Paulino Ungos III

Lawyer | Law Professor | Author

Tag: justice hernando

  • LMTs for the 2023 Labor Law Bar Examination

    LMTs for the 2023 Labor Law Bar Examination

    1) Employer-employee relationship

    Four-fold test (Selection and engagement; Payment of wages; Power of dismissal; and Power to control the employees’ conduct.)

    Employee’s burden of proving existence of employment relation: “Before a case for illegal dismissal can prosper, an employer-employee relationship must first be established.” (Ginta-Ason v. J.T.A. Packaging Corp., G.R. No. 244206, March 16, 2022.)

    Re: Power of Control: “An employer’s power of control, particularly over personnel working under the employer, is deemed inferred, more so when said personnel are working at the employer’s establishment.” (Parayday v. Shogun Shipping Co., Inc., G.R. No. 204555, July 6, 2020.)

    2) Independent Contractor

    “It is the burden of the employer to prove that a person whose services it pays for is an independent contractor rather than a regular employee with or without a fixed term.” (Fuji Television Network, Inc. v. Espiritu, G.R. Nos. 204944-45, December 3, 2014)

    3) Contracting Arrangements

    Elements of Labor-Only Contracting

    • The contractor merely supplies workers only to a principal;
    • The activities performed by the workers are directly related to the main business of the principal;
    • The contractor does not have substantial capital or investment in the form of tools, equipment, machinery or work premises, to carry out the contracted job or service.

    4) Illegal Recruitment

    To constitute Illegal Recruitment in Large Scale, three elements must concur:

    • The accused undertook any recruitment activity defined under Art. 13 (b) or any prohibited practice enumerated under Art. 34 of the Labor Code.
    • He did not have the license or the authority to lawfully engage in the recruitment and placement of workers.
    • He committed the same against three or more persons, individually or as a group.

    Re: Substituting or Altering Employment Contracts Without Approval

    To fall within the ambit of the prohibition, the alteration should put the worker at a disadvantage. If the alteration is beneficial to the worker, the prohibition will not apply.
    The reason is because the parties are not prohibited from entering into a contract which provides for benefits over and above those required by law.

    5) Management Prerogatives

    Prerogative to terminate employment vis-à-vis security of tenure: “All surrounding circumstances must be considered and the penalty must be commensurate to the violation committed by an employee. Termination of the services of an employee should be the employer’s last resort especially when other disciplinary actions may be imposed.” (Lamadrid v. Cathay Pacific Airways Limited, G.R. No. 200658, June 23, 2021.)

    6) Entitlement to Labor Standards

    Note those excluded, for instance: The right to retirement benefit is not available to: (a) employees who have not rendered service for at least five (5) years; and (b) employees of retail, service, and agricultural establishments regularly employing not more than ten (10) workers.

    7) Burden of Proving Certain Money Claims

    • In determining the employee’s entitlement to monetary claims, the burden of proof is shifted from the employer or the employee, depending on the monetary claim sought.
    • On claims for payment of salary differentials, service incentive leave, holiday pay, and 13th month pay, the burden rests on the employer to prove payment.
    • On the other hand, for overtime pay, premium pay for holidays and rest days, the burden is shifted on the employee, as these monetary claims are not incurred in the normal course of business. It is thus incumbent upon the employee to first prove that he actually rendered service in excess of the regular eight working hours a day, and that he, in fact, worked on holidays and rest days. (Zonio v. 1st Quantum Leap Security Agency, Inc., G.R. No. 224944, May 5, 2021.)

    8) Special Types of Employees

    Expect questions on any of the following: domestic workers, solo parents, persons with disability, and seafarers

    Re: Seafarers, remember that under the POEA-SEC, he/she should submit to “a mandatory post-employment medical examination within three (3) working days upon his/her arrival.” (Cabatan v. Southeast Asia Shipping Corp., G.R. No. 219495, February 28, 2022.)

    Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim benefits.

    9) Right to Self-Organization / Collective Bargaining

    A Union Security Agreement is a stipulation in a CBA which requires employees covered by the collective bargaining unit to become members of the contracting union and to maintain their union membership in good standing as a condition for continued employment.

    While government-owned or controlled corporations without original charters are covered by the Labor Code of the Philippines, employees of said government-owned or controlled corporations are bereft of any right to negotiate the economic terms of their employment, i.e., salaries, emoluments, incentives and other benefits, with their employers since these matters are covered by compensation and position standards issued by applicable law. (GSIS Family Bank Employees Union v. Villanueva, G.R. No. 210773, January 23, 2019.)

    10) Unfair Labor Practices

    • Article 258 of the Labor Code of the Philippines, unfair labor practices are violative of the constitutional right of workers to self-organize.
    • The person who alleges the unfair labor practice has the burden of proving it with substantial evidence.
    • In determining whether an act of unfair labor practice was committed, the totality of the circumstances must be considered. If the unfair treatment does not relate to or affect the workers’ right to self-organize, it cannot be deemed unfair labor practice. (Adamson University Faculty and Employees Union v. Adamson University, G.R. No. 227070, March 9, 2020.)

    11) Strikes

    • The Labor Code of the Philippines and its implementing rules limit the grounds for a valid strike to: (1) a bargaining deadlock in the course of collective bargaining, or (2) the conduct of unfair labor practices by the employer.
    • Only a certified or duly recognized bargaining representative may declare a strike in case of a bargaining deadlock. However, in cases of unfair labor practices, the strike may be declared by any legitimate labor organization. (Bigg’s, Inc. v. Boncacas, G.R. Nos. 200487 & 200636, March 6, 2019.)

    12) National Interest Disputes

    • Once the Secretary of Labor assumes jurisdiction over a labor dispute, a strike, whether actual or intended, is automatically enjoined.
    • If a strike has been declared, the strikers must return to work even if they filed a motion for reconsideration of the assumption order.
    • The moment a striker defies a return-to-work order, he is deemed to have abandoned his job. It is already in itself knowingly participating in an illegal act.
    • Considering that an illegal act was committed, all strikers, whether union officers or plain members, may be declared to have lost their employment status. (Rodriguez v. Philippine Airlines, Inc., G.R. Nos. 178501 & 178510, January 11, 2016.)

    13) Just Causes

    A question may be given on any of the just causes.

    Re: Serious Misconduct: Misconduct, as a ground for dismissal, must be serious or of such grave and aggravated character and not merely trivial or unimportant. (G & S Transport Corp. v. Medina, G.R. No. 243768, September 5, 2022.)

    14) Authorized Causes

    A question may given on any of the authorized causes.

    Re: Redundancy: To successfully invoke a valid dismissal due to redundancy, there must be:

    • A written notice served on both the employees and the DOLE at least one month prior to the intended date of termination of employment;
    • Payment of separation pay equivalent to at least one month pay for every year of service;
    • Good faith in abolishing the redundant positions; and
    • Fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished.
    • Moreover, the company must provide substantial proof that the services of the employees are in excess of what is required of the company. (Teletech Customer Care Management Philippines, Inc. v. Gerona, Jr., G.R. No. 219166, November 10, 2021.)

    15) Resignation

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

    16) Constructive Dismissal

    • There is constructive dismissal when an employer’s act of clear discrimination, insensibility or disdain becomes so unbearable on the part of the employee so as to foreclose any choice on his part except to resign from such employment. It exists where there is involuntary resignation because of the harsh, hostile and unfavorable conditions set by the employer. The standard for constructive dismissal is “whether a reasonable person in the employee’s position would have felt compelled to give up his employment under the circumstances.”
    • However, “not every inconvenience, disruption, difficulty, or disadvantage that an employee must endure sustains a finding of constructive dismissal.”
    • What is vital is the weighing of the evidence presented and a consideration of whether, given the totality of circumstances, the employer acted fairly in exercising a prerogative. (Dela Torre v. Twinstar Professional Protective Services, Inc., G.R. No. 222992, June 23, 2021.)

    17) Quitclaims

    • While an employee may indeed accept his dismissal and agree to waive his claims or right to initiate or continue any action against his employer, both parties do not have the jurisdiction or authority to determine the legality of such termination; such question of law is still subject to the final determination of the competent labor tribunals and courts, as the case may be.
    • It follows then that the award of nominal damages, which by its nature, arises from the determination of a violation of the employee’s rights in an illegal dismissal case, cannot be deemed to be covered by the quitclaim. (Dela Torre v. Twinstar Professional Protective Services, Inc., G.R. No. 222992, June 23, 2021.)

    18) Jurisdiction of the LAs vs Regional Director

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

    19) Appeals

    • The requisites laid out by Mcburnie v. Ganzon also presupposes a sixth requirement: that the National Labor Relations Commission issue an express ruling on the appellant’s motion to reduce bond.
    • Whether the National Labor Relations Commission accepts or rejects the appellant’s motion to reduce bond, the ruling must be unequivocal, and such ruling must be issued before or at the time the Commission resolves the appeal by final judgment.
    • Failure to do so shall render the National Labor Relations Commission liable for grave abuse of discretion for having ruled on an appeal without acquiring jurisdiction over the same, and the judgment it had issued shall be vacated as null and void. (Pacific Royal Basic Foods, Inc. v. Noche, G.R. No. 202392, October 4, 2021.)

    20) Liberal Application of the Rules

    • A liberal interpretation of the rules is primarily granted for the employee’s favor, and not the employer.
    • In the common scenario of an unaided worker, who does not possess the necessary knowledge to protect his rights, pitted against his employer in a labor proceeding, the former cannot be expected to be perfectly compliant at all times with every single twist and turn of legal technicality.
    • As an additional aid therefore, a liberal interpretation of the technical rules of procedure may be allowed if only to further bridge the gap between an employee and an employer. (Reyes v. Rural Bank of San Rafael (Bulacan), Inc., G.R. No. 230597, March 23, 2022.)

    Hope they help. Best of luck!

  • But the Employee Assaulted a Co-Worker Inside Company Premises

    On September 15, 2008, the employer, a rent-a-car company, hired Reynaldo for the position of driver for transporting tourists to their destination.

    Reynaldo was in the employ of the company for seven years. He had no derogatory record. However, on the night of February 12, 2015, Reynaldo was involved in misconduct for the first time in his career.

    On such date, Reynaldo engaged in a heated argument with a co-employee, Felix. According to Reynaldo, he left the work premises after his shift, but he had to return to retrieve his personal belongings. Upon arrival at the work premises, Reynaldo chanced upon Felix, whom he claimed was staring sharply at him. Reynaldo stated that he accosted Felix and asked if there was a problem. Felix fired back and asked Reynaldo the same question. A heated argument with shoving then ensued. Another employee, Jose, broke up the melee and led Reynaldo away from Felix.

    The employer company, however, countered that Reynaldo was drunk when he confronted Felix to the point of boxing and strangling the latter that the two of them had to be restrained by its security guards. It claimed that Reynaldo refused to be controlled, until Jose arrived, and led Reynaldo outside the garage.

    After the submission of various written explanations, the employer company placed Reynaldo under preventive suspension and conducted an administrative hearing. The employer company later concluded that Reynaldo violated its Code of Discipline for fighting with a co-employee inside the work premises. Thus, Reynaldo was terminated from employment on March 20, 2015.

    Aggrieved, Reynaldo filed a complaint for illegal dismissal against the employer company.

    The Office of the Labor Arbiter found that Reynaldo was not illegally dismissed from employment because fighting with a co-employee within work premises was considered by the employer company as serious misconduct and a valid ground for termination of his employment.

    The National Labor Relations Commission affirmed the ruling of the Office of the Labor Arbiter.

    The Court of Appeals reversed the findings of the labor tribunals and found that Reynaldo was illegally dismissed from employment since what transpired between Reynaldo and Felix was a petty quarrel that merely involved shoving or slight pushing. The Court of Appeals found that, except for a minor scratch in Reynaldo’s knee, the incident did not cause bodily harm. It was also found that the said incident did not in any manner interfere with the work of fellow employees, or the operations of the business. For the Court of Appeals, the penalty of dismissal imposed upon Reynaldo was too harsh and not commensurate with the act he committed.

    Thus, it declared the illegality of the dismissal of Reynaldo from employment and his entitlement to reinstatement and backwages.

    The employer company elevated its case to the Supreme Court.

    Was Reynaldo illegally dismissed from employment?

    The Supreme Court ruled in the affirmative.

    The Court found that Reynaldo did not commit serious misconduct to warrant his dismissal from employment.

    Jurisprudence1Empas v. Mariwasa Siam Ceramics, Inc., G.R. No. 246176, December 7, 2021. dictates that misconduct is generally defined as a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.

    Under Article 297 of the Labor Code of the Philippines, an employer may terminate the services of an employee on the ground of serious misconduct committed in connection with or relative to the performance of his duties.2Relevant portions of the Article states: Art. 297. Termination by Employer. — An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of lawful orders of his employer or representative in connection with his work; x x x

    Jurisprudence3Empas v. Mariwasa Siam Ceramics, Inc., G.R. No. 246176, December 7, 2021. also teaches that in labor cases, misconduct, as a ground for dismissal, must be serious or of such grave and aggravated character and not merely trivial or unimportant. To justify termination on the ground of serious misconduct, the following requisites must concur:

    • the misconduct must be serious;
    • 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
    • it must have been performed with wrongful intent.

    In the present case, the Court found that none of the requisites for serious misconduct was present. It agreed with the finding of the Court of Appeals that only a petty quarrel involving shoving or slight pushing transpired between Reynaldo and Felix. According to the Supreme Court, the same was nipped in the bud by the intervention of Jose and the security guards on duty. The incident neither caused work stoppage nor posed a threat to the safety of the other employees. Furthermore, the employer company never established how Reynaldo’s misconduct had adversely affected its business, or how Reynaldo had become unfit to continue working for the company. For the Supreme Court, no just cause supported the termination of Reynaldo’s employment.

    The Court cited Article 294 of the Labor Code of the Philippines, which states that illegally dismissed employees are entitled to reinstatement without loss of seniority rights and other privileges and to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent from the time their compensation was withheld from them up to the time of their actual reinstatement. The Court stated that Reynaldo deserved no less.

    Further reading:

    • G & S Transport Corp. v. Medina, G.R. No. 243768, September 5, 2022.

  • A Liberal Interpretation of the Rules Is Primarily Granted for the Employee’s Favor

    Sometime in 2012, several stockholders of the employer bank complained about the discrepancies in the amounts of the purchase price of stock subscriptions appearing in the original receipts as against the duplicate copies issued by the said bank. The anomaly involved several millions of pesos collected from stockholders of the employer bank which, if not corrected, will certainly tarnish the image and integrity of the latter.

    Acting on this anomaly, the employer bank conducted an investigation and confirmed the irregularities. It discovered that in the original receipts given to the stockholders, the stated price of shares ranged from Php250.00 to Php275.00, but in the duplicate copies retained by the employer bank, only Php100.00 was indicated. It also found that the original receipts were signed by the then president of the employer bank, while the duplicate copies were signed either by its then treasury head or branch manager.

    Thus, to comply with regulations mandating the prompt report of anomalies to the Bangko Sentral ng Pilipinas (BSP), the Board of Directors of the employer bank approved a Report on Crimes and Losses and directed Ariel — its Compliance Officer — to certify the same. However, Ariel refused to certify the report, reasoning that no independent investigation was conducted, and that he cannot completely validate the same for lack of material data and evidence. Ariel further remarked that he was being pressured to certify the report.

    Thereafter, Ariel claimed that instead of furnishing him the hard copies of the reports and relevant attachments to enable him to verify and certify the same, the employer bank issued him two show cause orders and put him on preventive suspension for neglect of duty. Meanwhile, the employer bank contended that several administrative hearings were scheduled to hear the side of Ariel, which he ignored.

    On March 25, 2013, Ariel filed a complaint against the employer bank for illegal suspension and money claims. This complaint was subsequently amended to include illegal dismissal, in view of the eventual termination of his employment.

    The employer bank did not file a position paper during the proceedings before the Office of the Labor Arbiter.

    The Office of the Labor Arbiter then ruled that the dismissal of Ariel was without a valid cause and that he was denied due process for having been summarily dismissed.

    The National Labor Relations Commission reversed the ruling of the Office of the Labor Arbiter. It adopted a liberal interpretation of procedural rules, relaxed the same and held that substantial justice must prevail over technicalities. Thus, it allowed the employer bank to submit countervailing evidence even on appeal. On the substantial issue, the National Labor Relations Commission found that Ariel was not illegally dismissed, since the employer bank was able to discharge the burden of proving that it had a just cause to terminate Ariel’s employment.

    The Court of Appeals affirmed the Decision of the National Labor Relations Commission. The said Court found no grave abuse of discretion on the part of the National Labor Relations Commission in relaxing its procedural rules. For the Court of Appeals, the failure of the employer bank to file a Position Paper and submit evidence was justified and satisfactorily explained, since it was neither given summons, nor notified of the scheduled preliminary conference and further hearings after Ariel filed his amended complaint. On the substantive issue, the Court of Appeals ruled that Ariel was validly dismissed for a just and valid cause.

    Ariel elevated his case to the Supreme Court to assail the decision of the Court of Appeals.

    Ariel asserted that the Court of Appeals abused its discretion amounting to lack or excess of jurisdiction:

    • in upholding the National Labor Relation Commission’s liberal application of the procedural rules in favor of the employer bank; and
    • in ruling that he was validly dismissed from employment.

    Was the liberal application of the procedural rules in favor of the employer bank warranted?

    Apart from its finding that Ariel was illegally dismissed from employment, the Supreme Court ruled that the the National Labor Relations Commission and the Court of Appeals erred in allowing the employer bank to present evidence on appeal.

    The Supreme Court reiterated established principles from jurisprudence and experts by stating that due process is a malleable concept anchored on fairness and equity. At its core is simply the reasonable opportunity for every party to be heard. What is required is not actual hearing but a real opportunity to be heard. Thus, one who refuses to appear at a hearing is not thereby denied due process if a decision is reached without waiting for him. Likewise, the requirement of due process can be satisfied by subsequent due hearing.

    In the present case, the Supreme Court ruled that the employer bank had been accorded ample opportunity to present its side during the proceedings before the Office of the Labor Arbiter based on the following findings:

    • The employer bank unjustifiably missed at least two hearing dates: that on June 4, 2013, and that on June 19, 2013. With regard to the hearing on June 19, 2013, the Supreme Court stated that the employer bank missed the hearing despite having been directed to attend by the Office of the Labor Arbiter;
    • The employer bank, at this point, had already obtained a copy of the amended complaint which would have enabled it to intelligently respond. According to the Court, the issuance of the summons would have been a mere superfluity;
    • The employer bank’s absences were unexplained; and
    • If the employer bank truly held sacred its right to due process, it should have wasted no time nor missed no opportunity to assert such right as early as during the initial stages of the proceedings. It should have at least pleaded for the Office of the Labor Arbiter to reopen the proceedings and admit its position paper, if there ever was one. At the very least, the employer bank was well-aware that a complaint was filed against it and failed to be proactive in the proceedings. The Court sensed employer bank’s cavalier attitude and remarked that it reeked of negligence and disrespect to duly instituted authorities and rules of procedures, which it could never tolerate.

    While commending the National Labor Relations Commission and the Court of Appeals in upholding substantial justice, the Supreme Court reminded them such principle must always be balanced with respect and honest efforts to comply with procedural rules.

    The Court stated that it cannot always be about substantial justice, especially to the point of disrespect and utter disregard to procedural rules. Imperative justice requires correct observance of indispensable technicalities precisely designed to ensure its proper dispensation. It cannot be overemphasized that procedural rules have their own wholesome rationale in the orderly administration of justice. Justice has to be administered according to the Rules in order to obviate arbitrariness, caprice, or whimsicality. It must never be forgotten that, generally, the application of the rules must be upheld, and the suspension or even mere relaxation of its application, is the exception.

    In this regard, the Court emphasized the policy that although in labor cases, strict adherence to the technical rules of procedure is not required, this liberal policy should still be subject to rules of reason and fairplay. The liberality of procedural rules is qualified by two requirements:

    • a party should adequately explain any delay in the submission of evidence; and
    • a party should sufficiently prove the allegations sought to be proven.

    The reason for these requirements, said the Court, is that the liberal application of the rules before quasi-judicial agencies cannot be used to perpetuate injustice and hamper the just resolution of the case. Neither is the rule on liberal construction a license to disregard the rules of procedure.

    In the present case, the Court highlighted the fact the employer bank failed to adequately explain and justify their non-participation in the proceedings before the Office of the Labor Arbiter.

    For the Court, the application of a more liberal policy was unwarranted, contrary to the rulings of the National Labor Relations Commission and the Court of Appeals.

    At any rate, the Court maintained that the employer bank in the present case is not entitled to be accorded a liberal interpretation of the rules; the same being primarily granted for the employee’s favor, and not the employer.

    The Court explained that the principles embodied by all prevailing labor rules, legislations, and regulations are derived from the Constitution, which intensely protects the working individual and deeply promotes social justice.1Article II, Section 18 of the 1987 Constitution provides: “SECTION 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.” Meanwhile, Article XIII, Section 3 states: “SECTION 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.” Lastly, Article 4 of PD 442 or the Labor Code, provides: Article 4. Construction in favor of labor. — All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.” The measures embedded in our legal system which accord specific protection to labor stems from the reality that normally, the laborer stands on unequal footing as opposed to an employer. Indeed, the labor force is a special class that is constitutionally protected because of the inequality between capital and labor. In fact, labor proceedings are so informally and, as much as possible, amicably conducted and without a real need for counsel, perhaps in recognition of the sad fact that a common employee does not or have extremely limited means to secure legal services nor the mettle to endure the extremely antagonizing and adversarial atmosphere of a formal legal battle. Thus, in the common scenario of an unaided worker, who does not possess the necessary knowledge to protect his rights, pitted against his employer in a labor proceeding, the former cannot be expected to be perfectly compliant at all times with every single twist and turn of legal technicality. The same, however, cannot be said for the latter, who more often than not, has the capacity to hire the services of a counsel. As an additional aid therefore, a liberal interpretation of the technical rules of procedure may be allowed if only to further bridge the gap between an employee and an employer.

    The Court clarified that it is not saying that the rules may never be relaxed in favor of the employer, and that every labor dispute will be automatically decided in favor of labor. In certain cases, of course, a liberal approach to the rules may be had even if it favors the employer. Such allowance, however, must be measured against standards stricter than that imposed against the worker, and only in compelling and justified cases where the employer will definitely suffer injustice should such liberal interpretation be disallowed. The Supreme Court stated that such was not the situation of the employer bank in the present case.

    Further reading:

    • Reyes v. Rural Bank of San Rafael (Bulacan), Inc., G.R. No. 230597, March 23, 2022.

  • He Is Not Our Employee

    Gerome alleged that he was hired by JTA Packing Corporation (JTA) on December 26, 2014 as an all-around driver.

    He narrated that on September 5, 2016, an officer of JTA maltreated him, prevented him from leaving the company premises, and threatened his life. Gerome no longer reported to work.

    Believing that his continued employment became impossible, unbearable, and unlikely, Gerome filed a complaint for illegal dismissal against his employer on January 30, 2017.

    JTA contended that Gerome was not its employee, as established by the following documents which never included Gerome’s name:

    • copies of its alpha list of employees as filed with the Bureau of Internal Revenue (BIR) for the years 2014-2016;
    • payroll monthly reports and 13th month pay it paid for the years 2015-2016;
    • reports on Social Security System (SSS) contributions of its employees remitted for the years 2015-2016;
    • PhilHealth remittance reports on contributions of its employees in 2016; and
    • Pag-IBIG fund membership and registration/remittance forms indicating the names of its employees and their contributions for the period of 2015-2016.

    On June 28, 2017, the Office of the Labor Arbiter rendered a Decision which declared the existence of an employer-employee relationship between Gerome and JTA. It then ruled that Gerome was constructively dismissed because his continued employment with JTA was rendered impossible due to fear after the September 5, 2016 incident of maltreatment and detention.

    On appeal, the National Labor Relations Commission reversed and set aside the Decision of the Office of the Labor Arbiter. It dismissed the complaint for lack of employer-employee relationship between Gerome and JTA.

    One reason was that the pay slips submitted by Gerome failed to reveal who issued the same. The Commission also discovered discrepancies on the dates of their issue in that the pay slips dated back as early as March 2014 contrary to Gerome’s claim that he was hired in December of the same year.

    The other reason was that JTA’s documentary evidence showed that Gerome was not among its employees.

    The Court of Appeals affirmed the ruling of the National Labor Relations Commission, in view of Gerome’s failure to substantiate his claim that he is an employee of JTA.

    Gerome elevated his case to the Supreme Court.

    Was Gerome an employee of JTA?

    The Supreme Court ruled in the negative.

    The Court reiterated the settled rule that allegations in the complaint must be duly proven by competent evidence and that the burden of proof is on the party making the allegation. In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an employee was for a valid cause. However, before a case for illegal dismissal can prosper, an employer-employee relationship must first be established. In this regard, the “four-fold test” determines the existence of an employer-employee relationship, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the power to control the employee’s conduct.

    In the present case, the Court stressed that since it was Gerome who was claiming to be an employee of JTA, he had the burden of proving the existence of an employer-employee relationship. The Court found that Gerome failed to discharge this burden.

    Gerome did not present any employment contract or company identification card to prove Gerome’s employment with JTA. According to the Court, in a business establishment, an identification card is usually provided not only as a security measure but mainly to identify the holder thereof as a bona fide employee of the firm that issues it.

    The pay slips presented by Gerome bore no indication that the amount he allegedly received came from JTA. The Court pointed out that the pay slips submitted by Gerome even showed that he had been receiving compensation as early as February 2014, when he had claimed that he was hired by JTA months later, or on December 26, 2014. The Court said that this wide gap between February 2014 and December 2014 was not a trivial inconsistency.

    Furthermore, there were no deductions from Gerome’s supposed salary such as withholding tax, SSS, PhilHealth or Pag-IBIG Fund contributions which were usual deductions from employees’ salaries.

    On the other hand, the following voluminous documentary evidence submitted by JTA, which were duly signed by its authorized representative and stamp received by the concerned government agencies, indubitably showed that Gerome was not among its employees:

    • the alpha list of employees submitted to the Bureau of Internal Revenue for the years during which Gerome claims to have been employed by JTA;
    • the payroll monthly reports; and
    • the remittances made by JTA of its employees’ monthly contributions to the SSS, PhilHealth and Pag-IBIG Fund.

    As to the power of control, the Court acknowledged that the purported driver’s itineraries presented by Gerome prescribed the manner by which his work as a driver is to be carried out. However, the Court found that the said driver’s itineraries were not signed by JTA’s authorized personnel and contained discrepancies on JTA’s name and address. For the Court, the driver’s itineraries were insufficient to establish the element of control.

    The Court accordingly denied Gerome’s petition for lack of merit.

    Further reading:

    • Ginta-Ason v. J.T.A. Packaging Corp., G.R. No. 244206, March 16, 2022.

  • Regardless of the Cause of Repatriation

    Reynaldo entered into a three-month employment contract to work as an oiler with Maritime Management Services (Maritime Management), through its agent, Southeast Asia Shipping Corp. (SEASCORP). Before deployment, he underwent his pre-employment medical examination and was certified to be fit for sea duty. On January 30, 2010, Reynaldo boarded the M/V BP Pioneer.

    Reynaldo narrated that on March 29, 2010, he was carrying spare parts needed for his repair of the ship’s generators when the ship swayed due to big waves. This caused him to bend and nearly fall to his knees.

    Reynaldo claimed that he soon felt excruciating pain in his scrotal/inguinal area, including pain and numbness in his left leg to his foot. Despite this, he continued to carry the parts and repaired the generator until he was relieved by another oiler. After his duty, Reynaldo went to his cabin and took a pain reliever. He then went to the ship’s clinic to have himself checked by the doctor on board. In the Report of Illness by the ship’s doctor, the latter diagnosed Reynaldo to have epididymorchitis and advised him to rest until further observation since it may just be due to tiredness. The doctor also ruled out hernia and trauma.

    On May 19, 2010, Reynaldo visited the ship’s doctor and informed the latter that he still feels pain during prolonged standing or while walking, with numbness of his lower extremity. However, the doctor concluded that this was normal considering his age and just advised to take pain relievers.

    Upon the expiration of his contract on May 25, 2010, Reynaldo disembarked the vessel at the port of Takoradi, Ghana and was repatriated back to the Philippines. Believing that the pain in his scrotal/inguinal area was normal and, as the doctor had advised, Reynaldo took a complete rest for about a month.

    Eventually, SEASCORP called him for possible deployment. He was sent to Merita Diagnostic Clinic (Merita), the company-accredited clinic, for his pre-employment medical examination.

    During his examination, Reynaldo informed the doctor about the injury sustained while on board the M/V BP Pioneer. Thus, the doctor asked him to get an x-ray of his scrotal/inguinal area and lumbar spine.

    On July 30, 2010, Reynaldo also underwent Magnetic Resonance Imaging (MRI) of the Lumbo-Sacral Spine. It was found that Reynaldo had spondylolisthesis, among others.

    On August 26, 2010, Reynaldo consulted two doctors who advised him to have surgery for his spondylolisthesis. Reynaldo found the procedure costly.

    Reynaldo approached SEASCORP to request for financial assistance. However, his request was denied.

    Reynaldo thus filed a complaint against his employer before the National Labor Relations Commission and claimed for permanent total disability benefits, moral and exemplary damages, and attorney’s fees.

    The Office of the Labor Arbiter found that Reynaldo suffered an injury while performing his duties as an oiler. Being a work-related injury, it held that it must be compensable.

    On the other hand, the said Office found that the mandatory three-day reporting requirement for a post-employment examination under the Philippine Overseas Employment Administration Standard Employment Contract (POEA SEC) did not apply in the case of Reynaldo because he was repatriated not because of a medical condition but due to the expiration of his contract.

    The Office of the Labor Arbiter thus ruled in favor of Reynaldo and required the employer to pay Reynaldo his permanent total disability compensation plus attorney’s fees.

    The National Labor Relations Commission reversed and set aside the Decision of the Office of the Labor Arbiter and dismissed Reynaldo’s complaint for lack of merit.

    According to the Commission, the injury suffered by Reynaldo that was reflected on record was the discomfort on his scrotal and inguinal area. His assertion that he suffered an injury while on board and felt pain on his left leg to his foot was unsupported by evidence.

    The Commission added that a seafarer who claims to be medically infirm must be examined by the company-designated physician within three days from repatriation. The failure of Reynaldo to report within the mandatory period without justifiable cause resulted in the forfeiture of his right to claim compensation and disability benefits under the POEA-SEC.

    The Court of Appeals denied Reynaldo’s petition in view of his failure to comply with the mandatory reporting requirement under the POEA-SEC. Such failure resulted in the forfeiture of his right to claim compensation and benefits.

    Reynaldo elevated his case to the Supreme Court.

    Was Reynaldo entitled to permanent total disability benefits?

    The Supreme Court ruled in the negative.

    The Court reiterated settled jurisprudence that in order to claim compensability under the POEA-SEC, it is required that the seafarer must have:

    • suffered a work-related illness or injury during the term of his contract; and
    • submitted himself to a mandatory post-employment medical examination within three (3) working days upon his arrival.

    The purpose of the three-day mandatory reporting requirement is to enable the company-designated physician to ascertain if the seafarer’s injury or illness is work-related. After that period, there would be difficulty in ascertaining the real cause of the illness. To ignore the rule would set a precedent with negative repercussions because it would open the floodgates to a limitless number of seafarers claiming disability benefits. It would certainly be unfair to the employer who would have difficulty determining the cause of a claimant’s illness considering the passage of time. In such a case, the employers would have no protection against unrelated disability claims.

    In the present case, the Court found that Reynaldo was repatriated due to the expiration of his contract. The Court stated that regardless of the cause of his repatriation, he was required to submit himself to a post-employment medical examination by the company-designated physician within three working days upon his return in order to ascertain if he was really suffering from a work-related injury or illness. Reynaldo may only be excused from such requirement if he was physically incapacitated to do so. The Court stressed that this was not Reynaldo’s situation.

    The Court equally found that Reynaldo complained of pain in the scrotal/inguinal area while on board which is why the initial diagnosis by the ship doctor was epididymorchitis.

    On the other hand, the Court noted that aside from his bare assertion, Reynaldo proffered no evidence establishing that he felt pain or numbness on his lower extremities while on board or that the ship doctor concluded that he contracted spondylolisthesis. According to the Court, it was only in July 2010, or after his repatriation, that the said findings were made by a doctor, which was well-beyond the three-day mandatory reporting period.

    The Court stated that while it commiserated with Reynaldo’s plight, non-compliance with the requirements set forth in the POEA-SEC had rendered it difficult to ascertain if his injury or illness was work-related.

    The Court accordingly denied Reynaldo’s claim for permanent total disability benefits.

    Further reading:

    • Cabatan v. Southeast Asia Shipping Corp., G.R. No. 219495, February 28, 2022.

  • But the OFW Directly Communicated with the Principal and without the Knowledge of Its Agent

    SRL International Manpower Agency (SRL) posted a job opening for its principal, Akkila Co. Ltd. UAE/Al Salmeen Trading Est. (Akkila), for a certain project in Qatar.

    Pedro sent an application to Akkila, through SRL. In July 2010, SRL received word from Akkila that the latter was interested in hiring Pedro as Project Manager. Afterwards, SRL forwarded Pedro’s documents to Akkila for the processing of his employment visa.

    Akkila soon furnished Pedro an “Offer of Employment” for a two (2) year engagement without the approval of the Philippine Overseas Employment Administration (POEA). Akkila and Pedro directly contacted each other and the latter was able to depart for the United Arab Emirates (UAE) on October 14, 2010 using a visit visa instead of an employment visa.

    On March 24, 2011, Akkila asked Pedro to return to the Philippines with an instruction to apply for deployment anew under an employment visa and with the condition that he should return 10 days after its processing.

    In April 2011, Pedro returned to the Philippines and started processing his next deployment under new “Contract of Employment,” with the assistance of SRL

    Pedro underwent a medical examination with SRL’s accredited clinic, Seamed Medical Clinic (Seamed), to assess his fitness for work. However, Seamed found that Pedro had Uncontrolled Diabetes Mellitus Type II and declared him unfit for work. This finding was reflected in a Medical Certificate dated May 10, 2011.

    SRL disclosed such finding to Akkila and informed the latter that if it was still interested, it should send a waiver indicating its willingness to hire Pedro notwithstanding his unfitness for work.

    Akkila replied that it had a strict qualification not to hire an applicant who is not fit for work. Subsequently, in a letter dated May 22, 2011, Akkila informed Pedro that he cannot be hired due to medical reasons.

    In the case of SRL International Manpower Agency v. Yarza, the Supreme Court resolved three issues:

    First: Was the “Offer of Employment” furnished by Akkila to Pedro valid?

    The Supreme Court stated that since employment contracts of Overseas Filipino Workers are perfected in the Philippines, and following the principle of lex loci contractus (the law of the place where the contract is made), such contracts are governed primarily by the Labor Code of the Philippines and its implementing rules and regulations.

    The Court added that the laws generally apply even to employment contracts of Overseas Filipino Workers since the Constitution explicitly provides that the State shall afford full protection to labor, whether local or overseas. Thus, even if a Filipino is employed abroad, he or she is entitled to security of tenure, among other constitutional rights. Security of tenure remains even if employees, particularly the Overseas Filipino Workers, work in a different jurisdiction.

    Furthermore, the Court also stated that under the Labor Code of the Philippines, employers hiring Overseas Filipino Workers may only do so through entities authorized by the Secretary of the Department of Labor and Employment. The Court continued that unless the employment contract of an Overseas Filipino Worker is processed through the POEA, the same does not bind the concerned Overseas Filipino Worker because if the contract is not reviewed by the POEA, certainly the State has no means of determining the suitability of foreign laws to our overseas workers.

    In the present case, the Court found that the “Offer of Employment” was perfected when Pedro agreed to the same while he was still in the Philippines.

    However, the Court found that the “Offer of Employment” ran contrary to the Constitution and the law and was not approved by the POEA. Specifically, the Court found that the “Offer of Employment”, although stating that the rules and regulations found in UAE’s labor laws should apply, contained stipulations contrary to the policies of the Philippines concerning labor contracts and security of tenure.

    With these findings, the Court declared the “Offer of Employment” invalid.

    Second: Did an employer-employee relationship exist between Akkila and Pedro.

    The Court ruled in the affirmative. Notwithstanding the invalidity of the “Offer of Employment,” the Court ruled that an employer-employee relationship existed between Akkila and Pedro.

    According to the Court, absent a valid employment contract, the following elements of the four fold test should be considered:

    • selection and engagement of the employee;
    • payment of wages;
    • power of dismissal; and
    • the employer’s power to control the employee’s conduct.

    The Court reiterated that the most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. However, the power of control refers merely to the existence of the power, and not to the actual exercise thereof. No particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. However, a finding that such relationship exists must still rest on some substantial evidence.

    In the present case, the Court found:

    • For the first element, Akkila, through the participation of SRL, selected and engaged the services of Pedro, precisely because he was deployed through a visit visa under Akkila’s instruction and endorsement.
    • For the second element, Akkila did not deny that it paid Pedro’s wages with the “Offer of Employment” as reference.
    • Regarding the third element, Akkila had the power to dismiss Pedro. In fact, it did so when it issued the termination letter dated May 22, 2011.
    • Lastly, on the fourth element, Akkila had control over Pedro’s work conduct, which included the means and methods he would employ to produce the results required by the company.

    In addition, the Court took into consideration the fact that Akkila did not show proof that it took no part in directing Pedro’s job output. In particular, Akkila did not appeal the finding of employer-employee relationship before the Court of Appeals. Hence, the Court bound Akkila by such conclusion.

    Third: Was Pedro illegally dismissed from employment?

    With the existence of the employer-employee relationship, the Court ruled that Akkila should accord Pedro due process, both substantial and procedural, before terminating his employment.

    The Court stated that to comply with substantive due process, Pedro can only be dismissed for a just or authorized cause, the absence of which renders his dismissal illegal.

    In the present case, it was found that Akkila dismissed the services of Pedro on the ground of disease, under Article 299 [284] of the Labor Code of the Philippines. The said provision essentially provides that “an employer would be authorized to terminate the services of an employee found to be suffering from any disease if the employee’s continued employment is prohibited by law or is prejudicial to his health or to the health of his fellow employees.”

    The Court further stated that to be considered valid, the dismissal on the ground of disease must satisfy two requisites:

    • the employee suffers from a disease which cannot be cured within six months and his/her continued employment is prohibited by law or prejudicial to his/her health or to the health of his/her co-employees, and
    • a certification to that effect must be issued by a competent public health authority.

    In the present case, record showed Akkila’s decision to inform Pedro that he could not be hired due to medical reasons. However, the Court found that Akkila failed to present any certification from a competent public health authority citing that Pedro’s disease not could be cured within six months, or that his employment was prejudicial to his health or that of his co-employees. Said the Court, absent this certification, Akkila failed to comply with Article 299 [284] of the Labor Code of the Philippines as well as applicable regulations. For the Court, Pedro’s dismissal was not based on a valid cause.

    Furthermore, the Court found that Akkila did not accord Pedro procedural due process. Record showed that Akkila unilaterally dismissed him by simply issuing a letter dated May 22, 2011. Additionally, Akkila sent this termination letter after it already issued a “new” Contract of Employment dated April 15, 2011 to him. Clearly, Akkila, after discovering that Pedro was deemed unfit for work due to diabetes, sought to immediately sever ties with him.

    The Court accordingly ruled that Pedro was illegally dismissed from employment.

    On the relief granted, the Court stated that even with the invalid “Offer of Employment”, the existence of an employer-employee relationship between Akkila and Pedro, as well as the illegality of his dismissal, entitled him to claim for the payment of his salaries for the unexpired portion of his contract.

    In this regard, the Court also found it proper to award moral and exemplary damages under prevailing jurisprudence which allows the migrant worker to claim such damages in connection with the employment contract or as provided by law. Moreover, the Court awarded Pedro attorney’s fees at the rate of ten percent (10%) under Article 2208 of the Civil Code of the Philippines.

    The Court stressed that the liability of Akkila and SRL was solidary, under Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995, as amended.

    Further reading:

    • SRL International Manpower Agency v. Yarza, Jr., G.R. No. 207828, February 14, 2022.

  • A Prejudicial Transfer

    The employer, a business process outsourcing (BPO) company, hired Mario as one of its technical support representatives and assigned him to handle a client account.

    On October 30, 2009, the employer informed Mario that he would be transferred to a different client account upon successfully passing the training, assessment and examination and that his refusal to take the examinations would result in the termination of his services on the ground of redundancy.

    Mario refused to undergo training and take the examinations under the belief that he was entitled to security of tenure.

    Thereafter, Mario received a memorandum informing him that those who declined to comply with the transfer directive were no longer required to log in their system since their respective team leaders will take care of their attendance instead until the redundancy offer is finalized.

    On November 17, 2009, Mario received a notice dated November 16, 2009 informing him of his dismissal due to redundancy effective December 16, 2009.

    Through his counsel, Mario sent a demand letter to his employer asserting that no redundancy in the company occurred considering that it was continuously hiring other technical support representatives. Mario further asserted that as a regular employee, he should no longer be required to take another examination to prove his qualifications.

    On January 7, 2010, Mario filed a complaint for illegal dismissal against the employer before the arbitration branch of the National Labor Relations Commission in Bacolod City.

    The employer argued that the decrease in volume of calls for the account to which Mario was originally assigned led to an excess number of technical support representatives working on the same. It stated that instead of immediately dismissing its employees, it offered to transfer Mario and other technical support representatives to another account, using the following criteria:

    • first call resolution scores for the last three preceding months; and
    • existence of remediation cases.

    The employer pointed out that using the foregoing criteria, Mario was one of the “bottom performers.” It then explained that transferring the said employees to another client account was without any demotion in rank or diminution in pay as long as they successfully passed the standard product training and assessment. It added that undergoing training and assessment were necessary due to the differences between the two client accounts. It posited that it was forced to dismiss Mario on the ground of redundancy since he refused to transfer and go through the training and examination. Finally, it claimed it sent a notice of termination to the Department of Labor and Employment (DOLE).

    The Office of the Labor and the National Labor Relations Commission ruled that the dismissal of Mario from employment on the ground of redundancy was valid.

    The Court of Appeals ruled that Mario was illegally dismissed from employment in view of the employer’s failure to show that his position was redundant.

    The employer went to the Supreme Court.

    Was Mario validly dismissed on the ground of redundancy?

    The Supreme Court ruled in the negative.

    The Court stated that in termination cases, the employer bears the burden of proving that the employee’s dismissal was for a valid and authorized cause. Consequently, an employer’s failure to prove that the dismissal was valid renders the dismissal illegal.

    Here, the Court ruled that Mario was illegally dismissed from employment since the employer’s evidence was found to be insufficient to support a claim of valid redundancy.

    The Court reiterated established principles by stating that redundancy exists when an employee’s services are in excess of what is reasonably demanded by the actual requirements of the business. To successfully invoke a valid dismissal due to redundancy, there must be:

    • a written notice served on both the employees and the DOLE at least one month prior to the intended date of termination of employment;
    • payment of separation pay equivalent to at least one month pay for every year of service;
    • good faith in abolishing the redundant positions; and
    • fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished.

    Moreover, the company must provide substantial proof that the services of the employees are in excess of what is required of the company.

    The Court noted the employer’s assertion that its business was slowing down and that it would require fewer representatives beginning November 2009. The Court also looked into the following documents submitted by the employer to support its claim of redundancy:

    • Affidavit of the human capital delivery site manager;
    • Mario’s Employment Contract;
    • FCR scores of the technical support representatives considered to be bottom performers;
    • FAQs for Transition Plans;
    • Attendance sheet for meeting with representatives dated October 30, 2009;
    • Transfer Agreement;
    • Recruitment Flowchart;
    • Comparison of the duties of representatives assigned to the different clients;
    • Notice of Termination addressed to Mario; and
    • Termination Report to DOLE.

    However, the Court was not convinced of the alleged decline in the employer’s business and the expected decrease in volume of calls. This was because other than the bare assertions of the human capital delivery site manager, the Court found no other evidence proving the business slow down or the alleged low volume of calls. According to the Court, the affidavit of the human capital delivery site manager did not substantiate the claim of slow down or decreased call volume and is mainly self-serving. The Court explained that the employer should have presented any document proving the decline in volume of calls for the past months, or affidavits of client officers who determined that business was slowing down and the basis thereof. Although other documents were submitted, the Court found that these hardly proved the fact of redundancy.

    The Court was also not convinced of the employer’s claim of good faith when Mario was offered a transfer. Under jurisprudence, for a transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Failure of the employer to overcome this burden of proof, the employee’s demotion shall no doubt be tantamount to unlawful constructive dismissal.

    In the present case, the Transfer Agreement was found to be prejudicial to him. According to the Court, by requiring Mario to pass additional trainings and examination as a condition to retain his employment under the pain of dismissal, the employer disregarded his right to security of tenure. For the Court, the employer’s failure to prove redundancy, coupled with the imposition of a prejudicial condition to retain employment, rendered the offer of transfer invalid.

    Having been illegally dismissed from employment, Mario was awarded separation pay and backwages.

    Further reading:

    • Teletech Customer Care Management Philippines, Inc. v. Gerona, Jr., G.R. No. 219166, November 10, 2021.

  • But My Motion to Reduce Bond was Impliedly Approved by the NLRC

    Pacific Royal Basic Foods, Inc. (Pacific Royal) is a company that makes, processes, and sells coconut goods for export. It hired Violeta and a few other people as coconut parers.

    Pacific Royal received complaints about a product contamination incident from some of its clients. In response to the complaints, Pacific Royal sent letters to Violeta and her group.

    Violeta and some of her co-employees said they had nothing to do with product contamination when they answered Pacific Royal’s letters.

    Pacific Royal still dismissed Violeta and her group from employment, which prompted the latter to file a complaint against Pacific Royal for illegal dismissal.

    The Office of the Labor Arbiter ruled that Violeta and her group were regular employees who were illegally dismissed from employment. According to the Office of the Labor Arbiter, Pacific Royal failed to establish specific circumstances of the infractions allegedly committed by Violeta and her group. The said Office also found that Violeta and her group were likewise not informed of, and given opportunity to, explain their alleged violation of company policies and regulations on quality control, poor work performance, and repeated defiance of lawful orders of their supervisors. The Office of the Labor Arbiter directed the reinstatement of Violeta and her group. They were also awarded backwages and attorney’s fees.

    Pacific Royal appealed the Decision of the Office of the Labor Arbiter.

    The National Labor Relations Commission reversed the ruling of the Office of the Labor Arbiter.

    Record showed that Pacific Royal filed a Motion to Reduce Bond before the National Labor Relations Commission. However, the Commission did not act on the same.

    The Commission, nonetheless, resolved Pacific Royal’s appeal and found that Violeta and her group failed to dispute the fact of product contamination and was unable to show any ill motive on Pacific Royal’s part in charging them with causing such contamination. The Commission considered the difficulties of a food product export industry, which demanded a higher degree of cooperation and concern from the employees. According to the Commission, Violeta and her group were indifferent to such difficulties of Pacific Royal. In fact, some of them did not even participate in the investigation when they opted not to respond to the letters sent to them. The Commission classified Violeta and her group’s conduct as gross negligence, as they were not new to their jobs and were expected to know fully well the consequences of food product contamination to the company, its employees, and public health.

    Violeta and her group filed a Petition for Certiorari before the Court of Appeals. They imputed grave abuse of discretion on the part of the Commission for entertaining Pacific Royal’s appeal. In addition to their assertion of illegality of their dismissal from employment, Violeta and her group pointed out that Pacific Royal failed to timely post the requisite appeal bond as the same was posted only almost a month after the appeal period had lapsed.

    The Court of Appeals granted the petition of Violeta and her group. It found that Pacific Royal did not find any proof of compliance with the required posting of an appeal bond. According to the Court of Appeals, Pacific Royal’s appeal before the Commission should have been deemed not perfected, and such Commission did not acquire jurisdiction over Pacific Royal’s appeal. The Court of Appeals stressed that Pacific Royal cannot rely on the presumption of regularity in the Commission’s performance of official duties.

    Pacific Royal filed before the Supreme Court its petition for review on certiorari to assail the decision of the Court of Appeals. Pacific Royal asserted, among others, that the inaction of the National Labor Relations Commission on its Motion to Reduce Bond, coupled with the Commission’s resolution of the case on all its substantial points, was tantamount to an implied affirmance of the perfection of the appeal.

    The Supreme Court was confronted with the issue of whether there is a need for the Commission to expressly rule on motions filed by the employer to reduce the appeal bond. Or could an implied approval of such motion to reduce bond by way of the disposal of the appeal by final decision, order, or resolution suffice as a grant of the employer’s motion to reduce bond?

    The Supreme Court in this case emphasized the need for an express ruling by the National Labor Relations Commission on the appellant’s motion to reduce bond.

    The Court reiterated established principles as follows:

    Appeals by an employer before the National Labor Relations Commission of decisions by the Office of the Labor Arbiter that involve monetary awards to an employee must be secured by a cash or surety bond in the full amount of the monetary award.

    By way of exception, the payment of this full amount may be excused if the appealing employer files a motion to reduce bond showing meritorious grounds, and upon posting of a bond in a reasonable amount.

    Mcburnie v. Ganzon1G.R. Nos. 178034, 178117 & 186984-85, October 17, 2013, 719 PHIL 680-728 has already set the “reasonable amount” of the provisional reduced bond at a percentage of 10% of the monetary award, excluding the amount of damages and attorney’s fees, if any.

    The Court stated that Mcburnie requires the concurrence of the following conditions before an aggrieved employer appealing before the National Labor Relations Commission may be allowed to post a bond in a reduced amount:

    • The employer-appellant files a motion to reduce bond;
    • The motion to reduce bond shall be based on meritorious grounds;
    • The employer-appellant posts the provisional percentage of at least 10% of the monetary award, excluding therefrom the award of damages and attorney’s fees;
    • The provisional bond must be posted within the reglementary period for appeal; and
    • If the National Labor Relations Commission eventually determines that a greater or the full amount of the bond shall be posted, the employer-appellant shall comply accordingly within ten (10) days from notice of the order issued by the Commission directing such posting of the increased or full amount of the bond.

    Once these are complied with, the aggrieved employer’s appeal of the Office of the Labor Arbiter’s decision before the National Labor Relations Commission shall be deemed perfected.

    The Court further noted that the requisites laid out by Mcburnie also presupposes a sixth requirement: that the National Labor Relations Commission issue an express ruling on the appellant’s motion to reduce bond.

    In the present case, the Supreme Court found that Pacific Royal’s Motion to Reduce Bond was never acted upon by the National Labor Relations Commission. Still, the Commission resolved Pacific Royal’s appeal of the Labor Arbiter’s Decision on the merits and issued its own resolutions thereon.

    However, the Court stressed that Section 6, Rule VI of the 2011 NLRC Rules of Procedure, as amended, provides that an appeal may be perfected by the appellant-employer only by the posting of a bond in the equivalent amount of the full monetary award granted to the appellee-employee. The Court then repeated that the perfection of an appeal in the manner and within the period set by law is not only mandatory but jurisdictional.2Boardwalk Business Ventures, Inc. v. Villareal, G.R. No. 181182, April 10, 2013, 708 PHIL 443-457

    Consequently, for the Court, there should be no implied approval of a jurisdictional requirement that has not been complied with. Otherwise, the Court said, the ground of lack of jurisdiction becomes a waivable defect in procedure. Whether the National Labor Relations Commission accepts or rejects the appellant’s motion to reduce bond, the ruling must be unequivocal, and such ruling must be issued before or at the time the Commission resolves the appeal by final judgment. Failure to do so shall render the National Labor Relations Commission liable for grave abuse of discretion for having ruled on an appeal without acquiring jurisdiction over the same, and the judgment it had issued shall be vacated as null and void.

    The Court further stated that Pacific Royal could not rely on the mere presumption of regularity in the performance of official duties in favor of the National Labor Relations Commission when the latter gave due course to its appeal; not when it is faced with a serious imputation of non-compliance from Violeta and her group. Considering that the requirements provided under the Labor Code of the Philippines and its Implementing Rules are mandatory for purposes of perfecting an appeal, the rule on presumption of regularity cannot apply.

    The Supreme Court affirmed the Decision of the Court of Appeals and explained that in setting aside the ruling of the National Labor Relations Commission, it is merely exercising prudence in applying the provisions of the law.

    Further reading:

    • Pacific Royal Basic Foods, Inc. v. Noche, G.R. No. 202392, October 4, 2021.

  • But Their Services were Coterminous with Their Assigned Projects

    The employees in this case were hired on various dates by Sigma Construction and Supply (Sigma Construction), an independent contractor owned by Eduardo. As cement cutters, the said employees were assigned to work at the drilling site of Philippine Geothermal, Inc. (Philippine Geothermal), beginning in April 1990.

    However, Philippine Geothermal preterminated one of its contracts with Sigma Construction on April 1, 1993. Due to such termination, the project manager of Sigma Construction issued a notice to all cement cutters, informing them that the contract with Philippine Geothermal will be effective only until April 30, 1993.

    The employees filed a complaint for illegal dismissal against Sigma Construction and Philippine Geothermal. They argued that they were regular employees of Sigma Construction because they were continuously hired and assigned to different Philippine Geothermal projects from the beginning of their employment in 1990 until their recent termination in 1993. The employees added that they were even transferred to other projects prior to the completion of a previously assigned project and they also cleaned canals and pipes, fixed tools, and other related work at Philippine Geothermal.

    Eduardo alleged that Sigma Construction was an independent contractor that hired project employees to work on its projects with Philippine Geothermal. In support of this stand, Eduardo presented Sigma Construction’s Service contracts with Philippine Geothermal. According to Eduardo, when Philippine Geothermal preterminated its latest contract with Sigma Construction, the latter was forced to dismiss its employees from employment their services were coterminous with Sigma Construction’s projects with Philippine Geothermal. Eduardo posited that it would be unjust to require Sigma Construction to retain employees in the absence of projects with Philippine Geothermal.

    Are the employees here project employees of Sigma Construction?

    The Supreme Court held that said employees were not project employees, but were regular employees of Sigma Construction.

    The Court stated that the principal test in determining whether an employee is a project employee is whether he/she is assigned to carry out a “specific project or undertaking,” the duration and scope of which are specified at the time the employee is engaged in the project, or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring.

    In the present case, the Court found no proof that the employees’ engagement as project employees had been predetermined, as required by law. There was no showing that the employees were informed that they were to be assigned to a “specific project or undertaking” upon their hiring. No employment contracts for the specific project signed by the employees were presented.

    The Court pointed out that Eduardo only presented Sigma Construction’s Service Contracts with Philippine Geothermal. According to the Court, nowhere in the contracts did it show that employees were parties to such contract. More importantly, the said documents did not prove that employees were hired for the projects with Philippine Geothermal.

    For the Court, the presentation of service contracts between Sigma Construction and Philippine Geothermal (even if it showed the duration of the project), in lieu of the employees’ individual employment contracts, did not establish that the latter were project employees.

    Further reading:

    • Jovero v. Cerio, G.R. No. 202466, June 23, 2021.

  • Stubborn Unwillingness to Return to Work

    In October 1988, Jose was employed as a security guard by Twinstar Professional Protective Services, Inc. (Twinstar). He was deployed at the Las Haciendas in Tarlac City.

    Sometime in January 2011, Jose sought assistance from the program of a certain Mr. Tulfo to complain about the underpayment of his salaries. On January 24, 2011, Twinstar directed Jose to report to its office in Quezon City. Jose stated that upon reporting to the office the next day, Twinstar informed him that he was being placed on floating status. Jose also stated that his floating status lasted for more than six (6) months.

    This was why he filed a complaint for illegal dismissal against Twinstar.

    The Office of the Labor Arbiter held that Jose was constructively dismissed from employment. The National Labor Relations Commission reversed the ruling of the Office of the Labor Arbiter and held that no constructive dismissal took place. The Court of Appeals affirmed the decision of the National Labor Relations Commission.

    Was Jose constructively dismissed from employment?

    The Supreme Court ruled in the negative.

    Jurisprudence teaches that there is constructive dismissal when an employer’s act of clear discrimination, insensibility or disdain becomes so unbearable on the part of the employee so as to foreclose any choice on his part except to resign from such employment. It exists where there is involuntary resignation because of the harsh, hostile and unfavorable conditions set by the employer. The standard for constructive dismissal is “whether a reasonable person in the employee’s position would have felt compelled to give up his employment under the circumstances.”

    However, the Court emphasized that “not every inconvenience, disruption, difficulty, or disadvantage that an employee must endure sustains a finding of constructive dismissal.” What is vital is the weighing of the evidence presented and a consideration of whether, given the totality of circumstances, the employer acted fairly in exercising a prerogative.

    In the present case, the Court found that Jose failed that he was constructively dismissed by Twinstar. According to the Court, Jose never presented any evidence, aside from his self-serving allegations, that he was forced to be on floating status for more than six (6) months without being given new assignment by Twinstar.

    On the other hand, the Court found that Twinstar was able to establish that Jose went on absence without leave on or about January 21, 2011 and that it had subsequently sent several notices directing Jose to report for work. The Court also found that Twinstar’s duty officer vainly tried to contact Jose by calling him and sending text messages. Also Twinstar’s field inspector attempted to deliver a company letter on June 8, 2011 but Jose refused to receive the same. Furthermore, the Court discovered that Jose himself admitted declining the assignment offered to him by Twinstar within six (6) months from the time he was placed on floating status in the hearing dated October 18, 2011 before the Office of the Labor Arbiter. According to the Court, Jose’s flimsy claim that he did not understand the question of the Office of the Labor Arbiter and the Minutes of the said hearing, as both were in the English language, would seem like a desperate attempt to feign ignorance in order to retract such statements. The Court stated that Jose had all the opportunity to request the Office of the Labor Arbiter to translate the question and the Minutes to a language he understood, but he chose not to. The Court pointed out that Jose himself indicated in his bio-data that English is one of the languages he can speak and write.

    For the Court, the totality of circumstances led it to conclude that no constructive dismissal happened. Instead, the circumstances revealed Jose’s stubborn unwillingness to return to work despite being required by Twinstar to report to work multiple times within six (6) months from January 21, 2011.

    Thus, this Court ruled that Twinstar had just cause to terminate Jose’s employment.

    Further reading:

    • Dela Torre v. Twinstar Professional Protective Services, Inc., G.R. No. 222992, June 23, 2021.