Government Insurance System vs. Manuel P.

Besitan
GR no. 178901

Facts:

Respondent Besitan was employed by the Central Bank of the Philippines (now Bangko Sentral
ng Pilipinas) on January 21, 1976 as a Bank Examiner. Subsequently, he was promoted as Bank Officer
II and eventually as Bank Officer III.

In October 2005, Besitan was diagnosed with End Stage Renal Disease secondary to Chronic
Glomerulonephritis and thus, had to undergo a kidney transplant at the National Kidney and Transplant
Institute (NKTI), for which he incurred medical expenses amounting to P817,455.40

Believing that his working conditions increased his risk of contracting the disease, he filed
a claim with the GSIS. However, the GSIS denied the claim on grounds that Besitan was not able
to prove that his working conditions are contributory causes of his disease.

Besitan elevated the matter to the Employees Compensation Commission where the
same appeal was denied and the decision of the GSIS was upheld.

When the matter was elevated with the Court of Appeals, the appellate court reversed the
ruling of the ECC rationating that his sickness was aggravated by his working conditions as
evidenced by a medical certificate made by Dr. Gregorio Suarez, Bank Physician of the Central
Bank.

Issue: Whether or not Besitan is entitled to compensation under PD 626?

Ruling: Yes

The Supreme Court held that Besitan was able to prove that his working conditions
increased the risk of him contracting the disease. The Supreme Court gave credence to the
medical certificate presented by Besitan which proved that his working conditions were
contributory to an increased risk of him contracting the disease.

Further, the Supreme Court upon coming up with the decision emphasized that,
compensation claims should be liberally construed in favor of the claimant, since the same laws
were established for the protection of workers and putting importance to their welfare.
Harpoon Services vs. Francisco
GR no. 167751

Facts

Francisco filed an illegal dismissal complaint praying for the payment of his backwages,
separation pay, unpaid commissions, moral and exemplary damages and attorney’s fees
against Harpoon Marine Services and its President and CEO Rosit. Francisco averred that
he was illegally dismissed by Rosit. He was informed that the company can no longer afford
his salary and he would be paid his sepration pay and accrued commissions. After some
days, Francisco was barred from entering the premises and when he went back to get what
was promised by Rosit, the latter only offered his separation pay. Francisco refused to
accept it and demanded for what was promised.

The Labor Commission and the Court of appeals held that the respondent was
illegally dismissed and awarded payment of commissions, backwages and separation pay.
Rosit was also held solidarily liable with Harpoon.

Issue:
Whether or not Rosit should be held solidarily liable with Harpoon for illegally
dismissing Francisco.?

Ruling: No

The Court, cited circumstances when solidary liabilities may be imposed, as exceptions:
1. When directors and trustees or, in appropriate cases, the officers of a corporation
(a) vote for or assent to patently unlawful acts of the corporation;
(b) act in bad faith or with gross negligence in directing the corporate affairs;
(c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or
members, and other persons.

2. When the director or officer has consented to the issuance of watered stock or who,
having knowledge thereof, did not forthwith file with the corporate secretary his written
objection thereto.

3. When a director, trustee or officer has contractually agreed or stipulated to hold himself
personally and solidarily liable with the corporation.

4. When a director, trustee or officer is made, by specific provision of law, personally liable
for his corporate action.

The general rule is grounded on the theory that a corporation has a legal personality
separate and distinct from the persons comprising it. To warrant the piercing of the veil of
corporate fiction, the officer's bad faith or wrongdoing "must be established clearly and
convincingly" as "bad faith is never presumed."
 In the case at bench, the CA's basis for petitioner Rosit's liability was that he acted
in bad faith when he approached respondent and told him that the company could no longer
afford his salary and that he will be paid instead his separation pay and accrued commissions.
This finding could not substantially justify the holding of any personal liability against petitioner
Rosit. The records are bereft of any other satisfactory evidence that petitioner Rosit acted
in bad faith with gross or inexcusable negligence, or that he acted outside the scope of his
authority as company president. Indeed, petitioner Rosit informed respondent that the
company wishes to terminate his services since it could no longer afford his salary.

Moreover, the promise of separation pay, according to petitioners, was out of goodwill
and magnanimity. At the most, petitioner Rosit's actuations only show the illegality of the
manner of effecting respondent's termination from service due to absence of just or valid
cause and non-observance of procedural due process but do not point to any malice or bad
faith on his part.
JUAN B. HERNANDEZ vs. CROSSWORLD MARINE SERVICES
GR No. 209098

Facts

Petitioner Juan B. Hernandez has been working continuously for respondents Mykonos
Shipping Co., Ltd. (Mykonos), Crossworld Marine Services, Inc. (Crossworld), and Eleazar Diaz
(Diaz) - Crossworld's President/Chief Executive Officer - since November 14, 2005, under
different employment contracts covering the latter's several oceangoing vessels.

On October 7, 2008, petitioner was once more engaged by respondents to work as Chief
Cook aboard the vessel M/V Nikomarin. This latest employment was for a period of nine months,
with a monthly salary ofUS$587.00, plus fixed overtime pay, food allowance, leave pay, and long
service bonus. When his contract expired, petitioner's service was extended for an additional five
months. Thereafter, he was repatriated on December 19, 2009.
With a view to serving respondents anew under a new contract, petitioner was made to
undergo a pre-employment medical examination on March 22, 2010, and he was found to be
suffering from hypertension and diabetes mellitus. He was declared fit for duty and required to
take maintenance medication. However, respondents deferred his employment on account of his
state of health.
In 2011, petitioner consulted two separate physicians who turned out the same diagnosis:
that he was suffering from hypertension, stage 2, and type 2 diabetes mellitus, and was therefore
unfit for sea duty in whatever capacity as seaman.
Petitioner demanded compensation by way of disability benefits and medical expenses
from respondents, but the latter refused to pay.
The labor arbiter dismissed the complaint on grounds that Hernandez was repatriated not
on medical grounds but of the expiration of his employment contract. Also, Hernandez was
already diagnosed with sickness even before he joined the company. Further, the fact that he
was repatriated not because of medical reasons but the expiration of his employment does not
warrant any valid reason for him to submit a post employment medical check up.
On the other hand, the National Labor Relations Commission reversed the decision of the
Labor Arbiter and granted the appeal rationating that the working conditions of Hernandez
increased the risk of aggravating his sickness.
However, the court of appeals reinstated the decision of the labor arbiter, one of the
grounds being that Hernandez signed Conditional Satisfaction of Judgment, Receipt of Payment,
and Affidavit which essentially denied any further actions on any other foras as may be provided
by the said judgment.
Issue:
Whether or not Hernandez is entitled to compensation?

Ruling: Yes
Respondents profess that the Conditional Satisfaction of Judgment, Receipt of Payment,
and Affidavit which petitioner was made to sign were prepared in good faith and simply to comply
with the execution proceedings below and prevent garnishment of their accounts. However, the
Supreme Court believes otherwise. Hidden behind these documents appears to be a convenient
ploy to deprive petitioner of all his rights to claim indemnity from respondents under all possible
causes of action and in all available fora, and effectively for nothing in return or exchange -
because in the event that the NLRC ruling is reversed, then petitioner must return what he
received, thus leaving him with the proverbial empty bag. This is fundamentally unfair, and goes
against public policy.