Labor-Law PDF

LABOR LAW CASE DIGESTS
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San Beda College Alabang School of Law
2018 Centralized Bar Operations
EXECUTIVE COMMITTEE 2018 – 2019
CHAIRPERSON Catriona Janelle Gayatin

VICE CHAIRPERSON FOR ACADEMICS Jerekko Cadorna
VICE CHAIRPERSON FOR ACADEMIC OPERATIONS Rodel Cadorniga Jr.
VICE CHAIRPERSON FOR HOTEL OPERATIONS Emmanuel Josef Jovellanos
EXECUTIVE OFFICER FOR HOTEL OPERATIONS Christian Boy Benedict Tiangco
VICE CHAIRPERSON FOR FINANCE Katreena Frances Monje
VICE CHAIRPERSON FOR SECRETARIAT Odette Marie Jumao-as
VICE CHAIRPERSON FOR COMMUNICATIONS Maryll Ann Ragpala
VICE CHAIRPERSON FOR RECRUITMENT AND MEMBERSHIP Giulia Ingrid Calub
VICE CHAIRPERSON FOR ELECTRONIC DATA PROCESSING John Eli Zuriel Bitong
San Beda College Alabang School of Law Administration

Dr. Ulpiano P. Sarmiento III
Dean and Adviser
ATTY. Anna Marie Melanie B. Trinidad

Vice Dean
ATTY. Carlo D. Busmente

Prefect of Student Affairs
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LABOR LAW TEAM

Subject Head Mykee Ferdinand Medina
Members Micah Gimelo
Christian Baun
Mitchie Reyno
Gerald Padilla
John Reyes
Jassy Rosit
Claire Palo
Clem Lagon
Donna Arriola
Chaliz Recasata
Danielle Christiana Verga
Justin Leanne Meneses
Mai Reamico
Deanna Roldan
Kaitlin Sierra
Edrese Aguirre
Dominic Marquez
Rik Garcia
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CASE DOCTRINES
LABOR STANDARDS
The repeated and successive rehiring of respondents as project-based employees does not
qualify them as regular employees. 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, Inc. and Esguerra vs. Oliveros, G.R. No. 208936, April
17, 2017)
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.(TSM shipping v LOUIE L. PATIÑO G.R. No.
210289, March 20, 2017)
In any event, it must be stressed that “in labor-only contracting, the statute creates an employer-
employee relationship for a comprehensive purpose: to prevent a circumvention of labor laws.
The contractor is considered merely an agent of the principal employer and the latter is
responsible to the employees of the labor-only contractor as if such employees had been
directly employed by the principal employer. The principal employer therefore becomes
solidarily liable with the labor-only contractor for all the rightful claims of the employees.” (Jack
C. Valencia Vs. Classique Vinyl Products Corporation, et al.; G.R. No. 206390; January 30, 2017
It is well-settled rule 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. (Rutcher T. Dagasdas V. Grand Placement and
General Services Corporation; G.R. No. 205727; January 18, 2017)
The motion to reduce bond cannot be given a liberal interpretation if it is not based on
meritorious grounds and if there is no reasonable amount as to the monetary award posted by
the appellant. (Turks Shawarma v. Feliciano Pajaron, G.R. No. 207156, January 16, 2017
The law does not consider as valid any agreement to receive less compensation than what a
worker is entitled to recover nor prevent him from demanding benefits to which he is entitled.
Quitclaims executed by the employees are thus commonly frowned upon as contrary to public
policy and ineffective to bar claims for the full measure of the workers legal rights, considering
the economic disadvantage of the employee and the inevitable pressure upon him by financial
necessity. (Juan B. Hernandez vs. Crossworld Marines Services, Inc., Et Al.; G.R. No. 209098,
November 14, 2016)
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For a disability to be compensable, the seafarer must prove a reasonable link between his work
and his illness in order for a rational mind to determine that such work contributed to, or at least
aggravated, his illness. It is not enough that the seafarer’s injury or illness rendered him disabled;
it is equally necessary that he establishes a causal connection between his injury or illness, and
the work for which he is engaged. (Doehle-Philman Manning Agency Inc V Henry C Haro G.R.
No. 206522; April 18, 2016)
The employer may terminate the services of its employee for the latter's serious misconduct or
willful disobedience of its or its representative's lawful orders. And for willful disobedience to
constitute a ground, it is required that: "(a) the conduct of the employee must be willful or
intentional; and (b) the order the employee violated must have been reasonable, lawful, made
known to the employee, and must pertain to the duties that he had been engaged to
discharge. (Tabuk Multi-Purpose Cooperative, Inc. (TAMPCO), et al. Vs. Magdalena Duclan; G.R.
No. 203005; March 14, 2016)
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 partial or total disability already exists. The 120 or 240-day period to determine the
seafarer’s disability or fitness to work is reckoned from his repatriation.(Wallem Maritime Services,
Inc., Reginaldo A. Oben and WallemShipmanagement, Ltd. v. Edwinito V. Quillao; G.R. No.
202885; January 20, 2016)
A regular employee is one who is 1) 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.The test to determine whether an employee is regular is the reasonable connection
between the activity he performs and its relation to the employer's business or trade, as in the
case of respondents assigned to the boiler section. On the other hand, a contractor’s certificate
of registration is not conclusive of the status of a legitimate contractor; rather, it merely prevents
the presumption of being a labor-only contractor from arising. (Vicmar Development Corp. v.
Elarcosa, G.R. No. 202215, December 9, 2015)
As a rule, the death of a seafarer during the term of his employment makes his employer liable
for death benefits. The employer, may, however, be exempt from liability if it can successfully
establish that the seafarer's death was due to a cause of attributable to his own willful act. (New
Filipino Maritime Agencies, Inc. Vs. Vincent H. Datayan – Heir Of Simon Vincent H. Datayan Iii,
G.R. No. 202859, November 11, 2015)
As a rule, once the employee has asserted with particularity in his position paper that his
employer failed to pay his benefits, it becomes incumbent upon the employer to prove
payment of the employee's money claims. In fine, the burden is on the employer to prove
payment, rather than on the employee to establish non-payment.(Etom, Jr. V. Aroma Lodging
House G.R. No. 192955; November 9, 2015)
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The absence of a post-employment medical examination cannot be used to defeat a seafarer's

right to claim compensation and benefits when the failure to subject him to such requirement
was not due to his fault but to the inadvertence or deliberate refusal of the employer. (Saso v. 88
Aces Maritime Service, Inc., G.R. No. 211638 October 7, 2015)
It has consistently been held that cardiovascular disease,coronary artery disease, as well as
other heart ailments, are compensable. (Magsaysay Maritime Corp. v. Mazaredo, G.R. No.
201359, September 23, 2015)
The mere lapse of the 120-day period does not in itself warrant the payment of permanent
disability benefits, as said period may be extended up to 240-days. (Maersk-Filipinas Maersk-
Filipinas Crewing V. Rommel Rene O. Jaleco, G.R. No. 201945, September 21, 2015)
An employer may not blame its employees for losses caused by its own disorganized system and
inept personnel. (Dominador Malabunga, Jr. Vs. Cathay Pacific Steel Corp., G.R. No. 198515,
June 15, 2015)
A person who claims entitlement to the benefits provided by law must establish his right thereto
by substantial evidence or "such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion. This Court cannot grant a claim for disability benefits without
such substantial evidence because to do so would be offensive to due process. Hence, 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. v. Aligway, G.R. No. 201793, September
16, 2015)
For disability to be compensable under Section 20(B) of the 2000 POEA-SEC, it is not sufficient to
establish that the seafarer’s illness or injury has rendered him permanently or partially disabled; 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. (Grace Marine Shipping Corp. vs. Alarcon; G.R. No.
201536, September 9, 2015)
The company-designated physician is expected to arrive at a definite assessment of the

seafarer's fitness to work or permanent disability within the period of 120 or 240 days. That should
he fail to do so and the seafarer's medical condition remains unresolved, the seafarer shall be
deemed totally and permanently disabled.(Centennial Transmarine, Inc. Et Al. vs. Pastor M.
Quiambao, G.R. No. 198096 July 8, 2015)
Aortic dissection, also called dissecting aneurysm, considered compensable under the
disputable presumption of compensability. Gazzingan’s work as a messman is not confined
mainly to serving food and beverages to all officers and crew. (Dohle-Philman Manning Agency,
Inc. v. Heirs of Gazzingan, G.R. No. 199568 , June 17, 2015)
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The law presumes a contractor to be a labor-only contractor and the employees are not
expected to prove the negative fact that the contractor is a labor-only contractor. Anyone
claiming the supposed status of an independent contractor bears the burden of proving the
same. (Petron Corp. V. Caberte, G.R. No. 182255; June 15, 2015)
A seafarer must submit himself to a post-employment medical examination within three days
from his arrival in the Philippines (mandatory reporting requirement) so that his claim for disability
and sickness allowance can prosper. The only exception to this rule is when the seafarer is
physically incapacitated to do so, but there must be a written notice to the agency within the
same period of three days for the seaman to be considered to have complied with the
requirement.Otherwise, he forfeits his right to claim his disability benefits and sickness allowance.
(Heirs of Dela Cruz vs. Philippine Transmarine Carriers, Inc., G.R. No. 196357, April 20, 2015)
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 and a
diminution in pay. Under Art. 279 of the Labor Code, as amended, an employee unjustly
dismissed shall be entitled to: (1) Reinstatement without loss of seniority rights and other privileges
and (2) full backwages, inclusive of allowances, and other benefits or their monetary equivalent
computed from the time compensation was withheld up to the time of reinstatement. (Peak
Ventrures Corp. V. Heirs Of Villareal, G.R. No. 184618, November 19, 2014)
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. (Goodyear
Phils., Inc. v. Angus, G.R. No. 185449, November 12, 2014)
Cardiovascular disease, coronary artery disease, and other heart ailments have repeatedly
been considered work-related and compensable by the Court. (Magsaysay Mitsui v. Juanito
Bengson, G.R. No. 198528, October 13, 2014)
For an illness to be compensable it must be: first that the illness must be work-related; and
second, that the work-related illness must have existed during the term of the seafarer’s
employment contract. (Interorient Maritime Enterprises, Inc. Vs Creer Iii, G.R. No. 181921;
September 17, 2014)
As a general rule, one who pleads payment has the burden of proving it. Even where the
employee must allege nonpayment, the general rule is that the burden rests on the employer to
prove payment, rather than on the employee to prove nonpayment. (LIBCAP MARKETING
CORP. V Lanny Jean Baquial, G.R. No. 192011; June 30, 2014)
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A contractor is presumed to be a labor-only contractor, unless it proves that it has the substantial
capital, investment, tools and the like. However, where the principal is the one claiming that the
contractor is a legitimate contractor, the burden of proving the supposed status of the
contractor rests on the principal. (Alilin v. Petron Corp., G.R. No. 177592, June 9, 2014)
The Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits employers
from eliminating or reducing the benefits received by their employees. This rule, however,
applies only if the benefit is based on an express policy, a written contract, or has ripened into a
practice. To be considered a practice, it must be consistently and deliberately made by the
employer over a long period of time. An exception to the rule is when “the practice is due to
error in the construction or application of a doubtful or difficult question of law.” The error,
however, must be corrected immediately after its discovery; Otherwise, the rule on Non-
Diminution of Benefits would still apply. It may not be amiss to mention that when the provision of
the CBA is clear, leaving no doubt on the intention of the parties, the literal meaning of the
stipulation shall govern. However, if there is doubt in its interpretation, it should be resolved in
favor of labor, as this is mandated by no less than the Constitution.(Wesleyan University - Phils. v.
Wesleyan University - Faculty and Staff Association, G.R. No. 181806, March 12, 2014)
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)
(1) of the Labor Code and Rule X, Section 2 of the 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 therefrom within the statutory period. (Fil-Pride Shipping Company, Inc. Vs. Edgar A.
Balasta, G.R. No. 193047, March 3, 2014)
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
period, and the company-designated physician fails to arrive at a definite assessment of the
employee's fitness or disability. (Alpha Ship Management Corp. v. Calo, G.R. No. 192034,
[January 13, 2014], 724 PHIL 106-127)
In the absence of specific terms and conditions governing a car plan agreement between the
employer and employee, the former mat retain the instalments made by the latter on the car
plan and treat them as rents for the use of the service vehicle, in the event that the employee
ceases his employment and fails to complete instalment payments on the vehicle. This is
precisely because, the service vehicle was specifically used in the employer’s business; any
personal benefit obtained by the employee from its use is merely incidental.(Antonio Locsin, II V.
Mekeni Food Corporatio, G.R. No. 192105, December 9, 2013)
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There is no automatic acquisition of regular employment for school personnel after the
expiration of the maximum number of years for probationary period. However, this requires that
the employer set the reasonable standards by which the employee will qualify as a regular
employee and inform the latter about such. (Colegio del Santisimo v. Emmanuel Rojo, G.R. No.
170388, September 4, 2013)
The burden of proof for payment of benefits under the Labor Code rests on the employer. The
employee does not have to prove non-payment of benefits. (Abduljuahid Pigcauan v. Security
and Credit, G.R. No. 173648, January 16, 2012)
There is labor-only contracting when the contractor or subcontractor merely recruits, supplies or
places workers to perform a job, work or service for a principal. The elements of which are: a. The
person supplying workers to an employer does not have substantial capital or investment in the
form of tools, equipment, machineries, work premises, among others; and b. The workers
recruited and placed by such person are performing activities which are directly related to the
principal business of the employer. (Sy Vs Failrand Knitcraft Co., Inc., G.R. Nos. 182915;
December 12, 2011)
A total disability does not require that the employee be absolutely disabled or totally paralyzed.
What is necessary is that the injury must be such that the employee cannot pursue his usual work
and earn therefrom. On the other hand, a total disability is considered permanent if it lasts
continuously for more than 120 days. (Valenzona Vs Fair Shipping Corporation, G.R. No. 176884;
October 19, 2011)
An employees’ propensity to commit repetitious infractions evidences wrongful intent, making him
undeserving of the compassion accorded by law to labor. (Mapili v. Philippine Rabbit Bus Lines, Inc.
G.R. No. 172506 July 27, 2011)
Finding that a contractor is a 'labor-only' contractor, as opposed to permissible job contracting,

is equivalent to declaring that there is an employer-employee relationship between the principal
and the employees of the supposed contractor, and the `labor-only' contractor is considered as
a mere agent of the principal, the real employer.(Aliviado V. Procter & Gamble Phils.,Inc., G.R.
No. 160506; June 6, 2011)
The heirs of a missing seaman may file their claim for death compensation benefits within the
three-year period fixed by law from the time the seaman has been presumed dead. The heirs of
a missing seaman have to wait for four years as provided under Article 391 of the Civil Code
before the seaman is declared as legally dead. (Pantollano vs. Korphil Shipmanagement And
Manning Corp.,G.R. No. 169575, March 30, 2011)
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Violations of bank's policies, rules and regulations, is tantamount to an abuse of the trust reposed
in him by his employer, justifies stripping of employee’s right to back wages (Bank of the Phil.
Islands v. Coquia, Jr. G.R. No. 167518. March 23, 2011)
Unlike in other cases where the complainant has the burden of proof to [prove] its allegations,
the burden of establishing facts as bases for an employer’s loss of confidence in an employee –
facts which reasonably generate belief by the employer that the employee was connected
with some misconduct and the nature of his participation therein is such as to render him
unworthy of trust and confidence demanded of his position – is on the employer. (Sanden
Aircon Philippines Vs. Loressa P. Rosales, G.R. No. 169260, March 23, 2011)
In illegal dismissal cases, it is incumbent upon the employees to first establish the fact of their
dismissal before the burden is shifted to the employer to prove that the dismissal was
legal.(Exodus International V. Biscocho,GR No. 166109, February 23, 2011)
We declared that in order to avail of death benefits, the death of the employee should occur during the
effectivity of the employment contract. The death of a seaman during the term of employment makes
the employer liable to his heirs for death compensation benefits. Once it is established that the seaman
died during the effectivity of his employment contract, the employer is liable. (Medline Management,
Inc. v. Roslinda , G.R. No. 168715. September 15, 2010)
While the Court adheres to the principle of liberality in favor of the seafarer in construing the Standard
Employment Contract, we cannot allow claims for compensation based on surmises. When the
evidence presented negates compensability, we have no choice but to deny the claim, lest we cause
injustice to the employer. The law in protecting the rights of the employees, authorizes neither oppression
nor self-destruction of the employer there may be cases where the circumstances warrant favoring labor
over the interests of management but never should the scale be so tilted as to result in an injustice to the
employer. (Southeastern Shipping Vs. Federico U. Navarra, Jr, G.R. No. 167678, June 22, 2010)
Labor laws expressly prohibit "labor-only" contracting. To prevent its circumvention, the Labor
Code establishes an employer-employee relationship between the employer and the
employees of the ‘labor-only’ contractor. (Aliviado V. Procter & Gamble Phils.Inc.; G.R. No.
160506. March 9, 2010)
By the voluntary withdrawal of respondent’s application from petitioner, the latter could not
have been involved in the recruitment and placement of respondent and consequently could
not be held liable for any violation. (LNS INTERNATIONAL V. Padua, Jr., GR No. 179792, March 5,
2010)
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LABOR RELATIONS
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. In order for
the employer to discharge its burden to prove that the employee committed abandonment,
which constitutes neglect of duty, and is a just cause for dismissal, the employer must prove that
the employee 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. (Ernesto Brown vs. Marswin Marketing, Inc.
and Sany tan, G.R. No. 206891, March 15, 2017)
Piercing the veil of corporate fiction is allowed where a corporation is a mere alter ego or a
conduit of a person, or another corporation. Responsible persons may be impleaded, and be
held solidarily liable even after final judgment and on execution, provided that such persons
deliberately used the corporate vehicle to unjustly evade the judgment obligation, or resorted
to fraud, bad faith, or malice in evading their obligation. By responsible person, we refer to an
individual or entity responsible for, and who acted in bad faith in committing illegal dismissal or in
violation of the Labor Code; or one who actively participated in the management of the
corporation. (Dutch Movers, Inc., Cesar Lee And Yolanda Lee Vs. Edilbertolequin, Et Al., G.R. No.
210032; April 25, 2017)
In case of alleged inclusions 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 the Labor
Code. (Asian Institute Of Management V. Asian Institute Of Management Faculty Association,
G.R. No. 207971, January 23, 2017)
When the breach of trust or loss of confidence conjectured upon is not borne by clearly
established facts, as in this case, such dismissal on the ground of loss of trust and confidence
cannot be upheld. (Interadent Zahntechnik Philippines, Inc., Et Al Vs Rebecca Simbillo
G.R. No. 207315; November 23, 2016)
To dismiss an employee on the ground of loss of trust and confidence, two requisites must
concur: (a) the concerned employee must be holding a position of trust; and, (b) the loss of trust
must be based on wilful breach of trust based on clearly established facts. (Leo’s Restaurant V.
Densing, GR No. 208535, October 19, 2016)
In illegal dismissal cases, the employer has the burden of proving that the employee’s dismissal
was legal. However, to discharge this burden, the employee must first prove, by substantial
evidence, that he had been dismissed from employment. (Lorelei O. Hadan Vs. La Suerte
International Manpower Agency, Inc. and Debbie Lao; G.R. No. 203882; January 11, 2016)
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The parties' CBA is inapplicable.Beja based his claim for full disability benefits under the CBA,
claiming that his disability resulted from an accident while in the employ of petitioners and that
petitioners' belated denial cannot negate the applicability of the CBA provisions. (Island
Overseas Transport Corp. v. Beja, G.R. No. 203115, December 7, 2015)
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. (NEC
System Integrated Contruction Phils. (NESIC), Inc. vs. Crisologo, G.R. No. 201535, October 5, 2015
The implementation of the rotation policy in a security agency is within the ambit of
management prerogative and the placing of the employee on floating status is not considered
a dismissal. (Gerardo Carique v. Philippine Scout Veterans, G.R. No. 197484, September 16, 2015)
In proving that the dismissal of an employee is based on valid cause, the employer must comply
with the following requisites: (1) the dismissal must be for a just or authorized cause, and (2) the
employee to be dismissed must have been afforded due process of law. (Inc Shipmanagement
V. Camporedondo, Gr No. 199931, September 7, 2015)
A surety bond should be accompanied by both an indemnity agreement and proof of security
deposit or collateral securing the bond, for illegal dismissal, among others, that two must be
presented. The submission of one cannot be considered sufficient as to dispense with the other.
(U-Bix Corp. v. Hollero,G.R. No. 199660 (Resolution), July 13, 2015)
Under Article 223 of the Labor Code, filing of supersede as bond for the perfection of an appeal
involving a monetary award is mandatory and jurisdictional and failure to comply with this
requirement renders the decision of the LaborArbiter final and executor. The filing of a motion to
reduce bond predicated on meritorious grounds coupled with the posting of a reasonable
amount of cash or surety bond suffice to suspend the running of the period within which to
appeal.In the recent case of Mcburnie v. Ganzon, the Court has set a provisional percentage of
10% of the monetary award, exclusive of damages and attorney’s fees, as a reasonable amount
of bond that an appellant should post pending resolution by the NLRC of a motion to reduce
bond. It is only after the posting of this bond that an appellant’s period to perfect an appeal is
suspended. This ruling is merely provisional and it is still depended on the discretion of the NLRC.
(Isabino Alarma Vs. Ace Promotion And Marketing Corporation, G.R. No. 195513 , June 22, 2015)
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
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relationship by some overt act.Mere failure to report for work after notice to return does not
constitute abandonment. (Litex Glass and Aluminum Supply v. Sanchez, G.R. No. 198465, April
22, 2015)
Constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an

employer has become so unbearable to the employee leaving him with no option but to forego
with his continued employment. (ICT MARKETING SERVICES, INC. vs Sales, G.R. No. 202090;
September 9, 2015)
A party will not be allowed to make a mockery of justice by taking inconsistent positions which, if
allowed, would result in brazen deception. (Nahas v. Olarte, G.R. No. 169247, [June 2, 2014], 734
PHIL 569-584)
The written statements of employees admitting their participation in the scheme are admissible
to establish the plan or scheme to defraud the employer. Said statements of a co- employee in
a labor case may prove an employee’s guilt or wrongdoing if it recites crucial details of his
involvement. The rules on hearsay do not apply because 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. (Castillo v. Prudential Plans, Inc., G.R. No. 196142, [March
26, 2014], 730 PHIL497-521)
The burden is on the employer to prove that the termination was for valid cause.
Unsubstantiated accusations or baseless conclusions of the employer are insufficient legal
justifications to dismiss an employee. The unflinching rule in illegal dismissal cases is that the
employer bears the burden of proof. (Garza vs.Coca-Cola Bottlers Phils., Inc.,G.R. No. 180972,
January 20, 2014)
When another employee is soon after appointed to a position which the employer claims has
been abolished, while the employee who had to vacate the same is transferred against her will
to a position which does not exist in the corporate structure, there is evidently a case of illegal
constructive dismissal. (Ico vs. Systems Technology Institute, Inc. G.R. No. 185100, July 9, 2014)
Article 217(a(4) of the Labor Codebestows upon the Labor Arbiter original and exclusive
jurisdiction over claims for damages arising from employer-employee relations. (Amecos
Innovations V. Lopez, GR No. 178055, July 3, 2014)
A collective bargaining dispute requires due consideration and proper balancing of the interests
of the parties to the dispute and of those who might be affected by the dispute. As a rule,
affordability or capacity to pay should be taken into account but cannot be the sole yardstick
in determining the wage award. The decision maker must always take into account the "public
interest" aspects of the case. (Asia Brewery, Inc. v. Tunay na Pagkakaisa ng mga Manggagawa
sa Asia, G.R. Nos. 171594-96, [September 18, 2013], 718 PHIL 33-54)
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diminution in pay. 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.
(Ang Vs San Joaquin, Jr, G.R. No. 185549; [August 7, 2013], 716 Phil 115-131)
In illegal dismissal cases, while the employer bears the burden to prove that the termination was
for a valid or authorized cause, the employee must first establish by substantial evidence the
fact of dismissal from service. (Cañedo vs. Kampilan Security and Detective Agency, Inc.; G.R.
No. 179326, [July 31, 2013], 715 Phil 625-637)
As the law between the parties, the CBA must be strictly complied with.It is a familiar and
fundamental doctrine in labor law that the CBA is the law between the parties and they are
obliged to comply with its provisions.Thus, where the CBA is clear and unambiguous, it becomes
the law between the parties and compliance therewith is mandated by the express policy of
the law.(Zuellig Pharma V. Sibal, GR No. 173587, July 15, 2013)
Constructive dismissal occurs not when the employee ceases to report for work, but when the
unwarranted acts of the employer are committed to the end that the employee’s continued
employment shall become so intolerable. In these difficult times, an employee may be left with
no choice but to continue with his employment despite abuses committed against him by the
employer, and even during the pendency of a labor dispute between them. (The Orchard Golf
and Country Club vs. Amelia R. Francisco, G.R. No. 178125; March 18, 2013)
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.(Tangga-an v. Philippine Transmarine Carriers, Inc., G.R. No. 180636, [March 13, 2013],
706 PHIL 339-354)
Every CBA shall provide a grievance machinery to which all disputes arising from its
implementation or interpretation will be subjected to compulsory negotiations. Hence, if a
remedy within the administrative machinery can still be resorted to by giving the administrative
officer concerned every opportunity to decide on a matter that comes within his jurisdiction,
then such remedy should be exhausted first before the court’s judicial power can be sought. The
premature invocation of the court’s judicial intervention is fatal to one’s cause of action." "The
underlying principle of the rule on exhaustion of administrative remedies rests on the
presumption that when the administrative body, or grievance machinery, is afforded a chance
to pass upon the matter, it will decide the same correctly." (Carlos L. Octavio, vs. Phlippine Long
Distance Telephone Company. G.R. No. 175492 February 27, 2013)
14
Resignation is the formal pronouncement or relinquishment of an office. The overt act of

relinquishment should be coupled with intent to relinquish, which intent could be inferred from
the acts of the employee before and after the alleged resignation.In Globe Telecom v.
Crisologo, we held that allegations of coercion are belied by words of gratitude coming from an
employee who is just forced to resign. Although the courts are committed to protect labor, the
rights of management shall be upheld if only to serve the interests of fair play. (Auza, Jr. v. MOL
Philippines, Inc., G.R. No. 175481, [November 21, 2012], 699PHIL 62-84)
The management's right to discipline its employees who, without its permission, joined a public
demonstration to protest the ruling of the Secretary of Labor vis-à-vis the employees'
constitutional rights to freedom of expression, to peaceful assembly and to petition the
government for redress of their grievances. ( Solidbank Union v. Metropolitan Bank and Trust Co.
G.R. Nos. 153799, 157169, 157327 & 157506 September 17, 2012)
In labor cases, strict adherence with the technical rules is not required. This liberal 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. (Misamis Oriental Ii Electric Service
Cooperative (Moresco Ii) Vs. Virgilio M. Cagalawan, G.R. No. 175170, September 5, 2012)
In dismissing an employee from service, employer has the burden of proving its observance of
the two-notice requirement and its accordance to the employee of a real opportunity to be
heard. Article 277 (b) of the Labor Code requires according the employee both notice and
hearing. Section 2 (d), Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code
expounds on the procedural due process requirements that every employer must observe in a
termination of employment based on a just cause. (Jarl Construction V. Atencio, G.R. No.
175969; August 1, 2012)
The law is fair and just to both labor and management. Thus, while the Constitution accords an
employee security of tenure, it abhors oppression to an employer who cannot be compelled to
retain an employee whose continued employment would be patently inimical to its interest.
(Reyes-Rayel v. Philippine Luen Thai Holdings, Corp G.R. No. 174893 July 11, 2012)
To validly dismiss an employee on the ground of loss of trust and confidence under Article 282
(c) of the Labor Code of the Philippines, the following guidelines must be observed: 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. More important, it must be based on a willful breach of trust and
founded on clearly established facts. Jurisprudence consistently holds that for managerial
employees the mere existence of a basis for believing that such employee has breached the
trust of his employer would suffice for his dismissal. (Apo Cement Corp. vs. Baptisma, G.R. No.
176671, June 20, 2012)
15
Indeed, quitclaims executed by employees are commonly frowned upon as being contrary to
public policy. But where the person making the waiver has done so voluntarily, with a full
understanding thereof, and the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as being a valid and binding undertaking. (Ison v. Crewserve,
Inc G.R. No. 173951 April 16, 2012)
In constructive dismissal cases, the employer has the burden of proving that the transfer of an
employee is for just or valid ground, such as genuine business necessity. The employer must
demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the employee
and that the transfer does not involve a demotion in rank or a diminution in salary and other
benefits. If the employer fails to overcome this burden of proof, the employees transfer is
tantamount to unlawful constructive dismissal. (Julies Bakeshop Vs. Henry Arnaiz, G.R. No. 173882,
February 15, 2012)
As the law regards workers with compassion, an employers’ right to discipline them should be tempered
with compassion as well. In line with this, the imposition of the supreme penalty of dismissal is justified only
when there are sufficient grounds as supported by substantial evidence. (Manila Electric Co. v. Beltran
G.R. No. 173774 January 30, 2012)
A worker cannot be deprived of his job, a property right, without satisfying the requirements of
due process. As enshrined in our bill of rights, no person shall be deprived of life, liberty or
property without due process of law. (Polsotin, Jr. vs. De Guia Enterprises, Inc.; G.R. No. 172624
December 5, 2011)
Constructive dismissal is quitting because continued employment is rendered impossible,

unreasonable or unlikely, or because of a demotion in rank or a diminution of pay. It exists when
there is a clear act of discrimination, insensibility or disdain by an employer which becomes
unbearable for the employee to continue his employment. Any benefit and perks being enjoyed
by employees cannot be reduced or discontinued; otherwise, the constitutional mandate to
afford full protection to labor shall be offended. But the rule against diminution of benefits is
applicable only if the grant or benefit is founded on an express policy or has ripened into a
practice over a long period which is consistent and deliberate.(Barroga v. Data Center College
of the Phils. G.R. No. 174158 June 27, 2011)
[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. (University Plans, Inc. v.
Solano G.R. No. 170416 June 22, 2011)
A judgment that has attained finality is immutable and could thus no longer be modified. There
is no necessity to conduct a proceeding to determine the participants in the illegal strike or
those who refused to heed the return to work order because the ambiguity can be cured by
16
reference to the body of the decision and the pleadings filed. (Airline Pilots Association Of The
Philippines Vs. Philippine Airlines Inc., G.R. No. 168382, June 6, 2011)
The base figure in computing the award of back wages to an illegally dismissed employee is the
employee’s basic salary plus regular allowances and benefits received at the time of dismissal,
unqualified by any wage and benefit increases granted in the interim.(BPI Employees Union-
Metro Manila v. Bank of the Phil. Islands G.R. Nos. 178699 & 178735 September 21, 2011)
The burden of proof for an employer’s loss of confidence in an employee, due to some
misconduct and the nature of his participation is such as to render him unworthy of trust and
confidence demanded of his position, is on the employer.(Jerusalem v. Keppel Monte Bank, G.R.
No. 169564, April 6, 2011)
A charter certificate does not need to be certified under oath by the union’s secretary nor be
attested to by the president. Neither does the mingling of rank-and-file and supervisory
employees in a union representing rank-and-file employees affect its legitimacy. (Samahang
Manggagawa v. Charter Chemical, G.R. No. 169717, March 16, 2011)
Jurisprudence provides for two essential requirements for abandonment of work to exist – the
failure to report for work or absence without valid or justifiable reason and clear intention to
sever the employer-employee relationship manifested by some overt acts should both concur.
(Harpoon Marine Services, Inc., Vs Francisco, G.R. No. 189658 167751; March 2, 2011)
The legal personality of a legitimate labor organization cannot be subject to a collateral attack.
The law is very clear on this matter. The Implementing Rules stipulate that a labor organization
shall be deemed registered and vested with legal personality on the date of issuance of its
certificate of registration. Once a certificate of registration is issued to a union, its legal
personality cannot be subject to a collateral attack. In may be questioned only in an
independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the
Implementing Rules. (Legend International Resorts Ltd. vs. Kilusang Manggagawa Ng Legenda;
G.R. No.169754. February 23, 2011)
A bank managers abuse of authority in implementing bank policies is an abuse of the trust reposed in
him by his employer which constitutes as a just cause for his termination. (Equitable Pci Bank vs. Castor A.
Dompor,G.R. Nos. 163293 & 163297, December 13, 2010)
The quantum of proof required in determining the legality of an employee's dismissal is only
substantial evidence. (PLDT V Eusebio M. Honorado, G.R. No. 189366, December 08, 2010)
17
Article 283 of the Labor Code, retrenchment is a valid exercise of management prerogative
subject to following: (1) That the retrenchment is reasonably necessary and likely to prevent
business losses which, if already incurred, are not merely de minimis, but substantial, serious,
actual and real, or if only expected, are reasonably imminent as perceived objectively and in
good faith by the employer; (2) That the employer served written notice both to the employees
and to the Department of Labor and Employment at least one month prior to the intended date
of retrenchment;(3) That the employer pays the retrenched employees separation pay
equivalent to one month pay or at least month pay for every year of service, whichever is
higher; (4) That the employer exercises its prerogative to retrench employees in good faith for
the advancement of its interest and not to defeat or circumvent the employees right to security
of tenure; and (5) That the employer used fair and reasonable criteria in ascertaining who would
be dismissed and who would be retained among the employees, such as status, x x x efficiency,
seniority, physical fitness, age, and financial hardship for certain workers. (Shimizu
Phils.Contractors, Inc. v. Callanta ...G.R. No. 165923. September 29, 2010)
It is incumbent upon this Court to afford full protection to labor. Thus, while we take cognizance
of the employer's right to protect its interest, the same should be exercised in a manner which
does not infringe on the workers' right to security of tenure. "Under the policy of social justice, the
law bends over backward to accommodate the interests of the working class on the humane
justification that those with less privilege in life should have more in law." (St. Mary’s Academy Of
Dipolog City Vs. Teresita Palacio, Et Al. G.R. No. 164913. September 8, 2010)
In the dismissal of employees, it has been consistently held that the twin requirements of notice
and hearing are essential elements of due process. The employer must furnish the employee with
two written notices before termination of employment can be legally effected: (a) a notice
apprising the employee of the particular acts or omissions for which his dismissal is sought, and
(b) a subsequent notice informing the employee of the employer's decision to dismiss him.
(Nagkakaisanglakas Ng Manggagawasa Keihin V. Keihin Phils. Corp., G.R. No. 171115; August 9,
2010)
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 v. Lopez G.R. No. 169999, July 26, 2010)
Section 226 of the Labor Codeclearly 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.There is, thus, no
doubt as to the BLR's jurisdiction over the dispute involving member-unions of a federation arising
from disagreement over the provisions of the federation's constitution and by-laws. (Montaño vs.
Verceles,G.R. No. 168583, July 26, 2010)
18
It is fundamental that an employer is liable for illegal dismissal when it terminates the services of the
employee without just or authorized cause and without due process of law. A mere decline in gross
income cannot in any manner be considered as serious business losses. It should be substantial,
sustained and real.(Lambert Pawnbrokers and Jewelry Corp. v. Binamira, G.R. No. 170464. July
12, 2010)
Before employers are burdened to prove that there was no illegal dismissal, the employee must
first establish the fact of his or her dismissal. (Romeo Basay v. Hacienda Consolacion, G.R. No.
175532, April 19, 2010)
In Nicolas vs NLRC, it was held that a criminal conviction is not necessary to find just cause for
employment termination. Otherwise stated, 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 interest. (Reno
Foods, Inc. vs NLM-KATIPUNAN, G.R. No. 164016. March 15, 2010)
Labor adjudicatory officials and the CA must demur the award of separation pay based on
social justice when an employees dismissal is based on serious misconduct or willful
disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or commission
of a crime against the person of the employer or his immediate family - grounds under Art. 282 of
the Labor Code that sanction dismissals of employees. (Quiambao V Manila Electric Company,
G.R. No. 171023 : December 18, 2009)
Loss of confidence constitutes a just cause for terminating an employer-employee relationship.

But for dismissal for loss of confidence to be warranted, there should naturally be some basis for
it. Unsupported by sufficient proof, loss of confidence is without basis and may not be
successfully invoked as a ground for dismissal. (Marina Port Services, Inc. v. NLRC, G.R. No. 80962,
January 28, 1991)
19
SOCIAL LEGISLATION
There being no employer-employee relation or any other definite or direct contract between
respondent and petitioner, the latter being responsible to the former only for the proper
payment of wages, respondent is thus justified in filing a case against petitioner, based on
Articles 19 and 20 of the Civil Code, to recover the proper salary due her as SSS Processor.
(SOCIAL SECURITY SYSTEM v. Debbie Ubana, G.R. No. 200114, August 24, 2015)
The right to compensation extends to disability due to disease supervening upon and
proximately and naturally resulting from a compensable injury. Where the primary injury is shown
to have arisen in the course of employment, every natural consequence that flows from the
injury likewise arises out of the employment, unless it is the result of an independent intervening
cause attributable to claimant's own negligence or misconduct. (Government Service Insurance
System v. Calumpiano, G.R. No. 196102, November 26, 2014)
In compensation proceedings, the test of proof is probability, not absolute certainty; hence, a
claimant only needs to show reasonable work connection and not direct causal relation.(GSIS v.
Besitan, GR No. 178901, November 23, 2011)
This Court defined "dependent" as "one who derives his or her main support from another [or]
relying on, or subject to, someone else for support; not able to exist or sustain oneself, or to
perform anything without the will, power or aid of someone else." (Social Security Commission v.
Favila G.R. No. 170195. March 28, 2011)
Employees who received separation benefit under RA 9136 are no longer entitled to retirement
benefits. (Herrera v. National Power Corp, G.R. No. 166570. December 18, 2009)
20
CASE DIGESTS
LABOR STANDARDS
HERMA SHIPYARD, INC. AND ESGUERRA vs OLIVEROS

G.R. No. 208936, April 17, 2017
DOCTRINE
The repeated and successive rehiring of respondents as project-based employees does not
qualify them as regular employees. 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.
FACTS
Herma Shipyard is a domestic corporation engaged in the business of shipbuilding and repair.
The respondents were its employees occupying various positions such as welder, leadman, pipe
fitter, laborer, helper, etc. When they were dismissed, they filed a complaint for illegal dismissal,
regularization, and non-payment of service incentive leave pay, alleging that they worked as
regular employees who have been continuously performing tasks usually necessary in
petitioner’s business. Petitioner allegedly made employees sign employment contracts for a
fixed period ranging from one to four months to make it appear that they were project-based
employees, but despite the expiration of said contracts, the project employees, continued to
work for Henna, who in turn failed to report the completion of such project to DOLE. The Labor
Arbiter denied the complaint for lack of merit. The NLRC likewise denied the respondents’
appeal. When the case was brought to the CA, the CA concluded that the project employment
contracts were indeed used as a device to circumvent respondents’ right to security of tenure
because the respondents were repeatedly rehired as employees of petitioners and were made
to work in different projects. Petitioner also failed to present proof that respondents were hired
for a specific project and period.
ISSUE
Whether or not respondents are regular employees whose terms of employment were not validly
terminated by petitioner
HELD
No. The Court held that the repeated and successive rehiring of respondents as project-based
employees does not qualify them as regular employees. 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. The completion of their work or project automatically
terminates their employment, in which case, the employer is, under the law, only obliged to
render a report on the termination of the employment. The nature of Henna Shipyard's business
requires hired workers when it has existing contracts for shipbuilding and repair. Hence, petitioner
is allowed '"to reduce its work force into a number suited for the remaining work to be done
upon the completion or proximate accomplishment of [each particular] project." As for
respondents, since they were assigned to a project or a phase thereof which begins and ends a
determined or determinable times, their services were lawfully terminated upon the completion
of such project or phase thereof.
21
TSM Shipping Co. vs. LOUIE L. PATIÑO

G.R. No. 210289, March 20, 2017
DOCTRINE
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.
FACTS
TSM, for and in behalf of its foreign principal, DNAS, entered into a Contract of Employment with
respondent for a period of six months as GP2/OS (General Purpose 2/Ordinary Seaman) for the
vessel Nord Nightingale, while working on board the vessel, respondent injured his right hand
while securing a mooring rope. He was brought to a medical facility in Istanbul, Turkey, where X-
ray showed a fracture on his 5th metacarpal bone. Respondent's right hand was placed in a
cast and thereafter he was repatriated. Upon arrival in Manila on May 24, 2010, petitioners
referred respondent to the company-designated physician, for further treatment. Respondent
was also referred to an orthopedic surgeon who recommended surgical operation to correct
the malunited fractured metacarpal bone and underwent Open Reduction and Internal
Fixation of the fractured 5th metacarpal bone at Manila Doctors Hospital. He then went through
physical therapy. After extensive medical treatments, therapy, and follow-up examinations, then
rendered an interim assessment of respondent's disability under the Philippine Overseas
Employment Administration - Standard Employment Contract (POEA-SEC), at Grade 10, or Joss
of grasping power for small objects between the fold of the finger of one hand. Despite
continuing physical therapy sessions with the company-designated physician, respondent filed
on September 8, 20l0 a complaint 9 with the NLRC against petitioners for total and permanent
disability benefits damages, and attorney's fees. Thereafter, in a Medical Report declared
respondent to have reached the maximum medical cure after rendering a final disability rating
of Grade 10 they assessed him to have permanent disability unfit for sea duty in whatever
capacity as a seaman
ISSUE
Whether or not the respondent is entitled to disability benefits
HELD
The Petition is GRANTED, the finding that his entitlement to disability benefits is governed by the
POEA-SEC and relevant labor laws, which are deemed written in the contract of employment
with petitioners.Article 192(c)(1) of the Labor Code provides that:
Art. 192. Permanent total disability. -x x x(c) The following disabilities shall be deemed total and
permanent:(1) Temporary total disability lasting continuously for more than one hundred twenty
days, except as otherwise provided for in the Rules;The Rule referred to in this Labor Code
provision is Section 2, Rule X of the Amended Rules on Employees' Compensation Implementing
Title II, Book IV of the Labor Code, Section 32 of the POEA-SEC provides for a schedule of
disability compensation which is often ignored or overlooked in maritime compensation cases.
To stress, 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.
22
JACK C. VALENCIA V. CLASSIC VINYL PRODUCTS CORPORATION, JOHNNY CHANG

(OWNER) AND/OR CANTINGAS MANPOWER SERVICES
GR. No. 206390; January 30, 2017
DOCTRINE
In any event, it must be stressed that “in labor-only contracting, the statute creates an employer-
employee relationship for a comprehensive purpose: to prevent a circumvention of labor laws.
The contractor is considered merely an agent of the principal employer and the latter is
responsible to the employees of the labor-only contractor as if such employees had been
directly employed by the principal employer. The principal employer therefore becomes
solidarily liable with the labor-only contractor for all the rightful claims of the employees.”
FACTS
Valencia alleged that he applied for work with Classique Vinyl but was told by the latter’s
personnel office to proceed to CMS, where he was made to sign a contract of employment but
no copy of the same was given to him. He was not paid his holiday pay, service incentive leave
pay, 13th month pay. His salary was way below the then mandated by law. Worse, premiums for
Philhealth and Pag-IBIG Fund were not paid and his monthly deductions for Social Security
System (SSS) premiums were not properly remitted. He further averred that he worked for
Classique Vinyl for four years until his dismissal. Hence, by operation of law, he had already
attained the status of a regular employee of his true employer, Classique Vinyl, since according
to him. CMS is a mere labor-only contractor. Valencia, therefore, argued that Classique Vinyl
should be held guilty of illegal dismissal for failing to comply with the twin-notice requirement
when it dismissed him from the service and be made to pay for his monetary claims. In sum,
Classique Vinyl asserted that there was no employer-employee relationship between it and
Valencia, hence, it could not have illegally dismissed the latter nor can it be held liable for
Valencia’s monetary claims. At any rate, Classique Vinyl insisted that Valencia’s true employer
was CMS, the latter being an independent contractor.
ISSUE:
Whether or not CMS is a labor-only contractor.
HELD:
NO. To prove that CMS was a legitimate contractor, Classique Vinyl presented the former’s
Certificate of Registration with the Department of Trade and Industry and, License as private
recruitment and placement agency from the Department of Labor and Employment. Indeed,
these documents are not conclusive evidence of the status of CMS as a contractor. However,
such fact of registration of CMS prevented the legal presumption of it being a mere labor-only
contractor from arising. In any event, it must be stressed that “in labor-only contracting, the
statute creates an employer-employee relationship for a comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is considered merely an agent of the principal
employer and the latter is responsible to the employees of the labor-only contractor as if such
employees had been directly employed by the principal employer. The principal employer
therefore becomes solidarily liable with the labor-only contractor for all the rightful claims of the
employees.” The facts of this case, however, failed to establish that there is any circumvention of
labor laws as to call for the creation by the statute of an employer-employee relationship
between Classique Vinyl and Valencia. In fact, even as against CMS, Valencia’s money claims
has been debunked by the labor tribunals and the CA. Again, the Court is not inclined to disturb
the same.
23
RUTCHER T. DAGASDAS V. GRAND PLACEMENT AND GENERAL SERVICES CORPORATION;

G.R. No. 205727; January 18, 2017
DOCTRINE: It is well-settled rule 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.
FACTS: Respondent employed Petitioner Dagasdas as Network Technician and was to be

deployed in Saudi Arabia pursuant to a one-year contract. Petitioner contended that his
position as a Network Technician indicated in his contract was only for the purpose of securing a
visa for Saudi Arabia, that he actually applied for and was engaged as a Civil Engineer. Upon
arrival in Saudi Arabia, petitioner signed with ITM a new employment contract, Dagasdas was
allegedly given tasks suited for a Mechanical Engineer, which were foreign to the job he applied
for and his experience as Civil Engineer. ITM gave petitioner a termination notice, pursuant to
clause 17.4.3 of his contract which provided that ITM reserved the right to terminate any
employee within the three-month probationary period without need of any notice to the
employee. Before repatriation, petitioner signed a Statement of Quitclaim with Final Settlement
stating that ITM paid him all the salaries and benefits for his services, relieving ITM from all
financial obligations due to petitioner. Upon return to the Philippines, petitioner filed an illegal
dismissal case against respondent, ITM and Aramco. Accusing the three of misrepresentation,
resulting to mismatch in the work assigned to him, Moreover, petitioner argued that although he
was engaged as a project employee, he was still entitled to security of tenure for the duration of
his contract. That the three merely invented “imaginary causes” to terminate him. Making his
termination groundless and without due process.
ISSUE: W/N Petitioner Dagasdas was validly dismissed from work
HELD: NO, CA decision set aside, NLRC decision in favor of Petitioner Dagasdas reinstated.
Petitioner Dagasdas is entitled to a security of tenure, given the fact that petitioner’s contract as
an OFW was perfected in the Philippines. Under the principle of Lex Loci Contractus, such
contracts are governed by Philippine laws, primarily by the Labor Code of the Philippines and its
IRR. At the same time, our laws generally apply even to employment contracts of OFWs as our
Constitution explicitly provides that the State shall afford full protection to labor, whether local or
overseas. Thus, even if a Filipino is employed abroad, he or she is entitled to security of tenure,
among other constitutional rights. Dagasdas' new contract is in clear violation of his right to
security of tenure. There is no clear justification for the dismissal of petitioner and no existing just
causes pursuant to Article 297 of the Labor Code is present. That only the exercise of ITM’s right
to terminate petitioner within the probationary period was the basis for the latter’s dismissal.
While the Civil Code recognizes that parties may stipulate in their contracts such terms and
conditions as they may deem convenient, these terms and conditions must not be contrary to
law, morals, good customs, public order or policy. The above-cited clause is contrary to law
because as discussed, our Constitution guarantees that employees, local or overseas, are
entitled to security of tenure. To allow employers to reserve a right to terminate employees
without cause is violative of this guarantee of security of tenure. Even if Petitioner Dagasdas was
still a probationary employee, his termination, dismissal must still be with a valid cause.
24
TURKS SHAWARMA COMPANY/GEM ZENAROSA V. FELICANO Z. PAJARON AND LARRY A.

CARBONILLA
G.R. No. 207156, January 16, 2017
DOCTRINE
The motion to reduce bond cannot be given a liberal interpretation if it is not based on
meritorious grounds and if there is no reasonable amount as to the monetary award posted by
the appellant.
FACTS
Turks Shawarma Company hired Feliciano Pajaron as service crew and Larry Carbonilla as head
crew. After three years, they filed complaints for constructive and actual illegal dismissal against
the company. The Labor Arbiter ruled in favor of Pajaron and Carbonilla. The company owner,
Gem Zeñarosa, filed a notice of appeal and a motion to reduce bond since he could not afford
the full award, being a backyard micro-entrepreneur. He only paid a partial bond of P15,000.
The NLRC denied such motion because financial difficulties were deemed not to be a valid
ground to reduce bond and because there was no substantial proof for this. The partial bond
was also deemed not reasonable for the total amount of the award, which was P197,93627. A
motion for reconsideration was filed reasoning that they had substantially complied with the
Rules through the posting of a partial bond and willingness to post additional bond. They also
argued that the motion to reduce bond was meritorious because to pay the full amount would
greatly affect the company’s operations. They asked for a more liberal application of the Rules.
The NLRC denied such motion. Their petition for certiorari with the CA was also dismissed.
ISSUE
Whether or not a liberal interpretation of the requirement of an appeal bond is meritorious
HELD
NO. The right to appeal is not a natural right or a component of due process. The party who
seeks to avail of such must comply with the requirements of the rules. Art. 223 of the Labor Code
states that in case of judgment involving a monetary award, an appeal by the employer may
be perfected only upon the posting of a cash or surety bond in the amount equivalent to the
monetary award in the judgment appealed from. Section 4 and 6 of the 2005 Revised Rules of
Procedure of the NLRC also state the same. In special and justified circumstances, the Court has
relaxed such requirement to give way to equity and justice. Section 6 of Rule VI of the same
Revised Rules states that the motion to reduce bond is allowed when based on meritorious
grounds and when a reasonable amount in relation to the monetary award is posted by the
appellant. Neither conditions were found in the case at bar.
25
JUAN B. HERNANDEZ vs. CROSSWORLD MARINES SERVICES, INC., ET AL.

G.R. No. 209098, November 14, 2016
DOCTRINE
The law does not consider as valid any agreement to receive less compensation than what a
worker is entitled to recover nor prevent him from demanding benefits to which he is entitled.
Quitclaims executed by the employees are thus commonly frowned upon as contrary to public
policy and ineffective to bar claims for the full measure of the workers legal rights, considering
the economic disadvantage of the employee and the inevitable pressure upon him by financial
necessity.
FACTS
On October 7, 2008, petitioner was engaged by respondents (with whom he has worked with
since 2005) to work as Chief Cook aboard the vessel M/V Nikomarin. He was repatriated on
December 19, 2009. With an intention to serve respondents 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. Despite being declared fit for
duty, his employment was deferred. In 2011, petitioner consulted two separate physicians who
gave out the same diagnosis and declared him unfit for sea duty. In the midst of the CA
proceedings, respondent paid petitioner the amount of the judgment award of the NLRC under
a Conditional Satisfaction of Judgment which stipulated, among others, that “should the CA or
Supreme Court reverse the ruling of the NLRC, he shall return whatever is due without need of
further demand” and, “that I have no further claims whatsoever against the owners of MV
NIKOMARIN”.
ISSUE
Whether or not petitioner is entitled to disability benefits
HELD
Yes, petitioner is entitled to disability benefits. In Career PhilippinesShip Management, Inc. v.
Madjus the Court ruled against the employer because the conditional satisfaction of judgment
signed by the parties was highly prejudicial to the employee. The agreement stated that the
payment of the monetary award was without prejudice to the right of the employer to a petition
for certiorari and appeal, while the employee agreed that she would no longer file any
complaint or prosecute any suit of [sic] action against the employer after receiving the
payment. And in More Maritime Agencies, Inc. v. NLRC the Court ruled that the law does not
consider as valid any agreement to receive less compensation than what a worker is entitled to
recover nor prevent him from demanding benefits to which he is entitled. Quitclaims executed
by the employees are thus commonly frowned upon as contrary to public policy and ineffective
to bar claims for the full measure of the workers legal rights, considering the economic
disadvantage of the employee and the inevitable pressure upon him by financial necessity.
Respondents could have simply paid the judgment award without attaching conditions that
have far-reaching consequences other than those intended by a simple compliance with what
was required under the circumstances - that is, the mandatory execution proceedings following
a favorable judgment allowed under the Labor Code. For what they did, respondents are guilty
of bad faith, and should suffer the consequences of their actions.
26
DOEHLE-PHILMAN MANNING AGENCY INC V HENRY C HARO

G.R. No. 206522; April 18, 2016
DOCTRINE
For a disability to be compensable, the seafarer must prove a reasonable link between his work
and his illness in order for a rational mind to determine that such work contributed to, or at least
aggravated, his illness. It is not enough that the seafarer’s injury or illness rendered him disabled;
it is equally necessary that he establishes a causal connection between his injury or illness, and
the work for which he is engaged.
FACTS
Doehle-Philman, in behalf of its foreign principal, Dohle Ltd., hired respondent as oiler a for a
period of nine months. Before deployment, respondent underwent pre-employment medical
examination (PEME) and was declared fit for sea duty. The respondent boarded the vessel and
assumed his duties as oiler; however, he experienced heartache and loss of energy; thereafter,
he was confined where he was informed of having a hole in his heart. After his repatriation on
December 6, 2008, respondent reported to Doehle-Philman which in turn referred him to Clinico-
Med. Respondent claimed that he was confined for two days in UST Hospital and that a heart
operation was recommended to him. He admitted that he has not yet undergone any surgery.
Respondent’s personal doctor declared him not fit to work. He filed a Complaint for disability
benefits, reimbursement of medical expenses, moral and exemplary damages, and attorney’s
fees against petitioners. He claimed that since he was declared fit to work before his
deployment, this proved that he sustained his illness while in the performance of his duties
aboard the vessel; that he was unable to work for more than 120 days; and that he lost his
earning capacity to engage in a work he was skilled to do. Thus, he insisted he is entitled to
permanent and total disability benefits
ISSUE
Whether or not the CA was correct in setting aside the NLRC Resolutions denying respondent’s
claim for permanent and total disability benefits.
HELD
No. The resolution of the Court of Appeals are REVERSED and SET ASIDE.
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.
Although this condition manifested while respondent was aboard the vessel, such circumstance
is not sufficient to entitle him to disability benefits as it is of equal importance to also show that
respondent’s illness is work-related .Here, respondent argues that he was unable to work as a
seaman for more than 120 days, and that he contracted his illness while under the employ of
petitioners. However, he did not at all describe his work as an oiler, and neither did he specify
the connection of his work and his illness. The company-designated doctor determined that
respondent’s condition is not work-related. The Court holds that the fact that respondent passed
the PEME is of no moment in determining whether he acquired his illness during his employment.
The PEME is not exploratory in nature. It is not intended to be a thorough examination of a
27
person's medical condition, .and is not a conclusive evidence that one is free from any ailment
before deployment.
TABUK MULTI-PURPOSE COOPERATIVE, INC. (TAMPCO), ET AL. VS. MAGDALENA DUCLAN;
G.R. No. 203005; March 14, 2016
DOCTRINE
ART. 282 DISMISSAL OF EMPLOYEE. The employer may terminate the services of its employee for
the latter's serious misconduct or willful disobedience of its or its representative's lawful orders.
And for willful disobedience to constitute a ground, it is required that: "(a) the conduct of the
employee must be willful or intentional; and (b) the order the employee violated must have
been reasonable, lawful, made known to the employee, and must pertain to the duties that he
had been engaged to discharge.
FACTS
Petitioner Tabuk Multi-Purpose Cooperative, Inc. (TAMPCO) is a duly registered cooperative. It is
engaged in the business of obtaining investments from its members which are lent out to
qualified member-borrowers. The two other petitioners are both officers of TAMPCO. On the
other hand, respondent Duclan, was employed as TAMPCO cashier. One of her duties as
Cashier was to sign checks for release. TAMPCO introduced Special Investment Loans (SILs) to its
members and prospective borrowers. A year after introducing the SIL program, TAMPCO
realized that a considerable amount of the cooperative's loanable funds was being allocated
to SILs, which thus adversely affected its ability to lend under the regular loan program. It further
discovered that single individual borrowings under the SIL program reached precarious levels,
thus placing the resources of the cooperative at risk. TAMPCO BOD issued BA No. 28, putting a
cap on SIL borrowings; BA No. 55 was issued, completely prohibiting the grant of SILs. Despite
issuance of BA Nos. 28 and 55, respondent and the other officers of the cooperative including its
former General Manager, continued to approve and release SILs to borrowers, among them
Falgui and Kotoken, who received millions of pesos in loans. Eventually, Falgui claimed
insolvency, and Kotoken failed to pay back her loans. Upon discovery of the said irregularity,
TAMPCO BOD initiated an investigation. Respondent and the other officers who appeared to
be responsible were made to explain. Respondent admitted to her failure to obey BA Nos. 28 &
55 despite knowledge of the directives. Thus, TAMPCO BOD suspended them from work and
were ordered to collect the amount lost by the cooperative with a threat that should they fail to
collect, they would be dismissed. Respondent failed to collect the amount she was told to
collect and thereafter, after notice, the cooperative dismissed her service. Respondent filed a
complaint for illegal dismissal.
ISSUE
Whether or not respondent was dismissed for a just cause.
HELD
The dismissal is proper. Under Article 282 of the Labor Code, the employer may terminate the
services of its employee for the latter's serious misconduct or willful disobedience of its or its
representative's lawful orders. And for willful disobedience to constitute a ground, it is required
that: "(a) the conduct of the employee must be willful or intentional; and (b) the order the
employee violated must have been reasonable, lawful, made known to the employee, and
must pertain to the duties that he had been engaged to discharge.
28
WALLEM MARITIME SERVICES, INC., ET AL vs. EDWINITO V. QUILLAO

G.R. No. 202885 January 20, 2016
DOCTRINE
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 partial or total disability already exists. The 120 or 240-day period to determine the
seafarer’s disability or fitness to work is reckoned from his repatriation.
FACTS
WMS is a local manning agency and hired respondent as fitter aboard the vessel Crown Garnet
for a period of nine months and his employment was covered by a CBA and after undergoing
pre-employment medical examination, he was declared fit to work. However, respondent
started experiencing neck and lower back pain and purportedly noticed numbness and
weakness of his left hand. He signed off from the vessel and upon arrival in the Philippines, he
was referred to the company-designated physician and was diagnosed of cervical
radiculopathy, thoracic and lumbar spondylosis, as well as carpal tunnel syndrome of the left,
and trigger finger, third digit of his right hand. He underwent carpal tunnel surgery on his left
hand, and physical therapy sessions. He still complains of pain and with no significant
improvement after several sessions of intensive physical therapy. Discontinuation of his
rehabilitation program was advised by the specialist. The respondent consulted an
independent orthopedic surgeon and opined that respondent “is not fit for further sea duty
permanently in whatever capacity.”However, the Legal Affairs Department informed WMS of
respondent’s claim for disability benefits and the clarificatory conference. Thereafter, grievance
proceedings were held.
ISSUE
Whether or not the respondent is entitled to permanent and total disability benefits
HELD
No. he respondent prematurely file his Complaint, he reneged on his duties to continue his
treatment as necessary to improve his condition. Respondent failed to reasonably explain his
failure to report to the company-designated physician. The only clear circumstance that
transpired between these periods is that he already filed his Complaint. The 240-day maximum
period for treatment has not yet lapsed. The respondent filed the Complaint within the 240-day
period while he was still under the care of the company-designated doctor. The respondent has
not even consulted his doctor-of-choice before instituting his Complaint for disability benefits.
Moreover, he has no basis for claiming permanent and total disability benefits because he has
not yet consulted his doctor-of-choice.Under these circumstances, the pertinent provisions of the
Labor Code on disability benefits, including its Implementing Rules and Regulations, as well as
those of the POEA-SEC apply here.His inability to continue his treatment, without any valid
explanation proves that he neglected his corresponding duty to continue his medical treatment.
Consequently, respondent’s inability to regularly return for his treatment caused the regress of his
condition. Indeed, respondent did not comply with the terms of the POEA-SEC. The failure of the
company-designated doctor to issue an assessment was not of his doing but resulted from
respondent's refusal to cooperate and undergo further treatment. Such failure to abide with the
procedure under the POEA-SEC results in his non-entitlement to disability benefits.
29
VICMAR DEVELOPMENT CORPORATION vs. CAMILO ELARCOSA

G.R. No. 202215, December 9, 2015
DOCTRINE
A regular employee is one who is 1) 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.The test to determine whether an employee is regular is the reasonable connection
between the activity he performs and its relation to the employer's business or trade, as in the
case of respondents assigned to the boiler section. On the other hand, a contractor’s certificate
of registration is not conclusive of the status of a legitimate contractor; rather, it merely prevents
the presumption of being a labor-only contractor from arising.
FACTS
As early as 1990, Vicmar Development Corporation (Vicmar), a domestic corporation engaged
in manufacturing of plywood for export and for local sale, employed the respondents allegedly
as seasonal employees. Respondents were assigned to the boiler room and the plywood repair
processing room among others. Elarcosa and the others were paid minimum wage plus a small
amount of overtime but were not given benefits afforded to regular employees. In 2004, Vicmar
informed respondents that they will now be handled by contractors. Respondents complained
of the deductions to their wages as a result. It was also alleged that the contractor is a labor
only contractor. Consequently, they filed a complaint with DOLE. Allegedly, they were dismissed
for this reason without sufficient notice. Respondents filed a complaint for Illegal dismissal before
the Labor Arbiter. They claimed that they were regular employees of Vicmar. Vicmar on the
other hand claims that respondents are merely seasonal employees because their employment
is dependent on availability of forest products and workers
ISSUE
Whether or not the respondents are regular employees and were therefore illegally dismissed?
HELD
Yes, respondents were regular employees and were therefore illegally dismissed. Respondents
presented documentary evidence showing they have performed activities necessary in the
usual business of Vicmar. Most of them were assigned to activities essential for plywood
production, the central business of Vicmar. Furthermore, respondents were performing the same
activity for at least one year without any indication that such activities ceased. Petitioners had
the opportunity to discredit them had they presented material evidence, including payrolls and
daily time records, which are within their custody, to prove that respondents were mere
additional workforce engaged when there are extraordinary situations and was employed for
less than a year. On the other hand, the contractors engaged were not shown to have
substantial capital or investment, tools and the like. Neither was it established that they owned
equipment and machineries for the purported contracted job. They merely presented a
certificate of registration issued by DOLE.
30
NEW FILIPINO MARITIME AGENCIES, INC. vs. VINCENT H. DATAYAN – HEIR OF SIMON
VINCENT H. DATAYAN III
G.R. No. 202859, November 11, 2015
DOCTRINE
As a rule, the death of a seafarer during the term of his employment makes his employer liable
for death benefits. The employer, may, however, be exempt from liability if it can successfully
establish that the seafarer's death was due to a cause of attributable to his own willful act.
FACTS
Simon Datayan was employed New Filipino Maritime Agencies, Inc. (NFMA) as deck cadet on
board the vessel Corona Infinity. The employment was for nine months. Prior to his deployment,
Simon underwent pre-employment medical examination and was declared fit for sea duties,
and was able to board the vessel. The Master authorized the conduct of an emergency fire drill
in which the crew participated. During the said drill Simon jumped overboard. A futile search-
and-rescue operation ensued. After a few weeks, Simon was declared missing and presumed
dead. Simon’s father, Vincent Datayan, went to the NFMA to claim death benefits but his claim
was unheeded; thus, he filed a complaint for death benefits against NFMA, Taiyo Nippon Kisen
Co., and Angelina Rivera (petitioners) averring that because Simon died during the term of his
employment, the provisions of the CBA among All Japan Seamen’s Union must be applied in the
grant of the death benefits and burial assistance in his favor, being the heir of Simon. Petitioners,
on the other hand, alleged that after the emergency fire drill took place, a crew meeting was
held where the Master reprimanded Simon for his poor performance and Simon left even before
the meeting was concluded. The Master ordered the crew to search for him and was afterwards
discovered that Simon jumped overboard. Petitioners argued that Vincent had no cause of
action because Simon’s death was a result of the his deliberate act, and insisted that
complainant is not entitled to death benefits when the cause of the seaman’s death was the
latter’s willful act. Labor Arbiter dismissed the complaint, and said LA decision was affirmed by
the NLRC. The CA rendered a decision in favor of respondent Vincent.
ISSUE
Whether or not respondent Vincent was entitled to the death benefits
HELD
NO. As claimant for death benefits, respondent has the burden to prove by substantial evidence
that his son's death is work-related and that it transpired during the term of his employment
contract. In this respect, respondent has discharged his burden. It is beyond question that Simon
died during the term of his contract. The next question is whether Simon's death was due to his
deliberate act. If such is the case, then respondent is not entitled to death benefits. That Simon's
death was a result of his willful act is a matter of defense. Thus, petitioners have the burden to
prove this circumstance by substantial evidence. The Court finds that petitioners discharged
their burden to prove that Simon committed suicide. By substantial evidence, there are
adequate reasons and proof that Simon committed suicide. Under Section 20 (D) of the POEA
SEC, 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. Although Simon died during the term of his contract with petitioners, still, respondent is
not entitled to receive benefits arising from his death. As clearly established, Simon died by his
willful act of committing suicide and death under that circumstance is not compensable under
the POEA SEC.
31
ETOM, JR. V. AROMA LODGING HOUSE

G.R. No. 192955; NOVEMBER 9, 2015
DOCTRINE
As a rule, once the employee has asserted with particularity in his position paper that his
employer failed to pay his benefits, it becomes incumbent upon the employer to prove
payment of the employee's money claims. In fine, the burden is on the employer to prove
payment, rather than on the employee to establish non-payment.
FACTS
Edilberto P. Etom, Jr. (employed as a roomboy) filed a complaint against Aroma Lodging House
for illegal dismissal and money claims. ALH averred that despite its beneficence, Etom Jr.
showed an adverse attitude in work particularly when he created trouble within the workplace,
stole items from customers and was even charged with rape. Taking into consideration the
safety of its employees and customers, it terminated Etom Jr. for serious misconduct. LA
rendered a Decision finding Etom Jr. to have been legally dismissed but ordering ALH to pay
petitioner punitive damages for non-compliance with the termination notice requirement,salary
differential, holiday pay and 13th month pay. ALH appealed to the NLRC arguing that Etom Jr.
was not underpaid. NLRC affirmed the ruling of the LA but deleted the award of punitive
damages. NLRC concurred with the LA ruling that Etom Jr. was underpaid. NLRC denied ALH's
motion for reconsideration. ALH filed with the CA a Petition for Certiorari to which Etom Jr.
argued that the Petition should not be entertained for late filing of the motion for
reconsideration of the NLRC Decision. CA rendered the assailed Decision granting the Petition
for Certiorari. Etom Jr. reiterates that ALH's motion for reconsideration of the NLRC Decision was
filed beyond the reglementary period. He also maintains that he was underpaid, and was not
given 13th month pay and holiday pay by ALH.
ISSUE
Whether the NLRC concurred with the LA ruling that Etom Jr. was underpaid.
HELD
YES. The power of the Court to review a CA Decision in labor cases is limited. Specifically, in a
petition for review under Rule 45 of the Rules of Court, the Court has to resolve whether the CA
properly determined the presence of grave abuse of discretion on the part of the NLRC in
rendering its Decision, and not whether the NLRC Decision on the merits was correct. However,
while the strict inquiry on the correctness of evaluation of evidence is not required in a certiorari
proceeding, it is still necessary to determine that the conclusions of labor tribunals were
supported by substantial evidence. This is because a decision unsupported by substantial
evidence is a judgment rendered with grave abuse of discretion. While a notarized document is
presumed to be regular such presumption is not absolute and may be overcome by clear and
convincing evidence to the contrary. The fact that a document is notarized is not a guarantee
of the validity of its contents. Here, petitioner is an unlettered employee who may not have
understood the full import of his statements in the affidavit. Notably, petitioner, along with a co-
worker did not state the specific amount of what they referred as salary above the minimum
required by law. Respondent's mere reliance on the affidavit is misplaced because the
requirement of established jurisprudence is for the employer to prove payment, and not merely
deny the employee's accusation of non-payment on the basis of the latter's own declaration.
32
SASO vs. 88 ACES MARITIME SERVICE, INC.

G.R. No. 211638, October 7, 2015
DOCTRINE
The absence of a post-employment medical examination cannot be used to defeat a seafarer's
claim when the failure to subject him to such requirement was not due to his fault but to the
inadvertence or deliberate refusal of the employer.
FACTS
Petitioner Mark Anthony Saso was engaged by respondent 88 Aces Maritime Services, Inc. on
behalf of its principal, respondent Lin Wen Yu, as a fisherman on board the latter's fishing vessel
in Taiwan. During his employment, he got into an accident on board the vessel, which resulted
to a fractured thigh. He was operated on twice in two different hospitals in Taiwan, then he went
back to the Philippines but did not receive any assistance from respondent 88 Aces. He was told
that they will only reimburse his medical expenses upon proper documentation. Respondent
averred that it was the petitioner who refused to submit himself to post-employment medical
examination and, despite such failure, respondents still accommodated Saso's request for
reimbursement of medical expenses. In view of these, respondents argued that Saso is not
entitled to his claims.
ISSUE
Whether or not the petitioner forfeited his right to claim compensation and benefits
HELD
No, the Court held that the absence of a post-employment medical examination cannot be
used to defeat a seafarer's claim when the failure to subject him to such requirement was not
due to his fault but to the inadvertence or deliberate refusal of the employer. Hence, contrary to
the rulings of the NLRC and the CA, Saso cannot be considered to have forfeited his right to
claim compensation and benefits. However, the Court noted that when the petitioner filed his
Complaint, the required 120-day period had not yet lapsed and so Saso has not yet acquired a
cause of action for total and permanent disability benefits. But the fact remains that he
sustained a work-connected injury that did not only impair his physical appearance but also his
earning capacity which, thus, needs to be compensated.
33
MAGSAYSAY MARITIME CORP. V. MAZAREDO

G.R. No. 201359, September 23, 2015
DOCTRINE
It has consistently been held that cardiovascular diseases, coronary artery disease, as well as
other heart ailments, are compensable.
FACTS
For his last employment contract, respondent, Virgilio Mazaredo was hired for Magsaysay's
foreign principal and co-petitioner herein, Princess Cruise Lines, Limited (Princess Cruise). He was
assigned as Upholsterer onboard the vessel MY "Tahitian Princess”. While aboard, respondent
experienced back pain. He was medically repatriated and immediately underwent a series of
examinations and he was found to be suffering from "coronary artery disease, three-vessel
involvement”. The recommendation was for him to undergo coronary artery bypass graft
surgery. Respondent then underwent angioplasty instead of bypass surgery because he could
not afford the latter procedure, as it was he who was paying for his treatment. Petitioners did not
provide medical and financial assistance after respondent's initial diagnosis. Dr. Efren R. Vicaldo
issued a Medical Certificatedeclaring that respondent is unfit to resume work as seaman in any
capacity; that he requires maintenance medication to control his hypertension to prevent
cardiovascular complications such as worsening coronary artery disease, stroke and renal
insufficiency; and that respondent is not expected to land gainful employment given his
medical background. Mazaredo claimed for disability benefits from Magsaysay Maritime Corp.
contending that his condition was contracted during his employment with petitioners; that his
work contributed to the development of his condition and deterioration of his health; that
cardiovascular disease is listed as a compensable illness under the POEA SEC; and that he is
entitled to permanent and total disability benefits as he has been unable to work even up to the
present as a result of his illness which prevents him from obtaining gainful employment. However,
Magsaysay insisted that respondent has no right to any disability benefits since his employment
contract expired before he contracted his illness; that his illness is not work-connected; that
hypertensive cardiovascular disease is not compensable as it is not a work-connected illness
under the POEA SEC; that respondent's illness was not work-related and thus not compensable;
that the company-designated physician's assessment - not that of respondent's appointed
doctor, Dr. Vicaldo's - should be given credence.
ISSUE
Whether or not Virgilio Mazaredo is entitled for disability benefits.
HELD
Yes. There is no question that respondent's condition, "coronary artery disease, three-vessel
involvement" is a covered illness. It has consistently been held that cardiovascular disease,
coronary artery disease, as well as other heart ailments, are compensable.47 It likewise remains
undisputed that given his 12 years of employment with petitioners and the conditions he was
subjected to as a seafarer, respondent's illness can be attributed to his work. As correctly held by
the CA, there is a reasonable connection between respondent's work and the development
and exacerbation of his heart ailment. During his employment as seafarer, respondent was
consistently exposed to varying temperatures and harsh weather conditions as the ship crossed
ocean boundaries, and he may have been required to perform overtime work. Indeed, "any
kind of work or labor produces stress and strain normally resulting in wear and tear of the human
body."Moreover, as seafarer, respondent was constantly plagued by homesickness and
emotional strain as he is separated from his family, even as he had to contend with the perils of
the sea while at work.
34
MAERSK-FILIPINAS MAERSK-FILIPINAS CREWING v. ROMMEL RENE O. JALECO

G.R. No. 201945, September 21, 2015
DOCTRINE
The mere lapse of the 120-day period does not in itself warrant the payment of permanent
disability benefits, as said period may be extended up to 240-days.
FACTS
Jaleco was hired by petitioner Maersk-Filipinas Crewing, Inc./A.P. Moller A/S as a Able Bodied
Seaman. He complained of intermittent pain on his left buttock radiating to the lower back and
left groin. He was advised to obtain an MRI Scan of the lumbar spine and to avoid lifting heavy
objects for one week. He was later declared unfit for duty. He was repatriated and was
immediately referred to the company designated physician, Dr. Alegre, who found out that he
was suffering from paralumbar spasm and limitation of movement due to pain. He prescribed
medication and physical therapy at three sessions per week. Jaleco took several tests and
treatments. When examined, Dr. Alegre’s progress report contained results that if a disability is to
be assessed, a disability grade of 11 based on the POEA-SEC would be obtained. Jaleco
consulted another independent physician Dr. Raymundo, who issued a Medical Report which
declared him unfit for duty, with a rating grade of 6 in terms of pain and affectation of the spinal
cord. Jaleco filed a complaint for illegal dismissal, disability claims, medical expenses, and
damaged against petitioners. Petitioners argued that Jaleco is not entitled to a Grade 6
disability rating, but only Grade 11 as determined by the company-designated physician,
arguing that is Dr. Alegre’s findings relative to the disability grading and compensation should be
upheld and that since a third opinion was not obtained, Dr. Alegre’s findings should prevail.
Jaleco countered that the opinion of Dr. Raymundo should prevail, as it correctly reflects his true
state of health, while the findings of the company designated physician are inadequate and
inaccurate; that he is also entitled to additional reimbursement of medical expenses.
ISSUE
Whether or not Kaleco can claim permanent and total disability compensation?
HELD
No. Jaleco cannot claim permanent and total disability compensation. The company-
designated physician made a categorical declaration relative to Jaleco’s fitness to resume duty
– approximately 127 days from his repatriation. Thus, in his progress report, Dr. Alegre declared: If
a disability is to be assessed now, a disability grade 11 would b obtained based on the POEA
Contract.” The mere lapse of the 120-day initial period itself does not automatically warrant the
payment of permanent disability benefits. If the 120-day initial period is exceeded and no such
declaration is made because the seafarer requires further medical attention, then the
temporary total disability already exists. The seaman may be declared fit to work at any time
such declaration is justified by his medical condition. Section 20(B) of the POEA-Standard
Employment Contract provides that the parties should have secured the opinion of a third
doctor jointly appointed by them whose decision will be final and binding. Because of Jaleco’s
disregard of the conflict-resolution procedure under the POEA-SEC, his claims should be denied
since Dr. Alegre’s assessment still stands. Since he is the one pursuing a claim, it he – and not his
employer – who – should have taken the initiative to secure a third opinion prior to seeking
intervention by the labor tribunals.
35
DOMINADOR MALABUNGA, JR. vs. CATHAY PACIFIC STEEL CORP.

G.R. No. 198515, June 15, 2015
DOCTRINE
An employer may not blame its employees for losses caused by its own disorganized system and
inept personnel.
FACTS
Respondent Cathay Pacific Steel hired Malabunga, Jr. as a machinist. On July 9,2004, an
inventory of respondent’s tools and items at the company warehouse was made and it was
found that one aluminum level was issued to respondent’s Fabrication Unit, and another to
Malabunga, Jr. On July 11,2004, Malabunga, Jr. returned an aluminum level to the warehouse.
Later, respondent served a written Notice upon Malabunga, Jr. charging him with theft of the
aluminum level issued to its Fabrication Unit. Respondent accused Malabunga, Jr. of stealing the
aluminum level issued to the Fabrication Unit and returning the same by passing it off as the one
that was issued to him previously. Respondent based its allegations from the statements made
by its warehousemen – which Malabunga, Jr. returned an untarnished aluminum level that was
issued to the Fabrication Unit. Malabunga, Jr. insisted that the accusation against him was false,
baseless and unfair; and that the aluminum level he borrowed was the very same tool he
returned. Respondent suspended Malabunga, Jr. for 30 days and required him to return the
value of the aluminum level through salary deductions. Malabunga, Jr. filed a complaint for
illegal suspension before the NLRC. The Labor Arbiter dismissed Malabunga, Jr.’s complaint and
held that substantial evidence – in the form of respondent’s witnesses positively identifying
Malabunga, Jr. – warranted the imposition of the penalty of suspension. The NLRC ruled in favor
if Malabunga, Jr. declaring that the doubts in the evidence submitted by respondent should be
resolved against it based on the cardinal rule in labor cases, that in case of doubts in the
evidence presented by the parties, the doubts should be resolved in favor of labor. The CA
nullified and set aside the decision of the NLRC.
ISSUE
Whether or not respondent Cathay Pacific Steel is guilty of illegal suspension
HELD
YES. The SC cannot rely on the statements of the Fabrication Unit workers; their failure to report
the loss of their unit's aluminum level makes their statements not only highly doubtful and self-
serving, but unnecessary and uncalled for — an afterthought not worth considering. There are
many ways to secure company property from pilferage and theft. An effective and efficient
system of property identification, recording and monitoring may be adopted; more efficient and
responsible personnel may be hired. In respondent's case, it is quite clear that its warehousemen
do not have an efficient system of monitoring and recording the items or tools being brought in
or out of its warehouse. The SC cannot sustain respondent’s view that petitioner is guilty of theft
of company property. It could simply be that due to the ineffective system within the warehouse
and its inefficient personnel, there was a mix-up of records; worse, it could be that tools and
items within the warehouse were misplaced or lost due to its irresponsible personnel. If any,
respondent is alone responsible; it cannot conveniently put the blame on its employees in order
to make up for or cover its losses caused by its own disorganized system and inept personnel.
From the foregoing, there are serious doubts in the evidence on record as to the factual basis of
the charges against petitioner. These doubts shall be resolved in his favor in line with the policy
under the Labor Code to afford protection to labor and construe doubts in favor of labor.
36
PHILIPPINE TRANSMARINE CARRIERS INC. VS ALIGWAY

G.R. No. 201793, September 16, 2015
DOCTRINE
A person who claims entitlement to the benefits provided by law must establish his right thereto
by substantial evidence or "such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion. This Court cannot grant a claim for disability benefits without
such substantial evidence because to do so would be offensive to due process. Hence, the
burden is on the seafarer to prove that he suffered from a work-related injury or illness during the
term of his contract.
FACTS
Petitioner in behalf of its foreign principal Norwegian Crew Management (NCM) employed
respondent as chief cook on board the vessel Amasis. Prior to deployment, respondent
underwent pre-employment medical examination and was declared fit to work. Aboard the
vessel, respondent suffered from illness which caused him to be medically repatriated.
Respondent claimed that despite medical exams by the company physician, his illness persisted.
Rendering him incapacitated to work as a seafarer but petitioner and NCM refused to pay him
disability benefits. Hence the complaint filed for disability benefits, damages, and attorney’s fees
against petitioner and NCM alleging that his work as chief cook which involves food intake,
contributed to or aggravated his gastric cancer. Labor Arbiter, dismissed the complaint for lack
of merit. On appeal, NLRC affirmed the decision of Labor Arbiter. Respondent filed Petition for
Certiorari with CA; CA ruled in favor of respondent.
ISSUE
W/N the illness of respondent is work related.
HELD
NO, respondent failed to establish the casual connection between his stomach cancer and his
work as chief cook. The entitlement of seafarers to disability benefits is governed by medical
findings, law and contract. Demetrio did not suffer from an occupational disease or such
diseases listed under Section 32-A of the 2000 POEA-SEC-. Thus, to be entitled to disability
benefits, he must first establish that he suffered from a work related injury or illness. Demetrio
admitted that the cause of stomach cancer was unknown, but stressed that there is speculation
that smoked food may be promoting its development, and is presumed to be work-related.
Such statements are deemed self-serving which are unproved or uncorroborated allegations,
raising a mere possibility that respondent’s illness might have been work related; considering the
absence of the second opinion of respondent’s physician of choice. In addition, the PEME
medical examination conducted to respondent would not necessarily reveal or disclose illnesses
for such examination is not at all fool-proof or thoroughly exploratory.
37
GRACE MARINE SHIPPING CORP. V. ALARCON,

G.R. No. 201536, September 9, 2015
DOCTRINE
For disability to be compensable under Section 20(B) of the 2000 POEA-SEC, it is not sufficient to
establish that the seafarer’s illness or injury has rendered him permanently or partially disabled; 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.
FACTS
In 2006, respondent Alarcon was hired by petitioner Grace Marine Shipping for its foreign
principal, Universal Marine as Messman on board the vessel “MV Sunny Napier III” for 9 months.
On January 11, 20017, Alarcon boarded the vessel. On August 6, 2007, however, respondent
developed a skin condition. He was repatriated on August 29, 2007 and was referred to the
company physician, Dr. Cruz. He was diagnosed with “nummular eczema” by the Dr. Cubillan,
the derma pathologist. On January 31, 2008, respondent was declared fit to work despite having
“minimal and resolving skin lesions” and was advised to continue on with medications to
completely resolve the lesions. In April 2008, respondent consulted an independent physician
who declared that he was unfit to work and was suffering from dermatitis which may require
lifetime treatment. Petitioners offered compensation based on a Grade 12 disability rating but
respondent claimed entitlement to Grade 5 disability. The NCMB ruled in favor of Alarcon that
he suffered permanent disability due to his work-related illness. The CA likewise affirmed the
ruling, and declared that the respondent is entitled to Grade 5 disability benefits under the POEA
Contract. Petitioner argues that since respondent was declared fit to work, he should not be
entitled to disability benefits and that he failed to prove that his illness is not work-connected.
Respondent maintains that his aliment rendered him unemployable and that he is entitled to the
Grade 5 rating.
ISSUE
Whether or not petitioners are liable to private respondent for disability benefits despite the fact
that he was declared fit to work by the company designated physician.
HELD
Yes, petitioners are liable. In Maersk Filipinas Crewing, Inc./Maersk Services Ltd. v. Mesina, this
Court held that there is a reasonable connection between the nature of one’s work and his
contracting psoriasis when, in the performance of his duties, strong detergents, fabric
conditioners, special soaps, and other chemicals are used. The Court therein declared that The
2000 POEA-SEC defines "work-related illness" as "any sickness resulting to disability or death as a
result of an occupational disease listed under Section 32-A of this contract with the conditions
set therein satisfied."
In interpreting the said definition, the Court has held that for disability to be compensable under
Section 20(B) of the 2000 POEA-SEC, it is not sufficient to establish that the seafarer’s illness or
injury has rendered him permanently or partially disabled; 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. It remains undisputed that the respondent used strong detergent, fabric
conditioner, special soap and chemicals in performing his duties as a steward. Stress and
climate changes likewise permeate his working environment as with that of any other seafarer.
These factors, taken together with Dr. Fugoso’s certification, confirm the existence of a
reasonable connection between the nature of respondent’s work and the onset of his psoriasis.
The court thus finds that respondent’s psoriasis and nummular eczema, which have not been
38
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.
CENTENNIAL TRANSMARINE, INC. ET AL. vs. PASTOR M. QUIAMBAO

G.R. No. 198096 July 8, 2015
DOCTRINE
The company-designated physician is expected to arrive at a definite assessment of the
seafarer's fitness to work or permanent disability within the period of 120 or 240 days. That should
he fail to do so and the seafarer's medical condition remains unresolved, the seafarer shall be
deemed totally and permanently disabled.
FACTS
Pastor was continuously employed by petitioner as a messman for and on behalf of its foreign
principal, petitioner Centennial Maritime Services. His last contract of employment of six months
on board the vessel MV Bonnie Smithwick covered by CBA. Pastor boarded MV Bonnie
Smithwick and shortly thereafter or during the first week, he figured in an accident while carrying
heavy food provisions. This caused him to suffer excruciating pain in his upper back and was
prescribed with oral pain killer as a temporary relief. As his condition continued to worsen, he
was referred to City Med Health Associates in Singapore for further evaluation and treatment.
The result of the x-ray examination conducted on him revealed that he has lumbar muscular
spasm with disc degeneration and thoracic spondylosis with disc degeneration. He was
subsequently recommended for repatriation to Manila for further treatment. Upon Pastor’s arrival
in the Philippines on September 18, 2006, he was referred to the company-designated
physicianand diagnosed him to have Thoraco Lumbar spine nerve impingement, and she then
referred Pastor for MRI and who later advised him not to carry heavy objects. While undergoing
treatment, or on November 7, 2006, Pastor filed a Complaint against petitioners for permanent
disability compensation, sickness wages for 120 days, moral and exemplary damages, attorney’s
fees and other benefits as provided by law.
ISSUE
Whether or not the disability of Pastor has become permanent and thus entitled to permanent
disability compensation
HELD
Yes, 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, pursuant to
Article 192(c)(1) of the Labor Code. Based on the foregoing provisions, 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.
However and as earlier mentioned, nowhere in the records does it show that Dr. Abesamis
arrived 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. In fact, as of the date of the Rejoinder they filed before the Labor Arbiter (June 25, 2007)
or 281 days after Pastor’s repatriation, petitioners themselves stated that no disability grading has
yet been issued by Dr. Abesamis. Clearly at that time, the period of 240 days had already lapsed
without the company-designated physician issuing a declaration of Pastor’s fitness to work or of
the existence of his permanent disability. This only means that his condition remained unresolved
even after the lapse of the said period and, consequently, his disability is deemed permanent
and total.
39
DOHLE-PHILMAN MANNING AGENCY, INC. vs. HEIRS OF ANDRES GAZZINGAN

G.R. No. 199568, June 17, 2015
DOCTRINE
Aortic dissection, also called dissecting aneurysm, considered compensable under the
disputable presumption of compensability. Gazzingan’s work as a messman is not confined
mainly to serving food and beverages to all officers and crew.
FACTS
Petitioner hired Gazzingan as a messman for a period of nine months on board the vessel M/V
Gloria with a basic monthly salary. Prior to his engagement, Gazzingan underwent a pre-
employment medical examination (PEME) which yielded normal results except for a finding of
left ventricular hypertrophy in his electrocardiogram test (ECG). Gazzingan was thus
pronounced fit for sea duty and he boarded the vessel M/V Gloria. While M/V Gloria was
docked at the port of Cartagena, Colombia, Gazzingan experienced chest pains. He was
confined at the Cartagena de Indias Hospital due to chest pain, shortness of breath and back
pain. The hospital’s cardiovascular and thoracic surgeon, , diagnosed him to have Acute Type-B
Dissection and was medically repatriated.Upon arrival in Manila Gazzingan was brought directly
to Manila Doctors Hospital for further medical evaluation, petitioners received a letter from its
company-designated physician, stating that Gazzingan is suffering from a non-work-related
illness.Petitioners disclaimed Gazzingan’s entitlement to his claims by arguing that his medical
condition is pre-existing for which no compensation is warranted under the POEA-SEC. They
alleged that the ECG test conducted during his PEME confirmed that his illness was brought
about by a physiological abnormality from birth.
ISSUE
Whether or not the deceased’s illness is work-related.
HELD
Gazzingan’s aortic dissection, also called dissecting aneurysm, considered compensable under
the disputable presumption of compensability. His work as a messman is not confined mainly to
serving food and beverages to all officers and crew; he was likewise tasked to assist the chief
cook/chef steward, and thus performed most if not all the duties in the ship’s steward
department. In the performance of his duties, he is bound to suffer chest and back pains, which
could have caused or aggravated his illness. As aptly observed by the CA, Gazzingan’s
strenuous duties caused him to suffer physical stress which exposed him to injuries. It is therefore
reasonable to conclude that Gazzingan’s employment has contributed to some degree to the
development of his disease. It must also be pointed out that Gazzingan was in good health and
fit to work when he was engaged by petitioners to work on board the vessel M/V Gloria. His
PEME showed essentially normal findings with no hypertension and without any heart problems. It
was only while rendering duty that he experienced symptoms. This is supported by a medical
report issued by Cartagena de Indias Hospital in Colombia stating that Gazzingan suffered
intense chest and back pains, shortness of breath and a slightly elevated blood pressure while
performing his duties. Therefore, even assuming that Gazzingan had a pre-existing condition, as
alleged by petitioners, this does not totally negate the probability and the possibility that his
aortic dissection was aggravated by his work conditions.
40
PETRON CORP. V. CABERTE

G.R. No. 182255; JUNE 15, 2015
DOCTRINE
The law presumes a contractor to be a labor-only contractor and the employees are not
expected to prove the negative fact that the contractor is a labor-only contractor. Anyone
claiming the supposed status of an independent contractor bears the burden of proving the
same.
FACTS
Respondents were hired to work at Petron's Bacolod Bulk Plant as LPG/Gasul fillers, maintenance
crew, warehousemen, utility workers and tanker receiving crew. Petron and ABC, a labor
contracting business owned and operated by Caberte, Sr., entered into a Contract for Services
and a Contract for LPG Assistance Services. ABC undertook to provide utility and maintenance
services. Hereafter, Petron no longer allowed them to enter and work in the premises of its
Bacolod Bulk Plant. Thus, respondents filed before the LA a Complaint for illegal dismissal
averring that even before Petron engaged ABC as contractor, most of them had already been
working for Petron for years. That every time Petron engages a new contractor, it would
designate such new contractor as their employer. Despite such arrangement, Petron exercised
control and supervision over their work, the performance of which is necessary and desirable in
its usual trade and business. Respondents added that ABC is a mere labor-only contractor which
had no substantial capital and investment, and had no control over the manner and method on
how they accomplished their work making Petron their true employer. LA held that ABC is an
independent contractor. Respondents appealed to the NLRC which affirmed the ruling of the
LA. Respondents filed a Motion for Reconsideration which was denied by the NLRC. Aggrieved,
respondents filed a Petition for Certiorari before the CA ascribing upon the NLRC grave abuse of
discretion amounting to lack or in excess of jurisdiction in holding that they are not employees of
Petron. CA ruled that ABC is engaged in labor-only contracting and declared respondents as
Petron's regular employees.
ISSUE
Whether ABC is engaged in Iabor-only contracting.
HELD
YES. Under Article 106 of the Labor Code, labor-only contracting, a prohibited act, is an
arrangement where the contractor, who does not have substantial capital or investment in the
form of tools, equipment, machineries, work premises, among others, supplies workers to an
employer and the workers recruited are performing activities which are directly related to the
principal business of such employer. It is not respondents but Petron which bears the burden of
establishing that ABC is not a labor-only contractor but a legitimate independent contractor. As
held in Alilin v. Petron Corporation, "where the principal is the one claiming that the contractor is
a legitimate contractor, the burden of proving the supposed status of the contractor rests on the
principal." Petron cannot rely on the contracts it entered into with ABC as these are not
determinative of the true nature of the parties' relationship. In proving that ABC is not a labor-
only contractor, it is incumbent upon Petron to show that ABC has substantial capital or
investment and that respondents were performing activities which were not directly related to
Petron's principal business. Petron failed to overcome the presumption that ABC is a labor-only
contractor. Thus, respondents are considered regular employees. In cases of regular
employment, an employer may only terminate the services of an employee for just or authorized
causes under the law. As the reason given by Petron for dismissing respondents does not
constitute a just cause for termination, the latter are declared to have been illegally dismissed.
41
HEIRS OF DELA CRUZ vs. PHILIPPINE TRANSMARINE CARRIERS, INC.

G.R. No. 196357, April 20, 2015
DOCTRINE
A seafarer must submit himself to a post-employment medical examination within three days
from his arrival in the Philippines (mandatory reporting requirement) so that his claim for disability
and sickness allowance can prosper. The only exception to this rule is when the seafarer is
physically incapacitated to do so, but there must be a written notice to the agency within the
same period of three days for the seaman to be considered to have complied with the
requirement.Otherwise, he forfeits his right to claim his disability benefits and sickness allowance.
FACTS
The late Delfin Dela Cruz was contracted for the position of Oiler by Philippine Transmarine
Carriers, Inc. for and in behalf of the latter's principal, Tecto Belgium N.V. Delfin left the
Philippines on 16 August 2000 and immediately embarked the vessel the next day. While on
board, he felt gradual chest pains and pain in his upper abdominal region. On June 2001, while
performing his regular duties, he was hit by a metal board on his back. He requested medical
attention and was given medications and advised to be given light duties for the rest of the
week. Upon the vessel's arrival at a convenient port on August 2001, his contract expired and he
was signed off from the vessel. He reported to respondents as required. He also sought medical
assistance but was not extended such. It was only on 2003 when Delfin went to De Los Santos
Medical Center for proper medical attention. Afterwards, he was not employed by respondents
because he was already incapacitated to engage in his customary work. He filed his claim for
sickness allowance from the same manning agency but the same was not granted. His
condition deteriorated. Thereafter, he was admitted at St. Luke's Medical Center, where he was
diagnosed to be suffering from malignant peripheral nerve sheath tumor (MPNST). He
shouldered his medical expenses. He filed a complaint before the NLRC to claim payment for
sickness allowance and disability compensation.
ISSUE
Whether or not petitioners are entitled to permanent disability benefits and sick allowance.
HELD
Petitioners are not entitled to permanent disability benefits and sickness allowance. At the time
of Delfin’s employment, it is the 1996 POEA SEC provision concerning permanent disability claims
and sickness allowance which should apply. It provides that a seafarer must submit himself to a
post-employment medical examination within three days from his arrival in the Philippines
(mandatory reporting requirement) so that his claim for disability and sickness allowance can
prosper. The only exception to this rule is when the seafarer is physically incapacitated to do so,
but there must be a written notice to the agency within the same period of three days for the
seaman to be considered to have complied with the requirement.Otherwise, he forfeits his right
to claim his disability benefits and sickness allowance. In this case, petitioners failed to show the
steps supposedlyundertaken by Delfin to comply with the mandatory reporting requirement.
Tothe Court's mind, this lapse on petitioners' part only demonstrates that Delfindid not comply
with what was incumbent upon him. The reasonable conclusion,therefore, is that at the time of
his repatriation, Delfin was not suffering fromany physical disability requiring immediate medical
attendance. Otherwise, andeven if his request for medical assistance went unheeded, he would
havesubmitted himself for check-up with his personal physician.
42
PEAK VENTRURES CORP. v. HEIRS OF VILLAREAL

G.R. No. 184618, November 19, 2014
DOCTRINE
diminution in pay. Under Art. 279 of the Labor Code, as amended, an employee unjustly
dismissed shall be entitled to: (1) Reinstatement without loss of seniority rights and other privileges
and (2) full backwages, inclusive of allowances, and other benefits or their monetary equivalent
computed from the time compensation was withheld up to the time of reinstatement. (Peak
Ventrures Corp. V. Heirs Of Villareal, G.R. No. 184618, November 19, 2014)
FACTS
On 1989, Villareal was hired as security guard and was assigned at East Greenhills Village by
petitioner Peak Ventures Corp., the owner/operator of El Tigre Security. Sometime in 2002, when
Villareal was at the age of 42, he was relieved form duty without any apparent reason. He was
later informed that he would no longer be given any assignment because of his age. His
repeated requests for a new posting were likewise declined. Due to his prolonged lack of
assignment and dwindling resources, the respondent was constrained to claim his security bond
deposits from petitioners. However, he was advised to first tender a letter of resignation before
the same could be released to him. Out of sheer necessity, he submitted a letter of resignation.
He stated therein that he was constrained to resign effective July 31, 2002 since he cannot
expect to be given any assignment for another one and a half months and that he can no
longer afford the fare going to petitioner’s office. The respondent alleged that the tenor of his
resignation letter was not acceptable to petitioners, who required him to submit another one
stating that his resignation is voluntary. Eventually, petitioners released to the respondent his
security bond deposits. The respondent took the case to the LA on the ground of illegal dismissal.
The LA ruled in his favor. The petitioner in this case took the matter to the NLRC which also ruled
in favor of the respondent. Thereafter, the petitioner appealed the case on certiorari to the CA.
During the pendency of the proceedings, the respondent died. An order was given out to find
the heirs of the respondent. The CA ruled in favor of the respondent.
ISSUE
Whether or not Villareal was constructively dismissed?
HELD
Yes.Villareal was constructively and illegally dismissed. Petitioners anchor their claim of voluntary
resignation on Villareal’s resignation letter, the Talaan ng Pakikipagpanayam sa Pagbibitiw(exit
interview form)accomplished by him, and his notarized clearance. However, the circumstances
surrounding the execution of thesedocuments prove otherwise.There is constructive dismissal
when an act of clear discrimination, insensitivity or disdain on the part of the employer has
become unbearable as to leave an employee with no choice but to forego continued
employment. In other words, 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 and a diminution in pay. In this case, the petitioners hinge their
arguments on the alleged voluntary resignation of the respondent. This is insufficient to discharge
the burden of proving that there were no other posts available for the respondent after his recall
from his last assignment. From these circumstances, petitioner’s claim of voluntary resignation is
untenable. Moreover, the immediate filing of an illegal dismissal complaint serves to further
43
negate the alleged voluntariness of resignation. Villareal’s backwages must be computed from
the time of his unjustified relief from duty up to his actual reinstatement.
GOODYEAR PHILS., INC. VS ANGUS

G.R. No. 185449, November 12, 2014
DOCTRINE
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. (Goodyear
Phils., Inc. v. Angus, G.R. No. 185449, November 12, 2014)
FACTS
Angus was employed by Goodyear as Secretary to the Manager of Quality and Technology. To
maintain the viability of its operations in the midst of economic reversal, Goodyear implemented
cost-saving measures. Angus received from Ramos, the Human Resources Director of Goodyear
a letter terminating her services with retirement benefits considering respondent reached the
age 55 in service. Respondent accepted the retrenchment but requested she be given a
separation pay. Goodyear declined, and insisted that their offer of early retirement benefit is the
best that they can offer for Angus. Respondent filed with the Labor Arbiter a complaint for illegal
dismissal, purported that her termination for redundancy was invalid for it was not time reported
to the DOLE and no separation pay was given to her; that the separation pay she was asking
was different from the retirement benefits she received. That there is nothing in the company’s
retirement plan under the CBA, the CBA itself or the employment contract that prohibits the
grant of more than one land of separation pay; that she was only forced to sign a quitclaim
after accepting her retirement benefits. In response, Goodyear asserted that Angus was validly
dismissed for an authorized cause; that by voluntarily accepting the termination benefits, had
effectively barred her from recovering separation pay due to redundancy, that udner the last
company CBA supports the grant of only one benefit.
ISSUE
W/N Respondent Angus is entitled to separation pay other than the retirement benefit?
HELD
YES,for there is no stipulation under the CBA that prohibits the recovery of both retirement
benefits and separation pay. To support their claim, Goodyear submitted a copy of what
appears to be a portion of the company CBA entitled "Retirement Plan, Life Insurance, Physical
Disability Pay and Resignation Pay." Section 1, Article XI thereof provides that the availment of
retirement benefits precludes entitlement to any separation pay. The same, however, can hardly
be considered as substantial evidence because it does not appear to be an integral part of
Goodyear's CBA. Even assuming that it is, it would still not suffice as there is no showing if the CBA
under which the said provision is found was the one in force at the time material to this case. On
the other hand, Angus presented the parties' 2001-2004 CBA which does not contain any
restriction on the availment of benefits under the company’s Retirement Plan and separation
pay. and upon examination of the same, the Court agrees with her that it does not contain any
restriction on the availment of benefits under the company's Retirement Plan and of separation
pay. Retirement benefits and separation pay are not mutually exclusive. The former are a form
of reward for an employee’s loyalty and service to an employer, and are earned under existing
laws, CBAs, employment contract and company policies. While the latter is the amount which
an employee receives at the time of his severance from employment, providing the employee
with financial aid during the period that he is searching for another employment and is
44
recoverable only in instances enumerated under Article 283 and 284 of the Labor Code or in
illegal dismissal cases where reinstatement is no longer feasible. In this case, Article 283 clearly
entitled respondent Angus to separation pay apart from the retirement benefit she received.
MAGSAYSAY MITSUI OSK MARINE, INC. AND/OR MOL TANKSHIP MANAGEMENT (ASIA)
PTE LTD., V. JUANITO G. BENGSON
G.R. No. 198528, October 13, 2014
DOCTRINE
Cardiovascular disease, coronary artery disease, and other heart ailments have repeatedly
been considered work-related and compensable by the Court.
FACTS
Juanito Bengson entered into his 22nd contract of employment with Magsaysay Mitsui OSK
Marine, Inc. for and in behalf of MOL Tankship Management (Asia) Pte., Ltd., as a Third Mate
Officer on board the “KN Trader” vessel for a duration of nine months. He was found to be fit for
sea duty. While on board, he suddenly experienced difficulty breathing and numbness on half of
his body. This continued even after he rested for two hours. He was brought and confined in a
hospital in Slovenia where he experienced partial paralysis in his right hand and leg. A CT Scan
showed a small hematoma in his head. Due to his incapacity to work, he was immediately
repatriated. In Manila, he was confined under the supervision of a company-designated
physician. His medical abstract showed that he had suffered a stroke and the doctor’s report
states that his hematoma was not work-related. Because of this, there was no assessment on the
disability grade. However, Bengson was still unable to return to work because of his disability. He
filed a disability compensation claim against Magsaysay, Inc., but this was denied. He insisted
that his illness was work-related and caused by the pressure, stress, and demands of his work. The
Labor Arbiter ruled in favor of Bengson a monetary award derived from their CBA. The NLRC
reversed such ruling, stating that the CBA was only applicable for permanent disabilities arising
from accident. For this case, the POEA-SEC was applicable and hematoma was not among the
list of compensable illnesses. Bengson then had to prove the relation of his illness to his work and
the fact that it was contracted during his employment does not prove such. The CA reversed
the NLRC’s decision and reinstated the Labor Arbiter’s decision.
ISSUE
Whether or not the illness of Bengson is an occupational disease
HELD
YES. The undisputed facts that Bengson had been working for Magsaysay, Inc., since 1988, that
he had been Third Mate for twelve years, and that this position had given him heavy
responsibilities relative to navigation of the vessel, ship safety, and management of
emergencies, show that he was subjected to physical and mental strain which contributed to his
illness. His illness, which was diagnosed as intracerebral hemorrhage or hemorrhage stroke is a
serious condition and could be deadly. In addition, the Court has decided that cardiovascular
disease, coronary artery disease, and other heart ailments are compensable in many cases
decided in the past. Lastly, Article 192 of the labor Code states that in the absence of a
declaration of the company-designated physician of the fitness or permanent total disability of
the worker within 120 or 240 days of the treatment period, the worker shall be deemed totally
and permanently disabled. Since Bengson’s company-designated physician did not make a
definite assessment within such time and his condition remained delicate, he is considered
totally and permanently disabled.
45
INTERORIENT MARITIME ENTERPRISES, INC. vs CREER III

G.R. No. 181921; September 17, 2014
DOCTRINE
For an illness to be compensable it must be: first, that the illness must be work-related; and
second, that the work-related illness must have existed during the term of the seafarer’s
employment contract.
FACTS
InterOrient Maritime Enterprises, Inc. hired Victor Creer III as Galley Boy on board the vessel M/V
MYRTO owned by Calidero Shipping Company, Ltd..Prior to embarkation, Victor went through
the requisite Pre-Employment Medical Examination and was declared fit for sea duty. Victor
commenced his employment on board the vessel and he alleged that when he was about to
get provisions from the cold storage, he felt a sudden pain in his chest that radiated to his back.
Since then, he experienced incessant cough, nasal congestion, difficulty in breathing, physical
weakness, chills and extreme apprehension, which persisted until the expiration of his contract.
Upon his arrival in Manila, he allegedly reported it to the office of the InterOrient, and avers that
he was merely advised to consult to a doctor without giving him any referral. He, however,
signed a Receipt and Release wherein he confirms that he worked under normal conditions and
has not contracted or suffered any illness or injury form work and was discharged in good and
perfect health. Thereafter, Victor claimed that he underwent medical examination at different
clinic and hospitals. Although he reported his condition to InterOrient, he was not given any
medical assistance, and was merely told to continue medication and consultation. Victor was
then diagnosed with far-advanced pulmonary tuberculosis, as well as Hypertension, Stage II,
and was declared to be unfit to resume work as seaman. Victor contended that he regularly
informed InterOrient of his sickness but he was neither apprised of his rights to nor paid sickness
allowance as mandated by law, which prompted him to file with the Labor Arbiter a complaint
for permanent disability benefits for pulmonary tuberculosis, medical reimbursement, sickness
allowance, compensatory, moral and exemplary damages, and attorney’s fees against
InterOrient and Calidero.
ISSUE
Whether or not InterOrient can be held liable for Victor’s disease even if the same was
diagnosed 11 months after he disembarked upon the termination of his employment contract
HELD
Victor’s claim for disability benefits must be denied for failure to comply with the mandatory
three-day rule on post-employment medical examination without any valid or justifiable reason,
and for being non-compensable there being no showing that the illness existed during the term
of his employment contract or that it is work-related. Other than his bare and self-serving
assertion that he informed InterOrient about his pain, he presented no evidence or tangible
proof that he indeed requested for medical attention, and on the contrary, records show that
he signed a Receipt and Release stating that he has not contracted or suffered any illness or
injury from work and that he was discharged in good and perfect health. Moreover, Victor’s
non-compliance with the three-day rule on post-employment medical examination is fatal to his
cause, as such, his right to claim for compensation and disability benefits is forfeited. Furthermore
Victor’s claim for disability benefits must still fail for not being compensable. For an illness to be
compensable it must be: first, that the illness must be work-related; and second, that the work-
related illness must have existed during the term of the seafarer’s employment contract. In this
46
case however, Victor failed to show that his illness existed during the term of his contract for
failure to submit proof of the same; nor did he show that his illness is work-related.
LIBCAP MARKETING CORP. V LANNY JEAN BAQUIAL

G.R. No. 192011; June 30, 2014
DOCTRINE
As a general rule, one who pleads payment has the burden of proving it. Even where the
employee must allege nonpayment, the general rule is that the burden rests on the employer to
prove payment, rather than on the employee to prove nonpayment.
FACTS
Petitioner Libcap Marketing Corporation (Libcap) is engaged in the freight forwarding business
with offices in Iloilo City. Petitioner Celiz is Libcap’s Human Resources Division Head, and
petitioner Mondragon is Libcap’s Vice-President for Administration. Respondent Baquial was
employed by Libcap as accounting clerk for Libcap’s Super Express branch in Cagayan de Oro
City. Her functions included depositing Libcap’s daily sales and collections in Libcap’s bank
account with Global Bank. Sometime in March 2003, an audit of Libcap’s Super Express branch
in Cagayan de Oro City was conducted, and the resulting audit report showed that respondent
made a double reporting of a single deposit. Respondent received a Notice of Administrative
Investigation requiring her to attend investigation at Libcap’s Iloilo office. Respondent was
unable to attend due to lack of financial resources subsequently, respondent received a 2nd
Notice of Administrative Investigation requiring her to attend another investigation in Iloilo City.
Again, respondent failed to attend. Respondent was placed on preventive suspension from July
29, 2003 to August 12, 2003. On August 16, 2003, respondent received a Notice of Termination,
stating that she was terminated from employment effective August 12, 2003 for dishonesty,
embezzlement, inefficiency, and for commission of acts inconsistent with Libcap’s work
standards. Respondent filed a labor complaint for illegal dismissal against petitioners
ISSUE
W/N the court of appeals erred when it ruled that there was non-compliance with the
procedural due process requirement when the records show that the respondent was given full
opportunity to explain the charges against her.
HELD
NO. By pre-judging respondent’s case, petitioners clearly violated her right to due process from
the very beginning, and from then on it could not be expected that she would obtain a fair
resolution of her case. Petitioners claim that respondent is not entitled to financial assistance
given that she is guilty of theft or embezzlement. The law and jurisprudence, on the other hand,
allow the award of nominal damages in favor of an employee in a case where a valid cause for
dismissal exists but the employer fails to observe due process in dismissing the employee.40
Financial assistance is granted as a measure of equity or social justice, and is in the nature or
takes the place of severance compensation. A dismissal for just cause under Article 282 implies
that the employee concerned has committed, or is guilty of, some violation against the
employer. Thus, it can be said that the employee himself initiated the dismissal process. On
another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply
delinquency or culpability on the part of the employee. Instead, the dismissal process is initiated
by the employer’s exercise of his management prerogative. As a general rule, one who pleads
payment has the burden of proving it. Even where the employee must allege nonpayment, the
general rule is that the burden rests on the employer to prove payment, rather than on the
47
employee to prove nonpayment. The reason for the rule is that the pertinent personnel files,
payrolls, records, remittances and other similar documents — which will show that overtime,
differentials, service incentive leave and other claims of workers have been paid — are not in
the possession of the employee but in the custody and absolute control of the employer.
ALILIN vs. PETRON CORP.,

G.R. No. 177592; June 9, 2014
DOCTRINE
A contractor is presumed to be a labor-only contractor, unless it proves that it has the substantial
capital, investment, tools and the like. However, where the principal is the one claiming that the
contractor is a legitimate contractor, the burden of proving the supposed status of the
contractor rests on the principal.
FACTS
A Contract for Services was entered by Petron and RDG from June 1, 2000 to May 31, 2002, to
provide Petron with janitorial, maintenance, tanker receiving, packaging and other utility
services. Upon expiration, no renewal was done and worker was dismissed. A complaint for
illegal dismissal was filed against Petron. Petitioners claim that although it was RDG who hired
them and paid their salaries, RDG is a labor-only contractor, acting as an agent of Petron, their
true employer. Claiming to be regular employees, petitioners asserted that their dismissal
allegedly in view of the expiration of the service contract between Petron and RDG is illegal.
RDG denied liability over petitioners’ claim of illegal dismissal while also corroborating petitioners’
claim that they are regular employees of Petron. Petron, on the other hand, maintained that
RDG is an independent contractor and the real employer of the petitioners. It was RDG, which
hired and selected petitioners, paid their salaries and wages, and directly supervised their work.
ISSUE
Whether RDG is a labor-only contractor
HELD
YES. The contractor is always presumed to be a labor-only contractor, unless such contractor
overcomes the burden of proving otherwise. However, where the principal is the on claiming
that the contractor is legitimate, said principal (Petron) has the burden of proving so. In this case,
the presumption that RDG is a labor-only contractor stands, due to the failure of Petron to
discharge the burden of proving otherwise. The Court also found that the works performed were
directly related to Petron’s business negating further Petron’s claim that RDG is independent. A
finding that a contractor is a ‘labor-only’ contractor is equivalent to declaring that there is an
employer-employee relationship between the principal and the employees of the supposed
contractor.”
48
WESLEYAN UNIVERSITY PHILIPPINESvs. WESLEYAN UNIVERSITY-PHILIPPINES FACULTY AND

STAFF ASSOCIATION
G.R. No. 181806, March 12, 2014
DOCTRINE
The Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits employers
from eliminating or reducing the benefits received by their employees. This rule, however,
applies only if the benefit is based on an express policy, a written contract, or has ripened into a
practice. To be considered a practice, it must be consistently and deliberately made by the
employer over a long period of time. An exception to the rule is when “the practice is due to
error in the construction or application of a doubtful or difficult question of law.” The error,
however, must be corrected immediately after its discovery; Otherwise, the rule on Non-
Diminution of Benefits would still apply. It may not be amiss to mention that when the provision of
the CBA is clear, leaving no doubt on the intention of the parties, the literal meaning of the
stipulation shall govern. However, if there is doubt in its interpretation, it should be resolved in
favor of labor, as this is mandated by no less than the Constitution.
FACTS
Petitioner Wesleyan University-Philippines is a non-stock, non-profit educational institution duly
organized and existing under the laws of the Philippines. Respondent Wesleyan University-
Philippines Faculty and Staff Association, on the other hand, is a duly registered labor
organization acting as the sole and exclusive bargaining agent of all rank-and-file faculty and
staff employees of petitioner.The parties signed a 5-year CBA. Petitioner, through its President,
Atty. Maglaya, issued a Memorandum providing guidelines on the implementation of vacation
and sick leave credits as well as vacation leave commutation. Memorandum states that
vacation and sick leave credits are not automatic they have to be earned monthly and only
vacation leave is commuted or monetized petitioner. De Lara questioned the guidelines for
being violative of existing practices and the CBA. Labor Management Committee (LMC)
Meeting was held during which petitioner advised respondent to file a grievance complaint on
the implementation of the vacation and sick leave policy. In the same meeting, petitioner
announced its plan of implementing a one-retirement policy,which was unacceptable to
respondent to cash. Vacation leave commutation is effected after the second year of
continuous service of an employee. On August 25, 2005, respondent’s President, Cynthia L. De
Lara (De Lara) wrote a letter to Atty. Maglaya informing him that respondent is not amenable to
the unilateral changes made by petitioner. De Lara questioned the guidelines for being violative
of existing practices and the CBA.
ISSUE
Whether or not the university practice of granting its employees two (2) sets of Retirement
Benefits had already been established as defined by the law and jurisprudence especially in
light of the illegality and lack of authority of such alleged grant.
HELD
Sections 1 and 2 of Article XII of the CBA provide that all covered employees are entitled to 15
days sick leave and 15 days vacation leave with pay every year and that after the second year
of service, all unused vacation leave shall be converted to cash and paid to the employee at
the end of each school year, not later than August 30 of each year. In closing, it may not be
amiss to mention that when the provision of the CBA is clear, leaving no doubt on the intention
of the parties, the literal meaning of the stipulation shall govern. However, if there is doubt in its
49
interpretation, it should be resolved in favor of labor,as this is mandated by no less than the
Constitution.
FIL-PRIDE SHIPPING COMPANY, INC. vs. EDGAR A. BALASTA
G.R. No. 193047, March 3, 2014
DOCTRINE
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 Art.192 (c) (1) of
the Labor Code and Rule X, Section 2 of the 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
therefrom within the statutory period.
FACTS
Petitioner Fil-Pride hired Balasta, for its foreign principal, as an Able Seaman onboard M/V Eagle
Pioneer. Balasta was declared fit to work after undergoing the mandatory Pre- Employment
Medical Examination. While aboard the vessel, Balasta 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. Balasta was thus repatriated on September 18, 2005 and
immediately referred to the company- designated physician Dr. Cruz, who diagnosed Balasta
with hypertension and myocardial ischemia. Consultations lasted until April 19, 2006. Balasta filed
a claim for permanent disability benefits with Fil-Pride but the latter denied the same. Balasta
filed against Fil-Pride a Complaint for recovery of disability benefits, illness allowance,
reimbursement of medical expenses, damages and attorney’s fees. Labor Arbiter rendered a
decision in favor of Balasta, which was reversed by the NLRC. The CA set aside the decision of
the NLRC and reinstated the decision of the LA.
ISSUE
Whether or not Balasta suffered permanent total disability entitling him to claim disability benefits
HELD
YES. Respondent was repatriated on September 18, 2005. He was further examined by the
company-designated physician Dr. Cruz on September 21, 23 and 30, 2005; October 6, 2005;
February 2, 13 and 17, 2006; March 6 and 20, 2006; and on April 19, 2006. After surgery,
respondent continued his treatment with Dr. Cruz, who on the other hand continued to
diagnose respondent with severe coronary artery disease even on respondent's last consultation
on April 19, 2006. Concededly, the period September 18, 2005 to April 19, 2006 is less than the
statutory 240-day — or 8-month — period. Nonetheless, it is impossible to expect that by May 19,
2006, or on the last day of the statutory 240-day period, respondent would be declared fit to
work when just recently — or on February 24, 2006 — he underwent coronary artery bypass graft
surgery; by then, respondent would not have sufficiently recovered. In other words, it became
evident as early as April 19, 2006 that respondent was permanently and totally disabled, unfit to
return to work as seafarer and earn therefrom, given his delicate post-operative condition; a
definitive assessment by Dr. Cruz before May 19, 2006 was unnecessary. Respondent would to all
intents and purposes still be unfit for sea-duty. Even then, with Dr. Cruz's failure to issue a definite
assessment of respondent's condition on May 19, 2006, or the last day of the statutory 240-day
50
period, respondent was thus deemed totally and permanently disabled pursuant to Article 192
(c) (1) of the Labor Code and Rule X, Section 2 of the AREC.
ALPHA SHIP MANAGEMENT CORP. V. CALO

G.R. No. 192034, [January 13, 2014], 724 PHIL 106-127
DOCTRINE
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
period, and the company-designated physician fails to arrive at a definite assessment of the
employee's fitness or disability.
FACTS
Respondent Eleosis V. Calo worked for petitioners Alpha Ship Management Corporation, Junel
M. Chan and their foreign principal, Chuo-Kaiun Company Limited. While MV Iris was in
Shanghai, China, respondent suffered back pain on the lower part of his lumbar region and
urinated with solid particles. On checkup, the doctor found him suffering from urinary tract
infection and renal colic, and was given antibiotics. Later he was found to have kidney
problems and urinary tract infection but was declared fit for work on a "light duty" basis. He then
suffered an attack of severe pain in his loin area below the ribs radiating to his groin and was
diagnosed with suspected renal and/or ureter calculus. He was declared "unfit for work" and
advised to be sent home and undergo further detailed examination and treatment. Respondent
underwent surgery for his nephrolithiasis. Thereafter, he filed a claim for disability benefits with
petitioners, but the claim was denied on the reason that the prolonged treatment should be
blamed on respondent as he failed to report to Dr. Cruz when required; instead, he sought
treatment from his personal physician and abandoned treatment being made by Dr. Cruz.
ISSUE
Whether or not Eleosis V. Calo is entitled to disability benefits
HELD
Yes. it can be said that 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 240days 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. This is true "regardless of whether the
employee loses the use of any part of his body. Respondent was repatriated on October 12,
2004 and underwent treatment by the company-designated physician, Dr. Cruz, until October
14, 2005, or for a continuous period of over one year or for more than the statutory 120-day or
even 240-day period. During said treatment period, Dr. Cruz did not arrive at a definite
assessment of respondent's fitness or disability; thus, respondent's medical condition remained
unresolved. It was only on July 18, 2006 that respondent was declared fit to work by Dr. Cruz.
Such declaration, however, became irrelevant, for by then, respondent had been under
medical treatment and unable to engage in gainful employment for more than 240 days.
Pursuant to the doctrine in Kestrel, the conclusive presumption that the respondent is totally and
permanently disabled thus arose.
51
ANTONIO LOCSIN, II v. MEKENI FOOD CORPORATION

G.R. No. 192105, December 9, 2013
DOCTRINE
In the absence of specific terms and conditions governing a car plan agreement between the
employer and employee, the former mat retain the installments made by the latter on the car
plan and treat them as rents for the use of the service vehicle, in the event that the employee
ceases his employment and fails to complete installment payments on the vehicle. This is
precisely because, the service vehicle was specifically used in the employer’s business; any
personal benefit obtained by the employee from its use is merely incidental
FACTS
Mekeni Food Corporation offered Locsin, the position of Regional Sales Manager to oversee its
South Luzon Operations. In addition to the compensation and benefit package, he was offered
a car plan, under which he would shoulder half of the cost of the vehicle (through salary
deduction), while the other half would be paid for by Mekeni. He was then furnished with the
used Honda Civic of his immediate supervisor, valued at PhP280,000.00. Locsin tendered his
resignation, after having PhP112,500.00 deducted from his monthly salary and applied as part of
the employee’s share in the car plan. He made an offer to purchase his service vehicle by
paying the outstanding balance thereon, however, they could not agree on the terms of the
proposed purchase. Mekeni maintains that the company car plan benefit applied only to
employees who have been with the company for five (5) years; hence the balance that the
petitioner should pay stood at PhP116,380.00 if he opts to purchase the same. Locsin filed
against Mekeni and its President a complaint for the recovery of monetary claims consisting of
unpaid salaries, commissions, sick/vacation leave benefits, and recovery of monthly salary
deductions which were earmarked for his cost-sharing in the car plan. The LA ruled in his favor
and ordered Mekeni to turn over the subject vehicle upon payment of the balance. The NLRC
on appeal, reversed the LA’s ruling and ordered the payment of all of Locsin’s claims including
the equivalent share of the company as part of his benefit under the car plan 50/50 sharing
amounting to PhP112,500.
ISSUE
Whether petitioner is entitled to the refund of all the amounts applied to the cost of the service
vehicle under the car plan?
HELD
No.The court cannot allow that payments made on the car plan be forfeited by Mekeni and
treated simply as rentals. Any benefit or privilege enjoyed by petitioner from using the service
vehicle was merely incidental and insignificant, because for the most part the vehicle was under
Mekeni‘s control and supervision. Free and complete disposal is given to the petitioner only after
the vehicle‘s cost is covered or paid in full. Given the vast territory petitioner had to cover to be
able to perform his work effectively and generate business for his employer, the service vehicle
was an absolute necessity, or else Mekeni‘s business would suffer adversely. Thus, it is clear that
while petitioner was paying for half of the vehicle‘s value, Mekeni was reaping the full benefits
from the use thereof. Conversely, petitioner cannot recover the monetary value of Mekeni‘s
counterpart contribution to the cost of the vehicle; that is not property or money that belongs to
him, nor was it intended to be given to him in lieu of the car plan. Mekeni‘s share of the vehicle‘s
cost was not part of petitioner‘s compensation package. The vehicle is an asset that belonged
to Mekeni. Just as Mekeni is unjustly enriched by failing to refund petitioner‘s payments, so should
52
petitioner not be awarded the value of Mekeni‘s counterpart contribution to the car plan, as this
would unjustly enrich him at Mekeni‘s expense.
COLEGIO DEL SANTISIMO ROSARIO AND SR. ZENAIDA S. MOFADA, OP V. EMMANUEL
ROJO
G.R. No. 170388, September 4, 2013
DOCTRINE
There is no automatic acquisition of regular employment for school personnel after the
expiration of the maximum number of years for probationary period. However, this requires that
the employer set the reasonable standards by which the employee will qualify as a regular
employee and inform the latter about such.
FACTS
Colegio del Santisimo Rosario hired Emmanuel Rojo as a high school teacher on probationary
basis for three consecutive school years. After that, his services were not renewed. Rojo filed a
complaint for illegal dismissal alleging that three consecutive school years is the maximum
number of terms allowed for probationary employment and that according to the 1970 Manual
of Regulations for Private Schools, he should be considered permanent after such. Colegio del
Santisimo argued that the three years mentioned in the manual refer to 36 months and not three
school years. Since he had only served for 30 months, he had not yet served the three years
mentioned in the manual. The Labor Arbiter ruled in favor of Rojo. The NLRC affirmed this
decision, stating in addition that after serving three school years, Rojo had become a regular
employee especially because it was not made known to him the reasonable standards he
should meet. The CA also affirmed this decision, stating that Rojo had satisfied all the
requirements necessary to acquire permanent employment, specifically that he was a full-time
teacher who rendered three consecutive years of satisfactory service.
ISSUE
Whether or not a probationary elementary teacher automatically becomes permanent after
three consecutive school years
HELD
NO. Employment on probationary status of teaching personnel are not governed solely by the
Labor Code but is also supplemented by the special rules in the Manual of Regulations for
Private Schools. Section 92 of the 1992 Manual provides that the probationary period for
elementary levels cannot exceed three consecutive years of satisfactory service. Section 93
states that full-time teachers who have satisfactorily completed this period shall be considered
regular or permanent. Thus, there is no permanent appointment unless the employee is a full-
time teacher and the services rendered are satisfactory. However, in all cases of probationary
employment, the employer must convey to the employee the standards under which he will
qualify as a regular employee at the time of his engagement. If these are not made known to
him at that time, he shall be deemed a regular employee. This is because the IRR of the Labor
Code ensures security of tenure for probationary employees by making sure that due process is
followed and that their services are only terminated if deemed unsatisfactory. In this case,
Colegio del Santisimo did not set such reasonable standards, nor did it inform the employees of
such standards.
53
ABDULJUAHID R. PIGCAULAN V. SECURITY AND CREDIT INVESTIGATION, INC, AND/OR

RENE AMBY REYES
G.R. No. 173648, January 16, 2012
DOCTRINE
The burden of proof for payment of benefits under the Labor Code rests on the employer. The
employee does not have to prove non-payment of benefits.
FACTS
Oliver Canoy and Abduljuahid Pigcaulan were both employed by Security and Credit
Investigation, Inc. and assigned to different clients. They subsequently filed separate complaints
for underpayment of salaries and non-payment of other benefits. They submitted daily time
records reflecting the number of hours served and their wages for the same, as well as itemized
lists of their claims. Security and Credit, however, claimed that the salaries Canoy and Pigcaulan
were paid were above the statutory minimum wage and that the other benefits were already
included in the computation of their salary. The Labor Arbiter ruled that the payroll listings
represented by Security and Credit were not convincing because they were not signed by any
officer and ordered them to pay the salary differentials and other benefits that were proven not
to be paid. The NLRC sustained the LA’s decision. However, upon petition for certiorari with the
CA, such decision was set aside on the ground that there were no factual and legal bases for
the previous rulings.
ISSUE
Whether or not the evidence supplied by Canoy and Pigcaulan were substantial
HELD
NO. The handwritten itemized computations were found to be self-serving, unreliable, and
unsubstantial to sustain the grant of salary differentials, particularly overtime pay. They are
unsigned and unauthenticated, so there is no way of verifying their truth. Also, the daily time
records cannot be considered competent evidence as they are only written in pieces of paper
and solely prepared by Canoy and Pgicaulan. Therefore, there is no substantial evidence that
they were underpaid or are entitled to overtime pay. However, Pigcaulan is entitled to holiday
pay, service incentive pay, and 13th month pay for year 2000. The burden of proof rests on the
employer for proving that such benefits were paid. It is a rule that one who pleads payment has
the burden of proving it. The plaintiff does not have to prove non-payment of the benefits. In this
case, Security and Credit failed to provide convincing proof that it had already settled the
claims.
54
SY vs FAILRAND KNITCRAFT CO., INC.

G.R. Nos. 182915; December 12, 2011
DOCTRINE
principal business of the employer.
FACTS
Fairland is a domestic corporation engaged in garments business, while Susan de Leon is the
owner/proprietress of Weesan Garments. The complaining workers are sewers, trimmers, helpers,
a guard and a secretary who were hired by Weesan. A Complaint for underpayment and/or
non-payment of wages, overtime pay, premium pay for holidays, 13th month pay and other
monetary benefits against Susan/Weesan. Weesan filed before the DOLE-NCR a report on its
temporary closure for a period of not less than 6 months. As the workers were not anymore
allowed to work on the same day, an Amended Complaint was filed to include the charge of
illegal dismissal and impleaded Fairland and its manager.
ISSUE
Whether or not Susan/Weesan is a mere labor-only contractor
HELD
principal business of the employer. In this case, there is no question that the workers were
recruited by Susan/Weesan and that they performed activities which are directly related to
Fairland’s principal business of garments. Nothing in the records show that Weesan has
investment in the form of tools, equipment or machineries, but shows that Fairland has to furnish
Weesan with sewing machines for it to be able to provide the sewing needs of the former.
AWeesan was unable to show that apart from the borrowed sewing machines, it owned and
possessed any other tools, equipment, and machineries necessary to its being a contractor or
sub-contractor for garments. Neither did it prove that it has substantial capital for its business.
There is also doubt as to who really owns the work premises occupied by Weesan, which Susan
failed to clarify. Neither did Susan/Weesan was able to prove that the suspension of its
operations was bona fide and that it complied with the mandatory requirement of notice under
the law, as well as to prove that the termination of the workers was for a lawful cause. The Court
likewise declare that Fairland is the principal of the labor-only contractor, Weesan.
55
VALENZONA VS FAIR SHIPPING CORPORATION

G.R. No. 176884; October 19, 2011
DOCTRINE
A total disability does not require that the employee be absolutely disabled or totally paralyzed.
What is necessary is that the injury must be such that the employee cannot pursue his usual work
and earn therefrom. On the other hand, a total disability is considered permanent if it lasts
continuously for more than 120 days.
FACTS
In May 2001, Carmelito Valenzona was recruited and hired by the Fair Shipping Corporation to
work as an engineer for Sejin Lines Company Limited. He was assigned to work aboard the M/V
Morelos ship. Before he embarked, he was declared fit to work by the company doctor. But in
September 2001, Valenzona got sick while aboard the ship. In October 2001, he was confined at
a hospital in Mexico. In the same month, he was repatriated by Sejin to the Philippines. Upon
reaching the Philippines, Valenzona was treated by the company doctor (Dr. Nicomedes Cruz).
He was treated continuously for six months until April 2002. But in April 2002, Valenzona sought a
second opinion from a certain Dr. Magpapala and the latter diagnosed Valenzona with a
cardiovascular disease. Later that same month, Valenzona demanded from Fair Shipping and
Sejin that he be paid his sickness allowance and permanent disability benefits. Instead of paying
him, the company did not as in fact, the company made a declaration that after the 6 months
testing, Valenzona was found to be fit to work. To prove his claim, Valenzona sought another
independent doctor (Dr. Rodrgigo Guanlao). Guanlao concurred with the findings of D.
Magpapala as he determined that Valenzona is unfit to work in any capacity.
ISSUE
Whether petitioner is entitled to receive permanent disability benefits as well as attorney’s fees.
HELD
Yes. Petitioner is entitled to permanent disability benefits. The certification by the company-
designated physician that petitioner is fit to work was issued after 199 days or more than 120
days from the time he was medically repatriated to the Philippines. Petitioner’s Employment
Contract specifically provides that the same shall be deemed an “integral part of the Standard
Terms and Conditions Governing the Employment of Filipino Seafarers On Board Ocean-Going
Vessels” otherwise known as the POEA Standard Employment Contract. A total disability does
not require that the employee be absolutely disabled or totally paralyzed. What is necessary is
that the injury must be such that the employee cannot pursue his usual work and earn
therefrom. On the other hand, a total disability is considered permanent if it lasts continuously for
more than 120 days. 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.
56
JERRY MAPILI VS. PHILIPPINE RABBIT BUS LINES, INC./NATIVIDAD NISCE

G.R. No. 172506 July 27, 2011
DOCTRINE
An employees’ propensity to commit repetitious infractions evidences wrongful intent, making
him undeserving of the compassion accorded by law to labor.
FACTS
Respondent Natividad P. Nisce (Nisce) is the President of respondent Philippine Rabbit Bus Lines,
Inc. (PRBLI), an entity engaged in the transportation business. PRBLI hired petitioner as bus
conductor. While on duty en route from Manila to Alaminos, Pangasinan, petitioner was caught
by PRBLIs field inspector extending a free ride to a lady passenger who happened to be the wife
of Julio Ricardo, petitioner’s co-employee and one of PRBLIs drivers, was immediately issued a
passenger ticket for which she paid the fare. The petitioner was preventively suspended and
was directed to appear in an administrative investigation. Thereafter, a formal hearing was
conducted during which petitioner was given an opportunity to present and explain his side.
Consequently, petitioner was terminated from employment for committing a serious irregularity
by extending a free ride to a passenger in violation of company rules and that was already the
third time that petitioner committed said violation. Petitioner filed with the NLRC a Complaint for
illegal dismissal against PRBLI, Nisce, and Ricardo Paras (Paras), PRBLIs General Manager. He
argued that the infraction was only trivial. It was done without malice and resulted from his
honest belief that immediate family members of PRBLIs employees are entitled to free ride.
ISSUE
Whether or not the penalty imposed was grossly disproportionate to the infraction committed
HELD
Section 13, Article VIII [21] of the CBA is clear and unequivocal that free rides are available only
to employees of PRBLI. The benefit is not automatically extended to members of the employees
immediate family as passes must first be requested for them. Petitioner should be conversant of
this provision considering his previous infractions of this same provision for which he was duly
penalized. Petitioners claim of good faith is belied by his testimony to the effect that he
extended a free ride out of gratitude to the wife of a co-employee who assisted him in his
financial troubles. Based on this testimony, it is quite apparent that petitioner was aware that the
infraction he committed constituted a grave offense but he still persisted in committing the same
out of gratitude to the passenger. Petitioner chose to violate company rules for his benefit
without regard to his responsibilities to the company. Also, if not for the inspector who
discovered the incident, the company would have been defrauded by the amount of fare. It
bears stressing that petitioner has been in the employ of PRBLI for more than eight years already
and is a member of the company’s labor union. As such, he ought to know the specific
company rules pertaining to his line of work as a bus conductor. Petitioners past infractions can
be gleaned from his employment record of offenses which was presented by the respondents.
This piece of evidence was not disputed by petitioner. Hence, petitioner cannot claim that the
finding of his past company infractions was based merely on allegations. Nor can it be plausibly
argued that because the offenses were already given the appropriate sanctions, they cannot
be taken against him. They are relevant in assessing private respondents liability for the present
violation for the purpose of determining the appropriate penalty. To sustain private respondents
argument that the past violation should not be considered is to disregard the warnings
previously issued to him.
57
ALIVIADO V. PROCTER & GAMBLE PHILS.,INC.

G.R. No. 160506; JUNE 6, 2011
DOCTRINE
Finding that a contractor is a 'labor-only' contractor, as opposed to permissible job contracting,
is equivalent to declaring that there is an employer-employee relationship between the principal
and the employees of the supposed contractor, and the `labor-only' contractor is considered as
a mere agent of the principal, the real employer.
FACTS
On March 9, 2010, SC rendered a Decision holding that Promm-Gem, Inc. is a legitimate
independent contractor; that Sales and Promotions Services (SAPS) is a labor-only contractor
consequently its employees are considered employees of Procter & Gamble Phils., Inc.; that
Promm-Gem is guilty of illegal dismissal; that SAPS/P&G is likewise guilty of illegal dismissal; that
petitioners are entitled to reinstatement; and that the dismissed employees of SAPS/P&G are
entitled to moral damages and attorney's fees there being bad faith in their dismissal.
ISSUE
Whether SAPS is a labor-only contractor.
HELD
YES. The Court correctly determined that SAPS is a labor-only contractor. There is no basis for
P&G's claim that the Court erred in not applying the "four-fold" test, particularly the "control test"
in determining whether SAPS is a legitimate independent contractor or a labor-only contractor.
As discussed in our March 9, 2010 Decision, the applicable rules are Article 106 of the Labor
Code and Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code, as amended
by Department Order No. 18-02. The "control test" is merely one of the factors to consider. This is
clearly deduced from the provision which states that labor-only contracting exists when any of
the two elements is present. In our March 9, 2010 Decision, it was established that SAPS has no
substantial capitalization and it was performing merchandising and promotional activities which
are directly related to P&G's business. Since SAPS met one of the requirements, it was enough
basis for us to hold that it is a labor-only contractor. Consequently, its principal, P&G, is
considered the employer of its employees.
58
PANTOLLANO vs. KORPHIL SHIPMANAGEMENT AND MANNING CORP.

G.R. No. 169575, March 30, 2011
DOCTRINE
The heirs of a missing seaman may file their claim for death compensation benefits within the
three-year period fixed by law from the time the seaman has been presumed dead. The heirs of
a missing seaman have to wait for four years as provided under Article 391 of the Civil Code
before the seaman is declared as legally dead.
FACTS
Korphil hired Vedasto Pantollano, the deceased husband of petitioner, as 4th Engineer on board
the vessel M/V Couper. On August 2, 1994, Vedasto was seen to be in deep thought, counting
other vessels passing by and talking to himself. That same day, the Chief Engineer of the vessel
reported to the Master of the vessel that Vedasto did not show up for his duty. The Master of the
vessel thus ordered all personnel on stand by. The vessel then altered its course to search for
Vedasto. On August 3, 1994, a Report was issued by the Master of M/V Couper declaring that
Vedasto was missing. His wife, petitioner Imelda Pantollano (Imelda), was informed about the
disappearance. Vedasto was never seen again. Imelda went to the office of Korphil to claim
the death benefits due to the heirs of her husband, but Korphil advised her that it was still
premature and that she has to wait for the lapse of four years before her husband Vedasto
could be declared dead. However, when she came back after four years, she was told that her
claim has already prescribed pursuant to Article 291 of the Labor Code. Korphil argues that the
three-year prescriptive period referred to in Article 291 shall commence to run from the time the
cause of action accrued which was August 2, 1994.
ISSUE
Whether the claim of Imelda for death compensation benefits filed on May 29, 2000, or more
than five years from the time her husband Vedasto was reported missing on August 2, 1994, is
already barred by prescription following the provisions of Article 291 of the Labor Code.
HELD
In this case, there is no dispute that Vedasto went missing on August 2, 1994, during the
effectivity of his employment contract. On August 2, 1994, it cannot yet be presumed that
Vedasto is already dead. "The boat was not lost. This opens up a number of possibilities. . .
Nothing is certain. Nobody knows what has happened to him. He could have transferred to
another vessel or watercraft. He could even have swum to safety. Or he could have died. Or
worse, he could have taken his own life. Legal implications — such as right to compensation,
succession, the legal status of the wife— are so important that courts should not so easily be
carried to the conclusion that the man is dead. The result is that death cannot be taken as a
fact." A person missing under the circumstances as those of Vedasto may not legally be
considered as dead until the lapse of the period fixed by law on presumption of death, and
consequently Imelda cannot yet be considered as a widow entitled to compensation under the
law. On August 2, 1994, when Vedasto was reported missing, Imelda cannot as yet file her claim
for death benefits as it is still premature. The provisions of Article 391 of the Civil Code therefore
become relevant, to wit: A person who has been in danger of death under other circumstances
and his existence has not been known for four years shall be presumed dead. Vedasto can only
be presumed dead after the lapse of four years from August 2, 1994 when he was declared
missing. But of course, evidence must be shown that Vedasto has not been heard of for four
years or thereafter. This is the case here. Vedasto is presumed legally dead only on August 2,
1998. It is only at this time that the rights of his heirs to file their claim for death benefits accrued.
59
BANK OF THE PHILIPPINE ISLANDS VS COQUIA, JR.

G.R. No. 167518. March 23, 2011
DOCTRINE
Violations of bank's policies, rules and regulations, amount to an abuse of the trust reposed in
him by his employer. Tantamount to stripping of employee’s right to backwages
FACTS
Respondent was forced to take a mandatory leave of absence to give way for an internal
auditing. He was suspected and was placed under preventive suspension for 30 days due to
various irregularities found to be committed by him. Thereafter, respondent received a notice of
termination on the ground of serious misconduct and breach of trust as grounds for his dismissal.
Respondent filed a complaint for illegal suspension, illegal dismissal, and other monetary claims
against petitioner. Labor Arbiter ruled in favor of respondent, held the dismissal as illegal and
lacks factual basis for the loss of trust and confidence reposed upon respondent, for such
irregular transactions were done for the benefit of the bank and without fraudulent intent on
respondent’s part. On appeal, NLRC reversed the decision in favor of petitioner, an MR was filed
by respondent and was granted, petitioner in response filed an MR but the decision was
affirmed but the award was modified noting that respondent was not entirely faultless of the
charges stripping him of back wages and no right to damages for he was not deprived of due
process. On separate appeals by petitioner and respondent, CA ruled differently. Respondent’s
petition was denied and sustained the deletion of award of back wages and damages.
Petitioner’s petition was granted rendering the respondent’s dismissal as legal but separation
pay was sustained for reinstatement was no longer possible due to strained relations between
petitioner and respondent. Hence this petition.
ISSUE
W/N the decision of the CA was proper?
HELD
Yes, on the ground of res judicata, the decision has become final and executory. The dismissal of
respondent has been declared legal by CA on the appeal filed by petitioner Bank since
violations of bank's policies, rules and regulations, amount to an abuse of the trust reposed in him
by his employer. As a result, the NLRC's award of separation pay and accumulated leave credits
were reversed and set aside. However, the CA, on equitable grounds, still granted respondent
Coquia financial assistance for his 26 years of service to the bank. Likewise, given that the
decision has become final and executory, the Supreme Court can no longer disturb such
rendered decision, causing the petitioner BPI's prayer in the instant petition to set aside the
award of separation pay barred by the principle of res judicata.
60
SANDEN AIRCON PHILIPPINES vs. LORESSA P. ROSALES

G.R. No. 169260, MARCH 23, 2011
DOCTRINE
Unlike in other cases where the complainant has the burden of proof to [prove] its allegations,
the burden of establishing facts as bases for an employer’s loss of confidence in an employee –
facts which reasonably generate belief by the employer that the employee was connected
with some misconduct and the nature of his participation therein is such as to render him
unworthy of trust and confidence demanded of his position – is on the employer.
FACTS
Sanden Aircon Philippines employed Loressa P. Rosales as Management Information System
Secretary (MIS) Department Secretary. Subsequently, she was promoted as Data Custodian and
Coordinator which gives her access to all computer programs and marketing data, including
Delivery Receipt Transaction Files of Sanden. Sanden discovered that the marketing delivery
receipt transaction files were missing. The Internal Auditing Department, through its Audit Officer,
immediately sent a memorandum requesting that a technical investigation be conducted.
Based on the facts gathered on the investigation the MIS Department found that it is highly
probable that Ms. Loressa Rosales was the culprit in the said incident. Thus, Atty. Reynaldo B.
Destura, the Personnel and Administrative Services Manager sent a letter8 to Loressa charging
her with data sabotage and absences without leave (AWOL). She was given 24 hours to explain
her side. Loressa submitted her letter where she vehemently denied the allegations of data
sabotage. According to her, only a computer programmer equipped with the necessary
expertise would be capable of such an act. As to the charge of incurring AWOL, she challenged
the dates and circumstances of her alleged AWOL. Loressa received a Notice of Disciplinary
Action from Sanden notifying Loressa that management is terminating Loressas employment
effective upon receipt of the said communication. The reason cited by Sanden was the loss of
trust on her capability to continue as its Coordinator and Data Custodian. For this reason, Loressa
filed a complaint for illegal dismissal. The Labor Arbiter rendered a decision finding that there
was illegal dismissal.
ISSUE
Whether or not Sanden legally terminated Loressa’s employment on the ground of willful breach
of trust and confidence as Coordinator and Data Custodian?
HELD
No. Settled is the rule that under Article 282(c), the breach of trust must be willful. Ordinary
breach will not suffice. A breach is willful if it is done intentionally and knowingly without any
justifiable excuse, as distinguished from an act done carelessly, thoughtlessly or inadvertently. As
firmly entrenched in our jurisprudence, loss of trust and confidence as a just cause for
termination of employment is premised on the fact that an employee concerned holds a
position where greater trust is placed by management and from whom greater fidelity to duty is
correspondingly expected. The betrayal of this trust is the essence of the offense for which an
employee is penalized. Sanden has the burden of proof to prove its allegations. Unlike in other
cases where the complainant has the burden of proof to [prove] its allegations, the burden of
establishing facts as bases for an employer’s loss of confidence in an employee – facts which
reasonably generate belief by the employer that the employee was connected with some
misconduct and the nature of his participation therein is such as to render him unworthy of trust
and confidence demanded of his position – is on the employer. While it is true that loss of trust
and confidence is one of the just causes for termination, such loss of trust and confidence must,
however, have some basis.
61
EXODUS INTERNATIONAL V. BISCOCHO

GR No. 166109, February 23, 2011
DOCTRINE
In illegal dismissal cases, it is incumbent upon the employees to first establish the fact of their
dismissal before the burden is shifted to the employer to prove that the dismissal was legal.
FACTS
Petitioner Exodus International Construction Corporation is a duly licensed labor contractor for
the painting of residential houses, condominium units and commercial buildings. Exodus
obtained from Dutch Boy Philippines, Inc. two contracts for the painting of specific
infrastructures. In the furtherance of its business, Exodus hired respondents as painters on different
dates. Subsequently, respondents Guillermo, Fernando, Ferdinand, and Miguel filed a complaint
for illegal dismissal and non-payment of holiday pay, service incentive leave pay, 13th month
pay and night-shift differential pay. The Labor Arbiter rendered a Decision exonerating
petitioners from the charge of illegal dismissal as respondents chose not to report for work. The
Labor Arbiter ruled that since there is neither illegal dismissal nor abandonment of job,
respondents should be reinstated but without any backwages. She disallowed the claims for
premium pay for holidays and rest days and nightshift differential pay as respondents failed to
prove that actual service was rendered on such non-working days. The NLRC dismissed the
appeal. It ruled that petitioners, who have complete control over the records of the company,
could have easily rebutted the monetary claims against it. All that it had to do was to present
the vouchers showing payment of the same. However, they opted not to lift a finger, giving an
impression that they never paid said benefits. The CA affirmed the LA and NLRC.
ISSUE
Whether or not the CA also seriously erred and committed grave abuse of discretion in affirming
the award of service incentive leave pay, 13th month pay, and holiday pay in the absence of
evidentiary and legal basis therefor
HELD
The Court is not unmindful of the rule that 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
petitioners must bear the burden of proving that the dismissal was legal, the respondents 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. There was no dismissal in this
case, hence, there is no question that can be entertained regarding its legality or illegality. As
found by the Labor Arbiter, there was no evidence that respondents were dismissed nor were
they prevented from returning to their work. It was only respondents’ unsubstantiated conclusion
that they were dismissed. As a matter of fact, respondents could not name the particular person
who effected their dismissal and under what particular circumstances. It is a settled rule that
mere absence or failure to report for work is not enough to amount to abandonment of work.
Abandonment is the deliberate and unjustified refusal of an employee to resume his
employment. Thus, respondents must be reinstated and paid their holiday pay, service incentive
leave pay, and 13th month pay. However, the CA erred when it ordered payment of full
backwages. In cases where there is no evidence of dismissal, the remedy is reinstatement but
without backwages. Therefore, the instant petition for review on certiorari is partly granted.
62
MEDLINE MANAGEMENT, INC. and GRECOMAR SHIPPING AGENCY vs ROSALINDA

G.R. No. 168715, September 15, 2010
DOCTRINE
We declared that in order to avail of death benefits, the death of the employee should occur
during the effectivity of the employment contract. The death of a seaman during the term of
employment makes the employer liable to his heirs for death compensation benefits. Once it is
established that the seaman died during the effectivity of his employment contract, the
employer is liable.
FACTS
Petitioner Medline Management, Inc. (MMI), on behalf of its foreign principal, petitioner
Grecomar Shipping Agency (GSA), hired Juliano Roslinda (Juliano) to work on board the vessel
MV Victory. Juliano was previously employed by the petitioners under two successive separate
employment contracts of varying durations. His latest contract was approved by the POEA for
duration of nine months. In accordance with which, he boarded the vessel MV Victory as an
oiler and, after several months of extension, was discharged. Months after his repatriation,
Juliano consulted Dr. Pamela R. Lloren (Dr. Lloren) of Metropolitan Hospital. He complained
about abdominal distention which is the medical term for a patient who vomits previously
ingested foods. From March 8 to August 24, 2000, Juliano visited Dr. Lloren for a series of medical
treatment.[ 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. In medicine, hemodialysis is the method of removing waste products such as
creatinine and urea, as well as freeing water from the blood, when the kidneys are in renal
failure. Juliano died. his wife Gliceria Roslinda and son Ariel Roslinda, respondents herein, filed a
complaint against MMI and GSA for payment of death compensation, reimbursement of
medical expenses, damages, and attorney's fees before the Labor Arbitration Branch of the
NLRC.
ISSUE
W/N the Heirs of Juliano are entitled to death benefits provided in POEA Standard employment
contract
HELD
Juliano did not die while he was under the employ of petitioners. His contract of employment
ceased when he was discharged, after having completed his contract thereat. He died on
August 27, 2001 or one year, seven months and seven days after the expiration of his contract.
Thus, his beneficiaries are not entitled to the death benefits under the Standard Employment
Contract for Seafarers. Moreover, there is no evidence to show that Julianos illness was acquired
during the term of his employment with petitioners. In respondents Position Paper,[26] they
admitted that Juliano was discharged not because of any illness but due to the expiration of his
employment contract.
63
SOUTHEASTERN SHIPPING vs. FEDERICO U. NAVARRA, JR

G.R. No. 167678, June 22, 2010
DOCTRINE
While the Court adheres to the principle of liberality in favor of the seafarer in construing the
Standard Employment Contract, we cannot allow claims for compensation based on surmises.
When the evidence presented negates compensability, we have no choice but to deny the
claim, lest we cause injustice to the employer. The law in protecting the rights of the employees,
authorizes neither oppression nor self-destruction of the employer there may be cases where the
circumstances warrant favoring labor over the interests of management but never should the
scale be so tilted as to result in an injustice to the employer.
FACTS
Petitioner Southeastern Shipping, hired Federico Navarra to work on board the vessel “George
McLeod”. Federico, while on board the vessel, 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. When he arrived back in the Philippines, the specimen excised from his neck lymph
node was found negative for malignancy. Subsequently, he was diagnosed at the Philippine
General Hospital to be suffering from Hodgkin’s Lymphoma. Thus, Federico filed a complaint
against petitioners with the arbitration branch of 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. Evelyn substituted him as complainant on her own behalf
and in behalf of their three children. The Labor Arbiter rendered a decision dismissing the
complaint on the ground that Hodgkin’s Lymphoma is not one of the occupational or
compensable disease. Upon appeal, the NLRC reversed the decision of the Labor Arbiter,
ordering the petitioner to pay the respondents death compensation and minor child allowance
amounting to $72,000. Petitioners filed a Motion for Reconsideration which was denied. They,
thus, filed a petition for certiorari with the CA. The CA dismissed the petition for lack of merit.
Hence, this present petition.
ISSUE
Whether or not the petitioners are liable to pay death compensation benefits?
HELD
No. Section 20 of the Standard Terms and Conditions Governing the Employment of Filipino
Seafarers On-Board Ocean-Going Vessels states that “ In case of death of the seafarer during
the term of his contact, the employer shall pay his beneficiaries the Philippine currency
equivalent to the amount of Fifty Thousand US Dollars (US$50,000) and an additional amount of
Seven Thousand US Dollars (US$7,000) to each child under the age of twenty-one but not
exceeding four children”. The death of a seaman during the term of employment makes the
employer liable to his heirs for death compensation benefits, but if the seaman dies after the
termination of his contract of employment, his beneficiaries are not entitled to the death
benefits. Federico did not die while he was under the employ of petitioners. His contract of
employment ceased when he arrived in the Philippines on March 30, 1998, whereas he died on
April 29, 2000. Thus, his beneficiaries are not entitled to the death benefits under the Standard
Employment Contract for Seafarers.
64
ALIVIADO V. PROCTER & GAMBLE PHILS.INC.

G.R. No. 160506. March 9, 2010
DOCTRINE
Labor laws expressly prohibit "labor-only" contracting. To prevent its circumvention, the Labor
Code establishes an employer-employee relationship between the employer and the
employees of the ‘labor-only’ contractor.
FACTS
Petitioners worked as merchandisers of P&G from various dates, allegedly starting as early as
1982 or as late as June 1991, to either May 5, 1992 or March 11, 1993. They all individually signed
employment contracts with either Promm-Gem or SAPS for periods of more or less five months at
a time. They received their wages from Promm-Gem or SAPS. Petitioners filed a complaint
against P&G for regularization, service incentive leave pay and other benefits with damages.
The Labor Arbiter dismissed the complaint for lack of merit and ruled that there was no
employer-employee relationship between petitioners and P&G. The NLRC and the CA affirmed
the decision of the Labor Arbiter. Petitioners insist that they are employees of P&G, claiming that
they were recruited by the salesmen of P&G and were engaged to undertake merchandising
chores for P&G long before the existence of Promm-Gem and/or SAPS. Petitioners further assert
that Promm-Gem and SAPS are labor-only contractors providing services of manpower to their
client, claiming that the contractors have neither substantial capital nor tools and equipment to
undertake independent labor contracting.
ISSUE
Whether or not the petitioners are employees of P&G
HELD
Yes, but only to the extent of those recruited and supplied by SAPS. Labor laws expressly prohibit
"labor-only" contracting. To prevent its circumvention, the Labor Code establishes an employer-
employee relationship between the employer and the employees of the ‘labor-only’ contractor.
The statute establishes this relationship for a comprehensive purpose: to prevent a circumvention
of labor laws. The contractor is considered merely an agent of the principal employer and the
latter is responsible to the employees of the labor-only contractor as if such employees had
been directly employed by the principal employer. There is labor-only contracting when the
contractor or sub-contractor merely recruits, supplies or places workers to perform a job, work or
service for a principal and any of the following elements are present: (a) The contractor or
subcontractor does not have substantial capital or investment which relates to the job, work or
service to be performed and the employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the main business of the
principal; or (b) The contractor does not exercise the right to control over the performance of
the work of the contractual employee. The Articles of Incorporation of SAPS shows that it has a
paid-in capital of only ₱31,250.00. There is no other evidence presented to show how much its
working capital and assets are. Furthermore, there is no showing of substantial investment in
tools, equipment or other assets. Substantial capital refers to capitalization used in the
performance or completion of the job, work or service contracted out. In the present case, SAPS
has failed to show substantial capital. Considering that SAPS has no substantial capital or
investment and the workers it recruited are performing activities which are directly related to the
principal business of P&G, the former is engaged in "labor-only contracting".
65
LNS INTERNATIONAL V. PADUA, JR.

GR No. 179792, March 5, 2010
DOCTRINE
By the voluntary withdrawal of respondent’s application from petitioner, the latter could not
have been involved in the recruitment and placement of respondent and consequently could
not be held liable for any violation.
FACTS
Respondent Armando C. Padua, Jr. filed a Sworn Statement[ before the Adjudication Office of
the POEA against LNS and Sharikat Al Saedi International Manpower for violation of Section
2(b), (d), and (e) of Rule I, Part VI of the 2002 POEA Rules and Regulations Governing the
Recruitment and Employment of Land-based Overseas Workers. Padua alleged that he applied
as auto electrician with petitioner LNS and was assured of a job in Saudi Arabia. He paid LNS for
processing fees, medical expenses, and for trade test, but he was not issued the corresponding
receipts. He further alleged that he signed an employment contract with LNS as a body builder.
Padua further alleged that it was another agency, Sharikat, which processed his papers and
eventually deployed him to Saudi Arabia. However, he returned to the Philippines after more or
less 3 months because he was not allegedly paid his salaries and also because of violations in
the terms and conditions of his employment contract. The POEA issued its Order finding LNS
liable for non-issuance of receipt and misrepresentation. As to Sharikat, the POEA found no
sufficient evidence to hold it liable for the violations charged. The DOLE affirmed the POEA. The
CA dismissed the petition for certiorari filed.
ISSUE
Whether or not petitioner is liable for non-issuance of receipt and misrepresetation
HELD
The Court notes that respondent did not deny the due execution of the withdrawal form as well
as the genuineness of his signature and thumb mark affixed therein. On the contrary, he
admitted signing the same. When he voluntarily signed the document, respondent is bound by
the terms stipulated therein. Moreover, The Court gave more evidentiary weight to the
allegation of petitioner that it did not receive any amount from the respondent. This conclusion is
more logical considering that it has been duly established that respondent had withdrawn all his
documents from LNS. There is likewise no basis for the POEA, DOLE, and the CAs conclusion that
it was petitioner that endorsed respondent’s documents to Sharikat. Other than respondent’s
self-serving claim, there is no proof whatsoever that petitioner endorsed respondents application
papers to Sharikat. In addition, if respondent’s allegations were to be believed, it is rather odd
that LNS would require him to fill up the withdrawal form if the intention of LNS was to endorse
the papers to Sharikat. No evidence whatsoever was adduced that LNS was acting as a conduit
of Sharikat. Likewise, there is no evidence, other than respondent’s unsubstantiated claim, that
petitioner endorsed his application to Sharikat. From the foregoing, it is more logical that it was
Sharikat to whom respondent eventually paid the corresponding fees. However, for failure to
interpose any appeal from the judgment of the POEA insofar as it absolved Sharikat, respondent
is thereby bound by it and is considered final as to him. In fine, for failure to adduce any shred of
evidence of payment made to petitioner, or that petitioner referred or endorsed respondent for
employment abroad to another agency, the charges of non-issuance of receipt and
misrepresentation against petitioner could not possibly prosper. By the voluntary withdrawal of
respondent’s application from petitioner, the latter could not have been involved in the
66
recruitment and placement of respondent and consequently could not be held liable for any
violation. The petition is granted.
LABOR RELATIONS
ERNESTO BROWN vs. MARSWIN MARKETING, INC. AND SANY TAN

G.R. No. 206891, March 15, 2017
DOCTRINE
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. In order for
the employer to discharge its burden to prove that the employee committed abandonment,
which constitutes neglect of duty, and is a just cause for dismissal, the employer must prove that
the employee 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.
FACTS
Brown filed a Complaint for illegal dismissal against Marswin and Tan, its owner and President. He
prayed for reinstatement with full backwages and payment of his other monetary claims. On
May 28, 2010, he reported at the Main Office of Marswin, and was told that it was already his last
day of work. Allegedly, he was made to sign a document that he did not understand; and,
thereafter, he was no longer admitted back to work. Thus, he insisted that he was terminated
without due process of law. Marswin/Tan argued that they received negative reports anent
Brown's work ethics, competence, and efficiency. On May 28, 2010, they summoned him at its
Main Office to purportedly discuss the complaints; during the meeting, they informed Brown of
the charges against him. During the meeting, Brown excused himself purportedly to get in touch
with his wife; however, he never returned and no longer reported for work. The Labor Arbiter
(LA) and the NLRC declared the dismissal illegal. The NLRC ratiocinated that Marswin/Tan did not
give Brown the opportunity to confront his accusers, and did not observe due process in
terminating him.
ISSUE
Whether or not Brown was illegally dismissed by Marswin.
HELD
Brown was illegally dismissed by respondents Marswin Inc., and Tan. In dismissal cases, the
employer bears the burden of proving that the employee was not terminated, or if dismissed,
that the dismissal was legal. The failure of the employer to discharge such burden would mean
that the dismissal is unjustified and thus, illegal. In fine, where there is no clear and valid cause for
termination, the law treats it as a case of illegal dismissal. In order for the employer to discharge
its burden to prove that the employee committed abandonment, which constitutes neglect of
duty, and is a just cause for dismissal, the employer must prove that the employee 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. The second requirement must be manifested by overt acts
and is more determinative in concluding that the employee is guilty of abandonment. This is
because abandonment is a matter of intention and cannot be lightly presumed from indefinite
acts. Apart from the allegation of abandonment, Marswin/Tan presented no evidence proving
that Brown failed to return without justifiable reasons and had clear intentions to discontinue his
work. Marswin did not send any notice to Brown to warn him that his supposed failure to report
would be deemed as abandonment of work. Marswin failed to discharge the burden of proving
that Brown abandoned his work. Just ten days after Brown's last day at work, he already filled an
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illegal dismissal suit against his employer. Such filing conveys his desire to return, and strengthens
his assertion that he did not abandon his work.
DUTCH MOVERS, INC., CESAR LEE AND YOLANDA LEE VS. EDILBERTOLEQUIN, ET AL.
G.R. No. 210032; APRIL 25, 2017
DOCTRINE
Piercing the veil of corporate fiction is allowed where a corporation is a mere alter ego or a
conduit of a person, or another corporation. Responsible persons may be impleaded, and be
held solidarily liable even after final judgment and on execution, provided that such persons
deliberately used the corporate vehicle to unjustly evade the judgment obligation, or resorted
to fraud, bad faith, or malice in evading their obligation. By responsible person, we refer to an
individual or entity responsible for, and who acted in bad faith in committing illegal dismissal or in
violation of the Labor Code; or one who actively participated in the management of the
corporation.
FACTS
Dutch Movers, Inc. employed Lequin as truck driver, and the rest of respondents as helpers.
Cesar Lee, informed them that DMI would cease its hauling operation for no reason. They
requested DMI to issue a formal notice regarding the matter but to no avail. DOLE NCR issued a
certification revealing that DMI did not file any notice of business closure. Respondents argued
that they were illegally dismissed as their termination was without cause and only on the pretext
of closure. LA dismissed the case for lack of cause of action. NLRC reversed and set aside the LA
Decision. The NLRC Decision became final and executory. Upon investigation, respondents
learned that DMI’s creation and operation was attended with fraud making it convenient for
petitioners to evade their legal obligations.
ISSUE
Whether petitioners are personally liable to pay the judgment awards in favor of respondents.
HELD
YES. The Court is not unmindful of the basic tenet that a corporation has a separate and distinct
personality from its stockholders, and from other corporations it may be connected with.
However, such personality may be disregarded, or the veil of corporate fiction may be pierced
attaching personal liability against responsible person if the corporation's personality "is used to
defeat public convenience, justify wrong, protect fraud or defend crime, or is used as a device
to defeat the labor laws x x x." While it is true that one's control does not by itself result in the
disregard of corporate fiction; however, considering the irregularity in the incorporation of DMI,
then there is sufficient basis to hold that such corporation was used for an illegal purpose,
including evasion of legal duties to its employees, and as such, the piercing of the corporate veil
is warranted. The act of hiding behind the cloak of corporate fiction will not be allowed in such
situation where it is used to evade one's obligations, which "equitable piercing doctrine was
formulated to address and prevent." Veil of corporate fiction must be pierced and petitioners
should be held personally liable for judgment awards because the peculiarity of the situation
shows that they controlled DMI; they actively participated in its operation such that DMI existed
not as a separate entity but only as business conduit of petitioners. As shown, petitioners
controlled DMI by making it appear to have no mind of its own, and used DMI as shield in
evading legal liabilities, including payment of the judgment awards in favor of respondents.
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ASIAN INSTITUTE OF MANAGEMENT v. ASIAN INSTITUTE OF MANAGEMENT FACULTY

ASSOCIATION
G.R. No. 207971, January 23, 2017
DOCTRINE
In case of alleged inclusions 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 the Labor
Code.
FACTS
On 2007, Respondent AIMFA filed a petition for certification election seeking to represent a
bargaining unit in AIM consisting of 40 faculty members. Petitioner AIM opposed the petition,
claiming that respondent’s members are neither rank-and-file nor supervisory but rather,
managerial employees. It subsequently filed for cancellation of respondent’s certificate of
registration on the grounds of misrepresentation. The Med-Arbiter ruled in favor of AIM and
denied AFA’s petition for certification election on the ground that AIM’s faculty members are
managerial employees. Upon appeal, the Secretary of Labor (SOLE) opined that they are not
managerial employees, reversing the Med-Arbiter’s ruling. The Secretary of Labor’s decision was
appealed by AIM to the CA, insisting that the members of its tenure-track faculty are managerial
employees, and therefore ineligible to join, assist, or form a labor organization. It ascribed grave
abuse of discretion on the SOLE for its rash conclusion because the faculty’s actions are still
subject to evaluation, review, or final approval by the board of trustees (BOT). Meanwhile, DOLE-
NCR RD Agrvante granted AIM’s petition cancelling respondent’s certificate of registration and
ordered AIMFA’s delisting from the roster of legitimate labor organizations. This Order was
appealed by AIMFA before the Bureau of Labor Relations (BLR), which held that the grounds
relied upon by the petitioner were not among the grounds authorized under Art. 239 of the
Labor Code. The MR did not prosper.
ISSUE
Whether or not AIM’s petition for cancellation of the Union’s certificate of registration was the
proper remedy to avail of
HELD
YES. There are two (2) kinds of managerial employees under Art. 212(m) of the Labor Code.Those
who 'lay down management policies', such as the Board of Trustees, and those who 'execute
management policies and/or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees'. Clearly, AIM's tenure-track faculty do not merely recommend faculty standards.
They 'determine all faculty standards', and are thus managerial employees. Respondent sought
reconsideration, but was denied. It thus instituted a Petition for Review on Certiorari before this
Court on July 4, 2011. The Petition, docketed as G.R. No. 197089, remains pending to date. On
the cancellation of the union registration, Art. 239 lays down grounds for such cancellation to
prosper, to wit: (1) Misrepresentation in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto; (2) Misrepresentation or fraud in the election
of officers minutes of the election of officers, and the list of voters; and (3) Voluntary dissolution
by the members. Art. 238 states that no other ground for cancellation is acceptable, meaning
the enumeration is exclusive. Assuming arguendo that there is a violation of Art. 245, such
violation will not result in the cancellation of the certificate of registration of the labor
organization. Inclusion of union members outside the bargaining unit is not a ground for
69
cancellation of the registration of the union. Said employees are automatically removed from
the list of membership of said union.
INTERADENT ZAHNTECHNIK PHILIPPINES, INC., et al vs REBECCA SIMBILLO

G.R. No. 207315; November 23, 2016
DOCTRINE
When the breach of trust or loss of confidence conjectured upon is not borne by clearly
established facts, as in this case, such dismissal on the ground of loss of trust and confidence
cannot be upheld.
FACTS
Rebecca F. Simbillo worked at Interadent Zahntechnik Philippines, Inc. as a rank-and-file
employee, and was promoted to the position of Finance and Accounting Manager. A
company-wide implementation of different security measures, such as body frisking and
bag/personal items inspection, disconnection of all USB ports, and prohibition of cellular phone
usage was sought by Interadent brought about by an alleged leakage of security information.
Because of such implementation, all network and internet connections in Interadent’s
Accounting Department were removed and disabled, which included suspension of Simbillo’s
electronic mail (email) account. A Memorandum (Notice to Explain) was served to Simbillo with
regard to a message she posted on her Facebook account “referring to company concerns
with the BIR and insulting statements against a co-worker.” In said Memorandum, she was
reminded that as Finance and Accounting Manager, she should observe the highest degree of
confidentiality in handling sensitive information. She was then preventively suspended for seven
days. The following day, Simbillo wrote a reply arguing that she was already constructively
dismissed prior receipt of the Memorandum because of the discriminatory acts committed by
petitioners through certain security procedures directed exclusively and solely against her.
Simbillo further claimed that the Memorandum was defective and was only used to disguise the
intent to dismiss her; and that she committed no violation of any rule or law relative to the
message she posted on Facebook. Upon failure to submit a written explanation and attend the
hearing, Simbillo’s suspension was extended; which caused Simbillo to reiterated her claim. A
Complaint for constructive illegal dismissal, non-payment of service incentive leave pay, 13th
month pay, illegal suspension, claims for moral and exemplary damages and attorney’s fees
was filed by Simbillo against petitioners to the Labor Arbiter. Days after, petitioners issued a
Second Notice informing Simbillo of her termination from service on the ground of loss of trust
and confidence, for disclosing sensitive and confidential information when she made a post on
her Facebook account.
ISSUE
Whether or not Rebecca Simbillo was validly dismissed from employment
HELD
Simbillo was illegally dismissed form employment since the allegation of loss of trust and
confidence was not supported by substantial evidence, thus making the dismissal unjustified. As
a managerial employee, the existence of a basis for believing that Simbillo has breached the
trust of petitioner justifies her dismissal. However, to be a valid ground, loss of trust and
confidence must be based on willful breach of trust, done intentionally, knowingly and
purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly,
heedlessly, or inadvertently. In this case, the act alleged made by Simbillo, the posting of the
Facebook entry did not contain any corporate record or any confidential information.
Otherwise stated, there was really no actual leakage of information; and that no company
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information or corporate record was divulged. If at all, Simbillo can only be said to have acted
“carelessly, thoughtlessly, heedlessly or inadvertently” in making such comment on Facebook;
however, such would not amount to loss of trust and confidence as to justify the termination of
her employment.
LEO’S RESTAURANT V. DENSING
GR No. 208535, October 19, 2016
DOCTRINE
To dismiss an employee on the ground of loss of trust and confidence, two requisites must
concur: (a) the concerned employee must be holding a position of trust; and, (b) the loss of trust
must be based on wilful breach of trust based on clearly established facts.
FACTS
Kimwa Construction & Development Corporation employed respondent as liaison officer.
Allegedly, Kimwa also operated Leo's Restaurant and Bar Cafe (Restobar), and the Mountain
Suite Business Apartelle (Apartelle); it appointed respondent as Administrative Officer/Human
Resource (HR) Head of these establishments. Thereafter, Leo Y. Lua (Leo), the Manager of the
Restobar and the Apartelle, issued upon respondent a Memorandum requiring her to explain the
circumstances surrounding the agreement between the Restobar and Pepsi Products
Philippines, Inc. (Pepsi), and the benefits she derived therefrom. Leo accused her of having
signed said contract without authority from him and of not informing him of the benefits arising
from the contract. Later in another memorandum, respondent was required to answer these
charges: 1) she committed dishonesty when she charged to the Restobar's account 50% of the
food she ordered therefrom without approval of its Owner or Manager; 2) she violated her duties
when she did not inform Leo of the signing of the Pepsi contract; and, 3) she failed to account
for 47 soft drinks cases that Pepsi gave the Restobar. Subsequently, on the ground of loss of trust
and confidence, Leo terminated respondent. Respondent thus filed an Amended Complaint for
illegal dismissal against Kimwa, and herein petitioners. The Executive Labor Arbiter (LA) rendered
a Decision dismissing the Complaint for lack of merit. Initially, the NLRC issued its Resolution
finding respondent's dismissal illegal. However, upon motion for reconsideration of Petitioners,
NLRC reversed itself and dismissed the Complaint for lack of merit. Thereafter, the CA rendered
the herein assailed Decision favouring the respondent.
ISSUE
Whether or not respondent was validly dismissed on the ground of loss of trust and confidence
HELD
The Court denies the Petition. To dismiss an employee on the ground of loss of trust and
confidence, two requisites must concur: (a) the concerned employee must be holding a
position of trust; and, (b) the loss of trust must be based on wilful breach of trust based on clearly
established facts. Loss of trust and confidence as a ground for dismissal is never intended for
abuse by reason of its subjective nature. It must be pursuant to a breach done wilfully, knowingly
and purposely without any valid excuse. It must rest on substantial grounds and not on mere
suspicion, whims, or caprices of the employer. There was no malice or any fraudulent intent on
the part of respondent when she signed the Pepsi contract. There is likewise no evidence that
she personally benefited therefrom. In fact, the Restobar did not suffer any damage arising from
the Pepsi contract. Loss of trust and confidence must stem from dishonest, deceitful or
fraudulent acts. In the absence of such malicious intent or fraud on the part of respondent, she
committed no wilful breach of trust against her employer. In addition, the Court finds that the
charge that respondent failed to account for a certain number of products Pepsi donated to
the Restobar is without basis. Moreover, despite respondent having explained herself, and Pepsi
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having folly and timely clarified the matters surrounding the contract, petitioners still dismissed
respondent. It thus appears that such dismissal was pre-determined by petitioners even before
respondent explained herself regarding the charges against her. Since petitioners failed to show
that respondent actually and wilfully breached their trust, then the CA properly ruled that
petitioners dismissed her without any valid cause.
LORELEI O. ILADAN vs. LA SUERTE INTERNATIONAL MANPOWER AGENCY, INC.,
G.R. No. 203882, January 11, 2016
DOCTRINE
In illegal dismissal cases, the employer has the burden of proving that the employee’s dismissal
was legal. However, to discharge this burden, the employee must first prove, by substantial
evidence, that he had been dismissed from employment.
FACTS
La Suerte is a recruitment agency duly authorized by the POEA to deploy workers for overseas
employment. La Suerte hired Iladan to work as a domestic helper in Hongkong and was
deployed to her principal employer in Hongkong, Domestic Services International to work as
domestic helper for Ms. Muk Sun Fan. Barely eight days into her job, Iladan executed a
handwritten resignation letter. In consideration of financial assistance given by Domestic
Services, Iladan signed an Affidavit of Release, Waiver and Quitclaim duly subscribed before
Labor Attache Leonida V. Romulo of the Philippine Consulate General in Hongkong. On the
same date, an Agreement, was signed by Iladan, Conciliator-Mediator and a representative of
Domestic Services, whereby Iladan acknowledged that her acceptance of the financial
assistance would constitute as final settlement of her contractual claims and waiver of any
cause of action against respondents and Domestic Services which was also subscribed before
Labor Attache Romulo. Iladan returned to the Philippines. Thereafter, Iladan filed a Complaint
for illegal dismissal, refund of placement fee, payment of salaries as well as moral and
exemplary damages, against respondents. Iladan alleged that she was forced to resign by her
principal employer, threatened with incarceration; and that she was constrained to accept the
financial assistance as she needed the money to defray her expenses in going back to the
Philippines. She averred that the statements in the Affidavit of Release, Waiver and Quitclaim
and the Agreement were not fully explained in the language known to her; that they were
considered contracts of adhesion contrary to public policy; and were issued for an
unreasonable consideration. Respondents averred that Iladan was not illegally dismissed but
voluntarily resigned.
ISSUE
Whether or not Iladan was illegally dismissed
HELD
Iladan’s resignation was voluntary; there was no illegal dismissal. In illegal dismissal cases, the
employer has the burden of proving that the employee’s dismissal was legal. However, to
discharge this burden, the employee must first prove, by substantial evidence, that he had been
dismissed from employment. 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 alleged resignation must
be considered in determining whether in fact, he or she intended to sever from his or her
employment. All told, the Labor Arbiter and the NLRC erred in finding that petitioner was illegally
72
dismissed as no substantial evidence was adduced to sustain this finding. As shown above,
Iladan failed to substantiate her claim of illegal dismissal for there was no proof that her
resignation was tainted with coercion and threats, as she strongly claims.
ISLAND OVERSEAS TRANSPORT CORP. V. BEJA,

G.R. No. 203115, December 7, 2015
DOCTRINE
The parties' CBA is inapplicable. Beja based his claim for full disability benefits under the CBA,
petitioners' belated denial cannot negate the applicability of the CBA provisions.
FACTS
Beja entered into a Contract of Employment with petitioner Island Overseas Transport Corp. for
and on behalf of its foreign principal, petitioner Pine Crest Shipping Corporation, for a period of
nine months as Second Assistant Engineer for the vessel M/V Atsuta. Beja underwent the pre-
employment medical examination, where he was declared fit for work. He boarded the vessel.
Beja experienced pain and swelling of his right knee, which he immediately reported to the
Master of the vessel. He was brought to a hospital in Italy and was diagnosed to have
Arthrosynovitis. He underwent arthrocentesis of the right knee, was referred to an orthopedic
surgeon and was advised to take a rest. However, while in Spain, the pain in his right knee
recurred and persisted. He was brought to a physician and was advised to be medically
repatriated. Upon arrival in Manila, petitioners referred him to Nicomedes G. Cruz (NGC)
Medical Clinic for evaluation. The Magnetic Resonance Imaging of his right knee showed
Chronic Tenosynovitis with Vertical Tear, Postero-Lateral Meniscus and Probable Tear Anterior
Cruciate and Lateral Collateral Ligaments. Beja underwent physical therapy and was advised to
undergo operation. Anterior Cruciate Ligament Reconstruction and Partial Menisectomy of the
Medial Meniscus was done on his right knee at Medical Center Manila. After the operation,
petitioners sent him for rehabilitation at St. Luke's Medical Center. Beja filed a complaint11
against petitioners for permanent total disability benefits, medical expenses, sickness allowance,
moral and exemplary damages and attorney's fees. Beja alleged that his knee injury resulted
from an accident he sustained on board the vessel when a drainage pipe fell on his knee. He
claimed that from the time of his repatriation on November 22, 2007, his knee has not recovered
which rendered him incapable of returning to his customary work as seafarer. This, according to
him, clearly entitles him to permanent total disability benefits pursuant to AMOSUP-JSU Collective
Bargaining Agreement (CBA). Petitioners assert that Beja cannot be automatically declared as
permanently and totally disabled by the mere lapse of 120 days without any assessment or
certification of fit to work being issued.
ISSUE
Whether in awarding permanent total disability benefits in favor of the Respondent in utter
disregard of extant case laws outlining the instances when and how a temporary total disability
can be converted into a permanent total one.
HELD
The parties' CBA is inapplicable. Beja based his claim for full disability benefits under the CBA,
petitioners' belated denial cannot negate the applicability of the CBA provisions. The Court also
takes notice of the fact that Beja's medical condition cannot be solely attributable to accidents.
73
His injury could have possibly been caused by other factors such as chronic wear and tear35and
aging. Thus, the NLRC's conclusion that the tear and injury on Beja's knee was caused by an
accident on board had no factual basis but was anchored merely on speculation. The Court
cannot, however, rest its rulings on mere speculation and presumption.
NEC SYSTEM INTEGRATED CONTRUCTION PHILS. (NESIC), INC. vs. CRISOLOGO

G.R. No. 201535, October 5, 2015
DOCTRINE
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.
FACTS
Crisologo was employed by petitioner NESIC. Due to his exemplary work performance,
respondent was promoted several times and eventually became VP of the Information Network
Group. NESIC Japan’s President, Amakawa, in an executive order, announced the
implementation of cost-cutting measures. Despite said measures, NESIC incurred losses. NESIC
notified DOLE of its retrenchment program and submitted an Establishment Termination Report,
which included respondent as among the 17 employees it was terminating from employment.
Crisologo received P1,002,065.24 representing his separation pay and other benefits. He
executed a Waiver and Quitclaim and a receipt for said amount. Crisologo filed a Complaint
against petitioner and Amakawa for illegal dismissal. Crisologo argued that NESIC's
retrenchment program was not premised on fair and reasonable criteria, NESIC and Amakawa
acted in bad faith and in wanton disregard of the law. In reversing the Labor Arbiter and the
NLRC, the CA essentially declared that while petitioner complied with four of the five
requirements for a valid retrenchment, the last requirement that fair and reasonable criteria
were used in ascertaining who would be dismissed and who would be retained, had not been
observed.
ISSUE
Whether or not Crisologo’s Deed of Waiver and Quitclaim discharged NESIC from any action
such as claim for illegal dismissal on the ground of retrenchment.
HELD
Crisologo’s waiver and quitclaim released, waived and forever discharged NESIC from any
action. Crisologo’s impressive credentials are proof of authentic high level academic
achievement, indicative of a by-no-means middling intellectual power. For this reason, this Court
cannot accept respondent's claim that he did not thoroughly apprehend the full scope, thrust
and import of the waiver-quitclaim cum separation pay that he freely, voluntarily and
intelligently forged and fashioned with NESIC. That by his free and voluntary act and deed he
chose or opted to deed away his patrimonial rights he has only himself to blame. 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
74
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.
GERARDO A. CARIQUE V. PHILIPPINE SCOUT VETERANS SECURITY AND INVESTIGATION

AGENCY, INC., AND/OR RICARDO BONA AND SEVERO** SANTIAGO
G.R. No. 197484, September 16, 2015
DOCTRINE
The implementation of the rotation policy in a security agency is within the ambit of
management prerogative and the placing of the employee on floating status is not considered
a dismissal.
FACTS
Gerardo Carique was hired as security guard by Philippine Scout Veterans Security and
Investigation Agency. He was assigned to their several clients, the last of which was National
Bookstore-Rosario, Pasig Branch. He was relieved from his post with such client and was replaced
by Roel Juan pursuant to a rotation policy implemented by the agency. He filed an illegal
dismissal case against the agency, alleging that shortly after his relief, he reported to the agency
and inquired about his next assignment but was informed that there were no available
assignments. He reported continuously but was repeatedly advised to wait for a new posting.
While waiting for a new post, he received two memorandums requiring him to explain his
absence without leave and his reason for unjustified refusal to accept the posts offered to him.
Attached to the latter memorandum were three Special Security Details requiring him to report
for Assignment in three different places. Philippine Scout averred that the lawful practice of
rotation policy did not serve to terminate the services of Carique but only put him on floating
status. He was also offered several assignments, which he refused. The Labor Arbiter ruled in
favor of Carique because the agency repeatedly denied his demands for a new assignment.
The NLRC reversed such decision, convinced that he denied new assignments. The CA also
affirmed the NLRC’s decision.
ISSUE
Whether or not Carique was illegally dismissed
HELD
NO. The evidence on record, particularly the SSDs and the affidavits, clearly shows that the
agency did offer Carique new assignments. Illegal dismissal must first be established by positive
and overt acts clearly indicative of a manifest intention to dismiss. Carique based his claims on
unfounded and unproven allegations instead of substantial evidence. It is clear that he was
relieved from his last assignment because of a rotation policy by the agency that was requested
by its clients and that he was considered on floating status for not more than sixth months, which
is not illegal and not tantamount to dismissal. The implementation of the rotation policy is within
the ambit of management prerogative. In this case, it only reflects the essence of security
planning and the importance of discouraging familiarity between security personnel and the
premises they are guarding. Furthermore, his insistence that he was not given any new
assignments after his relief is also not supported by evidence. He also never denied receiving
copies of the SSDs directing him to report to his new assignments. He cannot say that such
75
positions were only “reliever” positions because they were regular assignments that were
necessary to and essential in the usual business of the agency.
INC SHIPMANAGEMENT V. CAMPOREDONDO

GR No. 199931, September 7, 2015
DOCTRINE
In proving that the dismissal of an employee is based on valid cause, the employer must comply
with the following requisites: (1) the dismissal must be for a just or authorized cause, and (2) the
employee to be dismissed must have been afforded due process of law.
FACTS
INC Shipmanagement, Inc. (INC), for and in behalf of Interorient Navigation Company Ltd.
(Interorient), hired respondent Camporedondo (respondent) as chief cook on board the vessel
M/V Fortunia for a period of 10 months. Allegedly, keeping in mind his duties, respondent
inquired from the captain the budget for the vessel; he also reported to the latter the
insufficiency and poor quality of some of the supplies. These inquiries enraged the captain. As a
result, he reprimanded respondent on a daily basis. Thereafter, the captain gave him a return
ticket to the Philippines to take a vacation. He was purportedly promised to be transferred to
another vessel. About a month and a half into his contract, respondent was given a report of
dismissal, which he refused to accept. The Labor Arbiter rendered a Decision declaring that
petitioners illegally dismissed respondent. The NLRC set aside the Decision of the LA and
dismissed the case for lack of merit. The CA annulled and set aside the decision of the NLRC and
reinstated the earlier decision of the LA.
ISSUE
Whether or not respondent is estopped or barred by laches from claiming that he was illegally
dismissed since it took him almost 2 years to make such claim against the petitioners
HELD
It is settled that the employer has the burden to prove that the dismissal of an employee is based
on a valid cause. To discharge this burden, the employer must present substantial evidence.
Specifically, the employer must comply with the following requisites: (1) the dismissal must be for
a just or authorized cause, and (2) the employee to be dismissed must have been afforded due
process of law. In this case, petitioners failed to discharge this burden because they failed to
prove just or authorized cause. As a general concept, poor performance is tantamount to
inefficiency and incompetence in the performance of official duties. An unsatisfactory rating
can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties. Poor or
unsatisfactory performance of an employee does not necessarily mean that he is guilty of gross
and habitual neglect of duties,there must be lack of or failure to exercise slight care or diligence,
or the total absence of care in the performance of duties. In other words, there is gross neglect
when the employee exhibits thoughtless disregard of consequences without exerting effort to
avoid them. On the other hand, habitual neglect involves repeated failure to perform duties for
a certain period of time, depending upon the circumstances, and not mere failure to perform
duties in a single or isolated instance. Furthermore, petitioners did not comply with the two-
notice rule required in dismissing an employee. Under Section 17 of the Philippine Overseas
Employment Administration-Standard Terms and Conditions Governing the Employment of
Filipino Seafarers On Board Ocean-Going Vessels (Disciplinary Measures), to amount to a valid
dismissal, an erring seafarer must be handed a written notice of the charge against him and
must be given the opportunity to explain himself unless of course there is a clear and existing
76
danger against the safety of, the crew or the vessel in which case notice may be dispensed
with. Needless to say, this is not the situation here. In view thereof, we find that the CA did not err
in setting aside the Decision of the NLRC and in reinstating that of the LA, which found
respondent to have been illegally dismissed and entitled to his salaries for the unexpired portion
of his employment contract and to attorney's fees.
U-BIX CORP. vs. HOLLERO

G.R. No. 199660 (Resolution); July 13, 2015
DOCTRINE
A surety bond should be accompanied by both an indemnity agreement and proof of security
deposit or collateral securing the bond, for illegal dismissal, among others, that two must be
presented. The submission of one cannot be considered sufficient as to dispense with the other.
FACTS
The LA found respondent's dismissal to be valid and she was also ordered to reimburse the
amount spent by company for her training, with interest at the rate of 12% per annum.  NLRC
reversed LA and held that respondent was illegally dismissed. Petitioner company appealed
before the CA.  In the meantime, respondent filed a Supplemental Motion for Issuance of Writ of
Execution.  LA found the recomputation of the total award to be correct. Petitioners filed before
the NLRC a Notice and Memorandum of Appeal. At the same time, they  posted a
corresponding supersedeas bond issued by Mapfre Insular Insurance Corporation. NLRC denied
ruling that the supersedeas bond posted by petitioners has no force and effect because Mapfre
only has authority to transact surety in relation to civil/special proceedings cases.  
ISSUE
Whether or not the bond issued by the insurance company perfected the appeal of the
petitioner.  
HELD
No, the Court still finds that petitioners failed to comply with the bond requirement in perfecting
their appeal. In case of a surety bond, the applicable Section 6, Rule VI of the 2005 Revised
Rules of Procedure of the NLRC requires that the same should be accompanied by original and
certified true copies of the documents. Here, petitioners did not submit any proof of security
deposit or collateral securing the bond. They themselves admit this in their Petition by stating that
they no longer attached a separate document of security deposit or collateral securing the
bond because Mapfre did not find it necessary to require them to give a security deposit and/or
collateral. According to them, Mapfre finds it sufficient that the Indemnity Agreement attached
to the Memorandum of Appeal was signed by petitioner Bravo, the president of petitioner U-Bix,
in his personal capacity. To the Court's mind, the intention in requiring a security deposit or
collateral to secure the bond, apart from the indemnity agreement between the employer-
appellant and the bonding company, is to further ensure recovery by the employee of the
judgment award should the same be affirmed, in any and all eventualities.
77
ISABINO ALARMA vs. ACE PROMOTION AND MARKETING CORPORATION

G.R. No. 195513, June 22, 2015
DOCTRINE
Under Article 223 of the Labor Code, filing of supersede as bond for the perfection of an appeal
involving a monetary award is mandatory and jurisdictional and failure to comply with this
requirement renders the decision of the Labor Arbiter final and executor. The filing of a motion to
reduce bond predicated on meritorious grounds coupled with the posting of a reasonable
amount of cash or surety bond suffice to suspend the running of the period within which to
appeal. In the recent case of Mcburnie v. Ganzon, the Court has set a provisional percentage
of 10% of the monetary award, exclusive of damages and attorney’s fees, as a reasonable
amount of bond that an appellant should post pending resolution by the NLRC of a motion to
reduce bond. It is only after the posting of this bond that an appellant’s period to perfect an
appeal is suspended. This ruling is merely provisional and it is still depended on the discretion of
the NLRC.
FACTS
Respondent Ace Promotion and Marketing Corporation (APMC) is a contractor engaged in the
deployment of workers to various companies to promote the latter’s products through
promotional and merchandising services. APMC entered into a promotional contract with Delfi
Marketing Inc. (Delfi) whereby the former will promote the latter’s confectionary products.
Pursuant to this, APMC hired petitioners as merchandisers with a fixed term. Eventually Delfi
informed APMC that the promotional contract with it shall expire on January 31, 2007.
Consequently, APMC informed petitioners that their last day of work would be on January 30,
2007. Petitioners filed several complaints for illegal dismissal before the Labor Arbiter arguing that
they are regular employees. The Labor Arbiter decided in favour of petitioners awarding them
an amount of P6.2 million. On appeal with the NLRC, APMC filed a motion for reduction of
supersede bond and filed a bond in an amount of P437,210 arguing that the award given to
employees who did not sign the position paper filed before the LA. Petitioners filed an opposition
with a motion to dismiss on the ground that the supersede bond is a mandatory requirement for
the perfection of an appeal before the NLRC and the supersede bond filed was insufficient. The
NLRC, without resolving the motions, rendered a decision reversing the decision of the LA.
ISSUE
Whether or not the NLRC has jurisdiction to decide the case?
HELD
Yes, under Article 223 of the Labor Code, the filing of the bond equivalent to the amount of the
monetary award is required to perfect an appeal involving a monetary award before the NLRC.
However, such rule has been relaxed by the court when justified. In the case of Mcburnie v.
Ganzon, the Court has set a provisional percentage of 10% of the monetary award, exclusive of
damages and attorney’s fees, as a reasonable amount of bond that an appellant should post
pending resolution by the NLRC of a motion to reduce bond. In this case, the monetary award
granted to the complainants who did not sign the position paper before the LA should not be
included in the computation of the bond. The proper basis for the bond should at least be P3
million. Therefore, the bond in the amount of P437,210 is more than sufficient.
78
LITEX GLASS AND ALUMINUM SUPPLY vs SANCHEZ

G.R. No. 198465, April 22, 2015
DOCTRINE
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.
FACTS
Respondent Sanchez alleged that since 1994, he was employed as driver and aluminum installer
in several companies owned and managed by petitioner Ong-Sitco, the last of which was with
Litex. Sanchez averred that for the past 15 years, he has been diligently serving his employer. He
was thus surprised when on December 23, 2008, Ong-Sitco and his wife scolded him and
ordered him to go on indefinite leave. After a few days, he went back to the office to talk to
Ong-Sitco, but the latter just ignored him. He again returned on January 2, 2009 to discuss his
employment status, but Ong-Sitco was again unwilling to talk to him. The same thing happened
after he went back a week later. This led Sanchez to file a case for illegal dismissal and non-
payment of benefits against petitioners. After filing the complaint, Sanchez received two
memorandum-letters from petitioners, directing him to report for work and to explain his
continued absence from December 22, 2008 to January 7, 2009. Sanchez's legal counsel, Atty.
Merioles, Jr., informed them that his client would not report for work as the first memorandum-
letter was a mere afterthought to cover up their act of illegal termination. But the petitioners
denied having dismissed Sanchez. They averred that it was Sanchez who abandoned his job by
not reporting for work despite being summoned by the memorandum-letter.
ISSUE
Whether or not the respondent’s act constituted as abandonment of work
HELD
No. The Court is not convinced that Sanchez abandoned his work. 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. As mentioned,
Sanchez reported back to Ong-Sitco several times to ask about his employment status but was
not entertained. Oddly, while Ong-Sitco did not deny this, he never bothered to explain why
during these instances, he did not warn Sanchez about his continued absence or ask him to
return to work, if only to bolster the claim that he was not dismissed. Instead, Ong-Sitco just
ignored him and this, under the circumstances, only shows his intention not to retain him. This is
further bolstered by the fact, as shown by the records, that the two memorandum-letters were
sent to Sanchez after he filed a complaint against petitioners. Sanchez's immediate filing of the
complaint is proof of his desire to return to work. It has been held that the filing of a complaint
negates any intention of abandoning foregoing employment.
79
ICT MARKETING SERVICES, INC. vs SALES

G.R. No. 202090; September 9, 2015
DOCTRINE
Constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an
employer has become so unbearable to the employee leaving him with no option but to forego
with his continued employment.
FACTS
Petitioner ICT Marketing Services, Inc., hired respondent Mariphil L. Sales as its Customer Service
Representative or Telephone Service Representative, and assigned to her to its Capital One
account, and later on became a regular employee. Sales was then assigned to the Washington
Mutual account, where she was awarded a certificate for being the Top Converter/Seller. Sales
wrote to ICT Vice President – Glen Odom, complaining about the supposed irregularities in the
handling of funds entrusted to ICT by Washingtong Mutual. However, no action have been
made. Sales was then transferred to the Bank of America account. Without prior notice, ICT
scheduled Sales’s training on the very same day of her transfer, and was unable to attend the
third day of training. When she reported for training the next day, she was informed that she
could not be certified to handle calls for Bank of America due to her failure to complete the
training. From then on, Sales was placed on “floating status” and was not given any work
assignment. Sales then tendered her resignation from work. She wrote that she was forced to
resign because her employment was made on floating status and have not receive any notice,
hence, she consider the inaction as an indirect termination of her work with ICT, and that
because of the different circumstances that transpired, it was very clear that the harassment,
pressure, and indefinite floating of her status are retaliatory acts perpetrated by the company
because of her complaint/request for investigation on the irregularities committed by certain
company officials. A complaint for constructive dismissal was then filed against ICT.
ISSUE
Whether or not Sales was constructively dismissed from her employment
HELD
Sales was constructively dismissed from her employment. Under the doctrine of management
prerogative, every employer has the inherent right to regulate, according to his own discretion
and judgment, all aspects of employment. The only limitation to the exercise of this prerogative
are those imposed by labor laws and the principles of equity and substantial justice. While the
prerogative to transfer Sales to another account belonged to ICT, it wielded the same unfairly.
The evidence suggests that at the time Sales was transferred, ICT was hiring additional CSRs/TSRs
which means that there should be no need to transfer Sales; it could simply train new hires for
that program. Transferring Sales – an experienced employee who was already familiar with the
Washington Mutual account, and who was even proved to be outstanding in handling the
same – to another account means additional expenses for ICT, which is impractical on ICT’s
part. Even if there were attendance and punctuality issues, Sales’s overall performance was far
from mediocre; on the contrary, she proved to be a top performer. The only conceivable reason
why Sales was transferred to another account is the fact that she openly and bravely
complained about the supposed anomalies in the Washington Mutual account. In causing the
transfer, ICT clearly acted in bad faith and with discrimination, insensibility and disdain; the
transfer was effected as a form of punishment for her raising a valid grievance related to her
work. Furthermore, said transfer was obviously unreasonable, not to mention contrary to
80
experience, logic, and good business sense. This being the case, the transfer amounted to
constructive dismissal.
MA. CONSOLACION M. NAHAS, doing business under the name and style PERSONNEL
EMPLOYMENT AND TECHNICAL RECRUITMENT AGENCY vs. JUANITA L. OLARTE
G.R. No. 169247 June 2, 2014
DOCTRINE
A party will not be allowed to make a mockery of justice by taking inconsistent positions which, if
allowed, would result in brazen deception.
FACTS
Olarte was deployed as a domestic helper to Hail, Saudi Arabia for a contract term to serve her
employer, Fahad Abdulaziz Mohammed Al-Mijary with 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. This notwithstanding, Olarte served Fahad’s family diligently but she was not paid her
salaries. In the succeeding months, Olarte started feeling intense pain in her legs and without
immediate medical attention, her condition became critical such that she had to be operated
on due to water retention in her leg bones and was later diagnosed to be suffering from ostro-
arthritis. Olarte requested Fahad to just allow her go home to the Philippines but her pleas fell on
deaf ears and Fahad was already frequently maltreating her. When at last she was able to
return to the Philippines, Olarte had to be brought home from the airport by an emergency
ambulance. Several months later, 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. In the Position Paper she filed for PETRA, Nahas she denied having a
hand in Olarte’s deployment abroad. While she admitted that Olarte indeed went to PETRA’s
office as a walk-in applicant, the latter allegedly withdrew her application on the pretext that
she would just go home to the province and attached to the said pleading the alleged
withdrawal request of Olarte which turned out to be a filled-up bio-data form of Olarte bearing
the letterhead of Royal Dream, the local agency which according to Nahas was the one
responsible for Olarte’s deployment.
ISSUE
Whether or not Nahas should be held solidarily liable with PETRA and Royal Dream
HELD
The Court notes that in her quest to evade liability, Nahas introduced several conflicting
assertions. It is quite obvious that Nahas started singing a different song, so to speak, after the
Labor Arbiter did not buy her claim that Olarte withdrew her application with PETRA due to her
utter failure to support the same. Aside from the lack of any evidence showing the date of the
POEA’s issuance of license to PETRA, the fact that it was yet to be issued a license does not
preclude the possibility that it was already accepting applicants on behalf of Royal Dream
which at that time already possesses the required license. Clearly, Nahas’ vacillating from one
story to another and not being able to support them is nothing but a mere ruse to evade the
lawful claims of Olarte. This cannot be tolerated. Inconsistent and unsupported as they are, the
labor tribunals and the CA correctly rejected the contentions of Nahas. As a final note, it is worth
stating that recruitment agencies, as part of their bounden duty to protect the welfare of the
Filipino workers sent abroad from whom they take their profit, should in conscience not add to
the misery of maltreated and abused Filipino workers by denying them the reparation to which
81
they are entitled. Instead, they must "faithfully comply with their government prescribed
responsibilities" and be the first to ensure the welfare of the very people upon whose patronage
their industry thrives.
CASTILLO vs. PRUDENTIALIFE PLANS INC.

G.R. No. 196142, March 26, 2014
DOCTRINE
The written statements of employees admitting their participation in the scheme are admissible
to establish the plan or scheme to defraud the employer. Said statements of a co- employee in
a labor case may prove an employee’s guilt or wrongdoing if it recites crucial details of his
involvement. The rules on hearsay do not apply because 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.
FACTS
Petitioners were regular employees of respondent Prudentialife Plans Inc. Under the CBA,
Prudentialife employees were granted an optical benefit allowance of P2,500.00 to subsidize
prescription eyeglasses for those who have developed vision problems in the course of
employment. Many Prudentialife employees, including petitioners, availed thereof and
Prudentialife was flooded with requests for reimbursement for eyeglasses the employees
supposedly purchased from a single outfit/supplier, Alavera Optical. Suspecting fraud,
respondent conducted an investigation and issued notices of explanation to suspected
employees. Some employees admitted to the charge excluding petitioners. It was found that
official receipts were issued by Alavera Optical prior to the purchase of the glasses, the glasses
were overpriced and some did not have any grade and Alavera Optical has a non-existent
address and TIN number, as indicated by the receipt. Based on the investigation and admissions,
it was concluded that the employees involved conspired to defraud respondent. As a
consequence, notices of termination were issued to the petitioners. Petitioners filed a complaint
for illegal dismissal against respondent. They argued that the admission of their co-employees
cannot be used against them.
ISSUE
Whether or not petitioners were illegally dismissed?
HELD
No, petitioners were not illegally dismissed. Conspiracy exists when two or more persons come to
an agreement concerning the commission of a felony and decide to commit it. Conspiracy
need not be proved by direct evidence and may be inferred from the conduct of the accused
before, during and after the commission of the crime. Based on the record, it was clearly
established that a scheme to defraud respondent indeed existed. The written statements of
petitioners’ co-employees admitting their participation in the scheme are admissible to establish
the plan or scheme to defraud Prudentiallife. The fact that petitioners participated in said
conspiracy can be inferred from the actions of the petitioners. First of all, they all knew that even
though they were not paying for the eyeglasses, Alavera Optical would issue, as it did issue, an
official receipt falsely showing that the eyeglasses have been paid for. They presented the
fraudulent receipt to respondent for reimbursement. Such act alone is sufficient basis for
dishonesty. Secondly, some of the glasses of the petitioners either had no grade or does not
match the grade in the prescription. The dismissal of the petitioners was therefore justified.
82
GARZA vs.COCA-COLA BOTTLERS PHILS., INC.

G.R. No. 180972, January 20, 2014
DOCTRINE
The burden is on the employer to prove that the termination was for valid cause.
Unsubstantiated accusations or baseless conclusions of the employer are insufficient legal
justifications to dismiss an employee. "The unflinching rule in illegal dismissal cases is that the
employer bears the burden of proof.
FACTS
Petitioner Garza was a regular employee of respondent CCBPI. He was designated as Account
Specialist. Petitioner was an employee of good standing with an unblemished record. CCBPI has
a company policy which makes Account Specialists obliged to remit all cash sales and credit
cash collections to the company office on the same day that payments are received in cash or
check from customers, dealers and outlets. Garza received a memorandum from his immediate
supervisor, Macatangay, directing him to explain alleged past unliquidated collections and
cash shortages. Petitioner sought verbal clarification. Instead of furnishing details, another
memorandum was issued. Petitioner confronted Macatangay and reiterated his request for a
detailed account of his alleged violations, but the latter told him not to worry about it.
Macatangay issued another memorandum to petitioner, informing him that he had been
placed under preventive suspension and directing him to attend a formal investigation.
Petitioner sought a rescheduling of the investigation, as he had to attend to his wife and the
hospital obligations, and to have time to prepare for the investigation. Instead of rescheduling
the investigation, CCBPI sent a Notice of Termination. Garza sought permission from the CCBPI to
review the financial records in order to be apprised of the basis for the finding that he
misappropriated company funds, but his request was denied. Petitioner filed a Complaint for
illegal dismissal against respondents.
ISSUE
Whether or not there is just cause for petitioner Garza’s dismissal.
HELD
There was no just cause for petitioner’s dismissal. One of CCBPI's policies requires that, on a daily
basis, CCBPI Salesmen/Account Specialists must account for their sales/collections and obtain
clearance from the company Cashier before they are allowed to leave company premises at
the end of their shift and report for work the next day. If there is a shortage/failure to account,
the concerned Salesmen/Account Specialist is not allowed to leave the company premises until
he settles the same. It can be said that since petitioner continued to work for CCBPI, this should
necessarily mean that he was clear of daily cash and check accountabilities, including those
transactions covered by the charges against him. The Court finds convincing petitioner's
arguments that it was impossible for him to embezzle/not remit the customers' cash and check
payments, not only because of the existence of the abovementioned policy, but likewise due to
the sworn avowals of these customers that all their check payments have been issued in CCBPI's
name and have been duly debited from their accounts. Certainly, petitioner could not have
encashed check payments because they were issued in the name of CCBPI; for the same
reason, he could not have engaged in kiting operations. Quite certainly, he would have easily
been found out. The burden is on the employer to prove that the termination was for valid
cause. Unsubstantiated accusations or baseless conclusions of the employer are insufficient
legal justifications to dismiss an employee. The unflinching rule in illegal dismissal cases is that the
employer bears the burden of proof.
83
AMECOS INNOVATIONS V. LOPEZ

GR No. 178055, July 3, 2014
DOCTRINE
Article 217(a(4) of the Labor Code bestows upon the Labor Arbiter original and exclusive
jurisdiction over claims for damages arising from employer-employee relations.
FACTS
Petitioner Amecos Innovations, Inc. is a corporation duly incorporated under Philippine laws
engaged in the business of selling assorted products created by its President and herein co-
petitioner, Mateo. Later, Amecos received a Subpoena from the Office of the City Prosecutor of
in connection with a complaint filed by the Social Security System (SSS) for alleged delinquency
in the remittance of SSS contributions and penalty liabilities. By way of explanation, Amecos
attributed its failure to remit the SSS contributions to herein respondent Lopez. Amecos claimed
that it hired respondent as Marketing Assistant to promote its products; that upon hiring,
respondent refused to provide Amecos with her SSS Number and to be deducted her
contributions; that on the basis of the foregoing, Amecos no longer enrolled respondent with the
SSS and did not deduct her corresponding contributions up to the time of her termination.
Amecos eventually settled its obligations with the SSS; consequently, SSS filed a Motion to
Withdraw Complaint. Respondent claimed that petitioners filed the instant Complaint in
retaliation to her filing of an illegal dismissal case. The MeTC dismissed the complaint for lack of
jurisdiction. The RTC dismissed it for lack of merit. The CA denied the petition for review.
ISSUE
Whether or not the regular civil court and not the Labor Arbiter or the NLRC has jurisdiction over
claims arising from employer-employee relations
HELD
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 –
shared by the lower courts and the CA – is correct; thus, petitioners’ claims should have been
referred to the labor tribunals. In this connection, it is 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. As far as SSS is concerned, there is no longer a dispute with respect to
petitioners’ accountability to the System; petitioners already settled their pecuniary obligations
to it. Since there is no longer any dispute regarding coverage, benefits, contributions and
penalties to speak of, the SSC need not be unnecessarily dragged into the picture. At any rate,
it appears that petitioners do not have a cause of action against respondent. Given the above
facts, it is thus clear that petitioners have no cause of action against the respondent in the prior
Civil Case since Amecos did not remit respondent’s full SSS contributions, the latter was never
covered by and protected under the System. If she was never covered by the System, certainly
there is no sense in making her answerable for the required contributions during the period of her
employment. The petition is denied.
84
ASIA BREWERY, INC. VS. TUNAY NA PAGKAKAISA NG MGA MANGGAGAWA SA ASIA

G.R. Nos. 171594-96, [September 18, 2013], 718 PHIL 33-54
DOCTRINE
A collective bargaining dispute requires due consideration and proper balancing of the interests
of the parties to the dispute and of those who might be affected by the dispute. As a rule,
affordability or capacity to pay should be taken into account but cannot be the sole yardstick
in determining the wage award. The decision maker must always take into account the "public
interest" aspects of the case.
FACTS
Respondent and Petitioner had been negotiating for a new CBA since the old CBA expires. After
about 18 negotiations, the parties failed to reconcile their difference on their positions on wages
and other economic benefits. Respondent Union then declared a deadlock, filed a notice of
strike with the National Conciliation and Mediation Board (NCMB). Thereafter, respondent union
conducted a strike vote, and secured a majority vote in holding a strike. Petitioner petitioned the
Sec. of Labor to assume jurisdiction over the parties’ labor dispute. Respondent in response
opposed the assumption of jurisdiction, arguing that the business of petitioner is not
indispensable to national interest. Respondent filed before the CA a petition for injunction,
seeking to enjoin the respondent secretary of Labor from assuming jurisdiction over the Labor
dispute or issue a TRO to enjoin the former from assuming jurisdiction. The Sec. of Labor issued an
order assuming jurisdiction over the labor dispute. Respondent union filed another petition for
certiorari with the CA, imputing bad faith and grave abuse of discretion to the Sec. of Labor,
and prayed for the nullification of the order of assumption of jurisdiction and the declaration
that petitioner corporation is not an industry indispensable to national interest. Sec. of Labor
resolved the deadlock between the parties, granting arbitral award. Both petitioner and
respondent filed their respective motions seeking to clarify and reconsider the Sec. of Labor’s
decision. Thereafter, the parties signed the CBA. Respondent filed another petition for certiorari
to CA assailing arbitral award and decision. CA affirmed, with modifying the arbitral award,
arguing that the computation of wage increase should be remanded to the Secretary of Labor
because the computation was based on petitioner’s unaudited financial statements, which
have no probative value.
ISSUE
Whether the Secretary's actions have been reasonable in light of the parties’ positions and the
evidence they presented.
HELD
No, Secretary of Labor gravely abused her discretion in relying on the unaudited financial
statement of petitioner in determining the wage award, for such evidence is self-serving and
inadmissible. Such act may have resulted to a wage award that is based on an inaccurate and
biased picture of petitioner’s capacity to pay which is one of the significant factors in making a
wage award. The Sec. of Labor failed to indicate the actual data upon which such was award
was based, and industry trends were not discussed in detail so that the precise bases of the
wage award are not discernible on the face of the Decision. It utilized the middle ground
approach where it find the midway point between the demands of the company and the
union, split the difference as a simplistic solution failing to recognize that the parties may already
be at the limits of the wage levels. The contending parties are effectively precluded from
seeking a review of the wage award, because of the general but unsubstantiated statement in
the Decision that the wage award was based on factors like the bargaining history, trends of
arbitrated and agreed awards, and industry trends.
85
ANG vs SAN JOAQUIN, JR

G.R. No. 185549; [August 7, 2013], 716 PHIL 115-131
DOCTRINE
diminution in pay. 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.
FACTS
Vicente Ang is the proprietor of Virose Furniture and Glass Supply, while respondents Ceferino
San Joaquin, Jr. and Diosdado Fernandez were regular employees of Virose, as helper and
driver. Respondents attended the court hearing relative to the 41 criminal cases filed by former
Virose employee against Ang for the latter’s non-remittance of SSS contributions. During the
hearing, the respondents testified against Ang. Thereafter, Ang began to treat respondents with
hostility and antagonism. Through Ang’s wife Rosa’s instruction to transfer monobloc chairs from
Virose to her restaurant, San Joaquin was then asked to help, but he refused, which resulted for
a heated argument among him, Rosa’s son, and the salesclerk. When San Joaquin returned to
the store, he found out that Ang had torn his DTR to pieces, while Fernadez’s were torn
immediately after they testified. On the same day, Fernandez reported to work and received a
memorandum informing him that he was placed on a one-week suspension for insubordination.
Respondents filed complaints for illegal constructive dismissal with claims for backwages and
separation pay. Days after, San Joaquin received a memorandum from Ang placing him under
preventive suspension and ordering him to explain why no disciplinary action should be imposed
against him for his refusal to obey his wife’s instruction. A memorandum ordering Fernandez to
report for work was then sent to him. Ang then issued a memorandum terminating San Joaquin’s
employment.
ISSUE
Whether or not respondents San Joaquin and Fernandez were illegally dismissed from
employment
HELD
Respondents are illegally dismissed from employment. There is considerable reason to believe
that Ang began to treat respondents with disdain and discrimination after the hearing of the
criminal cases, where respondents testified against him, which he did not successfully dispute
this. Indeed, he has remained silent all along, considering that he has burden of proof to show
that no illegal dismissal was effected. The existence of the criminal charges and respondents’
testifying against petitioner prove that their relations have been strained, and that the
allegations of oppression and abuse are not without basis. It thus became incumbent upon Ang
to dispute such claims. While gross and abusive conduct on the part of respondents is not
tolerated, the Court notes that petitioner’s treatment of respondents is equally unacceptable,
and is tantamount to constructive dismissal. 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 and a diminution in pay. 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. By destroying the time cards of respondents, Ang
discontinued and severed their relationship – where the purpose of a time record is to show an
employee’s attendance in office for work and to be paid accordingly, taking into account the
policy of “no work, no pay.” Thus, Ang’s act virtually removed respondents from Virose’s payroll
and erased all vestiges of their employment; hence, effectively dismissed from work.
86
CAÑEDO V. KAMPILAN SECURITY AND DETECTIVE AGENCY, INC.

G.R. No. 179326, [July 31, 2013], 715 PHIL 625-637
DOCTRINE
In illegal dismissal cases, while the employer bears the burden to prove that the termination was
for a valid or authorized cause, the employee must first establish by substantial evidence the
fact of dismissal from service.
FACTS
Respondent agency hired petitioner as security guard for the National Power Corporation (NPC)
at Toledo City. For not wearing proper uniform while on duty, petitioner was suspended for a
month effective May 8, 2003. On June 2, 2003, NPC informed respondent agency that it was no
longer interested in petitioner’s services and thus requested for his replacement. Petitioner
requested respondent Arquiza to issue a certification in connection with his intended retirement,
and the latter issued one dated June 25, 2003 which stated that petitioner was “terminated from
his employment by this agency”. Five days later, petitioner filed a complaint for illegal dismissal,
illegal suspension and non-payment of monetary benefits against respondents. Petitioner insists
that the June 25, 2003 Certification issued by respondent Arquiza states in unequivocal
language that he was terminated from service. Thus, there is no need to interpret the word
"terminated" in the Certification as "pulled out.” Moreover, he was neither given any new
assignment nor called to work after his suspension until the filing of the petition before the
Supreme Court. Respondents contend that the said Certification not sufficient to establish
petitioner’s dismissal as such fact must be proven by direct evidence of actual dismissal. They
also averred that the word "terminated" as used in the said Certification actually meant "pulled-
out" and this can be construed from the following phrase "as per client’s request."
ISSUE
Whether or not petitioner was dismissed from service
HELD
No, the petitioner was not dismissed from service. In illegal dismissal cases, "while the employer
bears the burden to prove that the termination was for a valid or authorized cause, the
employee must first establish by substantial evidence the fact of dismissal from service." The
burden of proving the allegations rests upon the party alleging and the proof must be clear,
positive and convincing. Thus, in this case, it is incumbent upon petitioner to prove his claim of
dismissal. Petitioner relies on the word "terminated" as used in the June 25, 2003 Certification
issued him by respondent Arquiza and argues that the same is a clear indication that he was
dismissed from service. The Court, however, is not persuaded. Petitioner 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. Here, aside from this single document, petitioner
proffered no other evidence showing that he was dismissed from employment. While it is true
that he was not allowed to report for work after the period of his suspension expired, the same
was due to NPC’s request for his replacement as NPC was no longer interested in his services.
And as correctly argued by respondents, petitioner from that point onward is not considered
dismissed but merely on a floating status. "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."
87
ZUELLIG PHARMA V. SIBAL

GR No. 173587, July 15, 2013
DOCTRINE
As the law between the parties, the CBA must be strictly complied with. It is a familiar and
obliged to comply with its provisions. Thus, where the CBA is clear and unambiguous, it becomes
the law.
FACTS
Petitioner Zuellig Pharma Corporation (Zuellig) is a domestic corporation engaged in the
manufacture and distribution of pharmaceutical products. It also distributes pharmaceutical
products manufactured by other companies like Syntex Pharmaceuticals (Syntex). Roche
Philippines, Inc. (Roche) purchased Syntex and took over from Zuellig the distribution of Syntex
products. Consequently, Zuellig closed its Syntex Division and terminated the services of
respondents due to redundancy. Controversy arose when respondents filed before the
Arbitration Branch of the NLRC separate Complaints (which were later consolidated) for
payment of retirement gratuity and monetary equivalent of their unused sick leave on top of the
separation pay already given them. Respondents claimed that they are still entitled to
retirement benefits and that their receipt of separation pay and execution of Release and
Quitclaim do not preclude pursuing such claim. The Labor Arbiter rendered a decision denying
the respondents’ claims. The NLRC affirmed the decision of the LA. The CA granted the
respondents’ petition and nullified the decisions of both the LA and the NLRC.
ISSUE
Whether or not the respondents are entitled to the monetary equivalent of unused sick leave
HELD
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. Having
chosen and accepted redundancy pay, respondents are thus precluded from seeking payment
of retirement pay. Moreover, as correctly pointed out by Zuellig, Section 5, Article V of the 1968
Retirement Gratuity Plan was already superseded by Section 2, Article XIV of the 1995 CBA, a
much later contract which reiterates the express prohibition against "double recovery." Similarly,
respondents are not entitled to the monetary equivalent of their unused sick leave credits. As
the law between the parties, the CBA must be strictly complied with. It is a familiar and
obliged to comply with its provisions. Thus, where the CBA is clear and unambiguous, it becomes
the law. Here, and as discussed above, the parties’ CBA provides in no uncertain terms that
whatever amount of money the employees will receive as retirement gratuity shall be
chargeable against separation pay. It is the unequivocal manifestation of their agreement that
acceptance of retirement gratuity forecloses receipt of separation pay and vice versa. The CBA
likewise exclusively enumerates departing employees who are entitled to the monetary
equivalent of their unused sick leave. These agreements must prevail and be given full effect.
Therefore, the instant petition is granted.
88
THE ORCHARD GOLF AND COUNTRY CLUB VS. AMELIA R. FRANCISCO

G.R. No. 178125; March 18, 2013
DOCTRINE
Constructive dismissal occurs not when the employee ceases to report for work, but when the
unwarranted acts of the employer are committed to the end that the employee’s continued
employment shall become so intolerable. In these difficult times, an employee may be left with
no choice but to continue with his employment despite abuses committed against him by the
employer, and even during the pendency of a labor dispute between them.
FACTS
Petitioner, The Orchard Golf and Country Club (the Club), operates and maintains two golf
courses in Dasmariñas, Cavite for Club members and their guests. Respondent Francisco was
employed as Club Accountant, to head the Club’s General Accounting Division and the four
divisions under it. As General Accounting Division head, respondent reports directly to the Club’s
Financial Comptroller, Jose Ernilo P. Famy. Famy directed Francisco to draft a letter to SGV &
Co., the Club’s external auditor, inquiring about the accounting treatment that should be
accorded property that will be sold or donated to the Club. Francisco failed to prepare the
letter, even after Famy’s repeated verbal and written reminders. Famy issued a memorandum
requiring Francisco’s written explanation, relative to her failure to prepare the letter. Instead of
complying with the memorandum, Francisco went to the Club’s General Manager, Tomas B.
Clemente III, and personally explained that due to the alleged heavy volume of work that
needed her attention, she was unable to draft the letter. Famy issued a memorandum
suspending Francisco without pay for a period of 15 days. Famy issued another memorandum
informing Francisco that her suspension shall be effective from July 3 to 19, 2000. Francisco wrote
to the Club’s General and Administrative Manager questioning Famy’s act of charging,
investigating, and suspending her without coursing the same through the Club’s Personnel
Department. After Francisco’s period of suspension expired, Famy issued separate memoranda
to Francisco and Clemente informing them of Francisco’s transfer, without diminution in salary
and benefits, to the Club’s Cost Accounting Section while the investigation on Famy’s alleged
illegal activities is pending. Francisco accused Famy of waging a personal vendetta against her
for her seeking an inquiry into claimed anomalies.
ISSUE
Whether or not there is a constructive dismissal.
RULING
No, there was constructive dismissal when Francisco was transferred to the Cost Accounting
Section. Records show that when Francisco returned to work on July 20, 2000 fresh from her first
suspension. In other words, the cause of Francisco’s temporary transfer was her pending
complaint against Famy.The Court shares the CA’s observation that when Francisco was placed
on forced leave and transferred to the Cost Accounting Section, not once was Francisco given
the opportunity to contest these company actions taken against her. The fact that Francisco
continued to report for work does not necessarily suggest that constructive dismissal has not
occurred, nor does it operate as a waiver. Constructive dismissal occurs not when the employee
ceases to report for work, but when the unwarranted acts of the employer are committed to the
end that the employee’s continued employment shall become so intolerable. In these difficult
times, an employee may be left with no choice but to continue with his employment despite
abuses committed against him by the employer, and even during the pendency of a labor
dispute between them.
89
TANGGA-AN vs. PHILIPPINE TRANSMARINE CARRIERS INC.,

G.R. No. 180636; March 13, 2013; 706 PHIL 339-354
DOCTRINE
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.
FACTS
Private respondent Lorenzo T. Tangga-an filed against petitioners Philippine Transmarine Carriers,
Inc. (PTC), Universe Tankship Delaware LLC (UTD), and Carlos C. Salinas a case for illegal dismissal
with a claim for the payment of salaries corresponding to the unexpired term of contract,
damages and attorney’s fees. Tangga-an alleged that, he entered into an overseas
employment contract with Philippine Transmarine Carriers, Inc. (PTC) for and in behalf of its
foreign employer, UTD. Under the employment contract, he was to be employed for a period of
six months as chief engineer of the vessel the S.S. "Kure". Tangga-an and the other Engineering
Officers were ordered to disembark from the vessel on the basis of alleged negligence and
thereafter repatriated. Hence, the complaint.  
ISSUE
Whether or not the CA correctly held in applying the reliefs sought by petitioners.
HELD
No. The State guarantees of protection of labor and security of tenure, labor disputes involve the
fundamental survival of the employees and their families, who depend upon the former for all
the basic necessities in life. Thus, petitioner must be awarded his salaries corresponding to the
unexpired portion of his six-months employment contract, or equivalent to four months. This
includes all his corresponding monthly vacation leave pay and tonnage bonuses which are
expressly provided and guaranteed in his employment contract as part of his monthly salary and
benefit package.  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." As we have
time and again held, "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.Article 111 of the Labor Code, as amended, contemplates the
extraordinary concept of attorney’s fees and that Article 111 is an exception to the declared
policy of strict construction in the award of attorney’s fees. Although an express finding of facts
and law is still necessary to prove the merit of the award, there need not be any showing that
the employer acted maliciously or in bad faith when it withheld the wages.
90
CARLOS L. OCTAVIO, vs. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY

G.R. No. 175492 February 27, 2013
DOCTRINE
Every CBA shall provide a grievance machinery to which all disputes arising from its
implementation or interpretation will be subjected to compulsory negotiations. Hence, if a
remedy within the administrative machinery can still be resorted to by giving the administrative
officer concerned every opportunity to decide on a matter that comes within his jurisdiction,
then such remedy should be exhausted first before the court’s judicial power can be sought. The
premature invocation of the court’s judicial intervention is fatal to one’s cause of action." "The
underlying principle of the rule on exhaustion of administrative remedies rests on the
presumption that when the administrative body, or grievance machinery, is afforded a chance
to pass upon the matter, it will decide the same correctly."
FACTS
PLDT and Gabay ng Unyon sa Telekominaksyon ng mga Superbisor (GUTS) entered into a CBA.
Article VI, Section I thereof provides that the COMPANY agrees to grant the following across-
theboard salary increase. On October 1, 2000, PLDT hired Octavio as Sales System Analyst I on a
probationary status. He became a member of GUTS and was regularized on January 1, 2001. On
February 1, 2002, he was promoted to the position of Sales System Analyst 2. On May 31, 2002,
PLDT and GUTS entered into another CBA covering the period January 1, 2002 to December 31,
2004 which provided for new salary increases. Claiming that he was not given the salary
increases, Octavio wrote the President of GUTS, Adolfo Fajardo (Fajardo). Acting thereon and on
similar grievances from other GUTS members, Fajardo wrote the PLDT Human Resource Head to
inform management of the GUTS members’ claim for entitlement to the across-the-board salary
increases. Accordingly, the Grievance Committee convened on October 7, 2002 but failed to
reach an agreement. Aggrieved, Octavio filed before the Arbitration Branch of the NLRC a
Complaint for payment of said salary increases.
ISSUE
Whether or not NLRC has no jurisdiction to hear and decide Octavio’s claim
HELD
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. It is settled that "when
parties have validly agreed on a procedure for resolving grievances and to submit a dispute to
voluntary arbitration then that procedure should be strictly observed." Moreover, we have held
time and again that "before a party is allowed to seek the intervention of the court, it is a
precondition that he should have availed of all the means of administrative processes afforded
him. By failing to question the Committee Resolution through the proper procedure prescribed in
the CBA, that is, by raising the same before a Board of Arbitrators, Octavio is deemed to have
waived his right to question the same. Clearly, he departed from the grievance procedure
mandated in the CBA and denied the Board of Arbitrators the opportunity to pass upon a
matter over which it has jurisdiction. Hence, and as correctly held by the CA, Octavio’s failure to
assail the validity and enforceability of the Committee Resolution makes the same binding upon
him. On this score alone, Octavio’s recourse to the labor tribunals below, as well as to the CA,
and, finally, to this Court, must therefore fail.
91
AUZA JR. ET. AL. vs. MOL PHILIPPINES INC.

G.R. No. 175481, November 21, 2012
DOCTRINE
Resignation is the formal pronouncement or relinquishment of an office. The overt act of
relinquishment should be coupled with intent to relinquish, which intent could be inferred from
the acts of the employee before and after the alleged resignation. In Globe Telecom v.
employee who is just forced to resign. Although the courts are committed to protect labor, the
rights of management shall be upheld if only to serve the interests of fair play.
FACTS
In 1997, Respondent MOL employed Auza and Jeanjaquet, Otarra as managerial employees in
the Cebu branch. On October 14, 2002, Otarra tendered her resignation letter effective
November 15, 2002 while Auza and Jeanjaquet submitted their resignation letters on October 30,
2002 to take effect on November 30, 2002, all of which used words of gratitude towards the
employer. Petitioners were then given their separation pay and the monetary value of leave
credits, 13th month pay, MOL cooperative shares and unused dental/optical benefits as shown
in documents entitled “Remaining Entitlement Computation,” which documents were signed by
each of them acknowledging receipt of such benefits. After which, they executed Release and
Quitclaims and then issued Separation Clearances. In February 2004 or almost 15 months after
their severance from employment, petitioners filed separate Complaints for illegal dismissal
before the Labor Arbiter against respondents contending that they were coerced by being
made to believe that it is downsizing and even has to close the said branch when in fact it did
not happen. Petitioners were allegedly harassed into resign their positions and were therefore
constructively dismissed. Respondents contend that the subject quitclaims were executed by
petitioners voluntarily.
ISSUE
Whether or not the petitioners were illegally dismissed?
HELD
No, petitioners were not lured by any misrepresentation by respondents. Instead, they
themselves were convinced that their separation was inevitable and for this, they voluntarily
resigned. This is supported by the words of gratitude used in the resignations. In Globe Telecom v.
employee who is just forced to resign. It is important to note that petitioners waited for more
than a year or nearly 15 months before contesting them. This negates their claim that they were
victims of deceit. Moreover; no adequate proof was presented to show that the planned
downsizing of Cebu branch did not take place. Similarly, petitioners’ allegations of bad faith on
the part of respondents are unsupported by records. No proof whatsoever was advanced to
show that there was threat of withholding their separation pay unless their resignation letters
were submitted prior to the actual closure of the Cebu branch or that they were subjected to ill
treatment and unpalatable working conditions immediately prior to their resignation.
92
SOLIDBANK UNION V. METROPOLITAN BANK AND TRUST CO.

G.R. NOS. 153799, 157169, 157327 & 157506 September 17, 2012
DOCTRINE
The management's right to discipline its employees who, without its permission, joined a public
demonstration to protest the ruling of the Secretary of Labor vis-à-vis the employees'
constitutional rights to freedom of expression, to peaceful assembly and to petition the
government for redress of their grievances.
FACTS
Solidbank Union (Union) was a legitimate labor organization and the duly certified sole
bargaining representative of all rank-and-file employees of Solidbank. The Union and Solidbank
negotiated for a new economic package for the remaining two years of the 1997-2001 (CBA).
However, the parties reached an impasse. Thus, on January 18, 2000, then Secretary of Labor
Bienvenido E. Laguesma (Secretary Laguesma) assumed jurisdiction over the dispute and
enjoined the parties from holding a strike or lockout or any activity which might exacerbate the
situation. Displeased with Secretary Laguesma's ruling, about 712 union members and officers
skipped work in the morning of April 3, 2000 and trooped to his office in Intramuros, Manila, not
only to accompany their lawyer in filing the Union's Motion for Reconsideration but also to stage
a brief public demonstration claiming that it was their practice of freedom of expression. In
consequence, they were dismissed,
ISSUE
W/N their act is a practice of a valid freedom of expression or an illegal strike
HELD
The Court ruled that complainants' concerted mass action was actually a strike and not a
legitimate exercise of their right to freedom of expression; that complainants violated the
January 18, 2000 Order of Secretary Laguesma; that the union officers' dismissal was valid.
93
MISAMIS ORIENTAL II ELECTRIC SERVICE COOPERATIVE (MORESCO II) vs. VIRGILIO M.

CAGALAWAN
G.R. No. 175170, September 5, 2012
DOCTRINE
In labor cases, strict adherence with the technical rules is not required. This liberal 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.
FACTS
MORESCO II hired Cagalawan as a Disconnection Lineman on a probationary basis and six
months after was appointed to the same post on a permanent basis. Later on, he was
designated as Acting Head of the disconnection crew in the Balingasag sub-office of MORESCO
II. MORESCO II General Manager Ke-e transferred Cagalawan to its Gingoog sub-office as a
member of the disconnection crew. Cagalawan assailed his transfer claiming he was effectively
demoted from his position as head of the disconnection crew to a mere member thereof. Ke-e
explained that Cagalawan’s transfer was not a demotion since he was holding the position of
Disconnection Head only by mere designation and not by appointment. In reply, Cagalawan
claimed that he was transferred because he executed an Affidavit in support of his co-
employee who filed an illegal dismissal case against MORESCO II. Ke-e issued an order recalling
Cagalawan's previous designation as Acting Head of the disconnection crew of the Balingasag
sub-office. Cagalawan eventually stopped reporting for work and filed a Complaint for
constructive dismissal before the Arbitration branch of the NLRC against MORESCO II and its
officers, Ke-e and Subrado, in their capacities as General Manager and Board Chairman,
respectively. Labor Arbiter rendered a decision declaring Cagalawan’s transfer constituted
illegal constructive dismissal. The NLRC set aside the LA’s decision and dismissed Cagalawan's
complaint against MORESCO II – wherein NLRC admitted MORESCO II's evidence even if
submitted only on appeal in the interest of substantial justice. The CA reinstated the decision of
the LA and held that MORESCO II's belated submission of evidence despite the opportunities
given it cannot be countenanced as such practice "defeats speedy administration of justice"
and "smacks of unfairness."
ISSUE
Whether the respondent constructively dismissed by the petitioner?
HELD
NO. Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest
purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn duty
through some motive or intent or ill will; it partakes of the nature of fraud. Here, although we
agree with the Labor Arbiter that Ke-e acted in an arbitrary manner in effecting Cagalawan’s
transfer, the same, absent any showing of some dishonest or wrongful purpose, does not amount
to bad faith. Suffice it to say that bad faith must be established clearly and convincingly as the
same is never presumed. Similarly, no bad faith can be presumed from the fact that Subrado
was the opponent of Cagalawan s father-in-law in the election for directorship in the
cooperative. Cagalawan's claim that this was one of the reasons why he was transferred is a
mere allegation without proof. Neither does Subrado's alleged instruction to file a complaint
against Cagalawan bolster the Iatter's claim that the former had malicious intention against
him.Corporate officers; liability for employee’s money claim. In the absence of bad faith, a
corporate officer cannot be held liable for the money claims of an employee. Bad faith must be
established clearly and convincingly as the same is never presumed.
94
JARL CONSTRUCTION V. ATENCIO

G.R. No. 175969; AUGUST 1, 2012
DOCTRINE
In dismissing an employee from service, employer has the burden of proving its observance of
the two-notice requirement and its accordance to the employee of a real opportunity to be
heard. Article 277 (b) of the Labor Code requires according the employee both notice and
hearing. Section 2 (d), Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code
expounds on the procedural due process requirements that every employer must observe in a
termination of employment based on a just cause.
FACTS
JARL Construction, through its general manager Tejada, hired Atencio as chief operating
manager. JARL had an existing contract with Caltex which prohibited JARL from subcontracting
the project. Atencio discovered JARL did not have proper facilities, personnel, and equipment
to undertake the Caltex project, hence he and Tejada discussed the need for hiring
subcontractors. Tejada agreed to hire Atencio's construction company, Safemark Construction
and Development Corporation. Tejada allegedly gave Atencio full authority to hire other
subcontractors if necessary. Pursuant to his blanket authority, Atencio hired DDK Steel
Construction and Building Multi-Technology. Thereafter, Tejada terminated Atencio's
management and supervision works for the Caltex project. Atencio filed his complaint for illegal
dismissal, nonpayment of salaries, and 13th month pay with the NLRC maintaining that JARL did
not inform him of the charges leveled against him and of his termination from employment. LA
found just cause for Atencio's removal but found the dismissal ineffectual because of petitioners'
failure to observe the twin requirements of due process. After the LA and NLRC Decisions,
Atencio then appealed to the Ca which held that Atencio's dismissal was ineffectual for
employer's failure to observe procedural requirements for a proper termination of employment.
ISSUE
Whether petitioners were able to prove their substantial compliance with the procedural due
process requirements in Labor Cases.
HELD
NO. The Court explained the purposes of the two notices: The first notice, which may be
considered as the proper charge, serves to apprise the employee of the particular acts or
omissions for which his dismissal is sought. The second notice on the other hand seeks to inform
the employee of the employer's decision to dismiss him. This decision, however, must come only
after the employee is given a reasonable period from receipt of the first notice within which to
answer the charge and ample opportunity to be heard and defend himself with the assistance
of a representative, if he so desires. This is in consonance with the express provision of the law on
the protection to labor and the broader dictates of procedural due process. Non-compliance
therewith is fatal because these requirements are conditions sine qua non before dismissal may
be validly effected. The Court thus affirms the appellate court's ruling that petitioners' failure to
observe the two-notice rule under Article 277 (b) of the Labor Code entitles the respondent to
nominal damages, in accordance with Agabon v. National Labor Relations Commission.
95
REYES-RAYEL vs PHILIPPINE LUEN THAI HOLDINGS, CORP

G.R. No. 174893, July 11, 2012
DOCTRINE
The law is fair and just to both labor and management. Thus, while the Constitution accords an
employee security of tenure, it abhors oppression to an employer who cannot be compelled to
retain an employee whose continued employment would be patently inimical to its interest.
FACTS
Respondent PLTHC hired the petitioner as Corporate Human Resources Director for
Manufacturing for its subsidiary/affiliate company, L&T. In the employment contract, the
petitioner was tasked to perform functions in relation to administration, recruitment, benefits,
audit/compliance, policy development/ structure, project plan, and such other works as may
be assigned by her immediate superior. After some time, the petitioner received a Prerequisite
Notice from Sauceda and the Corporate Legal Counsel of PLTHC, Ma. Lorelie T. Edles for failure
to perform in accordance with management directives in various instances, which collectively
have resulted in loss of confidence in your capability to promote the interests of the Company.
She explained that her alleged failure to perform management directives could be attributed to
the lack of effective communication with her superiors due to malfunctioning email system.
Unconvinced, the respondents, through a Termination Notice, dismissed petitioner from the
service for loss of confidence on her ability to promote the interests of the company. This led
petitioner to file a complaint for illegal dismissal.
ISSUE
Whether or not the petitioner was illegally dismissed
HELD
No, the petitioner was not illegally dismissed from her employment. The Court is convinced that
respondents have sufficient and valid reasons in terminating the services of petitioner as her
continued employment would be patently inimical to respondents’ interest. 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. The petitioner delivered dismal performance and
displayed poor work attitude which constitute sufficient reasons for an employer to terminate an
employee on the ground of loss of trust and confidence. The burden of proving that the
termination was for a valid cause lies on the employer. The Court finds that the respondents
were able to overcome this burden as the evidence presented clearly support the validity of
petitioner’s dismissal.
96
APO CEMENT CORP. vs. BAPTISMA

G.R. No. 176671, June 20, 2012
DOCTRINE
To validly dismiss an employee on the ground of loss of trust and confidence under Article 282
(c) of the Labor Code of the Philippines, the following guidelines must be observed: 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. More important, it must be based on a willful breach of trust and
founded on clearly established facts. Jurisprudence consistently holds that for managerial
employees the mere existence of a basis for believing that such employee has breached the
trust of his employer would suffice for his dismissal.
FACTS
Baptisma was employed by petitioner Apo Cement Corporation. Petitioner received information
from one of its employees, Moralda, that some of its personnel, including respondent Baptisma
who was then the Power Plant Manager, were receiving commissions or "kickbacks" from
suppliers. To ascertain the veracity of the information given by Moralda, the petitioner
conducted an investigation during which Lobitaña, one of petitioner's accredited suppliers
came forward to corroborate the statement of Moralda. Lobitaña stated in his affidavit that
there were instances when he met with Baptisma to hand over the commissions, and that he
(Lobitaña) had a notebook containing the details of their dealings. Respondent submitted his
written explanation denying the accusations against him. Respondent received the Notice of
Termination informing him of his dismissal from employment effective immediately on the ground
of loss of trust and confidence. Respondent filed a complaint for illegal dismissal before the
NLRC.
ISSUE
Whether or not Baptisma was validly dismissed on the ground of loss of trust and confidence.
HELD
Respondent Baptisma's termination was for a just and valid cause. To validly dismiss an
employee on the ground of loss of trust and confidence under Article 282 (c) of the Labor Code
of the Philippines, the following guidelines must be observed: 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. More important, it must be based on a willful breach of trust and founded on clearly
established facts. In this case, as aptly pointed out by the NLRC, although Baptisma was not
directly involved in the procurement process, Baptsima, as the then Power Plant Manager, had
some power or authority vital and indispensable to the procurement process. Between the
positive testimony of Lobitaña that he gave respondent commissions and/or "kickbacks" on two
separate occasions, and the negative testimony of respondent's witnesses we are more inclined
to give credence to the former. We find that the testimony of Lobitaña constitutes substantial
evidence to prove that respondent accepted commissions and/or "kickbacks" from suppliers,
which is a clear violation of petitioner's Company Rules and Regulations. Jurisprudence
consistently holds that for managerial employees "the mere existence of a basis for believing
that such employee has breached the trust of his employer would suffice for his dismissal.
97
ISON V. CREWSERVE, INC

G.R. No. 173951 April 16, 2012
DOCTRINE
transaction must be recognized as being a valid and binding undertaking.
FACTS
A Contract of Employment was entered into by and between Daniel M. Ison and Crewserve,
Inc. whereby the former agreed to work as Cook A for the latter on board M.V. Stadt Kiel for a
period of 12 months. After his pre-employment medical examination, petitioner boarded the
vessel in November 1999. During the course of his employment, however, petitioner experienced
chest pains and leg cramps. Thus, when the vessel reached Miami, Florida, he was sent to
Sunshine Medical Center for a medical check-up, electrocardiogram (ECG) and chest x-ray.
The tests revealed abnormal findings with the corresponding recommendation that petitioner
consult a cardiologist. Petitioner was thereafter medically repatriated. Upon repatriation,
petitioner was referred to respondent’s physician and was diagnosed to be suffering from
enlargement of the heart and hypertension. For two months, he underwent a series of treatment
at respondent’s expense. Petitioner was declared fit to return to work since the diagnosis of the
company-designated physician already showed controlled hypertension with the concomitant
advice, however, of continuous medication for life. Petitioner thereafter executed a release and
quitclaim in favor of respondents. Despite the execution of the aforesaid release and quitclaim,
petitioner, filed a complaint against respondents before the Arbitration Branch of the NLRC to
claim full disability benefits. Petitioner claimed that his illness continued to worsen despite the fit
to work assessment of the company-designated physician, rendering him unfit for sea service
and entitling him to total and permanent disability compensation. Respondents, on the other
hand, argued that petitioner is not entitled to any disability compensation as he was declared fit
to return to work as a seaman on August 25, 2000 after undergoing two months of medical
treatment at respondent’s expense. Respondents further claimed to have settled its obligation
to petitioner, as evidenced by a release and quitclaim duly executed and signed by him.
ISSUE
Whether or not Daniel M. Ison is entitled to disability benefits
HELD
No. Petitioner voluntarily executed a release and quitclaim in respondents favor right after the
assessment of the company-designated physician and receipt of his sickness allowance.
transaction must be recognized as being a valid and binding undertaking. Contrary to
petitioner’s contention, the amount of US$1,136.67 he received is reasonable enough to cover
his sickness allowance for two months of treatment under the care of respondent’s physician.
We, therefore, find no reason to invalidate the quitclaim.
98
JULIES BAKESHOP vs. HENRY ARNAIZ

G.R. No. 173882, FEBRUARY 15, 2012
DOCTRINE
In constructive dismissal cases, the employer has the burden of proving that the transfer of an
employee is for just or valid ground, such as genuine business necessity. The employer must
tantamount to unlawful constructive dismissal.
FACTS
Edgar Reyes hired respondents as chief bakers in his three franchise branches of Julies Bakeshop
in Antique. Thereafter, respondents filed separate complaints against petitioners for
underpayment of wages, payment of premium for holiday pay and rest day, service incentive
leave pay, 13th month pay, and cost of living allowance. Subsequently, in a memorandum,
Reyes reassigned respondents as utility/security personnel. Upon service of the memo,
respondents, however, refused to sign the same and did not report to work. In two letters
memoranda, Reyes directed respondents to report back to work and to explain why they failed
to assume their duties but the respondents did not heed both memoranda. The parties failed to
enter into a compromise. The Labor Arbiter ordered to file their respective position papers. The
respondents alleged that they were dismissed from employment without valid cause. As for
petitioners, they stated that the respondents were never dismissed but they abandoned their
jobs after filing their complaints. Thus, the Labor Arbiter dismissed the complaint. Respondents
filed a joint appeal with the NLRC. The NLRC remanded the case for purpose of identifying the
real respondents. Upon petitioners’ motion, however, the NLRC reconsidered this ruling and
resolved the case on the merits. In so doing, it found the respondents to have been
constructively dismissed. The NLRC, however, once again reversed itself in a Resolution upon
Reyes’s filing of a Motion for Reconsideration. This time, the NLRC held that respondents were not
illegally dismissed but instead abandoned their jobs. Respondents sought recourse to the CA.
The CA found merit in the petition, ruling that respondents were constructively dismissed since
their designation from chief bakers to utility/security personnel is undoubtedly a demotion in rank
which involved “a drastic change in the nature of work resulting to a demeaning and
humiliating work condition. Hence, this petition.
ISSUE
Was The Transfer/Reassignment Of Respondents To Another Position Without Diminution In Pay
And Other Privileges Tantamount To Constructive Dismissal?
HELD
Yes. In constructive dismissal cases, the employer has the burden of proving that the transfer of
an employee is for just or valid ground, such as genuine business necessity. The employer must
tantamount to unlawful constructive dismissal. Petitioners failed to satisfy the burden of proving
that the transfer was based on just or valid ground. Petitioners bare assertions of imminent threat
from the respondents are mere accusations which are not substantiated by any proof. This Court
is proscribed from making conclusions based on mere presumptions or suppositions. An
employee’s fate cannot be justly hinged upon conjectures and surmises. The act attributed
99
against Tolores does not even convince us as he was merely a suspected culprit in the alleged
sabotage for which no investigation took place to establish his guilt or culpability.
MANILA ELECTRICT CO. VS. BELTRAN

G.R. No. 173774 January 30, 2012
DOCTRINE
As the law regards workers with compassion, an employers’ right to discipline them should be
tempered with compassion as well. In line with this, the imposition of the supreme penalty of
dismissal is justified only when there are sufficient grounds as supported by substantial evidence.
FACTS
Respondent was employed by petitioner as Senior Branch Clerk at petitioner’s Pasig branch.
While rendering overtime work on a Saturday, respondent accepted a cash payment made in
lieu of a returned check issued as payment for electric bill from Collection Route Supervisor
Marcos which was received from customer Chang. Respondent accepted payment despite of
it not being part of her duty and issued an Auxiliary Receipt dated the next business day which
Monday to show that such transaction was an accommodation, an accepted office practice.
Respondent was not able to remit the payment 4 months after such transaction, caused her to
be placed under preventive suspension pending investigation. Such act of failing to
immediately remit said payment was considered as misappropriation or withholding of
company funds. Respondent was found guilty of the charge against her and was dismissed.
Respondent filed an illegal dismissal case against petitioner, arguing that she had no intention to
withhold company funds,that it was not her customary duty to collect and remit payment from
customers. That by accepting Chang’s payment is considered as goodwill in favor of both
petitioner and its customer. That her only violation was a simple delay in remitting the payment.
In response, petitioner insists that there was convincing basis to dismiss Beltran from employment.
While there was no concrete proof of misappropriation, the fact that there was withholding of
company funds remains undisputed. This act of negligence by Beltran in the performance of her
duties has resulted to the loss of trust and confidence reposed on her, notwithstanding her self-
serving allegations of marital woes and family difficulties, which were not even corroborated by
any clear evidence.Labor Arbiter ruled in favor of respondent, finding the dismissal penalty as
not commensurate to the degree of infraction committed for there was no adequate proof of
misappropriation. On appeal, the NLRC reversed Labor Arbiter’s decision and dismissed
respondent’s complaint, convinced that respondent used the money for her personal needs. On
appeal, CA reversed NLRC decision, and upheld Labor arbiter’s decision.
ISSUE
W/N there was sufficient grounds to warrant respondent’s dismissal?
HELD
No, 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 just excuse, and must rest on substantial
grounds, as distinguished from a careless, thoughtless, act. Respondent attributed her delay in
turning over the payment to her difficult family situation which caused her to take leave of
absences. The burden of proving the legality of an employee’s dismissal lies with the employer.
Unsubstantiated suspicions, accusations, and conclusions of employers do not provide legal
justification for dismissing employees. Beltran was remiss in her duties for her failure to
immediately turn over Changs payment to the company. Such negligence, however, is not
100
sufficient to warrant separation from employment. To justify removal from service, the
negligence should be gross and habitual.
POLSOTIN, JR. V. DE GUIA ENTERPRISES, INC.

G.R. No. 172624 December 5, 2011
DOCTRINE
A worker cannot be deprived of his job, a property right, without satisfying the requirements of
due process. As enshrined in our bill of rights, no person shall be deprived of life, liberty or
property without due process of law.
FACTS
Petitioners Polsotin, Rayala, Limpante, Domdom and Andrin were bus drivers and conductors of
respondent De Guia Enterprises, Inc. Alleging that they were dismissed without cause and due
process, petitioners filed complaint for illegal dismissal and payment of back wages and
damages against respondent before the NLRC. During the hearings before the Labor Arbiter, the
respondent failed to appear despite due notice and likewise failed to timely submit its position
paper. However, despite the case being submitted for decision, the respondent filed its position
paper without furnishing petitioners a copy of the same. The Labor Arbiter dismissed the
complaint. Without the assistance of counsel, the petitioners through Rayala filed a
Memorandum of appeal with the NLRC, which the NLRC in turn dismissed for failure to append a
certificate of non-forum shopping. The petitioners then appealed to the CA imploring them to
be more liberal in the rules of procedure as they were not given opportunity to be heard. The CA
however dismissed their appeal on technical grounds.
ISSUE
Whether or not, in spite of technicalities, petitioners are entitled to due consideration of their
petition.
HELD
Yes, the petitioners are entitled to due consideration. The NLRC gravely erred in denying due
course to petitioners’ appeal and in sustaining the Labor Arbiter’s Decision as same infringed
upon petitioners’ right to due process. A careful consideration of the facts of the case shows
that petitioners’ appeal should have been given due course. It may be recalled that respondent
failed to timely submit its position paper when required by the Labor Arbiter, hence, the case
was submitted for decision sans the same. Nonetheless, when respondent filed its position paper,
the Labor Arbiter admitted the same and relied on it in coming up with a decision that
petitioners were validly terminated. More important is that petitioners were not even furnished a
copy of respondent’s position paper in order for them to refute the contents and allegations
therein. And since neither did respondent appear in any of the hearings conducted before the
Labor Arbiter, petitioners were never really afforded an opportunity to rebut respondent’s
allegations and charges against them or to introduce evidence to refute them. Petitioners’ right
to due process was thus clearly violated. Indeed, labor tribunals are mandated to use all
reasonable means to ascertain the facts in each case speedily, objectively and without regard
to technicalities of law or procedure. However, in every proceeding before it, the fundamental
and essential requirements of due process should not to be ignored but must at all times be
respected. Besides, petitioners’ case concerns their job, considered as a property right, of which
they could not be deprived of without due process.
101
WILLIAM BARROGA vs. DATA CENTER COLLEGE

G.R. No. 174158, July 27, 2011
DOCTRINE
Constructive dismissal is quitting because continued employment is rendered impossible,
unreasonable or unlikely, or because of a demotion in rank or a diminution of pay. It exists when
there is a clear act of discrimination, insensibility or disdain by an employer which becomes
unbearable for the employee to continue his employment. Any benefit and perks being enjoyed
by employees cannot be reduced or discontinued; otherwise, the constitutional mandate to
afford full protection to labor shall be offended. But the rule against diminution of benefits is
applicable only if the grant or benefit is founded on an express policy or has ripened into a
practice over a long period which is consistent and deliberate.
FACTS
Petitioner William Barroga was hired as an instructor by Data Center College in its Laoag City,
Ilocos Norte campus. Barroga was then re-assigned to Vigan, Ilocos Sur. Part of the deal for his
re-assignment was that Barroga will receive a monthly allowance of P1,200.00 for board and
lodging while performing his job in Vigan. However, Data Center made it clear in writing that
Barroga is only entitled to the additional allowance while assigned in Vigan and such allowance
may be changed or forfeited if he will be re-assigned somewhere. He was recalled to Laoag.
Later, Barroga was also assigned as the temporary Head of Education; he was also given a
scholarship grant to support his post-graduate studies. In 2003, Barroga was advised that he will
be transferred to Bangued, Abra. Barroga refused because his father was sick and second, he
found out that there will be no additional allowance this time and that he will be working there
as an instructor and not as a Head of Education. In the same year, he filed a labor case against
Data College for constructive dismissal. Barroga alleged that the real purpose of his transfer is to
demote him to the rank of an instructor from being the Head for Education performing
administrative functions and that his re-assignment will entail an indirect reduction of his salary or
diminution of pay considering that no additional allowance will be given to cover for board and
lodging expenses. He claims that such additional allowance was given in the past and therefore
cannot be discontinued and withdrawn without violating the prohibition against non-diminution
of benefits.
ISSUE
Whether or not the absence of the additional allowance in Barroga’s supposed reassignment
HELD
No, as a general rule, benefits and perks enjoyed by employees cannot be reduced and
discontinued or diminished. But this rule is only applicable to grants or benefits which are
founded on an express policy or has ripened into a practice over a long period which is
consistent and deliberate. In the case at bar, Barroga’s additional allowance while in Vigan was
not permanent. In fact, Data College made clear that such allowance is only applicable while
Barroga is in Vigan and such allowance is no longer applicable if he is going to be assigned
somewhere. The same can be said of his removal as Head of Education, said position being
merely temporary in nature and is terminable at the pleasure of Data College which made such
appointment.
102
UNIVERSITY PLANS INCORPORATED VS SOLANO

G.R. NO. 170416, June 22, 2011
DOCTRINE
The 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.
FACTS
Respondents Solano et al., filed before the Labor Arbiter complaints for illegal dismissal against
petitioner University Plans Incorporated. In a Decision, the Labor Arbiter found petitioner guilty of
illegal dismissal and ordered respondents reinstatement as well as the payment of their full
backwages, proportionate 13th month pay, moral/exemplary damages, and attorney’s fees.
Petitioner filed before the NLRC its Memorandum on Appeal as well as a Motion to Reduce
Bond. Simultaneous with the filing of said pleadings, it posted a cash bond in the amount of
P30,000.00. In its Motion to Reduce Bond, petitioner alleged that it was under receivership and
that it cannot dispose of its assets at such a short notice. Because of this, it could not post the
required bond. Nevertheless, it has P30,000.00 available for immediate disposition and thus
prayed that said amount be deemed sufficient to satisfy the required bond for the perfection of
its appeal. In an Order, the NLRC denied petitioners Motion to Reduce Bond and directed it to
post an additional appeal bond in the amount of P3,013,599.50 ,otherwise the appeal shall be
dismissed for non-perfection. In resolving the motion, the NLRC held that the amount of the
appeal bond is fixed by law pursuant to Article 223 of the Labor Code which provides in part
that: In case of a judgment involving a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Commission in the amount equivalent to the monetary award
in the judgment appealed from
ISSUE
W/N T]he bond requirement on appeals involving monetary awards has been and may be
relaxed in meritorious cases
HELD
In view of the foregoing, a remand of this case to the NLRC for the conduct of preliminary
determination of the merit or lack of merit of petitioners Motion to Reduce Bond is proper. In so
doing, the NLRC is also reminded to consider respondent Solanos allegation that petitioner is
now under liquidation and to receive evidence thereon so that it may judiciously resolve the
Motion to Reduce Bond. As regards the issues relating to the substantial merits of the case, we
shall leave the same to the NLRC. This is because should the NLRC eventually find the Motion to
Reduce Bond meritorious, it shall give due course to the appeal upon the timely posting of a
reasonable amount of supersedeas bond it deems appropriate under the circumstances, and
shall then proceed to determine the merits of the case.
103
AIRLINE PILOTS ASSOCIATION OF THE PHILIPPINES vs. PHILIPPINE AIRLINES INC.

G.R. No. 168382, June 6, 2011
DOCTRINE
A judgment that has attained finality is immutable and could thus no longer be modified. There
is no necessity to conduct a proceeding to determine the participants in the illegal strike or
those who refused to heed the return to work order because the ambiguity can be cured by
reference to the body of the decision and the pleadings filed.
FACTS
Claiming PAL committed unfair labor practice; ALPAP filed on December 9, 1997, a notice of
strike against PAL with the DOLE. Upon PAL’s petition and considering that its continued
operation is impressed with public interest, the DOLE Secretary assumed jurisdiction over the
labor dispute and ruled that all strikes and lockouts at PAL are prohibited. Despite such reminder,
ALPAP went on strike on June 5, 1998. This constrained the DOLE, through then Sec. Trajano, to
issue a return-to-work order on June 7, 1998. However, it was only on June 26, 1998 when ALPAP
officers and members reported back to work. PAL refused to accept the returning pilots for their
failure to comply immediately with the return-to-work order. ALPAP filed with the Labor Arbiter a
complaint for illegal lockout against PAL. ALPAP contended that its counsel received a copy of
the return-to-work order only on June 25, 1998, which justified their non-compliance therewith
until June 26, 1998; thus prayed that PAL be ordered to accept unconditionally all officers and
members of ALPAP. The LA and the NLRC consolidated the illegal lockout case with the strike
case. DOLE Sec. declared the strike as illegal and dismissed the complaint for illegal lockout.
ALPAP filed a Petition for certiorari. CA affirmed DOLE resolution. ALPAP sought a review of the
CA decision. The SC dismissed the petition for failure to show that CA committed grave abuse of
discretion. The decision attained finality on August 29, 2002. ALPAP the filed a motion to request
to conduct a proceeding to determine who among its officers and members should be
reinstated or sender to have lost their employment.
ISSUE
Whether or not a proceeding to determine who actually participated in the illegal strike may still
be conducted
HELD
NO. There was no grave abuse of discretion on the part of Sto. Tomas and Imson in merely
noting ALPAP's twin motions in due deference to a final and immutable judgment rendered by
the Supreme Court. In the instant case, ALPAP seeks for a conduct of a proceeding to
determine who among its members and officers actually participated in the illegal strike
because, it insists, the June 1, 1999 DOLE Resolution did not make such determination. However,
as correctly ruled by Sto. Tomas and Imson and affirmed by the CA, such proceeding would
entail a reopening of a final judgment which could not be permitted by this Court. Settled in law
is that once a decision has acquired finality, it becomes immutable and unalterable, thus can
no longer be modified in any respect. Subject to certain recognized exceptions, the principle of
immutability leaves the judgment undisturbed as "nothing further can be done except to
execute it." True, the dispositive portion of the DOLE Resolution does not specifically enumerate
the names of those who actually participated in the strike but only mentions that those strikers
who failed to heed the return-to-work order are deemed to have lost their employment. This
omission, however, cannot prevent an effective execution of the decision. There is no necessity
to conduct a proceeding to determine the participants in the illegal strike or those who refused
to heed the return to work order because the ambiguity can be cured by reference to the body
of the decision and the pleadings filed.
104
BPI EMPLOYEES UNION-METRO MANILA VS. BANK OF THE PHIL. ISLANDS

G.R. Nos. 178699 & 178735; September 21, 2011
DOCTRINE
The base figure in computing the award of back wages to an illegally dismissed employee is the
employee’s basic salary plus regular allowances and benefits received at the time of dismissal,
unqualified by any wage and benefit increases granted in the interim.
FACTS
Uy’s services as bank teller in BPI was terminated on grounds of gross disrespect/discourtesy
towards an officer, insubordination and absence without leave. Uy, together with the Union, thus
filed a case for illegal dismissal. The Voluntary Arbitrator rendered a Decision finding Uy’s
dismissal as illegal and ordering BPI to immediately reinstate Uy and to pay her full back wages,
including all her other benefits under the CBA and attorney’s fees. After the Decision became
final and executory, Uy and the Union filed for the Issuance of a Writ of Execution. In Uy’s
computation, she based the amount of her back wages on the current wage level and
included all the increases in wages and benefits under the CBA that were granted during the
entire period of her dismissal. BPI disputed Uy’s/Union’s computation arguing that it contains
items which are not included in the term “back wages” and that no proof was presented to
show that Uy was receiving all the listed items therein before here termination. It claimed that
the basis for the computation of back wages should be the employee’s wage rate at the time
of the dismissal. A consolidated Petitions for Review on Certiorari was filed by BPI, the Union and
Zenaida Uy to seek modification of the CA’s Amended Decision computing Uy’s back wages
and other monetary awards pursuant to the final and executory Decision of the Court in G.R. No.
137863 based on her salary rate at time of her dismissal and disregarded the salary increases
granted in the interim as well as other benefits which were not proven to have been granted at
the time of Uy’s dismissal from the service.
ISSUE
Whether or not the CA erred in computing the monetary awards
HELD
The observation of the CA in its Amended decision that the back wages as discussed in the
March 31, 2005 Decision in G.R. No. 137863 did not include salary increases and benefits.
Jurisprudence dictates that such award of back wages is without qualifications and deductions,
that is, "unqualified by any wage increases or other benefits that may have been received by
co-workers who were not dismissed." It is likewise settled that the base figure to be used in the
computation of back wages is pegged at the wage rate at the time of the employee's dismissal
unqualified by deductions, increases and/or modifications. In the dispositive portion of Its
Decision of March 31, 2005, the Supreme Court expressly awarded Uy full backwages from the
time of her dismissal up to the time of her actual reinstatement. The full backwages, as referred
to in the body of the decision pertains to "backwages" as defined in Republic Act No. 6715.
Under said law, and as provided in numerous jurisprudence, "full backwages" means backwages
without any deduction or qualification, including benefits or their monetary equivalent the
employee is enjoying at the time of his dismissal. Clearly, it is the intention of the Supreme Court
to grant unto Private Respondent Uy full backwages as defined under RA 6715. Consequently,
any benefit or allowance over and above that allowed and provided by said law is deemed
excluded under said SC Decision. The CBA benefits awarded by Public Respondent is not within
the benefits under RA 6715. Said benefits are not to be included in the backwages.
105
JERUSALEM vs KEPPEL MONTE BANK

G.R. No. 169564, April 6, 2011
DOCTRINE
The burden of proof for an employer’s loss of confidence in an employee, due to some
misconduct and the nature of his participation is such as to render him unworthy of trust and
confidence demanded of his position, is on the employer.
FACTS
Petitioner James Jerusalem was employed by respondent Keppel Monte Bank as Assistant Vice-
President. He was assigned as Head of the newly created VISA Credit Card Department. When
the bank re-organized the VISA Credit Card Department and reduced it to a mere unit, the
petitioner was reassigned as Head of the Marketing and Operations of the Jewelry Department.
When the petitioner received a sealed envelope said to be containing VISA Card application
forms from Jorge Javier, a Keppel Visa Card Holder, he immediately handed over said envelope
with accomplished application forms to the VISA Credit Card Unit. All of which were
subsequently approved. But as it turned out, all the accounts under these approved
applications became past due. Upon discovery of the status of the accounts, the petitioner
recommended the filing of a criminal case against Jorge and that all the officers which are
supposed to be involved should be probed for possible involvement. However, the petitioner
then received a Notice for Explanation from the Operations Department of Keppel, asking him
to prove that he was not involved in the questionable transactions of Jorge. He answered that
he was no longer the head of the credit card department and that he merely endorsed the
referrals of Jorge to such department. The petitioner then received a Notice of Termination
informing the latter that he was found guilty of breach of trust and confidence for knowingly and
maliciously referring, endorsing and vouching for VISA card applicants who later turned out to
be impostors resulting in financial loss to Keppel. This prompted James to file before the Labor
Arbiter a complaint for illegal dismissal
ISSUE
Whether or not the termination of James on the ground of willful breach of trust and confidence
is proper
HELD
No. Law and jurisprudence have long recognized the right of employers to dismiss employees by
reason of loss of trust and confidence. As provided for in Article 282, an employer may terminate
an employee’s employment for fraud or willful breach of trust reposed in him. But the burden of
proof for an employer’s loss of confidence in an employee, due to some misconduct and the
nature of his participation is such as to render him unworthy of trust and confidence demanded
of his position, is on the employer. At the time James handed the applications for approval, he
was already the Head of the Marketing and Operations of the Jewelry Department. His act
therefore of forwarding the already accomplished applications to the VISA Credit Card Unit is
proper as he is not in any position to act on them.
Having shown that Keppel failed to discharge its burden of proving that James dismissal is for a
just cause, such dismissal based on the ground of loss of trust and confidence was illegal.
106
SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE

PHILIPPINES FOR EMPOWERMENT AND REFORMS, ZACARRIAS JERRY VICTORIO V. CHARTER
CHEMICAL AND COATING CORPORATION
G.R. No. 169717 March 16, 2011
DOCTRINE
A charter certificate does not need to be certified under oath by the union’s secretary nor be
attested to by the president. Neither does the mingling of rank-and-file and supervisory
employees in a union representing rank-and-file employees affect its legitimacy.
FACTS
Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for
Empowerment and Reforms filed a petition for certification election among the regular rank-
and-file employees of Charter Chemical and Coating Corporation with the Mediation
Arbitration Unit of the DOLE, NCR. Charter Chemical filed an answer with motion to dismiss
alleging that the union was not a legitimate labor organization because of failure to comply with
the documentation requirements set by law and the inclusion of supervisory employees in the
union. The Med-Arbiter ruled that the union was not a legitimate labor organization because the
documents were not executed under oath, certified by the union secretary, and attested to by
the union president as required by Section 235 of the Labor Code. Also, the list of union
membership consisted of twelve supervisory employees, which according to Article 245 of the
Labor Code, are prohibited from joining rank-and-file employees’ unions. The DOLE also
dismissed the union’s appeal because its petition for certification was filed out of time and not
because of the Med-Arbiter’s reasons. The CA annulled this decision and gave credence to the
findings of the Med-Arbiter.
ISSUE
Whether or not there was a legitimate labor organization
HELD
YES. There is no need for the charter certificate to be certified under oath by the union’s
secretary and attested to by the president. The Implementing Rules of Book V, as amended by
D.O. No. 9, series of 1997, states that a duly registered federation or national union may create a
local chapter by issuing a charter certificate indicating its creation and submitting such to the
Regional Office or Bureau. These shall be certified under oath by the secretary and attested to
by the president of the local or chapter. However, in a previous case, the Court ruled that it
need not be certified under oath because it does not make sense to have the local or chapter’s
officers certify a document that they themselves did not prepare. Thus, the mere submission of
the requirements is enough to create a labor organization. Furthermore, the mixture of rank-and-
file and supervisory employees in a union does not nullify its legal personality as a legitimate
labor organization. D.O. No. 9, series of 1997 amended the 1989 Amended Omnibus Rules
because it no longer required the local or chapter to submit a list of its members. Therefore, after
a labor organization has been registered, it may exercise all the rights and privileges of a
legitimate labor organization. The mingling of rank-and-file and supervisory employees can no
longer affect its legitimacy. The DOLE’s ruling is reinstated.
107
HARPOON MARINE SERVICES, INC., vs FRANCISCO

G.R. No. 189658 167751; March 2, 2011
DOCTRINE
Jurisprudence provides for two essential requirements for abandonment of work to exist – the
failure to report for work or absence without valid or justifiable reason and clear intention to
sever the employer-employee relationship manifested by some overt acts should both concur.
FACTS
Harpoon Marine Services Inc., hired respondent Fernan H. Francisco as its Yard Supervisor.
Francisco aver that he was unceremoniously dismissed by petitioner Jose Lido T. Rosit, President
and CEO of Harpoon, as the company could no longer afford his salary and that he would be
paid his separation pay and accrued commissions. Nonetheless, Francisco continued to report
for work, but was barred from entering company premises days after. Despite promise of
payment of separation pay and commission, it was unheeded. A demand letter was then sent
to Harpoon, to which it replied denying that it owed Francisco any commission, asserting that
they never entered into any contract or agreement for the payment of commission, hence
prompting Francisco to file a complaint for illegal dismissal. Petitioners presented a different
version of the events and refuted the allegations. Petitioner Rosit indeed talked to Francisco not
to dismiss him but only to remind and warn him of his excessive absences and tardiness, as seen
on his Time Card. Instead of improving his work behavior, Francisco continued to absent himself
and sought employment with another company engaged in the same line of business, thus,
creating serious damage in the form of unfinished projects. Petitioners also denied having
terminated Francisco, as he voluntarily abandoned his work after going on Absence Without
Official Leave. Upon Francisco’s continuous and deliberate failure to respond to these
memoranda sent to DOLE for his absence, a Notice of Termination was issued on him. Francisco,
in turn, refutes the claim made by petitioners.
ISSUE
Whether or not Francisco was illegally dismissed from employment
HELD
Francisco was illegally dismissed from employment. A scrutiny of the time card and payroll
discloses that respondent incurred only three days of absence and no record of tardiness;
hence, it does not show gross and habitual absenteeism and tardiness, especially since
Francisco’s explanation of his three day absence was not denied by petitioners at the first
instance before the Labor Arbiter. On the other hand, a co-worker, who was under oath and his
supervisor, stated that Francisco was diligent in reporting for work until they heard the news of
Francisco’s termination from his job. Jurisprudence provides for two essential requirements for
abandonment of work to exist – the failure to report for work or absence without valid or
justifiable reason and clear intention to sever the employer-employee relationship manifested by
some overt acts should both concur. Further, the employee’s deliberate and unjustified refusal to
resume his employment without any intention of returning should be established and proven by
the employer. Petitioner failed to prove that it was Francisco who voluntarily refused to report
back to work. The fact that respondent never prayed for reinstatement and sought employment
in a competitor of Harpoon cannot be construed as an act of abandoning employment.
Neither can delay of filing of a complaint be construed against Francisco as he first attempted
to get his separation pay and alleged commission before resorting to judicial recourse.
108
LEGEND INTERNATIONAL RESORTS LTD. V. KILUSANG MANGGAGAWA NG LEGENDA

G.R. No.169754. February 23, 2011
DOCTRINE
The legal personality of a legitimate labor organization cannot be subject to a collateral attack.
The law is very clear on this matter. The Implementing Rules stipulate that a labor organization
shall be deemed registered and vested with legal personality on the date of issuance of its
certificate of registration. Once a certificate of registration is issued to a union, its legal
personality cannot be subject to a collateral attack. In may be questioned only in an
independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the
Implementing Rules.
FACTS
Respondent KML filed with the Med-Arbitration Unit of the DOLE a Petition for Certification
Election, alleging that it is a legitimate labor organization of the rank and file employees of
petitioner Legend International Resorts Limited. Legend moved to dismiss the petition, claiming
that KML is not a legitimate labor organization because its membership is a mixture of rank and
file and supervisory employees. The Med-Arbiter rendered judgment dismissing for lack of merit
the petition, concluding that it is not a legitimate labor organization. On appeal, the Office of
the Secretary of the DOLE reversed the Med-Arbiter and held that KML’s legitimacy as a union
could not be collaterally attacked. The CA upheld the decision of the Office of the Secretary of
the DOLE.
ISSUE
Whether or not the legitimacy of KML can be collaterally attacked in a petition for certification
election
HELD
No, it cannot be attacked collaterally. The Supreme Court agrees with the ruling of the Office of
the Secretary of DOLE that the legitimacy of the legal personality of KML cannot be collaterally
attacked in a petition for certification election proceeding. This is in consonance with the ruling
in Laguna Autoparts Manufacturing Corporation v. Office of the Secretary, Department of Labor
and Employment that "such legal personality may not be subject to a collateral attack but only
through a separate action instituted particularly for the purpose of assailing it.”The legal
personality of a legitimate labor organization x cannot be subject to a collateral attack. The law
is very clear on this matter. The Implementing Rules stipulate that a labor organization shall be
deemed registered and vested with legal personality on the date of issuance of its certificate of
registration. Once a certificate of registration is issued to a union, its legal personality cannot be
subject to a collateral attack. In may be questioned only in an independent petition for
cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules.
109
EQUITABLE PCI BANK (Now BANCO DE ORO UNIBANK, INC.) VS. CASTOR A. DOMPOR,
G.R. Nos. 163293 & 163297, December 13, 2010
DOCTRINE
A bank managers abuse of authority in implementing bank policies is an abuse of the trust
reposed in him by his employer which constitutes as a just cause for his termination.
FACTS
The respondent was employed by then Philippine Commercial and Industrial Bank (PCIB), which
came to be Equitable PCI Bank and now herein petitioner. He was assigned as branch manager
of PCIBs Makati Cinema Branch. PCIBs Operations Subcenter Head, Gerardo C. Gabriel, called
the attention of PCIBs Ayala-Makati Area Head, Cora Mallillin, regarding a number of PLDT
dividend checks being sent for clearing by PCIB Makati Cinema Branch. It appears that
respondent allowed Luz Fuentes, a client-depositor of PCIB Makati Cinema Branch who opened
checking account to deposit several second-endorsed PLDT dividend checks. A special audit
was then and showed that 67,748 PLDT second-endorsed dividend checks, covered by 332
deposit slips, and with a total amount of P6.713 million, were drawn on Rizal Commercial Banking
Corporation-Makati and made payable to different payee corporations and prominent
personalities. These checks were thereafter fraudulently negotiated in favor of Fuentes and
deposited to her account. The audit report also revealed striking similarities of strokes in the
signatures of the different payees appearing on the checks. The audit committee
recommended respondents dismissal from employment and setting up of a contingent liability
for the potential loss for violation of banks policies and failure to exercise prudence expected of
a branch head. A hearing was held by the investigating committee whereby several officers
and personnel including respondent were queried in relation to the irregular transactions
involving the account of Fuentes. Due to the ongoing investigation, respondent was placed
under preventive suspension and was asked to explain in writing why no disciplinary action
should be taken against him. Respondent filed a complaint for illegal dismissal before the the
NLRC.
ISSUE
Whether or not willful disobedience or insubordination as a valid ground for termination under
Labor laws
HELD
Yes, respondent committed willful disobedience and willful breach of trust sufficient as just
causes for his dismissal. In the case at bench, we hold that respondent was validly dismissed on
the grounds of willful disobedience and willful breach of trust under Article 282 of the Labor
Code. To justify willful disobedience or insubordination as a valid ground for termination, the
employees 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 pertain to the duties which he had been engaged to discharge. On the
other hand, willful breach of trust requires that the loss of confidence must not be simulated; it
should not be used as a subterfuge for causes which are illegal, improper or unjustified; it may
not be arbitrarily asserted in the face of overwhelming evidence to the contrary; it must be
genuine, not a mere afterthought to justify earlier action taken in bad faith; and, the employee
involved holds a position of trust and confidence. Respondent, as bank manager, has the duty
to ensure that bank rules are strictly complied with not only to ensure efficient bank operation
which is imbued with public interest but also to serve the best interest of the bank as he holds a
position of trust and confidence. Indubitably, any negligence in the exercise of his responsibilities
can be sufficient ground for loss of trust and confidence demanded by his position.
110
PLDT V EUSEBIO M. HONORADO

G.R. No. 189366 December 08, 2010
DOCTRINE
The quantum of proof required in determining the legality of an employee's dismissal is only
substantial evidence.
FACTS
Private respondent Honrado was an employee of petitioner PLDT assigned at the PLDT North
Paraaque Exchange. Spouses Pete A. Mueda and Rodrigo H. Mueda went to PLDTs Quality
Control Division (QCD)to verify their application for telephone because according to them, a
person named Rony Hipolito who introduced himself as a PLDT employee went to their house on
November 26, 1999 in the afternoon. Spouses Mueda narrated that Hipolito told them that he is
the area inspector assigned therein assurred them of the availability of the PLDT line in their area.
They paid Hipolito a partial payment for the installation of their new telephone line; The head of
the QCD transmitted to the manager of private respondent, Mr. Torrenueva, the Investigation
Report recommending that an administrative action for gross misconduct be filed against
private respondent. Mr. Torrenueva asked private respondent to explain, in writing, within 72
hours from receipt of the memo, why he should not be dismissed for serious misconduct and if he
so desire, he may ask for a hearing. Failure to do so shall be taken as waiver of his right to be
heard. In reply, private respondent denied all the allegations imputed against him and
requested for a formal hearing with the assistance of his counsel and Union official. Private
respondent was notified that he was found liable as charged, hence, dismissed from service
effective. Consequently, respondent Honorado filed a complaint for illegal dismissal, money
claims and damages against petitioner PLDT
ISSUE
W/N the CA misapplied the quantum of proof required in holding that there is no sufficient basis
to support the cause for the respondent's termination
HELD
Decision of the Labor Arbiter dismissing the complaint for lack of merit is hereby REINSTATED and
AFFIRMED. Mrs. Mueda categorically declared in the presence of respondent Honrado that the
latter solicited and received P1,500.00 from her as downpayment for the installation of her
telephone line on November 26, 1999. This fact is corroborated by the unnotarized affidavits of
the spouses Mueda and the receipt issued for the P1,500.00 downpayment. On the other hand,
respondent merely denied the accusations posed by Mrs. Mueda. In addition, in respondents
position paper submitted to the Labor Arbiter, he submitted the affidavits of Ernesto Ponce,
Rodolfo Untalan and Valente Jose, all claiming that Honrado was at his residence at PLDT
Village, Bian, Laguna. With these affidavits, Honrado sought to establish that he was nowhere
near the Makati residence of the spouses Mueda in the afternoon of November 26, 1999 when
the solicitation and collection of downpayment occurred However, we cannot give credence
to said affidavits. In respondents Reply filed with the LA, respondent indicated that he reported
for work at 6:00 p.m. Thus, we agree with the factual finding of the LA in his Decision that if
complainant reported for work. Time and again, this Court has held that positive identification of
the respondent where categorical and consistent, without any showing of ill motive on the part
of the eyewitness, should prevail over the alibi and denial of the respondent and his witnesses
whose testimonies are conflicting and not substantiated. The quantum of proof required in
determining the legality of an employee’s dismissal is only substantial evidence.
111
SHIMIZU PHILS.CONTRACTORS, INC vs. VIRGILIO P. CALLANTA

G.R. No. 165923 September 29, 2010
DOCTRINE
Article 283 of the Labor Code, retrenchment is a valid exercise of management prerogative
subject to following: (1) That the retrenchment is reasonably necessary and likely to prevent
business losses which, if already incurred, are not merely de minimis, but substantial, serious,
actual and real, or if only expected, are reasonably imminent as perceived objectively and in
good faith by the employer; (2) That the employer served written notice both to the employees
and to the Department of Labor and Employment at least one month prior to the intended date
of retrenchment; (3) That the employer pays the retrenched employees separation pay
equivalent to one month pay or at least month pay for every year of service, whichever is
higher; (4) That the employer exercises its prerogative to retrench employees in good faith for
the advancement of its interest and not to defeat or circumvent the employees right to security
of tenure; and (5) That the employer used fair and reasonable criteria in ascertaining who would
be dismissed and who would be retained among the employees, such as status, x x x efficiency,
seniority, physical fitness, age, and financial hardship for certain workers.
FACTS
Petitioner Shimizu employed respondent Callanta on August 23, 1994 as Safety Officer assigned
at petitioner’s Yutaka-Giken Project and eventually as Project Administrator of petitioner’s
Structural Steel Division (SSD). In a Memorandum, respondent was informed that his services will
be terminated in 1997 due to the lack of any vacancy in other projects and the need to re-align
the company’s personnel requirements brought about by the imperatives of maximum financial
commitments. Respondent then filed an illegal dismissal complaint against petitioner assailing his
dismissal as without any valid cause. Petitioner contended that respondent was validly
retrenched. Respondent countered that the alleged retrenchment was invalid on 2 grounds: (1)
non compliance with the 30 day service of notice of retrenchment to DOLE and (2) petitioner
failed to use fair and reasonable criteria in determining which employees shall be retrenched or
retained.
ISSUE
Whether or not there was a valid retrenchment?
HELD
Yes, in implementing its retrenchment scheme, petitioner was constrained to streamline its
operations and to downsize its complements in a progressive manner in order not to jeopardize
the completion of its projects. Thus, several departments like the Civil Works Division, Electro-
mechanical Works Division and the Territorial Project Management Offices, among others, were
abolished in the early part of 1996 and thereafter the Structural Steel Division, of which
respondent was an Administrator. Respondent was among the last batch of employees who
were retrenched and by the end of year 1997 all of the employees of the Structural Steel Division
were severed from employment. Respondent never refuted such allegations. The fact that
petitioner did not comply with the 30-day notice requirement does not invalidate the whole
retrenchment program. However, non-compliance with this rule clearly violates the employee’s
right to statutory due process which entitles respondent to indemnity in the form of nominal
damages.
112
ST. MARY’S ACADEMY OF DIPOLOG CITY vs. TERESITA PALACIO, et al.

G.R. No. 164913. September 8, 2010
DOCTRINE
It is incumbent upon this Court to afford full protection to labor. Thus, while this Court takes
cognizance of the employer's right to protect its interest, the same should be exercised in a
manner, which does not infringe on the workers' right to security of tenure. "Under the policy of
social justice, the law bends over backward to accommodate the interests of the working class
on the humane justification that those with less privilege in life should have more in law."
FACTS
Petitioner hired respondents as classroom teachers and as a guidance counselor. However,
petitioner informed them that their re-application for school year 2000-2001 could not be
accepted because they failed to pass the Licensure Examination for Teachers (LET). According
to petitioner, as non-board passers, respondents could not continue practicing their teaching
profession pursuant to DECS Memo. No. 10, S.1998 which requires incumbent teachers to register
as professional teachers. Respondents filed a complaint contesting their termination as highly
irregular and premature. They admitted that they are indeed non-board passers, however, they
also argued that their security of tenure could not simply be trampled upon for their failure to
register with the PRC or to pass the LET prior to the deadline set by RA 7836. Further, as the
aforesaid law provides for exceptions to the taking of examination, they opined that their
outright dismissal was illegal because some of them possessed civil service eligibilities and
special permits to teach. Labor Arbiter adjudged petitioner guilty of illegal dismissal because it
terminated the services of the respondents on March 31, 2000 which was clearly prior to the
September 19, 2000 deadline fixed by PRC for the registration of teachers as professional
teachers, in violation of the doctrine regarding the prospective application of laws. NLRC
affirmed the LA’s decision. CA agreed with the findings of both the LA and the NLRC that the
dismissal was effected prematurely in violation of existing laws, noting that respondents still had
until September 19, 2000 within which to pass the LET.
ISSUE
Whether or not petitioner is guilty of illegally dismissing respondents
HELD
The dismissal of Teresita Palacio, Calibod, Laquio, Santander, and Montederamos was
premature and defeated their right to security of tenure. Saile's dismissal has legal basis for lack
of the required qualification needed for continued practice of teaching. It is undisputed that
respondents were all non-board passers when they were dismissed by petitioner on March 31,
2000. Based on the certification issued by the PRC on October 23, 2000, only respondent
Santander passed the LET but only for the elementary level. Thus, she is still unqualified to teach
in the high school level. All the others, except respondent Saile who is not qualified to take the
LET, failed the examination. However, it is to be noted that the law still allows those who failed
the licensure examination between 1996 and 2000 to continue teaching if they obtain
temporary or special permits as para-teachers. As correctly pointed out by the Labor Arbiter and
affirmed by the NLRC and the CA, the dismissal from service of respondents Palacio, Calibod,
Laquio, Santander and Montederamos on March 31, 2000 was quite premature. The SC will not
hesitate to defend respondents' right to security of tenure. The premature dismissal from the
service of respondents Palacio, Calibod, Laquio, Santander and Montederamos is unwarranted.
However, this Court take exception to the case of respondent Saile who, as alleged by
petitioner, was not qualified to take the LET as she only had three out of the minimum 10
required educational units to be admitted. Thus, this Court finds her termination just and legal.
113
NAGKAKAISANGLAKAS NG MANGGAGAWASA KEIHIN V. KEIHIN PHILS. CORP.

G.R. No. 171115; AUGUST 9, 2010
DOCTRINE
In the dismissal of employees, it has been consistently held that the twin requirements of notice
and hearing are essential elements of due process. The employer must furnish the employee with
two written notices before termination of employment can be legally effected: (a) a notice
apprising the employee of the particular acts or omissions for which his dismissal is sought, and
(b) a subsequent notice informing the employee of the employer's decision to dismiss him.
FACTS
Helen Valenzuela was a production associate in Keihin Philippines Corporation, a company
engaged in the production of intake manifold and throttle body used in motor vehicles
manufactured by Honda. It is a standard operating procedure of Keihin to subject all its
employees to reasonable search before they leave the company premises. While Helen was
about to leave the company premises, she saw a packing tape near her work area and placed
it inside her bag because it would be useful in her transfer of residence. When the lady guard on
duty inspected Helen's bag, she found the packing tape inside her bag. The guard confiscated
it; said incident reached the Human Resources and Administration Department. The following
day, respondent company issued a show cause notice accusing Helen of violating F.2 of the
company's Code of Conduct, which says, "Any act constituting theft or robbery, or any attempt
to commit theft or robbery, of any company property or other associate's property. Penalty: D
(dismissal)." Helen received a notice of disciplinary action informing her that Keihin has decided
to terminate her services. Thereafter, petitioners filed a complaint for illegal dismissal. Petitioners
alleged that Helen's act of taking the packing tape did not constitute serious misconduct,
because the same was done with no malicious intent. They believed that the tape was not of
great value and of no further use to respondent company since it was already half used.
ISSUE
Whether respondent company failed to observe the requirements of procedural due process.
HELD
NO. In this case, respondent company furnished Helen a show-cause notice dated September
6, 2003 accusing her of violating F.2 of the company's Code of Conduct which says, "Any act
constituting theft or robbery, or any attempt to commit theft or robbery, of any company
property or other associate's property." We find that such notice sufficiently informed Helen of
the charge of theft of company property against her. We are convinced that such notice
satisfies the due process requirement to apprise the employee of the particular acts or omissions
for which dismissal is sought. With regard to the requirement of a hearing, the essence of due
process lies in an opportunity to be heard. Such opportunity was afforded the petitioner when
she was asked to explain her side of the story. In Metropolitan Bank and Trust Company v.
Barrientos' 43 we held that, "the essence of due process lies simply in an opportunity to be heard,
and not that an actual hearing should always and indispensably be held." Similarly in Philippine
Pasay Chung Hua Academy v. Edpan, we held that, "[e]ven if no hearing or conference was
conducted, the requirement of due process had been met since he was accorded a chance to
explain his side of the controversy."
114
NEW PUERTO COMMERCIAL vs LOPEZ

G.R. No. 169999, July 26, 2010
DOCTRINE
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.
FACTS
Petitioner New Puerto Commercial hired respondent Felix Gavan as a delivery panel driver and
respondent Rodel Lopez as roving salesman. Petitioner Richard Lim is the operations manager of
New Puerto Commercial. Under a rolling store scheme, petitioners assigned respondents to sell
goods stocked in a van on cash or credit to the sari-sari stores of far-flung barangays and
municipalities. Respondents were duty-bound to collect the accounts receivables and remit the
same upon their return to petitioners store on a weekly basis. Sometime in the third week of
October 2000, petitioners received information that respondents were not remitting their sales
collections to the company. Thereafter, petitioners initiated an investigation by sending one of
their trusted salesmen, Bagasala, in the route being serviced by respondents. To prevent a
possible cover up, respondents were temporarily reassigned to a new route to service.
Subsequently, respondents stopped reporting for work (i.e., starting from October 22, 2000 for
respondent Lopez and October 28, 2000 for respondent Gavan) after they got wind of the fact
that they were being investigated for misappropriation of their sales collection, and, on
November 3, 2000, respondents filed the subject illegal dismissal case to pre-empt the outcome
of the ongoing investigation. The month-long investigation only ended on November 18, 2000
and a termination proceeding commenced against respondents by sending notices to explain
with a notice of hearing scheduled on December 2, 2000.
ISSUE
Whether or not the respondents were denied procedural due process
HELD
No, the respondents were not denied procedural due process. In termination proceedings of
employees, procedural due process consists of the twin requirements of notice and hearing. 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. 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. Under the peculiar circumstances of this
case, it cannot be concluded that the sending of the notices and setting of hearings were a
mere afterthought because petitioners were still awaiting the report from Bagasala when
respondents pre-empted the results of the ongoing investigation by filing the subject labor
complaint. For this reason, there was sufficient compliance with the twin requirements of notice
and hearing even if the notices were sent and the hearing conducted after the filing of the
labor complaint.
115
MONTAÑO vs. VERCELES

G.R. No. 168583, July 26, 2010
DOCTRINE
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. There is, thus, no
doubt as to the BLR's jurisdiction over the dispute involving member-unions of a federation arising
from disagreement over the provisions of the federation's constitution and by-laws.
FACTS
Atty. Montaño worked as legal assistant of Federation of Free Workers (FFW) Legal Center.
Subsequently, he joined the union of rank-and-file employees, the FFW Staff Association, and
eventually became the employees' union president. He was likewise designated officer-in-
charge of FFW Legal Center. During the 21st National Convention and Election of National
Officers of FFW, Atty. Montaño was nominated for the position of National Vice-President.
However, the Commission on Elections (FFW COMELEC) informed him that he is not qualified for
the position as his candidacy violates the 1998 FFW Constitution and By-Laws. In the National
Convention, the election ensued pending the motion for reconsideration of Montaño with the
FFW COMELEC. The convention delegates allowed Montaño’s candidacy. Montaño won and
was proclaimed as the National Vice-President. Respondent Atty. Verceles protested even
before the election proceedings and now reiterated his protest after the said election. Verceles
filed before the Bureau of Labor Relations (BLR) a petition for the nullification of the election of
Atty. Montaño as FFW National Vice-President. He alleged that, as already ruled by the FFW
COMELEC, Atty. Montaño is not qualified to run for the position because Section 76 of Article XIX
of the FFW Constitution and By-Laws prohibits federation employees from sitting in its Governing
Board. Atty. Montaño filed his Comment with Motion to Dismiss on the grounds that the Regional
Director of DOLE and not the BLR has jurisdiction over the case.
ISSUE
Whether or not BLR has jurisdiction over intra-union disputes involving a federation.
HELD
The BLR has jurisdiction over intra-union disputes involving a federation. We find no merit in
petitioner's claim that under Section 6 of Rule XV in relation to Section 1 of Rule XIV of Book V of
the Omnibus Rules Implementing the Labor Code, it is the Regional Director of the DOLE and not
the BLR who has jurisdiction over election protests. 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. There is, thus, no doubt as to the BLR's jurisdiction over the
instant dispute involving member-unions of a federation arising from disagreement over the
provisions of the federation's constitution and by-laws. The matter of venue becomes
problematic when the intra-union dispute involves a federation, because the geographical
presence of a federation may encompass more than one administrative region. Pursuant to its
authority under Article 226, this Bureau exercises original jurisdiction over intra-union disputes
involving federations. It is well-settled that FFW, having local unions all over the country, operates
in more than one administrative region. Therefore, this Bureau maintains original and exclusive
jurisdiction over disputes arising from any violation of or disagreement over any provision of its
constitution and by-laws.
116
LAMBERT PAWNBROKERS AND JEWELRY CORP. V. BINAMIRA

G.R. No. 170464. July 12,2010
DOCTRINE
It is fundamental that an employer is liable for illegal dismissal when it terminates the services of
the employee without just or authorized cause and without due process of law. A mere decline
in gross income cannot in any manner be considered as serious business losses. It should be
substantial, sustained and real.
FACTS
Petitioner Lambert Lim (Lim) is a Malaysian national operating various businesses in Cebu and
Bohol one of which is Lambert Pawnbrokers and Jewelry Corporation. Lambert Pawnbrokers and
Jewelry Corporation Tagbilaran Branch hired Helen as an appraiser and later designated her as
Vault Custodian. Helen received a letter from Lim terminating her employment effective that
same day. Lim cited business losses necessitating retrenchment as the reason for the termination.
Helen received a letter[5] from Lim terminating her employment effective that same day. Lim
cited business losses necessitating retrenchment as the reason for the termination. petitioners
asserted that they had no choice but to retrench respondent due to economic reverses. The
corporation suffered a marked decline in profits as well as substantial and persistent increase in
losses. In its Statement of Income and Expenses, its gross income for 1998 dropped from P1million
toP665,000.00.
ISSUE
Whether or not there was a valid dismissal based on retrenchment.
HELD
No. There was no valid dismissal. 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. 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. In this
case, however, the Statement of Income and Expenses for the year 1997-1998 submitted by the
petitioners was prepared only on January 12, 1999. Thus, it is highly improbable that the
management already knew on September 14, 1998, the date of Helens retrenchment, that they
would be incurring substantial losses. At any rate, we perused over the financial statements
submitted by petitioners and we find no evidence at all that the company was suffering from
business losses. In fact, in their Position Paper, petitioners merely alleged a sharp drop in its
income in 1998 from P1million to only P665,000.00. This is not the business losses contemplated by
the Labor Code that would justify a valid retrenchment. A mere decline in gross income cannot
in any manner be considered as serious business losses. It should be substantial, sustained and
real. To make matters worse, there was also no showing that petitioners adopted other cost-
saving measures before resorting to retrenchment. They also did not use any fair and reasonable
criteria in ascertaining who would be retrenched. Finally, no written notices were served on the
employee and the DOLE prior to the implementation of the retrenchment. Helen received her
notice only on September 14, 1998, the day when her termination would supposedly take effect.
This is in clear violation of the Labor Code provision which requires notice at least one month
prior to the intended date of termination.
117
ROMEO BASAY, JULIAN LITERAL AND JULIAN ABUEVA V. HACIENDA CONSOLACION

AND/OR BRUNO BOUFFARD III, JOSE RAMON BOUFFARD, MALOT BOUFFARD, SPOUSES
CARMEN AND STEVE BUMANLAG, BERNIE BOUFFARD, ANALYN BOUFFARD, AND DONA
BOUFFARD
G.R. No. 175532, April 19, 2010
DOCTRINE
Before employers are burdened to prove that there was no illegal dismissal, the employee must
first establish the fact of his or her dismissal.
FACTS
Bruno Bouffard III and other respondents hired Romeo Basay and Julian Literal as tractor
operators, and Julian Abueva as laborer for the sugar cane plantation in Hacienda
Consolacion. Basay, Literal, and Abueva filed a complaint for illegal dismissal, alleging that they
were verbally informed to stop working. After that, they were no longer given work assignments
even though they were regular employees. The Bouffards denied such allegations, asserting that
Abueva was merely a contractor and Literal and Basay were regular employees who
abandoned their jobs. They also alleged that Literal was facing charges of misconduct,
insubordination, damaging hacienda property, and unauthorized cultivation in the hacienda.
The Labor Arbiter ruled in favor of respondents since it was petitioners who did not report for work
despite respondents’ call. The NLRC reiterated the Labor Arbiter’s ruling. The CA also affirmed
this ruling.
ISSUE
Whether or not Basay, Literal, and Abueva were illegally dismissed
HELD
NO. While the employer has the burden of proving that the termination was for a valid cause, it
is the employee’s burden to first establish by competent evidence that there was indeed
dismissal form employment. No evidence was shown by Basay, Literal, and Abueva that they
were dismissed from employment. There is also no indication in records that they were deprived
of any work assignment by respondents. On the other hand, respondents presented a
declaration under oath by the assistant supervisor of the hacienda, attesting that they were
asked to return to do some work but refused to do so upon the advice of their lawyer. Also,
Literal and Basay’s names were still in the payroll. Furthermore, records to date do not show that
they were already terminated from employment. Thus, since no dismissal was proven, there can
be no question as to its legality or illegality.
118
RENO FOODS, INC. vs NLM-KATIPUNAN

G.R. No. 164016. March 15, 2010
DOCTRINE
In Nicolas vs NLRC, it was held that a criminal conviction is not necessary to find just cause for
employment termination. Otherwise stated, 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 interest.
FACTS
It is a standard operation procedure of petitioner Reno Foods, Inc., to subject all its employees to
reasonable search of their belongings upon leaving the company premises. The guard on duty
then found six Reno canned goods wrapped in nylon leggings inside Nenita Capor’s, an
employee, fabric clutch bag. The only other contents of the bag were money bills and small
plastic medicine container. Opportunities to explain were given to Capor, often with the
assistance of the union officers of Nagkakaisang Lakas ng Manggagawa-Katipunan. After
petitioner sent a Notice of Termination to Capor, she was given yet another opportunity for
reconsideration through a labor-management grievance conference. Petitioners, however, did
not find reason to change its decision to terminate Capor’s employment. A complaint-affidavit
for qualified theft was filed. Meanwhile, NLM-Katipunan filed a complaint for illegal dismissal and
money claims.
ISSUE
Whether or not Capor was validly dismissed from employment
HELD
She was validly dismissed from employment. Capor was acquitted in the criminal case against
her based on reasonable doubt. The trial court did not categorically rule that the acts imputed
to Capor did not occur, neither did it find petitioners’ version of the vent as fabricated, baseless,
or unreliable. In Nicolas vs NLRC, it was held that a criminal conviction is not necessary to find just
cause for employment termination. Otherwise stated, 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 interest. Criminal
cases require proof beyond reasonable doubt while labor disputes require only substantial
evidence.
119
QUIAMBAO V MANILA ELECTRIC COMPANY

G.R. NO.171023 : December 18, 2009
DOCTRINE
Labor adjudicatory officials and the CA must demur the award of separation pay based on
social justice when an employees dismissal is based on serious misconduct or willful
disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or commission
of a crime against the person of the employer or his immediate family - grounds under Art. 282 of
the Labor Code that sanction dismissals of employees.
FACTS
Petitioner was employed as branch teller by respondent Manila Electric Company. He was
assigned at respondents Mandaluyong office and was responsible for the handling and
processing of payments made by respondents customers. It appears from his employment
records, however, that petitioner has repeatedly violated the Company Code of Employee
Discipline and has exhibited poor performance in the latter part of his employment. A Notice of
Investigation was served upon petitioner for his unauthorized and unexcused absences. The
legal department recommended petitioners dismissal from employment due to excessive,
unauthorized, and unexcused absences. Petitioner’s employment was terminated Proceedings
before the Labor Arbiter. Petitioner filed a complaint before the Arbitration Branch of the NLRC
against respondent assailing the legality of his dismissal. While petitioner did not dispute his
absences, he nonetheless averred that the same were incurred with the corresponding
approved application for leave of absence. He also claimed that he was denied due process.
ISSUE
Whether or not a validly dismissed employee may be entitled to separation pay.
HELD
NO, the petitioner is NOT entitled to separation pay. The court have examined the records which
indeed show that petitioners unauthorized absences as well as tardiness are habitual despite
having been penalized for past infractions. In Gustilo v. Wyeth Philippines, Inc., the court held
that a series of irregularities when put together may constitute serious misconduct. It was also
held that gross neglect of duty becomes serious in character due to frequency of instances.
Serious misconduct is said to be a transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and indicative of wrongful intent and
not mere error of judgment. Oddly, petitioner never advanced any valid reason to justify his
absences. Petitioners intentional and willful violation of company rules shows his utter disregard
of his work and his employers interest. Indeed, there can be no good faith in intentionally and
habitually incurring inexcusable absences. Thus, the CA did not commit grave abuse of
discretion amounting to lack or excess of jurisdiction in equating petitioners gross neglect of duty
to serious misconduct. Besides, even assuming that the ground for petitioners dismissal is gross
and habitual neglect of duty, still, he is not entitled to severance pay. Labor adjudicatory
officials and the CA must demur the award of separation pay based on social justice when an
employee’s dismissal is based on serious misconduct or willful disobedience; gross and habitual
neglect of duty; fraud or willful breach of trust; or commission of a crime against the person of
the employer or his immediate family - grounds under Art. 282 of the Labor Code that sanction
dismissals of employees. They must be most judicious and circumspect in awarding separation
pay or financial assistance as the constitutional policy to provide full protection to labor is not
meant to be an instrument to oppress the employers.
120
MARINA PORT SERVICES, INC. V. NATIONAL LABOR RELATIONS COMMISSION

G.R. No. 80962; 271 PHIL 445-454; JANUARY 28, 1991
DOCTRINE
Loss of confidence constitutes a just cause for terminating an employer-employee relationship.
But for dismissal for loss of confidence to be warranted, there should naturally be some basis for
it. Unsupported by sufficient proof, loss of confidence is without basis and may not be
successfully invoked as a ground for dismissal. Loss of confidence as a ground for dismissal has
never been intended to afford an occasion for abuse by the employer of its prerogative, as it
can easily be subject to abuse because of its subjective nature. The burden of proof rests upon
the employer that the dismissal is for cause, and the failure of the employer to do so would
mean that the dismissal is not justified.
FACTS
Philippine Ports Authority cancelled its arrastre management contract with Metro Port Services,
Inc. and directly assumed the cargo handling operations. Later, it awarded a permit to Marina
Port Services to undertake arrastre services in the same port, subject inter alia to Par. 7 of the
terms and conditions of the permit stating that: "Labor and personnel of previous operator,
except those positions of trust and confidence, shall be absorbed by grantee. Labor or
employees benefits provided for under existing CBA shall likewise be honored." Marina retained
2,700 personnel of Metro but refused to continue the employment of 65 of the 123 persons
constituting the security force. They filed a complaint for illegal dismissal and damages with
DOLE. LA held in favor of complainants. NLRC affirmed LA's decision. Motion for reconsideration
was denied. Petitioner came to SC alleging grave abuse of discretion on the part of the NLRC
contending that it had no pre-existing employer-employee relationship with respondents; that
Par. 7 should be interpreted by a court of law and not NLRC; and that Marina was not obligated
to re-hire respondents because it had no license to maintain a security agency.
ISSUE
Whether there is illegal dismissal by Marina Port Services.
HELD
YES. Loss of confidence is a valid ground for dismissal under our labor laws. However, that ground
must first be established in proper proceedings before an employee can be lawfully dismissed.
Record shows that petitioner did not follow proper procedure in dismissing respondents. There
was no hearing, only an alleged background investigation supposedly linking them to pilferages
in the pier. No charges were formally preferred nor were they given chance to defend
themselves. They were arbitrarily separated and served notices of termination in disregard of
their rights to due process and security of tenure. The argument that the petitioner could not re-
hire respondents because it had no license to operate a security agency must fall against the
admitted fact that it retained 56 of the security guards and later re-hired 2 others even without
the license. The solution was to secure the license, not to dismiss some of the security guards
while retaining the others. If petitioner distrusts respondents, it may seek to establish its lack of
confidence and trust by proving that ground for their dismissal at an investigation conducted in
accordance with the prescribed procedure. But before it can do so, it must first reinstate all of
them as among the personnel of the previous operator to be absorbed by the grantee of the
permit, conformably to its commitment in Par. 7 stipulation.
121
SOCIAL LEGISLATION
SOCIAL SECURITY SYSTEM v. DEBBIE UBANA

G.R. No. 200114, August 24, 2015
DOCTRINE
There being no employer-employee relation or any other definite or direct contract between
respondent and petitioner, the latter being responsible to the former only for the proper
payment of wages, respondent is thus justified in filing a case against petitioner, based on
Articles 19 and 20 of the Civil Code, to recover the proper salary due her as SSS Processor.
FACTS
Respondent Debbie Ubana filed a civil case for damages against the DBP Service Corporation,
petitioner Social Security System (SSS), and the SSS Retirees Association before the RTC of Daet,
Camarines Norte. In her Complaint, respondent alleged that, she applied for employment with
the petitioner. However, after passing the examinations and accomplishing all the requirements
for employment, she was instead referred to DBP Service Corporation for "transitory
employment." She took the pre-employment examination given by DBP Service Corporation
and passed the same. Respondent claimed she was qualified for her position as Processor,
having completed required training and passed the SSS qualifying examination for Computer
Operations Course given by the National Computer Institute, U.P. Diliman yet she was not given
the proper salary. Because of the oppressive and prejudicial treatment by SSS, she was forced to
resign as she could no longer stand being exploited. She asserted that she dedicated six years
of serving SSS, foregoing more satisfying employment elsewhere, yet she was merely exploited
and given empty and false promises; that defendants conspired to exploit her and violate civil
service laws and regulations and Civil Code. As a result, she suffered actual losses by way of
unrealized income, moral and exemplary damages, attorney's fees and litigation expenses.
ISSUE
Whether or notthere is labor dispute cognizable by the Labor Arbiters and NLRC.
HELD
NO, "in legitimate job contracting, no employer-employee relation exists between the principal
and the job contractor's employees. The principal is responsible to the job contractor's
employees only for the proper payment of wages.” Respondent acknowledges that she is not
petitioner's employee, but that precisely she was promised that she would be absorbed into the
SSS plantilla after all her years of service with SSS; and that as SSS Processor, she was paid only
P229.00 daily or P5,038.00 monthly, while a regular SSS Processor receives a monthly salary of
P18,622.00, or P846.45 daily wage. Both parties admit that there is no employment relation
between them, then there is no dispute cognizable by the NLRC. 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 employer-employee relation between the parties thereto. The action is within the
realm of civil law hence jurisdiction over the case belongs to the regular courts. While the
resolution of the issue involves the application of labor laws, reference to the labor code was
only for the determination of the solidary liability of the petitioner to the respondent where no
employer-employee relation exists. An employer-employee relationship is an indispensable
jurisdictional requisite. Since there is no employer-employee relationship between the parties
herein, then there is no labor dispute cognizable by the Labor Arbiters or theNLRC.
122
GOVERNMENT SERVICE INSURANCE SYSTEM V. CALUMPIANO

G.R. No. 196102, November 26, 2014
DOCTRINE
The right to compensation extends to disability due to disease supervening upon and
proximately and naturally resulting from a compensable injury. Where the primary injury is shown
to have arisen in the course of employment, every natural consequence that flows from the
injury likewise arises out of the employment, unless it is the result of an independent intervening
cause attributable to claimant's own negligence or misconduct.
FACTS
Aurelia Y. Calumpiano was employed as Court Stenographer at the then Court of First Instance
of Samar. Shortly before retirement, he filed before the Supreme Court, an application for
disability retirement on account of her ailments, Hypertensive Cardiovascular Disease and Acute
Angle Closure Glaucoma. His disability claim was forwarded to GSIS, but the latter denied her
claim for the reason that hypertension and glaucoma, which were her illnesses, were not work-
related and are not compensable under the principle of increased risk.Respondent argue
relevantly that the "increased risk theory," which applies to her, has been upheld in several
decided cases; that in disability compensation cases, it is not the injury which is compensated
for but rather the incapacity to work resulting in the impairment of the employee’s earning
capacity.
ISSUE
Whether or not the diseases (Hypertension and Glaucoma) of the respondent are compensable
under the Increased Risk Theory.
HELD
Yes. The fact that the essential hypertension of respondent worsened and resulted in a CVA at
the time she was already out of service is inconsequential. The main consideration for its
compensability is that her illness was contracted during and by reason of her employment, and
any non-work related factor that contributed to its aggravation is immaterial. Indeed, an
employee's disability may not manifest fully at one precise moment in time but rather over a
period of time. It is possible that an injury which at first was considered to be temporary may
later on become permanent or one who suffers a partial disability becomes totally and
permanently disabled from the same cause. The right to compensation extends to disability due
to disease supervening upon and proximately and naturally resulting from a compensable injury.
Where the primary injury is shown to have arisen in the course of employment, every natural
consequence that flows from the injury likewise arises out of the employment, unless it is the result
of an independent intervening cause attributable to claimant's own negligence or misconduct.
Simply stated, all medical consequences that flow from the primary injury are compensable.
123
GSIS V. BESITAN
GR No. 178901, November 23, 2011
DOCTRINE
In compensation proceedings, the test of proof is probability, not absolute certainty; hence, a
claimant only needs to show reasonable work connection and not direct causal relation.
FACTS
Respondent Besitan was employed by the Central Bank of the Philippines on 1976 as a Bank
Examiner. Subsequently, he was promoted as Bank Officer II and eventually as Bank Officer III. In
2005, Besitan was diagnosed with End Stage Renal Disease secondary to Chronic
Glomerulonephritis and thus, had to undergo a kidney transplant for which he incurred medical
expenses. Believing that his working condition increased his risk of contracting the disease,
Besitan filed with the GSIS a claim for compensation benefits under PD No. 626, as amended.
The GSIS, however, denied the claim. The ECC issued a decision affirming the denial by the GSIS.
On appeal, the CA reversed the ruling of the ECC. The CA ruled that Besitan is entitled to
compensation benefits because his ailment was aggravated by the nature of his work, as
evidenced by a medical certificate.
ISSUE
Whether or not the Besitan is entitled to compensation benefits under PD No. 626, as amended
HELD
The petition lacks merit. Corollarily, for the sickness or resulting disability or death to be
compensable, the claimant must prove either (1) that the employees sickness was the result of
an occupational disease listed under Annex A of the Amended Rules on Employees
Compensation, or (2) that the risk of contracting the disease was increased by his working
conditions. Under the increased risk theory, there must be a reasonable proof that the
employees working condition increased his risk of contracting the disease, or that there is a
connection between his work and the cause of the disease. Only a reasonable proof of work-
connection, not direct causal relation, however, is required to establish compensability of a non-
occupational disease. Probability, and not certainty, is the yardstick in compensation
proceedings; thus, any doubt should be interpreted in favor of the employees for whom social
legislations, like PD No. 626, were enacted. In this case, since Besitan’s ailment, End Stage Renal
Disease secondary to Chronic Glomerulonephritis is not among those listed under Annex A, of
the Amended Rules on Employees Compensation, he needs to show by substantial evidence
that his risk of contracting the disease was increased by his working condition. After a careful
study of the instant case, the Court finds that Besitan has sufficiently proved that his working
condition increased his risk of contracting Glomerulonephritis, which according to GSIS may be
caused by bacterial, viral, and parasitic infection. When Besitan entered the government
service in 1976, he was given a clean bill of health. In 2005, he was diagnosed with End Stage
Renal Disease secondary to Chronic Glomerulonephritis. It would appear therefore that the
nature of his work could have increased his risk of contracting the disease. His frequent travels to
remote areas in the country could have exposed him to certain bacterial, viral, and parasitic
infection, which in turn could have caused his disease. Delaying his urination during his long trips
to the provinces could have also increased his risk of contracting his disease. In closing, it may
not be amiss to add that the primordial purpose of PD No. 626 is to provide meaningful
protection to the workers against the hazards of disability or illness; hence, a liberal attitude in
favor of the employee and his beneficiaries in deciding claims for compensation should be
adopted.
124
SOCIAL SECURITY COMMISSION V. FAVILA

G.R. No. 170195. March 28, 2011
DOCTRINE
This Court defined "dependent" as "one who derives his or her main support from another [or]
relying on, or subject to, someone else for support; not able to exist or sustain oneself, or to
perform anything without the will, power or aid of someone else."
FACTS
Teresa G. Favila was married to Florante Favila, the latter designated her as the sole beneficiary
in the E-1 Form he submitted before petitioner Social Security System (SSS). When they begot
their children Jofel, Floresa and Florante II, her husband likewise designated each one of them
as beneficiaries. Teresa further averred that when Florante died on February 1, 1997, his pension
benefits under the SSS were given to their only minor child at that time, Florante II, but only until
his emancipation at age 21. Believing that as the surviving legal wife she is likewise entitled to
receive Florante’s pension benefits, Teresa subsequently filed her claim for said benefits before
the SSS. The SSS, however, denied the claim, SSC reiterates the argument that to be entitled to
death benefits, a surviving spouse must have been actually dependent for support upon the
member spouse during the latter’s lifetime including the very moment of contingency. SSC adds
that in the process of determining non-dependency status of a spouse, conviction of a crime
involving marital infidelity is not an absolute necessity. It is sufficient for purposes of the award of
death benefits that a thorough investigation was conducted by SSS through interviews of
impartial witnesses and that same showed that the spouse-beneficiary committed an act of
marital infidelity which caused the member to withdraw support from his spouse. Hence, the
petition.
ISSUE
Whether or not Teresa Favila is a primary beneficiary to be entitled to death benefits accruing
from the death of Florante.
HELD
No. It bears stressing that for her (the claimant) to qualify as a primary beneficiary, she must
prove that she was ‘the legitimate spouse dependent for support from the employee.’ The
claimant-spouse must therefore establish two qualifying factors: (1) that she is the legitimate
spouse, and (2) that she is dependent upon the member for support. This Court defined
"dependent" as "one who derives his or her main support from another [or] relying on, or subject
to, someone else for support; not able to exist or sustain oneself, or to perform anything without
the will, power or aid of someone else." Although therein, the wife’s marriage to the deceased
husband was not dissolved prior to the latter’s death, the Court denied the wife’s claim for
survivorship benefits from the Government Service Insurance System (GSIS) because the wife
abandoned her family to live with other men for more than 17 years until her husband died. Her
whereabouts was unknown to her family and she never attempted to communicate with them
or even check up on the well-being of her daughter with the deceased. From these, the Court
concluded that the wife during said period was not dependent on her husband for any support,
financial or otherwise, hence, she is not a dependent within the contemplation of RA 829129 as
to be entitled to survivorship benefits. It is worthy to note that under Section 2(f) RA 8291, a
legitimate spouse dependent for support is likewise included in the enumeration of dependents
and under Section 2(g), the legal dependent spouse in the enumeration of primary
beneficiaries.
125
HERRERA vs. NATIONAL POWER CORP.

G.R. No. 166570; December 18, 2009
DOCTRINE
Employees who received separation benefit under RA 9136 are no longer entitled to retirement
benefits.
FACTS
RA 9136 (EPIRA) was enacted to provide a framework for restructuring of electric power industry.
Due to the reorganization, all NPC employees, including petitioners, were separated from
service. All employees who held permanent positions opted for and were paid separation pay.
In addition to the separation pay under EPIRA, a number of NPC employees also claimed
retirement benefits. NPC claimed that grant of retirement benefits in addition to separation pay
was inconsistent with constitutional proscription on the grant of double gratuity.  
ISSUE
Whether NPC employees who were separated from service because of reorganization of
electric power industry and who received separation pay under RA 9136 are still entitled to
retirement benefits.  
HELD
No, there must be a clear and unequivocal statutory provision to justify the grant of both
separation pay and retirement benefits to an employee. Absent an express provision of law,
grant of both would amount to double compensation from one single act of separation from
employment. A careful reading of Section 63 of the EPIRA affirms that said law did not authorize
the grant of both separation pay and retirement benefits. The option granted was either to a
separation pay and other benefits or to a separation plan the option granted was either to “a
separation pay and other benefits in accordance with existing laws, rules and regulations” or to
“a separation plan which shall be one and one-half months” salary for every year of service in
the government.” The options were alternative, not cumulative. Having chosen the separation
plan, they cannot now claim additional retirement benefits under CA No. 186. Petition is denied.
126

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LABOR LAW CASE DIGESTS

EXECUTIVE COMMITTEE 2018 – 2019

CHAIRPERSON Catriona Janelle Gayatin

San Beda College Alabang School of Law Administration

ATTY. Anna Marie Melanie B. Trinidad

ATTY. Carlo D. Busmente

LABOR LAW TEAM

Danielle Christiana Verga

Justin Leanne Meneses

The absence of a post-employment medical examination cannot be used to defeat a seafarer's

The company-designated physician is expected to arrive at a definite assessment of the

Finding that a contractor is a 'labor-only' contractor, as opposed to permissible job contracting,

Constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an

Resignation is the formal pronouncement or relinquishment of an office. The overt act of

Constructive dismissal is quitting because continued employment is rendered impossible,

Loss of confidence constitutes a just cause for terminating an employer-employee relationship.

HERMA SHIPYARD, INC. AND ESGUERRA vs OLIVEROS

TSM Shipping Co. vs. LOUIE L. PATIÑO

JACK C. VALENCIA V. CLASSIC VINYL PRODUCTS CORPORATION, JOHNNY CHANG

RUTCHER T. DAGASDAS V. GRAND PLACEMENT AND GENERAL SERVICES CORPORATION;

FACTS: Respondent employed Petitioner Dagasdas as Network Technician and was to be

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DOEHLE-PHILMAN MANNING AGENCY INC V HENRY C HARO

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SASO vs. 88 ACES MARITIME SERVICE, INC.

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DOMINADOR MALABUNGA, JR. vs. CATHAY PACIFIC STEEL CORP.

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ALPHA SHIP MANAGEMENT CORP. V. CALO

ANTONIO LOCSIN, II v. MEKENI FOOD CORPORATION

ABDULJUAHID R. PIGCAULAN V. SECURITY AND CREDIT INVESTIGATION, INC, AND/OR

SY vs FAILRAND KNITCRAFT CO., INC.

VALENZONA VS FAIR SHIPPING CORPORATION

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PANTOLLANO vs. KORPHIL SHIPMANAGEMENT AND MANNING CORP.

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SANDEN AIRCON PHILIPPINES vs. LORESSA P. ROSALES

EXODUS INTERNATIONAL V. BISCOCHO

MEDLINE MANAGEMENT, INC. and GRECOMAR SHIPPING AGENCY vs ROSALINDA

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INTERADENT ZAHNTECHNIK PHILIPPINES, INC., et al vs REBECCA SIMBILLO

ISLAND OVERSEAS TRANSPORT CORP. V. BEJA,