the matter of SSS
contributions necessarily flowed from the employer-employee relationship
between the parties is correct; thus, petitioners’ claims should have been
referred to the labor tribunals. In this connection, it noteworthy to state
that the Labor Arbiter has jurisdiction to award not only the reliefs provided
by labor laws, but also damages governed by the Civil Code. (AMECOS
INNOVATIONS, INC. AND ANTONIO F. MATEO vs. ELIZA R. LOPEZ, G.R. No.
178055, July 2, 2014, Second Division, DEL CASTILLO, J.)

79. Q: Does the fact that the parties involved in a controversy are stockholders
place the dispute within the jurisdiction of the SEC?

A: No. The fact that the parties involved in the controversy are all
stockholders or that the parties involved are the stockholders and the
corporation does not necessarily place the dispute within the ambit of the
jurisdiction of the SEC (now the Regional Trial Court). The better policy to
be followed in determining jurisdiction over a case should be to consider
concurrent factors such as the status or relationship of the parties or the
nature of the question that is subject of their controversy. The incidents of
the relationship must also be considered for the purpose of ascertaining
whether the controversy itself is intra-corporate. The controversy must not
only be rooted in the existence of an intra-corporate relationship, but must
as well pertain to the enforcement of the parties correlative rights and
obligations under the Corporation Code and the internal and intra-corporate
regulatory rules of the corporation. If the relationship and its incidents are
merely incidental to the controversy or if there will still be conflict even if
the relationship does not exist, then no intra-corporate controversy exists.
The two-tier test was adopted in the recent case of Speed Distribution Inc.
v. Court of Appeals: To determine whether a case involves an intra-
corporate controversy, and is to be heard and decided by the branches of
the RTC specifically designated by the Court to try and decide such cases,
two elements must concur: (a) the status or relationship of the parties, and

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 (2) the nature of the question that is the subject of their controversy. The
first element requires that the controversy must arise out of intra-corporate
or partnership relations between any or all of the parties and the
corporation, partnership, or association of which they are not stockholders,
members or associates, between any or all of them and the corporation,
partnership or association of which they are stockholders, members or
associates, respectively; and between such corporation, partnership, or
association and the State insofar as it concerns the individual franchises.
The second element requires that the dispute among the parties be
intrinsically connected with the regulation of the corporation. (RENATO
REAL v. SANGU PHILIPPINES, INC. and/or KIICHI ABE, G.R. No. 168757,
January 19, 2011, First Division, DEL CASTILLO, J.)

80. Q: May an appeal be dismissed for failure to file a supersedeas bond?

A: Yes. Section 6, Rule VI of the 2005 Revised Rules of Procedure of the

NLRC explicitly requires that a surety bond should be accompanied by a
proof of security deposit or collateral. (U-BIX CORPORATION AND
EDILBERTO B. BRAVO v. VALERIE ANNE H. HOLLERO, G.R. No. 199660, July
13, 2015, Second Division, DEL CASTILLO, J.)

The posting of cash or surety bond is mandatory and jurisdictional;

failure to comply with this requirement renders the decision of the Labor
Arbiter final and executory. This indispensable requisite for the perfection of
an appeal "is to assure the workers that if they finally prevail in the case,
the monetary award will be given to them upon the dismissal of the
employer's appeal and is further meant to discourage employers from using
the appeal to delay or evade payment of their obligations to the
employees." However, the Court, in special and justified circumstances, has
relaxed the requirement of posting a supersedeas bond for the perfection of
an appeal on technical considerations to give way to equity and justice.
Thus, under Section 6 of Rule VI of the 2005 NLRC Revised Rules of
Procedure, the reduction of the appeal bond is allowed, subject to the
following conditions: (1) the motion to reduce the bond shall be based on
meritorious grounds; and (2) a reasonable amount in relation to the
monetary award is posted by the appellant. Compliance with these two
conditions will stop the running of the period to perfect an appeal. (TURKS
SHAWARMA COMPANY/GEM ZEÑAROSA v. FELICIANO PAJARON and LARRY
CARBONILLA, G.R. No. 207156, January 16, 2017, First Division, DEL
CASTILLO, J.)

81. Q: Is the NLRC precluded from conducting a preliminary investigation of the

merit or lack of merit of a motion to reduce bond?

A: Section 223 of the Labor Code, and Sections 4 and 6 of the Revised Rules
of Procedure of the NLRC highlight the importance of posting a cash or
surety bond in the perfection of an appeal to the NLRC from the Labor
Arbiter’s judgment involving a monetary award. In Ramirez v. CA, this Court
held that “under the Rules, appeals involving monetary awards are
perfected only upon compliance with the following mandatory requisites,
namely: 1) payment of the appeal fees; 2) filing of the memorandum of
appeal; and 3) payment of the required cash or surety bond.” Notably,
however, under Section 6, Rule VI of the said Rules, the bond may be

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 reduced albeit only on meritorious grounds and upon posting of a partial
bond in a reasonable amount in relation to the monetary award. It is not a
matter of right on the part of the movant, but lies within the sound
discretion of the NLRC upon a showing of meritorious grounds. In Nicol v.
Footjoy Industrial Corporation it was discussed that: “[T]he bond
requirement on appeals involving monetary awards has been and may be
relaxed in meritorious cases. These cases include instances in which 1)
there was substantial compliance with the Rules; 2) surrounding facts and
circumstances constitute meritorious grounds to reduce the bond; 3) a
liberal interpretation of the requirement of an appeal bond would serve the
desired objective of resolving controversies on the merits; or 4) the
appellants, at the very least exhibited their willingness and/or good faith by
posting a partial bond during the reglementary period.” Thus, the NLRC is
not precluded from conducting preliminary determination of the merits of a
motion to reduce bond. (UNIVERSITY PLANS INCORPORATED v. BELINDA P.
SOLANO, TERRY A. LAMUG, GLENDA S. BELGA, MELBA S. ALVAREZ,⃰ WELMA
R. NAMATA, MARIETTA D. BACHO and MANOLO L. CENIDO, G.R. No. 170416,
June 22, 2011, First Division, DEL CASTILLO, J.)

82. Q: Does the NLRC have jurisdiction over the claims of a contractor against
the principal?

A: No. In legitimate job contracting, no employer-employee relations exists

between the principal and job contractor employees. The principal is only
responsible to the job contractor employees for the proper payment of
wages. For Article 217 of the Labor Code to apply, and in order for the Labor
Arbiter to acquire jurisdiction over a dispute, there must be an EER between
the parties thereto. It is well-settled in law and jurisprudence that where no
employer-employee relationship exists between the parties and no issue is
involved which may be resolved by reference to the Labor Code, other labor
statutes or any collective bargaining agreement, it is the RTC that has
jurisdiction. (SOCIAL SECURITY SYSTEM v. UBAÑA, G.R. No. 200114, August
24, 2015, Second Division, DEL CASTILLO, J.)

83. Q: Is the Court precluded from examine and admit evidence, even if
presented only on appeal before the NLRC, if only to dispense substantial
justice?

A: Yes. Rules of procedure and evidence should not be applied in a very rigid
and technical sense in labor cases in order that technicalities would not
stand in the way of equitably and completely resolving the rights and
obligations of the parties. (ISLAND OVERSEAS TRANSPORT CORPORATION
v. ARMANDO M. BEJA, G.R. No. 203115, December 7, 2015, Second Division,
DEL CASTILLO, J.)

84. Q: Does the Bureau of Labor have jurisdiction over inter-union and intra-
union disputes?

A: Yes. Section 226 of the Labor Code clearly provides that the BLR and the
Regional Directors of DOLE have concurrent jurisdiction over inter-union
and intra-union disputes. Such disputes include the conduct or nullification
of election of union and workers’ association officers. (ATTY. ALLAN S.

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 MONTAÑO v. ATTY. ERNESTO C. VERCELES, ATTY. ALLAN S. MONTAÑO v.
ATTY. ERNESTO C. VERCELES)

85. Q: An arbitral award was granted by the Secretary of Labor, specifically as

to the wage increases. The basis of the decision, according to the Secretary
are the following: BARGAINING HISTORY, TRENDS OF ARBITRATED AND
AGREED AWARDS AND INDUSTRY TRENDS. The arbitral award was assailed
in the CA. The CA ruled, among others, that the computation of wage
increase should be remanded to the Secretary of Labor because the
computation was based on petitioner corporation’s unaudited financial
statements, which have no probative value pursuant to the ruling in
Restaurante Las Conchas v. Llego, and was done in contravention of DOLE
Advisory No. 1, Series of 2004. The corporation argued that although the
subject financial statements were not audited by an external and
independent auditor, the same should be considered substantial compliance
with the order of the Secretary. Was the CA correct in remanding the case?

A: Yes. In cases of compulsory arbitration before the Secretary of Labor

pursuant to Article 263(g) of the Labor Code, the financial statements of the
employer must be properly audited by an external and independent auditor
in order to be admissible in evidence for purposes of determining the proper
wage award. (ASIA BREWERY, INC. vs. TUNAY NA PAGKAKAISA NG MGA
MANGGAGAWA SA ASIA (TPMA), G.R. Nos. 171594-96, September 18, 2013,
Second Division, DEL CASTILLO, J.)

86. Q: Southeastern Shipping hired Federico to work on board its ship. While on
board the vessel, he complained of having a sore throat and on and off fever
with chills. He also developed a soft mass on the left side of his neck. He
was given medication. On March 30, 1998, he arrived in the Philippines and
was diagnosed with Hodgkin’s disease. He filed a complaint against
petitioners before the arbitration branch of the NLRC claiming entitlement
to disability benefits, loss of earning capacity, moral and exemplary
damages, and attorney’s fees. During the pendency of the case, Federico
died, and his wife, Evelyn substituted him. Thus the claim was converted
into a claim for death benefits. Are the heirs entitled to death benefits?

A: No. The death of a seaman during the term of employment makes the
employer liable to his heirs for death compensation benefits, but if a
seaman dies after the termination of his contract of employment, his
beneficiaries are not entitled to death benefits. As held in Gau Sheng Phils.,
Inc. v. Joaquin, Hermogenes v. Oseo Shipping Services, Inc., Prudential
Shipping and Management Corporation v. Sta. Rita, and Klaveness Maritime
Agency, Inc. v. Beneficiaries of Allas, in order to avail of death benefits, the
death of the employee should occur during the effectivity of the
employment contract. (SOUTHEASTERN SHIPPING, SOUTHEASTERN
SHIPPING GROUP, LTD. vs. NAVARRA, JR., G.R. No. 167678, June 22, 2010,
First Division, DEL CASTILLO, J.)

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