Paulino Ungos III

Lawyer | Law Professor | Author

Author: Paulino Ungos III

  • The Seafarer Received His Medical Report When the Parties Filed Their Position Papers

    On March 13, 2013, Leobert signed a 10-month contract as an Assistant Cook with Holland America Line Westours, Inc. (Holland America) through its agent, United Philippine Lines, Inc. (UPL). Leobert boarded the “MS Zuiderdam” on March 27, 2013.

    Leobert claimed that while performing his duties as an Assistant Cook, he experienced severe pain in his left shoulder, prompting him to notify his superior. He was advised to go to the infirmary, where the ship doctor prescribed pain relievers and advised him to rest for a few days. Leobert then requested an offshore consultation, but Holland America chose medical repatriation. Leobert was medically repatriated and arrived in the Philippines on April 10, 2013.

    Leobert reported to UPL for his post-disembarkation medical check-up on April 10, 2013, and was referred to Shiphealth, Inc., (Shiphealth) where he was advised to undergo physical therapy sessions. He was referred to the University Physicians Medical Center, Inc. after his condition did not improve, and he underwent medical tests. He then returned to Shiphealth and was instructed to obtain his medical records from UPL. He was told verbally that he was fit to work, but he was unable to obtain any documentation of his medical evaluation from UPL.

    From September 10, 2013 to October 8, 2013, Leobert sought medical advice from Seamen’s Hospital, where it was recommended that he undergo arthroscopic surgery. He also spoke with Dr. Cesar H. Garcia, an orthopedist who specializes in bone and joint diseases, who determined that Leobert was unfit to work as a seaman due to his shoulder injury. Leobert claimed that he was forced to seek medical help from independent doctors because Shiphealth and UPL refused to provide him with his medical records, and that he sought medical help from other doctors on his own initiative.

    On September 11, 2013, Leobert filed a complaint against Holland America and UPL, believing he was entitled to permanent total disability benefits.

    According to Holland America and UPL, Leobert was diagnosed with “Grade 10 — ankylosis of the shoulder joint not permitting arm to be raised above a level with a shoulder and/or irreducible fracture or faulty union collar bone” on June 14, 2013. However, Holland America and UPL claimed that Leobert was only entitled to US$12,090.00.

    Holland America and UPL also claimed that because Leobert failed to demonstrate that the company-designated physician’s assessment was tainted with bias, malice, or bad faith, and he failed to comply with the procedure under Section 20 (A) (3) of the POEA Standard Employment Contract for challenging the company-designated physician’s assessment, he was only entitled to the benefits resulting from the company-designated physician’s findings.

    Was Leobert entitled to permanent total disability benefits?

    The Supreme Court ruled in the affirmative.

    The Court noted that Holland America and UPL did not deny that Leobert’s injuries were work-related, but instead argued that Leobert was only entitled to disability benefits under Grade 10. Because Leobert failed to initiate the process to have the conflicting assessments of the company-designated physician and his own doctor referred to a third doctor, Holland America and UPL argued that the company-designated physician’s assessment is valid and should be relied on instead of the seafarer’s own doctor.

    While the Court recognized the conflict resolution procedure prescribed in Section 20 (A) (3) of the POEA Standard Employment Contract, it clarified that a seafarer’s failure to follow such procedure is only taken against him if it is first demonstrated that the seafarer was notified of the company-designated physician’s assessment. According to the Court, only after the seafarer has been duly and properly informed of the medical assessment can he decide whether or not he agrees with it. If he does not agree, he can begin the process of referring the assessment to his personal physician, after which the conflicting assessments are referred to a third doctor.

    The Court stressed its ruling in Gere v. Anglo-Eastern Crew Management Phils., Inc.1G.R. Nos. 226656 & 226713, April 23, 2018. in that the company-designated physician is mandated to issue a medical certificate, which should be personally received by the seafarer, or, if not practicable, sent to him/her by any other means sanctioned by present rules. Proper notice is one of the cornerstones of due process, the Court said, and the seafarer must be accorded the same especially so in cases where his/her well-being is at stake. If the seafarer is not notified of the evaluation of the company-designated physician after the lapse of the 120 or 240 day period from the date the seafarer first reported to the said physician, the Court states that by operation of law, the seafarer is deemed entitled to permanent total disability benefits.

    In the present case, the Court determined that Leobert was only shown the assessment of his impediment after Holland America and UPL had filed their position paper. Since the final and valid assessment of Leobert’s condition was not issued within the 120 or 240-day period, the Court ruled that Leobert was legally entitled to permanent total disability benefits.

    Further reading:

    • United Philippine Lines, Inc. v. Ramos, G.R. No. 225171, March 18, 2021.

  • We Laid the Employee Off to Re-assess His Qualifications

    On August 13, 2012, Jayraldin was hired by The Results Company, Inc. (TRCI), a business process outsourcing company. Jayraldin started as a sales representative and was promoted several times until he became a team leader in 2014. As a team leader, Jayraldin had the duty of supervising TRCI’s agents.

    On December 30, 2014, Jayraldin received an email from TRCI, informing him of infractions allegedly committed by Ruby, an agent under his supervision. Allegedly, based on quality call monitoring, Ruby incorrectly processed a customer’s order and failed to fully apprise the customer of TRCI products.

    TRCI’s Operations Manager decided to give Ruby a final written warning. However, Jayraldin, together with TRCI’s program managers, recommended that Ruby only be subjected to coaching.

    Later, Jayraldin was handed a notice stating that he was grossly negligent in the performance of an assigned task and that he willfully disobeyed an order of a superior, when he failed to give Ruby a Notice to Explain and final warning. The same notice placed him under preventive suspension and summoned him to an administrative hearing.

    Jayraldin explained that all program managers recommended that Ruby be provided only with coaching and that he had fulfilled his duty to issue her a Notice to Explain.

    After administrative proceedings, Jayraldin was admonished with a warning that a similar violation of TRCI’s Code of Discipline might lead to his dismissal. Jayraldin was also placed on temporary lay-off. Specifically, he was subjected to re-profiling until he was ready for re-assignment to another account. During the lay-off, Jayraldin was not to receive any compensation.

    Jayraldin thus filed a complaint for constructive dismissal against TRCI.

    TRCI contended that it only exercised its management prerogative. According to TRCI, it temporarily laid Jayraldin off so that it could assess his qualifications and re-assign him to other accounts, if needed.

    Was Jayraldin constructively dismissed from employment?

    The Supreme Court found that Jayraldin was constructively dismissed from employment.

    The Court stated that constructive dismissal exists where 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. Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment.1Morales v. Harbour Centre Port Terminal, Inc., G.R. No. 174208, January 25, 2012.

    With regard to transfer of an employee, the Court added that the employer is charged with the burden of proving that its conduct and action are for valid and legitimate grounds, such as genuine business necessity, and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal.2Morales v. Harbour Centre Port Terminal, Inc., G.R. No. 174208, January 25, 2012.

    In the present case, while the Court noted that the infraction that led to Jayraldin’s re-profiling was his failure to inform his subordinate of the penalty given by the Operations Manager, it found nothing on record to show that Jayraldin’s infraction was detrimental to the account he handled such that TRCI had no choice but to re-profile him.

    The Court added that Jayraldin was in reality not even transferred to any account. According to the Court, Jayraldin was temporarily laid-off and treated like a new applicant where he would be assessed for other accounts to see if he was qualified. However, the Court found that in the interim, Jayraldin’s economic circumstances became murky. His compensation ceased for a period not to exceed six months as he awaited being accepted into a new account. Worse, he had no assurance whether he would be considered for another account.

    The Court was convinced that TRCI failed to prove any valid and legitimate ground to re-profile Jayraldin as its drastic action was not commensurate to his transgressions. TRCI just made it appear on paper that Jayraldin was still its employee, but in reality he no longer received benefits, was placed in such a situation without any legitimate ground, and was treated like a new applicant. For the Court, this was clearly a dismissal in disguise and tantamount to constructive dismissal.

    On TRCI’s argument that it exercised its management prerogative, the Court did not accept the same, in view of the prejudice against Jayraldin and the lack of legitimate ground to place him on temporary lay-off. According to the Court, although the exercise of management prerogative will ordinarily not be interfered with, it is not absolute and it is limited by law, collective bargaining agreement, and general principles of fair play and justice. Said the Court: “Indeed, having the right should not be confused with the manner in which that right is exercised.”

    As a result of being constructively dismissed, Jayraldin was awarded separation pay, backwages, and attorney’s fees.

    Further reading:

    • Ebus v. The Results Co., Inc., G.R. No. 244388, March 3, 2021.

  • Not a Mere Run-of-the-Mill Employee

    Arlene started working as a Casual or Assistant Clinical Instructor for two semesters for the school year 1992-1993 in Holy Name University (HNU)’s College of Nursing while awaiting the results of her Nursing Board Examination.

    In the second semester of school year 1994-1995, she worked at the Medical Ward as a full-time Clinical Instructor until the school year 1998-1999. During the second semester of that school year, she transferred to the Guidance Center where she worked as a Nursing Guidance Instructor. In the meantime, she was elected as Municipal Councilor of Carmen, Bohol. She took a leave of absence from HNU upon her reelection as Municipal Councilor for the period from 2001 up to 2004.

    Sometime in the year 2004, Arlene rejoined HNU and was given a full-time load for the school year 2004-2005. For school years 2005-2006 and 2006-2007, Arlene signed contracts for term/semestral employment.

    However, in a notice dated February 28, 2007, HNU informed Arlene that her contract of employment, which would have expired on March 31, 2007, will no longer be renewed.

    Arlene filed a complaint for illegal dismissal against HNU. She argued that since she taught at HNU for more than six consecutive regular semesters, she already attained the status of a regular employee under the Manual of Regulations for Private School Teachers. She posited that she was not guilty of any infractions under the Labor Code of the Philippines or the Manual of Regulations for Private School Teachers. She concluded that she was illegally dismissed from employment as no valid or justifiable cause supported the same.

    On the other hand, HNU stated that for the school years 1995-1996, 1996-1997 and 1997-1998, Arlene received letters of appointment for each semester, with definite dates of commencement and end of her employment. Thus, HNU asserted that when her probationary appointment for the period June 1, 1997 until March 31, 1998 expired, that it was not obliged to renew her contract. With regard to the school years 2004-2005, 2005-2006, and 2006-2007, HNU contended that Arlene remained as a probationary employee.

    HNU stated that the completion of her probationary period did not automatically make her a permanent employee since she failed to satisfactorily comply with all the conditions of her probationary employment. HNU insisted that Arlene was not dismissed; rather, her contract of employment merely expired on March 31, 2007.

    Did Arlene attain regular status?

    The Supreme Court ruled in the negative.

    The Court reiterated prevailing jurisprudence in that the Manual of Regulations for Private Schools, not the Labor Code of the Philippines, determines whether or not a faculty member in a private educational institution has attained a permanent or regular status. According to the Court, before a private school teacher acquires permanent status, he or she should satisfy the following requisites: 1) The teacher must have served full-time; 2) he/she must have rendered three consecutive years of service; and 3) such service must have been satisfactory.

    In the present case, the Court found that Arlene failed to meet the required criteria to be considered as a permanent employee.

    According to the Court, prevailing regulations require a minimum of one-year clinical practice experience to qualify as a faculty member in a college of nursing, and is therefore, required for one to be considered as a full-time faculty of such.

    Although Arlene had rendered three consecutive years of satisfactory service, she never alleged to have performed clinical duties such as treating actual patients or assisting doctors in such treatment, nor did she present any substantial evidence to prove such. The Court stated that since Arlene failed to provide substantial evidence, much less clearly describe what kind of work she rendered as a clinical instructor, it could not consider Arlene’s work experience as “clinical practice.” For the Court, Arlene did not qualify as a full-time teacher at the College of Nursing of HNU.

    Based on evidence, the Court declared Arlene to be a fixed-term employee of HNU.

    The Court reiterated established jurisprudence that recognizes the validity of fixed-term employment contracts, as long as such contracts do not circumvent the employee’s right to security of tenure. According to the Court, the criteria under which fixed-term employment could not be said to be in circumvention of the law on security of tenure are the following:

    • The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or
    • It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter.

    In the present case, the Court considered Arlene’s part-time status and ruled that even if no written fixed-term contract was presented, judicial notice can be made upon the fact that teachers’ employment contracts are for a specific semester or term.

    The Court added that with respect to consent, the fixed-term contracts must be presumed to be knowingly and voluntarily entered into. It is a basic rule that “one who alleges defect or lack of valid consent to a contract by reason of fraud or undue influence must establish by full, clear and convincing evidence such specific acts that vitiated a party’s consent, otherwise, the latter’s presumed consent to the contract prevails.”

    In the present case, Arlene merely alleged that she was a regular employee and that her being a contractual employee was just a lame reason given by HNU to terminate her without due process. The Court viewed such allegations as self-serving and unsubstantiated that failed to overturn the presumption mentioned earlier.

    With regard to the second requisite, the Court found that Arlene was more or less on equal footing with HNU. According to the Court, Arlene was an honors graduate, an elected public official, and not a mere run-of-the-mill employee, who had the capability to be on equal footing in dealing with her employer when it came to her employment terms.

    The Court concluded that Arlene was validly contracted for a fixed-term, the expiry of which occurred with her latest contract on March 31, 2007. Such effectively ended the employee-employer relationship she had with HNU. No dismissal, whether illegal or not, ever happened. The Court accordingly denied her claims.

    Further reading:

    • Palgan v. Holy Name University, G.R. No. 219916, February 10, 2021.

  • But the Claims Exceeded Php5,000.00

    On February 12, 2014, the Department of Labor and Employment, through its Regional Director, issued Labor Standards Compliance Certificates to Del Monte Motor Works, Inc. (Del Monte Motor Works) for having complied with Department Order No. 118-12, other labor laws, rules and regulations.

    For context, Department Order No. 118-12 was issued on January 13, 2012 by the Department of Labor and Employment, in the exercise of its rule-making power. The issuance provides for a fixed and performance compensation scheme in the computation of public utility bus driver’s or conductor’s wage. Its goal was to ensure public road transport safety by improving the working conditions, compensation and competence of bus drivers and conductors thereby eliminating their risk-taking behavior.

    On July 28, 2014, a complaint for money claims was filed against Del Monte Land Transport Bus, Co., Inc. (Del Monte Land Transport) by its bus drivers and conductors before the Office of the Labor Arbiter.

    They averred that since the start of their employment, they have yet to receive certain labor standards benefits and their daily salaries were below the prevailing daily minimum wage, in violation of Department Order No. 118-12.

    Del Monte Land Transport contended that the salaries and benefits of its drivers and conductors were in accordance with law and that its Labor Standards Compliance Certificates established compliance with labor standards requirements. Furthermore, it raised the issue of jurisdiction. Specifically, it claimed that the Office of the Labor Arbiter had no jurisdiction to render judgment or award on the money claims since it was the Department of Labor and Employment which had jurisdiction under Article 128 of the Labor Code of the Philippines.

    In asserting that the Office of the Labor Arbiter had jurisdiction, the drivers and conductors argued:

    • Their money claims fell within the cases covered by Article 217 of the Labor Code of the Philippines as it exceeded the aggregate amount of five thousand pesos. Hence, the authority to hear and decide said cases is vested on the Office of the Labor Arbiter, to the exclusion of all other courts or quasi-judicial bodies or tribunals;
    • No complaint was filed before the Department of Labor and Employment for the latter to exercise its jurisdiction over their claim.
    • Neither was there any inspection conducted at Del Monte Land Transport as the Labor Standards Compliance Certificates in question were issued for the alleged compliance of Del Monte Motor Works, a separate and distinct corporation.
    • In issuing the Labor Standards Compliance Certificates, the Department of Labor and Employment exercised its visitorial and compliance powers under Article 128 (b) and not its enforcement and adjudicatory powers under Article 129 of the Labor Code.

    Did the Office of the Labor Arbiter have jurisdiction over the claims of the drivers and conductors?

    The Supreme Court ruled in the negative. This was because Department Order No. 118-12 clearly conferred jurisdiction with the Regional Office the claims of the bus drivers and conductors.

    The Court stressed that jurisdiction over the subject matter or authority to try a certain case is conferred by law and not by the whims, consent or acquiescence of the interested parties nor by the erroneous belief of the court or tribunal that it exists. It should be exercised precisely by the person in authority or body in whose hands it has been placed by the law; otherwise, acts of the court or tribunal shall be void and with no legal consequence.

    In the present case, the Regional Director issued several Labor Standard Compliance Certificates dated February 12, 2014, certifying Del Monte Land Transport’s compliance with the law. Five months after or on July 28, 2014, the bus drivers and conductors filed a complaint before the Office of the Labor Arbiter for money claims and alleged a violation of the requirements of Department Order No. 118-12 in their Position Paper.

    According to the Court, this fact should have prompted the Office of the Labor Arbiter to refer the case to the Department of Labor and Employment as it was evident that the money claims of the bus drivers and conductors were beyond its jurisdiction.

    Furthermore, the Court noticed the categorical statement of the bus drivers and conductors that they would not have filed the instant case for money claims had there been real compliance of the mandate of Department Order No. 118-12. The Court stated that such statement only revealed that the claims were the offshoot of the Regional Officer’s issuance of the certificates of compliance.

    For the Court, this constituted a challenge by the bus drivers and conductors on the certificates of compliance issued by the Regional Officer relative to the labor standard requirements under Department Order No. 118-12, which should have been lodged before the Department of Labor and Employment.

    On the other hand, the Court did not accept the argument of the bus drivers and conductors that jurisdiction over their claims was vested with the Office of the Labor Arbiter given that the aggregate amount subject of this case exceeded five thousand pesos.

    The Court stated that Article 128 of the Labor Code of the Philippines speaks of the jurisdiction of the Secretary of Labor and his representatives over labor standards violations based on findings made in the course of visitation and inspection of the business premises of an employer. The Court emphasized that the authority under Article 128 may be exercised by the Department of Labor and Employment regardless of the amount of the award claimed for provided there exists employer-employee relationship.

    The Court noted certain views espousing the proposition that the mode and fora by which the action has been initiated should determine jurisdiction. However, the Court clarified that this had been settled in People’s Broadcasting Service v. Secretary of the Department of Labor and Employment1People’s Broadcasting Service v. Secretary of the Department of Labor and Employment, G.R. No. 179652 (Resolution), [March 6, 2012], 683 PHIL 509-526). which summed up the rules governing jurisdiction on labor standards claims, as follows:

    • If the claim involves labor standards benefits mandated by the Labor Code or other labor legislation regardless of the amount prayed for and provided that there is an existing employer-employee relationship, jurisdiction is with the Department of Labor and Employment regardless of whether the action was brought about by the filing of a complaint or not; and
    • If the claim involves labor standards benefits mandated by the Labor Code or other labor legislation regardless of the amount prayed for and there is no existing employer-employee relationship or the claim is coupled with a prayer for reinstatement, jurisdiction is with the Office of the Labor Arbiter/National Labor Relations Commission.

    For the Court, the claims of the bus drivers and conductors were within the purview of the jurisdiction of the Department of Labor and Employment under Article 128 and the provisions of Department Order No. 118-12. The Court accordingly dismissed the complaint of the bus drivers and conductors for lack of jurisdiction.

    Further reading:

    • Del Monte Land Transport Bus, Co. v. Armenta, G.R. No. 240144, February 3, 2021.

  • Inconsistent Evidence and Unexplained Material Facts

    Jerome was hired by respondent ELPI in 1998 as a Professional Sales Representative. After several promotions, he was retrenched in 2003. He was rehired in 2005 and held the position of Sales and Marketing Services Manager in 2011.

    On November 4, 2011, ELPI issued a Show-Cause Letter, charging Jerome with violation of company rules and breach of trust and confidence. ELPI claims that on May 14, 2008, or more than three years back, Jerome simulated the purchase of four tires from a certain tire supplier and claimed reimbursement for the cost. He was placed under preventive suspension for 30 days. ELPI did not reveal the source of the damning information against Jerome.

    Jerome submitted his explanation and questioned ELPI’s failure to identify the source of the damaging information.

    In response, ELPI attached a copy of the official receipt, sales invoice, and car repairs request relating to the tire supplier.

    Jerome then submitted a certification dated December 7, 2011 issued by Lilia, proprietor of the tire supplier, stating that she issued the official receipt under the name of ELPI for the purchase of four tires.

    During the formal investigation, ELPI confronted Jerome with a notarized certification dated December 17, 2011 from Arnulfo, the husband of Lilia, stating that Jerome did not purchase tires from her. However, record showed that Arnulfo issued another statement dated December 20, 2011 acknowledging that he lacked knowledge of the sale and that his wife was the one who issued the official receipt.

    On December 21, 2011, Jerome was issued a Notice of Termination, prompting him to file a Complaint for illegal dismissal against ELPI.

    When ELPI filed its position paper, it presented two affidavits. First was the affidavit of Timothy dated December 18, 2011. Timothy narrated that Jerome directed him to obtain a receipt for the purchase of tires. Timothy further narrated that he obtained the receipt from the tire supplier and gave it to Jerome who, in turn, used it to obtain reimbursement. The second was the affidavit of Sojit dated December 19, 2011, who narrated that sometime in 2009, Timothy told him of Jerome’s directive to produce a receipt, of Jerome’s anger should Timothy fail to do so, and of Timothy’s fear during the conversation.

    The Office of the Labor Arbiter declared the dismissal of Jerome valid. The NLRC, however, ruled that Jerome was illegally dismissed from employment. The Court of Appeals’ ruling was that Jerome was validly dismissed.

    Was Jerome illegally dismissed from employment?

    The Supreme Court reiterated the settled rule that the employer has the right to terminate the services of an employee for a just or authorized cause.1Mayon Hotel & Restaurant v. Adana, G.R. No. 157634, [May 16, 2005], 497 PHIL 892-932 The dismissal of employees must, however, be made within the parameters of law and pursuant to the tenets of fair play. “[I]n termination disputes, the burden of proof is always on the employer to prove that the dismissal was for a just or authorized cause. Where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a matter of illegal dismissal.”

    Here, the Court remarked that during the administrative proceedings, ELPI had in its possession the official receipt, the sales invoice, the repairs request, Lilia’s statement, and the two contradicting statements of Arnulfo, as basis for its decision that Jerome committed dishonesty.

    However, the Supreme Court ruled that Jerome was illegally dismissed from employment because of ELPI’s failure to prove by substantial evidence the presence of a just cause for terminating Jerome’s employment. Specifically, ELPI had failed to show through substantial evidence that Jerome simulated the tire purchase transaction.

    Re: the official receipt, sales invoice, repairs request and Lilia’s certification

    The Court found that the official receipt, sales invoice, repairs request and Lilia’s certification only revealed the genuine transaction conducted by Jerome.

    The Court presumed the official receipt to be regular and in accordance with the ordinary course of business.2Section 3 (p) and (q), Rule 131, of the Rules of Court.

    Although noting the doubt expressed by the Court of Appeals on Jerome’s transaction because he presented an old receipt, the Supreme Court, nonetheless, stated that an old official receipt did not lead to Jerome’s guilt, especially in the face of Lilia’s undisputed certification to having herself issued the receipt for the purchase of four tires. According to the Court, that Lilia used an old receipt did not mean that the purchase of the tires did not happen.

    With regard to the repairs request, the Court found that it was approved by ELPI through its Human Resource Department (HRD) Manager, who had the duty to first ascertain that repairs were actually conducted on the car.

    For the Court, the said pieces of evidence contained no indication that Jerome simulated the sale and that no anomaly characterized Jerome’s claim for reimbursement.

    Re: Arnulfo’s statements

    The Court added that the evidence that would have contradicted Lilia’s statement was Arnulfo’s first statement. However, given the inconsistencies in Arnulfo’s two statements, the fact that Lilia sold tires to ELPI over which Jerome claimed reimbursements remained undisputed at the time of the administrative proceedings conducted by ELPI.

    Re: the affidavits of Timothy and Sojit

    The Court considered the affidavits unreliable given the circumstances under which they were executed.

    According to the Court, since the affidavits and their contents were only made known to Jerome when ELPI submitted its Position Paper, the presentation of the same was an attempt to validate Jerome’s termination post facto. These new allegations contained in the affidavits, the Court said, were not available at the time ELPI conducted the administrative hearing. It could therefore not have been its basis for dismissing Jerome.

    The Court even stated that even if it were to consider these affidavits, it would find it unusual for ELPI to not have initiated administrative proceedings against Timothy. The Court added that ELPI had not even explained why it took Timothy more than three years to inform ELPI of such simulated sale.

    Re: additional findings

    Other matters on record led the Court to doubt the validity of Jerome’s dismissal.

    First, despite the fact that Jerome’s tire transaction was readily verifiable, ELPI did not explain why it still initiated administrative proceedings against Jerome three years after his request for reimbursement was made and approved by ELPI’s HRD Manager. The Court pointed out that Timothy and the HRD Manager were not even directed to explain their participation in the purported simulation and approval of the reimbursement, respectively.

    Second, ELPI was the one who introduced as evidence the statement of Arnulfo that Jerome did not purchase any tires from the tire supplier, only for Arnulfo to issue a statement of recantation later.

    And third, on May 9, 2018, Jerome filed with the Court a Manifestation with Motion to Admit Attached Affidavit of Recantation. Jerome informed the Court that Sojit communicated to him the severance of the latter’s connection with ELPI. Sojit likewise disclosed that he was pressured to sign his purported affidavit dated December 19, 2011, under threats of including him in the investigation and dismissal should he refuse. Hence, on April 4, 2018, Sojit executed an Affidavit of Recantation, denying the events narrated in his affidavit dated December 19, 2011.

    Conclusion:

    The Court concluded that ELPI failed to show a clear, valid and legal cause to dismiss Jerome. According to the Court, the pieces of evidence ELPI presented were riddled with inconsistencies and unexplained material facts that leave much to be desired. Jerome’s dismissal was accordingly declared illegal.

    Further reading:

    • Bautista v. Eli Lilly Philippines, Inc., G.R. No. 235865, February 3, 2021.

  • Circumstances Revealed Voluntary Resignations

    Hazel was engaged by University of Saint Anthony as a credit and collection officer. Arlene was engaged as its accounting clerk. Jean was its classroom teacher. And Nancy was its accounting officer.

    With regard to Hazel, University of Saint Anthony noticed several irregular and anomalous transactions its University’s Accounting Office by way of a cash shortage of more than One Million Pesos representing the net collection of book remittances. Another audit report revealed anomalous transactions in prior years where tellers accommodated encashments of checks not in the name of University of Saint Anthony. Hazel went on leave during the audit, but later tendered her resignation. Record showed that University of Saint Anthony filed a criminal case and an information was filed before the Regional Trial Court.

    At around the same period, Arlene, Jean, and Nancy were found to have taken advantage of their positions in the Accounting Office by enrolling their children and relatives under the University’s group enrollment incentive program despite knowing that they were unqualified. Upon discovery of the fraudulent scheme, University of Saint Anthony immediately ordered an investigation and called a conference with Arlene, Jean and Nancy. During a conference, Arlene, Jean, and Nancy admitted that their children and relatives indeed benefitted from the unauthorized discounts. They were informed that their employment will be terminated on grounds of dishonesty amounting to malversation of school funds. Thereafter, Arlene, Jean, and Nancy tendered their resignation on December 22, 2007 (taking effect on January 2, 2008). Subsequently, University of Saint Anthony filed criminal cases Arlene, Jean, and Nancy.

    Hazel, Arlene, Jean, and Nancy soon filed their respective complaints for illegal dismissal against University of Saint Anthony.

    The Office of the Labor Arbiter declared their dismissal illegal and granted them the reliefs of reinstatement and backwages. On appeal, the National Labor Relations Commission reversed the decision of the Office of the Labor Arbiter because it found that the Hazel, Arlene, Jean and Nancy voluntarily resigned and opted for a voluntary exit before the effectivity of their supposed termination from employment. The Court of Appeals affirmed the Decision of the National Labor Relations Commission.

    An issue raised before the Supreme Court was whether the resignations of Hazel, Arlene, Jean, and Nancy rendered their complaints for illegal dismissal without basis.

    The Supreme Court ruled that Hazel, Arlene, Jean, and Nancy voluntarily resigned from employment.

    Jurisprudence teaches that resignation is the formal pronouncement or relinquishment of a position or office. It is the voluntary act of an employee who is in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and he has then no other choice but to disassociate himself from employment. The intent to relinquish must concur with the overt act of relinquishment; hence, the acts of the employee before and after the alleged resignation must be considered in determining whether he in fact intended to terminate his employment. In illegal dismissal cases, it is a fundamental rule that when an employer interposes the defense of resignation, on him necessarily rests the burden to prove that the employee indeed voluntarily resigned. For resignation from employment to be valid, there must be an intent to relinquish the position together with the overt act of relinquishment. Resignation must be voluntary. In illegal dismissal cases, the employer, if defense of resignation is presented, must show that the employee indeed voluntarily resigned.

    In the present case, the Court ruled that the fact of resignation by Hazel, Arlene, Jean, and Nancy was undisputed. It found that Hazel tendered her resignation on July 27, 2007, while Arlene, Jean, and Nancy tendered their resignation on December 22, 2007. Said resignations were found to have been approved by University of Saint Anthony.

    According to the Court, University of Saint Anthony correctly argued that Hazel, Arlene, Jean, and Nancy had voluntarily tendered their resignation before filing their complaints for illegal dismissal. The Court noted that ruling of the National Labor Relations Commission that this event rendered their complaints for illegal dismissal without basis as the employment relationship was severed before the effectivity date of its termination. The Court also noted that notwithstanding such ruling, Hazel, Arlene, Jean, and Nancy, no longer contested the same but insisted that there they were illegally dismissed.

    The Court considered the totality of circumstances, and ruled that University of Saint Anthony showed that Hazel, Arlene, Jean, and Nancy voluntarily resigned prior to the effectivity date of the termination of their employment. It was found that ongoing investigations were conducted relative to the irregular acts imputed to Hazel, Arlene, Jean, and Nancy thereby placing them in a difficult position. Although the Court acknowledged that wordings in resignations letters are not the sole test of voluntariness, the wording of the resignation letters of Hazel, Arlene, Jean, and Nancy, together with other circumstances found by the Court, showed the voluntariness of their resignations. The Court also emphasized that Hazel, Arlene, Jean, and Nancy neither contended nor presented countervailing evidence that their resignation was involuntary. The Court added the settled rule that 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.

    In view of the voluntary resignations of Hazel, Arlene, Jean, and Nancy prior to the termination of their employment, the Court concluded that their complaints for illegal dismissal had no basis.

    Further reading:

    • Bance v. University of St. Anthony, G.R. No. 202724, February 3, 2021.

  • Lone Act of Hostility

    Leyte Lumber, a construction supply and hardware store, hired Fernando as a sales representative.

    As a company policy, Leyte Lumber’s sales representatives were prohibited from getting items or stocks from the storage area by themselves. They were to course the orders through authorized checkers before the items are released. They were also prohibited from leaving their designated work areas without their superior’s consent. Moreover, they were required to submit their applications for leave days before the intended dates to allow the management ample time to approve the application and to adjust the workforce and their workload.

    Fernando allegedly overstepped the boundaries of Leyte Lumber’s company policies. One day, when Fernando was on his way to the stock room to follow up on a customer’s urgent order when Leyte Lumber’s general manager stopped him. The next day, the general manager saw Fernando step out of the store to check the availability of a ball caster in the storage area.

    Leyte Lumber’s general manager required Gososo to produce a letter of apology for the two incidents under pain of dismissal. Admitting fault, Fernando submitted a letter of apology stating that he was just doing his job for Leyte Lumber’s clients and that he never intended to neglect his duties or disobey the company policy. The general manager allegedly refused to accept the letter of apology and instructed Fernando to revise his to reflect the statements “I am not supposed to approach the checker” and “I promise again to ask permission from manager before I can go out.”

    The next day, Fernando was shown a prepared document, which he refused to sign since the document contained admissions of offenses that he did not commit. Irked by Fernando’s refusal, the general manager informed him of his termination from work and even threw a pair of scissors at him.

    Aggrieved, Fernando filed a complaint for illegal constructive dismissal against Leyte Lumber.

    Was Fernando illegally dismissed from employment.

    The Court ruled in the negative.

    The Court reiterated established principles in that in illegal dismissal cases, the employee must first establish by substantial evidence the fact of dismissal before the employer is charged with the burden of proving its legality.

    In the present case, the Court found that Fernando failed to prove that he was dismissed in the first place. Specifically, the Court discovered that he simply alleged that on October 11, 2008, upon his refusal to sign a document prepared by Leyte Lumber’s general manager, the latter was angrily told him that he was terminated from work on that very day, and even threw sharp scissors that almost hit him. The Court stated that this barely measured up to the minimum evidential requirement from Fernando. This is because mere acts of hostility, however grave, committed by the employer towards the employee cannot on their lonesome be construed as an overt directive of dismissal from work.

    The Court added that assuming that Fernando was truly dismissed from employment, he still failed to demonstrate that Leyte Lumber did it constructively. According to the Court, although Fernando alleged that he was forced to sign a prepared incriminatory letter and then fired when he refused to do so, no evidence supported such allegation. The Court said that bare allegations deserve no legal credit for being self-serving.

    The Court further stated that even if these accusations were adequately corroborated, the general manager’s rebuke of Fernando, while overbearing and intimidating, was reasonably incited by the latter’s violations of Leyte Lumber’s company practices. For the Court the rebuke did not amount to unequivocal acts of discrimination, insensibility, or disdain as to render Fernando’s continued employment as unbearable.

    The Court concluded that no working basis constrains it to declare Fernando as dismissed, whether legally, illegally, or constructively.

    Did Fernando abandon his employment?

    The Court ruled that Fernando did not abandon his employment.

    The Court said that abandonment requires the concurrence of the following: (1) the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (2) there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. Abandonment is a matter of intention and cannot lightly be presumed from equivocal acts. Absence must be accompanied by overt acts pointing definitely to the fact that the employee simply does not want to work anymore. The burden of proof to show that there was unjustified refusal to go back to work rests on the employer.

    In the present case, the Court found that Leyte Lumber failed to discharge this burden of proof of abandonment. It just surmised that Fernando had no intent to return to work when he allegedly went on an unapproved leave of absence on October 11, 2008, of which it was also the approving authority. No attendance sheet of any sort was submitted to substantiate its claim. Neither did it show that it denied Fernando’s application for leave.

    The Court stressed that mere absence or simple failure to report for work is not abandonment, more so if the employee was able to lodge his complaint before the labor tribunals with haste. An immediate filing of a complaint for illegal dismissal, more so when it includes a prayer for reinstatement, is inconsistent with a charge of abandonment. The Court said that employees like Fernando who take steps to protest their alleged dismissal cannot be said to have abandoned their work.

    Further reading:

    • Gososo v. Leyte Lumber Yard and Hardware, Inc., G.R. No. 205257, January 13, 2021.

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  • The Employee Rejected My Offer of Reinstatement

    On September 1, 2002, the employer hospital hired Antonina as a staff midwife. During her employment, the employer hospital also allowed her to study nursing simultaneously.

    Antonina alleged that on June 23, 2007, she requested permission to go on leave without pay from June 29, 2007 to September 15, 2007 as she needed to work as an affiliate, in compliance with a school requirement. The employer hospital approved the request on the same day and she was also included in the Schedule of Duty for the period September 16 to 30, 2007.

    Antonina stated that on September 19, 2007, the president of the employer hospital berated her for having been away from work for a long time. The next day, a supervisor relayed to Antonina the president’s instructions for her not to report for work anymore.

    Antonina thus filed a complaint against the employer hospital for illegal dismissal, with a prayer for payment of backwages and separation pay.

    The employer hospital denied dismissing Antonina. It claimed that the latter simply failed to report for work after June 28, 2007 for unspecified reasons.

    The Office of the Labor Arbiter ruled that Antonina was illegally dismissed from her job based on the following findings:

    • Antonina’s leave of absence was supported by a leave form and approval by the employer hospital.
    • Antonina was also found to have reported for work after September 15, 2007 and was included in the Schedule of Duty from September 16 to 30, 2007.
    • Antonina’s assertion that she was ordered not to report for work was credible.
    • Antonina filed her complaint for illegal dismissal within a reasonable period inconsistent with the employer hospital’s claim of abandonment.
    • Finally, Antonina was not accorded procedural due process in her dismissal from employment.

    The Office of the Labor Arbiter awarded Antonina full backwages, as well as separation pay, in lieu of reinstatement, because of strained relations between Antonina and the employer hospital.

    The National Labor Relations Commission affirmed the ruling of the Office of the Labor Arbiter.

    However, the Commission considered Antonina’s rejection of an alleged offer of reinstatement by the employer hospital during a hearing held on January 16, 2008. Thus, the Commission modified the computation of her backwages and separation pay by limiting it to the period of September 19, 2007 until January 16, 2008.

    The Court of Appeals reinstated the Decision of the Office of the Labor Arbiter. It found that the employer hospital’s offer of reinstatement was not supported by evidence and thus should not have been automatically factored in by the National Labor Relations Commission as a basis for modifying the reckoning point of the awards of backwages and separation pay.

    The Court of Appeals clarified that even if the alleged offer was made, the award of backwages and separation pay should be computed from the time Antonina’s compensation was withheld from her until the time of her actual reinstatement, and not only up to the time the offer of reinstatement was made, in accordance with Article 294 of the Labor Code of the Philippines. According to the Court of Appeals, a mere order for reinstatement issued by the Office of the Labor Arbiter is different from the actual restoration of an employee to his or her previous position.

    The Court of Appeals stated that in case of reinstatement, backwages and other monetary awards shall continue beyond the issuance of the Office of the Labor Arbiter’s ruling until such time the said reinstatement is actually complied with.

    The Court of Appeals further stated that if reinstatement is no longer feasible, backwages and separation pay must be computed up to the finality of the decision. Until actual receipt by the employee of the award of separation pay, the employer-employee relationship subsists and entitles the illegally dismissed employee to an award of backwages, and other benefits from the time of his or her actual dismissal until finality of the decision of the Office of the Labor Arbiter.

    The employer hospital elevated its case to the Supreme Court.

    How should the awards of Antonina be computed?

    The Supreme Court reiterated the settled rule that “[t]he twin reliefs that should be given to an illegally dismissed employee are full backwages and reinstatement. Backwages restore the lost income of an employee and is computed from the time compensation was withheld up to actual reinstatement. Anent reinstatement, only when it is not viable is separation pay given.”1Peak Ventures Corp. v. Heirs of Villareal, G.R. No. 184618, November 19, 2014.

    The Supreme Court then mentioned Session Delights Ice Cream and Fast Foods v. Court of Appeals,2G.R. No. 172149, February 8, 2010. where it held that a decision in a case involving illegal dismissal consists essentially of two components:

    The first is that part of the decision that cannot now be disputed because it has been confirmed with finality. This is the finding of the illegality of the dismissal, as well as the awards of separation pay, in lieu of reinstatement, and backwages.

    The second part is the computation of the awards made.

    In the present case, the Supreme Court recognized that the illegality of Antonina’s dismissal from employment had already been settled in a ruling of the Court of Appeals in a separate case. Antonina was declared entitled to the reliefs of backwages and separation pay.

    Thus, the Supreme Court focused on the issue on the computation of Antonina’s backwages and separation pay.

    In this regard, the Court referred to Bani Rural Bank, Inc. v. De Guzman3Bani Rural Bank, Inc. v. De Guzman, G.R. No. 170904, November 13, 2013. in explaining the basis for the computation of backwages and separation pay. Said the Court:

    The computation of backwages depends on the final awards adjudged as a consequence of illegal dismissal, in that:

    First, when reinstatement is ordered, the general concept under Article [294] of the Labor Code, as amended, computes the backwages from the time of dismissal until the employee’s reinstatement. The computation of backwages (and similar benefits considered part of the backwages) can even continue beyond the decision of the [Office of the Labor Arbiter] or [National Labor Relations Commission] and ends only when the employee is actually reinstated.

    Second, when separation pay is ordered in lieu of reinstatement (in the event that this aspect of the case is disputed) or reinstatement is waived by the employee (in the event that the payment of separation pay, in lieu, is not disputed), backwages is computed from the time of dismissal until the finality of the decision ordering separation pay.

    Third, when separation pay is ordered after the finality of the decision ordering the reinstatement by reason of a supervening event that makes the award of reinstatement no longer possible, backwages is computed from the time of dismissal until the finality of the decision ordering separation pay.

    The Court said that the above computation of backwages, when separation pay is ordered, has been its consistent ruling.

    According to the Court, the finality of the decision becomes the reckoning point because in allowing separation pay, the final decision effectively declares that the employment relationship ended so that backwages and separation pay are to be computed up to that point.

    The Court determined that the second scenario squarely applies in the present case since the order of separation pay was decreed in lieu of reinstatement.

    Hence, the Court said, the employer-employee relationship of the employer hospital and Antonina would only be completely terminated upon the finality of the decision which ordered the payment of backwages and separation pay. It follows that the computation of Antonina’s backwages must be from the time of her illegal dismissal from employment on September 19, 2007 until the finality of the decision ordering the payment thereof. As for her separation pay, it should be computed at one month pay for every year of service reckoned from September 2, 2002 until the finality of the decision in her favor.

    The Court affirmed the ruling of the Court of Appeals which reinstated the Decision of the Office of the Labor Arbiter.

    Further reading:

    • Angono Medics Hospital, Inc. v. Agabin, G.R. No. 202542, December 9, 2020.

  • The Second Company’s Deceitful Purpose

    The Supreme Court reiterated the doctrine of piercing the corporate veil in that it applies in three (3) basic areas, namely: 1) defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an existing obligation; 2) fraud cases or when the corporate entity is used to justify a wrong, protect fraud, or defend a crime; or 3) alter ego cases, where a corporation merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation.

    It is the act of hiding behind the separate and distinct personalities of juridical entities to perpetuate fraud, commit illegal acts and evade one’s obligations, that the equitable piercing doctrine was formulated to address and prevent. A settled formulation of the doctrine of piercing the corporate veil is that when two business enterprises are owned, conducted and controlled by the same parties, both law and equity will, when necessary to protect the rights of third parties, disregard the legal fiction that these two entities are distinct and treat them as identical or as one and the same. However, [an employer’s] attempt to isolate [itself] from and hide behind the supposed separate and distinct personality of [a different company] so as to evade [its] liabilities is precisely what the classical doctrine of piercing the veil of corporate entity seeks to prevent and remedy.1De Castro v. Court of Appeals, G.R. No. 204261, October 5, 2016, 796 PHIL 681-713.

    In Nextphase International, Inc. v. National Labor Relations Commission — Third Division,2G.R. No. 249046, December 9, 2020., Nextphase International, Inc. (NPI) was found to have used the corporate veil to perpetrate a fraud against certain employees. Thus:

    In this instance, petitioner denies committing fraud to defeat legal processes and deny private respondents of what is legally theirs, alleging merely that the evidence adduced by the latter is not sufficient to determine fraud or misuse of corporate fiction. However, it must be remembered that allegation is not equivalent to proof and, as such, the party who asserts a particular fact or affirmative defense is duty-bound to support the same with the requisite quantum of evidence.

    Here, petitioner miserably failed to support its denial of the commission of fraud to evade liability to private respondents or of the fact that it created NGII at around the same time as the conclusion of the case before the CA where being made to pay for P2,735,722.82 was likely. The deceitful purpose for which the second company was created was made clear by the fact that the sheriff was barred from serving the writ of execution to petitioner because its official address was suddenly under a new management whereas the banks to which he had sent notices of garnishment had all but refused. If the two companies were, indeed, separate and distinct from one another, the execution of the judgment would not have encountered a hitch, which it did. Thankfully, the private respondents inquired into the problem that led to the discovery of the surreptitious change in name cum creation of NGII for the purpose of thwarting the enforcement of the judgment award.

    In view thereof, there is no doubt that petitioner’s attempt to hide behind a new identity constitutes fraud within the meaning of the law. Fraud in this context proceeds from the intentional deception practiced by means of misrepresentation or concealment of a material fact. Petitioner did it by cloaking itself with a new legal personality in the hope that by hiding behind the legal fiction it could evade existing obligations and defeat the rights of the claimants to which it was held liable.

    As last ditch effort, petitioner contends that it has a different purpose than that of NGII’s. It claims that its main objective is to engage in the business of trading goods such as but not limited to novelty items on wholesale or retail basis whereas NGII is not. However, a reading of its petition yields to the fact that its nature of business is essentially the same as NGII’s. “[T]o engage in, conduct and carry on business of manufacturing, importing, exporting, marketing at retail/wholesale” is practically just a stretched-out itemization of the word “trading.” The identity of each of the companies’ business model (apart from their corporate names, address, contact numbers and website as well as directors, officers and shareholders) is rendered even more plainly and unambiguously by the subject of their enterprise which is plastic.

    Further reading:

    • Nextphase International, Inc. v. National Labor Relations Commission — Third Division, G.R. No. 249046, December 9, 2020.

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  • A Mere Finding that the Illness is Not Work-Related is Not Automatically a Valid Medical Assessment

    In Starocean Manning Philippines, Inc. v. Saturnino,1G.R. No. 252659, December 2, 2020. the Supreme Court stressed that sufficient basis must support the assessment of the company-designated physician:

    Regardless of who the doctor is and his or her relation to the parties, the overriding consideration should be that the medical conclusions are based on (a) the symptoms and findings collated with medically acceptable diagnostic tools and methods, (b) reasonable professional inferences anchored on prevailing scientific findings expected to be known to the physician given his or her level of expertise, and (c) the submitted medical findings or synopsis, supported by plain English annotations that will allow the Labor Arbiter and the National Labor Relations Commission to make the proper evaluation.2Orient Hope Agencies, Inc. v. Jara, G.R. No. 204307, June 6, 2018.

    If the company-designated physician failed to provide a final and definite medical assessment within the required periods, the seafarer’s condition shall be, by operation of law, characterized as total and permanent.3Ampo-on v. Reinier Pacific International Shipping, Inc., G.R. No. 240614, June 10, 2019.

    Here, the employer failed to adduce evidence supporting the assessment that the seafarer’s illness was not work-related. For the Court, such unsupported finding of non-work-relatedness is an invalid medical assessment.

    The seafarer was accordingly ruled to be entitled to total and permanent disability benefits by operation of law. The Court further applied Section 20(A)(7) of the 2010 POEA-SEC, which requires that such benefits be separate and distinct from, and be in addition to whatever benefits which the seafarer is entitled to under Philippine laws such as from the Social Security System, Overseas Workers Welfare Administration, Employees’ Compensation Commission, Philippine Health Insurance Corporation, and Home Development Mutual Fund.

    Further reading:

    • Starocean Manning Philippines, Inc. v. Saturnino, G.R. No. 252659, December 2, 2020.