BASIC DOCTRINES IN LABOR LAW

Atty. Maria Almira L. Fandialan – Saniano

Compassionate Justice Doctrine – It is disregarding rigid rules and giving

due weight to all equities of the case. (Ex. Employee validly dismissed may
still be given severance pay.) [UST Golden Notes]

Concept of liberal approach in interpreting the Labor Code and its

IRR – “All doubts in the implementation and interpretation of the provisions
of the Labor Code including its implementing rules and regulations shall be
resolved in favor of labor, as well as the Constitutional mandate that the
State shall afford full protection to labor and promote full employment
opportunities for all. (PLDT vs. NLRC, G.R. No. 111933, July 23, 1997) Under
the policy of social justice, the law bends over backward to accommodate
the interests of the working class on the humane justification that those with
less privileges in life should have more privileges in law. (PAL vs. Santos,
G.R. No. 77875, February 4, 1993 – 2006 Bar Question)

Doctrines on termination of employment (The Labor Code with

Comments and Cases Volume II, Azucena):

1. Wenphil (1989) - declared the termination valid BUT the employer

should pay indemnity for not respecting the employee's right to due
process.

2. Serrano (2000) - modified Wenphil; stiffened the penalty to "full

backwages"; The employee, dismissed for a valid reason, remains
dismissed, but the employer who disregarded proper procedure, must
pay full backwages in addition to the separation pay, if applicable, and
indemnity.

3. Viernes (2003) - imposed both backwages and indemnity.

4. Agabon (2004) – if the termination is valid, the employee remains

dismissed, but the employer must pay indemnity as penalty for not
observing due process; heavier than that imposed in Wenphil but
lighter than full backwages -- fixed the amount to P30,000.00.

5. Jaka (2005) - modified Agabon:

A. If dismissal is based on a just cause under Article 282 but the

employer failed to comply with the notice requirement, the sanction to
 be imposed upon him should be tempered because the dismissal
process was, in effect, initiated by an act imputable to the
employee;

B. If dismissal is based on an authorized cause under Article 283 but the

employer failed to comply with the notice requirement, the sanction
should be stiffer because the dismissal was initiated by the
employer's exercise of his management prerogative. [P50,000
nominal damages]

6. Industrial Timber (2006) - subdivides the authorized causes into: 1)

due to losses and 2) not due to losses. If the authorized cause that
terminates employment arises from losses, the penalty to the
employer who disregarded due process may be lighter than if the
authorized cause has no relation to losses. (The court in the Industrial
Timber case awarded P10,000.00 for each employee instead of
P50,000.00);

Factors to consider in assessing the penalty to the employer:

1. The authorized cause invoked, whether it was a retrenchment or a

closure or cessation of operation of the establishment due to serious
business losses or financial reverses or otherwise;

2. Number of employees to be awarded;

3. Capacity of the employers to satisfy the awards, taking into account

their prevailing financial status as borne by the records;

4. Employer's grant of other termination benefits in favor of the

employees; and

5. Whether there was a bona fide attempt to comply with the notice
requirements as opposed to giving no notice at all. (Industrial Timber
Corp. vs. Ababan, G.R. No. 165418, March 30, 2006)

Non-diminution of benefits - This principle mandates that the reduction

or diminution or withdrawal by employers of any benefits, supplements or
payments as provided in existing laws, individual agreements or collective
bargaining agreements between workers and employers or voluntary
employer practice or policy, is not allowed. The benefits being given to
employees cannot be taken back or reduced unilaterally by the employer
because the benefits have become part of the employment contract, written
or unwritten.

Reasonable connection rule - The primary standard is the reasonable

connection between the particular activity performed by the employee in
relation to the usual business or trade of the employer. If the employee has
been performing the job for at least one year, even if the performance is not
continuous or only intermittent, the law deems the repeated and continuing
need for its performance as sufficient evidence of the necessity, if not
indispensability, of the activity of the business.

Equipoise doctrine - with all things considered equal, all doubts must be
resolved in favor of labor.

Determination of Seafarers Degree of Disability - For purposes of

determining the seafarer’s degree of disability, it is the company-
designated physician who must proclaim that he sustained a permanent
disability, whether total or partial, due to either injury or illness, during the
term of his employment. The Court shall thus evaluate the findings of
petitioner’s physicians viś-a-viś the findings of the company-designated
physician. (Ison vs. Crewserve, G.R. No. 173951 April 16, 2012)

The POEA Standard Employment Contract clearly provides that when a

seafarer sustains a work-related illness or injury while on board the vessel,
his fitness or unfitness for work shall be determined by the company-
designated physician. However, if the doctor appointed by the seafarer
makes a finding contrary to that of the assessment of the company-
designated physician, the opinion of a third doctor may be agreed jointly
between the employer and the seafarer as the decision final and binding on
both of them. (Santiago vs. Pacbasin, G.R. No. 194677 April 18, 2012)

Conditions for Entitlement under POEA-SEC - Section 20-B (3) of the

2000 POEA- SEC states that “for the seaman's claim to prosper, however, it
is mandatory that he should be examined by a company-designated
physician within three days from his repatriation. Failure to comply with this
mandatory reporting requirement without justifiable cause shall result in
forfeiture of the right to claim the compensation and disability benefits
provided under the POEA-SEC.

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

all of the following conditions must be satisfied under the POEA- SEC: (1)
the seafarer’s work must involve the risks described in the contract; (2) the
disease was contracted as a result of the seafarer's exposure to the
described risks; (3) the disease was contracted within a period of exposure
and under such other factors necessary to contract it; and (4) there was no
notorious negligence on the part of the seafarer. (Loadstar vs. Heirs of
Calawigan, G.R. No. 187337, December 5, 2012)

PRINCIPLE OF CO-DETERMINATION - It is a joint responsibility of the

employer and the employee to establish terms and conditions of
employment. In establishing such terms and conditions of employment, the
employer and the employee must take into consideration existing laws and
regulations.

It also refers to the right of the workers to participate in policy and decision-
making processes directly affecting their rights and benefits, without
intruding into matters of management prerogatives. (PAL v. NLRC, G.R. No.
85985, August 13, 1993).

Globe Doctrine - refers to the method of determining the will or desire of

the employee which is an important factor in determining the appropriate
bargaining unit. The best way to determine such preference is through
referendum or plebiscite. (Globe Machine & Stamping Company, [1937])

FOREIGN EMPLOYER :

The failure of a foreign employer to observe some precautionary measures

and in allowing an overseas worker with mental disorder to travel home
alone renders it liable for the death of said worker. Indeed, “the obligations
and liabilities of the employer do not end upon the expiration of the
contracted period as it is duty bound to repatriate the seaman to the point of
hire to effectively terminate the contract of employment.

The foreign employer may not be obligated by its contract to provide a

companion for a returning employee but it cannot deny that it is expressly
tasked by its agreement to assure the safe return of said worker.
(Interorient Maritime Enterprises, Inc. vs. NLRC, 261 SCRA 757 , September
16, 1996)

A private employment agency can be sued jointly and severally with

the principal or foreign-based employer for any violation of the
recruitment agreement or the contract of employment. — Rule V,
Book I of the Omnibus Rules Implementing the Labor Code defines the
duties and obligations of a duly licensed placement and recruitment agency.
Section 2(e) requires a private employment agency to assume all
responsibilities for the implementation of the contract of employment of an
overseas worker. Section 10(a)(2) provides that a private employment
agency can be sued jointly and severally with the principal or foreign-based
employer for any violation of the recruitment agreement or the contract of
employment. (Prieto vs. NLRC)

DISEASE - The rule is that an ailment contracted by a worker even prior to

his employment, does not detract from the compensability of the disease. It
is not required that the employment be the sole factor in the growth,
development or acceleration of the illness to entitle the claimant to the
benefits incident thereto. It is enough that the employment had contributed,
even in a small measure, to the development of the disease.
It is not necessary, in order to recover compensation, that the employee
must have been in perfect health at the time he contracted the disease; If
the disease is the proximate cause of the employee’s death for which
compensation is sought, the previous physical condition of the employee is
unimportant, and recovery may be had for said death, independently of any
pre-existing disease.

MISREPRESENTATION - A worker’s misrepresentation cannot be made the

basis by his employer for the denial of his claims under the contract where
he passed the required pre-medical examination and was declared fit to
work. Labor contracts are impressed with public interest and the provisions
of the POEA Standard Employment Contract must be construed fairly,
reasonably and liberally in favor of Filipino seamen in the pursuit of their
employment on board ocean-going vessels.

CONSTRUCTIVE DISMISSAL DOCTRINE - Constructive dismissal is an

involuntary resignation resorted to when continued employment becomes
impossible, unreasonable, or unlikely, due to any of the following: (1)
demotion in rank or a diminution in pay; or (2) when a clear
discrimination, insensibility, or disdain by an employer becomes
unbearable to an employee.

Constructive dismissal is illegal and usually occurs when an employee

resigns as a result of unfavorable work conditions instigated by the
employer. It is typically resorted to by employers who do not want to
undergo the procedural due process involved in legally terminating an
employee.
RUBBER WORLD DOCTRINE (Also applicable in Commercial Law –
see Receivership) Presidential Decree No. 902-A is clear that "all actions
for claims against corporations, partnerships or associations under
management or receivership pending before any court, tribunal, board or
body shall be suspended accordingly." The law did not make any
exception in favor of labor claims.

"The justification for the automatic stay of all pending actions for claims is to
enable the management committee or the rehabilitation receiver to
effectively exercise its/his powers free from any judicial or extra judicial
interference that might unduly hinder or prevent the 'rescue' of the debtor
company. To allow such other actions to continue would only add to the
burden of the management committee or rehabilitation receiver, whose
time, effort and resources would be wasted in defending claims against the
corporation instead of being directed toward its restructuring and
rehabilitation."

Thus, the labor case would defeat the purpose of an automatic stay. To rule
otherwise would open the floodgates to numerous claims and would defeat
the rescue efforts of the management committee. (Rubberworld vs. NLRC,
G.R. No. 128003, July 26, 2000)

RULE ON FORUM NON CONVENIENS (As applied in Labor Cases) - a

Philippine court or agency may assume jurisdiction over the case if it
chooses to do so provided: (1) that the Philippine court is one to which the
parties may conveniently resort to; (2) that the Philippine court is in a
position to make an intelligent decision as to the law and the facts; and (3)
that the Philippine court has or is likely to have power to enforce its decision.

“The main aspects of the case transpired in two foreign jurisdictions and the
case involves purely foreign elements. The only link that the Philippines has
with the case is that respondent Santos is a Filipino citizen. The Palace Hotel
and MHICL are foreign corporations. Not all cases involving our citizens can
be tried here. Thus, the NLRC was a seriously inconvenient forum.” (Manila
Hotel Corp. vs. NLRC, G.R. No. 120077, October 13, 2000)