Omnibus Notes Conso Draft 1

LABOR LAW>Labor Standards>Illegal Recruitment
PEOPLE OF THE PHILIPPINES, Appellee

vs.
MARITESS MARTINEZ Y DULAY, Appellant
G.R. No. 158627, March 5, 2010
(Second Division)
DOCTRINE: No less than the Constitution ordains that labor, local and overseas, organized and
unorganized shall be given full protection. Further it mandates the promotion of full employment and
equality of employment opportunities.
FACTS: Maritess, Jenilyn and Julius Martinez, were charged with Estafa and the crime of Illegal
Recruitment in large scale. The trial court found that appellant was not a holder of a license or authority to
deploy workers abroad; that appellant falsely represented herself to have the capacity to send
complainants as factory workers in South Korea; that she asked from complainants various amounts
allegedly as placement and processing fees; that based on said false representations, complainants
parted with their money and gave the same to appellant; that appellant appropriated for herself the
amounts given her to the damage and prejudice of the complainants; and that she failed to deploy
complainants for work abroad. The trial court acquitted Julius Martinez of the crime of Illegal Recruitment
in large scale while finding appellant guilty of Illegal Recruitment and four counts of Estafa.
Appellant appealed to the CA arguing that no evidence was presented to show that she falsely
represented herself as having the capacity to send complainants as factory workers in South Korea. She
maintained that she merely assisted complainants in their applications with JH Imperial Organization
Placement Corp. and that she was merely an agent of the latter. CA found appellant guilty of Illegal
Recruitment in large scale and disregarded appellants argument that she merely assisted complainants in
their applications with JH Imperial Organization Placement Corp. The CA likewise affirmed appellants’
conviction for four counts of Estafa. Hence, the appeal.
ISSUE: Whether or not appellant is guilty of illegal recruitment in large scale.
HELD: YES.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed
committed in large scale if committed against three (3) or more persons individually or as a group.
In the instant case, the prosecution satisfactorily established that appellant was not a licensee or holder of
authority to deploy workers abroad. By this fact alone, she is deemed to have engaged in illegal
recruitment and the same was committed in large scale because it was carried out against the four
complainants. The fact that JH Imperial Organization Placement Corp. was a holder of a valid license to
deploy workers abroad did not serve to benefit herein appellant. There was no evidence at all that said
recruitment agency authorized herein appellant to act as its agent. By this fact alone, she is deemed to
have engaged in illegal recruitment and the same was committed in large scale because it was carried
out against the four complainants. The three elements of the crime of illegal recruitment, to wit: a) the
offender has no valid license or authority required by law to enable him to lawfully engage in recruitment
and placement of workers; b) the offender undertakes any of the activities within the meaning of
recruitment and placement under Article 13(b) of the Labor Code, or any of the prohibited practices
enumerated under Article 34 of the said Code (now Section 6 of RA 8042); and c) the offender committed
the same against three or more persons, individually or as a group, are present in the instant case.
LABOR LAW>Labor Standards>Labor Only Contracting
JOEB ALVIADO, ET AL.

vs.
PROCTER & GAMBLE, PHILS.,INC. and PROMM-GEM, INC.
G.R.No. 160506, June 6, 2011
(Second Division)
DOCTRINE: Labor laws expressly prohibit "labor-only" contracting. To prevent its circumvention, the
Labor Code establishes an employer-employee relationship between the employer and the employees of
the ‘labor-only’ contractor.
FACTS: Petitioners worked as merchandisers of P&G. They all individually signed employment contracts
with either Promm-Gem or SAPS and assigned at different outlets, supermarkets and stores where they
handled all the products of P&G. They received their wages from Promm-Gem or SAPS. SAPS and
Promm-Gem imposed disciplinary measures on erring merchandisers for reasons such as habitual
absenteeism, dishonesty or changing day-off without prior notice. P&G entered into contracts with
Promm-Gem and SAPS for the promotion and merchandising of its products. Petitioners filed a
complaint against P&G for regularization, service incentive leave pay and other benefits with damages
and was later amended to include their dismissal.
Labor Arbiter dismissed and ruled that there was no employer-employee relationship between petitioners
and P&G which was affirmed by NLRC and the CA. Hence the petition.
ISSUE: Whether or not there exists an employer-employee relationship.
HELD: YES.
Where ‘labor-only’ contracting exists, the Labor Code establishes an employer-employee relationship
between the employer and the employees of the ‘labor-only’ contractor. The statute establishes this
relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is
considered merely an agent of the principal employer and the latter is responsible to the employees of the
labor-only contractor as if such employees had been directly employed by the principal employer.
Under the circumstances, Promm-Gem cannot be considered as a labor-only contractor. We find that it is
a legitimate independent contractor. Promm-Gem showed that it has authorized capital stock of ₱1 million
and a paid-in capital, or capital available for operations and substantial investment which relates to the
work to be performed.
However, Petitioners, having been recruited and supplied by SAPS engaged in labor-only contracting are
considered as the employees of P&G. The records show that P&G dismissed its employees through
SAPS in a manner oppressive to labor. Article 279 of the Labor Code, an employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges.
LABOR LAW>Labor Standards>Separation Pay
RENO FOODS, INC., and/or VICENTE KHU, Petitioner

vs.
NAGKAKAISANG LAKAS NG MANGGAGAWA-KATIPUNAN, NENITA CAPOR, Respondent
G.R. No. 164016, March 15, 2010
(Second Division)
DOCTRINE: Social justice and equity are not magical formulas to erase the unjust acts committed by the
employee against his employer. While compassion for the poor is desirable, it is not meant to coddle
those who are unworthy of such consideration.
FACTS: Petitioner Reno Foods is the employer of respondent Nenita Capor. It is a standard operating
procedure of petitioner-company to subject all its employees to reasonable search of their belongings
upon leaving the company premises. The guard on duty found six Reno canned goods inside Capor’s
fabric clutch bag. Petitioners accorded Capor several opportunities to explain, often with the assistance of
the union officers of Nagkakaisang Lakas ng Manggagawa (NLM) – Katipunan. Petitioners sent a Notice
of Termination to Capor and was given another opportunity for reconsideration through a grievance
conference. Unfortunately, petitioners did not find reason to change its earlier decision to terminate
Capor’s employment. Petitioners filed a complaint-affidavit against Capor for qualified theft in the Office of
the City Prosecutor. Meanwhile,(NLM) – Katipunan filed on behalf of Capor a complaint for illegal
dismissal and money claims against petitioners with the Head Arbitration Office of the (NLRC) for the
National Capital Region.
Labor Arbiter found Capor guilty of serious misconduct which is a just cause for termination. On appeal,
the NLRC affirmed the factual findings of the Labor Arbiter but added an award of financial assistance.
CA affirmed the NLRC’s award of financial assistance. Hence the petition.
ISSUE: Whether or not the grant of financial assistance to a validly dismissed employee is proper.
HELD: NO.
The law is clear. Separation pay is only warranted when the cause for termination is not attributable to the
employee’s fault, such as those provided in Articles 283 and 284 of the Labor Code, as well as in cases
of illegal dismissal in which reinstatement is no longer feasible.
To reiterate our ruling in Toyota, labor adjudicatory officials and the CA must demur the award of
separation pay based on social justice when an employee’s dismissal is based on serious misconduct or
willful disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or commission of a
crime against the person of the employer or his immediate family – grounds under Art. 282 of the Labor
Code that sanction dismissals of employees. They must be most judicious and circumspect in awarding
separation pay or financial assistance as the constitutional policy to provide full protection to labor is not
meant to be an instrument to oppress the employers. The commitment of the Court to the cause of labor
should not embarrass us from sustaining the employers when they are right, as here. In fine, we should
be more cautious in awarding financial assistance to the undeserving and those who are unworthy of the
liberality of the law.
LABOR LAW>Labor Standards>Illegal Dismissal
BAGSAY, LITERAL and ABUEVA, Petitioners

vs.
HACIENDA CONSOLACION, Respondents
G.R.No. 175532, April 19, 2010
(Second Division)
DOCTRINE: Fair evidentiary rule dictates that before employers are burdened to prove that they did not
commit illegal dismissal, it is incumbent upon the employee to first establish the fact of his or her
dismissal.
FACTS: Respondents hired Basay and Literal, as tractor operators, and Abueva, as laborer, in the
hacienda for sugar cane plantation. Petitioners filed a complaint for illegal dismissal. They alleged that
respondents verbally informed them to stop working and were not given work assignments despite their
regular status. Respondents denied petitioners’ allegations. As regards Abueva, respondents averred that
he is not an employee but a mere contractor in the hacienda. According to respondents, Abueva hired
other men to perform weeding jobs and even entered into contract with neighboring haciendas for similar
jobs. Respondents alleged that Abueva’s name does not appear in the payroll, thus indicating that he is
not an employee. As such, there can be no dismissal to speak of, much less an illegal dismissal. With
regard to petitioners Literal and Basay, respondents admitted that both are regular employees as
evidenced by a Master Voucher. However, respondents denied having illegally dismissed them and
asserted that they abandoned their jobs.
Labor Arbiter rendered a Decision exonerating respondents from the charge of illegal dismissal as
petitioners were the ones who did not report for work despite respondents’ call. The Labor Arbiter,
however, awarded petitioners’ claim of 13th month pay and salary differentials. . The NLRC thus affirmed
with modification the Decision of the Labor Arbiter. CA dismissed the petition and affirmed the findings of
the NLRC.
ISSUE: Whether or not the petitioners were illegally dismissed.
HELD: NO.
The rule in labor cases that the employer has the burden of proving that the termination was for a valid or
authorized cause; however, it is likewise incumbent upon the employees that they should first establish by
competent evidence the fact of their dismissal from employment. The one who alleges a fact has the
burden of proving it and the proof should be clear, positive and convincing.
In this case, aside from mere allegations, no evidence was proffered by the petitioners that they were
dismissed from employment. The records are bereft of any indication that petitioners were prevented from
returning to work or otherwise deprived of any work assignment by respondents.
DANNIE PANTOJA, Petitioner

vs.
SCA HYGIENE PRODUCTS CORPORATION, Respondent
G.R. No. 163554, April 23, 2010
(Second Division)
DOCTRINE: Employer’s exercise of its management prerogative done for the advancement of its interest
and not for the purpose of defeating the lawful rights of an employee will be upheld.
FACTS: Respondent is engaged in the manufacture, sale and distribution of industrial paper and tissue
products, employed petitioner assigned at Paper Mill No. 4. In a Notice of Transfer, respondent informed
petitioner of its reorganization plan and offered him a position at Paper Mill No. 5 under the same terms
and conditions of employment in anticipation of closure and permanent shutdown of Paper Mill No. 4. The
closure and concomitant reorganization is in line with respondent’s decision to streamline and phase out
the company’s industrial paper manufacturing operations due to financial difficulties. Petitioner rejected
the offer. A notice of termination of employment was sent to petitioner. He then received his separation
pay and executed a release and quitclaim in favor of respondent. Respondent informed the Department
of Labor and Employment of its reorganization and partial closure by submitting with the said office an
Establishment Termination Report together with the list of terminated employees. Petitioner filed a
complaint for illegal dismissal assailing his termination without any valid cause.
The Labor Arbiter ruled that inasmuch as petitioner rejected the position offered to him, opted to receive
separation pay and executed a release and quitclaim releasing the company from any claim or demand in
connection with his employment, petitioner’s claim that he was illegally dismissed must fail. The NLRC
reversed LA’s decision. CA reinstated LA’s decision.
ISSUE: Whether or not respondent is guilty of illegal dismissal.
HELD: NO.
Respondent presented evidence of the low volume of sales and orders for the production of industrial
paper which inevitably resulted to the company’s decision to streamline its operations. In this case, the
abolishment of Paper Mill No. 4 was undoubtedly a business judgment arrived at in the face of the low
demand for the production of industrial paper at the time. Despite an apparent reason to implement a
retrenchment program as a cost-cutting measure, respondent, however, did not outrightly dismiss the
workers affected by the closure of Paper Mill No. 4 but gave them an option to be transferred to posts of
equal rank and pay. As can be seen, retrenchment was utilized by respondent only as an available option
in case the affected employee would not want to be transferred. Respondent did not proceed directly to
retrench. .
As long as no arbitrary or malicious action on the part of an employer is shown, the wisdom of a business
judgment’ to implement a cost saving device is beyond this court’s determination. After all, the free will of
management to conduct its own business affairs to achieve its purpose cannot be denied.
LABOR LAW>Labor Relations>Prescription of actions on Money claims
SOUTHEASTERN SHIPPING, SOUTHEASTERN SHIPPING GROU, LTD., Petitioners,

Vs.
FEDERICO U. NAVARRA, JR., Respondent
G.R. No. 167678, June 22, 2010
(First Division)
DOCTRINE: Money claims arising from employer-employee relations, including those specified in the
Standard Employment Contract for Seafarers, prescribe within three years from the time the cause of
action accrues. However, for death benefit claims to prosper, the seafarer’s death must have have
occurred during the effectively of said contract.
FACTS: Petitioner Southeastern Shipping, on behalf of its foreign principal, hired Federico to worn on
board the vessel. Frederico sign 10 successive separate employment contracts of varying durations. His
latest contract was approved by POEA on January 28, 1998 for 56 days and extendible for another 56
days. He worked as roustabout during the first contract and as a motorman during the succeeding
contracts.
On March 6, 1998, He complained of having a sore throat and on and off fevers with chills. He then was
given medications. On March 30, 1998, Frederico got back in the Philippines, he went to Philiippine
General Hospital to get for a check-up and thereafter was diagnosed that he was suffering a cancer
called Hodgkin’s Lymphoma. Another test was conducted in Medical Center Manila which had the same
results and confirmed having a Hodgkin’s disease.
Frederico filed a complaint against the petitioner claiming entitlement to disability benefits, loss of earning
capacity, moral and exemplary damages, and attorney’s fees. And during the pendency of his case, he
died on April 29, 2000. His widow, Evelyn, substituted him as party complainant on her own behalf and in
behalf of their 3 children. The claim for disability benefits was then converted into a claim for death
benefits.
The Labor Arbiter (LA) dismissed the case on the ground that “Hodgkin’s Lymphoma is not one of the
occupational or compensable diseases.” Then Evelyn appealed to the NLRC, which the NLRC reversed
the ruling of the LA. Which the petitioners filed for MR which it was denied by the NLRC then they filed for
petition for certiorari in the CA. Hence, this petition.
ISSUE: Whether or not the action has prescribed over the case considering the Section 28 of the
Standard of Seafarers that provides a prescriptive period on money claims of 1 year from the date of the
seafarer’s return to the point of hire.
HELD: NO.
Under our Labor Laws, Art 291 of the Labor Code (LC) prevails over Section 28 of the Standard of
Seafarers. It is therefore clear that Art 291 is the law governing the prescription of money claims of
seafarers, a class of overseas contract workers. This law prevails over Section 28 of the Standard
Employment Contract for Seafarers which provides for claims to be brought only within one year from the
date of the seafarer’s return to the point of hire. Thus, for the guidance of all, Section 28, insofar as it
limits the prescriptive period within which the seafarer’s may file their money claims, is hereby null and
void. The applicable provisions is Art 291 of the LC, it being more favorable to the seafarers and more in
accord with the State’s declared policy to afford full protection to labor. The prescriptive period in the
present case is thus 3 years form the time the cause of action accrues.
LABOR LAW>Labor Standards>Illegal Dismissal>Retrenchment
LAMBERT PAWNBROKERS and JEWELRY CORP and LAMBERT LIM, Petitioner

vs.
HELEN BINAMIRA, Respondent
G.R. No. 170464, July 12, 2010
(First Division)
DOCTRINE: It is fundamental that an employer is liable for illegal dismissal when it terminates the
services of the employee without just or authorized cause and without due process of law.
FACTS: Petitioner Lambert Lim is a Malaysian national operating various businesses in Cebu and Bohol
one of which is Lambert Pawnbrokers and Jewelry Corporation, hired Helen Binamira as an appraiser
and designated her as Vault Custodian. Helen received a letter from Lim terminating her employment,
cited business losses necessitating retrenchment as the reason for the termination. Helen thus filed a
case for illegal dismissal against petitioners.
Labor Arbiter held that Helen was legally dismissed and validly retrenched which was reversed by NLRC.
It observed that for retrenchment to be valid, a written notice shall be given to the employee and to the
DOLE at least one month prior to the intended date. Since none was given in this case, then the
retrenchment of Helen was not valid. CA found that both the Labor Arbiter and the NLRC failed to
consider substantial evidence showing that the exercise of management prerogative, in this instance, was
done in bad faith and in violation of the employee’s right to due process. The CA ruled that there was no
redundancy because the position of vault custodian is a requisite, necessary and desirable position in the
pawnshop business. There was likewise no retrenchment because none of the conditions for
retrenchment is present in this case.
ISSUE: Whether or not there was valid dismissal through retrenchment.
HELD: NO.
Art. 283. Closure of establishment and reduction of personnel.- The employer may also terminate the
employment of any employee due to x x x retrenchment to prevent losses or the closing or cessation of
operations of the establishment.
The losses must be supported by sufficient and convincing evidence. The normal method of discharging
this is by the submission of financial statements duly audited by independent external auditors. In this
case, however, the Statement of Income and Expenses for the year 1997-1998 submitted by the
petitioners was prepared only on January 12, 1999. Thus, it is highly improbable that the management
already knew on September 14, 1998, the date of Helen’s retrenchment, that they would be incurring
substantial losses.
At any rate, we perused over the financial statements submitted by petitioners and we find no evidence at
all that the company was suffering from business losses. In fact, in their Position Paper, petitioners merely
alleged a sharp drop in its income. This is not the business losses contemplated by the Labor Code that
would justify a valid retrenchment. A mere decline in gross income cannot in any manner be considered
as serious business losses. It should be substantial, sustained and real.
NEW PUERTO COMMERCIAL AND RICHARD LIM, Petitioners

vs.
RODEL LOPEZ AND FELIX GAVAN, Respondents
G.R. No. 169999, July 26, 2010
(First Division)
DOCTRINE: In order to validly dismiss an employee, he must be accorded both substantive and
procedural due process by the employer. Procedural due process requires that the employee be given a
notice of the charge against him, an ample opportunity to be heard, and a notice of termination.
FACTS: Petitioner New Puerto Commercial hired respondent Gavan as a driver and Lopez as salesman.
Under a rolling store scheme, petitioners assigned respondents to sell goods on cash or credit to the sari-
sari stores of far-flung barangays and municipalities outside Puerto Princesa. Respondents were duty-
bound to collect and remit upon their return to petitioners’ store on a weekly basis. Respondents filed a
Complaint for illegal dismissal. A conciliation conference was held but the parties failed to reach a
settlement. As a result, the complaint was endorsed for compulsory arbitration at NLRC. Previously,
petitioners sent respondents notices to explain why they should not be dismissed for gross misconduct.
The notice also required respondents to appear before petitioners’ lawyer to give their side with regard to
the charges. Respondents refused to attend said hearing.
Labor Arbiter dismissed the complaint and affirmed by the NLRC stating that respondents’ act of
misappropriating company funds constitutes gross misconduct. CA affirmed rulings and found, that
respondents were denied procedural due process. It held that the formal investigation of respondents for
misappropriation of company funds was a mere afterthought because it was conducted after petitioners
had notice of the complaint filed before the labor. Hence the petition.
ISSUE: Whether or not respondents were denied procedural due process.
HELD: NO.
In termination proceedings of employees, procedural due process consists of the twin requirements of
notice and hearing. The mere fact that the notices were sent to respondents after the filing of the labor
complaint does not, by itself, establish that the same was a mere afterthought. The surrounding
circumstances of this case adequately explain why the requirements of procedural due process were
satisfied only after the filing of the labor complaint. Petitioners received information that respondents were
not remitting their sales collections to the company. Thereafter, petitioners initiated an investigation by
sending one of their trusted salesmen, Bagasala, in the route being serviced by respondents. To prevent
a possible cover up, respondents were temporarily reassigned to a new route to service. Subsequently,
respondents stopped reporting for work.
Under the peculiar circumstances of this case, it cannot be concluded that the sending of the notices and
setting of hearings were a mere afterthought because petitioners were still awaiting the report from
Bagasala when respondents pre-empted the results of the ongoing investigation by filing the subject labor
complaint. For this reason, there was sufficient compliance with the twin requirements of notice and
hearing even if the notices were sent and the hearing conducted after the filing of the labor complaint.
LABOR LAW>Labor Standards>Termination of Employment
NAGKAKAISANG LAKAS NG MANGGAGAWA SA KEIHIN and HELEN VALENZUELA, Petitioners

vs.
KEIHIN PHILIPPINES CORPORATION, Respondent
G.R. No. 171115, August 9, 2010
(First Division)
DOCTRINE: Court leans over backwards to help workers and employees continue with their employment
or to mitigate the penalties imposed on them, acts of dishonesty in the handling of company property are
a different matter.
FACTS: Petitioner Helen Valenzuela was a production associate in respondent Keihin Philippines
Corporation. It is a standard operating procedure of Keihin to subject all its employees to reasonable
search before they leave the company premises. Helen saw a packing tape near her work area and
placed it inside her bag because it would be useful in her transfer of residence. When the lady guard on
duty inspected Helen’s bag, she found the packing tape, confiscated it and submitted an incident report.
The following day, respondent company issued a show cause notice to Helen and was called to the
supervisor’s office and directed her to explain in writing why no disciplinary action should be taken against
her. Helen, in her explanation, admitted the offense and even manifested that she would accept whatever
penalty would be imposed upon her. She, however, did not reckon that respondent company would
terminate her services for her admitted offense. Petitioners filed a complaint against respondent for illegal
dismissal.
Labor Arbiter rendered his Decision dismissing the complaint of illegal dismissal which was affirmed by
NLRC. CA dismissed the petition outright for not having been filed by an indispensable party in interest.
ISSUE: Whether or not the taking of packing tape for personal use be considered serious misconduct, a
just cause for her dismissal from service.
HELD: YES.
ARTICLE 282. Termination by employer. xxx (a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or representative in connection with his work. Misconduct is
defined as "the transgression of some established and definite rule of action, a forbidden act, a dereliction
of duty, willful in character, and implies wrongful intent and not mere error in judgment”.
In this case, Helen took the packing tape with the thought that she could use it for her own personal
purposes. There was intent on her part to benefit herself when she attempted to bring home the packing
tape in question. It is noteworthy that prior to this incident, there had been several cases of theft and
vandalism involving both respondent company’s property and personal belongings of other employees. In
order to address this issue of losses, respondent company issued two memoranda implementing an
intensive inspection procedure and reminding all employees that those who will be caught stealing and
performing acts of vandalism will be dealt with in accordance with the company’s Code of Conduct.
Despite these reminders, Helen took the packing tape and was caught during the routine inspection. All
these circumstances point to the conclusion that it was not just an error of judgment on the part of Helen,
but a deliberate act of theft of company property.
LABOR LAW>Labor Standards>Security of Tenure
ST. MARY’S ACADEMY of Dipolog City, Petitioner

vs.
TERESITA PALACIO, ET. AL, Respondents
G.R No. 164913, September 8, 2010
(First Division)
DOCTRINE: The Court will not hesitate to defend the workers’ constitutional right to security of tenure.
After all, the interest of the workers is paramount as they are regarded with compassion under the policy
of social justice.
FACTS: Petitioner hired respondents as classroom teachers and guidance counselor. The respondents’
re-application for school year 2000-2001 could not be accepted because they failed to pass the LET.
According to petitioner, as non-board passers, respondents could not continue practicing their teaching
profession pursuant to DECS Memorandum which requires incumbent teachers to register as
professional teachers. Respondents filed a complaint contesting their termination as highly irregular and
premature. They admitted that they are indeed non-board passers, however, they also argued that their
security of tenure could not simply be trampled upon for their failure to register with the PRC or to pass
the LET prior to the deadline set by RA 7836. Further, as the aforesaid law provides for exceptions to the
taking of examination, they opined that their outright dismissal was illegal because some of them
possessed civil service eligibilities and special permits to teach.
Labor Arbiter adjudged petitioner guilty of illegal dismissal because it terminated the services of the
respondents on March 31, 2000 which was clearly prior to the September 19, 2000 deadline fixed by PRC
for the registration of teachers as professional teachers, in violation of the doctrine regarding the
prospective application of laws. The NLRC affirmed LA’s decision, it held that the grounds relied upon by
petitioner to dismiss respondents are not among those enumerated by the Labor Code and that
respondents are regular employees, thus cannot be removed unless for cause. The CA agreed with the
findings of both the Labor Arbiter and the NLRC that the dismissal was effected prematurely in violation of
existing laws.
ISSUE: Whether or not the respondents were prematurely terminated.
HELD: YES.
Under DECS Memorandum, the Board for Professional Teachers, created under the control of the PRC,
effective September 20, 2000, only holders of valid certificates of registration, valid professional licenses
and valid special/temporary permits can engage in teaching in both public and private schools. Clearly,
respondents, in this case, had until September 19, 2000 to comply with the mandatory requirement to
register as professional teachers. As respondents are categorized as those not qualified to register
without examination, the law requires them to register by taking and passing the licensure examination. It
is incumbent upon this Court to afford full protection to labor. Thus, while we take cognizance of the
employer’s right to protect its interest, the same should be exercised in a manner which does not infringe
on the workers’ right to security of tenure. "Under the policy of social justice, the law bends over backward
to accommodate the interests of the working class on the humane justification that those with less
privilege in life should have more in law.
LABOR LAW>Labor Relations> Prescription of Actions on Money claims
MEDLINE MANAGEMENT, INC. & GRECOMAR SHIPPING AGENCY, Petitioners

vs.
GLICERA ROSLINDA & ARIEL ROSLINDA, Respondents
G.R. No. 168715, September 15, 2010
(First Division)
DOCTRINE: If a seafarer dies after the termination of his contract of employment, the Court can only
commiserate with his heirs because it has no alternative but to declare that his beneficiaries are not
entitled to the death benefits providd in the POEA Standard Employment Contract.
FACTS: Petitioner Medline Management, Inc. (MMI), on behalf of its foreign principal, hired Juliano
Roslinda (Juliano) to work on board the vessel. Juliano was previously under two successive separate
employment contacts of varying durations. His last contract was on September 9, 1998 for a duration for
nine (9) months. He boared on October 25, 1998 as an oiler and, after several months of extensions, was
discharged on January 20, 2000.
Months after his repatriation, Juliano consulted Dr. Lloren of Metropolitan Hospital. He complained about
abdominal distention which is the medical term for a patient who vomits previously ingested foods.
On August 27, 2001, Juliano died. On September 4, 2003, his wife Gliceria and son Ariel, filed a
complaint against the petitioners for payment of death compensation, reimbursement of medical
expenses, damages, and attorney’s fees before the Labor Arbitration branch of the NLRC.
Petitioners filed a motion to dismiss on the ground of prescriptions, lack of jurisdiction and prematurity.
Petitioners contented that the action has already prescribed because it was filed 3 years 7 months and 22
days from the time the deceased seafarer reached the point of hire.
The LA denied the motion to dismiss. Which the NLRC remanded the case back to LA. Thereafter, CA
dismissed the petition. Hence, this petition.
ISSUE: Whether or not the action filed by the respondent has prescribed for the action of claiming death
compensation.
HELD: YES.
Under our Labor Laws, Art 291 of the Labor Code (LC) prevails over Section 28 of the Standard of
Seafarers. It is therefore clear that Art 291 is the law governing the prescription of money claims of
seafarers, a class of overseas contract workers. This law prevails over Section 28 of the Standard
Employment Contract for Seafarers which provides for claims to be brought only within one year from the
date of the seafarer’s return to the point of hire.
Juliano did not die while he was under the employ of petitioners. His contract of employment ceased
when he was discharged on January 20, 2000, after having completed his contract thereat. He died on
August 27, 2001 or 1 year 7mos and 7 days after the expiration of his contract. Thus, his beneficiaries are
not entitled to the death benefits under the Standard Employment Contract for Seafarers.
SHIMIZU PHILS. CONTRACTORS, INC., Petitioner

vs.
VIRGILIO CALLANTA, Respondent
G.R. No. 165923, September 29, 2010
(First Division)
DOCTRINE: The purpose of the one month prior notice rule is to give DOLE an opportunity to ascertain
the veracity of the cause of termination. Non-compliance with this rule clearly violates the employee’s
right to statutory due process.
FACTS: Petitioner-corporation employed respondent as Safety Officer and eventually as Project

Administrator. Respondent was informed that his services will be terminated due to the lack of any
vacancy in other projects and the need to re-align the company’s personnel requirements brought about
by the imperatives of maximum financial commitments. Respondent then filed an illegal dismissal
complaint.
Labor Arbiter held that respondent was validly retrenched relying on petitioner’s factual version relating to
respondent’s employment background with regard to his position and behavioral conduct. NLRC upheld
the ruling that there was valid ground for respondent’s termination but modified the LA’s Decision by
holding that petitioner violated respondent’s right to procedural due process. The NLRC found that
petitioner failed to comply with the 30-day prior notice to the DOLE and that there is no proof that
petitioner used fair and reasonable criteria in the selection of employees to be retrenched. CA reversed
and set aside the NLRC’s ruling. The CA opined that petitioner failed to prove that there were employees
other than respondent who were similarly dismissed due to retrenchment and that respondent’s alleged
replacements held much higher ranks and were more deserving employees. Moreover, there were no
proofs to sustain that petitioner used fair and reasonable criteria in determining which employees to
retrench. According to the CA, petitioner’s failure to produce evidence raises the presumption that such
evidence will be adverse to it. Consequently, the CA invalidated the retrenchment, held respondent to
have been illegally dismissed, and ordered respondent’s reinstatement and payment of backwages.
ISSUE: Whether or not petitioner failed to observe fair and reasonable standards or criteria in effecting
the dismissal of respondent.
HELD: NO.
There was substantial compliance for a valid retrenchment; petitioner used fair and reasonable criteria in
effecting retrenchment. As an authorized cause for separation from service under Article 283 of the Labor
Code, retrenchment is a valid exercise of management prerogative subject to the strict requirements set
by jurisprudence.
In implementing its retrenchment scheme, petitioner was constrained to streamline its operations and to
downsize its complements in a progressive manner in order not to jeopardize the completion of its
projects. Petitioner was able to prove that it incurred substantial business losses, it offered to pay
respondent his separation pay, that the retrenchment scheme was arrived at in good faith, and lastly, that
the criteria or standard used in selecting the employees to be retrenched was work efficiency which
passed the test of fairness and reasonableness.
EQUITABLE PCI BANK (Now BANCO DE ORO UNIBANK INC.), Petitioner

vs.
CASTOR A. DOMPOR, Respondent
G.R NOs. 163293 & 163297, December 13, 2010
(First Division)
DOCTRINE: The mere existence of a basis for believing that a managerial employee has breached the
trust of his employer would suffice for his dismissal. Proof beyond reasonable doubt is not required.
FACTS: The respondent was employed by the petitioner as branch manager. Respondent allowed Luz
Fuentes, a client depositor, to deposit several second-endorsed PLDT dividend checks.
A special audit was conducted and it showed that second-endorsed dividend checks, covered by many
deposits slip were drawn and payable to different payee corporation ad prominent personalities. These
checks was negotiated and deposited to Fuentes which revealed that the signature of the different
payees had similar strokes. Respondent transgressed management policies: that checks payable to
corporations, societies, firms, etc. for credit to personal account and/or checks with unusual endorsement
should not be accepted; allowing the acceptance of second-endorsed checks despite the management to
stop accepting this type of deposits and failure to comply with Credit Policy Supervision No.6 which
prohibits the purchase of second-endorsed PLDT checks in the absence of approved credit line.
The audit committee recommended respondents dismissal from employment. Respondent argued that he
accepted said checks in good faith, solely for marketing considerations and the bank did not suffer
damage since all checks were cleared.
Complaint filed by respondent for illegal dismissal before the Labor Arbiter was dismissed, finding
dismissal valid. On appeal, NLRC affirmed the Labor Arbiter’s decision. On the other hand, CA reversed
NLRC decision that dismissal was effected without due process and without just cause, granting the
award of full backwages and other benefits.
ISSUE: Whether or not the respondent committed willful disobedience and willful breach of trust sufficient
as just causes for his dismissal.
HELD: YES.
Respondent, as bank manager, has the duty to ensure that bank rules are strictly complied with not only to ensure
efficient bank operation which is imbued with public interest but also to serve the best interest of the bank as he
holds a position of trust and confidence. As emphasized by petitioner, respondent was in charge of the overall
administration of the branch and is tasked to ensure that all policies and procedures are strictly followed. Indubitably,
any negligence in the exercise of his responsibilities can be sufficient ground for loss of trust and confidence
demanded by his position.
The mere existence of a basis for believing that [a managerial] employee has breached the trust of his
employer would suffice for his dismissal. Proof beyond reasonable doubt is not required.
Respondent’s wanton violation of bank policies equates to abuse of authority and, therefore, abuse of the trust
reposed in him. Such intention to violate the trust of petitioner is enough for his dismissal from service.
The requirements of procedural due process were complied with when petitioner sent a Memo to
respondent informing him of the specific charges and giving him opportunity to air his side.
We ruled in Toyota Motor Philippines Corp. Workers Association (TMPCWA) v. National Labor Relations
Commission that in addition to serious misconduct, separation pay should not be conceded to an
employee who was dismissed based on willful disobedience.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner

vs.
EUSEBIO M. HONRADO, Respondent
G.R. No. 189366, December 13, 2010
(First Division)
DOCTRINE: The essence of due process is an opportunity to be heard. A formal or trial type hearing is
not at all times and in all instances essential to due process.
FACTS: Respondent was an employee of petitioner PLDT Co. assigned at the PLDT North Parańaque
Exchange and held the position of a senior lineman.
Spouses Mueda went to PLDT’s Quality Control Division to verify their application for telephone line,
according to them, a person named Rony Hipolito, who introduced himself as a PLDT employee went to
their house, told them that he will process their telephone line and they can pay directly to him while the
balance be paid to PLDT within six months on instalment basis. Hipolito was given 1,500 as a partial
payment while he issued signed receipt. The act of soliciting and receiving 1,500 as down payment for
installation of telephone line is against the company policy of the petitioner.
The investigator together with Mrs. Mueda, conducted a stake out operation at the PLDT North
Parańaque Exchange to determine the identity of Rony Hipolito. When respondent Honrado handed his
Trip Authorization Pass to the guard at the gate, Mrs. Mueda identified him as Rony Hipolito.
Respondent was given chance to submit an explanation within 72 hours from receipt of the memo.
Respondent requested for a formal hearing. After the proceedings, respondent was dismissed.
Respondent filed a complaint wherein the Labor Arbiter dismissed. As respondent appealed to the NLRC,
the appealed decision was set aside.
ISSUE: Whether or not there was lack of due process in respondent’s dismissal.
HELD: NO.
On the basis of the related circumstances, the Court agrees with the finding of the CA that "petitioner
technically followed all the procedures laid down in Book VI, Rule I, Section 2(d) of the Omnibus Rules
Implementing the Labor Code in the sense that: (1) private respondent was served with written notice
specifying the ground for his termination; (2) a formal hearing was conducted with the assistance of his
counsel; (3) and he was served with written notice of termination indicating the grounds to justify it."
The requisites for a valid dismissal are: (a) the employee must be afforded due process, i.e., he must be
given an opportunity to be heard and defend himself; and (b) the dismissal must be for a valid cause as
provided in Article 282 of the Labor Code or for any of the authorized causes under Articles 283 and 284
of the same Code.
It is hornbook in employee dismissal cases that "the essence of due process is an opportunity to be
heard, or as applied to administrative proceedings, an opportunity to explain one’s side." “A formal or trial
type hearing is not at all times and in all instances essential to due process, the requirements of which
are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the
controversy. Neither is it necessary that the witnesses be cross-examined by counsel for the adverse
party.”
The quantum of proof required in determining the legality of an employee’s dismissal is only substantial
evidence.
ISLRIZ TRADING/VICTOR HUGO LU, Petitioner

vs.
EFREN CAPADA, et al., Respondents
G.R. No. 168501, January 31, 2011
(First Division)
DOCTRINE: If order of reinstatement of the Labor Arbiter is reversed, it is obligatory for employer to reinstate and
pay the wages of the dismissed employee during the period of appeal until reversal by the higher court or tribunal.
FACTS: Respondents are drivers and helpers of Islriz Trading, a gavel and sand business owned
operated by petitioner Victor Hugo Lu, president of the company. Respondents claimed that they were
illegally dismissed and not paid their overtime pay, holiday pay, rest day, allowances and separation pay.
However, petitioner imputed abandonment of work against respondents.
In the proceedings before the Labor Arbiter Waldo Emerson Gan and NLRC, Labor Arbiter Gan declared
petitioner guilty of illegal dismissal and ordering the reinstatement of respondent to their former positions
without loss of seniority rights and the payment of full backwages. NLRC set aside the LA’s decision, ordering the
reinstatement without backwages, respondents failure to continue working was neither caused by termination nor
abandonment of work.
Respondents filed motion for reconsideration but this was denied by NLRC and the resolution issued became final
and executory. Notwithstanding of its finality, petitioner still refused to reinstate the respondent. Respondents filed
with the other Labor Arbiter an Ex-Parte Motion to Set Case for Conference with Motion averring that a writ of
execution was already issued by LA Gan for the enforcement of its reinstatement which is immediately executory
even pending appeal.
An Alias Writ of Execution was issued to enforce the order of reinstatement and computation of the award of
backwages. The sheriff issued Notice of Sale/Levy on Execution of Personal Property against the property of
petitioner to effect the monetary award. Before the CA, it agreed with the LA ratiocination.
ISSUE: Whether or not respondents may collect their wages during the period between the Labor
Arbiter’s order of reinstatement pending appeal and the NLRC Resolution overturning that of the Labor
Arbiter.
HELD: YES.
In view of this, the Court held this stance in Genuino as a stray posture and realigned the proper course of the
prevailing doctrine on reinstatement pending appeal vis--vis the effect of a reversal on appeal, that is, even if the
order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to
reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court
or tribunal. It likewise settled the view that the Labor Arbiters order of reinstatement is immediately executory and the
employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal,
or to reinstate them in the payroll, and that failing to exercise the options in the alternative, employer must pay the
employee’s salaries.
The court went on to declare that after the Labor Arbiters decision is reversed by a higher tribunal, the employee
may be barred from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending
appeal was without fault on the part of the employer. It then provided for the two-fold test in determining whether an
employee is barred from recovering his accrued wages, to wit: (1) there must be actual delay or that the order of
reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to the
employer’s unjustified act or omission. If the delay is due to the employer’s unjustified refusal, the employer may still
be required to pay the salaries notwithstanding the reversal of the Labor Arbiters Decision
LABOR LAW>Labor Relations>Certification Election
LEGEND INTERNATIONAL RESORTS LIMITED, Petitioners

vs.
KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT), Respondents
G.R. No. 169754, February 23, 2011
(First Division)
DOCTRINE: An order to hold a certification election is proper despite the pendency of the petition for
cancellation of the registration certificate of the respondent union.
FACTS: KML filed with the Med-Arbitration Unit of the DOLE, San Fernando, Pampanga a petition for
Certification Election. KML alleged that it is a legitimate labor organization of the rank and file employees
of Legend International Resorts Limited (LEGEND). KML claimed that it was issued its Certificate of
Registration by the DOLE on May 18, 2001.
LEGEND moved to dims the petition alleging that KML is not a legitimate labor organization because its
membership is a mixture of rank and file and supervisory employees in violation of Art 245 of the LC.
LEGEND also claimed that KML committed acts of fraud and misrepresentation when it made it appear
that certain employees attended its general membership meeting when in reality some of them were
either at work; have recently resigned; or were abroad.
The Med-Arbiter dismissed the petition because the petitioner have proved their allegations of fraud and
misrepresentation to KML and also the mixtures of members which is not valid under Art. 245 of the LC.
KML thus appealed to the Office of the Secretary of the DOLE which they granted the petition of KML and
setting aside the decision of the Med-Arbiter. A petition for Certiorari filed by LEGEND with the CA. The
CA ruled in favor of KML. Hence, this petition.
ISSUE #1: Whether or not KML is a legitimate labor organization

ISSUE #2: Whether or not can file for a petition for Certification of Election
HELD #1: NO.
The reason is that, the Supreme Court REVERSED and SET ASIDE the decision of the BLR on the
legitimacy of the KML as a labor organization.
It is also said that the legitimacy of the legal personality of KML cannot be collaterally attacked in a
petition for certification election.
HELD #2: YES.
In Capitol Medical Center, Inc. v. Hon. Trajano, 462 SCRA 457 (2005), we also held that “the pendency of
a petition for cancellation of union registration does not preclude collective bargaining.” Citing the
Secretary of Labor, we held viz.: That there is a pending cancellation proceedings against the respondent
Union is not a bar to set in motion the mechanics of collective bargaining. If a certification election may
still be ordered despite the pendency of a petition to cancel the union’s registration certificate x x x more
so should the collective bargaining process continue despite its pendency.
EXODUS INTERNATIONAL CONSTRUCTION CORPORATION

and ANTONIO JAVALERA, Petitioner
vs.
GUILLERMO BISCOCHO, et al., Respondents
G.R. No. 166109, February 23, 2011
(First Division)
DOCTRINE: Mere absence or failure to report for work is not enough to amount to abandonment of work.
Abandonment is the deliberate and unjustified refusal of an employee to resume his employment.
FACTS: Petitioner Exodus is a duly licensed labor contractor for the painting of residential houses, condominium
units and commercial buildings. Exodus hired respondents as painters on the different projects.
Petitioner averred that respondent Gregorio absented himself from work and applied as painter to other contractor.
As to Guillermo he absented himself, he was reprimanded for being AWOL and because of reprimand he only
worked half-day and was unheard of until the filing of the complaint. Respondent Fernando, Ferdinand and Miguel
were caught eating during working hours for which they were reprimand, since then they no longer reported to work.
Respondents filed a complaint for illegal dismissal.
Labor Arbiter ruled there is neither illegal dismissal nor abandonment of work, respondents should be reinstated
without backwages. In the NLRC, petitioners filed an appeal limiting to the award of service incentive leave pay,
13the month pay, holiday pay and 10% attorney’s fees which NLRC dismissed. NLRC ruled that petitioners, who
have complete control over the records of the company, could easily rebutted monetary claim against it. As regards
to petitioners’ appeal before the CA, it affirmed the findings of LA and NLRC.
ISSUE: Whether or not the respondents were illegally dismissed from employment.
HELD: NO.
This Court is not unmindful of the rule that in cases of illegal dismissal, the employer bears the burden of
proof to prove that the termination was for a valid or authorized cause. But before the petitioners must
bear the burden of proving that the dismissal was legal, the respondents must first establish by
substantial evidence that indeed they were dismissed. If there is no dismissal, then there can be no
question as to the legality or illegality thereof.
Hence, as between respondents general allegation of having been orally dismissed from the service vis-
a-vis those of petitioners which were found to be substantiated by the sworn statement of foreman
Wenifredo, we are persuaded by the latter. Absent any showing of an overt or positive act proving that
petitioners had dismissed respondents, the latter’s claim of illegal dismissal cannot be sustained. Indeed,
a cursory examination of the records reveal no illegal dismissal to speak of.
The Labor Arbiter is also correct in ruling that there was no abandonment on the part of respondents that
would justify their dismissal from their employment. It is a settled rule that mere absence or failure to
report for work x x x is not enough to amount to abandonment of work. Abandonment is the deliberate
and unjustified refusal of an employee to resume his employment.
The court also found that respondents were regular employee of petitioner, therefore entitled to
reinstatement. It is clear from the records of the case that when one project is completed, respondents were
automatically transferred to the next project awarded to petitioners. There was no employment agreement given to
respondents. It is now too late for petitioners to claim that respondents are project employees whose employment is
coterminous with each project or phase of the project to which they are assigned.
LABOR LAW>Labor Relations>Certification Election
SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE

PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACCARIAS JERRY
VICTORIO-Union President, Petitioners
vs.
CHARTER CHEMICAL and COATING CORPORATION, Respondent
G.R, No. 169717, March 16, 2011
(First Division)
DOCTRINE: The right to file a petition for certification election is accorded to a labor organization
provided that it complies with the requirements of law for proper registration. The inclusion of supervisory
employees in a labor organization seeking to represent the bargaining unit of rank-and-file employees
does not divest it of its status as a legitimate labor organization.
FACTS: Petitioner Union filed a petition for certification election among the regular rank-and-file
employees of the respondent company with the Mediation Arbitration Unit of the DOLE, NCR.
Respondent filed an answer with Motion to Dismiss on the ground that petitioner union is not a legitimate
labor organization because of (1) failure to comply with the documentation requirements set by law, and
(2) the inclusion of supervisory employees within petitioner union.
On April 30, 1999, the Med-Arbiter ruled in dismissing the petition for certification of election. The Med-
Arbiter ruled that the petitioner is not a legitimate labor organization because the Charter Certificate were
not executed under oath and certified by the union secretary and attested by the union president as
required by Sec 235 of the LC. He also added that the list of membership of petitioner union consisted of
12 batchman, mill operator and leadman who performed supervisory functions.
However the DOLE issued a ruling favoring the petitioner to allow the certification election. Then an
appeal to the CA was filed which annulled and set aside the decision of the DOLE.
ISSUE: Whether or not the petitioner be allowed to file for petition for Certification Election
HELD:YES.
Anent to the ruling of the Supreme Court, a union’s charter certificate need not be executed under oath. It
valid acquired the status of a legitimate labor organization upon submission of (1) its Charter Certificate;
(2) the names of its officers, their addresses, and its principal office; and (3) its constitution and by-laws.
Having been executed the requirements, grants them a legitimate status.
Being a legitimate labor organization, they can be allowed to file a petition for Certification Election. A
Labor Union’s personality cannot be collaterally attacked in a certification election proceedings,
SANDEN AIRCON PHILIPPINES and ANTONIO ANG, Petitioner

vs.
LORESSA P. ROSALES, Respondent
G.R. No. 169260, March 23, 2011
(First Division)
DOCTRINE: Loss of trust and confidence as a just cause for termination of employment is premised on
the fact that an employee concerned holds a position where greater trust is placed by management and
from whom greater fidelity to duty is correspondingly expected.
FACTS: Sanden Aircon employed Loressa Rosales as Data Custodian and coordinator. Loressa had
access to delivery receipt transaction of files of Sanden.Technical investigation was conducted finding
that Loressa instructed the staff to log out from the system and being the only one logged in as part of her
job as Data Custodian who has the right to add, edit and delete all the files found in the system. Petitioner
accused the respondent of data sabotage.
Labor Arbiter ruled that Sanden is guilty of illegal dismissal while NLRC reversed its earlier resolution and
dismissed the complaint. However CA granted respondent’s petition and reversed and set aside the
NLRC resolution on dismissing the complaint
ISSUE: Whether or not petitioner legally terminated respondent’s employment on the ground of willful
breach of trust and confidence as Coordinator and Data Custodian.
HELD: NO.
Article 282(c) of the Labor Code prescribes two separate and distinct grounds for termination of
employment, namely: (1) fraud or (2) willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative. Settled is the rule that under Article 282(c), the breach of
trust must be willful. Ordinary breach will not suffice. "A breach is willful if it is done intentionally and
knowingly without any justifiable excuse, as distinguished from an act done carelessly, thoughtlessly or
inadvertently." "As firmly entrenched in our jurisprudence, loss of trust and confidence as a just cause for
termination of employment is premised on the fact that an employee concerned holds a position where
greater trust is placed by management and from whom greater fidelity to duty is correspondingly
expected." "The betrayal of this trust is the essence of the offense for which an employee is penalized."
"Unlike in other cases where the complainant has the burden of proof to prove its allegations, the burden
of establishing facts as bases for an employer’s loss of confidence in an employee – facts which
reasonably generate belief by the employer that the employee was connected with some misconduct and
the nature of his participation therein is such as to render him unworthy of trust and confidence
demanded of his position – is on the employer." Xxx It is sufficient that there must only be some basis for
such loss of confidence or that there is reasonable ground to believe if not to entertain the moral
conviction that the concerned employee is responsible for the misconduct and that the nature of his
participation therein rendered him absolutely unworthy of trust and confidence demanded by his position.
Sanden failed to discharge the burden of proof that the dismissal of Loressa is for a just cause. The first
requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must
be holding a position of trust and confidence. "The second requisite is that there must be an act that
would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for
dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis
for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not
necessary." Sanden’s evidence against Loressa fails to meet this standard.
LABOR LAW>Labor Relations>Prescription of Actions on Money Claims
IMELDA PANTOLLANO (for herself as surviving spouse and in behalf of her 4 children
Honeyvette, Tierra Bryan, Kienne Dionnes, Sherra Veda Mae, then all minors, deceased seaman
VEDASTO PANTOLLANO), Petitioner,
vs.
KORPHIL SHIPMANAGEMENT AND MANNING CORPORATION, Respondent
G.R. No. 169575, March 3, 2011
(First Division)
DOCTRINE: The heirs of a missing seaman may file their claim for death compensation benefits within
the three-year period fixed by law from the time has been presumed dead.
FACTS: Korphil is a domestic corporation engaged in the recruitment of seafarers for its foreign
principals. On March 24, 1994, they hired Vedasto as 4th Engineer on board the vessel under a POEA
approved contract of employment.
On August 3, 1994, a report was issued by the Master of the vessel declaring Vedasto was missing and
thereafter informed the family of the latter. Since then Vedasto was never seen again.
On May 29, 2000, Imelda filed a complaint before the NLRC where she sought to recover death benefits,
damages and attorney’s fees.
The LA ruled in favor of the widowed spouse. Korphil then sought recourse to the NLRC which reversed
the LA’s ruling on the ground that it was clearly shown in evidence to be a case of suicide and was not
compensable under the clear provisions of the POEA Standards Employment Contract. Then Imelda filed
motion for reconsideration which the NLRC reversed its earlier decision and affirming the decision of the
LA.
Korphil being aggrieved file with the CA a petition for Certiorari. The CA now issued a decision reversing
the decision of the NLRC which affirming the decision of the LA.
ISSUE: Whether or not the claim of Imelda for death compensation benefits filed for more than five years
from the time her husband was reported missing is already barred by prescription following the provisions
of Art 291 of the LC.
HELD: NO.
Under the Art 291 of the LC, it provides that there is a prescription on filing of an action for money claims
of four years. It is also provided in Art 391 of the LC that a person be presumed dead for all purposes
when “(3) A person who has been in danger under other circumstances and his existence has not be
known for four years”
When the respondent company said to the family of Vedasto to go back after 4 years for the claim of the
death benefits which the widowed spouse followed and thereafter filed a petition claiming such benefits,
she will be qualified because the cause of action accrued on August 2, 1998, it follows that her claim filed
on May 29, 2000 was timely. It was filed within 3 years from the time the cause of action accrued
pursuant to Art 291 of the LC. Hence, Imelda and her children are entitled to the payment of said
compensation.
JAMES BEN L. JERUSALEM, Petitioner

vs.
KEPPEL MONTE BANK, HOE ENG HOCK, SUNNY YAP
and JESEFINA PICART, Respondent
G.R. No. 169564, April 6, 2011
(First Division)
DOCTRINE: In order to constitute a just cause for dismissal, the act complained of must be work-related and
shows that the employee concerned is unfit to continue to work for the employer.
FACTS: James Jerusalem was employed by Keppel Monte Bank. He was assigned before as head of
newly created VISA Credit Card Department and eventually reassigned as Head of Marketing and
Operations of the Jewelry Department. James received from Jorge Javier, a credit card applicant, an
accomplished form which he handed to the VISA Credit Card Unit. The 67 VISA Credit Card applications
referred by Jorge which James forwarded to the VISA Credit Card Unit, were all approved. As it turned
out, all the accounts under these approved applications became past due.
James was dismissed because of referring/endorsing fictitious VISA Card applicants. He explained he
had no participation and he can only endorse the application to the VISA Credit Card Unit because he
was already transferred to Jewelry Department, as head.
The LA and NLRC, ruled that Keppel was guilty of illegal dismissal. On the other hand, CA ruled in favor
of Keppel. Hence, the petition.
ISSUE: Whether or not the respondent legally terminated petitioner’s employment on the ground of willful
breach of trust and confidence.
HELD: NO.
Article 282(c) of the Labor Code prescribes two separate and distinct grounds for termination of
employment, namely: (1) fraud; or (2) willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative.
Law and jurisprudence have long recognized the right of employers to dismiss employees by reason of
loss of trust and confidence.[23] As provided for in Article 282, an employer may terminate an employees’
employment for fraud or willful breach of trust reposed in him. But, in order to constitute a just cause for
dismissal, the act complained of must be work-related such as would show the employee concerned to be
unfit to continue working for the employer. Unlike in other cases where the complainant has the burden of
proof to discharge its allegations, the burden of establishing facts as bases for an employer’s loss of
confidence in an employee facts which reasonably generate belief by the employer that the employee
was connected with some misconduct and the nature of his participation therein is such as to render him
unworthy of trust and confidence demanded of his position is on the employer.
The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss
of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and
founded on clearly established facts. The basis for the dismissal must be clearly and convincingly
established but proof beyond reasonable doubt is not necessary. [27] Keppel’s evidence against James fails
to meet this standard.
Loss of confidence as a just cause for termination of employment is premised on the fact that the
employee concerned holds a position of responsibility or trust and confidence. He must be invested with
confidence on delicate matters, such as custody handling or care and protection of the property and
assets of the employer. And, in order to constitute a just cause for dismissal, the act complained of must
be work-related and shows that the employee concerned is unfit to continue to work for the employer.
LABOR LAW>Labor Standards>Labor-Only Contracting
JOEB M. ALIVIADO, et al., Petitioner

vs.
PROCTER & GAMBLE PHILS., INC, and PROMM-GEM INC, Respondents
G.R. No. 160506, June 6, 2011
(Second Division)
DOCTRINE: Labor Code itself establishes an employer-employee relationship between the employer and the
employees of the labor-only contractor.
FACTS: Petitioners worked as merchandisers of P&G. They all individually signed employment contract
and received their wages with either Promm-Gem or SAPS, who also imposed disciplinary measured on
erring merchandisers for reasons such as absenteeism, dishonesty or changing day-off without prior
notice. Petitioners filed complaint against P&G for regularization, service incentive leave pay and other
benefits with damages. Petitioners were subsequently dismissed, therefore included it to their complaint.
LA dismissed the complaint, ruling that there was no employer-employee relationship between petitioner
and P&G. Appeals before NLRC and CA were both denied. Hence, the petition.
ISSUE: Whether or not the respondents are the employer of the petitioners.
HELD: YES.
The law and its implementing rules allow contracting arrangements for the performance of specific jobs,
works or services. Indeed, it is management prerogative to farm out any of its activities, regardless of
whether such activity is peripheral or core in nature. However, in order for such outsourcing to be valid, it
must be made to an independent contractor because the current labor rules expressly prohibit labor-only
contracting.
To emphasize, there is labor-only contracting when the contractor or sub-contractor merely recruits,
supplies or places workers to perform a job, work or service for a principal and any of the following
elements are present: i) The contractor or subcontractor does not have substantial capital or investment
which relates to the job, work or service to be performed and the employees recruited, supplied or placed
by such contractor or subcontractor are performing activities which are directly related to the main
business of the principal; ii) The contractor does not exercise the right to control over the performance of
the work of the contractual employee.
Under the circumstances, we find that Promm-Gem has substantial investment which relates to the work
to be performed. In the instant case, petitioners-employees of Promm-Gem may have committed an error
of judgment in claiming to be employees of P&G, but it cannot be said that they were motivated by any
wrongful intent in doing so. As such, we find them guilty of only simple misconduct for assailing the
integrity of Promm-Gem as a legitimate and independent promotion firm. A misconduct which is not
serious or grave, as that existing in the instant case, cannot be a valid basis for dismissing an employee.
It must be emphasized that the onus probandi to prove the lawfulness of the dismissal rests with the
employer. In termination cases, the burden of proof rests upon the employer to show that the dismissal is
for just and valid cause. In the instant case, P&G failed to discharge the burden of proving the legality and
validity of the dismissals of those petitioners who are considered its employees. Hence, the dismissals
necessarily were not justified and are therefore illegal.
LABOR LAWS>Labor Relations>Jurisdiction
UNIVERSITY PLANS INCORPORATED, Petitioner,

Vs.
BELINDA P. SOLANO, TERRY A. LAMUG, GLENDA S. BELGA, MELBA S. ALVAREZ, *WELMA R.
NAMATA, MARIETTA D. BACHO and MANOLO L. CENIDA, Respondents
G.R. No. 170416, June 22, 2011
(First Division)
DOCTRINE: The NLRC is not precluded from conducting a preliminary determination of the merit or lack
of merit of a motion to reduce bond.
FACTS: Respondents Solano, Lamug, Belga, Alvarez, Namata, Bacho, and Cenido filed before the Labor
Arbiter (LA) complaints for illegal dismissal, illegal deductions, overriding commissions, unfair labor
practice, moral and exemplary damages, and actual damages against petitioner.
The LA found petitioner guilty of illegal dismissal and ordered the reinstatement as well as the payment of
their full backwages, proportionate 13th month pay, moral/exemplary damages and attorney’s fees. The
petitioner thereafter filed with NLRC a Motion to Reduce Bond however the NLRC denied the same.
Then the petitioner went to CA through a Petition for Certiorari. Hence, this petition.
ISSUE: Whether or not the Motion to Reduce Bond be allowed before making an appeal.
HELD: YES.
In the case of Ramirez v. CA, 607 SCRA 752 (2009) held that under the rules, appeals involving
monetary awards are perfected only upon compliance with the following mandatory requisites, namely: 1)
payment of the appeal fees; 2) filing of the memorandum of appeal; and 3) payment of the required cash
or surety bond. The posting of a bond is indispensable to the perfection of an appeal in cases involving
monetary awards from the decision of the LA. Also, it is said by this court that the reduction of the amount
of the bond lies within the sound discretion of the NLRC upon showing of meritorious ground.
In view of the foregoing, a remand of this case to the NLRC for the conduct of preliminary determination
of the merit or lack of merit of petitioner’s Motion to Reduce Bond is proper. In so doing, the NLRC is also
reminded to consider respondent Solano’s allegation that petitioner is now under liquidation and to
receive evidence thereon so that it may judiciously resolve the Motion. This is because should the NLRC
eventually find the Motion to Reduce Bond meritorious it shall give due course to the appeal upon the
timely posting of a reasonable amount of supersede as bond it deems appropriate under the
circumstances, and shall then proceed to determine the merits of the case.
LABOR LAW>Labor Standards> Constructive Dismissal
WILLIAM ENDELISEO BARROGA, Pettioner

vs.
DATA CENTER COLLEGE OF THE PHILIPPINES
and WILFRED BACTAD, Respondents
G.R. NO. 174158, June 27, 2011
(First Division)
DOCTRINE: Constructive dismissal is quitting because continued employment is rendered impossible,

unreasonable or unlikely, or because of a demotion in rank or a diminution of pay. It exists when there is
a clear act of discrimination, insensibility or disdain by an employer which becomes unbearable for the
employee to continue his employment.
FACTS: Petitioner was employed as an instructor in Data Center College, Laoag City branch in Ilocos
Norte. Respondents temporarily transferred petitioner to University of Northern Phils. in Vigan, Ilocos Sur
with additional allowance and then was recalled to Laoag campus. Petitioner received a memo of
transferring him to Bangued, Abra branch as Head for Education/ Instructor but he declined to accept his
transfer citing deteriorating health caution of his father and absence of additional allowance.
Petitioner filed a complaint for constructive dismissal against respondent alleging that his proposed
transfer to Abra constitutes demotion in rank and diminution in pay. He only reassigned as instructor in
Abra, whereby from an administrative officer to rank-and-file employee and the estimation of his
allowances will result indirectly to reduction of salary.
The proceeding before the Labor Arbiter and NLRC, found out no constructive dismissal.
ISSUE: Whether or not the petitioner was constructively dismissed by respondents.
HELD: NO.
Constructive dismissal is quitting because continued employment is rendered impossible, unreasonable

or unlikely, or because of a demotion in rank or a diminution of pay. It exists when there is a clear act of
discrimination, insensibility or disdain by an employer which becomes unbearable for the employee to
continue his employment.
Petitioner was originally appointed as instructor in 1991 and was given additional administrative functions
as Head for Education during his stint in Laoag branch. He did not deny having been designated as Head
for Education in a temporary capacity for which he cannot invoke any tenurial security. Hence, being
temporary in character, such designation is terminable at the pleasure of respondents who made such
appointment.
The Court agrees with the Labor Arbiter that there was no violation of the prohibition on diminution of
benefits. Indeed, any benefit and perks being enjoyed by employees cannot be reduced and
discontinued, otherwise, the constitutional mandate to afford full protection to labor shall be offended. But
the rule against diminution of benefits is applicable only if the grant or benefit is founded on an express
policy or has ripened into a practice over a long period which is consistent and deliberate.
LABOR LAW>Labor Standards> Termination of Employment
JERRY MAPILI, Petitioner

vs
PHILIPPINE RABBIT BUS LINES, INC/ NATIVIDAD NISCE, Respondents
G.R. No. 172506, July 27, 2011
(First Division)
DOCTRINE: Length of service may aggravate the resulting consequences of transgressions.
FACTS: PRBLI hired petitioner Jerry as bus conductor. Jerry was caught by PRBLIs field inspector
extending a free ride to a lady passenger. The lady passenger was happened to be the wife of petitioner
co-employee a driver in PRBLI.
Petitioner was terminated after conducting an investigation and a formal hearing. Petitioner argued that
the infraction was only trivial not knowing that immediate family members of PRBLIs employees are not
entitled to free ride. While respondents contended that petitioner admissions that he offered free ride out
of gratitude and considering that it was his third offense, was a valid cause of dismissal.
The ruling of Labor Arbiter was that Jerry was illegally dismissed. However proceeding before NLRC and
CA, ruled that petitioner Jerry was validly dismissed. Hence, the petition.
ISSUE: Whether or not the penalty of dismissal is disproportionate to the infraction petitioner committed.
HELD: NO.
For that matter, his length of service has even aggravated the resulting consequences of his
transgressions. In addition, sometime on the years 1994 and 1995, he committed similar infractions of
extending free ride to a police officer and a former employee, respectively. These had been brought to the
attention of the petitioner and for which the penalties of relief from duty and suspension were meted out
upon him. Hence, he ought to have known better than to repeat the same violation as he is presumed to
be thoroughly acquainted with the prohibitions and restrictions against extending free rides. We also
cannot agree with petitioners’ contention that his infraction was trivial. As a bus conductor whose duties
primarily include the collection of transportation fares, which is the lifeblood of the PRBLI, petitioner
should have exercised the required diligence in the performance thereof and his habitual failure to
exercise the same cannot be taken for granted. As correctly observed by the CA, petitioners’ position is
imbued with trust and confidence because it involves handling of money and failure to collect the proper
fare from the riding public constitutes a grave offense which justifies his dismissal. Moreover, petitioners’
series of irregularities when put together may constitute serious misconduct.
As petitioners employment record shows, this is not the first time that petitioner refused to collect fares
from passengers. In fact, this is already the third instance that he failed to collect fares from the riding
public. Although petitioner already suffered the corresponding penalties for his past misconduct, those
infractions are still relevant and may be considered in assessing his liability for his present infraction. We
thus held in Philippine Rabbit Bus Lines, Inc. v. National Labor Relations Commission that: Nor can it be
plausibly argued that because the offenses were already given the appropriate sanctions, they cannot be
taken against him. They are relevant in assessing private respondent’s liability for the present violation for
the purpose of determining the appropriate penalty. To sustain private respondent’s argument that the
past violation should not be considered is to disregard the warnings previously issued to him.
LABOR LAW>Social Legislation> Employees’ Compensation
CARMELITO N. VALENZONA, Petitioner

vs.
FAIR SHIPPING CORPORATION and/or SEJIN LINES COMPANY LIMITED, Respondents
G.R. No. 176884, October 19, 2011
(First Division)
DOCTRINE: A total disability does not require that the employee be absolutely disabled or totally
paralyzed. What is necessary is that the injury must be such that the employee cannot pursue his usual
work and earn therefrom and considered permanent if it lasts continuously for more than 120 days.
FACTS: Valenzona was hired by respondent as 2 nd Assistant Engineer aboard its vessel M/V Morelos for
duration of six months. While aboard the vessel, petitioner complained of chest pain, was then confined
and repatriated. The company physician diagnosed him with hypertension and treated him for six months.
Petitioner consulted another doctor who diagnosed him with Hypertensive Cardiovascular Disease and
because of prolonged sickness he demanded payment of the balance of his sickness allowance and
permanent disability benefits but it was not listened.
While on April 25, 2002 or a lapse of 199 days from repatriation, company physician issued certification
declaring Valenzona fit to work. Unconvinced, Valenzona consulted an Internist-Cardiologist who
declared him unfit to work. Hence, petitioner filed a complaint for recovery of disability benefits, sickness
allowance, attorney’s fees and moral damages.
The Labor Arbiter awarded sickness allowance. But NLRC and CA affirmed the LA ruling that Valenzona
is not entitled to disability benefits under the CBA as the same referred to disability caused by accident
and not by illness.
ISSUE: Whether or not petitioner is entitled to receive permanent disability benefits.
HELD: YES.
There are three kinds of disability benefits under the Labor Code, as amended by P.D. No. 626: (1)
temporary total disability, (2) permanent total disability, and (3) permanent partial disability. Section 2,
Rule VII of the Implementing Rules of Book V of the Labor Code differentiates the disabilities as follows:
Sec. 2. Disability. - (a) A total disability is temporary if as a result of the injury or sickness the employee is
unable to perform any gainful occupation for a continuous period not exceeding 120 days, except as
otherwise provided for in Rule X of these Rules.
(b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to
perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise
provided for in Rule X of these Rules.
(c) A disability is partial and permanent if as a result of the injury or sickness the employee suffers a
permanent partial loss of the use of any part of his body.
But even in the absence of an official finding by the company-designated physicians that respondent is
unfit for sea duty, respondent is deemed to have suffered permanent disability. Permanent disability is the
inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of
any part of his body. It is undisputed that from the time respondent suffered a heart attack on December
5, 1997, he was unable to work for more than 120 days, his cardiac rehabilitation and physical therapy
having ended only on May 28, 1998.
LABOR LAW>Social and Welfare Legislation>Employees’ Compensation
GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner

vs.
MANUEL P. BESITAN, respondent
G.R. No. 178901. November 23, 2011
(First Division)
DOCTRINE: Under the increased risk theory, there must be a reasonable proof that the employee’s
working condition increased his risk of contracting the disease, or that there is a connection between his
work and the cause of the disease.
FACTS: Respondent Besitan was employed by the Central Bank of the Philippines (now Bangko Sentral
ng Pilipinas) and was promoted as Bank Officer II and eventually as Bank Officer III. However, he was
diagnosed with End Stage Renal Disease secondary to Chronic Glomerulonephritis and thus, had to
undergo a kidney transplant for which he incurred medical expenses. Believing that his working condition
increased his risk of contracting the disease, Besitan filed with the GSIS a claim for compensation
benefits under PD No. 626, as amended. The GSIS denied the claim and the same was affirmed by the
ECC. On appeal, the CA reversed the ruling of the ECC. The CA ruled that Besitan is entitled to
compensation benefits under PD No. 626, as amended, because his ailment was aggravated by the
nature of his work, as evidenced by the Medical Certificate issued by the Bank Physician of the Bangko
Sentral ng Pilipinas.
ISSUE: Whether or not Besitan is entitled to compensation benefits under PD No. 626, as amended
based on the medical certificate presented.
HELD: YES.
For the sickness or resulting disability or death to be compensable, the claimant must prove either (1) that
the employee’s sickness was the result of an occupational disease listed under the Amended Rules on
Employees’ Compensation, or (2) that the risk of contracting the disease was increased by his working
conditions. Under the increased risk theory, there must be a reasonable proof that the employee’s
working condition increased his risk of contracting the disease, or that there is a connection between his
work and the cause of the disease. Only a reasonable proof of work-connection, not direct causal relation,
however, is required to establish compensability of a non-occupational disease. Probability, and not
certainty, is the yardstick in compensation proceedings; thus, any doubt should be interpreted in favor of
the employees for whom social legislations, like PD No. 626, were enacted.
Moreover, direct and clear evidence, is not necessary to prove a claim. Strict rules of evidence do not
apply as PD No. 626 only requires substantial evidence or “such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.” In this case, while Besitan’s ailment, End Stage Renal
Disease secondary to Chronic Glomerulonephritis is not among those listed under the Amended Rules on
Employees’ Compensation, the court, however, find that Besitan has sufficiently proved that his working
condition increased his risk of contracting Glomerulonephritis. The Medical Certificate is sufficient to
prove that the working condition of Besitan increased his risk of contracting Glomerulonephritis. In claims
for compensation benefits, a doctor’s certification as to the nature of a claimant’s disability deserves full
credence because no medical practitioner would issue certifications indiscriminately. Petitioner GSIS is
hereby ordered to pay respondent Manuel P. Besitan the compensation benefits due him under
Presidential Decree No. 626, as amended.
LABOR LAW>Labor Standards>Due Process>Illegal Dismissal
Overlap with
REMEDIAL LAW>Rules of Procedure
PABLO POLSOTIN, JR., et al., petitioners

vs.
DE GUIA ENTERPRISES, INC., respondent
G.R. No. 172624. December 5, 2011
(First Division)
DOCTRINE: The dismissal of an employee’s appeal on purely technical ground is inconsistent with the
constitutional mandate on protection to labor.
FACTS: Petitioners were bus drivers and conductors of respondent De Guia Enterprises, Inc. They
alleged that they were dismissed without cause and due process hence they filed a complaint for illegal
dismissal and payment of backwages and damages against respondent before the NLRC. The Labor
Arbiter dismissed the complaint for lack of merit. It held that petitioners were validly terminated from
employment and added that the procedural requirements for dismissing petitioners were likewise
satisfied. Without the assistance of counsel, petitioners, through Rayala as their representative, filed a
Memorandum of Appeal with the NLRC but the same was dismissed for failure of petitioners to append
thereto a certificate of non-forum shopping and proof of service upon the other party. The NLRC then
affirmed the decision appealed from. The CA also denied the petition for certiorari for the following
reasons: first, the verification and certification of non-forum shopping attached to the petition was not
signed by all of the petitioners; and, second, there was no showing of grave abuse of discretion since the
NLRC merely complied with the procedural rules governing appeals before it. Therefore, it could not be
faulted in denying petitioners’ appeal.
ISSUE: Whether or not in spite of technicalities, petitioners are still entitled to due consideration of their
petition.
HELD: YES.
Strict application of technical rules should be set aside to serve the broader interest of substantial justice.
Petitioners’ appeal before the NLRC was dismissed purely on technical grounds as it did not contain the
required certification of non-forum shopping and proof of service upon the respondent. With respect to
their petition for certiorari with the CA, petitioners failed to affix their individual signatures on top of their
typewritten names in the verification and certification of non-forum shopping attached to the petition.
Note, however, that in both instances, petitioners were not represented by a lawyer. They had no counsel
on record and had been filing and signing all pleadings only through their representative, Rayala. There
was no showing that their case was directly handled or at the very least, that they were assisted by a
counsel. Not being lawyers, petitioners’ lack of thorough understanding of procedural rules as well as the
importance of its strict observance is understandable. As held in a case, a non-lawyer litigant cannot be
expected to be well-versed on the rules of procedure as even the most experienced lawyers get tangled
in the web of procedure. It is worthy to mention at this point that the right to counsel, being intertwined
with the right to due process, is guaranteed by the Constitution to any person whether the proceeding is
administrative, civil or criminal. The CA should have extended some degree of liberality so as to give the
party a chance to prove their cause with a lawyer to represent or to assist them. It bears stressing that
“the dismissal of an employee’s appeal on purely technical ground is inconsistent with the constitutional
mandate on protection to labor.” The Court has often set aside the strict application of procedural
technicalities to serve the broader interest of substantial justice. Labor tribunals are mandated to use all
reasonable means to ascertain the facts in each case speedily, objectively and without regard to
technicalities of law or procedure. However, in every proceeding before it, the fundamental and essential
requirements of due process should not be ignored but must at all times be respected. Besides,
petitioners’ case concerns their job, considered as a property right, of which they could not be deprived of
without due process.
LABOR LAW>Labor Standards>Holiday Pay>Service Incentive Leave Pay>Overtime Pay
ABDULJUAHID R. PIGCAULAN, petitioner

vs.
SECURITY and CREDIT INVESTIGATION, INC. and/or RENE AMBY REYES, respondents.
G.R. No. 173648. January 16, 2012
(First Division)
DOCTRINE: “Even when the plaintiff alleges non-payment, still the general rule is that the burden rests
on the defendant to prove payment, rather than on the plaintiff to prove non-payment.”
FACTS: Pigcaulan was employed by SCII as a security guard. However, he filed with the Labor Arbiter a
complaint for underpayment of salaries and non-payment of overtime, holiday, rest day, service incentive
leave and 13th month pays. In support of his claim, petitioner submitted daily time records reflecting the
number of hours served and his wages for the same. He likewise presented itemized lists of his claims for
the corresponding periods served. Respondents, however, denied the claim and presented copies of
payroll listings and lists of employees who received their 13th month pay. In addition, the respondents
contended that Pigcaulan’s monetary claims should only be limited to the past three years of employment
pursuant to the rule on prescription of claims. The Labor Arbiter held that the payroll listings presented by
the respondents did not prove that the petitioner was duly paid as same were not signed by the latter or
by any SCII officer. The Labor Arbiter likewise ordered the payment of overtime pay, holiday pay, service
incentive leave pay and proportionate 13th month pay for the year 2000 in favor of the petitioner.
Respondents appealed to the NLRC but the same was dismissed as well as the motion for
reconsideration. On appeal, the CA, set aside the rulings of both the Labor Arbiter and the NLRC. Hence,
the present Petition for Review on Certiorari.
ISSUE: Whether or not Pigcaulan is entitled to holiday pay, service incentive leave pay and proportionate
13th month pay for year 2000.
HELD: YES.
Article 94 of the Labor Code provides that: ART. 94. RIGHT TO HOLIDAY PAY. - (a) Every worker shall
be paid his regular daily wage during regular holidays, except in retail and service establishments
regularly employing less than ten (10) workers; While Article 95 of the Labor Code provides: ART. 95.
RIGHT TO SERVICE INCENTIVE LEAVE. - (a) Every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive of five days with pay. Under the Labor Code,
Pigcaulan is entitled to his regular rate on holidays even if he does not work. Likewise, express provision
of the law entitles him to service incentive leave benefit for he rendered service for more than a year
already. Furthermore, under Presidential Decree No. 851, he should be paid his 13th month pay. As
employer, SCII has the burden of proving that it has paid these benefits to its employees. SCII failed to
show any other concrete proof by means of records, pertinent files or similar documents reflecting that the
specific claims have been paid. With respect to 13th month pay, SCII presented proof that this benefit
was paid but only for the years 1998 and 1999. To repeat, the burden of proving payment of these
monetary claims rests on SCII, being the employer. It is a rule that one who pleads payment has the
burden of proving it. “Even when the plaintiff alleges non-payment, still the general rule is that the burden
rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment.” Hence, he is
entitled, as a matter of right, to his holiday pay, service incentive leave pay and 13th month pay for year
2000.
LABOR LAW>Labor Standards> Reinstatement
MANILA ELECTRIC COMPANY, petitioner

vs.
MA. LUISA BELTRAN, respondent
G.R. No. 173774. January 30, 2012
(First Division)
DOCTRINE: Where a penalty less punitive would suffice, whatever missteps may be committed by an
employee ought not to be visited with a consequence so severe such as dismissal from employment.
FACTS: Beltran was holding the position of Senior Branch Clerk at MERALCO’s Pasig branch. While
rendering overtime work on September 28, 1996, she accepted cash payment from Collection Route
Supervisor Berlin Marcos, which the latter received from customer Andy Chang. Beltran was at first
hesitant as it was not part of her regular duties to accept payments from customers but was later on
persuaded by Marcos’ persistence. Hence, Beltran received the payment and issued Auxiliary Receipt
which she dated September 30, 1996, a Monday, instead of September 28, 1996. However, she was only
able to remit Chang’s payment on January 13, 1997. Thus, she was placed under preventive suspension.
MERALCO considered as misappropriation or withholding of company funds her failure to immediately
remit said payment in violation of its Code on Employee Discipline. Investigation thereafter ensued, and
the investigator found Beltran guilty of misappropriating and recommended her dismissal from service.
Beltran filed a complaint for illegal dismissal against MERALCO. The Labor Arbiter ordered to reinstate
the complainant to her former position. But the NLRC disregarded Beltran’s assertion of family problems
as the same cannot be used as an excuse for committing a serious misconduct in violation of the trust
reposed on her as a Senior Branch Clerk. The CA reversed the ruling and held that the penalty of
dismissal is harsh considering the infraction committed and Beltran’s nine years of unblemished service
with MERALCO.
ISSUE: Whether or not Beltran should be reinstated despite the undisputed finding that she is guilty of
withholding company funds.
HELD: YES. For loss of trust and confidence to be a valid ground for dismissal, it must be based on a
willful breach of trust and founded on clearly established facts. A breach is willful if it is done intentionally,
knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. In addition, loss of trust and confidence must rest on
substantial grounds and not on the employer’s arbitrariness, whims, caprices or suspicion.
It should be emphasized at this point that the burden of proving the legality of an employee’s dismissal
lies with the employer. “Unsubstantiated suspicions, accusations, and conclusions of employers do not
provide legal justification for dismissing employees.” “[M]ere conjectures cannot work to deprive
employees of their means of livelihood.” To begin with, MERALCO cannot claim or conclude that Beltran
misappropriated the money based on mere suspicion. The NLRC thus erred in concluding that Beltran
made use of the money from the mere fact that she took a leave of absence after having been reminded
of the unremitted funds. And even if Beltran delayed handing over the funds to the company, MERALCO,
as the employer still has the burden of proof to show clearly that such act of negligence is sufficient to
justify termination from employment. Moreover, we find that Beltran’s delay does not clearly and
convincingly establish a willful breach on her part, that is, which is done “intentionally, knowingly and
purposely, without any justifiable excuse.” True, the reasons Beltran proffered for her delay in remitting
the cash payment are mere allegations without any concrete proof.
Also, to justify removal from service, the negligence should be gross and habitual. No concrete evidence
was presented by MERALCO to show that Beltran’s delay in remitting the funds was done intentionally.
Neither was it shown that same is willful, unlawful and felonious. Where a penalty less punitive would
suffice, whatever missteps may be committed by an employee ought not to be visited with a consequence
so severe such as dismissal from employment.
LABOR LAW>Labor Relations>Jurisdictions>Appeals
In Relation to Labor Standards> Constructive Dismissal
JULIE’S BAKESHOP and/or EDGAR REYES, Petitioners,

vs.
HENRY ARNAIZ, EDGAR NAPAL, and JONATHAN TOLORES, Respondents
G.R. No. 173882, February 15, 2012
(First Division)
DOCTRINE: Management has a wide latitude to conduct its own affairs in accordance with the necessities of its
business. This so-called management prerogative, however, should be exercised in accordance with justice and fair
play.
FACTS: Reyes hired respondents as chief bakers in his three franchise branches of Julie’s Bakeshop in Sibalom and
San Jose, Antique. On January 26, 2000, respondents filed separate complaints against petitioners for underpayment
of wages, payment of premium pay for holiday and rest day, service incentive leave pay, 13 th month pay, cost of living
allowance (COLA) and attorney’s fees.
A letter-memorandum was issued by Reyes directed to the respondents to report back to work. And a second letter-
memorandum of the same tenor was sent however respondents did not heed both memoranda. The parties’ now
agreed to enter into a compromise agreement. However, respondents had a different counsel and amended their
complaints.
The LA in its decision expressed dismay over respondents’ lack of good faith in negotiating a settlement. Then the LA
dismissed this petition. The respondents now filed a joint appeal with the NLRC and overruled the LA’s decision.
Hence, this petition.
ISSUE#1: Whether or not the appeal made was in accordance to the rules.
ISSUE#2: Whether or not the respondents were properly dismissed.
HELD #1: YES.
It is a well-entrenched rule that findings of facts of the NLRC, affirming those of the Labor Arbiter, are accorded
respect and due consideration when supported by substantial evidence. We, however, find that the doctrine of great
respect and finality has no application to the case at bar. As stated, the Labor Arbiter dismissed respondents’
complaints on mere technicality. The NLRC, upon appeal, then came up with three divergent rulings. At first, it
remanded the case to the Labor Arbiter. However, in a subsequent resolution, it decided to resolve the case on the
merits by ruling that respondents were constructively dismissed. But later on, it again reversed itself in its third and
final resolution of the case and ruled in petitioners’ favor. Therefore, contrary to Reyes’s claim, the NLRC did not, on
any occasion, affirm any factual findings of the Labor Arbiter. The CA is thus correct in reviewing the entire records of
the case to determine which findings of the NLRC is sound and in accordance with law. Besides, the CA, at any rate,
may still resolve factual issues by express mandate of the law despite the respect given to administrative findings of
fact.
HELD #2: NO.
In constructive dismissal cases, the employer has the burden of proving that the transfer of an employee is for just or
valid ground, such as genuine business necessity. The employer must demonstrate that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee and that the transfer does not involve a demotion in rank
or a diminution in salary and other benefits. “If the employer fails to overcome this burden of proof, the employee’s
transfer is tantamount to unlawful constructive dismissal.”
When there is a demotion in rank and/or a diminution in pay; when a clear discrimination, insensibility or disdain by
an employer becomes unbearable to the employee; or when continued employment is rendered impossible,
unreasonable or unlikely, the transfer of an employee may constitute constructive dismissal.
LABOR LAW> Social and Welfare Legislation>Permanent Disabilty
DANIEL M. ISON, petitioner

vs.
Crewserve, Inc., ANTONIO GALVEZ, JR., and MARLOW NAVIGATION, CO., LTD., respondents
G.R. No. 173951. April 16, 2012
(First Division)
DOCTRINE: For purposes of determining the seafarer’s degree of disability, it is the company-designated
physician who must proclaim that he sustained a permanent disability, whether total or partial, due to
either injury or illness, during the term of his employment.
FACTS: During the course of his employment, petitioner experienced chest pains and leg cramps hence,
he was sent for a medical check-up. The petitioner was then medically repatriated and was referred to
respondents’ physician for a medical examination. Consequently, the company designated physician
declared Ison fit to return to work after two months of monitoring and continuous treatment. Petitioner
thereafter executed a release and quitclaim in favor of respondents. But despite the execution of the
aforesaid release and quitclaim, Ison filed a complaint against respondents to claim full disability benefits
pursuant to the POEA-SEC and claimed that his illness continued to worsen despite the fit to work
assessment of the company designated physician. His claim was supported by medical certificates
declaring him unfit to work. Labor Arbiter dismissed the complaint but the NLRC reversed the decision.
The CA ruled that the NLRC gravely abused its discretion in relying on the certification issued by Dr. Caja
instead of the fit to work declaration of the company-designated physician who, under the POEA-SEC, is
the one tasked to assess petitioner’s medical condition for purposes of claiming disability compensation.
ISSUE: Whether or not petitioner is entitled to total and permanent disability benefits based on the two
medical reports issued by his physicians.
HELD: NO.
It is explicit and clear that for purposes of determining the seafarer’s degree of disability, it is the company
designated physician who must proclaim that he sustained a permanent disability, whether total or partial,
due to either injury or illness, during the term of his employment. This was the ruling in Panganiban v.
Tara Trading Shipmanagement, Inc., 633 SCRA 353 (2010), where it was held that there being no
ambiguity in the wordings of the Standard Employment Contract that the only qualification prescribed for
the physician entrusted with the task of assessing the disability is that he be “company-designated,” the
literal meaning of the same shall thus control.
We hold that the CA is correct in ruling thus. The company-designated physician has cleared petitioner
for employment resumption after two months of continuous treatment and after medication has
successfully controlled his hypertension. As aptly held by the CA, the extensive medical attention given
by the company-designated physician to petitioner enabled the former to acquire a detailed knowledge
and familiarity of petitioner’s medical condition. This enabled the company-designated physician to arrive
at a more accurate prognosis of petitioner’s disability as compared to other physicians not privy to
petitioner’s case from the beginning. It has been held that the doctor who have had a personal knowledge
of the actual medical condition, having closely, meticulously and regularly monitored and actually treated
the seaman’s illness, is more qualified to assess the seaman’s disability. On the other hand, the medical
reports of Dr. Vicaldo and Dr. Caja (Ison’s physicians) were issued after petitioner consulted each of them
only once. Clearly, said physicians did not have the chance to closely monitor petitioner’s illness.
Moreover, Dr. Vicaldo’s evaluation of petitioner’s illness was unsupported by any proof or basis.
It is to be noted however that while it is the company-designated physician who must declare that the
seaman suffers a permanent disability during employment, it does not deprive the seafarer of his right to
seek a second opinion, hence the Contract recognizes the prerogative of the seafarer to request a
second opinion and, for this purpose, to consult a physician of his choice.
APO CEMENT CORPORATION, petitioner

vs.
ZALDY E. BAPTISMA, respondent
G.R. No. 176671. June 20, 2012
(First Division)
DOCTRINE: Jurisprudence consistently holds that for managerial employees “the mere existence of a
basis for believing that such employee has breached the trust of his employer would suffice for his
dismissal.”
FACTS: Petitioner Apo Cement Corporation received information from one of its employees, Moralda,
that some of its personnel, including respondent who was then the manager of petitioner’s Power Plant
Department, were receiving commissions or “kickbacks” from suppliers. Having been implicated in the
irregularities, respondent, received a Show Cause Letter with Notice of Preventive Suspension. To further
afford respondent ample opportunity to defend himself, petitioner conducted a series of administrative
investigation hearings during which respondent was able to face his accusers. The witness for the
petitioner, Lobitaña gave a more detailed narration of the events that transpired. Consequently,
respondent received the Notice of Termination informing him of his dismissal from employment on the
ground of loss of trust and confidence. Hence, respondent filed a complaint for illegal dismissal.
ISSUE: Whether or not there was just cause for the dismissal of respondent.
HELD: YES. To validly dismiss an employee on the ground of loss of trust and confidence under Article
282 (c) of the Labor Code of the Philippines, the following guidelines must be observed: “1) loss of
confidence should not be simulated; 2) it should not be used as subterfuge for causes which are
improper, illegal or unjustified; 3) it may not be arbitrarily asserted in the face of overwhelming evidence
to the contrary; and 4) it must be genuine, not a mere afterthought to justify earlier action taken in bad
faith.” More important, it “must be based on a willful breach of trust and founded on clearly established
facts.” In this case, we agree with the NLRC that the termination of respondent on the ground of loss of
trust and confidence was justified. Unlike the Labor Arbiter and the CA, we find the testimony of Lobitaña
credible and truthful.
To begin with, we find no inconsistencies between the first and the second affidavits of Lobitaña. If at all,
the only difference between the two is that the second affidavit is more detailed than the first one. This,
however, is understandable considering that the first affidavit was executed by Lobitaña during
petitioner’s initial investigation, when it was still verifying the information it received from Moralda, while
the second affidavit, which contains Lobitaña’s testimony during respondent’s administrative hearing, was
executed long after the investigation was conducted.
Also, there appears to be no ill-motive on the part of Lobitaña to falsely accuse respondent of accepting
commissions and/or “kickbacks.” In fact, it was not Lobitaña but Moralda who reported the irregularities to
petitioner. Lobitaña came forward only during petitioner’s initial investigation to confirm the testimony of
Moralda that some personnel were indeed receiving commissions and/or “kickbacks.” Moreover, as
between the positive testimony of Lobitaña that he gave respondent commissions and/or “kickbacks” on
two separate occasions, and the negative testimony of respondent’s witnesses Cedeño and Banzon that
no such meeting took place, we are more inclined to give credence to the former. It bears stressing that a
positive testimony prevails over a negative one, more especially in this case where respondent’s
witnesses did not even execute affidavits to attest to the truthfulness of their statements. Thus, it was
error on the part of the Labor Arbiter and the CA to disregard the testimony of Lobitaña. All told, we find
that the testimony of Lobitaña constitutes substantial evidence to prove that respondent, as the then
Power Plant Manager, accepted commissions and/or “kickbacks” from suppliers, which is a clear violation
of Section 2.04 of petitioner’s Company Rules and Regulations. Jurisprudence consistently holds that for
managerial employees “the mere existence of a basis for believing that such employee has breached the
trust of his employer would suffice for his dismissal.”
LABOR LAW>Labor Standards>Loss of Trust and Confidence
FLORDELIZA MARIA REYES-RAYEL, petitioner

vs.
PHILIPPINE LUEN THAI HOLDINGS, CORPORATION/L&T INTERNATIONAL GROUP PHILIPPINES,
INC., respondents
G.R. No. 174893. July 11, 2012
(First Division)
DOCTRINE: As distinguished from a rank and file personnel, mere existence of a basis for believing that
a managerial employee has breached the trust of the employer justifies dismissal.
FACTS: Respondent PLTHC hired petitioner as Corporate Human Resources Director for Manufacturing.
However, petitioner received a prerequisite notice from Sauceda and the Corporate Legal Counsel
referring to the petitioner’s failure to perform her tasks in accordance with management directives in
various instances, which collectively have resulted in loss of confidence in her capability to promote the
interests of the Company. Petitioner explained that her alleged failure to perform management directives
could be attributed to the lack of effective communication with her superiors due to malfunctioning email
system. This caused her to miss certain directives coming from her superiors and likewise, for her
superiors to overlook the reports she was submitting. She also denied causing disharmony in her division.
But the petitioner was dismissed from the service for loss of confidence on her ability to promote the
interests of the company. This led her to file a complaint for illegal dismissal and argued that the same
was effected without due process.
ISSUE: Whether or not the petitioner was validly dismissed from service based on loss of trust and
confidence.
HELD: YES.
Jurisprudence provides that an employer has a distinct prerogative and wider latitude of discretion in
dismissing a managerial personnel who performs functions which by their nature require the employer’s
full trust and confidence. As distinguished from a rank and file personnel, mere existence of a basis for
believing that a managerial employee has breached the trust of the employer justifies dismissal. “Loss of
confidence as a ground for dismissal does not require proof beyond reasonable doubt as the law requires
only that there be at least some basis to justify it.”
Petitioner, in the present case, was L&T’s CHR Director for Manufacturing. As such, she was directly
responsible for managing her own departmental staff. It is therefore without question that the CHR
Director for Manufacturing is a managerial position saddled with great responsibility. Because of this,
petitioner must enjoy the full trust and confidence of her superiors. Not only that, she ought to know that
she is “bound by more exacting work ethics” and should live up to this high standard of responsibility.
However, petitioner delivered dismal performance and displayed poor work attitude which constitute
sufficient reasons for an employer to terminate an employee on the ground of loss of trust and
confidence. Respondents also impute upon petitioner gross negligence and incompetence which are
likewise justifiable grounds for dismissal. The burden of proving that the termination was for a valid cause
lies on the employer. Here, respondents were able to overcome this burden as the evidence presented
clearly support the validity of petitioner’s dismissal.
JARL CONSTRUCTION and ARMANDO K. TEJADA, petitioners

vs.
SIMEON A. ATENCIO, respondent
G.R. No. 175969.August 1, 2012
(First Division)
DOCTRINE: Two-Notice Rule: The first notice, which may be considered as the proper charge, serves to
apprise the employee of the particular acts or omissions for which his dismissal is sought. The second
notice on the other hand seeks to inform the employee of the employer’s decision to dismiss him.
FACTS: During the respondent’s tenure as chief operating manager, his employer JARL had an existing
contract with Caltex Philippines. The contract with Caltex prohibited JARL from subcontracting the project.
According to Atencio, he discovered during his employment that JARL did not have the proper facilities,
personnel, and equipment to undertake the Caltex project, hence he and Tejada discussed the need for
hiring subcontractors. It was during these meetings that Tejada agreed to hire Atencio’s construction
company, Safemark Construction and Development Corporation (Safemark), to perform works for the
Caltex project. Further, Tejada allegedly gave Atencio full authority as JARL’s chief operating manager to
hire other subcontractors if necessary. Pursuant to his blanket authority, Atencio hired DDK Steel
Construction and Building Multi-Technology for the electrical installations of the Caltex project.
Consequently, Tejada informed Atencio and Safemark that JARL was terminating Atencio’s management
and supervision works for the Caltex project. Believing, however, that his employment as JARL’s chief
operating manager was separate from their subcontracting agreement, Atencio allegedly continued
reporting for work to the Caltex project site until he was barred from entering the said premises. Hence,
he filed a complaint for illegal dismissal and maintained that JARL did not inform him of the charges
leveled against him and of his termination from employment. He claimed learning of his termination only
through the letter that JARL sent to Caltex Philippines.
ISSUE: Whether or not the petitioners complied with the two-notice rule under Article 277(b) of the Labor
Code requirements in dismissing Atencio from service.
HELD: NO. The Court explained the purpose of the Two-Notice Rule: The first notice, which may be
considered as the proper charge, serves to apprise the employee of the particular acts or omissions for
which his dismissal is sought. The second notice on the other hand seeks to inform the employee of the
employer’s decision to dismiss him. This decision, however, must come only after the employee is given a
reasonable period from receipt of the first notice within which to answer the charge and ample opportunity
to be heard and defend himself with the assistance of a representative, if he so desires. This is in
consonance with the express provision of the law on the protection to labor and the broader dictates of
procedural due process. Non-compliance therewith is fatal because these requirements are conditions
sine qua non before dismissal may be validly effected.
The Court agrees with the shared conclusions of the Labor Arbiter and the appellate court that petitioners’
evidence fails to prove their contention that they afforded Atencio with due process. The June 21, 1999
letter, which allegedly proves Atencio’s knowledge of the charges against him, and which allegedly
constitutes Atencio’s explanation, clearly discusses an entirely different topic—which is the removal of his
construction company from the Caltex project. In the letter, Atencio states that he was wrong for
assuming that there was a subcontracting agreement between his firm and JARL. He took responsibility
for the misunderstanding between them and apologized. Nowhere in the said letter does Atencio refer to
the charges, which JARL mentioned before the Labor Arbiter as the causes for his dismissal. Logically,
he did not also explain himself as regards the said charges. As for the May 24, 1999 letter, which
allegedly constitutes the notice of termination of Atencio’s employment as JARL’s chief operating
manager, the Court agrees with the CA’s appreciation that the said letter involves the termination of the
subcontracting agreement between JARL and Atencio’s company, and not the termination of Atencio’s
employment.
LABOR LAW>Labor Standards>Transfer of Employees
MISAMIS ORIENTAL II ELECTRIC SERVICE COOPERATIVE (MORESCO II), petitioner

vs.
VIRGILIO M. CAGALAWAN, respondent
G.R. No. 175170. September 5, 2012
(Second Division)
DOCTRINE: The rule is that it is within the ambit of the employer’s prerogative to transfer an employee for
valid reasons and according to the requirement of its business, provided that the transfer does not result
in demotion in rank or diminution of salary, benefits and other privileges.
FACTS: Respondent Cagalawan was designated as Acting Head of the disconnection crew in Area III
sub-office of MORESCO II in Balingasag, Misamis Oriental. However, in a memorandum, MORESCO II
General Manager Ke-e transferred Cagalawan to Area I sub-office in Gingoog City, Misamis Oriental as a
member of the disconnection crew. Said memorandum stated that the transfer was done “in the exigency
of the service.” Cagalawan assailed his transfer claiming he was effectively demoted from his position as
head of the disconnection crew to a mere member thereof. Ke-e explained that Cagalawan’s transfer was
not a demotion and advised him to just comply with the order and not to question management’s
legitimate prerogative to reassign him. Cagalawan eventually stopped reporting for work. Consequently,
he filed a complaint for illegal constructive dismissal.
ISSUE: Whether or not Cagalawan was validly transferred.
HELD: NO.
The rule is that it is within the ambit of the employer’s prerogative to transfer an employee for valid
reasons and according to the requirement of its business, provided that the transfer does not result in
demotion in rank or diminution of salary, benefits and other privileges. This Court has always considered
the management’s prerogative to transfer its employees in pursuit of its legitimate interests. But this
prerogative should be exercised without grave abuse of discretion and with due regard to the basic
elements of justice and fair play, such that if there is a showing that the transfer was unnecessary or
inconvenient and prejudicial to the employee, it cannot be upheld.
Here, while we find that the transfer of Cagalawan neither entails any demotion in rank since he did not
have tenurial security over the position of head of the disconnection crew, nor result to diminution in pay
as this was not sufficiently proven by him, MORESCO II’s evidence is nevertheless not enough to show
that said transfer was required by the exigency of the electric cooperative’s business interest. Simply
stated, the evidence sought to be admitted by MORESCO II is not substantial to prove that there was a
genuine business urgency that necessitated the transfer.
DIONISO F. AUZA, JR., ADESSA F. OTARRA, and ELVIE JEANJAQUET, Petitioners

Vs.
MOL PHILIPPINES, INC and CESAR G. TIUTAN, Respondents
G.R. No. 175481, November 21, 2012
(Second Division)
DOCTRINE: Justice is in every case for the deserving, to be dispensed in the light of the established
facts and the applicable law and doctrine, Although we are committed to protect the working class, it
behoves us to uphold the rights of management too if only to serve the interest of fair play. As applied in
this case, the employees who voluntarily resigned and executed quitclaims are barred from instituting an
action or claim against their employer.
FACTS: Respondent MIL is a common carrier engaged in transporting cargoes to and from the different
parts of the world. It employed Auza and Jeanjaquet as Cebu’s Branch Manager and Administrative
Assistant, respectively. It also employed Otarra as its Accounts officer.
On October 14, 2002, Otarra tendered her resignation letter while Auza and Jeanjaquet tendered theirs
on October 30, 2002. They were given their separation pay, and the monetary value of leave credits, 13th
month pay, MOL cooperative shares and unused dental/optical benefits.
15 months after, petitioners filed for separate complaints for illegal dismissal. Respondents however
alleged they were voluntarily resigned from employment and the payment of their separation benefits was
paid to them for which quitclaims were duly executed. Petitioners now averred that their consent to resign
was not voluntarily given but obtained through mistake and fraud. As they (petitioners) believed that
MOL’s Cebu branch is downsizing due to productivity and profitability volume. They (respondents) are
now being pressured to resign because they might be denied to receive their separation pays.
Then the LA dismissed the complaints. The petitioners now filed an appeal to the NLRC to which this
court ruled in favor of the petitioners that they were illegally dismissed. CA then decided to annul and set
aside the decision of NLRC. Hence, this petition.
ISSUE: Whether or not the petitioners were illegally dismissed.
HELD:NO.
Resignation is the formal pronouncement or relinquishment of an office. The overt act of relinquishment
should be coupled with intent to relinquish, which intent could be inferred from the acts of the employee
before and after the alleged resignation.
It appears that petitioners, on their own volition, decided to resign from their positions after being informed
of the management’s decision that the Cebu branch would eventually be manned by a mere skeletal
force. As proven by the email correspondences presented, petitioners were fully aware and had, in fact,
acknowledged that Cebu branch has been incurring losses and was already unprofitable to operate. Note
that there was evidence produced to prove that indeed the Cebu branch’s productivity had deteriorated as
shown in a Profit and Loss Statement for the years 2001 and 2002.
LABOR LAW>Labor Relations>Collective Bargaining Agreements
CARLOS L. OCTAVIO, Petitioner,

vs.
PHILIPPHINE LONG DISTANCE TELEPHONE COMPANY, Respondent
G.R. No. 175492, February 27, 2013
(Second Division)
DOCTRINE: Every Collective Bargaining Agreement shall provide a grievance machinery to which all
disputes arising from its implementation or interpretation will be subjected to compulsory negotiations.
This essential feature of a CBA provides the parties with a simple, inexpensive and expedient system of
finding reasonable and acceptable solutions to disputes and helps in the attainment of a sound and stable
industrial peace.
FACTS: PLDT and Gabay ng Unyon sa Telekominaksyon ng mga Superbisor (GUTS) entered into a CBA
covering the period of Jan 1, 1999 to Dec 31, 2001. And on Oct 1, 2000, PLDT hired Octavio as Sales
System Analyst I on probationary status. Eventually, he was regularized and promoted to Sales Analyst II.
PLDT and GUTS now entered into a new CBA covering January 1, 2002 to December 31, 2004 which
provided for the increase of the salaries.
Octavio now claimed that he was not increased. He was told that during his regularization and promotion
the increase already reflected to his new basic salary. Being aggrieved, Octavio now filed before the
NLRC for a complaint for payment of said salary increase.
The LA in its decision dismissed the complaint of Octavio. Upon appeal to the NLRC, the same dismissed
its appeal. Octavio now went to the CA and filed for a petition for Certiorari which the CA found it without
merit. Hence, this petition.
ISSUE: Whether or not the employer and bargaining respective may amend the provisions of the CBA
without the consent and approval of the employees.
HELD: YES.
Under Article 260 of the Labor Code, grievances arising from the interpretation or implementation of the
parties’ CBA should be resolved in accordance with the grievance procedure embodied therein. It also
provides that all unsettled grievances shall be automatically referred for voluntary arbitration as
prescribed in the CBA.
It is settled that “when parties have validly agreed on a procedure for resolving grievances and to submit
a dispute to voluntary arbitration then that procedure should be strictly observed.” Moreover, we have
held time and again that “before a party is allowed to seek the intervention of the court, it is a precondition
that he should have availed of all the means of administrative processes afforded him. Hence, if a remedy
within the administrative machinery can still be resorted to by giving the administrative officer concerned
every opportunity to decide on a matter that comes within his jurisdiction[, then] such remedy should be
exhausted first before the court’s judicial power can be sought. The premature invocation of [the] court’s
judicial intervention is fatal to one’s cause of action.” “The underlying principle of the rule on exhaustion of
administrative remedies rests on the presumption that when the administrative body, or grievance
machinery, is afforded a chance to pass upon the matter, it will decide the same correctly.”
LORENZO T. TANGGA-AN, petitioner

vs.
PHIIDLIPPINE TRANSMARINE CARRIERS, INC., UNIVERSE TANKSHIP DELAWARE LLC, and
CARLOS C. SALINAS, respondents
G.R. No. 180636. March 13, 2013
(Second Division)
DOCTRINE: When the illegally dismissed employee’s employment contract has a term of less than one
year, he/she shall be entitled to recovery of salaries representing the unexpired portion of his/her
employment contract.
FACTS: This is a case for illegal dismissal with a claim for the payment of salaries corresponding to the
unexpired term of the contract, damages and attorney’s fees filed by private respondent Tangga-an
against the petitioners. Tangga-an alleged that he entered into an overseas employment contract with the
respondent. Under the employment contract, he was to be employed for a period of six months as chief
engineer of the vessel. However, while the vessel was still at sea, the master required Tangga-an and the
rest of the Filipino Engineer Officers to report to his office where they were informed that they would be
repatriated on account of the delay in the cargo discharging in Japan, which was principally a duty
belonging to the deck officers. Consequently, they were ordered to disembark from the vessel and
thereafter repatriated. Tangga-an filed a complaint for illegal dismissal with prayer for payment of salaries
for the unexpired portion of his contract, leave pay, exemplary and moral damages, attorney’s fees and
interest.
ISSUE: Whether or not Tangga-an who was illegally dismissed is entitled to full backwages equivalent to
the unexpired portion of his contract inclusive of allowances and other benefits or their monetary
equivalent from the time his compensation was withheld up to the time he is actually reinstated.
HELD: YES. In resolving petitioner’s monetary claims, the CA utterly misinterpreted the Court’s ruling in
Skippers Pacific, Inc. v. Skippers Maritime Services, Ltd., using it to support a view which the latter case
precisely ventured to strike down. In that case, the employee was hired as the vessel’s Master on a six-
months employment contract, but was able to work for only two months, as he was later on illegally
dismissed. The Labor Arbiter, NLRC, and the CA all took the view that the complaining employee was
entitled to his salary for the unexpired portion of his contract but limited to only three months pursuant to
Section 10 of RA 8042. The Court did not agree and hence modified the judgment in said case. It held
that, following the wording of Section 10 and its ruling in Marsaman Manning Agency, Inc. v. National
Labor Relations Commission, when the illegally dismissed employee’s employment contract has a term of
less than one year, he/she shall be entitled to recovery of salaries representing the unexpired portion of
his/her employment contract. Indeed, there was nothing even vaguely confusing in the Court’s citation
therein of Marsaman.
Petitioner therefore must be awarded his salaries corresponding to the unexpired portion of his six-
months employment contract, or equivalent to four months. This includes all his corresponding monthly
vacation leave pay and tonnage bonuses which are expressly provided and guaranteed in his
employment contract as part of his monthly salary and benefit package. These benefits were guaranteed
to be paid on a monthly basis, and were not made contingent. In fact, their monetary equivalent was fixed
under the contract: US$2,500.00 for vacation leave pay and US$700.00 for tonnage bonus each month.
Thus, petitioner is entitled to back salaries of US$32,800 (or US$5,000 + US$2,500 + US$700 =
US$8,200 x 4 months). “Article 279 of the Labor Code mandates that an employee’s full backwages shall
be inclusive of allowances and other benefits or their monetary equivalent.” As we have time and again
held, “[i]t is the obligation of the employer to pay an illegally dismissed employee or worker the whole
amount of the salaries or wages, plus all other benefits and bonuses and general increases, to which he
would have been normally entitled had he not been dismissed and had not stopped working.” This well-
defined principle has likewise been lost on the CA in the consideration of the case.
LABOR LAW>Labor Standards>Collective Bargaining Agreement
ZUELLIG PHARMA CORPORATION, Petitioner,

vs.
ALICE M. SIBAL, et al. Respondents.
G.R. No.173587, July 15, 2013
(Second Division)
DOCTRINE: Where the CBA is clear and unambiguous, it becomes the law between the parties and
compliance therewith is mandated by the express policy of the law.
FACTS: Zuellig is a domestic corporation engaged in the manufacture and distribution of pharmaceutical
products. It also distributes pharmaceutical products manufactured by other companies like Syntex
Pharmaceuticals. Respondents (36 in all), on the other hand, were the employees of Zuellig at its Syntex
Division. In 1995, Roche Philippines, Inc. (Roche) purchased Syntex and took over from Zuellig the
distribution of Syntex products. Consequently, Zuellig closed its Syntex Division and terminated the
services of respondents due to redundancy. They were properly notified of their termination and were
paid their respective separation pay in accordance with the Collective Bargaining Agreement (CBA) for
which, respondents individually signed Release and Quitclaim in full settlement of all claims arising from
their employment with Zuellig. Controversy arose when respondents filed before the Arbitration Branch of
the NLRC separate Complaints (which were later consolidated) for payment of retirement gratuity and
monetary equivalent of their unused sick leave on top of the separation pay already given them.
Respondents claimed that they are still entitled to retirement benefits and that their receipt of separation
pay and execution of Release and Quitclaim do not preclude pursuing such claim.
ISSUE: Whether or not the respondents are entitled to retirement benefits despite having received their
separation pay in accordance with the CBA
HELD: NO.
It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties and they
are obliged to comply with its provisions. Thus, where the CBA is clear and unambiguous, it becomes the
law between the parties and compliance therewith is mandated by the express policy of the law. In the
absence of specific prohibition in the retirement plan or the CBA, retirement benefits and separation pay
are not mutually exclusive of each other and the employees whose services were terminated without
cause are entitled to both separation pay and retirement gratuity. In the present case, the CBA contains
specific provisions which effectively bar the availment of retirement benefits once the employees have
chosen separation pay or vice versa. The parties’ CBA provides in no uncertain terms that whatever
amount of money the employees will receive as retirement gratuity shall be chargeable against separation
pay. It is the unequivocal manifestation of their agreement that acceptance of retirement gratuity
forecloses receipt of separation pay and vice versa.
LABOR LAW>Labor Standards>Termination by Employer>Gross Neglect of Duty
PHILIPPINE NATIONAL BANK, Petioner,

vs.
MARY SHEILA ARCOBILLAS, Respondent.
G.R. No. 179648, August 7, 2013
(Second Division)
DOCTRINE: To warrant removal from service, the negligence should be gross and habitual. Gross
neglect of duty "denotes a flagrant and culpable refusal or unwillingness of a person to perform a duty." It
"refers to negligence characterized by the want of even slight care, acting or omitting to act in a situation
where there is a duty to act, not inadvertently but willfully and intentionally, with a conscious indifference
to consequences insofar as other persons may be affected."
FACTS: The PNB Foreign Currency Denomination-Savings Account (FCD-S/A) of Avelina Nomad-Spoor
was credited with US$138.00. However, instead of posting its peso equivalent of ₱5,517.10, respondent,
the assigned administrative teller at PNB Bacolod-Lacson branch, erroneously posted US$5,517.10,
resulting in an overcredit. Said amount was later withdrawn by Nomad-Spoor to the damage of the PNB
in the amount of ₱214,641.23. The misposting was discovered only about seven months later. After
investigation by PNB’s Inspection and Investigation Unit, Arcobillas was administratively charged with
neglect of duty. In her Affidavit,, she admitted her mistake and said that she honestly believed the amount
to be correct, apologized for it, and stated that she did not benefit from the unintentional misposting. She
further explained that the heavy workload that day, a Friday coinciding with payroll day, plagued with
intermittent power interruptions, brought on a severe headache which greatly affected her work
performance. The petitioner’s Administrative Adjudication Panel found the respondent guilty of gross
neglect of duty and meted upon her the penalty of forced resignation with benefits, to take effect
immediately upon her receipt thereof.
ISSUE: Whether or not the respondent’s misposting can be considered gross neglect of duty to warrant a
penalty of forced resignation
HELD: NO.
To warrant removal from service, the negligence should be gross and habitual. Although it was her
second time to commit misposting (i.e., the first misposting was in 1995 while the second misposting was
committed in 1998), Arcobillas’ act cannot be considered as gross as to warrant her termination from
employment. Gross neglect of duty "denotes a flagrant and culpable refusal or unwillingness of a person
to perform a duty." It "refers to negligence characterized by the want of even slight care, acting or omitting
to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally, with a
conscious indifference to consequences insofar as other persons may be affected." As aptly held by the
labor tribunals, the misposting was not deliberately done as to constitute as gross negligence. Rather, it
was a case of simple neglect brought about by carelessness which, as satisfactorily explained by
Arcobillas, was the effect of her heavy workload that day and the headache she was experiencing.
LABOR LAW>Labor Standards>Termination by Employer>Constructive Dismissal
VICENTE ANG, Petitioner,

vs.
CEFERINO SAN JOAQUIN, JR., AND DIOSDADO FERNANDEZ, Respondents.
G.R. No. 185549, August 7, 2013
(Second Division)
DOCTRINE: A daily time record is primarily intended to prevent damage or loss to the employer, which
could result in instances where it pays an employee for no work done; it is a mandatory requirement for
inclusion in the payroll, and in the absence of an employment agreement, it constitutes evidence of
employment.
FACTS: Ang is the proprietor of Virose Furniture and Glass Supply, a wholesaler/retailer of glass
supplies, jalousies, aluminum windows, table glass and assorted furniture. San Joaquin and Fernandez
were regular employees of Virose. They have been continuously in Ang’s employ without any derogatory
record. On August 24, 1999, respondents attended the court hearing relative to the 41 criminal cases filed
by former Virose employee against Ang for non-remittance of SSS contributions. During that hearing,
respondents testified against Ang. After the said hearing, Ang began to treat respondents with hostility
and antagonism. On August 28, 1999, Ang’s wife, Rosa, instructed a Virose salesclerk to find helpers
who would transfer monobloc chairs from the Virose store to her restaurant, located just beside the store.
The salesclerk instructed San Joaquin to help, but the latter refused, saying that he was not an employee
of the restaurant but a glass installer of Virose. A heated argument ensued between San Joaquin on the
one hand and Rosa, her son Jonathan, and the salesclerk, on the other. San Joaquin left the store,
shouting invectives. On August 30, 1999, San Joaquin returned to the store, only to find out that Ang had
torn his dialy time records (DTR) to pieces that day while the DTR of Fernandez was torn to pieces by
Ang immediately after the August 24, 1999 hearing. On the same day, Fernandez reported for work and
received a memorandum issued by Ang informing him that he was placed on a one-week suspension for
insubordination. The memorandum did not specify the act of insubordination. Subsequently, respondents
filed against Ang Complaints for illegal constructive dismissal.
ISSUE: Whether or not the employer’s act of tearing to pieces the employee’s time card may be
considered as constructive dismissal
HELD: YES.
The CA is correct in its pronouncement that respondents were constructively dismissed from
work. Moreover, by destroying respondents’ time cards, Ang discontinued and severed his relationship
with respondents. The purpose of a time record is to show an employee’s attendance in office for work
and to be paid accordingly, taking into account the policy of "no work, no pay". A daily time record is
primarily intended to prevent damage or loss to the employer, which could result in instances where it
pays an employee for no work done; it is a mandatory requirement for inclusion in the payroll, and in the
absence of an employment agreement, it constitutes evidence of employment. Thus, when Ang tore the
respondents’ time cards to pieces, he virtually removed them from Virose’s payroll and erased all vestiges
of respondents’ employment; respondents were effectively dismissed from work. The act may be
considered an outright – not only symbolic – termination of the parties’ employment relationship; the "last
straw that finally broke the camel’s back", as respondents put it in their Position Paper.
LABOR LAW>Labor Standards>Probationary Employee
COLEGIO DEL SANTISIMO ROSARIO AND SR. ZENAIDA S. MOFADA, OP, Petitioners,
vs.
EMMANUEL ROJO,* Respondent.
G.R. No. 170388, September 04, 2013
(Second Division)
DOCTRINE: An employee who is allowed to work after a probationary period shall be considered a
regular employee.
FACTS: Petitioner Colegio del Santisimo Rosario (CSR) hired respondent as a high school teacher on
probationary basis for the school years 1992-1993, 1993-1994 and 1994-1995. On April 5, 1995, CSR,
through petitioner Mofada, decided not to renew respondent’s services. Respondent then filed a
Complaint for illegal dismissal. He alleged that since he had served three consecutive school years which
is the maximum number of terms allowed for probationary employment, he should be extended
permanent employment. Citing paragraph 75 of the 1970 Manual of Regulations for Private Schools,
respondent asserted that “full-time teachers who have rendered three (3) consecutive years of
satisfactory services shall be considered permanent.”
ISSUE: Whether or not respondent should be considered permanent after having served for three
consecutive years which is the maximum number of terms allowed for probationary employment
HELD: YES.
In Mercado v. AMA Computer College-Parañaque City, Inc., the Court ruled that cases dealing with
employment on probationary status of teaching personnel are not governed solely by the Labor Code as
the law is supplemented, with respect to the period of probation, by special rules found in the Manual of
Regulations for Private Schools. With regard to the probationary period, Section 92 of the 1992
Manual provides: Section 92. Probationary Period. – Subject in all instances to compliance with the
Department and school requirements, the probationary period for academic personnel shall not be more
than three (3) consecutive years of satisfactory service for those in the elementary and secondary
levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine
(9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses
are offered on a trimester basis. In this case, petitioners’ teachers who were on probationary employment
were made to enter into a contract effective for one school year. Thereafter, it may be renewed for
another school year, and the probationary employment continues. At the end of the second fixed period of
probationary employment, the contract may again be renewed for the last time. However, this scheme “of
fixed-term contract is a system that operates during the probationary period and for this reason is subject
to Article 281 of the Labor Code,” which provides: x x x The services of an employee who has been
engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a
regular employee in accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work after a probationary period
shall be considered a regular employee. That teachers on probationary employment also enjoy the
protection afforded by Article 281 of the Labor Code is supported by Section 93 of the 1992 Manual which
provides: Sec. 93. Regular or Permanent Status. - Those who have served the probationary period shall
be made regular or permanent. Full-time teachers who have satisfactorily completed their probationary
period shall be considered regular or permanent. The above provision clearly provides that full-time
teachers become regular or permanent employees once they have satisfactorily completed the
probationary period of three school years. The use of the term satisfactorily necessarily connotes the
requirement for schools to set reasonable standards to be followed by teachers on probationary
employment.
However, it must be emphasized that mere rendition of service for three consecutive years does not
automatically ripen into a permanent appointment. It is also necessary that the employee be a full-time
teacher, and that the services he rendered are satisfactory.
LABOR LAW>Labor Standards>Post Employment>Termination of Employment
ASIA BREWERY, INC., Petitioner,

vs.
TUNAY NA PAGKAKAISA NG MGA MANGGAGAWA SA ASIA (TPMA), Respondent.
G.R. Nos. 171594-96, September 18, 2013
(Second Division)
DOCTRINE: Unaudited financial statements showing the alleged losses of the business are mere self-
serving declarations and inadmissible in evidence in fixing the amount of wage increase, even if the
employees did not object to their presentation before the Labor Arbiter.
FACTS: TPMA is a legitimate labor organization, certified as the sole and exclusive bargaining agent of
all regular rank-and-file employees of Asia Brewery, Inc. (ABI). The latter, on the other hand, is a
company engaged in the manufacture, sale and distribution of beer, shandy, glass and bottled water
products. It employs about 1,500 workers and has existing distributorship agreements with at least 13
companies. ABI, due to a then labor dispute regarding the wage increase of the employees, petitioned the
Labor Secretary to assume jurisdiction, invoking Article 263 (g) of the Labor Code. TPMA opposed the
assumption of jurisdiction, reasoning therein that the business of ABI is not indispensable to the national
interest. It is to be noted that one of the documents submitted by ABI as basis in fixing the amount of the
wage increase are unaudited financial statements.
ISSUE: Whether or not unaudited financial statements are admissible in evidence as basis of fixing the
amount of wage increase
HELD: NO.
In Restaurante Las Conchas v. Llego, several employees filed a case for illegal dismissal after the
employer closed its restaurant business. The employer sought to justify the closure through unaudited
financial statements showing the alleged losses of the business. We ruled that such financial statements
are mere self-serving declarations and inadmissible in evidence even if the employees did not object to
their presentation before the Labor Arbiter. Thus, we rule that the Secretary of Labor gravely abused her
discretion when she relied on the unaudited financial statements of petitioner corporation in determining
the wage award because such evidence is self-serving and inadmissible. Not only did this violate the
December 19, 2003 Order of the Secretary of Labor herself to petitioner corporation to submit its
complete audited financial statements, but this may have resulted to a wage award that is based on an
inaccurate and biased picture of petitioner corporation’s capacity to pay — one of the more significant
factors in making a wage award. Petitioner corporation has offered no reason why it failed and/or refused
to submit its audited financial statements for the past five years relevant to this case. This only further
casts doubt as to the veracity and accuracy of the unaudited financial statements it submitted to the
Secretary of Labor. Verily, we cannot countenance this procedure because this could unduly deprive
labor of its right to a just share in the fruits of production and in order to defeat the right of labor to a just
wage.
LABOR LAWS>Social and Welfare Legislation>Permanent Total Disability
ALPHA SHIP MANAGEMENT CORPORATION/JUNEL M CHAN and/or CHUO-KAIUN COMPANY,

LIMITED, Petitioners,
vs.
ELEOSIS V. CALO, Respondent.
G.R. No. 192034, January 13, 2014
(Second Division)
DOCTRINE: It can be said that an employee’s disability becomes permanent and total when so declared
by the company-designated physician, or, in case of absence of such a declaration either of fitness or
permanent total disability, upon the lapse of the 120- or 240-day treatment period, while the employee’s
disability continues and he is unable to engage in gainful employment during such period, and the
company-designated physician fails to arrive at a definite assessment of the employee’s fitness or
disability.
FACTS: Respondent Calo worked for petitioners since 1998 under seven employment contracts. On
February 17, 2004, respondent was once more hired by petitioners as Chief Cook on board CKCL’s
vessel, MV Iris. On July 13, 2004, while MV Iris was in Shanghai, China, respondent suffered back pain
on the lower part of his lumbar region and urinated with solid particles. On checkup, the doctor found him
suffering from urinary tract infection and renal colic, and was given antibiotics. When respondent’s
condition did not improve, he consulted another doctor in Chile sometime in August 2004, and was found
to have kidney problems and urinary tract infection but was declared fit for work on a "light duty" basis. On
September 19, 2004, respondent suffered an attack of severe pain in his loin area below the ribs radiating
to his groin. At the hospital in Yokohama, Japan, respondent was diagnosed with suspected renal and/or
ureter calculus. He was declared "unfit for work" and advised to be sent home and undergo further
detailed examination and treatment. Respondent was thus repatriated on October 12, 2004 and was
referred by petitioners to Dr. Cruz, the company-designated physician. The Final Medical report was
issued only after a period exceeding 240 days, declaring the respondent fit to work.
ISSUE: Whether or not the disability of the respondent is considered permanent total disability for having
been under observation for more than 240 days despite the absence of findings made by the company
physician
HELD: YES.
It can be said that an employee’s disability becomes permanent and total when so declared by the
company-designated physician, or, in case of absence of such a declaration either of fitness or
permanent total disability, upon the lapse of the 120- or 240-day treatment period, while the employee’s
disability continues and he is unable to engage in gainful employment during such period, and the
company-designated physician fails to arrive at a definite assessment of the employee’s fitness or
disability. This is true "regardless of whether the employee loses the use of any part of his body."
Respondent was repatriated on October 12, 2004 and underwent treatment by the company-designated
physician, Dr. Cruz, until October 14, 2005, or for a continuous period of over one year – or for more than
the statutory 120-day or even 240-day period. During said treatment period, Dr. Cruz did not arrive at a
definite assessment of respondent’s fitness or disability; thus, respondent’s medical condition remained
unresolved. It was only on July 18, 2006 that respondent was declared fit to work by Dr. Cruz. Such
declaration, however, became irrelevant, for by then, respondent had been under medical treatment and
unable to engage in gainful employment for more than 240 days. Pursuant to the doctrine in Kestrel, the
conclusive presumption that the respondent is totally and permanently disabled thus arose. The CA is
therefore correct in declaring that respondent suffered permanent total disability.
JONAS MICHAEL R. GARZA, Petitioner,

vs.
COCA-COLA BOTTLERS PEREZ, AND PHILIPPINES, INC. CHRISTINE BANAL/CALIXTO
MANAIG, Respondents.
G.R. No. 180972, January 20, 2014
(Second Division)
DOCTRINE: Unsubstantiated accusations or baseless conclusions of the employer are insufficient legal
justifications to dismiss an employee. The unflinching rule in illegal dismissal cases is that the employer
bears the burden of proof.
FACTS: Petitioner Garza was a regular employee of the respondent CCBPI. Being an account specialist,
his function is to book customers’ order and collect on their account. Delivery of products is not included
as it is done by an independent dealer contracted by the petitioner. Respondent’s company policy
provides that account specialists/salesmen are obliged to remit all cash sales and credit cash collections
to the company office on the same day that payments are received in cash or check from customers,
dealers and outlets. Thus, before allowing the Account Specialists/Salesmen to work the following day,
the CCBPI cashier shall first issue a clearance which is given to the company security guard stating
whether they incurred shortages or have not remitted collections. Petitioner incurred shortages, so he
was given two memo directing him to explain said shortages and unliquidated collections. He sought
clarification as they do not specify the acts of misappropriation, but it was unheeded. He was served a
third memo stating that he is under preventive suspension and he should attend the formal investigation.
He sought rescheduling but it was denied and notice of termination was issued. He sought the review of
financial records to appraise the basis of the finding of misappropriation but it was likewise denied. There
was also an attempt to reconcile but such did not materialize. Petitioner then filed a complaint for illegal
dismissal.
ISSUE: Whether or not the respondent’s dismissal was without just cause
HELD: YES.
One of CCBPI’s policies requires that, on a daily basis, CCBPI Salesmen/Account Specialists must
account for their sales/collections and obtain clearance from the company Cashier before they are
allowed to leave company premises at the end of their shift and report for work the next day. If there is a
shortage/failure to account, the concerned Salesmen/Account Specialist is not allowed to leave the
company premises until he settles the same. In addition, shortages are deducted from the employee’s
salaries. Petitioner made repeated reiterations of this company policy all throughout the proceedings,
and not once did respondents deny or dispute its existence and implementation. In fact, respondents
confirmed existence of this policy when they stated in their Position Paper that “[a]s a matter of policy,
salesmen in respondent’s company are obliged to remit all cash sales and credit cash collections to the
company office on the same day that said payments are made by various customers, dealers and
outlets.” Within the context of said policy, it can be said that since petitioner continued to work for CCBPI
until June 2004, this should necessarily mean that he was clear of daily cash and check accountabilities,
including those transactions covered by the charges against him. If not, the company cashier would not
have issued the required clearance and petitioner would have been required to settle these shortages as
soon as they were incurred. Indeed, he would not have been allowed to leave company premises until
they were settled in accordance with company policy and he would not have been allowed to report for
work the following day. Unsubstantiated accusations or baseless conclusions of the employer are
insufficient legal justifications to dismiss an employee. “The unflinching rule in illegal dismissal cases is
that the employer bears the burden of proof.”
GRAND ASIAN SHIPPING LINES, INC., EDUARDO P. FRANCISCO AND WILLIAM HOW, Petitioners
vs.
WILFRED GALVEZ, ET AL., Respondents
G.R. No. 178184, January 29, 2014
(Second Division)
DOCTRINE: In termination disputes, the burden of proving that the dismissal is for a just or valid cause
rests on the employers. Failure on their part to discharge such burden will render the dismissal illegal.
The quantum of proof which the employer must discharge is substantial evidence.
FACTS: Petitioners in this case are: a domestic corporation engaged in transporting liquefied petroleum
gas from Petron refineries, its president and general manager. Respondents are crew members of one of
petitioner corporation’s vessels. A complaint was filed for qualified theft against the respondents for an
alleged selling of unconsumed fuel of the vessel to other vessels. Pending such complaint, the petitioner
conducted administrative hearings. As a result, it decided to terminate the respondents. Respondents
then filed a complaint for illegal suspension and dismissal. The petitioner contended that the dismissal
was valid on the ground that since an information was filed by the prosecutor against the respondents,
there is reasonable ground to believe that the respondents were responsible for qualified theft.
ISSUE: Whether or not the filing of the information for qualified theft justified the dismissal of the
respondents
HELD: NO.
In termination disputes, the burden of proving that the dismissal is for a just or valid cause rests on the
employers. Failure on their part to discharge such burden will render the dismissal illegal. “[T]he quantum
of proof which the employer must discharge is substantial evidence. Substantial evidence is that amount
of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if
other minds, equally reasonable, might conceivably opine otherwise.” Here, the mere filing of a formal
charge, to our mind, does not automatically make the dismissal valid. Evidence submitted to support the
charge should be evaluated to see if the degree of proof is met to justify respondents’ termination. The
affidavit executed by Montegrico simply contained the accusations of Abis that respondents committed
pilferage, which allegations remain uncorroborated. “Unsubstantiated suspicions, accusations, and
conclusions of employers do not provide for legal justification for dismissing employees.” The other bits of
evidence were also inadequate to support the charge of pilferage. The findings made by GASLI’s port
captain and internal auditor and the resulting certification executed by De la Rama merely showed an
overstatement of fuel consumption as revealed in the Engineer’s Voyage Reports. The report of Jade Sea
Land Inspection Services only declares the actual usage and amount of fuel consumed for a particular
voyage. There are no other sufficient evidence to show that respondents participated in the commission
of a serious misconduct or an offense against their employer.
The rule that the employer bears the burden of proof in illegal dismissal cases finds no application when
the employer denies having dismissed the employee. The employee must first establish by substantial
evidence the fact of dismissal before shifting to the employer the burden of proving the validity of such
dismissal.
LABOR LAW>Social and Welfare Legislation>Disability Compensation
FIL-PRIDE SIDPPING COMPANY, INC., CAPTAIN NICOLAS T. DOLLOLASA and OCEAN EAGLE
SIDPMANAGEMENT COMPANY, PTE.LTD., Petitioners,
vs.
EDGAR A. BALASTA, Respondent.
G.R. No. 193047 March 3, 2014
(Second Division)
DOCTRINE: The POEA-SEC cannot be presumed to contain all the possible injuries that render a
seafarer unfit for further sea duties. Just the same, in several cases, cardiovascular disease, coronary
artery disease, as well as other heart ailments were held to be compensable.
FACTS: Balasta was hired by Fil-Pride for its foreign principal, Ocean Eagle Ship Management Company.
He was assigned as Able Seaman onboard M/V Eagle Pioneer. He was also declared fit to work after
undergoing the mandatory Pre-Employment Medical Examination (PEME) before he commenced his
duties as Able Seaman. While aboard the vessel, Balasta experienced chest pains, fatigue, and
shortness of breath. He was examined by a physician in a hospital in China and was diagnosed as having
myocardial ischemia and coronary heart disease. He was declared unfit for duty and was recommended
for repatriation. He was thereafter examined by the company-designated physician. Also, on his own
initiative, Balasta was examined by an independent physician, where the latter found out that he was unfit
to continue his work due to work-related illness. Balasta then filed a claim for permanent disability
benefits, but Fil-Pride denied the same.
ISSUE: Whether or not the respondent is entitled to disability compensation due to the work-related
illness he suffered
HELD: YES.
Regarding the issue of compensability, it has been the Court’s consistent ruling that in disability
compensation, "it is not the injury which is compensated, but rather it is the incapacity to work resulting in
the impairment of one’s earning capacity." Moreover, "the list of illnesses/diseases in Section 32-A does
not preclude other illnesses/diseases not so listed from being compensable. The POEA-SEC cannot be
presumed to contain all the possible injuries that render a seafarer unfit for further sea duties." Just the
same, in several cases, cardiovascular disease, coronary artery disease, as well as other heart ailments
were held to be compensable. Likewise, petitioners failed to refute respondent’s allegations in his Position
Paper that in the performance of his duties as Able Seaman, he inhaled, was exposed to, and came into
direct contact with various injurious and harmful chemicals, dust, fumes/emissions, and other irritant
agents; that he performed strenuous tasks such as lifting, pulling, pushing and/or moving equipment and
materials on board the ship; that he was constantly exposed to varying temperatures of extreme hot and
cold as the ship crossed ocean boundaries; that he was exposed as well to harsh weather conditions; that
in most instances, he was required to perform overtime work; and that the work of an Able Seaman is
both physically and mentally stressful. It does not require much imagination to realize or conclude that
these tasks could very well cause the illness that respondent, then already 47 years old, suffered from six
months into his employment contract with petitioners.
LABOR LAW>Labor Standards>Wages>Non-Diminution of Benefits
WESLEYAN UNIVERSITY PHILIPPINES, Petitioner,

vs.
WESLEYAN UNIVERSITY- PHILIPPINES FACULTY AND STAFF ASSOCIATION, Respondent.
G.R. No. 181806, March 12, 2014
(Second Division)
DOCTRINE: The Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits
employers from eliminating or reducing the benefits received by their employees. This rule, however,
applies only if the benefit is based on an express policy, a written contract, or has ripened into a practice.
FACTS: Petitioner is a non-stock, non-profit educational institution duly organized and existing under the
laws of the Philippines. Respondent, on the other hand, is a duly registered labor organization acting as
the sole and exclusive bargaining agent of all rank-and-file faculty and staff employees of petitioner. The
petitioner issued a Memorandum which provided for guidelines on the implementation of vacation and
sick leave. The respondent, through its president, wrote a letter to the petitioner stating that they are not
amenable to such Memorandum since it is a violation of the existing CBA provisions. A Labor
Management Committee (LMC) Meeting was then held during which petitioner advised respondent to file
a grievance complaint on the implementation of the vacation and sick leave policy. Unable to settle their
differences at the grievance level, the parties referred the matter to a Voluntary Arbitrator. During the
hearing, respondent submitted affidavits to prove that there is an established practice of giving two
retirement benefits. The voluntary arbitrator rendered the one-retirement policy as contrary to law. The CA
affirmed said decision. Hence, this petition. The petitioner contended that there is only one retirement
plan as the CBA Retirement Plan and the Private Education Retirement Annuity Association (PERAA)
Plan are one and the same. It maintains that there is no established company practice or policy of giving
two retirement benefits to its employees. Assuming, without admitting, that two retirement benefits were
released, petitioner insists that these were done by mere oversight or mistake as there is no Board
Resolution authorizing their release. Also, since these benefits are unauthorized and irregular, these
cannot ripen into a company practice or policy.
ISSUE: Whether or not the Non-Diminution of Benefits Rule will apply on the ground that there is an
established practice of giving two retirement plans to the employees
HELD: YES.
The Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits employers from
eliminating or reducing the benefits received by their employees. This rule, however, applies only if the
benefit is based on an express policy, a written contract, or has ripened into a practice. To be considered
a practice, it must be consistently and deliberately made by the employer over a long period of time. In
this case, respondent was able to present substantial evidence in the form of affidavits to support its claim
that there are two retirement plans. Based on the affidavits, petitioner has been giving two retirement
benefits as early as 1997. Petitioner, on the other hand, failed to present any evidence to refute the
veracity of these affidavits. Petitioner’s contention that these affidavits are self-serving holds no water.
The retired employees of petitioner have nothing to lose or gain in this case as they have already
received their retirement benefits. Thus, they have no reason to perjure themselves. Obviously, the only
reason they executed those affidavits is to bring out the truth. As we see it then, their affidavits,
corroborated by the affidavits of incumbent employees, are more than sufficient to show that the granting
of two retirement benefits to retiring employees had already ripened into a consistent and deliberate
practice.
An exception to the rule is when “the practice is due to error in the construction or application of a
doubtful or difficult question of law.” The error, however, must be corrected immediately after its
discovery; otherwise, the rule on Non-Diminution of Benefits would still apply.
LABOR LAW>Labor Standards>Labor-Only Contracting
AVELINO ALILIN, et.al, Petitioners

vs.
PETRON CORPORATION, Respondent
G.R. No. 177592, June 9, 2014
(Second Division)
DOCTRINE: A contractor is presumed to be a labor-only contractor, unless it proves that it has the
substantial capital, investment, tools and the like. However, where the principal is the one claiming that
the contractor is a legitimate contractor, the burden of proving the supposed status of the contractor rests
on the principal.
FACTS: Romualdo D. Gindang Contractor, owned and operated by Romualdo D. Gindang, started
recruiting laborers for fielding to Petron’s Mandaue Bulk Plant. When Romualdo died, his son Romeo D.
Gindang, through Romeo D. Gindang Services (RDG), took over the business and continued to provide
manpower services to Petron. Petitioners were among those recruited to work in the premises of the said
bulk plant, with the corresponding dates of hiring and work duties. Petron and RDG entered into a
Contract for Services from June 1, 2000 to May 31, 2002, whereby RDG undertook to provide Petron with
janitorial, maintenance, tanker receiving, packaging and other utility services. This contract was further
extended until September 30, 2002. Upon expiration thereof, no further renewal of the service contract
was done. Petitioners did not deny that RDG hired them and paid their salaries. They, however, claimed
that the latter is a labor-only contractor, which merely acted as an agent of Petron, their true employer.
They asseverated that their jobs, which are directly related to Petron’s business, entailed them to work
inside the premises of Petron using the required equipment and tools furnished by it and that they were
subject to Petron’s supervision. Claiming to be regular employees, petitioners thus asserted that their
dismissal allegedly in view of the expiration of the service contract between Petron and RDG is illegal.
RDG denied liability and further argued that Petron cannot capitalize on the service contract to escape
liability. Petron, on the other hand, maintained that RDG is an independent contractor and the real
employer of the petitioners.
ISSUE: Whether or not RDG is a labor-only contractor
HELD: YES.
A contractor is presumed to be a labor-only contractor, unless it proves that it has the substantial capital,
investment, tools and the like. However, where the principal is the one claiming that the contractor is a
legitimate contractor, the burden of proving the supposed status of the contractor rests on the principal.
"Labor-only contracting" prohibited under this Rule is an arrangement where the contractor or
subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal
and the following elements are present: (i) The contractor or subcontractor does not have substantial
capital or investment to actually perform the job, work or service under its own account and responsibility;
and (ii) The employees recruited, supplied or placed by such contractor or subcontractors are performing
activities which are directly related to the main business of the principal. While "Permissible job
contracting or subcontracting refers to an arrangement whereby a principal agrees to farm out with a
contractor or subcontractor the performance of a specific job, work, or service within a definite or
predetermined period, regardless of whether such job, work or service is to be performed or completed
within or outside the premises of the principal. Petron failed to discharge the burden of proving that RDG
is a legitimate contractor. Hence, the presumption that RDG is a labor-only contractor stands.
LABOR LAW>Labor Standards>Termination from Employment>Nominal Damages
LIBCAP MARKETING CORP., JOHANNA J. CELIZ, and MA. LUCIA G. MONDRAGON, Petitioners,
vs.
LANNY JEAN B. BAQUIAL, Respondent.
G.R. No. 192011, June 30, 2014
(Second Division)
DOCTRINE: The law and jurisprudence allow the award of nominal damages in favor of an employee in a
case where a valid cause for dismissal exists but the employer fails to observe due process in dismissing
the employee. Nominal damages are awarded for the purpose of vindicating or recognizing a right and
not for indemnifying a loss.
FACTS: Libcap Marketing Corporation is engaged in the freight forwarding business with offices in Iloilo
City. Baquial was employed by Libcap on October 12, 1999 as accounting clerk for Libcap’s Super
Express branch in Cagayan de Oro City. An audit of Libcap’s branch in CDO was conducted, and the
resulting audit report showed that respondent made a double reporting of a single deposit. Thereafter,
petitioner Celiz required respondent to explain in writing within 24 hours why the cash sales as reported in
the daily collection reports were covered by a single validated bank deposit slip. On verification with PS
Bank, it was confirmed that only a single deposit was posted and that there was no misposting or
deposits to other accounts of the same amount made on the particular date. Respondent was placed on
preventive suspension. Subsequently, she received a Notice of Termination stating that she was
terminated from employment for dishonesty, embezzlement, inefficiency and for commission of acts
inconsistent with Libcap’s work standards.
ISSUE #1: Whether or not respondent was denied due process when she was terminated from
employment
ISSUE #2: Whether or not the CA correctly awarded nominal damages in the amount of P100,000.00
considering that respondent was required to work beyond her scheduled or assigned hours of work
without overtime pay
HELD #1: YES.
The CA, the NLRC and the Labor Arbiter are correct in concluding that respondent was denied due
process, but their reasons for arriving at such conclusion are erroneous. What they seem to have
overlooked is that respondent’s case has been prejudged even prior to the start of the investigation on
July 28, 2003. This is evident from the fact that the amount of P1,437.00 — or the amount which
petitioners claim was embezzled — was peremptorily deducted each payday from respondent’s salary on
a staggered basis, culminating on June 30, 2003, or nearly one month prior to the scheduled investigation
on July 28, 2003. In doing so, petitioners have made it clear that they considered respondent as the
individual responsible for the embezzlement; thus, in petitioners’ eyes, respondent was adjudged guilty
even before she could be tried — the payroll deductions being her penalty and recompense. By
prejudging respondent’s case, petitioners clearly violated her right to due process from the very
beginning, and from then on it could not be expected that she would obtain a fair resolution of her case. In
a democratic system, the infliction of punishment before trial is fundamentally abhorred. What petitioners
did was clearly illegal and improper.
HELD #2: NO.
The law and jurisprudence allow the award of nominal damages in favor of an employee in a case where
a valid cause for dismissal exists but the employer fails to observe due process in dismissing the
employee. Financial assistance is granted as a measure of equity or social justice, and is in the nature or
takes the place of severance compensation. On the other hand, nominal damages "may be awarded to a
plaintiff whose right has been violated or invaded by the defendant, for the purpose of vindicating or
recognizing that right, and not for indemnifying the plaintiff for any loss suffered by him. Its award is thus
not for the purpose of indemnification for a loss but for the recognition and vindication of a right." The
amount of nominal damages to be awarded the employee is addressed to the sound discretion of the
court, taking into consideration the relevant circumstances. Prescinding from the foregoing, we find it
necessary to reduce the amount of nominal damages the CA awarded from P100,000.00 to P30,000.00.
We cannot subscribe to the CA’s ratiocination that since respondent rendered overtime work for four
years without receiving any overtime pay, she is entitled to P100,000.00 nominal damages. Nominal
damages are awarded for the purpose of vindicating or recognizing a right and not for indemnifying a
loss. Hence, the CA should have limited the justification of the award of nominal damages to petitioners’
violation of respondent’s right to due process in effecting her termination. It should not have considered
the claimed unpaid overtime pay.
LABOR LAW>Labor Relations >Jurisdiction
AMECOS INNOVATIONS, INC. and ANTONIO F. MATEO, Petitioners,

vs.
ELIZA R. LOPEZ, Respondent.
G.R. No.178055, July 2, 2014
(Second Division)
DOCTRINE: The Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but
also damages governed by the Civil Code. SSS contributions and recovery of damages arising from
employer-employee relationship is under the jurisdiction of the Labor Arbiters.
FACTS: Amecos was complained by the SSS for alleged delinquency in the remittance of contributions.
Amecos attributed the same to Lopez, claiming that it hired the latter but she refused to provide Amecos
with her SSS Number. Hence, Amecos no longer enrolled Lopez with the SSS and did not deduct her
corresponding contributions up to the time of her termination. The complaint was withdrawn by SSS upon
settlement of the obligation by Amecos. Thereafter, Amecos filed a complaint for sum of money and
damages against Lopez before the RTC, claiming that because of Lopez’s misrepresentation, they
suffered actual damages by way of settlement and payment of its obligations with the SSS. Its contention
is that the employer-employee relationship between Amecos and Lopez is merely incidental, and does
not necessarily place their dispute within the exclusive jurisdiction of the labor tribunals. Instead, the true
source of Lopez’s obligation is derived from Articles 19, 22, and 2154 of the Civil Code.
ISSUE: Whether or not claims for damages arising from employer-employee relationship is within the
exclusive and original jurisdiction of the Labor Arbiter
HELD: YES.
SSS contributions and recovery of damages arising from employer-employee relationship is under the
jurisdiction of the Labor Arbiters. This Court holds that as between the parties, Article 217(a)(4) of the
Labor Code is applicable. Said provision bestows upon the Labor Arbiter original and exclusive
jurisdiction over claims for damages arising from employer-employee relations. The observation that the
matter of SSS contributions necessarily flowed from the employer-employee relationship between the
parties shared by the lower courts and the Court of Appeals (CA) is correct; thus, Amecos’ claims should
have been referred to the labor tribunals. In this connection, it is noteworthy to state that “the Labor
Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed
by the Civil Code.” At the same time, it cannot be assumed that since the dispute concerns the payment
of SSS premiums, petitioners’ claim should be referred to the Social Security Commission (SSC) pursuant
to Republic Act No. 1161, as amended by Republic Act No. 8282. As far as SSS is concerned, there is no
longer a dispute with respect to petitioners’ accountability to the System; petitioners already settled their
pecuniary obligations to it. Since there is no longer any dispute regarding coverage, benefits,
contributions and penalties to speak of, the SSC need not be unnecessarily dragged into the
picture. Besides, it cannot be made to act as a collecting agency for petitioners’ claims against the
respondent; the Social Security Law should not be so interpreted, lest the SSC be swamped with cases of
this sort.
LABOR LAW>Labor Standards>Termination of Employment>Constructive Dismissal
GIRLY G. ICO, Petitioner,

vs.
SYSTEMS TECHNOLOGY INSTITUTE, INC., MONICO V. JACOB and PETER K.
FERNANDEZ, Respondents.
G.R. No. 185100, July 9, 2014
(Second Division)
DOCTRINE: In cases of a transfer of an employee, the rule is settled that the employer is charged with
the burden of proving that its conduct and action are for valid and legitimate grounds such as genuine
business necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the employee.
If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to
unlawful constructive dismissal.
FACTS: STI College Makati (Inc.) is a wholly-owned subsidiary of STI. Sometime in July 2003, or during
petitioner Ico’s stint as Chief Operating Officer (COO) and School Administrator of STI-Makati, a Plan of
Merger was executed between STI and STI-Makati, whereby the latter would be absorbed by STI. The
merger was approved by the Securities and Exchange Commission. STI-Makati thus ceased to exist and
was placed under STI’s Education Management Division (EMD). In a Memorandum, STI updated Ico’s
appointment as COO of STI-Makati. However, she was not given the salary commensurate to her position
as COO, as well as benefits and privileges which holders of equivalent positions were entitled to, such as
a car plan. Two months thereafter, another Memorandum was issued by STI cancelling Ico’s COO
assignment and appointing her as STI’s Compliance Manager, citing management’s decision to
undertake an “organizational restructuring” in line with the merger of STI and STI-Makati. Ico argues that
her appointment as Compliance Manager is illegal, because the abolition of the STI Makati COO position
and the creation of the position of Compliance Manager were contrived and fabricated. She adds that her
appointment as Compliance Manager was in fact a demotion: she was relegated to a position where she
did not have any staff to supervise; her work became merely mechanical in nature; she became a mere
Compliance Officer reporting to the Compliance Group Head; and her work was severely limited. She
added that she was subjected to harassment and discrimination, humiliated and became the victim of
STI’s fraudulent scheme to illegally oust her from her position as STI-Makati COO.
ISSUE: Whether or not the petitioner was constructively dismissed
HELD: YES.
Constructive dismissal exists where there is cessation of work because ‘continued employment is
rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in
pay’ and other benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to
appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could
foreclose any choice by him except to forego his continued employment. In cases of a transfer of an
employee, the rule is settled that the employer is charged with the burden of proving that its conduct and
action are for valid and legitimate grounds such as genuine business necessity and that the transfer is not
unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden
of proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal. The May 18
conversation between petitioner and Fernandez, taken in conjunction with the Court’s findings that the
position of STI-Makati COO was never abolished and that petitioner’s appointment as Compliance
Manager was contrived, confirms the view that petitioner was not transferred to the School Compliance
Group as a matter of necessity, but as punishment for her perceived irregularities. In effect, petitioner was
demoted and relegated to a position of insignificance within STI, there to suffer for what her employer
alleged were transgressions committed by her. To all intents and purposes, petitioner was punished even
before she could be tried. She was threatened to accept her fate or else she would find herself without
work, either through dismissal or forced resignation. Evidently, she became the subject of an illegal
constructive dismissal in the guise of a transfer.
LABOR LAW>Labor Standards>Daily Time Records
ROSE HANA ANGELES, doing business under the name and style [of] LAS MARIAS GRILL AND
RESTAURANT, et. al, Petitioners,
vs.
FERDINAND M. BUCAD, CHARLESTON A. REYNANTE, BERNADINE B. ROAQUIN,
et.al, Respondents
G.R. No. 196249, July 21, 2014
(Second Division)
DOCTRINE: The purpose of a time record is to show an employee’s attendance in office for work and to
be paid accordingly, taking into account the policy of "no work, no pay".
FACTS: This Petition for Certiorari has its precursor in the consolidated Complaints for Illegal Dismissal
and Money Claims filed by respondents against petitioners. The employees hurled, inter alia, a litany of
charges, namely: 1) payment of salaries below the minimum wage and which were oftentimes paid after
much delay; 2) non-coverage under the SSS; 3) termination from employment without giving just benefits
despite long service; 4) signing of blank payroll without indicating the amount; and, 5) nonpayment of
night differential, holiday pay, COLA, commutation pay for sick leave and annual leave, 13th month pay
and service charges. They likewise charged petitioners with enforcing long hours of service and claimed
that petitioners heaped verbal abuses upon them and maltreated them by splashing water to wake them
up when anyone fell asleep at work. Also, petitioners forced sick employees to go home to their
respective provinces despite their illness and lastly, failed to provide respondents security of tenure.
Petitioner Angeles now argues that they submitted documentary evidence attached to their Memorandum
of Appeal with the NLRC consisting of DTR, cash vouchers, signed receipts for the payment of 13th
month pay, SSS records, releases and quitclaims, and computation of monetary claims supposedly
indicating that they have settled their pecuniary obligations to respondents. Petitioners claim that the CA
failed to appreciate such evidence, which led the appellate court to an erroneous conclusion.
ISSUE: Whether or not the petitioners failed to discharge the burden of proving payment on the ground
that the relevant payroll and daily time records were stolen
HELD: YES.
There exists serious doubt with respect to petitioners’ proffered evidence, considering that the relevant
payroll and daily time records are missing as they were, according to petitioners, stolen. Setting aside for
a moment the CA’s pronouncement that the "stolen records" angle is nothing but a lame excuse, it would
nonetheless be difficult if not impossible to validate and reconcile petitioners’ documentary evidence and
unilateral claims of payment, if the official payroll and daily time records are not taken into account.
Without them, there could be no sufficient basis for this Court to overturn the assailed Decision; the Court
can only rely on the findings of the Labor Arbiter, the NLRC, and the CA. The purpose of a time record is
to show an employee’s attendance in office for work and to be paid accordingly, taking into account the
policy of "no work, no pay". A daily time record is primarily intended to prevent damage or loss to the
employer, which could result in instances where it pays an employee for no work done; it is a mandatory
requirement for inclusion in the payroll, and in the absence of an employment agreement, it constitutes
evidence of employment. The punching of time card is undoubtedly work-related. It is from that moment
that an employee dons the cape of duties and responsibilities attached to his position in the
workplace. It is the reckoning point of the employer’s corresponding obligation to him — to pay his salary
and provide his occupational and welfare protection or benefits.
LABOR LAW>Labor Standards>Employer-Employee Relationship
ROYALE HOMES MARKETING CORPORATION, Petitioner,

vs.
FIDEL P. ALCANTARA [deceased], substituted by his heirs, Respondent.
G.R. No. 195190, July 28, 2014
(Second Division)
DOCTRINE: The most determinative factor in ascertaining the existence of employer-employee

relationship is the “right of control test.” For where the person for whom the services are performed
reserves the right to control not only the end to be achieved, but also the means by which such end is
reached, employer-employee relationship is deemed to exist.
FACTS: Alcantara filed a Complaint for Illegal Dismissal against Royale Homes and its corporate officers,
alleging that he is a regular employee of Royale Homes since he is performing tasks that are necessary
and desirable to its business; that in 2003 the company gave him P1.2 million for the services he
rendered to it; that in the first week of November 2003, however, the executive officers of Royale Homes
told him that they were wondering why he still had the gall to come to office and sit at his table; and that
the acts of the executive officers of Royale Homes amounted to his dismissal from work without any valid
or just cause and in gross disregard of the proper procedure for dismissing employees. Thus, he also
impleaded the corporate officers who, he averred, effected his dismissal in bad faith and in an oppressive
manner. Royale Homes, on the other hand, vehemently denied that Alcantara is its employee. It argued
that the appointment paper of Alcantara is clear that it engaged his services as an independent sales
contractor for a fixed term of one year only. He never received any salary, 13 thmonth pay, overtime pay or
holiday pay from Royale Homes as he was paid purely on commission basis. In addition, Royale Homes
had no control on how Alcantara would accomplish his tasks and responsibilities as he was free to solicit
sales at any time and by any manner which he may deem appropriate and necessary. He is even free to
recruit his own sales personnel to assist him in pursuance of his sales target.
ISSUE: Whether or not there is an employer-employee relationship between Alcantara and Royal Homes
HELD: NO.
In determining the existence of an employer-employee relationship, this Court has generally relied on the
four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the employer’s power to control the employee with respect to the means and
methods by which the work is to be accomplished. Among the four, the most determinative factor in
ascertaining the existence of employer-employee relationship is the “right of control test.” “It is deemed to
be such an important factor that the other requisites may even be disregarded.” This holds true where the
issues to be resolved is whether a person who performs work for another is the latter’s employee or is an
independent contractor, as in this case. For where the person for whom the services are performed
reserves the right to control not only the end to be achieved, but also the means by which such end is
reached, employer-employee relationship is deemed to exist. As the party claiming the existence of
employer-employee relationship, it behooved upon Alcantara to prove the elements thereof, particularly
Royale Homes’ power of control over the means and methods of accomplishing the work. He, however,
failed to cite specific rules, regulations or codes of ethics that supposedly imposed control on his means
and methods of soliciting sales and dealing with prospective clients. On the other hand, this case is
replete with instances that negate the element of control and the existence of employer-employee
relationship. Notably, Alcantara was not required to observe definite working hours. Except for soliciting
sales, Royale Homes did not assign other tasks to him. He had full control over the means and methods
of accomplishing his tasks as he can “solicit sales at any time and by any manner which [he may] deem
appropriate and necessary.” He performed his tasks on his own account free from the control and
direction of Royale Homes in all matters connected therewith, except as to the results thereof.
LABOR LAW>Social and Welfare Legislation>Seafarers>Medical Examinations
INTERORIENT MARITIME ENTERPRISES, INC., Petitioner,

vs.
VICTOR M. CREER III, Respondent.
G.R. No. 181921, September 17, 2014
(Second Division)
DOCTRINE: For a seaman’s claim for disability to prosper, it is mandatory that within three days from his
repatriation, he is examined by a company-designated physician. Non-compliance with this mandatory
requirement results in the forfeiture of the right to claim for compensation and disability benefits.
FACTS: InterOrient hired Victor as Galley Boy on board the vessel M/V MYRTO owned by Calidero
Shipping Company, Ltd. for a period of nine months, which may be extended for three more months upon
mutual consent of the parties. Prior to embarkation, Victor went through the requisite Pre-Employment
Medical Examination (PEME) and was declared fit for sea duty. As 2nd Cook, Victor was tasked to food
stored therein. He would do this either immediately before or after his exposure to intense heat in the
galley. Victor alleged that when he was about to get provisions from the cold storage sometime in
November 2001, he felt a sudden pain in his chest that radiated to his back. Since then, he experienced
incessant cough, nasal congestion, difficulty in breathing, physical weakness, chills and extreme
apprehension. According to him, this condition persisted until the expiration of his contract on May 7,
2002. Two days after, Victor arrived in Manila. The following day, he reported to the office of InterOrient
and informed the company about the pain he experienced while he was on board. Victor averred that
InterOrient merely advised him to consult a doctor without giving him any doctor’s referral. He did,
however, sign a Receipt and Release where he acknowledged receipt of the full payment of his monetary
entitlements under the employment contract. On June 18, 2002, Victor went to the Heart and Lung
Diagnostic Center where his attending physician, Dr. Ayuyao, found Victor to be suffering from
Community-Acquired Pneumonia 1 and Bronchial Asthma. On August 13, 2003, Victor consulted another
physician, Dr. Vicaldo, at the Philippine Heart Center. After conducting a medical examination and
evaluation, Dr. Vicaldo issued a medical certificate indicating that Victor was diagnosed with
Hypertension, Stage II, and Pulmonary Tuberculosis. He gave Victor an impediment grade VIII and further
declared him unfit to resume work as a seaman in any capacity, and that his illness was considered work-
aggravated. Victor contended that during the course of his treatment, he regularly informed InterOrient of
his sickness, but he was neither apprised of his rights to nor paid sickness allowance.
ISSUE: Whether or not Victor is entitled to medical and disability benefits
HELD: NO.
For a seaman’s claim for disability to prosper, it is mandatory that within three days from his repatriation,
he is examined by a company-designated physician. Non-compliance with this mandatory requirement
results in the forfeiture of the right to claim for compensation and disability benefits. The rationale for the
rule [on mandatory post-employment medical examination within three days from repatriation by a
company-designated physician] is that reporting the illness or injury within three days from repatriation
fairly makes it easier for a physician to determine the cause of the illness or injury. Ascertaining the real
cause of the illness or injury beyond the period may prove difficult. To ignore the rule might set a
precedent with negative repercussions, like opening floodgates to a limitless number of seafarers
claiming disability benefits, or causing unfairness to the employer who would have difficulty determining
the cause of a claimant’s illness because of the passage of time. The employer would then have no
protection against unrelated disability claims.” In fine, we hold that Victor’s noncompliance with the three-
day rule on post-employment medical examination is fatal to his cause. As a consequence, his right to
claim for compensation and disability benefits is forfeited. On this score alone, his Complaint could have
been dismissed outright.
LABOR LAW>Social and Welfare Legislation>Seafarers>Compensable Illness

MAGSAYSAY MITSUI OSK MARINE, INC. and/or MOL TANKSHIP MANAGEMENT (ASIA) PTE
LTD., Petitioners
vs.
JUANITO G. BENGSON, Respondent
G.R. No. 198528, October 13, 2014
(Second Division)
DOCTRINE: Cardiovascular disease, coronary artery disease, and other heart ailments are compensable.
FACTS: Since the year 1986, Bengson has been working as a seafarer for Magsaysay, from his first
position as Deck Cadet until his present position as Third Mate Officer. On October 5, 2007, after doing
his usual duties on board the vessel, Bengson suddenly experienced difficulty in breathing and numbness
on half of his body. Thinking that it was caused by fatigue, he rested for a while. After two hours, he still
felt numbness over his half body prompting him to ask for assistance. On October 7, 2007, Bengson was
brought to the Neurological Department of a hospital in Slovenia where he was confined for three days.
While in the hospital, Bengson had partial paralysis of the right hand and a minor partial paralysis of the
right leg. His CT Scan of the head showed a "small hematoma in the left part of the crane". At that time,
Bengson could only walk with the help of a physiotherapist and was prohibited from lifting heavy things.
Due to his incapacity to work, his immediate repatriation was arranged. Upon Bengson’s arrival in the
Philippines on October 21, 2007, he was immediately brought to the Manila Doctors Hospital for
confinement under the supervision of company-designated physician, Dr. Agbayani, Jr. Upon
examination, he was found to have a stroke. Dr. Agbayani issued an Initial Out-Patient Consult Report
which stated that Bengson’s illness of "hematoma in the cranium" was not work-related. Thus,
Magsaysay, Inc. and MOL Tankship did not anymore issue any assessment on Bengson’s disability
grade. Bengson, on the other hand, continuously took medications and was unable to return to his work
as a seaman due to the severity of his disability. He then filed his disability compensation claim against
Magsaysay. However, during the grievance proceedings, his claim was outrightly denied by Magsaysay.
ISSUE: Whether or not Bengzon’s illness is compensable.
HELD: YES.
In many cases decided in the past, this Court has held that cardiovascular disease, coronary artery
disease, and other heart ailments are compensable. In the present case, petitioners flatly claim that
Bengson’s hypertensive cardiovascular disease is not compensable on the sole basis of its company-
designated physician’s declaration that such illness is not work-related. However, the Court finds that
Bengson’s illness is work-related. The undisputed facts indicate that respondent has been working for
petitioners since 1988; that per his service record, he has been serving as Third Mate for twelve (12)
years; and that as Third Mate, he was saddled with heavy responsibilities relative to navigation of the
vessel, ship safety and management of emergencies. It is beyond doubt that respondent was subjected to
physical and mental stress and strain: as Third Mate, he is the ship’s fourth in command, and he is the
ship’s safety officer; these responsibilities have been heavy burdens on respondent’s shoulders all these
years, and certainly contributed to the development of his illness. Besides, “[i]t is already recognized that
any kind of work or labor produces stress and strain normally resulting in wear and tear of the human
body.” “Notably, it is a matter of judicial notice that an overseas worker, having to ward off homesickness
by reason of being physically separated from his family for the entire duration of his contract, bears a
great degree of emotional strain while making an effort to perform his work well. The strain is even greater
in the case of a seaman who is constantly subjected to the perils of the sea while at work abroad and
away from his family.” To be sure, the Court has ruled that “the list of illnesses/diseases in Section 32-A
does not preclude other illnesses/diseases not so listed from being compensable. The POEA-SEC cannot
be presumed to contain all the possible injuries that render a seafarer unfit for further sea duties.” And
equally significant, “it is not the injury which is compensated, but rather it is the incapacity to work
resulting in the impairment of one’s earning capacity.”
LABOR LAW>Labor Standards>Retirement Benefits and Separation Pay
GOODYEAR PHILIPPINES, INC. and REMEGIO M. RAMOS, Petitioners,

vs.
MARINA L. ANGUS, Respondent.
G.R. No. 185449, November 12, 2014
(Second Division)
DOCTRINE: Retirement benefits and separation pay are not mutually exclusive. Retirement benefits are
a form of reward for an employee’s loyalty and service to an employer and are earned under existing
laws, CBAs, employment contracts and company policies. On the other hand, separation pay is that
amount which an employee receives at the time of his severance from employment, designed to provide
the employee with the wherewithal during the period that he is looking for another employment and is
recoverable only in instances enumerated under Articles 283 and 284 of the Labor Code or in illegal
dismissal cases when reinstatement is not feasible.
FACTS: Angus was employed by Goodyear as the secretary to the Manager of Quality and Technology.
Goodyear experienced economic reversals. To continue its operations, it resorted to retrenchment. Angus
then received a letter from the HR Director, stating that the management considered her position
redundant and no longer necessary. Thus, the same was abolished on the same day, with her services to
be terminated after a month. Per company practice, Goodyear only granted her an early retirement
benefit. Angus claims that she is entitled to separation pay in addition to retirement benefits. Goodyear
points to a provision in their CBA stating that the availment of retirement benefits shall exclude
entitlement to any separation pay, termination pay, redundancy pay, retrenchment pay, or any other
severance pay. The parties finally agreed that an employee shall be entitled to the higher of either benefit.
This was, however, later contested by Angus.
ISSUE: Whether or not Angus is entitled to both the early retirement benefits and separation pay
HELD: YES.
It is worthy to mention at this point that retirement benefits and separation pay are not mutually exclusive.
Retirement benefits are a form of reward for an employee’s loyalty and service to an employer and are
earned under existing laws, CBAs, employment contracts and company policies. On the other hand,
separation pay is that amount which an employee receives at the time of his severance from employment,
designed to provide the employee with the wherewithal during the period that he is looking for another
employment and is recoverable only in instances enumerated under Articles 283 and 284 of the Labor
Code or in illegal dismissal cases when reinstatement is not feasible. In the case at bar, Article 283
clearly entitles Angus to separation pay apart from the retirement benefits she received from petitioners.
In the absence of an express or implied prohibition against it, collection of both retirement benefits and
separation pay upon severance from employment is allowed. This is grounded on the social justice policy
that doubts should always be resolved in favor of labor rights. The release and quitclaim signed by Angus
cannot be used by petitioners to legalize the denial of Angus’ rightful claims. As aptly observed by the CA,
the terms of the quitclaim authorizes Angus to receive less than what she is legally entitled to.
LABOR LAW>Labor Standards>Constructive Dismissal
PEAK VENTURES CORPORATION and/or EL TIGRE SECURITY and INVESTIGATION

AGENCY, Petitioners,
vs.
HEIRS OF NESTOR B. VILLAREAL, Respondents.
G.R. No. 184618, November 19, 2014
(Second Division)
DOCTRINE: There is constructive dismissal when an act of clear discrimination, insensitivity or disdain on
the part of the employer has become so unbearable as to leave an employee with no choice but to forego
continued employment.
FACTS: The petitioner hired the deceased respondent as security guard and assigned him at East
Greenhills Village. However, he was relieved from duty without any apparent reason. He was later
informed by the management that he would no longer be given any assignment because of his age. At
that time, he was 42. His repeated requests for a new posting were likewise declined. Due to his
prolonged lack of assignment and dwindling resources, the respondent was constrained to claim his
security bond deposits from petitioners. He was advised to first tender a letter of resignation before the
same could be released to him. Out of sheer necessity, he submitted a letter of resignation. He stated
therein that he was constrained to resign since he cannot expect to be given any assignment for another
one and a half months and that he can no longer afford the fare going to petitioner’s office. The
respondent alleged that the tenor of his resignation letter was not acceptable to petitioners, who required
him to submit another one stating that his resignation is voluntary. Eventually, petitioners released to the
respondent his security bond deposits. The respondent then filed a case for illegal dismissal.
ISSUE: Whether or not respondent was constructively and illegally dismissed
HELD: YES.
When Villareal was relieved from duty, he was placed on floating status. “A floating status requires the
dire exigency of the employer’s bona fide suspension of operation, business or undertaking.” “It takes
place when the security agency’s clients decide not to renew their contracts with the agency x x x” and
also “in instances where contracts for security services stipulate that the client may request the agency for
the replacement of the guards assigned to it x x x.” In the latter case, the employer should prove that
there are no posts available to which the employee temporarily out of work can be assigned. As pointed
out by the labor tribunals, petitioners failed to discharge the burden of proving that there were no other
posts available for Villareal after his recall from his last assignment. Worse, no sufficient reason was
given for his relief and continued denial of a new assignment. And because of the dire financial straits
brought about by these unjustified acts of petitioners, Villareal was forced to resign and execute
documents in a manner as directed by petitioners in order to claim his security bond deposits. From these
circumstances, petitioners’ claim of voluntary resignation is untenable. What is clear instead is that
Villareal was constructively dismissed. There is constructive dismissal when an act of clear discrimination,
insensitivity or disdain on the part of the employer has become so unbearable as to leave an employee
with no choice but to forego continued employment. “Constructive dismissal exists where there is
cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as
an offer involving a demotion in rank and a diminution in pay.” Moreover, Villareal’s immediate filing of a
Complaint for illegal dismissal to ask for reinstatement negates the fact of voluntary resignation. The
Court, thus, finds that the CA did not err in declaring that Villareal was constructively and illegally
dismissed by petitioners.
LABOR LAW>Labor Relations>Money Claims
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,

vs.
AURELIA Y. CALUMPIANO, Respondent
G.R. No. 196102, November 26, 2014
(Second Division)
DOCTRINE: That the primordial and paramount consideration is the employee’s welfare; that the strict
rules of evidence need not be observed in claims for compensation; that medical findings of the attending
physician may be received in evidence and used as proof of the facts in dispute; that in any determination
of compensability.
FACTS: Aurelia Y. Calumpiano was employed as Court Stenographer at the then Court of First Instance
of Samar from January 5, 1972 until her retirement on March 30, 2002. Shortly before her retirement,
[respondent] filed before the Supreme Court, an application for disability retirement on account of her
ailment[s], Hypertensive Cardiovascular Disease [and] Acute Angle Closure Glaucoma. To bolster her
claim, [respondent] submitted the medical certificates issued by her attending physicians, Dr. Alfred I. Lim
and Dr. Elmer Montes, both of whom are Op[h]thalmologists at Eastern Samar Provincial Hospital. She
submitted them together with the results of her perimetry test, a certificate of which was issued by Dr.
Lim. On September 30, 2002, the Supreme Court approved [respondent’s] application for disability
retirement, under Republic Act No. 8291 (New GSIS Act of 1997). Respondent’s disability claim was
forwarded to GSIS, but the latter denied her claim for the reason that hypertension and glaucoma, which
were her illnesses, were not work-related. Her motion for reconsideration was likewise denied by the
GSIS. Petitioner filed an appeal with the ECC wherein it held, to warrant compensability of ailment and its
resulting sickness, disability or death under P.D. 626, as amended, Rule III, Section 1(b) thereof,
specifically provides that the ailment must be listed by the Commission as an occupational disease with
the conditions set forth therein satisfied, otherwise, the conditions imposed under the Increased Risk
Theory must be complied with. In a Petition for Review filed with the CA, the CA held that while
respondent’s hypertension and glaucoma are not listed as occupational diseases under the implementing
rules of the Employee Compensation Program under PD 626, they were nonetheless contracted and
became aggravated during her employment as court stenographer; that under the "increased risk theory,"
a "non-occupational disease" is compensable as long as proof of a causal connection between the work
and the ailment is established; that respondent’s illnesses are connected to her work, given the nature of
and pressure involved in her functions and duties as a court stenographer.
ISSUE: Whether or not the respondent’s diseases (hypertension and glaucoma) are compensatable
under the increased risk theory
RULING: YES.
Applying Bauland De Castro to the instant case and looking at the factual milieu, the Court agrees with
the CA’s conclusion and so declares that respondent’s illness is compensable. Respondent served the
government for 30 long years; veritably, as the ECC itself said, "her duties were no doubt stressful and
the same may have caused her to develop her ailment, hypertension" – which is a listed occupational
disease, contrary to the CA’s pronouncement that it is not. And because it is a listed occupational
disease, the "increased risk theory" does not apply – again, contrary to the CA’s declaration; no proof of
causation is required. Probability, not certainty, is the test of proof in compensation cases that the
primordial and paramount consideration is the employee’s welfare.
LABOR LAW>Labor Relations>Jurisdiction>Payment of Damages
SOCIAL SECURITY SYSTEM, Petitioner,

vs.
DEBBIE UBAÑA, Respondent
G.R. No. 200114, August 24, 2015
(Second Division)
DOCTRINE: In this jurisdiction, the "long honored legal truism of 'equal pay for equal work'" has been
"impregnably institutionalized;" "[p]ersons who work with substantially equal qualifications, skill, effort and
responsibility, under similar conditions, should be paid similar salaries”. That public policy abhors
inequality and discrimination is beyond contention. Our Constitution and laws reflect the policy against
these evils. The Constitution in the Article on Social Justice and Human Rights exhorts Congress to 'give
highest priority to the enactment of measures that protect and enhance the right of all people to human
dignity, reduce social, economic, and political inequalities.
FACTS: In July 1995, Debbie Ubana applied for employment with the petitioner. After passing the
examinations and accomplishing all the requirements for employment, she was referred to DBP Service
Corporation for "transitory employment." She took the pre-employment examination given by DBP Service
Corporation and passed the same. As Processor, she was paid only P229.00 daily or P5,038.00 monthly,
while a regular SSS Processor receives a monthly salary of P18,622.00 or P846.45 daily wage. Her May
28, 1996 Service Contract Agreement with DBP Service Corporation was never renewed, but she was
required to work for SSS continuously under different assignments with a maximum daily salary of only
P229.00; at the same time, she was constantly assured of being absorbed into the SSS plantilla.
Respondent claimed she was qualified for her position as Processor, having completed required training
and passed the SSS qualifying examination for Computer Operations Course given by the National
Computer Institute, U.P. Diliman from May 16 to June 10, 2001, yet she was not given the proper salary.
Because of the oppressive and prejudicial treatment by SSS, she was forced to resign on August 26,
2002 as she could no longer stand being exploited, the agony of dissatisfaction, anxiety, demoralization,
and injustice. She asserted that she dedicated six years of her precious time faithfully serving SSS,
foregoing more satisfying employment elsewhere, yet she was merely exploited and given empty and
false promises; that defendants conspired to exploit her and violate civil service laws and regulations and
Civil Code provisions on Human Relations, particularly Articles 19, 20, and 21. As a result, she suffered
actual losses by way of unrealized income, moral and exemplary damages, attorney's fees and litigation
expenses. On October 1, 2003, the RTC issued an Order 10 dismissing respondent's complaint for lack of
jurisdiction, stating that her claim for damages "has a reasonable causal connection with her employer-
employee relations with the defendants"11 and "is grounded on the alleged fraudulent and malevolent
manner by which the defendants conspired with each other in exploiting her, which is a clear case of
unfair labor practice,"12 falling under the jurisdiction of the Labor Arbiter of the NLRC.
ISSUE #1:Whether Or Not The RTC Has Jurisdiction To Hear And Decide This Case.
ISSUE #2: Whether Or Not Respondent Is Entitled To Payment For Damages.
HELD #1: YES.
A careful perusal of Ubana's Complaint in Civil Case No. 7304 unveils that Ubana's claim is rooted on the
principle of abuse of right laid in the New Civil Code. She was claiming damages based on the alleged
exploitation [perpetrated] by the defendants depriving her of her rightful income. In asserting that she is
entitled to the damages claimed, [she] invoked not the provisions of the Labor Code or any other labor
laws but the provisions on human relations under the New Civil Code. Evidently, the determination of the
respective rights of the parties herein, and the ascertainment whether there were abuses of such rights,
do not call for the application of the labor laws but of the New Civil Code. Aproposthereto, the resolution
of the issues raised in the instant complaint does not require the expertise acquired by labor officials. It is
the courts of general jurisdiction, which is the RTC in this case, which has the authority to hear and
decide Civil Case No. 7304. Since both parties admit that there is no employment relation between them,
then there is no dispute cognizable by the NLRC. Thus, respondent's case is premised on the claim that
in paying her only P229.00 daily - or P5,038.00 monthly - as against a monthly salary of P18,622.00, or
P846.45 daily wage, paid to a regular SSS Processor at the time, petitioner exploited her, treated her
unfairly, and unjustly enriched itself at her expense. For Article 217 of the Labor Code to apply, and in
order for the Labor Arbiter to acquire jurisdiction over a dispute, there must be an employer-employee
relation between the parties thereto.
HELD #2: YES.
There being no employer-employee relation or any other definite or direct contract between respondent
and petitioner, the latter being responsible to the former only for the proper payment of wages,
respondent is thus justified in filing a case against petitioner, based on Articles 19 and 20 of the Civil
Code, to recover the proper salary due her as SSS Processor. At first glance, it is indeed unfair and
unjust that as, Processor who has worked with petitioner for six long years, she was paid only P5,038.00
monthly, or P229.00 daily, while a regular SSS employee with the same designation and who performs
identical functions is paid a monthly salary of P18,622.00, or P846.45 daily wage. Petitioner may not hide
under its service contracts to deprive respondent of what is justly due her. As a vital government entity
charged with ensuring social security, it should lead in setting the example by treating everyone with
justice and fairness. Persons who work with substantially equal qualifications, skill, effort and
responsibility, under similar conditions, should be paid similar salaries. That public policy abhors
inequality and discrimination is beyond contention.
INC SHIPMANAGEMENT, INC., INTERORIENT NAVIGATION COMPANY LTD. AND REYNALDO

RAMIREZ, Petitioners,
vs.
RANULFO CAMPOREDONDO, Respondent.
G.R. No. 199931, September 07, 2015
(Second Division)
DOCTRINE: In illegal dismissal cases, there are two requisites which the employer must comply: 1) the
dismissal must be for a just or authorized cause, and 2) the employee to be dismissed must have been
afforded due process of law.
FACTS: INC Shipmanagement, Inc. for and in behalf of Interorient Navigation Company Ltd. hired
Ranulfo Camporedondo as chief cook on board the vessel M/V Fortunia for a period of 10 months. As
chief cook, respondent's tasks included food preparation and meals of the ship crew, custody, inventory,
and budgeting of food supplies of the vessel. , respondent stated that on September 11, 2007, the captain
gave him a return ticket to the Philippines to take a vacation. He was purportedly promised to be
transferred to another vessel. On or about a month and a half into his contract, respondent was given a
report of dismissal, which he refused to accept. Respondent filed a Complaint for illegal dismissal, non-
payment of overtime pay and attorney's fees against INC. They contended that the captain complained
about his incompetence and/or poor performance. In particular, due to his stiff right hand, respondent was
allegedly unable to serve meals and maintain the cleanliness of the kitchen, store room and mess room.
They averred that eventually the captain served upon him the above-cited Report entitled as "Report of
incompetent action/insubordination/ indiscipline" which he refused to receive. In addition, petitioners
stated that the previous ship captain, under whom respondent was deployed, likewise complained about
his poor performance. They asserted that because they wanted to give respondent another chance, they
deployed him to M/V Fortunia. Allegedly, respondent was allowed to re-apply for assignment in another
vessel and he readily agreed to be repatriated. The LA rendered a Decision declaring that petitioners
illegally dismissed respondent.
ISSUE: Whether or not the respondent was illegally dismissed
HELD: YES.
The petitioners failed to prove any just or authorized cause. First off, we hold that the due execution of the
Report of incompetent action/insubordination/indiscipline was established considering that both parties
adduced it to support their respective positions. On one hand, petitioners relied on this Report to prove
that respondent was validly dismissed. On the other hand, respondent admitted that he was furnished a
copy of this Report but he declined to receive it. Thus, as regards the existence of the subject Report, We
find that the same was duly proved here. However, the contents of this Report were insufficient bases to
dismiss respondent. The report provided no detail and did not particularly describe such inability or
specific acts that would lead to the conclusion that he was incompetent. Petitioners did not comply with
the two-notice rule required in dismissing an employee. To amount to a valid dismissal, an erring seafarer
must be handed a written notice of the charge against him and must be given the opportunity to explain
himself unless of course there is a clear and existing danger against the safety of, the crew or the vessel
in which case notice may be dispensed with. Needless to say, this is not the situation here. no hearing
was conducted respecting respondent's alleged incompetence and poor performance, and granting him
opportunity to present countervailing evidence to disprove the charge against him. There was also no
showing of imminent danger to the crew or the vessel, so that the required notice may be dispensed with.
True, as stated elsewhere, the above-mentioned Report could somehow pass as a notice of respondent's
dismissal. Nevertheless, as earlier discussed, the allegations in this Report do not permit the conclusion
that respondent was guilty of poor performance and incompetence that would amount to gross and
habitual neglect of duties.
LABOR LAW>Labor Standards>Quitclaims
NEC SYSTEM INTEGRATED CONSTRUCTION (NESIC) PHILS., INC., Petitioner,

vs.
RALPH T. CRISOLOGO, Respondent.
G.R. No. 201535, October 05, 2015
(Second Division)
DOCTRINE: Not all waivers and quitclaims are invalid as against public policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not
later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver
was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on
its face, that the law will step in to annul the questionable transaction
FACTS: Ralph T. Crisologo was employed by petitioner NEC System Integrated Construction Phils., Inc.
He was assigned as Manager of petitioner's Communication Facilities Engineering Department. Due to
his exemplary work performance, respondent was promoted several times. Sometime in July 2001,
respondent was appointed as Executive Senior Manager - Quality Control and Training.
In a July 3, 2001 Memorandum to Yamashita, respondent voiced his reservations about being effectively
demoted yet expressed his willingness to train Nakahata on condition that his salary "remain the same,"
and that he would still be Head of the line functions for the ISED, or the Integrated Systems Engineering
Department. On March 5, 2004 petitioner sent respondent a termination letter via registered mail, which
could not be served personally as respondent was then absent. But on March 8, 2004, respondent
personally received a copy of the letter when he reported for work. He executed a quitclaim but later
questioned its validity. On April 12, 2004, respondent filed a Complaint against petitioner and Amakawa
for illegal dismissal and recovery of backwages, allowances, benefits, moral and exemplary damages,
and attorney's fees. On November 30, 2004, the Labor Arbiter rendered his Decision 37 dismissing
respondent's Complaint for lack of merit.
ISSUE: Whether or not respondents’ quitclaim and wavier is valid
HELD: YES.
Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily
entered into and represents a reasonable settlement, it is binding on the parties and may not later be
disowned simply because of a change of mind. It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its
face, that the law will step in to annul the questionable transaction. But where it is shown that the person
making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration
for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding
undertaking, as in this case. In Samaniego v. National Labor Relations Commission, this Court noted that
therein petitioners were "not ordinary laborers or rank-and-file personnel who may not be able to
completely comprehend and realize the consequences of their acts, x x x [that in fact, therein] petitioners
are managerial employees holding responsible positions[; and that moreover] they are educated
individuals:" basic considerations which impelled this Court into concluding that: "it can hardly be said that
they were coerced into resigning from the company.
LABOR LAW> Social and Welfare Legislation > Payment of Death Benefits
NEW FILIPINO MARITIME AGENCIES, INC., TAIYO NIPPON KISEN CO., LTD., AND ANGELINA T,
RIVERA, Petitioners,
vs.
VINCENT H. D ATAYAN -HEIR OF SIMON VINCENT H. DATAYAN III,Respondent.
G.R. No. 202859, November 11, 2015
(Second Division)
DOCTRINE: As a rule, the death of a seafarer during the term of his employment makes his employer
liable for death benefits. The employer, may, however, be exempt from liability if it can successfully
establish that the seafarer's death was due to a cause attributable to his own willful act
FACTS: New Filipino Maritime Agencies, Inc. (NFMA), for and on behalf of St. Paul Maritime Corp.
(SPMC), employed Simon Vincent Datayan II (Simon) as deck cadet on board the vessel Corona Infinity.
His employment was for nine months. Prior to his deployment, Simon underwent pre-employment medical
examination (PEME) and was declared fit for sea duties. On August 17, 2007, he boarded the vessel and
assumed his duties as deck cadet. On December 30,2007, at 12:40 a.m., the Master authorized the
conduct of an emergency fire drill in which the crew participated. At about 1:25 a.m., he declared that
Simon jumped overboard. A futile search-and-rescue operation ensued. After a few weeks, Simon was
declared missing and was presumed dead. Simon's father, Vincent H. Datayan (respondent), alleged that
he went to NFMA to claim death benefits but his claim was unheeded. On May 11, 2009, he filed a
complaint for death benefits and attorney's fees against NFMA, Taiyo Nippon Kisen Co., Ltd., and
Angelina T. Rivera (petitioners). Respondent averred that because Simon died during the term of his
employment, the provisions of the collective bargaining agreement (CBA) among All Japan Seamen's
Union, Associated Marine Officers' and Seamen's Union of the Philippines (AMOSUP), and the
International Mariners Management Association of Japan, must be applied in the grant of death benefits
and burial assistance in his favor, being the heir of Simon.
Respondent also stated that the fire drill was conducted at 12:40 a.m. where there was heavy
concentration of fishing boats in the area; and during which the water temperature was expected to cause
hypothermia. He asserted that petitioners were presumed to be at fault or had acted negligently, unless
they could prove that Simon's death was due to causes not legally compensable. He declared that there
was no evidence that Simon committed suicide and maintained that his death was a result of negligence
and reckless instruction of the Master.
ISSUE: Whether or not the petitioner is liable for payment of death benefits of the respondent
HELD: NO.
As claimant for death benefits, respondent has the burden to prove by substantial evidence that his son's
death is work-related and that it transpired during the term of his employment contract. In this respect,
respondent has discharged his burden. It is beyond question that Simon died during the term of his
contract. The next question is whether Simon's death was due to his deliberate act. If such is the case,
then respondent is not entitled to death benefits. That Simon's death was a result of his willful act is a
matter of defense. Thus, petitioners have the burden to prove this circumstance by substantial evidence.
The Court finds that petitioners discharged their burden to prove that Simon committed suicide. The
Master's Report clearly described the situation on the vessel prior to, during and after the time that Simon
went overboard. Simon’s death was due to his deliberate act, he is not entitled to death benefits.
LABOR LAW>Labor Standard >Illegal Dismissal>
REYNALDO INUTAN, HELEN CARTE, NOEL AYSON, IVY CABARLE, NOELJAMILI, MARITES
HULAR, ROLITOAZUCENA, RAYMUNDO TUNOG, ROGER BERNAL, AGUSTEV ESTRE, MARILOU
SAGUN, AND ENRIQUE LEDESMA, JR., Petitioners
vs.
NAPAR CONTRACTING & ALLIED SERVICES, NORMAN LACSAMANA, JONAS INTERNATIONAL,
INC., AND PHILIP YOUNG, Respondent
G.R. No. 195654, November 25, 2015
(Second Division)
DOCTRINE: A judicially approved compromise agreement has the effect and authority of res judicata.2 It
is final, binding on the parties, and enforceable through a writ of execution. Article 2041 of the Civil Code,
however, allows the aggrieved party to rescind the compromise agreement and insist upon his original
demand upon failure and refusal of the other party to abide by the compromise agreement.
FACTS: Petitioners were employees of respondent Napar, a recruitment agency owned and managed by
respondent Lacsamana. Napar assigned petitioners at respondent Jonas, a corporation engaged in the
manufacture of various food products with respondent Young as its President, to work as factory workers,
machine operator, quality control inspector, selector, mixer, and warehouseman.
Petitioners and other co-workers filed before the Arbitration Branch of the NLRC three separate
complaints for wage differentials, 13th month pay, overtime pay, holiday pay, premium pay for holiday
and rest day, service incentive leave pay, and unpaid emergency cost of living allowance (ECOLA)
against respondents.
Then on January 13, 2003, complainants and respondents entered into a Joint Compromise Agreement
which provides, among others, that the complainants be reassigned by Napar and be given work within
45 days. In accordance with the compromise agreement, petitioners, were paid P7,000 each as part of
the agreement but were required by Napar, (1) to submit their respective bio-data/resume and several
documents such as police clearance, NBI clearance, barangay clearance, mayor’s permit, health
certificate, drug test results, community tax certificate, eye test results and medical/physical examination
results; (2) to attend orientation seminars; (3) to undergo series of interviews; and (4) to take and pass
qualifying examinations, before they could be posted to their new assignments. These requirements,
according to Napar, are needed to properly assess complainants’ skills for new placement with the
agency’s other clients. Complainants failed to fully comply; hence they were not given new assignments.
Sensing Napar’s insincerity in discharging its obligation in reassigning them, complainants filed anew
before the Arbitration Branch of the NLRC four separate complaints for illegal dismissal and money
claims.
ISSUE: Whether or not Napar's failure to reinstate or provide them work without any condition, in
consonance with the terms of the Joint Compromise Agreement, constitutes illegal constructive dismissal.
HELD: YES.
As correctly rendered by Labor Arbiter Espiritu's ruling that petitioners, as regular employees, are deemed
to have been constructively and illegally dismissed by respondents. Being on floating status and off-
detailed for more than six months, not having been reinstated and reassigned by respondents, petitioners
are considered to have been constructively dismissed. Settled is the rule that an employee who is unjustly
dismissed from work shall be entitled to reinstatement, or separation pay if reinstatement is no longer
viable, and to his full back wages.
LABOR LAW> Social and Welfare Legislation > Seafarers> Disability Benefits
CENTENNIAL TRANSMARINE, INC. and/or MR. EDUARDO R. JABLA, CENTENNIAL MARITIME

SERVICES & MN BONNIE SMITHWICK, Petitioners
vs.
PASTOR M. QUIAMBAO, Respondent
G.R. No. 198096, July 8, 2015
(Second Division)
DOCTRINE: The company-designated physician is expected to arrive at a definite assessment of the

seafarer's fitness to work or permanent disability within the period of 120 or 240 days. That should he fail
to do so and the seafarer's medical condition remains unresolved, the seafarer shall be deemed totally
and permanently disabled.
FACTS: Since 2004, Pastor was continuously employed by petitioner Centennial Transmarine, Inc. as a
mess man for and on behalf of its foreign principal, petitioner Centennial Maritime Services. His last
contract of employment of six months on board the vessel MV Bonnie Smithwick was approved by the
POEA and was covered by the International Transport Workers’ Federation-Collective Bargaining
Agreement.
Pursuant to the aforementioned contract, Pastor boarded MV Bonnie Smithwick Shortly thereafter,
however, he figured in an accident while carrying heavy food provisions. This caused him to suffer
excruciating pain in his upper back. When he consulted the ship doctor, was prescribed with oral pain
killer. As his condition continued to worsen, he was referred to City Med Health Associates in Singapore
for further evaluation and treatment. The result of the x-ray examination conducted on him revealed that
he has lumbar muscular spasm and thoracic spondylosis with disc degeneration while the attending
physician declared him fit for light duties only, subsequently he was recommended for repatriation to
Manila for further treatment.
While undergoing treatment, Pastor filed a Complaint against petitioners for permanent disability
compensation in the sum of US$78,750.00 pursuant to the Associated Marine Officers’ and Seamen’s
Union of the Philippines / ITF TCCC CBA, sickness wages for 120 days, moral and exemplary damages,
attorney’s fees and other benefits as provided by law.
ISSUE #1: Whether or not Pastor’s illness is not work-related as osteoarthritis is not listed as an
occupational disease under the POEA-SEC. Therefore, is not entitled to disability compensation.
ISSUE #2: Whether or not Pastor’s disability can be considered permanent and total as no declaration of
fitness to work was issued upon the expiration of the maximum 240-day medical treatment period.
HELD#1: YES.
The Court sustains the uniform findings of the Labor Arbiter, the NLRC and the CA that Pastor’s ailment
is work-related and compensable. The Labor Arbiter ruled that Pastor’s illness is work-related. The NLRC
affirmed this finding by holding that the accident he met while carrying heavy food provisions was the
proximate cause of his injury. For its part, the CA ultimately concluded that the illness was acquired by
Pastor due to his work as a messman. It further ruled that Pastor was able to prove the conditions
necessary for osteoarthritis to be considered as having arisen in the course of his employment either by
direct causation or aggravation due to the nature of his work.
A seaman’s entitlement to disability benefits is governed, not only by medical findings, but by law (the
Labor Code) and by contract (the POEA-SEC and the parties’ CBA). Here, the POEA-SEC, as provided
under Department Order No. 4, Series of 2000 of the Department of Labor and Employment, which
contains the Standard Terms and Conditions Governing The Employment of Filipino Seafarers On-Board
Ocean-Going Vessels, governs the employment contract between Pastor and petitioners. Section 20(B),
paragraph 6 thereof reads: Section 20(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.
Two elements must concur for an injury or illness to be compensable. First, that the injury or illness must
be work-related; and second, that the work-related injury or illness must have [arisen] during the term of
the seafarer’s employment contract. For disability to be compensable under Section 20(B) of the 2000
POEA-SEC, it must be the result of a work-related injury or a work-related illness, which are defined as
“injury(ies) resulting in disability or death arising out of and in the course of employment” and 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.”
HELD#2: YES.
The Supreme Court pronounced in Vergara v. Hammonia Maritime Services, Inc., et al., 567 SCRA 610
(2008), that a temporary total disability becomes permanent when so declared by the company-
designated physician within the period allowed, or upon expiration of the maximum two hundred forty
(240)-day medical treatment period in case of absence of a declaration of fitness or permanent disability.
In this case, Pastor was repatriated on September 18, 2006.He was given a specific diagnosis as to his
ailment by the company-designated physician, Dr. Abesamis, on October 6, 2006. Thereafter, he
continuously received medical treatment from Dr. Abesamis. However and as earlier mentioned, nowhere
in the records does it show that Dr. Abesamis arrived at a definite assessment of respondent’s fitness to
work or a declaration of the existence of a permanent disability before the expiration of the maximum 240-
day medical treatment period. In fact, as of the date of the Rejoinder they filed before the Labor Arbiter
(June 25, 2007) or 281 days after Pastor’s repatriation, petitioners themselves stated that no disability
grading has yet been issued by Dr. Abesamis. Clearly at that time, the period of 240 days had already
lapsed without the company-designated physician issuing a declaration of Pastor’s fitness to work or of
the existence of his permanent disability. This only means that his condition remained unresolved even
after the lapse of the said period and, consequently, his disability is deemed permanent and total.49No
error, therefore, can be attributed to the Labor Arbiter, NLRC and CA in declaring Pastor’s disability as
permanent and total. In view of the foregoing, the Court sustains the CA in awarding Pastor disability
compensation in the amount of US$78,750.00 pursuant to the AMOSUP/ITF TCCC CBA that governed
his contract of employment with petitioners.
LABOR LAW> Labor Relations > Appeals>Surety Bond
U-BIX CORPORATION and EDILBERTO B. BRAVO, Petitioners

vs.
VALERIE ANNE H. HOLLERO, Respondent.
G.R. No. 199660, July 13, 2015
(Second Division)
DOCTRINE: In case of a judgment involving a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed
from
FACTS: Petitioners filed a complaint against respondent for reimbursement of training costs plus interest,
exemplary damages, attorney’s fees and litigation expenses. On the other hand, respondent filed against
petitioners a complaint for illegal dismissal, unpaid wages, backwages, moral and exemplary damages,
and attorney’s fees, docketed. The two complaints were later on consolidated.The Labor Arbiter found
respondent’s dismissal to be valid, she was also ordered to reimburse the amount spent by petitioners for
her training, with interest at the rate of 12% per annum. On appeal, the NLRC reversed the Labor
Arbiter’s Decision. Finding respondent to have been illegally dismissed, it awarded her backwages from
the date of her dismissal up to the date of the NLRC Decision and separation pay in lieu of reinstatement
due to strained relations. Anent petitioners’ complaint for reimbursement, the NLRC held that the same is
one for collection of sum of money over which it has no jurisdiction.
Petitioners filed before the NLRC a Notice and Memorandum of Appeal at the same time, they posted a
corresponding supersedeas bond issued by Mapfre Insular. In a Resolution the NLRC denied for lack of
merit petitioners’ Appeal it held that the supersedeas bond posted by petitioners has no force and effect
as it failed to present proof of security deposit or collateral securing the bond as required by Section 6(c)
of Rule 6, NLRC Rules of Procedure. U-Bix failed to perfect its appeal. Therefore, the Order appealed
from has attained finality.
ISSUE: Whether or not UBIX’s supersedeas bond was invalid and irregular for lack of Mapfre’s authority
to transact business as a bonding company (refers only to civil and special cases).
HELD: YES.
In case of a surety bond, the applicable Section 6, Rule VI of the 2005 Revised Rules of Procedure of the
NLRC requires that the same should be accompanied by original and certified true copies of the following:
a) a joint declaration under oath by the employer, his counsel and the bonding company, attesting that the
bond posted is genuine, and shall be in effect until final disposition of the case; b) an indemnity
agreement between the employer-appellant and bonding company; c) proof of security deposit or
collateral securing the bond; provided, that a check shall not be considered as an acceptable security; d)
a certificate of authority from the Insurance Commission; e) certificate of registration from the Securities
Exchange Commission; f) certificate of authority to transact surety business from the Office of the
President; g) certificate of accreditation and authority from the Supreme Court; and h) notarized board
resolution or secretary’s certificate from the bonding company showing its authorized signatories and their
specimen signatures.
Here, petitioners did not submit any proof of security deposit or collateral securing the bond. They
themselves admit this in their Petition by stating that they no longer attached a separate document of
security deposit or collateral securing the bond because Mapfre did not find it necessary to require them
to give a security deposit and/or collateral. According to them, Mapfre finds it sufficient that the Indemnity
Agreement attached to the Memorandum of Appeal was signed by petitioner Bravo, the president of
petitioner U-Bix, in his personal capacity.
LABOR LAW>Social and Welfare Legislation> Seafarers> Disability Benefits
ISLAND OVERSEAS TRANSPORT CORPORATION/PINE CREST SHIPPING CORPORATION/CAPT.

EMMANUEL L. REGIO, Petitioners
vs.
ARMANDO M. BEJA, Respondent
G.R. No. 203115, December 07, 2015
(Second Division)
DOCTRINE: A seafarer who surfers permanent disability as a result of an accident whilst in the
employment of the Company regardless of fault, including, accidents occurring while travelling to or from
the ship, and whose ability to work as a seafarer is reduced as a result thereof, but excluding permanent
disability due to willful acts, shall in addition to sick pay, be entitled to compensation, according to the
provisions of this Agreement.
FACTS: Beja is employed with petitioner Island Overseas Transport Corp. for and on behalf of its foreign
principal, petitioner Pine Crest Shipping Corporation, for a period of nine months as Second Assistant
Engineer for the vessel M/V Atsuta. Beja experienced pain and swelling of his right knee, which he
immediately reported to the Master of the vessel. He was brought to a hospital in Italy and was diagnosed
to have Arthrosynovitis. While in Spain, the pain in his right knee recurred and persisted. He was brought
to a physician and was advised to be medically repatriated.
Upon arrival in Manila, petitioners referred him to NGC Medical Clinic for evaluation. Beja underwent
physical therapy and was advised to undergo operation. Meantime, Beja filed a complaint against
petitioners for permanent total disability benefits, medical expenses, sickness allowance, moral and
exemplary damages and attorney's fees alleging that his knee injury resulted from an accident he
sustained on board the vessel when a drainage pipe fell on his knee. This, according to him, clearly
entitles him to permanent total disability benefits pursuant to AMOSUP-JSU Collective Bargaining
Agreement.
ISSUE: Whether or not Beja is entitled to permanent total disability benefits claim under CBA.
HELD: NO.
The Court applied the ruling in Kestrel Shipping Co., Inc. v. Munar, 689 SCRA 795 (2013), that if the
maritime compensation complaint was filed prior to October 6, 2008, the rule on the 120-day period,
during which the disability assessment should have been made in accordance with Crystal Shipping, Inc.
v. Natividad, 473 SCRA 559 (2005), that is, the doctrine then prevailing before the promulgation of
Vergara v. Hammonia Maritime Services, Inc., 567 SCRA 610 on October 6, 2008, stands; if, on the other
hand, the complaint was filed from October 6, 2008 onwards, the 240-day rule applies. In the case at bar,
Beja filed the complaint on May 15, 2008. Dr. Cruz issued his assessment only on May 26, 2008 or 187
days from Beja’s repatriation on November 21, 2007. Therefore, due to Dr. Cruz’s failure to issue a
disability rating within the 120-day period, a conclusive presumption that Beja is totally and permanently
disabled arose. Consequently, there was no need for Beja to secure an opinion from his own doctor or
resort to a third doctor as prescribed under Section 20(B)(3) of the POEA-SEC.
In the case at bar, Beja filed the complaint on May 15, 2008. Dr. Cruz issued his assessment only on May
26, 2008 or 187 days from Beja's repatriation on November 21, 2007. Therefore, due to Dr. Cruz's failure
to issue a disability rating within the 120-day period, a conclusive presumption that Beja is totally and
permanently disabled arose. Consequently, there was no need for Beja to secure an opinion from his own
doctor or resort to a third doctor as prescribed under Section 20 B (3) of the POEA-SEC.
In sum, the CA is correct in affirming the NLRC's award of permanent total disability benefit to Beja. It,
however, erred in pertaining to the parties' CBA in granting the award relative to the amount due. The
Schedule of Disability Allowances under Section 32 of the POEA-SEC should instead apply.
LABOR LAW> Labor Standard > Illegal Suspension
DOMINADOR MALABUNGA, JR., Petitioner

vs.
CATHAY PACIFIC STEEL CORPORATION, Respondent
GR No. 198515 June 15, 2015
(Second Division)
DOCTRINE: An employer may not blame its employees for losses caused by its own disorganized
system and inept personnel.
FACTS: Respondent Cathay Pacific Steel Corporation is a duly registered domestic corporation engaged
in the business of manufacturing steel products hired petitioner Dominador Malabunga, Jr. as one of its
machinists.An inventory of respondent's tools and items at the company warehouse was made, and it
was found that one aluminum level 7 was issued to respondent's Fabrication Unit, and another to
petitioner. On July 11, 2004, petitioner returned an aluminum level to the warehouse.Respondent served
a written Notice upon petitioner, charging the latter with theft of the aluminum level issued to its
Fabrication Unit and requiring him to submit a written explanation. Petitioner insisted that the accusation
against him was false, baseless and unfair; that the aluminum level he borrowed on June 28, 2004 was
the very same tool which he returned on July 11, 2004; that when he returned the aluminum level he
borrowed, the warehousemen readily accepted the same and they did not complain about the condition
thereof, nor did they notice anything unusual. Respondent issued its Decision suspending petitioner for a
period of 30 days and requiring him to return the value of the lost aluminum level, or ₱ 280.00, through
salary deductions. The decision stated that petitioner was charged with theft of the Fabrication Unit's
aluminum level.Petitioner filed a Complaint for illegal suspension before the NLRC.
ISSUE: Whether or not the suspension was illegal.
HELD: YES.
There are many ways to secure company property from pilferage and theft. 1Awphi1As petitioner himself
suggested, security features could be incorporated in each item or property of the employer. An effective
and efficient system of property identification, recording and monitoring may be adopted; more efficient
and responsible personnel may be hired. In respondent's case, it is quite clear that its warehousemen do
not have an efficient system of monitoring and recording the items or tools being brought in or out of its
warehouse. No codes or identifying marks were assigned to the items and tools to facilitate their easy
identification; respondent's warehousemen cannot identify the tools and items within the warehouse, and
they readily believe the declarations and statements of the workers - thus giving out the impression that
warehousemen are not even familiar with the tools in their custody.
Faced with the limitations in respondent's system, this Court cannot sustain its view that petitioner is guilty
of theft of company property. It could simply be that due to the ineffective system within the warehouse
and its inefficient personnel, there was a mix-up of records; worse, it could be that tools and items within
the warehouse were misplaced or lost due to its irresponsible personnel. If any, respondent is alone
responsible; it cannot conveniently put the blame on its employees in order to make up for or cover its
losses caused by its own disorganized system and inept personnel.
LABOR LAW>Labor Relations>Appeals>Supersedeas Bond
MARLON BEDUYA, ROSARIO DUMAS, ALEX LEONOZA, RAMILO FAJARDO, HARLAN LEONOZA,
ALVIN ABUYOT, DINDO URSABIA, BERNIE BESONA, ROMEO ONANAD, ARMANDO LIPORADA,
FRANKFER ODULIO, MARCELO MATA, ALEX COLOCADO, JOJO PACATANG, RANDY GENODIA
and ISABINO B. ALARMA, JR., Petitioners,
vs.
ACE PROMOTION AND MARKETING CORPORATION and GLEN HERNANDEZ, Respondents.
G.R. No. 195513, June 22, 2015
(Second Division)
DOCTRINE: The Revised Rules of Procedure of the NLRC allows the reduction of the appeal bond
subject to the conditions that: (1) the motion to reduce the bond shall be based on meritorious grounds;
and (2) a reasonable amount in relation to the monetary award is posted by the appellant.
FACTS: Ace Promotion and Marketing Corporation (APMC) entered into a Promotional Contract with
Delfi Marketing, Inc. (Delfi) whereby the former undertook to conduct promotional activities for the latter’s
confectionery products. For this purpose, APMC employed workers as merchandisers and assigned them
to various retail outlets and supermarkets under fixed-term employment contracts. Later on, Delfi notified
APMC that their Promotional Contract will expire effective January 31, 2007. On January 29, 2007, APMC
informed petitioners that their last day of work would be on January 30, 2007. The Labor Arbiter declared
complainants to have been illegally dismissed. APMC filed a Memorandum of Appeal with Motion for
Reduction of Bond with the NLRC. The latter rendered a Decision finding complainants to be contractual
employees hired for a specific duration.
ISSUE #1: Whether the filing of appeal with motion to reduce appeal bond may toll the running of the
period to perfect an appeal
ISSUE #2: Whether an appeal bond in the amount of ₱473,210.00 is reasonable in relation to [a possible]
monetary award of ₱6,269,856.00
HELD #1: YES.
In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal
by the employer may be perfected only upon the posting of a bond which shall either be in the form of
cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and
attorney’s fees. It is thus clear from the foregoing that the filing of supersedeas bond for the perfection of
an appeal is mandatory and jurisdictional and failure to comply with this requirement renders the decision
of the Labor Arbiter final and executory.
However, this Court, in many cases, has relaxed this stringent requirement whenever justified. Thus, the
rules, specifically Section 6 of Rule VI of the 2005 Revised Rules of Procedure of the NLRC, allows the
reduction of the appeal bond subject to the conditions that: (1) the motion to reduce the bond shall be
based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted
by the appellant. In the case at bench, the Court finds that respondents’ motion to reduce appeal bond
was predicated on meritorious and justifiable grounds. First, the fact that eight complainants failed to
verify or affix their signatures on the position paper filed before the Labor Arbiter merits the exclusion of
the monetary awards adjudged to them. Second, the withdrawal of seven complainants in this case
likewise warrants the reduction of the monetary award rendered against respondents.
HELD #2: YES.
In the recent case of Mcburnie v. Ganzon, the Court has set a provisional percentage of 10% of the
monetary award, exclusive of damages and attorney’s fees, as a reasonable amount of bond that an
appellant should post pending resolution by the NLRC of a motion to reduce bond. It is only after the
posting of this bond that an appellant’s period to perfect an appeal is suspended. Here, after deducting
from the total monetary award the amount of attorney’s fees and the amounts awarded to those
complainants who did not verify their position papers and those who had withdrawn their complaints, the
total monetary award amounts to only more than 3 million. Hence, the appeal bond of Php. 437,210.00
posted by respondents is in fact even more than 10% of the said total monetary award.
LABOR LAW> Social and Welfare Legislation>Compensability of Illnesses
DOHLE-PHILMAN MANNING AGENCY, et al., Petitioners,

vs.
HEIRS OF ANDRES G. GAZZINGAN, Respondents.
G.R. No. 199568, June 17, 2015
(Second Division)
DOCTRINE: 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, and only a reasonable proof of
work-connection, not direct causal relation, is required to establish compensability of illnesses not
included in the list of occupational diseases.
FACTS: Dohle-Philman Manning Agency, Inc. hired Gazzingan as a messman for a period of nine
months on board the vessel M/V Gloria. Prior to his engagement, Gazzingan underwent a pre-
employment medical examination (PEME) which yielded normal results except for a finding of left
ventricular hypertrophy in his electrocardiogram test (ECG). Gazzingan was thus pronounced fit for sea
duty and he boarded the vessel. While M/V Gloria was docked at a port in Colombia, Gazzingan
experienced chest pains. The hospital’s cardiovascular and thoracic surgeon diagnosed him to have
Acute Type-B Dissection. Gazzingan was then medically repatriated. Upon arrival in Manila, he was
brought directly to Manila Doctors Hospital for further medical evaluation. The company-designated
physician, on the other hand, sent a letter to the company stating that Gazzingan is suffering from a non-
work-related illness considering that the other risk factors associated with his condition are congenital in
nature. The company then refused to further shoulder Gazzingan’s medical expenses and he was
discharged from the hospital over the objection of his physician who diagnosed him with Dissecting
Aneurysm. Gazzingan later on died of hemorrhagic shock secondary to dissecting aortic aneurysm.
ISSUE: Whether or not Gazzingan’s illness is work-related and therefore compensable
HELD: YES.
Under the Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC),

an illness suffered by a seafarer during the term of his contract is presumed to be work-related and
compensable. This rule is in consonance with the POEA’s mandate to secure the best terms and
conditions of employment of Filipino contract workers and to promote and protect their well-being.
Concomitant with this presumption is the burden placed upon the claimant to present substantial
evidence that his work conditions caused or at least increased the risk of contracting the disease and only
a reasonable proof of work-connection, not direct causal relation, is required to establish compensability
of illnesses not included in the list of occupational diseases. As aptly observed by the CA, Gazzingan’s
strenuous duties caused him to suffer physical stress which exposed him to injuries. It is therefore
reasonable to conclude that Gazzingan’s employment has contributed to some degree to the
development of his disease. In view thereof, the presumption now operates in favor of respondents and
the burden is shifted to the petitioners to overcome the statutory presumption. However, in the case at
bench, petitioners failed to discharge such burden.
LABOR LAW>Social and Welfare Legislation>Disability Benefits>Permanent Total Disability
MARK ANTHONY SASO, petitioner,

vs.
88 ACES MARITIME SERVICES, INC. and/or CARMENCITA A. SARREAL and LIN WEN YU,
respondents.
G.R. No. 211638, October 7, 2015
(Second Division)
DOCTRINE: The absence of a post-employment medical examination cannot be used to defeat a

seafarer’s claim when the failure to subject him to such requirement was not due to his fault but to the
inadvertence or deliberate refusal of the employer.
FACTS: Mark Anthony Saso was engaged by 88 Aces, on behalf of its principal, as a fisherman onboard
the latter’s fishing vessel in Taiwan. Saso was declared “fit to work/fit for sea service” and left the
Philippines. One month after, he figured in an accident onboard the vessel while in the process of hauling
their catch. As a result, Saso had to be operated on twice in two different hospitals in Taiwan. He was
thereafter repatriated and arrived in the country on April 20, 2010 in crutches. On August 3, 2010, Saso
filed a Complaint before the Labor Arbiter (LA) against 88 Aces. He claimed that upon his arrival in the
Philippines, respondents already left him on his own and told him that he should first shoulder the
expenses for his continued medical treatment subject to reimbursement only upon proper documentation.
It was only on June 21, 2010 that respondents summoned him to report to their office for medical
examination. In compliance, Saso presented himself to them on July 1, 2010 and was referred to by
respondents to the company-designated physician. For their part, respondents averred that after the
accident, they properly attended to all of Saso’s medical needs while he was still in Taiwan and that Saso
was summoned several times by respondents to present himself for post-employment medical
examination but he failed to heed the same.
ISSUE #1: Whether or not the absence of post-employment examination defeated Saso’s right to claim
for compensation and benefits
ISSUE #2: Whether or not Saso is entitled to total and permanent disability benefits
HELD #1: NO.
The NLRC and the CA simply side-swept Saso’s allegation that he reported to 88 Aces on April 23, 2010
but was merely told by the latter to shoulder his medical expenses subject to reimbursement upon proper
documentation. Moreover, Saso’s willingness to undergo a post-medical examination despite being told
by respondents to just shoulder his medical expenses is shown by the fact that on the same day, he had
himself medically examined in the Philippine Orthopedic center. As held, the absence of a post-
employment medical examination cannot be used to defeat a seafarer’s claim when the failure to subject
him to such requirement was not due to his fault but to the inadvertence or deliberate refusal of the
employer. Hence, contrary to the rulings of the NLRC and the CA, Saso cannot be considered to have
forfeited his right to claim compensation and benefits.
HELD #2: NO.
The Court held in Vergara v. Hammonia Maritime Services, Inc. that: As [the relevant provisions of the
Labor Code and the POEA-SEC] operate, the seafarer, upon sign-off from his vessel, must report to the
company-designated physician within three (3) days from arrival for diagnosis and treatment. For the
duration of the treatment but in no case to exceed 120 days, the seaman is on temporary total disability
as he is totally unable to work. If the 120-day initial period is exceeded and no such declaration is made
because the seafarer requires further medical attention, then the temporary total disability period may be
extended up to a maximum of 240 days, subject to the right of the employer to declare within this period
that a permanent partial or total disability already exists. The seaman may of course also be declared fit
to work at any time such declaration is justified by his medical condition. As may be recalled, Saso filed
his Complaint on August 3, 2010 or after a mere 105 days from his repatriation on April 20, 2010. Clearly,
the 120-day period had not yet lapsed at that time. Moreover, the company-designated physician had not
yet issued any declaration as to his fitness or disability.
While it is true that Saso’s claim for total and permanent disability benefit is premature, the fact remains
that he sustained a work-connected injury that did not only impair his physical appearance but also his
earning capacity which, thus, needs to be compensated. Even respondents acknowledged this in their
Position Paper with the LA when they asserted that Saso is entitled to disability compensation
commensurate to Impediment Grade 13 under Section 32 of the POEA-SEC. On this score, the Court
deems it proper to award Saso partial disability benefit in accordance with the findings of the company-
designated physician.
LABOR LAW>Labor Standards>Labor-only Contracting
PETRON CORPORATION, petitioner,

vs.
ARMZ CABERTE, ANTONIO CABERTE, JR., MICHAEL SERVICIO, ARIEL DEVELOS, ADOLFO
GESTUPA, ARCHIE PONTERAS, ARNOLD BLANCO, DANTE MARIANO, VIRGILIO GALOROSA,
and CAMILO TE, respondents.
G.R. No. 182255, June 15, 2015
(Second Division)
DOCTRINE: The law presumes a contractor to be a labor-only contractor and the employees are not
expected to prove the negative fact that the contractor is a labor-only contractor.
FACTS: Petron entered into service contracts with ABC, a labor contracting business owned by Caberte,
Sr., where ABC undertook to provide utility and maintenance services to Petron in its Bacolod Bulk Plant.
Thereafter, complaints for illegal dismissal, underpayment of wages and nonpayment of allowances were
filed against Petron, ABC and Caberte, Sr. Respondents averred that even before Petron engaged ABC
as contractor in 1996, most of them had already been working for Petron for years. However, every time
Petron engages a new contractor, it would designate such new contractor as their employer. They
claimed that despite such arrangement, Petron exercised control and supervision over their work and
ABC is a mere labor-only contractor which had no substantial capital and investment. On the other hand,
Petron asserted that ABC is an independent contractor which supplied the needed manpower for the
maintenance of its bulk handling premises and offices, as well as for tanker assistance in the receiving
and re-filling of its LPG products. Petron submitted several documents to prove the legitimacy and
capacity of ABC as an independent contractor.
ISSUE: Whether or not ABC is a labor-only contractor
HELD: YES.
Labor-only contracting, a prohibited act, is an arrangement where the contractor, who does not have
substantial capital or investment in the form of tools, equipment, machineries, work premises, among
others, supplies workers to an employer and the workers recruited are performing activities which are
directly related to the principal business of such employer. The law presumes a contractor to be a labor-
only contractor and the employees are not expected to prove the negative fact that the contractor is a
labor-only contractor. Thus, it is not respondents but Petron which bears the burden of establishing that
ABC is not a labor-only contractor but a legitimate independent contractor. To show that ABC has
substantial capital or investment, Petron submitted, among others, ABC’s BIR Certificate of Registration,
VAT Return, BIR Confirmation Receipt, TIN, Individual Income Tax Return, Mayor’s Permit and DTI
Certificate of Registration. However, the Court observes that these documents are not conclusive
evidence of ABC’s financial capability. At most, they merely show that ABC is engaged in business and
licensed by the appropriate government agencies. Anent substantial investment in the form of equipment,
tools, implements, machineries and work premises, Petron likewise failed to show that ABC possessed
the same. Instead, what is evident in the records was that ABC had been renting a forklift from Petron in
order to carry out the job of respondents. This only shows that ABC does not own basic equipment
needed in the performance of respondents’ job. Moreover, respondents’ work as LPG fillers, maintenance
crew, LPG operator supervisor, warehouseman, utility worker, tanker receiving crew and utility workers
were directly related to Petron’s main business, vital as they are in the manufacture and distribution of
petroleum products. Besides, some of the respondents were already working for Petron even before it
engaged ABC as a contractor in 1996. Albeit it was made to appear that they were under the different
contractors that Petron engaged over the years, respondents have been regularly performing the same
tasks within the premises of Petron. The repeated and continuing need for the performance of the job is
sufficient evidence of the necessity, if not indispensability, of the activity to the business. Further, Petron
has the power of control over respondents in the performance of their work. It bears stressing that the
power of control merely calls for the existence of the right to control and not necessarily the exercise
thereof.
LABOR LAW>Social and Welfare Legislation>Seafarers>Permanent Total Disability
GRACE MARINE SHIPPING CORPORATION and/or CAPT. JIMMY BOADO, petitioners,

vs.
ARON S. ALARCON, respondent.
G.R. No. 201536, September 9, 2015
(Second Division)
DOCTRINE: An employee’s disability becomes permanent and total when so declared by the company-
designated physician, or in case of absence of such a declaration either of fitness or permanent total
disability, upon the lapse of the 120- or 240-day treatment period under Article 192(c)(1) of the Labor
Code and Rule X, Section 2 of the Amended Rules on Employees’ Compensation Commission, 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.
FACTS: Respondent Alarcon was hired by petitioner Grace Marine Shipping Corporation for its foreign
principal as Messman onboard the vessel M/V Sunny Napier II. As such, respondent maintained
messroom sanitation, washed clothes and dishes, cleaned the area onboard and was in charge of
general cabin sanitation. He used cleaning agents such as surfactants, alkalines, phosphates, acids,
complexing and bleaching agents, enzymes and other strong chemical substances. While aboard the
ship, respondent developed a skin condition which led to his repatriation on August 29, 2007. He was
immediately referred to the company-designated physician and underwent treatment, but his condition
was characterized by recurring lesions all over his body. On January 21, 2008, the company-designated
physician declared Alarcon’s condition as a Grade 12 disability — “slight residuals or disorder of the skin.”
He was declared fit to work on January 31, 2008, although it was noted that he still had “minimal and
resolving” skin lesions. In April 2008, respondent consulted an independent physician, Dr. Fugoso, who
declared that he was unfit to work and was suffering from subacute to chronic spongiotic dermatitis which
may require lifetime treatment. Petitioners offered to compensate respondent in the amount of
US$5,225.00 based on a Grade 12 disability rating, but respondent claimed entitlement to Grade 5
disability benefits with a higher indemnity.
ISSUE: Whether or not respondent is entitled to permanent and total disability benefits
HELD: YES.
There is no validity to petitioners’ argument that respondent’s “innate skin sensitivity” caused his illness. If
this were true, then it did not have to take eight months before he became ill, considering the level of
exposure he was subjected to, daily for at least eight hours. In Maersk Filipinas Crewing, Inc./Maersk
Services Ltd. v. Mesina, this Court held that there is a reasonable connection between the nature of one’s
work and his contracting psoriasis when, in the performance of his duties, strong detergents, fabric
conditioners, special soaps, and other chemicals are used. It remains undisputed that the respondent
used strong detergent, fabric conditioner, special soap and chemicals in performing his duties as a
steward. Stress and climate changes likewise permeate his working environment as with that of any other
seafarer. These factors, taken together with Dr. Fugoso’s certification, confirm the existence of a
reasonable connection between the nature of respondent’s work and the onset of his psoriasis. Adopting
the pronouncement in Maersk in its entirety and applying it to the present case, the Court finds that
respondent’s psoriasis and nummular eczema, which have not been cured, are work-connected and thus
compensable. He is unfit to continue his duties as messman, as his illness prevents him from performing
his functions as such. Up to this point, it does not appear that petitioners took him back to work for their
principal, or that a declaration of fitness to work or that his condition has been resolved or cured has been
issued. “[A]n employee’s disability becomes permanent and total when so declared by the company-
designated physician, or, in case of absence of such a declaration either of fitness or permanent total
disability, upon the lapse of the 120- or 240-day treatment period under Article 192(c)(1) of the Labor
Code and Rule X, Section 2 of the Amended Rules on Employees’ Compensation Commission, while the
employee’s disability continues and he is unable to engage in gainful employment during such period,
and the company-designated physician fails to arrive at a definite assessment of the employee’s fitness
or disability. This is true regardless of whether the employee loses the use of any part of his body or if the
injury or disability is classified as Grade 1 under the POEA-SEC.”
LABOR LAW>Labor Standards>Management Prerogative
ICT MARKETING SERVICES, INC.

(now known as SYKES MARKETING SERVICES, INC.), petitioner,
vs.
MARIPHIL L. SALES, respondent.
G.R. No. 202090, September 9, 2015
(Second Division)
DOCTRINE: Under the doctrine of management prerogative, every employer has the inherent right to
regulate, according to his own discretion and judgment, all aspects of employment. The only limitations to
the exercise of this prerogative are those imposed by labor laws and the principles of equity and
substantial justice.
FACTS: Petitioner ICT hired respondent Sales as its Customer Service Representative (CSR) or
Technical Support Representative (TSR), and assigned her to its Capital One account. Sales became a
regular employee and was assigned to the Washington Mutual account, where she was awarded with a
certificate for being the “Top Converter/Seller (Second Place)”. Sometime thereafter, Sales wrote to ICT’s
Vice President, complaining about supposed irregularities in the handling of funds which were intended
for distribution to outstanding Washington Mutual CSRs and TSRs as prizes and incentives. No action
appears to have been taken on her complaint until she was transferred to the Bank of America account.
Without prior notice, ICT also scheduled her for a seven-day training on the very same day of her
transfer. Sales was unable to attend the third day of the training as she was sick. When she reported for
training the next day, she was informed that she could not be certified to handle calls for Bank of America
due to her failure to complete the training. From then on, Sales was placed on “floating status” and was
not given any work assignment. She then tendered her resignation from work and filed a complaint for
constructive dismissal against ICT.
ISSUE #1: Whether or not respondent’s transfer to another account is a valid exercise of management
prerogative
ISSUE #2: Whether or not placing the respondent in “floating status” constitutes an act of discrimination
on the part of the petitioner
HELD #1: NO.
Under the doctrine of management prerogative, every employer has the inherent right to regulate,
according to his own discretion and judgment, all aspects of employment, including hiring, work
assignments, working methods, the time, place and manner of work, work supervision, transfer of
employees, layoff of workers, and discipline, dismissal, and recall of employees. The only limitations to
the exercise of this prerogative are those imposed by labor laws and the principles of equity and
substantial justice. While the prerogative to transfer respondent to another account belonged to petitioner,
it wielded the same unfairly. The only conceivable reason why petitioner transferred respondent to
another account is the fact that she openly and bravely complained about the supposed anomalies in the
Washington Mutual account; it is not her “derogatory record” or her “attendance and punctuality issues,”
which are insignificant and thus irrelevant to her overall performance in the Washington Mutual account.
Thus, in causing respondent’s transfer, petitioner clearly acted in bad faith and with discrimination,
insensibility and disdain; the transfer was effected as a form of punishment for her raising a valid
grievance related to her work. Furthermore, said transfer was obviously unreasonable, not to mention
contrary to experience, logic, and good business sense. This being the case, the transfer amounted to
constructive dismissal.
HELD #2: YES.
In placing respondent on “floating status,” petitioner further acted arbitrarily and unfairly, making life
unbearable for her. In so doing, it treated respondent as if she were a new hire; it improperly disregarded
her experience, status, performance, and achievements in the company; and most importantly,
respondent was illegally deprived of her salary and other emoluments. For her single absence during
training for the Bank of America account, she was refused certification, and as a result, she was placed
on floating status and her salary was withheld. Clearly, this was an act of discrimination and unfairness
considering that she was not an inexperienced new hire, but a promising and award-winning employee
who was more than eager to succeed within the company.
LABOR LAW>Social and Welfare Legislation>Seafarers>Disability Benefits
PHILIPPINE TRANSMARINE CARRIERS, INC./NORWEGIAN CREW MANAGEMENT, petitioners,

vs.
JULIA T. ALIGWAY (as substitute for her deceased husband, DEMETRIO ALIGWAY, JR.),
respondent.
G.R. No. 201793, September 16, 2015
(Second Division)
DOCTRINE: For disability to be compensable, (1) the seafarer’s injury or illness must be work-related;
and (2) the work-related injury or illness must have existed during the term of his employment contract.
FACTS: Petitioner PTC employed Demetrio, for and in behalf of its foreign principal, as chief cook
onboard the vessel Amasis. Demetrio alleged that prior to his deployment, he underwent pre-employment
medical examination (PEME) and was declared fit to work. While aboard the vessel, he suffered from
“vomiting, anorexia, weight loss, and palpitations followed by dizziness and a feeling of lightheadedness.”
As a result, he was medically repatriated. He claimed that despite medical examinations by the company-
designated physician, his illness persisted beyond 120 days. This condition allegedly rendered him
incapacitated to work again as a seafarer but the PTC and the NCM refused to pay him disability benefits.
Consequently, Demetrio filed a Complaint alleging that his work as chief cook, which involved food intake,
contributed to or aggravated his gastric cancer. He claimed that although the cause of gastric cancer was
unknown, there was speculation that smoked food may be promoting factors. The respondents, however,
contended that Demetrio was a heavy smoker, and that he was smoking 12 to 15 cigarette sticks a day;
that the company-designated physician declared that Demetrio’s condition was not work-related; and that
the risk factors in Demetrio’s condition included age, diet rich in saturated fat, fatty acid, linoleic acid, and
genetic predisposition. They also argued that stomach cancer is asymptomatic — or an illness that has
nonspecific symptoms in its early stage and only becomes apparent when in the advanced stage already;
that since Demetrio was only about four months aboard the vessel when the symptoms of his cancer
manifested, then it could not be inferred that he acquired it during his employment with them.
ISSUE: Whether or not Demetrio is entitled to disability benefits
HELD: NO.
We stress that entitlement of seafarers to disability benefits is governed by medical findings, law and
contract. Articles 191 to 193 under Chapter VI (Disability Benefits) of Book IV of the Labor Code set forth
the applicable provisions concerning disability benefits. Also, the POEA-SEC and the CBA bind the
seafarer and his employer to each other. In this case, considering that Demetrio did not suffer from an
occupational disease — or such diseases listed under Section 32-A of the 2000 POEA-SEC — it stands
to reason that to be entitled to disability benefits, he must establish that he suffered from a work-related
injury or illness. Under Section 20(B) of the 2000 POEA-SEC, for disability to be compensable, (1) the
seafarer’s injury or illness must be work-related; and (2) the work-related injury or illness must have
existed during the term of his employment contract. Hence, the seafarer must not only show that he
suffers from an illness or injury that rendered him permanently or partially disabled, but he must also
prove that there is a causal relation between his illness or injury and the work for which he had been
engaged. This Court has held that a person who claims entitlement to the benefits provided by law must
establish his right thereto by substantial evidence or “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” This Court cannot grant a claim for disability benefits
without such substantial evidence because to do so would be offensive to due process. Hence, the
burden is on the seafarer to prove that he suffered from a work-related injury or illness during the term of
his contract. In this case, Demetrio failed to discharge this burden. He failed to prove the required causal
connection between his stomach cancer and his work as chief cook aboard the vessel. Thus, this Court
agrees with the finding of the NLRC that there is no substantial evidence to support the allegation that
Demetrio’s stomach cancer was caused by work-connected factors.
LABOR LAW>Social and Welfare Legislation>Seafarers>Disability Benefits
THE HEIRS OF THE LATE DELFIN DELA CRUZ, represented by his SPOUSE, CARMELITA DELA
CRUZ, petitioners,
vs.
PHILIPPINE TRANSMARINE CARRIERS, INC., represented by MR. CARLOS C. SALINAS and/or
TECTO BELGIUM N.V., respondents.
G.R. No. 196357, April 20, 2015
(Second Division)
DOCTRINE: The 1996 POEA-SEC clearly provides that a seafarer must submit himself to a post-
employment medical examination within three days from his arrival in the Philippines (mandatory
reporting requirement) so that his claim for disability and sickness allowance can prosper. The only
exception to this rule is when the seafarer is physically incapacitated to do so, but there must be a written
notice to the agency within the same period of three days for the seaman to be considered to have
complied with the requirement.
FACTS: The late Delfin Dela Cruz was contracted as Oiler by the Philippine Transmarine Carriers, Inc.,
for and in behalf of the latter’s principal. Delfin underwent a Pre-Employment Medical Examination
(PEME) and was declared Fit for Sea Service. His work includes observing routine watch, taking records
of pressure of temperature of all working apparatus, obeying all orders and commands of the engineers,
and maintaining cleanliness of machinery and engine room. While onboard, he felt gradual chest pains
and pain in his upper abdominal region. One time, while performing his regular duties, he was hit by a
metal board on his back. He, thereafter, requested medical attention and was given medications and
advised to be given light duties for the rest of the week. Upon the vessel’s arrival at a convenient port, his
contract expired and he was signed off from the vessel. He reported to respondents as required and also
sought medical assistance, but was not extended such. About three months thereafter, Delfin went to a
hospital for proper medical attention and underwent X-Ray and MRI. He was no longer employed by
respondents because he was already incapacitated to engage in his customary work. He filed his claim
for sickness allowance but the same was not granted. His condition deteriorated, so he was admitted at
St. Luke’s Medical Center, where he was diagnosed to be suffering from malignant peripheral nerve
sheath tumor (MPNST). Delfin then filed a complaint. The LA found that petitioners ought to be awarded
permanent disability benefits, sickness allowance, attorney’s fees and damages. The NLRC and the CA,
on the other hand, ruled otherwise.
ISSUE: Whether or not Delfin is entitled to disability benefits
HELD: NO.
The 1996 POEA-SEC clearly provides that a seafarer must submit himself to a post-employment medical
examination within three days from his arrival in the Philippines (mandatory reporting requirement) so that
his claim for disability and sickness allowance can prosper. The only exception to this rule is when the
seafarer is physically incapacitated to do so, but there must be a written notice to the agency within the
same period of three days for the seaman to be considered to have complied with the requirement.
Otherwise, he forfeits his right to claim his disability benefits and sickness allowance. In Manota v.
Avantgarde Shipping Corporation, the Court explained the rationale behind the three-day period
requirement, thus: The 3-day mandatory reporting requirement must be strictly observed since within 3
days from repatriation, it would be fairly manageable for the physician to identify whether the disease
x x x was contracted during the term of his employment or that his working conditions increased the risk
of contracting the ailment. Unfortunately, in this case, petitioners failed to show the steps supposedly
undertaken by Delfin to comply with the mandatory reporting requirement. To the Court’s mind, this lapse
on petitioners’ part only demonstrates that Delfin did not comply with what was incumbent upon him. The
reasonable conclusion, therefore, is that at the time of his repatriation, Delfin was not suffering from any
physical disability requiring immediate medical attendance. Otherwise, and even if his request for medical
assistance went unheeded, he would have submitted himself for checkup with his personal physician.
LABOR LAW>Labor Standards>Termination of Employment>Abandonment
LITEX GLASS AND ALUMINUM SUPPLY and/or RONALD ONG-SITCO, petitioners,

vs.
DOMINADOR B. SANCHEZ, respondent.
G.R. No. 198465, April 22, 2015
(Second Division)
DOCTRINE: To constitute abandonment, it is essential that an employee failed to report for work without
any valid and justifiable reason and that he had a clear intention to sever the employment relationship by
some overt act. Mere failure to report for work after notice to return does not constitute abandonment.
FACTS: Sanchez alleged that since 1994, he was employed as driver and aluminum installer in several
companies owned and managed by Ong-Sitco, the last of which was with Litex. Since February 1996,
Ong-Sitco had been remitting his SSS monthly contributions. Sanchez averred that he has no record of
any work related offense for which he has been reprimanded, suspended or warned and that for the past
15 years, he has been diligently serving his employer. He was thus surprised when Ong-Sitco and his
wife scolded and threw insulting words and invectives upon him and then ordered him to go on indefinite
leave. Due to the incident, he decided to just leave the work premises with the hope that the animosity
between him and his employer would eventually subside. He went back to the office to talk to Ong-Sitco
several times, but the latter just ignored him. These, thus, led Sanchez to file a case for illegal dismissal
and nonpayment of benefits against petitioners. The latter, on the other hand, negated all of Sanchez’s
claims. They denied having employed him in 1994 since, according to them, Litex was only registered in
2002. Petitioners also denied having dismissed Sanchez. They averred that it was Sanchez who
abandoned his job by not reporting for work.
ISSUE #1: Whether or not Sanchez abandoned his work
ISSUE #2: Whether or not the award of separation pay is proper even if it was not prayed for in the
complaint
HELD #1: NO.
To constitute abandonment, it is essential that an employee failed to report for work without any valid and
justifiable reason and that he had a clear intention to sever the employment relationship by some overt
act. Mere failure to report for work after notice to return does not constitute abandonment. As mentioned,
Sanchez reported back to Ong-Sitco several times to ask about his employment status but was not
entertained. Oddly, while Ong-Sitco did not deny this, he never bothered to explain why during these
instances, he did not warn Sanchez about his continued absence or ask him to return to work, if only to
bolster the claim that he was not dismissed.
HELD #2: YES.
As stated, “an illegally dismissed employee is entitled to reinstatement as a matter of right.” But when an
atmosphere of antipathy and antagonism has already strained the relations between the employer and
employee, separation pay is to be awarded as reinstatement can no longer be equitably effected. We
agree with the CA when it held that the Labor Arbiter’s award of separation pay is an equitable
disposition. Although petitioners correctly pointed out that separation pay was not prayed for in the
complaint, Sanchez is deemed to have accepted the separation pay awarded by the Labor Arbiter since
he never questioned the same. The Court has ruled that separation pay may be awarded if the employee
decides not to be reinstated. Besides, the altercation that transpired between Sanchez and Ong-Sitco is
enough basis to conclude that there exists an apparent strained relationship between them. This strained
relationship is also very evident from petitioners’ refusal to retain Sanchez under their employ.
We, however, hold that the labor tribunals and the CA erred in reckoning the employment of Sanchez
from 1994 for the purpose of computing his separation pay. In L.C. Ordoñez Construction v. Nicdao, the
Court reiterated the basic rule on evidence that the burden of proof lies on the party who makes the
allegation and must prove his claim by competent evidence. Since the only persuasive evidence on
record regarding Sanchez’s date of employment with petitioners is the latter’s admission that they
employed him in April 2002, the date Litex was registered with the DTI, Sanchez is deemed employed by
petitioners beginning on such date. Hence, the reckoning point for the computation of the separation pay
in lieu of reinstatement awarded to Sanchez shall be the year 2002 and not 1994.
TABUK MULTI-PURPOSE COOPERATIVE, INC. (TAMPCO), JOSEPHINE DOCTOR, and WILLIAM

BAO-ANGAN, petitioners,
vs.
MAGDALENA DUCLAN, respondent.
G.R. No. 203005, March 14, 2016
(Second Division)
DOCTRINE: Disobedience, to be a just cause for termination, must be willful or intentional, willfulness
being characterized by a wrongful and perverse mental attitude rendering the employee’s act inconsistent
with proper subordination.
FACTS: TAMPCO is a duly registered cooperative engaged in the business of obtaining investments from
its members which are lent out to qualified member-borrowers. Respondent Duclan was employed as
TAMPCO Cashier. In 2002, TAMPCO introduced Special Investment Loans (SILs) to its members and
prospective borrowers. Among those who availed themselves of the SILs were Falgui and Kotoken. In
June 2003, the TAMPCO BOD issued Board Actions (BA) which limited the grant of SILs to P5 million
and then eventually halted the grant of SILs pending collection of outstanding loans. Nonetheless,
additional SILs were granted to Falgui and to Kotoken. Eventually, Falgui filed for insolvency while
Kotoken failed to pay back her loans. TAMPCO, thus, indefinitely suspended respondent and other
cooperative officials and required them to replace the amount of P6 million representing unpaid loans.
Respondent was summoned by the fact-finding committee and she admitted that despite the issuance of
the BA, she and her co-respondents approved and released SILs. Respondent was thereafter ordered
suspended and directed to collect, within the specified period, the unauthorized SIL releases she made.
Otherwise, she would be terminated from employment. Unable to collect or account for the same,
respondent was dismissed from employment.
ISSUE: Whether or not the termination of respondent’s employment is justified
HELD: YES.
Under Article 282 of the Labor Code, the employer may terminate the services of its employee for the
latter’s serious misconduct or willful disobedience of its or its representative’s lawful orders. In any case,
the conduct of the employee that is a valid ground for dismissal under the Labor Code constitutes harmful
behavior against the business interest or person of his employer. Disobedience, to be a just cause for
termination, must be willful or intentional, willfulness being characterized by a wrongful and perverse
mental attitude rendering the employee’s act inconsistent with proper subordination. A willful or intentional
disobedience of such rule, order or instruction justifies dismissal only where such rule, order or instruction
is (1) reasonable and lawful, (2) sufficiently known to the employee, and (3) connected with the duties
which the employee has been engaged to discharge. As TAMPCO Cashier, respondent was, among her
other designated functions and duties, responsible and accountable for all disbursements of cooperative
funds and the coordination of delinquency control and collection activities. She was likewise expected to
understand the cooperative’s operational procedures, and of course, follow its rules, regulations, and
policies. The CA failed to consider that in releasing loan proceeds to SIL borrowers like Falgui and
Kotoken even after the BOD issued BA Nos. 28 and 55, respondent, and the other cooperative officers,
willfully and repeatedly defied a necessary, reasonable and lawful directive of the cooperative’s BOD,
which directive was made known to them and which they were expected to know and follow as a
necessary consequence of their respective positions in the cooperative. They placed the resources of the
cooperative — the hard-earned savings of its members — in a precarious state as a result of the inability
to collect the loans owing to the borrowers’ insolvency or refusal to honor their obligations. Respondent
committed gross insubordination which resulted in massive financial losses to the cooperative. Applying
Article 282, her dismissal is only proper.
LABOR LAW > Labor Relations > Jurisdiction>Intra-Union Disputes
ALLAN M. MENDOZA, Petitioner,

vs.
OFFICERS OF MANILA WATER EMPLOYEES UNION (MWEU) Respondents.
G.R. No. 201595 January 25, 2016
(Second Division)
DOCTRINE: Petitioner’s charge of unfair labor practices falls within the original and exclusive jurisdiction
of the Labor Arbiters, pursuant to Article 217 of the Labor Code. In addition, Article 247 of the same Code
provides that “the civil aspects of all cases involving unfair labor practices, which may include claims for
actual, moral, exemplary and other forms of damages, attorney’s fees and other affirmative relief, shall be
under the jurisdiction of the Labor Arbiters.”
FACTS: Mendoza was a member of the Manila Water Employees Union (MWEU), a Department of Labor
and Employment (DOLE)-registered labor organization consisting of rank-and-file employees within
Manila Water Company (MWC). In April 11, 2007, MWEU informed petitioner that the union was unable to
fully deduct the increased P200.00 union dues from his salary and such would result in sanctions upon
him for violations of the MWEU’s Constitution and By-Laws. On June 6, 2007, the MWEU grievance
committee recommended that petitioner be suspended for 30 days which was approved. Respondents
denied petitioners request for appeal since the period had expired. Petitioner was twice more charged
with non-payment of union dues and was again penalized with a 30-day suspension. Finally, he was
penalized by expulsion from the union. In 2008, during the freedom period and negotiations for a new
collective bargaining agreement (CBA) with MWC, petitioner joined another union, the Workers
Association for Transparency, Empowerment and Reform, All-Filipino Workers Confederation (WATER-
AFWC). He was elected union President. Other MWEU members were inclined to join WATER-AFWC,
but MWEU director Torres threatened that they would not get benefits from the new CBA. The MWEU
leadership submitted a proposed CBA which contained provisions to the effect that in the event of
retrenchment, non-MWEU members shall be removed first, and that upon the signing of the CBA, only
MWEU members shall receive a signing bonus. Petitioner filed a complaint before the Labor Arbiter but
was denied due to lack of jurisdiction since appeal to the Board is still available and affirmed upon appeal.
A petition for Certiorari before the CA was likewise denied.
ISSUE: Whether or not the CA erred in declaring that the presence of inter/intra-union conflicts negates
the complaint for unfair labor practices against a labor organization and its officers, and in affirming that
the NLRC properly dismissed the case for alleged lack of jurisdiction.
HELD: YES.
Petitioner’s charge of unfair labor practices falls within the original and exclusive jurisdiction of the Labor
Arbiters, pursuant to Article 217 of the Labor Code. In addition, Article 247 of the same Code provides
that "the civil aspects of all cases involving unfair labor practices, which may include claims for actual,
moral, exemplary and other forms of damages, attorney’s fees and other affirmative relief, shall be under
the jurisdiction of the Labor Arbiters."
Unfair labor practices may be committed both by the employer under Article 248 and by labor
organizations under Article 249 of the Labor Code. Respondents are guilty of unfair labor practices under
Article 249 (a) and (b) – that is, violation of petitioner’s right to self-organization, unlawful discrimination,
and illegal termination of his union membership – which case falls within the original and exclusive
jurisdiction of the Labor Arbiters, in accordance with Article 217 of the Labor Code.
As members of the governing board of MWEU, respondents are presumed to know, observe, and apply
the union’s constitution and by-laws. Thus, their repeated violations thereof and their disregard of
petitioner’s rights as a union member – their inaction on his two appeals which resulted in his suspension,
disqualification from running as MWEU officer, and subsequent expulsion without being accorded the full
benefits of due process – connote willfulness and bad faith, a gross disregard of his rights thus causing
untold suffering, oppression and, ultimately, ostracism from MWEU. "Bad faith implies breach of faith and
willful failure to respond to plain and well understood obligation.
LABOR LAW > Social and Welfare Legislation > Permanent Disability Benefits
WALLEM MARITIME SERVICES, INC., REGINALDO A. OBEN and WALLEM

SHIPMANAGEMENT,LTD.,Petitioners,
vs.
EDWINITO V. QUILLAO, Respondent.
G.R. No. 202885 January 20, 2016
(Second Division)
DOCTRINE: Under Section 20(D) of the POEA-SEC “[n]o compensation and benefits shall be payable in
respect of any injury, incapacity, disability or death of the seafarer resulting from his willful or criminal act
or intentional breach of his duties, provided, however, that the employer can prove that such injury,
incapacity, disability or death is directly attributable to the seafarer.”
FACTS: WMS is a local manning agency, with Reginaldo A. Oben as its President and Manager.
Respondent, a fitter aboard the vessel Crown Garnet, alleged that his employment was covered by a
collective bargaining agreement between the Associated Marine Officers’ and Seamen’s Union of the
Philippines and WSL – Hong Kong, represented by WMS.
Respondent, averred that he started experiencing neck and lower back pain followed by numbness and
weakness of his left hand. Respondent stated that towards the end of his contract, the Chief Engineer
tried to convince him to extend his contract but he declined. Upon arrival to the Philippines after signing
off from the vessel, respondent was diagnosed of cervical radiculopathy, thoracic and lumbar
spondylosis, as well as carpal tunnel syndrome of the left, and trigger finger, third digit of his right hand.
He underwent surgery to address his condition. On November 23, 2009, the Legal Affairs Department of
AMOSUP informed WMS of respondent’s claim for disability benefits and the clarificatory conference
scheduled but to no avail. An independent surgeon opined that respondent “is not fit for further sea duty
permanently in whatever capacity with a status equivalent to Grade 8” Impediment. Respondent posited
that he was entitled to permanent and total disability benefits. The Panel of Voluntary Arbitrators ordered
respondents to grant petitioner his disability benefits which was affirmed by the CA.
ISSUE: Whether or not respondent is entitled to permanent disability benefits even before the company-
designated doctor declares him permanently and totally disabled.
HELD: NO.
Petitioners’ contention that at the time of filing of the Complaint, respondent has no cause of action
because the company-designated physician has not yet issued an assessment on respondent’s medical
condition; moreover the 240-day maximum period for treatment has not yet lapsed. As reiterated by the
Court in the recent case of C.F. Sharp Crew Management, Inc. v. Obligado, the 120-day rule applies only
when the complaint was filed prior to October 6, 2008; however, if the complaint was filed from October 6,
2008 onwards, the 240-day rule applies. Here, it is beyond dispute that the complaint for disability
benefits was filed after October 6, 2008. Hence, the 240-day rule should apply. It was thus error on the
part of the PVA to reckon respondent’s entitlement to permanent and total disability benefits based on the
120-day rule.
The records clearly show that respondent was still undergoing treatment when he filed the complaint. On
November 12, 2009, the physiatrist even advised respondent to seek the opinion of an orthopedic
specialist Respondent, however, did not heed the advice, instead, he proceeded to file a Complaint on
November 23, 2009 for disability benefits. And, it was only a day after its filing (or on November 24, 2009)
that respondent requested from the company-designated doctor the latter’s assessment on his medical
condition. Stated differently, respondent filed the Complaint within the 240-day period while he was still
under the care of the company-designated doctor. Significantly, we note that respondent has not even
consulted his doctor-of-choice before instituting his Complaint for disability benefits.
LABOR LAW > Labor Standards > Illegal Dismissal
LORELEI O. ILADAN, petitioner
vs.
LA SUERTE INTERNATIONAL MANPOWER AGENCY INC, AND DEBBY LAO, respondents
GR No 203882 January 11, 2016
(Second Division)
DOCTRINE: (1) The CA is not precluded from reviewing factual findings and conclusions of the NLRC
when it finds that the NLRC committed grave abuse of discretion in disregarding evidence material to the
controversy. (2) In illegal dismissal cases, the employer has the burden of proving that the employee’s
dismissal was legal. However, to discharge this burden, the employee must first prove, by substantial
evidence, that he had been dismissed from employment.
FACTS: La Suerte is a recruitment agency duly authorized by the Philippine Overseas Employment
Administration (POEA) to deploy workers for overseas employment. On March 20, 2009, La Suerte hired
Iladan to work as a domestic helper in Hong Kong for a period of two years. Barely eight days into her
job, Iladan executed a handwritten resignation letter. Iladan signed an Affidavit of Release, Waiver and
Quitclaim duly subscribed before Labor Attache Leonida V. Romulo of the Philippine Consulate General
in Hong Kong. On the same date, an Agreement, was signed by Iladan, Conciliator-Mediator, and a
representative of Domestic Services, whereby Iladan acknowledged that her acceptance of the financial
assistance would constitute as final settlement of her contractual claims and waiver of any cause of action
against respondents and Domestic Services. Thereafter, or on November 23, 2009, Iladan filed a
Complaint for illegal dismissal, refund of placement fee, payment of salaries corresponding to the
unexpired portion of the contract, as well as moral and exemplary damages, against respondents. Iladan
alleged that she was forced to resign by her principal employer, threatened with incarceration; and that
she was constrained to accept the amount of P35,000.00 as financial assistance as she needed the
money to defray her expenses in going back to the Philippines. Labor Arbiter declared Iladan to have
been illegally dismissed and that she was only forced by respondents to resign. NLRC affirmed the Labor
Arbiter’s judgment. CA granted the Petition for Certiorari, reversed the findings of both the Labor Arbiter
and NLRC and dismissed Iladan’s complaint for illegal dismissal. CA reversed the findings of NLRC.
ISSUE: Whether or not Iladan was illegally dismissed.
HELD: NO.
It is a settled jurisprudence that it is incumbent upon an employee to prove that his resignation is not
voluntary. However, Iladan did not adduce any competent evidence to prove that respondents used force
and threat. For intimidation to vitiate consent, the following requisites must be present: (1) that the
intimidation caused the consent to be given; (2) that the threatened act be unjust or unlawful; (3) that the
threat be real or serious, there being evident disproportion between the evil and the resistance which all
men can offer, leading to the choice of doing the act which is forced on the person to do as the lesser evil;
and (4) that it produces a well-grounded fear from the fact that the person from whom it comes has the
necessary means or ability to inflict the threatened injury to his person or property. In the instant case, not
one of these essential elements was amply proven by [Iladan]. Bare allegations of threat or force do not
constitute substantial evidence to support a finding of forced resignation.
LABOR LAW > Labor Standards > Disability Benefits
MAGSAYSAY MARITIME CORP., CSCS BMTERNATIONAL NV AND/OR

MARLON* RONO, Petitioners,
vs.
RODEL A. CRUZ, Respondent.
G.R. No. 204769, June 06, 2016
(Second Division)
DOCTRINE: While strict compliance to technical rules is not required in labor cases, liberal policy should
still be pursuant to equitable principles of law. In this regard, belated submission of evidence may be
allowed only if the delay in its presentation is sufficiently justified; the evidence adduced is undeniably
material to the cause of a party; and the subject evidence should sufficiently prove the allegations sought
to be established.
FACTS: CSCS, employed respondent as housekeeping cleaner on board the vessel Costa Fortuna for
eight months. While lifting heavy objects in the course of performing his duties, respondent experienced
low back pain. As a result, he was repatriated and was immediately referred to Dr. Benigno A. Agbayani
(Dr. Agbayani), the company-designated doctor. Respondent's MRI scan revealed that he was afflicted
with Mild L4-5 disc bulge and was given an interim disability rating of Grade 8 for "Moderate rigidity of two
thirds loss of motion or lifting power of the trunk. On January 21, 2009, respondent received sickness
allowance for 120 days. Consequently, on November 25, 2009, respondent filed a Complaint for
permanent and total disability benefits, sickness allowance, damages and attorney's fees against MMC,
Marlon Rono, its President, and CSCS. Respondent argued that he is entitled to disability benefits
because of the reasonable connection between his work and his illness. He stressed that before his
embarkation lie was declared fit to work; as such, it can be logically inferred that he acquired his illness
while aboard the vessel and by reason of its harsh working environment. The Labor Arbiter rendered
decision in favor of the respondent. NLRC modified the ruling of the Labor Arbiter by deleting the award of
Attorney’s fees which was reversed by the CA.
ISSUE: Whether or not respondent is entitled to disability benefits
HELD: Yes.
In Misamis Oriental II Electric Service Cooperative v. Cagalawan, the Court held that while strict
compliance to technical rules is not required in labor cases, liberal policy should still be pursuant to
equitable principles of law. In this regard, belated submission of evidence may be allowed only if the
delay in its presentation is sufficiently justified; the evidence adduced is undeniably material to the cause
of a party; and the subject evidence should sufficiently prove the allegations sought to be established. In
this case, petitioners did not explain the reasons for their failure to present the September 5, 2008
Medical Report at the earliest opportunity. It was only after an unfavorable decision was rendered did
petitioners present it with the CA.
Petitioners' belated submission of this Report without any explanation casts doubt on its credibility
especially since it does not appear to be a newly discovered evidence. Moreover, by reason of the lapse
of the 240-day period, the opinions of the company-designated physician and of respondent's personal
doctor are rendered irrelevant. As stated, after the lapse of said period, respondent is already deemed
totally and permanently disabled, which entitles him to full disability benefits amounting to
US$60,000.00. Notably, in his complaint respondent prayed for total permanent disability benefits. Also,
the medical opinion of his doctor-of-choice was issued only after the filing of the complaint.
Clearly, respondent did not refuse treatment to address and resolve his condition. In addition, as properly
declared by the LA, abandonment cannot be presumed from the acts of respondent; there must be a
deliberate intention on his part by some overt acts to abandon treatment, which acts are not present here.
LABOR LAW > LaborStandards > Illegal Dismissal
ROWENA SANTOS, petitioner
vs.
INTEGRATED PHARMACEUTICAL, INC, respondent
GR No. 204620 July 11, 2016
(Second Division)
DOCTRINE: While the law provides for a just cause to dismiss an employee, the employer still has the
discretion whether it would exercise its right to terminate the employment or not. In other words, the
existence of any of the just or authorized causes enumerated in Articles 282 and 283 of the Labor Code
does not automatically result in the dismissal of the employee. The employer has to make a decision
whether it would dismiss the employee.
FACTS: Integrated Pharma is a pharmaceutical marketing and distributing company. Petitioner’s work
includes visiting doctors in different hospitals located in Makati, Taguig, Pateros and Pasay. On April 6,
2010, petitioner Santos received a memorandum from her immediate supervisor regarding her failure to
remit her collections and return the POP demonstration unit to the office on time. Subsequently, petitioner
received another memorandum dominating Termination of Employment to which Santos allegedly
committed overstating transportation expenses, attempting to coerce manager to overstate transportation
expenses, unpleasant attitude towards clients, co-workers and superiors, failure to remit collection on
time and insubordination. Petitioner thus filed a complaint for illegal dismissal, nonpayment of salary,
separation pay, and 13th month pay, with claims for moral and exemplary damages and attorney's fees.
The Labor Arbiter ruled that respondents failed to comply with the two-day notice requirement and that
they failed to establish that there was a just cause to terminate petitioner's employment. NLRC sustained
the ruling of the Labor Arbiter. On the other hand, the CA reversed the ruling of the NLRC.
ISSUE: Whether or not petitioner is illegally dismissed
HELD: NO.
Petitioner is guilty of dishonesty and serious misconduct. Based on Article 282 of the Labor Code, such
offense may merit the termination of employment. However, while the law provides for a just cause to
dismiss an employee, the employer still has the discretion whether it would exercise its right to terminate
the employment or not. In other words, the existence of any of the just or authorized cases enumerated in
Articles 282 and 283 of the Labor Code does not automatically result in the dismissal of the employee.
The employer has to make a decision whether it would dismiss the employee, impose a lighter penalty or
perhaps even condone the offenses omitted by an erring employee. In making the decision, the employer
may take into consideration the employee’s past offenses. In this case, petitioner had been forewarned
that her failure to correct her poor behavior would be visited with stiffer penalty. However, she remained
recalcitrant to her superiors’ directives and warnings. This, respondents has come to a forced conclusion
to terminate her employment.
LABOR LAW> Labor Standards > Employer-Employee Relationship
ANTONIO VALEROSO AND ALLAN LEGATONA, Petitioners,

vs.
SKYCABLE CORPORATION, Respondent.
G.R. No. 202015, July 13, 2016
(Second Divison)
DOCTRINE: Article 280 is not the yardstick for determining the existence of an employment relationship
because it merely distinguishes between two kinds of employees, i.e., regular employees and casual
employees, for purposes of determining [their rights] to certain benefits, [such as] to join or form a union,
or to security of tenure. Article 280 does not apply where the existence of an employment relationship is
in dispute
FACTS: Petitioners Valeroso and Legatona alleged that they started working on November 1, 1998 and
July 13,1998, respectively, as account executives tasked to solicit cable subscriptions for respondent.
From being direct hires of respondent, they were transferred on January 1, 2007 to Skill Plus Manpower
Services sans any agreement for their transfer. In February 2009, they were informed that their
commissions would be reduced due to the introduction of prepaid cards sold to cable subscribers
resulting in lower monthly cable subscriptions. Dismayed, they notified their manager, Marlon Pasta
(Pasta), of their intention to file a labor case with the NLRC, which they did on February 25, 2009. Pasta
then informed them that they will be dropped from the roster of its account executives, which act,
petitioners claimed, constitutes unfair labor practice. Further, petitioners claimed that they did not receive
13th month pay for 2006 and were underpaid of such benefit for the years 2007 and 2008; and that in
January 2008, petitioner Legatona signed a Release and Quitclaim in consideration of the amount of
P25,000.00 as loyalty bonus from respondent. Respondent, on the other hand, claimed that it did not
terminate the services of petitioners for there was never an employer-employee relationship to begin
with. It averred that in 1998, respondent (then Central CATV, Inc.) engaged petitioners as independent
contractors under a Sales Agency Agreement. The Labor Arbiter dismissed the Complaint since
petitioners failed to establish by substantial evidence that respondent was their employer which was
reversed by the NLRC and affirmed by the CA.
ISSUE: Whether or not there exists an employer-employee relationship between the parties
HELD: NO.
The evidence presented by petitioners did not prove their claim that they were employees of respondent.
The certifications issued by De la Cuesta are not competent evidence of employer-employee relation as
these merely certified that respondent had engaged the services of petitioners without specifying the true
nature of such engagement. These documents did not certify that petitioners were employees but were
only issued to accommodate petitioners' request for loan applications, which fact was not refuted by
petitioners. To prove the claim of an employer-employee relationship, the following should be established
by competent evidence: (1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the employer's power to control the employee with respect to the means
and methods by which the work is to be accomplished. Among the four, the most determinative factor in
ascertaining the existence of employer-employee relationship is the "right of control test." Under this
control test, the person for whom the services are performed reserves the right to control not only the end
to be achieved, but also the means by which such end is reached.
LABOR LAW> Labor Standards > Quitclaims
JUAN B. HERNANDEZ, petitioner
vs.
CROSSWORLD MARINE SERVICES, INC., MYKONOS SHIPPING CO, LTD., and ELEAZAR DIAZ,
respondents
GR No. 209098 November 20, 2016
(Second Division)
DOCTRINE: As a rule, quitclaims and waivers or releases are looked upon with disfavor and frowned
upon as contrary to public policy. They are thus ineffective to bar claims for the full measure of a worker's
legal rights, particularly when the following conditions are applicable: 1) where there is clear proof that the
waiver was wangled from cm unsuspecting or gullible person, or (2) where the terms of settlement are
unconscionable on their face.
FACTS: Petitioner Juan B, Hernandez has been working continuously for respondents Mykonos Shipping
Co., Ltd., Crossworld Marine Services, Inc., and Eleazar Diaz - Crossworld's President/Chief Executive
Officer - since November 14, 2005, under different employment contracts covering the latter's several
oceangoing vessels.
On October 7, 2008, petitioner was once more engaged by respondents to work as Chief Cook aboard
the vessel MN Nikomarin for a period of nine months. With a view to serving respondents anew under a
new contract, petitioner was made to undergo a pre-employment medical examination and he was found
to be suffering from hypertension and diabetes mellitus. He was declared fit for duty and required to take
maintenance medication. However, respondents deferred his employment on account of his state of
health. Petitioner demanded compensation by way of disability benefits and medical expenses from
respondents, but the latter refused to pay. Petitioner filed a claim for disability benefits, medical expenses,
allowances, damages, and attorney's fees against respondents before the Labor Arbiter but was
dismissed. NLRC reversed the ruling of the Labor Arbiter. Meanwhile, respondents paid petitioner the
amount of the judgment award. In return, petitioner was made to sign a Conditional Satisfaction of
Judgment, Receipt of Payment, and Affidavit - which were duly filed with the NLRC and CA. The CA
reversed the decision of the NLRC.
ISSUE: Whether or not the claim of petitioner is still valid regardless of execution of Conditional
Satisfaction of Judgment
HELD: NO.
Respondents profess that the Conditional Satisfaction of Judgment, Receipt of Payment, and Affidavit
which petitioner was made to sign were prepared in good faith and simply to comply with the execution
proceedings below and prevent garnishment of their accounts. However, this Court believes otherwise.
Hidden behind these documents appears to be a convenient ploy to deprive petitioner of all his rights to
claim indemnity from respondents under all possible causes of action and in all available fora, and
effectively for nothing in return or exchange - because in the event that the NLRC ruling is reversed, then
petitioner must return what he received, thus leaving him with the proverbial empty bag. This is
fundamentally unfair, and goes against public policy. Human life is not more expendable than corporate
capital. The survival of the petitioner and his family depends on the former's ability to find and perform
work for wages they need to secure food, shelter, clothing, and the education of his children. It may be
that in this jurisdiction, petitioner may ultimately be adjudged as not entitled to the monetary claims he
seeks, but in other fora - such as in Panama, Japan, or any other country- he may be found to be entitled
thereto, and to other indemnities as well. Yet by affixing his signature upon the Conditional Satisfaction of
Judgment, Receipt of Payment, and Affidavit, petitioner effectively surrendered all his rights and waived
all his claims and causes of action in all jurisdictions, and in exchange for nothing. Indeed, in the Affidavit,
petitioner even went so far as to certify and warrant that he will not file any other complaint or prosecute
any suit or action here or in any other country after receiving the settlement amount. For what they did,
respondents are guilty of bad faith, and should suffer the consequences of their actions. One is that their
payment of petitioner's claim should properly be treated as a voluntary settlement of his claim in full
satisfaction of the NLRC judgment - which thus rendered the petition moot and academic.
LABOR LAW > Labor Standards> Illegal Dismissal
INTERADENT ZAHNTECHNIK PHILIPPINES INC., BERNARDINO G. BANTEGUI, JR., and SONIA J.

GRANDEA, petitioners
vs.
REBECCA F. SIMBILLO, respondent
GR No. 207315 November 20, 2016
(Second Division)
DOCTRINE: For loss of trust and confidence to be a valid ground for dismissal, it must be substantial and
founded on clearly established facts. Loss of confidence must . not be used as a subterfuge for causes
which are improper, illegal or unjustified; it must be genuine, not a mere afterthought, to jw,iify earlier
action taken in bad faith.
FACTS: .On April 16, 2010 Simbillo was promoted to the position of Finance and Accounting Manager
and was also Interadent' s Treasurer upon being elected by the Board of Directors on March 31, 2010. On
July 29, 2010, petitioners served Simbillo a Memorandum9 (Notice to Explain) requiring her to submit a
written explanation and to attend an administrative hearing o:n August 2, 2010, regarding a message she
posted on her Facebook account "referring to company concerns with the Bureau of Internal Revenue
(BIR) and insulting statements against a co-worker." In the Notice to Explain, Sirr1billo was reminded that
as Treasurer, as well as Finance and Accounting Manager, she should observe the highest degree of
confidentiality in handling sensitive information. She was preventively suspended for seven days effective
July 29, 2010 to August 6, 2010. petitioners extended Simbillo's suspension up to August 25, 2010 in
view of her failure to submit a written explanation and to attend the scheduled hearing. In a reply-letter,
Simbillo reiterated her claim of constructive dismissal and that there was no need for her to answer and
attend the hearing. Simbillo filed with the Labor Arbiter a Complaint for constructive illegal dismissal, non-
payment of service incentive leave pay, 13th month pay, illegal suspension, claims for moral and
exemplary damages and attorney's fees against petitioners. The LA dismissed Simbillo’s claim affirmed
by the NLRC. On appeal, CA reversed the decision of the NLRC.
ISSUE: Whether or not respondent is illegally dismissed.
HELD: NO.
As a managerial employee, the existence of a basis for believing that Simbillo has breached the trust of
petitioners justifies her dismissal. However, to be a valid ground, loss of trust and confidence must be
based on willful breach of trust, that is, done intentionally, knowingly and purposely, without justifiable
excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently. If at all,
Simbillo can only be said to have acted "carelessly, thoughtlessly, heedlessly or inadvertently" in making
such a comment on Facebook; however, such would not amount to loss of trust and confidence as to
justify the termination of her employment. When the breach of trust or loss of confidence conjectured
upon is not borne by clearly established facts, as in this case, such dismissal on the ground of loss of
trust and confidence cannot be upheld.
LABOR LAW > Social and Welfare Legislation> Permanent Disability Benefits
DOEHLE-PHILMAN1 MANNING AGENCY INC., DOHLE (IOM) LIMITED AND CAPT. MANOLO T.
GACUTAN, Petitioners
vs.
Henry C. Haro, Respondent
GR No. 206522 April 18, 2016
(Second Division)
DOCTRINE: To be entitled to compensation and benefits, the seafarer must prove by substantial
evidence that he contracted the illness during the term of his contract and [that] such infirmity was work-
related or at the very least aggravated by the conditions of the work for which he was engaged.
FACTS: Haro, respondent boarded the vessel and assumed his duties as oiler. However, he experienced
heartache and loss of energy after hammering and lifting a 120-kilogram machine; thereafter, he was
confined at a hospital in Rotterdam where he was informed of having a hole in his heart that needed
medical attention. After his repatriation, respondent reported to Doehle-Philman which in turn referred him
to Clinico-Med. Respondent claimed that he was confined for two days in UST Hospital and that a heart
operation was recommended to him. He nevertheless admitted that he has not yet undergone any
surgery. On April 24, 2009, respondent’s personal doctor, Dr. Luminardo M. Ramos (Dr. Ramos),
declared him not fit to work. Consequently, respondent filed a Complaint for disability benefits,
reimbursement of medical expenses, moral and exemplary damages, and attorney’s fees against
petitioners. Respondent claimed that since he was declared fit to work before his deployment, this proved
that he sustained his illness while in the performance of his duties aboard the vessel; that he was unable
to work for more than 120 days; and that he lost his earning capacity to engage in a work he was skilled
to do. Thus, he insisted he is entitled to permanent and total disability benefits. Petitioners denied that
respondent has a hole in his heart. Instead, they pointed out that, Dr. Abesamis diagnosed him of “aortic
regurgitation, moderate” but declared that his condition is not work-related. The Labor Arbiter dismissed
the case for lack of merit which was affirmed by the NLRC. The CA granted the respondent’s petition for
certiorari.
ISSUE: Whether or not respondent is entitled to permanent disability benefits
RULING: NO.
The Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-
Going Vessels (POEA-SEC), particularly Section 20(B) thereof, provides that the employer is liable for
disability benefits when the seafarer suffers from a work-related injury or illness during the term of his
contract. In Jebsen Maritime, Inc. v. Ravena, the Court held that those diseases not listed as occupational
diseases may be compensated if it is shown that they have been caused or aggravated by the seafarer’s
working conditions. The Court stressed that while the POEA-SEC provides for a disputable presumption
of work-relatedness as regards those not listed as occupational diseases, this presumption does not
necessarily result in an automatic grant of disability compensation. The claimant still has the burden to
present substantial evidence or “such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion” that his work conditions caused or at least increased the risk of contracting the
illness.
In this case, considering that respondent did not suffer from any occupational disease listed under
Section 32-A of the POEA-SEC, then to be entitled to disability benefits, the respondent has the burden to
prove that his illness is work-related. Unfortunately, he failed to discharge such burden.
LABOR LAW > Labor Standards> Assumption of Jurisdiction
GUAGUA NATIONAL COLLEGES, petitioner

vs.
GUAGUA NATIONAL COLLEGES FACULTY LABOR UNION and GUAGUA NATIONAL COLLEGES
NON-TEACHING AND MAINTENANCE LABOR UNION, respondents
GR No. 204693 July 13, 2016
(Second Division)
DOCTRINE: "No strike, no lock-out" provision in the CBA "may only be invoked by an employer when the
strike is economic in nature or one which is conducted to force wage or other agreements from the
employer that are not mandated to be granted by law. It is not applicable when the strike is grounded on
unfair labor practice.
FACTS: GNC is an educational institution. On the other hand, respondents Guagua National Colleges
Faculty Labor Union (GNCFLU) and Guagua National Colleges Non-Teaching and Maintenance Labor
Union (GNCNTMLU) were the bargaining agents for GNC's faculty members and non-teaching and
maintenance personnel, respectively. Significantly, the 1994-1999 CBA has a "no-strike, no lock-out"
clause which likewise provides for mechanism for grievance resolution and voluntary arbitration. This
provision was considered carried over in the subsequent CBAs. After several failure of negotiations,
respondents filed a Notice of Strike charging GNC with bad faith bargaining, violation of its duty to
bargain, gross violations of the provisions of the CBA, and gross and blatant diminution of benefits.
Subsequent to this, GNC allegedly stopped the grant of certain benefits to its employees. In view of the
notice of strike, the NCMB called for a conciliation conference which was later set for continuation.
Respondents conducted their respective Strike Votes wherein majority voted in favor of a strike. Since the
NCMB had not yet acted upon GNC's Motion to Strike Out Notice of Strike and to Refer Dispute to
Grievance Machinery and Voluntary Arbitration Pursuant to the Collective Bargaining Agreement despite
the looming strike of respondents, GNC urged the Secretary of Labor and Employment to assume
jurisdiction over the dispute. The June 28, 2010 Order of the Secretary granted the assumption of
jurisdiction of the labor dispute and certified the same to this Commission for compulsory arbitration.
ISSUE: Whether or not the labor dispute should have been ordered submitted to voluntary arbitration by
the Secretary of Labor and Employment pursuant to the parties' CBA and not certified to the NLRC for
compulsory arbitration.
HELD: YES.
The Secretary of Labor and Employment correctly certified the subject labor dispute to the NLRC for
compulsory arbitration. Indeed, the parties through their CBA, agreed to a "no-strike, no lock-out" policy
and to resolve their disputes through grievance machinery and voluntary arbitration. Despite these,
respondents were justified in filing a notice of strike in light of the facts of this case. It is settled that a "no
strike, no lock-out" provision in the CBA "may [only] be invoked by [an] employer when the strike is
economic in nature or one which is conducted to force wage or other agreements from the employer that
are not mandated to be granted by law. It [is not applicable when the strike] is grounded on unfair labor
practice." Here, while respondents enumerated four grounds in their notice of strike, the facts of the case
reveal that what primarily impelled them to file said notice was their perception of bad faith bargaining and
violation of the duty to bargain collectively by GNC - charges which constitute unfair labor practice under
Article 248(g) of the Labor Code.
Labor Law > Labor Standards > Illegal Dismissal
MARY JUNE CELIZ, petitioner
vs.
CORD CHEMICALS INC, LEONOR SANZ AND MARIA TIANCO, respondents
GR No. 200352 July 20, 2016
(Second Division)
DOCTRINE: In cases of dismissal for breach of trust and confidence, proof beyond reasonable doubt of
an employee's misconduct is not required. It is sufficient that the employer had reasonable ground to
believe that the employee is responsible for the misconduct which renders him unworthy of the trust and
confidence demanded by his position.
FACTS: Cord Chemicals, Inc. owned and managed by private respondent Leonor Sanz. Celiz was
employed with Cord as an Assistant Accounting Manager until being promoted as Chief of Sales and
Senior Operations Manager. Celiz averred that upon the death of Francisco, Leonor’s husband,
management told her not to report to work anymore. Celiz then asked that she be allowed to resign.
Leonor acceded and told her to claim her separation pay by the end of October 2008. Celiz did return to
Cord, Inc. to tender her resignation. However, she was informed by the company counsel that she will be
dismissed from work because of her failure to account for numerous unliquidated advances. Cord, Inc.
was impelled to place her on preventive suspension. She was also asked to submit her formal
explanation, and to attend the investigation that would be conducted so she could explain her side of the
matter. Celiz replied that she could not answer the accusations hurled against her because of time
constraint, and she did not have access to her office files. Cord, Inc. then dismissed Celiz for serious
breach of trust and confidence. Consequently, Celiz sued Cord for Illegal Dismissal and Monetary
Benefits before the Labor Arbiter but was dismissed for lack of merit and was affirmed by NLRC. The CA
sustained the ruling of NLRC upon appeal.
HELD: NO.
In labor cases, issues of fact are for the labor tribunals and the CA to resolve, a5 this Court is not a trier of
facts. In the present case, since the Labor Arbiter, the NLRC, and the CA are unanimous in their findings
that petitioner was not illegally dismissed, this Court must abide by such conclusion. "Factual findings of
quasi-judicial bodies like the NLRC, if supported by substantial evidence, are accorded respect and even
finality by this Court, more so when they coincide with those of the Labor Arbiter. Such factual findings
are given more weight when the same are affirmed by the Court of Appeals." Since there is no divergence
between the findings of these three tribunals, there is no need to go over the evidence once more in order
to resolve the issues relative to petitioner's failure to liquidate her cash advances and the manner by
which she was terminated. Finally, no ill motive or bad faith may be attributed to respondents. However,
the discovery of anomalies connected with her office simply took away her privilege of receiving monetary
benefits at such exit, which, despite the unfortunate circumstances, Leonor was graciously willing to
grant. For violating the trust and confidence reposed in her, petitioner is not entitled to any benefit in
leaving Cord, Inc.
LABOR LAW > Labor Standards > Illegal Dismissal
SUSAN D. CAPILI, petitioner

vs.
PHILIPPINE NATIONAL BANK, respondent
GR No. 204750 July 11, 2016
(Second Division)
DOCTRINE: To validly dismiss on this ground of loss of trust and confidence, the employee must hold a
position of trust and confidence; and, he or she must have committed an act justifying such loss of trust of
the employer.
FACTS: Capili was the Assistant Vice President- Systems and Methods Division (AVP-SMD) of the
Philippine National-Bank. PNB President, Omar Byron Mier received information from Hyun Duk Cho
(Hyun), a Korean national, that Capili was engaged in anomalous transactions. PNB created a Fact
Finding Committee to verify the matter and later served upon Capili a Memorandum charging her of
committing: "(a) Acts which Tend to Show Questionable Moral Character, Integrity or Honesty,
Constituting Loss of Confidence and Falsification of Personnel Records or Other Bank Records, Bank's
Code of Conduct." In its Decision, PNB's Administrative Adjudication Panel (AAP) declared that Hyun's
accusation, and the charge of falsification against Capili were without basis; and that the issue on her
purported questionable integrity lost its basis relative to the Makati case that was already dismissed.
However, it stated that with respect to the Bulacan case, the decision therein would be necessary in
resolving the issue on her character. Thus, AAP provisionally dismissed the administrative complaint
against her. The AAP rendered its Decision finding Capili guilty of violating PNB General Circular No. 2-
134527 (Policy on Loss of Confidence in relation to Article 282( e) of the Labor Code) and dismissing her.
Capili filed a Complaint against PNB, and its officers for illegal dismissal; non-payment of salary, service
incentive leave, 13th month pay, retirement benefits; actual, moral and exemplary damages, attorney's
fees, among other claims. LA rendered a Decision finding PNB guilty of illegally dismissing Capili affirmed
by the NLRC. CA reversed the decision.
HELD: YES.
In turn, to constitute a valid dismissal from employment, two requirements must concur: the dismissal
must be for any of the causes under Article 295 (previously Article 282) of the Labor Code; and the
employee must be given the opportunity to be heard and defend himself or herself. One of the grounds
under Article 297 of the Labor Code is the employer's loss of trust and confidence on the employee. To
validly dismiss on this ground, the employee must hold a position of trust and confidence; and, he or she
must have committed an act justifying such loss of trust of the employer. In the same vein, the Court is
unconvinced that PNB lost its confidence on Capili. As properly pointed out by the LA, PNB in fact gave
Capili a "Very Good" rating in her work performance. Particularly, in her Performance Appraisal Report68
dated February 27, 2007, Capili was given a "Very Good" rating by PNB. During this time, PNB was well
aware of the BP 22 cases against her, and the administrative case was also then pending investigation
already.
Labor Law > Social and Welfare Legislation > Employment Compensation
JESUS B. VILLAMOR, petitioner
vs.
EMPLOYEES COMPENSATION COMMISSION (ECC) AND SOCIAL SECURITY SYSTEM (SSS),
respondents
GR No. 204422 November 21, 2016
(Second Division)
DOCTRINE: The degree of proof required to validate the concurrence of the above-mentioned conditions
under P.D. No. 626 is merely substantial evidence, that is, such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion. What the law requires is a reasonable work
connection and not direct causal relation. It is enough that the hypothesis on which the workmen's claim
is based is probable. To safeguard the worker's rights, any doubt as to the proper interpretation and
application must be resolved in his favor.
FACTS: Petitioner Villamor was employed by Valle Verde Country Club in 1978. On November 3, 2006,
he was brought to Our Lady of Lourdes Hospital, Manila, due to dizziness assonated with numbness and
weakness on his left arm and leg. His CT scan revealed that he had an "acute non-hemorrhage infarct on
the right pons/basal ganglia." On March 9, 2007, petitioner filed before respondent SSS claims for
sickness benefits under the SSS law and the EC TID benefits under the EC law for his CVD or stroke,
Infarct Hypertension. Respondent SSS Pasig Branch granted his claim for sickness benefits under the
SSS law. However, it denied his claim for EC TTD benefit on the ground that there is no causal
relationship between his illness and his working conditions. On August 18, 2011, respondent SSS Pasig
Branch endorsed petitioner's records for further evaluation to respondent SSS-Medical Operations
Department (SSS-MOD) but the latter denied the claim. Petitioner appealed the denial of his claim to
respondent Employees' Compensation Commission (ECC) to which the ECC denied. Petitioner elevated
the matter to the CA and CA affirmed the denial of petitioner’s claim.
ISSUE: Whether or not petitioner is entitled to EC TTD benefits under PD No. 626
HELD: YES.
The Amended Rules on Employees' Compensation provides that for an illness or disease to be
compensable, "(it] must be a result of occupational disease listed under A.1111ex 'A' of these Rules with
the conditions set therein satisfied, otherwise, proof must be shown that the risk of contracting the
disease is increased by the working conditions." In the case of stroke and hypertension, both are
coml'ensable since they are listed as occupational diseases under Nos. 1955 and 29, respectively, of
Annex "A" of the said rules. Taking the cue from the Baul case, the Court finds that petitioner is entitled to
compensation for his illness. Just like in Baul petitioner was diagnosed with hypertension and stroke, as
evidenced by his medical reports: Cranial CT Scan, Chest X-Ray Result, Laboratory or Blood Chemistry
Result, and Electrocardiogram Result. He was also able to show that his work and position in the union
caused him physical and mental strain as he had to deal with the demands of various types of people.
Direct evidence showing that his work and position in the union caused his illness is not necessary. As we
have consistently ruled, the test of proof in compensation proceedings is probability, and not the ultimate
degree of certainty. In fact, in claims for compensation, the strict rules of evidence need not be observed
as the primordial and paramount consideration should be the employee's welfare.
LABOR LAW> Labor Standards> Termination of employment
LEO'S RESTAURANT and BAR CAFE, MOUNTAIN SUITE BUSINESS APARTELLE, LEO Y. LUA and
AMELIA LUA, Petitioners,
vs.
LAARNE C. DENSING, Respondent
G.R. No. 208535, 19 Oct 2016
(Second Division)
DOCTRINE: To dismiss an employee on the ground of loss of trust and confidence, two requisites must
concur: (a) the concerned employee must be holding a position of trust; and, (b) the loss of trust must be
based on willful breach of trust based on clearly established facts.
FACTS: Laarne C. Densing was appointed as Administrative Officer/Human Resource Head of Leo's
Restaurant and Bar Cafe, and the Mountain Suite Business Apartelle. Respondent received
memorandum from Leo requiring her to explain the circumstances surrounding the agreement between
the Restobar and Pepsi Products Inc. (Pepsi), and the benefits she derived therefrom. Leo accused her of
having signed said contract without authority from him and of not informing him of the benefits arising
from the contract. In her explanation, respondent stated that, in the presence of Sales Manager of Pepsi,
Leo verbally authorized her to sign the contract with Pepsi on behalf of the Restobar. Respondent was
required to answer these charges: 1) she committed dishonesty when she charged to the Restobar's
account 50% of the food she ordered therefrom without approval of its Owner or Manager; 2) she violated
her duties when she did not inform Leo of the signing of the Pepsi contract; and, 3) she failed to account
for 47 soft drinks cases that Pepsi gave the Restobar. Respondent asserted charge of dishonesty was not
related to the Pepsi contract such that she opted not to answer said accusation. With regard to the
alleged missing Pepsi drinks, she affirmed that Pepsi clarified the matter already, particularly to where
these soft drinks were placed or given. On the ground of loss of trust and confidence, Leo terminated
respondent.
ISSUE: Whether or not respondent was validly dismissed on the ground of loss of trust and confidence.
HELD: NO.
To dismiss an employee on the ground of loss of trust and confidence, two requisites must concur: (a) the
concerned employee must be holding a position of trust; and, (b) the loss of trust must be based on willful
breach of trust based on clearly established facts. As far as the first requisite is concerned, respondent is
shown to occupy a position of trust as her managerial work was directly related to management policies,
and generally required exercise of discretion and independent judgment. The second requirement is
wanting since petitioners failed to prove that their loss of trust on respondent was founded on clearly
established facts.
Loss of trust and confidence as a ground for dismissal is never intended for abuse by reason of its
subjective nature. It must be pursuant to a breach done willfully, knowingly and purposely without any
valid excuse. It must rest on substantial grounds and not on mere suspicion, whims, or caprices of the
employer. Therefore, having entered the Pepsi contract is not sufficient basis for petitioners to lose their
trust in respondent. Leo authorized her to enter said agreement. Even assuming that there was no explicit
order for her to do so, respondent still acted within her authority as in-charge of all operation,
administrative and functional matters of the establishments. there was no malice or any fraudulent intent
on the part of respondent when she signed the Pepsi contract. There is likewise no evidence that she
personally benefited therefrom. Loss of trust and confidence must stem from dishonest, deceitful or
fraudulent acts. In the absence of such malicious intent or fraud on the part of respondent, she committed
no willful breach of trust against her employer. Petitioners' loss of trust and confidence was merely
simulated. It was arbitrarily asserted despite sufficient evidence to the contrary
LABOR LAW>Social and Welfare Legislation>Social Security
PICOP RESOURCES, INC., Petitioner

vs.
SOCIAL SECURITY COMMISSION and MATEO A. BELIZAR, Respondents
G.R. No. 206936, August 3, 2016
(Second Division)
DOCTRINE: The clear intent of the law is to grant Condonation only to employers with delinquent
contributions or pending cases for their delinquencies and who pay their delinquencies within the six (6)
month period set by the law.
FACTS: Respondent Belizar filed a case with the Social Security Commission (SSC) and in his
correspondent this Petition to establish his actual period of employment with the Petitioner and compel
the latter to remit unpaid SSS premium contributions in order that he may collect his SSS retirement
benefits.
Upon due consideration, the Commission is now thoroughly convinced that the petitioner was
continuously employed as a preventive maintenance mechanic by the Bislig Bay Lumber Co., Inc./PICOP
from 1966 to 1978.
The respondent in his answer said that, the petitioner appears in its records to have been first employed
in 1966. While there is testimonial evidence to prove that the petitioner worked with the respondent until
1978, it cannot be determined exactly when his employment ceased in that year. Then the SSC ruled in
favour of the respondent.
Petitioner then filed an MR which the Commission denied it. And file a Petition for Review filed with the
CA. Petitioner sought reversal of the above SSC dispositions, arguing that the latter committed grave
abuse of discretion in declaring that Belizar was employed by it until 1978, and in giving more weight to
Belizar’s testimonial evidence instead of its documentary evidence. Hence, this petition.
ISSUE: Whether or not petitioner can avail of the provisions of RA 9903.
HELD: NO.
The clear intent of the law is to grant condonation only to employers with delinquent contributions or
pending cases for their delinquencies and who pay their delinquencies within the six (6)-month period set
by the law. It was never the intention of RA 9903 to give the employer the option of remitting and settling
only some of its delinquencies, and not all; of paying the lowest outstanding delinquencies and ignoring
the most burdensome; of choosing the course of action most beneficial to it, while leaving its employees
and government to enjoy the least desirable outcome. If this were so, then the purpose of the law would
be defeated.
To repeat, the clear implication of the February 28, 2013 SSS Certification is that petitioner did not settle
its delinquencies in full. Well into the present proceedings, petitioner has failed to disprove such fact. For
this reason, it cannot avail of the benefits under RA 9903. Laws granting condonation constitute an act of
benevolence on the government’s part, similar to tax amnesty laws; their terms are strictly construed
against the applicants, If petitioner desires to be covered under RA 9903, it must show that it is qualified
to avail of its provisions. This it failed to do, and for this reason, it may not escape payment of its
adjudged liabilities underthe SSC's February 4, 2009 Resolution.
LABOR LAW> Labor Standards> Termination of Employment
JULIETA B. STA. ANA, Petitioner,

vs.
MANILA JOCKEY CLUB, INC., Respondent
G.R. No. 208459, February 15, 2017
(First Division)
DOCTRINE: “It is a cardinal rule that loss of trust and confidence should be genuine, and not simulated;
it must arise from dishonest or deceitful conduct, and must not be arbitrarily asserted in the face of
overwhelming contrary evidence. While proof beyond reasonable doubt is not required, loss of trust must
have some basis or such reasonable ground for one to believe that the employee committed the
infraction, and the latter’s participation makes him or her totally unworthy of the trust demanded by the
position.”
FACTS: Manila Jockey Club, Inc. hired Julieta B. Sta. Ana as outlet teller of its off-track betting (OTB)
station in Tayuman, Manila. a Memorandum stating that its Treasury Department was discovered to have
been illegally appropriating funds and lending it out to the employees of MJCI. As a result, MTCI required
its officers and employees to report any loan obtained from said department or any of its personnel. MJCI,
then formally charged Sta. Ana with the act of dishonesty and other fraudulent acts. Sta. Ana denied
committing any offense. SDC found that Sta. Ana extended loans to the employees of MJCI during office
hours using its personnel as messenger. SDC found Sta. Ana guilty of conspiring to defraud, illegally take
funds, and cause irreparable damage to MJCI as such, MJCI lost its trust on her. It also declared that
even granting that there was no conspiracy, Sta. Ana, nonetheless, committed gross inexcusable
negligence for failure to perform her duties and protect the interest of MJCI. Thereafter, MJCI terminated
Sta. Ana.
ISSUE: Whether or not Sta. Ana was validly dismissed on the ground of loss of trust and confidence.
HELD: NO.
To legally dismiss an employee on the ground of loss of trust, the employer must establish that a) the
employee occupied a position of trust and confidence or has been routinely charged with the care and
custody of the employer's money or property; b) employee committed a willful breach of trust based on
clearly established facts; and, c) such loss of trust relates to the employee's performance of duties. In
fine, must be actual breach of duty on the part of the employee to justify his or her dismissal on the
ground of loss of trust and confidence. The Court determined that the position of a selling teller is a
position of trust and confidence since it requires the handling and custody of tickets issued and bets
made in the teller's station. Therefore, Sta. Ana undoubtedly occupied a position of trust and confidence.
However, while Sta. Ana occupied such position of trust and MJCI afforded her procedural due her
dismissal is still unwarranted because MJCI failed to discharge its burden of proving that she willfully
breached its trust, and such loss of trust relates to Sta. Ana's performance of duties. To accuse Sta. Ana
of having used MJCI's personnel in her business during office hours remains a bare allegation without
corresponding proof.
A cardinal rule that loss of trust and confidence should be genuine, and not simulated; it must from
dishonest or deceitful conduct, and must not be arbitrarily asserted in the face of overwhelming contrary
evidence. While proof beyond reasonable doubt is not required, loss of trust must have some basis or
such reasonable ground for one to believe that the employee committed the infraction, and the latter's
participation makes him or her totally unworthy of the trust demanded by the position to prove that Sta.
Ana committed willful breach of its trust. Particularly, it failed to establish that Sta. Ana used its employee
for her personal business during office hours, and used its money; without authority, to lend money to
another. Hence, to dismiss her on the ground of loss of trust and confidence is unwarranted.
LABOR LAW> Labor Relations> Perfection of Appeal
TURKS SHAWARMA COMPANY/GEM ZENAROSA, Petitioner,

vs.
FELICIANO Z. PAJARON and LARRY A. CARBONILLA, Respondent
G.R. No. 207156, January 16, 2017
(First Division)
DOCTRINE: The posting of cash or surety bond is therefore mandatory and jurisdictional. This
indispensable requisite for the perfection of an appeal ''is to assure the workers that if they finally prevail
in the case, the monetary award will be given to them upon the dismissal of the employer's appeal and is
further meant to discourage employers from using the appeal to delay or evade payment of their
obligations to the employees.
FACTS: Turks Shawarma Company hired Feliciano Z. Pajaron as service crew and Larry A. Carbonilla as
head crew. Pajaron and Carbonilla claimed that there was no just or authorized caused for their dismissal
and failed to comply with the requirements of due process. The Labor Arbiter held that Pajaron and
Carbonilla were constructively and illegally dismissed. They were also awarded certain sum of money as
backwages, separation pay in lieu of reinstatement, holiday pay, service incentive leave pay and
13th month pay. Zeñarosa himself filed a Notice of Appeal with Memorandum and Motion to Reduce
Bond with the NLRC. Zeñarosa posted a partial cash bond in the amount of ₱15,000.00, maintaining that
he cannot afford to post the full amount of the award. NLRC denied the motion to reduce bond on the
ground that financial difficulties may not be invoked as a valid ground to reduce bond. Also, the bond
posted is not reasonable in relation to the award which totaled to 197,936.27.
ISSUE: Whether or not there was substantial compliance with the Rules on perfection of appeal.
RULING: NO.
Petitioners’ motion to reduce bond was not predicated on meritorious and reasonable grounds and the
amount tendered is not reasonable in relation to the award. The Court has set a provisional percentage of
10% of the monetary award (exclusive of damages and attorney's fees) as reasonable amount of bond
that an appellant should post pending resolution by the NLRC of a motion for a bond's reduction. Only
after the posting of this required percentage shall an appellant's period to perfect an appeal be
suspended. The reduction of the bond is not a matter of right on the part of the movant but lies within the
sound discretion of the NLRC.
Under Section 6 of Rule VI of the 2005 NLRC Revised Rules of Procedure, the reduction of the appeal
bond is allowed, subject to the following conditions: (1) the motion to reduce the bond shall be based on
meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the
appellant. Compliance with these two conditions will stop the running of the period to perfect an appeal.
The posting of cash or surety bond is mandatory and jurisdictional; failure to comply with this requirement
renders the decision of the Labor Arbiter final and executory. The NLRC exercises full discretion in
resolving a motion for the reduction of bond in accordance with the standards of meritorious grounds and
reasonable amount.
LABOR LAW> Social and Welfare Legislation> Disability Benefits
TSM SHIPPING PHILS., INC. and/or DAMPSKIBSSELSKABET NORDER A/S and/or CAPT.
CASTILLO, Petitioner,
vs.
LOUIE L. PATIÑO, Respondent
G.R. No. 210289, March 20, 2017
(First Division)
DOCTRINE: Disability assessment issued by the company designated physician deserves more weight
than respondent’s own doctor. rules that disability schedule in POEA Contract should be seriously
observed.
FACTS: TSM employed Louie L. Patiño for a period of six months as General Purpose 2/Ordinary
Seaman for the vessel Nord Nightingale. Respondent injured his right hand while working on board the
vessel, and he was thereafter repatriated. After extensive medical treatment, the company- designated
physician, rendered an interim assessment of respondent's disability at Grade 10, or loss of grasping
power for small objects. The respondent filed a complaint with the NLRC to claim total and permanent
disability benefits. The respondent consulted Dr. Nicanor Escutin, who assessed him to have permanent
disability unfit for sea duty. The Labor Arbiter ruled in favor of the respondent based on the findings of Dr.
Escutin and observed that the respondent is indeed suffering from a total and permanent disability since
his rehabilitation took five months or more than 120 days and there was no offer on the part of the
petitioners to rehire him. The NLRC agreed with the decision of the LA. The CA agreed with the findings
of both the NLRC and LA that respondent is entitled to a Grade 1 or total permanent disability benefit
under the POEA-SEC .
ISSUE: Whether or not the mere lapse of the 120-day period does automatically vest an award of full
disability benefits and that the assessment of the company designated physician is controlling in
measuring the degree of the seafarer's disability.
HELD: NO.
The respondent is not entitled to total and permanent disability compensation. It was only 107 days since
repatriation, respondent filed a complaint tor total and permanent disability benefits. During this time, he
was considered under temporary total disability inasmuch as the 120/240-day period had not yet lapsed.
If the 120 days initial period is exceeded and no such declaration is made because the seafarer requires
further medical attention, then the temporary total disability period may be extended up to a maximum of
240 days, subject to the right of the employer to declare within this period that a permanent partial or total
disability already exists.
The POEA-Standard Employment Contract (SEC) clearly provides that when a seafarer sustains a work-
related illness or injury while on board the vessel, his fitness or unfitness for work shall be determined by
the company-designated physician. However, if the doctor appointed by the seafarer makes a finding
contrary to that of the assessment of the company-designated physician, a third doctor may be agreed
jointly between the employer and the seafarer and the latter's decision shall be final and binding on both
of them. The Court has held that non-observance of the requirement to have the conflicting assessments
determined by a third doctor would mean that the assessment of the company-designated physician
prevails.
LABOR LAW> Labor Relations> Labor Organization
ASIAN INSTITUTE OF MANAGEMENT, Petitioner

vs.
ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION, Respondent.
G.R. No. 207971, January 23, 2017
(First Division)
DOCTRINE: “In case of alleged inclusion of disqualified employees in a union, the proper procedure for
an employer is to directly file a petition for cancellation of the union's certificate of registration due to
misrepresentation, false statement or fraud under the circumstances enumerated in Article 239 of the
Labor Code, as amended.”
FACTS: Asian Institute of Management opposed the petition for certification election filed by the Asian
Institute of Management Faculty Association on the grounds of misrepresentation in registration and that
respondent is composed of managerial employees who are prohibited from organizing as a union. Med-
Arbiter issued an order denying the petition for certification election on the ground that AIM's faculty
members are managerial employees. The respondent appealed before the Secretary of the Department
of Labor and Employment, who reversed the decision of the med-arbiter. The petitioners question the
BLR's decision before the CA, the CA affirmed the decision of the BLR on the ground that the AIM did not
allege any specific act of fraud or misrepresentation committed by the AFA.
ISSUE: Whether not the CA erred in affirming the dispositions of the BLR and thus validating the
respondent's certificate of registration notwithstanding the fact that its members are all managerial
employees who are disqualified from joining, assisting, or forming a labor organization.
HELD: YES.
Petitioner was correct in filing a petition for cancellation of respondent's certificate of registration.
Petitioner's sole ground for seeking cancellation of respondent's certificate of registration - that its
members are managerial employees and for this reason, its registration is thus a patent nullity for being
an absolute violation of Article 245 of the Labor Code which declares that managerial employees are
ineligible to join any labor organization --- is, in a sense, an accusation that respondent is guilty of
misrepresentation for registering under the claim that its members are not managerial employees.
Court declared that in case of alleged inclusion of disqualified employees in a union, the proper procedure
for an employer like petitioner is to directly file a petition for cancellation of the union's certificate of
registration due to misrepresentation, false statement or fraud under the circumstances enumerated in
Article 239 of the Labor Code, as amended.
LABOR LAW> Labor Standards> Four-fold Test> Employer-Employee Relationship
JACK C. VALENCLA, Petitioner

Vs.
CLASSIQUE VINYL PRODUCTS CORPORATION, JOHNNY CHANG (OWNER) AND/OR CANTINGAS
MANPOWER SERVICES, Respondents.
G.R. No. 206390, January 30, 2017
(First Division)
DOCTRINE: “The burden to prove the elements of an employer-employee relationship, viz.: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4)
the power of control, lies upon the employee.”
FACTS: Valencia filed with the Labor Arbiter a Complaint for failure to comply with the statutory benefits
provided under the Labor Code and for illegal dismissal against respondents Classique Vinyl Products
Corporation and its owner Johnny Chang and/or respondent Cantingas Manpower Services
(CMS). Valencia alleged that by operation of law, he had already attained the status of a regular
employee of his true employer, Classique Vinyl, since according to him, CMS is a mere labor only
contractor. Valencia, therefore, argued that Classique Vinyl should be held guilty of illegal dismissal
for failing to comply with the twin-notice requirement when it dismissed him from the service and be made
to pay for his monetary claims. Valencia alleged that by operation of law, he had already attained the
status of a regular employee of his true employer, Classique Vinyl, since according to him, CMS is a mere
labor only contractor. The Labor Arbiter ruled that Valencia was not illegally dismissed because there is
no substantial evidence to support his claim. Valencia appealed before the NLRC, which held that there is
no basis for Valencia to hold Classique Vinyl liable for his alleged illegal dismissal as well as for his
money claims because applying the four-fold test he is an employee of CMS deployed to Classique
Vinyl. The CA affirmed the decision of the Labor Arbiter and the NLRC.
ISSUE: Whether there exists an employer- employee relationship between Classique Vinyl and Valencia.
HELD: NO.
It is an oft-repeated rule that in labor cases, as in other administrative and quasi-judicial proceedings, 'the
quantum of proof necessary is substantial evidence, or such amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.' 'The burden of proof rests upon the
party who asserts the affirmative of an issue'." Element of an employer employee relationship, viz.: (l) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4)
the power of control, lies upon Valencia. Valencia failed to present competent evidence, documentary or
otherwise, to support his claimed employer-employee relationship between him and Classique Vinyl.
In labor-only contracting, the statute creates an employer-employee relationship for a comprehensive

purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the
principal employer and the latter is responsible to the employees of the labor-only contractor as if such
employees had been directly employed by the principal employer. The principal employer therefore
becomes solidarity liable with the labor-only contractor for all the rightful claims of the employees. The
facts of this case, however, failed to establish that there is any circumvention of labor laws as to call for
the creation by the statute of an employer-employee relationship between Classique Vinyl and Valencia.
In fact, even as against CMS, Valencia's money claims has been debunked by the labor tribunals and the
CA. Again, the Court is not inclined to disturb the same.
LABOR LAW> Labor Standards> illegal Dismissal
RUTCHER T. DAGASDAS, Petitioner
vs.
GRAND PLACEMENT AND GENERAL SERVICES CORPORATION, Respondent
G.R. No. 205727, January 18, 2017
(First Division)
DOCTRINE: A contract allowing employer to terminate employees without cause is violative of the right to
security of tenure. A valid dismissal requires substantive and procedural due process.
FACTS: GPGS, for and on behalf of ITM, employed Dagasdas as Network Technician. Dagasdas was
made to sign a POEA-approved contract with GPGS, on behalf of ITM; and, upon arrival in Saudi Arabia,
ITM made him sign a new employment contract. Upon sometime, ITM gave him a termination notice and
dismissed pursuant to clause 17.4.3 of his contract, which provided that ITM reserved the right to
terminate any employee within the three-month probationary period without need of any notice to the
employee. Dagasdas signed a Statement of Quitclaim with Final Settlement stating that ITM paid him all
the salaries and benefits for his services. Dagasdas claimed that he was illegally dismissed and argued
that even he was engaged as a project employee, he was entitled to security of tenure for the duration of
his contract, and the cause is merely invented to terminate him. The LA dismissed the case on the ground
that Dagasdas signed his new employment contract in Saudi Arabia, he accepted its stipulations,
including the fact that he had to undergo probationary status. On appeal, NLRC ruled that Dagasdas was
illegally dismissed. The CA hold that the NLRC committed grave abused of discretion when they ruled for
Dagasdag. prior to his deployment and while still in the Philippines,
ISSUE: Whether or not Dagasdas was validly dismissed from work.
HELD: NO.
Dagasdas' new contract is in clear violation of his right to security of tenure. Security of tenure remains
even if employees, particularly the overseas Filipino workers (OFW), work in a different jurisdiction. Our
laws generally apply even to employment contracts of OFWs as our Constitution explicitly provides that
the State shall afford full protection to labor, whether local or overseas. To allow employers to reserve a
right to terminate employees without cause is violative of this guarantee of security of tenure.
The new contract was not shown to have been processed through the POEA. Under our Labor Code,
employers hiring OFWs may only do so through entities authorized by the Secretary of the Department of
Labor and Employment. Unless the employment contract of an OFW is processed through the POEA, the
same does not bind the concerned OFW because if the contract is not reviewed by the POEA, certainly
the State has no means of determining the suitability of foreign laws to our overseas workers.
As regards a probationary employee, his or her dismissal may be allowed only if there is just cause or
such reason to conclude that the employee fails to qualify as regular employee pursuant to reasonable
standards made known to the employee at the time of engagement. A valid dismissal requires
substantive and procedural due process. As regards the latter, the employer must give the concerned
employee at least two notices before his or her termination. Specifically, the employer must inform the
employee of the cause or causes for his or her termination, and thereafter, the employer's decision to
dismiss him. Aside from the notice requirement, the employee must be accorded the opportunity to be
heard.
Generally, the employee's waiver or quitclaim cannot prevent the employee from demanding benefits to
which he or she is entitled, and from filing an illegal dismissal case. This is because waiver or quitclaim is
looked upon with disfavor, and is frowned upon for being contrary to public policy. Unless it can be
established that the person executing the waiver voluntarily did so, with full understanding of its contents,
and with reasonable and credible consideration, the same is not a valid and binding undertaking. GPGS
and/or ITM failed to show that Dagasdas indeed voluntarily waived his claims against the employer.
LABOR LAW> > Labor Standards > Kinds of employee
HERMA SHIPYARD, INC, and MR. HERMINIO ESGUERRA, Petitioner
vs.
DANILO OLIVEROS, et al., Respondents
G.R. No. 208936, April 17, 2017
(First Division)
DOCTRINE: The principal test in determining whether particular employees were engaged as project-
based employees, as distinguished from regular employees, is whether they were assigned to carry out a
specific project or undertaking, the duration and scope of which was specified at, and made known to
them, at the time of their engagement.
FACTS: The respondents were the employees of Herma Shipyard. The respondents filed a complaint for
illegal dismissal and regularization on the ground that they are continuously performing tasks usually
necessary and desirable in its business. On various dates, petitioners dismissed them from employment.
Herma Shipyard argued that the respondents were its project-based employees in its shipbuilding
projects. Both the LA and NLRC held that respondents were project-based employees and their service
were validly terminated. The CA ruled that the respondents have become regular employees because
they were performing tasks necessary and desirable to the business of Henna Shipyard and were
repeatedly rehired
ISSUE: Whether or not the petitioners were project-based employees?
HELD: YES.
The records of this case reveal that for each and every project respondents were hired. They were
adequately informed of their employment status as project-based employees at least at the time they
signed their employment contracts. They were fully apprised of the nature and scope of their work
whenever they affixed their signature to their employment contract. Their contracts of employment (mostly
written in the vernacular) provide in no uncertain terms that they were hired as project-based employees
whose services are coterminous with the completion date thereof. The Court upheld the project
employment contracts which were knowingly and voluntarily signed by the employees for want of proof
that the employers employed force, intimidation, or fraudulently manipulated them into signing the same.
By voluntarily entering into the aforementioned project employment contracts, respondents are deemed to
have understood that their employment is coterminous with the particular project indicated therein
A project employee under Article 280 (now Article 294) of the Labor Code, as amended, is one whose
employment has been fixed for a specific project or undertaking, the completion or termination of which
has been determined at the time of the engagement of the employee. The services of project-based
employees are co-terminus with the project and may be terminated upon the end or completion of the
project or a phase thereof for which they were hired. The principal test in determining whether particular
employees were engaged as project-based employees, as distinguished from regular employees, is
whether they were assigned to carry out a specific project or undertaking, the duration and scope of
which was specified at, and made known to them, at the time of their engagement.
It is settled, however, that project-based employees may or may not be performing tasks usually
necessary or desirable in the usual business or trade of the employer. The fact that the job is usually
necessary or desirable in the business operation of the employer does not automatically imply regular
employment; neither does it impair the validity of the project employment contract stipulating a fixed
duration of employment.
The repeated and successive rehiring of respondents as project-based employees does not also, by and
of itself: qualify them as regular employees. Length of service is not the controlling determinant of the
employment tenure of a project employee.
LABOR LAW> Labor Standards>Retirement Benefit
EFREN M. HERRERA and ESTHER C. GALVEZ, et al., Petitioner,

vs.
NATIONAL POWER CORPORATION, THE DEPARTMENT OF BUDGET AND MANAGEMENT and
THE OFFICE OF THE SOLICITOR GENERAL, Respondent.
G.R. No. 166570, December 18, 2009
(Second Division)
DOCTRINE: Absent explicit statutory authority, the Court cannot sustain the grant of separation pay and
retirement benefits from one single act of involuntary separation from the service, lest there be duplication
of purpose and depletion of government resources.
FACTS: RA No. 9136 was enacted to provide framework for the restructuring of the electric power
industry, including the privatization of National Power Corporation’s (NPC) assets and liabilities. As a
result, NPC employees were separated from the service. Electric Power Industry Reform Act of 2001
(EPIRA) was also enacted to provide for a separation package. All NPC permanent employees opted for
and were paid the corresponding separation pay equivalent to one and a half months salary per year of
service. The NPC questioned the grant of retirement benefits to displaced employees in addition to
separation pay was inconsistent with the constitutional proscription on the grant of a double gratuity. The
lower court decided that employees who received the separation benefit under RA No. 9136 are no
longer entitled to retirement benefits.
ISSUE: Whether or not NPC Employees who were separated from the service because of the
reorganization of the electric power industry and who received their separation pay under RA No. 9136
are still entitled to receive retirement benefits under CA No. 186, as amended.
HELD: NO.
The CSC has previously ruled that employees similarly situated to petitioners herein were not entitled to
both separation pay and retirement benefits; instead, the concerned employee must either avail of the
separation benefit or opt to retire if qualified under existing laws. The court found that in the absence of
express provisions to the contrary, gratuity laws should be construed against the grant of double
compensation.
Section 8 of Article IX(B) of the Constitution provides that [n]o elective or appointive public officer or
employee shall receive additional, double, or indirect compensation, unless specifically authorized by
law. In prior decisions, we have ruled that there must be a clear and unequivocal statutory provision to
justify the grant of both separation pay and retirement benefits to an employee. Here, absent an express
provision of law, the grant of both separation and retirement benefits would amount to double
compensation from one single act of separation from employment.
Absent an express provision of law to the contrary, separation due to reorganization gives rise to two
possible scenarios: first, when the separated employee is not yet entitled to retirement benefits, second,
when the employee is qualified to retire. In the first case, the employees separation pay shall be
computed based on the period of service rendered in the government prior to the reorganization. In the
second case, where an employee is qualified to retire, he or she may opt to claim separation or retirement
benefits.
LABOR LAW> Labor Standards> Illegal Dismissal
ARSENIO S. QUIAMBAO, Petitioner,

vs.
MANILA ELECTRIC COMPANY, Respondent.
G.R. No. 171023, December 18, 2009
(Second Division)
DOCTRINE: Employees found guilty of habitual absenteeism and tardiness not entitled to severance pay.
Labor adjudicatory officials and the CA must demur the award of separation pay based on social justice
when an employee’s dismissal is based on serious misconduct or willful disobedience; gross and habitual
neglect of duty; fraud or willful breach of trust; or commission of a crime against the person of the
employer or his immediate family.
FACTS: Arsenio Quiambao was employed as branch teller by respondent Manila Electric Company. It
appears from his employment records that the petitioner has repeatedly violated the Company Code of
Employee Discipline and has exhibited poor performance in his duty. A Notice of Investigation was issued
to the petitioner. However, despite receipt of such notice, petitioner did not participate in the investigation.
The petitioner was terminated from employment due to excessive, unauthorized, and unexcused
absences, which constitute (i) abandonment of work under the provisions of the Company Code of
Employee Discipline (ii) and gross and habitual neglect of duty under Article 282 of the Labor Code of the
Philippines. The petioner filed a complaint before the NLRC assailing the legality of his dismissal. The
Labor Arbiter, the NLRC and the Court of Appeals found petitioner guilty of gross and habitual neglect of
duty.
ISSUE: Whether or not a validly dismissed employee may be entitled to separation pay.
HELD: NO.
Petitioner’s unauthorized absences as well as tardiness are habitual despite having been penalized for
past infractions. The ground for petitioner’s dismissal is gross and habitual neglect of duty, still, he is not
entitled to severance pay.
A series of irregularities when put together may constitute serious misconduct. Gross neglect of duty
becomes serious in character due to frequency of instances. Serious misconduct is said to be a
transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful
in character, and indicative of wrongful intent and not mere error of judgment. Oddly, petitioner never
advanced any valid reason to justify his absences. Petitioner’s intentional and willful violation of company
rules shows his utter disregard of his work and his employer’s interest. Labor adjudicatory officials and
the CA must demur the award of separation pay based on social justice when an employee’s dismissal is
based on serious misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful
breach of trust; or commission of a crime against the person of the employer or his immediate family -
grounds under Art. 282 of the Labor Code that sanction dismissals of employees.
Labor Law > Labor Standards > Illegal Dismissal
JIMMY ARENO, JR., petitioner

vs.
SKYCABLE PCC-BAGUIO, respondent
G.R. No. 180302 February 5, 2010
(Second Division)
DOCTRINE: It is axiomatic that appropriate disciplinary sanction is within the purview of management
imposition. What should not be overlooked is the prerogative of an employer company to prescribe
reasonable rules and regulations necessary for the proper conduct of its business and to provide certain
disciplinary measures in order to implement said rules to assure that the same would be complied with.
FACTS: Petitioner was employed as a cable technician by respondent Skycable PCC-Baguio. An

accounting clerk of the respondent, sent to the human resource manager a letter-complaint against
petitioner alleging that on two separate occasions, the latter spread false rumors about her. Soriano
averred that petitioner’s unscrupulous behavior constituted serious and grave offense in violation of the
company’s Code of Discipline. On the same day, respondent issued a Memorandum requiring petitioner
to submit an explanation within 76 hours from notice thereof to which petitioner acceded denying all the
allegations. An administrative investigation was accordingly conducted which found petitioner guilty of
having made malicious statements against Soriano. Petitioner was suspended for three days without pay.
The Memo was allegedly served but petitioner refused to sign it. Notwithstanding the suspension order,
however, petitioner still reported for work. By reason thereof, respondent sent petitioner a letter
denominated as 1st Notice of Termination requiring him to explain in writing why he should not be
terminated for insubordination. Petitioner again wrote to respondent, this time requesting for further
investigation on his alleged act of spreading rumors against Soriano in order for him to confront his
accuser and present his witnesses with the assistance of counsel. Respondent denied the request
reiterating that there has been substantial compliance with due process and that a reinvestigation is moot
because the suspension was already served. Through a Final Notice of Termination, petitioner was
dismissed from service on the ground of insubordination or willful disobedience in complying with the
suspension order. Petitioner filed a complaint before the Labor Arbiter against respondent assailing the
legality of his suspension and eventual dismissal but was dismissed and affirmed by the NLRC and the
CA.
ISSUE: Whether or not petitioner was illegally dismissed
HELD: NO.
As a just cause for dismissal of an employee under Article 282 of the Labor Code, willful disobedience of
the employers lawful orders requires the concurrence of two elements: (1) the employees assailed
conduct must have been willful, i.e., characterized by a wrongful and perverse attitude; and (2) the order
violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties
which he had been engaged to discharge. Both requisites are present in the instant case. It is noteworthy
that upon receipt of the notice of suspension, petitioner did not question such order at the first
instance. He immediately defied the order by reporting on the first day of his suspension. Deliberate
disregard or disobedience of rules by the employee cannot be countenanced. It may encourage him to do
even worse and will render a mockery of the rules of discipline that employees are required to observe.
Petitioner was served the first notice of termination and was given time to submit his written
explanation. A hearing was conducted wherein both parties with their respective counsels were
present. After finding cause for petitioner’s termination, a final notice apprising him of the decision to
terminate his employment was served. All things considered, respondent validly dismissed petitioner for
cause after complying with the procedural requirements of the law.
LABOR LAW> Labor Relations> Jurisdiction of Labor Secretary
TIGER CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner

vs.
REYNALDO ABAY,et al., Respondent
G.R. No. 164141, February 26, 2010
(Second Division)
DOCTRINE: The general rule is that any decision rendered without jurisdiction is a total nullity and may
be struck down at any time, the party that asserts it must be in good faith and not evidently availing
thereof simply to thwart the execution of an award that has long become final and executory.
FACTS: Reynaldo Abay and fifty-nine others filed a complaint before the Regional Office of DOLE. An
inspection was conducted by DOLE officials at the premises of Tiger Construction and Development
Corporation (TCDC). Several labor standard violations were noted, such as deficiencies in record
keeping, non-compliance with various wage orders, non-payment of holiday pay, and underpayment of
13th month pay. Director of Regional Office No. V, Ma. Glenda A. Manalo (Director Manalo) issued an
order directing the case to NLRC. The DOLE officials conducted another investigation of petitioners
premises following the issued order by the Secretary of Labor, and an apparent reversal of Director
Manalo’s endorsement. Director Manalo issued an Order directing TCDC to pay its employees due to
violation of the Labor Standards. TCDC failed to interpose an appeal within the prescribed period, which
rendered the decision of Director Manalo as final and executory.
ISSUE: Whether or not petitioner can still assail the Order of Director Manalo allegedly on the ground of
lack of jurisdiction, after said Order has attained finality and is already in the execution stage.
HELD: NO.
The petitioner failed to appeal within the period prescribed by law. It likewise admits that the case was
already in the execution process when it resorted to a belated appeal to the DOLE Secretary. While it is
true that orders issued without jurisdiction are considered null and void and, as a general rule, may be
assailed at any time, the fact of the matter is that in this case, Director Manalo acted within her
jurisdiction. Director Manalos initial endorsement of the case to the NLRC, on the mistaken opinion that
the claim was within the latters jurisdiction, did not oust or deprive her of jurisdiction over the case. She
therefore retained the jurisdiction to decide the case when it was eventually returned to her office by the
DOLE Secretary.
Article 128 (b) of the Labor Code, as amended by Republic Act (RA) No. 7730, the DOLE Secretary and
her representatives, the regional directors, have jurisdiction over labor standards violations based on
findings made in the course of inspection of an employer’s premises. Jurisdiction or authority to try a certain
case is conferred by law and not by the interested parties, much less by one of them, and should be exercised
precisely by the person in authority or body in whose hands it has been placed by the law.
GERARDO A. CARIQUE, Petitioner,

vs.
PHILIPPINE SCOUT VETERANS SECURITY and INVESTIGATION AGENCY, INC., and/or RICARDO BONA
AND SEVERO** SANTIAGO, Respondents.
G.R. No. 197484, September 16, 2015
(Second Division)
DOCTRINE: The implementation of the rotation policy by respondent agency is within the ambit of
management prerogative. The employer has the inherent right to regulate all aspects of employment,
according to his own discretion and judgment, including the right to transfer an employee as long as the
transfer is not unreasonable, inconvenient, prejudicial and does not involve a demotion in rank or a
diminution of the employee's salaries, benefits, and other privileges.
FACTS: Gerardo A. Carique was hired as security guard by the respondent agency. He was thereafter
assigned/posted to respondent agency’s several clients. The respondent was relieved from his post at the
National Bookstore and wasss replaced by other Security Guard pursuant to a rotation policy being
implement by respondent agency. The petitioner filed a complaint for illegal dismissal before the Labor
Arbiter. LA decided that the petitioner was illegally dismissed on the ground that the respondents
repeatedly denied petitioner’s demands/request. NLRC reversed the decision of the LA on the ground
that evidence proves that the petitioner refused to accept his new assignment, which thereafter affirmed
by the CA.
ISSUE: Whether or not petitioner was illegally dismissed.
HELD: NO.
Court is not unmindful of the rule that the employer has the burden of proving that the employee’s
termination was for a valid or authorized cause. However, before the employer is tasked to discharge this
burden, it is incumbent upon the employee to prove by substantial evidence the fact that he was indeed
illegally dismissed from employment. Petitioner anchored his claims on unfounded and unproven
allegations. No positive or direct evidence was adduced to show that he was indeed illegally dismissed
from employment, either factually or constructively. Illegal dismissal must be established by positive and
overt acts clearly indicative of a manifest intention to dismiss. This critical affirmative fact must be proved
by the party alleging the same with substantial evidence as required by the nature of this case. Mere
allegation is neither proof nor evidence.
Neither may petitioner claim that the new assignments offered to him were "reliever" positions that were
irregular in nature as those new assignments allegedly interrupted or temporarily halted his regular
employment, because even if his employment was regular or had been temporarily halted, the
employment is nonetheless deemed regular if the employee has rendered at least one year of service.
More importantly, the primary standard for determining regular employment is the reasonable connection
between the activity performed by the employee vis-a-vis the business or trade of the employer. Here, the
new assignment/s offered as "reliever assignments" were not merely temporary assignment/s but regular
ones as the assignment/s were necessary to and essential in the usual business of respondent agency.
In that context, petitioner's repeated refusal of the new assignments offered to him was not justified.
The implementation of the rotation policy by respondent agency is within the ambit of management
prerogative. The employer has the inherent right to regulate all aspects of employment, according to his
own discretion and judgment, including the right to transfer an employee as long as the transfer is not
unreasonable, inconvenient, prejudicial and does not involve a demotion in rank or a diminution of the
employee’s salaries, benefits, and other privileges. Contracts for security services may stipulate that the
clients may request the agency for the replacement of the guard/s assigned to it even for want of
cause; and that such replaced security guard/s could be placed on temporary "off-detail" or "floating
status" which is the period of time when such security guard/s are in between assignments or when they
are made to wait after being relieved from a previous post until they are transferred to a new one.
ERNESTO BROWN, Petitioner,

vs
MARSWIN* MARKETING, INC., and SANY TAN, represented by BERNADETTE S. AZUCENA, Respondents
G.R. No. 206891, March 15, 2017
(First Division)
DOCTRINE: “In order for the employer to discharge its burden to prove that the employee committed
abandonment, which constitutes neglect of duty, and is a just cause for dismissal, the employer must
prove that the employee 1) failed to report for work or had been absent without valid reason; and 2) had a
clear intention to discontinue his or her employment. The second requirement must be manifested by
overt acts and is more determinative in concluding that the employee is guilty of abandonment.”
FACTS: Ernesto Brown was employed by Marswin Marketing, Inc as building maintenance/electrician.
When Brown reported at the Main Office of Marswin he was told that it was already his last day of work.
He thereafter filed a complaint for illegal dismissal against Marswin Marketing, Inc. and Sany Tan, its
owner and President. He prayed for reinstatement with full backwages and payment of his other monetary
claims. The Labor Arbiter held that Brown was illegally dismissed and he was a regular employee of
Marswin. The NLRC affirmed the decision of the Labor Arbiter. The CA reversed the decision of the LA
and NLRC on the ground that Brown failed to prove that he was prevented from returning or was deprived
of work.
ISSUE: Whether or not Brown was illegally dismissed.
HELD: YES.
Brown was informed by Marswin that it was already his last day of work; and, thereafter, he was no longer
admitted back to work. Marswin/Tan presented no evidence proving that Brown felled to return without
justifiable reasons and had clear intentions to discontinue his work.
In dismissal cases, the employer bears the burden of proving that the employee was not terminated, or if
dismissed, that the dismissal was legal. Resultantly, the failure of fee employer to discharge such burden
would mean that the dismissal is unjustified and thus, illegal. In order for the employer to discharge its
burden to prove that the employee committed abandonment, which constitutes neglect of duty, and is a
just cause for dismissal, the employer must prove that the employee 1) failed to report for work or had
been absent without valid reason; and 2) had a clear intention to discontinue his or her employment. The
second requirement must be manifested by overt acts and is more determinative in concluding that the
employee is guilty of abandonment. This is because abandonment is a matter of intention and cannot be
lightly presumed from indefinite acts. There is clearly no showing that Brown committed abandonment
instead, evidence proved that he was illegally dismissed from work.

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LABOR LAW>Labor Standards>Illegal Recruitment

PEOPLE OF THE PHILIPPINES, Appellee

ISSUE: Whether or not appellant is guilty of illegal recruitment in large scale.

JOEB ALVIADO, ET AL.

ISSUE: Whether or not there exists an employer-employee relationship.

RENO FOODS, INC., and/or VICENTE KHU, Petitioner

BAGSAY, LITERAL and ABUEVA, Petitioners

ISSUE: Whether or not the petitioners were illegally dismissed.

DANNIE PANTOJA, Petitioner

ISSUE: Whether or not respondent is guilty of illegal dismissal.

SOUTHEASTERN SHIPPING, SOUTHEASTERN SHIPPING GROU, LTD., Petitioners,

LAMBERT PAWNBROKERS and JEWELRY CORP and LAMBERT LIM, Petitioner

ISSUE: Whether or not there was valid dismissal through retrenchment.

NEW PUERTO COMMERCIAL AND RICHARD LIM, Petitioners

ISSUE: Whether or not respondents were denied procedural due process.

NAGKAKAISANG LAKAS NG MANGGAGAWA SA KEIHIN and HELEN VALENZUELA, Petitioners

ST. MARY’S ACADEMY of Dipolog City, Petitioner

ISSUE: Whether or not the respondents were prematurely terminated.

MEDLINE MANAGEMENT, INC. & GRECOMAR SHIPPING AGENCY, Petitioners

SHIMIZU PHILS. CONTRACTORS, INC., Petitioner

FACTS: Petitioner-corporation employed respondent as Safety Officer and eventually as Project

EQUITABLE PCI BANK (Now BANCO DE ORO UNIBANK INC.), Petitioner

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner

ISLRIZ TRADING/VICTOR HUGO LU, Petitioner

LEGEND INTERNATIONAL RESORTS LIMITED, Petitioners

ISSUE #1: Whether or not KML is a legitimate labor organization

HELD #1: NO.

HELD #2: YES.

EXODUS INTERNATIONAL CONSTRUCTION CORPORATION

SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE

SANDEN AIRCON PHILIPPINES and ANTONIO ANG, Petitioner

JAMES BEN L. JERUSALEM, Petitioner

JOEB M. ALIVIADO, et al., Petitioner

UNIVERSITY PLANS INCORPORATED, Petitioner,

WILLIAM ENDELISEO BARROGA, Pettioner

DOCTRINE: Constructive dismissal is quitting because continued employment is rendered impossible,

ISSUE: Whether or not the petitioner was constructively dismissed by respondents.

Constructive dismissal is quitting because continued employment is rendered impossible, unreasonable

JERRY MAPILI, Petitioner

DOCTRINE: Length of service may aggravate the resulting consequences of transgressions.

CARMELITO N. VALENZONA, Petitioner

ISSUE: Whether or not petitioner is entitled to receive permanent disability benefits.

GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner

PABLO POLSOTIN, JR., et al., petitioners

ABDULJUAHID R. PIGCAULAN, petitioner

MANILA ELECTRIC COMPANY, petitioner

JULIE’S BAKESHOP and/or EDGAR REYES, Petitioners,

HELD #1: YES.

HELD #2: NO.

DANIEL M. ISON, petitioner

APO CEMENT CORPORATION, petitioner

FLORDELIZA MARIA REYES-RAYEL, petitioner

JARL CONSTRUCTION and ARMANDO K. TEJADA, petitioners

MISAMIS ORIENTAL II ELECTRIC SERVICE COOPERATIVE (MORESCO II), petitioner

ISSUE: Whether or not Cagalawan was validly transferred.

DIONISO F. AUZA, JR., ADESSA F. OTARRA, and ELVIE JEANJAQUET, Petitioners

ISSUE: Whether or not the petitioners were illegally dismissed.

CARLOS L. OCTAVIO, Petitioner,

LORENZO T. TANGGA-AN, petitioner

ZUELLIG PHARMA CORPORATION, Petitioner,

PHILIPPINE NATIONAL BANK, Petioner,

VICENTE ANG, Petitioner,

ASIA BREWERY, INC., Petitioner,