However, if the doctor appointed by the seafarer makes a finding contrary to that of the assessment of the company-designated physician, a third doctor might be agreed upon jointly by the employer and the seafarer, and the third doctor’s decision would be final and binding on both parties.
The non-observance of the requirement to have the conflicting assessments determined by a third doctor would mean that the assessment of the company-designated physician prevails.
The Supreme Court denied the seafarer’s claim for disability benefits in this case.
According to the Court, the need for the third doctor’s evaluation of the seafarer arose after his personal doctor declared him unfit for seafaring duties. The seafarer could not initiate his claim for disability solely on the basis of the declaration of his personal doctor. He should have instead set in motion the process of submitting himself to assessment by the third doctor by first serving the notice of his intent to do so on the employer.
The Court stressed that there was no other way to validate the claim of the seafarer but this. Without the notice of intent to refer the seafarer’s case to the third doctor, the employer could not itself initiate the referral.
Unless the seafarer served the notice of his intent, he could not then validly insist on an assessment different from that made by the company-designated physician. This outcome, which accorded with the procedure expressly set in the Philippine Overseas Employment Administration Standard Employment Contract, was unavoidable for him.
The employer could insist on the disability rating of its company-designated physician even against a contrary opinion by another doctor, unless the seafarer signified his intent to submit the disputed assessment to a third doctor. The duty to secure the opinion of a third doctor belonged to the employee asking for disability benefits. Said employee must actively or expressly request for it.
Further reading:
Maersk-Filipinas Crewing, Inc. v. Alferos, G.R. No. 216795, April 1, 2019.
Bigg’s, Inc. (Bigg’s) operates a restaurant chain with headquarters in Naga City, Camarines Sur.
Bigg’s Employees Union (union) was formed by its employees and was granted a Certificate of Registration by the Department of Labor and Employment on January 30, 1996.
Bigg’s Version of the Events
Bigg’s claimed that on February 16, 1996, approximately fifty (50) union members staged an illegal “sit-down strike”1Sit-down is a form of strike where the strikers do not leave the workplace but merely establish themselves within the plant and stop production in its restaurant.
Bigg’s stated that the union failed to file a notice of strike and conduct a strike vote. Bigg’s further stated that the union belatedly filed a notice of strike with the National Conciliation and Mediation Board on the same day of February 16, 1996 to cover up the illegality of the sit-down strike.
Bigg’s also stated that it issued to the striking union members a memorandum which placed them under preventive suspension and required them to explain their actions within twenty four (24) hours from receipt of the same. Bigg’s claimed that since the union members did not comply with its order, it sent the said union members their employment termination letters on February 19, 1996.
According to Bigg’s, it filed a complaint for illegal strike against the union members before the National Conciliation and Mediation Board.
Union’s Version of the Events
On the other hand, the union members accused Bigg’s of interfering with their union activities.
They stated that in February 1996, Bigg’s asked them to withdraw their union membership under threat of losing their employment.
They further stated that in the same month, Bigg’s dismissed two (2) employees from service due to their union membership.
They also stated that on February 16, 1996, the union president and other union members, were prevented from entering Bigg’s premises.
According to the union members, they filed a Notice of Strike with the National Conciliation and Mediation Board on the same day of February 16, 1996. When they attempted to return to work on the next day, they were instructed to obtain their respective memoranda from the main office in Naga City. They discovered that the memoranda informed them of their suspension from work for participating in a sit-down strike. Some union members tried to talk with Bigg’s management, but they were told not to report for work the next day.
The union members thus filed a complaint for unfair labor practices, illegal dismissal, and damages against Bigg’s before the National Conciliation and Mediation Board.
The National Conciliation and Mediation Board consolidated the two complaints and conducted mediation proceedings.
When mediation reached an impasse, the union went on strike on March 5, 1996.
Bigg’s claimed that during the strike on March 5, 1996, the union members:
1) committed violence and disruptions;
2) prevented ingress and egress of employees and customers to and from its premises;
3) stopped Bigg’s vans from making deliveries;
4) threw stones at the vans;
5) injured the driver;
6) damaged its vehicles and guardhouse; and
7) discouraged people from going to Bigg’s Diner.
The strike ceased when both parties agreed to compulsory arbitration.
Were the strikes held on February 16, 1996 and March 5, 1996 illegal?
The Supreme Court ruled that both strikes were illegal.
Requirements of a Valid Strike
The Court discussed established principles as follows:
Strike, Concept
A strike means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.2Article 219 (formerly Article 212) (o) of the Labor Code of the Philippines.
Procedural Requirements
Article 2783Formerly Article 263 of the Labor Code of the Philippines, lays down the procedural requirements depending on the ground of the strike.4In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a notice of lockout with the Ministry at least 30 days before the intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days and in the absence of a duly certified or recognized bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members. However, in case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action immediately. (d) The notice must be in accordance with such implementing rules and regulations as the Minister of Labor and Employment may promulgate. (e) During the cooling-off period, it shall be the duty of the Ministry to exert all efforts at mediation and conciliation to effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the mandatory filing of the notice, the labor union may strike or the employer may declare a lockout. (f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be approved by a majority of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The Ministry may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the Ministry the results of the voting at least seven days before the intended strike or lockout, subject to the cooling-off period herein provided. This provision was further implemented by Department of Labor and Employment Order No. 40-035Amending the Implementing Rules of Book V of the Labor Code of the Philippines and Department of Labor and Employment Order No. 40-A-036Amending Section 5, Rule XXII of the Implementing Rules of Book V of the Labor Code of the Philippines (March 12, 2003). which amended Book V of the Implementing Rules of the Labor Code of the Philippines.
Grounds
The Labor Code of the Philippines and its implementing rules limit the grounds for a valid strike to:
1) a bargaining deadlock in the course of collective bargaining, or
2) the conduct of unfair labor practices by the employer.7Section 5. Grounds for strike or lockout. — A strike or lockout may be declared in cases of bargaining deadlocks and unfair labor practices. Violations of collective bargaining agreements, except flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered unfair labor practice and shall not be strikeable. No strike or lockout may be declared on grounds involving inter-union and intra-union disputes or without first having filed a notice of strike or lockout or without the necessary strike or lockout vote having been obtained and reported to the Board. Neither will a strike be declared after assumption of jurisdiction by the Secretary or after certification of submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds or the strike or lockout.
Who Can Declare a Strike
Only a certified or duly recognized bargaining representative may declare a strike in case of a bargaining deadlock. However, in cases of unfair labor practices, the strike may be declared by any legitimate labor organization.8Section 6. Who May Declare a Strike or Lockout. — Any certified or duly recognized bargaining representative may declare a strike in cases of bargaining deadlocks and unfair labor practices. The employer may declare a lockout in the same cases. In the absence of a certified or duly recognized bargaining representative, any legitimate labor organization in the establishment may declare a strike but only on grounds of unfair labor practices. (DO 40-03: Amending the Implementing Rules of Book V of the Labor Code of the Philippines, February 17, 2003).
Strike Vote
In both instances, the union must conduct a “strike vote” which requires that the actual strike is approved by majority of the total union membership in the bargaining unit concerned.
Strike Vote Report
The union is required to notify the regional branch of the National Conciliation and Mediation Board of the conduct of the strike vote at least twenty four (24) hours before the conduct of the voting. Thereafter, the union must furnish the National Conciliation and Mediation Board with the results of the voting at least seven (7) days before the intended strike or lockout.9Section 10. Strike or Lockout Vote. — A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned obtained by secret ballot in meetings or referenda called for the purpose. A decision to declare a lockout must be approved by a majority of the Board of Directors of the employer, corporation or association or the partners in a partnership obtained by a secret ballot in a meeting called for the purpose. The regional branch of the Board may, at its own initiative or upon request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the regional branch of the Board and the notice of meetings referred to in the preceding paragraph at least twenty-four (24) hours before such meetings as well as the results of the voting at least seven (7) days before the intended strike, subject to the cooling-off period provided in this Rule. (DO 40-03)
Jurisprudence teaches that this seven-day period has been referred to as the “seven-day strike ban”10CCBPI Postmix Workers Union v. National Labor Relations Commission, G.R. Nos. 114521 & 123491, November 27, 1998. or the “seven-day waiting period”11Lapanday Workers Union v. National Labor Relations Commission, G.R. Nos. 95494-97, September 7, 1995. and such period is intended to give the National Conciliation and Mediation Board an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members.12Lapanday Workers Union v. National Labor Relations Commission, G.R. Nos. 95494-97, September 7, 1995.
Period for Filing Notice of Strike/Cooling-off Period in Strikes Due to Bargaining Deadlock
In a strike due to bargaining deadlocks, the union must file a notice of strike with the regional branch of the National Conciliation and Mediation Board at least 30 days before the intended date of the strike and serve a copy of the notice on the employer. This is the so-called “cooling-off period” when the parties may enter into compromise agreements to prevent the strike.
Period for Filing Notice of Strike/Cooling-off Period in Strikes Due to Unfair Labor Practice
In case of unfair labor practice, the period of notice is shortened to 15 days in that the union must file a notice of strike with the regional branch of the National Conciliation and Mediation Board at least 15 days before the intended date of the strike.
In Cases of Union Busting
In case of union busting, the “cooling-off period” does not apply 13but notice to strike still applies and the union may immediately conduct the strike after the strike vote and after submitting the results thereof to the regional arbitration branch of the National Conciliation and Mediation Board at least seven (7) days before the intended strike.14Section 7. Notice of Strike or Lockout. — In bargaining deadlocks, a notice of strike or lockout shall be filed with the regional branch of the Board at least thirty (30) days before the intended date thereof, a copy of said notice having been served on the other party concerned. In cases of unfair labor practice, the period of notice shall be fifteen (15) days. However, in case of unfair labor practice involving the dismissal from employment of any union officer duly elected in accordance with the union constitution and by-laws which may constitute union-busting where the existence of the union is threatened, the fifteen-day cooling-off period shall not apply and the union may take action immediately after the strike vote is conducted and the results thereof submitted to the appropriate regional branch of the Board. xxx xxx xxx Section 10. Strike or Lockout Vote. — A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned obtained by secret ballot in meetings or referenda called for the purpose. A decision to declare a lockout must be approved by a majority of the Board of Directors of the employer, corporation or association or the partners in a partnership obtained by a secret ballot in a meeting called for the purpose. The regional branch of the Board may, at its own initiative or upon request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the regional branch of the Board and the notice of meetings referred to in the preceding paragraph at least twenty-four (24) hours before such meetings as well as the results of the voting at least seven (7) days before the intended strike or lockout, subject to the cooling-off period provided in this Rule. (DO 40-03).
Strike Grounded on Unfair Labor Practice
According to the Court, in a strike grounded on unfair labor practice, the following are the requirements:
1) a strike declared by the duly certified bargaining agent or legitimate labor organization;
2) the conduct of the strike vote in accordance with the notice and reportorial requirements to the National Conciliation and Mediation Board and subject to the seven-day waiting period; and
3) the notice of strike filed with the National Conciliation and Mediation Board and copy furnished to the employer, subject to the 15-day cooling-off period. The Court restated that in cases of union busting, the 15-day cooling-off period shall not apply.
The Union Conducted an Illegal Sit-down Strike on February 16, 1996
A Sit-down Strike Occurred on February 16, 1996
With regard to the first strike conducted by the union members on February 16, 1996, the Court found substantial evidence proving that the union staged a “sit-down strike.” Specifically, The Court considered the affidavits executed by certain Bigg’s employees deposing that the union members conducted a sit-down strike on February 16, 1996. These employees consistently narrated that in the morning of February 16, 1996, union members refused to do their jobs despite having directed to do so.
Union Did Not File a Notice of Strike And Failed to Observe Cooling-off Period
The Court further found that the union failed to file the requisite Notice of Strike and likewise failed to observe the cooling-off period. According to the Court, in an effort to legitimize the strike on February 16, 1996, the union filed a Notice of Strike on the same day. The Court said that this cannot be considered as compliance with the requirement, as the cooling-off period is mandatory. The cooling-off period is not merely a period during which the union and the employer must simply wait. The purpose of the cooling-off period is to allow the parties to negotiate and seek a peaceful settlement of their dispute to prevent the actual conduct of the strike. In other words, the Court said, there must be genuine efforts to amicably resolve the dispute.
Ground of Unfair Labor Practice Was Not Proven
Moreover, the Court found no proof that Bigg’s was guilty of unfair labor practice as defined under Article 25915Art. 259. (Formerly 248) Unfair Labor Practices of Employers. — It shall be unlawful for an employer to commit any of the following unfair labor practices: (a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization; (b) To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs; (c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their right to self-organization; (d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters; (e) To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. Employees of an appropriate bargaining unit who are not members of the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent, if such non-union members accept the benefits under the collective bargaining agreement: Provided, That the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the non-members of the recognized collective bargaining agent; (f) To dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code; (g) To violate the duty to bargain collectively as prescribed by this Code; (h) To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute; or (i) To violate a collective bargaining agreement. The provisions of the preceding paragraph notwithstanding, only the officers and agents of corporations, associations or partnerships who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable. of the Labor Code of the Philippines to allow the union, a non-certified bargaining agent to initiate the strike.
Union Busting Was Also Not Proven
Likewise, the Court found that the union failed to prove the presence of union busting16To constitute union busting under Article 263 of the Labor Code,there must be: 1) a dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws; and 2) the existence of the union must be threatened by such dismissal. (Pilipino Telephone Corp. v. Pilipino Telephone Employees Association, G.R. Nos. 160058 &160094, June 22, 2007). to exempt it from compliance with the cooling-off period. The union did not present any substantial evidence to prove its allegations that union members were actually dismissed or threatened with dismissal for their union membership.
For the Court, the union’s failure to comply with mandatory requirements rendered the strike on February 16, 1996 illegal.
The Strike on March 5, 1996 Was Illegal Despite Compliance with Procedural Requirements
With regard to the strike conducted on March 5, 1996, the Court found that the union complied with the procedural requirements of a valid strike. However, it was established that the striking union members committed acts of violence, aggression, vandalism, and blockage of the free passage to and from Bigg’s premises.
Specifically, the Court considered an audio-video footage showing the union members’ acts of violence, aggression, and prevention of ingress to and egress from the premises of Bigg’s. Furthermore, it considered the undisputed facts that the union members:
1) formed a human barricade and prevented delivery vehicles from passing through Bigg’s gates;
2) placed three big stones along the gate entrance to keep the vehicles from exiting the premises; and
3) flung stones at another van while it was on its way out of the area.
Said the Court, while the law protects the right of workers to engage in concerted activities for the purpose of collective bargaining or to seek redress for unfair labor practices, this right must be exercised in accordance with the law, specifically Article 27917Formerly 264 (e) of the Labor Code of the Philippines which prohibits any person engaged in picketing from committing any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares.
For the Court, the strike conducted on March 5, 1996 was illegal.
Were the union officers and members validly dismissed?
The Court reiterated principles relating to Article 27918Formerly Article 264 (a), which states: x x x Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. of the Labor Code of the Philippines in that for union members, what is required is that they knowingly participated in the commission of illegal acts during the strike for there to be sufficient ground for termination of employment. For union officers, however, it suffices that they knowingly participated in an illegal strike.
Dismissal of the Union President Valid
In the present case, the Court, found that the union president not only knowingly participated, but also was the one who principally organized the two (2) illegal strikes on February 16, 1996 and March 5, 1996. For the Court, the dismissal of the union president and the other union officers after the illegal strike on February 16, 1996 as well as the March 5, 1996 strike was valid.
Union Members Who Did Not Participate in Any Prohibited Act During the Strikes, Dismissal Invalid
However, the Court clarified that as to the union members who did not participate in any prohibited act during the strikes, their dismissal was invalid.
Awards
Such employees were awarded separation pay as prayed for by Bigg’s. The Court said that considering that twenty three (23) years have passed since the dismissal of the union members on February 19, 1996, and bearing in mind Bigg’s manifestation that it could no longer trust the striking employees especially as it is in the food service industry, separation pay may be more appropriate in lieu of reinstatement.19Consistent with Philippine Diamond Hotel & Resort, Inc. v. Manila Diamond Hotel Employees Union, G.R. No. 158075, June 30, 2006 where the Court made the following discussion: Reinstatement without backwages of striking members of respondent who did not commit illegal acts would thus suffice under the circumstances of the case. If reinstatement is no longer possible, given the lapse of considerable time from the occurrence of the strike, the award of separation pay of one (1) month salary for each year of service, in lieu of reinstatement, is in order.
The relief of backwages was, however, not awarded said employees, consistent with jurisprudence which dictates that backwages are not granted to dismissed employees who participated in an illegal strike even if they are later reinstated.20In Escario v. National Labor Relations Commission (G.R. No. 160302, September 27, 2010), the Supreme Court held: Conformably with the long honored principle of a fair day’s wage for a fair day’s labor, employees dismissed for joining an illegal strike are not entitled to backwages for the period of the strike even if they are reinstated by virtue of their being merely members of the striking union who did not commit any illegal act during the strike.
Further reading:
Bigg’s, Inc. v. Boncacas, G.R. Nos. 200487 & 200636, March 6, 2019.
Marvin executed a Service Contract dated September 9, 2010 with Generation One Resource Service and Multi-Purpose Cooperative (Generation One) and assigned to work as a counter crew and cashier of its client, Southgate Foods, Inc. (Southgate), the owner of a Jollibee franchise located in Alphaland Southgate Mall, Makati City (Jollibee Alphaland). Generation One and Southgate had a Service Agreement where the former was to provide “specified non-core functions and operational activities” for the latter’s Jollibee Alphaland branch. Prior to his employment in Generation One, Marvin was directly employed by Southgate from March 12, 2010 to August 26, 2010 as counter crew.
Later, Marvin filed a complaint for illegal dismissal against Generation One and Southgate. The latter alleged, among others, that they had a legitimate contracting arrangement and that their Service Agreement was valid.
The labor tribunals ruled that Generation One was a legitimate contractor, having been a registered cooperative with substantial capital, investment, or equipment to perform its business. Said tribunals also ruled that Generation One had its own office where its members met and conducted activities.
The Court of Appeals held that Generation One was a legitimate contractor as it was issued a Certificate of Registration by the Department of Labor and Employment. The Court of Appeals also found that the Service Agreement between Generation One and Southgate clearly stated that the former was to provide specific non-core functions and operational activities which included management and supervision of the food chain system, assistance in food preparation and quality control, cleaning of the dining area, comfort room, and other areas of the restaurant, assistance in cash control activities and warehouse and utilities management.
Marvin filed a petition with the Supreme Court to assail, among others, the finding of legitimate contracting between Generation One and Southgate.
Was Generation One a legitimate contractor?
The Court ruled in the negative. It considered Generation One as a labor-only contractor.
The Court first stated that outsourcing of services is not prohibited in all instances. The rules1Rules Implementing Articles 106 to 109 of the Labor Code, As Amended (P.D. No. 442, as amended), Department of Labor and Employment Order No. 18-02, February 21, 2002) relevant to the case provided that legitimate contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with a 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. The principal refers to any employer who puts out or farms out a job, service or work to a contractor or subcontractor.
The Court then cited relevant rules on the prohibition against labor-only contracting, which describes the arrangement as one where the contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work or service for a principal, and any of the following elements is present:
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
The contractor does not exercise the right to control over the performance of the work of the contractual employee.
The Court stated that based on the foregoing rules, a factor in determining whether there is labor-only contracting is the nature of the employee’s job, i.e., whether the work he performs is necessary and desirable to the business of the principal. Another factor is the ownership of substantial capital in the form of tools, equipment, machinery, work premises, and other properties by the contractor.
In the present case, the Court disagreed with the assertion that Marvin performed “non-core” functions or peripheral activities. According to the Court, the assertion was simply preposterous and contrary to the basic business model of a fast food restaurant. Instead, the Court found that Marvin’s cash control activities which involved order-taking, food-assembling, receiving payments, and giving change were necessary and desirable to the business of a fast food restaurant, such as the franchise owned by Southgate.
Furthermore, the Court disagreed with the labor tribunals’ findings that Generation One was able to prove that it had substantial capital.
The Court found that Generation One’s Income Tax Return for the year ended December 2010 showing a gross income of around P9.5 million was hardly substantial evidence to prove substantial capitalization because the same was not submitted to the Bureau of Internal Revenue. The Court also found that Generation One only submitted the Notes to the Audited Financial Statements for the year ended 2010, and not the actual Audited Financial Statements itself. For the Court, the said Notes failed to show a complete picture of its financial standing.
The Court then ruled that the Certificate of Registration relied upon by the Court of Appeals was not conclusive evidence of legitimate contracting status. According to the Court, registration with Department of Labor and Employment as an independent contractor does not automatically vest status of a legitimate contractor; it is merely presumptive proof. The fact of registration simply prevents the legal presumption of being a mere labor-only contractor from arising.2San Miguel Corporation v. Semillano, G.R. No. 164257, July 5, 2010.
With regard to control, the Court noticed that Southgate took it upon itself to discipline Marvin for an alleged violation of its company rules, regulations, and policies. For the Court, this validated the presence of its right to control Marvin. The Court also looked into Marvin’s Service Contract and discovered that his work responsibilities were to be specified at the designated place of assignment. This suggested that the right to determine not only the end to be achieved, but also the manner and means to achieve that end, was reposed in Southgate.
Finally, it did not accept the reliance by the Court of Appeals on the provision in the Service Agreement between Generation One and Southgate which stated the absence of an employment relation between Southgate and the employees of Generation One. The reason was that the character of the business, whether as labor-only contractor or as a job contractor, should be determined by the criteria set by statute and the parties cannot dictate by the mere expedience of a unilateral declaration in a contract the character of their business.3Petron Corp. v. Caberte, G.R. No. 182255, June 15, 2015.
The Court stated that in distinguishing between permissible job contracting and prohibited labor-only contracting, the totality of the facts and the surrounding circumstances of the case are to be considered. Here, the Court found that ruled that the badges of labor-only contracting were too blatant to ignore.
With the finding that Generation One was a labor-only contractor, the Court applied the rule that the principal shall be deemed the employer of the contractual employee where there is labor-only contracting. Marvin was thus declared to be a regular employee of Southgate.
Further reading:
Daguinod v. Southgate Foods, Inc., G.R. No. 227795, February 20, 2019.
On December 20, 2013, employees of GSIS Family Bank, a non-chartered Government-Owned or Controlled Corporation, demanded for the payment of their Christmas bonus which had been annually given them pursuant to their Collective Bargaining Agreement with said bank.
GSIS Family Bank refused to grant the said bonus. This was because it was advised by the Governance Commission for Government-Owned or Controlled Corporations (or the Governance Commission) that it could not grant incentives and other benefits to its employees, without authority from the President of the Philippines. According to the Governance Commission, as a government financial institution, GSIS Family Bank was not authorized to enter into a collective bargaining agreement with its employees based on the principle that compensation and position classification system of its employees is provided for by law and not subject to private bargaining.
Was the refusal valid?
The Supreme Court ruled that it was valid. The Court found that GSIS Family Bank could not be faulted for refusing to enter into a new collective bargaining agreement with petitioner as it lacked the authority to negotiate economic terms with its employees.
In denying the claims of the employees of GSIS Family Bank, the Supreme Court illustrated the interplay between the provisions of the Labor Code of the Philippines and the provisions of the GOCC Governance Act of 2011 (or Republic Act Number 10149) on the life of a non-chartered government-owned or controlled corporation.
The Court ruled that the power of a government-owned or controlled corporation to fix salaries or allowances of its employees is subject to and must conform to the compensation and classification standards laid down by applicable law, specifically the GOCC Governance Act of 2011. According to the Court, the said law does not differentiate between chartered and non-chartered government-owned or controlled corporations; hence, the provisions of this law equally apply to all GOCCs.
Furthermore, the Court ruled that while government-owned or controlled corporations without original charters are covered by the Labor Code of the Philippines, employees of said government-owned or controlled corporations are bereft of any right to negotiate the economic terms of their employment, i.e., salaries, emoluments, incentives and other benefits, with their employers since these matters are covered by compensation and position standards issued by applicable law.
According to the Court, the law1Section 9 of Republic Act No. 10149 categorically states, “Any law to the contrary notwithstanding, no [government-owned or controlled corporation] shall be exempt from the coverage of the Compensation and Position Classification System developed by the [Governance Commission] under this Act.” The law also directed the Governance Commission to develop a Compensation and Position Classification System, to be submitted for the approval of the President of the Philippines, which shall apply to all officers and employees of government-owned or controlled corporations, whether chartered or non-chartered. When it comes to collective bargaining agreements and collective negotiation agreements in government-owned or controlled corporations, the President of the Philippines, through Executive Order No. 2032Section 2 issued on March 22, 2016, stated that while it recognized the right of workers to organize, bargain, and negotiate with their employers, “the Governing Boards of all covered [government-owned or controlled corporations], whether Chartered or Non-chartered, may not negotiate with their officers and employees the economic terms of their [collective bargaining agreements].”
Further reading:
GSIS Family Bank Employees Union v. Villanueva, G.R. No. 210773, January 23, 2019.
The seafarer entered into a 9-month employment contract with Veritas Maritime Corp. to work as a bosun on board the M/V Bangkok Highway, a vessel owned by TNCK Kline. He boarded the vessel on 15 October 2011.
The seafarer claimed that while he was on official duty on 10 February 2012, thinner solution spilled over his face, neck, chest, and arm, which suffered third-degree burns. When the vessel reached the port in Korea, the seafarer was brought to Dr. Kim Sung Jin, who diagnosed him to have suffered about a 15% to 20% third-degree burn. Said doctor declared him unfit for work, and recommended that he be immediately hospitalized for special burn treatment.
The seafarer arrived in the Philippines on 23 February 2012 and was placed under the care of the company-designated physician, who diagnosed him with contact dermatitis.
On 25 May 2012, the company-designated physician declared him fit to go back to work.
The seafarer thereafter consulted his personal doctor who declared that he is not yet well.
On 27 July 2012, the seafarer filed a complaint against Veritas Maritime Corp., et al., for payment of permanent total disability benefits, moral and exemplary damages, and attorney’s fees.
Question:
Will the seafarer’s complaint prosper?
Answer:
No. The complaint should be dismissed.
Section 20 (A) (2)1Relevant portion states: “2. x x x However, if after repatriation, the seafarer still requires medical attention arising from said injury or illness, he shall be so provided at cost to the employer until such time he is declared fit or the degree of his disability has been established by the company-designated physician.” and (3)2Relevant portion states: “3. x x x 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.” of the Philippine Overseas Employment AdministrationStandard Employment Contract3Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships, POEA Memorandum Circular No. 010, Series of 2010. requires the company-designated physician to determine the seafarer’s fitness to work or degree of disability upon the seafarer’s medical repatriation. Nonetheless, the seafarer may dispute the company-designated physician’s report by seasonably consulting another doctor. If this doctor appointed by the seafarer disagrees with the assessment of the company-designated physician, 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. Jurisprudence4Escabusa v. Veritas Maritime Corp., G.R. No. 223732, January 16, 2019; Magsaysay Maritime Corp. et al. v. Verga, G.R. No. 221250, October 10, 2018; Calimlim v. Wallem Maritime Services, Inc., G.R. No. 220629, November 23, 2016; INC Navigation Co. Philippines, Inc., et al. v. Rosales, 744 Phil. 774 (2014); Phil. Hammonia Ship Agency, Inc., et al. v. Dumadag, 712 Phil. 507 (2013); Ayungo v. Beamko Shipmanagement Corp., et al., 728 Phil. 244 (2014); Santiago v. Pacbasin ShipManagement, Inc., et al., 686 Phil. 255 (2012); Andrada v. Agemar Manning Agency, Inc., et al., 698 Phil. 170 (2012); Masangcay v. Trans-Global Maritime Agency, Inc., et al., 590 Phil. 611 (2008); and Vergara v. Hammonia Maritime Services, Inc., et al., 588 Phil. 895 (2008). dictates that this referral to a third doctor is a mandatory procedure that must be strictly followed.
In the present case, it was shown that on 25 May 2012, about 3 months from his repatriation, the company-designated physician declared the seafarer fit for work.
Although the seafarer consulted his personal doctor (who apparently had an opinion contrary to that reached by the company-designated physician), there was no showing that at the time the complaint was filed, said seafarer had observed the third doctor referral procedure under the Philippine Overseas Employment Administration Standard Employment Contract.
The seafarer’s noncompliance with the third doctor referral procedure constituted a breach of the Philippine Overseas Employment Administration Standard Employment Contract and thus rendered his complaint dismissible for being premature. Jurisprudence5Escabusa v. Veritas Maritime Corp., G.R. No. 223732, January 16, 2019;Calimlim v. Wallem Maritime Services, Inc., et al., 800 Phil. 830 (2016); Veritas Maritime Corp., et al. v. Gepanaga, Jr., 753 Phil. 308 (2015); Philman Marine Agency, Inc., et al. v. Cabanban, 715 Phil. 454 (2013); and Vergara v. Hammonia Maritime Services, Inc., et al., 588 Phil. 895 (2008). teaches that in such a situation, the company-designated physician’s findings should prevail.
Further reading:
Escabusa v. Veritas Maritime Corp., G.R. No. 223732, January 16, 2019.
Abosta Shipmanagement Corporation/Cido Shipping Company Ltd. hired the seafarer as an able seaman on board the vessel M/V Grand Quest. The seafarer boarded the vessel on 16 June 2009.
While he was on duty on 26 October 2010, the seafarer felt cramps followed by severe back pain. He was able to inform his master, who then advised him to rest. The next day, the seafarer was unable to stand that he remained in his cabin. When the vessel arrived in Panama, he was diagnosed with a lumbar disc problem and was recommended repatriation.
On 2 December 2010, the seafarer arrived in Manila and was referred to the company-designated physician, who then proceeded to treat him. On 8 July 2011 the company-designated physician issued a disability rating of “Grade 8 disability — moderate rigidity or 2/3 loss of motion or lifting power of the trunk.”
The seafarer asserts that despite the treatment he received, his condition did not improve, as the pain and discomfort persisted.
The seafarer sought treatment from his personal doctor, who conducted his own examination. Said doctor concluded that the nature and extent of the seafarer’s injury rendered him permanently and totally unable to work as a seafarer.
The seafarer demanded his employers to pay him total and permanent disability. Since the employers declined, the seafarer instituted his complaint for permanent total disabilitybenefits and attorney’s fees against the former.
Jurisprudence dictates that if there is a claim for total and permanent disability benefits by a seafarer, the following rules shall govern:
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;
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;
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
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.
In the present case, the company-designated physician failed to issue a medical assessment on the seafarer’s disability grading and determine the seafarer’s fitness to work within the prescribed periods.
From the seafarer’s repatriation and immediate referral to the company-designated physician on 2 December 2010 until the 120th day of his treatment (31 March 2011), the latter did not issue any medical assessment.
Although on 8 July 2011, the company-designated physician was able to issue a disability rating of “Grade 8 disability — moderate rigidity or 2/3 loss of motion or lifting power of the trunk,” 219 days have already lapsed from 2 December 2020 without any sufficient justification for the extension of the 120-day treatment period.
Following prevailing jurisprudence, the seafarer’s disability has become permanent and total. Accordingly, the seafarer is entitled to permanent total disability benefits.
2)
The seafarer is also entitled to attorney’s fees. This is because under Article 2208, paragraph 8 of the Civil Code of the Philippines, attorney’s fees can be recovered in actions for indemnity under workmen’s compensation and employer’s liability laws.
Further reading:
Abosta Shipmanagement Corp. v. Segui, G.R. No. 214906, January 16, 2019.
The Rules of Court clearly provides that awards, judgments, final orders or resolutions of quasi-judicial agencies are appealable to the Court of Appeals via Rule 43. Orders or decisions of the Department of Agrarian Reform Adjudication Board may be brought on appeal to the Court of Appeals within 15 days from receipt of the same.12009 Department of Agrarian Reform Adjudication Board Rules of Procedure
Further reading:
Rivera v. Heirs of Cabling, G.R. No. 242036, January 14, 2019.
In Mesta v. United Philippine Lines, Inc.,1G.R. No. 242719, January 14, 2019. the Supreme Court emphasized that the seafarer must comply with the post-employment medical examination set forth under Section 20 (A) (3) of the Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships.2Philippine Overseas Employment Administration Memorandum Circular No. 10, Series of 10. Section 20 (A) (3) provides: “SECTION 20. Compensation and Benefits. — “A. Compensation and Benefits for Injury or Illness “The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as follows: x x x 3. x x x For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. In the course of the treatment, the seafarer shall also report regularly to the company-designated physician specifically on the dates as prescribed by the company-designated physician and agreed to by the seafarer. 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 said:
x x x [P]etitioner failed to establish compliance with the mandatory post-employment medical examination. Jurisprudence provides that one who alleges a critical fact has the burden to prove his allegation with substantial evidence, which petitioner failed to do. Aside from her bare allegation, records are bereft of any evidence to show that petitioner indeed went to respondent United Philippine Lines, Inc.’s office to request for medical attention which was allegedly rebuffed.
Nevertheless, even assuming that petitioner did comply with the requisite post-employment medical examination, the CA was also correct in finding that the causal connection between her illness and the work she performed onboard the ship was not established. Petitioner merely presented documentary evidence to show her condition before and after the termination of her contract but failed to establish how the nature of her work increased the risk of contracting her illness. Thus, petitioner is not entitled to claim disability benefits under the POEA-SEC.
Further Reading:
Mesta v. United Philippine Lines, Inc., G.R. No. 242719, January 14, 2019.
In Alster International Shipping Services, Inc v. Acosta,1G.R. No. 242085, January 14, 2019. the Supreme Court reiterated the principle that an illegally dismissed migrant worker is entitled to payment of salaries for the unexpired portion of the employment contract. The Court said:
With respect to the proper amount of indemnity due him, the provision of law, restricting wages recoverable by illegally dismissed overseas workers to three months only, having been struck down twice for its unconstitutionality, there is no more coherent legal basis for restricting the unpaid salaries award in favor of respondent to an amount equivalent to three months’ worth of work only. Hence, respondent is entitled to the payment of unpaid salaries equivalent to the remaining unexpired portion of his employment contract.
Further reading:
Alster International Shipping Services, Inc v. Acosta, G.R. No. 242085, January 14, 2019.
In Republic v. Pilpa1G.R. No. 242549, January 14, 2019., the Supreme Court reiterated the principle that the one who makes an allegation has the burden of proving it. A party alleging a critical fact must support his allegation with substantial evidence. Any decision based on unsubstantiated allegation cannot stand as it will offend due process. The Court said:
x x x The CA was also correct when it ruled that VGC failed to rebut respondents’ claim that the six (6)-day workweek has been in existence since VGC took over the management of the golf course in 2007 and, as such, has become a company practice. Jurisprudence provides that one who alleges a critical fact has the burden to prove his allegation with substantial evidence. Aside from its bare allegations, VGC failed to establish by substantial evidence that it was suffering from serious losses which necessitated the reduction in the number of working days per week.
Further reading:
Republic v. Pilpa, G.R. No. 242549, January 14, 2019.
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