Paulino Ungos III

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  • General Return-to-Work Orders

    The employee alleged that sometime in May 2006, he was hired as a security guard by SF Security Services, Inc. He narrated that on December 25, 2013, he was suddenly relieved from his post upon request of SF Security Services, Inc.’s client. The next day, he received an order suspending him for 10 days. After the lapse of his 10-day suspension, or on January 7, 2014, he reported for work. However, SF Security Services, Inc. informed him that he was placed on floating status and he was just advised to wait for a call.

    The employee further narrated that on May 16, 2014, he received a letter from SF Security Services, Inc. directing him to report to its office within 48 hours from receipt thereof. The employee claimed that he went to SF Security Services, Inc. ‘s office on May 19, 2014, but he was not allowed to enter and was made to wait outside the office. Before leaving the premises, he handed a letter to SF Security Services, Inc. to inform his readiness to report for duty on the same day. SF Security Services, Inc. wrote a second letter dated May 28, 2014, allegedly to make it appear that he failed to report to work despite its return to work order. In a letter dated July 11, 2014, the employee inquired the status of his employment. However, SF Security Services, Inc. refused to provide him with work.

    On July 28, 2014, the employee filed a complaint for constructive dismissal against SF Security Services, Inc.

    SF Security Services, Inc. admitted the suspension of the employee for a period of 10 days, starting December 26, 2013. However, it asserted that on May 14, 2014, it sent the employee a letter directing him to report for posting, but the latter did not comply with the directive. On May 28, 2014, SF Security Services, Inc. sent him another letter reiterating the instruction to report for posting. However, it still received no word from the employee. According to SF Security Services, Inc., it was surprised to learn of the employee’s complaint for illegal dismissal.

    Was the employee validly placed on floating status?

    The Supreme Court stated that in security services, the “floating status” or temporary “off-detail” of an employee may take place when there are no available posts to which the employee may be assigned — which may be due to the non-renewal of contracts with existing clients of the agency, or from a client’s request for replacement of guards assigned to it.1Salvaloza v. National Labor Relations Commission, G.R. No. 182086, November 24, 2010, 650 PHIL 543-561. It added that while there is no specific provision in the Labor Code of the Philippines governing the “floating status” or temporary “off-detail” of employees, Article 3012Formerly Article 286. Article 301 reads: ART. 301. When Employment not Deemed Terminated. — The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty. of the said law, by analogy, considers this situation as a form of temporary retrenchment or lay-off.3on ||| Superior Maintenance Services, Inc. v. Bermeo, G.R. No. 203185, December 5, 2018.

    The Court further stated that conformably with the above provision, the placement of an employee on “floating status” must not exceed six months. Otherwise, the employee may be considered constructively dismissed.4Ibon v. Genghis Khan Security Services, G.R. No. 221085, June 19, 2017, 811 PHIL 250-260. Furthermore, the burden of proving that there are no posts available to which the security guard can be assigned rests on the employer.5Nationwide Security and Allied Services, Inc. v. Valderama, G.R. No. 186614, February 23, 2011, 659 PHIL 362-374. However, the mere lapse of six months in “floating status” should not automatically result to constructive dismissal. The peculiar circumstances of the employee’s failure to assume another post must still be inquired upon.6Exocet Security and Allied Services Corp. v. Serrano, G.R. No. 198538, September 29, 2014, 744 PHIL 403-422.

    In the present case, the Supreme Court found that the employee was placed on floating status beginning on the lapse of his 10-day suspension on January 7, 2014 and that he had been on floating status for six months and 21 days from the time he filed the complaint for constructive dismissal on July 28, 2014.

    The Court also found that although SF Security Services, Inc. sent the employee letters dated May 14, 2014 and May 28, 2014, the same were in the nature of general return to work orders. According to the Court, jurisprudence requires not only that the employee be recalled to the agency’s office, but that the employee be deployed to a specific client before the lapse of six months.7Ibon v. Genghis Khan Security Services, G.R. No. 221085, June 19, 2017, 811 PHIL 250-260.

    The Court stated that considering that the employee was placed on floating status for more than six months without being deployed to a specific assignment he was deemed to have been constructively dismissed from employment. The employee was granted the reliefs of separation pay 8considering that he no longer asked to be reinstated and backwages.

    Could the employee be said to have abandoned his employment?

    The Court ruled that with the finding of constructive dismissal it followed that the employee could not have abandoned his employment. The Court stressed that abandonment is incompatible with constructive dismissal.

    The Court reiterated the principle that abandonment, as a just cause for termination, requires “a deliberate and unjustified refusal of an employee to resume his work, coupled with a clear absence of any intention of returning to his or her work.”9Veterans Security Agency Inc. v. Gonzalvo Jr., G.R. No. 159293, December 16, 2005, 514 PHIL 488-505 The following elements must therefore concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts.10Icawat v. National Labor Relations Commission, G.R. No. 133573, June 20, 2000, 389 PHIL 441-447

    In the present case, the Court found no proof that the employee intended to sever his employment. On the contrary, the Court found strong indications of the employee’s desire to resume work. According to the Court, after the employee served his 10-day suspension, he reported for work but was instead told that he was being placed on floating status and instructed to wait for a call. The employee also sent SF Security Services, Inc. a letter dated May 19, 2014 to inform the latter that he was ready to report for duty, and a letter dated July 11, 2014 to inquire on the status of his employment. He also filed the complaint for constructive dismissal shortly after the lapse of his six-month floating status. For the Court, his immediate filing of the complaint sufficiently established his desire to return to work and negated any suggestion of abandonment. In addition, considering that the employee been in the service of SF Security Services, Inc. since 2006, or for eight years already before his dismissal in 2014, the employee could not have had such intention to abandon his work. The Court concluded that the totality of these circumstances negated the existence of a clear intention to sever the employment relation.

    Further reading:

    • Seventh Fleet Security Services, Inc. v. Loque, G.R. No. 230005, January 22, 2020.

  • Payment of Employment Bond

    On 4 April 2011, CP, Inc. hired the employee as its Network Engineer.

    The employment contract stated that the employee shall pay an “employment bond” of Eighty Thousand Pesos (Php80,000.00) if she resigns within twenty-four (24) months from the time of her employment.

    On 5 August 2011, the employee informed CP, Inc. of her intention to resign effective 9 September 2011. However, the employee was found to have committed an infraction and was placed on preventive suspension from 25 August up to 9 September 2011.

    The employee thus filed a complaint for illegal suspension, while CP, Inc. pursued its claim of payment of “employment bond” in the same proceedings.

    Should the claim for payment of “employment bond” be filed before the labor tribunals?

    Yes.

    Article 224 of the Labor Code of the Philippines clothes the labor tribunals with original and exclusive jurisdiction over claims for damages arising from employer-employee relationship, viz.:

    Art. 224. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: x x x

    4 Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;

    Jurisprudence1Bañez v. Valdevilla, G.R. No. 128024, May 9, 2000, 387 PHIL 601-612 also teaches that the jurisdiction of labor tribunals is comprehensive enough to include claims for all forms of damages “arising from the employer-employee relations.” Thus, labor tribunals have jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the Civil Code. Furthermore, while Article 224 of the Labor Code had been invariably applied to claims for damages filed by an employee against the employer, the said provision was also applied with equal force to an employer’s claim for damages against its dismissed employee, provided that the claim had arisen from or was necessarily connected with the fact of termination and entered as a counterclaim in the illegal dismissal case.2Supra Multi-Services, Inc. v. Labitigan, G.R. No. 192297, August 3, 2016, 792 PHIL 336-370. Thus, the “reasonable causal connection with the employer-employee relationship” is a requirement not only in employees’ money claims against the employer but is, likewise, a condition when the claimant is the employer.3Portillo v. Rudolf Lietz, Inc., G.R. No. 196539, October 10, 2012, 697 PHIL 232-250

    In the present case, the Supreme Court found that the controversy was rooted in the employee’s resignation from the company within twenty-four (24) months from the time she got employed, in violation of the “Minimum Employment Length” clause of her employment contract. The Court added that CP, Inc.’s claim for payment was inseparably intertwined with its employment relation with the employee. This was because it was the employee’s act of prematurely severing her employment with the company which gave rise to the latter’s cause of action for payment of “employment bond.” According to the Court, the claim was an offshoot of the employee’s resignation and its complications which eventually led to the filing of the case before the Office of the Labor Arbiter. For the Court, the employer’s claim fell within the original and exclusive jurisdiction of the labor tribunals.

    Should the employee pay the “employment bond”?

    The Court ruled that the employee was liable because of her undertaking in the employment contract and since the employee herself neither disputed said liability nor assailed the existence and validity of such provision in said contract.

    Further reading:

    • Comscentre Phils., Inc. v. Rocio, G.R. No. 222212, January 22, 2020.

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  • Perfection of Appeals and Article 128

    The Supreme Court reiterated the following rule:

    The perfection of an appeal of the Order of the Regional Director involving a monetary award in cases which concern the visitorial and enforcement powers of the Secretary of the Department of Labor and Employment is subject to the requirements prescribed under Article 128, to wit:

    Art. 128. Visitorial and Enforcement Power. — x x x

    An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from.1Emphasis supplied.

    The Court explained that the jurisdiction of the National Labor Relations Commission is separate and distinct from that of the Secretary of Labor and Employment. In the exercise of their respective jurisdictions, each agency is governed by its own rules of procedure. The rules of procedure of the Commission are thus different from (and do not apply in) cases cognizable by the Secretary of the Department of Labor and Employment.

    The Court added that unlike the 2011 NLRC Rules of Procedure, as amended, no provision in the Rules on the Disposition of Labor Standards Cases governs the filing of a motion for the reduction of the amount of the bond. However, on matters that are not covered by the Rules on the Disposition of Labor Standards Cases, the suppletory application of the Rules of Court (and not the 2011 NLRC Rules of Procedure, as amended) is authorized. In this regard, the Department of Labor and Employment has no authority to accept an appeal under a reduced bond.

    Further reading:

    • Blazing Star Security and Investigation Agency, Inc. v. Miraflor, G.R. No. 196022, January 22, 2020.

  • Exemption from Payment of Commissioners’ Fees

    In Land Bank of the Philippines v. Heirs of Sanchez1G.R. No. 214902, January 22, 2020, the Supreme Court ruled that the Land Bank of the Philippines is exempt from paying the costs of the suit under Section 1, Rule 142 of the Rules of Court,2Section 1 of Rule 142 provides: Section 1. Costs ordinarily follow results of suit. — Unless otherwise provided in these rules, costs shall be allowed to the prevailing party as a matter of course but the court shall have power, for special reasons adjudge that either party shall pay the costs of an action, or that the same be divided, as may be equitable. No costs shall be allowed against the Republic of the Philippines unless otherwise provided by law. since it is an instrumentality performing a governmental function in agrarian reform proceedings charged with the disbursement of public funds. Since the Land Bank of the Philippines is performing a governmental function in an agrarian reform proceeding, it is exempt from payment of costs of suit, including commissioners’ fees, as it is considered part of costs of suit.3Land Bank of the Phils. v. Rivera, G.R. No. 182431, November 17, 2010, 649 PHIL 575-589; Land Bank of the Phils. v. Gonzalez, G.R. No. 185821, June 13, 2013, 711 PHIL 98-121; Land Bank of the Phils. v. Ibarra, G.R. No. 182472, November 24, 2014, 747 PHIL 691-702; and Land Bank of the Philippines v. Baldoza, G.R. No. 221571, July 29, 2019.

    The Court also applied Section 12, Rule 67 of the Rules of Court, which states:

    Sec. 12. Costs, by whom paid. — The fees of the commissioners shall be taxed as a part of the costs of the proceedings. All costs, except those of rival claimants litigating their claims, shall be paid by the plaintiff, unless an appeal is taken by the owner of the property and the judgment is affirmed, in which event the costs of the appeal shall be paid by the owner.

    Based on the said provision, the Court added that the Land Bank of the Philippines is not liable to pay for commissioners’ fees considering that the Heirs of Sanchez were the plaintiffs or the ones who initiated the complaint for determination of just compensation before the Special Agrarian Court.

    Further reading:

    • Land Bank of the Philippines v. Heirs of Sanchez, G.R. No. 214902, January 22, 2020.

  • But She Went Home for Personal Reasons

    On 7 November 2010, Hazel entered into a 2-year employment contract with Kuwait by Al-Masiya, through its agent, Saad Mutlaq Al Asmi Domestic Staff Recruitment Office (Saad Mutlaq)/Al Dakhan Manpower where she to work as a domestic helper with a monthly salary of US$400.00.

    Hazel arrived in Kuwait on 8 November 2010. Due to disagreement in the working conditions, Hazel’s employment with her first and second employers did not succeed. Her employment with her third employer also did not succeed as the latter could not obtain a working visa for her.

    On 16 December 2010, Hazel went to the Philippine Embassy where she related her employment problems to a Labor Attaché in Kuwait who offered to help them.

    On 5 January 2011, Hazel left the Philippine Embassy after a certain Mr. Mutlaq offered to give her a job at a chocolate factory. However, this chocolate factory turned out to be inexistent.

    Then, the employees of Al Rekabi, an employment agency, told her that they would be bringing her to Hawally at night. She refused to take the trip as it was cold and drizzling. She then attempted to report the matter to the Labor Attaché using her cellular phone, but the employees of Al Rekabi confiscated it. Mr. Hassan, the Manager of Al Rekabi, did not accede to her request to postpone the trip to the following day. It came to a point where Mr. Hassan scolded Hazel and forced her to make a written admission that her employers treated her well.

    Sometime after 6 January 2011, Hazel was brought to the office of Al Rekabi at Salmiya. On an unspecified date thereafter, at around 7:00 p.m., two men offered her a job at a restaurant in front of the main office of the agency. She accepted the offer. However, instead of being brought to a restaurant in Hawally, where she was supposed to work, Hazel was taken to a flat where she was told to apply makeup and wear attractive and sexy clothes. Another man joined them. Hazel was then told that she would be brought to her place of work. However, she was instead taken to an unlighted area which had buildings but no restaurant or coffee shop signboards. At the area, she saw another man walking. After recognizing that the man was an employee of Al Rekabi, she asked him to bring her to the main office of the agency. She was able to leave at around 11:00 p.m. when the three other men agreed to release her.

    On 7 February 2011, Hazel was asked to affix her signature on a letter that she copied purportedly showing that she admitted having preterminated her contract of employment and that she no longer had any demandable claim as she was treated well. Hazel’s execution of this letter of resignation was made as a precondition to the release of her passport and plane ticket which were in the possession of petitioners.

    Hazel arrived in the Philippines on 12 February 2011 and thereafter filed a complaint for constructive dismissal against her employer.

    In response to Hazel’s complaint, the employers filed a motion to dismiss on 11 May 2011, alleging that on 7 February 2011, Hazel executed an Affidavit of Quitclaim and Desistance, Sworn Statement, and Receipt and Quitclaim before the Assistant Labor Attaché in Kuwait, where she allegedly stated that she voluntarily agreed to release her employers from all her claims arising from her employment abroad. They also presented her handwritten statement where she expressed that her cause for terminating her employment was her own personal reasons.

    Was Hazel constructively dismissed from employment?

    The Supreme Court stated that in cases of constructive dismissal, the impossibility, unreasonableness, or unlikelihood of continued employment leaves an employee with no other viable recourse but to terminate his or her employment. “An employee is considered to be constructively dismissed from service if an act of clear discrimination, insensibility or disdain by an employer has become so unbea[r]able to the employee as to leave him or her with no option but to forego his or her continued employment.” From this definition, it can be inferred that various situations, whereby the employer intentionally places the employee in a situation which will result in the latter’s being coerced into severing his ties with the former, can result in constructive dismissal.1Torreda v. Investment and Capital Corporation of the Philippines, G.R. No. 229881, September 5, 2018 and Agcolicol, Jr. v. Casiño, G.R. No. 217732, June 15, 2016.

    The Court found that the circumstances of the present case strongly indicated that Hazel was constructively dismissed.

    First, Hazel’s foreign employer never secured a working visa for her, in violation of the categorical requirement for an employer’s accreditation with the Philippine Overseas Employment Agency.

    Second, Hazel was not properly paid in accordance with the terms of her employment contract. During her 3-month stay, she was only paid US$227.75 instead of the stipulated pay of US$400 per month.

    Third, Hazel was not assigned to a permanent employer abroad for the entire contractual period of 2 years. Upon her arrival in Kuwait, she was consistently promised job placements which were found to be inexistent. The Court found it clear that the foreign employer intended to use Hazel as an entertainer of some sort in places of ill repute; and she would have fallen victim to human trafficking “[w]ere it not for some favorable providence.”

    Finally, Hazel was made to copy and sign a prepared resignation letter and this was made as a condition for the release of her passport and plane ticket.

    For the Court, it was logical for Hazel to consider herself constructively dismissed. since the impossibility, unreasonableness, or unlikelihood of continued employment has left her with no other viable recourse but to terminate her employment. The Court further stated:

    Our overseas workers belong to a disadvantaged class. Most of them come from the poorest sector of our society. Their profile shows they live in suffocating slums, trapped in an environment of crimes. Hardly literate and in ill health, their only hope lies in jobs they find with difficulty in our country. Their unfortunate circumstance makes them easy prey to avaricious employers. They will climb mountains, cross the seas, endure slave treatment in foreign lands just to survive. Out of despondence, they will work under sub-human conditions and accept salaries below the minimum. The least we can do is to protect them with our laws.

    On that note, the Court reminds petitioners to observe common decency and good faith in their dealings with their unsuspecting employees, particularly in undertakings that ultimately lead to waiver of workers’ rights. The Court will not renege on its duty to protect the weak against the strong, and the gullible against the wicked, be it for labor or for capital. The Court scorns petitioners’ reprehensible conduct. As employers, petitioners are bound to observe candor and fairness in their relations with their hapless employees.

    Further reading:

    • Al-Masiya Overseas Placement Agency, Inc. v. Viernes, G.R. No. 216132, January 22, 2020.

  • Invalid Addendum

    Norly M. Baybayan (Baybayan) was hired by Wacoal through its agent, petitioner Prime Stars, for a contract period of 24 months or two years, with a monthly salary of NT$15,840.00. However, he soon discovered that he was only paid NT$9,000.00 a month. Upon inquiry, he was informed that an amount of NT$4,000.00 was being deducted from his salary for expenses for his board and lodging. Since he still had debts to pay back home, he finished the contract and returned to the Philippines on 19 May 2009. He then instituted a complaint for underpayment of salaries and the reimbursement of his transportation expenses against petitioners Prime Star and Peralta.

    Michelle V. Beltran (Beltran) was hired by Avermedia, through its agent, petitioner Prime Stars, as an “operator” who assembles TV boxes and USBs. Her contract duration was for two years with a monthly salary of NT$17,280.00. She was deployed on 22 June 2008. After a year, she was abruptly and unceremoniously dismissed by her supervisor and was immediately repatriated to the Philippines on 3 July 2009. Beltran then instituted a complaint for illegal dismissal and sought for the payment of salaries for the unexpired portion of her contract, the refund of her repatriation expenses, plus damages and attorney’s fees against the petitioners.

    Petitioners denied that Baybayan was underpaid as his payslips for the months of March and April 2009 indicated that he received a monthly salary of NT$17,280.00 during his employment with Wacoal. Petitioners explained that Baybayan signed an Addendum to the Employment Contract (Addendum), which authorized the deduction of the amount of NT$4,000.00 as payment for his monthly food and accommodation. In the same Addendum, Baybayan was apprised that the transportation expenses for his round trip tickets from the Philippines to Taiwan shall be at his own expense. Petitioners further explained that these were supported by Baybayan’s sworn statement, Written Acknowledgment, Foreign Worker’s Affidavit Regarding Expenses Incurred for Entry into the Republic of China to Work and the Wage and Salary and Overseas Contract Worker’s Questionnaire.

    With respect to Beltran, petitioners contended that it was Beltran who voluntarily preterminated her contract for personal reasons. According to petitioners, Beltran approached them and expressed her intent to return to the Philippines, as evidenced by her handwritten statement which she duly signed on 4 July 2009. Petitioners add that the handwritten statement was supported by her sworn statement, written acknowledgment, Foreign Worker’s Affidavit, and Overseas Contract Worker’s Questionnaire.

    The issues of illegal dismissal, salary differentials, transportation expenses, damages, attorney’s fees and liability of petitioner Peralta were elevated to the Supreme Court.

    RULING:

    Beltran did not voluntarily preterminate her employment contract. She was illegally dismissed.

    The Supreme Court found that petitioners’ complete reliance on Beltran’s alleged voluntary execution of the Mutual Contract Annulment Agreement and the Worker Discontinue Employment Affidavit to support the claim that Beltran voluntarily preterminated her contract was unavailing. This was because her supposed resignation was inconsistent with her filing of the complaint for illegal dismissal.

    Furthermore, the Court found the wordings of Beltran’s relinquishment of her contract of employment ambiguous and doubtful. The burden of proving that Beltran voluntary preterminated her contract fell upon petitioners as the employer. Petitioners failed to discharge such burden despite their claim that the latter resigned.

    Specifically, the Court found it highly unlikely that Beltran would just quit even before the end of her contract after all the expenses she incurred and still needed to settle and the sacrifices she went through in seeking financial upliftment. According to the Court, it was incongruous for Beltran to simply give up her work, return home, and be unemployed once again given that so much time, effort, and money have already been invested to securing her employment abroad and enduring the tribulations of being in a foreign country, away from her family.

    Beltran was accordingly awarded her salaries for the unexpired portion of her employment contract.

    Baybayan and Beltran should be granted salary differentials and refund of transportation expenses.

    Paragraph (i) of Article 34 of the Labor Code of the Philippines prohibits the substitution or alteration of employment contracts approved and verified by the Department of Labor and Employment from the time of the actual signing thereof by the parties up to and including the period of expiration of the same without the approval of the said Department.

    Furthermore, Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, explicitly prohibits the substitution or alteration to the prejudice of the worker of employment contracts already approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the said Department.

    In the present case, petitioners admitted that the employment contracts of Baybayan and Beltran were indeed amended, but posited that the Addendum, while apparently did not appear to contain any indication of Philippine Overseas Employment Administration approval, actually contained provisions which have been approved by the Philippine Overseas Employment Administration through Baybayan and Beltran’s Foreign Worker’s Affidavits.

    The Supreme Court did not agree.

    According to the Court, the clear and categorical language of the law imposes upon foreign principals minimum terms and conditions of employment for land-based overseas Filipino workers, which include basic provisions for food, accommodation and transportation. The licensed recruitment agency shall also, prior to the signing of the employment contract, inform the overseas Filipino workers of their rights and obligations, and disclose the full terms and conditions of employment, and provide them with a copy of the Philippine Overseas Employment Administration-approved contract, to give them ample opportunity to examine the same.

    Article IV of Baybayan and Beltran’s Employment Contract, in relation to Section 2, Rule 1, Part V of the Philippine Overseas Employment Administration Rules and Regulations Governing the Recruitment and Employment of Land-based Overseas Workers,1“Section 2. Minimum Provisions of Employment Contract. — Consistent with its welfare and employment facilitation objectives, the following shall be considered minimum requirements for contracts of employment of land-based workers:

    x x x

    b. Free transportation to and from the worksite, or offsetting benefit;

    c. Free food and accommodation, or offsetting benefit;”     provided Baybayan and Beltran with:

    • free food and accommodation for the duration of the contract
    • an economy class air ticket from the country of origin to Taiwan
    • a ticket back to the country of origin upon completion of the contract.

    Furthermore, it was stated therein that an employment contract cannot be altered or modified without the prior approval of the Philippine Overseas Employment Administration.

    In the present case, the Addendum required Baybayan and Beltran shoulder their food and accommodation and transportation fare.

    Although the Court recognized the fact that the parties may stipulate on other terms and conditions of employment as well as other benefits, such stipulations should not violate the minimum requirements required by law as these would be disadvantageous to the employee. Section 3, Rule 1, Part V of the Philippine Overseas Employment Administration Rules and Regulations Governing the Recruitment and Employment of Land-based Overseas Workers states:

    “Section 3. Freedom to Stipulate. — Parties to overseas employment contracts are allowed to stipulate other terms and conditions and other benefits not provided under these minimum requirements; provided the whole employment package should be more beneficial to the worker than the minimum; provided that the same shall not be contrary to law, public policy and morals, and provided further, that Philippine agencies shall make foreign employers aware of the standards of employment adopted by the Administration.”

    The Court found that the minimum provisions for employment of Baybayan and Beltran were not met, and that there was diminution of their benefits which were already guaranteed by law and granted in their favor under their Philippine Overseas Employment Administration-approved contracts of employment.

    Accordingly, the Court ruled that the Addendum, absent the approval of the Philippine Overseas Employment Administration, was declared invalid for being contrary to law and public policy.

    Baybayan and Beltran should be awarded moral and exemplary damages and attorney’s fees.

    This was because the acts of the petitioners were evidently tainted with bad faith. Petitioners’ failure to comply with the stipulations on the Philippine Overseas Employment Administration-approved employment contracts constituted an act oppressive to labor and more importantly, contrary to law and public policy. Petitioners even tried to justify the execution and validity of the Addendum and cloak the latter as legal and binding through Baybayan and Beltran’s execution of Foreign Worker’s affidavits. According to the Court, petitioners’ circumvention of labor laws and the intentional diminution of employee’s benefits to land-based overseas workers were indicative of petitioners’ exercise of bad faith and fraud in their dealings with Filipino workers.

    With regard to Beltran’s dismissal from employment, the Court found nothing “voluntary” in putting words into Beltran’s own mouth in the guise of her handwritten statement of resignation. Petitioners’ attempt to demonstrate voluntariness should fail since “cooperate” was more of an imposition coming from the employer rather than from a disadvantaged overseas employee. The Court considered the execution of the documents plainly oppressive and violative of Beltran’s security of tenure.

    The Court accordingly awarded Baybayan and Beltran moral and exemplary damages to allay the sufferings they experienced and by way of example or correction for public good, respectively.

    Peralta should be solidarily liable with Prime Stars.

    Section 10 of Republic Act No. 8042 mandates solidary liability among the corporate officers, directors, partners and the corporation or partnership for any claims and damages that may be due to the overseas workers, viz.:

    “Section 10. Monetary Claims. — x x x The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to be filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages.”

    Further Reading:

    • Prime Stars International Promotion Corp. v. Baybayan, G.R. No. 213961, January 22, 2020.

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  • Your Employment Shall Start When You Are Issued a Boarding Confirmation

    Sometime in December 2012, a seafarer applied with Naess Shipping for possible employment as seaman upon learning of a job opening in its domestic vessel operations. He had completed the training on International Safety Management Code and had undergone the mandatory pre-employment medical examination where he was declared fit for sea service.

    On 15 February 2013, the seafarer signed an Embarkation Order stipulating the terms and conditions of his employment. On 18 February 2013, the seafarer executed a 6-month “Contract of Employment for Marine Crew on Board Domestic Vessels” with Royal Dragon, through its agent Naess Shipping, where he was to work as Second Officer with a gross monthly salary of Php30,000.00 aboard the vessel “M/V Melling 11,” an inter-island bulk and cargo carrier. It was stipulated that the contract shall take effect on 12 March 2013.

    Subsequently, the seafarer and Royal Dragon executed an “Addendum to Contract of Employment for Marine Crew Onboard Domestic Vessels” stating that the employment relationship between them shall commence once the Master of the Vessel issues a boarding confirmation to the seafarer.

    On 8 March 2013, Naess Shipping informed the seafarer that Royal Dragon cancelled his embarkation.

    As the seafarer was unable to leave, he filed a complaint for breach of contract against Royal Dragon and Naess Shipping before the Arbitration Branch of the National Labor Relations Commission.

    Royal Dragon and Naess Shipping, however, countered that the labor arbiter had no jurisdiction over the complaint. According to them, no employer-employee relationship had existed because the Master of the Vessel had not issued a boarding confirmation to the seafarer.

    The labor tribunals ruled in favor of the seafarer. However, the Court of Appeals reversed the said ruling. According to the Court of Appeals, the Office of the Labor Arbiter did not acquire jurisdiction over the seafarer’s complaint because no employer-employee relationship existed between him and Royal Dragon. It emphasized that the supposed contract of employment did not commence since the seafarer’s deployment to his vessel of assignment did not materialize.

    Did an employer-employee relationship exist between the seafarer and Royal Dragon?

    The Supreme Court ruled in the affirmative.

    The Court found that a contract of employment had already been perfected between the seafarer and Royal Dragon. Such contract had passed the negotiation stage or the time the prospective contracting parties had manifested their interest in the contract. It had reached the perfection stage or the so-called “birth of the contract” as it was clearly shown that the essential elements of a contract, i.e., consent, object, and cause, were all present at the time of its constitution. The seafarer and Royal Dragon, freely entered into the contract of employment, affixed their signatures thereto and assented to the terms and conditions of the contract (consent), under which the seafarer bound himself to render service (object) to Royal Dragon on board the domestic vessel “M/V Meiling 11” for the gross monthly salary of P30,000.00 (cause). According to the Court, the seafarer and Royal Dragon assumed obligations which pertain to those of an employer and an employee by virtue of said contract.

    Although the Court acknowledged that parties to a contract are free to adopt such stipulations, clauses, terms and conditions as they may deem convenient, such is qualified by the requirement that contractual stipulations therein should not be contrary to law, morals, good customs, public order or public policy.

    The Court found that the stipulation contained in Section D of the Addendum was a condition which held in suspense the performance of the respective obligations of the seafarer and Royal Dragon under the contract of employment, or the onset of their employment relations. The Court stated that such condition was solely dependent on the will or whim of Royal Dragon since the commencement of the employment relations was at the discretion or prerogative of the latter’s master of the ship through the issuance of a boarding confirmation to the seafarer. Applying the law1Article 1182 of the Civil Code of the Philippines, which reads: Art. 1182. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take effect in conformity with the provisions of this Code. and jurisprudence,2Naga Telephone Co., Inc. v. Court of Appeals, G.R. No. 107112, February 24, 1994, 300 PHIL 367-389. the Court viewed this kind of condition as a “potestative condition,” the fulfillment of which depends exclusively upon the will of the debtor, in which case, the conditional obligation is void.

    The Court clarified that where the so-called “potestative condition” is imposed not on the birth of the obligation but on its fulfillment, only the condition is avoided, leaving unaffected the obligation itself.3Romero v. Court of Appeals, G.R. No. 107207, November 23, 1995, 320 PHIL 269-284 In this regard, the condition set forth in the Addendum was one imposed not on the birth of the contract of employment since the contract has already been perfected, but only on the fulfillment or performance of their respective obligations, i.e., for the seafarer to render services on board the ship and for Royal Dragon to pay him the agreed compensation for such services. The Court accordingly ruled that a purely potestative imposition, such as the one in the Addendum, must be obliterated from the face of the contract without affecting the rest of the stipulations considering that the condition related to the fulfillment of an already existing obligation and not to its inception. The Court added that the condition imposed for the commencement of the employment relations offends the principle of mutuality of contracts ordained in Article 1308 of the Civil Code of the Philippines which states that contracts must bind both contracting parties, and its validity or compliance cannot be left to the will of one of them. The Court was accordingly constrained to treat the condition as void and of no effect, and declare the respective obligations of the parties as unconditional. Consequently, the Court declared that the employer-employee relationship between the seafarer and Royal Dragon should be deemed to have arisen as of the agreed effectivity date of the contract of employment, or on 12 March 2013.

    Further reading:

    • Gemudiano, Jr. v. Naess Shipping Philippines, Inc., G.R. No. 223825, January 20, 2020.

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  • Food Provisions on a Ship

    The seafarer entered into a 6-month employment contract with CTI, through UPLI, to work as a stateroom steward aboard the vessel Carnival Glory. After passing the pre-employment medical examination, he joined the vessel on 26 February 2014.

    Sometime in March 2014, the seafarer reported passing out fresh blood during bowel movement but with no fever, abdominal pain or vomiting. He was treated at the vessel infirmary. Thereafter, he was brought to the Charleston Endoscopy Center in South Carolina, USA for colonoscopy. His biopsy, however, indicated “Segments of Invasive Moderately Differentiated Adenocarcinoma.”

    On 12 June 2014, the seafarer was medically repatriated. Upon his arrival in Manila, UPLI immediately referred him to the Marine Medical Services for further evaluation and management. Thereafter, the company-designated doctor confirmed that respondent was suffering from “Moderately Differentiated Adenocarcinoma Rectum.” The seafarer underwent a surgical operation (Abdominal Resection) and was subsequently subjected to concurrent chemotherapy and radiation therapy.

    On 18 January 2016, respondent filed a complaint for permanent total disability benefits against UPLI and CTI.

    ULPI and CTI countered that the seafarer’s illness was not compensable because it was not work-related or listed among the occupational diseases under the Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships (POEA-SEC). It added that respondent likewise did not prove the causal relation between his illness and his work as stateroom steward.

    Should the seafarer be granted his claim for permanent total disability benefits?

    The Supreme Court granted the seafarer’s claim for permanent total disability benefits.

    The Court cited Section 20 (A) of the POEA-SEC, and ruled that in order for a disability to be compensable, (i) the injury or illness must be work-related; and, (ii) the work-related injury or illness must have existed during the term of the contract of the seafarer. In turn, “work-related illness” pertains to such sickness listed as occupational disease under Section 32-A of the POEA-SEC with the set conditions therein satisfied. An illness not listed as occupational disease is, nonetheless, disputably presumed work-related provided that the seafarer proves, by substantial evidence, that his or her work conditions caused or, at the least, increased his or her having contracted the same.1Ilustricimo v. NYK-Fil Ship Management, Inc., G.R. No. 237487, June 27, 2018.

    The Court also emphasized that for a disease to be compensable, the nature of work need not be the only reason for the seafarer to suffer his or her illness. What is crucial is the reasonable connection between the seafarer’s disease and one’s work leading a rational mind to conclude that such work contributed to or aggravated the development of the illness.2Ilustricimo v. NYK-Fil Ship Management, Inc., G.R. No. 237487, June 27, 2018.

    On the one hand, the Court found that the seafarer was able to establish a reasonable link between his having suffered rectal cancer and his work. Similarly, he was able to establish that his work conditions increased his having contracted his illness considering that the dietary provision on the vessel (food high in cholesterol and fat and low in fiber) was a known cause of rectal cancer.

    The Court mentioned that it has already taken judicial notice of the food provisions on a ship which are produced at one time for long journeys across the oceans and seas. In Skippers United Pacific, Inc. v. Lagne,3G.R. No. 217036, August 20, 2018, the Court recognized that the food provided to seafarers are mostly frozen meat, canned goods and seldom are there vegetables which easily rot and wilt and, therefore, impracticable for long trips. Also, in the case of Jebsens Maritime, Inc. v. Alcibar,4G.R. No. 221117, February 20, 2019. the Court similarly ruled that rectal cancer of therein respondent was work-related as the latter proved that the cause thereof was the poor provisions — high in fat and cholesterol and low in fiber — given to him while at sea. Such poor provisions were on the same level with those given to herein respondent while he was still aboard the vessel. Furthermore, the Court had already pronounced the compensability of colorectal cancer in Leonis Navigation Co., Inc. v. Villamater.5G.R. No. 179169, March 3, 2010, 628 PHIL 81-100. According to the Court, it cannot be gainsaid that the poor diet of the herein seafarer while at sea contributed to his having developed rectal cancer during the term of his employment contract.

    On the other hand, the Court also found that although UPLI and CTI argued that the company-designated doctor declared the seafarer’s illness as not work-related, the pronouncement of the company-designated physician had actually bolstered the contention that the seafarer’s diet on the vessel contributed to him having suffered from rectal cancer. The Court highlighted the company-designated physician’s medical report of 14 June 2014 which read:

    Adenocarcinoma’s risk factors include age, diet rich in saturated fat; fatty acid and linoleic acid and genetic predisposition and is likely not work-related.6Emphasis supplied.

    For the Court such report cited that one of the risk factors of rectal cancer was poor diet. Also, such report did not categorically state that respondent’s illness was not work-related but that it was just likely not work-related without any explanation for saying so.

    Further reading:

    • United Philippine Lines, Inc. v. Romasanta, Jr., G.R. No. 239256, January 15, 2020.

  • History of Agricultural Tenancy Laws in the Philippines

    In Spouses Franco v. Spouses Galera, Jr.,1G.R. No. 205266, January 15, 2020., the Supreme Court expounded on the development of agricultural tenancy laws in the Philippines, as follows:

    “Agricultural tenancy laws in the Philippines have evolved throughout centuries and are tied with the country’s history. Prior to the Spanish colonization, lands were held in common by inhabitants of barangays. Access to land and the fruits it produced were equally shared by members of the community.

    “This system of communal ownership, however, was replaced by the regime of private ownership of property.2Dissenting Opinion of J. Leonen, J.V. Lagon Realty Corporation v. Heirs of vda. de Terre, G.R. No. 219670, June 27, 2018, http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/64252 [J. Martires, Third Division] citing R.P. BARTE, LAW ON AGRARIAN REFORM 6-7 (2003). When the Spaniards arrived, they purchased communal lands from heads of the different barangays and registered the lands in their names. With the regalian doctrine imposed, uninhibited lands were decreed to be owned by the Spanish crown. Consequently, the encomienda system was introduced, in which the Spanish crown awarded tracts of land to encomenderos, who acted as caretakers of the encomienda.3Id. Under this system, natives could not own either the land they worked on or their harvest. To till the land, they had to pay tribute to their encomenderos.4Id. citing R.P. Barte, Law on Agrarian Reform 7 (2003).

    “Encomiendas mostly focused on small-scale food production, until the hacienda system was developed to cater to the international export market. Still, natives were not allowed to own land, and the larger demand by the wider market required them to live away from their homes. Families of natives who worked on farms were reduced to being slaves pushed into forced labor either as aliping namamahay or aliping sagigilid.5Id.

    “The encomienda and hacienda systems were analogous to share tenancy arrangements, which persisted in our agricultural tenancy laws.

    “Enacted in 1933, Act No. 4054, or the Philippine Rice Share Tenancy Act, contained the earliest iteration of share tenancy in the country. To promote the well-being of tenants in agricultural lands devoted to rice production, the law regulated relations between landlords and tenant-farmers. Under this law, share tenancy was the prevailing arrangement.6Act No. 4054 (1933), sec. 2. Share tenancy contracts must be expressed in writing and registered with the proper office to be valid.7

    Act No. 4054 (1933), secs. 4-5 provide:

    SECTION 4. Form of Contract. — The contract on share tenancy, in order to be valid and binding, shall be drawn in triplicate in the language or dialect known to known to all the parties thereto, to be signed or thumb-marked both by the landlord or his authorized representative and by the tenant, before two witnesses, one to be chosen by each party. The party who does not know how to read and write may request one of the witnesses to read the contents of the document. Each of the contracting parties shall retain a copy of the contract and the third copy shall be filed with, and registered in the office of the municipal treasurer of the municipality, where the land, which is the subject-matter of the contract, is located: Provided, however, That in order that a contract may be considered registered, both the copy of the landlord and that of the tenant shall contain an annotation made by the municipal treasurer to the effect that same is registered in his office.

    SECTION 5. Registry of Tenancy Contract. — For the purposes of this Act, the municipal treasurer of the municipality wherein the land, which is the subject-matter of a contract, is situated, shall keep a record of all contracts made within his jurisdiction, to be known as Registry of Tenancy Contracts. He shall keep this registry together with a copy of each contract entered therein, and make annotations on said registry in connection with the outcome of a particular contract, such as the way same is extinguished: Provided, however, That the municipal treasurer shall not charge fees for the registration of said contract which shall be exempt from the documentary stamp tax.

    “In 1954, Republic Act No. 1199, or the Agricultural Tenancy Act of the Philippines, repealed Act No. 4054.8Republic Act No. 1199 (1954), sec. 59. In line with its objective of pursuing social justice, this subsequent law redefined agricultural tenancy arrangements and recognized more tenant-farmers’ rights.9Republic Act No. 1199 (1954), sec. 22. The law also expanded the coverage beyond lands devoted to rice production and included share arrangement provisions for crops other than rice.10Republic Act No. 1199 (1954), sec. 41.

    “More important, Republic Act No. 1199 categorized agricultural tenancy into either share tenancy or a new system called leasehold tenancy. Whereas under share tenancy, the landlord and tenant contribute land and labor and later divide the resulting produce in proportion to their contribution,11Republic Act No. 1199 (1954), sec. 4. under leasehold tenancy, the lessee cultivates the landlord’s piece of land for a fixed amount of money or in produce, or both.12Republic Act No. 1199 (1954), sec. 4, as amended by Republic Act No. 2263 (1959), sec. 1.

    “Over time, share tenancy proved to be an abusive arrangement that heavily disadvantaged tenant-farmers. Thus, for being contrary to public policy, it was abolished with the passage of Republic Act No. 3844, or the Agricultural Land Reform Code.13Republic Act No. 3844 (1963), sec. 4. President Diosdado Macapagal, in his address during the signing of the law, recognized the need to end the oppressive system of share tenancy:

    “‘This document before us, a bill which in a few minutes will become a statute to be known as the Agricultural Land Reform Code, will provide us with the legal powers to remove once and for all the system of share-tenancy that has plagued our agricultural countryside. In one statement it declares share tenancy as violative of the law of the land, a system which will be abolished and will no longer be tolerated by law. But the Code does not only provide us with powers to remove an organic disease from our agricultural society; it also provides the means of injecting new health, new vigor, new muscles, and new strength into the new social order that will arise. Its first and immediate step is to destroy an oppressive and intolerable system; its ensuing objectives — which will constitute the sinews of land reform — is to nurse our agricultural economy into a state of healthy productivity. It not only aims to turn the Filipino tenant into a free man; it aims, most of all, to turn him into a more productive farmer.’14Address of President Macapagal at the Signing of the Agricultural Land Reform Code, August 8, 1963, https://www.officialgazette.gov.ph/1963/08/08/address-of-president-macapagal-at-the-signing-of-the-agricultural-land-reform-code/ (last accessed on January 14, 2020).

    “Still in line with the government’s policy of eliminating existing share tenancy arrangements, the law was amended such that all existing share tenancy relations are automatically converted to agricultural leasehold relations.15Republic Act No. 3844 (1963), sec. 4, as amended by Republic Act No. 6389 (1971), sec. 1. Today, agricultural leasehold relations remain to be the only form of agricultural tenancy arrangement under the law.”

    Further reading:

    • Spouses Franco v. Spouses Galera, Jr., G.R. No. 205266, January 15, 2020.

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  • Leniency and Substantial Justice

    In labor cases, rules of procedure should not be applied in a very rigid and technical sense. They are merely tools designed to facilitate the attainment of justice, and where their strict application would result in the frustration rather than promotion of substantial justice, technicalities must be avoided. Technicalities should not be permitted to stand in the way of equitably and completely resolving the rights and obligations of the parties. Where the ends of substantial justice shall be better served, the application of technical rules of procedure may be relaxed. In certain cases, leniency was granted in the observance of rules of procedure to advance substantial justice. After all, cases should be determined on the merits, after the parties have been given full opportunity to ventilate their causes and defenses, rather than on technicality or procedural imperfection.1Tres Reyes v. Maxim’s Tea House, G.R. No. 140853, February 27, 2003; Malixi v. Baltazar, G.R. No. 208224, November 22, 2017; Jaro v. Court of Appeals, G.R. No. 127536, February 19, 2002, 427 PHIL 532-549

    The Supreme Court remanded a certain case to the Court of Appeals, and directed it to reinstate and take action on the Petition for Certiorari filed by the employees. Record revealed that the Court of Appeals had previously dismissed the said petition for having been filed beyond 60 days from notice, based on the employees’ own allegations therein.

    Leniency was afforded the employees since they were able to prove that their Petition for Certiorari was actually filed within the reglementary period and the error was merely in the statement of material dates in the said petition. Specifically, the employees were able, albeit belatedly, to append to their Petition for Review on Certiorari a copy of the Bailiff’s Return dated 4 October 2018, which indicated that the Resolution of the National Labor Relations Commission was received by the employees’ counsel on 3 October 2018 (and not 25 September 2018, as erroneously stated by the employees in their Petition for Certiorari). Thus, the Supreme Court found that the Petition for Certiorari filed before the Court of Appeals on 3 December 2018 was filed on time. However, the Court reminded the employees and their counsel to be more circumspect in the indication of material dates and other factual matters in their pleadings to avoid any confusion and to prevent delay. The Court further warned them that other procedural missteps will not be granted the same leniency.

    Further reading:

    • San Felipe v. Armscor Global Defense, Inc., G.R. No. 247639, January 15, 2020.