Philippine Supreme Court Decisions on Labor Law

January 2014
Backwages; when awarded. As a general rule,
backwages are granted to indemnify a dismissed
employee for his loss of earnings during the whole
period that he is out of his job. Considering that an
illegally dismissed employee is not deemed to have
left his employment, he is entitled to all the rights
and privileges that accrue to him from the
employment. The grant of backwages to him is in
furtherance and effectuation of the public objectives
of the Labor Code, and is in the nature of a command
to the employer to make a public reparation for
dismissing the employee in violation of the Labor
Code.
The Court held that the respondents are not entitled
to the payment of backwages. The Court, citing G&S
Transport Corporation v. Infante (G. R. No. 160303,
September 13, 2007) stated that the principle of a
fair days wage for a fair days labor remains as the
basic factor in determining the award thereof. An
exception to the rule would be if the laborer was
able, willing and ready to work but was illegally
locked out, suspended or dismissed or otherwise
illegally prevented from working. It is, however,
required, for this exception to apply, that the strike
be legal, a situation which does not obtain in the
case at bar. Visayas Community Medical Center
(VCMC) formerly known as Metro Cebu Community
Hospital (MCCH) v. Erma Yballe, et al.,G.R. No.
196156, January 15, 2014
Dismissal; burden of proof on employer. The burden
is on the employer to prove that the termination was
for valid cause. Unsubstantiated accusations or
baseless conclusions of the employer are insufficient
legal justifications to dismiss an employee. The
unflinching rule in illegal dismissal cases is that the
employer bears the burden of proof.
One of CCBPIs policies requires that, on a daily
basis, CCBPI Salesmen/Account Specialists must
account for their sales/collections and obtain
clearance from the company Cashier before they are
allowed to leave company premises at the end of
their shift and report for work the next day. If there is
a shortage/failure to account, the concerned
Salesmen/Account Specialist is not allowed to leave
the company premises until he settles the same. In
addition, shortages are deducted from the

employees salaries. If CCBPI expects to proceed with

its case against petitioner, it should have negated
this policy, for its existence and application are
inextricably tied to CCBPIs accusations against
petitioner. In the first place, as petitioners employer,
upon it lay the burden of proving by convincing
evidence that he was dismissed for cause. If
petitioner continued to work until June 2004, this
meant that he committed no infraction, going by this
company policy; it could also mean that any
infraction or shortage/non-remittance incurred by
petitioner has been duly settled. Respondents
decision to ignore this issue generates the belief that
petitioner is telling the truth, and that the alleged
infractions are fabricated, or have been forgiven.
Coupled with Macatangays statement which
remains equally unrefuted that the charges against
petitioner are a scheme by local CCBPI management
to cover up problems in the Naga City Plant, the
conclusion is indeed telling that petitioner is being
wrongfully made to account. Jonas Michael R. Garza
v. Coca-Cola Bottlers Phils., Inc., et al.,G.R. No.
180972. January 20, 2014.
Embezzlement; failure to remit collections. The
irregularity attributed to petitioner with regard to the
Asanza account should fail as well. To be sure,
Asanza herself confirmed that she did not make any
payment in cash or check of P8,160.00 covering the
October 15, 2003 delivery for which petitioner is
being held to account. This being the case, petitioner
could not be charged with embezzlement for failure
to remit funds which he has not collected. There was
nothing to embezzle or remit because the customer
made no payment yet. It may appear from Official
Receipt No. 303203 issued to Asanza that the
October 15 delivery of products to her has been paid;
but as admitted by her, she has not paid for the said
delivered products. The reason for petitioners
issuance of said official receipt to Asanza is the
latters concurrent promise that she would
immediately issue the check covering the said
amount, which she failed to do. Jonas Michael R.
Garza v. Coca-Cola Bottlers Phils., Inc., et al.,G.R. No.
180972. January 20, 2014
Grave abuse of discretion; concept of. Having
established through substantial evidence that
respondents injury was self-inflicted and, hence, not
compensable pursuant to Section 20 (D) of the 1996
POEA-SEC, no grave abuse of discretion can be
imputed against the NLRC in upholding LAs decision

to dismiss respondents complaint for disability

benefits. It is well-settled that an act of a court or
tribunal can only be considered to be tainted with
grave abuse of discretion when such act is done in a
capricious or whimsical exercise of judgment as is
equivalent
to
lack
of
jurisdiction.
INC
Shipmanagement,
Inc.
Captain
Sigfredo
E.
Monterroyo and/or Interorient Navigation Limited v.
Alexander L. Moradas,G.R. No., January 15, 2014
Illegal strike and illegal acts during the strike;
distinction between union members and union
officers in determining when they lose their
employment status. The Supreme Court stressed that
the law makes a distinction between union members
and union officers. A union member who merely
participates in an illegal strike may not be terminated
from employment. It is only when he commits illegal
acts during a strike that he may be declared to have
lost employment status. In contrast, a union officer
may be terminated from employment for knowingly
participating in an illegal strike or participates in the
commission of illegal acts during a strike. The law
grants the employer the option of declaring a union
officer who participated in an illegal strike as having
lost his employment. It possesses the right and
prerogative to terminate the union officers from
service.
NAMA-MCCH-NFL
is
not
a
legitimate
labor
organization, thus, the strike staged by its leaders
and members was declared illegal.
The union
leaders who conducted the illegal strike despite
knowledge that NAMA-MCCH-NFL is not a duly
registered labor union were declared to have been
validly terminated by petitioner. However, as to the
respondents who were mere union members, it was
not shown that they committed any illegal act during
the strike. The Labor Arbiter and the NLRC were one
in finding that respondents actively supported the
concerted protest activities, signed the collective
reply of union members manifesting that they
launched the mass actions to protest managements
refusal to negotiate a new CBA, refused to appear in
the investigations scheduled by petitioner because it
was the unions stand that they would only attend
these investigations as a group, and failed to heed
petitioners final directive for them to desist from
further taking part in the illegal strike. The CA, on the
other hand, found that respondents participation in
the strike was limited to the wearing of armbands.
Since an ordinary striking worker cannot be
dismissed for such mere participation in the illegal

strike, the CA correctly ruled that respondents were

illegally dismissed. However, the CA erred in
awarding respondents full back wages and ordering
their
reinstatement
despite
the
prevailing
circumstances. Visayas Community Medical Center
(VCMC) formerly known as Metro Cebu Commnunity
Hospital (MCCH) v. Erma Yballe, et al.,G.R. No.
196156, January 15, 2014
Labor law; kinds of employment; casual employment;
requisites. Casual employment, the third kind of
employment arrangement, refers to any other
employment arrangement that does not fall under
any of the first two categories, i.e., regular or
project/seasonal. Universal Robina Sugar Milling
Corporation and Rene Cabati, G.R. No. 186439.
January 15, 2014.
Labor law; kinds of employment; fixed term
employment; requisites. The Labor Code does not
mention another employment arrangement
contractual
or
fixed
term
employment
(or
employment for a term) which, if not for the fixed
term, should fall under the category of regular
employment in view of the nature of the employees
engagement, which is to perform an activity
usually necessary or desirable in the employers
business.
In Brent School, Inc. v. Zamora (G.R. No. L-48494,
February 5, 1990), the Court, for the first time,
recognized and resolved the anomaly created by
a narrow and literal interpretation of Article 280 of
the Labor Code that appears to restrict the
employees right to freely stipulate with his employer
on the duration of his engagement. In this case, the
Court upheld the validity of the fixed-term
employment agreed upon by the employer, Brent
School,
Inc., and the employee, Dorotio Alegre,
declaring that the restrictive clause in Article 280
should be construed to refer to the substantive
evil that the Code itself x x x singled out: agreements
entered into precisely to circumvent security of
tenure. It should have no application to instances
where [the] fixed period of employment was agreed
upon knowingly and voluntarily by the parties x x x
absent any x x x circumstances vitiating [the
employees]
consent,
or
where
[the
facts
satisfactorily show] that the employer and [the]
employee dealt with each other on more or less
equal terms[.] The indispensability or desirability of
the activity performed by the employee will not
preclude the parties from entering into an otherwise

valid fixed term employment agreement; a definite

period of employment does not essentially contradict
the nature of the employees duties as necessary and
desirable to the usual business or trade of the
employer.
Nevertheless, where the circumstances evidently
show that the employer imposed the period
precisely to preclude the employee from acquiring
tenurial security, the law and this Court will not
hesitate to strike down or disregard the period as
contrary to public policy, morals, etc. In such a case,
the general restrictive rule under Article 280 of the
Labor Code will apply and the employee shall be
deemed regular. Universal Robina Sugar Milling
Corporation and Rene Cabati, G.R. No. 186439.
January 15, 2014.
Labor law; kinds of employment; nature of the
employment depends on the nature of the activities
to be performed by the employee. The nature of the
employment does not depend solely on the will or
word of the employer or on the procedure for hiring
and the manner of designating the employee.
Rather, the nature of the employment depends on
the nature of the activities to be performed by the
employee, taking into account the nature of the
employers business, the duration and scope of work
to be done, and, in some cases, even the length of
time of the performance and its continued existence.
Universal Robina Sugar Milling Corporation and Rene
Cabati, G.R. No. 186439. January 15, 2014.
Labor
law;
kinds
of
employment;
project
employment; requisites; length of time not
controlling. A project employment, on the other
hand, contemplates on arrangement whereby the
employment has been fixed for a specific project or
undertaking whose completion or termination has
been determined at the time of the engagement of
the employee[.] Two requirements, therefore, clearly
need to be satisfied to remove the engagement from
the presumption of regularity of employment,
namely: (1) designation of a specific project or
undertaking for which the employee is hired; and (2)
clear determination of the completion or termination
of the project at the time of the employees
engagement. The services of the project employees
are legally and automatically terminated upon the
end or completion of the project as the employees
services are coterminous with the project. Unlike in a
regular employment under Article 280 of the Labor
Code, however, the length of time of the asserted

project employees engagement is not controlling

as the employment may, in fact, last for more than a
year, depending on the needs or circumstances of
the project. Nevertheless, this length of time (or the
continuous rehiring of the employee even after the
cessation of the project) may serve as a badge of
regular employment when the activities performed
by the purported project employee are necessary
and indispensable to the usual business or trade of
the employer. In this latter case, the law will regard
the arrangement as regular employment. Universal
Robina Sugar Milling Corporation and Rene Cabati,
G.R. No. 186439. January 15, 2014.
Labor
law;
kinds
of
employment;
regular
employment; requisites. Article 280 of the Labor
Code provides for three kinds of employment
arrangements, namely: regular, project/seasonal and
casual.
Regular employment refers to that
arrangement whereby the employee has been
engaged to perform activities which are usually
necessary or desirable in the usual business or trade
of the employer[.] Under this definition, the primary
standard that determines regular employment is
the reasonable connection between the particular
activity performed by the employee and the usual
business or trade of the employer; the emphasis is
on the necessity or desirability of the employees
activity. Thus, when the employee performs activities
considered necessary and desirable to the overall
business scheme of the employer, the law regards
the employee as regular.
By way of an exception, paragraph 2, Article 280 of
the Labor Code also considers as regular, a casual
employment
arrangement
when
the
casual
employees engagement is made to last for at least
one year, whether the service is continuous or
broken. The controlling test in this arrangement is
the length of time during which the employee is
engaged. Universal Robina Sugar Milling Corporation
and Rene Cabati, G.R. No. 186439. January 15, 2014.
Labor law; kinds of employment; seasonal
employment; requisites. Seasonal
employment
operates much in the same way as project
employment, albeit it involves work or service that is
seasonal in nature or lasting for the duration of
the season. As with project employment, although
the seasonal employment arrangement involves
work that is seasonal or periodic in nature, the
employment itself is not automatically considered
seasonal so as to prevent the employee from

attaining regular status. To exclude the asserted

seasonal employee from those classified as regular
employees, the employer must show that: (1) the
employee must be performing work or services that
are seasonal in nature; and (2) he had been
employed for the duration of the season. Hence,
when the seasonal workers are continuously and
repeatedly hired to perform the same tasks or
activities for several seasons or even after the
cessation of the season, this length of time may
likewise serve as badge of regular employment. In
fact, even though denominated as seasonal
workers, if these workers are called to work from
time to time and are only temporarily laid off during
the off-season, the law does not consider them
separated from the service during the off-season
period. The law simply considers these seasonal
workers on leave until re-employed.
Universal
Robina Sugar Milling Corporation and Rene Cabati,
G.R. No. 186439. January 15, 2014.
Overseas employment; that the entitlement of
seamen on overseas work to disability benefits is a
matter governed, not only by medical findings, but
by law and by contract. With respect to the
applicable rules, it is doctrinal that the entitlement of
seamen on overseas work to disability benefits is a
matter governed, not only by medical findings, but
by law and by contract. The material statutory
provisions are Articles 191 to 193 under Chapter VI
(Disability Benefits) of the Labor Code, in relation [to]
Rule X of the Rules and Regulations Implementing
Book IV of the Labor Code. By contract, the POEASEC, as provided under Department Order No. 4,
series of 2000 of the Department of Labor and
Employment, and the parties Collective Bargaining
Agreement bind the seaman and his employer to
each other.
In the foregoing light, the Court observes that
respondent executed his contract of employment on
July 17, 2000, incorporating therein the terms and
conditions of the 2000 POEA-SEC which took effect
on June 25, 2000. However, since the implementation
of the provisions of the foregoing 2000 POEA-SEC
was temporarily suspended by the Court on
September 11, 2000, particularly Section 20,
paragraphs (A), (B), and (D) thereof, and was lifted
only on June 5, 2002, through POEA Memorandum
Circular No. 2, series of 2002, the determination of
respondents entitlement to the disability benefits
should be resolved under the provisions of the 1996
POEA-SEC as it was, effectively, the governing

circular at the time respondents employment

contract was executed. INC Shipmanagement, Inc.
Captain Sigfredo E. Monterroyo and/or Interorient
Navigation Limited v. Alexander L. Moradas,G.R. No.,
January 15, 2014
Payment of separation pay as alternative relief for
union members who were dismissed for having
participated in an illegal strike is in lieu of
reinstatement; circumstances when applicable. The
alternative relief for union members who were
dismissed for having participated in an illegal strike
is the payment of separation pay in lieu of
reinstatement under the following circumstances: (a)
when reinstatement can no longer be effected in
view of the passage of a long period of time or
because of the realities of the situation; (b)
reinstatement is inimical to the employers interest;
(c) reinstatement is no longer feasible; (d)
reinstatement does not serve the best interests of
the parties involved; (e) the employer is prejudiced
by the workers continued employment; (f) facts that
make execution unjust or inequitable have
supervened; or (g) strained relations between the
employer and employee.
The Court ruled that the grant of separation pay to
respondents is the appropriate relief under the
circumstances considering that 15 years had lapsed
from the onset of this labor dispute, and in view of
strained relations that ensued, in addition to the
reality of replacements already hired by the hospital
which had apparently recovered from its huge losses,
and with many of the petitioners either employed
elsewhere, already old and sickly, or otherwise
incapacitated. Visayas Community Medical Center
(VCMC) formerly known as Metro Cebu Commnunity
Hospital (MCCH) v. Erma Yballe, et al.,G.R. No.
196156, January 15, 2014
Rule 45; only questions of law are allowed in a
petition for review on certiorari. It is a settled rule in
this jurisdiction that only questions of law are allowed
in a petition for review on certiorari. The Courts
power of review in a Rule 45 petition is limited to
resolving matters pertaining to any perceived legal
errors, which the CA may have committed in issuing
the assailed decision. In reviewing the legal
correctness of the CAs Rule 65 decision in a labor
case, the Court examines the CA decision in the
context that it determined whether or not there is
grave abuse of discretion in the NLRC decision
subject of its review and not on the basis of whether

the NLRC decision on the merits of the case was

correct. Universal Robina Sugar Milling Corporation
and Rene Cabati, G.R. No. 186439. January 15, 2014.
Rule 45; the Courts jurisdiction in a Rule 45 petition
is limited to the review of pure questions of law;
exceptions. The Courts jurisdiction in cases brought
before it from the CA via Rule 45 of the Rules of Court
is generally limited to reviewing errors of law. The
Court is not the proper venue to consider a factual
issue as it is not a trier of facts. This rule, however, is
not ironclad and a departure therefrom may be
warranted where the findings of fact of the CA are
contrary to the findings and conclusions of the NLRC
and LA, as in this case. In this regard, there is
therefore a need to review the records to determine
which of them should be preferred as more
conformable
to
evidentiary
facts.
INC
Shipmanagement,
Inc.
Captain
Sigfredo
E.
Monterroyo and/or Interorient Navigation Limited v.
Alexander L. Moradas,G.R. No., January 15, 2014.
Section 20 (B) of the 1996 POEA-SEC; an employer
shall be liable for the injury or illness suffered by a
seafarer during the term of his contract; exception.
The prevailing rule under Section 20 (B) of the 1996
POEA-SEC on compensation and benefits for injury or
illness was that an employer shall be liable for the
injury or illness suffered by a seafarer during the
term of his contract. To be compensable, the injury or
illness must be proven to have been contracted
during the term of the contract. However, the
employer may be exempt from liability if he can
successfully prove that the cause of the seamans
injury was directly attributable to his deliberate or
willful act as provided under Section 20 (D) thereof,
to wit:
D. No compensation shall be payable in respect of
any injury, incapacity, disability or death of the
seafarer resulting from his willful or criminal act,
provided however, that the employer can prove that
such injury, incapacity, disability or death is directly
attributable to seafarer.
Hence, the onus probandi falls on the petitioners
herein to establish or substantiate their claim that
the respondents injury was caused by his willful act
with the requisite quantum of evidence. INC
Shipmanagement,
Inc.
Captain
Sigfredo
E.
Monterroyo and/or Interorient Navigation Limited v.
Alexander L. Moradas,G.R. No., January 15, 2014

Substantial evidence; concept of. In labor cases, as in

other administrative proceedings, only substantial
evidence or such relevant evidence as a reasonable
mind might accept as sufficient to support a
conclusion is required. To note, considering that
substantial evidence is an evidentiary threshold, the
Court, on exceptional cases, may assess the factual
determinations made by the NLRC in a particular
case.
The Court ruled that NLRC had cogent legal bases to
conclude
that
petitioners
have
successfully
discharged the burden of proving by substantial
evidence that respondents injury was directly
attributable to himself.
Records bear out
circumstances which all lead to the reasonable
conclusion that respondent was responsible for the
flooding and burning incidents. While respondent
contended that the affidavits and statements of
the vessels officers and his fellow crew members
should not be given probative value as they were
biased,
self-serving, and
mere
hearsay,
he
nonetheless failed to present any evidence to
substantiate his own theory. Besides, as correctly
pointed out by the NLRC, the corroborating
affidavits and statements of the vessels officers
and crew members must be taken as a whole and
cannot just be perfunctorily dismissed as self-serving
absent any showing that they were lying when they
made the statements therein. INC Shipmanagement,
Inc. Captain Sigfredo E. Monterroyo and/or Interorient
Navigation Limited v. Alexander L. Moradas,G.R. No.,
January 15, 2014