Case Syllabus Dec 2009

Case Syllabus 2010-04-17

1. Employee found guilty of habitual absenteeism and tardiness not entitled to economic assistance. Labor adjudicatory officials and the CA must demur the award of separation pay based on social justice when an employees dismissal is based on serious misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or commission of a crime against the person of the employer or his immediate family grounds under Art. 282 of the Labor Code that sanction dismissals of employees. They must be most judicious and circumspect in awarding separation pay or financial assistance as the constitutional policy to provide full protection to labor is not meant to be an instrument to oppress the employers. The commitment of the Court to the cause of labor should not embarrass us from sustaining the employers when they are right, as here. In fine, we should be more cautious in awarding financial assistance to the undeserving and those who

are unworthy of the liberality of the law. (Quiambao vs. Manila Electric Company, G.R. No. 171023, December 18, 2009.) 2. No work no pay scheme is not significant in determining employer-employee relationship. The fact the respondent was paid under a no work no pay scheme, assuming this claim to be true, is not significant. The no work no pay scheme is merely a method of computing compensation, not a basis for determining the existence or absence of employeremployee relationship. Abandonment of work; Requisites. Abandonment of work, or the deliberate and unjustified refusal of an employee to resume his employment, is a just cause for the termination of employment under paragraph (b) of Article 282 of the Labor Code, since it constitutes neglect of duty. The jurisprudential rule is that abandonment is a matter of intention that cannot be lightly presumed from equivocal acts. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or

justifiable reason, and (2) a clear intent, manifested through overt acts, to sever the employer-employee relationship. Ibid; Burden of proof. The employer bears the burden of showing a deliberate and unjustified refusal by the employee to resume his employment without any intention of returning. Constructive Dismissal; Definition. Case law defines constructive dismissal as a cessation of work because continued employment has been rendered impossible, unreasonable, or unlikely, as when there is a demotion in rank or diminution in pay or both or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. Ibid.; Test. The test of constructive dismissal is whether a reasonable person in the employees 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. In fact, the employee who is constructively dismissed might have been allowed to keep coming

to work. 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. (CRC Agricultural Trading, et al. vs. NLRC, G.R. No. 177664, December 23, 2009.) 3. Requirement for appeals involving monetary award. Appeals involving monetary awards are perfected only upon compliance with the following mandatory requisites, namely: (1) payment of the appeal fees; (2) filing of the memorandum of appeal; and (3) payment of the required cash or surety bond. Appeal bond; Mandatory nature. The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the labor arbiter. The intention of the lawmakers to make the bond a mandatory requisite for the perfection of an appeal by the employer is clearly expressed in the provision that an appeal by the employer may be perfected only upon the posting of a cash or surety bond. The word only in Articles 223

of the Labor Code makes it unmistakably plain that the lawmakers intended the posting of a cash or surety bond by the employer to be the essential and exclusive means by which an employers appeal may be perfected. The word may refers to the perfection of an appeal as optional on the part of the defeated party, but not to the compulsory posting of an appeal bond, if he desires to appeal. The meaning and the intention of the legislature in enacting a statute must be determined from the language employed; and where there is no ambiguity in the words used, then there is no room for construction Ibid; Requisites for reduction. The bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the appellant; otherwise, the filing of the motion to reduce bond shall not stop the running of the period to perfect an appeal. The qualification effectively requires that unless the NLRC grants the

reduction of the cash bond within the 10-day reglementary period, the employer is still expected to post the cash or surety bond securing the full amount within the said 10-day period. Ibid.; Appeal bond requirements is jurisdictional. Article 223, which prescribes the appeal bond requirement, is a rule of jurisdiction and not of procedure. There is little leeway for condoning a liberal interpretation thereof, and certainly none premised on the ground that its requirements are mere technicalities. It must be emphasized that there is no inherent right to an appeal in a labor case, as it arises solely from grant of statute, namely, the Labor Code. Non-compliance with such legal requirements is fatal and has the effect of rendering the judgment final and executory. (Ramirez vs. CA, G.R. No. 182626, December 4, 2009.) 4. Admissibility of evidence submitted for the first time on appeal. Indubitably, the NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in labor cases. There is,

however, a caveat to this policy. The delay in the submission of evidence should be clearly explained and should adequately prove the employers allegation of the cause for termination. Money claims; Prescription. Under Article 1139 of the Civil Code, actions prescribe by the mere lapse of the time prescribed by law. That law may either be the Civil Code or special laws as specifically mandated by Article 1148. In labor cases, the special law on prescription is Article 291 of the Labor Code which provides: Article 291. Money Claims. All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be barred forever. (Emphasis supplied) Ibid.; Accrual of money claims. The Labor Code has no specific provision on when a monetary claim accrues. Thus, again the general law on prescription applies. Article 1150 of the Civil Code provides that

Article 1150. The time for prescription for all kinds of actions, when there is no special provision which ordains otherwise, shall be counted from the day they may be brought. (Emphasis supplied) The day the action may be brought is the day a claim started as a legal possibility. In the present case, the day came when petitioner learned of Asiakonstrukts deduction from his salary of the amount of advances he had received but had, by his claim, been settled, the same having been reflected in his payslips, hence, it is assumed that he learned of it at the time he received his monthly paychecks. (Anabe vs. Asian Construction, et al., G.R. No. 183233, December 23, 2009.) 5. Permanent disability and Total disability; Meaning. Permanent disability is inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body. 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 ones earning capacity. (Iloreta vs. Philippine Transmarine Carriers, Inc. et al., G.R. No. 183908, December 4, 2009.) 6. Dismissal based on grounds not alleged in the notice of termination not necessarily illegal.Although petitioner was dismissed from work by the respondent on the ground of insubordination, this Court cannot close its eyes to the fact that the ground of sexual abuse committed against petitioners subordinate actually exists and was established by substantial evidence before the LA. The LA would be rendered inutile if she would just seal her lips after finding that a just cause for dismissal exists merely because the said ground was not stated in the notice of termination.

Sexual abuse by manager ground for termination. As a manager, petitioner enjoyed the full trust and confidence of respondent and his subordinates. By committing sexual abuse against his subordinate, he clearly demonstrated his lack of fitness to continue working as a managerial employee and deserves the punishment of dismissal from the service. Failure to observe procedural due process for termination entitles employee to nominal damages. Nominal damages are adjudicated in order that a right of the plaintiff that has been violated or invaded by the defendant may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. Thus, for respondents violation of petitioners statutory rights, respondent is sanctioned to pay petitioner nominal damages in the amount of P30,000.00. (Formantes vs. Duncan Pharmaceuticals, G.R. No. 170661, December 4, 2009.) 7. Dismissal of corporate officer falls under the jurisdiction of regular courts not NLRC. A corporate officers dismissal is always a corporate act, or an

intra-corporate controversy which arises between a stockholder and a corporation. The question of remuneration involving a stockholder and officer, not a mere employee, is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code. The determination of the rights of a director and corporate officer dismissed from his employment as well as the corresponding liability of a corporation, if any, is an intra-corporate dispute subject to the jurisdiction of the regular courts. (Okol vs. Slimmers World International, et al., G.R. No. 160146, December 11, 2009.) 8. Labor-only contracting; Pure supply of manpower to assist in sales and distribution of products is prohibited as labor-only contracting. In plainer terms, the contracted personnel (acting as sales route helpers) were only engaged in the marginal work of helping in the sale and distribution of company products; they only provided the muscle work that

sale and distribution required and were thus necessarily under the companys control and supervision in doing these tasks. Still another way of putting it is that the contractors were not independently selling and distributing company products, using their own equipment, means and methods of selling and distribution; they only supplied the manpower that helped the company in the handing of products for sale and distribution. In the context of D.O. 18-02, the contracting for sale and distribution as an independent and self-contained operation is a legitimate contract, but the pure supply of manpower with the task of assisting in sales and distribution controlled by a principal falls within prohibited labor-only contracting. (Coca-cola Bottlers Philippines vs. Dela Cruz, G.R. No. 184977, December 7, 2009.) 9. Suspension of labor-claims during corporate rehabilitation. Labor claims are included among the actions suspended upon the placing under rehabilitation of employer-corporations. The law is

clear: upon the creation of a management committee or the appointment of a rehabilitation receiver, all claims for actions shall be suspended accordingly. No exception in favor of labor claims is mentioned in the law. (Tiangco vs. Uniwide Sales Warehouse Club, Inc., et al., G.R. No. 168697, December 14, 2009.) Ibid.; Period or duration of the stay order. Petitioners seek to have the suspension of proceedings lifted on the ground that the SEC already approved respondent USWCIs SARP. However, there is no legal ground to do so because the suspensive effect of the stay order is not time-bound. The stay order continues to be in effect as long as reasonably necessary to accomplish its purpose. (Tiangco vs. Uniwide, G.R. No. 168697, December 14, 2009.) 10. Drug-Free Workplace Policy; Importance of confirmatory test after drug test. The importance of the confirmatory test is underscored in Plantation Bays own Policy and Procedures, in compliance with Republic Act No. 9165, requiring that a confirmatory test must be conducted if an employee is found

positive for drugs in the Employees Prior Screening Test, and that both tests must arrive at the same positive result. But where the confirmatory test results were released earlier than those of the drug test, the veracity of the confirmatory results is put to doubt. (Plantation Bay Resort and Spa vs. Dubrico, et al., G.R. No. 182216, December 4, 2009.) 11. POEA Standard Employment Contract; Permanent disability defined. Permanent disability refers to the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body. What determines petitioners entitlement to permanent disability benefits is his inability to work for more than 120 days. Ibid; Right of seafarer to ask for second-opinion on the finding of fitness to work. The provision of POEA Standard Employment Contract does not preclude the seafarer from getting a second opinion as to his condition for purposes of claiming disability benefits. While it is the company-designated physician who

must declare that the seaman suffers a permanent disability during employment, it does not deprive the seafarer of his right to seek a second opinion, hence, the Contract recognizes the prerogative of the seafarer to request a second opinion and, for this purpose, to consult a physician of his choice. Ibid; Effect of failure of company designated physician to certify the seafarers fitness to work. Given a seafarers entitlement to permanent disability benefits when he is unable to work for more than 120 days, the failure of the company-designated physician to pronounce petitioner fit to work within the 120-day period entitles him to permanent total disability benefit in the amount of US$60,000.00. (Abante vs. KJGS Fleet Management Manila, G.R. No. 182430, December 4, 2009.) 12. POEA Standard Employment Contract; Compensation and benefits for injury or illness; Effect of failure of seafarer to submit himself for medical examination within 3 days from repatriation. Even assuming that petitioner was repatriated for medical

reasons, he failed to submit himself to the companydesignated doctor in accordance with the postemployment medical examination requirement under paragraph 3 of Section 20(B) of the POEA Standard Employment Contract. Failure to comply with this requirement which is a sine qua non bars the filing of claim for disability benefits. xxx 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. For this purpose, the seafarer shall submit himself to a post- employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice

to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third doctors decision shall be final and binding on both parties xxx (Musnit vs. Sea Star Shipping Corporation, G.R. No. 182623, December 4, 2009.) 13. Executory character of assumption and certification order. Assumption and certification orders are executory in character and are to be strictly complied with by the parties, even during the pendency of any petition questioning their validity. Regardless therefore of its motives, or of the validity of its claims, the employer must readmit all striking employees and give them back their respective jobs.

Accepting back the workers is not a matter of option, but of obligation mandated by law for the employer to faithfully comply with. Its compulsory character is mandated, not to cater to a narrow segment of society, or to favor labor at the expense of management, but to serve the greater interest of society by maintaining the economic equilibrium. Ibid.; Implementation of return to work order cannot be made to depend upon the discretion of the employer. Certainly, the determination of who among the strikers could be admitted back to work cannot be made to depend upon the discretion of employer, lest we strip the certification or assumption-of-jurisdiction orders of the coercive power that is necessary for attaining their laudable objective. The return-to-work order does not interfere with the managements prerogative, but merely regulates it when, in the exercise of such right, national interests will be affected. The rights granted by the Constitution are not absolute. They are still subject to control and limitation to ensure that they are not exercised

arbitrarily. The interests of both the employers and employees are intended to be protected and not one of them is given undue preference. (YSS Employees Union vs. YSS Laboratories, Inc., G.R. No. 155125, December 4, 2009.)