LABOR STANDARDS

Case Digests
July 2017 -December 2017

In partial fulfillment of the requirements in

Labor Law 1

Submitted to:
Atty. Voltaire T. Duano, LL.M.
 Submitted by:
Krizza Lei T. Amoyan
Mohammad Aladdin B. Andig
Maureen Joanne A. Co
Raymond F. Cruz
Ali - Rose L. Datukon
Patrixia Joy M. De Guia
Anne Janelle B. Guan
Gabriel Vicente Roy L. Kayaban III
Jarrid Louie D. Larugal
Chelsea M. Liao
Alvin Joseph D. Mallo
Glaiza Cel C. Olis
Michael Q. Paca-anas
Desonny Chrisller A. Perera
Monica May R. Ramos
Marian Therese S. Singzon
Ralph Louisse D. Venezuela
Kathleen J. Virtusio

Submitted on:
30 April 2019
JULY
2017
 MAUNLAD TRANS INC. VS GABRIEL ISIDRO
G.R. NO. 222699; JULY 24, 2017

FACTS:

Gabriel Isidro, herein respondent, was hired by petitioner Maunlad Trans Inc. (MTI) as
a bartender for and in behalf of its foreign principal, Carnival Cruise Lines, with a salary of
$350, exclusive of overtime and other benefits, for a period of six (6) months.
Several months later while working on board the vessel “M/S Miracle”, respondent
figured in an accident while lifting heavy food provisions. He was then later diagnosed by the
ship’s physician with “Right Knee Synovitis, Meniscal, Chondromalacia”, he was advised by
said physician that he can continue working. His condition did not ease so he has diagnosed in
a hospital in Miami, where he underwent different treatment and examination. He went back
to work and experienced new symptoms and was diagnosed with “psoriasis”.
Respondent was repatriated several months later. He was then admitted to the hospital
where a company-designated doctor attended him. He was then referred by said physician to a
dermatologist.
Respondent went to a private doctor for further examination where he was assessed to
have been suffering from “psoriasis, chondromalacia”, and was found to be unfit to go back to
work. For that reason, he filed a claim for full disability benefits.
Petitioners offered to conduct a laboratory examination on the respondent to verify the
knee injury but the latter did not accede. Despite filing the complaint, respondent continued his
medical treatment with the company-designated doctor.

ISSUE:
Whether or not respondent is entitled to full disability benefit

HELD:
No is not entitled. The findings of the company designated doctor, together with a
dermatologist, presumably an expert in skin conditions, who periodically treated respondent
for months and monitored his condition, deserve greater evidentiary weight than the single
medical report of respondent's doctor of choice. Indeed, "the doctor who have had a personal
knowledge of the actual medical condition, having closely, meticulously and regularly
monitored and actually treated the seafarer's illness, is more qualified to assess the seafarer's
disability."
Respondent's medical treatment lasted more than 120 days but less than 240 days, after
which the company-designated doctor gave respondent a final disability grading of Grade 12
under the POEA schedule of disabilities. Clearly, before the maximum 240-day medical
treatment period expired, respondent was issued a final disability Grade 12 which is merely
permanent and partial disability, since under Section 32 of the POEA-SEC, only those
classified under Grade 1 are considered permanent and total disability. Also, we do not agree
with the CA's observation that said disability grading was haphazardly issued. As noted, the
disability grading was issued well-within the maximum period allowed and only after a period
and thorough examination of the respondent. Given this, the summary disregard by the CA of
the grading issued by the company-designated physician within the maximum 240-day period
is obviously not in accord with the law and jurisprudence.
 ESPERE VS. NFD INTERNATIONAL MANNING AGENTS, INC.
G.R. No. 212098; July 26, 2017

FACTS:

On June 21, 2011, petitioner Julio C. Espere was hired as a Bosun (a ship’s officer in
charge of equipment and the crew) by respondent NFD International Manning Agents, Inc.
(NFD) for and in behalf of its foreign principal Target Ship Management Pte Ltd. onboard the
vessel M. V. Kalpana Prem, for a period of nine months, with a basic monthly salary of
US$730.00. Prior to his employment and embarkation, petitioner underwent a Pre-
Employment Medical Examination where he was pronounced “Fit for Sea Duty.

Around five months into his deployment, petitioner complained of feeling dizzy, had
body malaise and chills. Upon referral to a clinic in Vancouver, Canada, the physician who
examined him found that he was suffering from “uncontrolled hypertension,” “malaise NYD,”
and “psychosomatic illness.” He was then declared unfit for duty and was repatriated.

Upon his return, the company-designated physicians examined petitioner at the Marine
Medical Services of the Metropolitan Medical Center. In the case report, it was stated that
petitioner was suffering from hypertension. He was given medication for his condition and
advised to come back for follow-up evaluations. Petitioner religiously went back for check-
up. In all the follow-up evaluations, petitioner was continually diagnosed to be suffering from
hypertension and was given the appropriate medications to address his medical condition.
Moreover, during the time he was undergoing treatment, petitioner received sickness allowance
amounting to Two Thousand Eight Hundred Eighty-Seven US dollars and Three Cents
(US$2,887.03) from respondent. Meanwhile, Marine Medical Services of the Metropolitan
Medical Center issued a report stating that the cause of petitioner’s hypertension was not work-
related. Moreover, one of the company-doctors stated that petitioner’s hypertension “is not a
contraindication to resume work as long as patient will be compliant with taking his anti-
hypertensive medications and we are able to achieve adequate blood pressure control.”

Not satisfied with the findings of the company-designated physicians, petitioner

consulted Dr. Jacinto. After examining petitioner, the doctor stated that petitioner suffered from
“uncontrolled essential hypertension” and concluded that petitioner’s illness started from work
and his condition did not improve despite treatment. Dr. Jacinto marked petitioner’s condition
being “work-related/work-aggravated.”

Petitioner filed a Complaint against respondents claiming disability benefits for

permanent disability and damages. The Labor Arbiter dismissed the complaint, petitioner
sought recourse before the National Labor Relations Commission where the latter ruled in favor
of herein petitioner. During the pendency of the petition before the CA, the LA, on July 30,
2013, issued a Writ of Execution. In compliance with the writ, respondents deposited the
judgment award before the NLRC Cashier. On November 2013, the CA annulled and set aside
the decision of the NLRC and dismissed petitioner’s complaint
ISSUES:

1. Whether or not the Court of Appeals erred in giving much weight and credence to
the findings of the company-designated physicians that his illness is not work-related
and in totally disregarding the medical assessment of his appointed doctor.

2. Whether or not petitioner is entitled to full disability compensation in accordance

with the POEA-SEC.

HELD:

1. In the present case, there is no evidence to show that the parties jointly sought the
opinion of a third physician in the determination and assessment of petitioner’s disability or
the absence of it. Hence, the credibility of the findings of their respective doctors was by the
labor tribunals (LA and NLRC) as well as the CA properly evaluated the credibility of findings
of their respective doctors on the basis of their inherent merits. The Supreme Court (SC) finds
no error in the ruling of the Court of Appeals (CA) that the extensive medical attention that the
company doctors gave to petitioner enabled them to acquire a more accurate diagnosis of
petitioner’s medical condition and fitness for work resumption compared to petitioner’s chosen
physician who was not privy to his case from the beginning and appears to have examined him
only once.

2. No. For disability to be compensable under the above Philippine Overseas

Employment Administration-Standard Employment Contract (POEA-SEC), two (2) elements
must concur: (1) the injury or illness must be work-related; and (2) the work-related injury or
illness must have existed during the term of the seafarer’s employment contract. To be entitled
to compensation and benefits under the governing 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. Thus, while the law recognizes that an illness may be
disputably presumed to be work-related, the seafarer or the claimant must still show a
reasonable connection between the nature of work onboard the vessel and the illness contracted
or aggravated. Therefore, the burden is placed upon the claimant to present substantial evidence
that his work conditions caused or at least increased the risk of contracting the disease.

In this case, however, petitioner relied on the presumption that his illness is work-
related but he was unable to present substantial evidence to show that his work conditions
caused or, at the least, increased the risk of contracting his illness. Neither was he able to prove
that his illness was preexisting and that it was aggravated by the nature of his employment.
Thus, the LA and the CA correctly ruled that he is not entitled to any disability compensation.
 GREIG PHILIPPINES, INC. VS. GONZALES
G.R. No. 228296; July 26, 2017

FACTS:

Grieg, a shipping agent, first hired Gonzales in 2010. While aboard Star Florida, Gonzales
experienced shortness of breath, pain in his left leg, fatigue, fever and headaches. A week later,
he sought medical attention in South Korea after experiencing the same symptoms. He was
then sent back to work upon finding that his medical tests were all normal. After a month,
Gonzales’ past symptoms returned with the added symptom of black tarry stools. He was
initially diagnosed with “Pancytopenia Suspect Aplastic Anemia” and was declared unfit for
sea duty and was repatriated.

Gonzales was admitted at the Metropolitan Medical Center where the company physicians
diagnosed him with Acute Promyelocytic Leukemia, they opined that Gonzales’ leukemia was
not work-related; although, for humanitarian reasons, Grieg continued to pay for his treatment.
However, the latter claimed that herein respondent suddenly stopped consulting the company
physicians. Gonzales denied and contended that he informed Grieg that he would be unable to
attend the scheduled appointment on April 28, 2014 for he was still raising money to travel
from his hometown to Manila. Respondent claimed that his request to reschedule his
appointment was granted and was surprised with the notification that Grieg had discontinued
his treatment.

Gonzales sought a second opinion from an independent physician who certified that his
leukemia was work-related. On July 15, 2014, after his disability claims were refused, Gonzales
filed a complaint against Grieg before the Labor Arbiter; the latter found that Gonzales’
leukemia was work-related and that it had permanently incapacitated him to work as a seafarer.

Petitioner appealed the Labor Arbiter’s Decision before the National Labor Relations
Commission. NLRC affirmed the Labor Arbiter’s ruling. It also denied Grieg’s motion for
reconsideration, resulting the latter to file its Petition for Certiorari before the Court of Appeals,
CA upheld the findings of NLRC and denied Grieg’s Petition and that Gonzales was entitled
to the sickness allowance under the Collective Bargaining Agreement and the permanent
disability benefits of US$90,000.00.

Hence, this petition.

ISSUE:

Whether the National Labor Relations Commission committed grave abuse of discretion in
awarding Gonzales’ claim for disability benefits.

HELD:

The petition must fail. The 2000 Philippine Overseas Employment Administration-Standard
Employment Contract 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.”
 The relevant portions of Section 32-A are as follows:

For an occupational disease and the resulting disability or death to be compensable,

all of the following conditions must be satisfied:
1. The seafarer’s work must involve the risks described herein;
2. The disease was contracted as a result of the seafarer’s exposure to the described
risks;
3. The disease was contracted within a period of exposure and under such other
factors necessary to contract it; and
4. There was no notorious negligence on the part of the seafarer.

Gonzales’ tasks included removing rust accumulations and refinishing affected areas of the
ship with chemicals and paint to retard the oxidation process. This meant that he was frequently
exposed to harmful chemicals and cleaning aids which may have contained
benzene. Furthermore, Star Florida transported chemicals, which could have also contributed
to Gonzales’ leukemia.

Moreover, as to compensability of illnesses, it is not necessary that the nature of the

employment is the sole reason for the seafarer’s illness. Magsaysay Maritime Services v.
Laurel, made mentioned that it is sufficient that there is a reasonable linkage between the
disease suffered by the employee and his work to lead a rational mind to conclude that his work
may have contributed to the establishment or, at the very least, aggravation of any preexisting
condition he might have had.

Gonzales was able to satisfy the conditions under Section 32-A and establish a reasonable
linkage between his job as an Ordinary Seaman and his leukemia. He has submitted his official
job description, which involved constant exposure to chemicals. It is also not disputed that he
contracted leukemia only while he was onboard Star Florida since he was certified to be fit for
sea duty prior to boarding and his leukemia was not genetic in nature.

Note that even if the opinion of Gonzales’ own physician is to be disregarded, the Court ruled
that petitioners miserably failed to dispute the medical finding that Gonzales’ leukemia is not
hereditary, as his tests reveal no apparent chromosome abnormality. This undeniable
circumstance, taken together with Gonzales’ testimony, plus the fact that he was declared fit
for sea duty prior to boarding the vessel for two (2) consecutive employment contracts with the
same company, all the more bolster the conclusion that the conditions set forth in Section 32-
A regarding the work-relatedness of his leukemia are present.
AUGUST
2017
 STERLING PAPER PRODUCTS ENTERPRISES, INC., Petitioner v. KMM-
KATIPUNAN AND RAYMOND Z. ESPONGA, Respondents.

G.R. No. 221493, 2 August 2017.

FACTS:

Petitioner Sterling averred that on June 26, 2010, their supervisor Mercy Vinoya (Vinoya),
found Respondent Raymond Esponga and his co-employees about to take a nap on the sheeter
machine. She called their attention and prohibited them from taking a nap thereon for safety
reasons.

Esponga and his co-employees then transferred to the mango tree near the staff house. When
Vinoya passed by the staff house, she heard Esponga utter, "Huwag maingay, puro bawal. "
She then confronted Esponga, who responded in a loud and disrespectful tone, "Puro kayo
bawal, bakit bawal ba magpahinga?”

When Vinoya turned away, Esponga gave her the "dirty finger" sign in front of his co-
employees and said "Wala ka pala eh, puro ka dakdak. Baka pag ako nagsalita hindi mo
kayanin. "

After being served a notice to explain and several hearings, Sterling dismissed Esponga for
gross and serious misconduct.

In the illegal dismissal case filed by Esponga, the Labor Arbiter ruled in favor of Esponga,
stating that Sterling failed to discharge the burden of proof. NLRC reversed the ruling, stating
that the acts of Esponga were all violations of the Company Code of Conduct. On appeal, the
Court of Appeals reversed NLRC’s ruling, stating that the utterances and gesture did not
constitute gross misconduct.

ISSUE: Whether the cause of Esponga’s dismissal amounts to serious misconduct.

RULING: Yes.

Under Article 282 (a) of the Labor Code, serious misconduct by the employee justifies the
employer in terminating his or her employment.

For misconduct or improper behavior to be a just cause for dismissal, the following elements
must concur: (a) the misconduct must be serious; (b) it must relate to the performance of the
employee's duties showing that the employee has become unfit to continue working for the
employer; and (c) it must have been performed with wrongful intent.

Primarily, the utterance of obscene, insulting or offensive words against a superior is not only
destructive of the morale of his co-employees and a violation of the company rules and
regulations, but also constitutes gross misconduct.

Further, Esponga's assailed conduct was related to his work. Vinoya did not prohibit him from
taking a nap. She merely reminded him that he could not do so on the sheeter machine for
safety reasons. Esponga's acts reflect an unwillingness to comply with reasonable management
directives.
Finally, Esponga was motivated by wrongful intent. He committed the acts in front of his co-
employees, which evidently showed that he intended to disrespect and humiliate his supervisor.
 G.R. No. 220002, August 02, 2017
EUGENIO M. GOMEZ, Petitioner, v. CROSSWORLD MARINE SERVICES, INC.,
GOLDEN SHIPPING COMPANY S.A., AND ELEAZAR DIAZ,

FACTS:

Crosworld Marine Services, Inc. employee Eugenio M. Gomez, is an ordinary seaman in the
vessel M/V Elena Ve for a period of 11 months. Before being hired by the respondents (CMS,
Inc.) he underwent the required pre-employment medical examination, and was declared fit to
work.

On February 2012, the Chief Officer of the vessel ordered the petitioner to remove the ice from
the lower and upper decks of the ship, while performing this task, petitioner accidentally
slipped and hit his back. Petitioner was immediately in pain. After 15 days he can no longer
bear the pain and was asked to go to a hospital.

When he came back to the Philippines, he underwent two surgical operations. Few months later
a report was submitted to the president of CMS, Inc. stating that petitioner still complained of
mild to moderate lower back discomfort. The petitioner still have persistent, chronic pain, and
cannot regain his physical capacity to work. So, he asked for the payment of his ability benefits,
but respondents refused.

Issue: Whether or not petitioner is entitled of full disability benefits.

Ruling: Yes, the petitioner did suffer a permanent partial disability with an impediment grade
of 8. Therefore he is subject for his disability compensation.
NORTH SEA MARINE SERVICES CORPORATION VS. SANTIAGO S. ENRIQUEZ
G.R. No. 201806; August 14, 2017

FACTS:

On February 27, 2008, Petitioner North Sea Marine Services Corporation, for and on behalf of
its foreign principal, petitioner Carnival Cruise Lines, entered into a Contract of Employment
with respondent for a period of six months which commenced on April 27, 2008, as Assistant
Plumber for the vessel MS Carnival Triumph.

On September 2, 2008, while in the performance of his duties respondent experienced nape
pains that radiated to his upper back. The ship doctor diagnosed him to be suffering from
mechanical back pains and prescribed him with medicines. However, due to the worsening of
his back pains, he was medically repatriated on October 5, 2008. The respondent was
immediately referred to the company-designated physician, Dr. John Rabago at the Cardinal
Santos Medical Center and undergo different kinds of examinations and surgeries.

On March 4, 2009, respondent filed a Complaint with the NLRC seeking to recover permanent
disability compensation in the amount of US$80,000.00 under the International Transport
Workers’ Federation Cruise Ship Collective Bargaining Agreement (ITF Cruise Ship CBA),
balance of sick wages for two months, moral and exemplary damages, and attorney’s fees.
Respondent claimed that despite the lapse of 120 days and medical attention given to him by
the company-designated physician, his condition did not improve, as attested by the medical
findings of his own physician Dr. Garduce.

Petittioners, on the other hand, disclaimed respondent’s entitlement to any disability benefit
since he was declared fit to work by Dr. Rabago, as attested by both the orthopedic surgeon
and physiatrist. Petitioners asserted that the fit to work assessment of the company-designated
physician deserved utmost credibility because it was rendered after extensive monitoring and
treatment of respondent’s condition by a team of specialists, and it contained a detailed
explanation of the progress in respondent’s condition.

On September 29, 2009, the Labor Arbiter denied respondent’s claim for disability benefits.
The Labor Arbiter found credence in Dr. Rabago’s fit to work assessment, which was
buttressed by the findings of the specialists, was arrived at after careful and accurate evaluation
of respondent’s condition, and well-substantiated by the medical records, Futhermore, the
complaint was dismissed due to lack of merit.

ISSUES:

1. Whether or not the Court of Appeals committed a serious error in law in affirming the award
of US$80,000. 00 under the CBA.

2. Whether or not the Court of Appeals committed serious error in holding that Respondent is
entitled to disability benefits.
HELD:

1. No. The Respondent’s failed to present any proof to show that employment was covered by
the CBA. The ITF Cruise Ship Model Agreement for Catering Personal April 2003 presented
by respondent bore no specific details as regards the parties covered thereby, the effectivity or
duration thereof, or even the signatures of contracting parties, Records are bereft of evidence
showing that respondent’s employment was covered by the supposed CBA or that petitioners
had entered into any collective bargaining agreement with any union in which respondent was
a member.

2. No. The respondent’s entitlement to disability benefits is therefor governed by the POEA-
SEC and relevant labor laws which are deemed writer in the contract of employment with
petitioners. Respondent is not entitled to total and permanent disability benefits. Under Section
20 B(3) of the POEA-SEC provides: (3) Upon signing off from the vessel for medical
treatment, the seafarer is entitles to sickness allowance equivalent to his basic wage until he is
declared fit to work or the degree of permanent disability has been assessed by the company
designated physician but in no case shall this period exceed one hundred twenty (120) days. It
is clearly provided in the POEA-SEC that in order to claim disability benefits, it is the
company-designated physician who must proclaim that the seafarer suffered a permanent
disability, whether total or partial, due to either injury or illness, during the term of his
employment. The Court finds Dr. Rabago’s assessment to be credible considering his close
monitoring and extensive treatment of respondent’s condition. Dr. Rabago’s fit to work
assessment was supported by the Certificate of Fitness to Work signed by the respondent. It
bears to emphasize that respondent immediately caused the execution of this waiver or release
in favor of petitioners instead of disputing the fit to work declaration of Dr. Rabago.
 READ- RITE PHILIPPINES VS. GINA G. FRANCISCO
G.R. No. 195457; August 16, 2017

FACTS:

During the time material to this case, Read Rite was a duly registered domestic corporation
engaged in the business of manufacturing magnetic heads for use in computer hard disks. In
the compensation and benefits manual of Read-Rite’s predecessor company, among the
benefits that an employee is entitled to are the following: Voluntary Separation Benefit, upon
separation from employment after rendering at least twenty (20) continuous years of service,
an employee shall be entitled to a lump sum benefit equal to his full retirement benefit with
salary and services calculated as of the date of voluntary separation; Involuntary Separation
Benefit which an employee terminated involuntarily for reasons beyond his control (except for
just cause), including but not limited to retrenchment or redundancy, shall be entitled to receive
the applicable minimum benefit prescribed by law.

Eventually, Read- Rite embarked on another round of retrenchment beginning the last quarter
of 1999. Most of the 49 respondents in this case were part of this second batch of retrenched
employees. All of the respondents received involuntary separation benefits equivalent to one
month pay per year of service. In July 2003, Read- Rite sent notices to various government
agencies, such as the Securities and Exchange Commission, BIR, and DOLE Region IV, that
the company had ceased its manufacturing operations effective June 18, 2003.

Meanwhile in February 202 and February 2003, respondents filed complaints against Read-
Rite docketed as NLRC Case No. RAB-IV-02-15180-02-L and NLRC Case No. RAB-IV-02-
17002-03-L, which were consolidated. Respondents sought the payment of additional
voluntary separation benefits, legal interest thereon, the attorney’s fees. They argued that Read-
Rite discriminated against them by not granting the aforesaid benefits, the award of which had
since become a company policy.

Respondents sought a reconsideration of the NLRC Resolution, manifesting that in similar

labor cases involving other employees of Read Rite, the Court of Appeals and the Supreme
Court allegedly upheld the employees’ entitlement to additional voluntary separation benefits.

ISSUES:

Whether or not the employer, forced to undergo retrenchment due to serious business losses,
be required to still pay Voluntary Separation Benefit after it had already paid Involuntary
Separation Benefits to the retrenched employees, simply because it had earlier paid, albeit
mistakenly, eight retrenched employees additional Voluntary Separation Benefit.

HELD:

No. The Respondents are only entitled to involuntary separation benefits. The Court rules that
respondents are only entitled to involuntary separation pay given that they were retrenched
employees. Retrenchment to prevent losses is one of the authorized causes for an employee’s
separation from employment. Under Article 283 (now Article 298) of the Labor Code, as
amended, recognizes retrenchment as a right of the management to meet clear and continuing
economic threats or during period of economic recession to prevent losses. Said article reads:
Article 283. Closure of establishment and reduction of personnel- the employer may also
terminate the employment of any employee due to the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor
and Employment at least one month before the intended date thereof. In case of termination
due to the installation of labor-saving devices or redundancy, the worker affected thereby shall
be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one
month pay every year of service, whichever is higher. In case of Retrenchment to prevent losses
and in cases of closure or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to one (1)
month pay or at least one half month pay for every year of service, whichever is higher. A
fraction of at least six months shall be considered one whole year.

The respondents never disputed the fact that they were retrenched employees of Read- Rite and
they were accordingly paid involuntary separation benefits of one month pay per year of
service. They, however, claim similar entitlement to voluntary separation benefits under Read-
Rites compensation and benefits manual. The Labor Arbiter and NLRC were correct in ruling
that voluntary and involuntary benefits are distinct from one another, The same are embodied
in separate provisions of both the Compensation and Benefits Manual. Finally, the Supreme
Court uphold the ruling of the Labor Arbiter and the NLRC that the respondents’ individual
quitclaims are valid and binding upon them. Therefore, the Supreme Court grant the petition
and reversed the decision of the Court of Appeals.
 Republic of the Philippines represented by OSG V Cortez et. al
GR NO. 187257 (August 8, 2017)

FACTS:

NECU and NEW filed a petition for mandamus praying that NAPOCOR be ordered to release
the Cost of Living Allowances (COLA) and Amelioration (AA) allegedly withheld from from
July 1, 1989 to March 19, 1999. NECU AND NEWU believed that they were among the
government employees whose COLA and AA were not factually integrated into their basic
salary upon the implementation of Republic Act No. 6758.

In their 16,500 Workers' Solicitous Motion for Reconsideration, respondents NECU and
NEWU insist that law, jurisprudence, and evidence support their contention that their COLA
and AA were deducted from their salaries from July 1, 1989 to March 19, 1999. In particular,
they distinguish NAPOCOR workers into three (3) categories. The first category includes
workers already employed when Republic Act No. 6758 took effect and whose COLA and AA
were integrated into their basic salaries only up to 1993. The second category covers those
hired after Republic Act No. 6758 took effect and whose COLA and AA were allegedly
deducted from 1989 to 1999. The third category consists of employees hired after the effectivity
of Republic Act No. 7648 and whose COLA and AA were allegedly deducted from 1994 to
1999.

ISSUE:

WON NAPOCOR shall release the COLA and AA?

RULING:

Republic Act No. 6758 remained effective during the period of ineffectivity of DBM-CCC No.
10. Thus, the COLA and AA of NAPOCOR officers and employees were integrated into the
standardized salaries effective July 1, 1989 pursuant to Section 12 of Republic Act No. 6758,
which provides:ch
anRoblesvirtualLawlibrary
Section 12. Consolidation of Allowances and Compensation. - All
allowances, except for representation and transportation allowances;
clothing and laundry allowances; subsistence allowance of marine
officers and crew on board government vessels and hospital
personnel; hazard pay; allowances of foreign service personnel
stationed abroad; and such other additional compensation not
otherwise specified herein as may be determined by the DBM, shall
be deemed included in the standardized salary rates herein prescribed.
Such other additional compensation, whether in cash or in kind, being
received by incumbents only as of July 1, 1989 not integrated into the
standardized salary rates shall continue to be authorized.

Hence, respondents NECU’s and NEWU’s COLA and AA were integrated into their basic
salary by virtue of RA NO 6758.

Section 12 has never been ineffective or rendered unconstitutional. Thus, all allowances not
covered by exceptions to section 12 are presumed to have been integrated into the basic
standardized pay. The receipt of a transition allowance is not proof that only those who are
hired before July 1 1989 received their COLA and A. The transition allowance was only given
to comply with the non-dimunition clause of law. It was never meant as an additional
compensation.

As basis for computation of the first across-the-board salary adjustment of incumbents with
transition allowance, no incumbent who is receiving compensation exceeding the standardized
salary rate at the time of the effectivity of this Act, shall be assigned a salary lower than ninety
percent (90%) of his present compensation or the standardized salary rate, whichever is higher.
Subsequent increases shall be based on the resultant adjusted salary.

Upon the implementation of Republic Act No. 7648, NAPOCOR workers were covered by a
new compensation plan. All prior questions on the non-publication of Department of Budget
and Management Corporate Compensation Circular No. 10 would no longer apply to the
determination of whether COLA and AA were withheld. Furthermore, the new compensation
plan under Republic Act No. 7648 already incorporated all benefits previously integrated,
including the COLA and AA.chanRoblesvirtualLawlibrary

The enactment of Republic Act No. 7648, or the Electric Power Crisis Act of 1993 authorized
the President of the Philippines to reorganize NAPOCOR and to upgrade its compensation
plan. From this period, NAPOCOR ceased to be covered by the standardized salary rates of
Republic Act No. 6758.
 PEOPLE OF THE PHILIPPINES V ERLINDA A. SISON
GR NO. 187160

FACTS:

Darvy Castuera was introduced to Sison who has a wife that he mentioned who can facilitate
papers for workers in Australia. Sison asked Castuera for 180, 000 for processing his papers
and after some negotiations Sison agreed to lower the fee to 160,000. Castuera paid the half
and the other half will be taken away from his salary in Australia. However, Sison failed to
secure an Australian visa for Castuera. She advised Castuera to got o Malaysia since it is easier
according to her to get an Australian visa in Malaysia. Upon arrival in Malaysia, Castuera met
Rea Dedales and Leonardo Bacomo (co-accused of Castuera).

Castuera’s application for visa was again, denied. Dedales said that it was harder to get an
Australian visa from Indonesa and told Castuera to apply for US visa. Dedales asked for 1000
USD which he paid. However, when his US Visa came it as an Indonesian passport bearing
and Indonesian name. He decided to seek help and just return to the Philippines. Castuera filed
a case against Sison, Dedales and Bacomo at POEA. POEA verified that the three has no license
or permit to hire and recruit overseas employment.

Sison denies that she is an illegal recruiter and alleged that she was also a victim of Dedales
and Bacomo.

ISSUE:

WON Sison, Dedales and Bacomo violated Article 13 of PD 442?

RULING:

RA 8042 or the Migrant Workers and Overseas Filipinos Act of 1995, approved on 7 June
1995, further strengthened the protection extended to those seeking overseas employment.
Section 6, in particular, extended the activities covered under the term illegal recruitment:

ILLEGAL RECRUITMENT

Sec. 6. DEFINITIONS. - For purposes of this Act, illegal

recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, procuring workers
and includes referring, contact services, promising or advertising
for employment abroad, whether for profit or not, when
undertaken by a non-license or non-holder of authority
contemplated under Article 13(f) of Presidential Decree No. 442,
as amended, otherwise known as the Labor Code of the
Philippines. Provided, that such non-license or non-holder,
who, in any manner, offers or promises for a fee employment
abroad to two or more persons shall be deemed so engaged. It
shall likewise include the following acts, whether committed by
any persons, whether a non-licensee, non-holder, licensee or
holder of authority.
Illegal recruitment is deemed committed by a syndicate carried out by a group of three
(3) or more persons conspiring or confederating with one another. It is deemed committed
in large scale if committed against three (3) or more persons individually or as a group.

The persons criminally liable for the above offenses are the principals, accomplices and
accessories. In case of juridical persons, the officers having control, management or direction
of their business shall be liable. It is "committed by persons who, without authority from the
government, give the impression that they have the power to send workers abroad for
employment purposes."

In this case, Sison herself admits that she has no license or authority to undertake recruitment
and placement activities'. The Court has held in several cases that an accused who represents
to others that he or she could send workers abroad for employment, even without the authority
or license to do so, commits illegal recruitment. It is the absence of the necessary license or
authority to recruit and deploy workers that renders the recruitment activity unlawful. To prove
illegal recruitment, it must be shown that "the accused gave the complainants the distinct
impression that she had the power or ability to deploy the complainants abroad in a manner
that they were convinced to part with their money for that end."

On the other hand, illegal recruitment committed by a syndicate, as in the present case, has the
following elements: (a) the offender does not have the valid license or authority required by
law to engage in recruitment and placement of workers; (b) the offender undertakes any of the
"recruitment and placement" activities defined in Article 13(b) of the Labor Code, or engages
in any of the prohibited practices enumerated under now Section 6 of RA 8042; and (c) the
illegal recruitment is "carried out by a group of three or more persons conspiring and/or
confederating with one another in carrying out any unlawful or illegal transaction, enterprise
or scheme."In the third element, it "is not essential that there be actual proof that all the
conspirators took a direct part in every act. It is sufficient that they acted in concert pursuant to
the same objective."

The acts of Sison, Dedales, and Bacomo show a common purpose and and each undertook a
part to reach their objective. Their concerted action is evident in that either Sison or Dedales
was receiving payments from the recruits; that Dedales signed the acknowledgment receipt
from Sison; and that the three accompanied their recruits together in seeking out their visas in
Malaysia and Indonesia. Further, the impression given to Castuera and other recruits was that
the three were indeed working together.

Since it was proven that the three accused were acting in concert and conspired with one
another, their illegal recruitment activity is considered done by a syndicate, making the offense
illegal recruitment involving economic sabotage. Hence, Santos, Dedales and Bacomo are
guilty of illegal recruitment.
SEPTEMBER
2017
 CUTANDA VS. MARLOW NAVIGATION PHILS., INC.,
839 SCRA 272, G.R. No. 219123 September 11, 2017

Fact:

Petitioner was hired by respondent MNPI to work as a Key Able Seaman onboard vessel MV
“Malte Rambow”. On April 3, 2012, petitioner had an accident aboard the vessel while
performing his duties at the Port in Malaysia so he was medically repatriated and arrived in the
Philippines on that same day. He immediately reported to the respondent MNPI’s office and
was referred to Notre Dame Medical Clinic. Petitioner then underwent continuous physical
therapy for a period of six (6) months from the time of the occurrence of the accident and was
still found to be unfit to work. However, petitioner’s condition did not improve and he could
not return to his work. Hence, he demanded from the respondents that he be paid his disability
benefits, but to no avail. Respondents even stopped providing medical attention to petitioner
after the lapse of 120 days and also refused to shoulder the expenses incurred for the medicine
of petitioner.

Aggrieved, petitioner filed a complaint for payment of total disability benefits, reimbursement
of medical expenses, sick allowance, moral and exemplary damages and attorney’s fees.

The Labor Arbiter, which affirmed by NRLC, decided in favor of petitioner. According to the
ruling, the respondents were mistaken in their notion that in determining the disability benefits
due a seafarer, only the POEA-SEC, specially its schedule of benefits, must be considered.
Such is governed not only by medical findings but by contract and law. The Labor Arbiter
found that the conflicting diagnoses were rendered, not by the company physician and the
physician chosen by the petitioner, but by the company physician and his “Iloilo coordinating
physician and surgeon.” It must be noted that the company physician declared that the
complainant suffered a Grade 10 disability 126 days after petitioner signed off from the vessel,
while the “Iloilo coordinating physician” declared him to be unfit to work exactly 240 days
after sign-off.

However, CA ruled that the company-designated physician was able to make a determination
that petitioner has a Grade 10 disability within the 240-day period from the time he suffered
his injury, thus, such declaration effectively prevented petitioner’s temporary disability from
becoming permanent. It also held that based on the POEA-SEC, disability payments are
compensated in accordance with the schedule of benefits enumerated under Section 32 thereof.
Furthermore, the CA ruled that without successfully refuting the medical assessment of Dr.
Hosaka by making use of the option provided for under Section 20(A)(3) of the POEA-SEC,
petitioner’s claim must necessarily fail. As such, the CA opined that since the POEA-SEC
expressly states that any item in the schedule of disabilities under Section 32 with a
classification Grade 1 shall be considered and shall constitute total and permanent disability,
then all other grades, including the diagnosis of Dr. Hosaka that petitioner is suffering from
Grade 10 disability cannot be considered total and permanent. It then added that injuries
classified under Grade 1 disabilities are more severe and traumatic, and more pervasive in its
effects and that needless to state, the severity of the injuries classified under Grade 1 will
indubitably and completely render the worker incapable of earning livelihood from a job he is
accustomed to is trained to perform, thus, the CA is not prepared to put in equal footing
petitioner with those who suffered far worse, and to award him the same amount of benefits
intended to those who are clearly and irrefutably, totally and permanently disabled.
Issue:

Whether or not Seaman Cutanda did not suffer Permanent Total Disability despite the fact that
he has been unable to return to his work as seaman for more than 240 days.\

Ruling:

In situations where the seafarer seeks to claim the compensation and benefits that Section 20-
B grants to him, the law requires the seafarer to prove that: (1) he suffered an illness; (2) he
suffered this illness during the term of his employment contract; (3) he complied with the
procedures prescribed under Section 20-B; (4) his illness is one of the enumerated occupational
disease or that his illness or injury is otherwise work-related; and (5) he complied with the four
conditions enumerated under Section 32-A for an occupational disease or a disputably-
presumed work-related disease to be compensable.

In Marlow Navigation Philippines, Inc. v. Osias, 775 SCRA 342 (2015), this Court expounded
on the 120-day and 240-day periods, thus: As early as 1972, the Court has defined the term
permanent and total disability in the case of Marcelino v. Seven-Up Bottling Co. of the Phil.,
in this wise: “permanent total disability means disablement of an employee to earn wages
in the same kind of work, or work of similar nature that he was trained for, or accustomed
to perform, or any other kind of work which a person of his mentality and attainments
could do.” The present controversy involves the permanent and total disability claim of a
specific type of labourer — a seafarer.

Indeed, under Section 32 of the POEA-SEC, only those injuries or disabilities that are classified
as Grade 1 may be considered as total and permanent. However, if those injuries or disabilities
with a disability grading from 2 to 14, hence, partial and permanent, would incapacitate a
seafarer from performing his usual sea duties for a period of more than 120 or 240 days,
depending on the need for further medical treatment, then he is, under legal contemplation,
totally and permanently disabled. In other words, an impediment should be characterized as
partial and permanent not only under the Schedule of Disabilities found in Section 32 of the
POEA-SEC but should be so under the relevant provisions of the Labor Code and the Amended
Rules on Employee Compensation (AREC) implementing Title II, Book IV of the Labor Code.
That while the seafarer is partially injured or disabled, he is not precluded from earning doing
the same work he had before his injury or disability or that he is accustomed or trained to do.
Otherwise, if his illness or injury prevents him from engaging in gainful employment for more
than 120 or 240 days, as the case may be, he shall be deemed totally and permanently disabled.
Moreover, 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.
 ORIENTAL SHIPMANAGEMENT CO., INC. VS. OCANGAS
G.R. No. 226766; September 27, 2017

FACTS:

Respondent was hired as a Pumpman and was deployed. Prior to his employment, Respondent
underwent a preemployment medical examination (PEME) and was declared fit to work.

One day, while on duty, Respondent suffered a broken spine and felt extreme pain on his lower
back and numbness on his lower extremities. Respondent was diagnosed to be suffering from
“Osteochondrosis, Regiolumbalis.”

Respondent’s condition did not improve despite medical attention. Thus, on August 20, 2012,
Respondent was recommended to be repatriated to obtain further medical treatment.

Upon his repatriation, Respondent immediately reported to Petitioner which then referred him
to the company’s accredited physician. Respondent was declared by Dr. William Chuasuan, to
have reached the maximum medical cure with Grade 11 disability impediment for 1/3 loss of
lifting power and per the POEA-Standard Employment Contract (POEA-SEC) Schedule of
Benefits, entitled to US$7,465.

Respondent filed a Complaint against Petitioner for recovery of permanent total disability
benefits, refund of medical expenses, sickness allowance, and claim for damages.

Respondent sought the medical opinion of Dr. Marcelino Cadag, an orthopedic surgeon and
recommended that the Respondent undergo further therapy and a different diagnosis was seen
in him was declared no longer fit for sea duty or for any work aboard seafaring vessel given
his medical condition.

The LA’s Decision

The LA rendered his Decision16 granting the Complaint and held that the company-designated
physician does not have the exclusive prerogative in the determination and assessment of the
illness and/or injury of the seafarer. As such, the findings of the company-designated physician
should not be taken as the only primary consideration, especially where there is a contrary
opinion as in the instant case.

The NLRC’s Decision

The NLRC claimed that even if it considers the medical certificate issued by the Respondent’s
doctor, it is still bound to uphold the Grade 11 disability assessment of the company-designated
physician, as the latter is in a far better position to assess the Respondent.

The NLRC also ruled that contrary to the LA’s determination, the mere fact that more than 120
days elapsed since the Respondent’s repatriation without him resuming from work as a seafarer
does not automatically warrant the award of permanent total (Grade 1) disability benefits.
Respondent filed motion for reconsideration but the same was denied. Respondent then filed a
petition for certiorari with the CA.

The CA’s Decision

According to the CA, the NLRC closed its eyes to the fact that since Respondent was
repatriated on September 4, 2012 up to the time he filed his complaint on January 24, 2013,
more than 120 days has elapsed during which the Respondent was medically treated and unable
to perform his duties as pumpman onboard any sea vessel.
Petitioners sought a reconsideration denied.

ISSUE:

Whether Respondent is entitled to the payment of permanent total disability benefits or to that
which corresponds to Grade 11 disability in accordance with the assessment of the company-
designated physician.

HELD:

The petition is meritorious.

The CA, relied primarily doctrine laid down in Crystal Shipping and other jurisprudence that
permanent and total disability consists mainly in the inability of the seafarer to perform his
customary work for more than 120 days.

The Court clarified that if the complaint for maritime disability compensation was filed prior
to October 6, 2008, the 120-day rule enunciated in Crystal Shipping applies. However, if such
complaint was filed from October 6, 2008 onwards, as in the case at bar where the Complaint
was filed by the Respondent on January 24, 2013, the 240-day rule provided in the case of
Splash Philippines, Inc. and clarified in the case of Vergara v. Hammonia Maritime Services
Inc., applies.

Harmonizing the provisions of the POEA-SEC, Labor Code, and the Rules on Employee
Compensation, the Court discussed in the case of Vergara v. Hammonia Maritime Services,
Inc. that:

Simply stated, a seafarer is conclusively presumed to be totally and permanently disabled when
the company-designated physician fails to make a declaration regarding the seafarer’s fitness
or status of disability within the specified 120 or 240-day periods. “On the other hand, if the
company-designated physician declares the seaman fit to work within the said periods, such
declaration should be respected unless the physician chosen by the seaman and the doctor
selected by both the seaman and his employer declare otherwise.”

In this case, immediately after he was medically repatriated and the Court is bound by the
Grade 11 disability grading and assessment by the company-designated physician rendered
within the specified period, as Respondent never questioned such diagnosis in accordance with
the procedure set forth under the POEA-SEC nor contested the company-designated
physician’s competence and filed a Complaint for permanent total disability benefits, which
took him two (2) months before he submitted himself for examination by a physician of his
choice, who then issued a permanent and total disability (Grade 1) rating.

The POEA-SEC clearly provides that when the seafarer disagrees with the findings of the
company-designated physician, he has the opportunity to seek a second opinion from the
physician of his choice. If the physician appointed by the seafarer disagrees with the assessment
of the company-designated physician, the parties may agree to jointly refer the matter to a third
doctor, whose decision shall be binding between them. Ultimately, the failure of the
Respondent to follow this procedure is fatal and renders conclusive disability rating issued by
the company-designated physician.

While it is true that the provisions of the POEA-SEC must be construed logically and liberally
in favor of Filipino seamen in pursuit of their employment onboard ocean-going vessels51
consistent with the State’s policy to afford full protection to labor, the same must be weighed
in accordance with the prescribed laws, procedure, and provisions of contract freely agreed
upon by the parties, and with utmost regard as well of the rights of the employers.

In the instant case, compelling the Court to consider the opinion rendered by Respondent’s
physician of choice, submitted two (2) months after the filing of the complaint, would
undermine the right of the Petitioners to refute the findings and avail of the option to jointly
refer with the Respondent the disputed diagnosis to a third doctor of the parties’ choice, as
agreed upon by the parties under the POEA-SEC.

WHEREFORE, in consideration of the foregoing disquisitions, the instant petition for review
on certiorari is GRANTED. The Decision and Resolution of the Court of Appeals are hereby
REVERSED and SET ASIDE. The Decision of NLRC is hereby REINSTATED.
 C.F. SHARP CREW MANAGEMENT VS. ORBETA
G.R. No. 211111; September 25, 2017

FACTS:

On June 11, 2009, respondent Noel N. Orbeta was hired by petitioner C.F. Sharp Crew
Management, Inc. (CF Sharp), on behalf of its foreign principal and co-petitioner herein, Gulf
Energy Maritime (GEM), as Able Seaman on board the vessel "M/T Gulf Coral". He boarded
on September 9, 2009 and commenced his work. While on duty, respondent, as he was closing
the vessel's air valve, slipped and fell on his back, and landed on the vessel's metal floor. After
conducting a medical examination, respondent was diagnosed with acute lumbago and
recommended for immediate repatriation. On February 10, 2010, respondent was repatriated
and, upon arrival, he immediately reported for postemployment examination and treatment to
the company-designated physician. He was placed under the care of an orthopedic surgeon,
who found him to be suffering from "compression fracture, L1, minimal." As a result,
respondent underwent physical therapy to rehabilitate his back, and was advised to wear a
lumbar corset and undergo magnetic resonance imaging (MRI) of the lumbosacral spine. On
June 16, 2010, after the MRI results came out, respondent was temporarily diagnosed with
"lumbosacral muscular spasm with mild spondylosis L3-L4;" the company-designated
physician also concluded that there was no compression fracture, contrary to what was initially
suspected. Respondent was thus given a Grade 10 partial disability rating pertaining to
moderate rigidity of the truncal area. On July 16, 2010, respondent failed to appear before the
company physician for the scheduled bone scan; instead, it appears that he consulted with an
independent orthopedic surgeon who prepared and signed a "Disability Report" wherein he was
given a permanent disability and unift for sea-duty in whatever capacity as a seaman.

Respondent filed a complaint for payment of permanent and total disability benefits, medical
expenses, damages, and attorney's fees against petitioners before the NLRC. Respondent
claimed that his work-related spinal injury entitles him to permanent and total disability and
other benefits afforded him under his Philippine Overseas Employment Administration
(POEA) Standard Employment Contract. Petitioners sought dismissal of the complaint, arguing
that respondent is not entitled to his claim of permanent total disability benefits, in view of the
company- designated physician's final and binding Grade 10 assessment; that respondent
abandoned his treatment, which was still ongoing when he filed the labor case; yet by
abandoning his treatment and violating the POEA contract, respondent should be held
responsible and is not entitled to disability and other benefits, damages, and all other claims,
and for this reason, respondent's case should be dismissed; that respondent's resort to an
independent physician who arrived at a contrary finding entitled petitioners to secure the
opinion of a third doctor, pursuant to Section 20-B(3) of the POEA contract,20 which could no
longer be done in view of the filing of the labor case, and for this reason, the opinion of the
company-designated physician should instead prevail; that respondent's back pain does not
deserve a Grade 1 rating under Section 32 of the POEA contract, as it is not severe and did not
render him completely immobile or paralyzed. Labor Arbiter granted the disability benefits in
favor of respondent. Petitioners took the matter
before the NLRC but their appeal is denied.

Petitioners thus filed a Petition for Certiorari before, questioning the NLRC's pronouncements.
But their petition was also denied and affirmed Labor Arbiter and NLRC’s ruling.
ISSUES:

1. Whether or not CA committed serious error when it held that respondent is entitled to
permanent total disability benefits.

2. Whether or not respondent violated his obligations under the POEA-SEC because he
inexplicably abandoned his treatment with the company-designated doctors.

HELD:

1. Yes. An employee's disability becomes permanent and total [only 1)] when so declared by
the company-designated physician, or, [2)] 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 periods,
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.'

The 'mere lapse of the 120-day period itself does not automatically warrant the payment of
permanent total disability benefits.

For a little over 120 days, respondent underwent treatment by the companydesignated
physician. On June 16, 2010, he was partially diagnosed with "lumbosacral muscular spasm
with mild spondylosis L3-L4;" the company physician also concluded that there was no
compression fracture, and respondent was told to return for a scheduled bone
scan. However, instead of returning for further diagnosis and treatment, respondent opted to
secure the opinion of an independent physician of his own choosing who, although arriving at
a finding of permanent total disability, nonetheless required respondent to subject himself to
further Bone Scan and Electromyography and Nerve Conduction Velocity tests "to determine
the exact problem on his lumbar spine." Instead of heeding the recommendations of his own
doctor, respondent went on to file the subject labor complaint.

The company-designated physician and Dr. Escutin are one in recommending that respondent
undergo at least a bone scan to determine his current condition while undergoing treatment,
thus indicating that respondent's condition needed further attention. In this regard, petitioners
are correct in arguing that respondent abandoned treatment, as under the law and the POEA
contract of the parties, the company physician is given up to 240 days to treat him.

2. Yes. Michael's claim that requiring him to await the medical assessment of Dr. Cruz
would mean that his fate would unduly rest in the hands of the company doctor does not
persuade. Worthy of note is that the company- designated physician is mandated under the law
to issue a medical assessment within 240 days from the seafarer's repatriation. It is, therefore,
incorrect to conclude that a seafarer is at the mercy of the company doctor.

Thus, without any disability assessment from Dr. Cruz, Michael's claim for disability
compensation cannot prosper. Section 20(D) of the POEA-SEC instructs that no compensation
and benefits shall be payable in respect of any injury, incapacity, disability or death of the
seafarer resulting from his willful or criminal act or intentional breach of his duties. Michael
was duty-bound to complete his medical treatment until declared fit to work or assessed with a
permanent disability grading. It is undisputed that Michael did not undergo further treatment.
Such a refusal negated the payment of disability benefits.
OCTOBER
2017
 OSG SHIP MANAGEMENT MANILA, INC. VS. MONJE
G.R. No. 214059; October 11, 2017
FACTS:

Aris Wendel R. Monje is a Filipino seafarer, who signed a Contract of Employment with
petitioner OSG Ship Management (UK) Ltd. (OSG UK), through its manning agent in the
Philippines, OSG Ship Management Manila, Inc. (OSG Manila). On February 11, 2011, the
respondent boarded the vessel "Overseas Sifnos." Sometime in June of the same year, and while
on board the vessel, the respondent complained of severe pain on his left knee, which prompted
him to seek medical consult in the United States of America on June 23, 2011. He was
repatriated back to the Philippines two (2) days later for further treatment. Upon his arrival,
OSG Manila referred the respondent for medical treatment. On June 28, 2011, Dr. Raymund
Jay Sugay (Dr. Sugay) of the Physician's Diagnostic Services Center, Inc. issued a medical
evaluation certificate, indicating therein a working diagnosis of "left knee pain, etiology
unknown." Dr. Sugay performed the necessary surgery on the knee of Monje. Also included in
this report was Dr. Sugay's opinion that the respondent's illness was not work-related. The
respondent filed the complaint before the Labor Arbiter seeking the payment of total and
permanent disability benefits, damages and attorney's fees. An independent physician, Dr.
Ticman, issued a Medical certificate finding that the former's illness rendered him permanently
disabled and unfit to work as a seaman in any capacity. The Labor Arbiter issued a Decision in
favor of herein respondent. Herein petitioners appealed the decision of the Labor Arbiter to the
NLRC, which found the case in their favor and subsequently reversed the Labor Arbiter ruling.
Aggrieved, the respondent appealed the case to the CA. Once more, the decision was reversed.
The NLRC decision was set aside and the Decision of the Labor Arbiter was reinstated in favor
of respondent. Hence, this petition.

ISSUE:

Whether or not the illness sustained by Respondent Monje is work-related.

HELD:

NO. The illness is not work-related. The Court pointed out that the diagnosed illness of the
respondent was "Giant cell tumor, proximal tibia, left knee." How the foregoing harsh
conditions caused the illness, or even how they aggravated the same, was never explained.
Indeed, it is as if the respondent merely enumerated the difficult conditions experienced by a
seafarer, and just left it to the Court to infer any connection that the conditions may have to the
diagnosed illness. In fact, by the way that the respondent argued his case, it would appear that
the same conditions could cause any and all conceivable illness that a seafarer may contract.
The respondent made a litany of factors that were attendant in his work as an ordinary seaman,
but none proves any reasonable connection between the illness and the factors mentioned. It is
not hard to conclude then that these are self-serving assertions that deserve scant consideration.
While the Court is wary of the principle that provisions of the POEA-SEC must be applied
with liberality in favor of the seafarers, the Court has not hesitated in the past to deny a
seafarer's disability claims when the same were anchored on flimsy grounds and unfounded
allegations. According to Cagatin v. Magsaysay Maritime Corporation, "claims for
compensation based on surmises cannot be allowed; liberal construction is not a license to
disregard the evidence on record or to misapply the laws. This Court abides by the principle
that justice is in every case for the deserving, to be dispensed with in the light of established
facts, the applicable law, and existing jurisprudence." In a long line of cases, the Court has oft-
repeated that for an illness or injury to be compensable, Section 20(B) of the 2000 POEA-SEC,
now Section 20(A) of the 2010 POEA-SEC, requires that two elements must concur: (1) the
injury or illness must be work-related; and (2) the work-related injury or illness must have
existed during the term of the seafarer's employment contract. In the case at hand, the Court
finds that no substantial evidence of work relation has been proven to exist between the
diagnosed illness and the respondent's work.
DOHLE PHILMAN MANNING AGENCY, INC., DOHLE (IOM) LIMITED AND/OR
CAPT. MANOLO T. GACUTAN
VS.
JULIUS REY QUINAL DOBLE
G.R. No. 223730; October 4, 2017
----------------------------------------------------------------------------------------------------------
JULIUS REY QUINAL DOBLE
VS.
DOHLE PHILMAN MANNING AGENCY INC., DOHLE (IOM) LIMITED AND OR
CAPT. MANOLO T. GACUTAN
G.R. No. 223782; October 4, 2017

FACTS:

Julius Rey Doble is a seafarer who signed a Contract of Employment for the position of
Ordinary seaman with DOHLE Penned by Associate Justice (IOM) Limited through its
manning agent in the Philippines. The duration of the contract was nine months. The contract
specified a 44-hour work week. On December of the same year, Doble accidentally stepped on
a mooring line while preparing to heave the same. As a result, he twisted his right foot and
immediately fell on the floor. He reported to the ship doctor and was declared fit to work. A
few months after, the respondent alleged another incident. He was pulling on the tug line, it
suddenly moved causing his hands to get pulled hitting the bitts boliard. He was referred for a
medical consult upon arriving in Hong Kong. On April 11, 2013, he was repatriated back to
the Philippines for medical reasons. A day after his arrival, medical tests were conducted upon
the respondent who was then diagnosed with “Right ankle sprain; Carpal Tunnel Syndrome,
Bilateral; and Osteochondral Defect Femoral Trachlea, Right Knee.” He underwent surgery for
the injury and physical therapy thereafter. The company designated physician issued a medical
report stating that according to the respondent’s surgeons, he is fit to work in relation to his
“Carpal Tunnel Syndrome” and his ankle sprain. The respondent sought his own medical expert
and another opinion on his condition. Upon examination and evaluation, Dr. Manuel fidel
Magtira issued a medical report stating that the respondent has lost his pre-injury capacity and
is no longer capable of working on his previous occupation because of the injuries sustained
and the permanent sequelae of said injury and thus he is now permanently disabled and is
therefore now permanently unfit in any capacity to resume his usual sea duties. Doble insisted
on his disability benefits including expenses for medical treatment and transportation. The
manning agency refused. This prompted the respondent to file the case before the Labor
Arbiter. The Labor Arbiter rendered a decision finding Doble permanently and totally disabled
and thus entitled to disability compensation. The Manning Agency appealed to the NLRC
which affirmed in toto the LA decision. The petitioners elevated the case to the CA. The CA
affirmed the NLRC Decision but modified the basis of the award of damages from the
Collective Bargaining Agreement to the POEA-SEC. Both parties filed their respective
motions for reconsideration which were both denied by the CA. Hence, this petition.

ISSUE:

Whether the respondent is entitled to permanent total disability benefits on the basis of his
alleged inability to resume employment for a period of 120 days which the PEOA-SEC no
longer recognize as a valid measure of a seafarer’s degree of disability
HELD:

No. While there is nothing inherently wrong in seeking a second opinion on the medical
assessment of the seafarer, the latter should not pre-empt the mandated procedure provided for
in Section 20 of the POEA-SEC "by filing a complaint for permanent disability compensation
on the strength of his chosen physicians' opinions, without referring the conflicting opinions to
a third doctor for final determination."

A temporary total disability only becomes permanent when so declared by the company
physician within the periods he is allowed to do so, or upon the expiration of the maximum
240-day medical treatment period without a declaration of either fitness to work or the
existence of a permanent disability. In the present case, while the initial 120-day treatment or
temporary total disability period was exceeded, the company-designated doctor duly made a
declaration well within the extended 240-day period that the petitioner was fit to work.

Two things must be said of this factual finding: first, the company-designated physician
complied with the requirements of the law when the respondent's medical status was assessed
with finality prior to the expiration of the 240-day rule; and second, the 240-day rule applies
only to the assessment provided by the company-designated physician, and not to the
assessment of the seafarer's personal physician, such that, even if the latter found the seafarer
unfit to work after the 240-day period, the law would not automatically transform the temporary
total disability of the seafarer to a permanent total disability.

Hence, for the foregoing reasons, the Court hereby reverses the appellate court's decision and
declares the assessment of the company-designated physician as final and binding.
Consequently, the respondent is considered fit to work, and thus not entitled to disability
benefits.
 CAREER PHILIPPINES SHIP MANAGEMENT, INC. VS. GODINEZ
G.R. No. 206826; October 2, 2017

FACTS:

Eduardo J. Godinez (Godinez) was hired by local manning agency Career Philippines
Shipmanagement, Inc. (Career), for its foreign principal Columbian Shipmanagement, Ltd.
(Columbian). He was assigned as Deck Cadet onboard the vessel “M/V Norviken.” His nine-
month stint, covered by a Philippine Overseas Employment Administration (POEA) Standard
Employment Contract,5 began on November 7,2003. Godinez was 20 years old at the time.

Prior to his employment, Godinez underwent a pre-employment medical examination (PEME)

consisting of a physical medical examination and psychological evaluation, involving an
intelligence and personality test, after which he was declared fit to work. Particularly,
Godinez’s Psychological Evaluation revealed “no significant manifestation of personality and
mental disturbances noted at the time of evaluation.”

On November 13, 2003, Godinez boarded “M/V Norviken” and commenced his work.

On the evening of December 17, 2003, just before the start of his look-out duty at midnight,
Godinez failed to wake up despite attempts by the crew to rouse him from sleep. As a result,
his superior, Second Officer Antonio Dayo (Dayo) took his place and acted as look-out,
together with the outgoing look-out. For this, Dayo became strict with Godinez, requiring the
latter, as punishment, to clean toilets instead of performing his regular look-out duty; Dayo
became rude, always finding fault and humiliating, accusing, shouting, insulting, nagging, and
snapping at Godinez, who was also prevented from preparing his food for breakfast and snacks.
On January 10, 2004, Godinez was repatriated, and was referred to and confined at Sachly
International Health Partners, Inc. The resulting Initial Medical Report on Godinez’s case,
which was unsigned, contains an admission made by the latter that when he was 15 years old,
he began to have episodes of insomnia and paranoia, for which he sought psychiatric evaluation
and management.

On January 22 and 23, 2004, Godinez underwent psychological tests.

On February 6, 2004, a report was issued which confirmed that Godinez was suffering from
bipolar disorder, which “has a good prognosis with adequate treatment” but “is not an
occupational related illness.”

Godinez sought to be re-hired and re-engaged by Career, but he was denied. He sought to be
hired by other manning agents as well, but he was rejected just the same.

ISSUE:

Whether or not the Court of Appeals gravely abused its discretion in modifying and reducing
the amount of damages.

HELD:

Yes. Workers are not robots built simply for labor; nor are they machines that may be turned
on or off at will; not objects that are conveniently discarded when every ounce of efficiency
and utility has been squeezed out of them; not appliances that may be thrown away when they
conk out. They are thinking and feeling beings possessed of humanity and dignity, worthy of
compassion, understanding, and respect.

We find that the handwritten listing and unsigned computer print-outs were unauthenticated
and, hence, unreliable. Mere self-serving evidence of which the listing and print-outs are of
that nature should be rejected as evidence without any rational probative value even in
administrative proceedings. Thus, there could be no fraudulent concealment on Godinez’s part.
On the other hand, the Court believes that Godinez was unjustifiably maltreated by his superior,
2nd Officer Dayo.

The Court concludes that Godinez’s grave illness was directly caused by the unprofessional
and inhumane treatment, as well as the physical, psychological, and mental abuse inflicted
upon him by his superiors, aggravated by the latter’s failure and refusal to provide timely
medical and/or professional intervention, and their neglect and indifference to his condition
even as it was deteriorating before their very eyes.

The Court finds as well that Godinez suffered permanent total disability, as there has been no
definite medical assessment by the company-designated physician regarding his condition-
even up to now.
NOVEMBER
2017
 JOLO'S KIDDIE CARTS/ FUN4KIDS/CABILI VS. CABALLA
G.R. No. 230682; November 29, 2017

FACTS:

Respondents and Colisao filed a complaint for illegal dismissal, underpayment of

salaries/wages and 13th month pay, non-payment of overtime pay, holiday pay, and separation
pay, damages, and attorney's fees. They alleged that petitioners hired them as staff members in
the latter's business. Caballa and Bautista were assigned to man petitioners' stalls in SM Bacoor
and SM Rosario in Cavite, respectively, while Colisao was assigned in several SM branches,
the most recent of which was in SM North EDSA. They were paid a daily salary that reached
₱330.00 for a six (6)-day work week from 9:45 in the morning until 9:00 o'clock in the evening.
They claimed that they were never paid the monetary value of their unused service incentive
leaves, 13th month pay, overtime pay, and premium pay for work during holidays; and that
when petitioners found out that they inquired from the Department of Labor and Employment
about the prevailing minimum wage rates, they were prohibited from reporting to their work
assignment without any justification. Petitioners denied dismissing respondents and Colisao,
and maintained that they were the ones who abandoned their work.

LA ruled that they were dismissed without just cause nor due process. On appeal, NLRC
reversed the decision and ordered petitioners to reinstate respondents to their former or
substantially equivalent positions without loss of seniority rights and privileges; deleted the
awards for payment of backwages, separation pay, and moral and exemplary damages.
Petitioner’s directly filed a petition for certiorari with the CA but denied the same for failure
to file a motion for reconsideration before the NLRC.

ISSUES:

Whether or not the respondents are entitled to their money claims

HELD:

Yes, the NLRC properly observed that petitioners failed to show that payment has been made.
As such, they must be held liable for the same. It is well-settled that "with respect to labor
cases, the burden of proving payment of monetary claims rests on the employer, the rationale
being 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 worker but in the custody
and absolute control of the employer. Caballa is entitled to wage differential and 13th month
pay in the amounts of ₱75,156.12 and ₱10,608.00, respectively; while (b) Bautista's entitlement
to such claims are in the amounts of ₱74,480.12 and ₱10,608.00, respectively.
 MAERSK-FILIPINAS CREWING, INC. VS. MALICSE
G.R. Nos. 200576 & 200626; November 20, 2017

FACTS:

For the tenth time, Efren was employed as an able-bodied seaman by petitioner AP Moller
Singapore Pte., Ltd. for a term of nine months through its agency, Maersk-Filipinas Crewing,
Inc. At the time of his employment, he had already passed his pre-employment medical
examination and was declared fit to work. Under a duly approved POEA Contract with an
overriding collective bargaining agreement entered between the company and the Singapore
Organization of Seamen (SOS). During the term of his employment, the seafarer did due to
multiple organ failure secondary to Septicemia or severe blood poisoning or infection.

The company offered to compensate the heirs with US$40,000 which is half of the death
benefits under the SOS CBA. This was rejected by the heirs and instead, they claimed benefits
under the International Transport Workers Federation (ITF) Agreement in the amount of US$
82,500.

The claim of the heirs was favoured by the Labor Arbiter, the NLRC and the Court of Appeals
where the award of death benefits was based on the ITF Agreement. The CA echoed the
appreciation of the NLRC that employers have the burden of proof in bowing that the seafarer
died from a non-compensable illness. Based on the records, the appellate court ruled that
petitioners had failed to show that they were not liable to pay respondent's claims for death
benefits. Petitioners and respondent unsuccessfully moved for reconsideration. Petitioners have
therefore filed the instant Petition for Review on Certiorari, questioning the grant of death
benefits and damages, as well as the applicability of the ITF Agreement. Respondent has
waived her right to comment on this petition.

ISSUES:
1. Which contract will apply in claiming seafarer’s death benefits? CBA.

2. Whether the claimants have proven the requisites of compensability under Sec. 32-A of the
POEA-SEC?

HELD:

1. The Court explained that entitlement to benefits of seafarers on overseas work is a matter
governed not only by medical findings, but also by law and contract. By contract, the POEA
Contract and the CBA bind seafarers and their employers. An overriding instrument, such an
ITF Agreement, also forms part of the covenants of the parties to each other if applicable.

Here, the ITF Agreement presented states that if a seafarer dies through any cause during
employment, the heirs shall be entitled to US$82,500 death benefits. The ITF agreement
likewise states that it is only applicable if there is a “Special Agreement” made between the
union, which is an affiliate of the ITF and the company. The Court, after perusing the evidence
of the parties failed to see any Special Agreement between the SOS union and the company to
make the ITF Agreement applicable to them. As such, the claim based on the ITF Agreement
was disregarded.
As the ITF Agreement is not an overriding instrument in this case, the Court then compared
the provisions of the POEA Contract and the CBA to determine which among them is more
beneficial to the heirs.

The POEA Contract provides that in case of the work-related death of a seafarer during the
term of his contract, the employer shall pay his beneficiaries, among others, US$50,000 death
benefits. On the other hand, the CBA states that the company shall pay compensation to a
seafarer for any death arising from an accident equivalent to US$80,000. It is further provided
that if a seafarer dies from natural causes or illness while in the employment of the Company,
the Company shall pay fifty percent of the quantum payable for death.

Comparing the relevant provisions, the SOS CBA clearly provides higher death benefits of
US$80,000. However, the cause of death of the seafarer must be due to an accident; otherwise,
his beneficiaries would receive only US$40,000. That amount is lower than the benefit granted
by the POEA Contract, which is US$50,000. But before beneficiaries may receive
compensation under the POEA Contact there must be substantial evidence that the seafarer
died of a work-related illness. Thus, the heirs are entitled to the more beneficial provision of
the POEA Contract if his death is proven to have been work-related. Otherwise, the SOS CBA’s
provision on the grant of USD 40,000 regardless of the cause of death will apply.

2. No. The heirs failed to satisfy the required positive propositions on compensability. First,
the tasks performed by the seafarer on-board were not discussed. In fact, the heirs did not even
explain how seafarer’s work environment caused his fever and headache, and how these
conditions worsened into the alleged fatal illness. Second, given the lack of evidence as regards
the seafarer’s actual job, there was absolutely no showing of how his duties or tasks contributed
to the development of his illness. Therefore, there could be no basis to conclude that his
multiple organ failure secondary to septicaemia was contracted as a result of his exposure to
the risks of his trade. As such, the POEA Contract will not apply as the heirs failed to prove
work-relation of the illness which caused the death of the seafarer.

Nevertheless, as the SOS CBA provision on death benefits does not require work-relation if a
seafarer dies during employment due to an illness, the heirs are entitled to the same. As such,
the Court ruled that the company was correct to offer US$40,000 death benefits to the heirs as
stated in the SOS CBA.

Supreme Court awards death benefits based on the applicable agreement most beneficial to the
heirs.
 SHARPE SEA PERSONNEL, INC. et al VS. MACARIO MABUNAY, JR.
G.R. No. 206113; November 6, 2017

FACTS:

Mabunay was hired by Sharpe Sea as an oiler for M/V Larisa. Mabunay slipped and hit his
back on the purifier while he was cleaning. He informed a certain 2nd Engineer Castro of his
accident, who directed him to continue with his assigned duties. Despite the persistent pain in
his back and numbness in his legs, Mabunay continued working·from April 16, 2009 to April
18, 2009, until Chief Engineer De Leon allowed him to have a medical checkup when the ship
docked in Nanjing, China, where he was declared unfit to work by his attending physician. On
April 29, 2009, Mabunay was medically repatriated to Manila. On April 30, 2009, Mabunay
reported to Sharpe Sea's company-designated physician, Dr. Cruz. From April 30, 2009 to June
3, 2009, Mabunay was confined at Manila Doctors Hospital. On August 14, 2009, after it was
noted that Mabunay was not responding to physical therapy, Dr. Cruz recommended that
Mabunay undergo a discectomy On November 24, 2009, Mabunay underwent surgery and Dr.
Cruz observed that Mabunay "tolerated the procedure well." On January 21, 2010, Mabunay
filed a complaint against Sharpe Sea, et al for the payment of his medical expenses, total
disability benefits, damages, and attorney's fees. On June 3 and July 2, he consulted two private
physicians Dr. Raymundo and Dr. Fernando, who both diagnosed him as “unfit to work”. The
Labor Arbiter ruled in Mabunay's favor and directed Sharpe Sea to pay him permanent and
total disability benefits. Mabunay had proven that he was unable to perform his function as an
oiler for more than 120 days. This already constituted permanent disability, which would merit
the award of total and permanent disability benefits. The NLRC modified the Labor Arbiter’s
ruling and found that Sharpe Sea was able to comply with the requirement that a company-
designated physician be able to come up with a definite assessment of a seafarer’s fitness or
lack of fitness to work or to determine the seafarer’s degree of disability within a period of 120
days or 240 days from repatriation when Sharpe Sea attached a medical report dated August
18, 2009 from Dr. Cruz, diagnosing Mabunay with a Grade 8 disability. The Court of Appeals
ruled that Sharpe Sea failed to adequately explain why it only submitted the medical report
with the Grade 8 disability rating in its Motion for Reconsideration of the NLRC Decision.
Therefore, Mabunay was entitled to attorney's fees, moral, and exemplary damages since
Sharpe Sea acted with bad faith in belatedly submitting a Grade 8 disability rating.

Petitioners filed their Petition for Review on Certiorari before this Court. Petitioners continue
to assert that the Grade 8 disability rating issued by Dr. Cruz should enjoy primacy over the
findings of respondent's private physicians since Mabunay entered into a contract of
employment. Hence the 2000 POEA-SEC is the applicable version and the governing law
between the parties.

ISSUE:

Whether or not the Grade 8 disability rating of the company-designated physician should be
upheld over the contrary findings of respondent's private physicians.

HELD:

Petitioners fail to convince. The Grade 8 disability rating by Dr. Cruz is only an interim
disability rating. An interim disability grading is merely an initial prognosis and does not
provide sufficient basis for an award of disability benefits. It does not fully assess respondent’s
condition and cannot provide sufficient basis for the award of disability benefits in his favor A
company-designated physician is expected to come up with a definite assessment of a seafarer's
fitness or lack of fitness to work or to determine the seafarer's degree of disability within a
period of 120 or 240 days from repatriation. Clearly, Dr. Cruz, Dr. Castillo, or any other
company-designated physician failed to issue respondent either a fit-to work certification or a
final disability rating after his operation and before the lapse of 240 days from his repatriation.
Indeed under Section 32 of the POEA-SEC, only those injuries or disabilities that are classified
as Grade 1 may be considered as total and permanent. However, if those injuries or disabilities
with a disability grading from 2 to 14, hence, partial and permanent, would incapacitate a
seafarer from performing his usual sea duties for a period of more than 120 or 240 days,
depending on the need for further medical treatment, then he is, under legal contemplation,
totally and permanently disabled. Private respondents also acted in bad faith when they
belatedly submitted petitioner's Grade 8 disability rating only via their motion for
reconsideration before the NLRC. By withholding such disability rating from petitioner, the
latter was compelled to seek out opinion from his private doctors thereby causing him mental
anguish, serious anxiety, and wounded feelings, thus, entitling him to moral damages and by
way of example or correction for the public good, exemplary damages is awarded.
 JOSELITO A. ALVA vs. HIGH CAPACITY SECURITY FORCE, INC.
G.R. No. 203328; November 8, 2017

FACTS:

Alva was hired as a security guard by respondent High Capacity, a security agency. On June
5, 2007, Alva was assigned as an Assistant Officer-in-Charge of HRD PTE. While assigned
thereat, one of the security guards under his supervision allowed the entry of a garbage
collection truck without securing the prior permission and approval of the company's
Administrative and Personnel Manager. Therefore, Alva was suspended for one month. Alva
was placed on floating status. Alva was given an option to temporarily render duty as an
ordinary guard while waiting for an available officer's post. However, Alva was no longer given
any post. This prompted Alva to file a Complaint for Illegal Dismissal, Underpayment of
Wages, Non-Payment of 13th Month Pay, Service Incentive Leave, Holiday Premium,
ECOLA, Payment for Rest Day, Night Shift Differential Pay, Separation Pay, moral and
exemplary damages and attorney's fees against High Capacity, et al. Alva was assisted by the
PAO in the proceedings before the Labor Arbiter (LA). The LA rendered a Decision finding
High Capacity guilty of illegal dismissal. In addition, the LA awarded attorney's fees equivalent
to ten percent (10%) of the total monetary award, finding that Alva was constrained to hire the
services of counsel to protect his rights and interests. The NLRC modified the Labor Arbiter’s
ruling and found that Alva was dismissed for just cause, as he was caught sleeping while on
duty, and therefore deleted the award of attorney's fees in favor of Alva.

The CA declared the dismissal of Joselito A. Alva to be illegal. However, it deleted the award
of attorney's fees noting that Alva was represented by the PAO. Alva merely availed of its free
legal services.

ISSUE:

Whether or not the CA gravely erred in deleting the award of attorney’s fees.

HELD:

The CA erred in deleting the award of attorney’s fees. Essentially, there are two commonly
accepted concepts of attorney's fees - the ordinary and extraordinary. On the one hand, in its
ordinary concept, an attorney's fee is the reasonable compensation paid by the client to his
lawyer in exchange for the legal services rendered by the latter. The compensation is paid for
the cost and/or results of the legal services, as agreed upon by the parties or as may be assessed
by the courts. On the other hand, as an extraordinary concept, an attorney's fee is deemed an
indemnity for damages ordered by the court to be paid by the losing party to the winning party.
In labor cases, attorney's fees partake of the nature of an extraordinary award granted to the
victorious party as an indemnity for damages. As a general rule, it is payable to the client, not
to his counsel, unless the former agreed to give the amount to the latter as an addition to, or
part of the counsel's compensation. Notably, Article 111 of the Labor Code sanctions the award
of attorney's fees in cases of the unlawful withholding of wages, wherein the culpable party
may be assessed attorney's fees equivalent to ten percent (10%) of the amount of wages
recovered. The amount of attorney's fees shall not exceed ten percent (10%) of the total
monetary award, and the fees may be deducted from the amount due the winning party. Article
111 is an exception to the declared policy of strict construction in the award of attorney's fees."
In fact, the general rule that attorney's fees may only be awarded upon proof of bad faith takes
a different turn when it comes to labor cases. The established rule in labor law is that the
withholding of wages need not be coupled with malice or bad faith to warrant the grant of
attorney's fees under Article 111 of the Labor Code. All that is required is that the lawful wages
were not paid without justification, thereby compelling the employee to litigate.
 TEODORO V. VENTURA, JR. VS.
CREWTECH SHIPMANAGEMENT PHILIPPINES, INC., et al
G.R. No. 225995; November 20, 2017

FACTS:

Petitioner was employed by respondent Crewtech for its principal, Rizzo, as Chief Cook on
board the vessel MV Maria Cristina Rizzo. Petitioner complained to the Chief Mate that he
was having a hard time urinating that was accompanied by lower abdominal pain. Upon
reaching the port of Singapore on April 30, 2014, petitioner was brought to a specialist and was
diagnosed to have "prostatitis"and declared "unfit for duty." On May 1, 2014, petitioner was
medically repatriated and referred to a company-designated physician for further evaluation
and treatment. In a Medical Report, the company-designated physician diagnosed petitioner's
illnesses to be "Cystitis with Cystolithiases; and Benign Prostatic Hyperplasia (BPH)," which
he declared to be not work-related. Prior to the expiration of the 240-day period reckoned from
his repatriation on May 1, 2014, petitioner claimed that he was verbally informed by the
company-designated physician that it would be his last check-up session and that subsequent
consultations would be for his own account. Considering that petitioner's illnesses remained
unresolved and he was still on catheters, the latter was compelled to seek an independent
physician of his choice, Dr. Tan, who, in a Medical Certificate dated October 20, 2014, declared
him to be permanently disabled. Petitioner filed a complaint for total permanent disability
benefits, sickness allowance, transportation and medical expenses, damages and attorney's fees
against Crewtech, Rizzo, et al. The LA dismissed the complaint for lack of merit, ruling that
petitioner failed to discharge the burden of proving that his illnesses were work-related. The
LA pointed out that since petitioner had a history of prostatitis in 2011 and did not take regular
medication for it, he merely suffered from a recurrence of a pre-existing illness. The NLRC
partly ruled in favor of petitioner, directing Crewtech, Rizzo, and Ancheta, in solidum, to pay
him his total and permanent disability benefits in the amount of US$60,000.00, and further
sustained the award of sickness allowance and 10% attorney's fees. The NLRC likewise ruled
that petitioner's illness was work-related, holding that as Chief Cook, the latter cannot just
excuse himself to obey the call of nature more so when preparing and cooking food of the
officers and crew of the vessel, and that the limited water provisions for the entire voyage and
their diet may have increased the development, if not aggravation of his illness. As petitioner's
illness rendered him incapable of resuming work, he was entitled to total and permanent
disability or Grade 1 impediment pursuant to the 2010 POEA-SEC. The CA partly granted the
petition and set aside the NLRC Decision in so far as it ordered the payment to petitioner of
total permanent disability benefits in the amount of US$60,000.00. Contrary to the findings of
the NLRC, the CA ruled that petitioner willfully concealed his previous treatment for prostatitis
in 2011 during his 2013 PEME. The CA further held that petitioner failed to discharge the
burden of proving that his illness was work-related. It observed that petitioner merely
enumerated his duties and responsibilities as Chief Cook without establishing a reasonable
connection between the nature of his work and his illness and how his working conditions
contributed to and/or aggravated his condition.

ISSUE:

Whether or not the CA erred in holding that the NLRC gravely abused its discretion when it
ruled that petitioner was entitled to total and permanent disability benefits.
HELD:

The petition is denied. The CA is correct in holding that petitioner's illnesses, Cystitis with
Cystolithiases and BPH, were not work-related, hence, not compensable. Section 20 (A) of the
2010 POEA-SEC is explicit that the employer is liable for disability benefits only when the
seafarer suffers from a work-related injury or illness during the term of his contract. Thus,
work-relation must be established. As a general rule, the principle of work-relation requires
that the disease in question must be one of those listed as an occupational disease under Section
32-A thereof. Nevertheless, should it not be classified as occupational in nature, Section 20 (A)
paragraph 4 thereof provides that such diseases are disputably presumed as work-related.
However, the presumption does not necessarily result in an automatic grant of disability
compensation. The claimant still has the burden to present substantial evidence that his work
conditions caused or at least increased the risk of contracting the illness. Contrary to the
findings of the CA, there was no concealment on the part of petitioner when he failed to disclose
in his 2013 PEME that he was previously treated for prostatitis in 2011. As culled from the
records, respondents were well aware of petitioner's past medical history given that the
company-designated physician was able to provide a detailed medical history of the latter in
the Medical Report dated May 2, 2014 which showed all of his past illnesses, the year he was
treated and where he obtained his treatment. Upon further examination, the company-
designated physician found petitioner to have cystitis, or inflammation of the bladder, which is
commonly caused by a bacterial infection known as urinary tract infection (UTI), and BPH, an
enlargement of the prostate gland that is common among aging men81 which can block the
flow of urine out of the bladder and cause bladder, urinary tract or kidney problems. Although
the foregoing illnesses became manifest only while petitioner was on board the vessel, such
circumstance alone is not sufficient to entitle him to disability benefits. It bears stressing that
for a disability to be compensable, the seafarer must show 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; rather, he should be able to establish a causal connection between his injury or illness,
and the work for which he is engaged. There was no evidence presented to establish how and
why petitioner's working conditions increased the risk of contracting his illness. In the absence
of substantial evidence, the Court cannot just presume that petitioner's job caused his illness or
aggravated any pre-existing condition he might have had. Mere possibility will not suffice and
a claim will still fail if there is only a possibility that the employment caused the disease.
Moreover, the Court notes that even petitioner's physician of choice, Dr. Tan, failed to refute
the company-designated physician's pronouncement that his illness was not work-related. In
the Medical Certificate dated October 20, 2014, Dr. Tan merely reiterated petitioner's medical
history of his illness and declared him permanently disabled on the justification that he would
not be able to perform his job effectively, in view of the presence of the catheter that caused
frequent episodes of urinary tract infection. It is significant to point out at this stage that in
determining the work-causation of a seafarer's illness, the diagnosis of the company-designated
physician bears vital significance given that the latter is mandated by the 2010 POEA-SEC to
arrive at a definite assessment of the seafarer's fitness to work or permanent disability. And
while the seafarer is not irrevocably bound by the findings of the company-designated
physician as he is allowed to seek a second opinion and consult a doctor of his choice, Section
20 (A) (3) thereof further provides that any disagreement in the findings may be referred to a
third doctor jointly agreed upon by the parties, whose findings shall be final and binding
between them. The Court has consistently held that non-observance of the requirement to have
the conflicting assessments determined by a third doctor would mean that the assessment of
the company-designated physician prevails.
Considering that petitioner failed to observe the conflict-resolution procedure provided under
the 2010 POEA-SEC, the Court is inclined to uphold the opinion of the company-designated
physician that petitioner's illnesses were not work-related, hence, not compensable.
DECEMBER
2017
 EXPEDITION CONSTRUCTION CORPORATION V. AFRICA, et.al.
G.R. No. 228671; December 14, 2017

FACTS:

Respondents are garbage truck drivers engaged by the petitioner to collect garbage from
Quezon City and Caloocan City and transport it to dumping sites. When the contract between
the petitioner and the LGUs expired, the respondents claim that the petitioner prevented them
from entering the premises. The respondents filed an action for illegal dismissal, underpayment
and non-payment of salaries/wages, holiday pay, holiday premium, rest day premium, service
incentive leave pay, 13th month pay, separation pay, and Emergency Cost of Living Allowance
(ECOLA); illegal deduction; moral and exemplary damages and attorney's fees against the
petitioner. Petitioner claims that there exists no employer-employee relationship between them
and respondents and that there is no illegal dismissal and it tried to accommodate respondents
by giving them intermittent trips.

ISSUE:
1.) Whether or not the respondents are employees of the petitioner.

2.) Whether or not there is illegal dismissal.

HELD:

1.) The respondents are employees of the petitioner. The four-fold test in determining the
existence of an employer-employee relationship is present, to wit: "(1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
power to control the employee's conduct, or the so-called 'control test'”. Expedition hired
respondents as dump truck drivers and paid them the amount of P620.00 per trip. The CA held
that Expedition wielded the power to dismiss respondents based on Expedition's admission that
when the dispatch of drivers became irregular, it tried to accommodate them by giving trips
when the need arose. The control test was likewise established because Expedition determined
how, where, and when respondents would perform their tasks.

2.) There is no illegal dismissal. There was no positive or direct evidence to substantiate
respondents' claim that they were dismissed from employment. Aside from mere assertions,
the record is bereft of any indication that respondents were barred from Expedition's premises.
If at all, the evidence on record showed that Expedition intended to give respondents new
assignments as a result of the termination of the garbage hauling contracts with Quezon City
and
Caloocan City where respondents were regularly dispatched. Despite the loss of some clients,
Expedition tried to accommodate respondents and offered to engage them in other garbage
hauling projects with other LGUs, a fact which respondents did not refute. However, instead
of returning and waiting for their next assignments, respondents instituted an illegal dismissal
case against Expedition.
 MEHITABEL, INC. V. ALCUIZAR
G.R. Nos. 228701-02; December 13, 2017

FACTS:

Petitioner engaged the employment of the respondent as Purchasing Manager. Respondent

earned a satisfactory rating during his first months, but beginning March, 2011, the respondent
exerted dismal work performance which resulted in delays in the production and delivery of
the company's goods. The petitioner’s supervisor talked to the respondent and advised the latter
to improve his work performance but the respondent walked out of the company premises and
advised the HR officer and the guard that he is quitting. The petitioner sent a letter to the
respondent ordering it to return to work but the latter did not comply. Instead of receiving a
reply, the petitioner received a summons. Unbeknownst to the petitioner, the respondent filed
an action for illegal dismissal claiming that the petitioner as early as May, 2011, caused the
publication in a newspaper of a notice of vacant position for Purchasing Manager, the very
same position he is occupying in the company. The petitioner contended that it did not illegally
dismiss the respondent and it was the latter who abandoned the company. The Labor Arbiter
dismissed the complaint while the NLRC reversed the ruling and said there was just cause in
the dismissal of the respondent. The CA ruled that respondent was illegally dismissed applying
Art. 4 of the Labor Code. Hence, the instant issue.

ISSUE:

Whether or not the respondent was illegally dismissed

HELD:

The respondent was not illegally dismissed. It failed to establish the fact of dismissal. The
records are bereft of any evidence that would corroborate respondent's claim that he was
actually dismissed from employment. His asseveration that the supervisor instructed him to
turnover his functions to Enriquez remains to be a naked claim. Apart from his bare self-serving
allegation, nothing in the records even hints of him being severed from employment by
petitioner. The publication of the purported vacancy for Purchasing Manager does not bolster
respondent's claim of dismissal. We find more credible petitioner's assertion that said
publications were made through sheer inadvertence, and that the vacancy is actually for the
position of Purchasing Officer, rather than Purchasing Manager.

In contrast, petitioner herein issued a Return to Work order to respondent, which the latter
received through registered mail. This circumstance bears more weight and effectively negates
respondent's self-serving asseveration that he was dismissed from employment; it more than
implies that the company still considered respondent as its employee on August 10, 2011.
Respondent's non-compliance with the directive in the Return to Work signifies his intention
to sever the employment relation with petitioner, and gives credence to the latter's claim that it
was respondent who abandoned his job.
The CA erred when it applied Art. 4 of the Labor Code stating that all doubts in the
interpretation and implementation of the provisions Labor Code shall be resolved in favor of
labor.
 TAGUD VS. BSM CREW SERVICE CENTRE PHILS., INC.
G.R. No. 219370; December 6, 2017

FACTS:

Respondent Bernhard Schulte Shipmanagement (Cyprus), a foreign shipping company doing

business in the Philippines through its local manning agent, respondent BSM Crew Service
Centre Philippines, Inc. (BSM) hired petitioner Tagud as Able Bodied Seaman since 2005. On
7 March 2008, Tagud was re-hired by respondents as Able Bodied Seaman for the Kota
Pemimpin vessel under a contract approved by the Philippine Overseas Employment
Administration (POEA). On 24 March 2008, Tagud was deployed and joined the Kota
Pemimpin vessel in Hongkong on the same day. Tagud's job as Able Bodied Seaman required
him to (1) stand watch while in port or at sea, and (2) perform routine deck department
maintenance tasks, e.g. cleaning, painting, and preserving the ship. Tagud's other
responsibilities also include underway replenishment, cargo handling, forklift operation, and
helicopter flight deck operations. On 18 October 2008, while on duty doing a sanding job,
Tagud lost his balance due to the sudden tilting of the ship and his right elbow region crashed
against a hard object. As a result, he lost sensation and strength on his upper right extremity.
After three days, he was brought to a doctor for medical attention when the vessel docked in
Wynnum, Queensland. He underwent an x-ray of his right elbow; based on the the x-ray report
dated 21 October 2008, there was no fracture but there was a small olecranon spur. Twenty-
one days later, on 8 November 2008, Tagud disembarked in Singapore and was repatriated to
Manila on the same day. Tagud alleged that when he reported to his manning agency, he was
not given any assistance or even referred to a company-designated physician for a follow-up
medical examination. After four months, on 9 and 10 March 2009, Tagud sought medical
attention at Sta. Isabel Medical Clinic in Caloocan City. Then on 11 December 2009, Tagud
filed a complaint with the NLRC against respondents for permanent and total disability
benefits, sickness wages, reimbursement of medical expenses, damages, and attorney's fees.
The Labor arbiter granted Tagud’s complaint. Respondents then filed an appeal with the NLRC
and the latter reversed the Labor Arbiter's decision. Subsequently, the Court of Appeals
dismissed the petition for certiorari filed by Tagud.

ISSUE:

Whether or not the CA erred in affirming the decision of the NLRC which dismissed
petitioner's claim for permanent disability benefits.

HELD:

NO. A seafarer employed on overseas vessels is entitled to disability benefits by law and by
contract. By law, the provisions of Articles 191 to 193 under Chapter VI (Disability Benefits)
of the Labor Code, in relation to Rule X of the Rules and Regulations Implementing Book IV
of the Labor Code, are applicable. By contract, the POEA Standard Employment Contract
(POEA-SEC) and the parties' Collective Bargaining Agreement bind the seafarer and the
employer to each other. In this case, Tagud executed his employment contract with respondents
on 7 March 2008. Accordingly, the 2000 POEA-SEC, as provided under Department Order
No. 4, series of 2000, issued by the Department of Labor and Employment (DOLE) on 31 May
2000, applies here. The POEA, pursuant to said order by the DOLE to formulate the guidelines
on the implementation of the amended contract for seafarers, issued Memorandum Circular
(MC) No. 9, series of 2000, on 14 June 2000. MC No. 9 or the POEA standard agreement,
entitled Amended Standard Terms and Conditions Governing the Employment of Filipino
Seafarers on Board Ocean-Going Vessels, sets the minimum requirements acceptable to the
POEA for Filipino seafarers employed on board ocean-going vessels and became effective for
all agreements signed starting 25 June 2000. Section 20(B) of the 2000 POEA-SEC provides
the compensation and benefits a seafarer is entitled to in case of illness or injury. The provision
states: SECTION 20. COMPENSATION AND BENEFITS x x x x B. COMPENSATION
AND BENEFITS FOR INJURY OR ILLNESS The liabilities of the employer when the
seafarer suffers work-related injury or illness during the term of his contract are as follows:

1. The employer shall continue to pay the seafarer his wages during the time he is on board the
vessel;

2. If the injury or illness requires medical and/or dental treatment in a foreign port, the employer
shall be liable for the full cost of such medical, serious dental, surgical and hospital treatment
as well as board and lodging until the seafarer is declared fit to work or to be repatriated.
However, if after repatriation, the seafarer still requires medical attention arising from said
injury or illness, he shall be so provided at cost to the employer until such time he is declared
fit or the degree of his disability has been established by the company-designated physician.

3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness
allowance equivalent to his basic wage until he is declared fit to work or the degree of
permanent disability has been assessed by the company-designated physician, but in no case
shall this period exceed one hundred twenty (120) days. For this purpose, the seafarer shall
submit himself to a post employment medical examination by a company-designated physician
within three working days upon his return except when he is physically incapacitated to do so,
in which case, a written notice to the agency within the same period is deemed as compliance.
Failure of the seafarer to comply with the mandatory reporting requirement shall result in his
forfeiture of the right to claim the above benefits. If a doctor appointed by the seafarer disagrees
with the assessment, a third doctor may be agreed jointly between the employer and the
seafarer. The third doctor's decision shall be final and binding on both parties.

4. Those illnesses not listed in Section 32 of this Contract are disputably presumed as work
related.

5. Upon sign-off of the seafarer from the vessel for medical treatment, the employer shall bear
the full cost of repatriation in the event that the seafarer is declared (1) fit for repatriation; or
(2) fit to work but the employer is unable to find employment for the seafarer on board his
former vessel or another vessel of the employer despite earnest efforts.

6. In case of permanent total or partial disability of the seafarer caused by either injury or
illness, the seafarer shall be compensated in accordance with the schedule of benefits
enumerated in Section 33 of his Contract. Computation of his benefits arising from an illness
or disease shall be governed by the rates and the rules of compensation applicable at the time
the illness or disease was contracted. (Emphasis supplied)

For disability to be compensable under Section 20(B) of the 2000 POEA-SEC, two elements
must concur:

(1) that the illness or injury must be work-related, and

(2) that the work-related illness or injury must have existed during the term of the seafarer's
employment contract.

It is stated in Section 20 (B)(3) of the 2000 POEA-SEC that a seafarer, upon signing off from
the vessel for medical treatment, is required to submit himself to a post-employment medical
examination by a company-designated physician within three working days upon his return.
The only exception is when the seafarer is physically incapacitated to do so, in which case, the
seafarer must give a written notice to the agency within three working days in order to have
complied with the requirement. Otherwise, he forfeits his right to claim his sickness allowance
and disability benefits.

In Heirs of the Late Delfin Dela Cruz v. Philippine Transmarine Carriers, Inc., we held that the
three-day mandatory reporting requirement must be strictly observed since within three days
from repatriation, it would be fairly manageable for the company-designated physician to
identify whether the illness or injury was contracted during the term of the seafarer's
employment or that his working conditions increased the risk of contracting the ailment.
Moreover, the post-employment medical examination within three days from arrival is required
to ascertain the seafarer's physical condition, since to ignore the rule would set a precedent with
negative repercussions because it would open the floodgates to seafarers claiming disability
benefits that are not work-related or which arose after the employment. It would certainly be
unfair to the employer who would have difficulty determining the cause of a claimant's illness
considering the passage of time. In such a case, the employer would have no protection against
unrelated claims. Therefore, it is the company-designated physician who must proclaim that
the seafarer suffered a permanent disability, whether total or partial, due to either illness or
injury, during the term of the latter's employment. In sum, the SC held that Tagud is not entitled
to permanent disability benefits for his failure to (1) undergo a post-employment medical
examination within the three-day mandatory reporting period as required under the law, or to
show that such failure was due to a valid reason; (2) establish that his illness or injury was
work-related; and (3) show that his illness or injury was contracted during the term of his
employment contract.
 ZARAGOZA V. TAN
G.R. No. 225544; December 4, 2017

FACTS:

Petitioner was the Area Sales Manager of Consolidated Distillers of the Far East Incorporated
(Condis) in the Bicol Region. He was dismissed on December 3, 2007. On February 18, 2008,
he filed an illegal dismissal case with money claims against Condis, Winston Co and
Dominador D. Hidalgo. In March 2009, the Labor Arbiter (LA) issued a decision finding that
petitioner was illegally dismissed. Condis filed its Manifestation by way of compliance with
the LA alleging that petitioner can no longer be reinstated as his former sales position no longer
existed and there was no equivalent position to which he could be reinstated pending appeal as
the company was no longer engaged in the manufacturing, selling and marketing of Emperador
Brandy and other liquor products; and that the Services Agreement which Condis entered with
Emperador Distillers, Inc. (EDI), the company that bought the former, to market, sell and make
logistic services was also terminated on June 1, 2008. Condis and Hidalgo appealed the LA
decision to the National Labor Relations Commission (NLRC). The NLRC affirmed with
modification the LA decision by deleting the award of nominal damages and reducing to
P50,000.00 the award of moral and exemplary damages. Subsequently, they filed a petition for
certiorari with the CA which partly granted the petition, absolving Hidalgo of liability and
deleted the award of moral and exemplary damages. Meanwhile, petitioner had already
received a total amount of P454,986.98. He then filed a motion for issuance of alias writ of
execution with notice of appearance, arguing that he is likewise entitled to accrued salaries by
reason of the order of reinstatement, which as of December 3, 2012 amounted to
P2,294,897.47. He prayed that respondent Tan, as President of Condis, should be held
personally liable for the awards; and that respondent EDI should also be held jointly and
solidarily liable with Condis for the judgment award as the transfer of manufacturing business
of the latter to the former was done in bad faith in order to evade payment/satisfaction of their
liabilities in the labor case, applying the doctrine of piercing the veil of corporate fiction. On
August 3, 2013, the LA issued a Resolution adjudging Tan and EDI to be jointly and severally
liable with Condis. The LA found that the execution of the Asset Purchase Agreement and the
termination of the Services Agreement were purposely done by Condis and respondent EDI to
defraud petitioner. Respondents then filed with the NLRC a Petition for Annulment of the
Resolution dated 3 August 2013 of the Executive Labor Arbiter Jess Orlando M. Quinones Ex
Abundante Ad Cautelam (with an Extremely Urgent Motion for the issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction) which was granted by the
Commission. On appeal, the CA dismissed the petition for certiorari and affirmed the NLRC
decision.

ISSUE:

Whether or not the monetary award in favor of petitioner in NLRC case no. SRAB V-07-00089-
08 can still be enforced against respondent Tan in her capacity as President of Condis and
against respondent EDI, even though they were not impleaded in said labor case.

HELD:
NO. The LA Resolution dated August 3, 2013, which directed the issuance of an alias writ of
execution against respondents had the effect of amending the final and executory decision
which made Condis the only one liable to petitioner. This cannot be done. The writ of execution
must conform to the judgment which is to be executed, as it may not vary the terms of the
judgment it seeks to enforce. Nor may it go beyond the terms of the judgment which is sought
to be executed. Where the execution is not in harmony with the judgment which gives it life
and exceeds it, it has pro tanto no validity. To maintain otherwise would be to ignore the
constitutional provision against depriving a person of his property without due process of law.
Moreover, it bears stressing that respondents were never mentioned in the illegal dismissal
proceedings, i.e., from the LA, the NLRC, the CA or up to this Court, since the party-
respondents therein were Condis, Co and Hidalgo. It is undisputed that respondents were
involved in the case only when petitioner filed a motion for issuance of alias writ of execution
which prayed for their inclusion, and which the LA granted; thus, they were unexpectedly
ordered to be jointly and severally liable with Condis to pay the judgment award. It is basic
that no man shall be affected by any proceeding to which he is a stranger, and strangers to a
case are not bound by judgment rendered by the court.[21] A decision of a court will not operate
to divest the rights of a person who has not and has never been a party to a litigation, either as
plaintiff or as defendant.[22] Execution of a judgment can only be issued against one who is a
party to the action, and not against one who, not being a party to the action, has not yet had his
day in court.[23] That execution may only be effected against the property of the judgment
debtor, who must necessarily be a party to the case.[24] Accordingly, the LA's Order against
respondents who were not parties to the case is a deprivation of property without due process
of law. More importantly, since respondents were never impleaded in the illegal dismissal case,
they were never served with summons nor did they voluntarily appear in the arbitration level;
thus, the LA never acquired jurisdiction over them as to order the piercing of the veil of
corporate fiction, and to make them jointly and severally liable with Condis for the judgment
award to petitioner.

Petitioner argues that respondent Tan, as President of Condis, can be held solidarily liable for
the judgment award despite not being impleaded as a party in the illegal dismissal case relying
on A.C. Ransom Labor Union-CCLU v. NLRC. In A.C. Ransom, Ransom was found guilty of
unfair labor practice; thus, it was ordered, together with its officers and agents, to reinstate the
22 union members to their respective positions with backwages, which decision became final
and executory but the writ of execution could not be implemented against Ransom because of
the disposition posthaste of its leviable assets. We found that Ransom put up another
corporation, the Rosario Industrial Corporation (Rosario), while the ULP case was pending
with the Court of Industrial Relations and that both corporations were closed corporations,
owned and managed by the members of the Hernandez family; and that Rosario was established
to phase out Ransom if an unfavorable decision would be rendered against the latter, hence,
Ransom's operation was discontinued few months after the LA ruled in the employees' favor.
As Ransom had the intention of evading its just and due obligations to the employees, we
allowed the piercing of the veil of corporate fiction by making the officers of Ransom
personally liable for the debts of the latter. We said that since Ransom is a corporation, an
artificial person, it must have an officer who can be presumed to be the employer, which as
defined under Article 212(c) (now Article 212 [e]) of the Labor Code, includes any person
acting in the interest of an employer, directly or indirectly, but does not include any labor
organization or any of its officers or agents, except when acting as employer. The factual milieu
of A.C. Ransom case is different from the instant case. As the CA correctly found, in A.C.
Ransom, the officers and agents were already held liable in the final and executory decision as
they were named individual respondents in the case. Here, respondents were included in this
case only in petitioner's motion for issuance of alias writ of execution. We have already ruled
in McLeod v. NLRC and Spouses Santos v. NLRC that Article 212(e) of the Labor Code, by
itself, does not make a corporate officer personally liable for the debts of the corporation. The
governing law on personal liability of directors for debts of the corporation is still Section 31
of the Corporation Code. Thus, we explained in McLeod: Personal liability of corporate
directors, trustees or officers attaches only when (1) they assent to a patently unlawful act of
the corporation, or when they are guilty of bad faith or gross negligence in directing its affairs,
or when there is a conflict of interest resulting in damages to the corporation, its stockholders
or other persons; (2) they consent to the issuance of watered down stocks or when, having
knowledge of such issuance, do not forthwith file with the corporate secretary their written
objection; (3) they agree to hold themselves personally and solidarity liable with the
corporation; or (4) they are made by specific provision of law personally answerable for their
corporate action. To stress, respondent Tan was not at all impleaded in the illegal dismissal
case; thus, her participation in petitioner's dismissal was never established in any of the
proceedings therein. Consequently, it was not shown at all that she assented to patently
unlawful acts of the corporation, or that she was guilty of gross negligence or bad faith. In fact,
the LA Resolution granting the alias writ of execution against the respondents did not make
any finding as to why respondent Tan was ordered to pay the judgment award in the alternative,
with Condis and respondent EDI, other than his reliance on our ruling in A.C. Ransom, which
as we found is misplaced.
 VERONICO O. TAGUD VS. BSM CREW SERVICE CENTRE PHILS., INC./
NARCISSUS DURAN AND/OR BERNHARD SCHULTE SHIPMANAGEMENT
(CYPRUS)
G.R. No 219370; December 06, 2017
FACTS:

Respondent a foreign shipping company doing business in the Philippines through its manning
agent BSM hired petitioners as able bodies sea man. Tagud was rehired as abled body seaman
for the Kota Pemimpin vessel under a contract approved by the POEA. While on duty, Tagud
lost his balance due to the sudden tilt of the ship and his right elbow crash against a hard object,
he lost total sensation of his upper right extremity. He then seek medical attention when the
vessel docked in Wynnum Queensland and it was found out that there is no fracture however,
there is a small olecranon spur. And no other abnormality. Tagud was however repatriated to
Manila.
Tagud alleged when he reported to the manning agency, he was not given any assistance or
even referred to a company-designated physician. Tagud sought medical attention at Sta Isabel
Medical Clinic in Caloocan and was examined. And was prescribed for elevated blood pressure
and pain in his upper extremities. Tagud sought another medical consultation for neuritis with
loss of strength of the right hand and such illness became chronic. With an illness which limits
the flexion of his upper right extremity, Tagud was no longer employed.

ISSUE:

Whether or not Tagud is entitled for disability benefits.

HELD:

Petition lacks merit. Petitioner contends that his injury was work related and had existed during
the term of his employment. Petitioner adds that even if his repatriation was regarded as
finished contract, this should not change the nature of his work related injury.

A seafarer employed on overseas vessels is entitled to disability benefits by law and by contract.
By law, the provisions of Articles 191 to 193 under Chapter VI (Disability Benefits) of the
Labor Code, in relation to Rule X of the Rules and Regulations Implementing Book IV of the
Labor Code, are applicable. By contract, the POEA Standard Employment Contract (POEA-
SEC) and the parties’ Collective Bargaining Agreement bind the seafarer and the employer to
each other.

In this case, Tagud executed his employment with the respondents. Accordingly, the 2000
POEA-SEC as approved under the DO 4 series of 2000, issued by the DOLE on 31 May 2000
applies here. Which provides: The POEA, pursuant to said order by the DOLE to formulate the
guidelines on the implementation of the amended contract for seafarers, issued Memorandum
Circular (MC) No. 9, series of 2000, on 14 June 2000. MC No. 9 or the POEA standard
agreement, entitled Amended Standard Terms and Conditions Governing the Employment of
Filipino Seafarers on Board Ocean-Going Vessels, sets the minimum requirements acceptable
to the POEA for Filipino seafarers employed on board ocean-going vessels and became
effective for all agreements signed starting 25 June 2000.
It is stated in Section 20 (B)(3) of the 2000 POEA-SEC that a seafarer, upon signing off from
the vessel for medical treatment, is required to submit himself to a post-employment medical
examination by a company-designated physician within three working days upon his return.
The only exception is when the seafarer is physically incapacitated to do so, in which case, the
seafarer must give a written notice to the agency within three working days in order to have
complied with the requirement. Otherwise, he forfeits his right to claim his sickness allowance
and disability benefits.
In the present case, Tagud disembarked in Singapore and was repatriated to Manila. He
reported to his manning agency but he failed to prove that he submitted himself to a company-
designated physician within three working days upon his return.

Therefore, the court denies his claim for disability benefits.

 ALMARIO F. LEONCIO VS. MST MARINE SERVICES (PHILS.), INC./ARTEMIO
VS. SERAFICO AND/OR THOME SHIP MANAGEMENT PTE., LTD.
G.R. No. 217426; December 04, 2017

FACTS:
Respondent is a domestic manning agency, with Thome Ship Management as one of its
principals. MTS repeatedly hired Leoncio. Petitioner disembarked from M/V Golden Stream
owned by one of the principals and was repatriated and treated for his Coronary Artery Decease
by the company designated physician, upon declaration that he is fit to work and redeployed
on board M/V Frontiers Express. After several redeployments, Leoncio was employed by
respondents as chef cook under the POEA-SEC. Petitioner was medically repatriated and was
referred to the company physician. He was confined in St Lukes for four days. While
undergoing treatment, respondent MST inquired with Dr Nolasco regarding Leoncio’s
condition .MST found that petitioner undergone stenting procedure therefore he was declared
unfit to work.

ISSUE:

Whether or not petitioner committed a fraudulent misrepresentation which bars him from
recovery of benefits.

HELD:

The court resolves to grant the petition. Nothing can be plainer that the meaning of the word
illness as referring to disease or injury. Neither of these words refers to a medical procedure
undergone by the seafarer in connection with an illness or condition already knows to the
employer as far back as 2001. A closer look of the previous procedure undergone by the
petitioner, is not a concealment due to an entirely different illness. The record is that the
complainant was first medically repatriate in 2001 due to hypertension where he was declared
as fit to work. He was even demoted for one contract after said medical repatriation but was
reverted back to his original position on subsequent redeployments. Hence employer cannot
claim that there was misrepresentation on account of his medical repatriation. Hence the
allegation of fraudulent misrepresentation cannot be given credence.