The employer here was unorganized and had no exclusive bargaining agent. A labor union soon filed a petition for certification election before the regional office of the Department of Labor and Employment. The employer opposed the petition asserting that the members of the said union were employees of their contractor. The petition was still granted despite the opposition and certification elections were conducted.
The employer then filed a protest with the Med-Arbiter, which then granted the same. In justifying the grant of the protest, the Med-Arbiter found that the contractor was legitimate and accordingly the employer of the challenged voters during the certification elections. The Med-Arbiter thus declared the relevant votes cast invalid for the purpose of certifying the labor union as exclusive bargaining agent to the employer.
The Department of Labor and Employment reversed the order of the Med-Arbiter and found that the contractor was a labor-only contractor. It ruled that the challenged votes should be considered.
The Court of Appeals reversed the decision of the Department of Labor and Employment, as the contractor was considered as legitimate. According to the Court of Appeals, the employer had presented substantial evidence that the contractor was legitimate. Specifically, it presented a Certificate of Registration issued by the Department of Labor and Employment, which declared the legitimacy of the contractor. Furthermore, it found that the contractor had substantial capitalization. Also the contractor had other clients from various industries. For the Court of Appeals, the fact that the contractor had other clients negated the conclusion that it is a labor-only contractor.
Should the contractor be considered as a labor-only contractor?
The Supreme Court ruled in the affirmative.
The Court stated that although a contractor possesses badges of legitimate contracting by having substantial capitalization and catering to other clients, the Court stressed that such situation does not automatically convert a labor-only contractor to a legitimate contractor because in the issue of labor-only contracting, the totality of the facts and the surrounding circumstances of the case must still be considered.
In the present case, the Court found that the employer entered into a Memorandum of Agreement with contractor even before the latter was issued a Certificate of Registration by the Department of Labor and Employment. The contractor had supplied manpower to various clients even without the stamp of imprimatur from the Department of Labor and Employment.
Furthermore, although the contractor complied with capitalization requirements, there was a showing that the said contractor exercised control over the employee’s work performance and output. According to the Court, proof of substantial capital does not make an entity immune to a finding of labor-only contracting when there is showing that control over the employees resides in the principal and not in the contractor.
The Court accordingly declared that since the contractor was a labor-only contractor, this created an employer-employee relationship between the employer as a principal, and workers whose votes were invalidated as its alleged employees.
Further reading:
Manila Cordage Company-Employees Labor Union-Organized Labor Union in Line Industries and Agriculture v. Manila Cordage Co., G.R. Nos. 242495-96, September 16, 2020.
Magno alleged that on November 13, 2014, he was hired by Goodwood Ship Management, Pte., Ltd., through its agent, Trans-Global Maritime Agency, Inc., as Oiler on board MT G.C. Fuzhou for a period of nine months. He stated that after he was declared fit for sea duty in his pre-employment medical examination, he boarded the vessel on November 15, 2014.
Magno narrated that on January 25, 2015, he suddenly felt severe chest pain, accompanied by dizziness and weakness while carrying out his duties. He was made to endure his condition until his repatriation on May 18, 2015. Upon arrival in the Philippines, he was referred to the employer-company’s designated physician. From May 20, 2015, he was subjected to various tests and treatment for coronary artery disease. After five months of treatment, the company-designated physician discontinued his treatment. Consequently, he consulted his personal cardiologist, who concluded that the nature and extent of his illness rendered him permanently and totally unfit to work as a seaman. Thus, on January 19, 2016, he filed a complaint for disability benefits, medical expenses, damages and attorney’s fees against his employer.
For its part, the employer retorted that Magno denied having a history of high blood pressure or any kind of heart disease when he ticked the “No” box opposite “High Blood Pressure” and “Heart Disease Vascular/Chest Pain” under the section, Medical History in his Pre-Employment Medical Examination (PEME). The employer stated that it was on May 17, 2015, that Magno complained of back and chest pains, with difficulty of breathing and easy fatigability, and was thereafter medically repatriated. During his treatment by the company-designated physician sometime in September 2015, Magno disclosed that he was diagnosed, as early as 2009, with coronary artery disease, for which he underwent Percutaneous Coronary Intervention of the left anterior descending artery. The company-designated physicians later stopped his treatment, prompting him to file a complaint for the payment of permanent total disabilitybenefits.
The Office of the Labor Arbiter ruled in favor of Magno and awarded him permanent total disability benefits. Said Office considered the company-designated physician’s continuation of Magno’s treatment despite his belated disclosure of his existing coronary artery disease as an instance of employer’s waiver of its right to deny liability for disability benefits. According to the Office of the Labor Arbiter, such treatment constituted an implied admission of compensability and work-relatedness of Magno’s lingering cardio-vascular illness. The Office of the Labor Arbiter further found that the company-designated physician failed to issue a final assessment of Magno’s illness or fitness to work, which failure deemed Magno totally and permanently disabled.
On appeal, the National Labor Relations Commission affirmed the Office of the Labor Arbiter’s ruling because Magno’s illness occurred within the duration of his contract, and his treatment lasted for more than 120 days. For the Commission, the award of permanent total disability benefits was justified.
The employer then filed a petition for certiorari with the Court of Appeals, which dismissed the petition.
Thus, the employer sought recourse before the Supreme Court, alleging that the Court of Appeals committed serious errors of law in upholding the Commission’s Decision. The employer insisted that Magno was not entitled to permanent and total disability benefits and his other monetary claims because of deliberate concealment of his coronary artery disease.
For his part, Magno maintained entitlement to permanent total disability benefits since his illness was work-related and had contributed to the development of his condition that resulted in his disability.
Is Magno entitled to permanent total disability benefits?
The Supreme Court ruled that Magno is not entitled to permanent total disability benefits. The Court of Appeals erred in upholding the decision of the National Labor Relations Commission.
The Court started by stating that entitlement of seafarers on overseas work to disability benefits is a matter governed, not only by medical findings, but by law and by contract. The Court stated that the material statutory provisions are Articles 197 to 199 of the Labor Code of the Philippines in relation to Section 2 (a), Rule X of the Amended Rules on Employee Compensation. By contract, the Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC), the parties’ collective bargaining agreement, if any, and the employment agreement between the seafarer and the employer are pertinent.
The Court pointed out that Section 20, paragraph E of the POEA-SEC clearly provides that “[a] seafarer who knowingly conceals a pre-existing illness or condition in the Pre-Employment Medical Examination (PEME) shall be liable for misrepresentation and shall be disqualified from any compensation and benefits.” The Court said that such rule seeks to penalize seafarers who conceal information to pass the pre-employment medical examination. It even makes such concealment a just cause for termination.
Under the POEA-SEC, there is a “pre-existing illness or condition” if prior to the processing of the POEA contract, any of the following is present:
the advice of a medical doctor on treatment was given for such continuing illness or condition; or
the seafarer has been diagnosed and has knowledge of such illness or condition but failed to disclose it during the pre-employment medical examination, and such cannot be diagnosed during such examination.
In the present case the Court found that:
In his September 18, 2014 PEME, Magno indicated that he was not suffering from any medical condition likely to be aggravated by service at sea or which may render him unfit for sea service;
Magno also indicated in the PEME that he did not have a history of heart disease/vascular/chest pain, high blood pressure, or that he underwent treatment for any ailment and was taking any medication; and
He signed the PEME certificate acknowledging that he had read and understood and was informed of the contents of such certificate.
However, the Court further found a medical report issued by the company-designated physician, dated September 17, 2015, which stated therein Magno’s disclosure of a history of coronary artery disease for which he underwent percutaneous coronary intervention of the left anterior descending artery in 2009.
With this disclosure, the Court declared that Magno had obscured his pre-existing cardiac ailment, and such concealment thus disqualified him from disability benefits notwithstanding the medical attention extended by the company-designated physician upon his repatriation.
The Court discussed that even if the misrepresentation was discovered during Magno’s treatment with the company-designated physician, the same was immaterial and could not have canceled out his deception.
The Court reiterated that a PEME is generally not exploratory in nature, nor is it a totally in-depth and thorough examination of an applicant’s medical condition. It does not reveal the real state of health of an applicant, and does not allow the employer to discover any and all pre-existing medical condition with which the seafarer is suffering and for which he may be taking medication. The PEME is nothing more than a summary examination of the seafarer’s physiological condition and is just enough for the employer to determine his fitness for the nature of the work for which he is to be employed.
Since the PEME is not exploratory, the Court emphasized that its failure to reveal or uncover Magno’s ailments cannot shield him from the consequences of his deliberate concealment. In this regard, the “fit to work” declaration in the PEME cannot be a conclusive proof to show that he was free from any ailment prior to his deployment.
For knowingly concealing his history of coronary artery disease during the PEME, Magno committed fraudulent misrepresentation which unconditionally barred his right to receive any disability compensation from his employer.
The Court added that even if it were to disregard Magno’s fraudulent misrepresentation, his claim would still fail.
Coronary artery disease, which is subsumed under cardio-vascular disease, and hypertension are listed as occupational diseases under item 11, Section 32-A of the POEA-SEC.
However, before such disease to be compensable, a seafarer must establish concurrence of the following conditions enumerated in the first paragraph of Section 32-A of the POEA-SEC:
The seafarer’s work must involve the risk described therein;
The disease was contracted as a result of the seafarer’s exposure to the described risks;
The disease was contracted within a period of exposure and under such other factors necessary to contract it; and
There was no notorious negligence on the part of the seafarer.
Relevant thereto, the Court reiterated prevailing jurisprudence in that the table of illnesses and the corresponding nature of employment in Section 32-A only provides the list of occupational illnesses. However, even if the illness may be considered as work-related for having been specified in the table, the seafarer is still not exempted from providing proof of the conditions under the first paragraph of Section 32-A in order for the occupational illnesses complained of to be considered as compensable. Whoever claims entitlement to benefits provided by law should establish his right thereto by substantial evidence which is more than a mere scintilla; it is real and substantial, and not merely apparent. Further, while in compensation proceedings in particular, the test of proof is merely probability and not ultimate degree of certainty, the conclusion of the courts must still be based on real evidence and not just inference and speculations.
In the present case, the Court found that Magno failed to present sufficient evidence to show how his working conditions contributed to or aggravated his illness. According to the Court, the general statements in his Position Paper were not validated by any written document or other proof. Neither was any expert medical opinion presented regarding the cause of his condition.
The Court expounded that although Magno suffered from coronary artery disease, a cardiovascular illness under item 11 of Section 32-A of the POEA-SEC, the conditions for compensability under the same section were not present since Magno did not present any proof of the required conditions to demonstrate that his illness is work-related and, therefore, compensable. Specifically, Magno failed to discharge his burden to prove the risks involved in his work, that his illness was contracted as a result of his exposure to the risks within the period of exposure and under such other factors necessary to contract it, and that he was not notoriously negligent. The Court thus ruled that Magno was not entitled to permanent total disability benefits.
In deciding against the seafarer in this case, the Court emphasized that the constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers, as justice is for the deserving and must be dispensed within the light of established facts, the applicable law, and existing jurisprudence. The Court said that its commitment to the cause of labor is not a lopsided undertaking. The Court concluded by stating that such commitment cannot and does not prevent it from sustaining the employer when it is in the right.
Further reading:
Trans-Global Maritime Agency, Inc. v. Utanes, G.R. No. 236498, September 16, 2020.
Laurence alleged that on September 3, 2007, he was hired by Verizon Communications Philippines, Inc. (Verizon) as network engineer.
Laurence narrated that sometime in January 2012, his doctor diagnosed him with pulmonary tuberculosis and pneumonia for which he was recommended to isolate and rest for 60 days.
Laurence informed his manager of his medical condition, and did not report for work from February 3, 2012 to recuperate from his illness. He went to Guimaras Island to quarantine himself and avoid the spread of his disease.
On March 14, 2012, Laurence received a notice to explain. When he called his manager to ask why he was being made to explain, the latter answered that the employer already terminated his employment on March 12, 2012.
Two weeks later, Laurence received a letter of termination from his employer, prompting him to file a complaint for illegal dismissal and damages against the latter.
In his case, Laurence claimed to have been illegally dismissed and entitled to his money claims. He asserted that there was no just or authorized cause for his dismissal and that the employer failed to observe the requirements of due process. Laurence also claimed that he did not abandon his work since he was able to notify the employer of his illness and the need for medical treatment on isolation. According to Laurence, his absence is justified due to his sickness that needed a long rest and quarantine period to prevent the spread of the disease to his co-workers.
For its part, the employer acknowledged that on February 3, 2012, Laurence notified his manager through text message on his absence. However, the employer pointed out that Laurence did not indicate the duration of his leave and no longer answered its manager’s phone calls. After more than a month of not hearing from Laurence, the employer sent its nurse, who was able to check on Laurence and serve him a notice requiring him to explain his unauthorized absence and why he should not be considered to have abandoned his work. It was only on March 14, 2012 that Laurence called his manager regarding the notice and explained that he had no cellphone reception in the place where he was. On the same day, Laurence sent an email in which he admitted his mistake, apologized for his unauthorized absence, and sought reconsideration of his dismissal. In view of Laurence’s admission, the employer terminated his employment on March 28, 2012.
The employer further averred that Laurence was aware of its policies on attendance and absences. Nonetheless, he failed to notify the employer of the duration of his leave. The notice he gave to his manager was not enough because he did not mention the length of his absence and did not submit a medical certificate or medical test results. For the employer, his 38-day absence, as well as his admission, warranted his termination from employment.
In its Decision dated February 11, 2013, the Office of the Labor Arbiter dismissed the complaint for lack of merit.
According to the Office of the Labor Arbiter, Laurence, a Network Engineer whose presence was always expected by the employer in the worksite, went on prolonged absence without official leave for 38 consecutive days, without informing his manager or the employer about it and without even offering any reasonable explanation for his failure to inform the employer of his prolonged absences. For the Office of the Labor Arbiter, the employer cannot be faulted in applying its rule on unauthorized absences for 5 consecutive days, which carried a penalty of dismissal from employment.
Aggrieved, Laurence appealed before the National Labor Relations Commission, pointing out that his prolonged absence was due to health reasons and he did not intend to abandon his work. Laurence thus insisted on his stand that no valid cause attended his dismissal from employment.
The National Labor Relations Commission reversed the Office of the Labor Arbiter’s ruling and upheld Laurence’s stand that the employer failed to show just cause in terminating his employment. The Commission explained that the rules of the employer only mandates its employees to notify their manager 4 hours before taking a sick leave and to submit his/her medical certificate upon return. The Commission found that Laurence was able to notify his immediate manager through text message about his sickness and his leave on February 3, 2012. Since the Commission did not consider the absences of Laurence as unauthorized, his dismissal from employment was declared illegal.
The employer filed a petition for certiorari before the Court of Appeals, but the latter upheld the Decision of the National Labor Relations Commission. The Court of Appeals added that the length of his absence is justified considering that pulmonary tuberculosis and pneumonia are commonly considered to be serious infectious diseases.
The employer elevated its case to the Supreme Court and asserted that Laurence was validly dismissed because of his deliberate violation of the employer’s rules on unauthorized absences and excessive absenteeism. The employer stated that it validly exercised its management prerogative in applying its rules. Finally, it granted Laurence ample opportunity to be heard.
Was Laurence validly dismissed from employment?
The Supreme Court ruled in the negative, because Laurence was not found to have violated the employer’s rules on authorized and unauthorized absences.
The Court reiterated prevailing principles in that the employer in an illegal dismissal case has the burden of proving that an employee’s dismissal from service was for a just or authorized cause. Otherwise, the employer’s failure shall result in a finding that the dismissal is unjustified.
Record showed that the employer dismissed Laurence because of his alleged violation of its rules. Under such rules, the absence of an employee may be authorized or unauthorized. An authorized absence, due to sickness, requires that the employee send his manager notice 4 hours before his shift, with a reasonable description of his illness, and the submission of the employee’s proof of illness on his return date. On the other hand, the employee’s absence becomes unauthorized if the employee fails to notify his/her immediate superior, or if the employee fails to submit a medical certificate on his/her return date.
However, the Supreme Court found that on February 3, 2012, Laurence sent his manager a text message, informing the latter that he will be absent because he was sick with pulmonary tuberculosis, a contagious disease, and was advised to take medication. It was also found that the manager did not deny having received this message from Laurence.
The Supreme Court thus stated that the information given by Laurence was sufficient to properly apprise the employer of his condition. Furthermore, Laurence’s failure to submit proof of illness while he was on sick leave and to indicate a return date did not render his absence unauthorized. The Court added that Laurence was no longer given the opportunity to submit his medical certificate and other documents to prove his illness.
With regard to the employer’s policy on excessive absenteeism, which prescribes dismissal as penalty, the Court ruled that the same was harsh.
The Court mentioned that the Constitution looks with compassion on the working class and is intent on protecting their rights. A worker’s employment is property in a constitutional sense, and he/she cannot be deprived thereof without due process and unless the deprivation is commensurate to his/her acts and degree of moral depravity. While the right of an employer to terminate the services of an employee for a just or authorized cause is recognized, the dismissal must be made within the parameters of law and pursuant to the tenets of equity and fair play. An employer’s power to discipline his employees must not be exercised in an arbitrary manner as to erode the constitutional guarantee of security of tenure.
The Court continued that although the power to dismiss employees is a formal prerogative of the employer, such power is not without limitations. The employer is bound to exercise caution in terminating the services of his employees and dismissals must not be arbitrary and capricious. Due process must be observed and employers should respect and protect the rights of their employees. To effect a valid dismissal, the law requires not only that there be just and valid cause; it must also be supported by evidence. There must be a reasonable proportionality between the offense and the penalty. Even when there exist some rules agreed upon between the employer and employee on the subject of dismissal, the same cannot preclude the State from inquiring on whether their rigid application would work too harshly on the employee. Dismissal, without doubt, is the ultimate penalty that can be meted to an employee. Hence, where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe. The Court stressed that it will not hesitate to disregard a penalty that is manifestly disproportionate to the infraction committed.
In the present case, the Court noted that since the employer raised Laurence’s violation of its rules, it is incumbent upon the employer to prove that Laurence clearly, voluntarily and intentionally committed the infraction. However, the Court found that Laurence’s absence from work was due to sickness and that he gave proper notification of his absence, which reason should have been given kind consideration by the employer. The Court remarked that an employee cannot anticipate when an illness may happen, thus, he may not be able to give prior notice or seek prior approval of his absence, but could only do so after the occurrence of the incident.
The Court added that even assuming that Laurence was found to have deliberately violated the employer’s rules, the penalty of dismissal imposed upon him was too harsh and disproportionate to the wrongdoing committed. In this regard, the Court maintained that it is not bound by the employer’s rules, as well as the employer’s findings of violation and dismissal. It is settled that the law serves to equalize the unequal. The labor force is a special class that is constitutionally protected because of the inequality between capital and labor. This constitutional protection presupposes that the labor force is weak. However, the level of protection to labor should vary from case to case; otherwise, the State might appear to be too paternalistic in affording protection to labor.
The Court also found that Laurence was not accorded procedural due process.
The Court stated that to effect a valid dismissal on the ground of just cause, the employer is bound to observe procedural due process. Procedural due process consists of the twin requirements of notice and hearing. The employer must furnish the employee with 2 written notices before the termination of employment can be implemented:
the first apprises the employee of the particular acts or omission for which his dismissal is sought; and
the second informs the employee of the employer’s decision to dismiss him.
In the present case, the Court found that the notices issued by the employer failed to observe the standards set forth in case law. The Court said that while the employer ostensibly afforded Laurence the opportunity to refute the charge of AWOL and abandonment against him, the employer deprived him of due process when he was not given ample time to prepare his defense and later on, when his explanation was not given consideration on the ground that it was submitted beyond the 48-hour period.
What reliefs were granted to Laurence?
In view of the finding of illegal dismissal, the Court upheld the grant of separation pay, but it deleted the award of backwages.
With regard to reinstatement, the Court discussed that usually, reinstatement without loss of seniority rights and other privileges and full backwages are granted to illegally dismissed employees.
However, if actual reinstatement is no longer possible, the employee becomes entitled to separation pay in lieu of reinstatement. Based on jurisprudence, reinstatement is not feasible:
in cases where the dismissed employee’s position is no longer available
the continued relationship between the employer and the employee is no longer viable due to the strained relations between them; and
when the dismissed employee opted not to be reinstated, or the payment of separation benefits would be for the best interest of the parties involved.
In these instances, said the Court, separation pay is the alternative remedy to reinstatement in addition to the award of backwages. The payment of separation pay and reinstatement are exclusive remedies. Stated differently, the payment of separation pay replaces the legal consequences of reinstatement to an employee who was illegally dismissed.
In the present case, the Court upheld the grant of separation pay in favor of Laurence since it was consistently found that he opted to receive separation pay instead of reinstatement.
On the other hand, with regard to backwages, the Court elaborated that in labor cases, the Court is tasked with the delicate act of balancing the employee’s right to security of tenure against the employer’s right to freely exercise its management prerogatives. Even though it is basic in labor law that an illegally dismissed employee is entitled to reinstatement, or separation pay if reinstatement is not viable, and payment of full backwages, in some instances, the Court has carved out exceptions where the reinstatement of an employee was ordered without an award of backwages. This is on account of: (1) the fact that dismissal of the employee would be too harsh of a penalty; and (2) that the employer was in good faith in terminating the employment.
The Court held that the employer is excused from paying backwages to Laurence because it considered the penalty of dismissal to be harsh. Although Laurence did not violate the employer’s rules on authorized and unauthorized absences since he was able to notify his immediate manager of his absence on February 3, 2012 because of his sickness, the Court found that he cannot be deemed entirely faultless. Aside from the text message he sent, he did nothing else to comply with the employer’s rules. He did not inform the employer that he would leave his residence nor leave any information on how he may be reached. On the other hand, his manager exerted efforts to contact Laurence, albeit to no avail. For such reasons, the Court held that no basis supported an award of backwages. Such award of backwages was thus deleted.
Further reading:
Verizon Communications Philippines, Inc. v. Margin, G.R. No. 216599, September 16, 2020.
Wilfredo alleged that he was engaged as a bus driver by the employer bus company since August 5, 2005.
Wilfredo narrated that on May 31, 2015, a representative from the head office of the employer bus company instructed him to alight from his assigned bus and no longer allowed him to continue his supposed trip that day. When Wilfredo reported for work the next day, he was advised not to come to work in the meantime. He was told that the employer bus company will just send him an e-mail as to when he will be given a bus assignment.
Since the employer bus company failed to file its position paper during the proceedings, the Office of the Labor Arbiter deemed Wilfredo’s allegations to be admitted. The Office of the Labor Arbiter declared Wilfredo to be illegally dismissed from employment and ordered the employer bus company to pay Wilfredo separation pay and backwages, among other awards.
In its appeal to the National Labor Relations Commission, the employer bus company averred that it filed its position paper with respect to the claim of Wilfredo and mailed the same to the Office of the Labor Arbiter.
The Commission admitted the position paper of the employer bus company and ruled that just cause attended the dismissal of Wilfredo from employment. The Commission found that Wilfredo was involved in several reckless driving incidents that constituted misconduct.
Wilfredo’s petition before the Court of Appeals was dismissed for lack of merit. The Court of Appeals found that there was valid ground to dismiss Wilfredo from employment and that the employer bus company complied with the procedural requirements of due process in such dismissal.
Wilfredo elevated his case before the Supreme Court. Wilfredo insisted that the employer bus company failed to substantiate his alleged cumulative infractions of company rules for reckless driving that warranted his dismissal. Wilfredo further mentioned that the employer bus company failed to afford him procedural due process since he was not given a notice to explain, there was no hearing or conference to afford him an opportunity to present evidence to support his claim, and he did not receive a notice of termination.
Was Wilfredo validly dismissed from employment?
The Supreme Court ruled that Wilfredo was validly dismissed from employment.
The Court discussed that dismissal from employment has two facets: first, the legality of the act of dismissal, which constitutes substantive due process; and second, the legality of the manner of dismissal, which constitutes procedural due process. The burden of proof rests upon the employer to show that the disciplinary action was made for lawful cause or that the termination of employment was valid. In administrative and quasi-judicial proceedings, the quantum of evidence required is substantial evidence or “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Thus, unsubstantiated suspicions, accusations, and conclusions of the employer do not provide legal justification for dismissing the employee.
With regard to the substantive aspect, the Court found that the employer bus company terminated Wilfredo’s employment on the ground of serious misconduct. The Court stated that for serious misconduct to be a just cause for dismissal, the concurrence of the following elements is required: (a) the misconduct must be serious; (b) it must relate to the performance of the employee’s duties showing that the employee has become unfit to continue working for the employer; and (c) it must have been performed with wrongful intent.
In the present case, the Court found that the employer bus company presented sufficient evidence to prove that Wilfredo committed numerous infractions of company rules and regulations since he started working with the employer bus company. According to the Court, the infractions can be traced as far back as 2002 up to the time he was rehired in 2008 when he admitted to hitting a concrete mixer truck in Baliuag, Bulacan. The Court added that in the year 2009, the side mirror of Wilfredo’s assigned bus was destroyed while he was trying to overtake another bus; and in 2013, he had an altercation with an inspector of the employer bus company for which he was meted a penalty of suspension. The Court continued that the last infraction was in March 2015 when he figured in a vehicular accident that caused injuries to his passengers.
For the Court, the repeated and numerous infractions committed by Wilfredo in driving the passenger bus assigned to him cannot be considered minor. The Court took judicial notice of the gross negligence and the appalling disregard of the physical safety and property of others so commonly exhibited today by the drivers of passenger buses. Taking into account the nature of Wilfredo’s job, the Court determined Wilfredo’s infractions to be numerous to be ignored or treated lightly that the same may already be subsumed as serious misconduct. The Court accordingly held that Wilfredo was validly dismissed from employment on the ground of serious misconduct.
With regard to requirements of procedural due process, the Court found that the employer bus company failed to comply with the same. The Court expounded that the following should be considered in terminating the services of employees:
The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period of at least five (5) calendar days from receipt of the notice.
After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to explain and clarify their defenses to the charge against them; present evidence in support of their defenses; and rebut the evidence presented against them by the management.
After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: all circumstances involving the charge against the employees have been considered; and grounds have been established to justify the severance of their employment.
In the present case, the Court found that the employer bus company was unable to send Wilfredo a first written notice containing the specific causes or grounds for termination against him. Although Wilfredo submitted a lengthy explanation letter dated June 3, 2015 explaining his side on the incident that transpired two months back, the Court stressed that such explanation did not excuse the fact that there was a complete absence of the first notice. The Court thus sanctioned the employer bus company for disregarding due process requirements.
According to the Court, where the dismissal is for a just cause, as in this case, the lack of statutory due process will not nullify the dismissal, or render it illegal or ineffectual. The employer will not be required to pay the employee backwages. However, the employer should indemnify the employee for the violation of his statutory right in the form of nominal damages in the amount of Thirty Thousand Pesos (Php30,000.00) in accordance with prevailing jurisprudence.
Further reading:
Mariano v. G.V. Florida Transport, G.R. No. 240882, 16 September 2020.
In this case, the Supreme Court noted the illegal dismissal case filed by Moreno, Francisco and Elmo against Lepanto Consolidated Mining Company.
The record showed that the Office of the Labor Arbiter dismissed the complaint for lack of merit.
In its Decision dated August 30, 2002, the National Labor Relations Commission reversed the Office of the Labor Arbiter’s Decision and declared Moreno, Francisco, and Elmo to have been illegally dismissed from employment. The Commission awarded them separation pay and backwages.
The Court of Appeals (in CA-G.R. SP No. 75860) affirmed the Decision of the National Labor Relations Commission through its Decision dated November 7, 2003.
The Supreme Court (in G.R. No. 163210) likewise affirmed the same. The Decision of the Supreme Court became final and executory on November 25, 2008.
Following the finality of the Supreme Court Decision, the Office of the Labor Arbiter issued the corresponding writ of execution in the total amount of P897,412.95 covering the backwages and separation pay of Moreno, Francisco, and Elmo. Furthermore, the Office of the Labor Arbiter granted their motion praying the recomputation of this award, through an Order dated May 27, 2009, which increased the award to P2,602,856.21.
Lepanto moved to quash the writ of execution, insisting that the computation should be reckoned from the date of dismissal up until the National Labor Relations Commission rendered its Decision dated August 30, 2002.
Moreno, Francisco and Elmo soon moved for another recomputation of the monetary award to include the salary increases allegedly granted them per the Collective Bargaining Agreement (CBA) between Lepanto and its employees.
In its Order dated September 2, 2009, the Office of the Labor Arbiter recalled his Order dated May 27, 2009 and further recomputed the award of backwages and separation pay to include the incremental salary increases pursuant to the CBA but only until November 7, 2003, the date when the Court of Appeals issued its Decision in CA-G.R. SP No. 75860.
Moreno, Francisco, and Elmo assailed the Order and asserted that the cut-off date for the computation of the award was November 25, 2008 when the Supreme Court’s Decision became final and executory.
Lepanto likewise assailed the Order and asserted that the cut-off date for the computation of the award was November 7, 2003, or the date of the Decision of the Court of Appeals.
In its Decision dated October 30, 2009, National Labor Relations Commission directed the Labor Arbiter to compute the backwages and separation pay of Moreno, Francisco, and Elmo from the date they were illegally dismissed up to the finality of the Supreme Court’s Decision on November 25, 2008, including therein the mandated CBA salary increases.
The Court of Appeals nullified the Decision of the National Labor Relations Commission and ordered the reinstatement of the Commission’s earlier Decision dated August 30, 2002, as well as the relevant Writ of Execution dated March 16, 2009. For the Court of Appeals, the computation of the National Labor Relations Commission in its earlier Decision became final and executory after the lapse of ten (10) days from the parties’ receipt thereof. The Court of Appeals added that the finality of this computation was not affected by the subsequent proceedings held before it and the Supreme Court and that the delayed enforcement of the Decision of the National Labor Relations Commission dated August 30, 2002 was not only attributable to Lepanto but also to Moreno, Francisco, and Elmo, who themselves appealed the case up to the Supreme Court.
Moreno, Francisco, and Elmo thus elevated their case to the Supreme Court, asserting that the computation of their backwages and separation pay should be reckoned from the date they were illegally terminated until the finality of Supreme Court’s Decision in G.R. No. 163210 on November 25, 2008. They further asserted that the computation should include the salary increases granted under the CBA.
What is the correct formula for computing the award of separation pay and backwages to Moreno, Francisco, and Elmo?
Should these include salary increases granted by the CBA?
The Supreme Court ruled that the award of separation pay and backwages for illegally dismissed employees should be computed from the time they were illegally dismissed until the finality of the decision ordering payment of their separation pay, in lieu of reinstatement.
As to what exactly these awards ought to include, the Court categorized its previous rulings as follows:
The first category delves into the inclusion or non-inclusion in the award of salary increases and benefits, which are contingent on the fulfillment of certain conditions, such as merit increases based on performance, the company’s fiscal position, or management’s benevolent initiative. According to the Court, the ruling in these cases denied the inclusion of contingent salary increases in the computation of backwages for being mere expectancies.
On the other hand, the second category delves into guaranteed salary increases and benefits, which are granted by law, standard company policy, or CBA.
However, the Court noted that those cases falling in the second category had opposing dispositions.
Acknowledging its contradicting rulings in the award of backwages or separation pay owing to illegally dismissed employees and the consequent instability they have caused to labor law jurisprudence, the Court laid down the following rule to settle the matter:
The award of backwages and/or separation pay due to illegally dismissed employees shall include all salary increases and benefits granted under the law and other government issuances, Collective Bargaining Agreements, employment contracts, established company policies and practices, and analogous sources which the employees would have been entitled to had they not been illegally dismissed. On the other hand, salary increases and other benefits which are contingent or dependent on variables such as an employee’s merit increase based on performance or longevity or the company’s financial status shall not be included in the award.
On this point, the Court noted that Article 294 of the Labor Code of the Philippines grants illegally dismissed employees the right to full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time their compensation was withheld up to the time of their actual reinstatement.
Furthermore, the Court equally noted that there is no provision in the Labor Code of the Philippines which mandates the exclusion of salary increases and benefits accruing to the dismissed employee.
In this regard, the Court explained that the overarching purpose of the reliefs granted by law to illegally dismissed employees is to make the latter whole again. For the Court, it should ensure that illegally dismissed employees are whole again by awarding them the benefits to which they would have been entitled if not for the illegal termination of their employment.
The Court stated that the ruling that the employees’ illegal dismissal literally allowed time to stand still for them because of their loss of employment and the resulting uncertainties from such an unfortunate event, does not sanction additionally punishing them for an act they have not been responsible for. The Court stressed that they, in fact, must be accorded justice and relief.
The Court thus ordered Lepanto to pay Moreno, Francisco, and Elmo backwages and separation pay based on their salary rates at the time of their termination, inclusive of guaranteed salary increases and other benefits and bonuses which they were entitled to receive under the law and other government issuances, collective bargaining agreements, employment contracts, established company policies and practices, and analogous sources had they not been illegally dismissed.
The award was computed from September 22, 2000, when they were illegally dismissed, up to November 25, 2008, when the Supreme Court’s Decision dated August 13, 2008 became final and executory.
The Court added that the award shall exclude salary increases and other benefits or bonuses which are contingent or dependent on variables such as an employee’s merit increase based on performance or longevity or the company’s financial status.
Further reading:
Dumapis v. Lepanto Consolidated Mining Co., G.R. No. 204060, 15 September 2020.
An electric cooperative holding a franchise for the retail distribution of electricity for the province of Albay had a labor organization, which also served as the collective bargaining agent of the electric cooperative’s employees.
The electric cooperative suffered from financial distress. Thus, efforts were undertaken to rehabilitate it. A strategy that the electric cooperative pushed for was that of Private Sector Participation. Under such strategy, the current employees of the electric cooperative shall be required to tender their courtesy resignation to give flexibility to the incoming private sector concessionaire, but they shall receive separation pay based on the existing collective bargaining agreement with the labor organization and shall have priority in rehiring based on the standards set by the concessionaire.
The labor organization expressed grievance over the conditions set under the Private Sector Participation strategy, which was why it sought preventive mediation for unfair labor practices before the regional branch of the National Conciliation and Mediation Board. The electric cooperative and the labor organization, however, failed to settle their differences, and this constrained the latter to decide to strike.
Subsequently, the Private Sector Participation strategy was eventually chosen as the appropriate rehabilitation measure and a concession was awarded to a certain company.
Still, the labor organization went on strike. Thereafter, notices of retrenchment were served on the labor organization’s employees.
As the labor dispute continued, the electric cooperative and the labor organization formally requested the Secretary of the Department of Labor and Employment to assume jurisdiction over the controversy.
The Secretary of the Department of Labor and Employment assumed jurisdiction on January 10, 2014 and correspondingly issued a Return-to-Work Order of even date.
In a Resolution dated April 29, 2016, the Secretary of the Department of Labor and Employment upheld the validity of the retrenchment of the employees of the electric cooperative and ordered it to pay the retrenched employees their separation benefits in accordance with the collective bargaining agreement. It also ordered the electric cooperative to pay them backwages and other benefits computed from January 10, 2014 until the finality of the said Resolution.
The Court of Appeals modified the said Resolution dated April 29, 2016 and fixed the period for computation of the backwages awarded by the Secretary of the Department of Labor and Employment from the date of the Return-to-Work Order on January 10, 2014 up to the issuance of the Resolution dated April 29, 2016.
The electric cooperative argued before the Supreme Court that the Court of Appeals erred in sustaining the award of backwages because:
it complied with the Assumption Order as early as January 14, 2014;
“backwages” is awarded only to an illegally dismissed employee; and
if backwages were to be awarded, the same should accrue only until February 26, 2014, the date when the returning employees last reported for work, and not until April 29, 2016, or the date of the Secretary of the Department of Labor and Employment’s Resolution.
Was the award of backwages proper?
If proper, was the limit to the period of computing backwages until April 29, 2016 correct?
The Court set forth relevant principles as follows:
The effects of an assumption order issued by the Secretary of the Department of Labor and Employment under Article 2781Formerly Article 263. The provision states: Art. 278. Strikes, picketing, and lockouts. — x x x (g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. x x x (Emphasis supplied.) (g) of the Labor Code of the Philippines are two-fold:
it enjoins an impending strike on the part of the employees, and
it orders the employer to maintain the status quo.2Digital Telecommunications Philippines, Inc. v. Digitel Employees Union, G.R. Nos. 184903-04, October 10, 2012.
In cases where a strike has already taken place, the assumption order shall have the effect of:
directing all striking workers to immediately return to work; and
mandating the employer to immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike.
The status quo to be maintained under law refers to that which was prevailing the day before the strike. Furthermore, this obligation on the part of the employer generally requires actual reinstatement.
Jurisprudence3San Fernando Coca-Cola Rank-and-File Union v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 200499, October 4, 2017. teaches that the purpose of maintaining the status quo is to avoid any disruption to the economy while the labor dispute is being resolved in the proper forum. The objective is to minimize, if not totally avert, any damage that such labor dispute might cause upon the national interest by occasion of any work stoppage or slow-down. The directive to maintain the status quo extends only until the labor dispute has been resolved.
1)
In the present case, the Supreme Court ruled that the award of backwages was proper.
The Court found that the Secretary of the Department of Labor and Employment assumed jurisdiction over the labor dispute between the parties on January 10, 2014 and issued a return-to-work order on even date under Article 278 (g) of the Labor Code of the Philippines.
Although the electric cooperative claimed that it admitted the striking employees to its premises on January 14, 2014, the Court found that no actual work was given to the said employees. Instead, the Court discovered that the electric cooperative confined these employees in a room for over three weeks.
Furthermore, although the electric cooperative claimed that it tendered the salaries of the employees who actually reported back for work, it also admitted that the employees refused to receive the amounts it supposedly tendered because of disagreement on the figures. The Court took this to mean that the affected employees were still not paid their wages and benefits for the period they were supposed to be reinstated.
The Court thus affirmed the Secretary of the Department of Labor and Employment’s award of backwages.
However, the Court clarified that backwages were not imposed as a penalty for non-compliance with the Assumption Order, but as satisfaction of the electric cooperative’s obligation towards the employees as contemplated under the Assumption Order. In other words, said backwages corresponded to the amount ought to have been received by the affected employees if only they had been reinstated following the Assumption Order.
The Court further stated that an award of backwages outside illegal dismissal cases is not prohibited. According to the Court, even in the absence of illegal dismissal in this case, the Secretary of the Department of Labor and Employment had the authority to award and was not mistaken in awarding backwages.
2)
In this regard, the limitation of the computation of backwages until April 29, 2016 by the Court of Appeals was affirmed. The Supreme Court ruled that the status quo mandated by the Assumption Order extended from the date of its issuance until the Secretary of the Department of Labor and Employment’s resolution of the dispute between the parties on the said date of April 29, 2016.
Further reading:
Albay Electric Cooperative, Inc. v. ALECO Labor Employees Organization, G.R. No. 241437, September 14, 2020.
The accused here were charged with one (1) count of violation of the Migrant Workers and Overseas Filipinos Act of 1995, alongside ten (10) counts of estafa. With regard to the charge relating to the Migrant Workers and Overseas Filipinos Act of 1995, they were specifically accused of illegal recruitment in large scale when they conspired to
represent themselves to have the capacity to contract, enlist and transport workers for employment as factory workers in Korea and Italy;
recruit and promise employment/job placement abroad to the complainants in the case; and
accordingly collect and receive money from them without first securing the required license and authority from relevant government authorities.
One of the accused (named Sagisag) countered that he was merely an administrative assistant of the agency, which, in turn, was owned by his co-accused. Sagisag alleged that he met the complainants when they purchased plane tickets for Korea, and he claimed that it was his co-accused who received the payments for the tickets, and that he was merely instructed to issue provisional receipts for the payments. Sagisag further denied conspiring with his co-accused to misrepresent and promise work in South Korea in exchange for money. He said that whenever he accepted money from the complainants, he merely did so in behalf of his co-accused De Guzman, and that in cases when he accepted money on his own behalf, he did so on the understanding that the money was for the payment of the tuition fee for the Korean language classes he conducted.
After trial, the Regional Trial Court found the accused guilty beyond reasonable doubt of the crime of illegal recruitment in large scale, in addition to the finding of guilt beyond reasonable doubt to three (3) counts of estafa. The trial court ruled that the prosecution sufficiently established that the two elements of illegal recruitment concurred, namely:
that Sagisag did not have the required license or authority to engage in the recruitment and placement of workers, and
that Sagisag nevertheless undertook a recruitment and placement activity as defined under Article 13 (b) of the Labor Code of the Philippines, or otherwise any prohibited practice under Article 34 of the same Code.
Specifically, it found that the first element was established by no less than the POEA Certification dated October 7, 2008 that Sagisag and his co-accused were not licensed or otherwise authorized to recruit workers for overseas employment.
This finding was affirmed by the Court of Appeals. Sagisag went to the Supreme Court.
The issue that reached the Court was whether the lower courts erred in convicting Sagisag.
The Court began by stating that an illegal recruiter may be held liable for the crimes of illegal recruitment committed in large scale and estafa without risk of being put in double jeopardy, for as long as the accused has been so charged under separate Informations. Here, record showed that Sagisag was separately charged for illegal recruitment in large scale and estafa. For the Court, Sagisag was properly prosecuted simultaneously for both crimes.
With regard to illegal recruitment, the Court stated that it is committed by a person who: undertakes any recruitment activity defined under Article 13 (b) or any prohibited practice enumerated under Articles 34 and 38 of the Labor Code of the Philippines; and does not have a license or authority to lawfully engage in the recruitment and placement of workers. It is committed in large scale when it is committed against three or more persons individually or as a group.
Together with the Migrant Workers and Overseas Filipinos Act of 1995, the law governing illegal recruitment is the Labor Code of the Philippines which, under Article 13 (b) thereof defines recruitment and placement as “any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not x x x.” The same Code also defines and punishes illegal recruitment, under Articles 38 and 39.
According to the Court, to prove illegal recruitment, two elements must be shown, namely:
the person charged with the crime must have undertaken recruitment activities, or any of the activities enumerated in Article 34 of the Labor Code of the Philippines, as amended; and
said person does not have a license or authority to do so.
In this regard, the Court said that it is not the issuance or signing of receipts for the placement fees that makes a case for illegal recruitment, but rather the undertaking of recruitment activities without the necessary license or authority.
The Court then added that to establish that the offense of illegal recruitment was conducted in a large scale, it must be proven that the accused:
engaged in acts of recruitment and placement of workers defined under Article 13 (b) or in any prohibited activities under Article 34 of the Labor Code of the Philippines;
has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of a license or an authority to recruit and deploy workers, either locally or overseas; and
commits the unlawful acts against three or more persons, individually or as a group.
The Court mentioned that all three elements have been established beyond reasonable doubt.
In the present case, the Court found that the accused engaged in recruitment and placement activities without the requisite authority, and were therefore properly charged with illegal recruitment.
The Court considered the attack of Sagisag on the admissibility of the POEA Certification which stated that he had no authority or license to recruit for overseas employment, since said document was not authenticated in court by the signatory thereto. However, such attack was not found to be meritorious, for record showed that the parties, which included Sagisag, had stipulated on the veracity and probative import of the POEA Certification. The Court stated that accused Sagisag may not now turn back on the stipulations and then question the admissibility of a crucial document, the due issuance of which he stipulated and agreed on.
The Court also found without merit Sagisag’s reliance on the Equipoise Rule, which provides that where the evidence in a criminal case is evenly balanced, the constitutional presumption of innocence tilts the scales in favor of the accused. The Court pointed out that the rule was inapplicable to the case of Sagisag because, contrary to his submission, the evidence submitted and evaluated by both lower courts mounted high against his denial and ineffective and uncorroborated feigning of innocence. The total evidence presented by both parties, said the Court, was asymmetrical, with the prosecution’s submissions indubitably demonstrating Sagisag’s guilt.
The Court accordingly affirmed the conviction of Sagisag.
Further reading:
People v. Bautista, G.R. No. 218582, September 3, 2020.
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