Paulino Ungos III

Lawyer | Law Professor | Author

Category: Labor Law

  • Proper Recourse to Assail the Decisions or Orders of the Secretary of the Department of Labor and Employment

    In Augustin International Center, Inc. v. Zacarias,1G.R. No. 242043, January 7, 2019 the Supreme Court reiterated that a petition for certiorari (under Rule 65 of the Rules of Court) should be filed to assail the decisions or orders of the Secretary of the Department of Labor and Employment. According to the Court, “[s]uch petition for certiorari must be seasonably filed with the Court of Appeals within 60 days from the notice of the order denying one’s motion for reconsideration.”

    Side Note:

    Distinguish remedy in connection with the Secretary’s exercise of assumption powers vis-à-vis remedy relating to Secretary’s decision as a voluntary arbitrator.

    Further Reading:

    • Augustin International Center, Inc. v. Zacarias, G.R. No. 242043, January 7, 2019.

  • Extent of the Awards of Backwages and Separation Pay

    The workers of the Continuous Galvanizing Line department of the Philippine Steel Coating Corp. asserted that the awards of backwages and separation pay should not have been limited to the closure of the said department, but should have included the closure of Philippine Steel Coating Corporation’s entire business.

    The Supreme Court disagreed based on the principle that “an illegally dismissed employee’s entitlement to backwages and separation pay should be computed only up to the time that the said employee would have been expected to work with his/her employer had he/she not been illegally dismissed.” The Court said:

    In any event, petitioner’s claim that the judgment award should include the period after the closure of the Continuous Galvanizing Line (CGL) department until the closure of respondent Philippine Steel Coating Corporation’s (PhilSteel) entire business, lacks merit.

    It should be noted that petitioner never questioned the validity of the closure of PhilSteel’s CGL department. It only insists that the closure of the CGL department does not affect the computation of the period for the purpose of determining the retrenched employees’ monetary award because PhilSteel continued to operate until May 8, 2013.

    Petitioner should be reminded that an illegally dismissed employee’s entitlement to backwages and separation pay should be computed only up to the time that the said employee would have been expected to work with his/her employer had he/she not been illegally dismissed. Given that the validity of the CGL department’s closure is not disputed, the ten (10) retrenched employees assigned to the CGL department could not have been presumed to continue working for PhilSteel despite the valid closure of PhilSteel’s CGL department. There is nothing in the petition to show that the retrenched employees’ employments were not dependent on the operation of the CGL department in order to justify their claim of entitlement to backwages and separation pay until PhilSteel’s total closure on May 8, 2013. On the contrary, the retrenched employees were specifically referred to as “workers of the CGL line,” thereby showing that their employment was contingent on the existence of the CGL department. As such, the backwages and separation pay were properly computed only until the closure of the CGL department, or until August 2, 2012.

    Further Reading:

    • PhilSteel Workers Union-Olalia-KMU v. Philippine Steel Coating Corp., G.R. No. 241897, January 7, 2019.

    Check Out My Latest YouTube Video

    [embedyt] https://www.youtube.com/embed?listType=playlist&list=UUA0qsY28UIiqNcY45Ez2rjg&layout=gallery[/embedyt]

  • Starting the Third Doctor Referral Process

    Section 20 (A) (3) of the Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships,1Philippine Overseas Employment Administration Memorandum Circular No. 10, Series of 2010 provides that [i]f 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.

    Who should initiate the third doctor referral process?

    In Placio v. Bahia Shipping Service, Inc.,2G.R. No. 241926, January 7, 2019 the Supreme Court ruled that the seafarer should initiate such process. The Court said:

    Petitioner “was bound to initiate the process of referring the findings to a third-party physician by informing his employer of the same, which is mandatory considering that the POEA-SEC is part and parcel of the employment contract between seafarers and their employers.”3Magsaysay Mitsui Osk Marine, Inc. v. Buenaventura, G.R. No. 195878, January 10, 2018. Due to petitioner’s failure to abide by the procedure, the Court of Appeals gave more weight to the findings of the company-designated physician and correctly dismissed the complaint.

    Further Reading:

    • Placio v. Bahia Shipping Service, Inc., G.R. No. 241926, January 7, 2019.

  • Presenting Unsubstantiated Documents to Prove Unpaid Commissions

    The employee claimed entitlement to Php802,372.28 in unpaid commissions. In support of this claim, she attached certain self-prepared, albeit “meticulously detailed,” documents to her pleading. Should this claim be granted?

    In Siroy v. Rudolf Lietz, Inc.,1G.R. No. 204013 (Notice), January 7, 2019 the Supreme Court denied the claim. According to the Court:

    Siroy’s computation of unpaid commissions appears to be self-serving as the supporting documents she attached were all prepared by her. Inasmuch as her computation can easily be concocted or fabricated to suit her personal interest and purpose, Siroy’s bare claim that she is entitled to unpaid commissions by simply presenting unsubstantiated documents will not win her judicial approval.

    Further Reading:

    • Siroy v. Rudolf Lietz, Inc., G.R. No. 204013, January 7, 2019.

  • Supervening Events Made It Impossible for Me to Reinstate My Employee

    The Court noted Rogel’s illegal dismissal case (G.R. No. 196038), a case related to the present one, which awarded the reliefs of reinstatement and backwages to Rogel. The Court stated that the decision in such case became final and executory on March 30, 2012. Thereafter, during execution proceedings therein, Rogel was granted separation pay in lieu of reinstatement.

    Furthermore, the Court found that Consolidated Distillers of the Far East, Inc. (Consolidated Distillers), or Rogel’s employer, no longer questioned the propriety of the awards of separation pay and backwages, as it only took issue with their computation. Specifically, the Court found that Consolidated Distillers argued that it should only be liable for separation pay and backwages until the year 2007 in view of the execution of the Asset Purchase Agreement and the termination of the subsequent Service Agreement it had with Emperador Distillers, Inc. (Emperador Distillers). For Consolidated Distillers, these were supervening events that caused the impossibility of Rogel’s reinstatement, as his position became inexistent as of 2007, consistent with the ruling of the Court in Olympia Housing, Inc. v. Lapastora1G.R. No. 187691, January 13, 2016

    Should computation of separation pay and backwages be limited to the year 2007, as Consolidated Distillers had asserted?

    The Court ruled in the negative.

    The Court stated that Consolidated Distillers cannot find support in Olympia Housing because the ruling in that case was against its position.

    The Court explained that in Olympia Housing, the employer therein was able to prove in a separate labor case that it had closed its business and followed all statutory requirements arising from the closure of its business. Given this, the Court in Olympia Housing ruled that the employer was liable for backwages and separation pay only until the date of the closure of the business of the employer, even if this was prior to the Office of the Labor Arbiter’s decision finding illegal dismissal.

    However, the Court stressed that for Olympia Housing to apply, the employer must prove the closure of its business in full and complete compliance with all statutory requirements prior to the date of the finality of the award of backwages and separation pay. The statutory requirements referred to by the Court were:

    In the present case, Consolidated Distillers failed to show that it had closed its business in 2007 and that it had complied with all the statutory requirements for the closure.

    The Court found that Consolidated Distillers only alleged the execution of the Asset Purchase Agreement and the termination of the Service Agreement with Emperador Distillers. For the Court, these never meant that Consolidated Distillers had closed its business. The Court even found no evidence that in 2007, Consolidated Distillers had notified the Department of Labor and Employment or its employees of the closure of its business and the reason for its closure. There was also no showing that Rogel was affected by this purported closure of Consolidated Distillers’ business.

    The Court thus ruled that Consolidated Distillers was liable for backwages and separation pay until the finality of its decision.

    It applied its Decision in Bani Rural Bank, Inc. v. De Guzman,2G.R. No. 170904, November 13, 2013 since separation pay, in lieu of reinstatement, was awarded after the finality of the decision declaring illegal dismissal and during the execution proceedings because the employees therein manifested that they no longer wanted to be reinstated. The Supreme Court held therein that when there is a supervening event that renders reinstatement impossible, backwages is computed from the time of dismissal until the finality of the decision ordering separation pay. The Court explained that when there is an order of separation pay (in lieu of reinstatement or when the reinstatement aspect is waived or subsequently ordered in light of a supervening event making the award of reinstatement no longer possible), the employment relationship is terminated only upon the finality of the decision ordering the separation pay. The finality of the decision cuts-off the employment relationship and represents the final settlement of the rights and obligations of the parties against each other.

    In the present case, the Court found that the award of separation pay in lieu of reinstatement, was made subsequent to the finality of the decision in Rogel’s illegal dismissal case (G.R. No. 196038). The Court thus ruled that Consolidated Distillers could not evade its liability to Rogel for backwages and separation pay computed until the finality of the Court’s Decision which affirmed the order granting separation pay.

    Further reading:

    • Consolidated Distillers of the Far East, Inc. v. Zaragoza, G.R. No. 229302, June 20, 2018.

  • Dismissal of Employees for Minor Offenses

    Laura was hired to join ProHealth’s audit team in 2007. She was later promoted to Finance Officer.

    On November 26, 2007, Laura’s superior ordered her to give three thousand pesos from the training funds to Prohealth’s District Business Manager, to serve as cash advance.

    On November 27, 2007, Prohealth issued a show cause memorandum for Laura’s failure to release the cash advance. Laura was also relieved of her duties and reassigned to the Office of the Personnel and Administration Manager.

    In her explanation, Laura alleged that when the District Business Manager saw that she was busy receiving cash sales from another District Business Manager, he told her that he would just return the next day to collect his cash advance. When he told her that the cash advance was for car repairs, Laura told him to get the cash from his revolving fund, which she would reimburse after the repairs were done. Prohealth was dissatisfied with her explanation and transferred her to another office.

    On December 3, 2007, Laura was invited to a fact-finding investigation, which was held on December 10, 2007, where Laura was again asked to explain her actions.

    On December 17, 2007, she was handed a notice of termination effective December 31, 2007 for disobeying an order of her superior.

    Laura filed a complaint for illegal dismissal against Prohealth.

    The Office of the Labor Arbiter declared the illegality of Laura’s dismissal from employment. This ruling was affirmed by the National Labor Relations Commission. However, the Court of Appeals reversed and set aside the decision of the Commission and ruled the validity of Laura’s dismissal from employment. The Court of Appeals viewed Laura failure to comply with her superior’s order, an instance of arrogance and hostility, that, in turn, warranted her dismissal.

    When the case reached the Supreme Court, Laura insisted that she was illegally dismissed from employment. According to Laura, she believed in good faith that the District Business Manager would just claim his cash advance the day after he tried to claim it and that there was nothing in her actions that would prove that she intended to disobey or defy respondent Prohealth’s order.

    Was the dismissal of Laura valid?

    The Supreme Court declared that Laura was illegally dismissed from employment.

    The Court stated that under the Labor Code of the Philippines an employer may terminate the services of an employee who commits willful disobedience of the lawful orders of the employer. The Court explained that for disobedience to be considered as just cause for termination, two (2) requisites must concur:

    • the employee’s assailed conduct must have been wilful or intentional; and
    • the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he [or she] had been engaged to discharge.

    For disobedience to be willful, the Court added, it must be characterized by a wrongful and perverse mental attitude rendering the employee’s act inconsistent with proper subordination. The conduct complained of must also constitute harmful behavior against the business interest or person of his [or her] employer. Thus, it is implied in every case of willful disobedience that the erring employee obtains undue advantage detrimental to the business interest of the employer.

    In the present case, the Court found that Laura, as Finance Officer, was instructed by her superior to give a cash advance of three thousand pesos to the District Branch Manager on November 26, 2007. For the Court, such instruction or order was reasonable, lawful, made known to Laura, and pertained to her duties.

    The Court then tried to determine whether Laura intentionally and willfully violated such order as to amount to insubordination.

    The Court ruled in the negative.

    The Court found that when the District Business Manager went to collect the money from Laura, he was told to return the next day as she was still busy. When Laura found out that the money was to be used for a car tune-up, she suggested to the District Business Manager to just get the money from his mobilization fund and that she just would reimburse it after.

    Diverging from the ruling of the Court of Appeals, the Supreme Court ruled that no ill will existed between the District Business Manager and Laura. According to the Supreme Court, Laura’s failure to immediately give the money to the District Business Manager was not the result of a perverse mental attitude but was merely because she was busy at the time. Neither did she profit from her failure to immediately give the cash advance for the car tune-up nor did respondents suffer financial damage by her failure to comply. For the Court, the severe penalty of dismissal was not commensurate to her infraction. Laura was illegally dismissed from employment.

    Further reading:

    • Malcaba v. ProHealth Pharma Philippines, Inc., G.R. No. 209085 , June 6, 2018.

  • Substantial Compliance with Appeal Bond Requirements

    The situation in this case was that the Office of the Labor Arbiter found that the employer had illegally dismissed three of its employees. This decision of the Office of the Labor Arbiter was affirmed by the National Labor Relations Commission. All parties then filed a Petition for Certiorari before the Court of Appeals.

    A portion of the Decision of the Court of Appeals related to its finding that the employer substantially complied with the requirement of an appeal bond despite it not appearing in the records of the surety company since the employer believed in good faith that the bond it secured was genuine.

    However, the employees argued that the Court of Appeals should have dismissed the Petition for Certiorari outright since the employer failed to post a genuine appeal bond before the National Labor Relations Commission. The petitioner-employees alleged that when the Sheriff of the Commission attempted to enforce the judgment award against the appeal bond, said Sheriff was informed that the appeal bond procured by the employer did not appear in the records of the bonding company. The petitioners-employees also claimed that the employer was notified by the National Labor Relations Commission that its appeal bond was not genuine, showing that the employer did exhibit good faith.

    On the other hand, the employer countered that procedural rules should liberally be applied to their case since it acted in good faith in posting their appeal bond. The employer further asserts that the issue should have already been considered moot since the employees were able to garnish and collect the amounts allegedly due to them.

    Did the employer perfect its appeal upon discovery of its forged appeal bond?

    Yes, because the Supreme Court found that the employer had substantially complied with the requirements on the posting of an appeal bond.

    The Court reiterated the principles that an appeal is not a matter of right. Courts and tribunals have the discretion whether to give due course to an appeal or to dismiss it outright. The perfection of an appeal is, thus, jurisdictional. Non-compliance with the manner in which to file an appeal renders the judgment final and executory. In labor cases, an appeal by an employer is perfected only by filing a bond equivalent to the monetary award.

    The Court further stated that the ruled of the National Labor Relations Commission require that the appeal bond filed be genuine. An appeal bond determined by the National Labor Relations Commission to be irregular or not genuine shall cause the immediate dismissal of the appeal. The Court also stated that while the procedural rules strictly require the employer to submit a genuine bond, an appeal could still be perfected if there was substantial compliance with the requirement.

    In this instance, the Court found that the National Labor Relations Commission certified that the employer was able to file a security deposit in the amount of more than 6.5 million pesos showing that the premium for the appeal bond was duly paid and that there was willingness to post it. The Court also noted that the employees likewise attached documents proving that Alpha Insurance was a legitimate and accredited bonding company.

    The Court stressed that despite the employees’ failure to collect on the appeal bond, the employees never denied that they were eventually able to garnish the amount from the employer’s bank deposits. For the Court, such situation fulfilled the purpose of the bond, which was, to guarantee the payment of valid and legal claims against the employer.

    The Court accordingly considered the employer to have substantially complied with the requirements on the posting of an appeal bond.

    Further reading:

    • Malcaba v. ProHealth Pharma Philippines, Inc., G.R. No. 209085 , June 6, 2018.

  • Employment Status the Day Before the Occurrence of the Strike or Lockout

    The employer here found a need to improve its selling and distribution system if it wanted to remain viable and competitive in the business. Thus, it decided to implement a new cost-effective and simplified scheme of selling and distributing its products, that, in turn, led to a separation of twenty seven (27) rank-and-file, regular employees and union members on the ground of redundancy.

    The employer claimed that prior to the termination of employment, it had made a careful study of how to be more cost effective in operations and competitive in the business. It recognized in the process that its multi-layered selling and distribution system had to be simplified. Thus, it determined that the phasing out of said system was necessary which, however, resulted in the termination of employment of certain employees as their positions have become redundant.

    On May 29, 2009, the employer issued notices of termination to twenty seven (27) rank-and-file, regular employees and members of the union on the ground of redundancy due to the ceding out of its selling and distribution systems to the Market Execution Partners. The termination of their employment was made effective on June 30, 2009, but the union members were no longer required to report for work as they were put on leave of absence with pay until the effectivity date of termination. The union members were also granted individual separation packages, which many of them accepted, but under protest.

    The union asserted that the new selling and distribution system adopted and implemented by the employer would result in the diminution of the union membership amounting to union busting and to a violation of the Collective Bargaining Agreement provision against contracting out of services or outsourcing of regular positions. Thus, they filed a Notice of Strike with the National Conciliation and Mediation Board on June 3, 2009 on the ground of unfair labor practice, among others. On June 11, 2009, the union conducted a strike vote where a majority decided on conducting a strike.

    On June 23, 2009, the Secretary of the Department of Labor and Employment assumed jurisdiction over the labor dispute by certifying for compulsory arbitration to the National Labor Relations Commission the issues raised in the notice of strike. The Secretary also enjoined the parties from committing any act that may further exacerbate the situation.

    At this point, the union asserted that the employer should have enjoined the termination of employment which took effect on July 1, 2009. On the other hand, the employer contended that termination of employment was a certainty, from the time it issued the notices of termination and that the status quo prior to the issuance of the assumption order included the impending termination of the employment of the 27 employees.

    On March 16, 2010, the National Labor Relations Commission ruled that the employer implemented a valid redundancy program and that it did not commit unfair labor practice. The Commission further found no violation in the dismissal of the employees from employment because their respective notices of dismissal were received prior to the assumption order of the Secretary of the Department of Labor and Employment. The Commission found that the employer did not commit an act that exacerbated the dispute.

    The Court of Appeals affirmed the Decision of the National Labor Relations Commission.

    The Supreme Court, in turn, affirmed the validity of the employer’s redundancy program.

    One issue that reached the Supreme Court was whether the employer’s implementation of the redundancy program was an unfair labor practice.

    The other issue resolved by the Court was whether the employer should have enjoined the effectivity of the termination of the employment of the 27 affected union members when the Secretary of the Department of Labor and Employment assumed jurisdiction over their labor dispute.

    The Court reiterated prevailing jurisprudence in that unfair labor practice refers to acts that violate the workers’ right to organize. The Court stated that there should be no dispute that all the prohibited acts constituting unfair labor practice in essence relate to the workers’ right to self-organization. Thus, an employer may only be held liable for unfair labor practice if it can be shown that his acts affect in whatever manner the right of his employees to self-organize. To prove the existence of unfair labor practice, substantial evidence has to be presented.

    In the present case, the Court found that the union failed to substantiate its charge of unfair labor practice against the employer. According to the Court, the consequent termination of employment due to redundancy is not per se an act of unfair labor practice amounting to union busting. For while the number of union membership was diminished due to the termination of the employment of union members, it cannot safely be said that the employer acted in bad faith in terminating their services because the termination was not without a valid reason. There was no showing that the redundancy program was motivated by ill will, bad faith or malice, or that it was conceived for the purpose of interfering with the employees’ right to self-organize.

    The findings of the National Labor Relations Commission and the Court of Appeals on said issue were affirmed.

    However, the Court found that the employer violated the return-to-work order in that the status quo was not maintained after the Secretary of the Department of Labor and Employment had assumed jurisdiction over the dispute on June 23, 2009.

    In this regard, the Court relied on Article 278 [Formerly 263] (g) of the Labor Code of the Philippnines, which provides the conditions for, and the effects of, the assumption of jurisdiction by the Secretary of the Departent of Labor and Employment over a dispute.

    The Court explained that the powers given to the Secretary of the Department of Labor and Employment under Article 278 [Formerly 263] (g) is an exercise of police power with the aim of promoting public good. In fact, the scope of the powers is limited to an industry indispensable to the national interest as determined by the Secretary of the Department of Labor and Employment. Industries that are indispensable to the national interest are those essential industries such as the generation or distribution of energy, or those undertaken by banks, hospitals, and export-oriented industries. And following Article 263 (g), the effects of the assumption of jurisdiction are the following:

    • the enjoining of an impending strike or lockout or its lifting, and
    • an order for the workers to return to work immediately and for the employer to readmit all workers under the same terms and conditions prevailing before the strike or lockout, or the return-to-work order.

    The Court added that when the Secretary of the Department of Labor and Employment exercises these powers, he is granted “great breadth of discretion” in order to find a solution to a labor dispute. The most obvious of these powers is the automatic enjoining of an impending strike or lockout or the lifting thereof if one has already taken place. Assumption of jurisdiction over a labor dispute, or as in this case the certification of the same to the National Labor Relations Commission for compulsory arbitration, always co-exists with an order for workers to return to work immediately and for employers to readmit all workers under the same terms and conditions prevailing before the strike or lockout.

    The Court then highlighted the significance of the return-to-work order, which is interlocutory, and is merely meant to maintain the status quo while the main issue is being threshed out in the proper forum. The Court stressed that the status quo is simply the status of the employment of the employees the day before the occurrence of the strike or lockout.

    According to the Court, from the date the Secretary of the Department of Labor and Employment assumes jurisdiction over a dispute until its resolution, the parties have the obligation to maintain the status quo while the main issue is being threshed out in the proper forum — which could be with Secretary of the Department of Labor and Employment or with the National Labor Relations Commission. This is to avoid any disruption to the economy and to the industry of the employer — as this is the potential effect of a strike or lockout in an industry indispensable to the national interest — while the Secretary of the Department of Labor and Employment or the National Labor Relations Commission is resolving the dispute.

    In the present case, the Court found that since the union voted for the conduct of a strike on June 11, 2009, when the Secretary of the Department of Labor and Employment issued the return-to-work order dated June 23, 2009, this meant that the status quo was the employment status of the employees on June 10, 2009. This status quo should have been maintained until the National Labor Relations Commission resolved the dispute in its Resolution dated March 16, 2010. For the Court, the said Resolution then took the place of the return-to-work order of the Secretary of the Department of Labor and Employment and the employer no longer had the duty to maintain the status quo after March 16, 2010.

    The Court accordingly awarded to the employees backwages and other benefits from July 1, 2009 until March 16, 2010, with a recomputation of their separation pay taking into consideration the termination of their employment beginning March 16, 2010.

    Further reading:

    • San Fernando Coca-Cola Rank-and-File Union v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 200499, October 4, 2017.

  • No Danger to the Safety of the Crew or Vessel

    Rogelio was engaged by his employer, Free Bulkers, through its agent Evic, as Chief Mate on board the M/V Free Lady for a period of six (6) months with a basic monthly salary of US$1,088.00.

    On August 28, 2010, Rogelio boarded the vessel. However, on September 24, 2010, Rogelio was repatriated to the Philippines without completing the contracted employment period.

    On September 28, 2010, Rogelio filed an illegal dismissal complaint against his employer. According to Rogelio, the ship captain developed a hostile attitude towards him. Specifically, Rogelio narrated that on September 7, 2010, he took a sip from the small flask of whisky given to him by one of the stevedores he dealt with and went to bed; but the ship captain had him awakened and ordered him to make a report on some damages in the railings of the ship caused by the stevedores. When he submitted the report to the ship captain, the latter allegedly smelled a faint odor of whisky and asked him if he had been drinking, to which Rogelio truthfully replied that he drank a little whisky and was willing to take an alcohol test. The ship captain shrugged off his offer to take an alcohol test, but still made a logbook entry dated September 7, 2010, recommending Rogelio’s immediate replacement.

    The employer contended that Rogelio was dismissed for just cause. On the basis of a Crew Behavior Report dated September 8, 2010 prepared by the ship captain, Rogelio was claimed to have violated company policies, instructions, and stipulations of the employment contract:
    1) by being grossly negligent since he failed to observe the safety precautions during the mooring and unmooring operations;
    2) by displaying arrogance towards his co-employees on board; and
    3) by having been found intoxicated.

    According to the employer, it feared for the safety of the vessel and determined that the crew may be at risk with Rogelio’s continued presence. Thus, it was constrained to ask that Rogelio be relieved, invoking Section 33 of the POEA Standard Employment Contract (POEA-SEC).

    Was Rogelio validly dismissed from employment?

    The Court ruled in the negative. It declared that Rogelio was illegally dismissed from employment.

    The Court reiterated established principles in that in labor cases, the employer has the burden of proving that the dismissal of an employee was for a just or authorized cause, and failure to show this would necessarily mean that the dismissal was unjustified and, therefore, illegal. Furthermore, not only must the dismissal be for a cause provided by law, it should also comply with the rudimentary requirements of due process, that is, the opportunity to be heard and to defend one’s self. Hence, for dismissal to be valid, the employer must show through substantial evidence that (1) the dismissal was for a just or authorized cause; and (2) the dismissed employee was afforded due process of law.

    In the present case, the Court found that the employer failed to establish the existence of a just cause in the dismissal of Rogelio from employment.

    It noted that the Crew Behavior Report, from which Rogelio’s dismissal from employment was based, alleged Rogelio’s inefficiency, incompetence and gross negligence in the performance of his duties.

    However, the Court considered the said report sorely inadequate in meeting the required quantum of proof to discharge the employer’s burden.

    The Court discussed that incompetence or inefficiency, as a ground for dismissal, means the failure to attain work goals or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory results. Neglect of duty, on the other hand, must be both gross and habitual. Gross negligence implies a lack of or failure to exercise slight care or diligence, or the total absence of care in the performance of duties, not inadvertently but willfully and intentionally, with conscious indifference insofar as other persons may be affected. Habitual neglect involves repeated failure to perform duties for a certain period of time, depending upon the circumstances, and not mere failure to perform duties in a single or isolated instance.

    Here, the Court found that the statements contained in the Crew Behavior Report were uncorroborated and self-serving because no other evidence was presented to support the statements of the ship captain. The Court added that while the report was signed by four (4) crew members, the statements contained therein were based on acts witnessed only by the ship captain.

    Specifically, the Court noted the claim of the ship captain that a crew was injured when Rogelio failed to observe safety precautions in the mooring and unmooring operations and that an agent informed him that Rogelio was hard to deal with because of intoxication. However, the Court found no affidavits of either the injured seaman or the concerned agent to corroborate the ship captain’s statements. For the Court, no basis constrained it to conclude that there was truth to the ship captain’s accusations.

    The Court found that the employer failed to show that Rogelio willfully or deliberately caused the alleged accident during the mooring operations or that Rogelio repeatedly committed mistakes or repeatedly failed to perform his duties. The Court stated that the single unverified incident on Rogelio’s supposed negligence was insufficient to warrant a finding of just cause for termination.

    With regard to the charge of intoxication, the Court applied Section 33 (6) of the POEA-SEC which provides that drunkenness must be committed while on duty to merit dismissal from employment.

    In the present case, the Court found that Rogelio was admittedly off duty when he was allegedly caught by the master drinking on board. The Court ruled that the penalty of dismissal from employment was unwarranted.

    The Court continued that the lack of just or valid cause of Rogelio’s dismissal was further exacerbated by the employer’s failure to afford Rogelio procedural due process. The Court stressed the two-notice rule in Section 17 of the POEA-SEC in that an erring seaman should be given a written notice of the charge against him and afforded an opportunity to explain or defend himself. Should sanctions be imposed, then a written notice of penalty and the reasons for it shall be furnished the erring seafarer. It is only in the exceptional case of clear and existing danger to the safety of the crew or vessel that the required notices are dispensed with; nonetheless, a complete report should be sent to the manning agency, supported by substantial evidence of the findings.

    In the present case, the Court found no evidence showing that Rogelio was given a written notice of the charges against him, or that he was given an opportunity to explain or defend himself. Neither was there proof that Rogelio was furnished with a written notice of the penalty imposed against him and the reasons for its imposition. Although the Court noted the employer’s claim that the required notices were dispensed with because of a clear and existing danger to the safety of the crew or vessel, no evidence was presented to prove such was the situation when Rogelio’s employment was terminated.

    With the illegality of Rogelio’s dismissal, the employer was held liable to pay Rogelio’s salaries for the unexpired portion of his employment contract under Section 10 of Republic Act No. 8042, as amended by Republic Act No. 10022.

    Further reading:

    • Evic Human Resource Management, Inc. v. Panahon, G.R. No. 206890, July 31, 2017.

  • Secular View of Morality

    At the time of her indefinite suspension from employment in 2006, the employee was the Human Resource Officer of Brent Hospital and Colleges, Inc. (Brent), an educational and medical institution of the Episcopal Church of the Philippines.

    The cause of suspension was the employee’s Unprofessionalism and Unethical Behavior Resulting to Unwed Pregnancy.

    It appears that the employee became pregnant out of wedlock, and Brent imposed the suspension until such time that she marries her boyfriend in accordance with law.

    The employee then filed a complaint for unfair labor practice, constructive dismissal, non-payment of wages and damages with a prayer for reinstatement.

    The labor tribunals upheld the employee’s dismissal as one attended with just cause.

    The just cause consisted in her engaging in premarital sexual relations with her boyfriend, resulting in her becoming pregnant out of wedlock. The labor tribunals deemed said act to be immoral, which was punishable by dismissal under Brent’s rules and which likewise constituted serious misconduct under Article 297 (a) of the Labor Code of the Philippines.1ARTICLE 297. [Formerly Article 282] Termination by Employer. — An employer may terminate an employment for any of the following causes:

    (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; x x x     For the labor tribunals, since the employee was Brent’s Human Resource Officer in charge of implementing its rules against immoral conduct, she should have been the epitome of proper conduct.

    The Supreme Court declared that the dismissal of the employee here was illegal.

    Immorality as a Just Cause for Termination of Employment

    The Supreme Court ruled that the employee’s premarital relations with her boyfriend and the resulting pregnancy out of wedlock did not constitute immorality, and thus could not be a just cause for termination of her employment.

    The Court noted that immorality was punishable under Brent’s policies by dismissal for the first offense.

    However, the Court also clarified that the determination of whether a conduct is disgraceful or immoral involves a two-step process:

    First, a consideration of the totality of the circumstances surrounding the conduct; and

    Second, an assessment of the said circumstances vis-à-vis the prevailing norms of conduct, i.e., what the society generally considers moral and respectable.

    1)

    In this case, the Court found that the surrounding facts leading to the employee’s dismissal were as follows:

    • she was employed as a human resources officer in an educational and medical institution of the Episcopal Church of the Philippines;
    • she and her boyfriend at that time were both single; and
    • they engaged in premarital sexual relations, which resulted into pregnancy.

    2)

    The labor tribunals characterized these as constituting disgraceful or immoral conduct and sweepingly concluded that as Human Resource Officer, the employee should have been the epitome of proper conduct and her indiscretion “surely scandalized the Brent community.”

    According to the Court, the foregoing circumstances, however, did not readily equate to disgraceful and immoral conduct:

    2a)

    Brent’s Policy Manual and Employee’s Manual of Policies did not define what constitutes immorality; it simply stated immorality as a ground for disciplinary action.

    Instead, Brent erroneously relied on the standard dictionary definition of fornication as a form of illicit relation and proceeded to conclude that the employee’s acts fell under such classification, thus constituting immorality.

    2b)

    Jurisprudence has already set the standard of morality with which an act should be gauged — it is public and secular, not religious.

    Whether a conduct is considered disgraceful or immoral should be made in accordance with the prevailing norms of conduct, which, refer to proscribed conduct because they are detrimental to conditions upon which depend the existence and progress of human society.

    The fact that a particular act does not conform to the traditional moral views of a certain sectarian institution is not sufficient reason to qualify such act as immoral unless it, likewise, does not conform to public and secular standards.

    2c)

    More importantly, there must be substantial evidence to establish that premarital sexual relations and pregnancy out of wedlock is considered disgraceful or immoral.

    The employee and her boyfriend were both single and had no legal impediment to marry at the time she committed the alleged immoral conduct. In fact, they eventually married on April 15, 2008.

    The labor tribunals’ respective conclusion that the employee’s indiscretion scandalized the Brent community was speculative, at most, and there was no proof adduced by Brent to support such sweeping conclusion.

    Even Brent admitted that it came to know of the employee’s “situation” only when her pregnancy became manifest.

    2d)

    Brent also conceded that at the time the employee and her boyfriend were just carrying on their relationship, there was no knowledge or evidence by Brent that they were engaged also in premarital sex. This only showed that the employee did not flaunt her premarital relations with her boyfriend and it was not carried on under scandalous or disgraceful circumstances.

    2e)

    Brent, likewise, could not resort to the Manual of Regulations for Private Schools2At that time the 1992 Revised Manual of Regulations for Private Schools, DECS Order No. 092-92, August 10, 1992 because premarital sexual relations between two consenting adults who have no impediment to marry each other, and, consequently, conceiving a child out of wedlock, gauged from a purely public and secular view of morality, did not amount to a disgraceful or immoral conduct under the said manual.

    The Court ruled that the totality of the circumstances of this case did not justify the conclusion that the employee committed acts of immorality.

    According to the Court there is no law which penalizes an unmarried mother by reason of her sexual conduct or proscribes the consensual sexual activity between two unmarried persons; that neither does such situation contravene any fundamental state policy enshrined in the Constitution.

    The fact that Brent is a sectarian institution does not automatically subject the employee to its religious standard of morality absent an express statement in its manual of personnel policy and regulations, prescribing such religious standard as gauge as these regulations create the obligation on both the employee and the employer to abide by the same.

    Marriage as a Condition for Reinstatement

    The Court noted that Brent imposed on the employee the condition that she subsequently contract marriage with her then boyfriend for her to be reinstated.

    According to Brent, this was “in consonance with the policy against encouraging illicit or common-law relations that would subvert the sacrament of marriage.”

    The Court did not agree.

    The doctrine of management prerogative gives an employer the right to “regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees.”

    Statutory law is, however, replete with legislation protecting labor and promoting equal opportunity in employment.

    No less than the 1987 Constitution3Article XIII, Section 3 mandates that the “State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.”

    The Labor Code of the Philippines, meanwhile, provides:

    Art. 136. Stipulation against marriage. It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage.

    With particular regard to women, the Magna Carta of Women4Under Section 19 (b) Republic Act No. 9710, Approved on August 14, 2009 which provides: SECTION 19. Equal Rights in All Matters Relating to Marriage and Family Relations. — The State shall take all appropriate measures to eliminate discrimination against women in all matters relating to marriage and family relations and shall ensure: x x x

    (b) the same rights to choose freely a spouse and to enter into marriage only with their free and full consent. The betrothal and the marriage of a child shall have no legal effect; x x x     protects women against discrimination in all matters relating to marriage and family relations, including the right to choose freely a spouse and to enter into marriage only with their free and full consent.

    Weighed against these safeguards, the Court found that Brent’s condition was coercive, oppressive and discriminatory.

    Said the Court:

    There is no rhyme or reason for it. It forces the employee to marry for economic reasons and deprives her of the freedom to choose her status, which is a privilege that inheres in her as an intangible and inalienable right.

    The Court acknowledged that while a marriage or no-marriage qualification may be justified as a “bona fide occupational qualification,” Brent must have proven two factors necessitating its imposition, viz.:

    • that the employment qualification is reasonably related to the essential operation of the job involved; and
    • that there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job.

    The Court, however, found that Brent had not shown the presence of of these factors. Thus, it did not uphold the validity of said condition.

    Further reading:

    • Capin-Cadiz v. Brent Hospital and Colleges, Inc., G.R. No. 187417, February 24, 2016.