[G.R. No.

182848 : October 05, 2011]

EMIRATE SECURITY AND MAINTENANCE SYSTEMS, INC. AND ROBERTO A. YAN, PETITIONERS, VS. GLENDA M. MENESE, RESPONDENT.

On June 5, 2001, respondent Glenda M. Menese (Menese) filed a complaint for constructive dismissal; illegal reduction of salaries and allowances; separation pay; refund of contribution to cash bond; overtime, holiday, rest day and premium pay; damages; and attorneys fees against the petitioners, Emirate Security and Maintenance Systems, Inc. (agency) and its General Manager, Robert A. Yan (Yan).

Menese alleged in the compulsory arbitration proceedings that on April 1, 1999, the agency engaged her services as payroll and billing clerk. She was assigned to the agencys security detachment at the Philippine General Hospital (PGH). She was given a monthly salary of P9,200.00 and an allowance of P2,500.00, for a total of P11,700.00 in compensation. Effective May 2001, her allowance was allegedly reduced to P1,500.00 without notice, and P100.00 was deducted from her salary every

month as her contribution to a cash bond which lasted throughout her employment. She was required to work seven (7) days a week, from 8:00 a.m. to 5:00 p.m. She was also required to report for work on holidays, except on New Years Day and Christmas. She claimed that she was never given overtime, holiday, rest day and premium pay.

Menese further alleged that on May 4, 2001, she started getting pressures from the agency for her to resign from her position because it had been committed to a certain Amy Claro, a protge of Mrs. Violeta G. Dapula (Dapula) the new chief of the Security Division of the University of the Philippines (UP) Manila and PGH. Menese raised the matter with Yan who told her that the agency was in the process of establishing goodwill with Dapula, so it had to sacrifice her position to accommodate Dapulas request to hire Claro.

Menese claimed that she was told not to worry because if she was still interested in working with the agency, she could still be retained as a lady guard with a salary equivalent to the minimum wage. She would then be detailed to another

detachment because Dapula did not like to see her around anymore. If the offer was acceptable to her, she should report to the agencys personnel officer for the issuance of the necessary duty detail order. Menese thought about the offer and soon realized that she was actually being demoted in rank and salary. She eventually decided to decline the offer. She continued reporting to the PGH detachment and performed her usual functions as if nothing happened.

Menese alleged that at this juncture, Claro reported at the agencys PGH detachment and performed the functions she was doing. She bewailed that thereafter she continuously received harassment calls and letters. She was also publicly humiliated and badly treated at the detachment. The agency, through Security Officer Alton Acab, prohibited her from using the office computer. On May 18, 2001, Jose Dante Chan, the agencys PGH detachment commander, arrogantly told her to leave PGH. Again on May 25, 2001, Chan shouted at her and told her to pack her things and to leave immediately, and not to return to the detachment anymore; otherwise, she would be physically driven out of the office.

Still not satisfied with what they did, the petitioners allegedly withheld her salary for May 16-31, 2001. She claimed that the petitioners dismissed her from the service without just cause and due process.

The petitioners, for their part, denied liability. They alleged that on May 8, 2001, Dapula informed the agency in writing, through Yan, that she had been receiving numerous complaints from security guards and other agency employees about Meneses unprofessional conduct. She told the petitioners that she was not tolerating Meneses negative work attitude despite the fact that she is the wife of Special Police Major Divino Menese who is a member of the UP Manila police force, and that as a matter of policy and out of delicadeza, she does not condone nepotism in her division.

On the basis of Dapulas letter, Yan sent Menese a memorandum dated May 16, 2001, instructing her to report to the agencys head office and, there and then, discussed with her Dapulas letter. Yan informed Menese that upon Dapulas request, she would be transferred to another assignment which would not

involve any demotion in rank or diminution in her salary and other benefits. Although Menese said that she would think about the matter, the petitioners were surprised to receive summons from the labor arbiter regarding the complaint.

Whether or not there has been illegal dismissal Whether or not overtime pay may be awarded

Yes. As Menese noted, the petitioners did not submit as annex to the petition Yans letter to Dapula, and the reason appears to be obvious they were trying to avoid calling attention to the absence of proof of Meneses alleged unprofessionalism and her involvement in nepotism. Evidently, the basis for Dapulas request did not exist. We thus find credible Meneses contention that her transfer was a ploy to remove her from the PGH detachment to accommodate the entry of Dapulas protge. In short, the agency wanted to create a vacancy for Claro, the protge. Confronted with this clear intent of the petitioners, we cannot see how Meneses transfer could be considered a valid exercise of management prerogative. As Menese rightly put it, her transfer was arbitrarily done, motivated no less by ill will and bad faith.

No. In Global Incorporated v. Commissioner Atienza, a claim for overtime pay will not be granted for want of factual and legal basis. In this respect, the records indicate that the labor arbiter

granted Meneses claim for holiday pay, rest day and premium pay on the basis of payrolls. There is no such proof in support of Meneses claim for overtime pay other than her contention that she worked from 8:00 a.m. up to 5:00 p.m. She presented no evidence to show that she was working during the entire one hour meal break. We thus find the NLRCs deletion of the overtime pay award in order.

[G.R. No. 195033 : October 12, 2011]

AGG TRUCKING AND/OR ALEX ANG GAEID, PETITIONERS, VS. MELANIO B. YUAG, RESPONDENT. The facts of the case are simple. Petitioner Alex Ang Gaeid had employed respondent Melanio Yuag as a driver since 28 February 2002. He alleged that he had a trucking business, for which he had 41 delivery trucks driven by 41 drivers, one of whom was respondent. His clients were Busco Sugar Milling Co., Inc., operating in Quezon, Bukidnon; and Coca-cola Bottlers Company in Davao City and Cagayan de Oro City. Respondent received

his salary on commission basis of 9% of his gross delivery per trip. He was assigned to a ten-wheeler truck and was tasked to deliver sacks of sugar from the Busco Sugar Mill to the port of Cagayan de Oro. Petitioner noticed that respondent had started incurring substantial shortages since 30 September 2004, when he allegedly had a shortage of 32 bags, equivalent to 48,000; followed by 50 bags, equivalent to 75,000, on 11 November 2004. It was also reported that he had illegally sold bags of sugar along the way at a lower price, and that he was banned from entering the premises of the Busco Sugar Mill. Petitioner asked for an explanation from respondent who remained quiet. Alarmed at the delivery shortages, petitioner took it upon himself to monitor all his drivers, including respondent, by instructing them to report to him their location from time to time through their mobile phones. He also required them to make their delivery trips in convoy, in order to avoid illegal sale of cargo along the way. Respondent, along with 20 other drivers, was tasked to deliver bags of sugar from Cagayan de Oro City to Coca-Cola Bottlers Plant in Davao City on 4 December 2004. All drivers, with the exception of Yuag who could not be reached through his cellphone, reported their location as instructed. Their reported

location gave evidence that they were indeed in convoy. Afterwards, everyone, except Yuag, communicated that the delivery of their respective cargoes had been completed. The Coca-Cola Plant in Davao later reported that the delivery had a suspiciously enormous shortage.

Respondent reported to the office of the petitioner on 6 December 2004. Allegedly in a calm and polite manner, petitioner asked respondent to explain why the latter had not contacted petitioner for two days, and he had not gone in convoy with the other trucks, as he was told to do. Respondent replied that the battery of his cellphone had broken down. Petitioner then confronted him allegedly still in a polite and civilized manner, regarding the large shortages, but the latter did not answer. Petitioner afterwards told him to just take a rest or, in their vernacular, pahulay lang una. This exchange started the He dispute since respondent construed it as a dismissal.

demanded that it be done in writing, but petitioner merely reiterated that respondent should just take a rest in the meanwhile. The former alleged that respondent had offered to resign and demanded separation pay. At that time, petitioner could not grant the demand, as it would entail computation which

was the duty of the cashier. Petitioner asked him to come back the next day. Instead of waiting for another day to go back to his employer, Respondent went to the Department of Labor-Regional Arbitration Board X, that very day of the confrontation or on 6 December 2004. There he filed a Complaint for illegal dismissal, claiming his separation pay and 13th month pay. Subsequently, after the delivered goods to the Coca-Cola Plant were weighed on 9 December 2004, it was found out that there was a shortage of 111 bags of sugar, equivalent to 166,000. Respondent argued that he was whimsically dismissed, just because he had not been able to answer his employer's call during the time of the delivery. His reason for not answering was that the battery pack of his cellphone had broken down. Allegedly enraged by that incident, his employer, petitioner herein, supposedly shouted at him and told him, pahuway naka. When he asked for a clarification, petitioner allegedly told him, wala nay daghan istorya, pahulay na! This statement was translated by the CA thus: No more talking! Take a rest! He then realized that he was being dismissed. When he asked for his separation pay, petitioner refused. Respondent thus filed a Complaint for illegal dismissal.

Whether or not employee is a regular employee Whether or not there was a valid dismissal

Yes. It is most disturbing to see how the CA regarded labor terms paid on commission, pakyaw and seasonal worker as one and the same. In labor law, they are different and have distinct meanings, which we do not need to elaborate on in this Petition as they are not the issue here. It should also be remembered that a regular status of employment is not based on how the salary is paid to an employee. An employee may be paid purely on commission and still be considered a regular employee. Moreover, a seasonal employee may also be considered a regular employee. No. Further, the appreciation by the CA of the NLRC Resolution was erroneous. The fact is that the refusal by the NLRC to grant separation pay was merely consistent with its ruling that there was no dismissal. Since respondent was not dismissed, much less illegally dismissed, separation pay was unnecessary. The CA looked at the issue differently and erroneously, as it held that the NLRC refused to grant the award of separation pay because respondent had not been found to be a regular employee. The NLRC had in fact made no such ruling. These are flagrant errors that are reversible by this

Court. They should be corrected for the sake not only of the litigants, but also of the CA, so that it would become more circumspect in its appreciation of the records before it. We reviewed the NLRC Resolution that reversed the LA Decision and found nothing in it that was whimsical, unreasonable or patently violative of the law. It was the CA which erred in finding faults that were inexistent in the NLRC Resolution.

[G.R. No. 195419 : October 12, 2011]

PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. HADJA JARMA LALLI Y PURIH, RONNIE ARINGOY Y MASION, AND NESTOR RELAMPAGOS (AT LARGE), ACCUSED. HADJA JARMA LALLI Y PURIH AND RONNIE ARINGOY Y MASION, ACCUSED-APPELLANTS. In the evening of June 3, 2005, while Lolita Sagadsad Plando, 23 years old, single, was in Tumaga, Zamboanga City on her way to the house of her grandfather, she met Ronnie Masion Aringoy and Rachel Aringoy Caete. Ronnie

greeted Lolita, Oy, its good you are here (oy, maayo kay dia ka). Rachel asked Lolita if she is interested to work in Malaysia. x x x Lolita was interested so she gave her cellphone number to Ronnie. After their conversation, Lolita proceeded to her grandfathers house.

xxx

On June 4, 2005, at about 7:00 oclock in the morning, Lolita received a text message from Ronnie Aringoy inviting her to go to the latters house. At 7:30 in the morning, they met at Tumaga on the road near the place where they had a conversation the night before. Ronnie brought Lolita to the house of his sister in Tumaga. Lolita inquired what job is available in Malaysia. Ronnie told her that she will work as a restaurant entertainer. All that is needed is a passport. She will be paid 500 Malaysian ringgits which is equivalent to P7,000.00 pesos in Philippine currency. Lolita told Ronnie that she does not have a passport. Ronnie said that they will look for a passport so she could leave immediately. Lolita informed him that her younger sister, Marife Plando, has a passport. Ronnie chided her for not telling him immediately. He told Lolita that she will leave for Malaysia on June 6, 2005 and they will go to Hadja Jarma Lalli who will bring her to Malaysia. Ronnie sent a text message to Lalli but the latter replied that she was not in her house. She was at the city proper.

On June 5, 2005, at about 6:00 oclock in the evening, Ronnie Aringoy and Rachel Aringoy Caete arrived on board

a tricycle driven by Ronnie at the house where Lolita was staying at Southcom Village. Ronnie asked if Lolita already had a passport. Lolita said that she will borrow her sisters passport. Ronnie, Rachel and Lolita went to Buenavista where Lolitas other sister, Gina Plando was staying. Her sister Marife Plando was there at that time. Lolita asked Marife to let her use Marifes passport. Marife refused but Lolita got the passport. Marife cried. Ronnie, Rachel and Lolita proceeded to Tumaga. Ronnie, Rachel and Lolita went to the house of Hadja Jarma Lalli just two hundred meters away from the house of Ronnie in Tumaga. Ronnie introduced Lolita to Hadja Jarma, saying Ji, she is also interested in going to Malaysia. Lolita handed a passport to Hadja Jarma telling her that it belongs to her sister Marife Plando. Hadja Jarma told her it is not a problem because they have a connection with the DFA (Department of Foreign Affairs) and Marifes picture in the passport will be substituted with Lolitas picture. Nestor Relampagos arrived driving an owner-type jeep. Hadja Jarma introduced Nestor to Lolita as their financier who will accompany them to Malaysia. x x x Lolita noticed three other women in Hadja Jarmas house. They were Honey, about 20 years old; Michele, 19 years old, and another woman who is about 28 years old. The women said that they are from Ipil, Sibugay Province. Ronnie told Lolita that she will have many companions going to Malaysia to work. They will leave the next day, June 6, and will meet at the wharf at 2:30 in the afternoon.

On June 6, 2005, Lolita went to Zamboanga City wharf at 2:00 oclock in the afternoon bringing a bag containing her make-up and powder. She met at the wharf Hadja Jarma Lalli, Ronnie Aringoy, Honey and Michele. Ronnie gave to

Lolita her boat ticket for the vessel M/V Mary Joy bound for Sandakan, Malaysia; a passport in the name of Marife Plando but with Lolitas picture on it, and P1,000.00 in cash. Hadja Jarma, Lolita, Honey, Michele and two other women boarded the boat M/V Mary Joy bound for Sandakan. Ronnie Aringoy did not go with them. He did not board the boat. x x x After the boat sailed, Hadja Jarma Lalli and Nestor Relampagos approached Lolita and her companions. Nestor told them that they will have a good job in Malaysia as restaurant entertainers. They will serve food to customers. They will not be harmed.

M/V Mary Joy arrived at the port of Sandakan, Malaysia at 10:00 oclock in the morning of June 7, 2005. After passing through the immigration office, Hadja Jarma Lalli, Nestor Relampagos, Lolita, Honey, Michele and two other women boarded a van for Kota Kinabalu. x x x At the hotel, Nestor Relampagos introduced to Lolita and her companions a Chinese Malay called Boss as their employer. After looking at the women, Boss brought Lolita, Honey, Diane and Lorraine to a restaurant near the hotel. Diane and Lorraine were also on baord M/V Mary Joy when it left the port of Zamboanga for Sandakan on June 6, 2005. When they were already at the restaurant, a Filipina woman working there said that the place is a prostitution den and the women there are used as prostitutes. Lolita and her companions went back to the hotel. They told Hadja Jarma and Nestor that they do not like to work as prostitutes. x x x After about five minutes, another person called boss arrived. x x x [T]hey were fetched by a van at about 7:00 oclock in the evening and brought to Pipen Club owned by Boss Awa, a Malaysian. At the club, they were told that they owe the club 2,000 ringgits each as payment for the amount given by the

club to Hadja Jarma Lalli and Nestor Relampagos. They will pay for the said amount by entertaining customers. The customers will pay 300 ringgits for short time services of which 50 ringgits will go to the entertainer, and 500 ringgits for over night service of which 100 ringgits will be given to the entertainer. Pipen Club is a big club in a two-storey building. There were about 100 women working in the club, many of them were Filipina women.

Lolita Plando was forced to work as entertainer at Pipen Club. She started working at 8:30 in the evening of June 14, 2005. She was given the number 60 which was pinned on her. That night, she had her first customer who selected her among the other women at the club. He was a very big man, about 32 years old, a Chinese-Malay who looked like a wrestler. The man paid for short time service at the counter. Lolita was given by the cashier a small pink paper. She was instructed to keep it. A small yellow paper is given to the entertainer for overnight services. The customer brought Lolita to a hotel. She did not like to go with him but a boss at the club told her that she could not do anything. At the hotel, the man poked a gun at Lolita and instructed her to undress. She refused. The man boxed her on the side of her body. She could not bear the pain. The man undressed her and had sexual intercourse with her. He had sexual intercourse with her every fifteen minutes or four times in one hour. When the customer went inside the comfort room, Lolita put on her clothes and left. The customer followed her and wanted to bring her back to the hotel but Lolita refused. At about 1:00 oclock in the morning of June 15, 2005, Lolita was chosen by another customer, a tall dark man, about 40 years old. The customer paid for an overnight service at the counter and brought Lolita to Mariner Hotel which is far from

Pipen Club. At the hotel, the man told Lolita to undress. When she refused, the man brought her to the comfort room and bumped her head on the wall. Lolita felt dizzy. The man opened the shower and said that both of them will take a bath. Lolitas clothes got wet. She was crying. The man undressed her and had sexual intercourse with her. They stayed at the hotel until 11:00 oclock in the morning of June 15, 2005. The customer used Lolita many times. He had sexual intercourse with her every hour.

Lolita worked at Pipen Club from June 14 to July 8, 2005. Every night, a customer used her. She had at least one customer or more a night, and at most, she had around five customers a night. They all had sexual intercourse with her. On July 9, 2005, Lolita was able to contact by cellphone at about 10:00 oclock in the morning her sister Janet Plando who is staying at Sipangkot Felda x x x. Janet is married to Said Abubakar, an Indonesian national who is working as a driver in the factory. x x x Lolita told Janet that she is in Labuan, Malaysia and beg Janet to save her because she was sold as a prostitute. Janet told Lolita to wait because her husband will go to Pipen Club to fetch Lolita at 9:00 oclock that evening of that day. x x x She told Janet to instruct her husband to ask for No. 60 at Pipen Club. x x x At 9:00 oclock in the evening, Lolita was told by Daddy Richard, one of the bosses at the club, that a customer requested for No. 60. The man was seated at one of the tables. Lolita approached the man and said, good evening. The man asked her is she is the sister of Janet Plando. Lolita replied that she is, and asked the man if he is the husband of her sister. He said, yes. The man had already paid at the counter. He stood up and left the place. Lolita got her wallet and followed him. x x x Lolita told her sister about her ordeal.

She stayed at her sisters house until July 22, 2005. On July 21, 2005 at 7:00 oclock in the evening, a policeman went to her sisters house and asked if there is a woman staying in the house without a passport. Her sister told the policeman that she will send Lolita home on July 22. At dawn on July 22, Lolita and her brother-in-law took a taxi from Sipangkot Felda to Mananamblas where Lolita will board a speedboat to Sibuto, Tawi-Tawi. x x x

Upon arrival in Zamboanga City on July 24, 2005, Lolita went directly to the house of her eldest sister Alejandra Plando Maywila at Sta. Catalina, Zamboanga City. She left her things at her sisters house and immediately went to the sister of Ronnie Aringoy in Tumaga. Ronnie was not there. She asked Russel, niece of Ronnie, to call for the latter. Ronnie arrived and said to her, so you are here, you arrived already. He said he is not involved in what happened to her. Lolita asked Ronnie to accompany her to the house of Nestor Relampagos because she has something to get from him. Ronnie refused. He told Lolita not to let them know that she had already arrived from Malaysia.

Whether or not there has been illegal recruitment

Yes. It is clear that a person or entity engaged in recruitment and placement activities without the requisite authority from the Department of Labor and Employment (DOLE), whether for profit or not, is engaged in illegal recruitment.39 The Philippine

Overseas Employment Administration (POEA), an agency under DOLE created by Executive Order No. 797 to take over the duties of the Overseas Employment Development Board, issues the authority to recruit under the Labor Code. The commission of illegal recruitment by three or more persons conspiring or confederating with one another is deemed committed by a syndicate and constitutes economic sabotage,40 for which the penalty of life imprisonment and a fine of not less than 500,000 but not more than 1,000,000 shall be imposed.41

The penalties in Section 7 of RA 8042 have already been amended by Section 6 of Republic Act No. 10022, and have been increased to a fine of not less than 2,000,000 but not more than 5,000,000. However, since the crime was committed in 2005, we shall apply the penalties in the old law, RA 8042.

In People v. Gallo,42 the Court enumerated the elements of syndicated illegal recruitment, to wit:

1.

the offender undertakes either any activity within the meaning of recruitment and placement defined under Article 13(b), or any of the prohibited practices enumerated under Art. 34 of the Labor Code; he has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and

2.

3.

the illegal recruitment is committed by a group of three (3) or more persons conspiring or confederating with one another.43

Article 13(b) of the Labor Code of the Philippines defines recruitment and placement as any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not, provided, that any person or entity which, in any manner, offers or promises for a fee, employment to two or more persons shall be deemed engaged in recruitment and placement. Clearly, given the broad definition of recruitment and placement, even the mere act of referring someone for placement abroad can be considered recruitment. Such act of referral, in connivance with someone without the requisite authority or POEA license, constitutes illegal recruitment. In its simplest terms, illegal recruitment is committed by persons who, without authority from the government, give the impression that they have the power to send workers abroad for employment purposes.44 In this case, the trial court, as affirmed by the appellate court, found Lalli, Aringoy and Relampagos to have conspired and confederated with one another to recruit and place Lolita for work in Malaysia, without a POEA license. The three elements of syndicated illegal recruitment are present in this case, in particular: (1) the accused have no valid license or authority required by law to enable them to lawfully engage in the recruitment and placement of workers; (2) the accused engaged in this activity of recruitment and placement by actually recruiting, deploying and transporting Lolita to Malaysia; and (3) illegal recruitment was committed by three persons (Aringoy, Lalli and Relampagos), conspiring and confederating with one another.

Aringoy claims and admits that he only referred Lolita to Lalli for job opportunities to Malaysia. Such act of referring, whether for profit or not, in connivance with someone without a POEA license, is already considered illegal recruitment, given the broad definition of recruitment and placement in the Labor Code. Lalli, on the other hand, completely denies any involvement in the recruitment and placement of Lolita to Malaysia, and claims she only met Lolita for the first time by coincidence on board the ship M/V Mary Joy. Lallis denial does not deserve credence because it completely conflicts with the testimony of Aringoy who claims he referred Lolita to Lalli who had knowledge of the job opportunities in Malaysia.

The conflicting testimonies of Lalli and Aringoy on material facts give doubt to the truth and veracity of their stories, and strengthens the credibility of the testimony of Lolita, despite allegations of irrelevant inconsistencies.

No improper motive could be imputed to Lolita to show that she would falsely testify against the accused. The absence of evidence as to an improper motive entitles Lolitas testimony to full faith and credit.45 Aringoy claims that no conspiracy existed in illegal recruitment, as he denies even knowing Relampagos, who is currently at-large. Lalli denies any involvement in the illegal recruitment, and claims that she only met Relampagos through Lolita on board the ship M/V Mary Joy on 6 June 2005, and learned that Relampagos was bringing Lolita and their other girl companions to Malaysia to work as sales ladies.

[G.R. No. 176884 : October 19, 2011]

CARMELITO N. VALENZONA, PETITIONER, VS. FAIR SHIPPING CORPORATION AND/OR SEJIN LINES COMPANY LIMITED, RESPONDENTS. On May 5, 2001, respondent Fair Shipping Corporation, for and on behalf of its principal, respondent Sejin Lines Company Limited, hired petitioner as 2nd Assistant Engineer aboard its vessel M/V Morelos for a duration of nine months. Before his embarkation on May 23, 2001, he was declared medically fit to work.

However, while aboard the vessel on September 29, 2001, petitioner complained of chest pain. He was thus brought to Centro Medico Quirurgico Echauri in Mexico where he was confined up to October 6, 2001 and diagnosed with hypertensive crisis, high blood pressure.

A day after his repatriation to the Philippines on October 8, 2001, petitioner was examined by Dr. Nicomedes G. Cruz (Dr. Cruz), the company-designated physician who diagnosed his illness as

hypertension. Dr. Cruz continuously treated petitioner for six months, i.e., from October 9, 2001 until April 25, 2002.

On April 18, 2002, however, petitioner consulted another doctor, a certain Dr. Mapapala at the Jose Reyes Memorial Medical Center who diagnosed him with Hypertensive Cardiovascular Disease. Considering his prolonged sickness, petitioner, on April 18, 2002, through Atty. Anastacio P. Marcelo, wrote a letter to respondents demanding payment of the balance of his sickness allowance and permanent disability benefits. However, same went unheeded.

Thereafter, or on April 25, 2002, Dr. Cruz issued a certification declaring petitioner as fit to work.

Unconvinced, on April 27, 2002, petitioner consulted Dr. Rodrigo F. Guanlao, an Internist-Cardiologist at the Philippine Heart Center who diagnosed him with Ischemic heart disease, Hypertensive cardiovascular disease and congestive heart failure and also declared him unfit to work in any capacity.

Hence, petitioner filed a complaint for recovery of disability benefits, sickness allowance, attorney's fees and moral damages.

Whether or not petitioner is entitled to disability benefits Yes. Petitioners Employment Contract specifically provides that the same shall be deemed an integral part of the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On Board Ocean-Going Vessels otherwise known as the POEA Standard Employment Contract. Section 20(B) of the POEA Standard Employment Contract provides:

B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS xxxx 3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the companydesignated physician but in no case shall this period exceed one hundred twenty (120) days.

xxxx

The Labor Code's provision on permanent total disability applies with equal force to seafarers. Article 192 (c) (1) of the Labor Code provides, viz;

Art. 192. Permanent total disability. - x x x xxxx (c) The following disabilities shall be deemed total and permanent: (1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided for in the Rules; xxxx

Thus, in Quitoriano v. Jebsens Maritime, Inc., we held that:

Thus, Court has applied the Labor Code concept of permanent total disability to the case of seafarers. x x x

xxxx 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. In Vicente v. ECC (G.R. No. 85024, January 23, 1991, 193 SCRA 190, 195): x x x the test of whether or not an employee suffers from 'permanent total disability' is a showing of the capacity of the employee to

continue performing his work notwithstanding the disability he incurred. Thus, if by reason of the injury or sickness he sustained, the employee is unable to perform his customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensability (which, in more detailed manner, describes what constitutes temporary total disability), then the said employee undoubtedly suffers from 'permanent total disability' regardless of whether or not he loses the use of any part of his body. 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 (Austria v. Court of Appeals, G.R. No. 146636, Aug. 12, 2002, 387 SCRA 216, 221). On the other hand, a total disability is considered permanent if it lasts continuously for more than 120 days. Thus, in the very recent case of Crystal Shipping, Inc. v. Natividad (G.R. No. 134028, December 17, 1999, 321 SCRA 268, 270-271), we held: Permanent disability is inability of a worker to perform his job for more than 120 days, regardless of whether or not he lose[s] the use of any part of his body. x xx Total disability, on the other hand, means the disablement of an employee to earn wages in the same kind of work of similar nature that he was trained for, or accustomed to perform, or any kind of work which a

person of his mentality and attainments could do. It does not mean absolute helplessness. In disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one's earning capacity.

In Quitoriano, the seafarer therein was medically repatriated to the Philippines on May 30, 2001 and upon arrival, he underwent several tests at the Medical Center Manila under the care of Dr. Cruz, the company-designated physician, who incidentally is the same Dr. Cruz who treated petitioner in the instant case. After a lapse of 169 days from his repatriation, or on November 16, 2001, Dr. Cruz declared the seafarer therein fit to work. Unconvinced, the seafarer consulted an independent internist-cardiologist who diagnosed him as suffering from hypertension cardiovascular disease and hyperlipidemia. The seafarer thus demanded from the shipping company payment of his permanent disability benefits but he was rebuffed on the ground that he was declared fit to work by Dr. Cruz. The seafarer thus filed a complaint to recover his permanent disability benefits and attorney's fees. The case eventually reached this Court raising the issue of whether the CA erred in not finding the disability of the seafarer as permanent and total and for not awarding him attorney's fees. The Court ruled in favor of the seafarer holding

that the fact that it was only on November 16, 2001 that the 'fit to work' certification was issued by Dr. Cruz or more than five months from the time petitioner was medically repatriated on May 30, 2001, petitioner's disability is considered permanent and total.

The ruling in Quitoriano applies in the instant case. Similarly, petitioner herein was medically repatriated to the Philippines on October 8, 2001. However, it was only on April 25, 2002 or after a lapse of 199 days that Dr. Cruz issued a certification declaring him fit to work. Thus, we declare herein, just as we pronounced in Quitoriano, that petitioners disability is considered permanent and total because the fit to work certification was issued by Dr. Cruz only on April 25, 2002, or more than 120 days after he was medically repatriated on October 8, 2001.

[G.R. Nos. 191138-39 : October 19, 2011]

MAGDALA MULTIPURPOSE & LIVELIHOOD COOPERATIVE AND SANLOR MOTORS CORP., PETITIONERS, VS. KILUSANG MANGGAGAWA NG LGS, MAGDALA MULTIPURPOSE & LIVELIHOOD CORPERATIVE (KMLMS)

AND UNION MEMBERS/ STRIKERS, NAMELY: THOMAS PADULLON, HERBERT BAUTISTA, ARIEL DADIA, AVELINO PARENAS, DENNIS MONTEALEGRE, SONNY CONSTANTINO, SHANDY CONSTANTINO, JOSEPH PERNIA, PETER ALCOY, EDILBERTO CERILLE, FERNANDO LEONOR, TEOTIMAR REGINIO, ALBERTO BAJETA, ALLAN MENESES, RONEL FABUL, JESUS COMENDADOR, JERRY PERNIA, OSCAR RIVERA, LEO MELGAR, ENRICO LAYGO, RICKY PALMERO, ROWELL GARCIA, LEOPITO MERANO, ALEJANDRO DE LARA, JOEL GARCIA, BONIFACIO PEREDA, REMEGIO CONSTANTINO, DICKSON PILAPIL, RANDY CORDANO, DARIUS PILAPIL, VENICE LUCERO, GREGORIO REANZARES, EULOGIO REGINIO, MICHAEL JAVIER, DENNIS MOSQUERA, FREDDIE AZORES, ROGELIO CABRERA, AURELIO TAGUINOD, OSCAR TAGUINOD, DEWELL PILAPIL, JOEL MAS-ING, EDUARDO LOPEZ, GLICERIO REANZAREZ, JOSEPH FLORES,BUENATO CASAS, ROMEO AZAGRA, ALFREDO ROSALES, ESTELITO BAJETA, PEDY GEMINA, FERNANDO VELASCO, ALBERTO CANEZA, ALEJANDRO CERVANTES, ERICK CARVAJAL, RONALDO BERNADEZ, JERRY COROSA, JAYSON COROSA, JAYSON JUANSON, SHELLY NAREZ, EDGARDO GARCIA, ARIEL LLOSALA, ROMMEL ILAYA, RODRIGO PAULETE, MERVIN PANGUINTO, MARVIN SENATIN, JAYSON RILLORA, RAFAEL SARMIENTO, FREDERICK PERMEJO, NICOLAS BERNARDO, LEONCIO PAZ DE LEON, EDWARD DENNIS MANAHAN, ANTONIO BALDAGO, ALEXANDER BAJETA, RESPONDENTS.

Respondent Kilusang Manggagawa ng LGS, Magdala Multipurpose and Livelihood Cooperative (KMLMS) is the union operating in Magdala Multipurpose & Livelihood Cooperative and Sanlor Motors Corp.

KMLMS filed a notice of strike on March 5, 2002 and conducted its strike-vote on April 8, 2002. However, KMLMS only acquired legal personality when its registration as an independent labor organization was granted on April 9, 2002 by the Department of Labor and Employment under Registration No. RO-400-200204-UR-002. On April 19, 2002, it became officially affiliated as a local chapter of the Pambansang Kaisahan ng Manggagawang Pilipino when its application was granted by the Bureau of Labor Relations.

Thereafter, on May 6, 2002, KMLMSnow a legitimate labor organization (LLO)staged a strike where several prohibited and illegal acts were committed by its participating members.

On the ground of lack of valid notice of strike, ineffective conduct of a strike-vote and commission of prohibited and illegal acts, petitioners filed their Petition to Declare the Strike of May 6, 2002 Illegal before the NLRC Regional Arbitration Board (RAB) No. IV in Quezon City, docketed as NLRC RAB IV-9-1265-02-R. In their petition, as well as their Position Paper, petitioners prayed, inter alia, that the officers and members of respondent KMLMS who participated in the illegal strike and who knowingly committed prohibited and illegal activities, respectively, be declared to have lost or forfeited their employment status.

Whether or not THE COURT OF APPEALS ERRED IN REFUSING TO SIMILARLY DECLARE AS HAVING LOST THEIR EMPLOYMENT STATUS THE REST OF THE UNION STRIKERS WHO HAVE PARTICIPATED IN THE ILLEGAL STRIKE AND COMMITTED PROHIBITED/ILLEGAL ACTS, TO THE PREJUDICE OF PETITIONERS[] BUSINESS OPERATIONS.

No. the CA is correct. There is no question that the May 6, 2002 strike was illegal, first, because when KMLMS filed the notice of strike on March 5 or 14, 2002, it had not yet acquired legal personality and, thus, could not legally represent the eventual union and its members. And second, similarly when

KMLMS conducted the strike-vote on April 8, 2002, there was still no union to speak of, since KMLMS only acquired legal personality as an independent LLO only on April 9, 2002 or the day after it conducted the strike-vote. These factual findings are undisputed and borne out by the records.

Consequently, the mandatory notice of strike and the conduct of the strike-vote report were ineffective for having been filed and conducted before KMLMS acquired legal personality as an LLO, violating Art. 263(c), (d) and (f) of the Labor Code and Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code. The Labor Code provisos pertinently provide:

ART. 263. Strikes, Picketing and Lockouts. (a) xxx (c) In case of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a notice of lockout with the Ministry at least 30 days before the intended date thereof. In case of unfair labor practice, the period of notice shall be 15 days and in absence of a duly certified or recognized bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members. However, in

case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting, where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action immediately. (As amended by Executive Order No. 111, December 24, 1986.) (d) The notice must be in accordance with such implementing rules and regulations as the Ministry of Labor and Employment may promulgate. xxxx (f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be approved by a majority of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The Ministry may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the Ministry the results of the voting at least seven days before the intended strike or lockout, subject to the cooling-off period herein provided. (As amended by Batas Pambansa Bilang 130, August 21, 1981 and further amended by Executive Order No. 111, December 24, 1986.)

On the other hand, Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code likewise pertinently provides:

RULE XXII CONCILIATION, STRIKES AND LOCKOUTS xxxx SEC. 6. Who may declare a strike or lockout. Any certified or duly recognized bargaining representative may declare a strike in cases of bargaining deadlocks and unfair labor practices. The employer may declare a lockout in the same cases. In the absence of a certified or duly recognized bargaining representative, any legitimate labor organization in the establishment may declare a strike but only on grounds of unfair labor practice. (Emphasis supplied.)

It is, thus, clear that the filing of the notice of strike and the conduct of the strike-vote by KMLMS did not comply with the aforequoted mandatory requirements of law and its implementing rules. Consequently, the May 6, 2002 strike is illegal. As the

Court held in Hotel Enterprises of the Philippines, Inc. (HEPI) v. Samahan ng mga Manggagawa sa Hyatt-National Union of Workers in the Hotel and Restaurant and Allied Industries (SAMASAH-NUWHRAIN), these requirements are mandatory and failure of a union to comply renders the strike illegal.

Striking KMLMS Members Committed Prohibited Acts

There is likewise no dispute that when the May 6, 2002 illegal strike was conducted, the members of respondent KMLMS committed prohibited and illegal acts which doubly constituted the strike illegal. This is the unanimous factual finding of the courts a quo which the Court accords finality, as supported by evidence on record.

The proscribed acts during a strike are provided under Art. 264 of the Labor Code, thus:

ART. 264. Prohibited Activities. (a) No Labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with Title VII of this Book or without first having filed the notice required in the preceding Article or without the necessary strike or lockout vote first having been obtained and reported to the Ministry. No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of case involving the same grounds for the strike or lockout. Any worker whose employment has been terminated as a consequence of any unlawful lockout shall be entitled to reinstatement with full backwages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. xxxx (e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employers premises for lawful purposes, or obstruct public

thoroughfares. (As amended by Batas Pambansa Bilang 227, June 1, 1982).

Here, the striking workers committed acts of (1) interference by obstructing the free ingress to or egress from petitioners compound and (2) coercion and intimidation. As aptly pointed out by the appellate court:

This is clear from the Police Blotter Certifications, including a Complaint for Grave Coercion, Affidavits from several workers, including one from a proprietor, all of whom were prevented from entering the company premises and doing their work or conducting their business, and the countless photographs which show the striking workers blocking the gates of the company premises which became the basis of the judgment of the Labor Arbiter and NLRC.

Thus, We agree with the CA that the arguments of respondent KMLMS are bereft of merit as the May 6, 2002 strike was properly declared an illegal strike and the prohibited and illegal acts committed by union members during said strike were duly proved by substantial evidence on record. Substantial evidence is that

amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.

[G.R. No. 174631 : October 19, 2011]

JHORIZALDY UY, PETITIONER, VS. CENTRO CERAMICA CORPORATION AND/OR RAMONITA Y. SY AND MILAGROS U. GARCIA, RESPONDENTS.

Petitioner Jhorizaldy Uy was hired by respondent Centro Ceramica Corporation as full-time sales executive on March 21, 1999 under probationary employment for six months. He became a regular employee on May 1, 2000 with monthly salary of P7,000.00 and P1,500.00 transportation allowance, plus commission. On March 18, 2002, petitioner filed a complaint for illegal dismissal against the respondent company, its President Ramonita Y. Sy (Sy) and Vice-President Milagros Uy-Garcia (Garcia). Petitioner alleged that his predicament began when former VP Garcia was rehired by respondent company in the last quarter of 2001. Certain incidents involving longtime clients led to a strained working relationship between him and Garcia. On February 19, 2002 after their weekly sales meeting, he was informed by his superior, Sales Supervisor Richard Agcaoili, that he (petitioner)

was to assume a new position in the marketing department, to which he replied that he will think it over. His friends had warned him to be careful saying "mainit ka kay Ms. Garcia." That same day, he was summoned by Sy and Garcia for a closed-door meeting during which Sy informed him of the termination of his services due to "insubordination" and advised him to turn over his samples and files immediately. Sy even commented that "member ka pa naman ng [S]ingles for [C]hrist pero napakatigas naman ng ulo mo." On February 21, 2002, he was summoned again by Sy but prior to this he was already informed by Agcaoili that the spouses Sy will give him all that is due to him plus goodwill money to settle everything. However, during his meeting with Sy, he asked for his termination paper and thereupon Sy told him that "If that's what you want I will give it to you". She added that "pag-isipan mo ang gagawin mo dahil kilala mo naman kami we are powerful."[4]

whether or not petitioner was dismissed by the respondents or voluntarily severed his employment by abandoning his job.

Yes. Scrutinizing the records, we find that the NLRC's finding of illegal dismissal is supported by the totality of evidence and more consistent with logic and ordinary human experience than the common finding of the CA and Labor Arbiter that petitioner informally severed his employment relationship with the company. It hardly convinces us that after declining his supposed transfer to another department as per the information relayed to him by his supervisor, petitioner would readily turn over his files

and samples unless something critical indeed took place in his subsequent closed-door meeting with Sy and Garcia. As correctly pointed out by petitioner, it is irrelevant whether or not he had earlier inquired from his supervisor what he will receive if he offers instead to resign upon being told of his impending transfer, for what matters is the action of Sy on his employment status. If ever petitioner momentarily contemplated resignation and such was the impression he conveyed in his talk with his supervisor prior to the meeting with Sy, such is borne by circumstances indicating Garcia's antagonism towards petitioner. In any event, whether such perception of a strained working relationship with Garcia was mistaken or not is beside the point. The crucial factor is the verbal order directly given by Sy, the company president, for petitioner to immediately turn over his accountabilities. Notably, Sy got irked when petitioner asked for his termination paper. Petitioner apparently wanted to ascertain whether such summary dismissal was official, and it was well within his right to demand that he be furnished with a written notice in order to apprise him of the real ground for his termination. Contrary to respondents' theory that petitioner's act of turning over the company files and samples is proof of his voluntary informal resignation rather than of the summary dismissal effected by management, no other plausible explanation can be made of such immediate turn over except that petitioner directly confirmed from the company president herself that he was already being dismissed. The subsequent memos sent to petitioner's residence after he did not anymore report for work only reinforce the conclusion that the belated written notice of the charge against him - his alleged failure to meet the prescribed sales quota - was

an afterthought on the part of respondents who may have realized that they failed to observe due process in terminating him. That respondents would still require a written explanation for petitioner's poor sales performance after the latter already complied with Sy's directive to turn over all his accountabilities is simply inconsistent with their claim that petitioner offered to resign and voluntarily relinquished possession of company files and samples when told of his impending transfer. In other words, petitioner was not given any opportunity to defend himself from whatever charges hurled by management against him, such as poor sales performance as relayed to him by his supervisor, when Sy unceremoniously terminated him which must have shocked him considering that his supervisor earlier advised that he would just be transferred to another department. Under this scenario, petitioner's decision not to report for work anymore was perfectly understandable, as the sensible reaction of an employee fired by no less than the company president. It was indeed a classic case of dismissal without just cause and due process, which is proscribed under our labor laws. As to the affidavits submitted by the respondents, these are at best self-serving having been executed by employees beholden to their employer and which evidence by themselves did not refute petitioner's main cause of action -- the fact of his summary dismissal on February 19, 2002. Respondents' effort to present the case as one of an erring employee about to be investigated for poor sales performance must likewise fail. The NLRC duly noted the discriminatory treatment accorded to petitioner when it declared that there is no evidence at all that other sales personnel who failed to meet the prescribed sales quota were similarly

reprimanded or penalized. Incidentally, the question may be asked if petitioner whose performance was assessed by management as "poor" yet admittedly ranked second to the top sales agent of the company, why was it that no evidence was submitted by respondents to show the comparative sales performance of all sales agents? Given the strained working relationship with Garcia, or at least a perception of such gap on the part of petitioner, the latter could not have been properly informed of the actual ground for his dismissal. But more importantly, respondents terminated petitioner first and only belatedly sent him written notices of the charge against him. Fairness requires that dismissal, being the ultimate penalty that can be meted out to an employee, must have a clear basis. Any ambiguity in the ground for the termination of an employee should be interpreted against the employer, who ordained such ground in the first place.[14] Resignation is defined as"the voluntary act of employees who are compelled by personal reasons to disassociate themselves from their employment. It must be done with the intention of relinquishing an office, accompanied by the act of abandonment."[15] In this case, the evidence on record suggests that petitioner did not resign; he was orally dismissed by Sy. It is this lack of clear, valid and legal cause, not to mention due process, that made his dismissal illegal, warranting reinstatement and the award of backwages.[16] Moreover, the filing of a complaint for illegal dismissal just three weeks later is difficult to reconcile with voluntary resignation. Had petitioner intended to voluntarily relinquish his employment after being unceremoniously dismissed by no less than the company president, he would not

have sought redress from the NLRC and vigorously pursued this case against the respondents.[17] When there is no showing of a clear, valid and legal cause for the termination of employment, the law considers it a case of illegal dismissal. Furthermore, Article 4 of the Labor Code expresses the basic principle that all doubts in the interpretation and implementation of the Labor Code should be interpreted in favor of the workingman. This principle has been extended by jurisprudence to cover doubts in the evidence presented by the employer and the employee.[18] Thus we have held that if the evidence presented by the employer and the employee are in equipoise, the scales of justice must be tilted in favor of the latter. [19] Accordingly, the NLRC's finding of illegal dismissal must be upheld.

[G.R. No. 164301 : October 19, 2011]

BANK OF THE PHILIPPINE ISLANDS, PETITIONER, VS. BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, RESPONDENT.

[G.R. No. 151993, October 19, 2011]

MARITIME FACTORS INC., PETITIONER, VS. BIENVENIDO R. HINDANG, RESPONDENT.

On June 10, 1994, petitioner Maritime Factors Inc., a domestic manning agency, for and in behalf of its foreign principal Bahrain Marine Contracting/Panama, engaged the services of Danilo R. Hindang (Danilo) to work as GP/Deckhand on board the M/T "Reya," a Panamanian-registered ocean-going vessel. Danilo's contract of employment was for a period of 12 months with a basic monthly salary of US$230.00.[3] On July 27, 1994, while within the territorial jurisdiction of the Kingdom of Saudi Arabia and on board the vessel, Chief Mate Marcial Lauron, Jr., AB Jaime Aguinaldo and Oiler Allan P. Sarabia forced open Danilo's cabin door by taking out the screws on the door lock with a screw driver. They found Danilo's body inside the locker (wardrobe) of his cabin.[4] Danilo was found hanging by a strap on his neck in a kneeling position.[5] Upon arriving at West Pier, Ras Tanurah, they turned over Danilo's body to the Saudi police authorities, who then brought the body to Dr. Ossman Abdel Hameed, the Medical Examiner of the Eastern Region, Kingdom of Saudi Arabia. It was alleged that Dr. Hameed conducted an autopsy on Danilo's remains and concluded that Danilo committed suicide by hanging himself.[6] Danilo's remains were repatriated to the Philippines where an autopsy was requested by Danilo's family. The autopsy was conducted by Dr. Maximo L. Reyes, a Medico-Legal Officer of the National Bureau of Investigation (NBI) and concluded that the

cause of Danilo's death was Asphyxia by Strangulation, Ligature. [7] Dr. Reyes subsequently issued a Certification[8] dated December 27, 1994 clarifying that Danilo died of Asphyxia by strangulation which meant that somebody caused his death based on his autopsy findings. On August 24, 1994, respondent Bienvenido R. Hindang, brother of the deceased seaman Danilo, filed for death compensation benefits pursuant to the POEA Standard Employment Contract Governing the Employment of All Filipino Seamen on Board Ocean-Going Vessels. The case was docketed as POEA Case No. 94-08-2599.[9] Since efforts to settle the case amicably proved futile, the Labor Arbiter (LA) directed the parties to submit their respective position papers. Petitioner filed its Position Paper claiming that based on Dr. Hameed's medical jurisprudence report, Danilo committed suicide by hanging himself; thus, his death is not compensable. Petitioner submitted a photocopy of the fax transmission of a purported English translation of a 4-page medical jurisprudence report of Dr. Hameed where the latter stated that the cause of Danilo's death was suicide by hanging himself. Petitioner also submitted the written report dated September 21, 1994 of Danilo's fellow crew members stating that Danilo's cabin door was locked, thus, they forced open it and found Danilo inside the locker room hanging by his neck in a kneeling position. In his Position Paper, respondent contended that the NBI autopsy report categorically declared that the cause of Danilo's death was Asphyxia by strangulation, ligature; that the alleged Dr. Hameed's

medical report cannot be given legal effect, since the report was a mere photocopy of a fax transmission from petitioner's foreign principal, hence, the document was unreliable as to its due execution and genuineness.

Whether or not death benefits may be appreciated Yes. In order to avail of death benefits, the death of the employee should occur during the effectivity of the employment contract. The death of a seaman during the term of employment makes the employer liable to his heirs for death compensation benefits. Once it is established that the seaman died during the effectivity of his employment contract, the employer is liable.[22] This rule, however, is not absolute. The employer may be exempt from liability if he can successfully prove that the seaman's death was caused by an injury directly attributable to his deliberate or willful act.[23] Clearly, respondent's entitlement to any death benefit depends on whether petitioner's evidence suffices to prove that Danilo committed suicide, and the burden of proof rests on petitioner.[24] The LA, the NLRC and the CA found that Danilo died of Asphyxia by strangulation as proved by the NBI post-mortem findings and certification issued by the medico-legal officer, Dr. Reyes. These three tribunals did not consider the photocopy of the fax transmission of the purported English translation of Dr. Hameed's medical report to prove that Danilo committed suicide, since the medical report's genuineness and due execution were unverifiable.

Notably, petitioner stated in all its pleadings filed that the medical report is the English translation of Dr. Hameed's report. However, the existence of the original medical report, which was written in the arabic language, was not even attached to the records and has not been proved.[25] Moreover, the identity of the person who made the translation and whether the translator has the recognized competence in both English and the language the medical report was originally written are not established.[26] Thus, there is no clear assurance that the translated words are the accurate translation of the original medical report of Dr. Hameed. More importantly, the alleged translated medical report was not even signed by Dr. Hameed which creates doubt as to its authenticity. The unsigned translated medical report is nothing but a self-serving document which ought to be treated as a mere scrap of paper devoid of any evidentiary value even in administrative proceedings. Thus, based on the foregoing, the photocopy of the fax transmission of an alleged translated medical report was correctly denied consideration, since it is required that there be some proof of authenticity or reliability as condition for the admission of documents.[27]

[G.R. No. 185412 :November 16, 2011]

GILBERT QUIZORA, PETITIONER, VS. DENHOLM CREW MANAGEMENT (PHILIPPINES), INC., RESPONDENT.

Records show that in 1992, Denholm Crew Management (Philippines), Inc. (respondent company), a domestic manning agency that supplied manpower to Denklav Maritime Services, Ltd. (Denklav), a foreign maritime corporation, hired the services of Gilbert Quizora (petitioner) to work as a messman on board the international vessels of Denklav. Based on Article 4.2 of the Collective Bargaining Agreement (CBA) entered into by and between the Association of Marine Officers and Seamen Union of the Philippines (AMOSUP) and Denholm Ship Management (Singapore) Ltd., represented by Denklav, his contractual work as messman was considered terminated upon the expiration of each contract. Article 5.1 thereof provided that the duration of his sea service with respondent company was nine (9) months depending on the requirements of the foreign principal. After the end of a contract for a particular vessel, he would be given his next assignment on a different vessel. His last assignment was from November 4, 1999 to July 16, 2000 on board the vessel MV Leopard.

After the expiration of his contract with MV Leopard, petitioner was lined up for another assignment to a different vessel, but he was later disqualified for employment and declared unfit for sea duty after he was medically diagnosed to be suffering from venous duplex scan (lower extremities) deep venous insufficiency, bilateral femoral and superficial femoral veins and the (L) popliteal vein. In laymans terms, he was medically found to have varicose veins.

Subsequently,

petitioner

demanded

from

respondent

company the payment of disability benefits, separation pay and reimbursement of medical expenses. His demands, however, were denied. He then submitted his claim before the AMOSUP, but it was likewise denied. Thereafter, he filed with the LA a complaint for payment of disability benefits, medical expenses, separation pay, damages, and attorneys fees.

WHETHER PETITIONER IS ENTITLED TO DISABILITY BENEFITS

No. Unfortunately for petitioner, he failed to prove that his varicose veins arose out of his employment with respondent company. Except for his bare allegation that it was work-related, he did not narrate in detail the nature of his work as a messman aboard Denklavs vessels. He likewise failed to particularly describe his working conditions while on sea duty. He also failed to specifically state how he contracted or developed varicose veins while on sea duty and how and why his working conditions aggravated it. Neither did he present any expert medical opinion regarding the cause of his varicose veins. No written document whatsoever was presented that would clearly validate his claim or visibly demonstrate that the working conditions on board the vessels he served increased the risk of acquiring varicose veins.

Moreover, although petitioner was rehired by respondent company several times, his eight-year service as a seaman was not actually without a sign-off period. His contract with respondent company was considered automatically terminated after the expiration of each overseas employment contract. Upon

the termination of each contract, he was considered signed-off and he would have to go back and re-apply by informing respondent company as to his availability. Thereafter, he would have to sign an Availability Advise Form. Meanwhile, he would have to wait for a certain period of time, probably months, before he would be called again for sea service.

Thus, respondent company can argue that petitioners eight (8) years of service with it did not automatically mean that he acquired his varicose veins by reason of such employment. His sea service was not an unbroken service. The fact that he never applied for a job with any other employer is of no moment. He enjoyed month-long sign-off vacations when his contract expired. It is possible that he acquired his condition during one of his sign-off periods.

As discussed in the decision of the CA, varicose veins may be caused by trauma, thrombosis, inflammation or heredity. Although the exact cause of varicose veins is still unknown, a number of factors contribute to it which include heredity, advance

aging, prolonged standing, being overweight, hormonal influences during pregnancy, use of birth control pills, post-menopausal hormonal replacement therapy, prolonged sitting with legs crossed, wearing tight undergarments or clothes, history of blood clots, injury to the veins, conditions that cause increased pressure in the abdomen including liver disease, fluid in the abdomen, previous groin injury, heart failure, topical steroids, trauma or injury to the skin, previous venous surgery and exposure to ultraviolet rays.

Lastly, there is also no proof that petitioners varicose veins caused him to suffer total and permanent disability. The PreEmployment Medical Examination (PEME) he underwent cannot serve as enough basis to justify a finding of a total and permanent disability because of its non-exploratory nature. The fact that respondent passed the companys PEME is of no moment. We have ruled that in the past the PEME is not exploratory in nature. It was not intended to be a totally in-depth and thorough examination of an applicants medical condition. The PEME merely determines whether one is "fit to work" at sea or "fit for sea service," it does not state the real state of health of an applicant. In short, the "fit to work" declaration in the respondents PEME cannot be a

conclusive proof to show that he was free from any ailment prior to his deployment. Thus we held in NYKFIL Ship Management, Inc. v. NLRC: While a PEME may reveal enough for the petitioner (vessel) to decide whether a seafarer is fit for overseas employment, it may not be relied upon to inform petitioners of a seafarers true state of health. The PEME could not have divulged respondents illness considering that the examinations were not exploratory.

Besides, it was not expressly stated in his medical diagnosis that his illness was equivalent to a total and permanent disability. Absent any indication, the Court cannot accommodate him.

[G.R. Nos. 180849 and 187143 : November 16, 2011]

PHILIPPINE NATIONAL BANK, PETITIONER, VS. DAN PADAO, RESPONDENT.

On August 21, 1981, Padao was hired by PNB as a clerk at its Dipolog City Branch. He was later designated as a credit investigator in an acting capacity on November 9, 1993. On

March 23, 1995, he was appointed regular Credit Investigator III, and was ultimately promoted to the position of Loan and Credit Officer IV.

Sometime in 1994, PNB became embroiled in a scandal involving behest loans. A certain Sih Wat Kai complained to the Provincial Office of the Commission on Audit (COA) of Zamboanga del Norte that anomalous loans were being granted by its officers: Assistant Vice President (AVP) and Branch Manager Aurelio De Guzman (AVP de Guzman), Assistant Department Manager and Cashier Olson Sala (Sala), and Loans and Senior Credit Investigator Primitivo Virtudazo (Virtudazo).

The questionable loans were reportedly being extended to select bank clients, among them Joseph Liong, Danilo Dangcalan, Jacinto Salac, Catherine Opulentisima, and Virgie Pango. The expos triggered the conduct of separate investigations by the COA and PNBs Internal Audit Department (IAD) from January to August 1995. Both investigations confirmed that the collateral provided in numerous loan accommodations were grossly over-

appraised. The credit standing of the loan applicants was also fabricated, allowing them to obtain larger loan portfolios from PNB. These borrowers eventually defaulted on the payment of their loans, causing PNB to suffer millions in losses.

In August 1995, Credit Investigators Rolando Palomares (Palomares) and Cayo Dagpin (Dagpin) were administratively charged with Dishonesty, Grave Misconduct, Gross Neglect of Duty, Conduct Prejudicial to the Best Interest of the Service, and violation of Republic Act (R.A.) No. 3019 (Anti-Graft and Corrupt Practices Act), in connection with an anomalous loan granted to the spouses, Jaime and Allyn Lim (the Lims). These charges, however, were later ordered dropped by PNB, citing its findings that Dagpin and Palomares signed the Inspection and Appraisal Report (IAR) and the Credit Inspection Report (CIR) in support of the Lims loan application in good faith, and upon the instruction of their superior officers. PNB also considered using Dagpin and Palomares as prosecution witnesses against AVP de Guzman, Loan Division Chief Melindo Bidad (Bidad) and Sala.

The following month, September 1995, administrative charges for Grave Misconduct, Gross Neglect of Duty and Gross Violations of Bank Rules and Regulations and criminal cases for violation of R.A. No. 3019 were filed against AVP de Guzman, Sala, Virtudazo, and Bidad. Consequently, they were all dismissed from the service by PNB in November 1996. Later, Virtudazo was ordered reinstated.

On June 14, 1996, Padao and Division Chief Wilma Velasco (Velasco) were similarly administratively charged with Dishonesty, Grave Misconduct, Gross Neglect of Duty, Conduct Prejudicial to the Best Interest of the Service, and violation of R.A. No. 3019.

The case against Padao was grounded on his having allegedly presented a deceptively positive status of the business, credit standing/rating and financial capability of loan applicants Reynaldo and Luzvilla Baluma and eleven (11) others. It was later found that either said borrowers businesses were inadequate to meet their loan obligations, or that the projects they sought to be financed did not exist.

Padao was also accused of having over-appraised the collateral of the spouses Gardito and Alma Ajero, the spouses Ibaba, and Rolly Pango.

On January 10, 1997, after due investigation, PNB found Padao guilty of gross and habitual neglect of duty and ordered him dismissed from the bank. Padao appealed to the banks Board of Directors. On January 20, 1997, Velasco was also held guilty of the offenses charged against her, and was similarly meted the penalty of dismissal. Her motion for reconsideration, however, was later granted by the bank, and she was reinstated.

On October 11, 1999, after almost three (3) years of inaction on the part of the Board, Padao instituted a complaint against PNB and its then AVP, Napoleon Matienzo (Matienzo), with the Labor Arbitration Branch of the NLRC Regional Arbitration Branch (RAB) No. IX in Zamboanga City for 1] Reinstatement; 2] Backwages; 3] Illegal Dismissal; and 4] Treachery/Bad Faith and Palpable Discrimination in the Treatment of Employees with administrative cases. The case was docketed as RAB 09-0400098-01.

Whether or not employee was illegally dismissed

No. In this case, Padao was dismissed by PNB for gross and habitual neglect of duties under Article 282 (b) of the Labor Code.

Gross negligence connotes want of care in the performance of ones duties, while habitual neglect implies repeated failure to perform ones duties for a period of time, depending on the circumstances. Gross negligence has been defined as the want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.

In the case at bench, Padao was accused of having presented a fraudulently positive evaluation of the business, credit standing/rating and financial capability of Reynaldo and Luzvilla Baluma and eleven other loan applicants. Some businesses were eventually found not to exist at all, while in other transactions, the financial status of the borrowers simply could not support the grant of loans in the approved amounts. Moreover, Padao over-

appraised the collateral of spouses Gardito and Alma Ajero, and that of spouses Ihaba and Rolly Pango.

The role that a credit investigator plays in the conduct of a banks business cannot be overestimated. The amount of loans to be extended by a bank depends upon the report of the credit investigator on the collateral being offered. If a loan is not fairly secured, the bank is at the mercy of the borrower who may just opt to have the collateral foreclosed. If the scheme is repeated a hundredfold, it may lead to the collapse of the bank. In the case of Sawadjaan v. Court of Appeals, the Court stressed the crucial role that a credit investigator or an appraiser plays. Thus:

Petitioner himself admits that the position of appraiser/inspector is "one of the most serious [and] sensitive job[s] in the banking operations." He should have been aware that accepting such a designation, he is obliged to perform the task at hand by the exercise of more than ordinary prudence. As appraiser/investigator, the petitioner was expected to conduct an ocular inspection of the properties offered by CAMEC as collaterals and check the copies of the certificates of title against those on file with the Registry of Deeds. Not only did he fail to conduct these routine checks, but he also deliberately misrepresented in his appraisal

report that after reviewing the documents and conducting a site inspection, he found the CAMEC loan application to be in order. Despite the number of pleadings he has filed, he has failed to offer an alternative explanation for his actions. [Emphasis supplied]

In fact, banks are mandated to exercise more care and prudence in dealing with registered lands:

[B]anks are cautioned to exercise more care and prudence in dealing even with registered lands, than private individuals, "for their business is one affected with public interest, keeping in trust money belonging to their depositors, which they should guard against loss by not committing any act of negligence which amounts to lack of good faith by which they would be denied the protective mantle of the land registration statute Act 496, extended only to purchasers for value and in good faith, as well as to mortgagees of the same character and description. It is for this reason that banks before approving a loan send representatives to the premises of the land offered as collateral and investigate who are the true owners thereof.

Padaos repeated failure to discharge his duties as a credit investigator of the bank amounted to gross and habitual neglect of

duties under Article 282 (b) of the Labor Code. He not only failed to perform what he was employed to do, but also did so repetitively and habitually, causing millions of pesos in damage to PNB. Thus, PNB acted within the bounds of the law by meting out the penalty of dismissal, which it deemed appropriate given the circumstances.

The CA was correct in stating that when the violation of company policy or breach of company rules and regulations is tolerated by management, it cannot serve as a basis for termination. Such ruling, however, does not apply here. The principle only applies when the breach or violation is one which neither amounts to nor involves fraud or illegal activities. In such a case, one cannot evade liability or culpability based on obedience to the corporate chain of command.

[G.R. No. 176377 : November 16, 2011]

FUNCTIONAL, INC. PETITIONER, VS. SAMUEL C. GRANFIL, RESPONDENT.

Sometime in 1992, respondent Samuel C. Granfil was hired as key operator by petitioner Functional, Inc. (FI), a domestic corporation engaged in the business of sale and rental of various business equipments, including photocopying machines. As Key Operator, Granfil was tasked to operate the photocopying machine rented by the National Bookstore (NBS) at its SM Megamall Branch. There is no dispute regarding the fact that, in the evening of 30 July 2002, Granfil attended to a customer by the name of Cosme Cavaldeja (Cavaldeja) who, together with his wife, asked to have their flyers photocopied. It appears that Bonnel Dechavez, the security guard assigned at said establishment, saw Cavaldeja handing money to Granfil after the transaction was finished. After investigating the matter, Dechavez submitted the following incident report to NBS Branch Manager Lucy Genegaban (Genegaban), to wit:

At around 1940 on July 30, 2002 at NBS SM Megamall Dona Julia Vargas Ave., Mandaluyong City, I checked one customer and asked if he already paid for his xerox[ed] items (sic) and he said yes. Upon asking for a receipt, he pointed to Sammy the Xerox operator [to] whom he g[a]ve payment, instead of paying to the cashier. Sammy came and it was only then that he brought the customer to the counter 09 for

payment [of] the amount of [the] xerox[ed] items (sic) is P250.

On 3 September 2002, Granfil filed a complaint against FI, its President, Romeo Bautista (Bautista), its Marketing Manager, Freddie Tenorio (Tenorio), its Office Supervisor, Julius Ballesteros (Ballesteros), and its Area Supervisor, Joel Dizon (Dizon), for illegal dismissal, unpaid 13th month pay, moral and exemplary damages and attorneys fees. In support of his complaint which was docketed as NLRC NCR Case No. 09-07126-2002 before the arbitral level of the National Labor Relations Commission (NLRC), Granfil alleged, among other matters, that the money which Dechavez saw him receive from Cavaldeja was a P200 tip said customer gave him in appreciation of his assistance in xeroxing and organizing the batches of voluminous materials he asked to be photocopied; that payment for the materials was, however, already paid per batch by Cavaldejas wife who, by that time, had already left the premises; and, that rather than listening to his explanation and simply verifying the meter of the photocopy machine as well as the paper allotted to it, Dechavez submitted his incident report which, in turn, caused Tenorio to tell him, Mr. Granfil, magpahinga ka muna. Mabuti pa, pumirma ka nalang ng resignation letter para may makuha ka pa.

Granfil further asseverated that, with said incident report having been telefaxed to FIs head office, he was asked to report thereat in the morning of 31 July 2002; that instead of allowing him to explain, however, Ballesteros peremptorily ordered his termination from employment; that wishing to explain his side, he sought out Dizon who merely ignored and tersely advised him, Magpahinga ka na lang; that refused entry when he tried to report for work on 1 August 2002, he subsequently sought out Cavaldeja whose corroboration of his version of the incident also fell on deaf ears; that having been terminated without just cause and observance of due process, he was constrained to file the 3 September 2002 complaint from which the instant suit originated; that aside from the reinstatement to which he is clearly entitled as an illegally dismissed employee, he should be paid full backwages and 13th month pay for the year 2002; and, that in view of the malice and bad faith which characterized his dismissal from employment, Bautista, Tenorio, Ballesteros and Dizon should be held jointly and severally liable with FI for the payment of said indemnities as well as his claims for moral and exemplary damages and attorneys fees.

In their position paper, FI and its corporate officers, in turn, averred that having been apprised of the incident, Genegaban requested for Granfils relief as Key Operator of the photocopying machine installed at the NBS SM Megamall Branch; that for the good of all concerned, FI informed Granfil that he was going to be transferred to a different assignment, without demotion in rank or diminution of his salaries, benefits and other privileges; that required to report to FIs main office to act as emergency reliever to other Key Operators while waiting for his new assignment, Granfil misconstrued his transfer as a punishment for his guilt and refused to heed said directive which was within the managements prerogative to issue; that an employees right to security of tenure does not give him such vested right to his position as would deprive his employer of its prerogative to change his assignment or transfer him where he will be most useful; and, that aside from being guilty of insubordination, Granfil clearly abandoned his employment rather than illegally dismissed therefrom.

On 29 April 2003, Labor Arbiter Eduardo Carpio rendered a decision discounting Granfils illegal dismissal from employment in view of his failure to prove with substantial evidence overt acts of

termination on the part of FI and its officers. Simply awarded the sum of P3,966.65 as proportionate 13th month pay for services rendered from January to July 2002, Granfil perfected the appeal which was docketed before the First Division of the NLRC as NLRC NCR CA No. 035887-03. With the affirmance of the Labor Arbiters decision in the 20 April 2005 Resolution issued by the NLRC and the subsequent denial of his motion seeking the reconsideration of said decision, Granfil elevated the case through the Rule 65 petition for certiorari docketed before the CA as CA-G.R. SP No. 94851. On 22 November 2006, the CA rendered the herein assailed 22 November 2006 Decision, reversing the NLRCs 20 April 2005 Resolution on the ground that FI failed to satisfactorily prove Granfils supposed abandonment of his employment which, by itself, was negated by his filing of a case for illegal employment. Ordering FI to reinstate Granfil and to pay his full backwages, allowances and other benefits from 31 July 2002 until his actual reinstatement, the CA denied said employees claims for moral and exemplary damages as well as attorneys fees for lack of factual basis.

FIs motion for reconsideration of the CAs 22 November 2006 decision was denied for lack of merit in said courts 22 January 2007 resolution, hence, this petition.

Whether or not employee was illegally dismissed

Yes. The rule is long and well settled that, in illegal dismissal cases like the one at bench, the burden of proof is upon the employer to show that the employees termination from service is for a just and valid cause. The employers case succeeds or fails on the strength of its evidence and not the weakness of that adduced by the employee, in keeping with the principle that the scales of justice should be tilted in favor of the latter in case of doubt in the evidence presented by them. Often described as more than a mere scintilla, the quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. justified and therefore illegal. Failure of the employer to discharge the foregoing onus would mean that the dismissal is not

Denying the charge of illegal dismissal, FI insists that Granfil abandoned his employment after he was transferred from his assignment at the NBS Megamall Branch as a consequence of the latters request for his relief. In the same manner that it cannot be said to have discharged the above-discussed burden by merely alleging that it did not dismiss the employee, it has been ruled that an employer cannot expediently escape liability for illegal dismissal by claiming that the former abandoned his work. This applies to FI which adduced no evidence to prove Granfils supposed abandonment beyond submitting copies of NBS 31 July 2002 request for said employees transfer and its 1 August 2002 written acquiescence thereto. While these documents may have buttressed the claim that Granfil was indeed recalled from his assignment, however, we find that the CA correctly discounted their probative value insofar as FIs theory of abandonment is concerned.

Being a matter of intention, moreover, abandonment cannot be inferred or presumed from equivocal acts. As a just and valid ground for dismissal, it requires the deliberate, unjustified refusal of the employee to resume his employment, without any intention

of returning. Two elements must concur: (1) failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts. The burden of proving abandonment is once again upon the employer who, whether pleading the same as a ground for dismissing an employee or as a mere defense, additionally has the legal duty to observe due process. Settled is the rule that mere absence or failure to report to work is not tantamount to abandonment of work.

Viewed in the light of the foregoing principles, we find that the CA correctly ruled out FIs position that Granfil had abandoned his employment. Aside from the fact that Bautista, Tenorio, Ballesteros and Dizon did not even execute sworn statements to refute the overt acts of dismissal imputed against them, the record is wholly bereft of any showing that FI required Granfil to report to its main office or, for that matter, to explain his supposed unauthorized absences. Absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore. Even then, FIs theory of abandonment was likewise negated by Granfils filing

the complaint for illegal dismissal which evinced his desire to return to work. In vigorously pursuing his action against FI before the Labor Arbiter, the NLRC and the CA, Granfil clearly manifested that he has no intention of relinquishing his employment. In any case, the fact that Granfil prayed for his reinstatement speaks against any intent to sever the employeremployee relationship with FI.

[G.R. No. 174179 : November 16, 2011]

KAISAHAN AT KAPATIRAN NG MGA MANGGAGAWA AT KAWANI SA MWC-EAST ZONE UNION AND EDUARDO BORELA, REPRESENTING ITS MEMBERS, PETITIONERS, VS. MANILA WATER COMPANY, INC., RESPONDENT.

The background facts are not disputed and are summarized below.

The Union is the duly-recognized bargaining agent of the rank-and-file employees of the respondent Manila Water

Company, Inc. (Company) while Borela is the Union President. On February 21, 1997, the Metropolitan Waterworks and Sewerage System (MWSS) entered into a Concession Agreement (Agreement) with the Company to privatize the operations of the MWSS. Article 6.1.3 of the Agreement provides that the Concessionaire shall grant [its] employees benefits no less favorable than those granted to MWSS employees at the time of [their] separation from MWSS. Among the benefits enjoyed by the employees of the MWSS were the amelioration allowance (AA) and the cost-of-living allowance (COLA) granted in August 1979, pursuant to Letter of Implementation No. 97 issued by the Office of the President.

The payment of the AA and the COLA was discontinued pursuant to Republic Act No. 6758, otherwise known as the Salary Standardization Law, which integrated the allowances into the standardized salary. Nonetheless, in 2001, the Union demanded from the Company the payment of the AA and the COLA during the renegotiation of the parties Collective Bargaining Agreement (CBA). The Company initially turned down this demand, however, it subsequently agreed to an amendment of the CBA on the matter, which provides:

The Company shall implement the payment of the Amelioration Allowance and Cost of Living [A]llowance retroactive August 1, 1997 should the MWSS decide to pay its employees and all its former employees or upon award of a favorable order by the MWSS Regulatory Office or upon receipt of [a] final court judgment.

Thereafter, the Company integrated the AA into the monthly payroll of all its employees beginning August 1, 2002, payment of the AA and the COLA after an appropriation was made and approved by the MWSS Board of Trustees. The Company, however, did not subsequently include the COLA since the Commission on Audit disapproved its payment because the Company had no funds to cover this benefit.

As a result, the Union and Borela filed on April 15, 2003 a complaint against the Company for payment of the AA, COLA, moral and exemplary damages, legal interest, and attorneys fees before the National Labor Relations Commission (NLRC).

Whether or not the amount of attorneys fees is tenable

No.

In the present case, the ten percent (10%) attorneys fees

awarded by the NLRC on the basis of Article 111 of the Labor Code accrue to the Unions members as indemnity for damages and not to the Unions counsel as compensation for his legal services, unless, they agreed that the award shall be given to their counsel as additional or part of his compensation; in this case the Union bound itself to pay 10% attorneys fees to its counsel under the MOA and also gave up the attorneys fees awarded to the Unions members in favor of their counsel. This is supported by Borelas affidavit which stated that [t]he 10% attorneys fees paid by the members/employees is separate and distinct from the obligation of the company to pay the 10% awarded attorneys fees which we also gave to our counsel as part of our contingent fee agreement. The limit to this agreement is that the indemnity for damages imposed by the NLRC on the losing party (i.e., the Company) cannot exceed ten percent (10%).

Properly viewed from this perspective, the award cannot be taken to mean an additional grant of attorneys fees, in violation of the ten percent (10%) limit under Article 111 of the Labor Code since it rests on an entirely different legal obligation than the one

contracted under the MOA. Simply stated, the attorneys fees contracted under the MOA do not refer to the amount of attorneys fees awarded by the NLRC; the MOA provision on attorneys fees does not have any bearing at all to the attorneys fees awarded by the NLRC under Article 111 of the Labor Code. Based on these considerations, it is clear that the CA erred in ruling that the LAs award of attorneys fees violated the maximum limit of ten percent (10%) fixed by Article 111 of the Labor Code.

Under this interpretation, the Companys argument that the attorneys fees are unconscionable as they represent 20% of the amount due or about P21.4 million is more apparent than real. Since the attorneys fees awarded by the LA pertained to the Unions members as indemnity for damages, it was totally within their right to waive the amount and give it to their counsel as part of their contingent fee agreement. Beyond the limit fixed by Article 111 of the Labor Code, such as between the lawyer and the client, the attorneys fees may exceed ten percent (10%) on the basis of quantum meruit, as in the present case.

[G.R. No. 171644 : November 23, 2011]

DELIA D. ROMERO, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, ROMULO PADLAN AND ARTURO SIAPNO, RESPONDENTS.

Private respondent Romulo Padlan (Romulo) was a former classmate of petitioner in college. Sometime in September 2000 Romulo went to petitioner's stall (wedding gown rentals) at W. A. Jones St., Calasiao, Pangasinan to inquire about securing a job in Israel. Convinced by petitioner's words of encouragement and inspired by the potential salary of US$700.00 to US$1,200.00 a month, Romulo asked petitioner the amount of money required in order for him to be able to go to Israel. Petitioner informed him that as soon as he could give her US$3,600.00, his papers would be immediately processed. To raise the amount, Romulo secured a loan from a bank and borrowed some more from his friends. When he was able to raise the amount, Romulo went back to petitioner and handed her the money. Petitioner contacted Jonney Erez Mokra who instructed Romulo to attend a briefing at his (Jonney's) house in Dau, Mabalacat, Pampanga. Romulo was able to leave for Israel on October 26, 2000 and was able to secure a job with a monthly salary of US$650.00. Unfortunately, after two and a half months, he was caught by Israel's immigration police and detained for 25 days. He was

subsequently deported because he did not possess a working visa. On his return, Romulo demanded from petitioner the return of his money, but the latter refused and failed to do so.

On the other hand, private respondent Arturo Siapno is petitioner's nephew. Sometime in August 2000, he went to petitioner's stall. He was convinced by the petitioner that if he could give her US$3,600.00 for the processing of his papers, he could leave the country within 1 to 2 weeks for a job placement in Israel. Arturo contacted a relative in the U.S. to ask the latter to cover the expenses for the former's overseas job placement. The relative sent the US$3,000.00 to Teresita D. Visperas, petitioner's sister in Israel. Petitioner processed Arturo's papers and contacted Jonney Erez Mokra. Jonney instructed Arturo to attend a briefing in Dau, Mabalacat, Pampanga. Afterwards, Arturo left for Israel sometime in September 2000. He was able to work and receive US$800.00 salary per month. After three months of stay in Israel, he was caught by the immigration officials, incarcerated for ten days and was eventually deported. After arriving in the country, Arturo immediately sought the petitioner. not happen. Petitioner promised him that she would send him back to Israel, which did

Arturo, after learning that Romulo suffered the same fate, checked with the Department of Labor and Employment (DOLE) Dagupan District Office whether petitioner, Teresita D. Visperas and Jonney Erez Mokra had any license or authority to recruit employees for overseas employment. Finding that petitioner and the others were not authorized to recruit for overseas employment, Arturo and Romulo filed a complaint against petitioner, Teresita and Jonney before the National Bureau of Investigation (NBI).

Consequently, an Information dated June 18, 2001 was filed against petitioner and Jonney Erez Mokra for the crime of Illegal Recruitment which reads as follows:

That sometime in the month of August and September 2000 in the Municipality of Calasiao, Province of Pangasinan, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, not being licensee or holder of authority, conspiring, confederating and mutually helping one another, did then and there, wilfully, unlawfully and feloniously undertake and perform recruitment activity by recruiting ARTURO SIAPNO and ROMULO

PADLAN to a supposed job abroad particularly in Israel, for a fee, without first securing the necessary license and permit to do the same. CONTRARY to Art. 38 (a) of P.D. 442, as amended by P.D. 2018.

Upon arraignment on August 20, 2001, petitioner, with the assistance of her counsel pleaded not guilty, whereas accused Jonney Erez Mokra was and is still at-large. Thereafter, trial on the merits ensued.

To establish the facts earlier mentioned, the prosecution presented the testimonies of Romulo Padlan and Arturo Siapno. Petitioner, on the other hand, offered her own testimony, as well as Satchi Co Pontaces to prove that petitioner did not recruit the private respondents. According to petitioner, private respondents went to her to inquire about the working status of her sister in Israel. She told them that her sister was doing well. When private respondents asked her how her sister was able to go to Israel, petitioner told them that she does not know and that she will have to ask her sister about that matter. Petitioner then called her sister and told her that the private respondents wanted

to ask for her help in going to Israel. It was petitioner's sister and the private respondents who communicated with each other, and the petitioner had no knowledge as to the content of the former's conversations and agreements.

Whether or not there has been illegal recruitment

Yes.

Illegal recruitment is defined in Article 38 of the Labor

Code, as amended, as follows:

ART. 38. Illegal Recruitment. - (a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by nonlicensees or non-holders of authority, shall be deemed illegal and punishable under Article 39 of this Code. The [Department] of Labor and Employment or any law enforcement officer may initiate complaints under this Article. (b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof. 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.

Article 13 (b) of the same Code defines, recruitment and placement as: any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, that any person or entity which, in any manner, offers or promises for a fee, employment to two or more persons shall be deemed engaged in recruitment and placement.

The crime of illegal recruitment is committed when two elements concur, namely: (1) the offender has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and (2) he undertakes either any activity within the meaning of "recruitment and placement" defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code.

In disputing the absence of the first element, petitioner offers her opinion that the CA erred in affirming the trial court's reliance on a mere certification from the DOLE Dagupan District Office that she does not have the necessary licence to recruit workers for abroad. She claims that the prosecution committed a procedural lapse in not procuring a certification from the agency primarily involved, the Philippine Overseas Employment Administration (POEA). The said argument, however, is flawed.

Under the first element, a non-licensee or non-holder of authority is any person, corporation or entity which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor, or whose license or authority has been suspended, revoked or cancelled by the POEA or the Secretary. Clearly, the creation of the POEA did not divest the Secretary of Labor of his/her jurisdiction over recruitment and placement of activities. The governing rule is still Article 35 of the Labor Code. This is further discussed in this Court's ruling in Trans Action Overseas Corp. v. Secretary of Labor, wherein it was ruled that:

In the case of Eastern Assurance and Surety Corp. v. Secretary of Labor, we held that: The penalties of suspension and cancellation of license or authority are prescribed for violations of the above-quoted provisions, among others. And the Secretary of Labor has the power under Section 35 of the law to apply these sanctions, as well as the authority, conferred by Section 36, not only to restrict and regulate the recruitment and placement activities of all agencies, but also to promulgate rules and regulations to carry out the objectives and implement the provisions governing said activities. Pursuant to this rule-making power thus granted, the Secretary of Labor gave the POEA, on its own initiative or upon a filing of a complaint or report or upon request for investigation by any aggrieved person, xxx (authority to) conduct the necessary proceedings for the suspension or cancellation of the license or authority of any agency or entity for certain enumerated offenses including 1) the imposition or acceptance, directly or indirectly, of any amount of money, goods or services, or any fee or bond in excess of what is prescribed by the Administration, and

2) any other violation of pertinent provisions of the Labor Code and other relevant laws, rules and regulations. The Administrator was also given the power to order the dismissal of the case or the suspension of the license or authority of the respondent agency or contractor or recommend to the Minister the cancellation thereof. This power conferred upon the Secretary of Labor and Employment was echoed in People v. Diaz, viz.: A non-licensee or non-holder of authority means any person, corporation or entity which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor, or whose license or authority has been suspended, revoked or cancelled by the POEA or the Secretary.

[G.R. No. 169757 : November 23, 2011]

CESAR C. LIRIO, DOING BUSINESS UNDER THE NAME AND STYLE OF CELKOR AD SONICMIX, PETITIONER, VS. WILMER D. GENOVIA, RESPONDENT.

On July 9, 2002, respondent Wilmer D. Genovia filed a complaint against petitioner Cesar Lirio and/or Celkor Ad Sonicmix Recording Studio for illegal dismissal, non-payment of commission and award of moral and exemplary damages.

In his Position Paper, respondent Genovia alleged, among others, that on August 15, 2001, he was hired as studio manager by petitioner Lirio, owner of Celkor Ad Sonicmix Recording Studio (Celkor). He was employed to manage and operate Celkor and to promote and sell the recording studio's services to music enthusiasts and other prospective clients. He received a monthly salary of P7,000.00. They also agreed that he was entitled to an additional commission of P100.00 per hour as recording technician whenever a client uses the studio for recording, editing or any related work. He was made to report for work from Monday to Friday from 9:00 a.m. to 6 p.m. On Saturdays, he was required to work half-day only, but most of the time, he still rendered eight hours of work or more. All the employees of petitioner, including respondent, rendered overtime work almost everyday, but petitioner never kept a daily time record to avoid paying the employees overtime pay.

Respondent stated that a few days after he started working as a studio manager, petitioner approached him and told him about his project to produce an album for his 15-year-old daughter, Celine Mei Lirio, a former talent of ABS-CBN Star Records. Petitioner asked respondent to compose and arrange songs for Celine and promised that he (Lirio) would draft a contract to assure respondent of his compensation for such services. As agreed upon, the additional services that respondent would render included composing and arranging musical scores only, while the technical aspect in producing the album, such as digital editing, mixing and sound engineering would be performed by respondent in his capacity as studio manager for which he was paid on a monthly basis. Petitioner instructed respondent that his work on the album as composer and arranger would only be done during his spare time, since his other work as studio manager was the priority. Respondent then started working on the album. Respondent alleged that before the end of September 2001, he reminded petitioner about his compensation as composer and arranger of the album. Petitioner verbally assured him that he would be duly compensated. By mid-November 2001, respondent

finally finished the compositions and musical arrangements of the songs to be included in the album. Before the month ended, the lead and back-up vocals in the ten (10) songs were finally recorded and completed. From December 2001 to January 2002, respondent, in his capacity as studio manager, worked on digital editing, mixing and sound engineering of the vocal and instrumental audio files.

Thereafter, respondent was tasked by petitioner to prepare official correspondence, establish contacts and negotiate with various radio stations, malls, publishers, record companies and manufacturers, record bars and other outlets in preparation for the promotion of the said album. By early February 2002, the album was in its manufacturing stage. ELECTROMAT, manufacturer of CDs and cassette tapes, was tapped to do the job. The carrier single of the album, which respondent composed and arranged, was finally aired over the radio on February 22, 2002. On February 26, 2002, respondent again reminded

petitioner about the contract on his compensation as composer and arranger of the album. Petitioner told respondent that since

he was practically a nobody and had proven nothing yet in the music industry, respondent did not deserve a high compensation, and he should be thankful that he was given a job to feed his family. Petitioner informed respondent that he was entitled only to 20% of the net profit, and not of the gross sales of the album, and that the salaries he received and would continue to receive as studio manager of Celkor would be deducted from the said 20% net profit share. Respondent objected and insisted that he be properly compensated. On March 14, 2002, petitioner verbally terminated respondents services, and he was instructed not to report for work. Respondent asserts that he was illegally dismissed as he was terminated without any valid grounds, and no hearing was conducted before he was terminated, in violation of his constitutional right to due process. Having worked for more than six months, he was already a regular employee. Although he was a so called studio manager, he had no managerial powers, but was merely an ordinary employee. Respondent prayed for his reinstatement without loss of seniority rights, or, in the alternative, that he be paid separation pay, backwages and overtime pay; and that he be awarded

unpaid commission in the amount of P2,000.00 for services rendered as a studio technician as well as moral and exemplary damages. Respondents evidence consisted of the Payroll dated July 31, 2001 to March 15, 2002, which was certified correct by petitioner, and Petty Cash Vouchers evidencing receipt of payroll payments by respondent from Celkor.

In defense, petitioner stated in his Position Paper that respondent was not hired as studio manager, composer, technician or as an employee in any other capacity of Celkor. Respondent could not have been hired as a studio manager, since the recording studio has no personnel except petitioner. Petitioner further claimed that his daughter Celine Mei Lirio, a former contract artist of ABS-CBN Star Records, failed to come up with an album as the latter aborted its project to produce one. Thus, he decided to produce an album for his daughter and established a recording studio, which he named Celkor Ad Sonicmix Recording Studio. He looked for a composer/arranger who would compose the songs for the said album. In July 2001, Bob Santiago, his son-in-law, introduced him to respondent, who

claimed to be an amateur composer, an arranger with limited experience and musician without any formal musical training. According to petitioner, respondent had no track record as a composer, and he was not known in the field of music. Nevertheless, after some discussion, respondent verbally agreed with petitioner to co-produce the album based on the following terms and conditions: (1) petitioner shall provide all the financing, equipment and recording studio; (2) Celine Mei Lirio shall sing all the songs; (3) respondent shall act as composer and arranger of all the lyrics and the music of the five songs he already composed and the revival songs; (4) petitioner shall have exclusive right to market the album; (5) petitioner was entitled to 60% of the net profit, while respondent and Celine Mei Lirio were each entitled to 20% of the net profit; and (6) respondent shall be entitled to draw advances of P7,000.00 a month, which shall be deductible from his share of the net profits and only until such time that the album has been produced. According to petitioner, they arrived at the foregoing sharing of profits based on the mutual understanding that respondent was just an amateur composer with no track record whatsoever in the music industry, had no definite source of income, had limited experience as an arranger, had no knowledge of the use of sound mixers or digital arranger and that petitioner would help and

teach him how to use the studio equipment; that petitioner would shoulder all the expenses of production and provide the studio and equipment as well as his knowledge in the use thereof; and Celine Mei Lirio would sing the songs. They embarked on the production of the album on or about the third week of August 2002.

Petitioner asserted that from the aforesaid terms and conditions, his relationship with respondent is one of an informal partnership under Article 1767 of the New Civil Code, since they agreed to contribute money, property or industry to a common fund with the intention of dividing the profits among themselves. Petitioner had no control over the time and manner by which respondent composed or arranged the songs, except on the result thereof. Respondent reported to the recording studio between 10:00 a.m. and 12:00 noon. Hence, petitioner contended that no employer-employee relationship existed between him and the respondent, and there was no illegal dismissal to speak of.

Whether or not there had been an illegal dismissal

Yes. Before a case for illegal dismissal can prosper, it must first be established that an employer-employee relationship existed between petitioner and respondent.

The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employees conduct. The most important element is the employers control of the employees conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it.

It is settled that no particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted.

In this case, the documentary evidence presented by respondent to prove that he was an employee of petitioner are as

follows: (a) a document denominated as "payroll" (dated July 31, 2001 to March 15, 2002) certified correct by petitioner, which showed that respondent received a monthly salary of P7,000.00 (P3,500.00 every 15th of the month and another P3,500.00 every 30th of the month) with the corresponding deductions due to absences incurred by respondent; and (2) copies of petty cash vouchers, showing the amounts he received and signed for in the payrolls.

The said documents showed that petitioner hired respondent as an employee and he was paid monthly wages of P7,000.00. Petitioner wielded the power to dismiss as respondent stated that he was verbally dismissed by petitioner, and respondent, thereafter, filed an action for illegal dismissal against petitioner. The power of control refers merely to the existence of the power. It is not essential for the employer to actually supervise the performance of duties of the employee, as it is sufficient that the former has a right to wield the power. Nevertheless, petitioner stated in his Position Paper that it was agreed that he would help and teach respondent how to use the studio equipment. In such case, petitioner certainly had the power to check on the progress and work of respondent.

On the other hand, petitioner failed to prove that his relationship with respondent was one of partnership. Such claim was not supported by any written agreement. The Court notes that in the payroll dated July 31, 2001 to March 15, 2002, there were deductions from the wages of respondent for his absence from work, which negates petitioners claim that the wages paid were advances for respondents work in the partnership. In Nicario v. National Labor Relations Commission, the Court held:

It is a well-settled doctrine, that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writing should be resolved in the formers favor. The policy is to extend the doctrine to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection of labor. This rule should be applied in the case at bar, especially since the evidence presented by the private respondent company is not convincing. x x x

Based on the foregoing, the Court agrees with the Court of Appeals that the evidence presented by the parties showed that an employer-employee relationship existed between petitioner and respondent.

In termination cases, the burden is upon the employer to show by substantial evidence that the termination was for lawful cause and validly made. Article 277 (b) of the Labor Code puts the burden of proving that the dismissal of an employee was for a valid or authorized cause on the employer, without distinction whether the employer admits or does not admit the dismissal. For an employees dismissal to be valid, (a) the dismissal must be for a valid cause, and (b) the employee must be afforded due process. Procedural due process requires the employer to furnish an employee with two written notices before the latter is dismissed: (1) the notice to apprise the employee of the particular acts or omissions for which his dismissal is sought, which is the equivalent of a charge; and (2) the notice informing the employee of his dismissal, to be issued after the employee has been given reasonable opportunity to answer and to be heard on his defense. Petitioner failed to comply with these legal requirements; hence, the Court of Appeals correctly affirmed the Labor Arbiters finding that respondent was illegally dismissed,

and entitled to the payment of backwages, and separation pay in lieu of reinstatement.

G.R. No. 168317 : November 21, 2011

DUP SOUND PHILS. and/or MANUEL TAN, Petitioners, v. COURT OF APPEALS and CIRILO A. PIAL, Respondents.

The instant petition arose from a complaint for illegal dismissal filed by herein private respondent Cirilo A. Pial (Pial) on November 5, 2001 with the NLRC, Quezon City. In his Position Paper, Pial alleged that he was an employee of herein petitioner DUP Sound Phils. (DUP), which is an entity engaged in the business of recording cassette tapes for various recording companies; petitioner Manuel Tan (Tan) is the owner and manager of DUP; Pial was first employed in May 1988 until December 1988; on October 11, 1991, he was re-employed by DUP and was given the job of mastering tape; his main function was to adjust the sound level and intensity of the music to be

recorded as well as arrange the sequence of the songs to be recorded in the cassette tapes; on August 21, 2001, Pial got absent from work because he got sick; when he got well the following day and was ready for work, he called up their office in accordance with his employer's policy that any employee who gets absent shall first call their office before reporting back to work; to his surprise, he was informed by the office secretary that the latter was instructed by Tan to tell him not to report for work until such time that they will advise him to do so; after three weeks, without receiving any notice, Pial again called up their office; this time the office secretary advised him to look for another job because, per instruction of Tan, he is no longer allowed to work at DUP; Pial asked the office secretary regarding the reason why he was not allowed to return to his job and pleaded with her to accept him back, but the secretary simply reiterated Tan's order not to allow him to go back to work. Pial prayed for the payment of his unpaid service incentive leave pay, full backwages, separation pay, moral and exemplary damages as well as attorney's fees.3

In their Position Paper, herein petitioners DUP and Tan denied the material allegations of Pial contending that on or about

January 1996 they hired Pial as a laborer; on August 21, 2001, the latter failed to report for work following an altercation with his supervisor the previous day; on September 12, 2001, Pial called up their office and informed the office secretary that he will be going back to work on September 17, 2001; however, he failed to report for work on the said date; petitioners were subsequently surprised when they learned that Pial filed a complaint for illegal dismissal against them; Pial was never dismissed, instead, it was his unilateral decision not to work at DUP anymore; Tan even offered him his old post during one of the hearings before the NLRC hearing officer, but Pial refused such offer or any other offer of amicable settlement.4

Whether or not there had been an illegal dismissal

Yes. The settled rule in labor cases is that the employer has the burden of proving that the employee was not dismissed, or, if dismissed, that the dismissal was not illegal, and failure to discharge the same would mean that the dismissal is not justified and, therefore, illegal.13 In the instant case, what betrays petitioners' claim that private respondent was not dismissed from his employment but instead abandoned his job is their failure to prove that the latter indeed stopped reporting for work without any

justifiable cause or a valid leave of absence. Petitioners merely presented the affidavits of their office secretary which narrated their version of the facts. These affidavits, however, are not only insufficient to prove their defense but also undeserving of credence because they are self-serving.14

Moreover, considering the hard times in which we are in, it is incongruous for private respondent to simply give up his work without any apparent reason at all. No employee would recklessly abandon his job knowing fully well the acute unemployment problem and the difficulty of looking for a means of livelihood nowadays. Certainly, no man in his right mind would do such thing.15

Petitioners further claim that private respondent's absence caused interruption in the workflow which caused damages to the company. It is, thus, logical that petitioners would have wanted private respondent to return to work in order to prevent further loss on their part. In such a case, they could have immediately sent private respondent a notice or show-cause letter at his last known address requiring him to report for work, or to explain his

absence with a warning that his failure to do so would be construed as abandonment of his work. However, petitioners failed to do so. Moreover, if private respondent indeed abandoned his job, petitioners should have afforded him due process by serving him written notices, as well as a chance to explain his side, as required by law. It is settled that, procedurally, if the dismissal is based on a just cause under Article 28216 of the Labor Code, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought, a hearing or an opportunity to be heard and, after hearing or opportunity to be heard, a notice of the decision to dismiss.17 Again, petitioners failed to do these. Thus, the foregoing bolsters private respondent's claim that he did not abandon his work but was, in fact, dismissed.

The consistent rule is that the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause.18 In addition, the employer must also observe the requirements of procedural due process. In the present case, petitioners failed to submit sufficient evidence to show that private

respondent's dismissal was for a justifiable cause and in accordance with due process.

The Court also agrees with private respondent that petitioners' earnestness in offering re-employment to the former is suspect. It was only after two months following the filing of the complaint for illegal dismissal that it occurred to petitioners, in a belated gesture of goodwill during one of the hearings conducted before the NLRC, to invite private respondent back to work. If petitioners were indeed sincere, they should have made their offer much sooner. Under circumstances established in the instant case, the Court doubts that petitioners' offer would have been made if private respondent had not filed a complaint against them.

Neither may private respondent's refusal to report for work subsequent to the Labor Arbiter's issuance of an order for his reinstatement be considered as another abandonment of his job. It is a settled rule that failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment.19 As defined under established jurisprudence, abandonment is the deliberate and unjustified refusal of an

employee to resume his employment.20 It is a form of neglect of duty, hence, a just cause for termination of employment by the employer.21 For a valid finding of abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employee has no more intention to work.22 The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified.23 In the instant case, private respondent claimed that his subsequent refusal to report for work despite the Labor Arbiter's order for his reinstatement is due to the fact that he was subsequently made to perform the job of a bodegero of which he is unfamiliar and which is totally different from his previous task of mastering tape. Moreover, he was assigned to a different workplace, which is a warehouse, where he was isolated from all other employees. The Court notes that petitioners failed to refute the foregoing claims of private respondent in their pleadings filed with the CA. It is only in their Reply filed with this Court that they simply denied and brushed off private respondent's assertion that he was made to work as a bodegero. The Court is, thus, led to conclude that petitioners' failure to immediately refute the claims of private

respondent is an implied admission thereof. In the same vein, the Court treats petitioners' belated denial of the same claims of private respondent as mere afterthought which is not worthy of credence.

G.R. No. 188169 : November 28, 2011

NIA JEWELRY MANUFACTURING OF METAL ARTS, INC. (otherwise known as NIA MANUFACTURING AND METAL ARTS, INC.) and ELISEA B. ABELLA, Petitioners, v. MADELINE C. MONTECILLO and LIZA M. TRINIDAD, Respondents.

Madeline Montecillo (Madeline) and Liza Trinidad (Liza), hereinafter referred to collectively as the respondents, were first employed as goldsmiths by the petitioner Nia Jewelry Manufacturing of Metal Arts, Inc. (Nia Jewelry) in 1996 and 1994, respectively. Madeline's weekly rate was P1,500.00 while Liza's was P2,500.00. Petitioner Elisea Abella (Elisea) is Nia Jewelry's president and general manager.

There were incidents of theft involving goldsmiths in Nia Jewelry's employ.

On August 13, 2004, Nia Jewelry imposed a policy for goldsmiths requiring them to post cash bonds or deposits in varying amounts but in no case exceeding 15% of the latter's salaries per week. The deposits were intended to answer for any loss or damage which Nia Jewelry may sustain by reason of the goldsmiths' fault or negligence in handling the gold entrusted to them. The deposits shall be returned upon completion of the goldsmiths' work and after an accounting of the gold received.

Nia Jewelry alleged that the goldsmiths were given the option not to post deposits, but to sign authorizations allowing the former to deduct from the latter's salaries amounts not exceeding 15% of their take home pay should it be found that they lost the gold entrusted to them. The respondents claimed otherwise insisting that Nia Jewelry left the goldsmiths with no option but to post the deposits. The respondents alleged that they were constructively dismissed by Nia Jewelry as their continued employments were made dependent on their readiness to post the required deposits.

Nia Jewelry averred that on August 14, 2004, the respondents no longer reported for work and signified their defiance against the new policy which at that point had not even been implemented yet.

On September 7, 2004, the respondents filed against Nia Jewelry complaints for illegal dismissal and for the award of separation pay.

Whether there has been an illegal dismissal

No. Madeline Montecillo (Madeline) and Liza Trinidad (Liza), hereinafter

referred to collectively as the respondents, were first employed as goldsmiths by the petitioner Nia Jewelry Manufacturing of Metal Arts, Inc. (Nia Jewelry) in 1996 and 1994, respectively. Madeline's weekly rate was P1,500.00 while Liza's was P2,500.00. Petitioner Elisea Abella (Elisea) is Nia Jewelry's president and general manager.

There were incidents of theft involving goldsmiths in Nia Jewelry's employ.

On August 13, 2004, Nia Jewelry imposed a policy for goldsmiths requiring them to post cash bonds or deposits in varying amounts but in no case exceeding 15% of the latter's salaries per week. The deposits were intended to answer for any loss or damage which Nia Jewelry may sustain by reason of the goldsmiths' fault or negligence in handling the gold entrusted to them. The deposits shall be returned upon completion of the goldsmiths' work and after an accounting of the gold received.

Nia Jewelry alleged that the goldsmiths were given the option not to post deposits, but to sign authorizations allowing the former to deduct from the latter's salaries amounts not exceeding 15% of their take home pay should it be found that they lost the gold entrusted to them. The respondents claimed otherwise insisting that Nia Jewelry left the goldsmiths with no option but to post the deposits. The respondents alleged that they were constructively dismissed by Nia Jewelry as their continued employments were made dependent on their readiness to post the required deposits.

Nia Jewelry averred that on August 14, 2004, the respondents no longer reported for work and signified their defiance against the new policy which at that point had not even been implemented yet.

On September 7, 2004, the respondents filed against Nia Jewelry complaints for illegal dismissal and for the award of separation pay.

G.R. No. 191053 : November 28, 2011

MARIO B. DIMAGAN, Petitioner, v. DACWORKS UNITED, INCORPORATED AND/OR DEAN A. CANCINO, Respondents.

Sometime in 2002, petitioner was downgraded from his post as OIC to supervisor. Then, in March of the following year, he was made to work as a mere technician. When he vocally expressed his concerns regarding his assignments, one Loida Aquino, who was in charge of servicing/personnel under the direct supervision of respondent Dean A. Cancino, told him not to report for work anymore. Thereafter, a certain Carlito Diaz, Operations Manager of respondent company, castigated petitioner for not following Aquino's instruction to work as a technician. This prompted petitioner to file a complaint for illegal dismissal, non-payment of overtime pay, holiday pay, service incentive leave and separation pay against respondents.

Respondents denied that petitioner was illegally dismissed arguing that, since April 4, 2003 up to the time of the filing of the complaint, petitioner never reported for work and continuously violated the company policy on absence without official leave (AWOL). They allegedly sent a total of four (4) memoranda for the period August 2002 to March 2003 informing petitioner of his offenses, including being AWOL, but he nonetheless unjustifiably refused to return to work. In reply, petitioner denied ever receiving any one of the four memoranda allegedly sent by respondents.

Wheter or not there had been constructive dismissal

Yes. Constructive dismissal is defined as a quitting because continued employment

is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay. The test of constructive dismissal is whether a reasonable person
24

in the employee's position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but is made to appear as if it were not. Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer.
25

As held in the case of Coca-Cola Bottlers Philippines, Inc. vs. Del Villar , the burden
26

falls upon the company to prove that the employee's assignment from one position to another was not tantamount to constructive dismissal. In the case at bar, respondents failed to discharge said burden. In fact, respondents never even disputed that petitioner was relegated from the position of OIC to supervisor and, subsequently, to an ordinary technician. Clearly, the reduction in petitioner's responsibilities and duties, particularly from supervisor to ordinary technician, constituted a demotion in rank tantamount to constructive dismissal.

Thus, contrary to the position of the CA, it is of no consequence that petitioner failed to substantiate his allegation that Loida Aquino, an employee of respondent company,

informed him that he will be working as an ordinary technician, and that when he openly voiced out his concern regarding the transfer, he was told not to report for work anymore. As with all the other allegations made by petitioner, respondents never disputed or rebutted this fact.

Similarly, We cannot concur with the finding of the CA that it was petitioner who abandoned his employment by failing to report for work or having gone AWOL.

Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. To constitute abandonment of work, two elements must concur: (1) the
27

employee must have failed to report for work or must have been absent without valid or justifiable reason; and (2) there must have been a clear intention on the part of the employee to sever the employer-employee relationship manifested by some overt act. The employer bears
28

the burden of proof to show the deliberate and unjustified refusal of the employee to resume his employment without any intention of returning.
29

In the case of Hodieng Concrete Products, Inc. v. Emilia , citing Samarca v. Arc-Men
30

Industries, Inc. , the Court has ruled thus:

31

x x x. Absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore. And the burden of proof to show that there was unjustified refusal to go back to work rests on the employer.

xxx

Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. To constitute abandonment, there must be clear proof of deliberate and unjustified intent to sever the employer-employee relationship. Clearly, the operative act is still the employees ultimate act of putting an end to his employment.

Settled is the rule that mere absence or failure to report for work is not tantamount to abandonment of work. x x x. (Emphasis supplied)

In this case, petitioner's failure to report for work was caused by the unwarranted demotion in rank that was imposed upon him by respondents, not by any intention to sever employment ties with them. And his filing of the instant complaint for illegal dismissal indubitably negates the allegation of abandonment. Had petitioner intended to forsake his job, then he would not have found it necessary to institute this case against respondents.

G.R. No. 192686 : November 23, 2011

FIL-STAR MARITIME CORPORATION, CAPTAIN VICTORIO S. MIGALLOS and GRANDSLAM ENTERPRISE CORPORATION, Petitioners, v. HANZIEL O. ROSETE, Respondent.

In 2005, petitioner Fil-Star Maritime Corporation (Fil-Star), the local manning agency of co-petitioner Grandslam Enterprise Corporation (Grandslam), hired respondent as third officer on board the ocean-going vessel M/V Ansac Asia. He was in charge of the loading and unloading operations of the vessels cargo primarily consisting of soda ash in bulk. Respondent stated that the nature of his work exposed him to minute particles of soda ash during the loading and unloading operations. On November 22, 2005, respondent finished his contract and returned to the Philippines.

Thereafter, the petitioners re-hired respondent to work as second officer on their vessel for a period of nine (9) months. On January 5, 2006, respondent underwent a pre-employment medical examination (PEME) with First Medical Team Health Care Specialist Group, the company accredited physician, and was pronounced fit to work. On board the vessel, he was tasked to make an inventory of the vessels property for annual inspection. According to respondent, he worked diligently and oftentimes worked odd hours just to familiarize himself with his new job. He averred that overtime work and the violent motions of the vessel due to weather inclemency caused undue strain to his eyes and his physical well-being.

On February 14, 2006 or a little over a month from his embarkation, respondent experienced an abrupt blurring of his left eye. He reported it to his captain and was advised to do an eye wash to relieve his pain until they reached Chiba, Japan. After the vessel arrived in Chiba, respondent was not able to seek

medical advice because he was tasked to man the ships navigation equipment. Five days later, respondent was able to receive medical attention in Kawasaki, Japan. Respondent was diagnosed with Central Retinal Vein Occlusion and immediately underwent three rounds of laser surgery on February 28, 2006, March 2, 2006 and March 4, 2006.

On March 9, 2006, respondent was declared fit for travel and was subsequently repatriated to the Philippines. Upon arrival in Manila, respondent went to the Metropolitan Hospital but could not get immediate treatment. On March 19, 2006, he experienced severe pain in his left eye so he insisted that he be admitted to the hospital. Respondent underwent another series of laser surgery on March 22 and 25, April 6, 18, and 25, 2006.

On August 11, 2006, Dr. Antonio Say declared respondents left eye to be legally blind with poor possibility of recovery. Relevant portions of the medical certificate read:

A. Left eye is legally blind B. Partial permanent disability Partial because the visual activity of the right eye is 20/20. It is permanent because the poor visual activity of the left eye, hand movement, has poor prognosis for visual recovery.

The petitioners denied his claim for permanent total disability and only rated his incapacity as Grade 7. Respondent stressed that, under their Collective Bargaining Agreement (CBA), he should be considered legally blind meriting entitlement to permanent total disability benefits in the sum of US$105,000.00 for being unable to perform his job for more than 120 days from his repatriation.

Thus, on August 29, 2006, respondent filed a complaint against Fil-Star, Capt. Victorio S. Migallos and Grandslam for disability benefits, damages and attorneys fees.

The petitioners averred that after almost a month aboard the vessel, respondent complained of a sudden blurring of his left eye. They referred him to the Honmoku Hospital where a Dr. Yasuhiko Tomita diagnosed him with Central Retinal Vein Occlusion, left eye and Neo-Vascular Glaucoma, left eye, suspicion. After his repatriation, they immediately referred him to the Metropolitan Medical Center where he was treated and underwent a series of Panretinal Photocoagulation Session to prevent further neovascular formation. They shouldered the expenses for all these procedures. They, however, argued that respondent was not qualified for disability benefits, damages and attorneys fees because his illness was not an occupational disease or work-related.

Whether or not employee is entitled to disability benefits

Yes. There is no quibble that respondent is entitled to disability benefits.

The Standard

Employment Contract (SEC) for seafarers was created by the Philippine Overseas Employment Administration (POEA) pursuant to its mandate under Executive Order (E.O.) No. 247 dated July 21, 1987 to secure the best terms and conditions of employment of Filipino contract workers and ensure compliance therewith and to promote and protect the well-being of Filipino workers overseas.

In this case, respondent was diagnosed with Central Retinal Vein Occlusion of his left eye. Central retinal vein occlusion is medically defined as the blockage of the central retinal vein by a thrombus. It causes painless vision loss which is usually sudden, but it can also occur gradually over a period of days to weeks. This condition, despite numerous medical procedures undertaken, eventually led to a total loss of sight of respondents left eye. Loss of one bodily function falls within the definition of disability which is essentially "loss or impairment of a physical or mental function resulting from injury or sickness."

Although Central Retinal Vein Occlusion is not listed as one of the occupational diseases under Section 32-A of the 2000 Amended Terms of POEA-SEC, the resulting disability which is loss of sight of one eye, is specifically mentioned in Section 32 thereof (Schedule of Disability or Impediment for Injuries Suffered and Diseases Including Occupational Diseases or Illness Contracted). More importantly, Section 20 (B), paragraph (4) states that those illnesses not listed in Section 32 of this Contract are disputably presumed as work-related.

The disputable presumption that a particular injury or illness that results in disability, or in some cases death, is work-related stands in the absence of contrary evidence. In the case at bench, the said presumption was not overturned by the petitioners. Although, the employer is not the insurer of the health of his employees, he takes them as he finds them and assumes the

risk of liability. Consequently, the Court concurs with the finding of the courts below that respondents disability is compensable.

Now, the Court shall determine whether respondent is entitled to be awarded permanent total or permanent partial disability benefits.

It should be noted that the company-designated physician assessed the loss of respondents left eye as a permanent partial disability while respondents own physician indicated his disability as Grade 7.

The Court is more inclined to rule, however, that respondent is suffering from a permanent total disability as he was unable to return to his job that he was trained to do for more than one hundred twenty days already. The recent case of Valenzona v. Fair Shipping Corporation, et al., citing Quitoriano v. Jebsens Maritime, Inc., elucidated the concept of permanent total disability, in this wise:

Thus, Court has applied the Labor Code concept of permanent total disability to the case of seafarers. x x x xxxx 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.

195):

In Vicente v. ECC (G.R. No. 85024, January 23, 1991, 193 SCRA 190,
x x x the test of whether or not an employee suffers from 'permanent total disability' is a showing of the capacity of the employee to continue performing his work notwithstanding the disability he incurred. Thus, if by reason of the injury or sickness he sustained, the employee is unable to perform his customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensability (which, in more detailed manner, describes what constitutes temporary total disability), then the said employee undoubtedly suffers from 'permanent total disability' regardless of whether or not he loses the use of any part of his body.

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 (Austria v. Court of Appeals, G.R. No. 146636, Aug. 12, 2002, 387 SCRA 216, 221). On the other hand, a total disability is considered permanent if it lasts continuously for more than 120 days. Thus, in the very recent case of Crystal Shipping, Inc. v. Natividad (G.R. No. 134028, December 17, 1999, 321 SCRA 268, 270-271), we held: Permanent disability is inability of a worker to perform his job for more than 120 days, regardless of whether or not he lose[s] the use of any part of his body. x x x Total disability, on the other hand, means the disablement of an employee to earn wages in the same kind of work of similar nature that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and attainments could do. It does not mean absolute helplessness. In disability compensation, it is not the injury which is compensated, but rather it is

the incapacity to work resulting in the impairment of one's earning capacity. [Emphasis and underscoring supplied]

A total disability does not require that the employee be completely disabled, or totally paralyzed. What is necessary is that the injury must be such that the employee cannot pursue his or her usual work and earn from it. On the other hand, a total disability is considered permanent if it lasts continuously for more than 120 days. What is crucial is whether the employee who suffers from disability could still perform his work notwithstanding the disability he incurred. Evidently, respondent was not able to return to his job as a seafarer after his left eye was declared legally blind. Records show that the petitioners did not give him a new overseas assignment after his disability. This only shows that his disability effectively barred his chances to be deployed abroad as an officer of an ocean-going vessel.

Therefore, it is fitting that respondent be entitled to permanent total disability benefits considering that he would not able to resume his position as a maritime officer and the probability that he would be hired by other maritime employers would be close to impossible. Indeed, a sight-impaired maritime applicant cannot stand in the same footing as his healthy coapplicant.

G.R. No. 192881 : November 16, 2011

TAMSONS ENTERPRISES, INC., NELSON LEE, LILIBETH ONG and JOHNSON NG, Petitioners, v. COURT OF APPEALS and ROSEMARIE L. SY, Respondents.
On February 24, 2007, four days before she completed her sixth month of working in Tamsons, Ng, the Sales Project Manager, called her to a meeting with

him and Lee. During the meeting, they informed Sy that her services would be terminated due to inefficiency. She was asked to sign a letter of resignation and quitclaim. She was told not to report for work anymore because her services were no longer needed. On her last day of work, Ong humiliated her in front of her officemates by shouting at her and preventing her from getting her personal things or any other document from the office.

During her pre-employment interview, Lee had nice comments about her good work experience and educational background. She was assured of a longterm employment with benefits. Throughout her employment, she earnestly performed her duties, had a perfect attendance record, worked even during brownouts and typhoons, and would often work overtime just to finish her work.

Sy claimed that the remarks of her superiors about her alleged inefficiency were ill-motivated and made without any basis. She had been rendering services for almost six (6) months before she was arbitrarily and summarily dismissed. Her dismissal was highly suspicious as it took place barely four (4) days prior to the completion of her six-month probationary period. The petitioners did not show her any evaluation or appraisal report regarding her alleged inefficient performance. As she was terminated without an evaluation on her performance, she was deprived of the opportunity to be regularly part of the company and to be entitled to the benefits and privileges of a regular employee. Worse, she was deprived of her only means of livelihood.

For their part, the petitioners asserted that before Sy was hired, she was apprised that she was being hired as a probationary employee for six months from September 1, 2006 to February 28, 2007, subject to extension as a regular employee conditioned on her meeting the standards of permanent employment set by the company. Her work performance was thereafter monitored and evaluated. On February 1, 2007, she was formally informed that her employment would end on February 28, 2007 because she failed to meet the companys standards. From then on, Sy started threatening the families of the petitioners with bodily harm. They pointed out that the unpredictable attitude of Sy was one of the reasons for her not being considered for regular employment.

The foregoing circumstances prompted Sy to file a case for illegal dismissal with claims for back wages, unpaid salary, service incentive leave, overtime pay, 13th month pay, and moral and exemplary damages, and attorneys fees.

Whether or not a probationary employee has been illegally dismissed

No. The petitioners pray for the reversal of the CA decision arguing that Sy
was a probationary employee with a limited tenure of six months subject to regularization conditioned on her satisfactory performance. They insist that they substantially complied with the requirements of the law having apprised Sy of her status as probationary employee. The standard, though not written, was clear that her continued employment would depend on her over-all performance of the

assigned tasks, and that the same was made known to her since day one of her employment. According to the petitioners, reasonable standard of employment does not require written evaluation of Sys function. It is enough that she was informed of her duties and that her performance was later rated below satisfactory by the Management.

Citing Alcira v. NLRC and Colegio San Agustin v. NLRC, the petitioners further argue that Sys constitutional protection to security of tenure ended on the last day of her probationary tenure or on February 28, 2007. It is unfair to compel regularization of an employee who was found by the Management to be unfit for the job. As they were not under obligation to extend Sys employment, there was no illegal dismissal, but merely an expiration of the probationary contract. As such, she was not entitled to any benefits like separation pay or backwages.

Sy counters that she was illegally terminated from service and insists that the petitioners cannot invoke her failure to qualify as she was not informed of the standards or criteria which she should have met for regular employment. Moreover, no proof was shown as to her alleged poor work performance. She was unceremoniously terminated to prevent her from becoming a regular employee and be entitled to the benefits as such.

The Court finds the petition devoid of merit.

The pertinent law governing the present case is Article 281 of the Labor Code which provides as follows:

Art. 281. Probationary employment. Probationary employment shall not exceed six months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged in 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. (Underscoring supplied)

There is probationary employment where the employee upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. The probationary employment is intended to afford the employer an opportunity to observe the fitness of a probationary employee while at work, and to ascertain whether he will become an efficient and productive employee. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other hand, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. Thus, the word probationary, as used to describe the period of employment, implies the purpose of the term or period, not its length.

On the basis of the aforequoted provisions and definition, there is no dispute that Sys employment with Tamsons on September 1, 2006 was probationary in character. As a probationary employee, her employment status was only temporary. Although a probationary or temporary employee with a limited tenure, she was still entitled to a security of tenure.

It is settled that even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security of tenure. This means they may only be terminated for a just cause or when they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to them by the employer at the time of their engagement. Consistently, in Mercado v. AMA Computer College-Paranaque City, Inc., this Court clearly stressed that:
Labor, for its part, is given the protection during the probationary period of knowing the company standards the new hires have to meet during the probationary period, and to be judged on the basis of these standards, aside from the usual standards applicable to employees after they achieve permanent status. Under the terms of the Labor Code, these standards should be made known to the [employees] on probationary status at the start of their probationary period, or xxx during which the probationary standards are to be applied. Of critical importance in invoking a failure to meet the probationary standards, is that the [employer] should show as a matter of due process how these standards have been applied. This is effectively the second notice in a dismissal situation that the law requires as a due process guarantee supporting the security of tenure provision, and is in furtherance, too, of the basic rule in employee dismissal that the employer carries the burden of justifying a dismissal. These rules ensure compliance with the limited security of tenure guarantee the law extends to probationary employees. [Emphases supplied]

In this case, the justification given by the petitioners for Sys dismissal was her alleged failure to qualify by the companys standard. Other than the general allegation that said standards were made known to her at the time of her employment, however, no evidence, documentary or otherwise, was presented to substantiate the same. Neither was there any performance evaluation presented to prove that indeed hers was unsatisfactory. Thus, this Court is in full accord with the ruling of the CA when it wrote that:

Private respondents were remiss in showing that petitioner failed to qualify as a regular employee. Except for their allegations that she was apprised of her status as probationary and that she would be accorded regular status once she meets their standards, no evidence was presented of these standards and that petitioner had been apprised of them at the time she was hired as a probationary employee. Neither was it shown that petitioner failed to meet such standards. Petitioner should have been informed as to the basis of private respondents decision not to extend her regular or permanent employment. This case is bereft of any proof like an evaluation or assessment report which would support private respondents claim that she failed to comply with the standards in order to become a regular employee. One of the conditions before an employer can terminate a probationary employee is dissatisfaction on the part of the employer which must be real and in good faith, not feigned so as to circumvent the contract or the law. In the case at bar, absent any proof showing that the work performance of petitioner was unsatisfactory, We cannot conclude that petitioner failed to meet the standards of performance set by private respondents. This absence of proof, in fact, leads Us to infer that their dissatisfaction with her work performance was contrived so as not to regularize her employment.

For failure of the petitioners to support their claim of unsatisfactory performance by Sy, this Court shares the view of the CA that Sys employment

was unjustly terminated to prevent her from acquiring a regular status in circumvention of the law on security of tenure. As the Court previously stated, this is a common and convenient practice of unscrupulous employers to circumvent the law on security of tenure. Security of tenure, which is a right of paramount value guaranteed by the Constitution, should not be denied to the workers by such a stratagem. The Court can not permit such a subterfuge, if it is to be true to the law and social justice.

In its attempt to justify Sys dismissal, the petitioners relied heavily on the case of Alcira v. NLRC where the Court stressed that the constitutional protection ends on the expiration of the probationary period when the parties are free to either renew or terminate their contract of employment.

Indeed, the Court recognizes the employers power to terminate as an exercise of management prerogative. The petitioners, however, must be reminded that such right is not without limitations. In this connection, written: it is well to quote the ruling of the Court in the case of Dusit Hotel Nikko v. Gatbonton, where it was

As Article 281 clearly states, a probationary employee can be legally terminated either: (1) for a just cause; or (2) when the employee fails to qualify as a regular employee in accordance with the reasonable standards made known to him by the employer at the start of the employment. Nonetheless, the power of the employer to terminate an employee on probation is not without limitations. First, this power must be exercised in accordance with the specific requirements of the contract. Second, the dissatisfaction on the part of the employer must be real and in good faith,

not feigned so as to circumvent the contract or the law; and third, there must be no unlawful discrimination in the dismissal. In termination cases, the burden of proving just or valid cause for dismissing an employee rests on the employer. [Emphases supplied]

Here, the petitioners failed to convey to Sy the standards upon which she should measure up to be considered for regularization and how the standards had been applied in her case. As correctly pointed out by Sy, the dissatisfaction on the part of the petitioners was at best self-serving and dubious as they could not present concrete and competent evidence establishing her alleged incompetence. Failure on the part of the petitioners to discharge the burden of proof is indicative that the dismissal was not justified.

The law is clear that in all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee. The standards under which she would qualify as a regular employee not having been communicated to her at the start of her probationary period, Sy qualified as a regular employee. As held by this Court in the very recent case of Hacienda Primera Development Corporation v. Villegas,:

In this case, petitioner Hacienda fails to specify the reasonable standards by which respondents alleged poor performance was evaluated, much less to prove that such standards were made known to him at the start of his employment. Thus, he is deemed to have been hired from day one as a regular employee. Due process dictates that an employee be

apprised beforehand of the condition of his employment and of the terms of advancement therein. [Emphasis supplied]

Even on the assumption that Sy indeed failed to meet the standards set by them and made known to the former at the time of her engagement, still, the termination was flawed for failure to give the required notice to Sy. Section 2, Rule I, Book VI of the Implementing Rules provides:

Section 2. Security of tenure. (a) In cases of regular employment, the employer shall not terminate the services of an employee except for just or authorized causes as provided by law, and subject to the requirements of due process. (b) The foregoing shall also apply in cases of probationary employment; Provided however, that in such cases, termination of employment due to failure of the employee to qualify in accordance with the standards of the employer made known to the former at the time of engagement may also be a ground for termination of employment. xxx (d) In all cases of termination of employment, the following standards of due process shall be substantially observed: xxx If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee, within a reasonable time from the effective date of termination. [Emphasis and Underscoring supplied]

In this case, the petitioners failed to comply with the requirement of a written notice. Notably, Sy was merely verbally informed that her employment would be terminated on February 28, 2007, as admitted by the petitioners. Considering that the petitioners failed to observe due process in dismissing her, the dismissal had no legal sanction. It bears stressing that a workers employment is property in the constitutional sense.

Being a regular employee whose termination was illegal, Sy is entitled to the twin relief of reinstatement and backwages granted by the Labor Code. Article 279 provides that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, to her full backwages, inclusive of allowances, and to her other benefits or their monetary equivalent computed from the time her compensation was withheld from her up to the time of actual reinstatement. Likewise, having been compelled to come to court and to incur expenses to protect her rights and interests, the award of attorneys fees is in order.

G.R. No. 195167 : November 16, 2011

FERNANDO CO (formerly doing business under the name Nathaniel Mami House*), Petitioner, v. LINA B. VARGAS, Respondent.