Paulino Ungos III

Lawyer | Law Professor | Author

Tag: 2020-01

  • 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.

  • 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.

  • 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.

  • 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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  • Recomputation of Accrued Benefits and Immutability of Judgment

    Execution is the final stage of litigation, the end of the suit. Backwages must be computed from the time the employee was unjustly dismissed until his or her actual reinstatement or upon payment of his or her separation pay if reinstatement is no longer feasible. Hence, insofar as accrued backwages and other benefits are concerned, the employer’s obligation to the employee continues to accumulate until the employer actually implements the reinstatement aspect of the final judgment or fully satisfies the monetary award in case reinstatement is no longer possible.1Mt. Carmel College v. Resuena, G.R. No. 173076, October 10, 2007, 561 PHIL 620-646.

    In one case, the Office of the Labor Arbiter rendered a Decision dated 12 September 2003 declaring the employer liable for illegal dismissal of the employee, with separation pay, backwages, service incentive leave pay, 13th month pay, moral and exemplary damages, and attorney’s fees.

    On 29 July 2004, the National Labor Relations Commission affirmed the illegality of the employee’s dismissal from employment, as well as the monetary award, when it dismissed the appeal of the employer for non-perfection. This Decision became final and executory on 10 January 2005. As soon as an entry of judgment thereon was issued on 17 January 2005, the corresponding writ of execution was implemented and satisfied in full.

    This, notwithstanding, the employer opted elevate the case before the Court of Appeals and later, before the Supreme Court. However, the employer lost in both fora. The Supreme Court’s Resolution dated 23 June 2008 dismissing the employer’s petition became final and executory on 21 August 2008.

    On 3 November 2008, the employee sought for additional increments to her monetary award. She posited that her backwages, separation pay, and other benefits should be computed up to 21 August 2008 when the resolution of the Supreme Court became final and executory.

    May the employee be granted a recomputation of accrued backwages, separation pay, and other benefits?

    The Supreme Court ruled in the negative, since the employee was no longer entitled to a recomputation or increase of the monetary award already paid her.

    While the Court noted that the employer formally opposed the employee’s claims, record, nonetheless, shows that the judgment was executed way back in 2005. For the Court, the employer had already satisfied the final monetary benefits awarded to the employee. Corollary, “the latter may not ask for another round of execution, lest, it violates the principle against unjust enrichment.” There was no additional increment which accrued to the employee by reason of the Supreme Court’s Resolution dated 23 June 2008 which did not modify, let alone, alter the long executed judgment of the National Labor Relations Commission.

    Jurisprudence2Mercury Drug Corp. v. Spouses Huang, G.R. No. 197654, August 30, 2017, 817 PHIL 434-464 dictates that a final judgment may no longer be altered, amended, or modified, even if the alteration, amendment or modification is meant to correct a perceived error in conclusions of fact and law and regardless of what court renders it. More so when, as in this case, such final judgment had already been executed and fully satisfied.

    The Court stressed that the employee’s receipt of full backwages, separation pay, and other benefits in 2005 effectively severed the employer-employee relationship between her and the employer. From that point up until the finality of the Court’s Resolution dated 23 June 2008, the employee no longer had a right to demand further benefits as such.

    The Court stated that “granting a recomputation and, consequently, another round of execution would indubitably alter the original decision which had been completely satisfied, nay, unjust enrichment would certainly result.”

    Further reading:

    • Tan v. Dagpin, G.R. No. 212111, 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.

  • 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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  • 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.

  • Implied Tenancy Relationship

    On 5 February 2006, the spouses G filed a complaint for legal redemption against the spouses F before the Regional Adjudicator in Baguio City,

    The spouses G alleged therein that in 1990, they were instituted by B as tenants of 2 agricultural landholdings. Eventually, B agreed to sell the properties to the spouses G in 2005. However, on 13 June 2005, B canceled the sale. Soon, the spouses G learned that B had sold the two (2) lots to the spouses F, as embodied in a 19 July 2005 Extra-Judicial Adjudication of Real Property with Absolute Sale that B executed in favor of said spouses F.

    The spouses G thus filed the said complaint praying among others, that: (1) as agricultural tenants, they be allowed to redeem the two (2) lots from spouses F; and (2) the spouses F be ordered to reconvey the lots to them.

    The spouses F argued that the spouses G, not being parties to the sale, had no cause of action against them. They further pointed out that the spouses G were merely caretakers and had no tenancy relationship with B, and as such, had no right of redemption available to agricultural tenants under Section 12 of the Code of Agrarian Reforms of the Philippines.

    Should the spouses G be considered as agricultural tenants

    The Supreme Court ruled in the affirmative.

    The Court explained that for a valid agricultural tenancy arrangement to exist, these elements must concur:

    • The parties are the landowner and the tenant;
    • The subject matter is agricultural land;
    • There is consent between the parties;
    • The purpose is agricultural production;
    • There is personal cultivation by the tenant; and
    • There is sharing of the harvests between the parties.1Adriano v. Tanco, G.R. No. 168164, July 5, 2010, 637 PHIL 218-229 (Citation omitted)

    The Court added that all these elements must be proven by substantial evidence; “the absence of one or more requisites is fatal.” As with any affirmative allegation, the burden of proof rests on the party who alleges it. The tenancy relationship cannot be presumed.2Adriano v. Tanco, G.R. No. 168164, July 5, 2010, 637 PHIL 218-229 and J.V. Lagon Realty Corp. v. Heirs of Vda. De Terre, G.R. No. 219670, June 27, 2018. Agricultural tenancy arrangements under the Code of Agrarian Reforms of the Philippines may be established either orally or in writing. The form of the contract is only prescribed when parties decide to reduce their agreement in writing, but it no longer affects the tenancy arrangement’s validity.3Code of Agrarian Reforms of the Philippines, Sections 5 and 17.

    In the present case, the Court found that certain disinterested persons testified and established that the spouses G were tenants of B in the landholdings, as follows:

    • B installed the spouses G as their tenants;
    • They had a 50-50 sharing arrangement of the farm produce;
    • The spouses G delivered harvest shares to B; and
    • There was a practice in in the area that for one to be a tenant, he or she may simply secure the landowner’s verbal consent, without any written agreement.

    The Court further stated that even if the B had not expressly instituted the spouses G as tenants, agricultural tenancy may still be established either expressly or impliedly on the basis of Republic Act No. 1199 and the Code of Agrarian Reforms of the Philippines.4Santos v. De Cerdenola, G.R. No. L-18412, July 31, 1962, 115 PHIL 813-820.

    Section 7 of Republic Act No. 1199 states:

    SECTION 7. Tenancy Relationship; How established; Security of Tenure. — Tenancy relationship may be established either verbally or in writing, expressly or impliedly. Once such relationship is established, the tenant shall be entitled to security of tenure as hereinafter provided.

    Section 5 of the Code of Agrarian Reforms of the Philippines then states:

    SECTION 5. Establishment of Agricultural Leasehold Relation. — The agricultural leasehold relation shall be established by operation of law in accordance with Section four of this Code and, in other cases, either orally or in writing, expressly or impliedly.

    In other words, the Court clarified that an express agreement is not necessary to establish the existence of agricultural tenancy. The tenancy relationship can be implied when the conduct of the parties shows the presence of all the requisites under the law.

    In the present case, the Court ruled that the tenancy relationship was, nonetheless, implied from the conduct of the parties, based on the following findings:

    • The spouses G had been tilling and cultivating the lands since 1990;
    • B had been receiving their share of the harvest; and
    • After B’s death, the spouses G continued to deliver the landowner’s share of the harvest to the heirs.

    For the Court, these circumstances indicated that B and his successor-in-interest had known and consented to the tenancy arrangement.

    Were they entitled to legal redemption?

    The Supreme Court also ruled in the affirmative.

    The Court discussed that in agricultural leasehold relations, the agricultural lessor — who can be the owner, civil law lessee, usufructuary, or legal possessor of the land — grants his or her land’s cultivation and use to the agricultural lessee, who in turn pays a price certain in money, or in produce, or both.5Dissenting 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). The definition and elements of leasehold tenancy relations are similar to those of share tenancy.6Dissenting 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 Spouses Cuaño v. Court of Appeals, G.R. No. 107159, September 26, 1994, 307 PHIL 128-149. A slight difference, however, exists: a leasehold relation is not extinguished by the mere expiration of the contract’s term or period, nor by the sale or transfer of legal possession of the land to another. Section 10 of the Code of Agrarian Reforms of the Philippines states:

    SECTION 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. — The agricultural leasehold relation under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the landholding. In case the agricultural lessor sells, alienates or transfers the legal possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural lessor.

    The Court stated that from the foregoing discussion the agricultural lessor is not prohibited from selling or disposing of the property. In case he or she does, the agricultural leasehold relation subsists. Corollary to this, the law also grants the agricultural lessee the right to preempt an intended sale. But if the property has been sold without the agricultural lessee’s knowledge, he or she shall have the right to redeem the property, as in line with the law’s objective of allowing tenant-farmers to own the land they cultivate. The Court pointed to Section 12 of the Code of Agrarian Reforms of the Philippines,7Republic Act No. 3844 (1963), sec. 12, as amended by Republic Act No. 6389 (1971), sec. 2. which provides:

    SECTION 12. Lessee’s Right of Redemption. — In case the landholding is sold to a third person without the knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable price and consideration: Provided, That where there are two or more agricultural lessees, each shall be entitled to said right of redemption only to the extent of the area actually cultivated by him. The right of the redemption under this Section may be exercised within one hundred eighty days from notice in writing which shall be served by the vendee on all lessees affected and the Department of Agrarian Reform upon the registration of the sale, and shall have priority over any other right of legal redemption. The redemption price shall be the reasonable price of the land at the time of the sale.

    Upon the filing of the corresponding petition or request with the department or corresponding case in court by the agricultural lessee or lessees, the said period of one hundred and eighty days shall cease to run.

    Any petition or request for redemption shall be resolved within sixty days from the filing thereof; otherwise, the said period shall start to run again.

    The Court continued that under the law, the agricultural lessor must first inform the agricultural lessee of the sale in writing. From this point, a 180-day period commences, within which the agricultural lessee must file a petition or request to redeem the land. The written notice shall be served on the agricultural lessee as well as on the Department of Agrarian Reform upon registration of the sale. The right of redemption granted to the agricultural lessee enjoys preference over any other legal redemption that may be exercised over the property. Upon filing of the petition or request, the 180-day period shall cease to run, and will commence again upon the resolution of the petition or request or within 60 days from its filing.

    In the present case, since the spouses G were the agricultural tenants of the landholdings, they were also entitled to the right of redemption. Accordingly, the spouses G may exercise their right to purchase the lots by paying a reasonable price of the land at the time of the sale.

    In highlighting the significance of a tenant’s right of redemption, the Court stated:

    Our agrarian reform laws are witness to the country’s attempts at reversing unjust structures developed throughout centuries of oppressive land regimes. Agrarian justice aims to liberate sectors that have been victimized by a system that has perpetuated their bondage to debt and poverty. Its goal is to dignify those who till our lands — to give land to those who cultivate them.

    The protection of tenancy relations is only one of agrarian reform’s significant features. The State, acknowledging that tenancy relations have an inherent imbalance that disadvantages farmer-tenants and privileges landowners, sought to it that this relationship is regulated so that social justice might be achieved. Ultimately, the program aims to remove farmer-tenants from the system that had once oppressed them by making the tenant, once just the tiller, owner of his or her land.

    Further reading:

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

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  • Guarded Prognosis

    In one case, the Supreme Court reiterated the following rules relating to seafarer claims of total and permanent disability benefits:

    • The company-designated physician must issue a final medical assessment on the seafarer’s disability grading within a period of 120 days from the time the seafarer reported to him;
    • If the company-designated physician fails to give his assessment within the said period of 120 days without any justifiable reason, then the seafarer’s disability becomes permanent and total;
    • If the company-designated physician fails to give his assessment within the said 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 for another 120 days (or up to 240 days from the time the seafarer reported to him). The employer has the burden to prove that the company-designated physician has sufficient justification to extend the period; and
    • If the company-designated physician still fails to give his assessment within the said extended period, then the seafarer’s disability becomes permanent and total, regardless of any justification.

    With regard to the company-designated physician’s medical assessment, the Court set forth the following requirements for determining the seafarer’s condition:

    • The assessment must be issued within the 120/240-day window; and
    • It must be final and definitive.

    In the present case, the Supreme Court found that the company-designated physician’s medical report was issued within the 240-day period. However, the Court ruled that the said report was not final and definitive.

    According to the Court, a final and definitive disability assessment is necessary in order to truly reflect the extent of the sickness or injuries to the seafarer and his or her capacity to resume work as such. To be conclusive, the medical assessments or reports:

    • must be complete and definite to give the proper disability benefits to seafarers
    • must also be supported with sufficient bases.

    The Court found that the company-designated physician’s medical report merely states that

    • the seafarer’s “prognosis for returning to sea duties is guarded” and
    • “if patient is entitled to disability, his suggested disability grading is Grade 10 — loss of grasping power for large objects.”

    The Court added that the report was notably bereft of any statement or explanation as to how the company-designated physician arrived with her medical conclusion. The report also did not even contain a definite statement as to the seafarer’s fitness to return to sea duties as it states that his prognosis of returning to his sea duties is still guarded.

    Furthermore, the company-designated physician failed to explain in detail the progress of the seafarer’s treatment and the approximate period needed for him to fully recover. Said physician merely adopted the findings or observations of the Orthopedics and Spine Surgery specialist.

    Thus, the Court ruled that the company-designated physician’s medical assessment was not final and definitive. The seafarer’s disability is deemed permanent and total by operation of law. The seafarer was awarded $110,000.00 under the CBA.

    Further reading:

    • Wilhelmsen-Smithbell Manning, Inc. v. Aleman, G.R. No. 239740 (Notice), January 8, 2020.