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CASEDOCTRI
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EXECUTIVE COMMITTEE
Over-all Chairperson Mary Cyriell C. Sumanqui
Chairperson for Academics Erica Mae C. Vista
Chairperson for Hotel Operations Ben Rei E. Barbero
Vice Chairperson for Secretariat Jhelsea Louise B. Dimaano
Vice Chairperson for Operations Daniel Philip V. Barnachea
Vice Chairperson for Finance Ma. Angelica B. De Leon
Vice Chairperson for Audit Arra Olmaya J. Badangan
Vice Chairperson for EDP Jordan N. Chavez
Vice Chairperson for Logistics Hanz Darryl D.Tiu
Vice Chairperson for Membership Colleen F. Dilla
SUBJECT COMMITTEE
Subject Chair for Political Law Cherish Kim B. Ferrer
Subject Chair for Labor Law Kristina D. Cabugao
Subject Chair for Civil Law Ma. Cristina D. Arroyo
Subject Chair for Taxation Law Maria Carissa C. Guinto
Subject Chair for Mercantile Law Dentzen S. Villegas
Subject Chair for Criminal Law Maria Regina C. Gameng
Subject Chair for Remedial Law Raymond F. Ramos
Subject Chair for Legal Ethics Rhev Xandra Acuña
LAYOUT AND CONTENT EDITORS

Roger P. Cuaresma Camille Victoria D. Dela Cruz
Gabrielle Anne S. Endona Paulo O. Hernandez
Joelle Mae J. Garcia Teresa Katherine R. Kua
Micah Regina A. Gonzales Ma. Lourdes M. Santos
Zennia S. Turrecha
Nestor J. Porlucas, Jr.
SAN BEDA COLLEGE OF LAW

ADMINISTRATION
Dean Atty. Marciano G. Delson
Vice Dean Atty. Risel G. Castillo-Taleon
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Administrative Officer Atty. Francesca Lourdes M. Señga
Legal Aid Bureau Director Atty. Peter-Joey B. Usita
KRISTINA D. CABUGAO
Subject Chair
VICTOR KENNER S. GALANG

Assistant Subject Chair
MISHAEL R. OCCIANO
Subject Electronic Data Processing
SUBJECT HEADS
Labor Standards NATHANAEL A. QUIJANO
Labor Relations BEA PATRICIA G. DANGAZO
Jurisdiction and Special Laws JUZMEND FRANCEZ THERESE M.
ABRIAM
SUBJECT MEMBERS
JOHN BENEDICT M. RIVERA JOANNA PATRICIA R. PADRID
RAJEEN JILLIAN D. BIASCA STEPHANIE NICOLE M. ILACAD
CHRISTIAN MARIE LYNN P. SOLIS ANN MARY MICHELLE B. RUALO
ADVISERS
Atty. JOYRICH M. GOLANGCO
Atty. PETER-JOEY B. USITA
PREFACE
The COVERED CASES AND J. PERLAS-BERNABE CASE DOCTRINES was
crafted as an apt response for the need to provide a comprehensive compilation of
jurisprudence, promulgated by the Supreme Court, covered for this year’s Bar
Examinations. This complement significantly the other bar review materials in the
repository of the San Beda Centralized Bar Operations.
On this year’s edition, the COVERED CASES is in two forms: a printed copy of
the Covered Cases: Case Doctrines, and a digital copy of the Covered Cases: Case
Digests which include the Supreme Court decisions released from July 1, 2017 to June
30, 2018; while the J. PERLAS-BERNABE CASE DOCTRINES includes the
summary of the rulings pronounced by the 2019 Bar Examination Chairperson, the
Honorable Justice Estela M. Perlas-Bernabe, from September 16, 2011 to December
31, 2018.
In addition to that, the cases herein are categorized and arranged based on the
2019 Supreme Court Bar Exam Syllabus in order to guide its readers in their
appreciation and understanding of the court decisions.
With this material, the San Beda Centralized Bar Operations seeks to uphold
its legacy of service and excellence in helping the examinees achieve their goal of
becoming worthy members of the legal profession.
UT IN OMNIBUS GLORIFICETUR DEUS!
THIS IS THE INTELLECTUAL PROPERTY OF THE

SAN BEDA UNIVERSITY COLLEGE OF LAW
CENTRALIZED BAR OPERATIONS.
THE UNAUTHORIZED COPYING, REPRODUCTION,

MODIFICATION OR DISTRIBUTION
OF ANY OF THE CONTENTS OF THIS BOOK IS
STRICTLY PROHIBITED.
TABLE OF CONTENTS
LABOR LAW AND SOCIAL LEGISLATION
Page
Number
Philippine National Bank vs. Teresita Gregorio…………………………………….……. 1

G.R. No. 194944; September 18, 2017
Charlie Hubilla et al. vs. HSY Marketing Ltd., Co. et al. ……………………….…... 2
G.R. No. 207354; January 10, 2018
People of the Philippines vs. Gilda Abellanosa …………………………………….….... 3

G.R. No. 214340; July 19, 2017
People of the Philippines vs. Erlinda A. Sison “Margarita S. Aguilar” ………….…… 4
G.R. No. 187160; August 9, 2017
People of the Philippines vs. Julia Regalado Estrada ……………………………….….. 5
G.R. No. 225730; February 28, 2018
People of the Philippines vs. Delia C. Molina ……………………………………………… 6
G.R. No. 229712; February 28, 2018
Republic of the Philippines vs. Cortez …………………………………………………….. 7

G.R. No. 187257; August 8, 2017
Philippine Geothermal, Inc. Employees Union (PGIEU) vs. ……………………………. 8
Chevron Geothermal Phils. Holding, Inc.
G.R. No. 207252; January 24, 2018
Marilyn B. Asentista vs. Jupp & Company, Inc…………………………………….…….. 9
G.R. No. 229404; January 24, 2018
Alfredo Mallari Magat vs. Interorient Maritime Enterprises, Inc. ………………….…… 10

G.R. No. 232892; April 4, 2018
Scanmar Maritime Services, Inc., et al. vs. Welfredo De Leon …………………….….. 11
G.R. No. 199977; January 25, 2017
Wilmer O. De Andres vs. Diamond H Marine Services & ………………………….…… 12
Shipping Agency, Inc., Wu Chun Hua and Ruben J. Turingan
G.R. No. 217345; July 12, 2017
Maunlad Trans, Inc., Carnival Cruise Lines and/or Amado Castro vs. ………….…... 13
Gabriel Isidro
G.R. No. 222699; July 24, 2017
Grieg Philippines, Inc. vs. Michael John M. Gonzales …………………………….……. 14
G.R. No. 228296; July 26, 2017
Hoegh Fleet Services Phils., Inc. vs. Bernardo M. Turallo ……………………….…….. 15
G.R. No. 230481; July 26, 2017
Julio C. Espere vs. NFD International Manning Agents …………………………….….. 16
G.R. No. 212098; July 26, 2017
Eugenio M. Gomez vs. Crossworld Marine Services, Inc. ……………………….…….. 17
G.R. No. 220002; August 2, 2017
Tomas P. Atienza vs. Orophil Shipping International Co., ……………………….…….. 18
G.R. No. 191049; August 7, 2017
Pedro C. Perea vs. Elburg Ship Management Philippines ……………………….…….. 19
G.R. No. 206178; August 9, 2017
Benedict N. Romana vs. Magsaysay Maritime Corporation, …………………….……. 20
Eduardo Manese and/or Princess Cruise Lines Ltd.
G.R. No. 192442; August 9, 2017
North Sea Marine Services Corporation vs. Santiago S. Enriquez …………………… 21
G.R. No. 201806; August 14, 2017
Antonio Manansala vs. Marlow Navigation Phils., Inc. ………………………………… 22
/Marlow Navigation Co. Ltd./Cyprus
G.R. No. 208314; August 23, 2017
Robelito Malinis Talaroc vs. Arpaphil Shipping Corporation, Epidaurus S.A. ……… 23
G.R. No. 223731; August 30, 2017
Magsaysay Maritime Corporation, Eduardo Manese …………………………………… 24
and/or Princess Cruise Lines Ltd. vs. Cynthia De Jesus
G.R. No. 203943; August 30, 2017
Desiderio C. Cutanda vs. Marlow Navigation Phils., Inc, …………………………..…… 25
and/or Marlow Navigation Co. LTD. and/or Antonio Galvez Jr.
G.R. No. 219123; September 11, 2017
C.F. Sharp Crew Management, Inc. vs. Noel N. Orbeta ……………………………….… 26
G.R. 211111; September 25, 2017
Oriental Shipmanagement Co., Inc. and/or MOL Tankship Management ………….. 27
(Europe) Ltd. and/or Ramon S. Herrera vs. William David P. Ocangas
G.R. No. 226766; September 27, 2017
TSM Shipping (Phils.), Inc., and MST Marine Services Phils., Inc. vs. ……………….. 28
Shirley G. De Chavez
G.R. No. 198225; September 27, 2017
Career Philippines Shipmanagement, Inc. vs. Eduardo J. Godinez ………………….. 29
G.R. No. 206826 & G.R. No. 206828; October 2, 2017
Dohle Philman Manning Agency, Inc. Dohle Limited, et. al. vs. ……………………… 30
Julius Rey Quinal Doble
G.R. No. 223730; October 4, 2017
OSG Ship Management Manila, Inc. vs. Aris Wendel R. Monje ……………………….. 31
G.R. No. 214059; October 11, 2017
Sharpe Sea Personnel, Inc. vs. Macario Mabunay, Jr. ……………………………….… 32
G.R. No. 206113; November 6, 2017
Government Service Insurance System vs. Simeon Tañedo, Jr. ………………….……. 33
G.R. No.193500; November 20, 2017
Maersk-Filipinas Crewing, Inc. and AP Moller Singapore PTE Ltd. vs. ………….….. 34
Rosemary G. Malicse
G.R. No.200576; November 20, 2017
Teodoro vs. Ventura, Jr. vs. Crewtech Ship Management Philippines, Inc. …….….. 35
G.R. No. 225995; November 20, 2017
Almario F. Leoncio vs. MST Marine Services ………………………………………….…. 36
G.R. No.230357; December 6, 2017
Veronico O. Tagud vs. BSM Crew Service Centre Phils., Inc. ………………………… 37
G.R. No. 219370; December 6, 2017
Career Philippines Ship Management vs. Donard P. Silvestre ……………………….. 38
G.R. No. 213465; January 8, 2018
Magsaysay Mitsui Osk Marine Inc. vs. Oliver G. Buenaventura………………………. 39
G.R. No. 195878; January 10, 2018
Teekay Shipping Philippines, Inc. vs. Roberto M. Ramoga, Jr………………………... 40
G.R. No. 209582; January 19, 2018
Generato M. Hernandez vs. Magsaysay Maritime Corporation………………………... 41
G.R. No. 226103; January 24, 2018
Manila Shipmanagement & Manning, Inc. vs. Ramon T. Aninang ………………….….. 42
G.R. No. 217135; January 31, 2018
Ariel Ebuenga vs. Southfield Agencies, Inc. ……………………………………….……… 43
G.R. No. 208396; March 14, 2018
Scanmar Maritime Services, Inc vs. Celestino Hernandez, Jr. ………………….……… 44
G.R. No. 211187; April 16, 2018
Loadstar International Shipping, Inc. vs. Ernesto Yamson ………………….…………. 45
G.R. No. 228470; April 23, 2018
Seacrest Maritime Management, Inc. vs. Francisco Roderos ………………………….. 46
G.R. No. 230473; April 23, 2018
Gere vs. Anglo-Eastern Manageent Phils., Inc. ………………………………………….. 47
G.R. No. 226713; April 23, 2018
Orient Hope Agencies, Inc. vs. Jara ……………………………………………………..…… 48
G.R. No. 204307; June 6, 2018
Philsynergy Maritime, Inc. vs. Columbano Gallano, Jr. …………………………….….. 49
G.R. No. 228504; June 6, 2018
Ricky B. Tulabing vs. MST Marine Services (Phils.), Inc., ……………………….…….. 50
TSM International Ltd., and/or Capt. Alfonso R. Del Castillo
G.R. No. 202113; June 6, 2018
Abosta Ship Management Corp. vs. Delos Reyes ………………………………….……. 51
GR No. 215111; June 20, 2018
Ilustricimo vs. NYK-Fil Ship Management, Inc. ………………………………….……….. 52
GR No. 237487; June 27, 2018.
Heirs of Marcelino Olorvida Jr., vs. BSM Crew Service Centre ………………….……. 53
Philippines, Inc.
GR No. 218330; June 27, 2018
SONEDCO Workers Free Labor Union, et al. vs. Universal Robina ………….………. 54
Corporation, Sugar Division-Southern Negros Development Corporation
G.R. No. 220383; July 5, 2017
Hongkong Bank Independent Labor Union vs. …………………………………….……. 55
Hongkong and Shanghai Banking Corp. Limited
G.R. No. 218390; February 28, 2018
Raymond Son vs. University of Santo Tomas, et al. ……………………………….…….. 56
G.R. No. 211273; April 18, 2018
Ergonomic Systems Philippines, Inc. and Phillip C. Ng and …………………….……. 57

Ma. Lourminda O. Ng, vs. Emerito C. Enaje et al.
G.R. No. 195163; December 13, 2017
Romeo Alba vs. Conrado Espinosa ………………………………………………..……….. 58

G.R. No. 227734; August 9, 2017
William Wenceslao, et al., vs. Makati Development Corporation ……………………… 59
G.R. No 230696; August 30, 2017
Macario S. Padilla vs. Airborne Security Service, Inc. ………………………………..… 60
and/or Catalina Solis
G.R. No. 210080; November 22, 2017
Innodata Knowledge Services, Inc. vs. Socorro Inting, et al. ……………………….….. 61
G.R. No. 211892; December 6, 2017
Allied Banking Corporation vs. Reynold Calumpang……………………………….…… 62
G.R. No. 219435; January 17, 2018
Leo V. Mago vs. Sun Power Manufacturing Limited……………………………….……. 63
G.R. No. 210961; January 24, 2018
San Miguel Foods, Inc. vs. Hannival V. Rivera, et. al. …………………………….……….. 64
G.R. No. 220103; January 31, 2018
Reyman Minsola vs. New City Builders Inc. and Engr. Ernel Fajardo …………….….. 65
G.R. No. 207613; January 31, 2018
Maria Carmela Umali vs. Hobbywing Solutions, Inc. ………………………………….… 66
G.R. No. 221356; March 14, 2018
Mario Bajaro vs. Metro Stonerich Corp., and/or Ibrahim Nuno …………………….…… 67
G.R. No. 227982; April 23, 2018
Consolidated Building Maintenance Inc. vs Asprec, Jr. …………………………….….. 68
G.R. No. 217301; June 6, 2018
Philippine National Bank vs. Jumelito T. Dalmacio ……………………………………... 69

G.R. No. 202308 and 202357; July 5, 2017
Distribution & Control Products, Inc. vs. Jeffrey E. Santos ………………………….… 70
G.R. No. 212616; July 10, 2017
Alaska Milk Corporation and Estate of Wilfred Uytengsu vs. ………………………….. 71
Ernesto L. Ponce
G.R. No 228412; July 16, 2017
BDO Unibank, Inc. vs. Nestor N. Nebres and Armenia F. Suravilla……………….….… 72
G.R. No. 208735; July 19, 2017
Evic Human Resource Management, Inc. vs. Rogelio Panahon…………………….… 73
G.R. No. 206890; July 31, 2017
United Polyresins, Inc. vs. Marcelino Pinuela………………………………………….…. 74
G.R No. 209555; July 31, 2017
Sterling Paper Products Enterprises, Inc. vs. KMM-Katipunan ………………….…… 75
and Raymond Z. Esponga
G.R. No. 221493; August 2, 2017
Transglobal Maritime Agency, Inc. vs. Vicente Chua, Jr…………………………….…… 76
G.R. No. 222430; August 30, 2017
Fabricator Philippines, Inc. vs. Jeanie Rose Q. Estolasb………………………….……. 77
G.R. No. 224308-09; September 27, 2017
San Fernando Coca-Cola Rank-and-File Union vs. …………………………………….. 78
Coca-Cola Bottlers Philippines, Inc.
G.R. No. 200499; October 4, 2017
Abbott Laboratories (Philippines), Inc. vs. Manuel F. Torralba……………………….. 79
G.R. No. 229746; October 11, 2017
De La Salle Araneta University, Inc. vs. Dr. Eloisa G. Magdurulang…………………. 80
G.R. No. 224319; November 20, 2017
Marie Vilma G. Doctor and Jaime Lao, Jr. vs. NII Enterprises………………………… 81
and/or Mrs. Nilda C. Ignacio
G.R. No. 194001; November 22, 2017
Ricardo G. Sy and Henry B. Alix vs. Neat, Inc., Banana Peel……………………….…. 82
and Paul Vincent Ng
G.R. No. 213748; November 27, 2017
Veterans Federation of the Philippines vs. Eduardo Montenejo, et. al. ………….…. 83
G.R. No. 184819; November 29, 2017
Grace R. Aluag vs. BIR Multi-Purpose Cooperative, Norma L. Lipana………………. 84
and Estelita V. Datu
G.R. No. 228449; December 6, 2017
Advan Motor, Inc. vs. Victoriano G. Veneracion……………………………………….…. 85
G.R. No. 190944; December 13, 2017
Digitel Telecommunications Phils., Inc./ John Gokongwei, Jr. …………………….…… 86
vs. Neilson M. Ayapana
G.R. No. 195614; January 10, 2018
Jovita B. Lamsis vs. Jude F. Sales……………………………………………………………. 87
A.M No. P-17-3772; January 10, 2018
American Power Conversion Corporation, et al. vs. Jayson Lim…………………….. 88
G.R. No. 214291; January 11, 2018
Wilfredo Asayas vs. Sea Power Shipping Enterprises Inc……………………………… 89
and/or Avin International S.A. and/or Antoniette Guerrero
G.R. No. 201792; January 24, 2018
Lourdes School Quezon City, Inc. vs. Luz V. Garcia………………………………….… 90
G.R. No. 213128; February 7, 2018
Josephine Casco vs. National Labor Relations Commission……………………….… 91
and/or Thelma N. Clemente
G.R. No. 200571; February 19, 2018
La Consolacion College of Manila, et al. vs. Virginia Pascua…………………….…….. 92
G.R. No. 214744; March 14, 2018
Central Azucarera De Bais and Antonio Steven Chan vs............................................. 93
Heirs of Zuelo Apostol
G.R. No. 21531; March 14, 2018
Princess Talent Center Production, Inc. vs. Desiree T. Masagca……………………… 94
G.R. No. 191310; April 11, 2018
Renante B. Remoticado vs. Typical Construction Trading Corp. ……………………. 95
and Rommel M. Alignay
G.R. No. 206529; April 23, 2018
University of the East vs. Masangkay……………………………………………………….. 96
G.R. No. 226727; April 25, 2018
Dionella Gopio vs. Salvador Bautistab……………………………………………………. 97
G.R. No. 205953; June 6, 2018
Marlon L. Arcilla, vs. Zulisibs, Inc., Piandre Salon, and Rosalinda Francisco…………. 98
G.R. No. 225125; June 6, 2018
Nicanor F. Malcaba, Christian C. Nepomuceno, ………………………………………... 99
and Laura Mae Fatima F. Palit-Ang vs. ProHealth Pharma Philippines, Inc., et al.
G.R. No. 209085; June 6, 2018
John L. Borja and Aubrey L. Borja vs. Randy B. Miñoza ……………………………… 100
and Alaine S. Bandalan
G.R. No. 218384, July 3, 2017
Edward M. Couse vs. Ferritz Integrated Development Corporation…………………. 101
G.R. No. 230664; July 24, 2017
FCA Security and General Services, Inc. vs. Sotero M. Academia, Jr. II……………… 102
G.R. No. 189493; August 2, 2017
Alicia M.L. Coseteng and Diliman Preparatory School vs. Leticia P. Perez………….. 103
G.R. No. 185938; September 6, 2017
Allan John Uy Reyes vs. Global Beer Below Zero, Inc. ………………………………… 104
G.R. No. 222816, October 4, 2017
Meatworld International, Inc. vs. Dominique Hechanova…………………………………. 105
G.R. No. 208053; October 18, 2017
Demex Rattancraft, Inc. vs. Rosalio A. Leron……………………………………………….. 106
G.R. No. 204288; November 8, 2017
Mehitabel, Inc. vs. Jufhel L. Alcuizar………………………………………………………… 107
G.R. No. 228701-02; December 13, 2017
Expedition Construction Corporation, Simon Lee Paz……………………………..…… 108
and Jordan Jimenez vs. Alexander M. Africa et al.
G.R. No. 228671; December 14, 2017
St. Paul College, Pasig, and Sister Teresita Baricaua, SPC……………………….…… 109
vs. Anna Liza L. Manacol and Jennifer Cecile S. Valera
G.R. No. 222317; January 24, 2018
Perfecto Pascua vs. Bank Wise, Inc. and Philippine Veterans Bank…………………… 110
G.R. No. 191460; January 31, 2018
Philippine Span Asia Carriers Corp. vs. Heidi Pelayo................................................. 111
G.R. No. 212003; February 28, 2018
United Coconut Chemicals, Inc. vs. Victoriano Valmores……………………………… 112

G.R. No. 201018; July 12, 2017
Froel Pu-od vs. Ablaze Builders, Inc. ………………………………………………….…… 113
G.R. No. 230791; November 20, 2017
Lino Fernandez, Jr. vs. Manila Electric Company………………………………….……. 114
G.R. No. 226002; June 25, 2018
Joselito Alva vs. High Capacity Security Force, Inc……………………………….……. 115
G.R. No. 203328; November 8, 2017
Rogel N. Zaragoza vs. Katherine L. Tan and Emperador Distillers, Inc………………. 116
G.R. No. 225544; December 4, 2017
Arlo Aluminum, Inc. vs. Vicente M. Pinon, Jr., in Behalf of Vic Edward Pinon…….. 117
G.R. No. 215874; July 5, 2017
Read-Rite Philippines, Inc. vs. Gina Francisco……………………………………………. 118
GR No. 195457; August 16, 2017
NPC Drivers and Mechanics Association vs. National Power Corporation…………. 119
G.R. No. 156208; November 21, 2017
Consolidated Distillers of the Far East vs. Zaragoza…………………………………… 120
G.R. No. 229302; June 20, 2018
United Doctors Medical Center (UDMC) vs. Cesario Bernadas,…………………………. 121

represented by Leonila Bernadas
G.R. No. 209468; December 13, 2017
Alfredo F. Laya, Jr. vs. Philippine Veterans Bank and Ricardo A. Balbido, Jr. ……….. 122
G.R. No. 205813; January 10, 2018
Armando M. Tolentino (deceased), represented by ……………………………………… 123
his surviving spouse Merla F. Tolentino et al. vs. Philippine Airlines, Inc.
G.R. No. 218984; January 24, 2018
Virgel Dave Japos vs. First Agrarian Reform Multipurpose……………………………. 124

Cooperative (FARMCOOP)
G.R. No. 208000; July 26, 2017
Maria De Leon Transportation, Inc., represented by …………………………………… 125
Ma. Victoria D. Ronquillo vs. Daniel M. Macuray
G.R. No. 214940; June 6, 2018
Marksman & Co, Inc. vs. Rodil Sta. Rita……………………………………………….….. 126

G.R. No. 194765; April 23, 2018
Philippine Airlines, Inc. vs. Airline Pilots Association of the Philippines…………… 127
G.R. No. 200088; February 26, 2018
Angelito Gabriel vs. Petron Corporation, Alfred Trio and Ferdinando Enriquez……… 128
G.R. No. 194575; April 11, 2018
Crispin Frondozo vs. Manila Electric Company…………………………………………. 129

G.R. No. 178379; August 22, 2017
Jolo’s Kiddie Carts vs. Evelyn A. Caballa and Anthony M. Bautista………………… 130
G.R. No. 230682; November 29, 2017
Agnes Coeli Bugaoisan vs. Owi Group Manila…………………………………………… 131
G.R. No. 226208, February 7, 2018
NYK-FIL Ship Management, Inc. vs. Gener G. Dabu……………………………………….. 132
G.R. No. 225142; September 13, 2017
Gonzalo Puyat & Sons, Inc. vs. Alcaide…………………………………………………… 133

G.R. No. 167952 (Resolution); July 5, 2017
Primitivo Macalanda, Jr. vs. Atty. Roque Acosta…………………………………….….. 134
G.R. No. 197718; September 6, 2017
Land Bank of the Philippines vs. Rural Bank of Hermosa (Bataan), Inc………….….. 135
G.R. No. 181953; July 25, 2017
Alfonso Digan vs. Noemi Malines…………………………………………………….…….. 136
G.R. No. 183004; December 6, 2017
Magdalena Dillena vs. Mariano Alcaraz…………………………………………………… 137
G.R. No. 204045; December 14, 2017
Chailese Development Company, Inc. vs. Monico Dizon, et al………………….…….. 138
G.R. No. 206788; February 14, 2018
Landbank of the Philippines vs. Edna Mayo Alcantara………………………….……… 139
and Heirs of Cristy Mayo Alcantara
G.R. No. 187423; February 28, 2018
Apo Fruits Corporation vs. The Land Bank of the Philippines………………….…….. 140
and Department of Agrarian Reform
G.R. Nos. 217985-86; March 21, 2018
Spouses Fredeswinda Drilon Ybiosa and Alfredo Ybiosa vs. Inocencio Drilon….…. 141
G.R. No. 212866; April 23, 2018
Spouses Nolasco vs. Rural Bank of Pandi………………………………………………… 142
G.R. No. 194455; June 27, 2018
Metropolitan Waterworks and Sewerage System vs. Commission on Audit………… 143

G.R. No. 195105; November 21, 2017
Rolando De Roca vs. Eduardo Dabuyan, et al………………………………………….…… 144

G.R. No. 215281; March 5, 2018
John E.R. Reyes and Merwin Joseph Reyes vs. Orico Doctolero, ……………….…... 145
Romeo Avila, Grandeur Security and Services Corporation,
and Makati Cinema Square
G.R. No. 185597; August 2, 2017
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON LABOR LAW AND SOCIAL LEGISLATION
THE QUANTUM OF PROOF REQUIRED IN LABOR CASES IS SUBSTANTIAL EVIDENCE
Philippine National Bank vs. Teresita Fe A. Gregorio

G.R. No. 194944; September 18, 2017
Jardeleza, J.
FACTS:
The case is a petition for Certiorari assailing the decision of the CA, which set aside the
decision of the NLRC and reinstated the ruling of the LA, finding petitioner Philippine National Bank
(PNB) liable for illegal dismissal of respondent Teresita Fe A. Gregorio.
PNB hired respondent Gregorio as an apprentice teller. PNB’s Internal Audit Group (IAG)
conducted a review of PNB Sucat wherein it found Gregorio to have conducted irregular lending
activities for which PNB Sucat received no commissions. The proceeds from the loans were being
transferred to Gregorio’s dummy accounts. By reason of such findings, PNB dismissed Gregorio.
Hence, Gregorio filed a case for illegal dismissal before the LA. PNB submitted 3 affidavits of
witnesses, 2 of which were retracted in the course of trial, and the findings of IAG in a
Memorandum. The LA ruled that the evidence presented by PNB was insufficient to prove the
alleged acts of Gregorio.
PNB alleges that the pieces of evidence it has presented altogether provide substantial
evidence to establish Gregorio's irregular transactions which amounts to gross misconduct.
Gregorio insists that there is no factual basis for her dismissal.
ISSUE:
Were the pieces of evidence presented by PNB sufficient to prove Gregorio's irregular
transactions as manager?
RULING:
Yes, the evidence submitted by PNB is sufficient to prove Gregorio’s irregular transactions
as manager.
In cases filed before quasi-judicial bodies, the quantum of proof required is substantial
evidence. This means that "amount of relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion, The evidence available before the NLRC to establish that
Gregorio indeed committed the acts which became the basis for her dismissal are the following:
the IAG Memorandum, which was the result of the investigation of the IAG, the charges against
Gregorio, Gregorio's answers to these charges, the three affidavits, the affidavits of retraction, the
testimonies of the tellers of PNB Sucat, and Gregorio's own testimony at the PNB meetings. We
agree with the NLRC that all these, taken together, are adequate to convince a reasonable mind
that Gregorio engaged in an unauthorized lending business within PNB Sucat.
The evidence presented before the NLRC painted a clear picture of Gregorio's irregular
loan activities: Gregorio facilitated the application for loans secured by deposit hold-outs of
some of PNB Sucat's depositors. These depositors agreed to invest in this scheme on the
promise that they will earn a 5% interest, although 2% of this will supposedly go to the bank
as commission. The proceeds of these loans were lent to other people. The 3% interest which
the depositors were promised were transferred to their accounts under Gregorio's authority.
Notably, the supposed 2% commission did not go to PNB Sucat.
Therefore, the evidence presented by PNB has sufficiently established Gregorio’s

irregular transactions as manager, which constituted gross misconduct that justifies her
dismissal.
|1
WHEN THE EVIDENCE IN LABOR CASES IS IN EQUIPOISE, DOUBT IS RESOLVED IN

FAVOR OF THE EMPLOYEE
Charlie Hubilla et al. vs. HSY Marketing Ltd., Co. et al.

G.R. No. 207354; January 10, 2018
Leonen, J.
FACTS:
This is a petition for review on Certiorari filed by petitioners Charlie Hubilla et. al. assailing
the decision of the CA, which set aside the ruling of the NLRC and reinstated the decision of the
LA, finding that the employees voluntarily terminated their employment.
Respondents HSY Marketing Ltd., Co et al, are engaged in manufacturing and selling
goods under the brand Novo Jeans & Shirt & General Merchandise (Novo Jeans). Petitioners
Charlie Hubilla et. al. are employees of Novo Jeans. Sometime in May 2010 and June 2010,
several Novo Jeans employees went to Raffy Tulfo's radio program to air their grievances against
their employers for alleged labor violations. They were referred to DOLE Camanava Regional
Office.
Petitioners allege that they were illegally dismissed from service when they were prevented
from entering their work premises a day after airing their grievance in a radio show. On the other
hand, respondents deny this allegation and state that petitioners were never dismissed from
employment. On the other hand, Novo Jeans claimed that these employees voluntarily severed
their employment but that they filed complaints later before the LA.
ISSUE:
Were the petitioners illegally dismissed by respondents as there was no evidence
presented showing that petitioners intended to abandon their employment and proving that each
and every petitioner received a copy of the First Notice of Termination of Employment?
RULING:
Yes, petitioners were illegally dismissed by respondents.
Where both parties in a labor case have not presented substantial evidence to prove their
allegations, the evidence is considered to be in equipoise. In such a case, the scales of justice are
tilted in favor of labor. Thus, petitioners are hereby considered to have been illegally dismissed.
Respondents have not presented any proof that petitioners intended to abandon their
employment. They merely alleged that petitioners have already voluntarily terminated their
employment due to their continued refusal to report for work. However, this is insufficient to prove
abandonment. Respondents failed to present evidence proving that the petitioners received a copy
of the first notice of termination of employment. The evidence on record merely showed sample
letters of notices. Petitioners were not dismissed under any of the causes mentioned in Article 279
[282] of the Labor Code. They were not validly informed of the causes of their dismissal.
Thus, their dismissal was illegal.
2|
ILLEGAL RECRUITMENT IS DEEMED COMMITTED BY A SYNDICATE IF CARRIED

OUT BY A GROUP OF THREE OR MORE PERSONS CONSPIRING AND/OR
CONFEDERATING WITH ONE ANOTHER IN CARRYING OUT ANY UNLAWFUL OR
ILLEGAL TRANSACTION
People of the Philippines vs. Gilda Abellanosa

G.R. No. 214340; July 19, 2017
Del Castillo, J.
FACTS:
This is an appeal from the Decision of the CA affirming the Joint Decision of RTC finding
respondent Gilda Abellanosa guilty beyond reasonable doubt of the crime of Illegal Recruitment in
large scale.
Respondent was accused of falsely representing to possess authority to recruit job

applicants for employment abroad without first having secured the required authority from DOLE.
She allegedly collected and received from Gephre Pomar a certain amount as partial payment of
processing and placement fees for overseas employment. Aside from Pomar, seven other people
filed a complaint against the respondent for the same crime. Respondent denied meeting any of
the private complainants while she was in Iloilo and maintained that her purpose in going to Iloilo
was only to assist Shirley in processing the latter’s business permit. Furthermore, she denied
receiving money from the private complainants. RTC held that the prosecution sufficiently
established that respondent engaged in recruitment activities without a valid license or authority
when she represented herself to private complainants as a recruiter and promised deployment
abroad after receipt of processing and placement fees. Thus, RTC convicted respondent of illegal
recruitment in large scale. Appellant insists that she was a mere visitor in the house of Shirley's
mother and thus prays for her acquittal.|
ISSUE:
Is respondent guilty of the crime of Illegal Recruitment involving economic sabotage?
RULING:
Yes, the respondent is guilty of the crime of Illegal Recruitment involving economic
sabotage.
Article 38 of the Labor Code defines Illegal Recruitment as any recruitment activity to be
undertaken by non-licensee or non-holders of authority shall be deemed illegal and punishable.
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 of the said law.
The prosecution was able to establish that the respondent was engaged in illegal
recruitment involving economic sabotage. It was proved that the respondent was a non- licensee
or non-holder of authority to recruit workers for deployment abroad; she offered or promised
employment abroad to private complainants; she received monies from private complainants
purportedly as placement or processing fees; that private complainants were not actually deployed
to Brunei; that despite demands, respondent failed to reimburse or refund to private complainants
their monies; and that appellant committed these prohibited acts against three or more persons,
individually or as a group. Finally, petitioner recruited seven persons, or more than the minimum
of three persons required by law, for illegal recruitment to be considered in large scale. Therefore,
the respondent is guilty of the crime Illegal Recruitment involving economic sabotage.
|3
ABSENCE OF THE NECESSARY LICENSE OR AUTHORITY TO RECRUIT AND DEPLOY

WORKERS RENDERS THE RECRUITMENT ACTIVITY UNLAWFUL
People of the Philippines vs. Erlinda A. Sison “Margarita S. Aguilar”

G.R. No. 187160; August 9, 2017
Carpio, J.
FACTS:
This is an appeal of respondent Erlinda Sison from the decision of the CA in affirming the
conviction of the RTC in finding her guilty of (1) violation of Section 6, in relation to Section 7 of
R.A. No. 8042 or illegal recruitment involving economic sabotage and (2) estafa under Article 315
of the RPC.
Darvy M. Castuera was told that respondent can help him in finding a job in Australia.
Respondent discussed the requirements for working as a fruit picker in Australia and showed
pictures of other people she had supposedly helped to get employment. Believing such
representations, Castuera paid the down payment for which respondent promised that she would
personally process the visa application. Respondent told Castuera that the visa application would
be made in Malaysia, with the help of certain Dedales and Bacomo. However, it turned out that
respondent, Dedales and Bacomo were unable to procure said visa. He thus filed a complaint
before the POEA.
The People argued that respondent made representations about her purported power and
authority to recruit for employment and collected various amounts of money as fees. Respondent
did not dispute her lack of license or authority to conduct recruitment activities. However, she
maintained that the transaction she facilitated between Castuera and Dedales was only for
securing a visa which did not qualify as a "recruitment activity”.
ISSUE:
Is the act of Sison in representing to have the power to deploy workers abroad considered
as an act of illegal recruitment?
RULING:
Yes. The act of Sison in representing to have the power to deploy workers abroad
constitutes an act of illegal recruitment. The act of one who, without authority, in representing
himself with power to recruit and deploy workers abroad constitute illegal recruitment.
Under RA 8042, a non-licensee or non-holder of authority commits illegal recruitment for

overseas employment in two ways: (1) by any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers, and includes referring, contract services,
promising or advertising for employment abroad, whether for profit or not; or (2) by undertaking
any of the acts enumerated under Section 6 of RA 8042. In other words, 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. It is the absence of the
necessary license or authority to recruit and deploy workers that renders the recruitment activity
unlawful. To prove illegal recruitment, it must be shown that the accused gave the complainants
the distinct impression that she had the power or ability to deploy the complainants abroad in a
manner that they were convinced to part with their money for that end.
In this case, respondent herself admits that she has no license or authority to undertake
recruitment and placement activities. Thus, respondent was held guilty of illegal recruitment.
4|
THERE IS ILLEGAL RECRUITMENT IN LARGE SCALE IF COMMITTED AGAINST

THREE OR MORE PERSONS, INDIVIDUALLY OR AS A GROUP
People of the Philippines vs. Julia Regalado Estrada

G.R. No. 225730; February 28, 2018
Martires, J.
FACTS:
This is an appeal under Rule 45 from the decision of the CA which found the accused guilty
beyond reasonable doubt of Illegal Recruitment in Large Scale.
Estrada, accused, was charged with the crime of Illegal Recruitment in Large Scale and
Estafa. She represented herself as having authority and power to deploy persons abroad for
overseas employment. The three private complainants submitted all the documents necessary for
their overseas placement to Estrada and paid her fees for which no receipt was issued by Estrada.
Estrada failed to deploy them abroad.
ISSUE:
Is Estrada, who promised the three complainants employment abroad but failed to deploy
them, guilty of Illegal Recruitment in Large Scale?
RULING:
Yes. Under Section 6 of R.A. No. 8042, illegal recruitment, when undertaken by a non-
licensee or non-holder of authority as contemplated under Article 13(f) of the Labor Code, shall
mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring workers,
and including referring, contract services, promising or advertising for employment abroad,
whether for profit or not.
To sustain a conviction for illegal recruitment under R.A. No. 8042 in relation to the Labor
Code, the prosecution must establish two (2) elements: first, the offender has no valid license or
authority required by law to enable one to lawfully engage in the recruitment and placement of
workers; and second, the offender undertakes any of the activities within the meaning of
recruitment and placement defined in Article 13(b) of the Labor Code, or any of the prohibited
practices enumerated under Section 6 of R.A. No. 8042. Further, in case the illegal recruitment
was committed in large scale, a third element must be established, that is, the offender commits
the illegal recruitment activities against three or more persons, individually or as a group.
The prosecution was able to establish the essential elements of illegal recruitment in large
scale. First, Estrada is not licensed or authorized to recruit workers for overseas placement.
Second, the prosecution established that Estrada unlawfully engaged in activities which refer to
recruitment and placement under Art. 13(b) of the Labor Code and Section 6 of RA 8042- that
Estrada promised and recruited private complainants for employment abroad for a fee. Finally,
Estrada committed illegal recruitment activities against the three private complainants.
Thus, Estrada is properly convicted of the crime of illegal recruitment in large scale.
|5
OFFICERS HAVING CONTROL, MANAGEMENT OR DIRECTION OF THEIR BUSINESS

SHALL BE LIABLE FOR ILLEGAL RECRUITMENT
People of the Philippines vs. Delia C. Molina

G.R. No. 229712; February 28, 2018
Peralta, J.
FACTS:
This is an appeal from the decision of the CA finding Molina guilty beyond reasonable
doubt of the crime of illegal recruitment in large scale.
Molina, with Juliet Pacon, was charged with the crime of Illegal Recruitment in Large Scale.
Pacon introduced Molina to the private complainants as the president and owner of Southern
Cotabato Landbase Management Corporation, a recruitment agency with a provisional license by
the POEA. The five private complainants were presented as witnesses of the prosecution. Said
private complainants claimed that they submitted documentary requirements and paid the
corresponding fees to Pacon who assured them of employment abroad but which employment did
not materialize. The defense presented as its lone witness the accused, Delia C. Molina.
Molina admitted that she was the former President of the Southern Cotabato Landbase
Management Corporation, which was a duly licensed recruitment agency as evidenced by the
provisional license issued by the POEA. She stated that co-accused Juliet Pacon had no relation
to her or to the agency in any capacity as Pacon was a total stranger to her and had no authority
to act for the agency.
ISSUE:
Is Molina guilty of Illegal Recruitment in Large Scale?
RULING:
Yes. Section 6 of R.A. No. 8042 provides that illegal recruitment likewise includes the
failure to reimburse expenses incurred by the worker in connection with his documentation and
processing for purposes of deployment, in cases where the deployment does not actually take
place without the worker's fault. Section 6 paragraph (m) of R.A. No. 8042 provides that illegal
recruitment "is deemed committed in large scale if committed against three or more persons
individually or as a group”. Thus, the offense charged in the Information is illegal recruitment in
large scale because it was committed against the five private complainants.
The persons criminally liable for the above offenses are the principals, accomplices, and
accessories. In case of juridical persons, the officers having control, management or direction of
their business shall be liable.
Molina cannot escape from liability for large scale illegal recruitment on the ground that
she did not recruit private complainants and participate in their transactions with Juliet Pacon to
whom complainants made their payments.
Hence, since the recruitment was made in the agency of which Molina is the President,
she shall also be liable for large scale illegal recruitment.
6|
NO BACKWAGES WHEN COST OF LIVING ALLOWANCE AND AMELIORATION ARE

INTEGRATED INTO THE STANDARDIZED SALARY
Republic of the Philippines vs. Cortez

G.R. No. 187257; August 8, 2017
Leonen, J.
FACTS:
The case resolves the Motion for Reconsideration filed by National Power Corporation
Employees Consolidated Union (NECU) and the National Power Corporation Employees and
Workers Union (NEWU) from the Court’s February 7, 2017 Decision.
The case stemmed from the Petition for Mandamus filed by NECU and NEWU with the
RTC praying that National Power Corporation (NAPOCOR) be ordered to release the Cost of Living
Allowance (COLA) and Amelioration (AA) allegedly withheld from them. They believed that they
were among the government employees whose basic salary, upon the implementation of RA 6758
(Compensation and Position Classification Act of 1989) to be effective on July 1, 1989, did not
factually integrate the COLA and AA. The Court’s February 7, 2017 Decision ruled, among others,
that respondents NECU's and NEWU's COLA and AA for the period of July 1, 1989 to March 19,
1999 were already factually integrated into their basic salaries.
Respondents NECU and NEWU insist that the COLA and AA were deducted from their
salaries and that those hired after RA 6758 took effect never received their COLA and AA. The
Republic, represented by the OSG, counters that the issues raised have already been amply and
exhaustively addressed in the February 7, 2017 Decision.
ISSUE:
Are NECU’s and NEWU’s COLA and AA already integrated into their basic salaries?
RULING:
Yes, NECU’s and NEWU’s COLA and AA have already been integrated into their basic
salaries.
Section 12 of RA 6758 provides that “all allowances, except for representation and
transportation allowances; clothing and laundry allowances; subsistence allowance of marine
officers and crew on board government vessels and hospital personnel; hazard pay; allowances
of foreign service personnel stationed abroad; and such other additional compensation not
otherwise specified herein as may be determined by the DBM, shall be deemed included in the
standardized salary rates…”
Since the exceptions did not include COLA and AA, the same is presumed to have been
integrated into the basic standardized pay. To grant any back payment of COLA and AA despite
their factual integration into the standardized salary would cause salary distortions in the Civil
Service. Furthermore, the enactment of RA 7648 (Electric Power Crisis Act of 1993) authorized
the President of the Philippines to reorganize NAPOCOR and to upgrade its compensation plan.
In view of such, NAPOCOR ceased to be covered by RA 6758. Nevertheless, the President’s
discretion to specify new salary rates is qualified by the statement that “nothing in this Section shall
result in the diminution of the present salaries and benefits of the personnel of NAPOCOR.
Hence, NECU’s and NEWU’s COLA and AA are already integrated into their basic salaries.
|7
WAGE DISTORTION APPLIES ONLY TO WAGE ADJUSTMENTS AND INCREASES DUE

TO A PRESCRIBED LAW OR WAGE ORDER
Philippine Geothermal, Inc. Employees Union (PGIEU) vs. Chevron Geothermal Phils.
Holding, Inc.
G.R. No. 207252; January 24, 2018
Reyes, Jr., J.
FACTS:
This is a petition for review on certiorari seeking the reversal of the ruling dismissing the
petition against respondent company.
Petitioner and respondent, PGIEU and Chevron respectively, formally executed a

Collective Bargaining Agreement (CBA) which provided for a stipulation governing salary
increases of Chevron’s rank-and-file employees. The President of PGIEU sent a letter to Chevron
expressing that the CBA Provision and implementing rules were not being implemented properly
pursuant to the guideline which, if not addressed, might result to a salary distortion among union
members.
Chevron denied any occurrence of salary distortion among union members. It explained
that Chevron claims that the increase in the wages of Lanao and Cordovales was due to an
increase in hiring rates at the time when these employees were hired.
ISSUE:
Is there wage distortion where the salary increase was due to an increase in hiring rates?
RULING:
No. There is no wage distortion when the salary increase was due to an increase in hiring
rates.
Article 124 of the Labor Code defined wage distortion as a situation where an increase in
prescribed wage rates results in the elimination or severe contraction of intentional quantitative
differences in wage or salary rate between and among employee groups an establishment as to
effectively obliterate the distinctions embodied in such wage structure based on skills, length of
service or other logical bases of differentiation. The four elements of wage distortion are: (1) an
existing hierarchy of positions with corresponding salary rates; (2) a significant change in the salary
rate of a lower pay class without a concomitant increase in the salary rate of a higher one; (3) the
elimination of the distinction between the two levels; and (4) the existence of the distortion in the
same region of the country. Contrary to petitioner’s claim of alleged wage distortion, Article 124 of
the Labor Code of the Philippines only cover wage adjustments and increases due to a prescribed
law or wage order.
There is no wage distortion in the case at bench. The apparent increase in Lanao and
Cordovales' salaries as compared to the other company workers who also have the same
salary/pay grade as them should not be interpreted to mean that they were given a premature
increase. The alleged increase in their salaries was not a result of the erroneous application of
Article VII and Annex D of the CBA, rather, it was because when they were hired by respondent in
2009, the hiring rates were relatively higher as compared to those of the previous years. Verily,
the setting and implementation of such various engagement rates were purely an exercise of the
respondent's business prerogative in order to attract or lure the best possible applicants in the
market and which will not interfere with, absent any showing that it was exercised in bad faith. The
SC held that it is the prerogative of the management to regulate, according to its discretion and
judgment all aspects of employment. This flows from the established rule that labor law does not
authorize the substitution of the judgment of the employer in the conduct of its business.
Hence, the salary increase due to an increase in hiring rates did not amount to a wage
distortion.
8|
SALES COMMISSIONS FORM PART OF A SALESMAN’S REMUNERATION FOR

SERVICES RENDERED TO THE COMPANY
Marilyn B. Asentista vs. Jupp & Company, Inc.

G.R. No. 229404; January 24, 2018
Reyes, Jr., J.
FACTS:
This is a petition for review on certiorari under Rule 45 filed by Marilyn B. Asentista
(Asentista) seeking to set aside the Decision of the Court of Appeals, which set aside and nullified
the Resolutions of the National Labor Relations Commission (NLRC) ordering respondents JUPP
& Company, Inc. (JUPP) and/or its President Joseph V. Ascutia (Ascutia) to pay Asentista her
remaining unpaid sales commissions.
Asentista, as sales agent, became entitled to sales commission of two percent for every attained
monthly quota. Despite reaching her monthly quota, JUPP failed to give Asentista her earned sales
commissions. As such, Asentista filed a claim for unpaid commission.
In JUPP’s defense, it claimed that the employment agreement with Asentista did not
contain an explicit provision as to sales commission which is given subject to the sole prerogative
of JUPP.
ISSUE:
Is Asentista entitled to sales commission she claims?
RULING:
Yes. Asentista is entitled to the sales commission.
The respondents can no longer refute Asentista's entitlement to a discretionary

commission since an admission can already be deduced in their position paper. Moreover, the
silence of the employment agreement including sales commission as part of remuneration does
not affect her entitlement.
As provided by Section 97(f) of the Labor Code, employee's wage has been defined as
"remuneration of earnings, however designated, capable of being expressed in terms of money,
whether fixed or ascertained on a time, task, piece, or commission basis, or other method of
calculating the same, which is payable by an employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for services rendered or to be rendered
and includes the fair and reasonable value, as determined by the Secretary of Labor and
Employment, of board, lodging, or other facilities customarily furnished by the employer to the
employee." This definition explicitly includes commissions as part of wages. While commissions
are, indeed, incentives or forms of encouragement to inspire employees to put a little more industry
on the jobs particularly assigned to them, still these commissions are direct remunerations for
services rendered.
|9
REASONABLE PROOF OF WORK-CONNECTION AND NOT DIRECT CAUSAL

RELATION IS THE QUANTUM OF PROOF FOR COMPENSABILITY OF NON-
OCCUPATIONAL DISEASE
Alfredo Mallari Magat vs. Interorient Maritime Enterprises, Inc., Interorient Maritime
Enterprise Liberia for Dromon E.N.E. and Jasmin Arboleda
G.R. No. 232892; April 4, 2018
Peralta, J.
FACTS:
In this petition for review on certiorari under Rule 45, petitioner Alfredo Magat challenged
the CA decision which reversed the NLRC decision granting him permanent disability benefits.
Magat worked as an Able Seaman for respondent Interorient Maritime Enterprises, Inc
(Interorient). He underwent a pre-employment medical examination (PEME) and was certified as
“fit to work.” His job required him to paint the ship’s pump room which had poor ventilation thus
exposing him to chemicals of the paint and thinner. Petitioner suffered shortness of breath and
chest pains. He was then repatriated and he immediately asked for Interorient’s referral for a
medical examination but such request was ignored. Petitioner re-applied with respondent and was
asked to take a PEME but the results caused the denial of his re-application. He consulted his own
physician who diagnosed him with a cardiovascular disease and found him disabled for work.
Thereafter, he filed a complaint for payment of permanent disability benefits.
Petitioner argued that his illness was due to his poor diet, exposure to harmful chemicals
and a stressful work environment. Respondent countered that petitioner was repatriated not
because of his illness but because his contract had ended. CA ruled that petitioner did not
sufficiently prove that he contracted the heart illness aboard the vessel thus failing to reach the
quantum of proof for compensability.
ISSUE:
Was petitioner-employee entitled to permanent disability benefits under the POEA-SEC
despite only being diagnosed after termination of his employment contract?
RULING:
Yes. Petitioner-employee is entitled to permanent disability benefits under the POEA-SEC
despite only being diagnosed after termination of his employment contract. A reasonable proof of
work-connection is enough and a direct causal relation is not required.
The POEA-SEC defines a work-related injury as "injury(ies) resulting in disability or death

arising out of and in the course of employment," and a work-related illness as "any sickness
resulting to disability or death as a result of an occupational disease listed under Section 32-A of
this Contract with the conditions set therein satisfied." For illnesses not mentioned under Section
32, the POEA-SEC creates a disputable presumption in favor of the seafarer that these illnesses
are work-related. Notwithstanding the presumption, the Court has held that on due process
grounds, the claimant-seafarer must still prove by substantial evidence that his work conditions
caused or at least increased the risk of contracting the disease.
The fact that petitioner was able to pass his PEME without any finding that he had a pre-
existing heart ailment before boarding the vessel and later on finding, after the termination of his
contract that he has acquired the said heart ailment, one can conclude that such illness developed
while he was on board the same vessel.
Thus, probability, not the ultimate degree of certainty, is the test of proof in compensation
proceedings.
10 |
THE PROXIMITY OF THE DEVELOPMENT OF THE INJURY TO THE TIME OF

DISEMBARKATION DOES NOT AUTOMATICALLY PROVE WORK CAUSATION
Scanmar Maritime Services, Inc., et.al. vs. Wilfredo T. De Leon

G.R. No. 199977; January 25, 2017
Sereno, J.
FACTS:
In this petition for review on certiorari, petitioner Scanmar Maritime Services, Inc.
(Scanmar) assails the resolution rendered by the CA, which affirmed the decision of the NLRC and
LA, finding respondent Wilfredo T. De Leon entitled to disability benefits.
Respondent worked for petitioner Scanmar as a seafarer aboard the vessels of its
principal, Crown Shipmanagement, Inc. For 22 years in the service, there was no account of any
ailment he had contracted. Prior to his next deployment, De Leon underwent a pre-employment
medical examination. Noticing that respondent dragged his right leg, the company physician
referred him to a neurologist. The status in his medical examination certificated was marked as
“pending.” Thereafter, Scanmar no longer heard from respondent until two years later when it
received a letter from respondent asking for disability benefits amounting to USD60,000. Scanmar
did not reply which prompted respondent to file a complaint with the LA for disability benefits.
Before the LA, respondent alleged that on his last duty as a Third Mate on board M/V
Thuleland, he began feeling that something was wrong with his body, and that he experienced
lower abdominal pain and saw blood in his stool. Upon consultation with his private doctors, it was
revealed that he was suffering from radiculopathy. In response, petitioners belied the claim of
respondent that he experienced an illness aboard M/V Thuleland, given the absence of any such
entry in the vessel’s logbook. The LA, NLRC, and CA similarly ruled that since there was no
reported incident befalling respondent from the time he disembarked to the time he underwent
medical examination, whatever causative circumstance led to his permanent disability must have
transpired during his 22 years of employment.
ISSUE:
Does the proximity of the development of the injury to the time of disembarkation
automatically prove work causation?
RULING:
No. The proximity of the development of the injury to the time of disembarkation does not
automatically prove work causation.
Claimants for disability benefits must first discharge the burden of proving, with substantial
evidence, that their ailment was acquired during the term of their contract. They must show that
they experienced health problems while at sea, the circumstances under which they developed
the illness, as well as the symptoms associated with it. The second hurdle for seafarers claiming
disability benefits is to prove the positive proposition that there is a reasonable causal connection
between their ailment and the work for which they have been contracted. The proximity of the
development of the injury to the time of disembarkation does not automatically prove work
causation.
Here, the courts a quo merely speculated that because respondent worked for 22 years, it
then follows that his injury was caused by his engagement as a seafarer. This blanket speculation
alone will not rise to the level of substantial evidence. Whilst the degree of determining whether
the illness is work-related requires only probability, the conclusions of the courts must be still be
based on real, and not just apparent, evidence.
Therefore, disability benefits should not be awarded to respondent for failure to prove work
causation.
| 11
FAILURE OF SEAFARER TO COMPLY WITH REPORTORIAL REQUIREMENT RESULTS

IN THE FORFEITURE OF HIS RIGHT TO CLAIM BENEFITS, SUBJECT TO EXCEPTIONS
Wilmer O. De Andres vs. Diamond H Marine Services & Shipping Agency, Inc., Wu Chun Hua
and Ruben J. Turingan
G.R. No. 217345; July 12, 2017
Mendoza, J.
FACTS:
This is a petition for review on certiorari seeking to reverse the Resolution of the CA
affirming the decision of the NLRC which reversed and set aside the decision of the Labor Arbiter
finding that petitioner Wilmer De Andres complied with the mandatory reportorial requirement.
Petitioner was hired by respondent Diamond H Marine Services & Shipping Agency, Inc.
for and in behalf of its Taiwanese principal, Wu Chun Hua. It was stipulated in the Employment
Contract that he would be working in the fishing vessel for two years. At the vessel, he was tasked
to work as a wiper, messman and bosun, and was also required to dive in the sea, and repair the
nets. Petitioner alleged that they were made to work for almost 24 hours a day. He sustained injury
while working, as a consequence he sustained an open fracture of the distal tibia and fibula and
underwent surgical operation. He repeatedly asked for repatriation as no one would attend his
needs, but his plea was ignored. Almost a year after his accident, petitioner was informed by the
respondents that he was free to go home but he discovered that his repatriation was due to the
expiration of his employment contract.
Petitioner filed before the LA for permanent and total disability benefits among others.
Respondent countered that petitioner forfeited his claim for disability benefits when he failed to
subject himself to the respondents for the mandatory medical examination within three working
days upon his arrival in the Philippines. On the other hand, petitioner argued that the mandatory
reportorial requirement should not be strictly applied in his case because it was the respondents
who prevented him from complying with the same.
ISSUE:
Is petitioner entitled to the disability benefits despite his failure to comply with the
mandatory reportorial requirement because his employer prevented him from complying with the
same?
RULING:
Yes. The petitioner is entitled to the benefits despite of his failure to comply with the
mandatory reportorial requirement.
Reporting the illness or injury by the seafarer within three (3) working days from repatriation
makes it easier for a physician to determine the cause of the illness or injury. Due to the express
mandate on the reportorial requirement, the failure of the seafarer to comply with the same shall
result in the forfeiture of his right to claim the above benefits. However, the rule is subject to the
following exceptions: (1) when the seafarer is incapacitated to report to the employer upon his
repatriation; and (2) when the employer inadvertently or deliberately refused to submit the seafarer
to a post-employment medical examination by a company-designated physician.
The second exception to the reportorial requirement applies in this case because the
seafarer was prevented by the employer from submitting himself to a post-employment medical
examination by a company-designated physician.
Thus, the disability claim of De Andres is not forfeited.
12 |
TEMPORARY TOTAL DISABILITY PERIOD MAY BE EXTENDED TO A MAXIMUM OF

240 DAYS UPON DECLARATION THAT FURTHER MEDICAL ATTENTION IS
REQUIRED
Maunlad Trans, Inc., Carnival Cruise Lines and/or Amado Castro vs. Gabriel Isidro
G.R. No. 222699; July 24, 2017
Tijam, J.
FACTS:
This is a petition for review seeking to nullify the Decision of the CA affirming the ruling of
the NLRC finding petitioners Maunlad Trans, Inc., Carnival Cruise Lines and/or Amado Castro
liable to pay permanent and total disability benefits in favor of respondent Gabriel Isidro.
Petitioner fired respondent as a bartender boarded on M/S Miracle. During work,

respondent figured in an accident while lifting heavy food provisions. The ship’s physician
diagnosed the respondent to be suffering from Right Knee Synovitis, Meniscal, Chondromalacia.
He was given medication and was advised that he can continue working after the treatment.
However, respondent began experiencing skin rashes on his right leg which later on spread thru
his body. He was diagnosed by the ship’s physician to be suffering from psoriasis. Thereafter, he
was repatriated on February 12, 2010. Three days after repatriation, he went to see the company-
designated physician who referred him to a dermatologist who treated him accordingly. While
undergoing such treatment, he went to a private doctor who certified that he was unfit to go back
to work. Such finding prompted respondent to file a claim for full disability benefits.
Petitioners argued that the alleged knee injury was not the cause of repatriation and that
respondent never complained of said knee injury prior to the filing of his labor complaint. In any
case, petitioners argued that respondent is only entitled to a compensation equivalent to Grade 12
disability grading as certified by the company-designated physician. Respondent insisted that the
period of disability entitled him to permanent and total disability benefits.
ISSUE:
Was the period of disability beyond the allowable maximum period of 240 days so as to
entitle respondent to permanent and total disability benefits?
RULING:
No, the period of disability did not extend beyond the maximum 240-day period.
For the duration of the treatment, but in no case to exceed 120 days, the seaman is on
temporary total disability as he is totally unable to work. If the 120 days initial period is exceeded
and no such declaration is made because the seafarer requires further medical attention, then the
temporary total disability period may be extended up to a maximum of 240 days, subject to the
right of the employer to declare within this period that a permanent partial or total disability already
exists.
In this case, respondent's medical treatment lasted for more than 120 days but less than
240 days, after which the company-designated doctor gave respondent a final disability grading of
Grade 12 under the POEA schedule of disabilities. Clearly, before the maximum 240-day medical
treatment period expired, respondent was issued a final disability Grade 12 which is merely
permanent and partial disability, since under Section 32 of the POEA-SEC, only those classified
under Grade 1 are considered permanent and total disability. Furthermore, the fact that respondent
did not complain of, and was not treated for the alleged knee injury is evident from the medical
reports.
Therefore, the respondent is not entitled to recover the permanent and total disability
benefits. He was only awarded permanent and partial disability benefits.
| 13
TO CLAIM COMPENSATION FOR ILLNESS, REASONABLE LINKAGE BETWEEN THE

ILLNESS AND WORK IS REQUIRED
Grieg Philippines, Inc. vs. Michael John M. Gonzales

G.R. No. 228296; July 26, 2017
Leonen, J.
FACTS:
This is a petition for review filed by Petitioner Grieg Philippines Inc., assailing the decision
of the CA upholding the disability benefits awarded by the NLRC and LA to respondent Michael
John M. Gonzales.
Petitioner hired Gonzales as Ordinary Seaman under a nine-month employment contract

and deployed him to the general cargo vessel Star Florida. Before being deployed, Gonzales
underwent pre-employment Medical Examination and was certified fit for sea duty. While aboard
the vessel, Gonzales experienced shortness of breath, pain in his left leg, fatigue, fever and
headaches. He was later declared unfit for sea duty and was repatriated. The company physicians
diagnosed him with acute promyelocytic leukemia. They opined that Gonzales' leukemia was not
work-related. After his disability claims were refused, Gonzales filed a complaint against petitioner.
Petitioner claims that Gonzales failed to prove the relation between his illness and his
former position. Petitioner asserts that a claimant cannot merely rely on the disputable presumption
that the illness is work-related and wait for the opposing party to dispute it.
Gonzales claims that he contracted acute promyelocytic leukemia due to his use of and
constant exposure to harmful chemicals and cleaning aids as part of his work function.
ISSUE:
Was the respondent able to sufficiently prove the relation between his illness and the
nature of his employment?
RULING:
Yes. Respondent was able to sufficiently prove the relation between his illness and the
nature of his employment.
For a disability claim to prosper, a seaman only needs to show that his work and contracted
illness have a reasonable linkage that must lead a rational mind to conclude that the seaman's
occupation may have contributed or aggravated the disease. Under the 2000 Philippine Overseas
Employment Administration-Standard Employment Contract, for an occupational disease and the
resulting disability or death to be compensable, all of the following conditions must be satisfied: (1)
The seafarer's work must involve the risks described herein; (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.
Gonzales was able to satisfy all the conditions and establish a reasonable linkage between
his job as an Ordinary Seaman and his leukemia. He has submitted his official job description,
which involved constant exposure to chemicals. It is also not disputed that he contracted leukemia
only while he was onboard Star Florida since he was certified to be fit for sea duty prior to boarding
and his leukemia was not genetic in nature.
Therefore, respondent was able to establish his claim of work-related illness and is entitled
to compensation.
14 |
FAILURE TO ARRIVE AT A DEFINITE ASSESSMENT WITHIN THE PRESCRIBED

PERIOD RENDERS THE DISABILITY AS TOTAL AND PERMANENT
Hoegh Fleet Services Phils., Inc. vs. Bernardo M. Turallo

G.R. No. 230481; July 26, 2017
Velasco, Jr., J.
FACTS:
This is a petition for review on Certiorari seeking to reverse and set aside the decision of
the Court of Appeals ordering petitioner Hoegh Fleet Services Phils. to pay respondent Bernardo
M. Turallo the disability compensation.
Petitioner hired respondent as a Messman on board vessel “Hoegh Tokyo”. The

employment contract was covered by a Collective Bargaining Agreement. Respondent felt pain on
the upper back of his body and chest pain. He was then referred to a doctor by the ship’s captain.
Upon arrival in Manila, he was referred to the company doctor, who certified that respondent was
undergoing medical and surgical treatment. Respondent followed up his pending surgery several
times but no response was given to him. This prompted him to seek a second opinion. The second
doctor found him to be "partially and permanently disabled with separate impediments for the
different affected parts of his body of Grade 8, Grade 10 and Grade 11, based on the POEA
contract" but declared him as "permanently unfit in any capacity for further sea duties." Thus,
respondent filed a claim for disability benefits. Despite efforts to arrive at an agreement, the parties
failed to settle their differences. Upon arbitration, the panel of arbitrators ruled that respondent was
entitled to total and permanent disability benefits because the alleged final assessment of Grade
8 disability was not attached to their Position Paper before the panel. CA affirmed the ruling of the
Panel.
Petitioner argued that respondent is not entitled to total and permanent disability benefits
because its company-designated physician issued a final disability assessment well within the 240-
day period. Respondent maintained that his disability was total and permanent.
ISSUE:
Did the petitioner fail to issue a definite assessment within the prescribed period so as to
justify the award of total and permanent disability benefits?
RULING:
Yes. The petitioner failed to issue a definite assessment within the prescribed period.
Under Section 32 of the POEA-SEC, only those injuries or disabilities that are classified as
Grade 1 may be considered as total and permanent. However, if those injuries or disabilities with
a disability grading from 2 to 14, hence, partial and permanent, would incapacitate a seafarer from
performing his usual sea duties for a period of more than 120 or 240 days, depending on the need
for further medical treatment, then he is, under legal contemplation, totally and permanently
disabled.
It cannot be any clearer that the company-designated physician's failure to arrive at a

definite assessment of the seafarer's fitness to work or permanent disability within the prescribed
periods would hold the seafarer's disability total and permanent.
Therefore, the respondent is entitled to total and permanent disability benefits.
| 15
A CLAIMANT MUST STILL SHOW REASONABLE CONNECTION BETWEEN NATURE

OF WORK AND ILLNESS DESPITE PRESUMPTION OF WORK-RELATEDNESS
Julio C. Espere vs. NFD International Manning Agents

G.R. No. 212098; July 26, 2017
Peralta, J.
FACTS:
This is a petition for review on Certiorari assailing the CA decision annulling the NLRC
decision which reversed the LA ruling dismissing petitioner Julio Espere’s complaint for recovery
of permanent total disability benefits against respondent NFD International Manning Agents, Inc.
Respondent hired petitioner as a Bosun on board MV Kalpana Prem. During his

deployment, he complained that he was feeling dizzy, and had body malaise and chills. He was
referred to a clinic and was found to be suffering from uncontrolled hypertension. Consequently,
he was declared unfit for duty and was repatriated. One of the company doctors stated that
petitioner’s hypertension is not work-related and that the cause of his hypertension is multifactorial
in origin, which includes genetic predisposition, and poor lifestyle. Petitioner was not satisfied with
the said findings, and thus consulted a private doctor who stated that the petitioner suffered from
hypertension and it started from work. Eventually, petitioner filed a Complaint against respondent
claiming for permanent disability benefits.
Petitioner contended that the worker is only burdened to prove the probability, and not
absolute certainty, that the nature of his employment had caused or contributed, even to a small
degree, in the development or aggravation of his illness. Respondent relied on the declaration of
the company-designated physician that the illness was not work-related.
ISSUE:
Did the petitioner establish a connection between the nature of the work and the illness so
as to entitle him to receive the permanent disability benefits?
RULING:
No. The petitioner failed to establish reasonable connection between the nature of the work
and the illness contracted.
For disability to be compensable under the above POEA-SEC, the following elements must
concur: (1) the injury or illness must be work-related; and (2) the work-related injury or illness must
have existed during the seafarer's employment contract. While the law recognizes that an illness
may be disputably presumed to be work-related, the seafarer or the claimant must still show a
reasonable connection between the nature of work on board the vessel and the illness contracted
or aggravated. Thus, the burden is placed upon the claimant to present substantial evidence that
his work conditions caused or at least increased the risk of contracting the disease.
In this case, petitioner relied on the presumption that his illness is work-related but he was
unable to present substantial evidence to show that his work conditions caused or, at the least,
increased the risk of contracting his illness. Neither was he able to prove that his illness was pre-
existing and that it was aggravated by the nature of his employment. The PEME is nothing more
than a summary examination of the seafarer's physiological condition; it merely determines
whether one is " fit to work" at sea and it does not state the real state of health of an applicant. It
cannot be a conclusive proof to show that he was free from any ailment prior to his deployment.
Therefore, the petitioner is not entitled to receive the permanent disability benefits.
16 |
TEMPORARY TOTAL DISABILITY ONLY BECOMES PERMANENT WHEN DECLARED

WITHIN THE PRESCRIBED PERIOD OR UPON THE EXPIRATION OF THE MAXIMUM
240-DAY MEDICAL TREATMENT PERIOD WITHOUT SUCH DECLARATION
Eugenio M. Gomez vs. Crossworld Marine Services, Inc.

G.R. No. 220002; August 2, 2017
Peralta, J.
FACTS:
This is a petition for review on Certiorari assailing the decision of the Court of Appeals (CA)
in reversing the decisions of the NLRC and LA and thereby declaring petitioner Eugenio M. Gomez
to have suffered permanent partial disability with an impediment of Grade 8.
Respondent Crossworld Marine Services, Inc. hired petitioner as an Ordinary Seaman.

While working, petitioner accidentally slipped and hit his lower back on the steel deck. He was
diagnosed with Lumbago. He was later repatriated on March 18, 2012. He underwent six (6)
sessions of physical therapy but the pain in his lumbar area still persisted. Thereafter, he
underwent two surgical procedures to address his herniated disc. On September 11, 2012, the
accredited doctor certified that petitioner can eventually resume his sea duties. In the meantime,
petitioner sought medical advice from another physician who opined that he was unfit for sea duty.
Petitioner asked respondent for payment of his disability benefits because he was unable
to earn wages in the same kind of work. Respondent relied on medical report of their accredited
doctor, and thus declined petitioner’s claim for permanent total disability.
ISSUE:
Was the period of disability of the petitioner beyond the maximum period allowed by law
so as to entitle petitioner to permanent total disability benefits?
RULING:
No. The period of disability did not exceed the maximum period of 240 days allowed by
law.
The income benefit shall be paid beginning on the first day of such disability. If caused by
an injury or sickness it shall not be paid longer than 120 consecutive days except where such injury
or sickness still requires medical attendance beyond 120 days but not to exceed 240 days from
onset of disability in which case benefit for temporary total disability shall be paid. A temporary
total disability only becomes permanent when so declared by the company-designated physician
within the periods he/she is allowed to do so, or upon the expiration of the maximum 240-day
medical treatment period without a declaration of either fitness to work or the existence of a
permanent disability.
In this case, the treatment of petitioner's injury required spine surgery and physical therapy
which extended beyond the initial 120-day period into the maximum 240-day treatment period.
Petitioner filed his complaints 197 days from the date he was injured, and, therefore, before the
lapse of the maximum 240-day treatment period within which the company- designated physician
should assess the fitness of petitioner to return to work. Since the doctor has not declared that
petitioner is not fit to work within the 240-day period, and the 240-day period has not lapsed when
petitioner filed his complaint, the petitioner cannot be legally presumed as permanently and totally
disabled to be entitled to permanent total disability.
Therefore, petitioner is entitled only to permanent partial disability.
| 17
THE PRE-EXISTING NATURE OF AN ILLNESS IS NOT A BAR TO COMPENSATION IF

THE SAME WAS AGGRAVATED DUE TO WORKING CONDITIONS
Tomas P. Atienza vs. Orophil Shipping International Co.

G.R. No. 191049; August 7, 2017
Perlas-Bernabe, J.
FACTS:
This petition for review on Certiorari assails the CA decision which affirmed the resolution
of the NLRC reversing the LA ruling for the payment of disability benefits to petitioner Tomas P.
Atienza. Respondent Orophil Shipping International Co. (Orophil), as the agent of co-respondent
Hakuho Kisen Co. (Hakuho), employed petitioner as a seaman.
As a seaman, petitioner was required to be on-call twenty-four (24) hours a day to observe
and record weather and sea conditions and keep watch at sea during navigation. He was
constantly exposed to cold, heat, and other elements of nature. Later, petitioner was repatriated
after complaining of severe headaches, nausea, and double vision. The company-designated
physician diagnosed him to be suffering from right cavernous sinus inflammation or Tolosa Hunt
Syndrome (THS), a rare neurologic disorder with unknown cause but associated with inflammation
of the area behind the eyes, in which a recent viral infection is a possible risk factor.
Petitioner filed a claim for disability benefits and asserted that his illness was work-related
and compensable because the nature of his work aggravated his condition. In their defense,
respondent and Hakuho denied the claim for disability benefits and asserted that the company-
designated physician declared him as fit to work. It also argued that the illness was not work-
related adding that Atienza concealed the fact that he had previously suffered from THS.
ISSUE:
Did the nature of the work of petitioner as seaman aggravate the illness so as to be
compensable?
RULING:
Yes. The nature of the work aggravated the illness.
Section 32-A of the 2000 POEA-SEC provides that for an occupational disease and the
resulting disability or death to be compensable, all of the conditions therein must be satisfied. On
the other hand, Section 20 (B) (4) of the 2000 POEA-SEC declares that those illnesses not listed
in Section 32 of the Contract are disputably presumed as work related. The Court ruled that there
is a need to satisfactorily show the four (4) conditions under Section 32-A of the 2000 POEA-SEC
in order for the disputably presumed disease resulting in disability to be compensable.
Compensability does not depend on whether the injury or disease was pre-existing at the time of
the employment but rather if the disease or injury is work-related or aggravated his condition.
Applying to the case at bar, the Court held that it is reasonable to conclude that petitioner's
illness was most probably aggravated due to the peculiar nature of his work. The activities
necessarily entail the use of eye muscles that can cause an eye strain as in fact, he experienced
headache, nausea, and double vision that worsened when he looked at his right side. Considering
further his constant exposure to different temperature and unpredictable weather conditions that
accompanied his work on board an ocean-going vessel, the likelihood to suffer a viral infection - a
possible risk factor - is not far from impossible. While petitioner's illness appears to have been pre-
existing, his work exposed him to the risk of aggravating the same.
Thus, the illness was compensable.
18 |
PHYSICIAN WITH PERSONAL KNOWLEDGE OF SEAFARER’S ACTUAL MEDICAL

CONDITION IS MORE CREDIBLE THAN ANOTHER PHYSICIAN WHO ONLY SAW
SUCH SEAFARER ONCE
Pedro C. Perea vs. Elburg Ship Management Philippines

G.R. No. 206178; August 9, 2017
Leonen, J.
FACTS:
In this petition for review, petitioner Pedro C. Perea assails the resolutions of the Court of
Appeals which affirmed the decisions of the National Labor Relations Commission (NLRC) and the
Labor Arbiter denying his claim for disability benefits.
Petitioner was hired as a fitter aboard M/V Lemno with respondent Elburg
Shipmanagement Philippines, Inc. acting on behalf of its principal Augustea Atlantica SRL/Italy.
While petitioner was welding, the oxygen and acetylene torch he was holding exploded. He hit his
left shoulder and twisted his fingers in trying to avoid the explosion. Due to chest pains, he was
repatriated. Thereafter, the company-designated physicians gave the impression that he had
hypertension after conducting laboratory examinations and other medical procedures. Meanwhile,
petitioner consulted with an internist who declared him medically unfit to work as seafarer.
In claiming for disability benefits, petitioner contests the "fit to work" assessment of the
company-designated physicians since it goes against the recommendation issued in his coronary
angiography result. Respondent maintained that the laboratory examinations and procedures
supported the resulting diagnosis of petitioner’s fitness to work. It also pointed out that the finding
of medical unfitness as a seafarer was arrived at after a single consultation and without conducting
any tests to ascertain his condition.
ISSUE:
Were the findings of the internist who only saw the seafarer once sufficient to overcome
those of the company-designated physician?
RULING:
No, the doctor who had personal knowledge of the actual medical condition, having closely,
meticulously and regularly monitored and actually treated the seafarer's illness, is more qualified
to assess the seafarer's disability.
As between the findings made by the company-designated physicians who conducted an

extensive examination and another physician who saw petitioner on only one (1) occasion and did
not even order that medical tests be done to support his declaration that petitioner is unfit to work
as a seaman, the company-designated physicians' findings that petitioner has been cleared for
work should prevail.
It is not disputed that petitioner was treated for injuries and hypertension during the term
of his contract. Soon after his repatriation, petitioner was seen by the company-designated
physicians. The Court sees no reason to distrust the company-designated physicians’ assessment
of Perea's condition considering that they were able to monitor Perea's condition over a prolonged
period.
Thus, giving credence to the finding of the company-designated physicians, the illness was
not work-related and not compensable.
| 19
SEAFARER MUST PROVE COMPLIANCE WITH THE CONDITIONS FOR

COMPENSABILITY OF SICKNESS OR INJURY
Benedict N. Romana vs. Magsaysay Maritime Corporation, Eduardo Manese and/or Princess
Cruise Lines Ltd.
G.R. No. 192442; August 9, 2017
Perlas-Bernabe, J.
FACTS:
This is a petition for review on Certiorari assailing the decision of Court of Appeals which
affirmed the rulings of the National Labor Relations Commission and the Labor Arbiter dismissing
the claim for disability benefits of petitioner Benedict N. Romana.
Respondents Magsaysay Maritime Corporation (MMC), Eduardo Manese and/or Princess

Cruise Lines Ltd. employed petitioner as a medical fitter aboard M/V Golden Princess. Petitioner
alleged that a metal ceiling fell and wounded his head while walking along the ship alley. He
allegedly experienced headache and blurring of vision as a result thereof. Upon consultation, a
specialist found a tumor at the left side of his brain, for which he underwent craniectomy. When
repatriated, the company-designated physician declared that the illness is not work-related.
Petitioner insisted that the illness is work-related. He claimed that the illness was
aggravated by the incident and his exposure to different chemicals, formaldehyde, hydrocarbons,
fumes, and other deleterious emissions, and to changes of temperature of extreme hot and
freezing colds at the engine room and deck areas. For their part, the respondents denied the claim
contending that brain tumor is not listed as an occupational disease under Section 32-A of the
2000 POEA-SEC.
ISSUE:
Did the petitioner proved compliance with the conditions for compensability to be entitled
for disability benefits?
RULING:
No. The petitioner failed to comply with the conditions for compensability.
For both listed occupational disease and a non-listed illness and their resulting injury to be
compensable, the seafarer must sufficiently show by substantial evidence compliance with the
conditions for compensability. For an occupational disease and the resulting disability or death to
be compensable, all of the following conditions must be satisfied: (1) The seafarer's work must
involve the risks described herein; (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; (4) There was no notorious negligence on the
part of the seafarer. The seafarer will, in all instances, have to prove compliance with the conditions
for compensability, whether or not the work-relatedness of his illness is disputed by the employer.
He has to prove that the illness he suffered was work-related and that it must have existed during
the term of his contract.
In this case, petitioner's brain tumor is a benign tumor, slow-growing and well-defined.
Medical studies show that brain tumors arise from cells in the linings of blood vessels. Its exact
cause is unknown and no risk factor accounting for the majority of brain tumors has been identified.
As records show, the company-designated physician, after due assessment of petitioner's
condition, found that his illness was caused by an abnormal growth of tissue in the brain's blood
vessels (brain tumor) and therefore not work-related.
Hence, petitioner’s brain tumor is not compensable because of failure to comply with the
conditions for compensability.
20 |
IN CASES COVERED BY THE POEA-SEC, THE SEAFARER MAY CLAIM A SECOND OR

THIRD OPINION, BUT THE PROPER PROCEDURE MUST BE OBSERVED, OTHERWISE
THE COMPANY-DESIGNATED PHYSICIAN'S ASSESSMENT BECOMES FINAL AND
BINDING
North Sea Marine Services Corporation vs. Santiago S. Enriquez

G.R. No. 201806; August 14, 2017
Del Castillo, J.
FACTS:
The case is a petition for review on Certiorari, which stemmed from a complaint filed before
the Labor Arbiter (LA) to recover permanent disability benefits, which the LA was dismissed for
lack of merit.
Respondent Santiago S. Enriquez and Petitioner North Sea Marine Services Corporation
entered into a contract of employment, whereby petitioner will render services as an assistant
plumber on respondent’s vessel for a period of six (6) months. While in the performance of his
duties, respondent experienced nape pains that radiated to his upper back. Due to the worsening
of his back pains, he was medically repatriated. Upon arrival in Manila, respondent was
immediately referred to the company-designated physician, Dr. Rabago, which found him fit to
resume sea duties. Thereafter, respondent consulted a physician of his choosing which certified
his unfitness to work, and on the basis of which he filed the complaint for the recovery of permanent
disability benefits.
Respondent claimed that despite the lapse of 120 days and medical attention given to him
by the company-designated physician, his condition did not improve, as attested by the medical
findings of his own physician Dr. Garduce. Petitioners asserted that the fit-to work assessment of
the company-designated physician deserved utmost credibility.
ISSUE:
May a seafarer overcome the findings of the company-designated physician that he is fit
to work, with the findings of the physician of his choosing?
RULING:
No. A seafarer may not overcome the findings of the company-designated physician that
he is fit to work with the findings of the physician of his choosing.
Pursuant to POEA-SEC, in order to claim disability benefits it is the company-designated

physician who must proclaim that the seafarer suffered a permanent disability, whether total or
partial, due to either injury or illness, during the term of his employment. If the doctor appointed by
the seafarer makes a finding contrary to that of the assessment of the company-designated
physician, a third doctor may be agreed jointly between the employer and seafarer whose decision
shall be binding on both of them. While a seafarer has the right to seek a second and even a third
opinion, the final determination of whose decision must prevail must be done in accordance with
this agreed procedure.
Here, Dr. Rabago, found respondent fit to resume sea duties. Thereafter respondent
sought an independent opinion from Dr. Garduce who assessed him to be unfit for sea duties.
However, respondent did not refer these conflicting assessments to a third doctor in accordance
with the mandated procedure. In fine, the company-designated physician's assessment was not
effectively disputed.
Therefore, the Court has no option but to declare Dr. Rabago's fit to work declaration as
final and binding.
| 21
POEA RULES BAR THE COMPENSABILITY OF DISABILITY ARISING FROM A PRE-

EXISTING ILLNESS WHEN ATTENDED BY AN EMPLOYEE'S FRAUDULENT
MISREPRESENTATION
Antonio B. Manansala vs. Marlow Navigation Phils., Inc./Marlow Navigation Co. Ltd./Cyprus
G.R. No. 208314; August 23, 2017
Leonen, J.
FACTS:
In this petition for review on Certiorari under Rule 45, petitioner assailed that CA’s decision
which he affirmed NLRC’s Decision, which, in turn, affirmed the Labor Arbiter's Decision.
Before petitioner’s services were engaged by respondents, petitioner underwent a Pre-

Employment Medical Examination, which specifically required information on illnesses and/or
conditions, among which were hypertension and diabetes. In his examination certificate, petitioner
specifically said “no” and denied having hypertension and diabetes. Hence, petitioner was declared
fit and was deployed. While on board, petitioner suffered a stroke and repatriated. While under the
primary care of the company–designated physician, he still repeatedly denied that he had any past
history of diabetes and hypertension. The company–designated physician then issued to him an
interim Grade 10 disability rating. Consequently, he filed a complaint against the respondents for
total and permanent disability benefits. Two months thereafter, petitioner's own doctor, issued a
medical opinion stating that he is permanently disabled but indicated that he admitted to having a
long history of hypertension and diabetes and was taking maintenance medications.
The Labor Arbiter dismissed Manansala’s complaint for payment of total and permanent
disability benefits finding that petitioner was suffering from pre-existing, rather than work-related,
ailments. Hence, Manansala filed the present petition asserting that he properly disclosed his pre-
existing illnesses during his medical examination and that his stroke was work-related.
ISSUE:
Is petitioner entitled to permanent disability benefits if there is no proper disclosure of a
pre-existing illness during medical examination?
RULING:
No, he is not entitled to permanent disability benefits since there is no proper disclosure of
a pre-existing illness during medical examination. Petitioner did not properly disclose his pre-
existing illnesses during his medical examination. Section 20(E) of the POEA Standard
Employment Contract (POEA-SEC) bars the compensability of disability arising from a pre-existing
illness when attended by an employee's fraudulent misrepresentation. To speak of fraudulent
misrepresentation is not only to say that a person failed to disclose the truth but that he or she
deliberately concealed it for a malicious purpose. To amount to fraudulent misrepresentation,
falsity must be coupled with intent to deceive and to profit from that deception.
In this case, facts prove that petitioner has knowingly and fraudulently misrepresented his
hypertension and diabetes. Petitioner categorically said 'no' when asked whether he has ever
suffered from hypertension and diabetes, even after repatriation. However, in the medical opinion
and evaluation prepared by his own physician, petitioner did not only admit that he had a history
of hypertension and diabetes, but also admitted that he was regularly taking maintenance
medicines to treat the said illnesses.
Thus, in keeping with Section 20(E) of the POEA-SEC, he is disqualified from receiving
any compensation due to his fraudulent misrepresentation and deceptively concealing his pre-
existing illness.
22 |
THE 240-DAY EXTENDED MEDICAL TREATMENT IS NOT AUTOMATIC IN CASE OF

DISABILITY CLAIM
Robelito Malinis Talaroc vs. Arpaphil Shipping Corporation, Epidaurus S.A.

G.R. No. 223731; August 30, 2017
Perlas-Bernabe, J.
FACTS:
Assailed in this petition for review on Certiorari are the decision and resolution of the Court
of Appeals which reversed the National Labor Relations Commission resolution and reinstated the
Labor Arbiter’s decision dismissing the complaint for total and permanent disability benefits of
petitioner Robelito Malinis Talaroc against respondent Arpaphil Shipping Corporation (ASC).
Respondent employed petitioner as third officer on board M/V Exelixis for its foreign
principal, co-respondent Epidaurus S.A. While collecting the mooring rope, petitioner felt a sudden
click in his lower back. Thereafter, he was unable to perform his duties due to fever, back pain,
stomach pain and dizziness. After repatriation on March 26, 2013, the company-designated
physician diagnosed him to have hypertension, gastric ulcer, duodenitis and lumbar spine disc
protrusion. In a medical report dated May 14, 2013, the same physician merely declared that the
estimated length of further treatment is approximately three more months before he reached his
maximum medical improvement.
Petitioner averred that he was no longer capable of resuming work as a seafarer and that
his disability lasted more than 240 days despite medical treatment. He alleged that the loss of
capacity to obtain further sea employment and opportunity to earn income entitled him to total
disability compensation. In their defense, Respondent and Epidaurus maintained that petitioner
was not entitled to permanent and total disability benefits because his illness did not arise from an
accident and argued that petitioner’s action was premature as the 240-day extended medical
treatment has not yet expired at the time he filed his complaint.
ISSUE:
Is the 240-day extended medical treatment period applicable to entitle petitioner to the
benefits?
RULING:
No, the 240-day extended medical treatment period is not applicable and thus the lapse of
said period is not required.
The Labor Code and the Amended Rules on Employees Compensation (AREC) provide
that the seafarer is declared to be on temporary total disability during the 120-day period within
which the seafarer is unable to work. However, a temporary total disability lasting continuously for
more than 120 days, except as otherwise provided in the Rules, is considered as total and
permanent. The exception to the above pertains to a situation when the sickness “still requires
medical attendance beyond the 120 days but not to exceed 240 days” in which case the temporary
total disability period is extended up to a maximum of 240 days. However, for the company-
designated physician to avail of the extended 240-day period, he must first perform some
significant act to justify an extension; otherwise, the seafarer’s disability shall be conclusively
presumed to be permanent and total.
In this case, there was no sufficient justification for the extension of petitioner’s treatment
from the initial 120-day period to 240 days. The confidential medical report issued was within 120
days from the time petitioner was repatriated, failed to indicate what kind of further treatment the
seafarer would be subjected to.
Thus, petitioner is entitled to total and permanent disability.
| 23
DEATH ON ACCOUNT OF A WORK-RELATED ILLNESS IS COMPENSABLE EVEN IF

OCCURRING AFTER EMPLOYMENT CONTRACT
Magsaysay Maritime Corporation, Eduardo Manese and/or Princess Cruise Lines Ltd. vs.
Cynthia De Jesus
G.R. No. 203943; August 30, 2017
Leonen, J.
FACTS:
This is a petition for review on Certiorari assailing the Court of Appeal’s decision which
upheld the ruling of the National Labor Relations Commission and the Labor Arbiter’s finding that
the cardio-vascular disease of respondent Cynthia De Jesus’ husband was work-related.
Petitioner Magsaysay Maritime Corporation (MMC), the local manning agent of Princess
co-petitioner Cruise Lines Ltd., hired Bernardine De Jesus as an accommodation supervisor for
the cruise ship Regal Princess. During his employment, Bernardine allegedly reported chest pains
but he was not provided medical attention. Upon repatriation, his request for medical attention was
likewise denied. Two months after such disembarkation, Bernardine was diagnosed with aortic
aneurysm and later died. MMC denied Cynthia’s claim.
Petitioners argued that that Bernardine's death was not compensable under the POEA-
SEC and that it cannot be presumed that the cause of his death was work-related. Meanwhile,
Cynthia contended that the findings of the administrative tribunals are supported by substantial
evidence. She maintained that her husband’s condition was suffered while on board the vessel
and that he reported his condition during the term of his employment contract.
ISSUE:
Was the aortic aneurysm suffered during the term of the contract so as to make the illness
compensable?
RULING:
Yes. The condition of the seafarer was suffered during the term of the contract.
Section 20(A) of the POEA-SEC requires that for a seafarer to be entitled to death benefits,
he must have suffered a work-related death during the term of his contract. However, Section 32-
A of the POEA-SEC acknowledges the possibility of "compensation for the death of the seafarer
occurring after the employment contract on account of a work-related illness" as long as the
following conditions are met: (1) The seafarer's work must involve the risks described herein; (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; (4) There was no notorious negligence on the part of the seafarer.
Both labor tribunals found that Bernardine first experienced chest pains while he was still
onboard the cruise ship, i.e., during the term of his employment contract. It was likewise
established that while Bernardine requested medical attention when he started to feel ill and upon
his repatriation, his requests were repeatedly ignored. The Court agreed with the fact that the
seaman's work exposed him to different climates and unpredictable weather also helped trigger
the onset of his disease. The Court agreed that the complainant has clearly established that her
husband's condition was suffered while he was on board the vessel and during the term of his
employment contract, the resulting death was compensable.
Thus, the aortic aneurysm is suffered during the term of the contract and is a compensable
illness.
24 |
COMPANY-DESIGNATED PHYSICIAN SHOULD ARRIVE AT A DEFINITE ASSESSMENT

OF FITNESS TO WORK OR PERMANENT DISABILITY WITHIN 120 OR 240 DAYS, AS
THE CASE MAY BE
Desiderio C. Cutanda vs. Marlow Navigation Phils., Inc, and/or Marlow Navigation Co. LTD.
and/or Antonio Galvez Jr.
G.R. No. 219123; September 11, 2017
Peralta, J.
FACTS:
This petition for review on Certiorari under Rule 45 seeks to set aside the decision of the
CA which reversed the decisions of the NLRC and the LA in granting petitioner Desiderio C.
Cutanda’s permanent total disability benefits. In this case, Marlow Navigation Phils., Inc. (MNPI)
hired Cutanda to work as a Key Able Seaman on board MV Malte Rambow.
While performing his duties, Cutanda had an accident wherein his left index and middle
fingers were severely injured when the tug’s rope crushed his left hand. He was immediately
repatriated and examined by the company-designated physician who recommended him for
physical therapy. Cutanda underwent physical therapy sessions. However, on February 11, 2013,
while complainant finished only 4 sessions out of the 12 sessions prescribed, the company-
designated physician already assessed complainant's disability as Grade 10. Meanwhile, the other
attending physician, who is also company-designated, issued another Medical Certificate on April
2, 2013 or on the 174th day, stating that complainant is "not fit to work" as of that date, and
recommended that he undergo rehabilitation treatment for another three (3) to six (6) months.
Petitioner alleged that his injuries rendered him unfit to return to work for more than 240
days and that his continuing inability to pursue his usual work and earn therefrom constitutes
permanent and total disability. Respondents contended that the finding of the company-designated
physician as to the temporary nature of the disability should prevail.
ISSUE:
Was the period of temporary disability beyond the allowable period of 120 or 240 days so
as to warrant the award of total and permanent disability?
RULING:
Yes. The period of disability exceeds the allowable maximum period of 240 days.
Under Section 3225 of the POEA-SEC, only those injuries or disabilities that are classified
as Grade 1 may be considered as total and permanent. However, if those injuries or disabilities
with a disability grading from 2 to 14, hence, partial and permanent, would incapacitate a seafarer
from performing his usual sea duties for a period of more than 120 or 240 days, depending on the
need for further medical treatment, then he is, under legal contemplation, totally and permanently
disabled. Moreover, the company-designated physician is expected to arrive at a definite
assessment of the seafarer's fitness to work or permanent disability within the period of 120 or 240
days. That should he fail to do so and the seafarer's medical condition remains unresolved, the
seafarer shall be deemed totally and permanently disabled.
In this case, although petitioner has been assessed to fall under the category of Grade 10
within the period provided by law, such was not a definite assessment as to his fitness to work as
shown by the medical certificates issued by the company-designated physician and the
coordinating physician and surgeon. From such findings, it appears that petitioner had been unfit
to work way beyond the 240 days provided by law. Hence, petitioner can be legally considered as
totally and permanently disabled.
| 25
MERE LAPSE OF THE 120-DAY PERIOD ITSELF DOES NOT AUTOMATICALLY

WARRANT THE PAYMENT OF PERMANENT TOTAL DISABILITY BENEFITS
C.F. Sharp Crew Management, Inc. vs. Noel N. Orbeta

G.R. 211111; September 25, 2017
Del Castillo, J.
FACTS:
This petition for review on Certiorari assails the CA decision which modified the LA award
of temporary disability benefits for respondent Noel N. Orbeta to permanent disability benefits.
Petitioner C.F. Sharp Crew Management, Inc. (CF Sharp), acting for its principal Gulf Energy
Maritime, hired Orbeta as able seaman on board M/T Gulf Coral.
While on duty closing the vessel’s air valve, Orbeta slipped and fell on his back. Since he
experienced pain in his abdomen and had difficulty urinating, he was examined and thereafter
diagnosed with acute lumbago. Accordingly, he was repatriated. Upon arrival on February 8, 2010,
a company-designated physician examined him. After a series of treatment, on June 16, 2010 or
after 126 days, Orbeta was temporarily diagnosed with lumbosacral muscular spasm, for which
the company-designated physician gave a Grade 10 partial disability rating and scheduled him to
undergo a bone scan. Instead of following the said recommendation, Orbeta consulted an
independent doctor who declared him to be unfit for sea duty. Orbeta then filed the claim for
permanent total disability benefits.
Petitioner argued that inability to work for more than 120 days is not tantamount to
permanent total disability and that Orbeta is not entitled to his claim because there was no
declaration with respect to his fitness to work or permanent total disability, as he required further
medical treatment and yet he abandoned the same. Meanwhile, Orbeta contended that since there
was no declaration of fitness for work after more than 120 days of treatment, he is entitled to
permanent disability claim.
ISSUE:
Does the lapse of 120 days automatically entitle to total permanent disability?
RULING:
No. The mere lapse of the 120-day period itself does not automatically warrant the payment
of permanent total disability benefits.
An employee's disability becomes permanent and total only: (1) when so declared by the
company-designated physician, or (2) in case of absence of such a declaration either of fitness or
permanent total disability, upon the lapse of the 120- or 240-day treatment periods, while the
employee's disability continues and he is unable to engage in gainful employment during such
period, and the company-designated physician fails to arrive at a definite assessment of the
employee's fitness or disability. If the 120 days initial period is exceeded and no such declaration
is made because the seafarer requires further medical attention, then the temporary total disability
period may be extended up to a maximum of 240 days, subject to the right of the employer to
declare within this period that a permanent partial or total disability already exists.
In this case, petitioners are correct in arguing that respondent abandoned treatment, as
under the law and the POEA contract, the company physician is given up to 240 days to treat him.
Consequently, respondent is entitled only to compensation equivalent to or commensurate with
his injury, and not permanent total disability benefits.
26 |
COMPANY-DESIGNATED PHYSICIAN’S ASSESSMENT PREVAILS OVER THE SECOND

OPINION IF THE LATTER IS NOT DONE IN ACCORDANCE WITH THE PROCEDURE
Oriental Shipmanagement Co., Inc. and/or MOL Tankship Management (Europe) Ltd. and/or
Ramon S. Herrera vs. William David P. Ocangas
G.R. No. 226766; September 27, 2017
Reyes, Jr. J.
FACTS:
This is a petition for review on Certiorari under Rule 45 assailing the CA decision reversing
the NLRC decision and reinstating the LA’s award of full disability benefits in favor of respondent
William Ocangas (Ocangas).
Ocangas was hired as a pumpman by petitioner MOL Tankship Management, through its
local manning agency – petitioner Oriental Shipmanagement. Prior to his employment, Ocangas
underwent a pre-employment medical examination (PEME) and was declared fit to work. He was
deployed on November 29, 2011. On July 12, 2012, while on duty, Ocangas became ill as a result
of him having to lift the cover of the ballast pump manually. However, his condition did not improve
despite medical attention. Thus, he was recommended to be repatriated to obtain further medical
treatment. Upon his repatriation on September 4, 2012, he immediately reported to petitioner and
was referred to the company’s accredited physician. On January 23, 2013, he was declared by Dr.
Chuasuan, the company-designated physician, to have reached the maximum medical cure with
Grade 11 disability impediment.
Ocangas filed a complaint for recovery of permanent total disability benefits against
petitioner. On March 25, 2013, he sought the medical opinion of Dr. Cadag who declared him no
longer fit for sea duty or for any work abroad seafaring given his medical condition. On the part of
the petitioners, they alleged that the findings of the company-designated physician should be the
only primary consideration in the assessment of the illness or injury of the seafarer.
ISSUE:
Does the assessment of Dr. Chuasuan prevails over that of Dr. Cadag in the determination
of the entitlement of Ocangan to payment of disability benefits?
RULING:
Yes. The assessment of Dr. Chuasuan prevails over that of Dr. Cadag with respect to the
determination of entitlement to payment of disability benefits.
A seafarer is conclusively presumed to be totally and permanently disabled when the

company-designated physician fails to make a declaration regarding the seafarer's fitness or status
of disability within the specified 120 or 240-day periods. If the physician appointed by the seafarer
disagrees with the assessment of the company-designated physician, the parties may agree to
jointly refer the matter to a third doctor, whose decision shall be binding between them. Failure to
follow this procedure is fatal and renders conclusive disability rating issued by the company-
designated physician.
In this case, instead of expressing his disagreement to the findings of the company-
designated physician, Ocangas filed a complaint for permanent total disability benefits. It took
respondent two (2) months after the filing of the complaint before he submitted himself for
examination by a physician of his choice.
Hence, for failure to follow the correct procedure, the certification of the company-
designated physician is the final determination that must prevail.
| 27
EMPLOYER IS NOT BOUND TO PAY DEATH BENEFITS UNDER POEA-SEC IN CASE OF

DEATH ATTRIBUTABLE TO THE DECEASED EMPLOYEE
TSM Shipping (Phils.), Inc., and MST Marine Services Phils., Inc. vs. Shirley G. De Chavez
G.R. No. 198225; September 27, 2017
Del Castillo, J.
FACTS:
This is a Petition for Review on Certiorari assailing the CA decision which reversed both
the NLRC and LA decision and granted the complaint for payment of death benefits filed by
respondent Shirley De Chavez.
On August 23, 2005, petitioners hired Ryan De Chavez as chief cook on board the oil
tanker vessel Haruna Express for a period of nine months. However, on February 26, 2005, De
Chavez was found dead inside his cabin bathroom hanging by the shower cord and covered with
blood. De Chavez’s surviving spouse, herein respondent, filed a complaint for death benefits.
Respondent alleged that her husband did not commit suicide considering that he even
submitted himself to a medical checkup prior to his death and that no suicide note was found. She
claimed that since De Chavez died during the effectivity of his contract and while on board the
vessel, his heirs are entitled to death benefits. On the other hand, petitioners claimed that
respondent is not entitled to death benefits under the POEA-SEC because it was uniformly found
by authorities that the cause of De Chavez’ death is suicide and that under the POEA-SEC, a
seafarer’s death during the term of his contract is not automatically compensable if the same was
due to his willful act.
ISSUE:
Can petitioners be liable for the payment of death benefits to the heirs when the cause of
death of the deceased employee was due to a willful act of the latter?
RULING:
No, the petitioners are not liable to pay the death benefits to respondent for the death of
De Chavez.
The employer is liable to pay the heirs of the deceased seafarer for death benefits once it
is established that he died during the effectivity of his employment contract. However, as provided
under Section 20 (D) of POEA-SEC, the employer may be exempt from liability if it can successfully
prove that the seaman's death was caused by an injury directly attributable to his deliberate or
willful act.
Given the evidence on record, the SC held that De Chavez’s death was due to his own
deliberate act and deed. This was duly proved by Ulsan City Hospital’s medical certificate of death
and the INTECO’s report. In the absence, as in this case, of incontrovertible proof to the contrary,
it must be presumed that the persons who prepared these documents acted in good faith to attest
to the facts they saw or had personal knowledge of, and that these documents likewise spoke the
truth.
Therefore, petitioners are not liable to pay the death benefits to respondent for the death
of De Chavez.
28 |
FAILURE OF THE COMPANY-PHYSICIAN TO ISSUE EITHER A FIT-TO-WORK

CERTIFICATION OR A FINAL DISABILITY RATING WITHIN THE PRESCRIBED
PERIODS RENDERS THE DISABILITY TO BE TOTAL AND PERMANENT
Career Philippines Shipmanagement, Inc. vs. Eduardo J. Godinez

G.R. No. 206826 & G.R. No. 206828; October 2, 2017
Del Castillo, J.
FACTS:
denying the parties' respective Motions for Reconsideration.
Godinez was employed as a deck cadet during his period of employment with Columbian
Ship Management. He was employed at a young age of twenty (20). He had undergone medical
tests the results of which are all cleared. However, during the period of employment, he
experienced and suffered maltreatment from his superior due to his failure to rouse from sleep. On
the subsequent days, Godinez was alleged to have been acting strange which made the other
crews and officers uneasy. Godinez was subjected to psychological exam for evaluation and
treatment. The initial report which was unsigned states that Godinez admitted that he had
experienced insomnia and paranoia when he was 15 years old. His other psychological test
however showed that he is suffering from bipolar disorder, but he was later considered mentally fit
for work.
With the latest result on hand, he asked Columbia if he can now work again but his request
was denied. He then filed a complaint before the Labor Arbiter (LA) with a prayer that disability
benefits be paid to him. Petitioner argued that Godinez concealed the fact that he had experienced
paranoia. The LA granted the petition of Godinez. This was affirmed by the National Labor
Relations Commission. On appeal, the CA ruled that Godinez is entitled to the disability benefits
since his sickness existed during the term of the employment contract. Hence, this petition.
ISSUE:
Is Godinez’s bipolar disorder work-related thus entitling him to disability benefits?
RULING:
Yes. Respondent’s illness is work-related and thus he should be properly compensated
with disability benefits.
The company-designated doctor is expected to arrive at a definite assessment of the

seafarer's fitness to work or to determine the degree of his disability within a period of 120 or 240
days from repatriation, as the case may be. If after the lapse of the 120/240-day period the seafarer
remains incapacitated and the company-designated physician has not yet declared him fit to work
or determined his degree of disability, the seafarer is deemed totally and permanently disabled.
The conditions of work, the elements, the environment, the fear and loneliness, the strange
surroundings, and the unnecessary cruelty and lack of understanding and compassion of his
immediate superior, the weight of all these was too much for the young man to handle. To
complicate matters, Godinez was never given medical care onboard as soon as he became ill. The
Court concludes that Godinez's grave illness was directly caused by the unprofessional and
inhumane treatment, as well as the physical, psychological, and mental abuse inflicted upon him
by his superiors, aggravated by the latter's failure and refusal to provide timely medical and/or
professional intervention, and their neglect and indifference to his condition even as it was
deteriorating before their very eyes. The Court finds as well that Godinez suffered permanent total
disability, as there has been no definite medical assessment by the company-designated physician
regarding his condition - even up to now.
| 29
REFERRAL TO A THIRD DOCTOR IS MANDATORY AND THE FAILURE TO DO SO

WOULD RENDER THE ASSESSMENT OF THE COMPANY-DESIGNATED PHYSICIAN
FINAL AND BINDING
Dohle Philman Manning Agency, Inc., Dohle Limited, et. al. vs. Julius Rey Quinal Doble
G.R. No. 223730; October 4, 2017
Reyes, Jr., J.
FACTS:
In this petition for review on Certiorari under Rule 45, petitioners Dohle Philman Manning
Agency, Inc. challenged the CA decision, NLRC affirming with modification NLRC’s Resolution,
which affirmed in toto the Labor Arbiter’s (LA) Decision finding Respondent Julius Rey Quinal Doble
entitled to disability compensation.
The respondent is a Filipino seafarer with employment under the petitioner. According to
the respondent, while on board the vessel, he "twisted his right foot and he immediately fell on the
floor." A few months after, respondent alleged another incident. As a result, he was repatriated
back to the Philippines. Upon his arrival, medical tests were conducted and he was eventually
diagnosed with "Right ankle sprain; Carpal Tunnel Syndrome, Bilateral; and Osteochondral Defect
Femoral Trochlea, Right Knee." He thereafter, underwent surgery and physical therapy.
Eventually, after treatment, the company-designated physician declared him fit to work. Unsatisfied
by the diagnosis, respondent consulted his own medical expert. His own doctor issued a medical
report, stating that he is now permanently disabled and is therefore now permanently unfit to
resume his usual sea duties. In light of this, respondent insisted on his disability benefits. The
petitioners refused. Thus, he filed a claim for disability compensation.
ISSUE:
Does the failure to refer to a third doctor render the findings of the company-designated
physician as to the fitness to work final and binding?
RULING:
Yes. For his failure to refer to a third doctor, the assessment of the company-designated
physician is final and binding. It is well settled that while it is the company-designated physician
who is entrusted with the task of assessing the seaman's disability during the term of the latter's
employment, the same is not automatically final, binding or conclusive. Should the seafarer
disagree with the assessment, he may dispute the same by seasonably exercising his prerogative
to seek a second opinion and consult a doctor of his choice. In case of disagreement between the
findings of the company-designated physician and the seafarer's doctor of choice, the employer
and the seafarer may agree jointly to refer the latter to a third doctor whose decision shall be final
and binding on them. Also, it was settled that the referral to a third doctor is mandatory, and should
the seafarer fail to abide by this method, the assessment of the company designated physician
shall be final and binding. Sec. 20 (B) of POEA-SEC provides that if a doctor appointed by the
seafarer disagrees with the assessment, a third doctor may be agreed jointly between the employer
and the seafarer and the third doctor's decision shall be final and binding on both parties. This,
however, was disregarded by the courts in their decision.
In the case at hand, there is no question that the company-designated physician and the
respondent's personal physician had two very different assessment of the respondent's illness.
However, respondent herein did not demand for his re-examination by a third doctor, and instead
opted to initiate the instant case. This is a fatal defect that militates against his claims and has the
effect of consolidating the finding of the company designated physician as final and binding.
Hence, respondent, here, is considered fit to work and not entitled to any disability benefits.
30 |
FOR AN ILLNESS OR INJURY TO BE COMPENSABLE, IT MUST BE WORK-RELATED

AND MUST HAVE EXISTED DURING THE TERM OF THE EMPLOYMENT CONTRACT
OSG Ship Management Manila, Inc. vs. Aris Wendel R. Monje

G.R. No. 214059; October 11, 2017
Reyes, Jr., J.
FACTS:
Challenged before this Court via this petition for review on Certiorari under Rule 45 of the
Rules of Court is the decision of the Court of Appeals. OSG Ship Management (UK) Ltd. (OSG
UK), through its manning agent in the Philippines, OSG Ship Management Manila, Inc. (OSG
Manila) employed respondent Monje as an ordinary-seaman. Respondent felt a pain on his left
knee while on board the vessel which prompted him to seek medical advice in the United States.
He was later repatriated in the Philippines for further treatment. Dr. Sugay found that the cause of
his left knee pain is unknown but advised that Monje should undergo knee surgery.
On Dr. Sugay’s report, it was stated that the illness was not work-related. Monte, on the
basis of the medical certificate issued by Dr. Ticman that his illness rendered him permanently
disabled and unfit to work as a seaman in any capacity, claims for the payment of the total and
permanent disability benefits. The Labor Arbiter issued a ruling in favor of Monje. This was
reversed by the National Labor Relations Commission. On appeal, the Court of Appeals reinstated
the award of the LA.
ISSUE:
Is the left knee pain suffered by respondent work-related?
RULING:
No. The illness suffered by respondent is not work-related.
For an illness or injury to be compensable, Section 20(B) of the 2000 POEA-SEC, now
Section 20(A) of the 2010 POEA-SEC, requires that two elements must concur: (1) the injury or
illness must be work-related; and (2) the work-related injury or illness must have existed during the
term of the seafarer’s employment contract. For illnesses not mentioned under Section 32, the
POEA-SEC creates a disputable presumption in favor of the seafarer that these illnesses are work-
related. To overcome this disputable presumption, sufficient evidence must be presented.
In the pleadings submitted, the petitioners presented the letter of Dr. Sugay, the company-
designated physician, who opined that the respondent’s condition is not work-related. It must also
be remembered that Dr. Sugay was the attending physician who provided the medical history of
the respondent, and who conducted the medical examination of and provided the diagnosis for the
respondent from the moment that the latter was repatriated back to the Philippines.
Further, De Leon vs. Maunlad Trans, Inc. stated that in order to establish compensability
of a non-occupational disease, reasonable proof of work-connection is sufficient — direct causal
relation is not required. Thus, probability, not the ultimate degree of certainty, is the test of proof in
compensation proceedings.
To be sure, the assertions made by the respondent in his pleadings are neither backed by
the expert testimony/affidavit of any competent physician, nor are they supported by any evidence
or testimony other than the mere allegations of the respondent.
Hence, the left knee pain suffered by respondent is not work-related
| 31
UNDER THE POEA-SEC, FAILURE OF THE COMPANY-PHYSICIAN TO ISSUE EITHER A

FIT-TO-WORK CERTIFICATION OR A FINAL DISABILITY RATING WITHIN THE
PRESCRIBED PERIODS, RENDERS DISABILITY TO BE TOTAL AND PERMANENT
Sharpe Sea Personnel, Inc. vs. Macario Mabunay, Jr.

G.R. No. 206113; November 6, 2017
Leonen, J.
FACTS:
This is a petition for review on Certiorari seeking to reverse the CA’s ruling on the liability
of the petitioner, Sharpe Sea, agent for CF Sharp & Company which hired Mabunay, respondent,
as an oiler. During the period of employment, Mabunay hit his back on the purifier while cleaning
the second floor of the engine room. This caused him pain in his back and numbness in his legs.
He continued working until he was allowed to have a medical checkup where he was declared unfit
to work. Dr. Cruz, a company-designated physician also reported that Mabunay is unfit for work.
He was confined and underwent surgery. Mabunay is now filing a complaint for the collection of
his medical expenses and his disability benefits.
The Labor Arbiter (LA) granted disability benefits in favor of Mabunay for being unfit for
sea duty as found by the company-physician, but the claim for medical expenses was dismissed.
The National Labor Relations Commission (NLRC) affirmed with modification the Labor Arbiter’s
Decision by deleting the award for attorney’s fees. Petitioner argues that respondent’s disability
rating of Grade 8 does not entitle him to any benefits. On appeal, the Court of Appeals (CA)
reinstated the awards of the LA with modifications. Hence, this petition.
ISSUE:
Is there sufficient evidence presented to warrant the award of disability benefits?
RULING:
Yes. There had been sufficient evidence presented to warrant the award of disability
benefits.
As part of a seafarer’s deployment for overseas work, he and the vessel owner or its
representative local manning agency are required to execute the POEA-SEC. Containing the
standard terms and conditions of seafarers’ employment, the POEA-SEC is deemed included in
their contracts of employment in foreign ocean-going vessels. Section 20(B) thereof provides the
two (2) requisites of compensable disability: a.) work-related injury or illness b) must be suffered
during the term of his contract. It is not disputed that respondent encountered an accident a day
after he boarded M/V Larisa.
Manning and shipping companies are always in a better position than their employees in
accessing, preserving, and presenting their evidence. In this case, despite the uncontested
disability of the employee, he presented all his evidence, even going to the extent of consulting
two other doctors after the company-designated physicians refused to provide a disability rating.
Furthermore, with the company-designated physicians’ failure to issue either a fit-to-work
certification or a final disability rating within the prescribed periods, respondent’s disability was
rightfully deemed to be total and permanent. Clearly, Dr. Cruz, Dr. Castillo, or any other company-
designated physician failed to issue respondent either a fit-to-work certification or a final disability
rating after his operation and before the lapse of 240 days from his repatriation. Thus, the Court of
Appeals did not err when it considered respondent to be permanently and totally disabled.
32 |
FOR AN EMPLOYEE TO BE ENTITLED TO DISABILITY BENEFITS, THE ILLNESS OR

INJURY MUST BE LISTED AS AN OCCUPATIONAL DISEASE; OTHERWISE, THERE
MUST BE SUBSTANTIAL EVIDENCE THAT IT WAS CONTRACTED DUE TO WORKING
CONDITIONS
Government Service Insurance System vs. Simeon Tañedo, Jr.

G.R. No.193500; November 20, 2017
Leonardo-De Castro, J.
FACTS:
This is a petition for review on Certiorari which seeks to set aside the decision of the Court
of Appeals (CA) which reversed the decision rendered by the Employee’s Compensation
Commission (ECC).
Petitioner Tañedo was a public servant who worked as records officer at the Bureau of
Internal Revenue (BIR). His duties include the encoding, printing, filing and delivering statements
and letters. Tañedo, before retiring, was found to have varicosities or varicose veins in his legs.
Convinced that his ailment was caused by his employment with the BIR, he filed for
compensation benefits before the Government Service Insurance System (GSIS). This was denied
by GSIS which contends that varicosities is not considered an occupational disease. On appeal,
ECC affirmed GSIS’ denial of Tañedo’s claim contending that for it to be compensable, the ailment
must be enlisted as an occupation disease otherwise, proof must be shown that the risk of
contracting the ailment is increased by the nature of employment. CA granted the appeal and set
aside the decision of ECC.
ISSUE:
Was the respondent’s varicosities work-related?
RULING:
No. The CA erred in ruling that the varicosities are work-related.
Compensable sickness as defined by PD. 626, is any illness definitely accepted as an

occupational disease listed by the commission or any illness caused by employment subject to
proof by the employee that the risk of contracting the same is increased by the working conditions.
It is undisputed that Tañedo’s medical condition is not among the occupational diseases
listed. Therefore, he is required by statute to prove that the risk of contracting the said ailment was
increased by the nature of his working conditions. The CA was correct in ruling that what the law
requires is reasonable work connection and not direct causal relation and that the degree of proof
required under PD. 626 is merely substantial evidence. In this case, Tañedo failed to provide
substantial evidence to prove that his medical condition was caused by his work at the BIR. He
was unable to present any competent medical history that would demonstrate his claim of a
reasonable connection between his work and his medical ailment.
Thus, Tañedo is not entitled to compensation as his condition is not work-related and he
failed to prove that the nature of his work increased the risk of contracting the same.
| 33
THE COLLECTIVE BARGAINING AGREEMENT CONTAINING MORE BENEFICIAL

CONDITIONS IN FAVOR OF THE LABORER MUST ALWAYS PREVAIL
Maersk-Filipinas Crewing, Inc. and AP Moller Singapore PTE., Ltd. vs. Rosemary G. Malicse
(Legal Wife of deceased seafarer Efren b. Malicse, representing the latter’s estate)
G.R. No. 200576; November 20, 2017
Sereno, C.J.
FACTS:
In a petition for review on Certiorari, petitioner Maersk-Filipinas Crewing Inc, (MAERSK)
seeks to reverse the decision of the Court of Appeals (CA) awarding death benefits, moral and
exemplary damages and attorney’s fees to respondent Rosemary Malicse as the beneficiary of the
deceased Efren Malicse.
After being declared as fit to work, Efren Malicse, was employed as a seaman by petitioner
Ap Moller Singapore through its agency MAERSK. Efren was employed under a duly approved
Philippine Overseas Employment Administration Standard Employment Contract for Seafarers
(POEA-SEC) with a collective bargaining agreement (CBA) entered between his employer Ap
Moller and the Singapore Organization of Seamen, a labor union. During his employment,
Efren died due to multiple organ failure secondary to septicemia or blood poisoning or infection.
MAERKS paid Rosemary USD1,000 for burial and as for death benefits, she was offered
USD40,000 which is half of the amount provided by the CBA.
Rosemary then filed a complaint before the Labor Arbiter (LA) for money claims. The LA
sustained the claim of Rosemary that since the labor union of Efren was an affiliate of the
International Transport Workers Federation (ITF), the agreement of ITF must prevail over the CBA
and POEA-SEC which grants more favorable death benefits regardless of the seafarer’s cause of
death. NLRC affirmed LA’s decision on the applicability of the ITF agreement. MAERSK responded
that the death of Efren was not caused by work-related illness therefore, Rosemary is not entitled
to death benefits. CA on the other hand affirmed both rulings of LA and NLRC and ruled that
Maersk failed to show that they were not liable to pay such benefits.
ISSUE:
Was the CA correct in granting the death benefits under the ITF agreement over the
benefits provided under the CBA and POEA-SEC?
RULING:
No. The court finds grave abuse of discretion on the part of the CA for awarding the death
benefits provided by the ITF agreement without any proof of its applicability. The POEA-SEC and
the CBA bind seafarers and their employers as well as the ITF agreement which also forms part
of the covenants of the parties to each other. Since none of the evidence presented show that the
labor union is affiliated with the ITF and that petitioners entered into any special agreement, the
court must apply the terms under the POEA-SEC. However, as stated under Legal Heirs of Deauna
vs. Fil Star Maritime Corp, special clauses on CBA must prevail over the standard terms and
benefits formulated by the POEA in its contract.
A contract of labor is so impressed with public interest that the more beneficial conditions
must be endeavored in favor of the laborer. Comparing the provisions on the CBA and POEA-
SEC, the CBA provides higher death benefits of USD80,000 as long as the cause of the death
must be due to an accident; otherwise his beneficiary would only receive USD40,000. Such amount
is lower than the benefit granted by the POEA-SEC, which is USD 50,000 but there must first be
substantial evidence that the seafarer died of a work-related illness.
Thus, Rosemary is entitled to the more beneficial provision of the POEA-SEC if Efren’s
death is proven to be work related, otherwise, the CBA’s provision on the grant of USD40,000
regardless of the cause of death will apply.
34 |
EMPLOYEE IS ENTITLED TO DISABILITY BENEFITS ONLY WHEN THE SEAFARER

SUFFERS FROM A WORK-RELATED ILLNESS OR INJURY DURING THE TERM OF
CONTRACT
Teodoro V. Ventura, Jr. vs. Crewtech Ship Management Philippines, Inc, Rizzo – Bottiglieri –
De Carlini Armatori S.P.A and Angelita Ancheta
G.R. No.225995; November 20, 2017
Perlas-Bernabe, J.
FACTS:
This is a petition for review on Certiorari which seeks to set aside the decision of the
National Labor Relations Commission (NLRC) and to reinstate the Labor Arbiter’s (LA) decision
which dismissed the complaint for total and permanent disability benefits filed by the Petitioner
Teodoro Ventura (Ventura). Ventura was employed by Crewtech for its principal Rizzo as a chief
cook on board and after undergoing the required pre-employment examination (PEME) where he
was declared fit for sea duty.
Ventura, while employed, was diagnosed by a specialist with prostatitis and decrlared unfit
for duty He disclosed that he has a history of prostatitis that occurred three years ago, was treated
for kidney stones and was not under any regular medicine. Ventura was then medically repatriated
and referred to the company-designated physician who reiterated that such illnesses were not
work-related and subjected him to further evaluation and treatment. After the 240-day period
expired and because his illnesses remained unresolved, he went to see an independent physician
who declared him to be permanently disabled.
Ventura filed a complaint for total permanent disability benefit and other money claims
against Crewtech before the NLRC. For their part, respondents contend that Ventura’s illnesses
were not work-related and that he was also guilty of fraudulent misrepresentation when he failed
to disclose his previous medical history and therefore disqualified under the POEA’s standard
employment contract (POEA-SEC). LA dismissed the complaint ruling that the petitioner failed to
prove that his illnesses were work related. NLRC reversed the decision ruling that such illnesses
were work-related and that there was no concealment because Crewtech was well aware of his
medical history. CA reversed NLRC and agreed with the LA that he failed to prove that his illnesses
were work-related.
ISSUE:
Were the petitioner’s illnesses work-related and thus compensable?
RULING:
No. They are not work-related.
The entitlement of a seafarer on overseas employment to disability benefits is governed

by medical findings, the law, and the parties’ contract. In this case, the POEA-SEC governs. It
states that the employer is liable for disability benefits when the seafarer suffers from a work-
related injury or illness during the term of his contract. In this regard, it also mandates the seafarer
to disclose all his pre-existing illnesses in his PEME, failing which shall disqualify him from
receiving the same. Also, the disease in question must be one of those listed as an occupational
disease; otherwise, such diseases are disputably presumed as work related. However, the
presumption does not necessarily result in an automatic grant of compensation.
In this case, the court ruled that there was no concealment as respondents were well aware
of petitioner's past medical history given that the company-designated physician was able to
provide a detailed medical history of the latter. However, there was also no evidence presented to
establish how and why petitioner’s working condition increased the risk of contracting his illness.
CA correctly ruled that petitioner failed to prove that his illnesses were work-related or at
least have aggravated them and hence, not compensable.
| 35
EMPLOYEE IS NOT GUILTY OF MISREPRESENTATION WHEN THE EMPLOYER

HAVING KNOWLEDGE OF THE EMPLOYEE’S MEDICAL HISTORY REEMPLOYED HIM
TO WORK FOR SEVERAL MORE YEARS
Almario F. Leoncio vs. MST Marine Services, Inc./ Artemio Serafico and/or Thome Shop
Management PTE., Ltd.
G.R. No.230357; December 6, 2017
Velasco, Jr., J.
FACTS:
This is a petition for review under Rule 45 of the Rules of Court. Petitioner Almario F.
Leoncio (Leoncio) seeks the reversal of decision rendered by the Court of Appeals (CA) which
denied Leoncio’s claim for permanent total disability benefits.
Leoncio was repeatedly hired by respondent MST Marine Services (MST Marine) for its
principals. In 2001, Leoncio was repatriated to be treated for his Coronary Artery
Disease/Hypertensive Cardio Vascular Disease (CAD/HCVD). He was provided with sickness
allowance and was in the care and management of the company designated physician. He was
eventually declared to be fit for work and was once again employed by MST Marina as Chief Cook.
He underwent pre-employment medical examination (PEME) and was declared fit for sea duty.
However, while on board, he was admitted to the hospital. He was diagnosed with “unstable
angina,” and he underwent a procedure. He was again repatriated to the Philippines while
undergoing treatment. MTS Marine found out that Leoncio underwent stenting procedure. Because
of this, MST Marine cut off the medical and sickness allowances due to failure to declare during
the PEME that he underwent such procedure.
Leoncio filed a complaint for permanent and total disability benefits against the private
respondents. LA ruled in favor of Leoncio stating that MST Marine was aware of the existence of
Leoncio’s disease since 2001 but nonetheless reemployed and redeployed him to work. NLRC set
aside LA’s ruling and ruled that Leoncio’s concealment of the stenting procedure during the PEME
is a misrepresentation that bars his right to any compensation. CA sustained NLRC.
ISSUE:
Was the petitioner guilty of misrepresentation which bars his recovery of total disability
benefits?
RULING:
No. He is not guilty of misrepresentation.
The resolution of the case pivots on the construction of the phrase "illness or condition" in
Section 20 (E) of the 2010 POEA-SEC, which provides that states “A seafarer who knowingly
conceals a pre-existing illness or condition in the Pre-Employment Medical Examination (PEME)
shall be liable for misrepresentation and shall be disqualified from any compensation and benefits.
This is likewise a just cause for termination of employment and imposition of appropriate
administrative sanctions.”
He cannot be considered to have concealed the same during his PEME in 2014. The so-
called misrepresentation ascribed to the petitioner is more imaginary than real. The Court ruled
that as it is, the stenting procedure undergone by Leoncio on his arteries is nothing more than an
attempt to discontinue the steady progression of his illness or condition-his CAD/HCVD, which was
already known by his employers. Simply, a stenting procedure is the "placement of a small wire
mesh tube called a stent to help prop the artery open and decrease its chance of narrowing again."
The procedure was intended to improve his health condition. Surely, the non-disclosure thereof
does not diminish MST Marine's knowledge of the "illness or condition" he had already been
diagnosed with since 2001. Undeniably then, Leoncio's failure to reveal the said procedure does
not amount to a concealment of a pre-existing "illness or condition" that can bar his claim for
disability benefit and compensation.
Hence, there is no misrepresentation or concealment on the part of petitioner.
36 |
COMPLIANCE WITH PROCEDURAL AND SUBSTANTIAL REQUIREMENTS IS

NECESSARY FOR ENTITLEMENT TO BENEFITS
Veronico O. Tagud vs. BSM Crew Service Centre Phils., Inc.

G.R. No. 219370; December 06, 2017
Carpio, J.
FACTS:
In a petition for review on Certiorari under Rule 45 before the Court of Appeals (CA),
petitioner Veronico Tagud (Tagud) assails the decision of the CA, affirming the decision of the
National Labor Relations Commission (NLRC) dismissing petitioner’s claim for disability benefits
and other monetary awards.
Bernhard Schulte Shipmanagement (Bernhard), a foreign shipping company doing

business in the Philippines through its local manning agent, respondent BSM Crew Service Centre
Philippines, Inc. (BSM) hired petitioner Tagud as Able-Bodied Seaman. Respondents rehired
Tagud as Able-Bodied Seaman for the Kota Pemimpin vessel under a contract approved by the
Philippine Overseas Employment Administration (POEA) wherein Tagud passed the required
preemployment medical examination. While on duty, Tagud lost his balance due to the sudden
tilting of the ship and his right elbow region crashed against a hard object. As a result, he lost
sensation and strength on his upper right extremity. He was repatriated to Manila. With an illness
which limits the flexion of his upper right extremity, Tagud was no longer employed in any gainful
occupation.
Tagud claimed that as a result of his work-related illness which he contracted during the
term of his employment; he should be entitled to permanent disability benefits. Respondents
denied any liability to Tagud alleging that he was repatriated to the Philippines on a “finished
contract” as stated in Tagud’s disembarkation report and failed to report to his manning agency.
ISSUE:
Is failure to undergo post-employment medical examination within the three-day mandatory
reporting period a ground for denial of permanent disability benefits?
RULING:
Yes. The failure to undergo post-employment medical examination within the three (3)-day
mandatory reporting period is a ground for denial of permanent disability benefits.
In Heirs of the Late Delfin Dela Cruz v. Philippine Transmarine Carriers, Inc., we held that
the three-day mandatory reporting requirement must be strictly observed since within three days
from repatriation, it would be fairly manageable for the company-designated physician to identify
whether the illness or injury was contracted during the term of the seafarer's employment or that
his working conditions increased the risk of contracting the ailment. To ignore the rule would set a
precedent with negative repercussions because it would open the floodgates to seafarers claiming
disability benefits that are not work-related or which arose after the employment.
One who claims entitlement to the benefits provided by law should not only comply with
the procedural requirements of law but must also establish his right to the benefits by substantial
evidence. The burden, therefore, rests on Tagud to show that he suffered or contracted his illness
or injury, while still employed as a seafarer, which resulted in his permanent disability. Tagud
disembarked in Singapore and was repatriated to Manila. He alleged that he reported to his
manning agency but was not given any assistance or referred to a company-designated physician.
However, Tagud did not present any evidence to prove that he tried to submit himself to a
company- designated physician within three working days upon his return. Tagud did not also
present any letter that he was physically incapacitated to see the company designated physician
in order to be exempted from the rule.
Tagud failed to show that his illness or injury was work-related. Hence, the denial of the
permanent disability benefits is proper.
| 37
EMPLOYER HAS THE DUTY TO PROVE THAT THE INJURY, INCAPACITY, DISABILITY
OR DEATH OF AN EMPLOYEE IS DIRECTLY ATTRIBUTABLE TO THE SEAFARER
Career Philippines Ship Management, Inc., Columbia Ship Management Ltd. Liberia and/ or
Sampaguita D. Marave vs. Donard P. Silvestre
G.R. No. 213465; January 8, 2018
Peralta, J.
FACTS:
This is a petition for review on Certiorari filed by the petitioners Career Philippines Ship
Management (Career Philippines) which seeks to set aside the decision of the Court of Appeals
(CA) which grants the respondent Donard P. Silvestre (Silvestre) permanent disability benefit.
Career Philippines hired Silvestre as a seaman. During his employment, his head was hit
by the closing hatch cover while he was climbing out of the cargo hold. He sustained an avulsion
wound on his right forehead. After five (5) days of confinement in the hospital, he was discharged
and was declared unfit to work and was repatriated. After seeking medical attention from the
company-designated physician and after several procedures, Silvestre had complaints of
intermittent paint and headaches.
Silvestre then filed a complaint for disability benefits and damages against Career
Philippines. The Labor Arbiter (LA) dismissed the complaint ruling that based on the evidence
procured, Silvestre forgot to put the safety pin of the cargo hold entrance therefore he willfully did
not observe the safety procedures. National Labor Relations Commission (NLRC) affirmed the
ruling of the LA. CA reversed the decision ruling that Silvestre was actually wearing his helmet
when the incident happened and merely lost the same when he was climbing and that he merely
failed to remember to put the safety pin.
ISSUE:
Was the respondent grossly negligent in failing to secure the safety pin of the hatch which
makes the injury a direct result of his willful and intentional breach of duties?
RULING:
No, the respondent is not considered as grossly negligent by the Court.
As stated under Sec 20 (D) of the 2000 POEA – Standard Employment Contract, no
compensation and benefits shall be payable in respect of any injury, incapacity, disability or death
of the seafarer resulting from his willful or criminal act or intentional breach of his duties, provided,
however, that the employer can prove that such injury, incapacity, disability or death is directly
attributable to the seafarer. The onus probandi falls on the petitioners to establish or substantiate
their claim that Silvestre’s injury was caused by his willful or intentional act with the requisite
quantum of evidence.
Here, petitioners never presented evidence before the LA to support the conclusion that
Silvestre’s injury is directly attributable to his willful or criminal act or intentional breach of duty.
Clearly, the petitioners failed to establish their claim and that Silvestre suffered an injury that is
work related during the term of his employment contract and such was not caused by his willful
and intentional breach of duties.
38 |
FAILURE TO REFER THE CONFLICTING FINDINGS BETWEEN THE COMPANY

DESIGNATED PHYSICIAN AND THE SEAFARER’S PHYSICIAN OF CHOICE GRANTS
THE FORMER’S MEDICAL OPINION MORE WEIGHT AND PROBATIVE VALUE OF THE
LATTER
Magsaysay Mitsui OSK Marine, Inc., Koyo Marine, Co. Ltd and Conrado Dela Cruz vs. Oliver G.
Buenaventura
G.R. No.195878; January 10, 2018
Martires, J.
FACTS:
This is a petition for review on Certiorari seeking to set aside the decision of the Court of
Appeals (CA) which reversed the ruling of the National Labor Relations Commission (NLRC).
Petitioner Magsaysay Mitsui OSK Marine, Inc (Magsaysay) hired the respondent Oliver
Buenaventura (Buenaventura) as a seaman. During his employment, Buenaventura met an
accident which crushed his hand and as a result, he suffered a fracture. He was medically
repatriated and was attended to by the company-designated clinic which declared him as fit to
work after undergoing several procedures. He also consulted Dr. Rodolfo Rosales who found him
unfit to work as well as Dr. Venancio Garduce, Jr. who opined that it would be difficult for
Bueneventura to continue work as a seaman.
Due to the differing opinions of his physicians of choice, he then filed a complaint for
disability compensation under the Contract Bargaining Agreement. Labor Arbiter (LA) dismissed
said complaint and ruled that Bueneventura was not suffering from total and permanent disability
because he was declared fit to work by the company designated physician. NLRC affirmed the LA
decision since the designated physician was in the best position to determine an employee’s
fitness to work. CA reversed the decision and ruled that a seafarer is not precluded from getting a
second opinion as to his condition for claiming disability benefits. It also elucidated that
Bueneventura was entitled to total and permanent disability benefits.
ISSUE:
Was respondent precluded from getting a second opinion as to his health after being
diagnosed by the company-designated physician?
RULING:
No. The court agrees with the CA that Magsaysay is not precluded from getting a second
opinion from a physician of his own choice.
It is true that the company-designated physician will have the first opportunity to examine
the seafarer and thereafter issue a certification as to the seafarer’s medical status. Seafarers,
however, are not precluded from challenging the diagnosis of the company designated physicians
should they disagree. The same mechanism is categorically provided for under the POEA –
Standard Employment Contract. Section 20 (A) thereof states that should the seafarer’s appointed
doctor disagree with the assessment, a third doctor may be agreed upon by the employer and the
seafarer and the latter’s decision shall be final and binding between the parties. However, failure
to refer the conflicting findings between the company- designated physician and the seafarer’s
physician of choice grants the former’s medical opinion more weight and probative value of the
latter.
In the case at bar, Bueneventura did not initiate the process of referring the conflicting
findings of his physicians of choice to a third doctor. Consequently, the findings of the company-
designated physicians deserve a greater weight and could be set aside only with a showing of
clear bias against Bueneventura. Here the seafarer was assessed by an orthopedic surgeon.
Records also show that there is insufficient evidence to hold that the company designated
physicians acted with clear bias against him.
Thus, the findings of the company designated physician should be given weight.
| 39
AS A GENERAL RULE, DISABILITY WHICH LASTS FOR MORE THAN 120 DAYS IS
DEEMED TOTAL AND PERMANENT
Teekay Shipping Philippines, Inc. vs. Roberto M. Ramoga, Jr.

G.R. No. 209582; January 19, 2018
Tijam, J.
FACTS:
This is a petition for review on Certiorari seeking to reverse the ruling directing petitioner
to pay total disability benefits to respondent Roberto Ramoga, Jr. (Ramoga). Ramoga had entered
into a contract of overseas employment with Teekay Shipping Philippines, Inc. (Teekay Shipping),
petitioner, to work on board a vessel for eight (8) months. Ramoga was declared fit for sea duty.
Barely six (6) months after joining the vessel, Ramoga slipped and twisted his left ankle. He was
repatriated to the Philippines and referred for further evaluation and treatment in the Metropolitan
Medical Center. He underwent a rehabilitation program and surgery. Ramoga, unsatisfied, sought
the help of his own doctor who declared him to be permanently unfit in any capacity to resume his
sea duties. The company designated physician issued a declaration as to respondent’s fitness to
work 186 days from Ramoga’s repatriation. Ramoga then filed a complaint for permanent total
disability benefits, sickness, allowance, medical expenses, damages and attorney’s fees.
ISSUE:
Is Ramoga entitled to the permanent total disability benefits where the company-
designated physician declared his fitness to work only 186 days, or beyond 120 days, after his
repatriation?
RULING:
No. Ramoga is not entitled to the permanent total disability benefits.
While Article 198(c)(1) of the Labor Code states that disability which lasts for more than
120 days is deemed total and permanent, the mere lapse of 120 days from the seafarer's
repatriation without the company-designated physician's declaration of the fitness to work of the
seafarer does not entitle the latter to his permanent total disability benefits. The following guidelines
govern the seafarer's claims for permanent total disability benefits: 1.) The company-designated
physician must issue a final medical assessment on the seafarer's disability grading within a period
of 120 days from the time the seafarer reported to him; 2.) If the company-designated physician
fails to give his assessment within the period of 120 days, without any justifiable reason, then the
seafarer's disability becomes permanent and total; 3.) If the company-designated physician fails
to give his assessment within the period of 120 days with a sufficient justification (e.g. seafarer
required further medical treatment or seafarer was uncooperative), then the period of diagnosis
and treatment shall be extended to 240 days. The employer has the burden to prove that the
company-designated physician has sufficient justification to extend the period; and 4.) If the
company-designated physician still fails to give his assessment within the extended period of 240
days, then the seafarer's disability becomes permanent and total, regardless of any justification.
The declaration of respondent's own doctor that respondent is unfit to return to sea duties
is not conclusive as to respondent's condition. It is well-settled that the assessment of the
company-designated physician prevails over that of the seafarer's own doctor. With the declaration
of the company-designated physician that respondent is already fit to return to work, the latter is
not entitled to his permanent total disability benefits.
40 |
UNDER THE POEA-SEC, THE SEAFARER'S NON-COMPLIANCE WITH THE CONFLICT-

RESOLUTION PROCEDURE SHALL RESULT IN THE AFFIRMANCE OF THE FIT-TO-
WORK CERTIFICATION OF THE COMPANY-DESIGNATED PHYSICIAN
Generato M. Hernandez vs. Magsaysay Maritime Corporation

G.R. No. 226103; January 24, 2018
Peralta, J.
FACTS:
This is a petition for review on Certiorari seeking to uphold petitioner’s Generato M.
Hernandez (Hernandez) entitlement to total disability benefits.
Magsaysay Maritime Corporation (MMC) hired Hernandez to work on board a vessel for a
period of six (6) months. He was declared fit for sea duty. However, Hernandez suffered an injury
on his lower back. Upon repatriation, he underwent post-employment medical examination with
the company-designated physicians which considered his injury as slight rigidity or one-third loss
of lifting power. Hernandez sought an independent expert whose medical report found him unfit to
work back at his previous occupation. Despite the finding of physical disabilities, Hernandez’ plea
for assistance from MMC was denied who alleged that they have no liability. MMC also denied the
request of Hernandez for sickness allowance. Thus, the present complaint.
ISSUE:
Is Hernandez entitled to permanent total disability benefits?
RULING:
No. Hernandez is not entitled o permanent total disability benefits. Under Section 20(A)(3)
of the 2010 POEA-SEC, "[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 doctor’s
decision shall be final and binding on both parties." It presupposes that the company-designated
physician came up with a valid, final and definite assessment as to the seafarer's fitness or
unfitness to work before the expiration of the 120-day or 240-day period. The company can insist
on its disability rating even against a contrary opinion by another doctor, unless the seafarer
signifies his intent to submit the disputed assessment to a third physician. The duty to secure the
opinion of a third doctor belongs to the employee asking for disability benefits. He must actively or
expressly request for it. His non-compliance with this conflict-resolution procedure results in the
affirmance of the fit-to-work certification of the company-designated physician.
The Court is bound by the Grade 11 disability grading and assessment by the company-
designated physician that was timely rendered within the 120-day period.
Petitioner neither questioned such diagnosis in accordance with the procedure set forth
under the POEA-SEC nor contested the company-designated doctor's competence. To reiterate
what has already been settled, the referral to a third physician is mandatory and non-compliance
with the procedure may militate against the claim for permanent total disability in cases where the
company-designated doctor declared otherwise. Since he did not observe the relevant provisions
of the POEA-SEC after he received a definitive disability assessment from the company-
designated physician, the Court is left without a choice but to uphold the certification issued with
respect thereto.
| 41
FAILURE OF A SEAFARER TO SUBMIT TO A POST-EMPLOYMENT MEDICAL

EXAMINATION SHALL RESULT IN THE FORFEITURE DISABILITY BENEFITS
Manila Shipmanagement & Manning, Inc. vs. Ramon T. Aninang

G.R. No. 217135; January 31, 2018
Reyes, Jr., J.
FACTS:
Rules of Court is the Decision of the Court of Appeals (CA). The Petition seeks to declare
respondent Ramon T. Aninang (Aninang) as not entitled to disability benefits. He signed a Contract
of Employment with Hellespont Hammonia through its agent Manila Shipmanagement, the
petitioner. While on board the vessel where Aninang commenced his duties, Aninang experienced
chest pain and shortness of breath. Aninang requested for early repatriation but was refused, and
instead, his contract was extended for another month. Upon Aninang’s arrival in the Philippines,
he underwent medical examinations of his own volition following the alleged failure of Manila
Shipmanagement to refer him to company-designated physician. Aninang thus filed a claim for
payment of disability benefits, among others.
ISSUE:
Is Aninang entitled to the disability benefits he claims?
RULING:
No. Aninang is not entitled to the disability benefits he claims.
Section 20(A)(3) of the 2010 "Amended Standard Terms and Conditions Governing the
Overseas Employment of Filipino Seafarers On-board Ocean-going Ships provides that for a
seafarer who suffers work-related illness during the term of his contract to be qualified for the
monetary benefits he is entitled, the seafarer must submit himself/herself to a post-employment
medical examination by a company-designated physician within three working days upon his return
to the Philippines, except when he is physically incapacitated to do so. The seafarer is likewise
required to report regularly to the company-designated physician during his treatment. Failure of
the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the
right to claim the above benefits.
The Court held that aside from the self-serving allegations of the respondent in his
pleadings, there is no evidence that would suggest that he presented himself before the petitioners
upon disembarkation. Against this factual backdrop, the respondent would be hard-pressed to
convince the Court of his arguments. The Court could enter no other conclusion than that the
respondent failed to comply with the requirements of Section 20(A)(c) of the POEA Contract.
Necessarily therefore, the ruling of the CA and the LA must be reversed and set aside.
42 |
THE CONDUCT OF POST-EMPLOYMENT MEDICAL EXAMINATION IS A RECIPRIOCAL

OBLIGATION WHERE THE SEAFARER IS OBLIGED TO SUBMIT TO AN EXAMINATION
WITHIN THREE WORKING DAYS FROM ARRIVAL, AND THE EMPLOYER TO
CONDUCT A MEANINGFUL AND TIMELY EXAMINATION OF THE SEAFARER
Ariel A. Ebuenga vs. Southfield Agencies, Inc.

G.R. No. 208396; March 14, 2018
Leonen, J.
FACTS:
This is a petition for review on certiorari seeking to reverse the ruling of the Court of
Appeals (CA) in forfeiting petitioner’s claim. Southfield Agencies, Inc. (Southfield), respondent,
hired Ariel A. Ebuenga (Ebuenga), petitioner, as chief cook aboard the vessel MTV Super
Adventure. Two months into his engagement, Ebuenga wrote a letter to Southfield asking for
repatriation as soon as possible to attend a family problem which was granted. Upon his return to
the Philippines, Ebuenga, without consulting Southfield’s designated physician, had himself
checked at St. Luke’s Medical Center where he underwent Magnetic Resonance Imaging. He was
diagnosed with multi-level disk dessication and was advised to undergo physical therapy. Upon
consulting with his personal physician who found him permanently disabled and no longer fit to
work as seafarer, Ebuenga filed a complaint for permanent disability benefits.
ISSUE:
Is Ebuenga entitled to the disability benefits he claims?
RULING:
No. Ebuenga is not entitled to the disability benefits he claims. Section 20(B) of the
Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC)
mandates seafarers to see a company-designated physician for a post-employment medical
examination, which must be done within three (3) working days from their arrival. Failure to comply
shall result in the forfeiture of the right to claim disability benefits. The conduct of post-employment
medical examination is not a unilateral burden on the part of the seafarer. Rather, it is a reciprocal
obligation where the seafarer is obliged to submit to an examination within three (3) working days
from his or her arrival, and the employer is correspondingly obliged to conduct a meaningful and
timely examination of the seafarer.
Petitioner's cause is grossly deficient in several ways. First, he failed to undergo the
requisite examination, thereby creating a situation resulting in the forfeiture of his claims. This
alone suffices for the denial of his petition. Second, he posited a narrative of indifference and
oppression but failed to adduce even the slightest substantiation of it. Petitioner asked the Court
to overturn the consistent findings of the three tribunals but offered nothing other than his word as
proof. Finally, petitioner averred a medical condition from which no causal connection can be
drawn to his brief engagement as chief cook.
Hence, he is not entitled to disability benefits.
| 43
A COMPLAINT FOR TOTAL AND PERMANENT DISABILITY BENEFITS FILED BEFORE

A DEFINITE ASSESSMENT BY THE COMPANY-DESIGNATED PHYSICAL IS
PREMATURE
Scanmar Maritime Services, Inc. and Crown Shipmanagement, Inc. vs. Celestino Hernandez, Jr.
G.R. No. 211187; April 16, 2018
Del Castillo, J.
FACTS:
This petition for review on Certiorari assails the decision of the Court of Appeals (CA) which
ordered the petitioners Scanmar Maritime Services, Inc. and Crown Shipmanagement, Inc.
(Petitioners) to pay respondent Celestino M. Hernandez, Jr. (respondent) disability benefits and
attorney's fees.
Petitioners employed respondent as a seaman. During his employment, respondent

experienced pain in his inguinal area and pelvic bone. The pain continued for weeks.
Consequently, respondent was medically repatriated to the Philippines. Respondent was
diagnosed to have Epididymitis, right, Varicocoele, left. He underwent surgery by Dr. Gatchalian,
the company-designated Urological Surgeon. The procedure was a success and his condition was
continually monitored by Dr. Ed R. Gatchalian after surgery. Despite continuing medical treatment
and evaluation, respondent filed a complaint with the NLRC for permanent disability benefits,
damages, and attorney's fees against petitioners. After the filing of the claim, Dr. Gatchalian
pronounced respondent fit to resume sea duties.
Respondent averred that due to the loss of his earning capacity as a result of his unfitness
for further sea duties, as attested by the medical findings of his own physician, Dr. Pascual, he is
entitled to permanent total disability benefits pursuant to POEA-SEC. Petitioners contend that
respondent's complaint was prematurely filed and lacked cause of action as there was no medical
assessment yet by the company-designated physician and the 240-day allowable period within
which the company-designated physician may assess respondent had not yet lapsed at the time
it was filed. The LA ruled in favor of respondent.
ISSUE:
May a complaint for total and permanent disability benefits be filed without a definite
assessment of respondent’s condition by the company-designated physician?
RULING:
No. The complaint is premature.
The 120 days provided under Section 20B(3) of the POEA-SEC is the period given to the
employer to determine (the seafarer’s) fitness to work and when the seafarer is deemed to be in a
state of total and temporary disability. The 120 days of total and temporary disability may be
extended up to a maximum of 240 days should the seafarer require further medical treatment.
After the lapse of 120 days from the date of repatriation, respondent's treatment continued;
thus, the 240-day extension period was justified. At the time respondent filed his complaint on July
20, 2010, or 162 days since repatriation and without a definite assessment from the company-
designated physician, respondent's condition could not be considered permanent and total.
Temporary total disability only becomes permanent when the company-designated physician,
within the 240-day period, declares it to be so, or when after the lapse of the said period, he fails
to make such declaration.
From the foregoing, it is evident that respondent's complaint was prematurely filed. His
cause of action for total and permanent disability benefits had not yet accrued.
44 |
FAILURE OF THE SEAFARER TO COMPLY WITH THE MANDATORY REPORTING

REQUIREMENTS AS PRESCRIBED BY THE COMPANY-DESIGNATED PHYSICIAN
WOULD RESULT IN THE FORFEITURE OF THE RIGHT TO CLAIM COMPENSATION
Loadstar International Shipping, Inc. vs. Ernesto Yamson

G.R. No. 228470; April 23, 2018
Peralta, J.
FACTS:
Assailed in the present petition for review on Certiorari under Rule 45 of the Rules of Court
is the Decision of the Court of Appeals which reversed the resolution of the National Labor
Relations Commission which dismissed herein respondent's complaint for recovery of total and
permanent disability benefits.
Respondent Ernesto Yamson (Ernesto) was employed by petitioner as Third Mate. While
performing his regular tasks on an extremely hot day, Ernesto felt dizzy. He then started to feel the
left side of his body getting numb. When his condition worsened, he was repatriated to the
Philippines. In Manila, he underwent medical check-up. The examining doctor sent him home as
he was classified as an "out-patient." However, Ernesto continued to experience headache and
numbness of the entire left side of his body which prompted his admission in a private hospital.
The CT scan, as reported by the company-designated physician, showed a sign of stroke. He was
thereafter discharged from the hospital. Subsequently, he consulted another physician. Based on
the findings of his own doctor, Ernesto filed a complaint praying that he be awarded total and
permanent disability benefits. Ernesto died while the case was pending.
ISSUE:
Were Ernesto's illnesses considered as work-related or work aggravated and is, he entitled
to disability compensation by reason of such illnesses ?
RULING:
No. Ernesto failed to establish that his subject illnesses were either work-related or work-
aggravated.
For disability to be compensable under the above POEA-SEC, two elements must concur:
(1) the injury or illness must be work-related; and (2) the work-related injury or illness must have
existed during the term of the seafarer's employment contract. To be entitled to compensation and
benefits under the governing POEA-SEC, it is not sufficient to establish that the seafarer's illness
or injury has rendered him permanently or partially disabled; it must also be shown that there is a
causal connection between the seafarer's illness or injury and the work for which he had been
contracted. In other words, while the law recognizes that an illness may be disputably presumed
to be work-related, prevailing jurisprudence requires that the claimant must still show a reasonable
connection between the nature of work and the illness contracted or aggravated. Thus, the burden
is placed upon the claimant to present substantial evidence that his work conditions caused or
increased the risk of contracting the disease.
In this case, however, Ernesto was unable to present substantial evidence to show that his
work conditions caused, or at the least increased the risk of contracting his illness. Neither was he
able to prove that his illness was pre-existing and that it was aggravated by the nature of his
employment. The Court agrees with the finding of the NLRC that Ernesto failed to demonstrate
that he was subjected to any unusual and extraordinary physical or mental strain or event that may
have triggered his stroke.
Ernesto is not entitled to disability compensation. Under Section 20 of the 2010 Amended
Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-
Board Ocean-Going Ships, failure of the seafarer to comply with the mandatory reporting
requirements as prescribed by the company-designated physician would result in the forfeiture of
the right to claim, among others, sickness allowance and reimbursement of medical and
transportation expenses incurred as a result of the seafarer's continued treatment.
| 45
NOTWITHSTANDING THE PRESUMPTION THAT AN ILLNESS IS WORK RELATED,

ILLNESSES NOT MENTIONED UNDER THE POEA-SEC MUST BE PROVED BY
SUBSTANTIAL EVIDENCE TO BE COMPENSABLE
Seacrest Maritime Management, Inc. vs. Francisco Roderos

G.R. No. 230473; April 23, 2018
Reyes, Jr., J.
FACTS:
Rules of Court is the decision of the Court of Appeals (CA) which reversed and set aside the
decision of the National Labor Relations Commission (NLRC).
The respondent is the widow of Francisco Roderos (Roderos), a Filipino seafarer, who was
employed as a Chief Cook by petitioner Herning Shipping Asia Pte. Ltd., through its manning agent
in the Philippines, Seacrest. During Roderos’ employment, he experienced constipation and
abdominal pains. Roderos was found to have blood in his stool, with swollen intestinal walls and
swollen lower abdomen. He was repatriated back to the Philippines. Roderos was diagnosed with
colon cancer and underwent chemotherapy under the care of the company-designated physician,
Dr. Natalio Alegre. When Dr. Alegre issued a report that Rodero’s illness was not deemed “work-
related” for not being listed in the POEA list of occupational diseases, Rodero’s chemotherapy
treatments were discontinued. Thus, Roderos filed a complaint before the Labor Arbiter (LA) for
disability benefits. The LA and NLRC rendered a decision against Roderos. Roderos died while
the case was pending. The CA reversed and rendered a decision in favor of Roderos, finding
Roderos’ illness work-related, or at the very least, work aggravated due to the dietary factors
attendant to his work on board the vessel, that is, Roderos' meals consisted of processed meats
and canned goods and that he was constantly exposed to heat and fumes inside the kitchen.
ISSUE:
Did the respondent establish by substantial evidence the reasonable causation, or
aggravation, of the exigencies of Roderos' work aboard the vessel as Chief Cook to his diagnosed
illness?
RULING:
No. The respondent was not able to establish by substantial evidence the reasonable
causation or aggravation of the exingencies of Roderos’ work aboard the vessel as Chief Cook to
his diagnosed illness.
Roderos' illness, Cancer of the Large Bowel (Colon), is not an occupational disease listed
in Section 32 of the POEA-SEC, and the respondent failed to discharge the burden of providing
substantial evidence of the causal connection between the work done by Roderos aboard the
vessel and his diagnosed illness. Work-related illnesses are determined by the following rules:
First, there is work relation if the illness leads to disability or death as a result of an occupational
disease listed under Section 32-A of the POEA-SEC with the conditions set therein satisfied;
Second, for illnesses not mentioned under Section 32, the POEA-SEC creates a disputable
presumption in favor of the seafarer that these illnesses are work-related. However, this
presumption notwithstanding, the Court has held that the claimant-seafarer must still prove by
substantial evidence that his/her work conditions caused or, at least, increased the risk of
contracting the disease.
Respondent failed to prove a causal connection between the employment and his colon
cancer. Regarding Roderos' dietary intake while on board the vessel, no evidence other than these
self-serving allegations were presented.
Thus, for the respondent's failure to present substantial evidence that would prove
reasonable causation, or at the very least, aggravation of Roderos' work while aboard the
petitioners' vessel, the Court is constrained to rule for the petitioners.
46 |
REFERRAL TO A THIRD PERSON IS MANDATORY ONLY WHEN THE SEAFARER HAS

BEEN INFORMED OF THE ASSESSMENT OF THE COMPANY-DESIGNATED PHYSICIAN
Arnel T. Gere vs. Anglo-Eastern Management Phils., Inc.

G.R. No. 226713; April 23, 2018
Reyes, Jr., J.
FACTS:
Consolidated in this case are the petitions for review on Certiorari under Rule 45 of the
Rules of Court. The petitions challenge the Decision of the CA which affirmed with modification the
Decision and Resolution of the Panel of Voluntary Arbitrators which granted total and permanent
disability benefits in favor of Arnel T. Gere, petitioner.
Petitioner was employed as a seafarer of respondent. Petitioner suffered an accident and

broke his arm while performing his duties on board the vessel. Due to this, he was repatriated to
the Philippines. The petitioner underwent different medical examinations, procedures, and
treatments on the injured arm and, subsequently, on his hips. When the 240 days of treatment
lapsed without the disability grading from the company-designated physician, petitioner consulted
his personal physician.
From this, he filed a complaint against respondent to pay him disability benefits.
Respondents maintained that petitioner had been informed by the company-designated physician
about his state of heath and insist that petitioner should have referred to a third doctor due to
disagreements between the company-designated physician and the seafarer's personal physician.
ISSUE:
Is referral to a third doctor mandatory in case of conflicting findings between the company-
designated physician and the seafarer's personal physician even if the seafarer was not informed
of the medical assessment by the company-designated physician?
RULING:
No. Without proper notice, petitioner was not given the opportunity to evaluate his medical
assessment. In this instance, the mandatory referral to a neutral third doctor could not have been
applicable.
According to Section 20 (A) (3) of the Philippine Overseas Employment Administration-

Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-
board Ocean-going Ships (POEA Contract), in the event that a seafarer suffers a work-
related/aggravated illness or an injury during the course of his/her employment, it is the company-
designated physician's medical assessment that shall control the determination of the seafarer's
disability grading. Should the seafarer's personal physician disagree, then the matter shall be
referred to a neutral third-party physician, who shall then issue a final and binding assessment.
Referral to a third doctor is mandatory, and should the seafarer fail to abide by this method, he/she
would be in breach of the POEA-SEC, and the assessment of the company-designated physician
shall be final and binding. However, only when the seafarer is duly and properly informed of the
medical assessment by the company-designated physician could he determine whether he/she
agrees with the same; and if not, only then could he/she commence the process of consulting his
personal physician. If conflicting assessments arise, only then is there a need to refer the matter
to a neutral third-party physician.
The company-designated physician must give his assessment to the seafarer concerned.
Without the proper notice, the petitioner was not given the opportunity to evaluate his medical
assessment. Insofar as he was concerned, the disability grading of his personal physician was the
only disability grading available to him. In this instance, the mandatory referral to a neutral third
doctor could not have been applicable.
As such, there was no impetus to seek a neutral third doctor.
| 47
AN ASSESSMENT BY THE COMPANY-DESIGNATED PHYSICIAN BEYOND THE 240-

DAY PERIOD TRANSFORMS THE SEAFARER'S DISABILITY TO PERMANENT AND
TOTAL
Orient Hope Agencies, Inc. vs. Michael E. Jara

G.R. No. 204307; June 6, 2018
Leonen, J.
FACTS:
This petition for review on Certiorari seeks to annul the decision of the Court of Appeals,
which granted respondent, Michael E. Jara (Jara) permanent and total disability benefits.
Jara was hired by Orient Hope, on behalf of its foreign principal, Zeo Marine, as engine
cadet on board M/V Orchid Sun. M/V Orchid Sun sank during which Jara sustained leg injuries.
He was thereafter repatriated. Jara was diagnosed to have suffered from "fracture, shaft of left
ulna and left fibula” and underwent knee operations. However, he did not return to the company-
designated doctor after his check-up.
Jara filed a complaint with the Labor Arbiter insisting that he was entitled to total permanent
disability benefits. Petitioner refused on the ground that the company-designated physician
assessed Jara’s disability as Grade 11 and not total and permanent. This assessment was issued
nine (9) months from his repatriation beyond the 240-day period for giving an assessment.
Petitioner contends that although a temporary total disability becomes permanent when a
company-designated physician fails to make a declaration of the seafarer's fitness to work within
240 days, this is not applicable in this case because their company-designated physical found that
Jara’s disability was Grade 11. Petitioners contend that the 240-day presumptive disability rule
operates only in default of a declaration of a seafarer's fitness or disability assessment from a
company-designated physician.
ISSUE:
Is respondent Michael E. Jara entitled to permanent and total disability compensation
considering that the Grade 11 disability grading was given by the company-designated physician
beyond the 240-day period?
RULING:
Yes. A partial and permanent disability could become total and permanent when a
company-designated physician fails to arrive at a definite assessment within the 120- or 240-day
periods.
According to the case of Vergara v. Hammonia Maritime Services, Inc., the seafarer, upon
sign-off from his vessel, must report to the company-designated physician within three days from
arrival for diagnosis and treatment. For the duration of the treatment but in no case to exceed 120
days, the seaman is on temporary total disability as he is totally unable to work. If the 120 days
initial period is exceeded and no such declaration is made because the seafarer requires further
medical attention, then the temporary total disability period may be extended up to a maximum of
240 days, subject to the right of the employer to declare within this period that a permanent partial
or total disability already exists. However, there must be a sufficient justification to extend the
medical treatment from 120 days to 240 days. In other words, the 240-day extended period
remains to be an exception, and as such, must be clearly shown to be warranted under the
circumstances of the case before it can be applied.
In this case, the surgical procedure performed on respondent 159 days from his repatriation
shows that his condition required further medical treatment, justifying the extension to 240 days.
Moreover, the company-designated physician is expected to arrive at a definite assessment of the
seafarer's fitness to work within the period of 120 or 240 days. That should he fail to do so and the
seafarer's medical condition remains unresolved, the seafarer shall be deemed totally and
permanently disabled. Without a final assessment from the company-designated physician,
respondent's temporary and total disability became permanent and total.
48 |
FOR AN ILLNESS TO BE CONSIDERED AS PRE-EXISTING, IT IS REQUIRED THAT: A)

ADVICE OF A MEDICAL DOCTOR ON TREATMENT WAS GIVEN FOR SUCH
CONTINUING CONDITION; OR B) SEAFARER HAS KNOWLEDGE OF THE CONDITION
BUT FAILED TO DISCLOSE THE SAME
Philsynergy Maritime, Inc. vs. Columbano Gallano, Jr.

G.R. No. 228504; June 6, 2018
Perlas-Bernabe, J.
FACTS:
Assailed in this petition for review on Certiorari is the decision of the Court of Appeals (CA)
granting Columbano Pagunsan Gallano, Jr.'s (respondent) claim for permanent total disability
benefits in accordance with the IBF JSU/PSU-IMMAJ Collective Agreement (CBA). Respondent
was employed by petitioner Philsynergy Maritime, Inc. (Philsynergy) as ship master. After
undergoing the required pre-employment medical examination (PEME) where the company-
designated physician declared him fit for sea duty, respondent, who was then 62 years old,
boarded the vessel. While in the performance of his duties, respondent felt a sudden numbness
on the left side of his body and noticed that his speech was slurred, he immediately took an Isordril
medication used to treat chest pain which respondent had personally brought to the vessel. On the
next day, his symptoms recurred despite taking another dose of Isordil. He was repatriated when
he was found to have suffered from brain stroke.
Respondent filed a complaint for total permanent disability benefits before the NLRC.
Petitioners denied respondent's claim alleging that the latter fraudulently concealed a previously
diagnosed medical condition for which he was prescribed a medication (Isordil), and which he
failed to disclose during his PEME. Hence, he was disqualified to receive any compensation and
benefits under the POEA-SEC. Petitioners claim that the fact that the respondent brought on board
the medicine Isordil suggests that respondent may already have been experiencing some
symptoms for which he was given that medications previously. The LA, NLRC, and CA all found
that respondent's brain stroke was work-aggravated/related which rendered him incapacitated to
work.
ISSUE:
Is respondent’s illness a pre-existing condition given that he carried on board medication
(Isordil) to address hypertension or heart condition, and thus not compensable?
RULING:
No. Petitioners failed to demonstrate that respondent's act of carrying Isordil per se
conclusively established the fact he had actual knowledge of his medical condition, and
consequently, concealed the same in his PEME.
Pursuant to the 2010 POEA-SEC, an illness shall be considered as pre-existing if prior to

the processing of the POEA contract, any of the following conditions is present: (a) the advice of
a medical doctor on treatment was given for such continuing illness or condition; or (b) the seafarer
had been diagnosed and has knowledge of such illness or condition but failed to disclose the same
during the PEME, and such cannot be diagnosed during the PEME.
In this case, the evidence on record is devoid of any indication that any of the conditions
is present. Moreover, there was no clear showing that respondent was taking Isordil as
maintenance medication for his hypertension or that it was the appropriate medication for his
condition that gave rise to his brain stroke. At any rate, it is well to note that had respondent
been suffering from a pre-existing hypertension at the time of his PEME, the same could have
been easily detected by standard/routine tests conducted during the said examination, i.e., blood
pressure test, electrocardiogram, chest x-ray, and/or blood chemistry. However, respondent's
PEME showed normal blood pressure with no heart problem, which led the company-designated
physician to declare him fit for sea duty.
Hence, respondent illness and resulting liability is compensable.
| 49
120-DAY INITIAL PERIOD MAY BE EXTENDED TO 240 DAYS IN THE DETERMINATION

OF SEAFARER’S DISABILITY GRADE
Ricky B. Tulabing vs. MST Marine Services (Phils.), Inc., TSM International Ltd., and/or Capt.
Alfonso R. Del Castillo
G.R. No. 202113; June 6, 2018
Reyes, Jr., J.
FACTS:
This involves a consolidated petition for review on Certiorari filed by petitioner Ricky
Tulabing (Tulabing) against respondent MST Marine Services (Phils), Inc. (MST), et al., seeking
the reversal of CA’s decision which affirmed the NLRC’s decision in granting permanent disability
benefits.
MST employed Tulabing as GP2 Wiper. His employment was covered by POEA-approved
contract of employment. Sometime in January 2008, he felt ill while on board. Eventually his
condition aggravated. Upon examination, he was diagnosed with cervical neuralgia and was
declared unfit to work for four days with a recommendation that should his medical condition fail
to improve, he should be repatriated back. Tulabing was repatriated. On June 17, 2008, Tulabing
reported to the company-designated physician, Dr. Mylene Cruz-Balbon, for medical evaluation
who confirmed the diagnosis of Tulabing. Tulabing underwent physical rehabilitation. On
November 14, 2008, Dr. Cruz assessed Tulabing’s condition as Grade 10 disability. However,
Tulabing did not agree and he demanded for the payment of maximum disability compensation.
This prompted Tulabing to file a complaint against MST for payment of permanent total
disability benefits. He claimed that his disability was of such nature that he cannot be restored to
his former physical condition and cannot resume his customary work. Respondent counters that
the assessment of the company-designated physician was issued only after nine (9) months or
more than 120 days from his medical repatriation.
ISSUE:
Is Tulabing entitled to permanent disability benefits when the company-designated
physician issued his assessment beyond the 120-day period?
RULING:
No, Tulabing is not entitled to the permanent total disability benefits when the company-
designated physician issued his assessment beyond 120-day period.
By correlating and harmonizing the provisions of Article 192 (c) (1) of the Labor Code and
Section 2, Rule X of the Amended Rules on Employees' Compensation, the prevailing rule is that
the 120-day initial period may be extended for the purpose of determining the seafarer's grade of
disability. The company-designated physician must arrive and issue a definite assessment of the
seafarer's fitness to work or permanent disability within the period of 120 days. If the company-
designated physician fails to give his assessment within the 120-day period but there is sufficient
justification for the delay (e.g, the seafarer's condition required further medical treatment or on-
going rehabilitation), the 120-day period shall be extended to 240 days. If the company-designated
physician still fails to give a final assessment within the extended period and the seafarer's medical
condition remains unresolved after the lapse of said period, the seafarer's disability shall be
deemed permanent and total.
In the present case, the disability grading was given by Dr. Cruz 150 days after Tulabing's
first medical evaluation from repatriation. It was well within the 240-day period. Dr. Cruz's second
medical report issued on June 26, 2008 which referred Tulabing to undergo physical rehabilitation,
justified the extension of the 120-day period to an additional 31 days.
Hence, Tulabing is still not entitled to the permanent total disability benefits from the
respondents.
50 |
COMPANY PHYSICIAN’S ASSESMENT PREVAILS OVER THOSE MADE BY EMPLOYEE’S

PHYSICIAN IN CASE OF NON-REFERRAL TO THIRD DOCTOR
Abosta Ship Management Corp. vs. Delos Reyes

GR No. 215111; June 20, 2018
Del Castillo, J.
FACTS:
In a petition for review on Certiorari filed under Rule 45, petitioner’s duly licensed manning
agency Abosta Ship Management Corp. (Abosta) and foreign principal manning agency Panstar
Shipping, Co., Ltd. challenges the decision of the CA entitling respondent Rodel D. Delos Reyes
to total and permanent disability compensation.
Abosta employed Delos Reyes as a bosun aboard M/V Stellar Daisy for nine months. On
July 2010, Delos Reyes was diagnosed with Inguinal Hernia and received treatment in Korea. He
was repatriated in August 1, 2010 to be examined by the company physician and was given two
months sickness allowance. Delos Reyes received treatment and was discharged on August 25,
2010. On September 2, 2010, respondent was declared fit to work by the company physician.
However, on July 29, 2011, respondent consulted with Dr. Li-Ann Lara-Orencia who found him to
be permanently unfit to work. Respondent thereafter filed a complaint for disablity benefits,
damages, and attorney’s fees.
Petitioner argues that the findings of the company physician should be given more weight
than that of Dr. Orencia consistent with prevailing jurisprudence and considering their personal
knowledge of the actual medical condition, having closely monitored the seafarer’s illness.
Respondent argues that disability should be understood on the loss of employment, and that his
disability was total and permanent because he could no longer be hired as a bosun.
ISSUE:
Should the company physician’s findings be given more credence than that of the
respondent’s physician?
RULING:
Yes. The findings of the company physician should be given more credence.
To clarify, the Court in the case of Marlow Navigation vs. Osias declared that only by
complying with the procedures set by POEA may the petitioner question the assessment of the
company physician and compel the company to jointly seek an appropriate third doctor. Absent
proper compliance, the final medical report and certification of the company-designated physician
would be upheld.
Respondents in this case failed to refer the conflicting medical assessments to a third
doctor. For this, the CA should not have given credence to the findings of Dr. Orencia. The
company-designated physician’s findings are more credible as it was done on treatment and
medical evaluation done on the respondent, whereas Dr. Orencia’s merely quoted the definition of
hernia and some studies on the possibility of recurrence of the illness. Under prevailing
jurisprudence, “the assessment of the company-designated physician is more credible for having
been arrived at after months of medical attendance and diagnosis, compared with the assessment
of a private physician done in one day on the basis of an examination or existing medical records”.
The Court thus, grants the petition, reversing the CA’s finding that respondent is entitled to
total and permanent disability benefits.
| 51
EMPLOYER HAS THE BURDEN OF ACTIVATING THE THIRD DOCTOR PROVISION
Ilustricimo vs. NYK-Fil Ship Management, Inc.

GR No. 237487; June 27, 2018
Velasco, Jr., J
FACTS:
Petitioner Aldrine B. Ilustricimo assails by a petition for review on Certiorari under Rule 45
the decision of the CA awarding him compensation for partial permanent disability instead of total
permanent disability.
He was engaged as Quarter Master by International Cruise Services, Ltd. through

respondent NYK-Fil Ship Management Inc. (NYK-Fil).
In November 2014, Ilustricimo was diagnosed with bladder cancer by the company-
designated physician, Dr. Cruz, who issued a final assessment of Grade 7 disability and noted risk
factors for the illness to include “occupational exposure to aromatic amines and cigarette smoking.”
In September 2015, Ilustricimo underwent another surgery using his own funds. He secured the
opinion of another physician, Dr. Richard Combe who declared him unfit to work. Ilustricimo sent
a letter to NYK-Fil claiming total and permanent disability benefits and willingness to prove the
extent of disability being claimed. NYK-Fil did not respond, prompting Ilustricimo to file a complaint
before the National Conciliation and Mediation Board (NCMB).
Ilustricimo maintains that he sought the opinion of a second doctor and faulted NYK-Fil for
not referring the case to a third doctor. NYK-Fil argues that Ilustricimo failed to seek a second
medical opinion and seek the opinion of a third doctor provided for in POEA-SEC. Therefore, Dr.
Cruz’s findings should be given credence.
ISSUES:
(1) Did Ilustricimo comply with his duties under POEA-SEC regarding third doctors?; and
(2) Is Ilustricimo entitled to total and permanent disability benefit?
RULING:
(1) Yes. Ilustricimo was able to comply despite not having a third doctor.
Under POEA-SEC Section 20(A)(3) referral to third doctor is mandatory in case of dispute
(third doctor provision). However, the Court has ruled in INC Ship management vs. Rosales, that
when the seafarer challenges the findings of the company-designated physician, he should so
signify and the company thereafter carries the burden of activating the third doctor provision.
In this case, Ilustricimo was able to notify the company of his intention to dispute the
findings of Dr. Cruz through the letter he sent them. The burden of referring the case to a third
doctor now falls upon NYK-Fil. Thus, Ilustricimo cannot be faulted for not having a third doctor
assess the condition.
(2) Yes, Ilustricimo is so entitled. The rule that the findings of the company-designated
physician should prevail in case of non-referral to third doctors is not a hard and fast rule.
The Court has held in the past that the notion of disability is intimately related to the
worker’s capacity to earn and should be understood less on its medical significance. The Voluntary
Arbitrator observed petitioner was never declared “cancer-free” or “fit to work” by Dr. Cruz and that
the sickness was of serious nature because he had to undergo repeated cystoscopy. Ilustricimo
cannot be expected to return to work if the risk of contracting the disease is related to his work as
Quarter Master. Indeed, he was never re-employed by respondent NYK-Fil or any other manning
agency. Therefore, his disability is permanent and total.
52 |
TO BE COMPENSABLE, DEATH MUST BE WORK-RELATED AND MUST OCCUR

DURING EMPLOYMENT
Heirs of Marcelino Olorvida Jr., vs. BSM Crew Service Centre Philippines, Inc.
G.R. No. 218330; June 27, 2018
Reyes, Jr., J.
FACTS:
This is a petition for review on Certiorari under Rule 45 seeking the review of the decision
of the Court of Appeals (CA) which reversed the decision of the National Labor Relations
Commission (NLRC) ordering BSM Crew Service Centre Philippines, Inc. (BSM Crew), its
President, Narcissus L. Duran (Duran), and its foreign principal, Bernhard Schulte Ship
Management (Cyprus) Limited (Bernhard Schulte) (collectively referred to as the respondents) to
jointly and severally pay death benefits to the Heirs of Marceliano N. Olorvida, Jr. (petitioner). The
NLRC, in turn, reversed the ruling of the Labor Arbiter (LA) dismissing the petitioner's claim for
death benefits. Petitioners, heirs of Olorvida Jr., assail the decision of the CA in a petition under
Rule 45 rejecting Olorvida’s argument that his illness was related to his work as a seafarer for
Bernhard Schulte, the principal of respondent BSM Crew Service Centre Philippines, Inc. (BSM
Crew).
During his employment as a seafarer, Olorvida suffered from severe soughing, shortness
of breath, chest pains which he communicated to his wife and to the captain of the vessel. Upon
expiration of his contract, Olorvida supposedly reported his health condition to BSM Crew.
However, he was not referred to the company physician. Olorvida consulted with a doctor at his
own expense and was diagnosed with lung cancer.
His heirs claimed death benefits because the cancer was related to Olorvida’s work as a
motorman and wiper (as a seafarer) which exposed him to different elements. BSM Crew argues
that the cancer was not work-related considering that Olorvida is a 37-pack per year smoker, that
he died outside of employment, and that he failed to report his illness to BSM Crew.
ISSUE:
May the heirs claim compensation and benefit for the death of Olorvida?
RULING:
No. The heirs may not claim compensation. In order to do so, the petitioners must establish
that (a) the death (or cancer) was work-related, and (b) the death occurred during the term of
employment.
Section 20(B)(4) of POEA-SEC creates a disputable presumption that the sickness, if not
listed under Section 32-A of the same law, is work-related. However, Olorvida’s clinical abstract
shows his history of smoking and drinking. The Court takes judicial notice that the main cause of
lung cancer is use of tobacco through cigarette smoking. Further, no reasonable connection was
established between lung cancer and Olorvida’s work as a motorman. Because of this, the
disputable presumption had been overcame.
Apart from this, the death should occur during the worker’s employment except when he
is repatriated due to work-related sickness or injury. Olorvida’s death occurred after the termination
of his work. There are also no records to support the claim that Olorvida reported his illness to his
wife or to the captain of the vessel. All the documentary evidence submitted were dated after the
termination of his employment.
Thus, due to the lack of evidence presented to establish that the death was work-related,
the Court denies the petition.
| 53
ANY BENEFIT NOT INCLUDED IN THE CBA IS NOT DEMANDABLE
SONEDCO Workers Free Labor Union, et.al. vs. Universal Robina Corporation, Sugar Division-
Southern Negros Development Corporation
G.R. No. 220383; July 5, 2017
Leonen, J.
FACTS:
This is a Motion for Partial Reconsideration filed by petitioner SONEDCO Workers Free
Labor Union (SWOFLU) assailing the decision of the SC denying their claim of a continuing wage
increase of P32.00/ day from January 1, 2009.
In 2016, SC found respondent Universal Robina Corporation, Sugar Division-Southern

Negros Development Corporation (URC-SONEDCO) guilty of unfair labor practice for failing to
bargain with SWOFLU in good faith. URC-SONEDCO restricted SWOFLU’s bargaining power
when it asked the rank-and-file employees to sign a waiver foregoing Collective Bargaining
Agreement (CBA) negotiations in exchange for wage increases of P16.00/day in 2007 and an
additional P16.00/day increase in 2008. However, SC denied their claim of continuing wage
increase in 2009 since a new CBA was already in effect by 2009.
Petitioners aver that the P16.00 wage increases granted in 2007 and 2008 were integrated
in the salary of the employees who signed the waiver. Thus, since the start of 2009, employees
who signed the waiver have been receiving P32.00/day more than petitioners. Respondent argues
that since the 2009 wage increase was not included in the 2009 CBA, it cannot be demanded.
ISSUE:
Are respondents entitled to continuing wage increase beginning year 2009 despite
absence of such remuneration under their CBA?
RULING:
Yes, respondents are entitled to the continuing wage increase beginning year 2009.
Generally, the Collective Bargaining Agreement controls the relationship between the
parties. Any benefit not included in it is not demandable. However, considering the peculiar
circumstances in this case, the requested wage increase should be granted.
The grant of the P32.00/day wage increase is not an additional benefit outside the
Collective Bargaining Agreement of 2009. By granting this increase to petitioners, SC is eliminating
the discrimination against them, which was a result of respondent's unfair labor practice. To rule
otherwise will perpetuate the discrimination against the petitioners.
Hence, respondents are entitled to the P32.00/day wage increase despite such
remuneration not being included in the CBA.
54 |
EMPLOYER CANNOT UNILATERALLY ADD OR MODIFY AGREEMENT BEYOND THE

TERMS OF THE CBA
Hongkong Bank Independent Labor Union vs. Hongkong and Shanghai Banking Corporation
Limited
G.R. No. 218390; February 28, 2018
Velasco, Jr., J.
FACTS:
This is a petition for review on Certiorari under Rule 45 which challenges the ruling of CA
which affirmed the NCMB decision sustaining the validity of the external credit check as a condition
before respondent could grant the application for salary loans of petitioner's members,
notwithstanding the non-mention of the said condition in the parties' Collective Bargaining
Agreement (CBA).
Petitioner Hongkong Bank Independent Labor Union (HBILU) is the incumbent bargaining
agent of the Respondent Hongkong and Shanghai Banking Corporation limited (HSBC). Bangko
Sentral ng Pilipinas (BSP) issued the Manual of Regulations for Banks (MoRB) which under
Section X338 allows banks to provide financial assistance to their officers and employees subject
to prior approval. HSBC then submitted its Financial Assistance Plan to the BSP for approval. It
allegedly contained a credit checking proviso stating that "repayment defaults on existing loans
and adverse information on outside loans will be considered in the evaluation of loan applications.”
Meanwhile, HBILU entered into a CBA with HSBC to which the latter proposed amendments to
align the CBA with the BSP-approved Plan. HBILU objected to the amendments thus HSBC
withdrew the same. However, it still enforced the Plan.
HBILU argued that the imposition of credit checking requirement is not sanctioned under
the CBA hence cannot be unilaterally imposed by HSBC. On the other hand, HSBC countered that
the external credit check conducted was merely an implementation of the BSP-approved Plan
which was a condition sine qua non for any loan grant under Section X338 of the MoRB.
ISSUE:
Did HSBC invalidly modified the CBA when it enforced additional requirement such as the
credit checking on salary loans?
RULING:
Yes. HSBC invalidly modified the CBA when it enforced additional requirement such as
the credit checking on salary loans.
A CBA is the negotiated contract between a legitimate labor organization and the employer
concerning wages, hours of work and all other terms and conditions of employment in a bargaining
unit. Where the CBA is clear and unambiguous, it becomes the law between the parties.
In the present case, the Plan was never made part of the CBA. The implementation of the
Plan's external credit check was then an imposition solely by HSBC. Tolerating HSBC's conduct
would be tantamount to allowing a blatant circumvention of Article 253 of the Labor Code. It would
contravene the express prohibition against the unilateral modification of a CBA during its
subsistence and even thereafter until a new agreement is reached. It would unduly license HSBC
to add, modify, and ultimately further restrict the grant of Salary Loans beyond the terms of the
CBA by simply adding stringent requirements in its Plan, and having the said Plan approved by
BSP in the guise of compliance with the MoRB.
Hence, HSBC's enforcement of credit checking on salary loans under the CBA invalidly
modified the latter's provisions thereon.
| 55
MANDATORY REQUIREMENT OF THE DECS FOR EMPLOYMENT IS NEITHER

SUBJECT TO THE PREROGATIVE OF THE SCHOOL NOR AGREEMENT OF THE
PARTIES
Raymond A. Son, et al vs. University of Santo Tomas, et al

G.R. No. 211273; April 18, 2018
Del Castillo, J.
FACTS:
This is a petition for review on Certiorari which seeks to set aside the decision of the CA
which reversed both the LA and NLRC decision and declared that petitioners’ termination from
employment was valid and legal.
Respondent University of Santo Tomas (UST) is an educational institution where

petitioners Raymond A. Son, Raymond S. Antiola, and Wilfredo E. Pollarco are full time professors
in the Colleges of Fine Arts and Design and Philosophy, and are members of the UST Faculty
Union, with which UST at the time had a Collective Bargaining Agreement (CBA). Petitioners were
designated as on probationary status conditioned on rules, one of which is to finish a Master's
degree. Petitioners enrolled in the Master's program, but were unable to finish the same. In spite
of their failure to obtain the required Master's degree, they continued to teach even beyond the
period given for completion thereof. Thereafter, CHED Chairman Angeles issued a Memorandum
directing the strict implementation of the master’s degree qualification for faculty members.
Petitioners then received termination letters for their failure to obtain the required master’s degree.
Petitioners filed a case against the respondents for illegal dismissal, among others.
Petitioners claimed that since they have already acquired tenure by default pursuant to the
tenure provision in the CBA, they could not be dismissed for failure to complete their respective
master’s degrees. On the other hand, respondents argue that a master’s degree in the
undergraduate program professor's field of instruction is a mandatory requirement that is neither
subject to the prerogative of the school nor the agreement of the parties.
ISSUE:
Was the petitioners’ failure to obtain master’s degree as required by CHED as a condition
for tenure a valid cause for dismissal?
RULING:
Yes. Petitioners’ failure to obtain master’s degree is a valid cause for their dismissal.
The minimum requirement of a master's degree in the undergraduate teacher's field of

instruction has been cemented in DECS Order 92, Series of 1992. Both of the parties have been
violating it. The fact that government has not cracked down on violators, or that it chose not to
strictly implement the provision, does not erase the violations committed by erring educational
institutions. It cannot be said either that by agreeing to the tenure by default provision in the CBA,
respondents are deemed to be in estoppel or have waived the application of the requirement. Such
a waiver is precisely contrary to law.
Petitioners are not qualified to teach in the undergraduate programs of UST. They were
given ample opportunity to satisfy the requirements by obtaining their respective master's degrees
but they failed in the endeavor. Petitioners cannot insist to be employed by UST. The fact that UST
continues to hire and maintain professors without the necessary master's degrees is not a ground
for claiming illegal dismissal. While it is true that respondents are in violation of the CHED
regulations for hiring unqualified teaching personnel, the law cannot come to the aid of petitioners
on this sole ground.
Hence, the termination of petitioners from employment was valid and legal.
56 |
A STRIKE IS DEEMED ILLEGAL FOR FAILURE TO TAKE A STRIKE VOTE AND TO

SUBMIT A REPORT THEREON TO THE NCMB
Ergonomic Systems Philippines, Inc. and Phillip C. Ng and Ma. Lourminda O. Ng, vs. Emerito
C. Enaje et al.
G.R. No. 195163; December 13, 2017
Martires, J.
FACTS:
In a petition for review on Certiorari, petitioner Ergonomic Systems Philippines, Inc. assails
the decision of the CA, which affirmed the decision of the NLRC and LA, finding no illegal dismissal
of respondents Emerito C. Enaje et.al. and ordering petitioners to reinstate respondents.
Respondents were union officers and members of Ergonomic System Employees Union-
Workers Alliance Trade Unions (local union). Respondents-union officers were found guilty of
disloyalty for attending and participating in other union's seminars and activities using union leaves
without the knowledge and consent of the Federation and ESPI as well as in initiating and
conspiring in the disaffiliation before the freedom period. Respondents-union officers were issued
letters of termination, which they again refused to receive. The local union staged a series of noise
barrage and "slow down" activities. Forty (40) union members refused to submit their Daily
Production Reports (DPRs) and twenty-eight (28) union members abandoned their work and held
a picket line outside the premises of ESPI. For refusal to submit DPRs and for abandonment,
respondents-union members were issued letters of termination.
Petitioners argue that the respondents failed to comply with two of the procedural
requirements for a valid strike. Respondents counter that they were not legally terminated because
the grounds relied upon by the petitioners were non-existent.
ISSUE:
Did the respondents’ failure to comply with two of the procedural requirements for a valid
strike rendered the same illegal and warranted their dismissal.
RULING:
Yes. Respondents’ failure to comply with two of the procedural requirements for a valid
strike warranted their dismissal.
Procedurally, for a strike to be valid, it must comply with Article 278 of the Labor Code,
which requires that: (a) a notice of strike be filed with the NCMB 30 days before the intended date
thereof, or 15 days in case of unfair labor practice; (b) a strike vote be approved by a majority of
the total union membership in the bargaining unit concerned, obtained by secret ballot in a meeting
called for that purpose; and (c) a notice be given to the NCMB of the results of the voting at least
seven days before the intended strike. These requirements are mandatory, and the union's failure
to comply renders the strike illegal.
In this case, it is apparent that the union conducted a strike without seeking a strike vote
and without submitting a report thereon to the DOLE. Thus, the strike was illegal. Respondents-
union officers stand to be dismissed as they conducted a strike despite knowledge that a strike
vote had not yet been approved by majority of the union and the corresponding strike vote report
had not been submitted to the NCMB. With respect to respondents-union members, there is,
however, a dearth of evidence to prove that respondent-members committed illegal acts during
the strike such as obstruction of ingress to and egress from the premises of ESPI and execution
of acts of violence and intimidation.
Hence, there is no basis to dismiss respondents-union members from employment on the

ground that they committed illegal acts during the strike.
| 57
THE MERE FACT THAT CONSTRUCTION WORKERS WORKED ON PROJECTS THAT

WERE TIME-BOUND DID NOT AUTOMATICALLY CHARACTERIZE THEM AS
PROJECT EMPLOYEES
Romeo Alba vs. Conrado G. Espinosa et al.

G.R. No. 227734; August 09, 2017
Reyes, Jr., J.
FACTS:
The case is a petition for review on Certiorari, which stemmed from a complaint for illegal
dismissal and monetary claims filed before the Labor Arbiter. The LA initially dismissed the case,
finding that there was no employer-employee relationship between the parties. Romeo Alba (Alba)
was the alleged employer, while Conrado Espinosa (Espinosa) et. al. were the alleged employees.
Petitioner Alba hired respondents Espinosa et. al. separately from the 1990s to 2006 as
construction workers. The respondents claim that they are regular employees who were deprived
of some statutorily-mandated benefits. Some of the respondents confronted Alba regarding such
benefits but such acts resulted in their dismissal. The other respondents sought the help from Raffy
Tulfo in his radio program, who personally called Alba, and reminded the latter to pay the benefits.
However, when they reported the following day, they were informed of their dismissal. Hence, this
suit.
Respondents claim that they were regular employees as they were continuously rehired
by Alba, that they were illegally dismissed, and that they were deprived of their right to the proper
procedure for dismissal of employees, while petitioner Alba argued that the respondents are not
his regular employees, as they were mere project employees hired for specific projects that usually
lasted for a week or two.
ISSUE:
May construction workers hired for specific projects for a limited period become regular
employees?
RULING:
Yes. Construction workers hired for specific projects for a limited period may become
regular employees. The mere fact that the respondents worked on projects that were time-bound
did not automatically characterize them as project employees.
The nature of their work was determinative, as the Court considers its ruling in DM.
Consunji, Inc., et al. v. Jamin that "once a project or work pool employee has been: (1)
continuously, as opposed to intermittently, rehired by the same employer for the same tasks or
nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business
or trade of the employer, then the employee must be deemed a regular employee."
As construction workers, the respondents performed tasks that were crucial and necessary
in Alba's business. Their work was the core of his trade. The fact that the respondents had been
engaged to work for long periods of time, and across several construction projects, further
substantiate the finding that their work was vital in the business. Most respondents were separately
employed beginning way back to the 1990s to 2006. "An employment ceases to be co-terminus
with specific projects when the employee is continuously rehired due to the demands of the
employer's business and re-engaged for many more projects without interruption."
Hence, construction workers hired for specific projects for a limited period may become
regular employees.
58 |
REPEATED EMPLOYMENT ON A PER-PROJECT BASIS DOES NOT RESULT TO

REGULAR EMPLOYMENT
William Wenceslao, et al. vs. Makati Development Corporation

G.R. No 230696; August 30, 2017
Martires, J.
FACTS:
This case involves a petition for review on Certiorari assailing the CA Decision which
dismissed the petition for certiorari filed before it for failure to attach the certified true copies of the
assailed NLRC decisions and resolutions.
Petitioners William Wenceslao, et al. filed a Complaint for Illegal Dismissal and Monetary
Claims against private respondent Makati Development Corporation (MDC). Petitioners were
former construction workers of MDC and they claimed that they were regular employees and were
illegally dismissed for refusing to apply and be transferred to another contractor. On the other hand,
MDC submitted evidence to show that petitioners had worked in several of its projects.
NLRC affirmed the decision of LA that repeated re-employment does not make a project
employee a regular employee. While CA dismissed the petition on for failure to attach the certified
true copies of the assailed NLRC decisions and resolutions.
ISSUE:
Did petitioner’s repeated employment in respondent’s projects resulted to regular
employment?
RULING:
No. Petitioners were not regular employees and were not illegally terminated.
The Court affirmed the dismissal by the CA of the petition for certiorari not purely on a
technicality but also on a ruling on the substantive merits of the case as it affirmed the findings of
the NLRC that petitioners did not present any evidence, by way of contract of employment or other
relevant proof which would establish their status as regular employee. The issue of whether the
petitioners are project employees were not even discussed in the petition as petitioners concluded
that they are "regular employees" without debunking the finding that they were hired on a per-
project basis. Petitioners' allegation has no weight of persuasive effect upon this Court absent any
evidence to support the same. On the other hand, MDC was able to submit evidence to show that
petitioners had worked in several of its projects and the same was relied upon by the LA and
NLRC.
The determination on whether the petitioners were project employees and whether they
were illegally dismissed would necessarily require the Court to inquire into the factual matters
which the Court cannot do in a petition for review on certiorari under Rule 45 of the Rules of Court.
Moreover, factual findings of quasi-judicial agencies like the NLRC, when affirmed by the CA, are
conclusive upon the parties and binding on this Court.
Hence, petitioners were project employees and were not illegally terminated.
| 59
SECURITY GUARDS ON “FLOATING STATUS” OR “TEMPORARY OFF-DETAIL” IS A

VALID EXERCISE OF MANAGEMENT PREROGATIVE
Macario S. Padilla vs. Airborne Security Service, Inc. and/or Catalina Solis
G.R. No. 210080; November 22, 2017
Leonen, J.
FACTS:
This is a petition for review on Certiorari assailing the decision of the CA, which sustained
the decision of the NLRC and LA, dismissing petitioner Macario S. Padilla’s (Padilla) complaint for
illegal dismissal against respondent Airborne Security Service, Inc. (Airborne).
Airborne hired Padilla as a security guard. He was relieved from his post at City Advertising
Ventures Corporation and was advised to wait for his reassignment order. Pending reassignment,
he was told that Airborne was having a hard time finding an assignment for him since he was
already over 38 years old and subsequently advised him to resign which he refused. He reported
to the office to collect his 13th month pay and was again persuaded to hand a resignation letter.
When he was still not deployed or reassigned for more than a year, he filed a Complaint for illegal
dismissal.
Padilla alleged that he was constructively dismissed on the ground that he was placed on
a floating status. Airborne countered that Padilla was relieved from his post on account of a client’s
request. He was directed to report to Airborne’s office but he failed to comply and went on absence
without leave instead.
ISSUE:
Is placement in an inordinately long floating status a ground for constructive dismissal?
RULING:
Yes. Padilla was constructively dismissed from employment owing to his inordinately long
floating status.
According to the case of Reyes v. RP Guardians Security Agency, temporary displacement

or temporary off-detail of security guard is, generally, allowed in a situation where a security
agency’s client decided not to renew their service contract with the agency and no post is available
for the relieved security guard. Such situation does not normally result in a constructive dismissal.
Nonetheless, when the floating status lasts for more than six (6) months, the employee may be
considered to have been constructively dismissed. In addition, for an employee to be considered
to have abandoned his work, two (2) requisites must concur, (1) the employee must have failed to
report for work or have been absent without a valid or justifiable reason and (2) the employee must
have had a “clear intention to sever the employer-employee relationship.
Padilla’s conduct belies any intent to abandon his work. Right after he received the first
letter, he called Airborne’s head office, only to be told that he has no assignment yet. Considering
Padilla’s 24 years of uninterrupted service, it is highly improbable that he would abandon his work
so easily. Padilla was placed on floating status for more than six (6) months.
Thus, Padilla was constructively dismissed when he was placed in inordinately long floating
status.
60 |
THE DAY CERTAIN AGREED UPON, NOT THE ACTIVITY THE EMPLOYEE WAS
CALLED TO PERFORM, IS THE DETERMINING FACTOR IN FIXED-TERM
EMPLOYMENT
Innodata Knowledge Services, Inc. vs. Socorro Inting, et al.

G.R. No. 211892; December 06, 2017
Peralta, J.
FACTS:
In a petition for review on Certiorari under Rule 45 before the CA, petitioner Innodata
Knowledge Services, Inc. (IKSI) assails the decision of the CA, reversing the decision of the NLRC
dismissing petitioner’s claim that respondents Soccoro Inting et al. are project employees.
Applied Computer Technologies (ACT), a company based in the United States of America,
hired IKSI to review various litigation documents. Due to the nature of the job, ACT required IKSI
to hire lawyers, or at least, law graduates, to review various litigation documents, classify said
documents into the prescribed categories, and ensure that outputs are delivered on time. For this
purpose, IKSI engaged the services of respondents Inting, et. al. as senior and junior reviewers
with a contract duration of five (5) years. Respondents received a Notice of Forced Leave from
IKSI informing them that they shall be placed on indefinite forced leave effective that same day
due to changes in business conditions, client requirements, and specifications and eventually, their
contracts would have to be terminated. Hence, respondents filed a complaint for illegal dismissal,
reinstatement or payment of separation pay, backwages, and damages against IKSI.
IKSI countered that the respondents are project employees and the duration of the project
was reasonably determinable at the time respondents were hired.
ISSUE:
Are fixed-term employees placed on floating status illegally dismissed?
RULING:
Yes. Fixed-term employees placed on floating status are illegally dismissed.
The respondents indeed entered into fixed-term employment contracts with IKSI, contracts
with a fixed period of five (5) years. But project employment and fixed-term employment are not
the same. While the former requires a particular project, the duration of a fixed-term employment
agreed upon by the parties may be any day certain, which is understood to be “that which must
necessarily come although it may not be known when.” The decisive determinant in fixed-term
employment is not the activity that the employee is called upon to perform but the day certain
agreed upon by the parties for the commencement and termination of the employment relationship.
IKSI’s contracts of employment are suspect for being highly ambiguous. In effect, it sought
to alternatively avail of project employment and employment for a fixed term so as to preclude the
regularization of respondents’ status. The fact that respondents were lawyers or law graduates
who freely and with full knowledge entered into an agreement with the company is inconsequential.
The utter disregard of public policy by the subject contracts negates any argument that the
agreement is the law between the parties and that the fixed period was knowingly and voluntarily
agreed upon by the parties.
Thus, there were no valid fixed-term or project contracts and respondents were IKSI’s
regular employees who could not be dismissed except for just or authorized causes.
| 61
LABOR-ONLY CONTRACTING EXISTS WHERE THE CONTRACTOR DOES NOT

POSSESS SUBSTANTIAL CAPITAL, INVESTMENT, TOOLS AND THE LIKE
Allied Banking Corporation vs. Reynold Calumpang

G.R. No. 219435; January 17, 2018
Velasco, J.
FACTS:
This is a petition for review on Certiorari seeking to reverse the ruling of the CA that Race
Cleaners, Inc. (RCI) is engaged in labor only contracting.
Allied Banking Corporation (Bank), through a service agreement with RCI, hired Reynold
Calumpang as janitor at the Bank’s Tanjay City Branch. Calumpang was tasked to perform
janitorial work and messenger/errand services. This job required Calumpang to be out of the
Branch at times to run errands. The Bank discovered that whenever Calumpang went out on
errands, he was also plying his pedicab and ferrying passengers. The branch manager informed
the Bank that Calumpang had been borrowing money from them which prompted them to inform
Calumpang that his services would no longer be needed. Disgruntled, Calumpang filed a complaint
for illegal dismissal and underpayment of wages before the NLRC.
The Bank denied the existence of employer-employee relationship between itself and
Calumpang. It asserted that Calumpang was an employee of RCI.
ISSUE:
(1) Does RCI engage in labor-only contracting?; and
(2) Is there an employer-employee relationship between the Bank and Calumpang?
RULING:
(1) Yes. As a general rule, a contractor is presumed to be a labor-only contractor, unless
such contractor overcomes the burden of proving that it has the substantial capital, investment,
tools and the like.
In the present case, petitioner failed to establish that RCI is a legitimate labor contractor
as contemplated under the Labor Code. Except for the bare allegation of petitioner that RCI had
substantial capitalization, it presented no supporting evidence to show the same. Petitioner never
submitted financial statements from RCI.
(2) Yes. A finding that a contractor is a labor-only contractor, as opposed to permissible

job contracting, is equivalent to declaring that there is an employer-employee relationship between
the principal and the employees of the supposed contractor, and the labor-only contractor is
considered as a mere agent of the principal, the real employer.
In this case, petitioner bank is the principal employer and RCI is the labor-only contractor.
Accordingly, petitioner and RCI are solidarily liable for the rightful claims of respondent.
62 |
A LEGITIMATE INDEPENDENT CONTRACTOR MUST HAVE SUBSTANTIAL CAPITAL

OR INVESTMENT AND MUST CARRY A DISTINCT AND INDEPENDENT BUSINESS
FREE FROM THE CONTROL OF THE PRINCIPAL
Leo V. Mago vs. Sun Power Manufacturing Limited

G.R. No. 210961; January 24, 2018
Reyes, Jr., J.
FACTS:
This is a petition for review on Certiorari under Rule 45 of the Rules of Court, seeking the
review of the decision of the Court of Appeals (CA). The CA reversed the decision of the National
Labor Relations Commission (NLRC) declaring Leo V. Mago (Leo) and Leilanie E. Colobong
(Leilanie) (petitioners) as employees of Sunpower Philippines Manufacturing Limited (Sunpower)
and consequently, holding that Jobcrest Manufacturing, Incorporated (Jobcrest) was a labor-only
contractor.
Jobcrest and Sunpower entered into a Service Contract Agreement, in which Jobcrest
undertook to provide business process services for Sunpower, a corporation principally engaged
in the business of manufacturing automotive computer and other electronic parts. Jobcrest then
trained its employees, including the petitioners, for purposes of their engagement in
Sunpower. After the satisfactory completion of this training, the petitioners were assigned to
Sunpower's plant in Laguna Technopark. Sunpower conducted an operational alignment, which
affected some of the services supplied by Jobcrest. The employment of petitioners was allegedly
terminated.
During the mandatory conference, Jobcrest clarified that the petitioners were not dismissed
from employment and offered to accept them when they report back to work. The petitioners
refused and insisted that they were regular employees of Sunpower, not Jobcrest. The petitioners
insist that Jobcrest is a labor-only contractor, and that the DOLE Certificate of Registration is not
conclusive of Jobcrest's legitimate status as a contractor. They further argue that, aside from
lacking substantial capital, Jobcrest only supplied manpower to Sunpower.
ISSUE:
Is Jobcrest a legitimate independent contractor?
RULING:
Yes. Jobcrest is a legitimate independent contractor.
Article 106 of the Labor Code defines labor-only contracting as a situation "where the
person supplying workers to an employer does not have substantial capital or investment in the
form of tools, equipment, machineries, work premises, among others, and the workers recruited
and placed by such person are performing activities which are directly related to the principal
business of such employer." In order to become a legitimate contractor, the contractor must have
substantial capital or investment, and must carry a distinct and independent business free from the
control of the principal.
The fact of registration with DOLE does not necessarily create a presumption that Jobcrest
is a legitimate and independent contractor. The Court emphasizes, however, that the DOLE
Certificate of Registration issued in favor of Jobcrest is presumed to have been issued in the
regular performance of official duty. Jobcrest had substantial capital to perform the business
process services it provided Sunpower. It has its own office, to which the petitioners admittedly
reported to, possessed numerous assets for the conduct of its business, and even continuously
earned profit as a result. The Court can therefore reasonably conclude from Jobcrest's financial
statements that it carried its own business independent from and distinctly outside the control of
its principals.
| 63
IN LEGITIMATE JOB CONTRACTING, THE EMPLOYER-EMPLOYEE RELATIONSHIP

BETWEEN THE JOB CONTRACTOR AND HIS EMPLOYEES IS MAINTAINED
San Miguel Foods, Inc. vs. Hannival V. Rivera, et al

G.R. No. 220103; January 31, 2018
Velasco, Jr., J.
FACTS:
This is a petition for review on Certiorari seeking to reverse the ruling directing San Miguel
Foods, Inc. (petitioner) to reinstate Hannival V. Rivera, et al (respondents). San Miguel Foods,
petitioner, forged an invoicing services contract with IMSHR Corporate Support, Inc. (ICSI), an
independent contractor duly registered with the DOLE and engaged in the business of providing
and supplying various services to different companies. ICSI has an authorized capital stock of P4
Million while per an independent auditor's report for the year ending on December 31, 2008, it has
a gross income of P14,192,040 and a total asset amounting to P30,820,419.34. ICSI then assigned
its employees which included Rivera to perform invoicing services for San Miguel Foods. However,
San Miguel Foods decided to discontinue its invoicing services in its head office where Rivera was
assigned. As a result of the discontinuance of the invoicing operations, Rivera filed complaints for
constructive dismissal, underpayment of salaries and other benefits, among others against San
Miguel Foods.
San Miguel Foods, in its defense, argued that Rivera’s employer is ICSI as it was the one
that hired and selected them. ICSI was the one that paid their salaries and made the necessary
deductions for the social security contributions.
ISSUE:
Is ICSI a legitimate independent contractor?
RULING:
Yes. ICSI is a legitimate independent contractor.
According to the case of Petron Corporation v. Caberte, et al, a legitimate job contract is
an arrangement whereby a principal agrees to put out or farm out with the contractor or
subcontractor the performance or completion of a specific job, work, or service within a definite or
predetermined period, regardless of whether such job, work, or service is to be performed or
completed within or outside the premises of the principal. In legitimate job contracting, the
employer-employee relationship between the job contractor and his employees is maintained.
While the law creates an employer-employee relationship between the employer and the
contractor's employees, the same is only for the purpose of ensuring the payment of the
employees' wages. In short, the employer becomes jointly and severally liable with the job
contractor but only for the payment of the employees' wages whenever the contractor fails to pay
the same. Other than that, the employer is not responsible for any claim made by the contractor's
employees.
ICSI had satisfactorily proven that the latter is a legitimate contractor. First, ICSI has been
incorporated and duly registered with the Securities and Exchange Commission (SEC), as well as
with the BIR, SSS, Philhealth, PAG-IBIG, and the DOLE. These may not be conclusive evidence
of the status of the petitioner as a contractor but the fact of its registration prevented the legal
presumption of it being a mere labor-only contractor from arising. Second, ICSI has substantial
capital. Third, ICSI also has other A-list clients which is an indication that it carries on a distinct
and independent business. Fourth, ICSI also has the control on the performance of the work of its
employees. It was the officer or officers of ICSI who has the direct supervision over the
respondents. It was the ICSI's Base Controller, who gives the respondents their work schedule,
while its OIC was the one who monitors their attendance.
64 |
REPEATED REHIRING OF PROJECT EMPLOYEES IN A CONSTRUCTION INDUSTRY IS

NOT A BADGE OF REGULARIZATION
Reyman Minsola vs. New City Builders Inc. and Engr. Ernel Fajardo
G.R. No. 207613; January 31, 2018
Bersamin, J.
FACTS:
This case involves a petition for review on Certiorari under Rule 45 seeking to reverse the
decision and resolution of the CA, which dismissed petitioner Reyman Minsola’s (Minsola)
complaint for illegal dismissal.
Petitioner Minsola was hired by respondent New City Builders, a corporation engaged in
the construction business, as a laborer for the structural phase and as a mason for the architectural
phase of Avida 3, respectively. Upon reviewing his employment record, respondent found that
petitioner was lacking in appointment paper. Hence, the former instructed the latter to update his
employment records which the petitioner ignored and who subsequently never went back to work
after being reminded to sign the appointment paper once again. Petitioner then filed an illegal
dismissal case before the LA which was dismissed. On appeal to the NLRC, the latter reversed
the ruling of the LA. Respondent then filed a motion for reconsideration of the decision which was
denied which led it to file a petition for certiorari under Rule 65 with the CA. Petitioner alleged that
his work as a laborer and mason was necessary and desirable to the business of the employer
and that his rehiring which resulted to his working for more than one year makes him a regular
employee. On the other hand, respondent averred that petitioner was hired as a project employee
for the two different phases and that his tasks were completely different from each project.
ISSUE:
Was petitioner’s repeated rehiring enough to make him a regular employee?
RULING:
No. The repeated rehiring of Minsola did not make him a regular employee of the
respondent.
It is not uncommon for a construction firm to hire project employees to perform work
necessary and vital for its business. In William Uy Construction Corp. and/or Uy, et al. v. Trinidad,
the SC acknowledged the unique characteristic of the construction industry and emphasized that
the laborer's performance of work that is necessary and vital to the employer's construction
business, and the former's repeated rehiring, do not automatically lead to regularization.
Additionally, the employee's tenure "is not permanent but coterminous with the work to which he
is assigned." Consequently, it would be extremely burdensome for the employer, who depends on
the availability of projects, to carry the employee on a permanent status and pay him wages even
if there are no projects for him to work on. An employer cannot be forced to maintain the employees
in the payroll, even after the completion of the project.
Accordingly, it is all too apparent that the employee's length of service and repeated re-
hiring constitutes an unfair yardstick for determining regular employment in the construction
industry.
Thus, Minsola's rendition of more than one year of service and his repeated re-hiring are
not badges of regularization.
| 65
A PROBATIONARY EMPLOYEE ENGAGED TO WORK BEYOND THE PROBATIONARY

PERIOD OF SIX MONTHS FOR ANY LENGTH OF TIME SET FORTH BY THE EMPLOYER,
SHALL BE CONSIDERED A REGULAR EMPLOYEE
Maria Carmela P. Umali vs. Hobbywing Solutions, Inc.

G.R. No. 221356; March 14, 2018
Reyes, Jr., J.
FACTS:
This is a petition for review on Certiorari under Rule 45 appealing the decision of the CA
which ruled that Maria Carmela P. Umali (petitioner) was not illegally dismissed.
Petitioner alleged that she started working for the Hobbywing Solutions inc. (respondent)
on June 19, 2012 as a Pitboss Supervisor. She allegedly never signed any employment contract
before the commencement of her service but regularly received her salary every month. After
seven (7) months since she started working for the respondent, the petitioner was asked to sign
two (2) employment contracts, one for a period of five (5) months and the other for a period of
three (3) months. On February 18, 2013, however, the petitioner was informed by the respondent
that her employment has already ended. Thus, she filed a complaint for illegal dismissal against
the respondent.
For its part, the respondent admitted that it hired the petitioner as Pitboss Supervisor on
probationary basis. With the conformity of the petitioner, the probationary period was extended for
three months. After receiving a commendable rating by the end of the extended probationary
period, the petitioner was advised that the company will be retaining her services as Pitboss
Supervisor. Surprisingly, the petitioner declined the offer. The LA ruled in favor of respondent. The
NLRC reversed the same. CA agreed with the LA. Hence, this petition.
ISSUE:
Did petitioner acquire regular employment due to the lapse of the probationary period?
RULING:
Yes. Petitioner is a regular employee due to the lapse of the probationary period of
employment.
It bears stressing that while in a few instances the Court recognized as valid the extension
of the probationary period, still the general rule remains that an employee who was suffered to
work for more than the legal period of six months of probationary employment or less shall, by
operation of law, become a regular employee.
In the instant case, there was no valid extension of the probationary period since the same
had lapsed long before the company thought of extending the same. More significantly, there is no
justifiable reason for the extension since, based on the Performance Evaluation dated February 1,
2013, the petitioner had a commendable performance all throughout the probationary period.
Therefore, having rendered service even after the lapse of the probationary period, the
petitioner had attained regular employment with all the rights and privileges pertaining thereto.
66 |
DURATION OF SERVICE AND REPEATED REHIRING ARE NOT BADGES OF

REGULARIZATION IN THE CONSTRUCTION INDUSTRY
Mario Bajaro vs Metro Stonerich Corp., and/or Ibrahim Nuno

G.R. No. 227982; April 23, 2018
Reyes, Jr., J.
FACTS:
This is a petition for review on Certiorari seeking the reversal of the CA decision affirming
the NLRC and LA ruling which dismissed the illegal dismissal complaint filed by petitioner Mario
Bajaro (Bajaro) against respondent Metro Stonerich Corporation and Ibrahim Nuno.
Respondent is a domestic entity engaged in the construction business. On June 4, 2008,

Respondent hired Bajaro as a concrete pump operator in five different construction projects. Bajaro
was called to work from 7:00 am until 4:00 pm, from Mondays to Saturdays, with a daily wage of
Php 500.00. He was assigned in various construction projects until May 10, 2014. Sometime in
April 2014, he was injured while working. After recovering from his injury, Bajaro returned to his
workplace. However, upon his return, Bajaro was informed that he should no longer report to work,
and he was offered money in lieu of his employment. This prompted him to file a case for illegal
dismissal against the respondent.
Bajaro asserted that he was a regular employee of the respondent, as he was continuously
employed for six (6) years and performed activities that were necessary and desirable to the latter’s
usual business. As such, he claimed that he was entitled to security of tenure and could not be
dismissed except for just or authorized cause. On the other hand, respondent argued that Bajaro
is not a regular employee, but a project employee. As proof, respondent pointed out its submission
of reports to DOLE upon completion of the projects Bajaro was engaged in.
ISSUE:
Was Bajaro’s continuous employment and performance of work which was necessary to
respondent’s construction business enough to make him a regular employee?
RULING:
No. Bajaro’s continuous employment and performance of such activities necessary for
respondent’s business did not make him a regular employee.
It is not uncommon for a construction firm to hire project employees to perform work
necessary and vital for its business. In William Uy Construction Corp. v. Trinidad, the Court
acknowledged the unique characteristic of the construction industry and emphasized that the
laborer's performance of work that is necessary and vital to the employer's construction business,
and the former's repeated rehiring, do not automatically lead to regularization. Moreover, as in
ruled in Malicdem, et al. vs. Marulas Industrial Corporation, et al., the employee’s tenure is not
permanent but coterminous with the work to which he is assigned. It would be extremely
burdensome for the employer, who depends on the availability of projects, to carry the employee
on a permanent status and pay him wages even if there are no projects for him to work on. An
employer cannot be forced to maintain the employees in the payroll, even after the completion of
the project. It is extremely unfair to the employers and amounts to labor coddling at the expense
of management.
Accordingly, it is all too apparent that the employee's length of service and repeated re-
hiring constitutes an unfair yardstick for determining regular employment in the construction
industry.
Thus, Bajaro's rendition of six years of service, and his repeated re-hiring are not badges
of regularization.
| 67
JOB CONTRACTING IS DEEMED LEGITIMATE AND PERMISSIBLE WHEN THE

CONTRACTOR HAS SUBSTANTIAL CAPITAL OR INVESTMENT AND RUNS A
BUSINESS THAT IS INDEPENDENT AND FREE FROM CONTROL BY THE PRINCIPAL
Consolidated Building Maintenance Inc. vs Asprec, Jr.

G.R. No. 217301; June 6, 2018
Reyes, Jr., J.
FACTS:
This is a petition for review on Certiorari under Rule 45 of the Rules of Court seeking to
annul and set aside the decision of the Court of Appeals. CBMI provides kitchen, delivery,
sanitation and other related services to Philippine Pizza, Inc. – Pizza Hut (PPI). Respondents
Asprec, Jr. and Bataller were employed by PPI as rider and team member/slice cashier,
respectively. After the expiration of their contracts, PPI endorsed the respondents to CBMI. CBMI
renewed their contracts but continued to perform their previous work for PPI. Respondents were
investigated for theft. They were thereafter dismissed. Respondents filed their complaint against
the petitioners for constructive illegal dismissal, illegal suspension, and non-payment of separation
pay. They also impleaded PPI.
Respondents argued two points: first, that their transfer from PPI to CBMI constituted labor-
only contracting and was a mere scheme by PPI to prevent their regularization; and second, that
they were illegally dismissed without cause and due process of law.
ISSUE:
Is CBMI a labor-only contractor or an independent contractor?
RULING:
CBMI is an independent contractor.
Labor-only contracting is defined by Article 106 of the Labor Code as an arrangement

where any of the following elements are present: (i) the contractor or subcontractor does not have
substantial capital or investment which relates to the job, work, or service to be performed and the
employees recruited, supplied or placed by such contractor or subcontractor are performing
activities which are directly related to the main business of the principal; or (ii) the contractor does
not exercise the right to control the performance of the work of the contractual employee.
Job contracting is not absolutely prohibited. Job contracting is deemed legitimate and
permissible when the contractor has substantial capital or investment and runs a business that is
independent and free from control by the principal. The absence of any of these elements results
in a finding that the contractor is engaged in labor-only contracting. In addition to the foregoing,
DO No. 18-02 requires that contractors and subcontractors be registered with the DOLE Regional
Offices. The system of registration has been established under the DO to regulate and monitor
contracting arrangements.
The Court finds that CBMI has established compliance with the requirements of legitimate
job contracting previously cited. CBMI is a duly licensed labor contractor by the DOLE. CBMI also
has substantial capital to maintain its manpower business. From the evidence adduced by CBMI,
it is also clear that it runs a business independent from the PPI. Above all, CBMI maintains the
"right of control" over the respondents. CBMI has the "sole authority to control and direct the
performance of the details of the work of its employees." It is indisputable from the respondents'
employment contracts that they were hired by CBMI. It is also CBMI who pays the respondents
their salaries, and remits premiums to PhilHealth and Social Security System. The way
respondents perform their task are all dictated by CBMI, the sole concern of PPI being the result.
68 |
REDUNDANCY IS ONE OF THE AUTHORIZED CAUSES FOR THE DISMISSAL OF AN

EMPLOYEE
Philippine National Bank vs. Jumelito T. Dalmacio

G.R. No. 202308 and 202357; July 5, 2017
Tijam, J.
FACTS:
This is a petition for review on Certiorari assailing the decision of the CA affirming the
decision of the NLRC which in turn affirmed the decision of the Labor Arbiter finding that Petitioner
Philippine National Bank (PNB) effected a valid redundancy program.
Respondent Jumelito Dalmacio (Dalmacio) and Emma Martinez, who were both utility
worker and communication equipment operator, filed a complaint for illegal dismissal, under-
payment of separation pay and retirement benefits, illegal deduction, nonpayment of provident
fund with prayer for damages and attorney’s fees against PNB before the Labor Arbiter. The case
was filed as a result of their separation from PNB due to the latter’s implementation of a
redundancy program. In implementing the said program, PNB officially notified the employees on
the management’s decision after consultation with complainants and their union officers. The
complainants also agreed and accepted the said decision. The NLRC affirmed the LA's Decision.
Dalmacio elevated the case before the CA which affirmed the decision of the NRLC and stated
that principles of justice and fair play call for the modification of the reparation package already
received by herein petitioner.
Dalmacio argued that he was illegally dismissed due to PNB’s failure to implement its
redundancy program validly. On the other hand, PNB maintained that the dismissal was not illegal
since the same as made pursuant to a valid redundancy program.
ISSUE:
Is PNB guilty of illegal dismissal due to an invalid implementation of its redundancy
program?
RULING:
No. Respondent was not illegally dismissed because the PNB’s implementation of its
redundancy program is valid.
According to the case of Dole Philippines, Inc., et al. v. National Labor Relations
Commission, et al., one of the authorized causes for the dismissal of an employee is redundancy.
It exists when the service capability of the workforce is in excess of what is reasonably needed to
meet the demands of the business enterprise. It has been ruled that an employer has no legal
obligation to keep more employees than are necessary for the operation of its business. For the
implementation of redundancy program to be valid, the employer must comply with the following
requisites: (1) written notice served on both the employees and the DOLE at least one month prior
to the intended date of termination of employment; (2) payment of separation pay equivalent to at
least one month pay for every year of service; (3) good faith in abolishing the redundant positions;
and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant
and accordingly abolished, taking into consideration different factors.
In the case at bar, PNB was upfront with its employees about its plan to implement its
redundancy program. Moreover, PNB’s redundancy program was neither unfair nor unreasonable
considering that it was within the ambit of its management prerogative.
Hence, respondent was not illegally dismissed by the petitioner.
| 69
LOSS OF TRUST AND CONFIDENCE AS A GROUND FOR DISMISSAL MUST BE CLEARLY

ESTABLISHED BY FACTS
Distribution & Control Products, Inc. vs. Jeffrey E. Santos

G.R. No. 212616; July 10, 2017
Peralta, J.
FACTS:
In this petition for review on Certiorari, petitioner Distribution & Control Products, Inc.
assails the decision of the CA which affirmed the decision of the NLRC and the Labor Arbiter
finding respondent Jeffrey E. Santos illegally dismissed.
Respondent was employed as petitioners’ company driver. In 2010, he received a notice

informing him that he was being placed under preventive suspension for thirty days because he
was one of the employees suspected of having participated in the theft of the electrical products
of petitioners.
Respondent aver that he was not given the opportunity to explain his side before he was
suspended and that after the lapse of his 30-day suspension, he was no longer allowed to return
to work without any justification for such disallowance. Petitioners contend that the
termination of respondent’s employment was based on their loss of trust and confidence in him.
Petitioner explained that only the respondent and the company warehouseman were the only ones
who had complete access to the warehouse where the stolen items were located.
ISSUE:
Was the petitioner able to sufficiently establish the existence of an act justifying the loss of
trust and confidence in the respondent?
RULING:
No. Petitioner was not able to establish the existence of an act justifying the loss of trust
and confidence in the respondent.
Loss of trust and confidence is a just cause for dismissal under Article 282 (c) of the Labor
Code, which provides that an employer may terminate an employment for "[f]raud or willful breach
by the employee of the trust reposed in him by his employer or duly authorized representative." In
order to properly invoke the ground of loss of trust and confidence as a just cause for dismissal,
two conditions must be satisfied: (1) the employer must show that the employee concerned holds
a position of trust and confidence; and (2) the employer must establish the existence of an act
justifying the loss of trust and confidence. To be a valid cause for dismissal, the act that betrays
the employer’s trust must be real. Loss of confidence as a ground for dismissal has never been
intended to afford an occasion for abuse by the employer of its prerogative, as it can easily be
subject to abuse because of its subjective nature and the loss must be founded on clearly
established facts sufficient to warrant the employee's separation from work.
Respondent may indeed be considered as one who occupies a position of trust and
confidence as he is one of those who were entrusted with the handling of a significant amount or
portion of petitioners' products for sale. However, records show that petitioners failed to present
substantial evidence to support their allegations that respondent had participated in the theft of the
company’s stolen items.
Therefore, petitioners illegally dismissed respondent since it failed to establish valid

termination by loss of trust and confidence.
70 |
FOR DISMISSAL OF MANAGERIAL EMPLOYEE ON THE GROUND OF LOSS OF TRUST

AND CONFIDENCE, PROOF BEYOND REASONABLE DOUBT IS NOT REQUIRED
Alaska Milk Corporation and Estate of Wilfred Uytengsu vs. Ernesto L. Ponce
G.R. No 228412; July 16, 2017
Mendoza, J.
FACTS:
This is a petition for review on Certiorari assailing the decision of the CA, which reversed
and set aside the decision of the NLRC and reinstated the decision of the LA, finding respondent
Ernesto L. Ponce (Ponce) illegally dismissed.
Petitioner Alaska Milk Corporation (AMC) hired Ponce as Manager for Engineering
Services. In an e-mail, Ponce solicited official receipts from his colleagues in exchange for a 5%
rebate on the value of the receipts submitted to him. Such copy of the email was received by
chairman of the board of AMC, petitioner Wilfred Uytengsu. Ponce was directed to explain why his
services should not be terminated. However, after finding his explanation unsatisfactory, AMC
terminated Ponce’s employment. Ponce filed a complaint for illegal dismissal.
Petitioners argue that the sending of the R/A e-mail soliciting official receipts in exchange
for a 5% cash rebate is an act inimical to the company's interests because Ponce will be
reimbursed for expenses he did not incur. They consider such act a fraudulent representation
enough to erode its trust and confidence.
Ponce alleges that that loss of trust and confidence was an afterthought as AMC was
unable to prove that solicitation of official receipts was against company policy.
ISSUE:
Is the act of soliciting official receipts enough basis to dismiss the respondent on the ground
of loss of trust and confidence?
RULING:
Yes. The act of soliciting official receipts is enough basis to dismiss the respondent on the
ground of loss of trust and confidence.
According to the case of Philippine Plaza Holdings, Inc. v. Ma Flora M. Episcope, there are
two classes of positions of trust: (1) managerial employees whose primary duty consists of the
management of the establishment in which they are employed or of a department or a subdivision
thereof, and to other officers or members of the managerial staff; and (2) fiduciary rank-and-file
employees, such as cashiers, auditors, property custodians, or those who, in the normal exercise
of their functions, regularly handle significant amounts of money or property. As regards a
managerial employee, the mere existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his dismissal. Hence, in the case of managerial
employees, proof beyond reasonable doubt is not required, it being sufficient that there is some
basis for such loss of confidence.
The act of soliciting receipts from colleagues constitutes dishonesty, inimical to AMC's
interests, for the reason that Ponce would be collecting receipted allowance from expenses he did
not actually incur. It has long been settled that an employer cannot be compelled to retain an
employee who is guilty of acts inimical to his interests.
Hence, respondent’s dismissal from employment is justified.
| 71
DISMISSAL ON THE GROUND OF WILLFULL DISOBEDIENCE REQUIRES THE ORDER

VIOLATED BE REASONABLE AND LAWFUL
BDO Unibank, Inc. vs. Nestor N. Nebres and Armenia F. Suravilla

G.R. No. 208735; July 19, 2017
Tijam, J.
FACTS:
In this petition for review on Certiorari, petitioner BDO Unibank, Inc. (formerly Equitable
PCI Bank) assails the decision of the CA which reversed the decision of the NLRC and reinstated
that of the LA finding respondents Nestor N. Nebres (Nebres) and Armenia F. Suravilla (Suravilla)
to have been illegally dismissed.
Respondents were employees of petitioner and members of Equitable PCI Bank

Employees Union (EPCIBEU). The union held an election and Nebres and Suravilla were
proclaimed as President and Executive Vice-President, respectively. After taking their oath,
respondents notified the bank of their decision to be on full-time leave in order to devote their time
in maintaining industrial peace which is a privilege given to their position under their CBA. Because
of the pendency of the appeal by the losing candidates, the bank disapproved the leaves of
respondent, which the latter failed to comply. They were meted the penalty of dismissal after
administrative hearings were conducted.
Petitioner bank essentially argues that it validly dismissed Nerbes and Suravilla from
employment because they committed serious misconduct and willful disobedience when they
failed to return to work despite orders for them to do so. Nerbes and Suravilla counter that as duly-
elected officers of the union they are entitled to be on full-time leave.
ISSUE:
Does the respondents’ refusal to report to work despite the bank’s order for them to do so
constitute disobedience of such a willful character as to justify their dismissal from service?
RULING:
No. Respondents’ refusal to report to work does not constitute disobedience of such a
willful character as to justify their dismissal from service.
According to the case of Micro Sales Operation Network, et al. v. NLRC et al., a v alid
dismissal on the ground of willful disobedience requires the concurrence of twin requisites: (1) the
employee's assailed conduct must have been willful or intentional, the willfulness being
characterized by a wrongful and perverse attitude; and (2) the order violated must have been
reasonable, lawful, made known to the employee and must pertain to the duties which he had been
engaged to discharge.
Respondent’s failure to report for work despite the disapproval of their application for leave
was clearly intentional. However, such was not characterized by a wrongful and perverse attitude
or with deliberate disregard of their duties as such. At the time respondents notified the bank of
their intent to avail of their union leaves, they were already proclaimed as winners and in fact took
their respective oaths of office. Following the terms of the parties' CBA, which has the strength of
law as between them, respondents, as duly-elected union officers, were entitled to take their union
leaves.
Hence, respondents’ refusal to return to work was not characterized by a wrongful and
perverse attitude to warrant dismissal.
72 |
EMPLOYER HAS THE BURDEN OF PROVING THAT THE DISMISSAL OF AN EMPLOYEE

WAS FOR A JUST OR AUTHORIZED CAUSE
Evic Human Resource Management, Inc. vs. Rogelio Panahon

G.R. No. 206890; July 31, 2017
Caguioa, J.
FACTS:
which set aside the resolution of NLRC and LA decision declaring the existence of just cause in
terminating respondent Rogelio Panahon (Panahon).
Petitioner Evic Human Resource Management, for and in behalf of its foreign principal,
hired Panahon as Chief Mate on board M/V Free Lady. Respondent was repatriated without
completing the contracted period of employment. Thus, he filed a Complaint for illegal dismissal
with monetary claims. In his position paper, respondent alleged that during the voyage, the vessel’s
Captain developed a hostile attitude towards him. Respondent took a sip from small flask of whisky
and then went to bed, but the Captain had him awakened and ordered him to make a report on
some damages in the railings of the ship. When he submitted the report, Captain smelled a small
faint of odor of alcohol and asked him if he had been drinking, to which he truthfully replied and
offered to take an alcohol test. Later, the Captain recommended respondent’s replacement.
Petitioners averred that respondent was dismissed for just cause. The Report prepared by
the Captain showed that respondent was grossly negligent as he failed to observe the safety
precautions during the mooring and unmooring operations; displayed arrogance towards his co-
employees on board; and was caught intoxicated, in violation of the company policies, instructions,
and stipulations of the POEA contract. Respondent maintained that there was no just cause which
would warrant his dismissal.
ISSUE:
Was the alleged failure to observe safety precautions, displayed arrogance and
intoxication enough causes to justify the dismissal of the respondent?
RULING:
No. The respondent’s dismissal was not for a just cause.
According to the case of Skippers United Pacific, Inc. V. NLRC, it is a settled rule in labor
cases that the employer has the burden of proving that the dismissal of an employee was for a just
cause, and failure to show this would necessarily mean that the dismissal was unjustified and
illegal. Furthermore, not only must the dismissal be for a cause provided by law, it should also
comply with the rudimentary requirements of due process, that is, the opportunity to be heard and
to defend one's self.
In the case, the only evidence relied upon by the petitioner is the report prepared by the
Captain, although it was signed by four other crew members, it was only the Captain who saw the
alleged incident. The Court finds the report inadequate in meeting the required quantum of proof
to discharge petitioner’s burden. The statements contained therein were uncorroborated and self-
serving, no other evidence was presented to support the statements of the Captain. The records
are bereft of any evidence showing that respondent was given a written notice of the charges
against him, or that he was given an opportunity to explain or defend himself. As for the monetary
claim, the Court affirms the grant of attorney’s fee of 10% of the total award pursuant to Art. 111
of the Labor Code.
Therefore, the respondent’s dismissal was not for a just cause and he is entitled to
attorney’s fee.
| 73
UNION OFFICERS CANNOT BE DISMISSED MERELY BASED ON PROVISIONS FOR

IMPEACHMENT OF UNION OFFICERS
United Polyresins, Inc. vs. Marcelino Pinuela

G.R No. 209555; July 31, 2017
Del Castillo, J.
FACTS:
which set aside the decision of NLRC and the LA finding the petitioner United Polyresin’s dismissal
of respondent Marcelino Pinuela valid.
Petitioner hired respondent who became the Union President of Polyresins Rank and File
Association (PORFA). Petitioner extended loan to the union with a condition that it should be paid
before the expiration of the Bargaining Agreement (BA); otherwise all officers and members of the
union shall be liable personally. During the respondent’s term, there has been conflict within the
union involving money. The loan became due but the union does not have enough funds to pay it.
Petitioner refused to discuss a new Bargaining Agreement until the loan is settled. The members
demanded for a special election due to the respondent’s alleged mismanagement of the funds.
The new set of union officers issued a resolution expelling respondent from PORFA. Thereafter,
petitioner issued a letter of termination to respondent. Respondent filed a complaint against
petitioner before the LA for illegal dismissal.
Respondent claimed that his dismissal was effected in bad faith and without due process.
On the other hand, petitioner countered that respondent’s dismissal is valid under the BA which
states that employees who ceased to be PORFA members by reason of resignation or expulsion
shall not be retained in the employ of the petitioner; and that he was accorded substantive and
procedural due process.
ISSUE:
Is the dismissal of the respondent valid under the security clause of the Bargaining
Agreement?
RULING:
No. The dismissal of the respondent is not valid under the security clause of the Bargaining
Agreement.
A review of the PORFA Constitution itself reveals that the only provision authorizing
removal from the union is found in Article X, Section 6, that is, on the ground of failure to pay union
dues, special assessments, fines, and other mandatory charges. These provisions do not apply in
respondent's case. Although he was eventually charged with estafa, a crime involving moral
turpitude, still, he has not been convicted of the crime. For this reason, he may not be disqualified
as union member.
Respondent's expulsion from PORFA is grounded on the union's Constitution. However,

these provisions refer to impeachment and recall of union officers, and not expulsion from union
membership. It was therefore error on the part of PORFA and petitioners to terminate respondent's
employment based on Article XV, Section 1, paragraphs (e) and (f) of the union's Constitution.
Such a ground does not constitute just cause for termination. Accordingly, for what he is charged
with, he may not be penalized with expulsion from the union, because the same is not authorized
and provided for under PORFA’s Constitution.
Therefore, the dismissal of the respondent is not valid.
74 |
UTTERANCE OF OFFENSIVE WORDS AGAINST SUPERIOR CONSTITUTES GROSS

MISCONDUCT
Sterling Paper Products Enterprises, Inc. vs. KMM-Katipunan and Raymond Z. Esponga
G.R. No. 221493; August 2, 2017
Mendoza, J.
FACTS:
This is a petition for review on certiorari by petitioner Sterling Paper Products, Inc.
(Sterling), assailing the decision of the CA which reinstated the decision of the LA finding
respondent Raymond Z. Esponga (Esponga) illegally dismissed.
Sterling hired respondent as machine operator. Years later, Sterling’s supervisor found
Esponga and his co-employees about to take a nap on the sheeter machine. She called their
attention and prohibited them from taking a nap thereon for safety reasons. Esponga then uttered
disrespectful and provocative words and raised his middle finger against his superior. A Notice to
explain was served on Esponga but the latter neither responded nor attended the administrative
hearings for the same. Sterling then terminated Esponga’s employment.
Sterling argues that Esponga's utterance of foul and abusive language against his
supervisor, demonstrating a dirty finger, and defiance to perform his duties undeniably constitute
serious misconduct. Esponga denies the allegations and contends that Sterling failed to
establish the validity of his dismissal by clear and convincing evidence. He insisted 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.
ISSUE:
Was the respondent’s utterance of foul and abusive language against his supervisor a valid
cause for dismissal?
RULING:
Yes. The respondent’s utterance of foul and abusive language against his supervisor is a
valid cause for dismissal.
According to the case of Imasen Philippine Manufacturing Corp. v. Alcon, for misconduct
or improper behavior to be a just cause for dismissal, the following elements must concur: (a) the
misconduct must be serious; (b) it must relate to the performance of the employee's duties showing
that the employee has become unfit to continue working for the employer; and (c) it must have
been performed with wrongful intent. The utterance of obscene, insulting or offensive words
against a superior is not only destructive of the morale of his co-employees and a violation of the
company rules and regulations, but also constitutes gross misconduct.
The accusatory and inflammatory language used by an employee towards his employer or
superior can be a ground for dismissal or termination. Further, Esponga's assailed conduct was
related to his work. The supervisor did not prohibit him from taking a nap. She merely reminded
him that he could not do so on the sheeter machine for safety reasons. Esponga's acts reflect an
unwillingness to comply with reasonable management directives.
Hence, respondent was validly dismissed.
| 75
A SEAMAN IS BOUND TO OBEY LAWFUL COMMANDS OF THE CAPTAIN OF THE SHIP,

BUT ONLY AS LONG AS THESE PERTAIN TO HIS DUTIES
Transglobal Maritime Agency, Inc. vs. Vicente D. Chua, Jr.

G.R. No. 222430, August 30, 2017
Peralta, J.
FACTS:
The case is a petition for review on Certiorari assailing the decision of the CA, which set
aside the decision of the NLRC and LA, finding the petitioner Transglobal Maritime Agency
(Transglobal) liable for illegal dismissal of respondent Vicente Chua (Chua).
Transglobal hired respondent Chua as a seaman for a nine (9)-month duty on board a
vessel. While at a port in Taiwan, Chua and his four (4) companions left the vessel. Upon their
return, their captain was infuriated in view of their tardiness. The latter served them with a
reprimand letter for misbehaving and arguing with a chief officer in the captain’s presence. They
refused to sign the letter since it allegedly contained false statements. They were dismissed as a
result thereof. Hence, Chua filed a complaint for illegal dismissal.
Transglobal alleges that Chua’s unwarranted refusal to sign the reprimand letter in violation
of his captain’s order constitute insubordination which is a ground for dismissal. Chua alleges that
his refusal to sign the same was justified due to the false statements contained therein.
ISSUE:
Is the refusal to sign a written reprimand by a seaman sufficient to justify dismissal by
insubordination?
RULING:
No. Refusal to sign a written reprimand by a seaman is not sufficient to justify dismissal.
According to the case of Maersk-Filipinas Crewing, Inc. v. Avestruz, Insubordination or

willful disobedience, as a just cause for the dismissal of an employee, necessitates the
concurrence of at least two requisites: (1) the employee's assailed conduct must have been willful,
that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have
been reasonable, lawful, made known to the employee, and must pertain to the duties which he
had been engaged to discharge.
Chua is bound to obey lawful commands of the captain of the ship, but only as long as
these pertain to his duties. There is no relevance to the order to sign the documents in Chua’s
performance of his duty as a seaman. The pieces of evidence presented are insufficient to
establish that Chua's refusal was characterized by a wrongful and perverse mental attitude
rendering his act inconsistent with proper subordination. Chua had explained that he refused to
sign the written reprimand for he maintained that the same contained falsehoods. Dismissal is too
harsh a penalty to be imposed due to Chua's supposed disobedience.
Therefore, a seaman is bound to obey lawful commands of the captain of the ship but only
as long as these pertains to his duties; signing a written reprimand is not one of these duties.
76 |
MISCONDUCT IMPLIES WRONGFUL INTENT AND NOT MERE ERROR IN JUDGMENT
Fabricator Philippines, Inc. vs. Jeanie Rose Q. Estolas

G.R. No. 224308-09; September 27, 2017
Perlas-Bernabe, J.
FACTS:
Assailed in this petition for review on Certiorari are the decision and resolution of the CA
which affirmed the rulings of the NLRC and LA that petitioner Fabricator Philippines, Inc.
(petitioner) illegally dismissed respondent Jeanie Rose Q. Estolas. Petitioner Fabricator
Philippines Inc. (FPI), domestic corporation engaged in the manufacture and sale of motorcycle
parts, hired Estolas as a welder.
While waiting for a replacement part during work, Estolas took a seat and rested. A co-
employee, Rosario Banayad, saw her and reported the matter. Thereafter, verbal confrontations
ensued between Estolas and Banayad in front of a superior, Warlito Abaya. As a result of the
incident, FPI President Victor Lim talked to Estolas and suspended her for three days. A few
months later, Lim told Estolas to resign and instructed her not to report for work. Since Estolas
refused, she was served a notice of termination finding her guilty of serious misconduct.
In her complaint, Estolas claimed that she was illegally dismissed. For their part, petitioner
and Lim maintained that respondent was validly dismissed for gross misconduct, as she was
caught sitting down during office hours and she insulted and uttered offensive language towards
her superior, Banayad.
ISSUE:
Was the misconduct serious and willful to warrant the dismissal from work?
RULING:
No. The misconduct was not serious nor willful and intentional in character.
Article 297 of the Labor Code, as amended, lists serious misconduct as one of the just
causes for an employee's dismissal from work. Misconduct is defined as an improper or wrong
conduct. It is a transgression of some established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.
To constitute a valid cause for the dismissal within the text and meaning of the foregoing provision,
the following elements must concur: (a) the misconduct must be serious; (b) it must relate to the
performance of the employee's duties, showing that the employee has become unfit to continue
working for the employer; and (c) it must have been performed with wrongful intent.
In this case, while respondent indeed committed some sort of misconduct when she
engaged in a verbal tussle with Banayad during work hours and in front of their superior, Abaya,
the same was not serious enough to warrant respondent's dismissal. Neither was it shown that
respondent performed such act of misconduct with wrongful intent nor did the same render her
unfit to continue working for petitioner. Respondent could not have been validly terminated from
work.
Thus, Estolas was illegally dismissed.
| 77
THE EMPLOYER’S SUBSEQUENT ACT OF HIRING ADDITIONAL EMPLOYEES IS

INCONSISTENT WITH THE TERMINATION ON THE GROUND OF REDUNDANCY FOR
FAILURE TO COMPLY WITH THE FOURTH REQUIREMENT IMPOSED BY LAW
San Fernando Coca-Cola Rank-and-File Union vs. Coca-Cola Bottlers Philippines, Inc.,
G.R. No. 200499, October 4, 2017
Caguioa, J.
FACTS:
Petitioner San Fernando Coca-Cola Rank and File Union (SACORU) filed a petition for
review on Certiorari under Rule 45 of the Rules of Court assailing the decision of the Court of
Appeals (CA).
The CA affirmed the dismissal of SACORU's complaint against respondent Coca-Cola

Bottlers Philippines, Inc. (CCBPI) for unfair labor practice and declared the dismissal of 27
members of SACORU for redundancy as valid. Twenty-seven rank and file workers of Coca-Cola
Bottlers Philippines, Inc., (CCBPI) were issued with a notice of termination on the ground of
redundancy due to the ceding out of two selling and distribution systems. The affected employees
were members of the San Fernando Coca-Cola Rank-and-file Union (SACORU). The employees
were no longer required to report for work even before the effectivity of the termination. SACORU
filed a Notice of Strike due to the diminution of the union membership amounting to union busting
and to a violation of the Collective Bargaining Agreement (CBA) provision as a result of the selling
and distribution systems. On their part, CCBPI alleged that the new scheme adopted is an exercise
of management prerogative. The strikes and any concerted actions were enjoined by the Secretary
of Labor who issued a return to work order.
The NLRC dismissed the complaint for unfair labor practice and declared as valid the
dismissal of the employees due to redundancy. This decision was adopted by the Court of Appeals.
Hence, this petition.
ISSUE:
Is there a valid implementation of the redundancy program?
RULING:
Yes. There is a valid implementation of the redundancy program.
According to the case of Asian Alcohol Corp. v. National Labor Relations Commission, for
there to be a valid implementation of a redundancy program, the following should be present: (1)
written notice served on both the employees and the Department of Labor and Employment at
least one month prior to the intended date of retrenchment; (2) payment of separation pay
equivalent to at least one month pay or at least one month pay for every year of service, whichever
is higher; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria
in ascertaining what positions are to be declared redundant and accordingly abolished.
The termination was due to the scheme adopted and implemented by respondent company
in distributing and selling its products, to reach consumers at greater length with greater profits,
through MEPs or dealership system. The adoption of the scheme is basically a management
prerogative and even if it caused the termination of twenty-seven regular employees, it was not in
violation of their right to self-organization nor in violation of their right to security of tenure because
the essential freedom to manage the business remains with management.
78 |
REQUISITES FOR A VALID IMPLEMENTATION OF A REDUNDANCY PROGRAM MUST

BE COMPLIED WITH
Abbott Laboratories (Philippines), Inc vs. Manuel F. Torralba

G.R. No. 229746; October 11, 2017
Velasco, Jr., J.
FACTS:
This is a petition for review on Certiorari to reverse the rulings which held that petitioner’s
redundancy program was invalid, and that respondents were illegally dismissed from employment.
Respondents Roselle P. Almazar, Redel Ulysses M. Navarro and Manuel F. Torralba were
employed by Abbott in the PediaSure Division. However, the positions of the respondents were
declared redundant when the PediaSure Division and its Medical Nutrition Division were merged
into one. This resulted in the termination of the respondents who were subsequently offered
another position. The offer was denied by the respondents. Respondents signed a Quitclaim after
receiving the amounts offered by Abbott.
A complaint for illegal dismissal was filed by respondents arguing that no fair criteria was
utilized in determining who among the employees are redundant. Abbott argued that respondents
were terminated for an authorized cause.
The Labor Arbiter (LA) held that respondents were illegally dismissed due to Abbott’s
failure to overcome the burden of proving the validity of redundancy. The NLRC agreed with the
LA’s decision but ruled that the quitclaim precluded respondents from claiming that there was
illegal dismissal. On appeal, the CA modified the decision of the NLRC ruling that as the ground
for termination of employment was illegal, the deeds signed by respondents could not also be valid.
Hence, this petition.
ISSUE:
Is there a valid implementation of the redundancy program?
RULING:
No. There was no valid implementation of the redundancy program.
As stated in General Milling Corporation v. Viajar, the burden of proving that the dismissal
of the employees was for a valid and authorized cause rests on the employer. Failure to discharge
this duty would mean that the dismissal is illegal. Redundancy exists where the services of an
employee are in excess of what is reasonably demanded by the actual requirement of the
enterprise. For there to be a valid implementation of a redundancy program, the following should
be present: (1) written notice served on both the employees and the Department of Labor and
Employment at least one month prior to the intended date of retrenchment; (2) payment of
separation pay equivalent to at least one month pay or at least one month pay for every year of
service, whichever is higher; (3) good faith in abolishing the redundant positions; and (4) fair and
reasonable criteria in ascertaining what positions are to be declared redundant and accordingly
abolished.
Petitioner failed to establish compliance with the fourth requirement since Abbott did not
gauge the redundant employees against the preference criteria of status, efficiency, and
proficiency. Furthermore, the offer for job openings for the position of district sales manager puts
a cloud on the wisdom and validity of the redundancy program as the essence of redundancy is
that the existing manpower exceeds more than what is necessary in their operation. It is
questionable why they opened new jobs for sales manager.
Thus, a s the ground for termination of employment was illegal, the quitclaims are deemed
illegal as the employees’ consent had been vitiated by mistake or fraud.
| 79
PROBATIONARY EMPLOYEE ENJOYS LIMITED SECURITY OF TENURE AND CANNOT

BE TERMINATED EXCEPT FOR JUST AND AUTHORIZED CAUSES
De La Salle Araneta University, Inc. vs. Dr. Eloisa G. Magdurulang

G.R. No.224319; November 20, 2017
Perlas–Bernabe, J.
FACTS:
This is a petition for review on Certiorari which seeks to reverse the decision of the Court
of Appeals (CA) which modified the decision of the National Labor Relations Commission (NLRC)
that ordered Petitioner De La Salle Araneta University (De La Salle) to pay respondent Dr. Eloisa
Magdurulang (Dr. Eloisa) backwages and pro-rated 13th month pay.
It was alleged that De la Salle hired her as part time faculty member for the 2 nd semester
of 2008 and summer semester of the same year. She was then appointed as a full-time faculty
member for year 2008–2009. During the pendency of her contract for 2009 to 2010, the University’s
acting Dean recommended to the University President that Dr. Eloisa be given a permanent status.
The University President, instead of extending the same, issued a re-appointment to Dr. Eloisa as
full-time faculty member with a reclassified ranking of Asst. Professor 4 and on a contractual basis
for the reason that Dr. Eloisa cannot be extended a permanent appointment as she has yet to
finish the probationary period of six months as required under the university’s personnel handbook.
Dr. Eloisa then filed a complaint for constructive dismissal and claims that despite her
reappointment, she was not given any academic load and her academic administrative position
was also discontinued. She also insisted that since she had already been teaching for three (3)
years, she already attained the status of a regular employee. The Labor Arbiter dismissed the
complaint ruling that since Dr. Eloisa has not held a full-time academic teaching position for a
period of six (6) consecutive semesters or nine (9) straight trimesters, she is not eligible for such
appointment. NLRC reversed the decision and declared that Dr. Eloisa have been constructively
dismissed and ordered her reinstatement and payment of full back wages. CA ruled that Dr. Eloisa
is not eligible for permanent appointment. It also modified the NLRC ruling deleting the
reinstatement and ordered the payment of backwages for three semesters.
ISSUE:
Is the respondent eligible for permanent appointment even though she has yet to finish the
probationary period?
RULING:
No. She is not eligible for permanent appointment.
Art. 296 of the Labor Code sets a maximum allowable period of not more than 6 months
within which the employee may be subjected to a probationary period. However, the probationary
period of employment for academic personnel shall be governed by the standards established by
the DEPED and CHED, as the case may be.
As stated under 2010 Manual of Regulations for Private Schools in Basic Education, for
an academic personnel to acquire permanent employment status, it is required that an employee
must be full time, completed the probationary period and his service must be satisfactory.
Respondent failed to comply with the 2nd requisite. However, as a probationary employee,
respondent still enjoys limited security of tenure and cannot be dismissed except for just and
authorized causes.
Hence, De la Salle’s act of depriving her of teaching loads and academic administrative
functions constitute constructive dismissal.
80 |
SUBSTANTIVE AND PROCEDURAL REQUIREMENTS; PREREQUISITE TO LAWFUL

DISMISSAL
Marie Vilma G. Doctor and Jaime Lao, Jr. vs. NII Enterprises and/or Mrs. Nilda C. Ignacio
G.R. No. 194001; November 22, 2017
FACTS:
In a petition for review on Certiorari under Rule 45 before the CA, petitioners Maria Vilma
G. Doctor (Doctor) and Jaime Lao, Jr. (Lao) assailed the decision of the CA, which reversed the
decision of the NLRC and LA, dismissing petitioners’ complaint for illegal dismissal against
respondent NII Enterprises.
NII Enterprises is a sole proprietorship owned by Nilda Ignacio (Ignacio), engaged in the
business of providing car air-conditioning (aircon) services. It hired Doctor as a clerk and Lao as
an aircon technician. Respondent Ignacio and Doctor had a serious argument. This prompted
Doctor, accompanied by Lao who was then engaged to be married to her, to file a complaint for
slander and threat against Ignacio at Makati City. Since efforts to amicably resolve the dispute
failed, the barangay issued a Certification to File Action and petitioners filed a case for illegal
dismissal before the NLRC.
Doctor and Lao alleged that they were illegally dismissed as they were barred from
reporting to their former positions or employment without any valid reason. Respondents countered
that after the heated altercation, Doctor no longer reported for work and Lao similarly absented
himself from work without prior leave.
ISSUE:
Does absence without prior leave constitute abandonment of work?
RULING:
No. Petitioners cannot be deemed to have abandoned their work simply because they had
been absent the days following the heated altercation.
As stated in Samarca v. Arc-Men Industries Inc., mere absence or failure to report for work
is not tantamount to abandonment of work. Before the employer must bear the burden of proving
that the dismissal was legal, the employee must first establish by substantial evidence the fact of
his dismissal from service. If there is no dismissal, then there can be no question as to the legality
or illegality thereof.
Respondents failed to present any proof of petitioners’ overt acts which manifest the latter’s
clear intention to terminate their employment. In addition, petitioners’ filing of a complaint for illegal
dismissal is inconsistent with the charge of abandonment, for employees who take steps to protest
their dismissal cannot, by logic, be said to have abandoned their work. Since the fact of dismissal
had not been satisfactorily established by petitioners, then the burden of proving that the dismissal
was legal, i.e., that it was for just and authorized cause/s and in accordance with due process, did
not shift to the respondents. Also, petitioners could not be deemed to have abandoned their work
by merely being absent and without clear intention of severing the employer-employee
relationship.
Thus, there being no dismissal and no abandonment, the appropriate course of action is
to reinstate the employee/s.
| 81
TOTALITY OF INFRACTIONS IS TO BE CONSIDERED IN DETERMINATION OF

SANCTIONS AGAINST AN EMPLOYEE
Ricardo G. Sy and Henry B. Alix vs. Neat, Inc., Banana Peel and Paul Vincent Ng
G.R. No. 213748; November 27, 2017
Peralta, J.
FACTS:
In a petition for review on Certiorari under Rule 45 before the CA, petitioners Ricardo Sy
(Sy) and Henry Alix (Alix) assail the decision of the CA finding Sy and Alix terminated from
employment for just causes.
Neat, Inc. is a corporation and the owner/distributor of rubber slippers known as “Banana
Peel,” while Paul Vincent Ng is its President and Chief Executive Officer. Sy was hired as a
company driver and Alix was hired as a delivery helper/utility. In order to avoid confrontation with
a fellow employee, Sy assigned to himself a new delivery utility. On the other hand, Alix was tasked
to assist a newly-hired clerk. After doing so, he sat down for a while which Respondent Ng saw
and thought Alix was doing nothing during working hours. Both were informed that they would be
suspended for three (3) days and were thereafter dismissed. Petitioners Sy and Alix then filed a
Complaint for illegal dismissal and payment of money claims.
Both Sy and Alix alleged that they were illegally dismissed. Respondents countered that
during the period that petitioners were employed, they were both problem employees.
Respondents contended that because of petitioners’ continued and repeated commission of
various offenses and violations of company rules and regulations, they were terminated for a just
cause. Sy was the recipient of numerous disciplinary actions including three (3) counts of wearing
of improper uniform, one count of insubordination and another of poor performance evaluation.
Alix was similarly disciplined for two (2) offenses of poor performance evaluation, two of wasting
time, improper uniform, frequent tardiness, and negligence in work.
ISSUE:
Is the dismissal based on totality of infractions a just cause for dismissal?
RULING:
Yes. Dismissal based on totality of infractions is a just cause for dismissal.
In determining the sanction imposable on an employee, the employer may consider the
former’s past misconduct and previous infractions. As stated in Merin v. National Labor Relations
Commission, et al., the totality of infractions or the number of violations committed during the
period of employment shall be considered in determining the penalty to be imposed upon an erring
employee.
Habitual tardiness alone, is a just cause for termination of Alix’s employment. Having in
mind the work productivity-related infractions he incurred in a span of five (5) months consisting of
habitual tardiness, two (2) warnings for wasting time during working hours and two (2) more
warnings for poor performance evaluation, the respondents have a just cause to terminate Alix’s
employment. However, the entirety of the violations imputed against Sy shows that respondents
failed to prove with substantial evidence that the totality of infractions committed by him constitutes
as a just cause for his dismissal under the Labor Code. Sy’s insubordination of changing his
delivery utility without permission from the operations manager is no doubt a misconduct, but not
a serious and willful one as to cost him his livelihood.
Therefore, Alix was validly dismissed but Sy was dismissed without just cause and due
process.
82 |
BONA FIDE CESSATION OF BUSINESS OR OPERATIONS AN AUTHORIZED CAUSE FOR

DISMISSAL
Veterans Federation of the Philippines vs. Eduardo Montenejo, et al.

G.R. No. 184819; November 29, 2017
Velasco, Jr., J.
FACTS:
In a petition for review on Certiorari under Rule 45 before the CA, petitioner Veteran’s
Federation of the Philippines (VFP) assails the decision of the CA affirming the decision of the
NLRC, which reversed and set aside the decision of LA, finding respondents Eduardo Montenejo,
Mylene M. Bonifacio, Evangeline E. Valverde, and Deana N. Pagal (Montenejo, et al.) illegally
dismissed.
Pursuant to a management agreement entered by the VFP and VFP Management and
Development Corporation (VMDC), respondents Montenejo et al. were hired by VMDC as its own
personnel. The term of the management agreement between VPF and VMDC was extended to
two years. It was again extended albeit only on a month-to-month basis. VFP board passed a
resolution terminating the management agreement. The President of VMDC issued a
memorandum informing the company’s employees of the termination of their services. VMDC
dismissed all its employees and paid each his or her separation pay.
Montenejo, et al. alleged that their dismissals had been effected without cause and
observance of due process. VMDC countered that the dismissals were valid as they were due to
an authorized cause, the cessation or closure of its business.
ISSUE:
Is cessation of business or operations an authorized cause for dismissal?
RULING:
Yes. Cessation of business or operations is an authorized cause for dismissal.
One of the authorized causes for dismissal recognized under the Labor Code is the bona
fide cessation of business or operations by the employer. Article 298 of the Labor Code explicitly
sanctions terminations due to the employer’s cessation of business or operations as long as the
cessation is bona fide or is not made for the purpose of circumventing the employee’s right to
security of tenure.
Montenejo, et. al were dismissed as a result of the closure of VMDC. VMDC’s closure,
qualifies as a bona fide cessation of operations or business as contemplated under Article 298 of
the Labor Code. The acts of VMDC in relinquishing all properties required for its operations and in
dismissing its entire workforce would have indubitably compromised its ability to continue on with
its operations and are, thus, the practical equivalents of a business closure.
Hence, the closure of VMDC had been established and the validity of the closure of VMDC
necessarily validates the dismissals of Montenejo, et al. that resulted therefrom.
| 83
MISCONDUCT IS SUFFICIENT FOR DISMISSAL OF A CASHIER ON THE GROUND OF

LOSS OF CONFIDENCE
Grace R. Aluag vs. BIR Multi-Purpose Cooperative, Norma L. Lipana and Estelita V. Datu
G.R. No. 228449; December 06, 2017
Perlas-Bernabe, J.
FACTS:
In a petition for review on Certiorari under Rule 45 before the CA, petitioner Grace Aluag
(Aluag) assails the decision of the CA, reversing the decision of the NLRC and reinstating the
Labor Arbiter’s decision, finding respondent BIR Multi-Purpose Cooperative (BIRMPC) not liable
for illegal dismissal.
BIRMPC employed Aluag as cashier. Initially, she was tasked to give only verbal weekly
reports on BIRMPC’S funds until she was required to put them into writing. BIRMPC’s loan
processors started accepting post-dated checks with the prior approval of the general manger,
who then was Gerardo Flores. She submitted a report of bounced checks and deposited the
remaining checks in her possession. BIRMPC’s Board of Directors sent a letter to Aluag ten (10)
days before she gave birth, temporarily relieving her from her position pending an investigation
against her and two (2) loan processors involving suspicious loans. She then went on a maternity
leave and during which period, she received another letter from BIRMPC preventively suspending
her. Aluag filed a complaint for illegal suspension before the NRLC. She then received another
letter terminating her employment. BIRMPC terminated Aluag's employment for the following
infractions: (a) acceptance of accommodation checks; (b) failure to deposit checks on due dates,
pursuant to a member/debtor's request; (c) not reporting to the manager those checks with no
sufficient funds or which accounts had already closed; and (d) failure to act upon returned checks.
Thus, Aluag amended her complaint from illegal suspension to illegal dismissal.
Aluag claims that she was illegally dismissed. BIRMPC countered that Aluag was legally
dismissed on the ground of loss of trust and confidence as they found her infractions substantially
contributed damages to BIRMPC’s financial position.
ISSUE:
Are the perceived infractions sufficient to warrant dismissal on the ground of loss of trust
and confidence?
RULING:
Yes, the perceived infractions are sufficient to warrant dismissal on the ground of loss of
trust and confidence.
As stated in Cañeda v. Philippine Airlines, Inc., in dismissing a cashier on the ground of

loss of confidence, it is sufficient that there is some basis for the same or that the employer has a
reasonable ground to believe that the employee is responsible for the misconduct, thus making
her unworthy of the trust and confidence reposed in her. If there is sufficient evidence showing that
the employer has ample reason to dismiss her, labor tribunals should not deny the employer the
authority to dismiss her from employment.
Being a cashier charged with the collection of remittances and payments, Aluag
undoubtedly occupied a position of trust and confidence. Notably, in holding a position requiring
full trust and confidence, Aluag gave up some of the rigid guarantees available to ordinary
employees. Her failure to deposit the checks on their due dates means that she failed to deliver
on her task to safeguard BIRMPC’s finances.
Thus, BIRMPC had just cause for Aluag’s dismissal.
84 |
STRAINED RELATIONSHIP MAY BE INVOKED ONLY AGAINST EMPLOYEES WHOSE

POSITIONS DEMAND TRUST AND CONFIDENCE, OR WHOSE DIFFERENCES WITH
THEIR EMPLOYER ARE OF SUCH NATURE OR DEGREE AS TO PRECLUDE
REINSTATEMENT
Advan Motor, Inc. vs. Victoriano G. Veneracion

G.R. No. 190944; December 13, 2017
Leonardo- De Castro, J.
FACTS:
In a petition under Rule 45, petitioner Advan Motor, Inc. challenges the decision of the CA,
which affirmed and modified the NLRC and LA’s finding of illegal dismissal. Respondent filed an
amended complaint for actual illegal dismissal, underpayment of salaries/wages with damages,
attorney's fees, and a prayer for reinstatement and payment of full backwages.
Respondent Victor G. Veneracion works for petitioner’s business of selling and repairing
cars as Sales Consultant. In a letter dated May 21, 2001, he was informed of the termination of his
services "effective May 2, 2001 for the reason of repeated AWOL violations for more than six
consecutive days and management's loss of trust and confidence in you for your repeated
abandonment of your office duties and responsibilities." Aggrieved, respondent filed a complaint
for illegal dismissal.
In his defense, petitioner contended that respondent was oftentimes absent or tardy and
failed to meet his sales quota of three (3) cars a month; that he went on an unannounced leave
and, later, by just handing to the security guard his request for vacation leave; that he informed the
Personnel Officer that he would no longer report for work, prompting management to issue a notice
of termination on May 21, 2001. Petitioner argues that the order of reinstatement is not proper
when the position occupied is one vested with trust and confidence. Petitioner alleges that it placed
a high level of trust and confidence to the respondent as a Sales Consultant.
ISSUE:
Is respondent’s reinstatement not proper as his position is vested with complete trust and
confidence, applying the doctrine of strained relationship
RULING:
No. Respondent’s reinstatement is proper as his position is not vested with complete trust
and confidence.
The Court found that the CA correctly ruled in favor of reinstatement and agreed with the
reasoning that respondent is a mere car sales agent/sales consultant whose function is precisely
to sell cars for the company. Said position is clearly not vested with complete trust and confidence
from the employer as compared to, for example, a managerial employee. In Dimabayao v. National
Labor Relations Commission, the Court had occasion to state that strained relationship may be
invoked only against employees whose positions demand trust and confidence, or whose
differences with their employer are of such nature or degree as to preclude reinstatement.
The CA pointed as significant that "strained relationship" is a question of fact. Petitioner

did not allege in its position paper that it could no longer employ respondent because of "strained
relationship. The doctrine of strained relations should not be used recklessly or applied loosely nor
be based on impression alone" so as to deprive an illegally dismissed employee of his means of
livelihood and deny him reinstatement. Reinstatement is proper in this case under Article 294 of
the Labor Code (Security of Tenure).
Thus, respondent was unjustly dismissed from work and is entitled to an award of
backwages and to reinstatement.
| 85
THE WILLFULL BREACH BY THE EMPLOYEE OF THE TRUST REPOSED IN HIM BY HIS
EMPLOYER OR THE LATTER’S AUTHORIZED REPRESENTATIVE IS A JUST CAUSE
FOR DISMISSAL
Digitel Telecommunications Phils., Inc./ John Gokongwei, Jr. vs. Neilson M. Ayapana
G.R. No. 195614; January 10, 2018
Martires, J.
FACTS:
In a petition for review on Certiorari, petitioner Digitel Telecommunications, Phil., Inc.
(Digitel) assails the decision of the CA affirming the NLRC’s ruling, which reversed and set aside
that of the LA, finding that respondent Neilson M. Ayapana to have been illegally dismissed.
Petitioner hired respondent as Key Accounts Manager in the areas of Quezon,

Marinduque, and Laguna provinces. Respondent was tasked to offer and sell Digitel's foreign
exchange (FEX) line. Respondent successfully offered two FEX lines to Estela Lim (Lim).
Respondent received P7,000 but did not remit the amount to petitioner. Upon verification by
petitioner’s customer representative, it was found out that there was no existing application for two
(2) FEX lines for Lim. Respondent was ordered to refund the said amount to the client.
Petitioner issued a Notice to Explain to respondent, asking him: why he offered an

inexistent FEX line; why he did not immediately remit the proceeds of the transaction; and why he
retained the subject amount. Respondent submitted a written response where he explained that
he was not aware of the unavailability of the Atimonan line at the time he offered it to Lim; that he
retrieved the official receipts to avoid explaining the late remittance to the treasury department
because, at the time, Lim was still undecided whether to take up respondent's alternative offer of
subscribing to a FEX line in Lucena until such time that an Atimonan line could become available;
and that he made several attempts to return the amount but to no avail.
After the administrative hearing, petitioner issued a Notice of Dismissal finding respondent
guilty of "breach by the employee of the trust and confidence reposed in him under petitioner's
disciplinary rules, which merited dismissal for the first offense. Aggrieved, respondent filed a
complaint for illegal dismissal.
ISSUE:
Was respondent validly dismissed for his alleged breach of the trust and confidence?
RULING:
Yes. Respondent was validly dismissed for his alleged breach of the trust and confidence
reposed in him by management or by a company representative.
A perusal of the notice of dismissal shows that the ground relied upon was the breach of
the trust and confidence reposed in respondent by the company. As provided in Martinez v. Central
Pangasinan Electric Cooperative, Inc., the willful breach by the employee of the trust reposed in
him by his employer or the latter's duly authorized representative is a just cause for dismissal.
However, the validity of a dismissal based on this ground is premised upon the concurrence of
these conditions: (1) the employee concerned must be holding a position of trust and confidence;
and (2) there must be a willful act that would justify the loss of trust and confidence.
The first requisite is certainly present. It is not disputed that respondent was tasked to
solicit subscribers for petitioner's FEX line and, in the course thereof, collect money for
subscriptions and issue official receipts therefor. Being involved in the handling of the company's
funds, respondent undeniably occupies a position of trust and confidence. The records likewise
reveal that the second requisite is present. It is uncontroverted that respondent took part in a series
of irregularities relative to his transaction with Lim.
Hence, respondent was validly dismissed for breach of trust and confidence.
86 |
AN EMPLOYEE’S DISGRACEFUL AND IMMORAL CONDUCT WARRANTS DISMISSAL

FROM SERVICE
Jovita B. Lamsis vs. Jude F. Sales

A.M No. P-17-3772; January 10, 2018
Per Curiam
FACTS:
For resolution is a complaint filed by Jovita B. Lamsis (Jovita) against respondent Jude F.
Sales, Sr. (Jude), process server of Regional Trial Court of La Trinidad, Benguet, Branch 10 (RTC)
for Sexual Harassment under R.A. 7877, which was forwarded to the Office of the Court
Administrator (OCA) by Executive Judge Danilo P. Camacho (Judge Camacho).
Jovita works as a janitress in the Hall of Justice in Benguet. During her Saturday duty and
while she was at the 2nd floor of the Hall of Justice, Jude walked towards her while holding his
private organ and showed it to her. She then filed a complaint for sexual harassment under R.A.
7877 and prayed for the preventive suspension of Jude pending the investigation. Jude on the
other hand denied such allegations and he asserted that Jovita only filed the complaint after he
filed a complaint against her for several offenses.
The OCA dismissed the complaint and referred it to the Committee on Decorum and
Investigation (CODI). CODI dismissed the complaint for sexual harassment without prejudice to
him being charged of disgraceful and immoral conduct noting that Jude had also been convicted
of Unjust Vexation for the same act. It ruled that Jude cannot be held liable for sexual harassment
since he does not have moral ascendency over Jovita which is a critical element of the crime. OCA
affirmed the CODI’s decision and ordered that Jude be dismissed from the service.
ISSUE:
Is respondent’s act of holding his private parts and showing it to Jovita a disgraceful and
immoral conduct as to warrant his dismissal from service where this is his second offense for such
conduct?
RULING:
Yes, Jude is guilty of disgraceful and immoral conduct. The court agrees with the findings
of the OCA and CODI and considering that this is his second infraction of the same nature, he
should be dismissed from the service.
Immoral conduct has been defined as a conduct that is willful, flagrant or shameless,
showing moral indifference to the opinion of the good and respectable members of the community
and includes conduct consistent with rectitude or indicative of corruption, indecency, depravity and
dissoluteness. Section 1 of the Civil Service Commission Memorandum Circular No 15, Series of
2010 defines disgraceful and immoral conduct as a willful act that violates the basic norm of
decency, morality and decorum abhorred and condemned by society.
In this case, the court agrees with OCA’s findings that respondent deliberately exposed his
private organ to Jovita and exhibited gross sexual innuendo which are well supported by records.
What made matters worse for respondent is the fact that this is his second offense of the same
nature.
Therefore, Jude is dismissed from the service with forfeiture of all retirement benefits,
except accrued leave benefits and with prejudice to re-employment in any branch or agency of the
government.
| 87
REDUNDANCY EXISTS WHEN SERVICE CAPABILITY WORK FORCE IS IN EXCESS OF

WHAT IS REASONABLY NEEDED TO MEET DEMANDS OF ENTERPRISE
American Power Conversion Corporation, et al. vs. Jayson Yu Lim

G.R. No. 214291; January 11, 2018
Del Castillo, J.
FACTS:
This petition for review on Certiorari seeks to set aside the decision of the CA which set
aside the decision and resolution of the NLRC and reinstated the decision of the LA which ruled
that the termination of the respondent was unlawful.
Respondent Jason Lim (Lim) was the Regional Manager of petitioner American Power
Conversion Corporation (APCC). He was terminated by petitioner when he refused to resign. The
letter of termination did not specify any reason why he was being fired from work. Thereafter, he
was informed by General Manager Kong of the supposed company restructuring which rendered
his position as regional manager redundant.
Lim filed a case for illegal dismissal against the petitioners. He claimed that he was illegally
dismissed by petitioners using a fabricated and contrived restructuring/reorganization/redundancy
program, and that in effecting the redundancy program, petitioner failed to comply with the
requirements laid down by the Labor Code. On the other hand, petitioners claimed that there was
a need to abolish the position of respondent and that in effecting the redundancy program, they
complied with the requirement of law.
ISSUE:
Was respondent Lim validly dismissed on the ground of redundancy?
RULING:
No. Lim was invalidly dismissed as the ground of redundancy was not proven.
As provided by Article 283 of the Labor Code, redundancy exists when the service
capability of the work force is in excess of what is reasonably needed to meet the demands of the
enterprise. A redundant position is one rendered superfluous by any number of factors, such as
over hiring of workers, decreased volume of business, dropping of a particular product line
previously manufactured by the company, or phasing out of a service activity previously
undertaken by the business. Redundancy may be proven by a new staffing pattern, feasibility
studies/proposal on the viability of newly created positions, job description and approval by the
management of the restructuring.
The SC affirmed the ruling of the LA. It was found by the LA that the petitioner did not
present any of the foregoing evidence to establish the supposed restructuring and/or redundancy.
There was also no evidence showing the approval of the said restructuring and/or redundancy by
the directors and officers of petitioner. In the absence of a clear showing of redundancy, the
assertion that petitioner thru the initiative of Kong was motivated to dismiss Lim from the company
because of Kong’s report on the former's violations of the APCC's Code of Ethics was given
credence by the SC. Evidently, the termination of complainant was not due to redundancy but a
retaliatory action in the guise of redundancy for purposes of dismissing the complainant from the
service. It may be true that the investigation was conducted on the reported breach of Code of
Ethics, the lack of transparency on the results thereof prevented the SC from giving credence to
said assertion. The said action is clearly an exercise of management prerogative in bad faith.
Hence, petitioner’s dismissal was invalid.
88 |
SALE OF THE VESSEL IS NOT A VALID CAUSE FOR DISMISSAL
Wilfredo Asayas vs. Sea Power Shipping Enterprises Inc., and/or Avin International S.A.,
and/or Antoniette Guerrero
G.R. No. 201792; January 24, 2018
Bersamin, J.
FACTS:
The present case seeks the reversal of the decision of CA which nullified and set aside the
decision of the NLRC affirming the decision of the LA finding that herein petitioner Wilfredo Asayas
was illegally dismissed from employment.
Petitioner was employed by respondent Sea Power Shipping Enterprise as Third Officer
on board the M/T Samaria, owned by Avin International SA. Prior to the expiration of petitioner’s
contact, the vessel was sold to the Swiss Singapore Overseas Enterprise, Pte. Ltd. As a result,
respondent assigned him to another vessel, M/T Platinum, to which he was not ultimately deployed
but was engaged to work as a Second Mate on board the M/T Kriti Akti. However, the same was
also sold and he was no longer deployed to any other vessel.
Petitioner complained with the POEA demanding the full payment of his employment
contract. His claim was settled through a compromise agreement with quitclaim, pursuant to which
he received separation pay after deducting his cash advances. Two months later, petitioner filed
a complaint with the LA against the respondents for alleged illegal dismissal. Respondents contend
that petitioner was not illegally dismissed considering that the POEA Standard Contract permitted
the termination of his employment on account of the sale of the vessel.
ISSUE:
Was the sale of the vessel a valid cause for dismissal?
RULING:
No, the sale of the vessel is not a valid cause for dismissal.
The LA and the NLRC both declared that the termination of the petitioner's employment is
illegal and violated Section 23 of the Standard Terms and Conditions Governing the Employment
of Filipino Seafarers on Board Ocean Going Vessels which states: Where the vessel is sold, laid
up, or the voyage is discontinued necessitating the termination of employment before the date
indicated in the Contract, the seafarer shall be entitled to earned wages, repatriation at employer's
cost and one (1) month basic wage as termination pay, unless arrangements have been made for
the seafarer to join another vessel belonging to the same principal to complete his contract which
case the seafarer shall be entitled to basic wages until the date of joining the other vessel.
Hence, employment of petitioner was illegally terminated and petitioner is entitled to the
payment of salaries for the remaining unexpired portion of his employment contract.
| 89
LOSS OF TRUST AND CONFIDENCE MUST BE BASED ON WILLFUL BREACH
Lourdes School Quezon City, Inc. vs. Luz V. Garcia

G.R. No. 213128; February 7, 2018
Peralta, J.
FACTS:
This is a petition for review on Certiorari under Rule 45 which seeks to set aside the
decision of CA which reversed the NLRC and LA decision and declared the dismissal of
respondent Luz Garcia (Garcia) as illegal, and consequently, ordering petitioner Lourdes School
Quezon City (LSQC) to pay Garcia separation pay in lieu of reinstatement.
Garcia was the Chief Accountant and Head of the Accounting Office of LSQC. In
September 2010, a Memorandum was issued by Fr. Cesar Acuin (Fr. Acuin), Rector of LSQC,
creating two committees to investigate possible irregularities in the purchase of notebook and sale
of textbooks. Thereafter, Fr. Antonio Ala (Fr. Ala), Treasurer of LSQC, instructed Garcia to turn-
over all the money and other financial resources of the school to which Garcia immediately
complied with. Both committees then recommended the termination of employment of Garcia on
the ground of breach of trust and confidence through gross and habitual neglect of duty. After the
hearing held by another fact-finding committee, it found that Garcia knowingly misled the School
Treasurer and allowed the massive theft in the sale of textbooks and recommended her dismissal.
Fr. Acuin agreed and in his letter dated April 14, 2011, Garcia was terminated from employment.
Thereafter, Garcia filed a case for illegal dismissal and damages against LSQC, Fr. Acuin, Fr. Ala,
and the committee.
Petitioner contends that Garcia knew exactly how much the inventory of notebooks at any
given time and yet they repeatedly gave false information to Fr. Ala in order to manipulate its
purchase in favor of a supplier. Garcia countered that she discovered the excessive supply of
notebooks and had its delivery stopped and it was Fr. Ala and Angelito Salas who were responsible
for the purchase of said notebooks.
ISSUE:
Was respondent’s negligence a valid cause for dismissal based on loss of trust and
confidence?
RULING:
No. The respondent’s negligence is not a valid cause for dismissal based on loss of trust
and confidence.
The loss of trust and confidence must be based not on ordinary breach but, in the language
of Article 282 (c) of the Labor Code, on willful breach. A breach is willful if it is done intentionally,
knowingly and purposely, without justifiable excuse. In termination cases, the burden of proving
that the dismissal of the employees was for a valid and authorized cause rests on the employer.
In this case, the evidence submitted failed to establish that Garcia had malice aforethought
at the time the alleged oversupply of notebooks and theft in the textbook sale were being
committed. Although the Court agrees with petitioner that Garcia was somehow remiss in her
duties as Chief Accountant of LSQC, nevertheless, for lack of malicious intent or fraud, her
negligence or carelessness is not a justifiable ground to impose the ultimate penalty of dismissal
from employment.
Hence, the dismissal of Garcia is not valid.
90 |
NEGLECT OF DUTY MUST BE GROSS AND HABITUAL
Josephine A. Casco vs. National Labor Relations Commission and/or Thelma N. Clemente
G.R. No. 200571; February 19, 2018
Bersamin, J.
FACTS:
This is an appeal that seeks to set aside the decision of the CA which affirmed the NLRC
decision in reversing the Labor Arbiter’s ruling, and which declared petitioner Josephine Casco’s
dismissal to be valid.
Private respondent Capitol Medical Center (Capitol) is a private hospital where petitioner
is the Nurse Supervisor in its Operating Room. In 2008, a representative of Abbot Laboratories
conducted a calibration of the Operating Room's vaporizers and found that several hospital
equipment were missing. A complaint for gross negligence in connection with the loss of hospital
equipment has been filed against the petitioner. Thereafter, Capitol issued a letter of termination.
Petitioner then filed a complaint for illegal dismissal and damages against respondents.
Petitioner contends that care and custody of equipment were tasked upon the Head Nurse
and that loss of trust and confidence required willfulness on her part but the same was lacking thus
she could only be guilty of simple negligence and such offense was not punishable with dismissal.
On the other hand, respondents maintain that petitioner did not institute control measures to secure
the equipment under her custody and her acts warranting her dismissal were voluntary, willful and
blameworthy for having resulted in financial loss to the employer.
ISSUE:
Was petitioner’s alleged neglect of duty gross and habitual, as to warrant a valid dismissal?
RULING:
No, petitioner's alleged neglect of duty was not gross and habitual, thereby the dismissal
on such ground was not valid.
As stated in School of the Holy Spirit of Quezon City v. Taguiam, neglect of duty, as a
ground for dismissal, must be both gross and habitual. Gross negligence implies a want or absence
of or a 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. Habitual neglect
implies repeated failure to perform one's duties for a period of time, depending upon the
circumstances. In termination cases, the burden of proving that the dismissal of the employees
was for a valid and authorized cause rests on the employer, who must show by substantial
evidence that the termination of the employment of the employee was validly made; the failure to
discharge this duty will mean that the dismissal was not justified and was, therefore, illegal.
In this case, respondent was not able to discharge the burden. Before the petitioner could
be held liable for gross and habitual negligence of duty, respondents must clearly show that part
of her duty as a Nurse Supervisor was to be the custodian of hospital equipment and machineries
within her area of responsibility. Yet, there was no evidence submitted that substantially proved
that the respondents had entrusted to her the custody of such property. Moreover, respondents
failed to establish that the petitioner had willfully and deliberately intended to be mindless of her
responsibilities, or that she had been reckless as to be blameworthy for her acts or omissions.
Therefore, petitioner was illegally dismissed from her employment.
| 91
RETRENCHMENT MAY ONLY BE EXERCISED IN COMPLIANCE WITH SUBSTANTIVE

AND PROCEDURAL REQUISITES
La Consolacion College of Manila, et al vs. Virginia Pascua

G.R. No. 214744; March 14, 2018
Leonen, J.
FACTS:
decision of CA which reversed the NLRC decision and reinstating the LA decision, and declared
that respondent Virginia Pascua (Pascua) ‘s employment was illegally terminated.
Pascua's services as school physician were engaged by petitioner La Consolacion College

of Manila (La Consolacion). On September 29, 2011, Pascua was invited by Albert Manalili, La
Consolacion's Human Resources Division Director, to a meeting wherein she was handed her
termination of employment letter. The reason for her dismissal was said to be the current financial
situation of La Consolacion caused by the decrease in enrollment. After her exit clearance, Pascua
filed a complaint for illegal dismissal against La Consolacion, Sr. Mora, Manalili, and Manabat.
Pascua pointed out that the part-time school physician, Dr. Venus Dimagmaliw should
have been considered for dismissal first or La Consolacion could have asked her to revert to part-
time status instead. Sr. Mora explained that Pascua in particular was retrenched because her
position, the highest paid in the health services division, was dispensable.
ISSUE:
Was Pascua’s retrenchment justified by the reason that she had highest rate of pay?
RULING:
No, Pascua’s retrenchment was invalid.
The Labor Code recognizes retrenchment as an authorized cause for terminating

employment. However, it may only be exercised in compliance with substantive and procedural
requisites. As to the substantive requisites, an employer must first show that the retrenchment is
reasonably necessary and likely to prevent business losses. Second, an employer must also show
that it exercises its prerogative to retrench employees in good faith and not to defeat or circumvent
the employees' right to security of tenure. Third, an employer must demonstrate that it used fair
and reasonable criteria in ascertaining who would be dismissed and who would be retained among
the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship
for certain workers. Procedurally, employers must serve a written notice both to the employees
and to the DOLE at least one month prior to the intended date of retrenchment and they must pay
the retrenched employees separation pay equivalent to one month pay or at least 1/2 month pay
for every year of service, whichever is higher.
In this case, La Consolacion's failure was non-compliance with the third substantive
requisite of using fair and reasonable criteria that considered the status and seniority of the
retrenched employee. La Consolacion's disregard of respondent's undisputed seniority and
preferred status relative to a part-time employee indicates its resort to an unfair and unreasonable
criterion for retrenchment. Its flawed standard for retrenchment constrains the Court to maintain
that respondent was illegally dismissed.
Hence, respondent, deemed to be employed on a part-time basis from the effective date
of her wrongful termination, is entitled to backwages corresponding to such status and period.
92 |
AMPLE OPPORTUNITY TO BE HEARD IS ANY MEANINGFUL OPPORTUNITY (VERBAL

OR WRITTEN) GIVEN TO THE EMPLOYEE TO ANSWER THE CHARGES AGAINST HIM
Central Azucarera De Bais and Antonio Steven Chan vs. Heirs of Zuelo Apostol
G.R. No. 215314; March 14, 2018
Reyes, Jr., J.
FACTS:
decision of the CA which affirmed the NLRC decision reversing the LA ruling and which found
respondent Zuelo Apostol to have been illegally dismissed.
Respondent, now deceased and represented by his heirs, commenced his 20 years of
employment with petitioner Central Azucarera de Bais (CAB) when he was hired as the latter's
Motor Pool Over-All Repairs Supervisor. During the inspection of Tomasito A. Rosel, one of CAB's
security guards, it was discovered that respondent was using his company house, as well as other
company equipment to repair privately owned vehicles. CAB management then through its
resident manager, Roberty Y. Dela Rosa, issued a memorandum addressed to respondent for
violating Rule 9 of CAB's Rules of Discipline. Respondent submitted a handwritten explanation.
Thereafter, respondent received a copy of the termination letter. Respondent filed a Complaint
against the petitioners for constructive dismissal, among others.
The LA dismissed the complaint after finding that CAB complied with the twin requirements
of notice in relation to the dismissal of the respondent. On appeal, the NLRC reversed the LA’s
decision and ruled that the respondent should be given the opportunity to be heard through a
hearing. The CA, in turn, affirmed the NLRC’s decision.
ISSUE:
Is termination without a formal hearing illegal for being a violation of due process?
RULING:
No. Termination without formal hearing is not illegal for being a violation of due process.
As provided in the case of Perez v. Philippine Telegraph and Telephone Company, “ample
opportunity to be heard" means any meaningful opportunity (verbal or written) given to the
employee to answer the charges against him and submit evidence in support of his defense,
whether in a hearing, conference or some other fair, just and reasonable way.
In the present case, the petitioners furnished the respondent with two (2) notices: one, the
memorandum issued by CAB's resident manager which sought the respondent's explanation on
the incident and informed the respondent of the charges against him; and two, the letter of
termination which, this time, notified the respondent of CAB's decision to dismiss him. The Court
ruled that rights of the respondent to procedural due process was observed by CAB as documents
clearly show that CAB complied with the twin requirements of due process. Furthermore, it was
previously held that employer has a distinct prerogative to dismiss an employee if the former has
ample reason to distrust the latter or if there is sufficient evidence to show that the employee has
been guilty of breach of trust. In the case at bar, a perusal of the entirety of the records would
reveal that all the requirements for the valid dismissal of the respondent exist. It is not disputed
that respondent is in a position of trust and confidence and that he did violate the company rules.
Hence, respondent was validly dismissed.
| 93
CONTRACT IS DEEMED EXTENDED DESPITE ABSENCE OF EXTENSION AGREEMENT

IF THE EMPLOYER IS AWARE THAT THE EMPLOYEE CONTINUED WORKING
Princess Talent Center Production, Inc. vs. Desiree T. Masagca

G.R. No. 191310; April 11, 2018
FACTS:
In this petition for review on Certiorari under Rule 45, the petitioners assail the CA’s
decision which annulled the NLRC’s decision and ordered them to pay respondent her one-year
unpaid salaries jointly and severally with Saem Entertainment Company, Ltd. (SAENCO).
Respondent Desiree Masagca auditioned for a singing contest at ABC Channel 5 when a
talent manager approached her to discuss her showbusiness potential. Enticed by thoughts of a
future in the entertainment industry, respondent went to the office of petitioner Princess Talent
Center Production, Inc. (PTCPI). A Model Employment Contract for Filipino Overseas Perf.orming
Artists (OPAS) to Korea was executed with PTCPI as the Philippine agent of SAENCO, the Korean
principal/promoter. The contract has a duration of six (6) months extendible for another six months
by mutual agreement of the parties. Respondent left for South Korea and worked there as a singer
for nine (9) months, until her repatriation to the Philippines sometime in June 2004. Believing that
the termination of her contract was unlawful and premature, respondent filed a complaint against
PTCPI and SAENCO with the NLRC.
Respondent alleged that she did not receive any salary and subsisted only on the 20%
commission that she received. PTCPI alleged that respondent was repatriated to the Philippines
on account of her illegal or immoral activities which violated the club policies of SAENCO. Her
salaries were also paid in full as evidenced by the nine cash vouchers. PTCPI alleged that
respondent on her own extended her Employment Contract with SAENCO and so its liability should
not extend beyond the original six-month term of the Employment Contract because the extension
was made without their participation or consent.
ISSUE:
Is the contract of employment deemed extended even without any extension agreement
where the employer is aware of the employee’s continued work?
RULING:
Yes, the contract of employment is deemed extended without any extension agreement.
Ideally, the extension of an employment contract should also be reduced into writing and
submitted/reported to the appropriate Philippine labor authorities. Nonetheless, even in the
absence of a written contract evidencing an extension of employment, the same is practically
admitted by petitioners, subject only to the defense that there is no proof of their knowledge of or
participation in said extension and so they cannot be held liable for the events that transpired
between respondent and SAENCO during the extension period. Petitioners presented nine
vouchers to prove that respondent received her salaries from SAENCO for nine months.
Petitioners also did not deny that petitioner Moldes, President of petitioner PTCPI, went to confront
respondent about the latter's outstanding loan at the Seaman's Seven Club in Ulsan, South Korea
in June 2004, thus, revealing that petitioners were aware that respondent was still working for
SAENCO up to that time.
Therefore, petitioners should pay Masagca because the contract of employment is deemed
extended.
94 |
THERE IS NO ILLEGAL TERMINATION OF EMPLOYMENT WHEN THERE WAS NO

TERMINATION BY THE EMPLOYER
Renante B. Remoticado vs. Typical Construction Trading Corp. and Rommel M. Alignay
G.R. No. 206529; April 23, 2018
Leonen, J.
FACTS:
This is a petition for review on Certiorari assailing the CA decision which affirmed the LA’s
dismissal of Renante Remoticado (Remoticado)’s complaint for illegal dismissal after finding that
he voluntarily resigned.
Remoticado’s services were engaged by respondent Typical Construction Trading

Corporation (Typical Construction) as a helper in its construction projects. As evidenced by sworn
statements, the field human resources officer Nieto and Remoticado’s co-workers recalled that on
December 6, 2010, Remoticado was absent without official leave. He remained absent until
December 20, 2010 when he informed Nieto that he was resigning. He was advised to return the
next day as his final pay had yet to be computed. The next day, he tried claiming his separation
pay but the same was refuted by Nieto explaining that Remoticado is not entitled thereto because
he voluntarily resigned. He proceeded to sign the “Kasulatan ng Pagbawi ng Karapatan at Kawalan
ng Paghahabol”, a waiver and quitclaim. Subsequently, he filed a complaint for illegal dismissal
against respondent.
In his complaint, Remoticado claimed that he was told to stop reporting to work due to a
“debt at the canteen” and thereafter was prevented from entering the respondent’s premises. On
the contrary, respondent presented the waiver and quitclaim to cast doubt on the veracity of the
petitioner’s recollection of events. The LA dismissed the complaint for lack of merit based on the
finding that Remoticado voluntarily resigned. On appeal, NLRC denied the same. The CA, in turn,
affirmed the decision of the LA.
ISSUE:
Was Remoticada illegally dismissed by the respondent despite his acquiescence on the
waiver and quitclaim?
RULING:
No, Remoticada was not illegally dismissed in view of the waiver and quitclaim that he
executed.
In illegal termination cases, the burden is upon the employer to prove that termination of
employment was for a just cause. However, as provided in Doctor v. NII Enterprises, the
complaining employee must first establish by substantial evidence the fact of termination by the
employer. If there is no proof of termination by the employer, there is no point in even considering
the cause for it. There can be no illegal termination when there was no termination.
In the case at bar, petitioner failed to present convincing evidence as to his version of
events on his alleged illegal dismissal. His basic narrative is bereft of supporting details that could
be taken as badges of veracity. In addition, despite the waiver and quitclaim being antedated,
petitioner never disavowed the same. Generally, jurisprudence frowns upon waivers and
quitclaims forced upon employees. However, these are not invalid when shown to be freely
executed.
Hence, Remoticada was not illegally dismissed by the respondent.
| 95
WAIVERS AND QUITCLAIMS VOLUNTARILY ENTERED INTO AND REPRESENTING A

REASONABLE SETTLEMENT ARE VALID
University of the East vs. Masangkay

G.R. No. 226727; April 25, 2018
Velasco, Jr., J.
FACTS:
This is a petition for review on Certiorari under Rule 45 of the Rules of Court seeking the
reversal of the decision of the Court of Appeals (CA).
Respondents Masangkay and Regondola were regular faculty members, Associate

Professors, and Associate Deans of petitioner University of the East (UE)-Caloocan Campus.
Respondents submitted manuals, representing themselves under oath as the authors thereof,
together with their co-author, a certain Rocamora. When UE received complaints via email from
the real authors that the manuals were plagiarized, it investigated the matter. Respondents actively
participated in the investigation. Eventually, UE’s Board of Trustees dismissed respondents.
Rocamora (the co-author) sought reconsideration of the decision to the Board of Trustees.
Respondents, however, did not appeal the decision dismissing them and instead opted to claim
the benefits due them. These were duly acted upon by UE. For the amounts that they received,
they signed vouchers and pay slips.
Rocamora’s case reached the SC and the court ruled that Rocamora was illegally
dismissed. Meanwhile, almost three years after having been dismissed from service and after
collecting their accrued benefits, respondents then filed a complaint for illegal dismissal before the
NLRC, claiming that they were also illegally dismissed applying the doctrine of stare decisis of
Rocamora’s case, who was a co-author.
ISSUE:
Does stare decisis apply to respondents who did not appeal their dismissal and instead
opted to receive their benefits where their co-author, who appealed, was held in another case to
have been illegally dismissed?
RULING:
No. Stare decisis is not applicable because unlike Rocamora, respondents acquiesced to
UE's decision to terminate their services and even requested the release of and thereafter claimed
the benefits due them.
As provided in Periquet v. National Labor Relations Commission, not all waivers and
quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the parties and may not later be disowned
simply because of a change of mind. It is only where there is clear proof that the terms of settlement
are unconscionable that the law will step in to annul the questionable transaction.
Rocamora’s case is not on all fours with the present case. First, herein respondents
categorically represented to UE under oath that the Manuals were free from plagiarism — an act
in which their co-author Rocamora did not participate. Second, respondents benefited financially
from the sale of the Manuals while Rocamora did not. Third, respondents acquiesced to UE's
decision to terminate their services. Thus, there was no reason to rule that respondents did not
waive their right to contest UE's decision. Based on their actuations subsequent to their
termination, it is clear that they were amenable to UE's decision of terminating their services on
the ground of academic dishonesty.
Hence, the Rocamora case cannot be used as a precedent to the case at bar. In view of
the substantial evidence presented by petitioner UE that respondents committed plagiarism, then
the complaint for illegal dismissal must be dismissed for utter lack of basis.
96 |
STIPULATIONS, CLAUSES, AND TERMS AND CONDITIONS OF THE EMPLOYMENT

CONTRACT MUST NOT CONTRAVENE LABOR LAW PROVISIONS
Dionella Gopio vs. Salvador Bautista

G.R. No. 205953; June 6, 2018
Jardeleza., J.
FACTS:
This is a petition for review on Certiorari seeking the reversal of the decision of the CA in
which annulled the decision issued by the NLRC and reinstated the decision rendered by the Labor
Arbiter denying petitioner's motion for reconsideration.
Salvador Bautista (Bautista) was hired as a Project Manager for Shorncliffe in Papua New Guinea
through Job Asia, a single proprietorship owned by petitioner Dionella Gopio, which deploys
manpower for overseas work. Even before the expiration of his employment contract, Bautista was
notified that his services will be terminated due to unsatisfactory performance and failure to meet
the company’s standards.
Bautista filed a complaint with the NLRC against petitioners for illegal dismissal. He
claimed that he was dismissed without just cause since there had been no job evaluation
conducted prior to Shorncliffe's decision to dismiss him from employment and that he was deprived
of due process. Petitioners, on the other hand, allege that there was just cause as Bautista
performed below the company’s standards and that this cause falls under “other grounds” of
termination in the employment contract. As to the due process requirement, Shorncliffe claimed
that Article 4.3 of the employment contract provides that a one-month salary may be given in lieu
of the one month written notice.
ISSUE:
Was Bautista’s employment validly terminated even without notice as he was already given
the equivalent of one-month salary in lieu thereof, as provided in Article 4.3 of the employment
contract?
RULING:
No. Bautista’s employment was not validly terminated when it was made without notice.
The employer is bound to adduce clear, accurate, consistent, and convincing evidence to
prove that the dismissal is valid and legal. This is consistent with the principle of security of tenure
as guaranteed by the Constitution and reinforced by Article 292(b) of the Labor Code of the
Philippines. Furthermore, the Labor Code requires both notice and hearing; notice alone will not
suffice.
In this case, Bautista was not given a chance to defend himself since five days after the
notice was served, he was repatriated. Furthermore, Article 4.3 of the employment contract
violates the provisions of the Labor Code on security of tenure since it gives the employer the
option to do away with the notice requirement as long as he grants one-month salary to the
employee. The provision deprives the employee of due process and violates his right to be
apprised of the grounds for his termination without giving him an opportunity to defend himself.
Moreover, the term "other grounds" is all-encompassing. It makes the employee susceptible to
arbitrary dismissal. The employee may be terminated not only for just or authorized causes but
also for anything under the sun that may suit his employer.
Hence, Bautista was illegally dismissed.
| 97
WILLFUL DISOBEDIENCE OF COMPANY’S ORDER IS A VALID GROUND FOR

DISMISSAL
Marlon L. Arcilla, vs. Zulisibs, Inc., Piandre Salon, and Rosalinda Francisco
G.R. No. 225125; June 6, 2018
Carpio, J.
FACTS:
This is a petition for review assailing the CA’s and NLRC’s decision finding petitioner
Marlon Arcilla (Arcilla)’s dismissal valid and for just cause.
Respondent Zulisibs, Inc. (Zulisibs) operates respondent Piandre Salon (Piandre), an

establishment engaged in the operation of beauty salons. In 2000, petitioner Arcilla was hired by
Piandre and was assigned to the Alabang, Muntinlupa Branch. His wife was also hired and was
assigned to Salcedo Village, Makati City branch. After some time, both were promoted as senior
hair stylists. Sometime in 2014, respondent Zulisibs received an information that Arcilla was
establishing a beauty salon. Subsequently, Arcilla was placed under preventive suspension. Upon
investigation, it was found and admitted by Arcilla that he extended help to the salon owner who
happens to be his brother-in-law. In September 2014, Arcilla’s employment was terminated due to
loss of trust.
Subsequently, Arcilla filed a complaint for illegal dismissal. He claimed that his dismissal
was invalid and not for just cause. On the other hand, respondents alleged that Arcilla committed
serious misconduct or willful disobedience of the company’s lawful orders, and of fraud or willful
breach of trust reposed in him by the company. They claimed that these justified Arcilla’s dismissal.
The LA dismissed the complaint for lack of merit. On appeal, NLRC affirmed the LA Decision. On
appeal, the CA upheld the validity of Arcilla’s dismissal.
ISSUE:
Was Arcilla’s involvement in the establishment of another beauty salon a valid cause for
dismissal?
RULING:
Yes, Arcilla’s involvement in setting up a competing beauty salon was a valid cause for his
dismissal.
Article 297 (a) and (c) of the Labor Code provides for termination by employer on the
ground of: “Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work,” and “Fraud and willful breach by the
employee of the trust reposed in him by his employer or duly authorized representative.”
In the present case, it was stated in their agreement that petitioner is prohibited from setting
up or being involved in a business similar to that of private respondents’ during the course of their
employment. As private respondents' trusted Senior Hairstylist for quite several years, it is
incumbent upon him to have read and understood its provisions and be fully aware of the
prohibitions and penalties imposed upon erring employees. The important fact remains that Arcilla
made an admission that he gave funds to his brother-in-law for the new salon in Alabang which
directly competes with the business of his employer. It is not disputed that the new beauty salon
is located less than a kilometer away from Piandre Salon in Alabang. His involvement in setting up
a competing salon, which albeit indirect, constitutes serious misconduct because of his blatant
disregard of the terms and conditions of his contract/agreement with the private respondents.
Hence, Arcilla was validly dismissed.
98 |
PENALTIES IMPOSED MUST BE COMMESURATE TO THE EMPLOYEE’S INFRACTIONS
Nicanor F. Malcaba, Christian C. Nepomuceno, And Laura Mae Fatima F. Palit-Ang vs.
ProHealth Pharma Philippines, Inc., et al.
G.R. No. 209085; June 6, 2018
Leonen, J.
FACTS:
This is a petition for review on Certiorari assailing the CA decision which reversed the
NLRC and the Labor Arbiter’s ruling and held that petitioners Christian Nepomuceno
(Nepomuceno) and Laura Palit-Ang (Palit-Ang) were validly dismissed from service for loss of trust
and confidence, and insubordination, respectively.
ProHealth Pharma Philippines, Inc. (ProHealth) is a corporation engaged in the sale of

pharmaceutical products and health food on a wholesale and retail basis. Nepomuceno and Palit-
Ang were employed as its Business Manager and Finance Officer, respectively.
For Nepomuceno’s part, in 2008, he applied for a vacation leave for April 24, 25 and 28,
which was duly approved. When he left on April 23, ProHealth asked him to explain his absence.
He replied through an email that he tried to inform them that his flight was on April 22, not on April
23, but he was unable to connect on the phone. On May 7, Nepomuceno was given notice of
termination on the ground of fraud and willful breach of trust. For Palit-Ang’s part, she was given
an instruction to release cash advance, however, she was not able to do so. Dissatisfied with her
explanation, she was handed a notice of termination for disobeying the order of ProHealth’s highest
official.
Aggrieved, Nepomuceno and Palit-Ang filed separate illegal dismissal complaints.

Respondents argued that they were justified in dismissing Nepomuceno and Palit-Ang because
(1) Nepomuceno’s abandonment of his duties at critical sales period was a ground for them to lose
their trust and confidence; and (2) Palit-Ang defied the lawful instructions of their officials and
illustrated her grave disrespect towards authorities.
ISSUE:
Was the termination of the petitioner’s employment commensurate to their alleged
infractions?
RULING:
No, the cited petitioners’ acts were not sufficient to terminate their employment.
In all cases of employment termination, the employee must be granted due process. The
manner by which this is accomplished is stated in Book V, Rule XXIII, Section 2 of the Rules
Implementing the Labor Code. While an employer is free to regulate all aspects of employment,
the exercise of management prerogatives must be in good faith and must not defeat or circumvent
the rights of its employees. While the inherent right of employers to discipline their employees is
recognized, the penalties imposed must be commensurate to the infractions committed. Dismissal
of employees for minor and negligible offenses may be considered as illegal dismissal.
In the present case, both Nepomuceno and Palit-Ang’s termination were not
commensurate to the infractions attributed to them. As to Nepomuceno’s alleged infraction,
respondent did not suffer any financial damage as a result of his absence. On the other hand, as
to Palit-Ang’s alleged infraction, her failure to immediately release the requested money was not
a result of a perverse mental attitude but was merely because of heavy workload.
Hence, the penalty of dismissal for both of them was not commensurate to their infractions.
| 99
CONSTRUCTIVE DISMISSAL EXISTS WHEN AN EMPLOYEE IS LEFT WITH NO CHOICE

BUT TO FOREGO CONTINUED EMPLOYMENT
John L. Borja and Aubrey L. Borja vs. Randy B. Miñoza and Alaine S. Bandalan
G.R. No. 218384; July 3, 2017
Perlas-Bernabe, J.
FACTS:
In this petition for review on Certiorari, petitioners John L. Borja and Aubrey L. Borja assails
the resolution rendered by the CA, which set aside the decision of the NLRC and reinstated the
ruling of the Labor Arbiter (LA) finding respondents Randy B. Miñoza (Miñoza) and Alain S.
Bandalan (Bandalan) to have been constructively dismissed.
Respondents were employed as cooks for a restaurant operated by petitioners. The

company implements a “double-absent” policy, which considers an employee absent for two (2)
days without pay if he incurs an absence on a Friday, Saturday, or Sunday. Because of such policy,
Miñoza and Bandalan absented themselves on a Saturday and Sunday, respectively, since they
both were not able to report to work the day prior and will not be receiving pay anyway. Petitioners
dismissed them from employment after their failure to explain their absence.
Respondents alleged that they reported for work but were barred from entering the
restaurant. Instead they were forced to receive separate memoranda, during a special meeting,
asking them to justify their unexplained absences. Thereat, they alleged that a certain Mark Opura
(Opura), the person called by petitioners to keep the other employees from being harassed,
created a hostile work environment and threatened them to leave employment. Out of fear,
respondents no longer reported for work the following day, and instead filed a complaint for illegal
dismissal. In defense, petitioners explained that the “double-absent” policy was proposed by the
employees and that Opura was called on to maintain order in the restaurant and to keep watch.
ISSUE:
Did the petitioners create a hostile working environment leaving respondents without any
choice but to relinquish their employment?
RULING:
No, the petitioners did not leave respondents without any choice but to relinquish
employment.
As provided in Soliman Security Services, Inc. v. CA, constructive dismissal exists when
an act of clear discrimination, insensibility, or disdain on the part of the employer has become so
unbearable as to leave an employee with no choice but to forego continued employment, or when
there is cessation of work because continued employment is rendered impossible, unreasonable,
or unlikely, as an offer involving a demotion in rank and a diminution in pay. The test of constructive
dismissal is whether a reasonable person in the employee's position would have felt compelled to
give up his job under the circumstances.
Petitioners were validly exercising their management prerogative when they called
meetings to investigate respondents' absences and gave them separate memoranda seeking
explanation therefor. Respondents failed to prove that Opura's presence created a hostile work
environment, or that the latter threatened and intimidated them so much as to convince them to
leave their employment.
Therefore, despite their allegations, respondents failed to prove through substantial

evidence that they were discriminated against, or that working at the restaurant had become so
unbearable that they were left without any choice but to relinquish their employment.
100 |
NOTHING IS REPREHENSIBLE OR ILLEGAL WHEN AN EMPLOYER GRANTS AN

EMPLOYEE A CHANCE TO RESIGN AND SAVE FACE RATHER THAN SMEAR THE
LATTER’S EMPLOYMENT RECORD
Edward M. Couse vs. Ferritz Integrated Development Corporation

G.R. No. 230664; July 24, 2017
Tijam, J.
FACTS:
This is a petition for review assailing the decision of the CA affirming the resolution of the
NLRC upholding the Labor Arbiter’s finding that petitioner Edward M. Cosue was not illegally
dismissed.
Petitioner filed a complaint against respondent Ferritz Integrated Development Corporation

for illegal dismissal. He started working for the respondent as a construction worker and later
performed the work as a janitor staff. Melissa Tanya Germino (Germino), head of the respondent
company asked petitioner to stay in the building to watch over the generator due to the frequent
power outage and to assist the newly hired guards. The wires got stolen during the watch of the
petitioner. Because of this, he was summoned by Germino who verbally informed him that he was
suspended on suspicion that he stole the electrical wires.
Petitioner maintained that he was constructively dismissed because he reported to work

immediately after his suspension he was not anymore allowed to work. He argued that mere
absence or failure to report is not tantamount to abandonment of work. On the other hand,
respondent argued that there was no illegal dismissal as there was an agreement between
respondent and petitioner that the latter would just resign. However, petitioner did not file his
resignation, and eventually instituted his Complaint for illegal dismissal.
ISSUE:
Was the petitioner constructively dismissed when the respondent gave him a graceful
dismissal?
RULING:
No, the petitioner was not constructively dismissed when the respondent gave him a
graceful exit. Respondents' decision to give petitioner a graceful exit is perfectly within their
discretion.
As provided in Central Azucarera de.Bais, Inc. v. Siason, there is nothing reprehensible or

illegal when the employer grants the employee a chance to resign and save face rather than smear
the latter's employment record. Petitioner's claim of constructive dismissal fails. Bare allegations
of constructive dismissal, when uncorroborated by the evidence on record, as in this case, cannot
be given credence.
In this case, records do not show any demotion in rank or a diminution in pay made against
petitioner. Neither was there any act of clear discrimination, insensibility or disdain committed by
respondents against petitioner which would justify or force him to terminate his employment from
the company.
Therefore, the petitioner was not constructively dismissed by the respondent.
| 101
TO ESTABLISH DEFENSE OF VOLUNTARY RESIGNATION, BURDEN OF PROOF RESTS

ON THE EMPLOYER
FCA Security and General Services, Inc. vs. Sotero M. Academia, Jr. II
G.R. No. 189493; August 2, 2017
Bersamin, J.
FACTS:
This is a petition of review on Certiorari by petitioner FCA Security and General Services,
Inc. (FCA) assailing the decision of the CA reinstating the decision of the LA finding petitioner liable
for the illegally dismissal of respondent Sotero M. Academia, Jr.
Respondent was hired as a security guard by FCA. While he was assigned in an RCBC
branch, he had an altercation with a driver of Dunking Donuts, wherein respondent drew and
pointed his service firearm at the driver. FCA issued an inter-office memo relieving the respondent
from his post at the RCBC branch and directing him to report to the head office for instruction and
proper disposition.
FCA asserts that respondent had offered to voluntarily resign from the FCA. Such claim
was attested to by several employees of FCA. FCA also submits the results of the investigation of
the incident, which was signed by the respondent. Respondent on the other hand, submits that the
employees which substantiated and corroborated his verbal resignation were not just employees
of FCA but were its officers whose testimonies served their own best interest.
ISSUE:
Was the respondent’s voluntary resignation sufficiently established?
RULING:
Yes, respondent’s voluntary resignation was sufficiently established.
As provided in Grande v. Philippine Nautical Training College, in an illegal dismissal case,

the employer whose defense is the voluntary resignation of the employee must prove by clear,
positive and convincing evidence that the resignation was voluntary.
Petitioners submitted the results of the investigation of the respondent. The results
included the hand-written explanation on the incident at the RCBC branch as well as the
typewritten statement in question-and-answer form, both executed and signed by the respondent
himself. In addition, the fact alone that the corroborating employees were officers of FCA did not
discredit their confirmation of the verbal resignation of the respondent. The relationship of
employment between the witnesses and one of the parties, although a factor to weigh the value of
the testimony, is not of itself sufficient to discredit the testimony.
As the foregoing disquisition indicates, FCA fully discharged their burden of proof.
102 |
RESIGNATION CONTRADICTS CLAIM OF ILLEGAL DISMISSAL
Alicia M.L. Coseteng and Diliman Preparatory School vs. Leticia P. Perez
G.R. No. 185938; September 6, 2017
Reyes, Jr., J.
FACTS:
In this petition for review on Certiorari, petitioners Diliman Preparatory School (School) and
its former president, Alicia M.L. Coseteng, challenge the decisions of the CA and NLRC which
reversed the LA ruling that respondent Leticia P. Perez (Perez) voluntarily resigned and was not
constructively dismissed.
The School hired Perez as a teacher for its elementary students. During her service, Perez
was suspended twice for separate incidents involving negligence. First, several students reported
that she collected payment for subscription to Saranggola magazine, but for which they did not
receive their copies. Second, she admitted to allowing a student to cheat during the quarterly exas.
After serving suspension, she was informed that she would be temporarily re-assigned. Instead of
coming back to work, she tendered her resignation via a handwritten letter. Despite receiving
amounts under the School’s retirement program, she filed a complaint for constructive dismissal.
To support her claim of constructive dismissal, Perez claimed that she opted to resign from
work because she was being demoted to a floating status. Petitioners denied that Perez was
constructively dismissed from employment because her resignation was a free and voluntary act
on her part. They also refuted that Perez was demoted since her reassignment was due to a
legitimate concern, that is, the school year would have begun by the time Perez has served out
her suspension; she wouldn't be able to handle any class immediately at the beginning of a school
year.
ISSUE:
Did petitioner voluntarily resign so as to negate the claim of constructive dismissal?
RULING:
Yes, petitioner voluntarily resigned and was not constructively dismissed.
As provided in Divine Word College v. Mina, there is constructive dismissal when there is cessation
of work, because continued employment is rendered impossible, unreasonable or unlikely, as an
offer involving a demotion in rank or a diminution in pay and other benefits. It exists when there is
clear act of discrimination, insensibility or disdain by an employer which becomes unbearable for
the employee to continue his employment. Resignation, being voluntary, contradicts a claim of
illegal dismissal. Thus, when an employee tenders resignation, he or she has the burden of proving
that the resignation was not voluntary but was actually a case of constructive dismissal; that it is a
product of coercion or intimidation.
The School was able to satisfactorily explain that Perez was merely reassigned and not
demoted. While Perez has enjoyed her position of having a regular teaching load and advisory
class for years, and may have to adjust to her temporary assignment, it is a recognized rule that
not every inconvenience, disruption, difficulty, or disadvantage that an employee must endure
results in a finding of constructive dismissal.
Having failed to prove that her transfer was a result of discrimination, bad faith or disdain
by the petitioners, Perez's claim of constructive dismissal must necessarily fail.
| 103
THE FACTS OF ILLEGAL DISMISSAL MUST FIRST BE PROVED BY THE EMPLOYEE

BEFORE THE BURDEN SHIFTS TO THE EMPLOYER
Allan John Uy Reyes vs. Global Beer Below Zero, Inc.,

G.R. No. 222816; October 4, 2017
Peralta, J.
FACTS:
This is a petition for review on Certiorari seeking to declare illegal the dismissal of petitioner
Allan Reyes (Reyes) who was the operations manager of respondent Global Beer Below Zero Inc.,
(GBZ).
Reyes alleged that he was illegally terminated from work by GBZ’s Vice President for
Operations, Vinson Co Say (Co Say). Reyes alleged that on separate occasions, Co Say contacted
him through phone calls and text messages informing him not to report for work anymore. He
further averred that it was due to his leave of absences that caused his dismissal from work. GBZ,
on the other hand, alleged that it was Reyes who voluntarily stopped from coming to work and that
there was no order of dismissal on their part. Furthermore, according to GBZ, Reyes was
oftentimes absent without first securing the consent of GBZ.
Reyes filed a case for illegal dismissal. The Labor Arbiter (LA) ruled in favor of Reyes. On
appeal, National Labor Relations Commission (NLRC) affirmed the findings of the LA. However,
the Court of Appeals (CA) reversed the Decision of the NLRC, ruling that Reyes failed to prove by
sufficient evidence that he was dismissed from service. Hence, this petition.
ISSUE:
Does the employee need to prove the fact of illegal dismissal?
RULING:
Yes, the employee has the burden of proof in showing by substantial evidence that there
has been an illegal dismissal.
As provided in Philippine Rural Reconstruction Movement (PRRM) v. Pulgar, before the

employer must bear the burden of proving that the dismissal was legal, the employee must first
establish by substantial evidence the fact of his dismissal from service. In this case, the
complainant sufficiently alleged the surrounding circumstances of his dismissal. He was able to
state, with the required particularities how he was terminated from his employment. He stated in
detail that on January 19, 2012, he was not able to report for work early due to his son’s illness. He
also alleged that respondent Co Say called him and angrily told him not to report for work anymore
and that they will have to talk in a week’s time. While the allegations of the complainant may not
be taken as gospel truths at this point, the complainant was able to establish that he was dismissed
from his employment contrary to the denials of the respondents.
Thus, it is now incumbent upon the respondents to prove that the complainant was validly
dismissed from his job in the light of the detailed and straightforward narration of the complainant.
104 |
CONSTRUCTIVE DISMISSAL IS A DISMISSAL IN DISGUISE OR AN ACT AMOUNTING

TO DISMISSAL BUT MADE TO APPEAR AS IF IT WERE NOT
Meatworld International, Inc. vs. Dominique A. Hechanova

G.R. No. 208053; October 18, 2017
Del Castillo, J.
FACTS:
In this petition for review on Certiorari, petitioner Meatworld International assails the
resolution of the CA, which dismissed petitioner’s earlier petition for certiorari and affirmed the
decision of the NLRC and LA, finding petitioner liable for illegal dismissal of respondent Dominique
A. Hechanova (Hechanova).
Petitioner, a corporation engaged in selling fresh meat, hired respondent Hechanova as a

head butcher. Hechanova was allegedly suspended for violating SM Hypermarket Regulations.
After his suspension, he returned to the office of petitioner for his reassignment but was told that
there was no available outlet yet. He was temporarily assigned in Robinsons Manila but was
quickly relieved from assignment. He asked the supervisor when he can return to work. He was
told that he can return at any time. But upon his return he was scolded by the supervisor for not
arriving in the morning and told him "Magresign ka na lang or tanggalin ka namin”. Thereafter,
Hechanova filed a complaint for illegal dismissal before the LA.
Petitioner claimed that it did not dismiss respondent as he was the one who failed to report
for work, which made the vacancy which he was supposed to fill no longer available. Respondent
claims that petitioner forced him to resign since the latter refused to give him any work assignment.
ISSUE:
Does the failure to assign a previously suspended employee to an available post in the
absence of proof that there was no available post amount to illegal dismissal?
RULING:
Yes, the failure to assign a previously suspended employee to an available post in the
absence of proof that there were no posts available amounts to illegal dismissal.
The Court finds that although there was no actual dismissal, the failure of petitioner to
assign respondent to a specific branch without any justifiable reason constituted illegal constructive
dismissal. As stated in Galang v. Malasugui, constructive dismissal is defined as a cessation of
work because continued employment is rendered impossible, unreasonable or unlikely. Similarly,
there is constructive dismissal when an act of clear discrimination, insensibility or disdain by an
employer has become so unbearable to the employee leaving him with no option but to forego with
his continued employment.
In this case, petitioner admits that after relieving respondent from his assignment at
Robinsons Place Manila on January 5, 2011, it failed to assign him to a new branch. However, to
justify its failure, petitioner claims that there was no available post as the vacancy which
respondent was supposed to fill was no longer available since he failed to report on January 6,
2011. The employer should bear the burden of proving that there are no posts available to which
the employee temporarily out of work can be assigned. Petitioner failed to prove the same.
Therefore, petitioner’s failure to assign respondent to any post amounted to illegal

dismissal.
| 105
MERE FAILURE TO REPORT TO WORK IS INSUFFICIENT TO SUPPORT A CHARGE OF

ABANDONMENT; IT MUST BE PROVEN BY AN OVERT ACT OF DELIBERATE REFUSAL
TO RESUME EMPLOYMENT
Demex Rattancraft, Inc. vs. Rosalio A. Leron

G.R. No. 204288; November 8, 2017
Leonen, J.
FACTS:
This is a petition for review on Certiorari seeking to reverse the upholding of the illegal
dismissal of respondent Rosalio Leron (Leron) who was employed by petitioner Demex
Rattancraft, Inc. (Demex) as a weaver.
On June 28, 2006, Leron did not report for work. The next day, he filed a complaint against
Demex for illegal dismissal arguing that his dismissal was due to the accusation against him of
instigating a campaign to remove the foreman. Demex construed Leron's failure to report to work
as an absence without leave and sent Leron a notice requiring him to return to work. This was
personally served to Leron by one (1) of his co-employees. Demex then sent another notice to
Leron requiring him to report to work. Despite having received these two (2) notices, Leron did not
resume his post. Subsequently, Leron received a third notice from Demex informing him of its
decision to terminate his services on the ground of abandonment.
The Labor Arbiter (LA) ruled that Leron was legally dismissed which was affirmed by the
National Labor Relations Commission (NLRC). On appeal, the Court of Appeals found that Demex
failed to prove that there was abandonment on the part of Leron. Hence, this petition.
ISSUE:
Does the act of not reporting for work constitute abandonment?
RULING:
No, the mere act of not reporting for work does not constitute abandonment.
Article 297 of the Labor Code enumerates the just causes for the dismissal of an employee.
Although abandonment of work is not expressly enumerated as a just cause under Article 297 of
the Labor Code, jurisprudence has recognized it as a form of or akin to neglect of duty.
Abandonment of work has been construed as “a clear and deliberate intent to discontinue one’s
employment without any intention of returning back.” To justify the dismissal of an employee on
this ground, two (2) elements must concur, namely: “(a) the failure to report for work or absence
without valid or justifiable reason; and (b) a clear intention to sever the employer-employee
relationship.” Mere failure to report to work is insufficient to support a charge of abandonment. The
employer must adduce clear evidence of the employee’s “deliberate, unjustified refusal to resume
his employment,” which is manifested through the employee’s overt acts.
Intent to sever the employer-employee relationship can be proven through the overt acts
of an employee. However, this intent cannot be lightly inferred or legally presumed from certain
ambivalent acts. The overt acts, after being considered as a whole, must clearly show the
employee’s objective of discontinuing his or her employment. Petitioner’s evidence does not clearly
establish a case of abandonment. Petitioners failed to prove the second element of abandonment,
which is regarded by this Court as the more decisive factor. Petitioners point to respondent’s
absences, noncompliance with the return-to-work notices, and his alleged act of crumpling the first
return-to-work notice as indicators of abandonment. These acts still fail to convincingly show
respondent’s clear and unequivocal intention to sever his employment.
Hence, respondent was illegally dismissed from employment as his act of not reporting for
work does not constitute abandonment.
106 |
NON-COMPLIANCE WITH RETURN TO WORK DIRECTIVE IS DEEMED

ABANDONMENT OF EMPLOYMENT
Mehitabel, Inc. vs. Jufhel L. Alcuizar

G.R. No. 228701-02; December 13, 2017
Velasco, Jr., J.
FACTS:
In this petition for review on Certiorari, petitioner Mehitabel, Inc. assails the decision of the
CA, which reversed the decision of the NLRC and LA, finding respondent Jufhel L. Alcuizar
(Alcuizar) illegally dismissed.
Mehitabel, Inc. hired Alcuizar as its Purchasing Manager. Alcuizar’s immediate supervisor
started receiving complaints on his work ethics. Despite repeated counseling, Alcuizar’s
performance exacerbated to the point that even the top-level officers of the company have
expressed their dissatisfaction over his ineptitude. Alcuizar left the premises of Mehitabel, Inc. and
gave word that he was quitting his job. Mehitabel, Inc. wrote to Alcuizar via registered mail to inform
him that the company decided to treat his act of leaving the office as a violation of its code of
conduct, specifically on the provision of abandonment. Despite receipt of the letter, Alcuizar never
reported back to work nor submitted his written explanation.
Alcuizar filed a complaint for illegal dismissal before the LA. Respondent emphasized that
petitioner caused the publication in a newspaper and online a notice of a vacant position for
Purchasing Manager, the very same item he was occupying in the company. Subsequently, he
was allegedly advised that the company no longer required his services for his failure to
satisfactorily meet the company's performance standards. Seeking to absolve itself from the
charge, petitioner countered that respondent was not illegally dismissed, and that it was the latter
who abandoned his post.
ISSUE:
Did Alcuizar commit an act of abandonment which warranted his dismissal?
RULING:
Yes. Alcuizar abandoned his job. Abandonment is a ground for dismissal for just cause.
As stated in Noblejas v. Italian Maritime Academy Phils., Inc., in illegal termination cases,
the fact of dismissal must be established by positive and overt acts of an employer indicating the
intention to dismiss before the burden is shifted to the employer that the dismissal was legal.
In the extant case, the records are bereft of any evidence that would corroborate
respondent’s claim that he was actually dismissed from employment. Petitioner herein issued a
Return to Work order to respondent, which the latter received through registered mail. This
circumstance bears more weight and effectively negates respondent’s self-serving asseveration
that he was dismissed from employment; it more than implies that the company still considered
respondent as its employee. Respondent’s noncompliance with the directive in the Return to Work
signifies his intention to sever the employment relation with petitioner and gives credence to the
latter’s claim that it was respondent who abandoned his job.
Therefore, there is no illegal dismissal to speak of. Instead, it was respondent who clearly
demonstrated his lack of interest in resuming his employment with petitioner, culminating in
abandonment.
| 107
IN ILLEGAL DISMISSAL CASES, THE EMPLOYER HAS THE BURDEN OF PROVING

THAT THE TERMINATION WAS FOR A VALID OR AUHORIZED CAUSE; EMPLOYEE
MUST FIRST ESTABLISH BY SUBSTANTIAL EVIDENCE THE FACT OF HIS DISMISSAL
FROM EMPLOYMENT
Expedition Construction Corporation, Simon Lee Paz and Jordan Jimenez vs. Alexander M.
Africa et. al.
G.R. No. 228671; December 14, 2017
Del Castillo, J.
FACTS:
In a petition for review on Certiorari, petitioner Expedition Construction Corp. (Expedition),
Simon Lee Paz, and Jordan Jimenez as CEO and Operations Manager, respectively, assails the
decision of the CA, which affirmed with modification the NLRC’s order of reinstatement and the
payment of full backwages of drivers-respondents Alexander Africa et. al. for having been illegally
dismissed.
Petitioners engaged the services of respondents as garbage truck drivers to collect

garbage from different cities and transport the same to the designated dumping site. Respondents
alleged that they were illegally terminated from employment when they were prevented from
entering the premises of Expedition without cause or due process. They claimed that they were
regular employees of Expedition.
Expedition, in its Position Paper, countered that respondents were not illegally dismissed.
It averred that it entered into separate contracts with the cities of Quezon, Mandaluyong, Caloocan,
and Muntinlupa for the collection and transport of their garbage to the dump site; that respondents
were not its employees; that they were not under Expedition’s direct control and supervision and,
that it nonetheless tried to accommodate respondents by giving them intermittent trips whenever
the need arose. Petitioner claims that respondents’ money claims had no legal basis.
ISSUE:
Will respondents’ complaint for illegally dismissal prosper despite lack of sufficient proof
that they were laid off work?
RULING:
No, respondents were not illegally dismissed as there was no sufficient proof that they
were actually laid off from work.
As stated in Noblejas v. Italian Maritime Academy Phils., Inc., in illegal dismissal cases,
the employer has the burden of proving that the termination was for a valid or authorized cause.
However, it is likewise incumbent upon an employee to first establish by substantial evidence the
fact of his dismissal from employment by positive and overt acts of an employer indicating the
intention to dismiss.
In this case, there was no positive or direct evidence to substantiate respondents' claim
that they were dismissed from employment. Aside from mere assertions, the record is bereft of
any indication that respondents were barred from Expedition's premises. If at all, the evidence on
record showed that Expedition intended to give respondents new assignments as a result of the
termination of the garbage hauling contracts with Quezon City and Caloocan City where
respondents were regularly dispatched. However, instead of returning and waiting for their next
assignments, respondents instituted an illegal dismissal case against Expedition. It was
respondents who no longer wanted to return to work.
Hence, respondents were not illegally dismissed.
108 |
AN EMPLOYEE IS CONSIDERED TO BE CONSTRUCTIVELY DISMISSED FROM SERVICE

IF AN ACT OF CLEAR DISCRIMINATION, INSENSIBILITY OR DISDAIN BY AN
EMPLOYER HAS BECOME SO UNBEARABLE TO THE EMPLOYEE AS TO LEAVE HIM
OR HER WITH NO OPTION BUT TO FOREGO WITH HIS OR HER CONTINUED
EMPLOYMENT
St. Paul College, Pasig, and Sister Teresita Baricaua, SPC vs. Anna Liza L. Mancol and Jennifer
Cecile S. Valera
G.R. No. 222317; January 24, 2018
Peralta, J.
FACTS:
In a petition for review on Certiorari, petitioners St. Paul College, Pasig (SPCP) and Sister
Teresita Baricaua (Sister Baricaua) assail the decision of the CA, which reversed and set aside
the decision of the NLRC and reinstated that of the LA, finding respondents Anna Liza L. Mancol
(Mancol) and Jennifer Cecile Valera (Valera) constructively dismissed by the petitioners.
Respondents Mancol and Valera were both hired as pre-school teachers of petitioner St.
Paul College, Pasig (SPCP). Mancol, on May 18, 2010, filed a leave of absence for the period May
21 to June 18, 2010 as she was to undergo a fertility check-up in Canada. She received a letter
from petitioner Sister Baricaua, requiring her to explain why she should not be dismissed for taking
a leave of absence without approval. When Mancol reported back to SPCP, she was allegedly
barred by SPCP and Sister Baricaua from teaching in her class. Thus, Mancol alleged that all
these acts constitute constructive dismissal.
Valera, on the other hand, took a leave of absence without pay from April 13 to June 11,
2010 to undergo surgical operation for scoliosis. On June 15, 2010, Valera received a letter from
Sister Baricaua advising her to file a leave of absence (Sick Leave) for the entire school year 2010-
2011; otherwise, she will be reassigned to a higher-grade level where the students are more
independent learners. Herein petitioners deny having terminated Mancol and Valera either actually
or constructively.
ISSUE:
Were the respondents constructively dismissed by petitioners when they were prevented
from working after the duration of their leave of absence?
RULING:
Yes, respondents were constructively dismissed by petitioners when they were prevented
from working after the duration of their leave of absence.
As stated in Tan v. National Labor Relations Commission, constructive dismissal arises

"when continued employment is rendered impossible, unreasonable or unlikely; when there is a
demotion in rank and/or a diminution in pay; or when a clear discrimination, insensibility or disdain
by an employer becomes unbearable to the employee." In such cases, the impossibility,
unreasonableness, or unlikelihood of continued employment leaves an employee with no other
viable recourse but to terminate his or her employment.
It is clear that petitioners employed means whereby the respondents were intentionally
placed in situations that resulted in their being coerced into severing their ties with the same
petitioners, thus, resulting in constructive dismissal. An employee is considered to be
constructively dismissed from service if an act of clear discrimination, insensibility or disdain by an
employer has become so unbearable to the employee as to leave him or her with no option but to
forego with his or her continued employment.
Hence, respondents were constructively dismissed.
| 109
UNCONDITIONAL AND CATEGORICAL LETTER OF RESIGNATION IS NOT

INDICATIVE OF CONSTRUCTIVE DISMISSAL
Perfecto Pascua vs. Bank Wise, Inc. and Philippine Veterans Bank
G.R. No. 191460; January 31, 2018
Leonen, J.
FACTS:
This case involves a petition for review on Certiorari assailing the decision of the CA which
affirmed the findings of the NLRC that petitioner Perfecto Pascua (Pascua) was constructively
dismissed from employment by respondent Bank Wise, Inc. (Bankwise).
Pascua was an employee of Bankwise which was later bought by Philippine Veterans
Bank. As a result of the merger or trade-off of Bankwise with Philippine Veterans Bank, he was
informed that he should tender his resignation and was promised that his money claims will be
paid during the transition and he was later assured of his continued service with the Philippine
Veterans Bank. Due to the inaction of Philippine Veterans Bank and Bankwise, Pascua sent
Bankwise a letter demanding the early settlement of his money claims. The demand was not
heeded. Thus, Pascua filed a complaint for illegal dismissal. The respondents argued that
Pascua's resignation was voluntary.
The LA dismissed the complaint on the ground that Pascua had voluntarily resigned. NLRC
reversed the same, ruling that he was constructively dismissed in view of the merger or trade-off
that occurred.
ISSUE:
Was petitioner constructively dismissed from employment by reason of the merger or
trade-off of the companies?
RULING:
No, Pascua was not constructively dismissed from employment.
The employer has the burden of proving, in illegal dismissal cases, that the employee was
dismissed for a just or authorized cause. As stated in Peñaflor v. Outdoor Clothing Manufacturing
Corporation, even if the employer claims that the employee resigned, the employer still has the
burden of proving that the resignation was voluntary. There is constructive dismissal when an
employee is compelled by the employer to resign or is placed in a situation where there would be
no other choice but to resign. An unconditional and categorical letter of resignation cannot be
considered indicative of constructive dismissal if it is submitted by an employee fully aware of its
effects and implications.
In the present case, Pascua's resignation letter, however, was unconditional. It contained
no reservations that it was premised on his subsequent claim for severance pay and other benefits.
His resignation was also accepted by his employers.
Hence, Pascua is not considered to have been constructively dismissed.
110 |
NOT EVERY INCONVENIENCE, DISRUPTION, DIFFUCULTY, OR DISADVANTAGE

THAT AN EMPLOYEE MUST ENDURE SUSTAINS A FINDING OF CONSTRUCTIVE
DISMISSAL
Philippine Span Asia Carriers Corporation vs. Heidi Pelayo

G.R. No. 212003; February 28, 2018
Leonen, J.
FACTS:
This is a petition for review on Certiorari under Rule 45 which seeks to reverse the decision
of the CA which held that respondent Heidi Pelayo (Pelayo) was constructively dismissed.
Pelayo was employed by petitioner Philippine Span Asia Carriers Corporation, then
Sulpicio Lines, Inc. (Sulpicio Lines) as an accounting clerk at its Davao City branch office. Sulpicio
Lines uncovered several anomalous transactions in said branch. Pelayo was interviewed as she
was the one who personally prepared the cash vouchers and checks for approval by branch
manager Tirso Tan (Tan) and cashier Fely Sobiaco (Sobiaco). In the midst of the interview, Pelayo
walked out and later claimed that she was being coerced to admit complicity with Tan and Sobiaco.
Pelayo then returned to Davao City, where she was admitted to a hospital because of depression
and a nervous breakdown and eventually filed for leave of absence and ultimately stopped
reporting for work. Sulpicio Lines served on Pelayo a memorandum requiring her to submit an
explanation but instead, Pelayo filed a Complaint against Sulpicio Lines for constructive dismissal.
Sulpicio Lines denied liability asserting that Pelayo was merely asked to come to Cebu "to
shed light on the discovered anomalies" and was "only asked to cooperate in prosecuting Tan and
Sobiaco.” The LA held that Sulpicio Lines constructively dismissed Pelayo. However, the NLRC
reversed the decision and ruled that discipling employees was a management prerogative and that
pelayo’s involvement in the investigation did not necessarily amount to constructive dismissal.
Then, the CA found grave abuse of discretion on the part of the NLRC.
ISSUE:
Did respondent’s involvement in the investigation conducted by petitioner amount to
constructive dismissal?
RULING:
No, the involvement of respondent did not amount to constructive dismissal.
As stated in Rodriguez v. Park N Ride, Inc., there is constructive dismissal when an

employer's act of clear discrimination, insensibility or disdain becomes so unbearable on the part
of the employee so as to foreclose any choice on his part except to resign from such employment.
It exists where there is involuntary resignation because of the harsh, hostile and unfavorable
conditions set by the employer. However, not every inconvenience, disruption, difficulty, or
disadvantage that an employee must endure sustains a finding of constructive dismissal. An
employer who conducts investigations following the discovery of misdeeds by its employees is not
being abusive when it seeks information from an employee involved in the workflow which
occasioned the misdeed. An employee's involvement in such an investigation will naturally entail
difficulty. This difficulty does not mean that the employer is creating an inhospitable employment
atmosphere so as to ease out the employee involved in the investigation.
In this case, the Court fails to see how the petitioner's investigation amounted to
respondent's constructive dismissal. Respondent's recollection is riddled with impressions,
unsupported by independently verifiable facts.
Hence, the involvement of respondent in the investigation did not amount to constructive
dismissal.
| 111
ILLEGALLY DISMISSED EMPLOYEE IS ENTITLED TO ALL BENEFITS GRANTED PRIOR

TO DISMISSAL
United Coconut Chemicals, Inc. vs. Victoriano Valmores

G.R. No. 201018; July 12, 2017
Bersamin, J.
FACTS:
In this petition for review on Certiorari, petitioner United Coconut Chemicals, Inc. (UCCI)
assails the decision of the CA which affirmed the decision of the NLRC finding that the computation
of backwages should include the benefits granted under the CBA.
Petitioner terminated the employment of respondent Victoriano Valmores upon his

expulsion from United Coconut Chemicals, Inc. Employees’ Labor Organization (UELO) pursuant
to the union security clause of the CBA. The Labor Arbiter found respondents liable for illegal
dismissal and awarded respondent with full backwages. When the decision became final and
executory, respondent moved for the execution of the judgment.
Petitioner UCCI posits that in determining the respondent’s backwages, and prospective
increases in wages as well as the benefits provided in the CBA should be excluded that, as a
consequence, the base figure for computing the respondent's backwages should be his basic
salary prevailing at the time of his dismissal, unqualified by deductions or increases.
Respondent insisted that his CBA-granted benefits should be included.
ISSUE:
Do backwages include all benefits previously enjoyed by the illegally dismissed employee
or only his basic salary prevailing at the time of his dismissal?
RULING:
Yes, backwages include all benefits previously enjoyed by the illegally dismissed
employee, and not only his basic salary prevailing at the time of his dismissal.
As stated in Paramount Vinyl Products Corp. v. National Labor Relations Commission, the
base figure to be used in reckoning full backwages is the salary rate of the employee at the time
of his dismissal. The amount does not include the increases or benefits granted during the period
of his dismissal because time stood still for him at the precise moment of his termination and move
forward only upon his reinstatement.
In the case at bar, the respondent should only receive backwages that included the
amounts being received by him at the time of his illegal dismissal but not the benefits granted to
his co-employees after his dismissal. Also, CBA allowances and benefits that the respondent
was regularly receiving before his illegal dismissal should be added to the base figure. This is
because Article 279 of the Labor Code decrees that the backwages shall be "inclusive of
allowances, and to his other benefits or their monetary equivalent." Considering that the law does
not distinguish between the benefits granted by the employer and those granted under the CBA,
he should not be denied the latter benefits. In this case, respondent was able to sufficiently prove
his entitlement to the benefits by submitting proof of his having received the same at the time of
his illegal dismissal.
Hence, respondent is entitled to backwages including all benefits enjoyed by the illegally
dismissed employee.
112 |
IF THERE IS NO ACTUAL DISMISSAL NOR ABANDONMENT, THE REMEDY IS

REINSTATEMENT BUT WITHOUT BACKWAGES; BUT IF THERE ARE STRAINED
RELATIONS BETWEEN THE PARTIES, EACH PARTY BEARS HIS OWN LOSS
Froel Pu-od, et al vs. Ablaze Builders, Inc.

G.R. No. 230791; November 20, 2017
Tijam, J.
FACTS:
The case is a petition for review on Certiorari assailing the decision of the CA, which
reversed the decision of the NLRC and reinstated that of the LA, finding no unlawful termination of
petitioners Froel Pu-od, et. al.
Respondent Ablaze Builders, Inc. hired petitioners as construction workers for a project,
specifically on the finishing phase. A project engineer allegedly told petitioners that they are
dismissed because there is no more work to be done, even if the phase in which they are working
on was not yet finished. Aggrieved by their verbal dismissal, petitioners filed a complaint for illegal
dismissal before the LA which was found that there was in fact no actual termination of nor
abandonment by employees. Hence, it dismissed the case.
Petitioners averred, among others, that respondents unceremoniously terminated their

employment without giving them an opportunity to explain their side. Hence, they claim backwages
but not reinstatement in view of their strained relations with their employer. Respondents, on the
other hand, alleged that the company did not terminate petitioners' employment, but rather, this is
a case of abandonment of work on the part of the petitioners.
ISSUE:
In cases where there was no actual dismissal of or abandonment by employees, are such
employees entitled to backwages for the periods they were not able to work?
RULING:
No, employees are not entitled to backwages when there is no actual dismissal or
abandonment.
As stated in MZR Industries, et.al. v. Majen Colambot, in cases where there is both an
absence of illegal dismissal on the part of the employer and an absence of abandonment on the
part of the employees, the remedy is reinstatement but without backwages. In a case where the
employee's failure to work was occasioned neither by his abandonment nor by a termination, the
burden of economic loss is not rightfully shifted to the employer; each party must bear his own
loss.
In the case at bar, since respondents were not dismissed and they were not considered
to have abandoned their jobs, it is only proper for them to report back to work and for petitioners
to reinstate them to their former positions or substantially-equivalent positions. However,
considering that the reinstatement was already impossible by reason of the strained relations of
the parties, and the fact that petitioners already found another employment, each party must bear
his or her own loss, thus, placing them on equal footing
Hence, due to petitioners' failure to prove the fact of their dismissal; and that respondent-
company in turn, failed to show abandonment on the part of the petitioners, petitioners are not
entitled to their money claims, either in the form of backwages or separation pay.
| 113
SEPARATION PAY IN LIEU OF REINSTATEMENT IN CASE OF STRAINED

RELATIONSHIP
Lino Fernandez, Jr. vs. Manila Electric Company

G.R. No. 226002; June 25, 2018
Peralta, J.
FACTS:
This case involves a petition for review on Certiorari assailing the decision and resolution
of the CA which affirmed the resolutions of the NLRC denying the complaint for illegal dismissal.
Lino Fernandez (Fernandez) was a leadman employed by respondent Manila Electric

Company (MERALCO) from October 3, 1978 until his termination on September 14, 2000 for
allegedly participating in an illegal strike. He then filed a case for illegal dismissal. Both the LA and
the NLRC ruled that Fernandez was not illegally dismissed, but the CA declared that he was
illegally dismissed. During the execution proceedings, both parties filed several motions regarding
the inclusions to and computations of monetary benefits due to Fernandez. One of the significant
motions filed by Fernandez is a motion to require respondent to reinstate him.
ISSUE:
Was Fernandez entitled to reinstatement since he was illegally dismissed?
RULING:
As stated in Balais Jr. v. Se'Lon by Aimee, an illegally dismissed employee is entitled to
reinstatement as a matter of right. The award of separation pay is a mere exception to the rule. It
is made an alternative relief in lieu of reinstatement in certain circumstances, like: (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 employer's 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.
Under the doctrine of strained relations, the payment of separation pay is considered an
acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On
one hand, such payment liberates the employee from what could be a highly oppressive work
environment. On the other hand, it releases the employer from the grossly unpalatable obligation
of maintaining in its employ a worker it could no longer trust.
In the present case, Fernandez's intent and willingness to be reinstated to his former
position is evident during the execution proceedings. To stress, strained relationship may be
invoked only against employees whose positions demand trust and confidence, or whose
differences with their employer are of such nature or degree as to preclude reinstatement. Here,
the confidential relationship between Fernandez, as a supervisory employee, and MERALCO has
not been established.
The Supreme Court remanded the case for the determination of this issue.
114 |
AN EMPLOYEE’S AVAILMENT OF FREE LEGAL SERVICE FROM PAO DOES NOT

DISQUALIFY HIM FROM AN AWARD OF ATTORNEY’S FEES
Joselito A. Alva vs. High Capacity Security Force, Inc and Armando M. Villanueva
G.R. No.203328; November 8, 2017
Reyes, Jr. J.
FACTS:
This is a petition for review on Certiorari under Rule 45 of Rules of Court seeking the
reversal of the decision rendered by the CA which deleted the award of attorney’s fees in favor of
petitioner Joselito Alva who was hired as a security guard by respondent High Capacity Security
Force, Inc. (High Capacity), a duly organized security agency.
Petitioner was initially detailed as a security guard and eventually after several promotions,
became an Assistant Officer-In-Charge of HRD-PTE, Ltd. While assigned thereat, a mishap
occurred involving one of the security guards under his supervision and as a result, petitioner was
suspended and during such suspension, HRD-PTE requested for his relief from post. He was later
placed on a floating status and was no longer given any post.
Petitioner filed a complaint for illegal dismissal with money claims and attorney’s fees
against High Capacity. He was assisted by PAO in the proceedings. Labor Arbiter (LA) held that
High Capacity is guilty of illegal dismissal. NLRC found that the dismissal is for a just cause and
maintained the award of attorney’s fees. However, CA deleted the award of attorney’s fees since
petitioner was assisted by PAO. Hence, this petition. Petitioner asserts that High Capacity should
be ordered to pay the attorney’s fees as he was compelled to litigate to protect his interest by
reason of unlawful termination. Respondent argues that since petitioner was represented by PAO
he did not incur any expenses to protect his interest.
ISSUE:
Is the petitioner, who was represented by PAO in litigation, entitled to attorney’s fees?
RULING:
Yes, petitioner is entitled to be awarded attorney’s fees.
Both the Labor Code and the Civil Code provide that attorney's fees may be recovered in
the following instances, namely: (i) in cases involving the unlawful withholding of wages; (ii) where
the defendant's act or omission has compelled the plaintiff to litigate with third persons or the
plaintiff incurred expenses to protect his interest; (iii) in actions for the recovery of wages of
household helpers, laborers and skilled workers; (iv) in actions for indemnity under workmen's
compensation and employer's liability laws; and (v) in cases where the court deems it just and
equitable that attorney's fees and expenses of litigation should be recovered.
It is settled that in actions for recovery of wages or where an employee was forced to
litigate and thus, incur expenses to protect his rights and interest, the award of attorney’s fees is
legally and morally justifiable. Applying the pronouncement in Our Haus Realty Devt Corp v.
Parian, the employees in the case at bar are entitled to attorney’s fees notwithstanding their
availment of the free legal services offered by PAO. The amount of attorney’s fees shall be
awarded to the PAO as token recompense to them for their provision of free legal services to
litigants who have no means of hiring a private lawyer.
Thus, petitioner’s availment of free legal services from the PAO does not disqualify him
from an award of attorney’s fees.
| 115
A PARTY NOT IMPLEADED IN THE ILLEGAL DISMISSAL CASE MAY NOT BE HELD
LIABLE THEREOF
Rogel N. Zaragoza vs. Katherine L. Tan and Emperador Distillers, Inc.

G.R. No. 225544; December 4, 2017
Peralta, J.
FACTS:
In a petition for review on Certiorari under Rule 45 before the CA, petitioner Rogel N.
Zaragoza (Zaragoza) assails the decision of the CA, affirming the decision of the NLRC declaring
the LA’s issuance of alias writ of execution void.
Zaragoza was the Area Sales Manager of Consolidated Distillers of the Far East
Incorporated (Condis) in the Bicol Region. He obtained a favorable decision on his illegal dismissal
case. As Condis alleged that it can no longer reinstate Zaragoza, the latter sought for an alias writ
of execution arguing that he is likewise entitled to accrued salaries by reason of the order of
reinstatement.
Zaragoza contends that Katherine Tan, President of Condis, should be held personally
liable and respondent Emperador Distillers, Inc. (EDI) should also be held jointly and solidarily
liable with Condis as the transfer of manufacturing business of the latter to the former was done in
bad faith in order to evade payment/satisfaction of liabilities. Respondent Tan and EDI countered
that they were never made parties in the illegal dismissal case filed by Zaragoza and the LA did
not acquire jurisdiction over the respondents.
ISSUE:
Can a monetary claim for accrued salaries by reason of order of reinstatement be still
enforced against parties not impleaded in the case?
RULING:
No, a monetary claim cannot be enforced against parties not impleaded in the case.
As stated in Matuguina Integrated Wood Products Inc. v. Court of Appeals, a decision of a

court will not operate to divest the rights of a person who has not and has never been a party to a
litigation, either as plaintiff or as defendant. Thus, to hold a director or officer personally liable for
corporate obligations, two requisites must concur: (1) complainant must allege in the complaint
that the director or officer assented to patently unlawful acts of the corporation, or that the officer
was guilty of gross negligence or bad faith; and (2) complainant must clearly and convincingly
prove such unlawful acts, negligence or bad faith.
The LA’s Order against respondents who were not parties to the case is a deprivation of
property without due process of law. More importantly, since respondents were never impleaded
in the illegal dismissal case, they were never served with summons nor did they voluntarily appear
in the arbitration level; thus, the LA never acquired jurisdiction over them as to order the piercing
of the veil of corporate fiction, and to make them jointly and severally liable with Condis for the
judgment award to petitioner. Respondents were included in this case only in petitioner’s motion
for issuance of alias writ of execution. Tan was not at all impleaded in the illegal dismissal case.
Thus, her participation in petitioner’s dismissal was never established in any of the
proceedings therein.
116 |
SEPARATION PAY AND BACKWAGES MUST BE COMPUTED UNTIL THE FINALITY OF

DECISION AWARDING THE SAME
Consolidated Distillers of the Far East, Inc. vs. Rogel N. Zaragoza

G.R. No. 229302; June 20, 2018
Caguioa, J.
FACTS:
In a petition for review on Certiorari under Rule 45, petitioner Consolidated Distiller of the
Far East (Condis) challenges the computation of the Court of Appeals (CA) regarding respondent
Rogel Zaragoza (Zaragoza)’s reinstatement and separation pay to start from the date of the illegal
dismissal until the finality of the CA decision.
In a separate illegal dismissal case (GR No. 196038; March 30, 2012), the Court found
that Zaragoza was illegally dismissed by Condis. Zaragoza moved for the issuance of writ of
execution for reinstatement and payment of full back wages which Condis opposed in light of the
execution of the Asset Purchase Agreement (APA) and the termination of Service Agreement with
Emperador Distillers, Inc (EDI).
Condis argues that the APA was a supervening event which rendered the reinstatement
impossible and that the back wages should be computed only until the finality of the Court’s
decision in the previous case – March 30, 2012. CA computed the same until the finality of its
decision. Condis argues that Olympia Housing, Inc. v Lapostora should be applied where the Court
held that the computation is until the date of the closure of its business, not until the finality of
judgment of the case.
ISSUE:
Should the back wages and separation pay be computed until the finality of Court’s
decision in the previous case (March 30, 2012)?
RULING:
No, the back wages and separation pay should be computed until the finality of the decision
awarding the pay which in this case is until the finality of GR No. 229302.
As ruled in Bani Rural Bank, Inc v. De Guzman, the order of the separation pay (a) in lieu
of reinstatement, (b) when it is waived, or (c) ordered in light of supervening event rendering it
impossible, the employment relationship is terminated only upon the finality of the decision
ordering the separation pay. The finality of the decision cuts-off the employment relationship and
represents the final settlement of rights and obligations between the parties. Here, the award of
separation pay was made subsequent to the illegal dismissal case (GR No. 136098) hence the
computation must be made until the finality of the decision awarding the separation pay.
The Court elaborates that Olympia Housing only applies if the employer proves the closure
of its business in full and complete compliance with all statutory requirements prior to the date of
finality of the award of back wages and separation pay. The execution of APA and termination of
Service Agreement with EDI does not mean that Condis has closed its business, nor that
respondent was affected by the purported closure of business.
Therefore, the back wages and separation pay are computed from the date of the illegal
dismissal until the finality of judgment awarding the pays. Because the case was brought to the
Supreme Court, it is computed until the finality of this decision (June 20, 2018).
| 117
WHEN A QUITCLAIM IS DECLARED INVALID FOR ONE REASON OR ANOTHER, THE

RECIPIENT THERETO MUST RETURN OR OFFSET THE COMPENSATION RECEIVED
Arlo Aluminum, Inc. vs. Vicente M. Pinon, Jr., in Behalf of Vic Edward Pinon
G.R. No. 215874; July 5, 2017
Mendoza, J.
FACTS:
This is a petition for review on Certiorari seeking to reverse and set aside the Decision of
the CA affirming the ruling of the NLRC.
Petitioner Arlo Aluminum, Inc. engaged the services of EMP Glazing through
subcontracting where Vic Edward, son of the respondent Vicente Pinon, was one of the workers.
Eleven (11) employees of EMP Glazing, including Vic Edward, met an accident which led to the
demise of ten (10) employees including Vic Edward. The families of the victims were extended
financial assistance in the amount of Php150,000 by the petitioner. In return, the families signed a
Deed of Release, Waiver and Quitclaim, absolving the petitioner from liabilities.
Respondent filed a complaint in behalf of his deceased son before the LA alleging that the
amount paid as salaries to his deceased son was not in accordance with law and that the waiver
and quitclaim was invalid because he was made to sign when he was still vulnerable from the
tragedy. The LA ruled in favor of petitioner. The NLRC modified the LA decision. Petitioner elevated
the case to the CA which held that the deed of release, waiver and quitclaim was invalid because
it was signed only a week after the death of Vic Edward and that it covered all the claims that
Vincent might have against the petitioner. Hence, petitioner elevated the case before the SC.
Petitioner argued that the deed of release, waiver and quitclaim was valid because it
showed that it was a settlement and satisfaction of any and all labor claims relating to the salaries
and benefits that Vic Edward could have been entitled to under relevant labor laws during his
lifetime.
ISSUE:
Are the release, waiver and quitclaim, and the sufficiency of the consideration paid to the
heirs of the laborer who died while in work valid?
RULING:
Yes. The release, waiver and quitclaim, and the sufficiency of the consideration paid to the
heirs of the laborer who died while in work are valid.
The Supreme Court held that the quitclaim in this case is valid because it is supported by
a sufficient consideration to cover all the liabilities of the petitioner. As stated in City Government
of Makati v. Odeña, to be valid, a deed of release, waiver or quitclaim must meet the following
requirements: (1) that there was no fraud or deceit on the part of any of the parties; (2) that the
consideration for the quitclaim is sufficient and reasonable; and (3) that the contract is not contrary
to law, public order, public policy, morals or good customs, or prejudicial to a third person with a
right recognized by law.
In the case at bar, the consideration given to Vicente in the amount of P150,000.00 was
reasonable and sufficient to cover the labor claims. Moreover, petitioner did not procure the
quitclaim with fraud or deceit. Neither was there proof that it employed force or duress to compel
respondent to sign the quitclaim.
Thus, Arlo Aluminum and Eton Properties have nothing more to pay as far as the labor
claims are concerned.
118 |
GRANT OF INVOLUNTARY SEPARATION BENEFITS EXCLUDES THE RIGHT TO

VOLUNTARY SEPARATION BENEFITS
Read-Rite Philippines vs. Gina G. Francisco

G.R. No. 195457; August 16, 2017
Leonardo-de Castro, J.
FACTS:
This is a petition for review on Certiorari filed by petitioner Read-Rite Philippines, Inc.
(Read-Rite) assailing the decision of the CA, which reversed and set aside the decision of the LA
and NLRC, finding petitioner liable for voluntary separation benefit.
Petitioner is a domestic corporation and the former employer of respondents Gina

Francisco et al, which implemented company policies regarding both voluntary and involuntary
separation benefits of employees. The respondents were dismissed, along with 200 other
employees of Read-Rite, on the ground of retrenchment. Each of them received involuntary
separation benefits. However, there were eight (8) employees (not the respondents) who received
additional voluntary separation benefits. Respondents filed a complaint before the LA for payment
of such additional voluntary separation benefits.
The respondents argued that Read-Rite discriminated against them by not granting the
aforesaid benefits, the award of which had since become a company policy. Read-Rite avers that
respondents were separated from service on the ground of retrenchment, which separation was
involuntary in nature. Hence, nothing more was due to them. Petitioner Read-Rite argues that
there was no intent to favor the eight employees who were retrenched in April 1999 and who were
mistakenly paid additional voluntary separation benefits, over the other retrenched employees.
ISSUE:
May an employer, which underwent retrenchment, be required to still pay Voluntary
Separation Benefit after it had already paid Involuntary Separation Benefit (retrenchment pay) to
the retrenched employees, simply because it had earlier paid, albeit mistakenly, eight (8)
retrenched employees additional Voluntary Separation Benefit?
RULING:
No. An employer need not pay voluntary separation benefits after it had already paid
involuntary separation benefits to the same employees.
As stated in Suarez, Jr. v. National Steel Corporation, voluntary and involuntary separation
benefits are distinct from one another. By its nomenclature alone, one could easily discern that the
award of voluntary separation benefits involves a situation that is opposite of that contemplated in
involuntary separation benefits – that is, the employee's separation from employment is by his own
choice and/or for reasons within his control. Given the diametrical nature of an involuntary and a
voluntary separation from service, one necessarily excludes the other.
As respondents' termination was involuntary in nature, i.e., by virtue of a retrenchment

program undertaken by Read-Rite, they are only entitled to receive involuntary separation benefits.
The Court is more inclined to believe that the payment of additional voluntary separation benefits
to eight retrenched employees of Read Rite in April 1999 was indeed a mistake since the same
was not in accordance with the company's policies.
Therefore, Read-Right does not need to pay voluntary separation benefits after it had
already paid involuntary separation benefits to the same employees.
| 119
AN ILLEGALLY DISMISSED EMPLOYEE IS ENTITLED TO BACKWAGES COMPUTED

FROM THE TIME OF DISMISSAL UNTIL REINSTATEMENT AND BASED ON THE MOST
RECENT SALARY RATE UPON TERMINATION
NPC Drivers and Mechanics Association vs. National Power Corporation

G.R. No. 156208; November 21, 2017
Lenoardo-De Castro, J.
FACTS:
The case is for the resolution of motions filed subsequent to the entry in the book of entries
of the above titled case.
Respondent National Power Corporation (NPC) is a government instrumentality which has

in its employment petitioners NPC Drivers and Mechanics Association. The Electric Power Industry
Reform Act (EPIRA) was enacted to ordain reforms in the electric power industry, and also for
NPC's restructuring. The National Power Board issued resolution directing the termination of all
NPC employees effective January 31, 2003. The Supreme Court ruled the resolution void and
without effect. Thereafter, the Court clarified its decision that such dismissal directed by the
resolution was illegal, and that petitioners were entitled to backwages.
Respondent, in its manifestation, argues that in the absence of an actual computation of

the amounts due to the petitioners, the RTC Clerk of Court and Ex-Officio sheriff cannot garnish
NPC's properties. Petitioners on the other hand argue that funds belonging to a public corporation
or a government-owned or controlled corporation, which is clothed with its own personality,
separate, and distinct from that of the government are not exempt from garnishment.
ISSUE:
Is a civil service employee who has been illegally dismissed entitled to reinstatement and
backwages?
RULING:
Yes, the established rule is that an illegally dismissed civil service employee shall be
entitled to reinstatement plus backwages.
An illegally dismissed government employee is entitled to backwages from the time of his
illegal dismissal until his reinstatement because he is considered as not having left his office.
Following Galang v. Land Bank of the Philippines, backwages shall be computed based on the
most recent salary rate upon termination. As a rule, backwages shall be computed until actual
reinstatement. However, when an entirely new set-up takes the place of the entity's previous
corporate structure, the abolition of positions and offices cannot be avoided, thus, making
reinstatement impossible. In which case, separation pay shall be awarded in lieu of reinstatement.
The award of separation pay in illegal dismissal cases is an accepted deviation from the general
rule of ordering reinstatement because the law cannot exact compliance with what is impossible.
For purposes of computing separation pay in lieu of reinstatement, the length of service shall be
computed until the time reinstatement was rendered impossible.
In the present case, the petitioners' reinstatement became impossible when their illegal
dismissal was subsequently validated by the issuance of NPB Resolution No. 2007-55 on
September 14, 2007, as correctly pointed out by PSALM.
Since reinstatement is no longer possible in this case, it must be computed from the
petitioners' effective dates of termination until September 14, 2007 or the petitioners' date of
retirement, in case petitioners retired after the effective date of termination but before September
14, 2007.
120 |
AN EMPLOYEE WHO IS QUALIFIED FOR OPTIONAL RETIREMENT BUT DIES BEFORE

THE OPTION TO RETIRE IS ENTITLED TO HIS OR HER OPTIONAL RETIREMENT
BENEFITS; IT MAY BE CLAIMED BY HIS/HER BENEFICIARIES ON HIS OR HER BEHALF
United Doctors Medical Center (UDMC) vs. Cesario Bernadas,

represented by Leonila Bernadas
G.R. No. 209468; December 13, 2017
Leonen, J.
FACTS:
In a petition for review on Certiorari, petitioner United Doctors Medical Center (UDMC)
assails the resolution of the CA sustaining the decision of the NLRC, which reversed LA’s decision,
finding respondent Cesario Bernardas’ (Cesario) beneficiaries entitled to his optional retirement
benefits.
Cesario started working as an orderly in UDMCs housekeeping department and he was

eventually promoted as a utility man. Petitioner and its rank-and-file employees had a collective
bargaining agreement (CBA), under which rank-and-file employees were entitled to optional
retirement benefits. Under the optional retirement policy, an employee who has rendered at least
20 years of service is entitled to optionally retire. However, this CBA does not provide for the terms
and conditions of the "present policy on optional retirement. Cesario died from a "freak accident"
while working in a doctor's residence.
Leonila Bernadas (Leonila), representing her deceased husband, Cesario, filed a

Complaint for payment of retirement benefits, damages, and attorney's fees with the NLRC.
Petitioner argues that respondent Cesario's beneficiaries do not have legal capacity to apply for
Cesario's optional retirement benefits since respondent himself never applied for it in his lifetime.
On the other hand, respondent Leonila counters that had her husband died "under normal
circumstances," he would have applied for optional retirement benefits.
ISSUE:
Is Cesario entitled to receive his optional retirement benefits despite his untimely death,
thru his surviving spouse/representative Leonila?
RULING:
Yes, Cesario is entitled to receive his optional retirement benefits despite his untimely
death, thru his surviving spouse/representative Leonila.
As stated in GSIS v. Montesclaros, an employee who has already qualified for optional
retirement but dies before the option to retire could be exercised is entitled to his or her optional
retirement benefits, which may be claimed by the qualified employee's beneficiaries on his or her
behalf. Retirement benefits are the property interests of the retiree and his or her beneficiaries.
In this case, the CBA entered into between the petitioner and Cesario does not prohibit
the employee's beneficiaries from claiming retirement benefits if the retiree dies before the
proceeds could be released.
Thus, Leonila, being the surviving spouse of respondent Cesario, is entitled to claim the
optional retirement benefits on his behalf.
| 121
AN EMPLOYEE IN THE PRIVATE SECTOR WHO DID NOT EXPRESSLY AGREE TO THE
TERMS OF AN EARLY RETIREMENT PLAN CANNOT BE VALIDLY SEPARATED FROM
SERVICE BEFORE HE REACHES THE AGE OF 65 YEARS
Alfredo F. Laya, Jr. vs. Philippine Veterans Bank and Ricardo A. Balbido, Jr.
G.R. No. 205813; January 10, 2018.
Bersamin, J.
FACTS:
This is a petition for review on Certiorari filed by petitioner Alfredo Laya, Jr. assailing the
decision promulgated by the CA, which upheld the ruling of the NLRC and LA, finding no illegal
dismissal by respondent Philippine Veterans Bank (PVB).
Petitioner was hired by respondent PVB as its Chief Legal Counsel with a rank of Vice
President. Pursuant to a retirement plan imposed by the company with which the normal retirement
is at age 60, petitioner was informed thru letter by the private respondent of his retirement effective
on 1 July 2007. On 26 June 2008, private respondent and PVB president Ricardo A. Balbido, Jr.
(Balbido, Jr.) issued a memorandum directing the petitioner to continue to discharge his official
duties and functions as chief legal counsel pending his request. However, on 18 July 2007,
petitioner was informed by Balbido Jr. that his request for an extension of tenure was denied.
According to the petitioner, he was made aware of the retirement plan of respondent PVB
only after he had long been employed and was shown a photocopy of the Retirement Plan Rules
and Regulations and that Balbido, Jr. had told him upon his request for extension of his service
that the same would be denied "to avoid precedence.” He sought the reconsideration of the denial
of the request for the extension of his retirement, but PVB certified his retirement from the service.
The petitioner filed his complaint for illegal dismissal against PVB and Balbido, Jr. in the NLRC to
protest his unexpected retirement.
ISSUE:
Was petitioner validly retired at age 60 when he did not expressly agree to the terms of an
early retirement plan?
RULING:
No, petitioner was not validly retired at age 60 when he did not expressly agree to the
terms of an early retirement plan.
The mere mention of the retirement plan in the letter of appointment did not sufficiently
inform the petitioner of the contents or details of the retirement program. To construe from the
petitioner's acceptance of his appointment that he had acquiesced to be retired earlier than the
compulsory age of 65 years would, therefore, not be warranted. This is because retirement should
be the result of the bilateral act of both the employer and the employee based on their voluntary
agreement that the employee agrees to sever his employment upon reaching a certain age.
Moreover, it was incumbent upon PVB to prove that the petitioner had been fully apprised
of the terms of the retirement program at the time of his acceptance of the offer of employment.
PVB did not discharge its burden, for the petitioner's appointment letter apparently enumerated
only the minimum benefits that he would enjoy during his employment by PVB, and contained no
indication of PVB having given him a copy of the program itself in order to fully apprise him of the
contents and details thereof.
With the petitioner having been thus dismissed pursuant to the retirement provision that
he had not knowingly and voluntarily agreed to, PVB was guilty of illegal dismissal as to him.
122 |
EMPLOYEE TERMINATED DUE TO JUST CAUSE IS NOT ENTITLED TO RETIREMENT

BENEFITS
Armando M. Tolentino (deceased), represented by his surviving spouse Merla F. Tolentino et

al. vs. Philippine Airlines, Inc.
G.R. No. 218984; January 24, 2018
Carpio, J.
FACTS:
In a petition under Rule 45, petitioners Merla F. Tolentino, the surviving spouse of Armando
M. Tolentino (Tolentino) and the children of Tolentino challenges the decision of the CA, which
affirmed with the decision and resolution the NLRC and the LA.
Tolentino was hired by respondent Philippine Airlines, Inc. (PAL) as a flight engineer on
1971. On 5 June 1998, Airline Pilots Association of the Philippines (ALPAP) member, where
Tolentino was a member, went on an illegal strike. On 7 June 1998, the Secretary of Labor issued
an Order requiring all striking officers and members of ALPAP to return to work within 24 hours
from receipt of the Order but pilots — including Tolentino — continued to participate in the strike.
On 26 June 1998, when Tolentino and other striking pilots returned to work, PAL refused to readmit
these returning pilots. Thus, they led a complaint for illegal lockout against PAL. On 20 July 1998,
Tolentino reapplied for employment with PAL as a newly hired pilot, and thus voluntarily underwent
the six months probationary period. After less than a year, Tolentino resigned.
Petitioners argue that Tolentino had been a pilot for PAL for more than 20 years since his
employment on 1971, and thus he was qualified for normal retirement under the PAL-ALPAP
Retirement Plan; which provides that any member who completes 20 years of service as a pilot
for PAL or has flown 20,000 hours for PAL shall be eligible for normal retirement. Respondent
argued that Tolentino was not entitled to his supposed accrued vacation leave pay considering,
among others, the company's policy on forfeiture of benefits and privileges upon the dismissal of
an employee prevails over the CBA.
ISSUE:
Is Tolentino entitled to retirement benefits, reckoned from the date when he was hired in
1971, when he defied a return-to-work order?
RULING:
No, Tolentino is not entitled to retirement benefits.
An employee who knowingly defies a return-to-work order issued by the Secretary of Labor
is deemed to have committed an illegal act which is a just cause to dismiss the employee under
Article 282 of the Labor Code.
It is clear, therefore, Tolentino had not retired from PAL — it was not a result of a voluntary
agreement. Tolentino lost his employment status because of his own actions. For purposes of the
retirement plan, the computation of Tolentino's length of service to the company should be
reckoned from the date he was rehired after his own voluntary application as a new pilot. His
services from 1971 to 1998 cannot be tacked to his new employment starting in July 1998 because
the first employment had already been finally terminated — not due to his voluntary resignation or
retirement, but because of termination due to just causes.
Therefore, Tolentino is not entitled to any retirement or resignation benefits under the PAL-
ALPAP Retirement Plan.
| 123
MEDICAL CERTIFICATE MUST BE CREDIBLE IN ITSELF TO PROVE THAT AN

EMPLOYEE IS ILL AND REQUIRED REST AND TREATMENT DURING A QUESTIONED
PERIOD
Virgel Dave Japos vs. First Agrarian Reform Multipurpose Cooperative (FARMCOOP)
G.R. No. 208000; July 26, 2017
Del Castillo, J.
FACTS:
This petition for review on Certiorari assails the CA decision setting aside the resolution of
the NLRC which, in turn, reversed the LA ruling that petitioner Virgel Dave Japos was legally
terminated by respondent First Agrarian Reform Multipurpose Cooperative (FARMCOOP)
Respondent employed petitioner as a gardener. Respondent requires that for employees

who want to be absent from work, they must seek previous approval from his/her supervisor and
an employee is subject to discharge if he or she incurs six or more absences without permission
within one employment year. Petitioner received a memorandum ordering him to explain his June
22-28, 2005 unauthorized absences because it appeared that it is his 6th offense during his
employment. Petitioner submitted a Medical Certificate (MC), however, it did not provide date when
it was issued and the date when the petitioner was absent. Respondent issued a Notice of
Termination informing the petitioner that his employment will be terminated. Thus, petitioner filed
a complaint against respondent before the Labor Arbiter for illegal dismissal.
Respondent claimed that the MC submitted by the petitioner, which stated that petitioner
was diagnosed and treated for respiratory tract infection, could not be given credence because it
conflicted with petitioner's own claim that he was sick with influenza. On the other hand, petitioner
contended that it would be absurd under FARMCOOP's rules and policies to require an employee
to submit a Personnel Leave Authority prior to contracting illness when it could not be known or
planned precisely when he might get sick.
ISSUE:
Was the dismissal of the petitioner invalid for failure to provide medical certificate with
regular information?
RULING:
No, the dismissal of the petitioner was valid.
In the case of Filflex Industrial & Manufacturing Corp. vs. NLRC, the Supreme Court ruled
that if the medical certificate fails to refer to the specific period of the employee's absence, then
such absences are not supported by competent proof and hence, unjustified.
In the case at bar, the medical certificate did not indicate the period within which he was
examined by the physician and the period he was to rest due to his illness. It fails to refer to the
specific period of his absences. It should likewise be emphasized that in the absence of credible
evidence indicating that he was indeed sick before the date stated in the medical certificate, his
alleged sickness ought not be considered as an excuse for his excessive absences without leave.
One may argue that in order to uphold the rights of labor, this Court must simply accept the medical
certificate as proof that indeed, petitioner became ill, but this cannot be done without lowering the
standards required for the presentation of proof in courts and even in administrative bodies such
as the labor tribunals. Without these relevant pieces of information, it cannot be reliably concluded
that indeed, petitioner was ill on June 22-28, 2005.
Therefore, the petitioner was not illegally dismissed.
124 |
DISMISSAL OF EMPLOYEES IS A PREROGATIVE BELONGING TO MANAGEMENT
Maria De Leon Transportation, Inc., represented by Ma. Victoria D. Ronquillo vs. Daniel M.
Macuray
G.R. No. 214940; June 6, 2018
Del Castillo, J.
FACTS:
This is a petition for review on Certiorari assailing the decision of CA that respondent Daniel
Macuray (Macuray) has been illegally dismissed by petitioner Maria De Leon Transporation, Inc.
Petitioner is a company engaged in paid public transportation. Respondent Macuray was

employed as a bus driver of petitioner. He was assigned to the Laoag-Manila route. Sometime in
2009, he was not assigned to a bus for no apparent reason. For a period of one month, he
continually returned to follow up his bus assignment. Then, finally, the dispatcher informed him
that he was already considered AWOL (absent without leave). He followed up his status for about
six months, but to no avail. He considered himself illegally dismissed. Aggrieved, he filed a
complaint against petitioner.
Macuray claimed that he was illegally dismissed after his 18 years of service to the
petitioner. On the other hand, petitioner claimed that respondent was hired on commission basis,
on a “no work, no pay” and “per travel, per trip” basis, and contrary to Macuray’s claim of illegal
dismissal, he simply stopped reporting to work and that he left his post to work for his family’s
trucking business. The LA dismissed the case for lack of merit. On appeal, the NLRC modified the
decision by awarding financial assistance to Macuray. On Appeal, the CA declared Macurray to
have been illegally dismissed.
ISSUE:
Was Macuray constructively dismissed in view of his alleged abandonment of work?
RULING:
No, Macuray was not constructively dismissed.
There is no truth to the allegation that Macuray was dismissed, actually or constructively.
He claims that the dispatcher informed him that he was AWOL; however, a mere bus dispatcher
does not possess the power to fire him from work. Dismissal of employees is a prerogative
belonging to management. At any rate, even assuming that respondent was indeed told by
respondent's bus dispatcher that he was AWOL, this was not tantamount to dismissal, actual or
constructive. An ordinary bus dispatcher has no power to dismiss an employee; in a typical bus
company, a driver might even be of more significance than an ordinary dispatcher. Moreover, the
fact that respondent made no sincere effort to meet with the management of the bus company
gives credence to petitioner's allegation that he was never fired from work.
As to his alleged abandonment of work, petitioner admitted that it sanctioned the practice
of allowing its drivers to take breaks from work as some form of sabbatical or vacation. Macuray
simply availed of this company practice. It appears that when he did this, he was already
approaching retirement age, and when he filed the labor case, he was already 60.
Since Macuray was not dismissed from work, petitioner may not be held liable for the
former’s monetary claims, except those that were owing to him by way of unpaid
salary/commission, and retirement benefits, which are due to him.
| 125
MANAGEMENT HAS THE PREROGATIVE TO TRANSFER AN EMPLOYEE FROM ONE

COMPANY TO ANOTHER THROUGH A CORPORATE SPIN-OFF
Marksman & Co, Inc. vs. Rodil Sta. Rita

G.R. No. 194765; April 23, 2018
FACTS:
This is a petition for review on Certiorari under Rule 45 of the Rules of Court filed by
Marsman & Company, Inc. (Marsman) seeking the annulment of the decision of the Court of
Appeals (CA). The CA found Marsman guilty of illegal dismissal.
Marsman hired respondent Rodil Sta. Rita (Sta. Rita) as a warehouseman when it was still
engaged in the business of distribution and sale of pharmaceutical and consumer products.
Marsman thereafter purchased Metro Drug, now Consumer Products Distribution Services, Inc.
(CPDSI) which at that time, was engaged in a similar business. Marsman then entered into a MOA
with Marsman Employees Union (MEU), its bargaining representative. The MOA transferred all of
Marsman’s employees together with their respective employment contracts and the attendant
employment obligation to CPDSI. Due to redundancy, Sta. Rita was dismissed.
Aggrieved, Sta. Rita filed a complaint against Marsman in the NLRC for illegal dismissal
and damages. Marsman filed a motion to dismiss on the premise that the LA had no jurisdiction
over the complaint for illegal dismissal because Marsman is not Sta. Rita's employer, but CPDSI
due to the transfer of employees in the MOA. Sta. Rita's contended that he did not sign the MOA,
hence, his employment remained with Marsman.
ISSUE:
Is Sta. Rita still considered an employee of Marsman even when Marsman already
transferred and integrated its employees with CPDSI by virtue of the MOA?
RULING:
No. Sta. Rita is no longer Marsman’s employee but that of CPDSI. Hence, the LA no longer
has jurisdiction over the illegal dismissal complaint against Marsman due to the absence of
employer-employee relationship.
This Court has consistently recognized and upheld the prerogative of management to
transfer an employee from one office to another within the business establishment, provided there
is no demotion in rank or a diminution of salary, benefits and other privileges. Analogously, the
Court has upheld the transfer/absorption of employees from one company to another, as
successor-employer, as long as the transferor was not in bad faith and the employees absorbed
by a successor-employer enjoy the continuity of their employment status and their rights and
privileges with their former employer.
The integration and transfer of employees was a necessary consequence of the business
transition or corporate reorganization that Marsman and CPDSI have undertaken, which had the
characteristics of a corporate spin-off. A proviso in the MOA limited Marsman's function into that
of a holding company and transformed CPDSI as its main operating company. The spin-off and
the attendant transfer of employees are legitimate business interests of Marsman. Sta. Rita's
contention that the absence of his signature on the MOA meant that his employment remained
with Marsman is merely an allegation that cannot prevail over Marsman's evident intention to
transfer its employees.
To assert that Marsman remained as Sta. Rita's employer even after the corporate spin-
off disregards the separate personality of Marsman and CPDSI. The Memorandum of Agreement
effectively transferred Marsman's employees to CPDSI.
126 |
REASONABLE CAUSAL CONNECTION BETWEEN THE CLAIM ASSERTED AND

EMPLOYER-EMPLOYEE RELATIONS NECESSARY IN MONEY CLAIMS
Philippine Airlines, Inc. vs. Airline Pilots Association of the Philippines

GR. No. 200088; February 26, 2018
Martires, J.
FACTS:
This is a petition for review on Certiorari under Rule 45 seeking the reversal of the CA
decision which affirmed with modification the decisions of the NLRC and LA dismissing petitioner’s
claims for damages against respondents.
This case arose from a labor dispute between petitioner Philippine Airlines, Inc. (PAL) and
respondent Airline Pilots’ Association of the Philippines (ALPAP), a duly registered labor
organization and exclusive bargaining agent of all commercial pilots of PAL. Sometime in 1998,
ALPAP staged a strike. A return-to-work order was issued by the SOLE, but ALPAP defied the
same and went on with their strike. Consequently, SOLE declared their strike illegal. In 2003, PAL
filed before the LA a complaint for damages against ALPAP.
PAL alleged that due to the illegal strike staged by ALPAP, its operation was crippled
resulting in several losses from ticket refunds, extraordinary expenses to cope with the shutdown
situation, and lost income. The LA and NLRC dismissed the complaint for damages on the ground
that they had no jurisdiction to resolve the same. It was opined that the reliefs prayed for by PAL
should have been ventilated before regular courts.
ISSUE:
Was it proper for labor tribunals to assume jurisdiction over PAL’s claims against the
ALPALP for damages as a result of the latter’s illegal strike?
RULING:
Yes, the assumption of jurisdiction by the labor tribunals was proper.
Under Article 217 (now Article 224) of the Labor Code, as amended by Section 9 of R.A.
No. 6715, the LA and the NLRC have jurisdiction to resolve cases involving claims for damages
arising from employer-employee relationship. It is settled, however, that not every controversy or
money claim by an employee against the employer or vice-versa falls within the jurisdiction of the
labor arbiter. Intrinsically, civil disputes, although involving the claim of an employer against its
employees, are cognizable by regular courts.
A money claim by a worker against the employer or vice-versa is within the exclusive
jurisdiction of the labor arbiter only if there is a "reasonable causal connection" between the claim
asserted and employee-employer relations. Only if there is such a connection with the other claims
can the claim for damages be considered as arising from employer-employee relations.
In this case, PAL’s claim for damages has reasonable connection with its employer-
employee relationship with ALPAP as the claimed damages arose from the illegal strike and acts
committed during the same which were in turn closely related and intertwined with the respondents'
allegations of unfair labor practices against PAL.
Hence, labor tribunals have jurisdiction over PAL’s claims for damages against ALPAP.
| 127
APPELLATE COURTS HAVE THE POWER TO SCRUTINIZE NLRC DECISIONS EVEN

THOUGH THE LAW GIVES NO EXPLICIT PROVISION FOR APPEALS
Angelito Gabriel vs. Petron Corporation, Alfred Trio and Ferdinando Enriquez
G.R. No. 194575; April 11, 2018
Martires, J.
FACTS:
This case involves a petition for review on Certiorari under Rule 45 assailing the CA
decision denying the motion for extension to file a petition for certiorari against the NLRC decision
which reversed the decision of the LA and dismissed the complaint filed by petitioner Angelito
Gabriel (Gabriel).
Petitioner Gabriel was hired as Maintenance Technician by respondent Petron Corporation

(Petron). He later rose from the ranks and became a Quality Management Systems (QMS)
Coordinator. However, this change of position did not give him any increase in salary or any
additional benefits.
After suffering a series of harassment acts from the private respondents, Gabriel claimed
that he was constructively dismissed. Hence, he filed a complaint against Petron. On their part,
Petron explained that Gabriel’s assignment was not a promotion, but was a result of company
reorganization. The LA then ruled in favor of Gabriel. On appeal, the NLRC reversed the decision
and dismissed the complaint. Due to time and distance constraint, Gabriel, having three (3) days
left before the expiration of the sixty (60)-day period to file a petition for certiorari, filed a motion for
extension. The CA denied the same saying no extensions are allowed.
ISSUE:
Does the filing of the petition for certiorari under Rule 45 before the SC include the
determination of the merits of the NLRC decision?
RULING:
No, the remedy of petition for review on certiorari is only limited to the CA denial of the
motion for extension.
Under our present labor laws, there is no provision for appeals from the decision of the
NLRC. In fact, under Article 229 of the Labor Code, all decisions of the NLRC shall be final and
executory after ten (10) calendar days from receipt thereof by the parties. Nevertheless, appellate
courts - including the SC – still have an underlying power to scrutinize decisions of the NLRC on
questions of law even though the law gives no explicit right to appeal. Simply said, even if there is
no direct appeal from the NLRC decision, the aggrieved party still has a legal remedy.
In St. Martin Funeral Home v. NLRC, the Supreme Court laid down the proper recourse
should the aggrieved party seek judicial review of the NLRC decision, to wit: “…the special civil
action of certiorari was and still the proper vehicle for judicial review of decisions of the NLRC. […]
All such petitions should henceforth initially be filed in the CA in strict observance of the doctrine
on hierarchy of courts as the appropriate forum for the relief desired.”
Therefore, in reviewing labor cases through a petition for review on certiorari, the SC are
solely confronted with whether the CA correctly determined the presence or absence of grave
abuse of discretion in the NLRC decision before it, and not whether the NLRC decision on the
merits of the case was correct.
128 |
WRITS OF EXECUTION MAY BE ASSAILED WHEN THERE HAS BEEN A CHANGE IN

THE SITUATION OF THE PARTIES MAKING EXECUTION INEQUITABLE OR UNJUST
Crispin S, Frondozo, et. al. vs. Manila Electric Company

G.R. No. 178379; August 22, 2017
Carpio, J.
FACTS:
The is a petition for review on Certiorari which stemmed from a certified case to the NLRC
which ruled that the subject strike conducted was illegal but ordered the reinstatement of
petitioners.
The Acting DOLE Secretary certified the issues of the strike conducted by petitioners
Crispin Frondozo, et.al., employees of respondent Manila Electric Company (MERALCO), to the
NLRC for compulsory arbitration. While the case was pending, petitioners were dismissed by
MERALCO for committing unlawful acts and violence during the strike. Thereafter, another strike
was again staged on the ground of union busting. The issues of the second strike were again
certified to the NLRC. The NLRC ruled that the strike was illegal but ordered the reinstatement of
petitioners because their participation in the commission of illegal acts in the strike were not
proved. The NLRC issued an Entry of Judgment, stating that the NLRC Order became final and
executory. Labor Arbiter Veneranda C. Guerrero issued a Writ of Execution directing the
reinstatement of the respondents.
Later, the CA’s Special Second division ruled in favor of MERALCO. On 27 January 2004,
the CA’s Fourteenth Division ruled in favor of petitioners. Petitioners then filed a petition before the
SC questioning the CA Special Second Division’s ruling, while respondent also filed a petition
before the SC questioning the CA Fourteenth Division’s decision. Both petitions were denied, and
such denial attained finality. Respondent also filed a motion for a writ of preliminary injunction
against the writ of execution issued by the LA on the basis of the CA decision in its favor. The
NLRC granted the motion due to difficulty in proceeding with the execution given the conflicting
decisions of the Court of Appeals' Special Second Division and the Court of Appeals' Fourteenth
Division.
ISSUE:
Was it proper for the NLRC to issue a writ of preliminary injunction in view of the conflicting
decisions by the different divisions of the CA?
RULING:
Yes, it was proper for the NLRC to issue a writ of preliminary injunction.
There are instances when writs of execution may be assailed. They are: (1) the writ of
execution varies the judgment. (2) there has been a change in the situation of the parties making
execution inequitable or unjust, (3) execution is sought to be enforced against property exempt
from execution, (4) it appears that the controversy has been submitted to the judgment of the
court;(5) the terms of the judgment are not clear enough; or (6) it appears that the writ of execution
has been improvidently issued, or issued without authority.
The situation in this case is analogous to a change in the situation of the parties making
execution unjust or inequitable in view of the conflicting decisions of the CA divisions, both of which
have attained finality. MERALCO's refusal to reinstate petitioners and to pay their backwages is
justified by the 30 May 2003 Decision in CA-G.R. SP No. 72480. On the other hand, petitioners'
insistence on the execution of judgment is anchored on the 27 January 2004 Decision of the Court
of Appeals' Fourteenth Division in CA-G.R. SP No. 72509.
Therefore, it was proper for the NLRC to issue a writ of preliminary injunction in view of the
conflicting decisions of the CA.
| 129
PETITION FOR CERTIORARI MAY BE FILED DIRECTLY WITH THE COURT OF

APPEALS IF IT SATISFACTORILY SHOWED THAT THE NRLC GRAVELY ABUSED THE
DISCRETION CONFERRED UPON IT
Jolo’s Kiddie Carts/Fun4kids/Marlo U.Cabili vs. Evelyn A. Caballa and Anthony M. Bautista
G.R. No.230682; November 29, 2017
Perlas-Bernabe, J.
FACTS:
This is a petition for review on Certiorari seeking to reverse the CA decision which denied
the petition due to petitioners' failure to file a motion for reconsideration before the NLRC prior to
the filing of a petition for certiorari before the CA.
Respondents Evelyn Caballa (Caballa) and Anthony Bautista (Bautista) were hired by
petitioner Jolo’s Kiddie Carts as staff members in the latter’s business which has several stalls in
SM Bacoor and SM Rosario. They were paid a daily salary of P330 for a 6-day work week from
9:45 in the morning until 9:00 in the evening. They claimed that they were never paid the monetary
value of their unused service incentive leaves, 13th month pay, overtime pay and premium pay.
They also alleged that when the petitioners found out that they inquired from DOLE about the
minimum wage, they were prohibited from reporting to work.
Caballa and Bautista filed a complaint for illegal dismissal, underpayment of salaries, 13 th
month pay, non-payment of overtime pay, holiday pay and separation pay and other money claims
against petitioner Jolo’s Kiddie Carts before the NLRC. Jolo’s Kiddie Carts denied such allegation
and maintained that they were the ones who abandoned their work. LA ruled in favor of
respondents, and accordingly, ordered petitioners to pay the respondents. NLRC set aside LA
ruling finding no illegal dismissal and ordered the petitioners to reinstate Caballa and Bautista.
Dissatisfied, petitioners directly filed a petition for certioari before the CA, without moving for
reconsideration before the NLRC. CA denied said petition.
ISSUE:
Was the CA correct in dismissing the petition for certiorari before it due to the non-filling of
a prior motion for reconsideration before the NLRC?
RULING:
No, the CA erred in dismissing the petition for certiorari filed before it due to the non-filling
of a prior motion for reconsideration before the NLRC.
Court procedure dictates that the case be remanded to the CA for a resolution on the
merits. However, as stated in Sy-Vargas v. The Estate of Rolando Ogsos, Sr., when there is
already enough basis on which a proper evaluation of the merits may be had, the court may
dispense with the procedure of remand in order to prevent further delays. Moreover, it must be
stressed that to justify the grant of the extraordinary remedy of certiorari, petitioners must
satisfactorily show that the court gravely abused the discretion conferred to it.
Verily, the CA erred in dismissing the petition for certiorari filed before it based on the
aforesaid technical ground, as petitioners were justified in pursuing a direct recourse to the CA
even without first moving for reconsideration before the NLRC.
130 |
IN A PETITION FOR CERTIORARI FROM THE DECISION OF THE NLRC, THE CA IS

ONLY TASKED TO DETERMINE WHETHER THE NLRC COMMITTED GRAVE ABUSE
OF DISCRETION IN ITS APPRECIATION OF THE MATERIAL FACTS OF THE CASE
Agnes Coeli Bugaoisan vs. Owi Group Manila

G.R. No. 226208; February 7, 2018
Reyes, Jr., J.
FACTS:
This is a petition for review on Certiorari under Rule 45 seeking to partially annul, reverse,
and set aside the decision of the CA which modified the decision of the NLRC and denied petitioner
Agnes Coeli Bugaoisan's (Agnes) partial motion for reconsideration.
The petitioner was employed as a chef in Australia through respondent OWI Group Manila,
Inc. (OWI). Due to the extensive work that was given to her, she suffered from Bilateral CTS and
was declared unfit to work for several days. She was also advised to undergo surgery. Petitioner
filed a compensation claim with the Worker's Compensation and Injury Management of Australia
to seek compensation while she was still unfit for work or reimbursement of her medical expenses,
but her application was denied.
Thereafter, the petitioner decided to tender her resignation letter and left for the Philippines.
She filed a complaint for constructive illegal dismissal and payment of salary for the unexpired
portion of her 2-year employment contract, moral and exemplary damages, and attorney's fees
against respondents OWI, Morris Corporation (Morris) and Marlene D. Alejandrino before the
NLRC.
The Labor Arbiter (LA) ruled that the petitioner was illegally dismissed from employment.
On appeal, the NLRC sustained the findings of the LA. Aggrieved, respondents filed with the CA
a Petition for Certiorari under Rule 65 assailing the NLRC's decision and resolution. The CA then
issued its assailed Decision partially granting the petition where the CA went beyond the issues of
the case in ruling that the employment contract was only for 1 year thus reducing petitioner’s award
of salary. The petitioner’s motion for reconsideration was denied, hence this appeal.
ISSUE:
Did the CA err when it went beyond the issues of the case and the assigned errors raised
by respondents when it filed the certiorari petition under Rule 65?
RULING:
Yes, the CA erred in going beyond the issues of the case and the assigned errors raised
by the respondent.
As stated in Tagle v. Equitable PCI Bank, et al., a writ of certiorari may be issued only for
the correction of errors of jurisdiction or grave abuse of discretion amounting to lack or excess of
jurisdiction. It cannot be used for any other purpose, as its function is limited to keeping the inferior
court within the bounds of its jurisdiction.
Applying this to the case at bench, the supervisory jurisdiction of the CA under Rule 65
was confined only to the determination of whether or not the NLRC committed grave abuse of
discretion in deciding the issues brought before it on appeal. Clearly, the appellate court found no
grave abuse of discretion committed by the NLRC as enunciated in the dispositive portion of its
assailed decision.
Hence, there being no grave abuse of discretion, the CA erred when it went beyond the
issues and errors raised by the respondent.
| 131
VOLUNTARY ARBITRATOR'S DECISION MUST BE APPEALED WITHIN 10 DAYS FROM

RECEIPT OF DECISION
NYK-FIL Ship Management, Inc. vs. Gener G. Dabu

G.R. No. 225142; September 13, 2017
Peralta, J.
FACTS:
This is a petition for review on Certiorari under Rule 45 seeking to set aside the CA decision
which dismissed the appeal of petitioner NYK-FIL Ship Management, Inc. (NYK) from the ruling of
the National Conciliation Mediation Board (NCMB) Panel of Arbitrators granting the claim for
disability compensation of respondent Gener G. Dabu (Dabu). NYK is a local manning agent acting
for and in behalf of its foreign principal NYK Ship Management Pte. Ltd. Singapore. NYK hired
Dabu to work as oiler on board the vessel M/V Hojin.
During his employment, Dabu had palpitations, pains all over the body, numbness of hands
and legs, lack of sleep and nervousness. Upon repatriation, he was immediately referred to a
company-designated physician who diagnosed him with diabetes mellitus which was not work-
related. Unconvinced, Dabu consulted other physicians who declared that he was permanently
unfit to resume work as a seaman and that his illness was considered work-aggravated/related.
After attempts to settle failed, Dabu filed a notice to arbitrate with the NCMB. The Panel of
Arbitrators rendered a decision granting the claim. NYK received a copy of the decision on
February 9, 2015 and filed with the CA a petition for review under Rule 43 on February 24, 2015.
CA dismissed the appeal for being filed out of time.
NYK invoked Section 4 of Rule 43 which provides that the period to appeal to the CA is 15
days from receipt of the decision. It argued that this 15-day period should apply. Dabu, on the other
hand, maintained that that the petition should be dismissed for being filed out of time beyond the
10-day reglementary period under Art. 262-A of the Labor Code.
ISSUE:
Is the 15-day period to file an appeal applicable?
RULING:
No, the 15-day reglementary period to file an appeal is not applicable.
Art. 262-A of the Labor Code provides that the award or decision of the Voluntary Arbitrator
or Panel of Voluntary Arbitrators shall be final and executory after ten (10) calendar days from
receipt of the copy of the award or decision by the parties. Likewise, Section 6, Rule VII of the
NCMB Procedural Guidelines in the conduct of voluntary arbitration proceedings provides that
awards or decisions of voluntary arbitrator become final and executory after ten (10) calendar days
from receipt of copies of the award or decision by the parties. Despite Rule 43 providing for a 15-
day period to appeal, the Court ruled that the Voluntary Arbitrator's decision must be appealed
before the CA within 10 calendar days from receipt of the decision.
In this case, petitioner received the PVA decision on February 9, 2015, and filed the petition
for review 15 days after receipt thereof, i.e., on February 24, 2015. Clearly, the decision of the
voluntary arbitrator had become final and executory after 10 days from receipt thereof.
As the PVA decision is already final and executory when petitioner filed the petition with the CA,
the CA correctly dismissed the petition since it has no more appellate jurisdiction to review the
decision.
132 |
SUPREME COURT SITTING EN BANC IS NOT AN APPELLATE COURT VIS-A-VIS ITS

DIVISIONS, AND IT EXERCISES NO APPELLATE JURISDICTION OVER THE LATTER
Gonzalo Puyat & Sons, Inc. vs. Alcaide

G.R. No. 167952 (Resolution); July 5, 2017
Velasco, Jr., J.
FACTS:
For consideration of the Court is an Omnibus Motion filed by petitioner Gonzalo Puyat &
Sons, Inc. praying that the resolution dated October 19, 2016 be set aside and reconsidered and
that the decision dated February 1, 2005 of the Court of Appeals be reinstated or, in the alternative,
its Motion for Reconsideration be referred to the Supreme Court En Banc.
Petitioner is the registered owner of fourteen (14) parcels of land. The Municipal Agrarian
Reform Officer (MARO) issued a Notice of Coverage over the subject landholding informing
petitioner that the subject properties were being considered for distribution under the government’s
agrarian reform program.
Petitioner then filed a petition before the Department of Agrarian Reform (DAR), wherein it
argued that the properties were classified as industrial, thus, exempt from the coverage of the
Comprehensive Agrarian Reform Program (CARP). As an answer, the respondents countered that
the classification of the land as industrial did not make it exempt from coverage of the CARP and
that the subject lands are planted with palay.
DAR Secretary Hernani A. Braganza issued an Order in favor of the respondent declaring
that the subject properties are agricultural land thus, falling within the coverage of the CARP. The
DAR further dismissed their motion for reconsideration. Unfazed, the petitioner filed an appeal to
the Office of the President (OP) which ruled in his favor, setting aside the DAR Order and lifting
the Notice of Coverage. Such decision by the OP was reversed by the CA when the respondents
sought recourse. Hence, petitioner filed the present motion praying that its motion for
reconsideration be referred to the Supreme Court En Banc.
ISSUE:
Should the petitioner's prayer to refer the case to the Court's En Banc be granted?
RULING:
No. The Court found no cogent reason to grant petitioner's prayer to refer the case to the
Court's En Banc,
In Apo Fruits Corporation and Hijo Plantation, Inc. v. Court of Appeals, the Court already
ruled that the Supreme Court sitting En Banc is not an appellate court vis-a-vis its Divisions, and
it exercises no appellate jurisdiction over the latter. Each division of the Court is considered not a
body inferior to the Court en banc, and sits veritably as the Court en banc itself. It bears to stress
further that a resolution of the Division denying a party's motion for referral to the Court en banc of
any Division case, shall be final and not appealable to the Court en banc.
Hence, the omnibus motion praying that the case be referred to the Supreme Court En
Banc should be denied.
| 133
FOR TENANCY RELATIONS TO EXIST, THE ESSENTIAL ELEMENTS OF (1) CONSENT;

AND (2) SHARING AND/OR PAYMENT OF LEASE RENTALS, MUST BE PRESENT
Primitivo Macalanda, Jr. vs. Atty. Roque A. Acosta

G.R. No. 197718; September 6, 2017
Tijam, J.
FACTS:
In this petition for review on Certiorari under Rule 45, petitioner assailed the CA’s Decision,
which affirmed the DARAB’s decision declaring him not a bona fide tenant of the land owned by
respondent and which directed him and all persons under him to vacate the land.
In Atty. Roque Acosta’s (respondent) complaint before the Department of Agrarian Reform
Adjudication Board (DARAB), he prayed for a judgment ordering Primitivo Macalanda Jr
(petitioner), who is respondent’s caretaker and not a tenant under agrarian laws, to vacate the land
and to account and pay for the fruits of the land illegally withheld from and due to respondent. In
his defense, petitioner alleged that he is a tenant of the subject land with the respondent
recognizing him, as evidenced by a deed of agreement (DOA) which shows in the signature portion
that petitioner is a "tenant/caretaker". The Provincial Adjudicator (PA) dismissed the complaint for
prematurity. Upon appeal, the DARAB reversed the PA and declared that petitioner is not a bona
fide tenant of the subject land.
Petitioner filed the instant petition insisting that he is a tenant of respondent, as evidenced
by DOA. He alleged that his occupation and cultivation of the subject land for a period of 17 years
is with the consent of respondent.
ISSUE:
Is the DOA sufficient to prove the existence of tenancy relationship?
RULING:
No. The DOA is not sufficient to prove the existence of tenancy relationship.
For tenancy relationship to exist, the following elements must be shown to concur: (1) the
parties are the landowner and the tenant; (2) the subject matter is agricultural land; (3) there is
consent between the parties to the relationship; (4) the purpose of the relationship is to bring about
agricultural production; (5) there is personal cultivation on the part of the tenant or agricultural
lessee; and, (6) the harvest is shared between landowner and tenant or agricultural lessee. All
these elements must be proved by substantial evidence. Unless a person has established his
status as a de jure tenant, he is not entitled to security of tenure or to be covered by the Land
Reform Program of the Government under existing tenancy laws. Crucial for the creation of
tenancy relations would be the existence of two of the essential elements, namely, consent and
sharing and/or payment of lease rentals.
In the present case, petitioner miserably failed to prove the existence of such tenancy
relationship. The essential element of consent is not sufficiently established because its alleged
proof – the DOA, does not categorically constitute him as de jure tenant of the subject land. In fact,
in the signature portion of the deed, it referred to petitioner as a "tenant/caretaker" of the subject
land, thus, the DOA is ambiguous as to whether petitioner is a tenant or a caretaker. Further, the
essential element of sharing of harvest was also not sufficiently established. Petitioner failed to
show any evidence that there is sharing of harvest between him and the respondent. In his petition
for review before the CA, petitioner alleged that he has continuously cultivated and occupied the
subject lot for a period of 17 years. On this note, common sense dictates that if petitioner is indeed
a de jure tenant, he should fully know his arrangement with the respondent as to the sharing of
harvest. However, petitioner, failed to prove such arrangement.
For failing to prove with substantial evidence the existence of tenancy relationship,
petitioner, not being a tenant under agrarian laws, should vacate the land of respondent.
134 |
IN DETERMINING JUST COMPENSATION, COURTS SHOULD CONSIDER THE

FACTORS ENUMERATED IN SECTION 17 OF R.A. NO. 6657, AS AMENDED
Land Bank of the Philippines vs. Rural Bank of Hermosa (Bataan), Inc.
G.R. No. 181953; July 25, 2017
Perlas-Bernabe, J.
FACTS:
In this petition for review on Certiorari, petitioner Land Bank of the Philippines (LBP) assails
the CA’s decision which affirmed the RTC’s decision fixing the just compensation for the
respondent’s agricultural land acquired by the government at P30.00 per sq. m.
Respondent is the registered owner of two parcels of agricultural land. Respondent

voluntarily offered to sell the same to the government under the Comprehensive Agrarian Reform
Program (CARP). LBP valued the subject land at ₱28,282.09 using the formula under Department
of Agrarian Reform (DAR) Administrative Order No. 17, Series of 1989, as amended, i.e., LV =
(CNI x .70) + (MV x .30), but respondent rejected the said valuation, prompting the LBP to deposit
the said amount in the latter's name.
The Office of the Provincial Adjudicator rendered a decision adopting the LBP's
valuation. Hence, respondent filed before the RTC, a petition seeking the determination of just
compensation. RTC found the LBP's valuation as too low and unrealistic while considering not only
the testimony of the parties' respective witnesses, but also the nature of the land's use and its
assessed value based on the tax declarations. On appeal, CA upheld RTC’s valuation holding that
administrative orders are mere guidelines used by the LBP that are not binding on the courts.
ISSUE:
May the CA completely disregard the DAR formula for the determination of just
compensation?
RULING:
No, the CA erred in upholding the RTC’s valuation and in completely disregarding the DAR
formula.
In determining just compensation, the fair market value of an expropriated property is

determined by its character and price at the time of taking, or the time when the landowner was
deprived of the use and benefit of his property, such as when title is transferred in the name of the
Republic of the Philippines or when the Certificates of Land Ownership Awards are issued in favor
of the farmer-beneficiaries. Further, courts should consider the factors in Section 17 of R.A. No.
6657, as amended, prior to its amendment by R.A. No. 9700, as translated into the applicable DAR
formula. However, if the RTC finds that a strict application of the relevant DAR formulas is not
warranted, it may depart therefrom upon a reasoned explanation. The factors enumerated are as
follows: (a) the acquisition cost of the land, (b) the current value of like properties, (c) the nature
and actual use of the property, and the income therefrom, (d) the owner's sworn valuation, (e) the
tax declarations, (j) the assessment made by government assessors, (g) the social and economic
benefits contributed by the farmers and the farmworkers, and by the government to the property,
and (h) the non-payment of taxes or loans secured from any government financing institution on
the said land, if any.
Here, the CA merely upheld the just compensation fixed by the RTC which considered only
the nature of the land's use, and its assessed value based on the tax declarations without a
showing, however, that the other factors under Section 17 of R.A. No. 6657, as amended, were
taken into account or otherwise found to be inapplicable, and completely disregarded the pertinent
DAR formula contrary to what the law requires.
On this score alone, the CA clearly erred in sustaining the RTC's valuation as having been
made in disregard of Section 17 of R.A. No. 6657, as amended.
| 135
A LAND HAVING BEEN ACQUIRED IN A VALID SALE PURSUANT TO P.D. 27 COULD

NO LONGER BE THE SUBJECT OF EMANCIPATION PATENTS
Alfonso Digan, Tilabdo Buelta, Bernardo Mariano, Santiago Acquidan, Fernando Agnno,
Johnny Orie and Felimon Gaceta (deceased) rep. by his wife Lolita Gaceta vs. Noemi Malines
G.R. No.183004; December 6, 2017
Martires, J.
FACTS:
This is a petition for review on Certiorari that seeks to set aside the decision of the Court
of Appeals (CA) which reversed and set aside the decision of the Department of Agrarian Reform
Arbitration Board (DARAB).
Modesta Paris (Paris), owner of three registered parcels of land which were placed under
the coverage of Operation Land Transfer (OLT) pursuant to P.D. 27, sold to respondent Noemi
Malines (Malines) and Jones Melecio (Melecio) one of her six lots. Petitioners, who were identified
by the Department of Agrarian Reform (DAR) as among those qualified as farmer – beneficiaries
of the landholdings of Paris gave their consent to said sale. However, Emancipation Patents (EP)
covering the same land was issued in favor of the petitioners which led to the cancellation of the
Transfer Certificate of Title (TCT) of Malines and Melecio by the Register of Deeds (RD).
Malines and Melacio filed a petition for the cancellation of the EPs contending that the sale
of the land was with the consent of the petitioners and they were not informed of the taking of the
land. Petitioners on the other hand assailed the validity of the sale of the subject land. Provincial
Adjudicator (PA) dismissed the petition. The PA disqualified petitioners from being beneficiaries of
the DAR’s OLT for failure to pay their amortizations. The DARAB central office affirmed the PA’s
decision stating that there was no violation of the right to due process when no notice of coverage
of the subject land was served to Malines and Melacio since at that time, the place is under
ownership of Paris. The CA ruled that the subject land is exempt from OLT coverage because it is
part of their retained areas.
ISSUE:
Was the sale to the respondents of the land under the coverage of OLT valid?
RULING:
Yes, the sale of the subject land under the coverage of the OLT is valid.
To protect the rights of tenants-farmers, P.D. 27 decreed that titles to land acquired
pursuant to it or the land reform program shall not be transferrable except by hereditary succession
or to the Government in accordance with its provisions and other pertinent laws and regulations.
However, not all conveyances involving tenanted rice and corn lands are prohibited. DAR issued
several memorandum circulars which recognized the validity of direct sale between the landowner
and the tenant-beneficiary under a direct payment scheme and at liberal terms and subject to
conditions. Said circulars also prohibit transfer of ownership except to actual tenant-farmers/tillers
The transfer of the subject land from Paris to Malines and Melacio would have been void
had not the petitioners admitted in their answer that Malines and Melecio were qualified
beneficiaries. Consequently, the subject land, having been acquired in a valid sale pursuant to
P.D. 27, could no longer be bound by separate EPs in favor of other persons.
Thus, the EPs of the petitioners, which covers land already conveyed to qualified farmer-
beneficiaries through a valid sale, have been irregularly issued and must be declared null and void.
136 |
FISHPONDS ARE NO LONGER CONSIDERED AS AGRICULTURAL LANDS; DISPUTES

ARISING FROM THE SAME NOW FALL WITHIN THE JURISCTION OF REGULAR
COURTS
Magdalena C. Dillena vs. Mariano Alcaraz, Bernardo Alcaraz, Joselito Alcaraz and Amor
Alcaraz Sta. Maria
G.R. No.204045; December 14, 2017
Del Castillo, J.
FACTS:
This is a petition for review on Certiorari which seeks to set aside the decision of the Court
of Appeals (CA) which reversed the decision rendered by the Department of Agrarian Reform
Adjudication Board (DARAB).
Salud Crespo instituted Catalino Dillena (Catalino) as tenant of the subject landholding
(fishpond). When one Ana Alcaraz (Ana) purchased the land, the latter recognized Catalino’s
tenancy over the same. When Catalino died, petitioner’s husband Narciso Dillena (Narciso)
succeeded to the former’s tenancy rights. When Ana died, said landholding was inherited by the
respondents who also recognized Narciso’s tenancy rights. Narciso continued to pay rent and
introduced improvements on the land. However, after Narciso died, they informed petitioner about
their intention to increase rental and that petitioner must vacate the land.
This prompted petitioner Magdalena Dillena to file a petition with the PARAD praying that
she be declared a de jure tenant. Respondent filed a motion to dismiss contending that the lease
already expired and as a civil case it must be cognizable by the regular courts. PARAD ruled that
fishponds remained agricultural lands covered by the Comprehensive Agrarian Reform Law
(CARL) and that the dispute is an agrarian controversy, therefore, petitioner is not a lessee but a
legitimate tenant and enjoys security of tenure pursuant to her tenurial arrangement with
respondents. DARAB affirmed the decision of PARAD ruling that as tenant, he has acquired a
vested right over the subject fishpond which has become fixed and established and is no longer
open for doubt or controversy. DARAB also ruled that since jurisdiction was already assumed by
PARAD, the same may not be denied. CA set aside the decision and ruled in favor of the
respondents.
ISSUE:
Are fishponds agricultural lands subject to the jurisdiction of DARAB/PARAD?
RULING:
No, the court agreed with the CA that the case is beyond the jurisdiction of DARAB and
PARAD.
By virtue of RA 7881 (CARL), private lands actually, directly and exclusively used for prawn
farms and fishponds were exempted from the coverage of the CARL. When petitioner filed the
complaint with the PARAD, RA 7881 was already in effect, therefore the subject landholding which
remained undistributed under and was not subjected to the CARP ceased to be covered by the
CARL. Consequently, the PARAD and the DARAB had no authority to take cognizance of the case
since their jurisdiction is limited to agrarian disputes. It also nullifies petitioner’s claim that a tenurial
arrangement, which is governed by RA 3844, exists between her and the respondents.
Thus, since petitioner and Narciso did not apply to become beneficiaries in the
landholdings and chose instead to remain in the fishponds, they cannot claim protection
specifically under the CARL and other agrarian laws, as the landholding ceased to be covered
under said laws.
| 137
DAR HAS JURISDICTION OVER CASES WHEN (A) THERE IS AN ALLEGATION FROM
ANY ONE OR BOTH OF THE PARTIES THAT THE CASE IS AGRARIAN IN NATURE;
AND (B) ONE OF THE PARTIES IS A FARMER, FARMWORKER, OR TENANT
Chailese Development Company, Inc. vs. Monico Dizon, et. al.

G.R. No. 206788; February 14, 2018
Reyes, Jr., J.
FACTS:
In this petition for review on Certiorari under Rule 45, petitioner sought to annul and set
aside the CA’s decision which ordered the referral of the case to DAR. The CA found the existence
of an agrarian dispute since the issue of petitioner's possession was intertwined with the issue of
whether the respondents are bona fide tillers and occupants entitled to disturbance compensation.
Petitioner Chailese Development Company, Inc., registered owner of the subject

landholdings, filed a complaint for recovery of possession and damages before the trial court
against respondents. The DAR Secretary issued a resolution ordering that the subject landholdings
be converted for commercial and light industrial uses. Petitioner averred that it is, however, unable
to introduce developments as a portion of the lots were being illegally occupied by respondents
who refused to vacate.
Respondents, in their answer, contended that lower court has no jurisdiction over the case
as the allegations involve the application of the Agrarian Reform Law. They averred that they are
tenants of the subject landholding which is a hacienda devoted to agricultural production and that
petitioner, who in order to avoid the compulsory distribution under the Comprehensive Agrarian
Reform Law (CARL), filed a "bogus" petition for conversion.
ISSUE:
Does the case for recovery of possession and damages involve an agrarian dispute which
is under DAR’s jurisdiction?
RULING:
No, the case does not involve an agrarian dispute.
It is a basic rule in procedure that the jurisdiction of a court over the subject matter and the
nature of an action is determined by law and the allegations in the complaint. The exclusive
jurisdiction of the DAR over agrarian cases was introduced by Sec. 19 to Sec. 50 of R.A. No. 9700
which provides that the judge or prosecutor is obligated to automatically refer the cases pending
before it to the DAR when the following requisites are present: (a) there is an allegation from any
one or both of the parties that the case is agrarian in nature; and (b) one of the parties is a farmer,
farmworker, or tenant.
In this case, the first requisite is satisfied by the allegations made by the respondents in
their answer assailing the jurisdiction of the regular court to rule on the matter on the ground that
it is agrarian in nature. Anent the second requisite, the Court finds that the respondents failed to
prove that they are farmers, farmworkers, or tenants. Mere allegation would not suffice to establish
the existence of the second requirement. Respondents failed to adduce any evidence of the
existence of any tenancy agreement between respondents and petitioner's predecessor-in-
interest.
For failure to satisfy the second requisite, this, as discussed, precludes the application R.A.
No. 9700, thus, it is the regular court which has jurisdiction over the present case, and not DAR.
138 |
SPECIAL AGRARIAN COURTS MAY RELAX THE APPLICATION OF THE DAR

FORMULA IN COMPUTING JUST COMPENSATION BUT THEY MUST CLEARLY
EXPLAIN THE DEVIATION; OTHERWISE, THEY WILL BE CONSIDERED IN GRAVE
ABUSE OF DISCRETION
Landbank of the Philippines vs. Edna Mayo Alcantara and Heirs of Cristy Mayo Alcantara
G.R. No. 187423; February 28, 2018
Martires, J.
FACTS:
Petitioner assails by way of a petition for review on Certiorari the CA’s decision which
affirmed with modification the RTC’s decision, sitting as Special Agrarian Court (SAC).
The Department of Agrarian Reform (DAR) issued a Notice of Land Valuation and
Acquisition over the lands owned by respondents. LBP gave its valuation of P1,210,252.96, in
accordance with DAR A.O. No. 6, series of 1992, as amended. Respondents did not question their
land's acquisition but disagreed with its valuation. They filed a protest with the DAR Adjudication
Board (DARAB), which rendered a decision upholding the valuation of LBP. Thereafter, they filed
a judicial complaint and reiterated that just compensation for their agricultural land should be based
on its fair market value. The SAC ruled in respondents' favor and ignored the formula given in DAR
A. O. No. 6, series of 1992, as amended and used the 1998 issuance of the Barangay Council of
Brgy. Tamisian. In the said issuance, the council members agreed that the selling price for the
coconut lands in their barangay would be P100,000.00 per hectare. Multiplying the 22.6762
hectares of herein respondents by P100,000.00 per hectare, the SAC arrives at the amount of P2,
267,620.00, as the just compensation. Hence, this petition.
LBP asserts that the SAC had contravened the valuation of CARP lands set in DAR A.O.
No. 6, Series of 1992, as amended, as it based its valuation solely on the fair market value.
ISSUE:
Was the SAC correct in basing its valuation solely on the fair market value?
RULING:
No, the SAC had contravened the law as it based its valuation solely on the fair market
value.
The Supreme Court reiterated the following guidelines in determining just compensation:
First, in determining just compensation, courts are obligated to apply both the compensation
valuation factors enumerated under Section 17 of R.A. No. 6657 and the basic formula laid down
by the DAR. Second, these formulas have the force and effect of law; unless declared invalid in a
case where its validity is directly put in issue, courts must consider their use and application. Third,
courts, in the exercise of their judicial discretion, may relax the application of the formula to fit the
peculiar circumstances of a case. They must, however, clearly explain the reason for any deviation;
otherwise, they will be considered in grave abuse of discretion.
In this case, the SAC clearly deviated from, nay rejected, the formula set by the DAR in
the subject administrative orders. In its determination of just compensation in this case, the SAC
made no use of any calculation or formula. The special court relied, quite simply, on respondents'
valuation, which in turn was based on a 1998 issuance of the Barangay Council of Brgy. Tamisian.
The SAC did not discuss how the council came up with this figure. In fine, the SAC failed to present
a well-reasoned justification, as supported by the evidence on record, for why it deviated from the
DAR formula.
Hence, it ruled in blatant disregard of the factors spelled out in Section 17 of R.A. No. 6657.
The SAC's valuation in this case must be struck down as illegal and must be set aside.
| 139
IF PROPERTY IS TAKEN FOR PUBLIC USE BEFORE COMPENSATION, THE FINAL

COMPENSATION MUST INCLUDE INTERESTS ON ITS JUST VALUE TO BE COMPUTED
FROM THE TIME THE PROPERTY IS TAKEN TO THE TIME WHEN COMPENSATION IS
ACTUALLY PAID OR DEPOSITED WITH THE COURT
Apo Fruits Corporation vs. The Land Bank of the Philippines

and Department of Agrarian Reform
G.R. Nos. 217985-86; March 21, 2018
Tijam, J.
FACTS:
This is an omnibus motion filed by the Land Bank of the Philippines (LBP) for the
reconsideration of the SC’s decision affirming CA and RTC’s decision.
Apo was the registered owner of a 115.2179-hectare land situated in San Isidro, Tagum
City. Apo voluntarily offered to sell the subject property to the government for purposes of the
Comprehensive Agrarian Reform Program (CARP). Apo was informed that the value of the subject
property was P16.5484 per sq.m. Finding the said valuation low, Apo rejected the offer. Meanwhile,
the DAR requested LBP to deposit the amount of P3,814,053.53 as initial payment for the subject
property at the rate of P3.3102 per sq.m.
On December 9, 1996, the certificate of title of Apo was cancelled and the subject property
was transferred in the name of the Republic of the Philippines. Corollarily, several Certificates of
Land Ownership (CLOAs) were issued in favor of farmer-beneficiaries. Not satisfied with the
valuation of LBP, Apo filed a complaint for determination of just compensation with the Department
of Agrarian Reform Adjudication Board (DARAB). Unfortunately, the said case remained pending
for almost six (6) years without resolution. Apo then filed a Complaint for determination of just
compensation and prayed for 12% interest on the unpaid just compensation as counted from the
time of the taking until full payment.
ISSUE:
Is LBP liable to pay legal interest on the just value of the property from the time of the
taking until full payment thereof?
RULING:
Yes, LBP is liable to pay legal interest from the time of the taking of the property until full
payment.
In Republic of the Philippines. vs. Court of Appeals, the Supreme Court held that the
constitutional limitation of "just compensation" is considered to be the sum equivalent to the market
value of the property, broadly described to be the price fixed by the seller in open market in the
usual and ordinary course of legal action and competition or the fair value of the property as
between one who receives, and one who desires to sell, it fixed at the time of the actual taking by
the government.
In the present case, LBP merely deposited the amount of Php 3,814,053.53 as initial
payment of the just compensation. The RTC's valuation in its decision as just compensation for
the subject property is Php 149,783,000.27. There is a staggering difference between the initial
payment made by the LBP and the amount of the just compensation due to Apo. It should be noted
that the subject property has already been taken by the government on December 9, 1996. Up to
this date, the just compensation has not been fully paid. During the interim, Apo is deprived of the
income it would have made had it been properly compensated for the properties at the time of the
taking. It is therefore necessary to hold LBP liable to pay for the legal interest due to its delay in
fully satisfying the payment of the just compensation.
Thus, LBP is liable to pay legal interest of 12% counted from December 9, 1996, the time
of the taking until June 30, 2013. Thereafter, or beginning July 1, 2013 until fully paid, the just
compensation shall earn 6% legal interest in accordance with Bangko Sentral ng Pilipinas
Monetary Board Circular No. 799, Series of 2013.
140 |
DAR HAS EXCLUSIVE JURISDICTION TO CANCEL CERTIFICATION OF LAND

OWNERSHIP AWARDS TO PARTIES WHO ARE NOT AGRICULTURAL TENANTS
Spouses Fredeswinda Drilon Ybiosa and Alfredo Ybiosa vs. Inocencio Drilon
G.R. No. 212866; April 23, 2018
Del Castillo, J.
FACTS:
In this petition for review on Certiorari, petitioner assails the CA’s decision finding that the
complaint filed is under the jurisdiction of Department of Agrarian Reform (DAR) and not the
Department of Agrarian Reform Adjudication Board (DARAB). The subject matter of this
controversy involves a property covered by an Original Certificate of Title that was issued pursuant
to a Certificate of Land Ownership (CLOA) issued by the DAR to Gabriel Drilon.
Herein respondent, Inocencio Drilon alleged that he is the owner of the subject property
after he purchased the same from the late Gabriel Drilon as evidenced by the receipts. He further
alleged that a certain Eustaquia Eumague Drilon connived with herein petitioners, Spouses
Fredeswinda Drilon Ybiosa and Alfredo Ybiosa, in effecting a deed of sale in favor of Spouses
Ybiosa where the signature of the late Gabriel Drilon was forged. Hence, respondent filed a
complaint in the RTC for the annulment of deed of absolute sale and cancellation of certificate of
title and CLOA of the subject property. For their defense, defendants insisted that the case should
be dismissed because the trial court acquired no jurisdiction over the subject matter of the case.
The trial court ruled that it does not have jurisdiction to annul a CLOA as it is the DARAB
who has jurisdiction over cases involving the correction, partition, cancellation, secondary and
subsequent issuances of CLOAs and Emancipation Patents (EPs) which are registered with the
Land Registration Authority. CA, however, found that this is falls under DAR and not DARAB.
ISSUE:
Is it the DAR, and not the DARAB nor the RTC, which has jurisdiction to cancel CLOAs to
parties who are not agricultural tenants?
RULING:
Yes, DAR has jurisdiction to cancel CLOAs to parties who are not agricultural tenants.
In Heirs of Julian dela Cruz v. Heirs of Alberto Cruz, the Court pronounced that under
Section 2(f), Rule II of the DARAB Rules of Procedure, the DARAB has jurisdiction over cases
involving the issuance, correction and cancellation of CLOAs which were registered with the LRA.
However, for the DARAB to have jurisdiction in such cases, they must relate to an agrarian dispute
between landowner and tenants to whom CLOAs have been issued by the DAR Secretary. The
cases involving the issuance, correction and cancellation of the CLOAs by the DAR in the
administrative implementation of agrarian reform laws, rules and regulations to parties who are not
agricultural tenants or lessees are within the jurisdiction of the DAR and not of the DARAB. To this
day, this very same procedure is applicable, pursuant to the more recent 2009 DARAB Rules of
Procedure; Section 9 of RA No. 9700, or the CARPER Law; and DAR AO No. 3, series of 2009.
With the above disquisition, respondent should have filed his case against petitioners
before the DAR, and not the RTC. The RTC had no jurisdiction over respondent's cause of action
as it primarily seeks to cancel the CLOA and certificate of title issued to petitioners who are not
agricultural tenants.
Thus, it is the DAR Secretary who has jurisdiction over the instant case for cancellation of
petitioners' CLOA and certificate of title.
| 141
PARAD HAS JURISDICTION OVER AGRARIAN DISPUTE
Spouses Nolasco vs. Rural Bank of Pandi

G.R. No. 194455; June 27, 2018
Martires, J.
FACTS:
Before the Court is a petition for review on Certiorari under Rule 45, assailing the decision
of the Court of Appeals (CA) ruling that the Department of Agrarian Reform Adjudication Board
(DARAB) had no jurisdiction over the complaint filed.
The spouses Reynaldo and Primitiva Rivera (the spouses Rivera) obtained a loan from the
Rural Bank of Pandi, Inc. (respondent bank). The loan was secured with a mortgage over a parcel
of land. Respondent bank extrajudicially foreclosed the mortgage. The spouses, now solely
represented by Primitiva, refused to vacate the property, prompting the bank to seek relief from
the Regional Trial Court in Malolos City (RTC). The RTC issued a writ of possession in favor of
the bank, directing its sheriff to eject the spouses. The next month, by virtue of the writ, the bank
was placed in possession of the property.
Herein petitioners, the spouses Avelina Rivera--Nolasco and Eduardo Nolasco (petitioner
spouses), filed a Complaint before the DARAB denominated as "For: Maintenance and Peaceful
Possession of Landholding and Damages with Prayer for Temporary Restraining Order and/or Writ
of Preliminary Injunction". Respondent bank argues that the DARAB and/or PARAD had no
jurisdiction over the complaint as petitioner spouses were not tenants at the property. Spouses
Nolasco assailed the decision of the CA finding that they are not tenants of the land, 1/8 of which
they own, and affirming the RTC’s decision granting respondent bank writ of possession.
ISSUE:
Does PARAD have jurisdiction over the subject complaint?
RULING:
Yes, PARAD has jurisdiction over the complaint filed by petitioner spouses.
The controversy raised squarely falls under that class of cases described under Paragraph
1.1, Section 1, Rule II of the 2003 DARAB Rules of Procedure. Petitioner spouses assert that they
are tenants of agricultural land and pray that their tenancy be respected by respondent bank. What
results is an agrarian dispute, a controversy over which the PARAD has jurisdiction. An agrarian
dispute is any controversy relating to, among others, tenancy over lands devoted to agriculture. In
this regard, the specific elements of tenancy are sufficiently averred in the subject complaint, these
being: first, that the parties are the landowner and the tenant or agricultural lessee; second, that
the subject matter of the relationship is an agricultural land; third, that there is consent between
the parties to the relationship; fourth, that the purpose of the relationship is to bring about
agricultural production; fifth, that there is personal cultivation on the part of the tenant or agricultural
lessee; and sixth, that the harvest is shared between the landowner and the tenant or agricultural
lessee.
Given the averments of the subject complaint, the PARAD already obtained a jurisdictional
foothold in this case.
Hence, it could take on all the issues of the case, including the defenses raised by
respondent bank. The petitioner spouses are allowed to present their case in full, which must then
be decided on the merits.
142 |
ALLOWANCES AND COMPENSATION OF GOVERNMENT EMPLOYEES ARE

CONSOLIDATED IN THE STANDARDIZED SALARY UNLESS EXCLUDED BY LAW OR
DBM ISSUANCE
Metropolitan Waterworks and Sewerage System vs. Commission on Audit

G.R. No. 195105; November 21, 2017
Bersamin, J.
FACTS:
This is a petition for Certiorari assailing the decision of respondent Commission on Audit
(COA) affirming the disallowance of certain benefits received by the employees of petitioner
Metropolitan Waterworks and Sewerage System (MWSS) and ordering the MWSS officers
responsible for the approval and payment of the benefits to refund the total amount disallowed.
Prior to the passage of the Compensation and Position Classification Act of 1989 (RA No.
6758), the Board of Trustees of MWSS approved the grant of certain benefits to its employees.
These included the mid-year financial assistance; bigay-pala; meal/medical allowance; productivity
bonus; year-end financial assistance; longevity pay; and representation and transportation
allowance (RATA). Upon enactment of RA 6758, the auditor from COA of MWSS issued a Notice
of Disallowance (ND) of the benefits from January 2000 to November 2000. MWSS moved for
reconsideration. The COA Legal and Adjudication Officer (COA-LAO) modified the decision and
allowed the payment of some of the benefits.
MWSS contends that the COA committed grave abuse of discretion in issuing the NDs
inasmuch as the grant of the benefits by its Board of Trustees had legal bases, thus valid. In
contrast, COA insists that the mid-year and year-end financial assistance and the bigay-pala
anniversary bonus initially granted in 1987 were not among the benefits authorized under item 5
of Letter of Implementation and that said benefits had been granted pursuant to board resolutions
without the imprimatur of the Office of the President as required by Section 2 of PD No. 985.
ISSUE:
Was the disallowance of all the above mentioned benefits upon the enactment of RA 6758
proper?
RULING:
No, the disallowance of certain benefits was incorrectly done.
Section 12 of the RA No. 6758 states that all allowances except RATA, clothing and
laundry allowances, subsistence allowance for marine officers and crew on board government
vessels and hospital personnel, and such other additional compensation not otherwise specified
therein, as may be determined by the DBM, shall be deemed included in the standardized salary
rates therein prescribed. Moreover, although it was the policy intent of RA No. 6758 to standardize
salary rates among government personnel, Congress nonetheless saw the need for equity and
justice in adopting the policy of non-diminution of pay when it authorized incumbents as of July 1,
1989 to receive salaries and/or allowances over and above those authorized by RA 6758.
The disallowed benefits and allowances of petitioner, with the exception of the RATA and
the medical allowance, were not excluded by RA No. 6758 or any issuance of DBM. Moreover,
inasmuch as the MWSS did not substantiate the entitlement of its officers and employees to the
mid-year and year-end financial assistance as well as the bigay-pala anniversary bonus, said
benefits must be disallowed in full without any need to distinguish between employees hired before
or after July 1, 1989.
Hence, only the mid-year, year-end financial assistance, and bigay-pala anniversary bonus
should be disallowed.
| 143
CONTRACT OF EMPLOYMENT IS EFFECTIVE ONLY BETWEEN THE PARTIES
Rolando De Roca vs. Eduardo C. Dabuyan, et. al.

G.R. No. 215281; March 5, 2018
Del Castillo, J.
FACTS:
This is a petition for review on Certiorari which seeks to set aside the decision of the CA
which held that there is an employer-employee relationship between the petitioner and private
respondents, and thus under the labor arbiter’s jurisdiction.
In 2012, private respondents Eduardo Dabuyan et al. filed a complaint for illegal dismissal
against RAF Mansion Hotel Old Management and New Management and Victoriano Ewayan then
later included petitioner Rolando De Roca. Despite service of summons, petitioner did not attend
the subsequent hearings prompting the labor arbiter to direct private respondents to submit their
position paper. Private respondents submitted their position paper and on the same day, petitioner
filed his motion to dismiss on the ground of lack of jurisdiction.
Petitioner alleged that while he was the owner of RAF Mansion Hotel, the same was leased
to Victoriano Ewayan, owner of Oceanic Tours and Travel Agency. Further, petitioner asserted
that Ewayan was the employer of private respondents, there was no employer-employee
relationship between him and private respondents, and hence, the labor arbiter had no jurisdiction.
On the other hand, respondents argue that since petitioner owned the building which was a hotel,
it follows that he is their employer and labor arbiter has jurisdiction over him. The LA that petitioner
is liable. Instead of filing an appeal, a tardy petition for annulment of judgment was filed. The CA,
in turn, ruled against the petitioner.
ISSUE:
Is there an employer-employee relationship despite petitioner being only the owner-lessor
of the building being leased to the Oceanic Tours and Travel Agency?
RULING:
No, there is no employer-employee relationship between the parties.
Article 1311 of the Civil Code provides that “Contracts take effect only between the parties,
their assigns and heirs, except in case where the rights and obligations arising from the contract
are not transmissible by their nature, or by stipulation or by provision of law.”
In the case at bar, the contract of employment between respondents, on the one hand, and
Oceanic Tours and Travel Agency and Ewayan on the other, is effective only between them; it
does not extend to petitioner, who is not a party thereto. His only role is as lessor of the premises
which Oceanic leased to operate as a hotel; he cannot be deemed as respondent's employer.
Therefore, there is no employer-employee relationship between petitioner and private

respondents. Consequently, the decision of the Labor Arbiter must be set aside for being grossly
erroneous and unjust and the same could not have acquired finality, contrary to what respondents
believe — as it creates no rights and imposes no duties. Any act performed pursuant to it and any
claim emanating from it does not have any legal effect.
144 |
PRINCIPLE OF PATER FAMILIAS APPLIES ONLY WHEN THERE IS EMPLOYER-

EMPLOYEE RELATIONSHIP
John E.R. Reyes and Merwin Joseph Reyes vs. Orico Doctolero, Romeo Avila, Grandeur
Security and Services Corporation, and Makati Cinema Square
G.R. No. 185597; August 2, 2017
Jardeleza, J.
FACTS:
This is a petition for review on Certiorari under Rule 45 challenging the CA’s decision which
affirmed the RTC’s decision dismissing the complaint against respondents Grandeur Security and
Services Corporation (Grandeur) and Makati Cinema Square (MCS). Co-respondents Orico
Doctolero and Romeo Avila were Grandeur’s security guards assigned in the MCS’ parking area.
The incident arose when John E.R. Reyes, driving a Toyota Tamaraw with co-petitioner
Merwin Joseph Reyes, approached the entrance of the basement parking of MCS. Doctolero
stopped John several times to give way to outgoing cars. A heated argument ensued which led to
Doctolero shooting John in his leg while Avila likewise shooting Merwin on the stomach.
In a complaint for damages, the RTC held Doctolero and Avila liable for the injuries, but
absolved Grandeur and MCS. Petitioners argued that Grandeur was negligent in the selection and
supervision of its employees. They likewise impleaded MCS on the ground that it was negligent in
getting Grandeur's services. For its part, Grandeur asserted that it exercised the required diligence
in the selection and supervision of its employees. MCS denied liability and contended that it cannot
be held liable for damages simply because of its ownership of the premises where the shooting
incident occurred.
ISSUE:
Are Grandeur and MCS liable for the injuries inflicted by the respondent guards?
RULING:
No. Grandeur and MCS are not liable.
As a general rule, one is only responsible for his own act or omission. The law, however,
provides for exceptions when it makes certain persons liable for the act or omission of another.
One exception is an employer who is made vicariously liable for the tort committed by his employee
under par. 5 of Art. 2180. Here, although the employer is not the actual tortfeasor, the law makes
him vicariously liable on the basis of the civil law principle of pater familias for failure to exercise
due care and vigilance over the acts of one's subordinates to prevent damage to another. However,
the above rule is applicable only if there is an employer-employee relationship.
With respect to MCS, the Court held that there was no employer-employee relationship
between MCS and respondent guards. The guards were merely assigned by Grandeur to secure
MCS' premises pursuant to their Contract of Guard Services. Thus, MCS cannot be held
vicariously liable for damages caused by the guard’s acts or omissions. Meanwhile, the said
principle applies to Grandeur, it being undisputed that respondent guards were its employees.
However, Grandeur’s standard operational procedures, showing the means by which Grandeur
conducts close and regular supervision over the security guards assigned to their various clients,
established that it exercised due diligence in the selection and supervision of its employees.
Accordingly, having successfully overcome the legal presumption of negligence, it is

relieved of liability from the negligent acts of its employees.
| 145
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SAN BEDA COLLEGE OF LAW

VICTOR KENNER S. GALANG

UT IN OMNIBUS GLORIFICETUR DEUS!

THIS IS THE INTELLECTUAL PROPERTY OF THE

THE UNAUTHORIZED COPYING, REPRODUCTION,

Philippine National Bank vs. Teresita Gregorio…………………………………….……. 1

People of the Philippines vs. Gilda Abellanosa …………………………………….….... 3

Republic of the Philippines vs. Cortez …………………………………………………….. 7

Alfredo Mallari Magat vs. Interorient Maritime Enterprises, Inc. ………………….…… 10

Ergonomic Systems Philippines, Inc. and Phillip C. Ng and …………………….……. 57

Romeo Alba vs. Conrado Espinosa ………………………………………………..……….. 58

Philippine National Bank vs. Jumelito T. Dalmacio ……………………………………... 69

United Coconut Chemicals, Inc. vs. Victoriano Valmores……………………………… 112

United Doctors Medical Center (UDMC) vs. Cesario Bernadas,…………………………. 121

Virgel Dave Japos vs. First Agrarian Reform Multipurpose……………………………. 124

Marksman & Co, Inc. vs. Rodil Sta. Rita……………………………………………….….. 126

Crispin Frondozo vs. Manila Electric Company…………………………………………. 129

Gonzalo Puyat & Sons, Inc. vs. Alcaide…………………………………………………… 133

Metropolitan Waterworks and Sewerage System vs. Commission on Audit………… 143

Rolando De Roca vs. Eduardo Dabuyan, et al………………………………………….…… 144

THE QUANTUM OF PROOF REQUIRED IN LABOR CASES IS SUBSTANTIAL EVIDENCE

Philippine National Bank vs. Teresita Fe A. Gregorio

Therefore, the evidence presented by PNB has sufficiently established Gregorio’s

WHEN THE EVIDENCE IN LABOR CASES IS IN EQUIPOISE, DOUBT IS RESOLVED IN

Charlie Hubilla et al. vs. HSY Marketing Ltd., Co. et al.

Thus, their dismissal was illegal.

ILLEGAL RECRUITMENT IS DEEMED COMMITTED BY A SYNDICATE IF CARRIED

People of the Philippines vs. Gilda Abellanosa

Respondent was accused of falsely representing to possess authority to recruit job

ABSENCE OF THE NECESSARY LICENSE OR AUTHORITY TO RECRUIT AND DEPLOY

People of the Philippines vs. Erlinda A. Sison “Margarita S. Aguilar”

Under RA 8042, a non-licensee or non-holder of authority commits illegal recruitment for

THERE IS ILLEGAL RECRUITMENT IN LARGE SCALE IF COMMITTED AGAINST

People of the Philippines vs. Julia Regalado Estrada

OFFICERS HAVING CONTROL, MANAGEMENT OR DIRECTION OF THEIR BUSINESS

People of the Philippines vs. Delia C. Molina

NO BACKWAGES WHEN COST OF LIVING ALLOWANCE AND AMELIORATION ARE

Republic of the Philippines vs. Cortez

WAGE DISTORTION APPLIES ONLY TO WAGE ADJUSTMENTS AND INCREASES DUE

Petitioner and respondent, PGIEU and Chevron respectively, formally executed a

SALES COMMISSIONS FORM PART OF A SALESMAN’S REMUNERATION FOR

Marilyn B. Asentista vs. Jupp & Company, Inc.

The respondents can no longer refute Asentista's entitlement to a discretionary

REASONABLE PROOF OF WORK-CONNECTION AND NOT DIRECT CAUSAL

The POEA-SEC defines a work-related injury as "injury(ies) resulting in disability or death

THE PROXIMITY OF THE DEVELOPMENT OF THE INJURY TO THE TIME OF

Scanmar Maritime Services, Inc., et.al. vs. Wilfredo T. De Leon

FAILURE OF SEAFARER TO COMPLY WITH REPORTORIAL REQUIREMENT RESULTS

Thus, the disability claim of De Andres is not forfeited.

TEMPORARY TOTAL DISABILITY PERIOD MAY BE EXTENDED TO A MAXIMUM OF

Petitioner fired respondent as a bartender boarded on M/S Miracle. During work,

TO CLAIM COMPENSATION FOR ILLNESS, REASONABLE LINKAGE BETWEEN THE

Grieg Philippines, Inc. vs. Michael John M. Gonzales

Petitioner hired Gonzales as Ordinary Seaman under a nine-month employment contract

FAILURE TO ARRIVE AT A DEFINITE ASSESSMENT WITHIN THE PRESCRIBED

Hoegh Fleet Services Phils., Inc. vs. Bernardo M. Turallo

Petitioner hired respondent as a Messman on board vessel “Hoegh Tokyo”. The

It cannot be any clearer that the company-designated physician's failure to arrive at a

Therefore, the respondent is entitled to total and permanent disability benefits.

A CLAIMANT MUST STILL SHOW REASONABLE CONNECTION BETWEEN NATURE

Julio C. Espere vs. NFD International Manning Agents