The Supreme Court reiterated the doctrine of piercing the corporate veil in that it applies in three (3) basic areas, namely: 1) defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an existing obligation; 2) fraud cases or when the corporate entity is used to justify a wrong, protect fraud, or defend a crime; or 3) alter ego cases, where a corporation merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation.
It is the act of hiding behind the separate and distinct personalities of juridical entities to perpetuate fraud, commit illegal acts and evade one’s obligations, that the equitable piercing doctrine was formulated to address and prevent. A settled formulation of the doctrine of piercing the corporate veil is that when two business enterprises are owned, conducted and controlled by the same parties, both law and equity will, when necessary to protect the rights of third parties, disregard the legal fiction that these two entities are distinct and treat them as identical or as one and the same. However, [an employer’s] attempt to isolate [itself] from and hide behind the supposed separate and distinct personality of [a different company] so as to evade [its] liabilities is precisely what the classical doctrine of piercing the veil of corporate entity seeks to prevent and remedy.1De Castro v. Court of Appeals, G.R. No. 204261, October 5, 2016, 796 PHIL 681-713.
In Nextphase International, Inc. v. National Labor Relations Commission — Third Division,2G.R. No. 249046, December 9, 2020., Nextphase International, Inc. (NPI) was found to have used the corporate veil to perpetrate a fraud against certain employees. Thus:
In this instance, petitioner denies committing fraud to defeat legal processes and deny private respondents of what is legally theirs, alleging merely that the evidence adduced by the latter is not sufficient to determine fraud or misuse of corporate fiction. However, it must be remembered that allegation is not equivalent to proof and, as such, the party who asserts a particular fact or affirmative defense is duty-bound to support the same with the requisite quantum of evidence.
Here, petitioner miserably failed to support its denial of the commission of fraud to evade liability to private respondents or of the fact that it created NGII at around the same time as the conclusion of the case before the CA where being made to pay for P2,735,722.82 was likely. The deceitful purpose for which the second company was created was made clear by the fact that the sheriff was barred from serving the writ of execution to petitioner because its official address was suddenly under a new management whereas the banks to which he had sent notices of garnishment had all but refused. If the two companies were, indeed, separate and distinct from one another, the execution of the judgment would not have encountered a hitch, which it did. Thankfully, the private respondents inquired into the problem that led to the discovery of the surreptitious change in name cum creation of NGII for the purpose of thwarting the enforcement of the judgment award.
In view thereof, there is no doubt that petitioner’s attempt to hide behind a new identity constitutes fraud within the meaning of the law. Fraud in this context proceeds from the intentional deception practiced by means of misrepresentation or concealment of a material fact. Petitioner did it by cloaking itself with a new legal personality in the hope that by hiding behind the legal fiction it could evade existing obligations and defeat the rights of the claimants to which it was held liable.
As last ditch effort, petitioner contends that it has a different purpose than that of NGII’s. It claims that its main objective is to engage in the business of trading goods such as but not limited to novelty items on wholesale or retail basis whereas NGII is not. However, a reading of its petition yields to the fact that its nature of business is essentially the same as NGII’s. “[T]o engage in, conduct and carry on business of manufacturing, importing, exporting, marketing at retail/wholesale” is practically just a stretched-out itemization of the word “trading.” The identity of each of the companies’ business model (apart from their corporate names, address, contact numbers and website as well as directors, officers and shareholders) is rendered even more plainly and unambiguously by the subject of their enterprise which is plastic.
Further reading:
Nextphase International, Inc. v. National Labor Relations Commission — Third Division, G.R. No. 249046, December 9, 2020.
In Starocean Manning Philippines, Inc. v. Saturnino,1G.R. No. 252659, December 2, 2020. the Supreme Court stressed that sufficient basis must support the assessment of the company-designated physician:
Regardless of who the doctor is and his or her relation to the parties, the overriding consideration should be that the medical conclusions are based on (a) the symptoms and findings collated with medically acceptable diagnostic tools and methods, (b) reasonable professional inferences anchored on prevailing scientific findings expected to be known to the physician given his or her level of expertise, and (c) the submitted medical findings or synopsis, supported by plain English annotations that will allow the Labor Arbiter and the National Labor Relations Commission to make the proper evaluation.2Orient Hope Agencies, Inc. v. Jara, G.R. No. 204307, June 6, 2018.
If the company-designated physician failed to provide a final and definite medical assessment within the required periods, the seafarer’s condition shall be, by operation of law, characterized as total and permanent.3Ampo-on v. Reinier Pacific International Shipping, Inc., G.R. No. 240614, June 10, 2019.
Here, the employer failed to adduce evidence supporting the assessment that the seafarer’s illness was not work-related. For the Court, such unsupported finding of non-work-relatedness is an invalid medical assessment.
The seafarer was accordingly ruled to be entitled to total and permanent disability benefits by operation of law. The Court further applied Section 20(A)(7) of the 2010 POEA-SEC, which requires that such benefits be separate and distinct from, and be in addition to whatever benefits which the seafarer is entitled to under Philippine laws such as from the Social Security System, Overseas Workers Welfare Administration, Employees’ Compensation Commission, Philippine Health Insurance Corporation, and Home Development Mutual Fund.
Further reading:
Starocean Manning Philippines, Inc. v. Saturnino, G.R. No. 252659, December 2, 2020.
On 17 December 1997, Lailani started working for CML as an Assembly Production Operator. On 6 February 2012, she was dismissed by way of redundancy. She then signed a quitclaim indicating her position as QA Inspector Lead and received a certain amount as severance package. At the time of her dismissal, she was receiving a monthly salary of Php17,047.88.
On 21 September 2012, Lailani accepted a job with the same employer, CML, for the position of QA Inspector Senior — a position under the QA Inspector Lead. The position had a basic monthly salary of Php10,835.86.
On 20 April 2015, a first Absence Without Official Leave (AWOL) Notice was given to Lailani due to the latter’s absence from 16 to 18 April 2015. Lailani was directed to report for work on 21 April 2015. Due to Lailani’s continued absence, a second AWOL Notice and a third AWOL Notice were sent to her. As a result of her prolonged unexplained absence, Lailani’s employment was terminated on 11 May 2015. A Termination Letter dated 11 May 2015 was sent to Lailani informing her of the decision to sever her employment.
In the Court of Appeals (CA), the dismissal of Lailani from employment on 6 February 2012 was affirmed to be illegal. With regard to the awards of separation pay and backwages, although the CA computed the said reliefs using Lailani’s original monthly salary of P17,047.88 for the period of 6 February 2012 to September 2012, the amount of Php10,835.86 was used in computing separation pay and backwages from September 2012 until 11 May 2015. The CA explained that Lailani’s employment in September 2012 constituted a new job because her first employment was effectively terminated on 6 February 2012. The CA added that Lailani’s execution of the employment contract in September 2012 was an acceptance of the lower salary.
Was Lailani entitled to differentials in the awards of separation pay and backwages?
The Supreme Court ruled that Lailani was entitled to salary differentials from the time she was re-hired in September 2012 up to the time she was validly dismissed on 11 May 2015.
In pointing out the error of the CA, the Supreme Court cited Article 294 of the Labor Code of the Philippines, which states:
Art. 294. Security of Tenure. — An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits of their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
The Court explained that since the termination of Lailani’s employment on 6 February 2012 was illegal, Article 294 requires that she be given whatever she was previously entitled to. The Court stated that this did not only include Lailani’s reinstatement to her old position but also the amount of compensation previously received. According to the Court, when Lailani was “re-hired” in September 2012, she was actually reinstated. Thus, she should have been paid her basic monthly salary of Php17,047.88 instead of Php10,835.86. Accordingly, the Supreme Court awarded differential in the amount of Php6,212.02 from September 2012 until 11 May 2015
Further reading:
Hapita v. Cypress Manufacturing Limited, G.R. No. 240512, January 27, 2020.
On 16 February 2000, the Manila Electric Company (MERALCO) Employees and Workers Association (MEWA), the official bargaining unit of MERALCO, through its former President, Juanito, filed a Notice of Strike with the National Conciliation Mediation Board (NCMB) due to bargaining deadlock.
After conducting a strike vote in June 2000, Juanito informed the NCMB Administrator of its result in a Letter dated 12 July 2000. The letter was served through registered mail on 17 July 2000.
After 4 days, or on 21 July 2000, MEWA staged a strike. Record showed that the following persons joined the strike:
UNION OFFICERS
UNION MEMBERS
Federico
Marcelo
Catalino
Gerardo
Romeo
Rolando
Donatilo
Edgardo
Allan
Leonides
Arturo
Amadeo
Restituto
Melandro
Dominador
Lito
Arnaldo
Edwin
The Secretary of the Department of Labor and Employment issued an Assumption Order dated 21 July 2000, assuming jurisdiction and directing the striking workers to return to work within 24 hours from notice. Copies of the order were published in 3 major newspapers on 23 July 2000 and served to union officers and its lawyers. MERALCO’s security guards also exhibited the order to the strikers but they refused to obey.
On 24 July 2000, several strikers wearing masks chained and padlocked the 3 gates of the MERALCO Center. They laid on the pavement and blocked the entry and exit gates of MERALCO. The strikers stated that they formed human barricades and placed obstructions, but only for collective self-defense because the guards used unnecessary force in dispersing them. Consequently, on 25 July 2000, the Secretary of the Department of Labor and Employment issued another Order reminding the parties to comply with the return-to-work order. He even deputized the PNP Chiefs of the National Capital Region, Region III and Region IV to ensure compliance.
On 2 August 2000, MEWA and MERALCO executed an Agreement directing all employees who have not been placed on duty (except the 13 union officers and 13 members who were facing charges) to report for work. MERALCO also issued a Memorandum stating that the resumption of office was without prejudice to an administrative investigation for prohibited acts committed during the strike and/or defiance of the Assumption Orders. From 2 August to 11 October 2000, 66 employees were terminated from employment.
Was the strike illegal?
Yes.
The Supreme Court stated that a strike is the most powerful weapon of workers in coming to an agreement with management as to the terms and conditions of employment. Premised on the concept of economic war between labor and management, staging a strike either gives life to or destroys the labor union and its members, as well as affect management and its members.1Phimco Industries, Inc. v. Phimco Industries Labor Association, G.R. No. 170830, August 11, 2010, 642 PHIL 275-307
The Court added that in order to be legitimate, a strike should not be antithetical to public welfare, and must be pursued within legal bounds. The right to strike as a means of attaining social justice is never meant to oppress or destroy anyone, least of all, the employer.2Phimco Industries, Inc. v. Phimco Industries Labor Association, G.R. No. 170830, August 11, 2010, 642 PHIL 275-307 Since strikes affect not only the relationship between labor and management, but also the general peace and progress of the community, the law has provided limitations on the right to strike.3Phimco Industries, Inc. v. Phimco Industries Labor Association, G.R. No. 170830, August 11, 2010, 642 PHIL 275-307 According to the Court, Article 2634Art. 263. Strikes, picketing and lockouts of the Labor Code, as amended by Republic Act (R.A.) No. 6715, and Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code outline the following procedural requirements for a valid strike:
A notice of strike, with the required contents, should be filed with the DOLE, specifically the Regional Branch of the NCMB, copy furnished the employer of the union;
A cooling-off period must be observed between the filing of notice and the actual execution of the strike thirty (30) days in case of bargaining deadlock and fifteen (15) days in case of unfair labor practice. However, in the case of union busting where the unions existence is threatened, the cooling-off period need not be observed. x x x
Before a strike is actually commenced, a strike vote should be taken by secret balloting, with a 24-hour prior notice to NCMB. The decision to declare a strike requires the secret-ballot approval of majority of the total union membership in the bargaining unit concerned.
The result of the strike vote should be reported to the NCMB at least seven (7) days before the intended strike or lockout, subject to the cooling-off period. (emphasis supplied)
Jurisprudence5Pilipino Telephone Corp. v. Pilipino Telephone Employees Association, G.R. Nos. 160058 &160094, June 22, 2007, 552 PHIL 432-452 teaches that these requirements are mandatory in nature and failure to comply therewith renders the strike illegal.
In the present case, the Court found that MEWA failed to comply with the 7-day strike ban rule which was counted from the time the union furnished the NCMB the strike vote result. It also found that MEWA also failed to furnish the NCMB the results of the vote at least 7 days before the intended strike. The Court noted that although the letter containing the strike vote result was dated 12 July 2000, it was sent through registered mail only on 17 July 2000, which was 4 days before the strike. The Court stressed that the NCMB thus did not have sufficient time to determine if the intended strike was approved by majority of the union workers. For the Court, the strike was illegal.
Was the dismissal of strikers from employment valid?
The Court relied on Article 264 of the Labor Code which enumerates the prohibited acts during a strike, to wit:
ARTICLE 264. Prohibited Activities. — (a) No Labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with Title VII of this Book or without first having filed the notice required in the preceding Article or without the necessary strike or lockout vote first having been obtained and reported to the Ministry. No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout. Any worker whose employment has been terminated as a consequence of any unlawful lockout shall be entitled to reinstatement with full backwages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. x x x (e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares. (emphasis supplied)
The Court explained that the above-cited provision of the Labor Code presents a substantial distinction between the consequences of an illegal strike for union officers and mere members of the union. For union officers, knowingly participating in an illegal strike is a valid ground for termination of their employment. However, for union members who participated in an illegal strike, their employment may be terminated only if there is substantial evidence or proof that they committed prohibited and illegal acts during the strike.6Magdala Multipurpose & Livelihood Cooperative v. Kilusang Manggagawa ng LGS, G.R. Nos. 191138-39, October 19, 2011, 675 PHIL 861-877
In the present case, the Court declared the dismissal of the following union officers valid considering the illegality of the 21 July 2000 strike for noncompliance with the law:
Federico;
Catalino;
Romeo;
Donatilo;
Allan;
Arturo; and
Restituto.
Furthermore, the Court found substantial evidence proving that the following union members performed some of the prohibited acts mentioned in Article 264 of the Labor Code:
Marcelo;
Gerardo;
Rolando;
Edgardo;
Leonides;
Amadeo;
Melandro;
Dominador; and
Lito.
The Court stated that photographs submitted by MERALCO revealed that these union members committed the prohibited acts, which were then corroborated by security guards who were present during the strike. The Court stressed that the security guards identified the said members to have barricaded the gates and prevented other employees from entering MERALCO’s premises. The Court accordingly declared their dismissal valid for their illegal acts during the illegal strike.
However, the Court reached a different conclusion with regard to 2 union members (Arnaldo and Edwin), since it found that the testimonies of the security guards revealed that they only saw these members joining the picket line without performing any illegal act during the strike.
The Court reiterated the proof required to terminate union members, to wit:
For the rest of the individual respondents who are union members, the rule is that an ordinary striking worker cannot be terminated for mere participation in an illegal strike. There must be proof that he or she committed illegal acts during a strike. In all cases, the striker must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice. Liability for prohibited acts is to be determined on an individual basis7Solidbank Corporation v. Gamier, G.R. Nos. 159460 & 159461, November 15, 2010, 649 PHIL 54-83.
For the Court, absent any clear, substantial and convincing proof of illegal acts committed by Arnaldo and Edwin during the strike, MERALCO could not arbitrarily dismiss them from employment.
Should Arnaldo and Edwin be granted backwages?
No, the Court ruled that they should not be granted backwages in view of the illegality of the said strike.
The Court reiterated the principles in G & S Transport Corporation v. Infante,8G & S Transport Corporation v. Infante, G.R. No. 160303, September 13, 2007, 559 PHIL 701-716 where the Court held:
It can now therefore be concluded that the acts of respondents do not merit their dismissal from employment because it has not been substantially proven that they committed any illegal act while participating in the illegal strike. x x x x x x With respect to backwages, the principle of a “fair day’s wage for a fair day’s labor” remains as the basic factor in determining the award thereof. If there is no work performed by the employee there can be no wage or pay unless, of course, the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working. While it was found that respondents expressed their intention to report back to work, the latter exception cannot apply in this case. In Philippine Marine Officers’ Guild v. Compañia Maritima, as affirmed in Philippine Diamond Hotel and Resort v. Manila Diamond Hotel Employees Union, the Court stressed that for this exception to apply, it is required that the strike be legal, a situation that does not obtain in the case at bar9G & S Transport Corporation v. Infante, G.R. No. 160303, September 13, 2007, 559 PHIL 701-716.
Accordingly, the Court ruled although Arnaldo and Edwin N. Reyes could be reinstated, they are not entitled to backwages.
Further reading:
Ilagan v. Manila Electric Co., G.R. Nos. 211746 & 212077, January 22, 2020.
The perfection of an appeal of the Order of the Regional Director involving a monetary award in cases which concern the visitorial and enforcement powers of the Secretary of the Department of Labor and Employment is subject to the requirements prescribed under Article 128, to wit:
Art. 128. Visitorial and Enforcement Power. — x x x
An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from.1Emphasis supplied.
The Court explained that the jurisdiction of the National Labor Relations Commission is separate and distinct from that of the Secretary of Labor and Employment. In the exercise of their respective jurisdictions, each agency is governed by its own rules of procedure. The rules of procedure of the Commission are thus different from (and do not apply in) cases cognizable by the Secretary of the Department of Labor and Employment.
The Court added that unlike the 2011 NLRC Rules of Procedure, as amended, no provision in the Rules on the Disposition of Labor Standards Cases governs the filing of a motion for the reduction of the amount of the bond. However, on matters that are not covered by the Rules on the Disposition of Labor Standards Cases, the suppletory application of the Rules of Court (and not the 2011 NLRC Rules of Procedure, as amended) is authorized. In this regard, the Department of Labor and Employment has no authority to accept an appeal under a reduced bond.
Further reading:
Blazing Star Security and Investigation Agency, Inc. v. Miraflor, G.R. No. 196022, January 22, 2020.
In labor cases, rules of procedure should not be applied in a very rigid and technical sense. They are merely tools designed to facilitate the attainment of justice, and where their strict application would result in the frustration rather than promotion of substantial justice, technicalities must be avoided. Technicalities should not be permitted to stand in the way of equitably and completely resolving the rights and obligations of the parties. Where the ends of substantial justice shall be better served, the application of technical rules of procedure may be relaxed. In certain cases, leniency was granted in the observance of rules of procedure to advance substantial justice. After all, cases should be determined on the merits, after the parties have been given full opportunity to ventilate their causes and defenses, rather than on technicality or procedural imperfection.1Tres Reyes v. Maxim’s Tea House, G.R. No. 140853, February 27, 2003; Malixi v. Baltazar, G.R. No. 208224, November 22, 2017; Jaro v. Court of Appeals, G.R. No. 127536, February 19, 2002, 427 PHIL 532-549
The Supreme Court remanded a certain case to the Court of Appeals, and directed it to reinstate and take action on the Petition for Certiorari filed by the employees. Record revealed that the Court of Appeals had previously dismissed the said petition for having been filed beyond 60 days from notice, based on the employees’ own allegations therein.
Leniency was afforded the employees since they were able to prove that their Petition for Certiorari was actually filed within the reglementary period and the error was merely in the statement of material dates in the said petition. Specifically, the employees were able, albeit belatedly, to append to their Petition for Review on Certiorari a copy of the Bailiff’s Return dated 4 October 2018, which indicated that the Resolution of the National Labor Relations Commission was received by the employees’ counsel on 3 October 2018 (and not 25 September 2018, as erroneously stated by the employees in their Petition for Certiorari). Thus, the Supreme Court found that the Petition for Certiorari filed before the Court of Appeals on 3 December 2018 was filed on time. However, the Court reminded the employees and their counsel to be more circumspect in the indication of material dates and other factual matters in their pleadings to avoid any confusion and to prevent delay. The Court further warned them that other procedural missteps will not be granted the same leniency.
Further reading:
San Felipe v. Armscor Global Defense, Inc., G.R. No. 247639, January 15, 2020.
The seafarer entered into a 6-month employment contract with CTI, through UPLI, to work as a stateroom steward aboard the vessel Carnival Glory. After passing the pre-employment medical examination, he joined the vessel on 26 February 2014.
Sometime in March 2014, the seafarer reported passing out fresh blood during bowel movement but with no fever, abdominal pain or vomiting. He was treated at the vessel infirmary. Thereafter, he was brought to the Charleston Endoscopy Center in South Carolina, USA for colonoscopy. His biopsy, however, indicated “Segments of Invasive Moderately Differentiated Adenocarcinoma.”
On 12 June 2014, the seafarer was medically repatriated. Upon his arrival in Manila, UPLI immediately referred him to the Marine Medical Services for further evaluation and management. Thereafter, the company-designated doctor confirmed that respondent was suffering from “Moderately Differentiated Adenocarcinoma Rectum.” The seafarer underwent a surgical operation (Abdominal Resection) and was subsequently subjected to concurrent chemotherapy and radiation therapy.
ULPI and CTI countered that the seafarer’s illness was not compensable because it was not work-related or listed among the occupational diseases under the Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships (POEA-SEC). It added that respondent likewise did not prove the causal relation between his illness and his work as stateroom steward.
Should the seafarer be granted his claim for permanent total disability benefits?
The Supreme Court granted the seafarer’s claim for permanent total disability benefits.
The Court cited Section 20 (A) of the POEA-SEC, and ruled that in order for a disability to be compensable, (i) the injury or illness must be work-related; and, (ii) the work-related injury or illness must have existed during the term of the contract of the seafarer. In turn, “work-related illness” pertains to such sickness listed as occupational disease under Section 32-A of the POEA-SEC with the set conditions therein satisfied. An illness not listed as occupational disease is, nonetheless, disputably presumed work-related provided that the seafarer proves, by substantial evidence, that his or her work conditions caused or, at the least, increased his or her having contracted the same.1Ilustricimo v. NYK-Fil Ship Management, Inc., G.R. No. 237487, June 27, 2018.
The Court also emphasized that for a disease to be compensable, the nature of work need not be the only reason for the seafarer to suffer his or her illness. What is crucial is the reasonable connection between the seafarer’s disease and one’s work leading a rational mind to conclude that such work contributed to or aggravated the development of the illness.2Ilustricimo v. NYK-Fil Ship Management, Inc., G.R. No. 237487, June 27, 2018.
On the one hand, the Court found that the seafarer was able to establish a reasonable link between his having suffered rectal cancer and his work. Similarly, he was able to establish that his work conditions increased his having contracted his illness considering that the dietary provision on the vessel (food high in cholesterol and fat and low in fiber) was a known cause of rectal cancer.
The Court mentioned that it has already taken judicial notice of the food provisions on a ship which are produced at one time for long journeys across the oceans and seas. In Skippers United Pacific, Inc. v. Lagne,3G.R. No. 217036, August 20, 2018, the Court recognized that the food provided to seafarers are mostly frozen meat, canned goods and seldom are there vegetables which easily rot and wilt and, therefore, impracticable for long trips. Also, in the case of Jebsens Maritime, Inc. v. Alcibar,4G.R. No. 221117, February 20, 2019. the Court similarly ruled that rectal cancer of therein respondent was work-related as the latter proved that the cause thereof was the poor provisions — high in fat and cholesterol and low in fiber — given to him while at sea. Such poor provisions were on the same level with those given to herein respondent while he was still aboard the vessel. Furthermore, the Court had already pronounced the compensability of colorectal cancer in Leonis Navigation Co., Inc. v. Villamater.5G.R. No. 179169, March 3, 2010, 628 PHIL 81-100. According to the Court, it cannot be gainsaid that the poor diet of the herein seafarer while at sea contributed to his having developed rectal cancer during the term of his employment contract.
On the other hand, the Court also found that although UPLI and CTI argued that the company-designated doctor declared the seafarer’s illness as not work-related, the pronouncement of the company-designated physician had actually bolstered the contention that the seafarer’s diet on the vessel contributed to him having suffered from rectal cancer. The Court highlighted the company-designated physician’s medical report of 14 June 2014 which read:
Adenocarcinoma’s risk factors include age, diet rich in saturated fat; fatty acid and linoleic acid and genetic predisposition and is likely not work-related.6Emphasis supplied.
For the Court such report cited that one of the risk factors of rectal cancer was poor diet. Also, such report did not categorically state that respondent’s illness was not work-related but that it was just likely not work-related without any explanation for saying so.
Further reading:
United Philippine Lines, Inc. v. Romasanta, Jr., G.R. No. 239256, January 15, 2020.
In Leonis Navigation Agency, Inc. v. Dagos,1G.R. No. 241909, January 14, 2019. the Supreme Court ruled that the surviving legitimate spouse of the seafarer is not an indispensable party but only a necessary party in a complaint for deathbenefits. According to the Court, there is no law stating that only the legal spouse has the legal standing to institute a complaint to claim death benefits under the Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships2Philippine Overseas Employment Administration Memorandum Circular No. 10-10.. The failure to implead her will not result in the dismissal of the claim.
Further reading:
Leonis Navigation Agency, Inc. v. Dagos, G.R. No. 241909, January 14, 2019.
In one case, the Supreme Court reiterated the following rules relating to seafarer claims of total and permanent disability benefits:
The company-designated physician must issue a final medical assessment on the seafarer’s disability grading within a period of 120 days from the time the seafarer reported to him;
If the company-designated physician fails to give his assessment within the said period of 120 days without any justifiable reason, then the seafarer’s disability becomes permanent and total;
If the company-designated physician fails to give his assessment within the said period of 120 days with a sufficient justification (e.g., seafarer required further medical treatment or seafarer was uncooperative), then the period of diagnosis and treatment shall be extended for another 120 days (or up to 240 days from the time the seafarer reported to him). The employer has the burden to prove that the company-designated physician has sufficient justification to extend the period; and
If the company-designated physician still fails to give his assessment within the said extended period, then the seafarer’s disability becomes permanent and total, regardless of any justification.
With regard to the company-designated physician’s medical assessment, the Court set forth the following requirements for determining the seafarer’s condition:
The assessment must be issued within the 120/240-day window; and
It must be final and definitive.
In the present case, the Supreme Court found that the company-designated physician’s medical report was issued within the 240-day period. However, the Court ruled that the said report was not final and definitive.
According to the Court, a final and definitive disability assessment is necessary in order to truly reflect the extent of the sickness or injuries to the seafarer and his or her capacity to resume work as such. To be conclusive, the medical assessments or reports:
must be complete and definite to give the proper disability benefits to seafarers
must also be supported with sufficient bases.
The Court found that the company-designated physician’s medical report merely states that
the seafarer’s “prognosis for returning to sea duties is guarded” and
“if patient is entitled to disability, his suggested disability grading is Grade 10 — loss of grasping power for large objects.”
The Court added that the report was notably bereft of any statement or explanation as to how the company-designated physician arrived with her medical conclusion. The report also did not even contain a definite statement as to the seafarer’s fitness to return to sea duties as it states that his prognosis of returning to his sea duties is still guarded.
Furthermore, the company-designated physician failed to explain in detail the progress of the seafarer’s treatment and the approximate period needed for him to fully recover. Said physician merely adopted the findings or observations of the Orthopedics and Spine Surgery specialist.
Thus, the Court ruled that the company-designated physician’s medical assessment was not final and definitive. The seafarer’s disability is deemed permanent and total by operation of law. The seafarer was awarded $110,000.00 under the CBA.
Further reading:
Wilhelmsen-Smithbell Manning, Inc. v. Aleman, G.R. No. 239740 (Notice), January 8, 2020.
On 6 December 2005, the Social Security System filed a petition for the issuance of a warrant of levy and garnishment of the personal properties and bank accounts of the directors of a dissolved corporation to satisfy its unremitted contributions and penalties.
In their defense, A and B (both directors) averred that they had already assigned their respective shares to certain persons on 5 May 1998. According to A and B, they already ceased to be directors and were no longer connected in any capacity with the corporation at the time of the alleged non-remittance of the contributions. A and B stress that since their Deed of Assignment was notarized, the assignment was binding upon third parties, including the Social Security System.
Can a director of a dissolved corporation be held solidarily liable for its unremitted Social Security System contributions?
The Supreme Court ruled in the affirmative. It found that the Social Security System was not bound to recognize the transfer, there being no showing that the transfer of their shares was recorded in the books of the corporation. Furthermore, under prevailing jurisprudence,1Philex Gold Phil. Inc. v. Philex Bulawan Supervisors Union, G.R. No. 149758, August 25, 2005, 505 PHIL 224-240. a corporate director may be held jointly and severally liable with the corporation when a director, trustee or officer is made, by a specific provision of law, personally liable for his corporate action. In this regard, the Supreme Court pointed to Section 28 (f) of the Social Security Act of 1997,2NOTE: This provision also appears in the Social Security Act of 2018 (Republic Act No. 11199) as follows: “SECTION 28. Penal Clause. — x x x (f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable for the penalties provided in this Act for the offense.” which reads:
“Sec. 28. Penal Clause. — x x x
“(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable to the penalties provided in this Act for the offense.”
Further reading:
Dox & Parcel Courier Express International, Inc. v. Social Security System, G.R. No. 225648, January 8, 2020.
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