Here are select January 2014 rulings of the Supreme Court of the Philippines on labor law:

Backwages; when awarded. As a general rule, backwages are granted to indemnify a dismissed
employee for his loss of earnings during the whole period that he is out of his job. Considering that
an illegally dismissed employee is not deemed to have left his employment, he is entitled to all the
rights and privileges that accrue to him from the employment. The grant of backwages to him is in
furtherance and effectuation of the public objectives of the Labor Code, and is in the nature of a
command to the employer to make a public reparation for dismissing the employee in violation of the
Labor Code.
The Court held that the respondents are not entitled to the payment of backwages. The Court, citing
G&S Transport Corporation v. Infante (G. R. No. 160303, September 13, 2007) stated that the
principle of a fair days wage for a fair days labor remains as the basic factor in determining the
award thereof. An exception to the rule would be if the laborer was able, willing and ready to work
but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working.
It is, however, required, for this exception to apply, that the strike be legal, a situation which does not
obtain in the case at bar. Visayas Community Medical Center (VCMC) formerly known as Metro Cebu
Community Hospital (MCCH) v. Erma Yballe, et al.,G.R. No. 196156, January 15, 2014
Dismissal; burden of proof on employer. The burden is on the employer to prove that the termination
was for valid cause. Unsubstantiated accusations or baseless conclusions of the employer are
insufficient legal justifications to dismiss an employee. The unflinching rule in illegal dismissal cases
is that the employer bears the burden of proof.
One of CCBPIs policies requires that, on a daily basis, CCBPI Salesmen/Account Specialists must
account for their sales/collections and obtain clearance from the company Cashier before they are
allowed to leave company premises at the end of their shift and report for work the next day. If there
is a shortage/failure to account, the concerned Salesmen/Account Specialist is not allowed to leave
the company premises until he settles the same. In addition, shortages are deducted from the
employees salaries. If CCBPI expects to proceed with its case against petitioner, it should have
negated this policy, for its existence and application are inextricably tied to CCBPIs accusations
against petitioner. In the first place, as petitioners employer, upon it lay the burden of proving by
convincing evidence that he was dismissed for cause. If petitioner continued to work until June 2004,
this meant that he committed no infraction, going by this company policy; it could also mean that any
infraction or shortage/non-remittance incurred by petitioner has been duly settled. Respondents
decision to ignore this issue generates the belief that petitioner is telling the truth, and that the
alleged infractions are fabricated, or have been forgiven. Coupled with Macatangays statement
which remains equally unrefuted that the charges against petitioner are a scheme by local CCBPI
management to cover up problems in the Naga City Plant, the conclusion is indeed telling that
petitioner is being wrongfully made to account. Jonas Michael R. Garza v. Coca-Cola Bottlers Phils., Inc.,
et al.,G.R. No. 180972. January 20, 2014.
Embezzlement; failure to remit collections. The irregularity attributed to petitioner with regard to the
Asanza account should fail as well. To be sure, Asanza herself confirmed that she did not make any
payment in cash or check of P8,160.00 covering the October 15, 2003 delivery for which petitioner is
being held to account. This being the case, petitioner could not be charged with embezzlement for
failure to remit funds which he has not collected. There was nothing to embezzle or remit because
the customer made no payment yet. It may appear from Official Receipt No. 303203 issued to
Asanza that the October 15 delivery of products to her has been paid; but as admitted by her, she
has not paid for the said delivered products. The reason for petitioners issuance of said official
receipt to Asanza is the latters concurrent promise that she would immediately issue the check
covering the said amount, which she failed to do. Jonas Michael R. Garza v. Coca-Cola Bottlers Phils.,
Inc., et al.,G.R. No. 180972. January 20, 2014
Grave abuse of discretion; concept of. Having established through substantial evidence that
respondents injury was self-inflicted and, hence, not compensable pursuant to Section 20 (D) of the
1996 POEA-SEC, no grave abuse of discretion can be imputed against the NLRC in upholding LAs
decision to dismiss respondents complaint for disability benefits. It is well-settled that an act of a
court or tribunal can only be considered to be tainted with grave abuse of discretion when such act is
done in a capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction. INC
Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v. Alexander L.
Moradas,G.R. No., January 15, 2014
Illegal strike and illegal acts during the strike; distinction between union members and union officers in
determining when they lose their employment status. The Supreme Court stressed that the law makes a
distinction between union members and union officers. A union member who merely participates in
an illegal strike may not be terminated from employment. It is only when he commits illegal acts
during a strike that he may be declared to have lost employment status. In contrast, a union officer
may be terminated from employment for knowingly participating in an illegal strike or participates in
the commission of illegal acts during a strike. The law grants the employer the option of declaring a
union officer who participated in an illegal strike as having lost his employment. It possesses the
right and prerogative to terminate the union officers from service.
NAMA-MCCH-NFL is not a legitimate labor organization, thus, the strike staged by its leaders and
members was declared illegal. The union leaders who conducted the illegal strike despite
knowledge that NAMA-MCCH-NFL is not a duly registered labor union were declared to have been
validly terminated by petitioner. However, as to the respondents who were mere union members, it
was not shown that they committed any illegal act during the strike. The Labor Arbiter and the NLRC
were one in finding that respondents actively supported the concerted protest activities, signed the
collective reply of union members manifesting that they launched the mass actions to protest
managements refusal to negotiate a new CBA, refused to appear in the investigations scheduled by
petitioner because it was the unions stand that they would only attend these investigations as a
group, and failed to heed petitioners final directive for them to desist from further taking part in the
illegal strike. The CA, on the other hand, found that respondents participation in the strike was
limited to the wearing of armbands. Since an ordinary striking worker cannot be dismissed for such
mere participation in the illegal strike, the CA correctly ruled that respondents were illegally
dismissed. However, the CA erred in awarding respondents full back wages and ordering their
reinstatement despite the prevailing circumstances. Visayas Community Medical Center (VCMC)
formerly known as Metro Cebu Commnunity Hospital (MCCH) v. Erma Yballe, et al.,G.R. No. 196156,
January 15, 2014
Labor law; kinds of employment; casual employment; requisites. Casual employment, the third kind of
employment arrangement, refers to any other employment arrangement that does not fall under any
of the first two categories, i.e., regular or project/seasonal. Universal Robina Sugar Milling Corporation
and Rene Cabati, G.R. No. 186439. January 15, 2014.
Labor law; kinds of employment; fixed term employment; requisites. The Labor Code does not mention
another employment arrangement contractual or fixed term employment (or employment for a
term) which, if not for the fixed term, should fall under the category of regular employment in view
of the nature of the employees engagement, which is to perform an activity usually necessary
or desirable in the employers business.
In Brent School, Inc. v. Zamora (G.R. No. L-48494, February 5, 1990), the Court, for the first time,
recognized and resolved the anomaly created by a narrow and literal interpretation of Article
280 of the Labor Code that appears to restrict the employees right to freely stipulate with his
employer on the duration of his engagement. In this case, the Court upheld the validity of the fixed-
term employment agreed upon by the employer, Brent School, Inc., and the employee, Dorotio
Alegre, declaring that the restrictive clause in Article 280 should be construed to refer to the
substantive evil that the Code itself x x x singled out: agreements entered into precisely to
circumvent security of tenure. It should have no application to instances where [the] fixed period of
employment was agreed upon knowingly and voluntarily by the parties x x x absent any x x x
circumstances vitiating [the employees] consent, or where [the facts satisfactorily show] that the
employer and [the] employee dealt with each other on more or less equal terms[.] The
indispensability or desirability of the activity performed by the employee will not preclude the parties
from entering into an otherwise valid fixed term employment agreement; a definite period of
employment does not essentially contradict the nature of the employees duties as necessary and
desirable to the usual business or trade of the employer.

Nevertheless, where the circumstances evidently show that the employer imposed the period
precisely to preclude the employee from acquiring tenurial security, the law and this Court will not
hesitate to strike down or disregard the period as contrary to public policy, morals, etc. In such a
case, the general restrictive rule under Article 280 of the Labor Code will apply and the employee
shall be deemed regular. Universal Robina Sugar Milling Corporation and Rene Cabati,G.R. No. 186439.
January 15, 2014.
Labor law; kinds of employment; nature of the employment depends on the nature of the activities to be
performed by the employee. The nature of the employment does not depend solely on the will or word
of the employer or on the procedure for hiring and the manner of designating the employee. Rather,
the nature of the employment depends on the nature of the activities to be performed by the
employee, taking into account the nature of the employers business, the duration and scope of work
to be done, and, in some cases, even the length of time of the performance and its continued
existence. Universal Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439. January 15,
2014.
Labor law; kinds of employment; project employment; requisites; length of time not controlling. A project
employment, on the other hand, contemplates on arrangement whereby the employment has
been fixed for a specific project or undertaking whose completion or termination has been
determined at the time of the engagement of the employee[.] Two requirements, therefore, clearly
need to be satisfied to remove the engagement from the presumption of regularity of employment,
namely: (1) designation of a specific project or undertaking for which the employee is hired; and (2)
clear determination of the completion or termination of the project at the time of the employees
engagement. The services of the project employees are legally and automatically terminated upon
the end or completion of the project as the employees services are coterminous with the project.
Unlike in a regular employment under Article 280 of the Labor Code, however, the length of time of
the asserted project employees engagement is not controlling as the employment may, in fact, last
for more than a year, depending on the needs or circumstances of the project. Nevertheless, this
length of time (or the continuous rehiring of the employee even after the cessation of the project)
may serve as a badge of regular employment when the activities performed by the purported
project employee are necessary and indispensable to the usual business or trade of the employer.
In this latter case, the law will regard the arrangement as regular employment. Universal Robina Sugar
Milling Corporation and Rene Cabati,G.R. No. 186439. January 15, 2014.
Labor law; kinds of employment; regular employment; requisites. Article 280 of the Labor Code provides
for three kinds of employment arrangements, namely: regular, project/seasonal and casual. Regular
employment refers to that arrangement whereby the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer[.]
Under this definition, the primary standard that determines regular employment is the reasonable
connection between the particular activity performed by the employee and the usual business or
trade of the employer; the emphasis is on the necessity or desirability of the employees
activity. Thus, when the employee performs activities considered necessary and desirable to the
overall business scheme of the employer, the law regards the employee as regular.
By way of an exception, paragraph 2, Article 280 of the Labor Code also considers as regular, a
casual employment arrangement when the casual employees engagement is made to last for at
least one year, whether the service is continuous or broken. The controlling test in this arrangement
is the length of time during which the employee is engaged. Universal Robina Sugar Milling
Corporation and Rene Cabati, G.R. No. 186439. January 15, 2014.
Labor law; kinds of employment; seasonal employment; requisites. Seasonal employment operates
much in the same way as project employment, albeit it involves work or service that is seasonal
in nature or lasting for the duration of the season. As with project employment, although the
seasonal employment arrangement involves work that is seasonal or periodic in nature, the
employment itself is not automatically considered seasonal so as to prevent the employee from
attaining regular status. To exclude the asserted seasonal employee from those classified as
regular employees, the employer must show that: (1) the employee must be performing work or
services that are seasonal in nature; and (2) he had been employed for the duration of the season.
Hence, when the seasonal workers are continuously and repeatedly hired to perform the same
tasks or activities for several seasons or even after the cessation of the season, this length of time
may likewise serve as badge of regular employment. In fact, even though denominated as seasonal
workers, if these workers are called to work from time to time and are only temporarily laid off during
the off-season, the law does not consider them separated from the service during the off-season
period. The law simply considers these seasonal workers on leave until re-employed. Universal
Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439. January 15, 2014.
Overseas employment; that the entitlement of seamen on overseas work to disability benefits is a matter
governed, not only by medical findings, but by law and by contract. With respect to the applicable rules, it
is doctrinal that the entitlement of seamen on overseas work to disability benefits is a matter
governed, not only by medical findings, but by law and by contract. The material statutory provisions
are Articles 191 to 193 under Chapter VI (Disability Benefits) of the Labor Code, in relation [to] Rule
X of the Rules and Regulations Implementing Book IV of the Labor Code. By contract, the POEA-
SEC, as provided under Department Order No. 4, series of 2000 of the Department of Labor and
Employment, and the parties Collective Bargaining Agreement bind the seaman and his employer to
each other.
In the foregoing light, the Court observes that respondent executed his contract of employment on
July 17, 2000, incorporating therein the terms and conditions of the 2000 POEA-SEC which took
effect on June 25, 2000. However, since the implementation of the provisions of the foregoing 2000
POEA-SEC was temporarily suspended by the Court on September 11, 2000, particularly Section
20, paragraphs (A), (B), and (D) thereof, and was lifted only on June 5, 2002, through POEA
Memorandum Circular No. 2, series of 2002, the determination of respondents entitlement to the
disability benefits should be resolved under the provisions of the 1996 POEA-SEC as it was,
effectively, the governing circular at the time respondents employment contract was executed. INC
Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v. Alexander L.
Moradas,G.R. No., January 15, 2014
Payment of separation pay as alternative relief for union members who were dismissed for having participated
in an illegal strike is in lieu of reinstatement; circumstances when applicable. The alternative relief for union
members who were dismissed for having participated in an illegal strike is the payment of separation
pay in lieu of reinstatement under the following circumstances: (a) when reinstatement can no longer
be effected in view of the passage of a long period of time or because of the realities of the
situation; (b) reinstatement is inimical to the employers interest; (c) reinstatement is no longer
feasible; (d) reinstatement does not serve the best interests of the parties involved; (e) the employer
is prejudiced by the workers continued employment; (f) facts that make execution unjust or
inequitable have supervened; or (g) strained relations between the employer and employee.
The Court ruled that the grant of separation pay to respondents is the appropriate relief under the
circumstances considering that 15 years had lapsed from the onset of this labor dispute, and in view
of strained relations that ensued, in addition to the reality of replacements already hired by the
hospital which had apparently recovered from its huge losses, and with many of the petitioners either
employed elsewhere, already old and sickly, or otherwise incapacitated. Visayas Community Medical
Center (VCMC) formerly known as Metro Cebu Commnunity Hospital (MCCH) v. Erma Yballe, et al.,G.R.
No. 196156, January 15, 2014
Rule 45; only questions of law are allowed in a petition for review on certiorari. It is a settled rule in this
jurisdiction that only questions of law are allowed in a petition for review on certiorari. The Courts
power of review in a Rule 45 petition is limited to resolving matters pertaining to any perceived legal
errors, which the CA may have committed in issuing the assailed decision. In reviewing the legal
correctness of the CAs Rule 65 decision in a labor case, the Court examines the CA decision in the
context that it determined whether or not there is grave abuse of discretion in the NLRC decision
subject of its review and not on the basis of whether the NLRC decision on the merits of the case
was correct. Universal Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439. January 15,
2014.
Rule 45; the Courts jurisdiction in a Rule 45 petition is limited to the review of pure questions of law;
exceptions. The Courts jurisdiction in cases brought before it from the CA via Rule 45 of the Rules of
Court is generally limited to reviewing errors of law. The Court is not the proper venue to consider a
factual issue as it is not a trier of facts. This rule, however, is not ironclad and a departure therefrom
may be warranted where the findings of fact of the CA are contrary to the findings and conclusions of
the NLRC and LA, as in this case. In this regard, there is therefore a need to review the records to
determine which of them should be preferred as more conformable to evidentiary facts. INC
Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v. Alexander L.
Moradas,G.R. No., January 15, 2014.
Section 20 (B) of the 1996 POEA-SEC; an employer shall be liable for the injury or illness suffered by a
seafarer during the term of his contract; exception. The prevailing rule under Section 20 (B) of the 1996
POEA-SEC on compensation and benefits for injury or illness was that an employer shall be liable
for the injury or illness suffered by a seafarer during the term of his contract. To be compensable, the
injury or illness must be proven to have been contracted during the term of the contract. However,
the employer may be exempt from liability if he can successfully prove that the cause of the
seamans injury was directly attributable to his deliberate or willful act as provided under Section 20
(D) thereof, to wit:
D. No compensation shall be payable in respect of any injury, incapacity, disability or death of the seafarer
resulting from his willful or criminal act, provided however, that the employer can prove that such injury,
incapacity, disability or death is directly attributable to seafarer.

Hence, the onus probandi falls on the petitioners herein to establish or substantiate their claim that
the respondents injury was caused by his willful act with the requisite quantum of evidence. INC
Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v. Alexander L.
Moradas,G.R. No., January 15, 2014
Substantial evidence; concept of. In labor cases, as in other administrative proceedings, only substantial
evidence or such relevant evidence as a reasonable mind might accept as sufficient to support a
conclusion is required. To note, considering that substantial evidence is an evidentiary threshold, the
Court, on exceptional cases, may assess the factual determinations made by the NLRC in a
particular case.
The Court ruled that NLRC had cogent legal bases to conclude that petitioners have successfully
discharged the burden of proving by substantial evidence that respondents injury was directly
attributable to himself. Records bear out circumstances which all lead to the reasonable conclusion
that respondent was responsible for the flooding and burning incidents. While respondent
contended that the affidavits and statements of the vessels officers and his fellow crew
members should not be given probative value as they were biased, self-serving, and mere
hearsay, he nonetheless failed to present any evidence to substantiate his own theory.
Besides, as correctly pointed out by the NLRC, the corroborating affidavits and
statements of the vessels officers and crew members must be taken as a whole and cannot
just be perfunctorily dismissed as self-serving absent any showing that they were lying when they
made the statements therein. INC Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or
Interorient Navigation Limited v. Alexander L. Moradas,G.R. No., January 15, 2014