Paulino Ungos III

Lawyer | Law Professor | Author

Tag: justice leonen

  • Totality of Circumstances and Contracting Arrangements

    The employer here was unorganized and had no exclusive bargaining agent. A labor union soon filed a petition for certification election before the regional office of the Department of Labor and Employment. The employer opposed the petition asserting that the members of the said union were employees of their contractor. The petition was still granted despite the opposition and certification elections were conducted.

    The employer then filed a protest with the Med-Arbiter, which then granted the same. In justifying the grant of the protest, the Med-Arbiter found that the contractor was legitimate and accordingly the employer of the challenged voters during the certification elections. The Med-Arbiter thus declared the relevant votes cast invalid for the purpose of certifying the labor union as exclusive bargaining agent to the employer.

    The Department of Labor and Employment reversed the order of the Med-Arbiter and found that the contractor was a labor-only contractor. It ruled that the challenged votes should be considered.

    The Court of Appeals reversed the decision of the Department of Labor and Employment, as the contractor was considered as legitimate. According to the Court of Appeals, the employer had presented substantial evidence that the contractor was legitimate. Specifically, it presented a Certificate of Registration issued by the Department of Labor and Employment, which declared the legitimacy of the contractor. Furthermore, it found that the contractor had substantial capitalization. Also the contractor had other clients from various industries. For the Court of Appeals, the fact that the contractor had other clients negated the conclusion that it is a labor-only contractor.

    Should the contractor be considered as a labor-only contractor?

    The Supreme Court ruled in the affirmative.

    The Court stated that although a contractor possesses badges of legitimate contracting by having substantial capitalization and catering to other clients, the Court stressed that such situation does not automatically convert a labor-only contractor to a legitimate contractor because in the issue of labor-only contracting, the totality of the facts and the surrounding circumstances of the case must still be considered.

    In the present case, the Court found that the employer entered into a Memorandum of Agreement with contractor even before the latter was issued a Certificate of Registration by the Department of Labor and Employment. The contractor had supplied manpower to various clients even without the stamp of imprimatur from the Department of Labor and Employment.

    Furthermore, although the contractor complied with capitalization requirements, there was a showing that the said contractor exercised control over the employee’s work performance and output. According to the Court, proof of substantial capital does not make an entity immune to a finding of labor-only contracting when there is showing that control over the employees resides in the principal and not in the contractor.

    The Court accordingly declared that since the contractor was a labor-only contractor, this created an employer-employee relationship between the employer as a principal, and workers whose votes were invalidated as its alleged employees.

    Further reading:

    • Manila Cordage Company-Employees Labor Union-Organized Labor Union in Line Industries and Agriculture v. Manila Cordage Co., G.R. Nos. 242495-96, September 16, 2020.

  • No Alternative But to Implement a Retrenchment Program

    In February 1999, the employee was hired to work as a production operator in the hermetic department of the employer corporation. Later, the employee was promoted to the position of quality assurance calibration technician.

    On 23 April 2009, the employee filed for and commenced her 60-day maternity leave, which was to end on 21 June 2009. She gave birth on 27 April 2009.

    On 8 May 2009, while on her maternity leave, the employee was asked to see the employer’s human resource and administrative manager. During their meeting on 21 May 2009, the employee received a letter informing her of her dismissal from employment, effective on 22 June 2009, or the day after the end of her maternity leave. She was told that she would receive her separation pay on the same date. The employer explained that it had to implement survival measures (such as energy saving programs, forced leaves, and compressed workweek arrangements) in view of the global economic crisis that started in the previous year. The employer added that it also suffered a 30% reduction in business volume resulting to substantial losses that threatened its survival. According to the employer, to minimize continuing losses and to ensure survival of the company, it had no alternative but to implement a retrenchment program.

    The employee then went to the Department of Labor and Employment, where she was advised to first accept her separation pay before filing a complaint. Thus, on 8 June 2009, after she had been required to process her clearance and sign several documents, the employee received her separation pay.

    On 9 July 2009, the employee lodged her complaint for illegal dismissal against her employer.

    Was the dismissal from employment on the ground of retrenchment valid?

    In Team Pacific Corp. v. Parente1G.R. No. 206789, July 15, 2020, the Supreme Court declared the illegality of the employee’s dismissal from employment.

    Under Article 2982Article 298 of the Labor Code of the Philippines states: “ARTICLE 298. Closure of Establishment and Reduction of Personnel. — The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. . . . In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. of the Labor Code of the Philippines, retrenchment is one of the authorized causes to dismiss an employee. It involves a reduction in the workforce and is resorted to when the employer encounters business reverses, losses, or economic difficulties, such as “recessions, industrial depressions, or seasonal fluctuations.” This is usually done as a last recourse when other methods are found inadequate.3La Consolacion College of Manila v. Pascua, G.R. No. 214744, March 14, 2018.

    There is a valid retrenchment if the employer had complied with the procedural and substantive requisites of valid retrenchment.

    With regard to the procedural requisites for a valid retrenchment, the employer must:

    • serve a written notice on the employee and the Department of Labor and Employment one month before the date of the dismissal; and
    • pay the required amount of separation pay.

    As to the substantive requisites, the employer must show that:

    • the retrenchment was a necessary measure to prevent substantial and serious business losses;
    • the retrenchment was done in good faith and not to defeat employees’ rights; and
    • it was fair and reasonable in selecting the employees who will be retrenched.4La Consolacion College of Manila v. Pascua, G.R. No. 214744, March 14, 2018.

    Absent any of these, the dismissal is illegal.

    In the said case, the Court found that the employer failed to comply with all the requisites for a valid retrenchment.

    Record revealed that the employer submitted the following documents:

    • Audited Financial Statements for the years 2006 to 2009, showing its net losses and deficits amounting to millions;
    • Letter dated 29 April 2008 advising the Department of Labor and Employment of the compressed work week arrangement it will be implementing;
    • Notice of Retrenchment dated 8 May 2009, served on the Department of Labor and Employment;
    • Duly accomplished Establishment Employment Report received by the Department of Labor and Employment on 8 May 2009;
    • List of Affected Workers by Displacements received by the Department of Labor and Employment on 8 May 2009; and
    • The Decision granting the employer’s Petition for Corporate Rehabilitation.

    Although the Court acknowledged that these documents would suffice to show business losses and compliance with notice requirements, it, nonetheless, ruled that the employer failed to establish that the employees chosen for retrenchment were selected through fair and reasonable criteria. According to the Court, the employer failed to prove that it used fair and reasonable criteria in carrying out the retrenchment program. It also failed to justify why it included the employee, who had already been employed for 10 years. The Court thus ordered the employer to reinstate the employee to her former position and pay her backwages.

    Did the acts of accepting separation pay from the employer and signing a waiver and quitclaim bar the employee from questioning the illegality of her dismissal?

    The Court held that the employee was not barred by estoppel. According to the Court, such acts are generally taken with a grain of salt, considering that employees are usually at an economic disadvantage and are often left with no choice, since they are suddenly faced with the pressure to meet financial burdens. Here, the Court found that the employee was dismissed from employment when she had just given birth. Her dismissal’s effectivity was set on the date she was supposed to return from her maternity leave. For the Court, the employee was at a clear disadvantage, having found herself without a job and a source of income right at a time when finances were crucial. Thus, the employee could not be deemed to have waived her right to file a complaint. She was not estopped from contesting the legality of her dismissal.

    Can the officers be held solidarily liable with the employer corporation?

    The Supreme Court ruled in the negative in view of the principle that corporate directors and officers are solidarily liable with the corporation for the termination of employees done with malice or bad faith. According to the Court, although the employer was unable to show that it applied fair and reasonable criteria in selecting the employees to be entrenched, it did not mean that the dismissals were automatically done in bad faith or with malice. It may have simply failed to strictly comply or to sufficiently prove compliance with the stringent rules for a valid retrenchment. As such, bad faith or malice must still be proved. Since the employee failed to present clear and convincing evidence that the officers of the employer corporation acted in bad faith or with malice, breached any duty, or were motivated by ill will, the employer corporation’s separate and distinct personality was respected.

    Further reading:

    • Team Pacific Corp. v. Parente, G.R. No. 206789, July 15, 2020.

  • Returning to the Same Employer

    Z was hired in 1985 by LS, Inc. He filed a case on 4 January 1991 for illegal dismissal and regularization against LS, Inc. and SM Corp. before the National Labor Relations Commission.

    In its Decision dated 15 December 1994, the Office of the Labor Arbiter ruled that Z was a regular employee of SM Corp., as LS, Inc. was declared to be a labor-only contractor. It was also ruled that Z was illegally dismissed from employment in 1990. Thus, SM Corp. (the true employer) was ordered to reinstate Z to his former position as regular employee, his regular status “effective as of the date of the Office of the Labor Arbiter’s decision.” Z was also awarded backwages.

    Should Z’s employment be reckoned from 15 December 1994 (the date of the Office of the Labor Arbiter’s decision), or should it be reckoned from 1985 (the year when Z was hired to work in SM Corp)?

    The Supreme Court ruled that Z’s employment started from 1985. This is because service to an employer is presumed continuous unless there is evidence that employer-employee relations were validly severed in the interim. If an employee returns to work upon an order of reinstatement, he or she is not considered a new hire.

    Following this principle, the employment relationship between Z and SM Corp. should have been considered as continuous and not validly severed when Z was illegally dismissed from employment. When Z was returned to work upon an order of reinstatement, Z was not a new hire. Thus, the reckoning point of his length of service must be in 1985, or that date when he first started working in SM Corp.

    Further reading:

    • Cuadra v. San Miguel Corp., G.R. No. 194467, July 13, 2020.

  • Unique Skills and Talents

    The complainants here were engaged on various dates as camera operators and were later dismissed in May 2013.

    Because of the termination of their employment, the said camera operators filed a complaint for illegal dismissal and regularization against GMA Network, Inc. (GMA).

    The camera operators asserted that they were assigned to several television programs of GMA and had performed functions that were necessary and desirable to GMA’s business as both a television and broadcasting company. They further contended that their repeated and continuous employment with GMA after each television program they covered showed the necessity and desirability of their functions. The camera operators concluded they have already attained the status of regular employees.

    On the other hand, GMA asserted that the camera operators were never hired as employees, as they were merely pinch-hitters or freelancers engaged on a per-shoot basis whenever the need for additional workforce arose. Further, GMA asserted that the “service fees” given to the camera operators were “not compensation paid to an employee, but rather remuneration for the services rendered” as pinch-hitters/freelancers. GMA also belied the contention that it exercised control over the camera operators. It claimed that it only monitored the performance of their work to ensure that the “end result” is compliant with company standards.

    GMA added that, even assuming that an employer-employee relationship did exist between them, the camera operators could not have attained regular status considering their failure to render “at least one year of service” as required by law.

    Specifically, with respect to one of the camera operators, named Adonis, GMA added that he was engaged as a fixed-term employee under a valid “Talent Agreement.” Accordingly, Adonis’ employment was automatically terminated upon the happening of the day certain stipulated in the contract. GMA further maintained that it may not be obliged to re-engage Adonis.

    Did an employer-employee relationship exist between GMA and the camera operators?

    The Supreme Court did not agree with GMA’s assertion as it found that the four-fold test in determining the existence of an employer-employee relationship was met.

    Jurisprudence1Begino v. ABS-CBN Corp., G.R. No. 199166, April 20, 2015. dictates that to determine the existence of an employer-employee relationship, case law has consistently applied the four-fold test, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished. Of these criteria, the so-called “control test” is generally regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under this test, an employer-employee relationship is said to exist where the person for whom the services are performed reserves the right to control not only the end result but also the manner and means utilized to achieve the same.

    On the power of hiring, the Court found that the camera operators were engaged by GMA and had rendered services directly to it. GMA was found to have engaged the camera operators to perform functions necessary and desirable to its usual business as both a television and broadcasting company.

    On the payment of wages, there was no question that GMA directly compensated the camera operators for their services. Although GMA paid the camera operators “service fees” or “talent fees,” the Court ruled that this was merely a matter of nomenclature. The Court further ruled that although the camera operators were paid on a per-shoot basis, this was only a mode of computing compensation and did not, in any way, preclude GMA’s control over the distribution of their wages and the manner by which they carried out their work. According to the Court, what matters is that the employee received compensation from the employer for the services that he or she rendered.2Chavez v. National Labor Relations Commission, G.R. No. 146530, January 17, 2005, 489 PHIL 444-462

    On the power to dismiss, the Court found that GMA’s act of disengaging the camera operators from service amounted to a dismissal from employment.

    Finally, on the element of control, the Court noted GMA’s implicit assertion that it engaged the camera operators as independent contractors in view its denial of an employer-employee relationship, coupled with the claim that it merely exercised control over the output required of the camera operators. The Court thus inquired whether the camera operators fell within the concept of an independent contractor.

    Jurisprudence3Fuji Television Network, Inc. v. Espiritu, G.R. Nos. 204944-45, December 3, 2014, 749 PHIL 388-450 has recognized a certain kind of independent contractor: individuals with unique skills and talents that set them apart from ordinary employees. In such a situation there is no trilateral relationship (as in legitimate contracting provided under Article 106 of the Labor Code of the Philippines) because the independent contractor himself or herself performs the work for the principal. In other words, the relationship is bilateral.

    In the present case, the Court found that the relationship between GMA and the camera operators was bilateral since the camera operators themselves performed work for GMA. Therefore, in order to be considered independent contractors GMA should establish that the camera operators were hired because of their “unique skills and talents” and that they were not controlled over the means and methods of their work.

    However, the Court found no proof that they were hired because of their unique skills, talent and celebrity status not possessed by ordinary employees.

    Significantly, there was a showing that the camera operators were subject to GMA’s control in that:

    • Their recordings and shoots were never left to their own discretion and craft;
    • They were required to follow the work schedules which GMA provided to them;
    • They were not allowed to leave the work site during tapings, which often lasted for days;
    • They were also required to follow company rules like any other employee.

    The Court also found that GMA provided the equipment they used during tapings and assigned supervisors to monitor their performance and guarantee their compliance with company protocols and standards.

    Should the camera operators be considered regular employees of GMA?

    The Supreme Court ruled in the affirmative.

    It found that GMA is primarily engaged in the business of broadcasting, which encompasses the production of television programs. Following the nature of its business, GMA was naturally and logically expected to engage the service of camera operators, such as the camera operators. The Court said that there was no denying that a reasonable connection exists between camera operators’ work and GMA’s business as both a television and broadcasting company. The repeated engagement of camera operators over the years only reinforces the indispensability of their services to GMA’s business. For the Court, the camera operators were GMA’s regular employees.

    The Court did not accept GMA’s assertion that the camera operators were mere casual employees.

    The Court stated that it is clear from the law that the requirement of rendering “at least one (1) year of service[,]” before an employee is deemed to have attained regular status, only applies to casual employees. An employee is regarded a casual employee if he or she was engaged to perform functions which are NOT necessary and desirable to the usual business and trade of the employer. Thus, when one is engaged to perform functions which are necessary and desirable to the usual business and trade of the employer, engagement for a year-long duration is not a controlling consideration.

    The Court stressed that GMA’s claim that the camera operators were required to render at least one (1) year of service before they may be considered regular employees had no basis in law. This was because the camera operators were never casual employees as they performed functions that were necessary and desirable to the usual business of GMA. For the Court, the camera operators need not render a year’s worth of service to be considered regular employees.

    Although the Court noted that the camera operators’ functions could mean that they were project employees whose engagements were fundamentally time-bound, the Court ruled that they were not. The Court found that GMA repeatedly engaged them as camera operators for its television programs. As camera operators, they performed activities which were within the regular and usual business of GMA and NOT identifiably distinct or separate from the other undertakings of GMA. According to the Court, it would be absurd to consider the nature of their work of operating cameras as distinct or separate from the business of GMA, a broadcasting company that produces, records, and airs television programs. From this alone, the camera operators could not be considered project employees for there was no distinctive “project” to even speak of.

    On GMA’s assertion that the camera operators were merely pinch-hitters or substitutes, the Court did not lend credence to the same. According to the Court, every industry has to deal with securing substitutes for employees who are absent or on leave. Such tasks, whether performed by the usual employee or by a substitute, cannot be considered separate and distinct from the other undertakings of the company. While it is management’s prerogative to device a method to deal with this issue, such prerogative is not absolute and is limited to systems wherein employees are not ingeniously and methodically deprived of their constitutionally protected right to security of tenure. It is unlikely that a big corporation could not device a system wherein a sufficient number of technicians can be hired with a regular status who can take over when their colleagues are absent or on leave, especially when it appears from the records that petitioner hires so-called pinch-hitters regularly every month.

    Finally, on GMA’s assertion of Adonis’ fixed-term employment, the Court did not accept the same. The Court said that it would be improper to classify Adonis as a fixed-term employee considering that GMA did not even allege the manner as to how the terms of the contract with him were agreed upon. The Court stressed that it is “the employer which must satisfactorily show that it was not in a dominant position of advantage in dealing with its prospective employee.” Thus, GMA as the employer had the burden to prove that it dealt with Adonis in more or less equal terms in the execution of the talent agreements with him. Sweeping guarantees that the contract was knowingly and voluntarily agreed upon by the parties and that the employer and the employee stood on equal footing will not suffice. The Court added that although Adonis never contested the execution of his talent agreements, such could not preclude him from attaining regular employment status. In the words of the Court, it is not blind to the unfortunate tendency for many employees to cede their right to security of tenure rather than face total unemployment.

    Were the camera operators validly dismissed from employment?

    The Supreme Court ruled that the camera operators were illegally dismissed from employment since GMA failed to allege and that the camera operators’ dismissals were impelled by any of the just or authorized causes recognized in the Labor Code of the Philippines. The camera operators were thus awarded the reliefs of reinstatement and backwages.

    Further reading:

    • Paragele v. GMA Network, Inc., G.R. No. 235315, July 13, 2020.

  • PTSD and Claims for Disability Benefits

    On 30 October 2013, the seafarer entered into a 7-month employment contract with Anglo-Eastern (ANTWERP), NV, through its agent, Anglo-Eastern Crew Management Philippines (Anglo-Eastern Crew), Inc., to work as a Messman aboard the M/V Mineral Water. On 23 February 2014, the seafarer boarded the vessel.

    The seafarer claimed that sometime in June 2014, he was sexually harassed by the chief officer of the vessel during the course of his employment. He also claimed that the chief officer also threatened to kill him upon learning that he filed a complaint against the latter before the ship captain. After the incident, the seafarer opted for voluntary repatriation and was able to return to the Philippines on 12 July 2014.

    On 24 November 2014 the seafarer consulted his personal doctor, a clinical psychologist, who diagnosed him with Post Traumatic Stress Disorder (PTSD). The diagnosis of this doctor was verified by another doctor, who concluded that the seafarer cannot return to his job as a seafarer.

    Due to his illness, the seafarer requested for compensation from Anglo-Eastern Crew. However, his request remained unheeded.

    On 2 March 2015, the seafarer filed a complaint for constructive dismissal, sexual harassment and maltreatment. In addition, he prayed for the payment of disability benefits, damages and attorney’s fees since he claims to have been rendered permanently and totally disabled due to his post-traumatic stress disorder from his unfortunate experience onboard the vessel.

    The Office of the Labor Arbiter awarded the salaries of the seafarer for the unexpired portion of his employment contract because of the finding that the seafarer was forced to repatriate himself due to the hostile environment brought about by the filing of the complaint. The Office of the Labor Arbiter also awarded him moral damages for the mental torture that he endured and exemplary damages to dissuade such incident from further occurring. It also granted the claim for attorney’s fees since the seafarer was constrained to avail the services of a lawyer.

    When the case reached the Supreme Court, the seafarer insisted on his entitlement to disability benefits. However, the Court denied his claim for said benefits. The Court ruled:

    To support his claim for disability benefits, petitioner presented a psychiatric report and a medical certificate. These documents only prove that he was diagnosed with PTSD, prescribed to take medication, and recommended for psychotherapy sessions. However, there was no disability grading.

    The medical certificate states that “[a]t this point in time he cannot return to his work as a seafarer.” This statement is not sufficient for this court to conclude that petitioner is permanently and totally disabled to work as a seafarer. It does not instruct us how petitioner’s PTSD is work-related or work-aggravated. It also does not tell us whether petitioner underwent psychotherapy sessions, as recommended by his physicians. Assuming that petitioner underwent psychotherapy sessions and took his prescribed medication, no evidence was presented showing how he responded to treatment.

    It is established that petitioner suffered some form of injury, but the pieces of evidence he submitted are not sufficient to convince this Court that he has been rendered permanently and totally disabled. Thus, this Court is precluded from awarding disability benefits, not because of his non-compliance with the 3-day reportorial requirement, but because there is barely any evidence to support the claim for disability benefits.

    Further reading:

    • Toliongco v. Court of Appeals, G.R. No. 231748, July 8, 2020.

  • Totality of Circumstances and Constructive Dismissals

    In early August of 2014, Donna entered into a 2-year employment contract to work as a household service worker with a foreign employer in the Kingdom of Saudi Arabia through its local agent, FS Manpower. She was deployed overseas on January 11, 2015.

    Donna only stayed abroad for less than 3 months before an early repatriation. She narrated that at around noontime on January 31, 2015, she was washing the dishes when she felt a hard object rubbing against her bottom and was surprised to see her male employer attempting to rape her. She went upstairs to report the matter to her female employer, but the latter did not believe her. Instead, the female employer began to ill-treat her. On February 16, 2015, her female employer violently threw a shoe at her.

    Donna escaped and went to her agency’s counterpart in the KSA where she met another Overseas Filipino Worker who mentioned that they might be sold to other Arab employers. That fellow OFW suggested that they escape the agency through the window of the second-floor comfort room, since the agency keeps their doors locked at night. The fellow OFW succeeded in escaping the agency. Donna, however, fell and injured her back. The case mentioned a rather unsavory experience they had with a passerby during that time, anyway, an ambulance later took Donna to a hospital where she underwent surgery on February 28, 2015. After a few days, representatives from the Overseas Workers Welfare Administration brought them to bahay kalinga where they waited for their ticket exit visas.

    On July 2, 2015, Donna filed a case for constructive illegal dismissal before the Office of the Labor Arbiter. She claimed that her working environment abroad allegedly became so intolerable that she was impelled to leave her job. She also assailed the validity of Final Settlement.

    On the other hand, FS Manpower countered that Donna was the one who commenced the pre-termination of her contract since she was feeling “homesick.” Donna allegedly requested to be repatriated as soon as possible. When her foreign employer tried convincing her to stay, she repeatedly threatened to run away if she will not be permitted to leave.

    Was Donna constructively dismissed from employment?

    The Supreme Court found that Donna was constructively dismissed.

    The Court said that in resolving issues of constructive dismissal, courts do not only weigh the evidence presented by the parties, but also delve into the totality of circumstances in a case.

    The Court found that the controversy emanated from the lewd actuations of her male foreign employer on January 31, 2015. To avert a commotion, she reported the matter to her female employer but unfortunately, she was merely discredited and even blamed for the incident. From then on, Donna’s female foreign employer treated her differently. Donna was subjected to physical and verbal harm that she was left with no other choice but to relinquish her employment.

    The treatment Donna experienced in the hands of her foreign employers fostered a hostile and unbearable work setting which impelled her not only to leave her employers but also, as in Donna’s words, to escape (or the Filipino word tumakas).

    For the Court, it was clear that there existed a well-grounded fear on her part prompting her to run away despite having been employed overseas for barely 2 months. The cessation of Donna’s employment was not of her own doing but was brought about by unfavorable circumstances created by her foreign employers. If Donna failed to continue her job, it was because she refused to be further subjected to the ordeal caused by the her employers’ conduct.

    Donna, the Court added, could not have gone to the counterpart agency and eventually injure herself in the course of escape were it not for the hostile treatment afforded by her foreign employers which made her run away.

    The Court concluded that all of these evidently constituted a case of constructive dismissal.

    Further reading:

    • Jacob v. First Step Manpower Int’l. Services, Inc., G.R. No. 229984, July 8, 2020.

  • Foreign Doctor Who Provided Urgent Care — a Company-Designated Physician?

    On 7 August 2015, the seafarer entered into a 9-month employment contract with Beks Gemi Isletmeciligi Ve Ticaret A.S. through its agent, Status Maritime Corporation, to work as a fitter.

    Before boarding the vessel, the seafarer underwent a pre-employment medical examination and was declared fit to work.

    On 25 March 2016, the seafarer’s shoulder snapped and was dislocated while he was allegedly lifting a heavy object. He was repatriated and recommended for surgical repair after being diagnosed with recurrent left shoulder dislocation.

    Immediately after repatriation, the seafarer reported to Status Maritime, which referred him to the company-designated physician. Although the company-designated physician initially recommended that the seafarer undergo an MRI, Status Maritime disapproved of the procedure and rejected the seafarer’s sickness allowance claim.

    The seafarer then consulted his personal doctor. After undergoing an MRI, the seafarer was diagnosed with “Rotator cuff tear (Supraspinatus), left shoulder.” Said personal doctor declared him permanently disabled and “unfit to work” as a seafarer.

    On 16 June 2016, the seafarer filed a complaint for permanent total disability benefits before the Office of the Labor Arbiter.

    The Office of the Labor Arbiter found that when the seafarer underwent pre-employment medical examination, he misrepresented that he was not suffering from any illness. However, when he was diagnosed abroad, he admitted to a certain Dr. Selvarajah that it was already his third time to sustain a left shoulder dislocation and that two episodes occurred before he boarded the vessel.

    The Office of the Labor Arbiter added that even if the seafarer did not conceal his medical history, he still could not claim disability benefits because his injury was not work-related. While his condition manifested onboard, the seafarer failed to show the connection of his injury to the nature of his work as a fitter. For his failure to present substantial evidence that his work condition caused or aggravated his injury, the seafarer was accordingly denied his claim for disability benefits.

    When the case reached the Supreme Court, the seafarer asserted the following:

    • No diagnosis was made by a company-designated physician. Dr. Selvarajah, a foreign doctor, was not a company-designated physician and, therefore, not qualified to make conclusive findings. The failure of a company-designated physician to give a definite medical finding after the period set under the POEA Standard Employment Contract renders his disability permanent and total.
    • He did not willfully conceal his medical condition during his pre-employment medical examination. He merely forgot to disclose his medical history and, being a layman without medical background, thought there was no need to disclose this information.
    • There was a presumption of fitness which was uncontroverted by evidence.
    • His medical condition should have been detected during the pre-employment medical examination because it was an apparent and external injury. Status Maritime was estopped because it had all the opportunity to screen him for the injury.

    Did Status Maritime comply with its obligation to refer the seafarer to a company-designated physician?

    The requirement of a post-employment medical examination can be gleaned in the provisions of Section 20 (A) of the POEA Standard Employment Contract.1SECTION 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 ship;

    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) In addition to the above obligation of the employer to provide medical attention, the seafarer shall also receive sickness allowance from his employer in an amount equivalent to his basic wage computed from the time he signed off until he is declared fit to work or the degree of disability has been assessed by the company-designated physician. The period within which the seafarer shall be entitled to his sickness allowance shall not exceed 120 days. Payment of the sickness allowance shall be made on a regular basis, but not less than once a month.

    The seafarer shall be entitled to reimbursement of the cost of medicines prescribed by the company-designated physician. In case treatment of the seafarer is on an out-patient basis as determined by the company-designated physician, the company shall approve the appropriate mode of transportation and accommodation. The reasonable cost of actual traveling expenses and/or accommodation shall be paid subject to liquidation and submission of official receipts and/or proof of expenses.

    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. In the course of the treatment, the seafarer shall also report regularly to the company-designated physician specifically on the dates as prescribed by the company-designated physician and agreed to by the seafarer. 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.

    4) Those illnesses not listed in Section 32 of this Contract are disputably presumed as work-related.

    Jurisprudence teaches that the conduct of the post-employment medical examination is a reciprocal obligation shared by the seafarer and the employer. The seafarer is obliged to submit to an examination within 3 working days from his or her arrival, and the employer is correspondingly obliged to conduct a meaningful and timely examination of the seafarer.2Ebuenga v. Southfield Agencies, Inc., G.R. No. 208396, March 14, 2018.

    This post-employment medical examination is primarily conducted by the company-designated physician.3Orient Hope Agencies, Inc. v. Jara, G.R. No. 204307 , June 6, 2018. However, to be reliable, the assessment or findings of the company-designated physician must be “complete and definite to give the proper disability benefits to seafarers.” When the employer refuses to comply with its obligation to have the seafarer examined, the seafarer may rely on the medical findings of his or her chosen doctor.4Ebuenga v. Southfield Agencies, Inc., G.R. No. 208396, March 14, 2018. Between a non-existent medical assessment of a company-designated physician and the medical assessment of the seafarer’s doctor of choice, the latter evidently stands.5Dionio v. ND Shipping Agency and Allied Services, Inc., G.R. No. 231096, August 15, 2018.

    In the present case, the Supreme Court found that the seafarer went to Status Maritime immediately after arriving in the Philippines. However, when he requested a medical diagnosis of his condition, Status Maritime refused to subject him to a post-employment medical examination. This compelled the seafarer to go to a doctor of his choice. As noted above, this personal doctor declared him permanently disabled and “unfit to work” as a seafarer.

    On the other hand, the Court ruled that Dr. Selvarajah’s diagnosis could not be considered as that rendered by a company-designated physician. This is because a strict reading of the POEA Standard Employment Contract requires that the company-designated physician be the one to diagnose the seafarer upon repatriation.

    The Court further stated that even if the rules were to be applied liberally, the assessment of Dr. Selvarajah could not be considered thorough, final, and definitive, as it was merely for the seafarer’s urgent medical care. In Dr. Selvarajah’s medical report, there was no showing that he conducted tests to arrive at a proper diagnosis. In fact, he even recommended for the seafarer to undergo further tests to determine the extent of the injury. Furthermore, Dr. Selverajah’s report explicitly stated that it was not meant for any medicolegal proceedings, that it should not be used as a reference in any court hearing and that it does not support any compensation claim. The provisional nature of Dr. Selvarajah’s diagnosis was further supported by his act of recommending that the seafarer see an orthopedic surgeon for further assessment.

    The Court thus ruled that when there is no post-employment medical examination by a company-designated physician, the evaluation of the seafarer’s personal doctor is considered by law as binding between the parties. The refusal of Status Maritime to submit the seafarer to a medical examination was a contravention of its responsibility under the POEA Standard Employment Contract. Thus, the Court upheld the permanent disability rating of the seafarer’s personal doctor.

    Was the seafarer qualified to claim disability benefits?

    Despite the conclusion of his personal doctor, the Supreme Court declared that the seafarer was disqualified from claiming disability benefits on the ground of fraudulent concealment.

    Section 20 (E) of the POEA Standard Employment Contract states that “[a] seafarer who knowingly conceals a pre-existing illness or condition” is disqualified from claiming compensation and benefits.6The provision reads:

    SECTION 20. Compensation and Benefits. — x x x

    E. A seafarer who knowingly conceals a pre-existing illness or condition in the Pre-Employment Medical Examination (PEME) shall be liable for misrepresentation and shall be disqualified from any compensation and benefits. This is likewise a just cause for termination of employment and imposition of appropriate administrative sanctions. (Emphasis supplied)

    In the present case, the Court found that the seafarer knowingly concealed his history of shoulder dislocation. According to the Court, the seafarer had two instances of left shoulder dislocation prior to his employment — once in June 2015 and another in July 2015. Knowing that he had this recurring condition, the seafarer should have disclosed this fact during his pre-employment medical examination. This non-disclosure was apparent in his medical certificate, wherein he answered “no” to the question “Is applicant suffering from any medical condition likely to be aggravated by service at sea or to render the seafarer unfit for service. . .?”

    The Court further stated that the seafarer could not bank on the fact that he was cleared during the pre-employment medical examination. Jurisprudence dictates that this examination is not exploratory in nature and employers are not burdened to discover any and all pre-existing medical condition of the seafarer during its conduct. Pre-employment medical examinations are only summary examinations. They only determine whether seafarers are fit to work and does not reflect a comprehensive, in-depth description of the health of an applicant. This is precisely why Section 20 (E) mandates the seafarer to disclose his or her medical history during the pre-employment medical examination.7Status Maritime Corp. v. Spouses Delalamon, G.R. No. 198097, July 30, 2014, 740 PHIL 175-200; Philman Marine Agency, Inc. v. Cabanban, G.R. No. 186509, July 29, 2013, 715 PHIL 454-483

    According to the Court, intentional concealment of a pre-existing illness or injury is a ground for disqualification for compensation and benefits under the POEA Standard Employment Contract. While the laws give ample protection to our seafarers, this protection does not condone fraud and dishonesty.

    In the present case, the seafarer could not feign ignorance and downplay the concealment of his medical condition. The seafarer knew that he had a recurring shoulder dislocation and never denied this fact. Hence, his disability claim was not granted.

    Further reading:

    • Clemente v. Status Maritime Corp., G.R. No. 238933, July 1, 2020.

  • Part-Time Employees and Retirement Benefits

    The university hired Atty. C to teach commercial law subjects in its Commerce Department during the second semester of school year 1979 to 1980. Atty. C was subsequently given teaching loads in the College of Engineering and the College of Arts and Sciences. He later taught subjects as a pioneering professor in its College of Law.

    On 21 November 2008, Atty. C wrote a letter applying for early retirement, under the university’s Personnel Policy and Procedure and the Retirement Pay Law. He was informed that his retirement application could not be approved as the university did not grant retirement benefits to its part-time teachers.

    On 25 June 2010, Atty. C filed a complaint against the university for retirement benefits before the Arbitration Branch of the National Labor Relations Commission.

    The university contended that the provision on retirement benefits under Article 3021Formerly Article 287 of the Labor Code of the Philippines does not apply to part-time teachers, because they cannot acquire regular permanent status. A “regular permanent status” is a precondition for entitlement to retirement benefits.

    Is the university’s contention correct?

    The Court ruled that the university’s contention was not correct. Atty C. is entitled to retirement benefits.

    Article 302 of the Labor Code of the Philippines specifically states that “any employee may be retired upon reaching the retirement age[,]” and that in case of retirement, in the absence of a retirement agreement, an employee who reaches the retirement age “who has served at least five (5) years . . . may retire and shall be entitled to retirement pay[.]” No exception is made for part-time employees.

    The only exemptions specifically identified by the law and its Implementing Rules are:

    • employees of the National Government and its political subdivisions, including government-owned and/or controlled corporations, if they are covered by the Civil Service Law and its regulations; and
    • employees of retail, service and agricultural establishments or operations regularly employing not more than 10 employees.2De La Salle Araneta University v. Bernardo, G.R. No. 190809, February 13, 2017, 805 PHIL 580-607

    According to the Court, the law encompasses all private sector employees, save for those specifically exempted. Part-time employees, not being among those exempted from coverage, may qualify for retirement benefits.

    In the present case, Atty C was found to have rendered service in favor of the university for 22 years. Thus, he was ruled to be entitled to retirement benefits.

    Further reading:

    • Father Saturnino Urios University (FSUU), Inc. v. Curaza, G.R. No. 223621, June 10, 2020.

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  • Expletives, Dismissals, and Unfair Labor Practices

    “O” was a professor and the assistant chairperson of the Social Sciences Department of a university. “O” was also the president of the university union, a duly registered labor union and the sole and exclusive bargaining agent of the university’s faculty and non-academic personnel.

    On 5 September 2014, the university received an administrative complaint filed by a student against “O.” The student claimed that “O” abused her and accordingly violated the university’s code of conduct and Republic Act No. 7610.

    According to the student, she encountered “O” as the latter was about to enter the university’s faculty room. She held the doorknob on her way out of the office, while “O” held the opposite end of the doorknob. When she stepped aside, “O” allegedly exclaimed the words “anak ng puta” and walked on without any remorse. The student claims that she experienced emotional trauma from “O”‘s conduct.

    The university thus charged “O” with gross misconduct and unprofessional behavior in violation of Section 16 (4) of Batas Pambansa Blg. 232, or the Education Act of 1982.1SECTION 16. Teacher’s Obligations. — Every teacher shall:

    1. Perform his duties to the school by discharging his responsibilities in accordance with the philosophy, goals, and objectives of the school.

    2. Be accountable for the efficient and effective attainment of specified learning objectives in pursuance of national development goals within the limits of available school resources.

    3. Render regular reports on performance of each student and to the latter and the latter’s parents and guardians with specific suggestions for improvement.

    4. Assume the responsibility to maintain and sustain his professional growth and advancement and maintain professionalism in his behavior at all times.

    5. Refrain from making deductions in students’ scholastic ratings for acts that are clearly not manifestations of poor scholarship.

    6. Participate as an agent of constructive social, economic, moral, intellectual, cultural and political change in his school and the community within the context of national policies. (Emphasis supplied)

    The university eventually dismissed “O” after complying with the requirements of procedural due process. “O” then proceeded to file a complaint for illegal dismissal and unfair labor practice against the university.

    “O” denied that he “unjustifiably, angrily” yelled “anak ng puta” at the student. He pointed out inconsistencies in her testimony, arguing that he was in his classroom, and not where she had claimed, when the incident happened. In any case, “O” insisted that he had no motive to malign the student, who was never enrolled in any of his classes, and whom he did not know before the alleged incident.

    “O” also contended that “anak ng puta” per se is neither defamatory nor constitutive of gross misconduct and unprofessional behavior. He argued that there was no proof that he had perverse or corrupt motivations in violating the school policy.

    “O” added that should he be found guilty, dismissal was too harsh a penalty for the alleged infraction, especially since it would have been his first offense after 20 years of service. He believed that he was well loved by his students and that he had been professional throughout his stint, mindful of others’ feelings.

    “O” further contended that his dismissal constituted unfair labor practice as it was done on account of his union activities, which involved taking a stand against the school’s K-12 policies. He claimed that the university saw the complaint as an opportunity to get rid of him for being critical of the university’s actions. He also asserted that the dismissal was done at the time the union was mourning the death of its secretary.

    Was “O” validly dismissed from employment?

    The Supreme Court ruled that “O”‘s dismissal was valid.

    Article 297 of the Labor Code of the Philippines provides that an employer may terminate an employment for serious misconduct.

    Misconduct is defined as improper or wrong conduct. It is the 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 of judgment. The misconduct to be serious within the meaning of the act must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless be in connection with the work of the employee to constitute just cause from his separation.

    In order to constitute serious misconduct which will warrant the dismissal of an employee under paragraph (a) of Article [297] of the Labor Code, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent.

    Misconduct is not considered serious or grave when it is not performed with wrongful intent. If the misconduct is only simple, not grave, the employee cannot be validly dismissed.2National Labor Relations Commission v. Salgarino, G.R. No. 164376, July 31, 2006, 529 PHIL 355-376

    The Court stated that a teacher exclaiming “anak ng puta” after having encountered a student is an unquestionable act of misconduct. However, the Court also clarified that whether the said expression constitutes serious misconduct that warrants the teacher’s dismissal will depend on the context of the phrase’s use. “Anak ng puta” is similar to “putang ina” in that it is an expletive sometimes used as a casual expression of displeasure, rather than a personal attack or insult.3Pader v. People, G.R. No. 139157, February 8, 2000, 381 PHIL 932-937

    In the present case, the Court found that the utterance in question, “anak ng puta,” was an expression of annoyance or exasperation. Both “O” and the student were pulling from each side of the door, prompting “O” to exclaim frustration without any clear intent to maliciously damage or cause emotional harm upon the student. That they had not personally known each other before the incident, and that “O” had no personal vendetta against the student as to mean those words to insult her, confirm this conclusion.

    However, the Court considered other relevant circumstances that aggravated the misconduct he committed.

    First, he not only denied committing the act, but he also refused to apologize for it and even filed a counter-complaint against the student for supposedly tarnishing his reputation. He even refused to sign the receiving copy of the notices that sought to hold him accountable for his act.

    According to the Court, while uttering an expletive out loud in the spur of the moment is not grave misconduct per se, the refusal to acknowledge this mistake and the attempt to cause further damage and distress to a minor student cannot be mere errors of judgment. “O”‘s subsequent acts are willful, which negate professionalism in his behavior. They contradict a professor’s responsibility of giving primacy to the students’ interests and respecting the institution in which he teaches. In the interest of self-preservation, “O” refused to answer for his own mistake; instead, he played the victim and sought to find fault in a student who had no ill motive against him.

    The Court added that had he been modest enough to own up to his first blunder, “O”‘s case would have gone an entirely different way.

    Second, a similar complaint had already been filed against “O”: that of verbal abuse against another student.

    And third, “O” was found to have exhibited aggressive behavior to his colleagues in that he shouted at co-professors, displayed a dirty finger sign against his immediate superior, and challenged a co-professor to a fist-fight.

    For the Court, the foregoing circumstances revealed “O”‘s pugnacious character and ill-mannered conduct.

    The Court stressed that in determining the sanction imposable on an employee, the employer may consider the former’s past misconduct and previous infractions.4Sy v. Neat, Inc., G.R. No. 213748, November 27, 2017

    Employers are not expected to retain an employee whose behavior causes harm to its establishment. The law also recognizes the right of the employer to expect from its workers not only good performance, adequate work and diligence, but also good conduct and loyalty. The employer may not be compelled to continue to employ such persons whose continuance in the service will patently be inimical to its interests. 5Sugue v. Triumph International (Phils.), Inc., G.R. Nos. 164804 & 164784, January 30, 2009, 597 PHIL 320-342

    In the present case, “O” cannot rely on his 20-year stay in the university to shield him from liability. The longer an employee stays in the service of the company, the greater is his responsibility for knowledge and compliance with the norms of conduct and the code of discipline in the company.6Punzal v. ETSI Technologies, Inc., G.R. Nos. 170384-85, March 9, 2007, 546 PHIL 704-719

    For the Court, “O”‘s dismissal was valid.

    Did “O”‘s dismissal from employment constitute unfair labor practice?

    The Supreme Court ruled that the university was not guilty of unfair labor practice.

    Under Article 258 of the Labor Code of the Philippines, unfair labor practices are violative of the constitutional right of workers to self-organize.

    Jurisprudence teaches that the person who alleges the unfair labor practice has the burden of proving it with substantial evidence.7UST Faculty Union v. University of Santo Tomas, G.R. No. 180892, April 7, 2009, 602 PHIL 1016-1036 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. A dismissal of a union officer is not necessarily discriminatory, especially when that officer committed an act of misconduct. In fact, union officers are held to higher standards.8Republic Savings Bank v. Court of Industrial Relations, G.R. No. L-20303, October 31, 1967, 128 PHIL 230-247 and Great Pacific Life Employees Union v. Great Pacific Life Assurance Corp., G.R. No. 126717, February 11, 1999, 362 PHIL 452-466

    In the present case, the Court found that “O”‘s dismissal, which was brought about by his personal acts, did not constitute unfair labor practice as provided under the Labor Code of the Philippines. Dismissing him was not meant to violate the right of the university employees to self-organize. Neither was it meant to interfere with the Union’s activities. The Court further stated that “O” failed to prove that the proceedings against him were done with haste and bias. And although the Court noted “O”‘s defense that he was the union president, this does not make him immune from liability for his acts of misconduct.

    The Court reiterated the principle that the employer’s management prerogative to dismiss an employee is valid as long as it is done in good faith and without malice.9 In this case, this Court found no bad faith on the part of the university when it dismissed “O” from employment. “O”‘s claim of unfair labor practice thus failed.

    Further reading:

    • Adamson University Faculty and Employees Union v. Adamson University, G.R. No. 227070, March 9, 2020.

  • My Supervisor Committed Sexual Harassment, Not Me

    On 16 January 2009, MCP started working for LBC as a customer associate in one of its branches. The branch’s team leader and officer-in-charge, AAB, endorsed her application for the post and acted as her immediate superior.

    However, during her employment with LBC, MCP was sexually harassed by AAB.

    On 5 May 2010, MCP reported the incident to the LBC Head Office and also prepared a resignation letter in case management would not act on her complaint. Management acted on her complaint by advising her to request for a transfer to another team while they investigated the matter.

    On 8 May 2010, MCP returned to the LBC Head Office and submitted her formal complaint against AAB. MCP also reported AAB’s acts of sexual harassment to the police.

    On 14 May 2010, MCP resigned from her employment since LBC management did not immediately act on her complaint. According to MCP, she was forced to quit since she no longer felt safe at work.

    On 20 July 2010, MCP filed a complaint for illegal dismissal against LBC.

    Was MCP constructively dismissed from employment?

    The Supreme Court reiterated the principle that constructive dismissal occurs when an employer makes an employee’s continued employment impossible, unreasonable or unlikely, or has made an employee’s working conditions or environment harsh, hostile and unfavorable, such that the employee feels obliged to resign from his or her employment. Common examples are when the employee is demoted, or when his or her pay or benefits are reduced. However, constructive dismissal is not limited to these instances. The gauge to determine whether there is constructive dismissal, is whether a reasonable person would feel constrained to resign from his or her employment because of the circumstances, conditions, and environment created by the employer for the employee1Saudi Arabian Airlines (Saudia) v. Rebesencio, G.R. No. 198587, January 14, 2015, 750 PHIL 791-846. There may be constructive dismissal 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.2Hyatt Taxi Services Inc. v. Catinoy, G.R. No. 143204, [June 26, 2001], 412 PHIL 295-307

    In the present case, the Court found no proof that LBC acted on MCP’s report before they issued AAB a notice to explain. The Court further found that LBC only commenced the formal investigation 41 days after MCP reported the incident. Another month passed before it held an administrative hearing for the case against AAB. 2 more months passed before LBC resolved the matter.

    The Court viewed LBC’s delay in acting on MCP’s complaint as an instance of insensibility, indifference, and disregard for its employees’ security and welfare. In failing to act promptly on MCP’s complaint and in choosing to let the resolution of the complaint hang in the air for a long period of time, LBC had shown that it did not accord her claims the necessary degree of importance, and at best considered it a minor infraction that could wait. LBC, the Court said, belittled her allegations.

    Furthermore, the Court found that during the investigation, AAB resumed his duties as usual. In the meantime, MCP was found to have consumed her vacation leaves just to avoid him while waiting for the approval of her transfer to another branch. LBC’s acts showed that it was MCP who had to change and adjust, and even transfer from her place of work, instead of AAB. For the Court, LBC created create a hostile, unfavorable, unreasonable work atmosphere for MCP.

    Stated otherwise LBC’s insensibility to MCP’s sexual harassment case was a ground for constructive dismissal. MCP was compelled to leave her employment because of the hostile and offensive work environment created and reinforced by AAB and LBC. MCP was thus clearly constructively dismissed.

    Further reading:

    • LBC Express-Vis, Inc. v. Palco, G.R. No. 217101, February 12, 2020.