Paulino Ungos III

Lawyer | Law Professor | Author

Tag: decision

  • The Liability Continues

    Antonio was employed by a foreign principal employer, Fairport Shipping Co., Ltd. (Fairport Shipping) to work as Master on board the vessel M/V Orionis from August 4, 2009 to July 24, 2010.

    Antonio states that Fairport Shipping did not pay his salary and benefits, but assured him that these will be paid in full upon disembarkation. Although Antonio disembarked from the vessel on July 27, 2010, he did not receive his salary and benefits despite his demand.

    On July 24, 2012, Antonio filed a complaint before the Office of the Labor Arbiter for money claims against Fairport Shipping and its current local manning agency Stella Marris Shipmanagement, Inc. (Stella Marris).

    Stella Marris denied liability for Antonio’s claims. Although Stella Marris acknowledged having executed an Affidavit of Assumption of Responsibility, the same only pertained to the assumption of full and complete responsibility for all contractual obligations to the seafarers originally processed and recruited by its immediate predecessor, Global Gateway Crewing Services, Inc. (Global Gateway). Stella Marris explained that Antonio was originally hired by Skippers United Pacific, Inc. (Skippers United), whose obligations under Antonio’s contract were transferred to Global Gateway. Since said obligations were beyond the coverage of its Assumption of Responsibility, Stella Marris posited that it should not be held liable for Antonio’s claims.

    The Office of the Labor Arbiter ruled in favor of Antonio and held the three manning agencies, i.e., Skippers United, Global Gateway, and Stella Marris solidarily liable with Fairport Shipping to pay Antonio his claims. The Office of the Labor Arbiter found Skippers United liable as signatory to the employment contract and Global Gateway as substitute manning agent, which assumed full and complete responsibility for all contractual obligations to the seafarers originally recruited and processed by Skippers United.

    The National Labor Relations Commission, in turn, ruled that the Office of the Labor Arbiter erred in holding Skippers United and Global Gateway solidarily liable with Fairport Shipping since they were not impleaded as parties in the complaint. The Commission then found no basis to hold Stella Marris liable, considering that the latter was not the local manning agency which originally deployed Antonio and it did not assume the liability of Skippers United as the deploying agency. According to the National Labor Relations Commission, it was Skippers United which should have been held liable pursuant to Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995, as amended, which provides that the liability of the original manning agency continues during the entire period of the employment contract and is not affected by the transfers or substitutions of manning agencies. Finally, it observed that the liability assumed by Stella Marris under its Affidavit of Assumption of Responsibility pertained only to those employees originally recruited by Global Gateway, and not of Skippers United, as Antonio was in this case.

    The Court of Appeals affirmed the Decision of the National Labor Relations Commission. Said Court ruled that Skippers United, as Fairport Shipping’s original manning agent, was solidarily liable with Fairport Shipping for Antonio’s claims under the applicable 2003 POEA Rules and Regulations1recent version is the 2016 Revised POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers (POEA Rules and Regulations) since its liability continued during the entire period of the employment contract and was not affected by the transfers or substitutions of manning agencies. Although Fairport Shipping was a party in the complaint, the Court of Appeals still dismissed Antonio’s petition.

    Could Stella Marris be held liable for Antonio’s claims?

    The Supreme Court ruled in the negative.

    The Court stated that while the POEA Rules and Regulations allow the transfer of the registration and/or accreditation of the foreign principal to another local manning agency, which includes the transfer of the full and complete responsibility over all contractual obligations of the principal to the seafarers, the said transfer, covers only those contractual obligations to seafarers “originally recruited and processed by the former agency” relating to the registration of principal and the transfer of registration.

    In the present case, the Court found that Skippers United recruited Antonio and processed his employment as the original local manning agency of Fairport Shipping. For the Court, Skippers United assumed joint and solidary liability with Fairport Shipping under the contract of employment of Antonio as mandated by law.

    The Court likewise found that Fairport Shipping thereafter transferred its accreditation or registration to Global Gateway in accordance with POEA Rules and Regulations. And by virtue of an Affidavit of Assumption of Responsibility Global Gateway assumed full and complete responsibility and without qualification all contractual obligations to the seafarers originally recruited and processed by Skippers United for the vessel M/V Orionis. Stella Marris then executed an Affidavit of Assumption of Responsibility covering those contractual obligations of Fairport that were “originally processed and recruited by Global.”

    Since the Court considered Stella Marris’ limited assumption of liability to be consistent with the POEA Rules and Regulations which, to reiterate, pertained only to the liability of the substitute manning agent to those contracts originally recruited by the transferor, the Court found no basis to hold Stella Marris liable for Antonio’s claims.

    Did the Court deny Antonio’s claims for his failure to implead Skippers United and Global Gateway?

    No.

    The Court cited relevant portions of Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995, as amended, which provides that the local manning agency assumes joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the employment contract.

    This liability remains intact and extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said agreement and covers any and all claims arising therefrom. The solidary liability of the foreign principal and the recruitment agency to the employees shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the said contract.

    According to jurisprudence,2Catan v. National Labor Relations Commission, G.R. No. 77279, [April 15, 1988], 243 PHIL 858-864 this must be so, because the obligations covenanted in the recruitment agreement entered into by and between the local agent and its foreign principal are not coterminous with the term of such agreement so that if either or both of the parties decide to end the agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all end, but the same extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Otherwise, this will render nugatory the very purpose for which the law governing the employment of workers for foreign jobs abroad was enacted.

    The Court added that even if an Affidavit of Assumption of Responsibility was validly executed by the transferee agent assuming the full and complete responsibility over all contractual obligations of the principal to the seafarers originally recruited and processed by therein original manning agent, the latter’s liability to its recruited workers remained intact because the said workers were not privy to such contract of transfer.

    In the present case, the Court discovered that prior to the filing of the complaint in the present case, Antonio had earlier filed a complaint against Skippers United and Fairport Shipping. The Court also noticed that during the pendency thereof, Fairport Shipping’s manning agent transferred from Skippers United to Global Gateway, and Global Gateway to Stella Marris.

    However, the Office of the Labor Arbiter rendered a Decision dismissing this earlier complaint, without prejudice to Antonio’s refiling of the case against the alleged proper parties, i.e., Global Gateway, Fairport Shipping, and Stella Marris. Antonio appealed this Decision before the National Labor Relations Commission, but the appeal was dismissed due to his failure to sign the certificate of non-forum shopping. Unfortunately, Antonio no longer moved for reconsideration of the said Resolution.

    According to the Court, since both Skippers United and Global Gateway were not impleaded in the present complaint; it could not adjudge their respective liabilities to Antonio.

    Nonetheless, the Court took into account the mistake of the Office of the Labor Arbiter in dismissing the earlier complaint. Said the Court: “so as not to cause Antonio serious injustice absent any fault or wrongdoing, the Court deems it proper to remand the present case back to the Office of the Labor Arbiter in order to further implead both Skippers United and Global Gateway as respondents together with Fairport Shipping, the original respondent.”

    The Court explained that such course of action found bearing in Section 11, Rule 3 of the Rules of Court, which provides that parties may be added by order of the court on its own initiative at any stage of the action and on such terms as are just.

    The Court stated that once Skippers United and Global Gateway, together with Fairport Shipping, are properly impleaded, Antonio’s monetary claims in the present complaint should be resolved by the Office of the Labor Arbiter with utmost dispatch on its merits.

    Further reading:

    • Orlanes v. Stella Marris Shipmanagement, Inc., G.R. No. 247702, June 14, 2021.

  • Unfit to Work as a Seaman

    Feliciano was hired by a foreign employer, Barker Hill Enterprises (Barker Hill), through its agent, Pacific Ocean Manning, Inc. (Pacific Ocean Manning) to work as a fitter on board the vessel MT Tequila under a Philippine Overseas Employment Administration-Standard Employment Contract (POEA Standard Employment Contract) and a Collective Bargaining Agreement (CBA). Feliciano boarded the vessel on May 9, 2012.

    Feliciano alleged that in July 2012, he figured in an accident when he bumped his right knee on the step of the stairs while on board the ship. On October 25, 2012, Feliciano consulted the on-board doctor due to pain in his right knee. The on-board doctor diagnosed Feliciano with “Damage of the Meniscus of the Right Knee.” He was then referred to a doctor in Poland, who made the same diagnosis. On October 28, 2012 he was medically repatriated to the Philippines.

    Upon arrival in Manila, Feliciano reported to Pacific Ocean Manning’s office and was referred to the company-designated physician. On October 30, 2012, Feliciano was diagnosed with chondromalacia patella, right or patellofemoral syndrome. He was prescribed medications and advised to undergo physical rehabilitation. Feliciano had follow-up consultations on December 4, 2012, as well as January 9, February 8, and March 7, 2013.

    On March 27, 2013, Feliciano consulted his personal doctor, who issued a medical report which stated that Feliciano was unfit for sea duties as he was suffering from partial permanent disability with a disability rating of Grade 10.

    On April 11, 2013, Feliciano had a check-up with the company-designated physician, who issued an interim disability assessment also of Grade 10 and advised Feliciano to continue physiotherapy. Feliciano had another check-up on May 8, 2013, after which, Feliciano’s condition was declared by the company-designated physician to be work-related with a final disability rating of Grade 10. Feliciano had follow-up check-ups on June 10, July 19, and August 2, 2013. During the last consultation on August 2, 2013, the company-designated physician advised that Feliciano’s physiotherapy be stopped and for Feliciano to continue on a home exercise program.

    On October 2, 2013, Feliciano consulted a different personally-appointed doctor, who gave a disability rating of Grade 6.

    Thereafter, Feliciano filed a complaint before the Office of the Labor Arbiter for total and permanent disability compensation. During the preliminary conference, the parties agreed to refer Feliciano to a third and independent doctor, who diagnosed Feliciano with valgus knee 2º to moderate-severe degenerative osteoarthritis and declared him unfit to work as a seaman, with a disability rating of Grade 7.

    Should Feliciano be granted total and permanent disability compensation?

    The Supreme Court ruled that Feliciano is only entitled to partial permanent disability compensation of Grade 7.

    The Court cited the last paragraph of Section 20 (A) (3) of the POEA Standard Employment Contract providing for the mandatory conflict resolution procedure when the findings of the company-designated physician and the seafarer’s appointed physician are different. The provision states: “If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third doctor’s decision shall be final and binding on both parties.”

    In the present case, the Court found that the company-designated physician and Feliciano’s personal doctor were consistent in their diagnoses that Feliciano was suffering from partial permanent disability and that they differed only as to the disability rating. On the one hand, the company-designated physician issued a disability rating of Grade 10. On the other hand, Feliciano’s personal doctor gave a disability rating of Grade 6. The Court noted that in any event, the parties agreed to refer Feliciano’s condition to a third doctor in compliance with the mandatory conflict resolution procedure under the POEA Standard Employment Contract. Said doctor issued a medical report which rated Feliciano’s disability as Grade 7 which is a partial permanent disability under the POEA Standard Employment Contract.

    The Court explained that Section 32 of the POEA Standard Employment Contract provides a schedule of disability from Grade 1 to Grade 14 and only disabilities classified as Grade 1 are considered total and permanent disability. Disabilities with a rating from Grade 2 to Grade 14 are classified as partial permanent disability.

    The Court stressed that the third doctor’s medical report must be viewed and upheld in its entirety. Said medical report did not indicate that Feliciano was suffering from total and permanent disability. According to the Court, were it so, the third doctor would have rated Feliciano’s disability as Grade 1. The phrase “unfit to work as a seaman”, said the Court, should be understood in the context of the third doctor having also given a Grade 7 rating. Thus, the rational understanding of this phrase “unfit to work as a seaman” was that it merely indicated that Feliciano was suffering from a disability which rendered him physically incapable for sea duties. The report clearly did not declare that Feliciano was suffering from total and permanent disability but rather, that he was suffering only from Grade 7 partial permanent disability.

    Furthermore, the Court considered the company-designated physician’s medical report as a final and conclusive assessment of Feliciano’s condition because although treatment of Feliciano continued after he was found to be suffering from disability, the same did not automatically negate the finality of the third doctor’s diagnosis, since there may be illnesses, injuries, or other health conditions which require regular treatment, follow-up consultations, rehabilitation, and maintenance medication.

    Also, the Court stated that the fact that Feliciano had not been redeployed within 240 days from repatriation did not mean that his disability could be deemed total and permanent. This is because Section 20 (A) (6) of the POEA Standard Employment Contract expressly states that the disability shall be based exclusively on the disability ratings under Section 32 and shall not be measured or determined by the number of days a seafarer is under treatment or the number of days in which sickness allowance is paid.

    Finally, the Court no longer gave credence to Feliciano’s assertion of entitlement to total and permanent disability by operation of law in view of the claim that he was not furnished with a copy of the company-designated physician’s medical report. According to the Court, such was a novel allegation that was never raised before the labor tribunals. The Court reiterated the principle that points of law, theories, issues, and arguments not previously raised before the lower court or quasi-judicial tribunal cannot be raised for the first time on appeal or review. Parties are not permitted to belatedly raise new issues or arguments which had not been previously determined by the lower courts or tribunals. To allow parties to do so would be offensive to the tenets of fair play and due process.1Pioneer Insurance & Surety Corp. v. Tan, G.R. No. 239989, July 13, 2020.

    In sum, the Court upheld the final and binding medical report of the third doctor and affirmed the finding that Feliciano was suffering from a Grade 7 disability or partial permanent disability.

    Further reading:

    • Pacific Ocean Manning, Inc. v. Castillo, G.R. No. 230527, June 14, 2021.

  • A Verbal Notice of the Seafarer’s Disability Rating Is Not Enough

    Gregorio was engaged under a 10-month employment contract by Panstar Shipping Co., Ltd. (Panstar), through its agent Abosta Shipmanagement Corporation (Abosta) to work as an oiler on board the M/V Sino Trader. He was deployed on March 20, 2016.

    On June 23, 2016, Gregorio and several crewmates were ordered to carry ship supplies and food provisions. While carrying a sack of rice, Gregorio claimed to have felt a sudden snap on his left lower back with a sharp pain radiating down to his thigh/leg. He immediately reported the incident to his superiors, and he was given pain relievers and a waist protector. Since his condition did not improve, he was brought to a medical center in Singapore where he was diagnosed with “Lumbar spondylosis with discopathy at L4-L5, L5-S1” and also prescribed medication. He was again brought to a hospital in Brazil because of persistent pain. On August 6, 2016, he was repatriated to the Philippines for further medical treatment.

    Upon arrival, Gregorio immediately reported to the company-designated physician on August 8, 2016. After running a series of laboratory tests on Gregorio, the company-designated physician diagnosed him with “Herniated Nucleus Pulposus L3-L4, Disc Protrusion L5-S1 and L-4 Radiculopathy,” and recommended that he undergo physical therapy. Gregorio claimed, however, that the employer ceased his treatment and rehabilitation on February 16, 2017.

    During a conference held on February 20, 2017, the employer informed Gregorio that he suffered from Grade 8 disability and offered him the corresponding disability benefits in the amount of US$16,795.00. Gregorio requested for further treatment or an improved monetary offer, but his requests were denied.

    On April 25, 2017, Gregorio consulted his personal doctor, an orthopedic surgeon, who diagnosed him with “Disc Protrusion L5-S1 & Radiculopathy” and declared him permanently unfit for sea duty in any capacity.

    Gregorio instituted a complaint for payment of total and permanent disability benefits against the employer. According to Gregorio, the company-designated physician failed to timely issue a final medical assessment. He emphasized that the employer was not able to present any final medical assessment even during the mandatory conferences before the Office of the Labor Arbiter.

    The employer contended that based on an alleged November 22, 2016 Medical Assessment issued by the company-designated physician, Gregorio only suffered from a Grade 8 disability. The employer posited that said November 22, 2016 Medical Assessment should prevail. Said employer also stressed that Gregorio failed to provide a copy of the medical assessment of his personal doctor of choice prior to his filing of complaint.

    In the meantime, the parties agreed to refer the conflicting medical findings to a third doctor. The appointed third doctor recommended Gregorio to undergo a Magnetic Resonance Imaging (MRI) scan and Electromyography (EMG) test. Despite the release of the MRI scan and EMG test results, the medical assessment of the third doctor was not secured. Gregorio claimed that the non-completion of the conflict-resolution procedure was due to the fault of the employer, which the latter denied.

    Is Gregorio entitled to total and permanent disability benefits?

    The Supreme Court ruled in the affirmative.

    The Court stated that claims for disability benefits for injuries suffered by seafarers on board or during the term of their employment contract are governed by the provisions of Section 20 (A) of the POEA Standard Employment Contract1SECTION 20. COMPENSATION AND BENEFITS. — A. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as follows: 1. The employer shall continue to pay the seafarer his wages during the time he is on board the vessel. 2. If the injury or illness requires medical and/or dental treatment in a foreign port, the employer shall be liable for the full cost of such medical, serious dental, surgical and hospital treatment as well as board and lodging until the seafarer is declared fit to work or to be repatriated. However, if after repatriation, the seafarer still requires medical attention arising from said injury or illness, he shall be so provided at cost to the employer until such time he is declared fit or the degree of his disability has been established by the company-designated physician. 3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one hundred twenty (120) days. For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third doctor’s decision shall be final and binding on both parties. xxx xxx xxx in that the seafarer has the obligation to report to the company-designated physician within three days from his repatriation, while the company-designated physician has the corresponding obligation to issue a final assessment of the seafarer’s disability within the periods mandated by law. The Court clarified that it is, however, not enough for the company-designated physician to issue a medical assessment within 120 or 240 days from the seafarer’s repatriation. In order to be binding, the medical assessment must be final, definite, and conclusive, otherwise, the law will step in and consider the seafarer totally and permanently disabled. Jurisprudence2Jebsens Maritime, Inc. v. Mirasol, G.R. No. 213874, June 19, 2019. has described a final, conclusive and definite medical assessment as that which must clearly state whether the seafarer is fit to work or the exact disability rating, or whether such illness is work-related, and without any further condition or treatment. It should no longer require any further action on the part of the company-designated physician and it is issued by the company-designated physician after he or she has exhausted all possible treatment options within the periods allowed by law. Jurisprudence3Gere v. Anglo-Eastern Crew Management Phils., Inc., G.R. Nos. 226656 & 226713, April 23, 2018. also teaches that apart from issuing a final, conclusive, and definite medical assessment, the company-designated physician and/or the company must also furnish the seafarer a copy thereof. To require the seafarer to seek the decision of a neutral third-party physician without primarily being informed of the assessment of the company-designated physician is a clear violation of the tenets of due process and is not countenanced.

    In the present case, the Court found that the company-designated physician failed to furnish Gregorio with a copy of the November 22, 2016 Medical Assessment within the periods mandated by law. The Court also found that Gregorio was informed of his Grade 8 disability rating only during the conference held on February 20, 2017 before the Office of the Labor Arbiter.

    The Court stressed that a verbal notice of the seafarer’s disability rating is not enough. The reason for furnishing the seafarer with a copy of the final medical assessment is to afford the seafarer the opportunity to evaluate the same and decide whether he agrees with it or not. Should the seafarer disagree with it, he ought to bring the same to an independent doctor who can only get a better understanding of the opinion of the company-designated physician through a copy of the latter’s medical assessment.

    In the present case, the Court stated that Gregorio cannot be expected to make an informed decision on the medical assessment of the company-designated physician based on a mere verbal declaration of his purported disability. Said the Court: Insofar as he is concerned, no final medical assessment was issued by the company-designated physician to contest. As such, Gregorio need not seek the opinion of an independent physician, more so refer the matter to a third doctor. Without proper notice of the November 22, 2016 Medical Assessment to Gregorio, he was already deemed totally and permanently disabled by operation of law, and therefore entitled to the corresponding disability benefits under the POEA Standard Employment Contract. The medical assessment of Gregorio’s personal doctor, as well as the absence of a medical assessment from a third doctor became immaterial.

    The Court added that the November 22, 2016 Medical Assessment, as an attachment to respondents’ Position Paper, was furnished Gregorio on September 8, 2017, or 396 days from his repatriation. For the Court, the final medical assessment of the company-designated physician was clearly not furnished to Gregorio within the 120 or 240-day periods mandated by law.

    The Court ordered the employer to pay total and permanent disability benefits to Gregorio.

    Further reading:

    • Abella v. Abosta Shipmanagement Corp., G.R. No. 249358, April 28, 2021.

  • A Blank Form with a Checklist

    The employee initially filed on 25 September 2014 a complaint against his employer via the Single-Entry Approach (SENA) before the Regional Conciliation and Mediation Board — NCR for illegal dismissal and non-payment of separation pay and labor standard law benefits (SENA Complaint). The SENA Complaint was, however, deemed closed and terminated because of the employee’s filing of a similar complaint before the National Labor Relations Commission (NLRC) against his employer for money claims (NLRC Complaint). Record shows that although the employee included a claim of separation pay in the causes of action in the NLRC Complaint, he failed to include therein a cause of action for illegal dismissal. The employee’s position paper still revealed that he specifically argued for the illegality of his dismissal from employment, as well as his entitlement to separation pay, among others.

    However, the labor tribunals and the Court of Appeals (CA) refused to resolve the issues on illegal dismissal and the money claims concomitant thereto, such as separation pay, damages, and attorney’s fees. Particularly, they ruled that since these money claims arose from a finding of illegal dismissal and the latter was not among the causes of action listed in the employee’s NLRC Complaint, they were precluded from passing on the issue of illegal dismissal, under Section 12, Rule V of the 2011 NLRC Rules of Procedure, as amended.

    Were the labor tribunals and the CA correct in not passing on the issue of illegal dismissal?

    The Supreme Court ruled that the labor tribunals and the CA were not correct. They should have addressed the issue of illegal dismissal.

    Section 12, Rule V of the 2011 NLRC Rules of Procedure, as amended, governs the rules on submission of position papers and replies before the NLRC. Such provision reads:

    SECTION 12. SUBMISSION OF POSITION PAPER AND REPLY. —

    (a) Subject to Sections 9 and 10 of this Rule, the Labor Arbiter shall direct the parties to submit simultaneously their verified position papers with supporting documents and affidavits on a date set by him/her within ten (10) calendar days from termination of the mandatory conciliation and mediation conference.

    (b) No amendment of the complaint or petition shall be allowed after the filing of the position papers, unless with leave of the Labor Arbiter.

    (c) The position papers of the parties shall cover only those claims and causes of action stated in the complaint or amended complaint, accompanied by all supporting documents, including the affidavits of witnesses, which shall take the place of their direct testimony, excluding those that may have been amicably settled.

    (d) Within ten (10) days from receipt of the position paper of the adverse party, a reply may be filed on a date agreed upon and during schedule set before the Labor Arbiter. The reply shall not allege and/or prove facts and any causes of action not referred to or included in the original or amended complaint or petition or raised in the position paper. (Emphases supplied)

    The Court stated that sub-paragraph (c) purportedly limits the coverage of the position papers of the parties to only those claims and causes of action stated in the complaint or amended complaint; whereas sub-paragraph (d) directs that the reply shall only allege and prove facts and causes of action in the original or amended complaint or in the position paper.

    The Court took judicial notice of the fact that initiatory complaints filed before the NLRC are just blank forms wherein the employee-complainant simply inputs his/her details, the respondent’s details, and ticks off a checklist of causes of action which are applicable to him/her. The Court stated that it is only upon the filing of position papers that the complainant is able to expound on the employer’s acts or omissions which constitute his/her causes of action against the latter.

    According to the Court, it is only reasonable to infer that notwithstanding the aforementioned provision, the complaint could not be the sole basis in determining the complainant’s causes of action given that it is in the position paper that the ultimate facts are presented and established by the submission of all relevant documents and affidavits to support the same and prove their respective causes of action. Otherwise stated, the filing of the position paper, and not the mere complaint, should be the operative act that forecloses the raising of matters constitutive of the employee-complainant’s cause of action.1Dee Jay’s Inn and Café v. Rañeses, G.R. No. 191823, October 5, 2016, 796 PHIL 574-596, citing Tegimenta Chemical Phils. and Garcia v. Buensalida, G.R. No. 176466, June 17, 2008, 577 PHIL 534-546

    The Court added that it is for this reason why sub-paragraph (d) of Section 12, Rule V of the 2011 NLRC Rules allows the replies to discuss matters not only covered by the complaint or amended complaint, but also those covered by the position papers. Such interpretation, the Court said, is in accord with the settled norm that “[i]n labor cases, rules of procedure should not be applied in a very rigid and technical sense,”2Loon v. Power Master, Inc., G.R. No. 189404, December 11, 2013, 723 PHIL 515-533 and that “labor officials should use all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, in the interest of due process.”3Claudia’s Kitchen, Inc. v. Tanguin, G.R. No. 221096, June 28, 2017, 811 PHIL 784-802

    In this case, the Court found that the employee initially filed a SENA Complaint which included, illegal dismissal and the concomitant claim of separation pay as his causes of action. His SENA Complaint was, however, deemed closed and terminated when he filed his NLRC Complaint — which, while including separation pay as among the causes of action indicated therein, did not include illegal dismissal. Nonetheless, the employee went ahead and presented arguments supporting his claim for illegal dismissal in his position paper. For the Court, the employee never intended to remove his cause of action for illegal dismissal when he essentially refiled his SENA Complaint as his NLRC Complaint. The Court accordingly resolved the issue of illegal dismissal.

    Further reading:

    • Burnea v. Security Trading Corp., G.R. No. 231038, April 26, 2021.

  • The Seafarer Received His Medical Report When the Parties Filed Their Position Papers

    On March 13, 2013, Leobert signed a 10-month contract as an Assistant Cook with Holland America Line Westours, Inc. (Holland America) through its agent, United Philippine Lines, Inc. (UPL). Leobert boarded the “MS Zuiderdam” on March 27, 2013.

    Leobert claimed that while performing his duties as an Assistant Cook, he experienced severe pain in his left shoulder, prompting him to notify his superior. He was advised to go to the infirmary, where the ship doctor prescribed pain relievers and advised him to rest for a few days. Leobert then requested an offshore consultation, but Holland America chose medical repatriation. Leobert was medically repatriated and arrived in the Philippines on April 10, 2013.

    Leobert reported to UPL for his post-disembarkation medical check-up on April 10, 2013, and was referred to Shiphealth, Inc., (Shiphealth) where he was advised to undergo physical therapy sessions. He was referred to the University Physicians Medical Center, Inc. after his condition did not improve, and he underwent medical tests. He then returned to Shiphealth and was instructed to obtain his medical records from UPL. He was told verbally that he was fit to work, but he was unable to obtain any documentation of his medical evaluation from UPL.

    From September 10, 2013 to October 8, 2013, Leobert sought medical advice from Seamen’s Hospital, where it was recommended that he undergo arthroscopic surgery. He also spoke with Dr. Cesar H. Garcia, an orthopedist who specializes in bone and joint diseases, who determined that Leobert was unfit to work as a seaman due to his shoulder injury. Leobert claimed that he was forced to seek medical help from independent doctors because Shiphealth and UPL refused to provide him with his medical records, and that he sought medical help from other doctors on his own initiative.

    On September 11, 2013, Leobert filed a complaint against Holland America and UPL, believing he was entitled to permanent total disability benefits.

    According to Holland America and UPL, Leobert was diagnosed with “Grade 10 — ankylosis of the shoulder joint not permitting arm to be raised above a level with a shoulder and/or irreducible fracture or faulty union collar bone” on June 14, 2013. However, Holland America and UPL claimed that Leobert was only entitled to US$12,090.00.

    Holland America and UPL also claimed that because Leobert failed to demonstrate that the company-designated physician’s assessment was tainted with bias, malice, or bad faith, and he failed to comply with the procedure under Section 20 (A) (3) of the POEA Standard Employment Contract for challenging the company-designated physician’s assessment, he was only entitled to the benefits resulting from the company-designated physician’s findings.

    Was Leobert entitled to permanent total disability benefits?

    The Supreme Court ruled in the affirmative.

    The Court noted that Holland America and UPL did not deny that Leobert’s injuries were work-related, but instead argued that Leobert was only entitled to disability benefits under Grade 10. Because Leobert failed to initiate the process to have the conflicting assessments of the company-designated physician and his own doctor referred to a third doctor, Holland America and UPL argued that the company-designated physician’s assessment is valid and should be relied on instead of the seafarer’s own doctor.

    While the Court recognized the conflict resolution procedure prescribed in Section 20 (A) (3) of the POEA Standard Employment Contract, it clarified that a seafarer’s failure to follow such procedure is only taken against him if it is first demonstrated that the seafarer was notified of the company-designated physician’s assessment. According to the Court, only after the seafarer has been duly and properly informed of the medical assessment can he decide whether or not he agrees with it. If he does not agree, he can begin the process of referring the assessment to his personal physician, after which the conflicting assessments are referred to a third doctor.

    The Court stressed its ruling in Gere v. Anglo-Eastern Crew Management Phils., Inc.1G.R. Nos. 226656 & 226713, April 23, 2018. in that the company-designated physician is mandated to issue a medical certificate, which should be personally received by the seafarer, or, if not practicable, sent to him/her by any other means sanctioned by present rules. Proper notice is one of the cornerstones of due process, the Court said, and the seafarer must be accorded the same especially so in cases where his/her well-being is at stake. If the seafarer is not notified of the evaluation of the company-designated physician after the lapse of the 120 or 240 day period from the date the seafarer first reported to the said physician, the Court states that by operation of law, the seafarer is deemed entitled to permanent total disability benefits.

    In the present case, the Court determined that Leobert was only shown the assessment of his impediment after Holland America and UPL had filed their position paper. Since the final and valid assessment of Leobert’s condition was not issued within the 120 or 240-day period, the Court ruled that Leobert was legally entitled to permanent total disability benefits.

    Further reading:

    • United Philippine Lines, Inc. v. Ramos, G.R. No. 225171, March 18, 2021.

  • We Laid the Employee Off to Re-assess His Qualifications

    On August 13, 2012, Jayraldin was hired by The Results Company, Inc. (TRCI), a business process outsourcing company. Jayraldin started as a sales representative and was promoted several times until he became a team leader in 2014. As a team leader, Jayraldin had the duty of supervising TRCI’s agents.

    On December 30, 2014, Jayraldin received an email from TRCI, informing him of infractions allegedly committed by Ruby, an agent under his supervision. Allegedly, based on quality call monitoring, Ruby incorrectly processed a customer’s order and failed to fully apprise the customer of TRCI products.

    TRCI’s Operations Manager decided to give Ruby a final written warning. However, Jayraldin, together with TRCI’s program managers, recommended that Ruby only be subjected to coaching.

    Later, Jayraldin was handed a notice stating that he was grossly negligent in the performance of an assigned task and that he willfully disobeyed an order of a superior, when he failed to give Ruby a Notice to Explain and final warning. The same notice placed him under preventive suspension and summoned him to an administrative hearing.

    Jayraldin explained that all program managers recommended that Ruby be provided only with coaching and that he had fulfilled his duty to issue her a Notice to Explain.

    After administrative proceedings, Jayraldin was admonished with a warning that a similar violation of TRCI’s Code of Discipline might lead to his dismissal. Jayraldin was also placed on temporary lay-off. Specifically, he was subjected to re-profiling until he was ready for re-assignment to another account. During the lay-off, Jayraldin was not to receive any compensation.

    Jayraldin thus filed a complaint for constructive dismissal against TRCI.

    TRCI contended that it only exercised its management prerogative. According to TRCI, it temporarily laid Jayraldin off so that it could assess his qualifications and re-assign him to other accounts, if needed.

    Was Jayraldin constructively dismissed from employment?

    The Supreme Court found that Jayraldin was constructively dismissed from employment.

    The Court stated that constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay and other benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment.1Morales v. Harbour Centre Port Terminal, Inc., G.R. No. 174208, January 25, 2012.

    With regard to transfer of an employee, the Court added that the employer is charged with the burden of proving that its conduct and action are for valid and legitimate grounds, such as genuine business necessity, and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal.2Morales v. Harbour Centre Port Terminal, Inc., G.R. No. 174208, January 25, 2012.

    In the present case, while the Court noted that the infraction that led to Jayraldin’s re-profiling was his failure to inform his subordinate of the penalty given by the Operations Manager, it found nothing on record to show that Jayraldin’s infraction was detrimental to the account he handled such that TRCI had no choice but to re-profile him.

    The Court added that Jayraldin was in reality not even transferred to any account. According to the Court, Jayraldin was temporarily laid-off and treated like a new applicant where he would be assessed for other accounts to see if he was qualified. However, the Court found that in the interim, Jayraldin’s economic circumstances became murky. His compensation ceased for a period not to exceed six months as he awaited being accepted into a new account. Worse, he had no assurance whether he would be considered for another account.

    The Court was convinced that TRCI failed to prove any valid and legitimate ground to re-profile Jayraldin as its drastic action was not commensurate to his transgressions. TRCI just made it appear on paper that Jayraldin was still its employee, but in reality he no longer received benefits, was placed in such a situation without any legitimate ground, and was treated like a new applicant. For the Court, this was clearly a dismissal in disguise and tantamount to constructive dismissal.

    On TRCI’s argument that it exercised its management prerogative, the Court did not accept the same, in view of the prejudice against Jayraldin and the lack of legitimate ground to place him on temporary lay-off. According to the Court, although the exercise of management prerogative will ordinarily not be interfered with, it is not absolute and it is limited by law, collective bargaining agreement, and general principles of fair play and justice. Said the Court: “Indeed, having the right should not be confused with the manner in which that right is exercised.”

    As a result of being constructively dismissed, Jayraldin was awarded separation pay, backwages, and attorney’s fees.

    Further reading:

    • Ebus v. The Results Co., Inc., G.R. No. 244388, March 3, 2021.

  • Not a Mere Run-of-the-Mill Employee

    Arlene started working as a Casual or Assistant Clinical Instructor for two semesters for the school year 1992-1993 in Holy Name University (HNU)’s College of Nursing while awaiting the results of her Nursing Board Examination.

    In the second semester of school year 1994-1995, she worked at the Medical Ward as a full-time Clinical Instructor until the school year 1998-1999. During the second semester of that school year, she transferred to the Guidance Center where she worked as a Nursing Guidance Instructor. In the meantime, she was elected as Municipal Councilor of Carmen, Bohol. She took a leave of absence from HNU upon her reelection as Municipal Councilor for the period from 2001 up to 2004.

    Sometime in the year 2004, Arlene rejoined HNU and was given a full-time load for the school year 2004-2005. For school years 2005-2006 and 2006-2007, Arlene signed contracts for term/semestral employment.

    However, in a notice dated February 28, 2007, HNU informed Arlene that her contract of employment, which would have expired on March 31, 2007, will no longer be renewed.

    Arlene filed a complaint for illegal dismissal against HNU. She argued that since she taught at HNU for more than six consecutive regular semesters, she already attained the status of a regular employee under the Manual of Regulations for Private School Teachers. She posited that she was not guilty of any infractions under the Labor Code of the Philippines or the Manual of Regulations for Private School Teachers. She concluded that she was illegally dismissed from employment as no valid or justifiable cause supported the same.

    On the other hand, HNU stated that for the school years 1995-1996, 1996-1997 and 1997-1998, Arlene received letters of appointment for each semester, with definite dates of commencement and end of her employment. Thus, HNU asserted that when her probationary appointment for the period June 1, 1997 until March 31, 1998 expired, that it was not obliged to renew her contract. With regard to the school years 2004-2005, 2005-2006, and 2006-2007, HNU contended that Arlene remained as a probationary employee.

    HNU stated that the completion of her probationary period did not automatically make her a permanent employee since she failed to satisfactorily comply with all the conditions of her probationary employment. HNU insisted that Arlene was not dismissed; rather, her contract of employment merely expired on March 31, 2007.

    Did Arlene attain regular status?

    The Supreme Court ruled in the negative.

    The Court reiterated prevailing jurisprudence in that the Manual of Regulations for Private Schools, not the Labor Code of the Philippines, determines whether or not a faculty member in a private educational institution has attained a permanent or regular status. According to the Court, before a private school teacher acquires permanent status, he or she should satisfy the following requisites: 1) The teacher must have served full-time; 2) he/she must have rendered three consecutive years of service; and 3) such service must have been satisfactory.

    In the present case, the Court found that Arlene failed to meet the required criteria to be considered as a permanent employee.

    According to the Court, prevailing regulations require a minimum of one-year clinical practice experience to qualify as a faculty member in a college of nursing, and is therefore, required for one to be considered as a full-time faculty of such.

    Although Arlene had rendered three consecutive years of satisfactory service, she never alleged to have performed clinical duties such as treating actual patients or assisting doctors in such treatment, nor did she present any substantial evidence to prove such. The Court stated that since Arlene failed to provide substantial evidence, much less clearly describe what kind of work she rendered as a clinical instructor, it could not consider Arlene’s work experience as “clinical practice.” For the Court, Arlene did not qualify as a full-time teacher at the College of Nursing of HNU.

    Based on evidence, the Court declared Arlene to be a fixed-term employee of HNU.

    The Court reiterated established jurisprudence that recognizes the validity of fixed-term employment contracts, as long as such contracts do not circumvent the employee’s right to security of tenure. According to the Court, the criteria under which fixed-term employment could not be said to be in circumvention of the law on security of tenure are the following:

    • The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or
    • It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter.

    In the present case, the Court considered Arlene’s part-time status and ruled that even if no written fixed-term contract was presented, judicial notice can be made upon the fact that teachers’ employment contracts are for a specific semester or term.

    The Court added that with respect to consent, the fixed-term contracts must be presumed to be knowingly and voluntarily entered into. It is a basic rule that “one who alleges defect or lack of valid consent to a contract by reason of fraud or undue influence must establish by full, clear and convincing evidence such specific acts that vitiated a party’s consent, otherwise, the latter’s presumed consent to the contract prevails.”

    In the present case, Arlene merely alleged that she was a regular employee and that her being a contractual employee was just a lame reason given by HNU to terminate her without due process. The Court viewed such allegations as self-serving and unsubstantiated that failed to overturn the presumption mentioned earlier.

    With regard to the second requisite, the Court found that Arlene was more or less on equal footing with HNU. According to the Court, Arlene was an honors graduate, an elected public official, and not a mere run-of-the-mill employee, who had the capability to be on equal footing in dealing with her employer when it came to her employment terms.

    The Court concluded that Arlene was validly contracted for a fixed-term, the expiry of which occurred with her latest contract on March 31, 2007. Such effectively ended the employee-employer relationship she had with HNU. No dismissal, whether illegal or not, ever happened. The Court accordingly denied her claims.

    Further reading:

    • Palgan v. Holy Name University, G.R. No. 219916, February 10, 2021.

  • Inconsistent Evidence and Unexplained Material Facts

    Jerome was hired by respondent ELPI in 1998 as a Professional Sales Representative. After several promotions, he was retrenched in 2003. He was rehired in 2005 and held the position of Sales and Marketing Services Manager in 2011.

    On November 4, 2011, ELPI issued a Show-Cause Letter, charging Jerome with violation of company rules and breach of trust and confidence. ELPI claims that on May 14, 2008, or more than three years back, Jerome simulated the purchase of four tires from a certain tire supplier and claimed reimbursement for the cost. He was placed under preventive suspension for 30 days. ELPI did not reveal the source of the damning information against Jerome.

    Jerome submitted his explanation and questioned ELPI’s failure to identify the source of the damaging information.

    In response, ELPI attached a copy of the official receipt, sales invoice, and car repairs request relating to the tire supplier.

    Jerome then submitted a certification dated December 7, 2011 issued by Lilia, proprietor of the tire supplier, stating that she issued the official receipt under the name of ELPI for the purchase of four tires.

    During the formal investigation, ELPI confronted Jerome with a notarized certification dated December 17, 2011 from Arnulfo, the husband of Lilia, stating that Jerome did not purchase tires from her. However, record showed that Arnulfo issued another statement dated December 20, 2011 acknowledging that he lacked knowledge of the sale and that his wife was the one who issued the official receipt.

    On December 21, 2011, Jerome was issued a Notice of Termination, prompting him to file a Complaint for illegal dismissal against ELPI.

    When ELPI filed its position paper, it presented two affidavits. First was the affidavit of Timothy dated December 18, 2011. Timothy narrated that Jerome directed him to obtain a receipt for the purchase of tires. Timothy further narrated that he obtained the receipt from the tire supplier and gave it to Jerome who, in turn, used it to obtain reimbursement. The second was the affidavit of Sojit dated December 19, 2011, who narrated that sometime in 2009, Timothy told him of Jerome’s directive to produce a receipt, of Jerome’s anger should Timothy fail to do so, and of Timothy’s fear during the conversation.

    The Office of the Labor Arbiter declared the dismissal of Jerome valid. The NLRC, however, ruled that Jerome was illegally dismissed from employment. The Court of Appeals’ ruling was that Jerome was validly dismissed.

    Was Jerome illegally dismissed from employment?

    The Supreme Court reiterated the settled rule that the employer has the right to terminate the services of an employee for a just or authorized cause.1Mayon Hotel & Restaurant v. Adana, G.R. No. 157634, [May 16, 2005], 497 PHIL 892-932 The dismissal of employees must, however, be made within the parameters of law and pursuant to the tenets of fair play. “[I]n termination disputes, the burden of proof is always on the employer to prove that the dismissal was for a just or authorized cause. Where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a matter of illegal dismissal.”

    Here, the Court remarked that during the administrative proceedings, ELPI had in its possession the official receipt, the sales invoice, the repairs request, Lilia’s statement, and the two contradicting statements of Arnulfo, as basis for its decision that Jerome committed dishonesty.

    However, the Supreme Court ruled that Jerome was illegally dismissed from employment because of ELPI’s failure to prove by substantial evidence the presence of a just cause for terminating Jerome’s employment. Specifically, ELPI had failed to show through substantial evidence that Jerome simulated the tire purchase transaction.

    Re: the official receipt, sales invoice, repairs request and Lilia’s certification

    The Court found that the official receipt, sales invoice, repairs request and Lilia’s certification only revealed the genuine transaction conducted by Jerome.

    The Court presumed the official receipt to be regular and in accordance with the ordinary course of business.2Section 3 (p) and (q), Rule 131, of the Rules of Court.

    Although noting the doubt expressed by the Court of Appeals on Jerome’s transaction because he presented an old receipt, the Supreme Court, nonetheless, stated that an old official receipt did not lead to Jerome’s guilt, especially in the face of Lilia’s undisputed certification to having herself issued the receipt for the purchase of four tires. According to the Court, that Lilia used an old receipt did not mean that the purchase of the tires did not happen.

    With regard to the repairs request, the Court found that it was approved by ELPI through its Human Resource Department (HRD) Manager, who had the duty to first ascertain that repairs were actually conducted on the car.

    For the Court, the said pieces of evidence contained no indication that Jerome simulated the sale and that no anomaly characterized Jerome’s claim for reimbursement.

    Re: Arnulfo’s statements

    The Court added that the evidence that would have contradicted Lilia’s statement was Arnulfo’s first statement. However, given the inconsistencies in Arnulfo’s two statements, the fact that Lilia sold tires to ELPI over which Jerome claimed reimbursements remained undisputed at the time of the administrative proceedings conducted by ELPI.

    Re: the affidavits of Timothy and Sojit

    The Court considered the affidavits unreliable given the circumstances under which they were executed.

    According to the Court, since the affidavits and their contents were only made known to Jerome when ELPI submitted its Position Paper, the presentation of the same was an attempt to validate Jerome’s termination post facto. These new allegations contained in the affidavits, the Court said, were not available at the time ELPI conducted the administrative hearing. It could therefore not have been its basis for dismissing Jerome.

    The Court even stated that even if it were to consider these affidavits, it would find it unusual for ELPI to not have initiated administrative proceedings against Timothy. The Court added that ELPI had not even explained why it took Timothy more than three years to inform ELPI of such simulated sale.

    Re: additional findings

    Other matters on record led the Court to doubt the validity of Jerome’s dismissal.

    First, despite the fact that Jerome’s tire transaction was readily verifiable, ELPI did not explain why it still initiated administrative proceedings against Jerome three years after his request for reimbursement was made and approved by ELPI’s HRD Manager. The Court pointed out that Timothy and the HRD Manager were not even directed to explain their participation in the purported simulation and approval of the reimbursement, respectively.

    Second, ELPI was the one who introduced as evidence the statement of Arnulfo that Jerome did not purchase any tires from the tire supplier, only for Arnulfo to issue a statement of recantation later.

    And third, on May 9, 2018, Jerome filed with the Court a Manifestation with Motion to Admit Attached Affidavit of Recantation. Jerome informed the Court that Sojit communicated to him the severance of the latter’s connection with ELPI. Sojit likewise disclosed that he was pressured to sign his purported affidavit dated December 19, 2011, under threats of including him in the investigation and dismissal should he refuse. Hence, on April 4, 2018, Sojit executed an Affidavit of Recantation, denying the events narrated in his affidavit dated December 19, 2011.

    Conclusion:

    The Court concluded that ELPI failed to show a clear, valid and legal cause to dismiss Jerome. According to the Court, the pieces of evidence ELPI presented were riddled with inconsistencies and unexplained material facts that leave much to be desired. Jerome’s dismissal was accordingly declared illegal.

    Further reading:

    • Bautista v. Eli Lilly Philippines, Inc., G.R. No. 235865, February 3, 2021.

  • Circumstances Revealed Voluntary Resignations

    Hazel was engaged by University of Saint Anthony as a credit and collection officer. Arlene was engaged as its accounting clerk. Jean was its classroom teacher. And Nancy was its accounting officer.

    With regard to Hazel, University of Saint Anthony noticed several irregular and anomalous transactions its University’s Accounting Office by way of a cash shortage of more than One Million Pesos representing the net collection of book remittances. Another audit report revealed anomalous transactions in prior years where tellers accommodated encashments of checks not in the name of University of Saint Anthony. Hazel went on leave during the audit, but later tendered her resignation. Record showed that University of Saint Anthony filed a criminal case and an information was filed before the Regional Trial Court.

    At around the same period, Arlene, Jean, and Nancy were found to have taken advantage of their positions in the Accounting Office by enrolling their children and relatives under the University’s group enrollment incentive program despite knowing that they were unqualified. Upon discovery of the fraudulent scheme, University of Saint Anthony immediately ordered an investigation and called a conference with Arlene, Jean and Nancy. During a conference, Arlene, Jean, and Nancy admitted that their children and relatives indeed benefitted from the unauthorized discounts. They were informed that their employment will be terminated on grounds of dishonesty amounting to malversation of school funds. Thereafter, Arlene, Jean, and Nancy tendered their resignation on December 22, 2007 (taking effect on January 2, 2008). Subsequently, University of Saint Anthony filed criminal cases Arlene, Jean, and Nancy.

    Hazel, Arlene, Jean, and Nancy soon filed their respective complaints for illegal dismissal against University of Saint Anthony.

    The Office of the Labor Arbiter declared their dismissal illegal and granted them the reliefs of reinstatement and backwages. On appeal, the National Labor Relations Commission reversed the decision of the Office of the Labor Arbiter because it found that the Hazel, Arlene, Jean and Nancy voluntarily resigned and opted for a voluntary exit before the effectivity of their supposed termination from employment. The Court of Appeals affirmed the Decision of the National Labor Relations Commission.

    An issue raised before the Supreme Court was whether the resignations of Hazel, Arlene, Jean, and Nancy rendered their complaints for illegal dismissal without basis.

    The Supreme Court ruled that Hazel, Arlene, Jean, and Nancy voluntarily resigned from employment.

    Jurisprudence teaches that resignation is the formal pronouncement or relinquishment of a position or office. It is the voluntary act of an employee who is in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and he has then no other choice but to disassociate himself from employment. The intent to relinquish must concur with the overt act of relinquishment; hence, the acts of the employee before and after the alleged resignation must be considered in determining whether he in fact intended to terminate his employment. In illegal dismissal cases, it is a fundamental rule that when an employer interposes the defense of resignation, on him necessarily rests the burden to prove that the employee indeed voluntarily resigned. For resignation from employment to be valid, there must be an intent to relinquish the position together with the overt act of relinquishment. Resignation must be voluntary. In illegal dismissal cases, the employer, if defense of resignation is presented, must show that the employee indeed voluntarily resigned.

    In the present case, the Court ruled that the fact of resignation by Hazel, Arlene, Jean, and Nancy was undisputed. It found that Hazel tendered her resignation on July 27, 2007, while Arlene, Jean, and Nancy tendered their resignation on December 22, 2007. Said resignations were found to have been approved by University of Saint Anthony.

    According to the Court, University of Saint Anthony correctly argued that Hazel, Arlene, Jean, and Nancy had voluntarily tendered their resignation before filing their complaints for illegal dismissal. The Court noted that ruling of the National Labor Relations Commission that this event rendered their complaints for illegal dismissal without basis as the employment relationship was severed before the effectivity date of its termination. The Court also noted that notwithstanding such ruling, Hazel, Arlene, Jean, and Nancy, no longer contested the same but insisted that there they were illegally dismissed.

    The Court considered the totality of circumstances, and ruled that University of Saint Anthony showed that Hazel, Arlene, Jean, and Nancy voluntarily resigned prior to the effectivity date of the termination of their employment. It was found that ongoing investigations were conducted relative to the irregular acts imputed to Hazel, Arlene, Jean, and Nancy thereby placing them in a difficult position. Although the Court acknowledged that wordings in resignations letters are not the sole test of voluntariness, the wording of the resignation letters of Hazel, Arlene, Jean, and Nancy, together with other circumstances found by the Court, showed the voluntariness of their resignations. The Court also emphasized that Hazel, Arlene, Jean, and Nancy neither contended nor presented countervailing evidence that their resignation was involuntary. The Court added the settled rule that there is nothing reprehensible or illegal when the employer grants the employee a chance to resign and save face rather than smear the latter’s employment record.

    In view of the voluntary resignations of Hazel, Arlene, Jean, and Nancy prior to the termination of their employment, the Court concluded that their complaints for illegal dismissal had no basis.

    Further reading:

    • Bance v. University of St. Anthony, G.R. No. 202724, February 3, 2021.

  • But the Claims Exceeded Php5,000.00

    On February 12, 2014, the Department of Labor and Employment, through its Regional Director, issued Labor Standards Compliance Certificates to Del Monte Motor Works, Inc. (Del Monte Motor Works) for having complied with Department Order No. 118-12, other labor laws, rules and regulations.

    For context, Department Order No. 118-12 was issued on January 13, 2012 by the Department of Labor and Employment, in the exercise of its rule-making power. The issuance provides for a fixed and performance compensation scheme in the computation of public utility bus driver’s or conductor’s wage. Its goal was to ensure public road transport safety by improving the working conditions, compensation and competence of bus drivers and conductors thereby eliminating their risk-taking behavior.

    On July 28, 2014, a complaint for money claims was filed against Del Monte Land Transport Bus, Co., Inc. (Del Monte Land Transport) by its bus drivers and conductors before the Office of the Labor Arbiter.

    They averred that since the start of their employment, they have yet to receive certain labor standards benefits and their daily salaries were below the prevailing daily minimum wage, in violation of Department Order No. 118-12.

    Del Monte Land Transport contended that the salaries and benefits of its drivers and conductors were in accordance with law and that its Labor Standards Compliance Certificates established compliance with labor standards requirements. Furthermore, it raised the issue of jurisdiction. Specifically, it claimed that the Office of the Labor Arbiter had no jurisdiction to render judgment or award on the money claims since it was the Department of Labor and Employment which had jurisdiction under Article 128 of the Labor Code of the Philippines.

    In asserting that the Office of the Labor Arbiter had jurisdiction, the drivers and conductors argued:

    • Their money claims fell within the cases covered by Article 217 of the Labor Code of the Philippines as it exceeded the aggregate amount of five thousand pesos. Hence, the authority to hear and decide said cases is vested on the Office of the Labor Arbiter, to the exclusion of all other courts or quasi-judicial bodies or tribunals;
    • No complaint was filed before the Department of Labor and Employment for the latter to exercise its jurisdiction over their claim.
    • Neither was there any inspection conducted at Del Monte Land Transport as the Labor Standards Compliance Certificates in question were issued for the alleged compliance of Del Monte Motor Works, a separate and distinct corporation.
    • In issuing the Labor Standards Compliance Certificates, the Department of Labor and Employment exercised its visitorial and compliance powers under Article 128 (b) and not its enforcement and adjudicatory powers under Article 129 of the Labor Code.

    Did the Office of the Labor Arbiter have jurisdiction over the claims of the drivers and conductors?

    The Supreme Court ruled in the negative. This was because Department Order No. 118-12 clearly conferred jurisdiction with the Regional Office the claims of the bus drivers and conductors.

    The Court stressed that jurisdiction over the subject matter or authority to try a certain case is conferred by law and not by the whims, consent or acquiescence of the interested parties nor by the erroneous belief of the court or tribunal that it exists. It should be exercised precisely by the person in authority or body in whose hands it has been placed by the law; otherwise, acts of the court or tribunal shall be void and with no legal consequence.

    In the present case, the Regional Director issued several Labor Standard Compliance Certificates dated February 12, 2014, certifying Del Monte Land Transport’s compliance with the law. Five months after or on July 28, 2014, the bus drivers and conductors filed a complaint before the Office of the Labor Arbiter for money claims and alleged a violation of the requirements of Department Order No. 118-12 in their Position Paper.

    According to the Court, this fact should have prompted the Office of the Labor Arbiter to refer the case to the Department of Labor and Employment as it was evident that the money claims of the bus drivers and conductors were beyond its jurisdiction.

    Furthermore, the Court noticed the categorical statement of the bus drivers and conductors that they would not have filed the instant case for money claims had there been real compliance of the mandate of Department Order No. 118-12. The Court stated that such statement only revealed that the claims were the offshoot of the Regional Officer’s issuance of the certificates of compliance.

    For the Court, this constituted a challenge by the bus drivers and conductors on the certificates of compliance issued by the Regional Officer relative to the labor standard requirements under Department Order No. 118-12, which should have been lodged before the Department of Labor and Employment.

    On the other hand, the Court did not accept the argument of the bus drivers and conductors that jurisdiction over their claims was vested with the Office of the Labor Arbiter given that the aggregate amount subject of this case exceeded five thousand pesos.

    The Court stated that Article 128 of the Labor Code of the Philippines speaks of the jurisdiction of the Secretary of Labor and his representatives over labor standards violations based on findings made in the course of visitation and inspection of the business premises of an employer. The Court emphasized that the authority under Article 128 may be exercised by the Department of Labor and Employment regardless of the amount of the award claimed for provided there exists employer-employee relationship.

    The Court noted certain views espousing the proposition that the mode and fora by which the action has been initiated should determine jurisdiction. However, the Court clarified that this had been settled in People’s Broadcasting Service v. Secretary of the Department of Labor and Employment1People’s Broadcasting Service v. Secretary of the Department of Labor and Employment, G.R. No. 179652 (Resolution), [March 6, 2012], 683 PHIL 509-526). which summed up the rules governing jurisdiction on labor standards claims, as follows:

    • If the claim involves labor standards benefits mandated by the Labor Code or other labor legislation regardless of the amount prayed for and provided that there is an existing employer-employee relationship, jurisdiction is with the Department of Labor and Employment regardless of whether the action was brought about by the filing of a complaint or not; and
    • If the claim involves labor standards benefits mandated by the Labor Code or other labor legislation regardless of the amount prayed for and there is no existing employer-employee relationship or the claim is coupled with a prayer for reinstatement, jurisdiction is with the Office of the Labor Arbiter/National Labor Relations Commission.

    For the Court, the claims of the bus drivers and conductors were within the purview of the jurisdiction of the Department of Labor and Employment under Article 128 and the provisions of Department Order No. 118-12. The Court accordingly dismissed the complaint of the bus drivers and conductors for lack of jurisdiction.

    Further reading:

    • Del Monte Land Transport Bus, Co. v. Armenta, G.R. No. 240144, February 3, 2021.