Paulino Ungos III

Lawyer | Law Professor | Author

Tag: 2020-01

  • Recurrence of Lumbar Problem from a Previous Employment

    On 22 August 2012, the seafarer entered into a 7-month employment contract with WSM Ltd., through its agent, WSBM, Inc., to work as a third engineer on board the vessel M/V NOCC Puebla. On 5 September 2012, the seafarer boarded the said vessel.

    The seafarer alleged that sometime in March 2013, he felt pain on his back while conducting maintenance works. He said that the pain was so severe that he fell on his knees. He added that although he was given pain relievers, he was advised to be medically repatriated for further examination.

    The seafarer was repatriated on 28 March 2013 and was seen by the company-designated physician. He was diagnosed to have S/P Laminotomy, L4 Bilateral Interspinous Process Decompression Coflex. He was advised to regularly consult with the specialists for the monitoring of his condition. He also underwent out-patient rehabilitation sessions at the Metropolitan Medical Center.

    On 9 July 2013, the company-designated physician issued a letter addressed to a co-specialist, stating that the seafarer’s prognosis was guarded and that the latter had already reached his maximum medical improvement. Consequently, the company-designated physician gave the seafarer a disability grading of 8 or 2/3 loss of lifting power of the trunk. Despite this, the company-designated physician still advised the seafarer to continue with his medications and rehabilitation. The seafarer was also directed to see the co-specialist sometime in May 2014.

    On 5 June 2014, the seafarer independently consulted his personal doctor. On 21 July 2014, said personal doctor issued a Medical Certificate, stating that the seafarer’s disability was total and the cause of injury was work-related/work-aggravated, thus, declaring the seafarer unfit to go back to work as a seafarer. This prompted the seafarer to file a complaint for total and permanent disability benefits against his employer.

    In denying liability for total and permanent disability benefits, the employer countered that the seafarer’s condition was merely brought about by the recurrence of his lumbar problem from his previous employment, for which he had already claimed total and permanent disability benefits from his previous employer.

    Can the seafarer be granted his claim of total and permanent disability benefits?

    Yes.

    The Court emphasized the requirement of a final and definite disability assessment within the 120-day or 240-day period.1

    As to the extent of compensability, the entitlement of an overseas seafarer to disability benefits is governed by the law, the employment contract, and the medical findings in accordance with the rules.

    By law, the seafarer’s disability benefits claim is governed by Articles 191 to 193, Chapter VI of the Labor Code, in relation to Rule X, Section 2 of the Implementing Rules and Regulations (IRR) of the Labor Code. Article 192 (c) (1) of the Labor Code provides:

    Art. 192. Permanent total disability. x x x

    C. The following disabilities shall be deemed total and permanent:

    (1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided in the Rules;

    xxx xxx xxx

    Rule VII, Section 2 (b) of the Amended Rules on Employees’ Compensation also provides:

    (b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided for in Rule X of these Rules.

    The exception to the 120-day rule repeatedly cited above is Rule X of the Implementing Rules and Regulations (IRR) of Book IV of the Labor Code, specifically Section 2 thereof which states:

    Section 2. Period of entitlement. — (a) The income benefit shall be paid beginning on the first day of such disability. If caused by an injury or sickness it shall not be paid longer than 120 consecutive days except where such injury or sickness still requires medical attendance beyond 120 days but not to exceed 240 days from onset of disability in which case benefit for temporary total disability shall be paid. However, the System may declare the total and permanent status at any time after 120 days of continuous temporary total disability as may be warranted by the degree of actual loss or impairment of physical or mental functions as determined by the System.

    By contract, it is governed by the employment contract which the seafarer and his employer/local manning agency executes prior to employment, and the applicable POEA-SEC that is deemed incorporated in the employment contract. In this case, the parties executed the contract of employment on August 22, 2012, thus, the 2010 POEA-SEC is applicable. Relevant provision of Section 20 (A) thereof provides:

    SECTION 20. COMPENSATION AND BENEFITS —

    A COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS

    The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as follows:

    xxx xxx xxx

    6 In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section 32 of his Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted.

    The disability shall be based solely on the disability gradings provided under Section 32 of this Contract, and shall not be measured or determined by the number of days a seafarer is under treatment or the number of days in which sickness allowance is paid.

    By the medical findings, the assessment of the company-designated doctor generally prevails, unless the seafarer disputes such assessment by exercising his right to a second opinion by consulting a physician of his choice, in which case, the medical report issued by the latter shall also be evaluated by the labor tribunal and the court, based on its inherent merit. In case off disagreement in the findings of the company-designated doctor and the seafarer’s personal doctor, the parties may agree to jointly refer the matter to a third doctor whose decision shall be final and binding on them.

    The Court had the occasion to summarize the rules above-cited regarding the company-designated physician’s duty to issue a final medical assessment on the seafarer’s disability grading to determine the extent of compensation:

    1 The company-designated physician must issue a final medical assessment on the seafarer’s disability grading within a period of 120 days from the time the seafarer reported to him;

    2 If the company-designated physician fails to give his assessment within the period of 120 days, without any justifiable reason, then the seafarer’s disability becomes permanent and total;

    3 If the company-designated physician fails to give his assessment within the period of 120 days with a sufficient justification (e.g., seafarer required further medical treatment or seafarer was uncooperative), then the period of diagnosis and treatment shall be extended to 240 days. The employer has the burden to prove that the company-designated physician has sufficient justification to extend the period; and

    4 If the company-designated physician still fails to give his assessment within the extended period of 240 days, then the seafarer’s disability becomes permanent and total, regardless of any justification.

     According to the Court, such kind of assessment is neccessary under the rules to truly reflect the true extent of the sickness or injuries of the seafarer and his capacity to resume to work as such.2Pastor v. Bibby Shipping Philippines, Inc., G.R. No. 238842, November 19, 2018 Otherwise, the corresponding disability benefits awarded might not be commensurate with the prolonged effects of the injuries suffered.3Sunit v. OSM Maritime Services, Inc., G.R. No. 223035, February 27, 2017, 806 PHIL 505-524

    In the present case, the Court found that although the company-designated physician subjected the seafarer to a series of medications and rehabilitation, he failed to give any definite disability assessment.

    The Court pointed out that the Grade 8 disability rating given by the company-designated physician could not be considered as the complete, definite, and final medical assessment contemplated by the rules, as such assessment was merely addressed to another specialist, who still advised the seafarer to continue with his medications and rehabilitation. The Court further found that:

    • Up to May 2014, the seafarer was still ordered to see the said specialist for re-evaluation
    • The seafarer’s treatment lasted for over a year, evidencing that his condition remained unresolved.
    • The company-designated physician’s prognosis on the seafarer’s condition was guarded in that the outcome of his illness was in doubt.

    The Court added that the employer could not rely on Section 20 (A) (6) of the 2010 POEA-SEC which states that “[t]he disability shall be based solely on the disability gradings provided under Section 32 of this contract, and shall not be measured or determined by the number of days a seafarer is under treatment or the number of days in which sickness allowance is paid.” According to the Court, before the disability gradings under Section 32 should be considered, the disability ratings should be properly established and contained in a valid and timely medical report of a company-designated physician or the third doctor agreed upon by the parties. In other words, the periods prescribed by the rules should still be complied with. Thus, the foremost consideration of the courts should be to determine whether the medical assessment or report of the company-designated physician was complete and appropriately issued; otherwise, the medical report shall be set aside and the disability grading contained therein cannot be seriously appreciated.4Olidana v. Jebsens Maritime, Inc., G.R. No. 215313, October 21, 2015, 772 PHIL 234-251 The Court reiterated that no final and complete assessment was given in this case.

    The Supreme Court ruled that with this failure of the company-designated physician to issue a complete, definite, and final medical assessment, the seafarer’s disability, under legal contemplation, is deemed total and permanent.5Pastor v. Bibby Shipping Philippines, Inc., G.R. No. 238842, November 19, 2018

    Further reading:

    • Wilhelmsen Smith Bell Manning, Inc. v. Villaflor, G.R. No. 225425, January 29, 2020.

  • Minimum Salary Rates as a Management Prerogative

    An exclusive bargaining representative of the supervisory employees claimed for “accrued differentials and salary adjustments due to underpayment of salary” for its recently regularized members, on the basis of the employer’s Local Policy on minimum salary rates. Record showed that several supervisory employees were regularized by the employer, but the latter provided them with salary rates lower than those prescribed under the Local Policy.

    The employer refused to pay the claims and denied that the Local Policy was binding. It argued that the decision to implement any company policy is a prerogative of management.

    Can the employer refuse to implement its Local Policy relating to the minimum salary rates for regularized employees?

    No.

    The Supreme Court acknowledged that employers enjoy management prerogative when it comes to the formulation of business policies, including those that affect their employees.1Lagatic v. National Labor Relations Commission, G.R. No. 121004, January 28, 1998, 349 PHIL 172-186 and Pantoja v. SCA Hygiene Products Corporation, G.R. No. 163554, April 23, 2010, 633 PHIL 235-243 However, the Court also clarified that company policies resulting from an exercise of management prerogative can implicate the rights and obligations of employees. The Court added that they become part of the employment contract to that extent.2Duncan Association of Detailman-PTGWO v. Glaxo Wellcome Philippines, Inc., G.R. No. 162994, September 17, 2004, 481 PHIL 687-705

    In the present case, the Court interpreted the Local Policy and found that:

    • The employer has the discretion to pay newly-hired employees a salary rate lower than the minimum rate during the probationary period;
    • However, once the probationary period ends and the employee is regularized, the employer must pay the minimum rate.
    • Entitlement to the minimum rate requires mere regularization based solely on performance review, without need of merit promotion.

    The Court ruled that the employer had no discretion over the payment of the minimum rate upon regularization of an employee. Once the employee is regularized, management prerogative must give way and be subject to the limitations composed by law, the collective bargaining agreement and general principles of fair play and justice.

    For the Court, the employer should implement its Local Policy. The employees should accordingly be granted their claim for salary differentials.

    Further reading:

    • Del Monte Fresh Produce (Philippines), Inc. v. Del Monte Fresh Supervisors Union, G.R. No. 225115, January 27, 2020.

  • But His Dismissal from Employment Was Harsh

    On 31 March 1992, the employee was hired as an able seaman by the employer on board one of its vessels. One of his primary duties entailed being a duty look-out during vessel navigation.

    In 2016, after serving for 24 years, the employee was dismissed from employment for his failure to call out and report instances of oil pilferage when he was on duty. According to the employer, the employee was undoubtedly aware of the oil pilferage, for he had a good vantage point from his post. Despite said pilferage, Cordero did not report the same to his employer.

    When the case reached the Court of Appeals, it affirmed the validity of the employee’s dismissal. However, it also awarded separation pay as a measure of compassionate justice since it found the penalty of dismissal too harsh.

    The issue determined by the Supreme Court was on the propriety of the award of separation pay for this validly-dismissed employee.

    The Supreme Court ruled that the award of separation pay was devoid of basis in fact and in law.

    According to the Court, jurisprudence dictates that as a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not entitled to a separation pay. In exceptional cases, however, separation pay has been granted to a legally dismissed employee as an act of “social justice” or on “equitable grounds.” In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) did not reflect on the moral character of the employee.1Manila Water Co. v. Del Rosario, G.R. No. 188747, January 29, 2014, 725 PHIL 513-525 It is stressed that separation pay shall be allowed as a measure of social justice only in the instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. A contrary rule would have the effect of rewarding rather than punishing the erring employee for his offense. The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. Equity as an exceptional extenuating circumstance does not favor, nor may it be used to reward, the indolent or the wrongdoer for that matter. A party will not be allowed, in guise of equity, to benefit from his own fault.2Philippine Long Distance Telephone Co. v. National Labor Relations Commission, G.R. No. 80609, August 23, 1988, 247 PHIL 641-652 and Toyota Motor Phils. Corp. Workers Association v. National Labor Relations Commission, G.R. Nos. 158786, 158789 & 158798-99, October 19, 2007, 562 PHIL 759-817

    In the present case, the Court acknowledged that the dismissal of the employee was valid. It also found that his infractions involved moral turpitude and constituted serious misconduct. No basis thus supported the award of separation pay.

    The Court added that the employee’s long years of service did not serve to mitigate his offense and it should not be considered in meting out the appropriate penalty therefor. According to the Court, the infraction that he committed against his employer demonstrated the highest degree of ingratitude to an institution that has been the source of his livelihood for 24 years, constitutive of disloyalty and betrayal of the trust and confidence reposed upon him. The full trust and confidence reposed by the employer in him, coupled with the fact that he occupied a position that allowed him full access to its property, aggravated the offense.

    Further reading:

    • Herma Shipping and Transport Corp. v. Cordero, G.R. Nos. 244144 & 244210, January 27, 2020.

  • An Assessment Reflective of the Seafarer’s Medical Condition

    On 25 March 2015, the seafarer entered into an 8-month employment contract with SSA, PTE. LTD., through its agent, MSM, Inc. to work as a cabin stewardess in the vessel Viking Mimir. She boarded the vessel and commenced her work on 15 May 2015.

    The seafarer alleged that on 17 July 2015, she assisted in the unloading of luggage of departing passengers and in retrieving boxes of mattresses and bedsheets from the laundry section to the state rooms. She then felt pain in her back while in the middle of replacing the mattresses. When the pain did not subside the following day, she went to see the ship’s doctor and was given pain relievers. She was allowed to continue her work, but the pain persisted and became unbearable after almost 2 weeks of continuous duty.

    She further alleged that she was able to visit a hospital in Hungary on 23 July 2015, where she was diagnosed to have lower back pain and muscle strain. Despite having been prescribed pain relievers, her back pain worsened. She was able to have an X-ray and MRI on her back in Germany on 29 July 2015. There, she was suspected to have lumbar spine problem. She was prescribed with medicines to alleviate the pain and advised to have a thorough check-up.

    As she was unable to receive further check up, her condition deteriorated and her mobility was seriously impaired after 2 months of heavy manual labor. Thus, when the vessel arrived in Austria on 21 September 2015, she was sent to a hospital. She was found to have serious back pain and was advised to be repatriated and undergo physiotherapy.

    She was finally repatriated on 24 September 2015 and was able to visit the company-designated physician. She underwent various laboratory examinations the results of which revealed that she was suffering from back pain and Lumbago. She was advised to undergo physical therapy sessions and continue her medications.

    She claimed that despite treatment and therapy, she was not able to recover from her back pain.

    On 1 December 2015, the company-designated doctor cleared the seafarer from the cause of her repatriation despite her failure to recover, declared that her Lumbago was resolved, discontinued her treatment, and ignored her plea to continue medical treatment.

    The seafarer stated that this constrained her to consult her personal doctor (an orthopedic specialist). Upon advice of said doctor, she underwent MRI on her thorax and lumbar spine on 4 February 2016 and was prescribed pain relievers. On 10 March 2016, her personal doctor issued a Certification declaring her “permanently UNFIT in any capacity to resume her sea duties as a Sea woman.”

    Without observing the third doctor referral provision in the POEA-SEC, the seafarer filed a complaint for total and permanent disability benefits against her employer.

    Was the seafarer entitled to payment of total permanent disability benefit despite her failure to observe the third-doctor referral provision in the POEA-SEC?

    Yes.

    The Supreme Court stated that the POEA-SEC provides for the procedure to be followed in case there is a divergence in medical findings between the company-designated physician and the seafarer’s personal doctor. Under Section 20 (A) (3) of the 2010 POEA-SEC, “[if] a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third doctor’s decision shall be final and binding on both parties.” The provision refers to the declaration of fitness to work or the degree of disability. It presupposes that the company-designated physician came up with a valid, final and definite assessment as to the seafarer’s fitness or unfitness to work before the expiration of the 120-day or 240-day period. The company can insist on its disability rating even against a contrary opinion by another doctor, unless the seafarer signifies his intent to submit the dispute assessment to a third physician. The duty to secure the opinion of a third doctor belongs to the employee asking for disability benefits. He must actively or expressly request for it.1Hernandez v. Magsaysay Maritime Corp., G.R. No. 226103, January 24, 2018. This referral to a third doctor has been held to be a mandatory procedure2INC Shipmanagement, Inc. v. Rosales, G.R. No. 195832, October 1, 2014, 744 PHIL 774-790 and the seafarer’s non-compliance with the conflict-resolution procedure results in the affirmance of the fit-to-work certification of the company-designated physician.3Philippine Hammonia Ship Agency, Inc. v. Dumadag, G.R. No. 194362, June 26, 2013, 712 PHIL 507-524

    The Court, however, stressed that non-compliance with the third doctor referral does not automatically make the diagnosis of the company-designated physician conclusive and binding on the courts. The Court has previously held that, “if the findings of the company-designated physician are clearly biased in favor of the employer, then courts may give greater weight to the findings of the seafarer’s personal physician. Clear bias on the part of the company-designated physician may be shown if there is no scientific relation between the diagnosis and the symptoms felt by the seafarer, or if the final assessment of the company-designated physician is not supported by the medical records of the seafarer.”4C.F. Sharp Crew Management, Inc. v. Castillo, G.R. No. 208215, April 19, 2017, 809 PHIL 180-206 A seafarer’s compliance with such procedure presupposes that the company-designated physician came up with an assessment as to his fitness or unfitness to work before the expiration of the 120-day or 240-day periods. Alternatively put, absent a certification from the company-designated physician, the seafarer has nothing to contest and the law steps in to conclusively characterize his disability as total and permanent.5Kestrel Shipping Co., Inc. v. Munar, G.R. No. 198501, January 30, 2013, 702 PHIL 717-738

    In the present case, the Court found that the medical report of the company-designated physician failed to state a definite assessment of the seafarer’s fitness or unfitness to work, or to give a disability rating of her injury. According to the Court, the report lacked substantiation on the medical condition of the seafarer concerning her fitness to return to the type of work she was performing at the time of her injury. Furthermore, the report showed that the seafarer has not fully recovered from her injury as she “was advised to continue home exercises and that pain was foreseen to improve with time” and since she had to undergo “15 Physical Therapy Sessions.” The Court construed such statements as an admission from the company-designated physician that the pain experienced by the seafarer was still subsisting and that it was thru the passage of time that it was expected to improve.

    On the other hand, the Court considered the medical report issued by the seafarer’s personal doctor, and found that this doctor gave an explanation on the nature, cause, effects, and possible treatment of the injury sustained by the seafarer. The Court pointed out that the medical report of the company-designated physician merely described the MRI of the Lumbosacral spine as “unremarkable,” while the report of the personal doctor on the MRI of the Thoraco-Lumbar Spine (Non-Contrast) conducted on the seafarer, contained the following impression: “L4-L5: Mild bilateral neural foraminal narrowing due to disc bulge; L5-S1: Mild bilateral neural foraminal narrowing due to disc bulge and facet hypertrophy; Facet arthrosis and ligamentum flavum hypertrophy; Mild lumbar curvature to the right may be positional versus mild lumbar dextroscoliosis; Small non-specific pelvic fluid; Small uterine myomas.” The Court found that consistent with the result of the said MRI, the seafarer’s personal doctor explained that:

    “The significance of this posterior bulge of the degenerated disc is that this is the area where the nerves run that supply the extremities. This patient has been complaining of back pain. The vast majority of patients responded well to non-surgical treatment though. Probably the most important of which is time, that is to say, that no matter what is done, most cases of acute back and neck pain slowly resolve if given enough time to get better. x x x If a long term and more permanent result are desired however, she should refrain from activities producing torsional stress on the back and those that require repetitive bending and lifting. Things Ms. Briones is expected to do as a Sea woman.”

    The Court, thus, viewed the assessment of the personal doctor as exhaustive and more reflective of the seafarer’s medical condition especially so since both medical reports acknowledged the passage of time as a key factor in resolving the back pain experienced by Briones.

    The Court clarified that a total disability does not require that the employee be completely disabled, or totally paralyzed, for what is necessary is that the injury must be such that the employee cannot pursue his or her usual work and earn from it. It added that a total disability is considered permanent if it lasts continuously for more than 120 days, as what is crucial is whether the employee who suffers from disability could still perform his work notwithstanding the disability he incurred.6Talaroc v. Arpaphil Shipping Corp., G.R. No. 223731, August 30, 2017, 817 PHIL 598-618

    Further reading:

    • Multinational Ship Management, Inc. v. Briones, G.R. No. 239793, January 27, 2020.

  • Your New Engagement with Us Terminated Your Previous Employment

    On 17 December 1997, Lailani started working for CML as an Assembly Production Operator. On 6 February 2012, she was dismissed by way of redundancy. She then signed a quitclaim indicating her position as QA Inspector Lead and received a certain amount as severance package. At the time of her dismissal, she was receiving a monthly salary of Php17,047.88.

    On 21 September 2012, Lailani accepted a job with the same employer, CML, for the position of QA Inspector Senior — a position under the QA Inspector Lead. The position had a basic monthly salary of Php10,835.86.

    On 20 April 2015, a first Absence Without Official Leave (AWOL) Notice was given to Lailani due to the latter’s absence from 16 to 18 April 2015. Lailani was directed to report for work on 21 April 2015. Due to Lailani’s continued absence, a second AWOL Notice and a third AWOL Notice were sent to her. As a result of her prolonged unexplained absence, Lailani’s employment was terminated on 11 May 2015. A Termination Letter dated 11 May 2015 was sent to Lailani informing her of the decision to sever her employment.

    Lailani filed a complaint for illegal dismissal against CML.

    In the Court of Appeals (CA), the dismissal of Lailani from employment on 6 February 2012 was affirmed to be illegal. With regard to the awards of separation pay and backwages, although the CA computed the said reliefs using Lailani’s original monthly salary of P17,047.88 for the period of 6 February 2012 to September 2012, the amount of Php10,835.86 was used in computing separation pay and backwages from September 2012 until 11 May 2015. The CA explained that Lailani’s employment in September 2012 constituted a new job because her first employment was effectively terminated on 6 February 2012. The CA added that Lailani’s execution of the employment contract in September 2012 was an acceptance of the lower salary.

    Was Lailani entitled to differentials in the awards of separation pay and backwages?

    The Supreme Court ruled that Lailani was entitled to salary differentials from the time she was re-hired in September 2012 up to the time she was validly dismissed on 11 May 2015.

    In pointing out the error of the CA, the Supreme Court cited Article 294 of the Labor Code of the Philippines, which states:

    Art. 294. Security of Tenure. — An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits of their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

    The Court explained that since the termination of Lailani’s employment on 6 February 2012 was illegal, Article 294 requires that she be given whatever she was previously entitled to. The Court stated that this did not only include Lailani’s reinstatement to her old position but also the amount of compensation previously received. According to the Court, when Lailani was “re-hired” in September 2012, she was actually reinstated. Thus, she should have been paid her basic monthly salary of Php17,047.88 instead of Php10,835.86. Accordingly, the Supreme Court awarded differential in the amount of Php6,212.02 from September 2012 until 11 May 2015

    Further reading:

    • Hapita v. Cypress Manufacturing Limited, G.R. No. 240512, January 27, 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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  • 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.

  • 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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  • But Are You a De Jure Tenant?

    Lutero Romero (Lutero) owned property by virtue of an approved homestead application in 1967. Although ownership of the said property was subject of a legal dispute involving Lutero and his siblings, the Supreme Court eventually declared Lutero the true and lawful owner of the property in De Romero v. Court of Appeals1G.R. No. 109307, November 25, 1999, 377 PHIL 189-202.

    After the Court’s Decision in De Romero v. Court of Appeals became final and executory, the Heirs of Lutero filed a Motion for the Issuance of a Writ of Execution before the Regional Trial Court (RTC) on 10 March 2003. On 16 June 2003, the RTC issued a Writ of Execution. However, the implementation of the writ was held in abeyance because Crispina Sombrino (Sombrino) filed a Motion for Intervention, alleging that she was a tenant of the subject property. After due hearing and deliberation, the RTC ordered the implementation of the writ. Sombrino was consequently ousted from the subject property.

    Sombrino then filed a Complaint against the Heirs of Lutero for Illegal Ejectment and Recovery of Possession before the Office of the Provincial Agrarian Reform Adjudicator. At the heart of Sombrino’s claim of tenancy was her allegation that the parents of Lutero installed her as tenant in 1952.

    The consistent ruling of the Provincial Agrarian Reform Adjudicator, the Department of Agrarian Reform Adjudication Board, and the Court of Appeals on the said complaint was that an agricultural leasehold tenancy relation existed between Sombrino and the Heirs of Lutero because the supposed original landowners of the subject property, i.e., parents of Lutero, allegedly entered into a tenancy agreement with Sombrino in 1952. Said ruling viewed the following pieces of evidence as proof of the existence of said tenancy relation:

    • Affidavits of certain persons stating that Sombrino occupied the subject property; and
    • Acknowledgment Receipts pertaining to payment of irrigation and fees to a sister of Lutero.

    According to said tribunals, Lutero and, subsequently, his heirs should also be bound by this leasehold relation and respect Sombrino’s tenancy rights.

    Did an agricultural leasehold tenancy relationship exist between Sombrino and the Heirs of Lutero?

    The Supreme Court ruled that no agricultural leasehold tenancy relationship existed between them.

    According to the Court, an agricultural leasehold tenancy exists “when a person who, either personally or with the aid of labor available (from) members of his immediate farm household, undertakes to cultivate a piece of agricultural land susceptible of cultivation by a single person together with members of his immediate farm household, belonging to or legally possessed by, another in consideration of a fixed amount in money or in produce or in both.”2Section 4, Agricultural Tenancy Act of the Philippines, Republic Act No. 1199, as amended by Republic Act No. 2263

    The Court also reiterated established jurisprudence:

    The existence of a tenancy relation is not presumed, as the following indispensable elements must be proven in order for a tenancy agreement to arise:

    • the parties are the landowner and the tenant or agricultural lessee;
    • the subject matter of the relationship is an agricultural land;
    • there is consent between the parties to the relationship;
    • the purpose of the relationship is to bring about agricultural production;
    • there is personal cultivation on the part of the tenant or agricultural lessee; and
    • the harvest is shared between the landowner and the tenant or agricultural lessee.

    The absence of any of the requisites does not make an occupant, cultivator, or a planter a de jure tenant which entitles him to security of tenure under existing tenancy laws.3Heirs of Cadeliña v. Cadiz, G.R. No. 194417, November 23, 2016, 800 PHIL 668-679

    However, if all the aforesaid requisites are present and an agricultural leasehold relation is established, the same shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relation is extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized by the Court for causes herein provided.4Section 7, Code of Agrarian Reforms In case of death or permanent incapacity of the agricultural lessor, the leasehold shall bind the legal heirs.

    Since a tenancy relationship cannot be presumed, an assertion that one is a tenant does not automatically give rise to security of tenure. Nor does the sheer fact of working on another’s landholding raise a presumption of the existence of agricultural tenancy. One who claims to be a tenant has the onus to prove the affirmative allegation of tenancy.5Soliman v. Pampanga Sugar Development Co., G.R. No. 169589, June 16, 2009, 607 PHIL 209-227 Hence, substantial evidence is needed to establish that the landowner and tenant came to an agreement in entering into a tenancy relationship.

    In the present case, the Court found that Sombrino failed to provide sufficient evidence that there was, in the first place, an agricultural leasehold tenancy agreement entered into by herself and the parents of Lutero.

    According to the Court, the joint affidavit of Sarillo Bacalso and Neil Ocopio revealed that Sombrino allegedly hired them in several occasions as planters, mud boat operators and thresher operators and that Sombrino occupied and cultivated the subject property at some point in time. The Court stressed that such document in no way confirmed that Sombrino’s presence on the land was based on a tenancy relationship as “[m]ere occupation or cultivation of an agricultural land does not automatically convert the tiller into an agricultural tenant recognized under agrarian laws.”6Heirs of Quilo v. Development Bank of the Philippines – Dagupan Branch, G.R. No. 184369, October 23, 2013, 720 PHIL 414-426 The Court thus said that self-serving statements regarding supposed tenancy relations are not enough to establish the existence of a tenancy agreement.7Soliman v. Pampanga Sugar Development Co., G.R. No. 169589, June 16, 2009, 607 PHIL 209-227

    Furthermore, the Court found that the Affidavit of the Barangay Agrarian Reform Committee (BARC) Chairman deserved scant consideration since the said chairman was not the proper authority to make such determination. The Court emphasized that certifications issued by administrative agencies and/or officials concerning the presence or the absence of a tenancy relationship are merely preliminary or provisional and are not binding on the courts,8Soliman v. Pampanga Sugar Development Co., G.R. No. 169589, June 16, 2009, 607 PHIL 209-227 and have little evidentiary value without any corroborating evidence.9Reyes v. Heirs of Floro, G.R. No. 200713, December 11, 2013, 723 PHIL 755-775 The Court said that there should be independent evidence establishing the consent of the landowner to the relationship.10Caluzor v. Llanillo, G.R. No. 155580, July 1, 2015, 762 PHIL 353-370

    With respect to acknowledgment receipts presented by Sombrino showing the payment of irrigation fees and rentals to Lutero’s sibling, the Court declared such pieces of documentary evidence insufficient for the said receipts merely established that, at most, Sombrino entered into an arrangement with Lutero’s sister and not with their parents.

    The Court continued that assuming that it even existed, the supposed tenancy agreement was invalid as it was not entered into with the true and lawful landowner of the subject property.

    According to the Court, tenancy relationship can only be created with the consent of the true and lawful landowner who is the owner, lessee, usufructuary or legal possessor of the land. It cannot be created by the act of a supposed landowner, who has no right to the land subject of the tenancy, much less by one who has been dispossessed of the same by final judgment.11Cunanan v. Aguilar, G.R. No. L-31963, August 31, 1978, 174 PHIL 299-314

    In the present case, the Court doubted the existence of the alleged agricultural tenancy agreement because of the undisputed fact that Lutero’s father died sometime in 1948, and it was, thus, impossible for Lutero’s father to have instituted Sombrino as tenant of the subject property.

    With the absence of the first essential requisite of an agricultural tenancy relationship, i.e., that the parties to the agreement are the true and lawful landholders and tenants, the Court ruled that Sombrino was not a de jure tenant entitled to security of tenure under existing tenancy laws.

    In sum, the Court ruled that security of tenure may be invoked only by de jure tenants. Security of tenure may not be invoked by those who are not true and lawful tenants but became so only through the acts of a supposed landholder who had no right to the landholdings. Tenancy relation can only be created with the consent of the landholder who is either the owner, lessee, usufructuary or legal possessor of the land.

    Further reading:

    • Romero v. Sombrino, G.R. No. 241353, January 22, 2020.

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  • Human Barricades and Obstructions for Collective Self-Defense

    On 16 February 2000, the Manila Electric Company (MERALCO) Employees and Workers Association (MEWA), the official bargaining unit of MERALCO, through its former President, Juanito, filed a Notice of Strike with the National Conciliation Mediation Board (NCMB) due to bargaining deadlock.

    After conducting a strike vote in June 2000, Juanito informed the NCMB Administrator of its result in a Letter dated 12 July 2000. The letter was served through registered mail on 17 July 2000.

    After 4 days, or on 21 July 2000, MEWA staged a strike. Record showed that the following persons joined the strike:

    UNION OFFICERSUNION MEMBERS
    FedericoMarcelo
    CatalinoGerardo
    RomeoRolando
    DonatiloEdgardo
    AllanLeonides
    ArturoAmadeo
    RestitutoMelandro
    Dominador
    Lito
    Arnaldo
    Edwin

    The Secretary of the Department of Labor and Employment issued an Assumption Order dated 21 July 2000, assuming jurisdiction and directing the striking workers to return to work within 24 hours from notice. Copies of the order were published in 3 major newspapers on 23 July 2000 and served to union officers and its lawyers. MERALCO’s security guards also exhibited the order to the strikers but they refused to obey.

    On 24 July 2000, several strikers wearing masks chained and padlocked the 3 gates of the MERALCO Center. They laid on the pavement and blocked the entry and exit gates of MERALCO. The strikers stated that they formed human barricades and placed obstructions, but only for collective self-defense because the guards used unnecessary force in dispersing them. Consequently, on 25 July 2000, the Secretary of the Department of Labor and Employment issued another Order reminding the parties to comply with the return-to-work order. He even deputized the PNP Chiefs of the National Capital Region, Region III and Region IV to ensure compliance.

    On 2 August 2000, MEWA and MERALCO executed an Agreement directing all employees who have not been placed on duty (except the 13 union officers and 13 members who were facing charges) to report for work. MERALCO also issued a Memorandum stating that the resumption of office was without prejudice to an administrative investigation for prohibited acts committed during the strike and/or defiance of the Assumption Orders. From 2 August to 11 October 2000, 66 employees were terminated from employment.

    Was the strike illegal?

    Yes.

    The Supreme Court stated that a strike is the most powerful weapon of workers in coming to an agreement with management as to the terms and conditions of employment. Premised on the concept of economic war between labor and management, staging a strike either gives life to or destroys the labor union and its members, as well as affect management and its members.1Phimco Industries, Inc. v. Phimco Industries Labor Association, G.R. No. 170830, August 11, 2010, 642 PHIL 275-307

    The Court added that in order to be legitimate, a strike should not be antithetical to public welfare, and must be pursued within legal bounds. The right to strike as a means of attaining social justice is never meant to oppress or destroy anyone, least of all, the employer.2Phimco Industries, Inc. v. Phimco Industries Labor Association, G.R. No. 170830, August 11, 2010, 642 PHIL 275-307 Since strikes affect not only the relationship between labor and management, but also the general peace and progress of the community, the law has provided limitations on the right to strike.3Phimco Industries, Inc. v. Phimco Industries Labor Association, G.R. No. 170830, August 11, 2010, 642 PHIL 275-307 According to the Court, Article 2634Art. 263. Strikes, picketing and lockouts of the Labor Code, as amended by Republic Act (R.A.) No. 6715, and Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code outline the following procedural requirements for a valid strike:

    • A notice of strike, with the required contents, should be filed with the DOLE, specifically the Regional Branch of the NCMB, copy furnished the employer of the union;
    • A cooling-off period must be observed between the filing of notice and the actual execution of the strike thirty (30) days in case of bargaining deadlock and fifteen (15) days in case of unfair labor practice. However, in the case of union busting where the unions existence is threatened, the cooling-off period need not be observed. x x x
    • Before a strike is actually commenced, a strike vote should be taken by secret balloting, with a 24-hour prior notice to NCMB. The decision to declare a strike requires the secret-ballot approval of majority of the total union membership in the bargaining unit concerned.
    • The result of the strike vote should be reported to the NCMB at least seven (7) days before the intended strike or lockout, subject to the cooling-off period. (emphasis supplied)

    Jurisprudence5Pilipino Telephone Corp. v. Pilipino Telephone Employees Association, G.R. Nos. 160058 &160094, June 22, 2007, 552 PHIL 432-452 teaches that these requirements are mandatory in nature and failure to comply therewith renders the strike illegal.

    In the present case, the Court found that MEWA failed to comply with the 7-day strike ban rule which was counted from the time the union furnished the NCMB the strike vote result. It also found that MEWA also failed to furnish the NCMB the results of the vote at least 7 days before the intended strike. The Court noted that although the letter containing the strike vote result was dated 12 July 2000, it was sent through registered mail only on 17 July 2000, which was 4 days before the strike. The Court stressed that the NCMB thus did not have sufficient time to determine if the intended strike was approved by majority of the union workers. For the Court, the strike was illegal.

    Was the dismissal of strikers from employment valid?

    The Court relied on Article 264 of the Labor Code which enumerates the prohibited acts during a strike, to wit:

    ARTICLE 264. Prohibited Activities. — (a) No Labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with Title VII of this Book or without first having filed the notice required in the preceding Article or without the necessary strike or lockout vote first having been obtained and reported to the Ministry.
    No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout.
    Any worker whose employment has been terminated as a consequence of any unlawful lockout shall be entitled to reinstatement with full backwages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike.
    x x x
    (e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares. (emphasis supplied)

    The Court explained that the above-cited provision of the Labor Code presents a substantial distinction between the consequences of an illegal strike for union officers and mere members of the union. For union officers, knowingly participating in an illegal strike is a valid ground for termination of their employment. However, for union members who participated in an illegal strike, their employment may be terminated only if there is substantial evidence or proof that they committed prohibited and illegal acts during the strike.6Magdala Multipurpose & Livelihood Cooperative v. Kilusang Manggagawa ng LGS, G.R. Nos. 191138-39, October 19, 2011, 675 PHIL 861-877

    In the present case, the Court declared the dismissal of the following union officers valid considering the illegality of the 21 July 2000 strike for noncompliance with the law:

    • Federico;
    • Catalino;
    • Romeo;
    • Donatilo;
    • Allan;
    • Arturo; and
    • Restituto.

    Furthermore, the Court found substantial evidence proving that the following union members performed some of the prohibited acts mentioned in Article 264 of the Labor Code:

    • Marcelo;
    • Gerardo;
    • Rolando;
    • Edgardo;
    • Leonides;
    • Amadeo;
    • Melandro;
    • Dominador; and
    • Lito.

    The Court stated that photographs submitted by MERALCO revealed that these union members committed the prohibited acts, which were then corroborated by security guards who were present during the strike. The Court stressed that the security guards identified the said members to have barricaded the gates and prevented other employees from entering MERALCO’s premises. The Court accordingly declared their dismissal valid for their illegal acts during the illegal strike.

    However, the Court reached a different conclusion with regard to 2 union members (Arnaldo and Edwin), since it found that the testimonies of the security guards revealed that they only saw these members joining the picket line without performing any illegal act during the strike.

    The Court reiterated the proof required to terminate union members, to wit:

    For the rest of the individual respondents who are union members, the rule is that an ordinary striking worker cannot be terminated for mere participation in an illegal strike. There must be proof that he or she committed illegal acts during a strike. In all cases, the striker must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice. Liability for prohibited acts is to be determined on an individual basis7Solidbank Corporation v. Gamier, G.R. Nos. 159460 & 159461, November 15, 2010, 649 PHIL 54-83.

    For the Court, absent any clear, substantial and convincing proof of illegal acts committed by Arnaldo and Edwin during the strike, MERALCO could not arbitrarily dismiss them from employment.

    Should Arnaldo and Edwin be granted backwages?

    No, the Court ruled that they should not be granted backwages in view of the illegality of the said strike.

    The Court reiterated the principles in G & S Transport Corporation v. Infante,8G & S Transport Corporation v. Infante, G.R. No. 160303, September 13, 2007, 559 PHIL 701-716 where the Court held:

    It can now therefore be concluded that the acts of respondents do not merit their dismissal from employment because it has not been substantially proven that they committed any illegal act while participating in the illegal strike. x x x
    x x x
    With respect to backwages, the principle of a “fair day’s wage for a fair day’s labor” remains as the basic factor in determining the award thereof. If there is no work performed by the employee there can be no wage or pay unless, of course, the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working. While it was found that respondents expressed their intention to report back to work, the latter exception cannot apply in this case. In Philippine Marine Officers’ Guild v. Compañia Maritima, as affirmed in Philippine Diamond Hotel and Resort v. Manila Diamond Hotel Employees Union, the Court stressed that for this exception to apply, it is required that the strike be legal, a situation that does not obtain in the case at bar9G & S Transport Corporation v. Infante, G.R. No. 160303, September 13, 2007, 559 PHIL 701-716.

    Accordingly, the Court ruled although Arnaldo and Edwin N. Reyes could be reinstated, they are not entitled to backwages.

    Further reading:

    • Ilagan v. Manila Electric Co., G.R. Nos. 211746 & 212077, January 22, 2020.