Labor 1 Cases 1-10

THIRDDIVISION
G.R.No.189255,June17,2015
JESUSG.REYES,P
etitioner,v
.G
LAUCOMARESEARCHFOUNDATION,INC.,EYEREFERRALCENTER
ANDMANUELB.AGULTO,R
espondent.
DECISION
PERALTA,J
.:
Before the Court is a petition for review on certiorari seeking to reverse and set aside the Decision1 and
Resolution2 oftheCourtofAppeals(CA),datedApril20,2009andAugust25,2009,respectively,inCAG.R.
SP No. 104261. The assailed CA Decision annulled the Decision oftheNationalLaborRelationsCommission
(NLRC) in NLRC NCR CaseNo.05044105andreinstatedtheDecisionoftheLaborArbiter(LA)inthesame
case,whiletheCAResolutiondeniedpetitioner'smotionforreconsideration.
The instant petition arose from a complaint for illegal dismissal filed by petitioner againstrespondentswith
the NLRC, National Capital Region, QuezonCity.Petitionerallegedthat:onAugust1,2003,hewashiredby
respondent corporation as administrator of the latter's Eye Referral Center (ERC) he performed his duties
as administrator and continuously received his monthly salaryofP20,000.00untiltheendofJanuary2005
beginning February 2005, respondent withheld petitioner's salary without notice but he still continued to
reportforworkonApril11,2005,petitionerwrotealettertorespondentManuelAgulto(Agulto),whoisthe
Executive Director of respondentcorporation,informingthelatterthathehasnotbeenreceivinghissalaries
since February 2005 as well as his 14th month pay for 2004 petitioner did not receive any response from
Agulto on April 21, 2005, petitioner was informed by the Assistant to theExecutiveDirectoraswellasthe
Assistant AdministrativeOfficer,thatheisnolongertheAdministratoroftheERCsubsequently,petitioner's
office waspadlockedandclosedwithoutnoticehestillcontinuedtoreportforworkbutonApril29,2005he
wasnolongerallowedbythesecurityguardondutytoenterthepremisesoftheERC.
On theirpart,respondentscontendedthat:uponpetitioner'srepresentationthatheisanexpertincorporate
organizational structureandmanagementaffairs,theyengagedhisservicesasaconsultantoradviserinthe
formulation of an updated organizational setup and employees' manual which is compatible with their
present condition based on his claim that there is a need for an administrator for the ERC, he later
designated himself as such on a trial basis there is no employeremployee relationship between them
because respondents had no control over petitioner in terms of working hours as he reports for work at
anytime of the day and leaves as hepleasesrespondentsalsohadnocontrolastothemannerinwhichhe
performs his alleged duties as consultant he became overbearing and his relationship with the employees
and officers of the company soured leading to the filing of threecomplaintsagainsthimpetitionerwasnot
dismissedashewastheonewhovoluntarilyseveredhisrelationswithrespondents.
On January 20, 2006, the LA assigned to the case rendered a Decision3 dismissing petitioner's complaint.
The LA held, among others, that petitioner failed to establish that the elements of an employeremployee
relationship existed between him and respondents because he was unable to show that he was, in fact,
appointed as administrator of the ERC and received salaries as such he also failed to deny thatduringhis
stint with respondents, he was, at the same time, a consultantofvariousgovernmentagenciessuchasthe
Manila International Airport Authority, Manila Intercontinental Port Authority, AntiTerrorist Task Force for
Aviation and Air Transportation Sector his actions were neither supervised nor controlled by the
management of the ERC petitioner, likewise, did not observe working hours by reporting for work and
leavingtherefromashepleasedand,hewasreceivingallowances,notsalaries,asaconsultant.
On appeal, the NLRC reversed and set aside the Decision of the LA. The NLRC declared petitioner as
respondents' employee, that he was illegally dismissed and ordered respondents to reinstate him to his
former position without loss of seniority rights and privileges with full backwages. The NLRC held that the
basis upon which the conclusion of theLAwasdrawnlackedsupportthatitwasincumbentforrespondents
to discharge the burden of proving that petitioner's dismissal was for cause and effected after due process
wasobservedand,thatrespondentsfailedtodischargethisburden.4
Respondents filed a motion for reconsideration, but it was denied by the NLRC in itsResolution5datedMay
30,2008.
RespondentsthenfiledaPetitionforC
ertiorari6withtheCA.
In its assailedDecision,theCAannulledandsetasidethejudgmentoftheNLRCandreinstatedtheDecision
of the LA. The CA heldthattheLAwascorrectinrulingthat,underthecontroltestandtheeconomicreality
test,noemployeremployeerelationshipexistedbetweenrespondentsandpetitioner.
Petitionerfiledamotionforreconsideration,buttheCAdenieditinitsResolutiondatedAugust25,2009.
Hence,thepresentpetitionforreviewonc
ertioraribasedonthefollowinggrounds:
I
THE HONORABLE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION IN NOT DISMISSING
RESPONDENTS' PETITION FOR CERTIORARI ON THE GROUND THAT RESPONDENTS SUBMITTED A
VERIFICATIONTHATFAILSTOCOMPLYWITHTHE2004RULESONNOTARIALPRACTICE.
chanroblesvirtuallawlibrary
cralawlawlibrary
II
THE HONORABLE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION IN RULING THAT NO
EMPLOYEREMPLOYEERELATIONSHIPEXISTSBETWEENRESPONDENTSANDPETITIONER.7
As to the first ground, petitioner contends that respondents' petition for certiorari filed with the CA should
have been dismissed on the ground that it was improperly verified because the jurat portion of the
verification states only the community tax certificate number of the affiant as evidence of her identity.
Petitioner argues that under the 2004 Rules on Notarial Practice, asamendedbyaResolution8ofthisCourt,
dated February 19, 2008,acommunitytaxcertificateisnotamongthoseconsideredascompetentevidence
ofidentity.
TheCourtdoesnotagree.
This Court has already ruled thatcompetentevidenceofidentityisnotrequiredincaseswheretheaffiantis

personallyknowntothenotarypublic.9
cralawlawlibrary
Thus,inJ andoquilev.Revilla,Jr.,10
thisCourtheldthat:
If the notary public knows the affiants personally, he need not require them to show theirvalid
identification cards. This rule is supported by the definition of a "jurat" under Section 6, Rule II of the
2004 Rules on Notarial Practice. A "jurat" refers to an act in which an individual on a single occasion: (a)
appearsinpersonbeforethenotarypublicandpresentsaninstrumentordocument(b)ispersonallyknown
to the notary public or identified by the notary public throughcompetentevidenceofidentity(c)signsthe
instrument or document in the presence of the notary and (d) takes an oath or affirmation before the
notarypublicastosuchinstrumentordocument.11
Also,Section2(b),RuleIVofthe2004RulesonNotarialPracticeprovidesasfollows:
SEC.2.Prohibitions
(a)xxx
(b) A person shall not perform a notarial act if the person involved as signatory to the instrument or
document
(1)isnotinthenotary'spresencepersonallyatthetimeofthenotarizationand
(2) is not personally known to the notary public or otherwise identified by the notary public through
competentevidenceofidentityasdefinedbytheseRules.
Moreover,RuleII,Section6ofthesameRulesstatesthat:
cralawlawlibrary

SEC6.Jurat."Jurat"referstoanactinwhichanindividualonasingleoccasion:
(a)appearsinpersonbeforethenotarypublicandpresentsaninstrumentordocument
(b)ispersonallyknowntothenotarypublicoridentifiedbythenotarypublicthroughcompetentevidenceof
identityasdefinedbytheseRules
(c)signstheinstrumentordocumentinthepresenceofthenotaryand
(d)takesanoathoraffirmationbeforethenotarypublicastosuchinstrumentordocument.
In legal hermeneutics, "or" isadisjunctivethatexpressesanalternativeorgivesachoiceofoneamongtwo
or more things.12 The word signifies disassociation and independence of one thing from anotherthinginan
enumeration.13
Thus, as earlier stated, iftheaffiantispersonallyknowntothenotarypublic,thelatterneednotrequirethe

formertoshowevidenceofidentityasrequiredunderthe2004RulesonNotarialPractice,asamended.
Applying the above rule to the instant case, it is undisputed that the attorneyinfact of respondents who
executedtheverificationandcertificateagainstforumshopping,whichwasattachedtorespondents'petition
filed with the CA, is personally knowntothenotarypublicbeforewhomthedocumentswereacknowledged.
Bothattorneyinfactandthenotarypublicholdofficeatrespondents'placeofbusinessandthelatterisalso
thelegalcounselofrespondents.
In any event, this Court's disquisition in the fairly recent case of Heirs of Amada Zaulda v. Isaac Zaulda14
regarding the import of procedural rules visavis the substantive rights of the parties, is instructive, to
wit:
[G]ranting, arguendo, that there was noncompliance with the verification requirement, the rule is that
courts shouldnotbesostrictaboutprocedurallapseswhichdonotreallyimpairtheproperadministrationof
justice.Afterall,thehigherobjectiveofproceduralruleistoensurethatthesubstantiverightsoftheparties
are protected. Litigations should, as much as possible, be decided on the merits and not on technicalities.
Every partylitigant must be afforded ample opportunity for the proper and just determination of his case,
freefromtheunacceptablepleaoftechnicalities.
In CocaCola Bottlersv.DelaCruz,wheretheverificationwasmarredonlybyaglitchintheevidenceofthe
identity of the affiant, the Court was of the considered viewthat,intheinterestofjustice,theminordefect
canbeoverlookedandshouldnotdefeatthepetition.
The reduction in the number of pending cases is laudable, but if it would be attained by precipitate, if not
preposterous, application of technicalities, justice would not be served. The law abhors technicalities that
impede the cause of justice. The court's primary duty is torenderordispensejustice."Itisamoreprudent
course of action for the court to excuse a technical lapse and afford the parties a review of the case on
appeal rather than dispose of the case on technicality and cause a grave injustice to the parties, giving a
false impression of speedy disposal of cases while actually resulting in more delay, if not miscarriage of
justice."
What should guide judicial action is the principle thatapartylitigantshouldbegiventhefullestopportunity

to establish the merits ofhiscomplaintordefenseratherthanforhimtoloselife,liberty,honor,orproperty
ontechnicalities.Therulesofprocedureshouldbeviewedasmeretoolsdesignedtofacilitatetheattainment
of justice. Their strict and rigid application, which would result in technicalities that tendtofrustraterather
than promotesubstantialjustice,mustalwaysbeeschewed.Atthisjuncture,theCourtremindsallmembers
ofthebenchandbaroftheadmonitionintheoftencitedcaseofA
lonsov.Villamor:
Lawsuits, unlike duels, are not to be won by a rapier's thrust. Technicality,whenitdesertsitsproperoffice
as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from
courts.Thereshouldbenovestedrightsintechnicalities.15
cralawlawlibrary
Anent the second ground, petitioner insists that, based on evidence on record, an employeremployee
relationshipexistsbetweenhimandrespondents.
TheCourtisnotpersuaded.
It is a basic rule of evidence that each party must prove his affirmative allegation.16 If he claims a right
granted by law,hemustprovehisclaimbycompetentevidence,relyingonthestrengthofhisownevidence
and not upon the weakness of thatofhisopponent.17Thetestfordeterminingonwhomtheburdenofproof
lies is found in the result of an inquiry as to whichpartywouldbesuccessfulifnoevidenceofsuchmatters
weregiven.18Inanillegaldismissalcase,theonusprobandirestsontheemployertoprovethatitsdismissal
of an employee was for a valid cause.19 However, before a case for illegal dismissal can prosper, an
employeremployee relationship must first be established.20 Thus, in filing a complaint before the LA for
illegal dismissal, based on the premise that he was an employee of respondents, it is incumbent upon
petitionertoprovetheemployeremployeerelationshipbysubstantialevidence.21
In regard to the above discussion, the issue of whether or not an employeremployee relationship existed
between petitioner and respondents is essentially a question of fact.22 The factors that determine theissue
include who has the power to select the employee, who pays the employee's wages, whohasthepowerto
dismiss the employee, and who exercises control of the methods and results by which the work of the
employee is accomplished.23 Although no particular form of evidence is required to prove the existence of
the relationship, and any competent and relevant evidence to prove the relationship may be admitted, a
finding that the relationship exists must nonetheless rest on substantial evidence, which is that amount of
relevantevidencethatareasonablemindmightacceptasadequatetojustifyaconclusion.24
Generally, the Court does not review factual questions, primarily because the Court is not atrieroffacts.25
However, where, like here, there is a conflict between the factual findings of the LA and the CA, on one
hand, and those of the NLRC, on the other, it becomes proper for the Court, in the exercise of its equity
jurisdiction, to review and reevaluate the factual issues and to look into the records of the case and
reexaminethequestionedfindings.26
Etched in an unending stream of cases are four standards in determining the existence of an
employeremployee relationship, namely: (a) the manner of selection and engagement of the putative
employee (b) the mode of payment of wages (c) the presence or absenceofpowerofdismissaland,(d)
the presence or absence of control of the putative employee's conduct. Most determinative among these
factorsisthesocalled"controltest."27
Indeed, the power of the employer to control the work of the employee is considered the most significant
determinant of the existence of an employeremployee relationship.28 This test is premised on whetherthe
person for whom the services are performed reserves the right to control both the end achieved and the
mannerandmeansusedtoachievethatend.29
In the present case, petitioner contends that, as evidence of respondents' supposed control over him, the
organizational plans he has drawn were subject to the approval of respondent corporation's Board of
Trustees.However,theCourtagreeswiththedisquisitionoftheCAonthismatter,towit:
[Respondents'] power to approve or reject the organizational plans drawn by [petitioner] cannot be the
control contemplated in the "control test." It is but logical that one who commissionsanothertodoapiece
ofworkshouldhavetherighttoacceptorrejecttheproduct.Theimportantfactortoconsiderinthe"control
test"isstilltheelementofcontroloverhowtheworkitselfisdone,notjusttheendresultthereof.
Well settled is the rule that where a person who worksforanotherperformshisjobmoreorlessathisown

pleasure, in the manner he sees fit, not subject todefinitehoursorconditionsofwork,andiscompensated
according to the result of his efforts and not the amount thereof, no employeremployee relationship
exists.30
cralawlawlibrary
What was glaring in the present case is the undisputed fact that petitioner was never subject to definite
working hours. He never denied that he goes to work and leaves therefrom as he pleases.31 In fact, on
December 131, 2004, he went onleavewithoutseekingapprovalfromtheofficersofrespondentcompany.
On the contrary, hisletter32simplyinformedrespondentsthathewillbeawayforamonthandevenadvised
them that they have the option of appointing his replacement during his absence. This Court has heldthat
there is no employeremployee relationship where the supposed employee is not subject to a set of rules
and regulations governing the performance of his duties under the agreement with thecompanyandisnot
requiredtoreportforworkatanytime,nortodevotehistimeexclusivelytoworkingforthecompany.33
Inthisregard,thisCourtalsoagreeswiththerulingoftheCAthat:
Aside from the control test, the Supreme Court has also used the economic reality test in determining
whether an employeremployee relationship exists between the parties. Under this test, the economic
realities prevailing within the activity or between the parties are examined, taking into consideration the
totality of circumstances surrounding the true nature of the relationship between the parties. This is
especially appropriate when, as in this case, there isnowrittenagreementorcontractonwhichtobasethe
relationship. In our jurisdiction, the benchmark of economic reality in analyzing possible employment
relationships for purposes of applying the Labor Code ought to be the economic dependence of the worker
onhisemployer.
In the instant case, as shown by theresumeof[petitioner],heconcurrentlyheldconsultancypositionswith

the Manila International Airport Authority (from 04 March 2001 to September 2003 andfrom01November
2004 up to the present) and the AntiTerrorist Task Force for Aviation and Air Transportation Sector (from
16 April 2004 to 30 June 2004) during his stint with the Eye Referral Center (from 01 August 2003 to 29
April 2005). Accordingly, it cannot be said that the [petitioner] was wholly dependent on [respondent]
company.34
In bolstering his contention thattherewasanemployeremployeerelationship,petitionerdrawsattentionto
the pay slips he supposedly received from respondent corporation. However, he does not dispute the
findings of the CA that there are no deductions for SSS and withholding tax from his compensation, which
are the usual deductions from employees' salaries. Thus, the alleged pay slips may not be treated as
competentevidenceofpetitioner'sclaimthatheisrespondents'employee.
In addition, the designation of the payments to petitioner as salaries, is not determinative oftheexistence
of an employeremployee relationship.35 Salary is a general term defined as a remuneration for services
given.36 Evidence of this fact, intheinstantcase,wasthecashvoucherissuedinfavorofpetitionerwhereit
was stated therein that the amount of P20,000.00 was given as petitioner's allowance for the month of
December 2004, although it appears from the pay slip that the said amount was his salary for the same
period.
Additional evidence of the fact that petitioner was hired as a consultant and not as an employee of
respondent corporation are affidavits to this effect which were executed by Roy Oliveres37 and Aurea Luz
Esteva,38 who are Medical Records Custodian and Administrative Officer, respectively, of respondent
corporation. Petitioner insists in its objection of the use of these affidavits on the ground that they are,
essentially, hearsay. However, this Court has ruled that although the affiants had not been presented to
affirm the contents of their affidavits and be crossexamined, their affidavits may be given evidentiary
valuetheargumentthatsuchaffidavitswerehearsaywasnotpersuasive.39Likewise,thisCourtruledthatit
was not necessary for the affiants to appear and testify and be crossexamined by counsel fortheadverse
party.40 To require otherwise would be to negate the rationale and purpose of the summary nature of the
proceedings mandated by the Rules and to make mandatory the application of the technical rules of
evidence.41
cralawlawlibrary
These affidavits are corroborated by evidence, as discussed above, showing that petitioner has no definite
workinghoursandisnotsubjecttothecontrolofrespondents.
Lastly, the Court does not agree withpetitioner'sinsistencethathisbeinghiredasrespondentcorporation's

administrator and his designation as such in intracompany correspondence proves that he is an employee
of the corporation. The fact alone that petitioner was designated as an administrator does not necessarily
mean that he is an employee of respondents. Mere title or designation in a corporation will not, by itself,
determine the existence of an employeremployee relationship.42 In thisregard,eventheidentificationcard
which was issued to petitioner is not an adequate proof of petitioner's claim that he is respondents'
employee.Inaddition,petitioner'sdesignationasanadministratorneitherdisprovesrespondents'contention
thathewasengagedonlyasaconsultant.
As a final point, it bears to reiterate that while the Constitution is committed to the policy of social justice
and the protection of the working class, it should not be supposed that every labor dispute will be
automatically decided in favor of labor.43 Management also has its rights which are entitled to respect and
enforcement in the interest of simple fair play.44 Out of its concern for the less privileged in life, the Court
has inclined, more often than not, toward the worker and upheld his cause in his conflicts with the
employer.45 Such favoritism, however, has not blinded the Court to the rule thatjusticeisineverycasefor
thedeserving,tobedispensedinthelightoftheestablishedfactsandtheapplicablelawanddoctrine.46
WHEREFORE, the instant petition is DENIED. The Decision and Resolution of the Court of Appeals, dated
April20,2009andAugust25,2009,respectively,inCAG.R.SPNo.104261,areA
FFIRMED.
SOORDERED.
DelCastillo,**Villarama,Jr.,Reyes,andJ ardeleza,JJ.,concur.
RepublicofthePhilippines
SUPREMECOURT
Manila
SECONDDIVISION
G.R.No.199568June17,2015
DOHLEPIDLMANMANNINGAGENCY,INC.,DOHLE(IOM)LIMITEDand/orCAPT.MANOLOT.
GACUTAN,Petitioners,
vs.
HEIRSOFANDRESG.GAZZINGAN,representedbyLENIEL.GAZZINGAN,Respondents.
DECISION
DELCASTILLO,J
.:
Under the Philippine Overseas Employment AdministrationStandard Employment Contract
(POEASEC), an illness suffered by a seafarer during the term of his contract is presumed to be
workrelated and compensable. This rule is in consonance with the POEA's mandate to secure the
best terms and conditions of employment of Filipino contract workers and to promote and protect
theirwellbeing.
By thisPetitionforReviewonCertiorari, DoblePhilmanManningAgency,Inc.,Doble(IOM)Limited
and/or Capt. Manolo T. Gacutan (petitioners) assail the May 26, 2011 Decision andNovember25,
2011 Resolution of the Court of Appeals (CA) in CAG.R. SP No. 103580, which nullified the
January 31, 2008 Decision and March 12, 2008 Resolution of the National Labor Relations
Commission (NLRC) and ordered petitioners to pay respondents, as legal heirs of Andres G.
Gazzingan (Gazzingan), total permanent disability) benefits in the amount of US$50,000.00 and
sicknessallowanceofUS$1,300.00plus10%thereofasattorneysfees.
AntecedentFacts
On October 14, 2005, petitioners hired Gazzingan as a messman for a period of nine month son
board the vessel M/V Gloria with a basic monthly salary of US$325.00. Prior to his engagement,
Gazzingan underwent a preemployment medical examination (PEME) whichyieldednormalresults
except for a finding of left ventricular hypertrophy in his electrocardiogram test (ECG). Gazzingan
wasthuspronouncedfitforseaduty andonNovember4,2005,heboardedthevesselM/VGloria.
In May 2006, while M/V Gloria was docked at the port of Cartagena, Colombia, Gazzingan
experiencedchestpains.OnJuly16,2006,hewasconfinedattheCartagenadeIndiasHospitaldue
to chest pain, shortness of breath and back pain. The hospitals cardiovascular and thoracic
surgeon,Dr.HernanFernandezCuartas,diagnosedhimtohaveAcuteTypeBDissection.
OnAugust3,2006,Gazzinganwasmedicallyrepatriated.
Upon arrival in Manilaon August5,2006,GazzinganwasbroughtdirectlytoManilaDoctorsHospital
for further medical evaluation under the care of Dr. Justo Cammayo (Dr. Cammayo). On August 8,
2006, petitioners received a letter from its companydesignated physician, Dr. Raymond C.Banaga
(Dr.Banaga),statingthatGazzinganissufferingfromanonworkrelatedillness.Thus:
DATE:AUGUST08,2006
TO:DOHLEPHILMANMANNINGAGENCY,INC.
ATTN:Ms.EstrellaR.Aguilar
GMFinanceAdmin
FROM:PHYSICIANSDIAGNOSTICSERVICESCENTER,INC.
RE:Mr.AndresGazzingan
DearMs.Aguilar,
Thisiswith[regard]toyourrequestforouropinionifthesubjectseafarersillnessisworkrelatedor
not.
Mr. Gazzingan is presently confined at Manila Doctors Hospital because of AorticDissection.Aortic
Dissection results from [a] tear in the inner walls lining this great artery.Thisconditionhaspotential
for rupture or tamponade. Based on his preemployment medical examination dated August 30,
2005 he was not found to be hypertensive with normal blood pressure at 110/70. The other risk
factorsassociatedwiththisconditionlikeMarfansSyndrome,Coarctationofthe
Aorta,Aorticvalveabnormalitiesarecongenitalinnatureandarenotworkrelatedinthiscase(fora
shipmessman).
Trulyyours,
(Signed)
RAYMONDC.BANAGA,M.D.
Notedby,
(Signed)
PEDROS.DEGUZMAN,M.D.,FPCOM
MedicalDirector
At the Manila Doctors Hospital, Gazzingan underwent numerous diagnostic tests and treatment.
10However, his confinement thereat lasted only until September 9, 2006 as Gazzingan had no
financial capacity to defray his hospital expenses since petitioners refused to further shoulder the
same in viewofDr.Banagasdeclarationthathisillnessisnotworkrelated.Hewasdischargedfrom
11
the hospital over the objection of hisphysician.InamedicalcertificatedatedOctober7,2006, Dr.

Cammayos final diagnosisofGazzingansillnesswasDissectingAneurysm.Proceedingsbeforethe
LaborArbiter
12
On August 25, 2006, Gazzingan filed a Complaint for nonpayment or under payment of
salaries/wages, sickness allowance, disability benefits and reimbursementofmedicalexpensesand
attorneysfees.
Petitioners disclaimed Gazzingans entitlement to his claims by arguing that his medical condition
ispreexisting for which no compensation is warranted under the POEASEC. They alleged that the
ECGtestconductedduringhisPEMEconfirmedthathisillnesswasbroughtaboutbyaphysiological
13
abnormality from birth. This, coupled with Gazzingans admission of being a smoker, provedthat
his illness is not workrelated. Besides, Gazzingans work could not have in any way contributed to
the development of his condition because his work as a messman created no risktoproducesuch.
Petitioners further pointed out that they shouldered Gazzingans medical expenses however, when
Dr. Banaga declared his condition as not workrelated and therefore not compensable, their
obligation to provide medical assistance ceased. Petitioners explained that under the POEASEC,
the companydesignated physician is the one mandated to assess the medical condition of a
seafareruponmedicalrepatriation.
Gazzingan, on the other hand, disputed Dr. Banagas declaration for being selfserving andforlack
of basis.Heasseveratedthathisillnessisnotcongenitalbutwascausedbyhypertensionwhichwas
not immediately detected for being asymptomatic. He emphasized that during the previous
deployments abroad, he was declared fit for sea duties therefore, his illness could not be
preexisting. Gazzingan attributed his sickness to his work as a messmanwhichentailedwakingup
very early in the morning,liftingheavystocks/suppliesandservingthecrewmembersonboard,and
being oncall for the arrival of supplies. Thus, Gazzingan invoked his right to compensation for his
ailmentwhichheclaimedtobeworkconnected.
14
In a Decision dated September 18,2007, the Labor Arbiter opined that although the cause of or
the risk of contracting aorticdissectionisuncertain,thisuncertaintydoesnot,however,eliminatethe
probability that such illness is workconnected. And since actual proofofcausationisnotnecessary
to justify compensability and it is enoughthatthenatureoftheseafarersworkhadcontributedeven
in a small degree to the development of the disease, as in this case, the Labor Arbiter granted
Gazzingansclaims,thus:
WHEREFORE, premises considered, judgment is hereby rendered ordering the [petitioners] to pay
jointly and solidarily, [Gazzingan] his total permanent disability benefits in the amount of
US$50,000.00 and his sickness allowance of US$1,300.00, in Philippine currency, at the rate of
exchange prevailing at the time of payment. [Petitioners] are likewise ordered to pay [Gazzingan]
attorneysfeesequivalentto10%ofthetotalmonetaryawards.
Allotherclaimsaredismissed.
15
SOORDERED.
ProceedingsbeforetheNationalLaborRelationsCommission
In their appeal to the NLRC, petitioners claimed that the Labor Arbiter erred (1) in declaring
Gazzingans illness as workrelated despite the contrary opinion of the companydesignated
physician who is the one mandated by law to determine and assess a seamans disability (2) in
disregarding Gazzingans failure to challenge Dr. Banagasdeclarationbynotseekingtheopinionof
another doctor in accordance with the procedure laid down in the POEASEC (3) in awarding
US$50,000.00 to Gazzingan as permanenttotaldisabilitybenefitssincethePOEASECprovidesfor
the grant of such amountonlyfordeathbenefits(4)inawardingsicknessallowancewhenthesame
hasalreadybeenpaidbypetitionerstoGazzinganand,(5)inawardingattorneysfees.
On January 30, 2008, Gazzingan died of hemorrhagic shock secondary to dissecting aortic
16
aneurysm.
17
In a Decision dated January 31, 2008, the NLRC gave weight to the opinion of the
companydesignated physician that Gazzingans illness is not workrelated. It ruled that the Labor
Arbiters Decision is not rooted on legal and factual basis. It explained that as Gazzingan did not
seek and present a second opinion from another physician, he left the NLRC with no option but to
consider the certification issued by Dr. Banaga as anaccurateassessmentofhismedicalcondition.
The NLRCtooknotethatGazzinganisasmokerandhasapriorsurgeryfortheexcisionoflipoma,a
hereditary disease. Thus, it concluded that his aortic dissection developed due to hereditary
susceptibility, is not workrelated and, consequently, not compensable. The NLRC disposed of the
appealasfollows:
WHEREFORE, on the basis oftheforegoing,thedecisionappealedfromisherebyreversedandset
aside.Anewoneisentereddismissingthecomplaintforlackofmerit.
18
SOORDERED.
Gazzingans counsel filed a motion for reconsideration which was denied for lack of merit in the
19
NLRCResolution ofMarch12,2008.
Proceedings before the Court of Appeals Respondents, as heirs of Gazzingan, filed a Petition for
20
Certiorari withtheCA.Theyimputedgraveabuseofdiscretionamountingtolackofjurisdictionon
the NLRC in ruling that Gazzingans illness is congenital and not compensable and in giving
credence to Dr. Banagas assessment, which was not based on a thorough, exhaustive and
complete examination of Gazzingan but is merely an opinion on the nature of the illness.
Respondents further argued that compensability of disability claims is presumed and this
presumption cannot be defeated by an opinion plucked out of thin air justtofavortheemployer.On
21
May 26, 2011, the CA rendered a Decision granting the Petition, setting aside the NLRC ruling,
and reinstating the LaborArbitersDecision.Itfoundnosubstantialevidencetoprovethattheillness
of Gazzingan is congenital. It noted that Gazzingan,whohadpreviouslyworkedabroadforasimilar
job, had no record of having suffered from, or was treated for, dissecting aneurysm or any other
heart ailment. The CA thus concluded that his illness is presumed to have been acquired or
aggravated by his strenuous job on board M/V Gloria. In view of the same, it upheld the Labor
Arbiters awards of permanent disability benefits, sickness allowance and attorneys fees infavorof
respondents.
Petitioners soughtreconsiderationoftheCADecision.TheyarguedthatGazzinganssmokinghabits
and history of a congenital condition of lipoma,asbothrevealedinhisPEME,andtheunchallenged
expert opinion of Dr. Banaga constitute more than enough substantial evidencetoconcludethathis
ailmentisnotworkrelated.
22
In a Resolution dated November 25,2011,theCAdeniedpetitionersMotionforReconsideration.

It noted that Gazzingans lipoma has no relation or causal connectiontotheailmentthatcausedhis
death. Anent Dr. Banagas assessment, the CA ruled that it cannot be relieduponbecauseitwasa
mere opinionbasedsolelyonthePEMEresults.Dr.Banagadidnotperformanypriorassessmentof
Gazzingans health condition while he was confined at Manila Doctors Hospital or any exhaustive
postemployment medical examination on him. The CA reiterated that the physical stress that
Gazzingan suffered while he performed a strenuous jobonboardthevesselexposedhimtoinjuries
causedbydissectinganeurysm.
Issues
Hence,thepresentPetitionraisingthefollowingissues:
A.WHETHERTHEDECEASEDSILLNESSISWORKRELATED.
B. WHETHER THE COMPANYDESIGNATED PHYSICIAN, TO WHICH GROUP DRS. BANAGA
AND CAMMAYO ARE PART OF, HAS THE AUTHORITY TO ESTABLISH IF THE ILLNESSISNOT
WORK[]RELATED.
C.WHETHERRESPONDENTSHAVETHEBURDENOFPROOFTOPROVEWORKRELATION.
D. WHETHER RESPONDENTS COULD RELY ON THE DISPUTABLE PRESUMPTIONOFWORK
RELATION TO SUPPORT THEIR CASE WITHOUT ANY MEDICAL EVIDENCE TO CONTRADICT
THECOMPANYDOCTORSOPINION.
E. WHETHER PAYMENT OF SICKNESS ALLOWANCE UNTIL SUCH TIME THAT THE NATURE
OFTHE ILLNESS HAS BEEN ESTABLISHED AS NOT WORK CONNECTED EXTINGUISHED
PETITIONERSOBLIGATIONSASREGARDSTHEPAYMENTTHEREOF.
F. WHETHER RESPONDENTS ARE ENTITLED TO 10% ATTORNEYS FEES IN THE ABSENCE
23
OFBADFAITHONTHEPARTOFTHEPETITIONERS.
Petitioners maintain that there is substantial evidence to support their contention that Gazzingans
ailment has no workconnection. They contend that Gazzingans condition was caused, not by
hypertension, but by atherosclerosis, a congenital disease, thedevelopmentofwhichwashastened
by Gazzingans smoking habits. The congenital nature of Gazzingans ailment is further buttressed
by the result of his PEME indicating a history of lipoma excision and a finding of left ventricular
hypertrophy. Petitioners aver that respondents cannot simply rely on the presumption of
workrelation they have to present adequate evidence to overcome Dr. Banagas declaration that
Gazzingans ailment is congenital. However, they failed to present evidence to prove that
Gazzingansworkcausedorcontributedtothedevelopmentofhisailment.
OurRuling
ThePetitionisdevoidofmerit.
The core issue to be resolved is whether Gazzingans illness is workrelated and therefore
compensable.
Deemed written in the contract of employment between Gazzingan and petitioners is the 2000
24
POEASEC, which was issued pursuant to Department Order No. 4 of the Department of Labor
and Employment and POEA Memorandum Circular No. 09, both series of 2000. Section 20(B)
thereofprovides:
The liabilities of the employer whentheseafarersuffersworkrelatedinjuryorillnessduringtheterm
ofhiscontractareasfollows:
xxxx
6. In case of permanent total or partial disability of theseafarercausedbyeitherinjuryorillnessthe
seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section
32 of this Contract. Computation of his benefits arising from an illnessordiseaseshallbegoverned
bytheratesandrulesofcompensationapplicableatthetimetheillnessordiseasewascontracted.
"Pursuant to the aforequoted provision, two elements must concur for an injury or illness of a
seafarer to be compensable. First, the injury or illness must be workrelated and second, x x x the
workrelated injury or illness must have existed during the term of the seafarers employment
25
contract." The 2000 POEASECdefinesworkrelatedinjuryandworkrelatedillnessas"injuries

resulting in disability or death arising out of and in the course ofemployment"andas"anysickness
resulting to disability ordeathasaresultofanoccupationaldiseaselistedunderSection32Aofthis
contractwiththeconditionssetthereinsatisfied.
Section32A.OCCUPATIONALDISEASES
For an occupational disease and the resulting disability or death to be compensable, all of the
followingconditionsmustbesatisfied:
1.Theseafarersworkmustinvolvetherisksdescribedherein
2.Thediseasewascontractedasaresultoftheseafarersexposuretothedescribedrisks
3. The disease was contracted within a period of exposure and under such otherfactorsnecessary
tocontractitand
26
4.Therewasnonotoriousnegligenceonthepartoftheseafarer."
Here, it was shown that Gazzingan suffered recurring and intense chest and backpainsassociated
with acute typeB aortic dissection during the term of his employment contract that led to his
immediate medical repatriation to the Philippines. Upon arrival on August 5, 2006andaftermedical
evaluation at the Manila Doctors Hospital, Gazzingan was diagnosed by Dr. Cammayo to have
dissecting aneurysm. Records also bear that he sought consultation and treatment at St. Paul
Hospital in Tuguegarao City from September 13 to14, 2006, whereby he was also found to be
27
suffering from aortic aneurysm by Dr. George Ramos. He then finally succumbed to death on
January 30, 2008 because of ruptured dissecting aortic aneurysm. Aortic dissection, also called
28
dissecting aneurysm, is a potentially life threatening condition in which there isbleedingintoand
29
along the wall of the aorta, the major artery leaving the heart. The condition starts with a tear in
the wall of the major artery carrying blood out of the heart and as thetearextendsalongthewallof
the aorta, blood enters the aortic wall and "dissects" or separates the layers of the aorta from one
30
another which leads to aortic rupture or decreased blood flow to the organs. Thiscanthenresult
31
in heart attacks, strokes, paralysis, and renal failure among other medical conditions. The
ailments risk factors, which include but are not limited to aging, connective tissue and rare genetic
disorders,atherosclerosis,inflammation,trauma,highbloodpressure,heartsurgery/procedures,and
32
pregnancy, do not seem to be direct causes of the disease, such that having one makes the
chances of getting the condition higher but does not always lead to aortic dissection.[[33]Thus,the
34
exact cause ofaorticdissectionisstillunknownandremainsunderinvestigation. Nonetheless,the

progression of this ailment is oftentimes caused by the increased stress in the aortic wall attributed
35
to strenuous physical activities. Patients are strongly advised to refrain from strenuous physical
exertion and are often required to undertake lifestyle modification, such as change of occupationto
sedentary jobs, in order to reduce the risk of enlargement of an already weakened aorta thatmight
36
eventuallyleadtorupture,afatalcondition.
Gazzingan averred that his duties as a messman entailed work of an assistant chef steward which
aggravated his health condition. Concomitantly, the Labor Arbiter opined that although the causeof
the illness is unknown, there is probability that Gazzingans illness was broughtaboutbythenature
of hisworkasamessman,whichincludedliftingheavyobjectscompoundedbylackofsleepandthe
pressure of serving the entire crew with efficiency. While the NLRC found doubtful the connection
between Gazzingans illness and his work, the CA affirmed the findings of the Labor Arbiter and
ruled that Gazzingans activites while on board the vessel caused physical stress and exposedhim
toinjuries.
Indeed, the causal connection between the illness contractedandthenatureofworkofaseamanis
37
a factual question, which is not a proper subject of this Courts review. Nonetheless,considering
the conflicting findings of the tribunals below, this Court is constrained to dwell on factual matters
38
involved in this case and reassess the evidence on record. Gazzingans work as a messman is
not confined mainlytoservingfoodandbeveragestoallofficersandcrewhewaslikewisetaskedto
assist the chief cook/chef steward,andthusperformedmostifnotallthedutiesintheshipssteward
department. In the performance of his duties, he is bound to suffer chest and back pains, which
could have caused or aggravated his illness. As aptly observed by the CA, Gazzingans strenuous
duties caused him to suffer physical stress which exposed him to injuries. Itisthereforereasonable
to conclude that Gazzingansemploymenthascontributedtosomedegreetothedevelopmentofhis
disease.
It must also be pointed out thatGazzinganwasingoodhealthandfittoworkwhenhewasengaged
by petitioners to work onboardthevesselM/VGloria.HisPEMEshowedessentiallynormalfindings
with no hypertension and without any heart problems. It was only while rendering duty that he
experienced symptoms. This is supported by a medical report issued by Cartagena de Indias
Hospital in Colombia stating that Gazzingan suffered intense chest and back pains, shortness of
breath and a slightly elevated bloodpressurewhileperforminghisduties.Therefore,evenassuming
that Gazzingan had a preexisting condition, as alleged by petitioners, this does not totally negate
the probability and the possibility that his aortic dissection was aggravated by his work conditions.
The stress caused byhisjobactivelycontributedtotheprogressionandaggravationofhisillness.In
compensation cases, "[i]t is sufficient that there is a reasonable linkage between the disease
suffered by the employee and his work to lead a rational mind to conclude that his work may have
contributed to the establishment or, at the very least, aggravation of any preexisting condition he
39
mighthavehad."
More importantly, the 2000 POEASEC has created a presumption of compensability for those
illnesses which are not listed as an occupational disease. Section 20 (B), paragraph (4) states that
"those illnesses not listed in Section 32 of this Contract are disputably presumed as workrelated."
Concomitant with this presumption is the burden placed upon the claimant to present substantial
evidencethathisworkconditionscausedoratleastincreasedtheriskofcontractingthediseaseand
only a reasonable proof of workconnection, not direct causal relation is required to establish
40
compensability of illnesses not included in the list ofoccupationaldiseases. Asdiscussedabove,

a causal linkwasestablishedbetweenGazzingansemploymentandhisailment.Inviewthereof,the
presumption now operates in favor of respondents and the burden is shifted to the petitioners to
overcome the statutory presumption. However, in the case at bench, petitioners failed to discharge
suchburdenaswillbediscussedbelow.
First, petitioners insist that Gazzingans genetic predisposition has caused his ailment and that his
smoking habits hastened its development. We are not persuaded. As stated earlier, the specific
cause of aortic dissection is still unknown and the risk factors may only seem to be associated in
some way with the disease. Thus, petitioners theory cannot be completely correct. Besides, no
medical certification was presented by petitioners to substantiate their bare allegation that
Gazzingans left ventricular hypertrophy and lipoma excision found in his PEME had a causal
relation with the disease that caused his death. As aptly held by the CA, there was no evidence to
prove the causal connection between Gazzingans lipoma, which was already removed, and his
dissecting aneurysm. With respect to left ventricular hypertrophy, the same does not automatically
suggest the presence of a preexisting congenital disease. It is not an illness but a mere condition
that involves the thickening of the muscle wall of the hearts left pumping chamber that can be
41
wellmanagedandusuallyonlydevelopsovertime. Also,smoking,byitself,canneitherbeafactor
42
that bars compensation for the illness. While smoking may contribute to the development of the
disease, it is not the only possible cause. Other factors such as working and living under stressful
conditionsalsocontributetoitsdevelopment.
Next, petitionersstronglyrelyonDr.BanagasopinionthatGazzingansconditionisnotworkrelated.
They insist that Dr. Banagas assessment is conclusive in the absence of a contrary opinion
rendered by a separate physician. The Court, however, agrees with the CA that such opinion is
inconclusive for purposes of determining thecompensabilityofGazzingansillness.Section20(B)(3)
ofthePOEASECprovides:
Upon signoff from the vessel for medical treatment, the seafarer is entitled to sickness allowance
equivalent to his basic wage until he isdeclaredfittoworkorthedegreeofpermanentdisabilityhas
been assessed by the companydesignated physician but in no case shall this period exceed one
hundredtwenty(120)days.
For this purpose, the seafarer shall submit himself to a postemployment medical examination by a
companydesignated 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 compliance. Failure of the seafarer to comply with the mandatory reporting
requirementshallresultinhisforfeitureoftherighttoclaimtheabovebenefits.
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 doctors decision shall befinalandbinding
onbothparties.
"It is beyond cavil that it is the companydesignated physician who is entrusted with the task of
43
assessing the seamans disability." It is the companydesignated physicians findings which

should form the basis of any disability claim of the seafarer. Suchassessmentisarrivedatafterthe
seafarer submits himself to the companydesignated physician for a post employment medical
examination within three days from his repatriation. It is significant to note, however,thatcourtsare
44
not bound by the assessment of the companydesignated physician. While the

companydesignated physician must declare the nature of a seafarers disability, the formers
45
declaration is not conclusive and final upon the latter or the court. Its inherent merit will still be
weighedanddulyconsidered.
46
In Racelis v. United Philippine Lines, Inc., the medical opinion presented bytheemployerstating
that the seafarers ailment is congenital in origin was discarded by the Court because the opinion
came from a physician who did not personally attend to the seafarer in the course of the latters
medical treatment and for being unsubstantiatedbyanymedicalfindings.Theailmentwhichcaused
the seafarersdeathwasheldbytheCourttobeworkrelatedforfailureoftheemployertoovercome
47
the statutory presumption of workrelatedness. Similarly, in Jebsens Maritime, Inc. v. Babol, the
Court did not give probative weight on the company doctors opinion that theseafarersconditionis
not workrelated as the wordings used in the doctors report did not make a categorical statement
confirming the total absence of workrelationbutonlyamereprobability.Again,theCourtupheldthe
48
presumption of workrelation. In Magsaysay Mitsui Osk Marine, Inc. v. Bengson, the Court
disregarded the companydesignated physicianscategoricaldeclarationthattheseafarersillnessis
not workrelatedforbeingselfserving.Asthefactsofthecaseclearlyshowedthecontributoryfactor
of the seafarers daily working conditions to the illness suffered, even in the absence of a contrary
opinion of other doctors, the Court sustained the illness workconnection. Also, in Teekay Shipping
49
Philippines,Inc.v.Jarin, theCourtruledthatitwasunnecessaryfortheseafarerthereintoconsult
and provide a contrary opinionfromhisowndoctorssincethecausalconnectionbetweentheillness
and the work for which he hadbeencontractedwasclearlydetailedandconvincinglyestablishedby
him.
Here, while petitioners were quick to point out that Dr. Banaga is a companydesignated physician,
the latter, however, could not have possibly arrived at a reliable diagnosisofGazzinganscondition.
His assessment, based merely on Gazzingans PEME, did not reflect the true state of health of the
seafarer. AstheCourthaspreviouslyruled,aPEMEisnotexploratoryinnatureandcannotberelied
50
upon to arrive at a seafarers true state of health. The NLRC erred in statingthatthisopinioncan
be relied uponasanaccurateassessmentofGazzingansillnessonthesolereasonthatnocontrary
opinion was rendered. The fact that there was no contrary opinion of another physician is of no
moment. To repeat, Dr. Banagas opinion is not an accurate appraisal of the extent of Gazzingans
disability. It was not based on the postemployment medical examination conducted on Gazzingan
after his medicalrepatriation.Intheabsenceofreasonablefindings,diagnostictestsandprocedures
to support the assessment, the same cannot be simply taken at face value. Moreover, Dr. Banaga
hastily concluded that aortic dissection is hereditary without necessarily considering other varied
factors that can contribute to the development of the disease. Consequently, his medical opinion
cannotbegivencredenceorserveasbasistodenyGazzingansdisabilityclaims.
In view of the above, the Court holds that the CA correctly found theNLRCtohavegravelyabused
its discretion amounting to lack or in excess of jurisdiction in declaring that the illness suffered by
Gazzinganisnotworkrelated.
Anent the nature of disabilitycausedbyhisworkrelatedillness,theCourtnotesthatGazzinganwas
no longer provided work after being diagnosed with aortic dissection/dissecting aneurysm. He was
constrained to seek further medical attention at his own expense and was continuously unable to
work until his death. Thus, the Court is inclined to rule that Gazzingan suffered from a permanent
total disability as he was unable to return to his regular job for more than one hundred twenty
51
days. Accordingly, his permanent total disability benefits should be US$60,000.00 or 120% of
US$50,000.00, pursuant to the Schedule of Disability Allowances under the POEASEC.TheLabor
Arbiter thus erred in fixing his disability benefits at US$50,000.00. As regards sickness allowance,
the award of US$1,300.00forhisincapacitytoworkfor120dayswasproper.Thegrantofattorneys
52
fees is likewise affirmed for being justified in accordance with Article 2208(2) of the Civil Code
since respondents were compelled to litigate to satisfy their claims for Gazzingans disability
53
benefits.
WHEREFORE, the Petition is DENIED. The May 26, 2011 Decision and November 25, 2011
Resolution of the Court of Appeals in CAG.R. SP No. 103580 are AFFIRMED with the
MODIFICATION that petitioners are ordered to jointly and solidarily pay respondents total and
permanent disability benefits in the amount of US$60,000.00 or its equivalent amount in Philippine
currencyatthetimeofpayment.
SOORDERED.
RepublicofthePhilippines
SUPREMECOURT
Manila
THIRDDIVISION
G.R.No.179226June29,2015
MA.SUSANAA.AWATIN,andonbehalfoftheheirs/beneficiariesofdeceasedALBERTO
AWATIN,Petitioners,
vs.
AVANTGARDESHIPPINGCORPORATIONandMRS.DORAG.PASCUAL,OFFSHORE
MARITIMEMANAGEMENTINT'L.,INC.(SWITZERLAND),SEABULKTREASUREISLAND,
Respondents.
DECISION
PERALTA,J
.:
For this Court'sresolutionisthePetitionforReviewonCertiorariunderRule45oftheRulesofCourt
of petitioners Ma. Susana A. Awatin, and on behalf of the heirs/beneficiaries of deceased Alberto
Awatin that seeks to reverse and set aside the Decision and Resolution of the Court of Appeals,
datedMarch21,2007andAugust3,2007,respectively.
Thefactsfollow.
Alberto B. Awatin (Awatin) was recruited and hired as Master for the vessel M/V Seabulk Treasure
Island by private respondent Avantgarde Shipping Corporation (Avantgarde), for its principal,
Offshore Marine Management International, Inc. (Switzerland)onJanuary16,2001.TheContractof
Employment provided, among others, for a term of six ( 6) months, a monthly basic salary of
US$1,750.00, fixed overtime pay of US$700.00 per month and vacation leave pay of US$350.00.
Awatin joined the vessel M/V Seabulk Treasure Island on January 21, 2001 after submitting the
required preemployment medical examination where he was declared "fit to work" by thecompany
designatedphysician.
Before his employment with M/V Seabulk Treasure Island, A watin claimed to have been
continuously and exclusively employed by Avantgarde under successive contractual service as
"Master"forvariouscargovesselssinceMay28,1997.
Awatin was repatriated back to the Philippines on July 29, 2001 after completing his employment
contract. Awatin's wife, Susana Awatin (petitioner), claimed that her husband underwent medical
checkup at the Camiguin General Hospital in Mambajao, Camiguin, due to difficulty in breathing,
coupled with hard and painful cough. He was treated byDr.JosephChryslerBejaanddiagnosedto
have "Massive Ascitis, Secondary to Adenocarcinoma, Moderate Pleural Effusion, Right Lung" and
"repeated abdominal paracentesis due to recurrent ascitis." On September 10, 2001, Awatin
reported back to A vantgarde's office for redeployment and was subjected to the mandatory
preemployment medical examination where he was declared "unfit to work" due to a finding of
"Minimal PTB right upper lung." He was then confined at the St. Dominic Medical Center, Bacoor,
Cavite from November 7 to 9, 2001 because of difficulty in breathing and at the Doctor's Sabal
Hospital, Inc. from June 8 to27,2002inCagayandeOroCitybecauseof"Adenocarcinomaprimary
etiology unknown with massiveAscitis"andattheCamiguinGeneralHospitalfromJuly2to4,2002
for the same illness. Eventually,Awatindiedof"multiorganfailureandadenocarcinoma"onJuly12,
2002.
Thereafter, on October 9, 2002, petitioner, for herself and on behalf of her two (2) minor children
(collectively called petitioners), filed a complaint for recovery of death benefits, burial allowance,
sickness allowance, additional benefits forhertwo(2)minorchildren,reimbursementofmedicaland
hospitalization expenses, moral and exemplary damages and attorney's fees against private
respondents Avantgarde, its officer, Ms. Dora Pascual, Offshore Marine Management Int'l., Inc.
(Switzerland) and Seabulk Treasure Island (collectively called private respondents) before the
National Labor Relations Commission (NLRC), docketed as NLRC OFW Case No. (M)
0210260500.
According to private respondents, petitioners' claim for death benefits was not granted becausethe
late Awatin was no longer in their employ at the time of his death and that his death arose froman
illness which was not workrelated. Petitioners' claim for sickness allowance and reimbursement of
medical expenses were also denied because according to the same private respondents, the
deceasedAwatinwasnotrepatriatedbyreasonofillnessandformedicaltreatment.
However, petitioners insist that the late Awatin was repatriated due to illness that resulted to his
death and that underthePOEAStandardEmploymentContract,itissufficientthattheillnessoccurs
duringthetermofthecontracttomakeaseafarer'sdeathcompensable.
The Labor Arbiter, on May 30, 2003 rendered a Decision in favor of petitionersuponafindingthat
the late Awatin's illness was contracted during his employment with the private respondents. The
dispositiveportionofthedecisionreads:
WHEREFORE, premises considered, judgment is hereby rendered, ordering the respondents
Avantgarde Shipping Corporation/Dora G Pascual/Offshore Marine Management International,
Inc./Switzerland/Seabulk Treasure Island to pay complainants the amount of NINETY THOUSAND
TWO HUNDRED USDOLLARS(US$90,200.00)oritsequivalentinPhilippinePesoattheprevailing
rate of exchange at the time of the actual payment representing the death benefit,burialexpenses,
sicknesswagesofthedeceasedMasterAlbertoB.Awatinandattorney'sfees.
The respondents are further ordered to pay complainant the amount of THREE HUNDRED
FORTYSEVEN THOUSAND ONE HUNDRED EIGHTYEIGHT PESOS & 50/100 (1!347,188.50)
representingreimbursementofmedicalexpenses.
AllotherclaimsareDISMISSEDforlackofmerit.
SOORDERED.
Private respondents appealed to the NLRC which reversed and set aside the findings of the Labor
Arbiter.TheNLRCruledasfollows:
Records show that the evidence submitted by complainant insupportofherclaimfordeathbenefits

consist of medical results and medical certificates. Except for the chest xray conducted on May 5,
1998, the rest of the examinations conductedoncomplainantweredoneafterhewasrepatriatedon
July 29, 2001. Further, the results of the examinations and the certificate issued merely speaks of
medical finding of Awatin's lung problem. There were no showing that his lung cancer has
reasonable connection with the nature of his work. It is to be noted that Awatin was employed by
respondents as master of their vessel. And, according to complainant, as Master of the vessel the
latest of which was the "Seabulk Treasure Island," her husband oversees the general control,
operation and management of the vessel which was used for delivering the supplies needed by
respondents' customers in the oil rigs which consist of high grade industrial pipes and drilling
equipment. Complainant claims that the exposure of her husband to the toxic residues of oil and
industrial equipment aggravated his lung cancer. Such claim of complainant deserves scant
consideration. Besides being hearsay, not a single evidence was submitted by complainant to
buttresssuchclaim.
Infine,consideringthatthediseaseforwhichAwatindiedisnotworkrelated,complainant'sclaimfor
deathbenefitsmustfail.
WHEREFORE, premises considered, the Decision dated May 30,2003isherebySETASIDEanda
newoneentereddismissingtheinstantcomplaintforlackofmerit.
SOORDERED.
The motion for reconsideration was denied by the NLRC initsResolutiondatedJanuary31,2006.
Hence, petitioner filed a petition for certiorari under Rule 65 with the CA and in its decision dated
March 21, 2007, the CA dismissed the case and affirmed the decisionoftheNLRC.Thedispositive
portionofthedecisionreads:
WHEREFORE, premises considered, the instant petition is DISMISSED. The assailed Decision of
the NLRC dated October 28, 2005anditsResolutiondatedJanuary31,2006inNLRCNCRCANo.
03668603areherebyAFFIRMED.
SOORDERED.
The CA, in a Resolution dated on August 3, 2007, denied petitioners' motion for reconsideration.
Hence,thepresentpetition.
Petitioners argue that Section 20 (A) 1 and (4) of the POEA SEC was primarily designed to be
construed, together with Section 20(B) of the POEA SEC to compensate allclaimsforaseafareror
his beneficiary fortheseafarer'sinjury,illnessanddeathuponaseafarer'sreturnfromdeploymentin
the Philippines pursuant to the local recruiter's use of deployment license in implementing the
contract of employment itself pursuant to existing labor and social legislation for theemployertobe
socially responsible with the deployed worker's postemployment medical examination when the
worker is returned from deployment to determine his claim for Workmen's Compensation benefits
under the deployment itself as provided for by law and the POEA Rules and Regulations by itself
and not as what theCourtofAppealsclaimintheassaileddecisionthatsaidsectioncompensatesa
seafarer's death only when the death is proven by the seafarer's beneficiaries with substantial
evidence under the Rules of Courttobeworkrelatedandoccurringduringthetermoftheseafarer's
termofthecontractofemployment.
Petitioners also claim that theprovisionsofSection20(B)(4)andSection32AofthePOEASECby
themselves that disputably presume workrelation of a seafarer's illness even if the illness is not
listed in the list of compensable illness and occupational diseases of Section 32 of the POEA SEC
itself negates the legality of the Court of Appeals' conclusion to the case that the Section 20(A) (1)
and (4) of the POEA SEC compensates only a seafarer's death if the death is the result of a
workrelatedillness.
It is also asserted that because of theprovisionsofSection20(B)(4)andSection32AofthePOEA
SEC that already disputably presumes all illnesses of a seafarer as workrelated and/or
workaggravated if listed as an occupational disease that therefore makes it contrary to law for the
Court of Appeals to dismiss the claims of petitioners in the instant case on the basisofamistaken,
absurd and imposable legal conclusion that misapplies Section 20 (A)(1)and(4)ofthePOEASEC
to compensate only a seafarer's death when the death occurs during the term of the contract of
employment itself when the death is substantially proven by the beneficiaries to be workrelated
pursuanttothequantumofevidencerequiredbytheRulesofCourtitself
Thepetitionisbereftofmerit.
It is well settled in jurisprudence thatfactualfindingsofadministrativeorquasijudicialbodies,which

are deemed to have acquired expertise in matters within their respective jurisdictions,aregenerally
accorded not only respect but even finality, and bind the Court when supported by substantial
evidence. Consistent therewithisthedoctrinethatthisCourtisnotatrieroffacts,andthisisstrictly
adhered to in labor cases. We may take cognizance of and resolve factual issues, only when the
findings of fact and conclusions of law of the Labor Arbiter or the NLRC are inconsistentwiththose
10
oftheCA.
The NLRC, as affirmed by the CA, found thattherecordsarebereftofshowingthatAwatin'sillness,

adenocarcinoma, was contracted during the term of his last employment contract. It was notedthat
Awatin was declared fit to work when he was subjected to the mandatory preemployment medical
examination prior to his deployment on January 16, 2001. There was, likewise, no showing that he
complained of any illness while on board the vessel nor was it established that Awatin was
repatriatedduetoanillness.
Thus, the CA did not err when it ruled that the provisions of the POEA Standard Employment
Contract areexplicitthatforaseafarer'sdeathtobecompensable,thedeathmustbeshowntohave
occurred during the term of the employment contract.Thedeterminationofwhetherornotthedeath
was the result of aworkrelatedillnessbecomesnecessaryonlywhentheaboveconditionhasbeen
satisfied because of the rule that "the mere death ofaseamanduringthetermofhisemploymentis
11
notsufficienttogiverisetocompensation."
Section 20 (A) subparagraphs 1 and 4 of the Standard Terms and Conditions Governing the
Employment of Filipino Seafarers OnBoard Oceangoing Vessels on compensation and benefits in
caseofdeathofaseafarerprovides:
"l.Incaseofworkrelateddeathoftheseafarerduringthetermofhiscontracttheemployershallpay
his beneficiaries the Philippine Currency equivalent to the amount of Fifty Thousand US dollars
(US$50,000) and an additional Seven Thousand US dollars(US$7,000)toeachchildundertheage
of twentyone (21) but not exceeding four (4) children, at the exchange rate prevailing during the
timeofemployment."
"4. The other liabilities of the employer when the seafarer dies as a result of workrelated injury or
illnessduringthetermofemploymentareasfollows:
a. The employer shall pay the deceased's beneficiary all outstanding obligations due the seafarer
underthisContract.
b. The employer shall transporttheremainsandpersonaleffectsoftheseafarertothePhilippinesat
employer's expense except if the death occurred in a port where local government laws or
regulations do not permit the transport of such remains.Incasedeathoccursatsea,thedisposition
of the remains shall be handled or dealt with in accordance with the master's best judgment. In all
cases, the employer/master shall communicate with the manningagencytoadvisefordispositionof
seafarer'sremains.
c. The employer shall pay the beneficiaries of the seafarer the Philippine currencyequivalenttothe
amount of One Thousand USdollars(US$1,000)forburialexpensesattheexchangerateprevailing
duringthetimeofpayment.
1awp++i1
On the basis of the foregoing provisions, the death of a seaman to be compensable should occur
during the term of his employment contract and must betheresultofaworkrelatedillnessorinjury.
In the present case, it is not disputed that Awatin died on July 12, 2002, almost a year after the
termination of his last employment contract on July, 2001. It must be remembered that Awatin was
repatriated not because of any illness but because his contract of employment expired. Thereisno
proof that he contracted hisillnessduringthetermofhisemploymentnorthathisworkingconditions
increased the risk of contracting the illness which caused his death. While the Courtadherestothe
principle of liberality in favor of the seafarer in construing the Standard Employment Contract, we
cannot allow claims for compensation based on surmises. When the evidence presented negates
12
compensability,wehavenochoicebuttodenytheclaim,lestwecauseinjusticetotheemployer.
The law in protecting the rights of the employees,authorizesneitheroppressionnorselfdestruction

of the employer there may be cases where the circumstances warrant favoring labor over the
interests of management but never should the scale be so tilted as to result in an injustice to the
13
employer.
WHEREFORE, the Petition for Review on Certiorari under Rule 45 of the Rules of Court of
petitioners Ma. Susana A. Awatin, and on behalf of the heirs/beneficiaries of deceased Alberto
Awatin, is hereby DENIED. Consequently, the Decision and Resolution of the Court of Appeals,
datedMarch21,2007andAugust3,2007,respectively,areherebyAFFIRMED.
SOORDERED.
FIRSTDIVISION
G.R.No.209822,July08,2015
DIONISIODACLES,*Petitioner,v.MILLENIUMERECTORSCORPORATIONAND/ORRAGAS
TIU,R
espondents.
DECISION
PERLASBERNABE,J
.:
Assailed in this petition for review on certiorari1 are the Decision2 dated April 8, 2013. and the Resolution3
dated October 11, 2013 oftheCourtofAppeals(CA)inCAGR.SPNo.122928,whichannulledandsetaside
the Decision4 dated October 17, 2011 and the Resolution5 dated December 2, 2011 of the National Labor
Relations Commission (NLRC) in NLRC Case No. NCR 060798510, thereby reinstating the Decision6dated
April 4, 2010 of the Labor Arbiter (LA) dismissing petitioner Dionisio Dacles's (petitioner) illegal dismissal
complaint.
TheFacts
Respondent Millenium Erectors Corporation (MEC) is a domestic corporation engaged in the construction
business.7 On October 6, 2010, petitioner instituted a complaint8 for illegal dismissal with money claims
against MEC and its owner/manager, respondent Ragas Tiu9 (respondents), before the NLRC, National
CapitalRegion,docketedasNLRCNCR060798510.
Petitioner claimed that he was hired by respondents as a mason in 1998. On June 7, 2010, while he was
working on a project in Malakas Street, Quezon City (QC), he was advised by respondent's officer, Mr.
Bongon, to move to another project in Robinson's Cubao, QC. However, upon arrival at the site, he was
instructedtoreturntohisformerjobsiteand,thereafter,wasgivenarunaroundforthetwo(2)succeeding
days. When he requested to begivenapostorassignedtoanewproject,hewastoldbythepaymasternot
to report for work anymore, prompting him to file the illegal dismissal complaint, with claims for service
incentive leave (SIL) pay,overtimepay,holidaypay,13thmonthpay,restdayandpremiumpay,andsalary

differentials.10
redarclaw
For their part, respondents denied having illegally dismissedpetitioner,claimingthathewasamereproject

employee whose contract expired on June 4, 2010 upon the completion ofhismasonryworkassignmentin
the Residential & Commercial Building Project (RCBMalakas
Project)alongEastAvenue,QC.11Respondents
further denied having employed petitioner since 1998 because it was only organized and started business
operations in February 2000.12 They averredthatpetitionerappliedandwashiredasamasononOctober8,
2009 and assigned to the Newport Entertainment and Commercial Center Project in Pasay City (NECC
Project), which was completed on March 3, 2010. Thereafter, petitioner applied anew and was hired as a
mason on April 15, 2010 to work on the RCBMalakas Project.13Petitioner's termination from both projects
wasthendulyreportedtotheDepartmentofLaborandEmployment(DOLE)Makati/PasayFieldOffice.14
redarclaw
TheLARuling
In a Decision15 datedApril4,2010,theLAdismissedtheillegaldismissalcomplaint,findingthatpetitioneris
a project employee given that: (a) the employment contracts between MEC and petitioner show that the
latter, although repeatedly rehired, was engaged in particular projects and for specific periods (b) the
periods of employment were determinable with a known beginning and termination and (c) the DOLEwas
notified of petitioner's termination at the end of each project. Consequently, the LA held that petitioner
cannot validly claim that he was illegally dismissed because his separation was a consequence of the
completion of his contract.16 The LA likewise denied petitioner's money claims for lack of evidentiary
support.17
redarclaw
Aggrieved,petitionerappealed18totheNLRC,docketedasNLRCLACNo.0500135611.
TheNLRCRuling
In a Decision19 dated October 17, 2011, the NLRC reversed the LA ruling and instead, declared that
petitioner was a regular employee. At the outset, the NLRC deniedrespondents'assertionthatrespondents
could not have employed petitioner in 199820 since it was only registered with theSecuritiesandExchange
Commission on February 1, 2000, as evinced by its Certificate of Incorporation,21 ruling that the said
document only proves that MEC has been operating as such without the benefit of registration thus, the
sameshouldnotbetakenagainstpetitioner'spositiveassertionthathewasemployedwaybackin1998.
Accordingly,theNLRCruledthatpetitionerwasaregularemployeesincehewasoriginallyemployedin1998
without a fixed period to perform tasks that were necessary and desirable to MEC's business, and which
status cannot be altered by a subsequent contract stating otherwise. To this end, it pointed out that
petitioner cannot be lawfully dismissed basedonthecompletionofthelasttwo(2)projectstowhichhewas
assigned and that the employment contracts and terminationreportssubmittedbyMECweremerelyissued
to circumvent the law on regularization of the employment of construction workers.22 The NLRC, however,
denied petitioner's other money claims for lack of legal basis.23 In fine, respondents were ordered to
reinstatepetitionerwithfullbackwages,plusattorney'sfees.24
redarclaw
Dissatisfied, respondents moved for reconsideration whichwasdeniedinaResolution26datedDecember2,

2011.Hence,theyfiledapetitionforreviewonc
ertiorari27beforetheCA.
TheCARuling
In a Decision28 dated April 8, 2013, the CA annulled and setasidetheNLRC'srulingandreinstatedtheLA's

ruling.29 It held that petitioner has not presented evidence to substantiate his claim of illegal dismissal. In
this relation, it observed that the NLRC made a hasty conclusion that MEC has been operating without the
benefit of registration as early as 1998, and in so doing, erroneously relied on the selfserving and
unsubstantiated statementofpetitioner.Therefore,theCAupheldtheLA'sfindingthatpetitionerisaproject
employee who was first hired as a mason fortheNECCProjectfromOctober8,2009untilitscompletionon
March 3, 2010, and second, for the RCBMalakas Project from April 15, 2010 also until its completion. It
25
further gave emphasis on the fact that petitioner's termination was duly reported by respondents to the
DOLE.30
redarclaw
Petitioner moved for reconsideration31 but was denied in aResolution32datedOctober11,2013hence,this

petition.
TheIssueBeforetheCourt
The essential issue for the Court's resolution is whether or not theCA committed reversible errorinholding
that the NLRC gravely abused its discretion in declaring that petitioner was a regular employee, and not a
projectemployee.
TheCourt'sRuling
Thepetitioniswithoutmerit.
First, it must be stressed that to justify the grant of the extraordinary remedyofcertiorari,petitionermust
satisfactorily show that the court or quasijudicial authoritygravelyabusedthediscretionconferreduponit.
Grave abuse of discretion connotes judgment exercised in a capricious and whimsical manner that is
tantamount to lack of jurisdiction. To be considered "grave," discretion must be exercised in a despotic
manner by reason of passion or personal hostility, and must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in
contemplationoflaw.33
redarclaw
In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and
the conclusions reached thereby are not supported by substantial evidence,34 "or that amount of relevant
evidencewhichareasonablemindmightacceptasadequatetojustifyaconclusion."35
redarclaw
Tested against these considerations, the Court finds that the CA correctly granted respondents'
certioraripetition before it, since the NLRC gravely abused its discretion in ruling that petitioner was a
regular employee of MEC whenthelatterhadestablishedbysubstantialevidencethatpetitionerwasmerely
a project employee.Ontheotherhand,thereisnoevidenceonrecordtosubstantiatepetitioner'sclaimthat
he was employed as early as 1998. Article 29436 of the Labor Code,37 as amended, distinguishes a
projectbasedemployeefromaregularemployeeasfollows:
LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
Art. 294. Regular and casual employment. The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties,anemploymentshallbedeemedtobe
regular wheretheemployeehasbeenengagedtoperformactivitieswhichareusuallynecessaryordesirable
in the usual business or trade of the employer, except where the employment has been fixed for a
specificproject or undertaking the completion or termination of which has been determined at
the time of theengagementoftheemployeeorwheretheworkorservicestobeperformedisseasonal
innatureandtheemploymentisforthedurationoftheseason.
xxxx(Emphasisandunderscoringsupplied)
Thus, for an employee to beconsideredprojectbased,theemployermustshowthat:(a) theemployeewas
assigned to carry out a specific project or undertaking and (b) the duration and scope of which were
specified at the time the employee was engaged for such project.38 Being assigned to a project or aphase
thereof which begins and ends at determined ordeterminabletimes,theservicesofprojectemployeesmay
be lawfully terminated at the completion ofsuchprojectorphase.39Consequently,inordertosafeguardthe
rights of workers against the arbitrary use of the word "project" to prevent them from attaining regular
status, employers claiming that theirworkersareprojectemployeesshouldprovethat:(a) thedurationand
scope of the employment was specified at the time they were engaged and (b) there was indeed a
project.40
redarclaw
In this case, records reveal that petitioner was adequately informed of his employment status (as project
employee) at the time of his engagement for the NECC and RCBMalakas Projects. This is clearly
substantiated by the latter's employment contracts41 duly signed by him, explicitly stating that: (a) hewas
hired as a project employee and (b) his employment was for the indicated starting dates therein"andwill
end on completion/phase of work of project."42 To the Court's mind, said contracts sufficiently apprised
petitioner that his security of tenure with MEC would only last as long as the specific project or a phase
thereof to which he was assigned was subsisting. Hence, whentheprojectorphasewascompleted,hewas
validlyterminatedfromemployment,hisengagementbeingcoterminusonlywithsuchprojectorphase.
Further, pursuant to Department Order No. 19, orthe"GuidelinesGoverningtheEmploymentofWorkersin

the Construction Industry," respondent duly submitted therequiredEstablishmentEmploymentReports43to
the DOLE Makati/Pasay Field Office regarding the "permanent termination" of petitioner from both of the
projects for which he was engaged (i.e., the NECC and RCBMalakas Projects). As aptly pointed outbythe
CA, such submission is an indication ofprojectemployment.InTomasLaoConstructionv.NLRC,44
theCourt
elucidated:
LawlibraryofCRAlaw
Moreover, if private respondents were indeed employed as "project employees," petitioners should have
submitted a report of termination tothenearestpublicemploymentofficeeverytimetheiremploymentwas
terminated due to completion of each construction project. The records show that they did not. Policy
Instruction No. 20 is explicit that employers of project employees are exempted from the clearance
requirement but not from thesubmissionofterminationreport.Wehaveconsistentlyheldthatfailureofthe
employer to file termination reports after every project completion proves that the employees are not
project employees. Nowhere in the New Labor Code is it provided that the reportorial requirement is
dispensed with. The fact is that Department Order No. 19 superseding Policy Instruction No. 20
expressly provides that the report of termination is one oftheindicatorsofprojectemployment.
(Emphasissupplied)
On the other hand, the records are bereft of any substantial evidence to support petitioner's claim that he
had been continuously rehired by respondent as a mason for 22 years45 as to accord him with a regular
employment status. Petitioner proffered a bare and selfserving claim that he has been employed by
respondent since1998.46Itiswellsettledthatapartyallegingacriticalfactmustsupporthisallegationwith
substantial evidence as allegation is not evidence.47 Ultimately, nothing on record evinces the existence of
an employeremployee relationship48 between him and respondent prior to his employment as a project
employeeintheNECCProject.
At any rate, the repeated and successive rehiring of project employees does not, by and of itself, qualifY
them as regular employees. Case law states that length of service (through rehiring) is not the controlling
determinant of the employment tenure,butwhethertheemploymenthasbeenfixedforaspecificprojector
undertaking, with its completion having been determined at the timeoftheengagementoftheemployee.49
While generally, length of service provides a fair yardstick for determining whenanemployeeinitiallyhired
on a temporary basis becomes a permanent one, entitled to thesecurityandbenefitsofregularization,this
standard will not be fair, ifappliedtotheconstructionindustrybecauseconstructionfirmscannotguarantee
work and funding for its payrolls beyond the life of each project as they have nocontroloverthedecisions
and resources of project proponents or owners.50 Thus, once the project is completed it wouldbeunjustto
require the employer to maintaintheseemployeesintheirpayrollsincethiswouldbetantamounttomaking
the employee a privileged retainerwhocollectspaymentfromhisemployerforworknotdone,andamounts
tolaborcoddlingattheexpenseofmanagement.51
redarclaw
All told, since respondents have duly proven by substantial evidence that petitioner, although rehired, was
engaged for specific projects, the duration and scope of which were specifiedatthetimeshewasengaged,
and that he was apprised of his status as a project employee at the onset, the NLRC gravely abused its
discretion in ruling that petitioner was a regular employee. Therefore,theaffirmanceoftheCA'srulingisin
order.
WHEREFORE, the petition is DENIED. The Decision dated April 8, 2013 and the ResolutiondatedOctober
11,2013oftheCourtofAppealsinCAG.R.SPNo.122928areherebyA
FFIRMED.
SOORDERED.
cralawlawlibrary
FIRSTDIVISION
G.R.No.212049,July15,2015
MAGSAYSAYMARITIMECORPORATION,PRINCESSCRUISELINES,MARLONR.ROOAND"STAR
PRINCESS,"P
etitioners,v.R
OMEOV.PANOGALINOG,R
espondent.
DECISION
PERLASBERNABE,J
.:
Assailed in this petition for review on certiorari1 are the Decision2 dated October 25, 2013 and the
Resolution3 dated April 7, 2014 of the Court ofAppeals(CA)inCAG.R.SPNo.126368,whichreversedand
set aside the Decision4 dated December 15, 2011 and the Resolution5 dated June 27, 2012 of the National
Labor Relations Commission (NLRC) in NLRC NCRCN.OFW(M)101469010denyingrespondentRomeoV.
Panogalinog's(respondent)claimforpermanenttotaldisabilitybenefits.
TheFacts
Respondent was employed by petitioner Magsaysay Maritime Corporation (MMC) for its foreign principal,
Princess Cruise Lines, Ltd. (PCL) as Mechanical Fitter on board the vessel "Star Princess" under a ten (10)
month contract6 that commenced on December 18, 2009, with a basic salary of US$508.00 per month,
exclusiveofovertimeandotherbenefits.7
cralawrednad
On April 27, 2010, respondent suffered injuries when he hit his right elbow and forearm on a sewage pipe
during a maintenance work conductedonboardthevessel.Hewasimmediatelyprovidedmedicaltreatment
at theship'sclinicandwasdiagnosedbytheshipdoctorwith"LateralEpicondylitis,Right".However,despite
treatment,hisconditiondidnotimprove.Hence,hewasmedicallyrepatriatedonMay9,2010.8
cralawrednad
On May 14,2010,thecompanydesignatedphysiciansalsodiagnosedrespondentwith"LateralEpicondylitis,
Right" and, thus, the latter was advised to undergo physical therapy. On June2,2010,Dr.RobertLim(Dr.
Lim), the companydesignated doctor, found that "[p]atient claims almost resolution of both lateral elbow
paid, decreased pain on the right wrist, slight limitation of motion of the right wrist,fairgrip."OnJune23,
2010, another medical bulletin was issued by Dr. Lim stating that "[p]atient claims improvement with
physical therapy." On September 15, 2010, Dr. William Chuasuan, Jr. (Dr. Chuasuan), also a
companydesignated physician, issued a medical report stating that respondent was fit to return to
work.9
cralawrednad
After the companydesignated physicians declared him fit to work, respondent sought the services of an
independent physician, Dr. Manuel C. Jacinto, Jr. (Dr. Jacinto), who, on the other hand, found him
"physicallyunfittogobacktowork"10asdeclaredinamedicalcertificatedatedOctober13,2010.11
cralawrednad
On even date, respondent filed a complaint for the payment ofpermanenttotaldisabilitycompensationin

accordance withtheparties'collectivebargainingagreement(CBA),medicalexpenses,moralandexemplary
damages, and other benefits provided by law and the CBA against MMC, itsPresident,MarlonR.Rofio,and
its foreign principal, PCL (petitioners), before the Labor Arbiter (LA), docketed as NLRC RAB No. NCR Case
No.(M)NCR101469010.
In his Position Paper,13 respondentaverredthathewasunfittoperformhisjobformorethan120days,and

that his injuries in hisrightelbowandforearmwereneverresolvedandinfact,deteriorateddespitemedical
treatment.14 And since by reason thereof he had lost his capacity to obtain furtherseaemploymentandan
opportunity to earn an income, respondent sought for the payment of permanent total disability
compensation in the amount of US$80,000.00 pursuant to the CBA that was enforced during his last
employment contract. He also sought for the payment of moral and exemplary damages in view of
petitioners' unjustified refusal to settle the matter under the CBAandtheirevidentbadfaithindealingwith
him,aswellasattorney'sfeesforhavingbeencompelledtolitigate.15
12
cralawrednad
For their part, petitioners maintained that respondent is not entitled to the payment of permanent total
disability benefits since he was declared fit to work by the companydesignated physician. They further
denied respondent's claims for moral and exemplary damages as they treated him fairly and in goodfaith.
Theylikewisedeniedrespondent'sclaimofattorney'sfeesforlackofbasis.16
cralawrednad
TheLARuling

In a Decision17 dated April 7, 2011, the LA ruled in favor of respondent, ordering petitioners to jointly and
severally pay the former the sum of US$80,100.00, or its peso equivalent at the time of payment, as
permanent total disability benefits, as well as moral and exemplary damages in the amount of P50,000.00
each.
The LA held that since the treatment of respondent's work related injury and declaration of fitnesstowork
exceeded the 120day period under the POEA Standard EmploymentContract(POEASEC),andconsidering
further that he was not anymore rehired, respondent was entitled to permanent total disability benefits in
accordancewiththeCBA.Moralandexemplarydamageswereequallyawardedforpetitioners'refusaltopay
respondent'sjustclaim,whichconstitutesevidentbadfaith.
However, the LA denied respondent's other money claims due to his failure to sufficiently state in his
complainttheultimatefactsonwhichthesamewerebased.
Aggrieved,petitionersfiledanappeal18totheNLRC.
TheNLRCRuling
In a Decision19 dated December 15, 2011, the NLRC reversed and set aside the appealed LA decision and
instead,dismissedrespondent'scomplaint.
Itheldthatthemedicalcertificateoftheindependentphysician,Dr.Jacinto,insupportofrespondent'sclaim
for permanent total disability benefits cannot prevail over the medical reports of the companydesignated
physicians who actually treated him. It added that respondent's injury had clearly healed, considering that
he admittedly signed the certificate of fitness to work, adding too that his doubts about his true medical
condition at the time he was promised redeployment was not proof that he was merely forced to sign the
same.20
cralawrednad
Respondent moved for reconsideration,21 but was denied in a Resolution22 dated June 27, 2012, prompting
thefilingofapetitionforc
ertiorari23beforetheCA.
TheCARuling
In a Decision24 dated October 25, 2013, the CA granted the certiorari petition and reinstated the LA's
DecisiondatedApril7,2011.
It ruled that respondent was entitled to full permanent total disability benefits, considering thataperiodof
more than 120 days had elapsed before the companydesignated physicians made their findings, and that
respondent was no longer redeployed by petitioners despite the finding of fitness to work by the
companydesignated physicians. In this relation, it further observed thattheawardofsaidbenefitswasnot
based on the findings of respondent's physician but rather on the number ofdaysthathehasbeenunfitto
work.
Dissatisfied, petitioners filed a motion for reconsideration25 which was, however, denied in aResolution26
datedApril7,2014hence,thispetition.
The essential issue for the Court's resolution is whether or not the CA committed grave error in awarding
respondentpermanenttotaldisabilitybenefits.
TheCourt'sRuling
cralawred
Thepetitionismeritorious.
To justify thegrantoftheextraordinaryremedyofcertiorari,thepetitionermustsatisfactorilyshowthatthe
court or quasijudicial authority gravely abused the discretion conferred upon it. Grave abuse of discretion
connotes a capricious and whimsical exercise of judgment, done in a despoticmannerbyreasonofpassion
orpersonalhostility,thecharacterofwhichbeingsopatentandgrossastoamounttoanevasionofpositive
dutyortoavirtualrefusaltoperformthedutyenjoinedbyortoactatallincontemplationoflaw.27
cralawrednad
In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and
conclusions are not supported by substantial evidence, or that amount of relevant evidence which a
reasonablemindmightacceptasadequatetojustifyaconclusion.28
cralawrednad
Guided by the foregoing considerations, the Court finds that the CA committed reversible error in granting
respondent's certiorari petition since the NLRC did not gravely abuse its discretion in dismissing the
complaint for permanent total disability benefits for respondent's failure to establish his claim through
substantialevidence.
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.29 The relevant legal provisions are Articles 191to
193 of the Labor Code and Section 2, Rule X of the Amended Rules on Employees' Compensation (AREC),
while the relevant contracts are the POEA Standard Employment Contract (POEASEC), the parties'
Collective Bargaining Agreement (CBA), if any, and the employment agreement between the seafarer and
employer.
In this case, the parties entered into a contract of employment in accordancewiththePOEASECwhich,as

borne from the records, was covered by an overriding International Transport Workers' Federation (ITF)
Cruise Ship Model Agreement For CateringPersonnel,i.e.,theCBA,thatwaseffectivefromJanuary1,2010
until December 31, 2010.30 Since respondent's injury on board the vessel "Star Princess" that caused his
eventual repatriation was sustained on April 27, 2010, or during theeffectivityoftheCBA,hisclaimforthe
payment of permanent total disability compensation shall be governed by Article 12 (2) of the CBA which
provides:
2.Disability:
cralawlawlibrary
ChanRoblesvirtualLawlibrary
A Seafarer who suffers injury as a result of an accident from any cause whatsoever whilst in the
employment of the Owners/Company, regardlessoffault,includingaccidentsoccurringwhilsttravelingtoor
from the Ship and whose ability to work is reduced as a result thereof, shall in addition to his sickpay,be
entitledtocompensationaccordingtotheprovisionsofthisAgreement.
The compensation which the Owner/Company, Manager, Manning Agent, and any other legal entity
substantially connected with the vessel shall be jointly and severally liable to pay shall be calculated by
reference to an agreed medicalreport,withtheOwners/CompanyandtheSeafarerbothabletocommission
their own and when there is disagreement the parties to this Agreement shall appointathirddoctorwhose
findings shall be binding on allparties.TheaforesaidmedicalreportdeterminestheDegreeofDisabilityand
thetablebelowtheRateofCompensation.
xxxx
Regardless of the degree of disability an injury or illness which results in loss of profession will entitle the
Seafarer to the full amount of compensation, USD eightythousand (80,000) for Ratings (Group B, C & D)
and USD onehundredandtwentythousand (120,000) for Officers (Group A). For the purposes of this
Article, loss of profession means when the physical condition of the Seafarer prevents a return to sea
service, under applicable national and international standards and/or when it is otherwise clear that the
Seafarer's condition will adversely prevent the Seafarer's future of comparable employment on board
ships.31
Based ontheaforecitedprovision,aseafarershallbeentitledtothepaymentofthefullamountofdisability
compensation only if his injury, regardless of thedegreeofdisability,resultsinlossofprofession,
i.e., his physical condition prevents a return to sea service. Based on the submissions of the parties, this
contractual attribution refers to permanent total disability compensation as known in labor law. Thus, the
Courtexaminesthepresenceofsuchdisabilityinthiscase.
Preliminarily, the task of assessing the seaman's disability or fitness to work is entrusted to the
companydesignatedphysician.Section20(B)(3)ofthe2000POEASECstates:
SECTION20.COMPENSATIONANDBENEFITS
xxxx
B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS The liabilities of the employer when the
seafarersuffersworkrelatedinjuryorillnessduringthetermofhiscontractareasfollows:
cralawlawlibrary
xxxx
3. Upon signoff from the vessel for medical treatment, the seafarer is entitled to sickness allowance
equivalent to his basic wage until he is declared fit to work or the degree of permanentdisabilityhasbeen
assessed by the companydesignated physician but in no case shall this period exceedonehundredtwenty
(120)days.
For this purpose,theseafarershallsubmithimselftoapostemploymentmedicalexaminationby

a companydesignated physician within three working days upon his return except when he is
physically incapacitated to do so, in which case, a written notice to the agency within the same
period is deemed as compliance. Failure of the seafarer to comply withthemandatoryreporting
requirementshallresultinhisforfeitureoftherighttoclaimtheabovebenefits.
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
andbindingonbothparties.(Emphasessupplied)
Under the Labor Code, there are three kinds of disability, namely: (1) temporary total disability (2)
permanent total disability and (3) permanent partial disability. Section 2, Rule VII of the AREC
differentiatesthedisabilitiesasfollows:
SEC. 2. Disability (a) A total disability is temporary if as a resultoftheinjuryorsicknesstheemployeeis
unable to perform any gainful occupation for a continuous period not exceeding 120 days, except as
otherwiseprovidedinRuleXoftheseRules.
(b) A disability is total and permanent if as a result of the injury or sickness the employee is
unable to perform any gainful occupation for a continuous period exceeding120days,exceptas
otherwiseprovidedforinRuleXoftheseRules.
(c) A disability is partial and permanent if as a result of the injury or sickness the employee suffers a
permanentpartiallossoftheuseofanypartofhisbody.(E
mphasissupplied)
In this case, despite the finding of fitness to work by the companydesignated physicians, the CA declared
respondent entitled to permanent total disability benefits for failure of the formertodeclarethelatterfitto
work within the120dayperiodprovidedunderSection20(B)(3)ofthe2000POEASEC,citingtherulingin
the cases of Valenzona v. Fair Shipping Corporation32 (Valenzona) and Maersk Filipinas Crewing, Inc. v.
Mesina33 (Maersk Filipinas Crewing, Inc.) that declared a seafarer permanently disabled if it lasts
continuously for more than 120 days. Both ValenzonaandMaerskFilipinasCrewing,Inc.stemmedfromthe
ruling in Crystal Shipping, Inc. v. Natividad34 that characterized permanent disability as the inability of a
worker to perform his job for morethan120days,regardlessofwhetherornothelosestheuseofanypart
ofhisbody.
cralawlawlibrary
However, recent jurisprudence now holds that the said 120dayruleisnotamagicwandthatautomatically

warrants the grant of total and permanent disability benefits in his favor.35 As clarified by the Court in the
latercaseofV
ergarav.HammoniaMaritimeServices,Inc.:36
[T]he petitioner has repeatedly invoked our ruling in Crystal Shipping, Inc. v. Natividad, apparently for its
statement that the respondent in the case "was unable to perform his customary work for more than 120
days which constitutes permanent total disability." This declaration of a permanent total disabilityafterthe
initial 120 days of temporary total disability cannot, however, be simply liftedandappliedasageneralrule
for all cases in all contexts. The specific context of the application should be considered, as we must do in
theapplicationofallrulingsandevenofthelawandoftheimplementingregulations.
Elucidating on this point, Vergara discussed the seeming conflict between Section 20 (B) (3) of the 2000
POEASEC and Article 192 (c) (1)37 of the Labor Code on permanent total disability in relation to Section
2(a),RuleX38
oftheARECthatprovidedfora240dayperiodincaseoffurthermedicaltreatment,thus:
As these provisions operate, the seafarer, upon signoff from his vessel, must report to the
companydesignated physician within three (3) days from arrival for diagnosis and treatment. For the
duration of the treatment but in no case to exceed120days,theseamanisontemporarytotaldisabilityas
he is totally unable to work. He receives his basic wage during this perioduntilheisdeclaredfittoworkor
his temporary disability is acknowledged by the company to be permanent,eitherpartiallyortotally,ashis
condition isdefinedunderthePOEAStandardEmploymentContractandbyapplicablePhilippinelaws.Ifthe
120 days initial period is exceeded and no such declaration is made because the seafarer
requires further medicalattention,thenthetemporarytotaldisabilityperiodmaybeextendedup
to a maximum of 240 days, subjecttotherightoftheemployertodeclarewithinthisperiodthat
a permanent partialortotaldisabilityalreadyexists.Theseamanmayofcoursealsobedeclaredfitto
work at any time such declaration is justified by his medical condition.39(Emphasis and underscoring
supplied)
Thus, temporary total disability only becomes permanent when so declared by the companydesignated
physician within the periods he is allowed to do so, or upon the expiration of the maximum 240day
medical treatment period without a declaration of either fitness to work or the existence of a
permanentdisability.40
cralawlawlibrary
cralawrednad
In this relation, the Court, in the recent case ofC.F.SharpCrewManagement,Inc.v.Taok,41

laiddownthe
instances when a seafarer maybeallowedtopursueanactionfortotalandpermanentdisabilitybenefits,to
wit:
(a)
the companydesignated physician failed to issue a declaration as to his fitness to engage in sea
duty or disability even after the lapseofthe120dayperiodandthereisnoindicationthatfurther
medical treatment would address his temporary total disability, hence, justify anextensionofthe
periodto240days
(b)
240dayshadlapsedwithoutanycertificationbeingissuedbythecompanydesignatedphysician
(c)
the companydesignated physician declared that he is fit for sea duty within the 120day or
240day period, as the case may be, but his physician of choice and the doctor chosen under
Section20B(3)ofthePOEASECareofacontraryopinion
(d)
the companydesignated physician acknowledged that he is partially permanently disabled but

other doctors who he consulted, on his own and jointly with his employer, believed that his
disabilityisnotonlypermanentbuttotalaswell
(e)
the companydesignated physician recognized that he is totally and permanently disabled but
thereisadisputeonthedisabilitygrading
(f)
the companydesignated physician determined that his medical condition is not compensable or
workrelated under the POEASEC but his doctorofchoice and the third doctor selected under
Section20B(3)ofthePOEASECfoundotherwiseanddeclaredhimunfittowork
(g)
the companydesignated physician declared him totally and permanently disabled but the
employerrefusestopayhimthecorrespondingbenefitsand
(h)
the companydesignated physician declared him partially and permanently disabled within the
120day or 240day period but he remains incapacitated to performhisusualseadutiesafterthe
lapseofthesaidperiods.42
Noneoftheforegoingcircumstances,however,attendinthiscase.
Records show that from the time respondent was medically repatriated onMay9,2010uptothetimethe
company designated physicians declared him fit to resume work during his last followup consultation on
September 15, 2010, a period of 130 days had lapsed. Concededly, said period exceeded the 120day
period under Paragraph 3, Section 20 (B) of the 2000 POEASEC and Article 192 of the Labor Code.
However, respondent'sinjuryrequiredfurtherphysicaltherapy/rehabilitation.Therefore,despitethelapseof
the120dayperiod,respondentwasstillconsideredtobeunderastateoftemporarytotaldisability,andthe
companydesignated physician, following the Vergara case, has a period of 240 days from the time the
former suffered his injury within which to make a finding on his fitness for further sea duties or degree of
disability.
Considering that the companydesignated physicians declared respondent fit to work on September 15,
2010, or well within the 240day period, respondent cannot be said to have acquired a cause of action for
permanent total disability benefits. Consequently, the CA ruled outside of legal contemplation when it
awarded permanent total disability benefits to the respondent based solely on the 120day rule and thus,
committed a reversible error in holding that the NLRC gravely abused its discretion as its findings are fully
supportedbysubstantialevidenceandwithinthepurviewofthelaw.
Note that while respondent has the right to seek the opinion of other doctors under Section 20 (B) of the
POEASEC and the CBA, it bears stressing that the employer isliableforaseafarer'sdisability,arisingfrom
a workrelated injury or illness, only after the degree of disability has been established by the
companydesignatedphysicianand,iftheseafarerconsultedwithaphysicianofhischoicewhose
assessment disagrees with that of the companydesignatedphysician,thedisagreementmustbe
referred to a third doctor for a final assessment.43
No such mandated third doctor was, however,
consultedtosettletheconflictingfindingsofthecompanydesignatedphysicians(Dr.LimandDr.Chuasuan)
andtherespondent'sowndoctor(Dr.Jacinto).Tothis,PhilippineHammoniaShipAgency,Inc.v.Dumadag44
holds:
The POEASEC and theCBAgoverntheemploymentrelationshipbetweenDumadagandthepetitioners.The
two instruments are the law between them. They are bound by their terms and conditions, particularly in
relation to this case, the mechanism prescribed to determine liability for a disability benefits claim. x x x
Durnadag, however, pursued his claim without observing thelaidoutprocedure.Heconsultedphysiciansof
his choice regarding his disability after Dr. Dacanay, the companydesignated physician, issued her
cralawlawlibrary
fittowork certification for him. There is nothing inherently wrong with the consultations as the POEASEC
andtheCBAallowhimtoseekasecondopinion.Theproblemaroseonlywhenhepreemptedthemandated
procedure by filing a complaint for permanent disability compensation on the strength of his chosen
physicians'opinions,withoutreferringtheconflictingopinionstoathirddoctorforfinaldetermination.
The filing of the complaint constituted a breach of Dumadag's contractual obligationtohavethe

conflicting assessments of his disability referred to a third doctor for a binding opinion. x x x
Thus, the complaint should have been dismissed, for without a binding third opinion, the
fittowork certification of the companydesignated physician stands, pursuant to the POEASEC
andtheCBA.45(Emphasissupplied.)
Besides,thefindingsofDr.LimandDr.ChuasuanshouldprevailoverthatofDr.Jacintoconsideringthatthe
former examined, diagnosed, and treated respondent from his repatriation on May 9, 2010 until he was
assessed fit to work on September 15, 2010 whereas, it appears that the independent physician, Dr.
Jacinto, only examined respondent on October 13, 201046 which was the same daythelatterfiledhisclaim
for permanent total disability benefits.47 While the medical certificate indicates that respondent was under
Dr. Jacinto's service beginning "September 2010," no supportingdocumentonrecordshowsthistobetrue.
In fact, the NLRC even observed that the medical certificate of Dr. Jacinto was issued after a onetime
examination and worse, without any medical support.48 Case law dictates that, under these circumstances,
the assessment of the companydesignated physician should be given more credence for having been
arrived at after months of medical attendance and diagnosis, compared with the assessment of a private
physiciandoneinonedayonthebasisofanexaminationorexistingmedicalrecords.49
cralawrednad
Finally, as the NLRC aptly pointed out, respondent even signed the certification of fitness to work, which
thus operates as an admission in petitioners' favor.50 The burden of proof to show that his consent was
vitiated in signing said certification befalls upon respondent a burden the latter, however, failed to
discharge.
In fine, absent a showing that respondent is entitled to the full disability compensation under the CBA as
aforediscussed, the Court finds that the NLRC did not commit grave abuse of discretion in dismissing
respondent'scomplaint.TheCArulingshouldthereforebereversed.
WHEREFORE, the petition is GRANTED. The Decision dated October 25, 2013 and the Resolution dated
April 7, 2014 of the Court of Appeals in CAG.R. SP No. 126368 are hereby REVERSED and SET ASIDE.
The complaint ofRomeoV.Panogalinog,docketedasNLRCRABNo.NCRCaseNo.(M)NCR101469010,is
DISMISSEDforlackofmerit.
SOORDERED.
FIRSTDIVISION
G.R.No.215555,July29,2015
CENTRALAZUCARERADEBAIS,INC.ANDANTONIOSTEVENL.CHAN,P
etitioners,v
.J
ANETT.
SIASON,R
espondent.
DECISION
PERLASBERNABE,J
.:
Assailed in this petition for review on certiorari1aretheDecision2datedMarch14,2014andtheResolution3
dated November 25, 2014 of the Court of Appeals (CA) in CAG.R. SP No. 130708, which affirmed the
Decision4 dated December 26,2012andtheResolution5datedApril30,2013oftheNationalLaborRelations
Commission (NLRC) in NLRC LAC No. 0700199812 declaring respondent Janet T. Siason (Siason)tohave
been constructively dismissed by petitioners Central Azucarera de Bais, Inc. (CABI) and Antonio Steven L.
Chan(Chan),theincumbentpresidentofCABI(collectively,petitioners).
TheFacts
The instant case stemmed from a complaint for illegal dismissal, nonpayment of wages, separation pay,
service incentive leave pay, retirement benefits, emergency cost of living allowance, with damages and
attorney's fees filed by Siason against petitioners before the NLRC, docketed as NLRCNCRCASE No.
111704311.6
redarclaw
Siason alleged that sometime in July 1988, petitioners hired her as a Purchasing Assistant,andeventually,
promoted her to the position of Purchasing Officer.7 On October 3, 2011, Chan confronted her on the
propriety of the delivery of a machine part via air freight in lieu of a previously approved sea freight. She
responded by explaining to Chan that such delivery benefited the company, but the latter considered the
same as a "big infraction of the rules and regulations of [CABI]."8 Later that day, Siason received a letter9
signed by Chan informing her that she had been committing various purchasing policy violations over the
past 12 months which are very unfavorable to CABI, and thatthemanagementcouldnolongertumablind
eye on such violations as such, she should tender her immediate resignation from CABI, "rather than[to]
force [his] hand."10 On October 4,2011,Siasonreceivedanotherletter,11thistimefromCABI'slegalofficer,
Atty. Suzette A. NerTiangco (Atty. NerTiangco), following up the former's action regarding Chan's letter.
Consequently, Siason wrote a resignation letter,12 stating that she was tendering her resignation because
Chan told her to do so. However, petitioners refused to accept the same,13thus,Siasonwasconstrainedto
draft another resignation letter14 which was acceptable to petitioners. On November 14, 2011, Siason filed
the instant complaint against petitioners alleging that Chan forced her toresignasshownbyhisOctober3,
2011letter.15
redarclaw
In their defense,16 petitioners claimed that Siason was not constructively dismissed since she voluntarily
resigned from CABI.17 They explained that CABI's accounting department audited the purchases made by
Siason and discovered irregularities in the procurement of several supplies, such as when she increased
price quotations without the approval of CABIorofthesupplierconcerned.18Theythenaverredthatinview
of her long tenure inCABIandcloserelationshipwithChan,shewasgiventheoptionofresigninginsteadof
facing an administrative investigation which would eventually result in her termination.19 Lastly, they
asserted that Siason shredded all company documentsinherpossessionandmadeunauthorizeddeletionof
filesstoredinherofficeissuedcomputerinordertocoverhermisdeeds.20
redarclaw
TheLARuling
In a Decision21 dated May 24, 2012, the Labor Arbiter (LA) dismissed Siason's complaint for lack of merit.
Nevertheless, Siason was awarded separation payequivalenttoone(1)monthpayforeveryyearofservice
intheamountofP923,210.00intheinterestofequityandcompassion.22
redarclaw
In ruling for petitioners, the LA found that petitioners did not constructivelydismissSiason,sincethelatter
voluntarily resigned from her job. In this relation, the LA opined that if Siason really had no intention to
resign, no amount of persuasion or instruction shall suffice to compel her to tender her resignation.23 Her
voluntary resignation notwithstanding, the LA optedtoawardseparationpayinSiason'sfavorinviewofher
long tenure in CABI as well as her humility, respect, and obedience to the instruction ofhersuperiorwhen
shewasaskedtoresign.24
redarclaw
Dissatisfied,bothpartiesappealed25totheNLRC.Specifically,petitionersquestionedtheawardofseparation
payinSiason'sfavor,whilethelatterassailedthefindingthatshevoluntarilyresigned.26
redarclaw
TheNLRCRuling
In a Decision27 dated December 26, 2012, the NLRC reversed the LA ruling and held that petitioners
constructivelydismissedSiason.
Accordingly, it ordered petitioners to pay Siason the aggregate amount of P1,736,041.95 representing
backwages,separationpay,andattorney'sfees.28
redarclaw
Contrary to the LA's findings, the NLRC found that Chan coerced Siason to resign, asmaybegleanedfrom
his October 3, 2011letteraddressedtothelatter.Further,theNLRCpointedoutthatpetitioners'disposition
to force Siason into resignation became more evident when taken in conjunction with Atty. NerTiangco's
October4,2011letterpressuringSiasontotenderherimmediateresignation.29
redarclaw
Petitioners moved for reconsideration30 which was, however, denied in a Resolution31 dated April 30, 2013.
Aggrieved,theyelevatedthecasetotheCAviapetitionforc
ertiorari.32
redarclaw
TheCARuling
In aDecision33datedMarch14,2014,theCAaffirmedtheNLRCruling.Itheldthatpetitionersconstructively
dismissed Siason, considering that the latter would not have resigned from her job had it not been for the
pressure exerted by Chan on her.34 The CA added that Siason's filing of a complaint for constructive
dismissalrightafterherseverancefromofficenegatedthevoluntarinessofherresignation.35
redarclaw
Petitioners moved for reconsideration, which was, however, denied in a Resolution dated November 25,
2014hence,thispetition.
The issue for the Court's resolution is whether or not the CA correctly affirmed the NLRC ruling finding
Siasontohavebeenconstructivelydismissedbypetitioners.
Essentially, petitioners contend that there is no constructive dismissal to speak of, given that they merely
afforded Siason the option to have a "graceful exit" by tendering her resignation instead of facing
administrative investigation and eventual sanctions for the irregularities she committed regarding the
purchase of supplies.38 For her part, Siason maintains that petitioners forced her to resign from CABI, and
thus,shewasconstructivelydismissed.39
36
37
redarclaw
TheCourt'sRuling
Theappealismeritorious.
Resignation is the formal pronouncement or relinquishment of a position or office. It isthevoluntaryactof

an employee who is in a situation where he believes that personal reasons cannot be sacrificed in favor of
the exigency of the service, and he has then no other choice but todisassociatehimselffromemployment.
The intent to relinquish must concur with the overt act of relinquishment hence, the acts oftheemployee
before and after the alleged resignation must be considered in determining whether he in fact intended to
terminate his employment. In illegal dismissal cases, it is a fundamental rule that when an employer
interposes the defense of resignation, on him necessarily rests the burden to prove that the employee
indeedvoluntarilyresigned.40
redarclaw
In contrast, constructive dismissal existswherethereiscessationofworkbecausecontinuedemploymentis

rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in
pay and other benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to
appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could
foreclose any choice by him except to forego his continued employment.41 It must benoted,however,that
bare allegations of constructive dismissal, when uncorroborated by theevidenceonrecord,cannotbegiven
credence.42
redarclaw
Guided bytheforegoingconsiderations,theCourtfindsthattheCAerredinaffirmingtheNLRCruling,which
foundSiasontohavebeenconstructivelydismissedbypetitioners.
A judicious review of the records reveals that CABI's accounting department indeed made an audit of the
purchases made by the company through its Purchasing Officer, Siason. This resulted in the discoveryofa
number of questionable discrepanciesinseveralpurchasingtransactionsundertakenbySiason,consistingin
different price quotations for identical items contained in various purchase documents prepared by Siason
herself.43
redarclaw
Taking into considerationSiason'slongtenureatCABI,aswellashercloserelationshipwithChan,thelatter

sent her the October 3, 2011 letter asking her to resign "ratherthan[to]force[his]hand"44whichshould
be construed as Chan telling Siason to resign or be faced with an administrative complaint. On October 4,
2011, Atty. NerTiangco sentSiasonanotherletter,essentiallyconfirmingifthelatterwasgoingtoresignor

if she is subjecting herself to an administrative investigation. Ultimately, Siason chose to tender her
resignationtosaveherselffromthetroubleofbesmirchingheremploymentrecord.
The foregoing facts belie Siason's argument that petitioners constructively dismissed her. These
circumstancesshowthatshewasgiventheoptiontovoluntarilyresignfromCABI,insteadofdealingwithan
investigation which might result inherdismissal.Verily,Chan'sdecisiontogiveSiasonagracefulexitrather
than to file an action for redress is perfectly within the discretionoftheformerasitisnotuncommonthat
an employee is permitted to resigntoavoidthehumiliationandembarrassmentofbeingterminatedforjust
cause after the exposure of her malfeasance.45 It is settled that there is nothing reprehensible or illegal
when the employer grants the employee a chance to resign and save face rather than smear the latter's
employmentrecord,46asinthiscase.
In sum, petitioners didnotconstructivelydismissSiasonbutrather,thelattervoluntarilyresignedfromher

job in ordertoavoidafullblownadministrativetrialregardinghermisdeedswhichcouldpotentiallyresultin
her termination for just cause. While it may be saidthatshedidnottenderherresignationwholeheartedly,
circumstances of her own making did not give her any other option but tovoluntarilydoso.47Therefore,in
view of her voluntary resignation from CABI, she isnotentitledtoanyseparationpayintheabsenceofany
agreementwithpetitionersprovidingforsuch.48
redarclaw
WHEREFORE, the petition is GRANTED. The Decision dated March 14, 2014 and the Resolution dated
November 25, 2014 of the Court ofAppeals(CA)inCAG.R.SPNo.130708areherebyREVERSEDandSET
ASIDE. Accordingly the Decision dated May 24, 2012 of the Labor Arbiter in NLRCNCRCASE No.
111704311isR
EINSTATEDwithM
ODIFICATIONinthattheawardofseparationpayisDELETED.
SOORDERED.
SECONDDIVISION
G.R.No.201494,July29,2015
MARITESR.CUSAP,P
etitioner,v
.A
DIDASPHILIPPINES,INC.,(ADIDAS),PROMOTIONRESOURCES
&INTERMARKETINGEXPONENTS,INC.(PRIME)ANDJCATHLETES,INC.(JCA),R
espondents.
DECISION
BRION,J
.:
We resolve petitioner Marites R. Cusap's appeal1 from theSeptember21,2011decision2andFebruary20,
2012resolution3oftheCourtofAppealsinCAG.R.SPNo.104725.
TheAntecedents
On January 21, 2003, the petitioner and 27 other employees (complainants) filed a complaint for illegal
dismissal4 against the respondents Adidas Philippines Inc. (Adidas) and Promotion Resources
InterMarketing Exponents, Inc. (PRIME). The complainants later amended the complaint to include JC
Athletes, Inc. (JCA), as a respondent.5 They prayed for reinstatement with back wages, separation pay
(shouldreinstatementbenolongerfeasible),13thmonthpay,serviceincentiveleavepay,anddamages.
Through their "Magkasanib na Sinumpaang Salaysay,"6 the complainants alleged that they were regular
employees of Adidas after having worked as promo girls and stockmen at the company's various rented
outlets for years, ranging from one year to seven years the earliest employed (June 1, 1995) was Nova
Toque while the latest was Aquilino Banaag (September 21,2000).ThepetitionerwashiredonOctober28,
1995.7
The record shows that Adidas is engaged in the manufacture and marketing of different lines of shoesand
other sporting goods and apparel in the Philippines.8 After its contract with its former distributor, World
Sports, Inc. (WOSI) allegedly expired, it contracted9 JCA to be its exclusive distributor nationwide for one
year or fromJanuary1,2002toDecember31,2002.Inturn,JCAenteredintoaPromotionalContract10with
PRIME to meet the promotional requirements in the distribution of Adidas products. PRIME supposedly
assignedthecomplainantstoJCAforthepurpose.
The complainants claimed that they were dismissed from employment on December 9, 2002, when the
service contractbetweenPRIMEandJCAwasterminated.Thisnotwithstanding,theyarguedthatAdidaswas
theirrealemployer,notPRIMEwhich,theybelieved,wasmerelyarecruitmentagencysupplyingAdidaswith
manpower. PRIME was being used, they further claimed, to conceal the actual employment relationship
betweenthemandAdidas.
They pointed out that for theyearsthattheywereemployed,theyworkedforAdidas,underthesupervision

and control of Adidas and JCA personnel. They stressed that their work was related to and in pursuit of
Adidas' principal business activity (the marketing of its products), thereby making them regularemployees
ofthecompany.ThiswastheirreasonfordemandingtheirregularizationbyAdidas.
Further, thecomplainantsmaintainedthatJCAwasamerealteregoofAdidasandwasbeingusedtofurther
muddletheemploymentrelationshipbetweenthemandAdidas.JCA'sactualroleasadummy(togetherwith
PRIME) for Adidas, the complainants explained, wasevidencedbythefactthatJCAandAdidasoccupiedthe
sameoffice.JCAtooktheplaceofWOSIasdistributorofAdidasproducts.
Elaborating on their "muddled" employment status in relation with Adidas, the complainants bewailed that
JCAwaserroneouslyidentifiedas"distributor"ofAdidasproductsasnoevidenceshowedthatJCApurchased
the Adidas products they were selling.11 Under their supposedDistributionAgreement,the"Distributorshall
purchase the Products only from Adidas or any other sources expressly designated by Adidas and sell the
Productsinitsownnameandforitsownaccountxxx."12
The complainants asserted that the products they weresellingatvariousoutletsremainedthepropertyand

under the control of Adidas it was Adidas that provided the warehouse where the products were stored,
that leased the outlets from department stores, and that provided regular training to them.13Also, the
proceeds of the sales were directly deposited to the bank account of Adidas. Moreover, their salaries and
other monetary benefits supposedly paid by PRIME were charged to the account of Adidas, as indicated in
their payslips.14 They argued that if JCA purchased the products being sold and were already its property,
therewasnopointtostillchargecomplainants'wagesandbenefitstotheAdidas'account.
These circumstances, complainants stressed, confirmed their position that JCA and PRIME were only
intermediariesofAdidasandwereusedtoconcealAdidas'identityastheirrealemployer.
To substantiate their assertion that PRIME was justanintermediaryofAdidas,theysubmitteddocumentary

proof that it was not even a registered corporation, labor recruiter, or agency when it supposedly entered
into a contract with JCA neither with theSecuritiesandExchangeCommission15norwiththeDepartmentof
Trade and Industry.16 It was registered as a "job contractor/subcontractor" only on May 20, 2002.17 They
thus maintained that PRIME wasjustalaboronlycontractoratthetimeitclaimedithademployedthemfor
itssupposedundertakingwithJCA.
In defense, Adidas argued that in 2002, it amended its Articles of Incorporation18 to enableitto
engage in the retail business without the need to contract the services of distributors such as
JCA, following the approval by the Board of Investments of the application of its mother company, Adidas
Solomon AG, to operate as a foreign retailer in the country. As a consequence, it no longer renewed its
DistributionAgreementwithJCAwhenitexpiredonDecember31,2002.
Necessarily, it maintained,thePromotionContractbetweenJCAandPRIMEwasalsoterminated,resultingin
the complainants' dismissal. However, for purposes of proper inventory, accounting and turnover of
products,itagreedwithJCAforaholdoverperiodofthreemonthsendingMarch31,2003.
Also, Adidas turned down the complainants' demand for regularizationastheywereemployeesofPRIME.It

claimed it was PRIME who exercised control over their work at most, the supervision it exercisedoverthe
complainants was only toprovidethemguidelinesinaidoftheirmarketingwork.Itaddedthatneithercould
itsatisfytheirmoneyclaimsbecausetheywerelegallydismissedwhentheircontractswithPRIMEexpired.
For its part, JCA prayed for the dismissal of the complaint as far as it was concerned in view of what it
claimed its valid job contract with PRIME, the complainants' employer. It averred that it was PRIME who
exercised the power to select, engage, and dismiss the complainants, and who assumed the obligation to
pay their wages. To bolster its position, JCA presented quitclaim and release papers executed by some
employeesinfavorofPRIME.19
JCAaddedthatwhateverliabilityithadwiththecomplainantswaslimitedtosatisfyingtheirunpaidwagesto
the extent of the work performed under its Promotion Contract with PRIME. However, PRIME'S paymentof
itsmonetaryobligationstothecomplainantsextinguisheditsliabilitytowardsthem.
As its corespondents did, PRIME denied liability, contending that it hired the complainants as contractual
employees for its project with JCA to promote Adidas products. It maintained that their employment was
terminated when its contract with JCA expired and was not renewed. Thus, the petitioner and the other
complainants were not illegally dismissed and were notthereforeentitledtoreinstatementandbackwages.
On the issue of its legal personality as an independent contractor, it submitted certificates of registration
fromtheDTI,20DOLE,21andSEC22toestablishthatithadbeeninoperationearlierthanMay20,2002.
TheRulingsonCompulsoryArbitration
In a decision23 dated February 23, 2004,LaborArbiter(LA)EliasH.Salinasdismissedthecomplaintforlack

of merit, holdingthatPRIMEwasthecomplainants'employerasitwasPRIMEwhohiredthemtoworkunder
its Promotions Contract with JCA. LA Salinas found the complainants' dismissal valid in view of the
terminationandnonrenewalofthecontract.
LA Salinas denied the complainants' money claims, finding that PRIME had shown that it paid their 13th
month payandserviceincentiveleavepay.However,forreasonsofequityandhumanitarianconsiderations,
LA Salinas awarded the petitioner and the complainants financial assistance of onehalf month's salary for
everyyearofservice.
The petitioner and 15 of the othercomplainantsappealed.The15howevermovedtowithdrawtheirappeal,

which the NationalLaborRelationsCommission(NLRC)grantedinitsdecision24ofJanuary23,2008,leaving
only the petitioner to pursue the case. Eventually, NLRC denied the appeal. It also denied the petitioner's
motion forreconsideration,promptinghertoseekrecoursefromtheCAthroughapetitionforcertiorari.She
chargedtheNLRCwithgraveabuseofdiscretioninrejectingherappealandmotionforreconsiderationasit
was,shelamented,contrarytolawandjurisprudence.
TheCADecision
Before the CA, thepetitionerreiteratedherpositionincompulsoryarbitrationthatAdidaswasheremployer,

not JCA or PRIME, since the two entities were mere dummies/intermediariesorwerelaboronlycontractors
of Adidas. She insisted that JCA and PRIME carried out under their respective contracts Adidas'
merchandising activities using Adidas' premises and equipment with PRIME'S purportedemployeesworking
underthesupervisionandcontrolofAdidas'personnel.
The CA 10th Division denied the petition in its September 21, 201125 decision and affirmed the assailed
NLRC rulings as they were not rendered with grave abuse of discretion. It held that the rulings were
supported by evidence establishing PRIME to be a "legitimate job contractor" as it possessed substantial
capital to finance its promotions undertaking with JCA. The evidence, the CA explained, consisted of
remittances to Philhealth, SSS and Pagibig26 which showed that PRIME fulfilled its obligations toward its
employeesunderthegovernment'swelfareprograms.
Applying the fourfold employeremployee relationship test,27 the CA found PRIME to be the complainants'
andthepetitioner'semployerasitwasPRIMEwhich(1)hiredthecomplainants28(2)paidtheirwages29(3)
dismissedthemupontheexpirationofthecontractforwhichtheywerehiredand(4)exercisedcontrolover
themwithrespecttotheconductoftheworktobeperformed.30
Consequently, the CA brushed aside the random certificates of attendance in Adidas seminars31 of some of
the complainants to prove that Adidas was their employer, agreeingwithNLRCfindingthatthe"certificates
only establish the fact that complainants attended the seminarsforproductknowledge,servicequality,and
retailservice."32
The petitioner moved for reconsideration of the CA decision, to no avail, as the CAdeniedthemotioninits
February20,2012resolution.33
ThePetition
The petitioner now asks this Court to reverse the CA rulings, contending that the appeals court seriously
erred and gravely abused its discretion when itheldthatshewasanemployeeofPRIME,notofAdidas,and
wasvalidlydismissed,contrarytolawandapplicablejurisprudence.
Before the Court, the petitioner reiterates the argumentsshepresentedtotheCA,particularlythefollowing

factualnarration:
chanRoblesvirtualLawlibrary
1.
SheappliedatAdidasinitsformeraddressatEstrata200,EmeraldAvenue,OrtigasCenterCity.
AftertheinterviewsmadebyMs.CorneliaIndon(HeadConcession,WorldofSportsInc.)andMr.
EnriqueVictoria(AdidasSalesManager),theyorderedhertoproceedtotheofficeofPRIMEand
fromthereshewasgivenaletterofintroduction("introletter")addressedtotheoutletwhereshe
wasassigned.
2.
3.
4. ShewasassignedtodifferentAdidasoutletsandshe,togetherwithhercoemployees,were
supervisedbyAdidasmanagersandsupervisorsCorneliaIndon,SonnyNiebres(ManagingDirector)
andPhilipGo(President).ItwasnotPRIMEwhosupervisedthemneitherwasitJCA.
5.
6.
7. ThesalesintheoutletsweredepositeddirectlytothebankaccountofAdidasandnottoJCAor
PRIMEbankaccounts.
8.
9.
10. Theproductsbeingsoldandthetoolssheusedintheperformanceofherdutywereownedby
Adidas.Adidaswasalsotheonethatpaidtherentsinthestoreswhereithasconcessions.
11.
12.
13. ShecontinuedtoworkindifferentAdidasoutletsformorethansevenyears.
14.
The petitioner submits that Adidas, JCA and PRIME failed to refute the above narration or to present any
evidence to the contrary. Citing Lakas sa Industriya ng Kapatirang Haligi ng AlyansaPinagbuklod ng
Manggawang Promo ng Burlingamev.BurlingameCorporation,34
shearguesthataspromogirl,herworkis
directly related to Adidas' principal business or operations, which makes her a regular employee of the
company.
On the other hand, she points out, JCA and PRIME did not carry on an independent business or undertook
theperformanceoftheirservicecontractsaccordingtotheirownmannerandmethods,freefromthecontrol
andsupervisionoftheprincipalAdidas.Thetwoentities,sheinsists,weremerelaboronlycontractors.
It is thus clear, the petitioner submits, that an employeremployee relationship existed between her and
Adidas. Accordingly, she prays that: (1) she be declared a regular employee of Adidas (2) Adidas be
ordered (a) to reinstate her with full back wages or to pay her back wages and separation pay if
reinstatement is no longer feasible (b) to grant her moral and exemplary damages, plus attorney's fees
and(3)JCAandPRIMEbedeclaredjointlyandsolidarityliablewithAdidasforallherothermoneyclaims.
TheCasefortheRespondents
In its Comment35 filed on June7,2012,Adidasasksforthedismissalofthepetition,arguingprincipallythat

the petitioner failed to present any cogent reason to reverse the CAfactualconclusionsupholdingthelabor
tribunals'rulingthatthepetitionerwasanemployeeofPRIMEandwasnotillegallydismissed.
To support its position, Adidas submits that the arguments relied upon by the petitioner are substantially
identical with those raised in her certiorari petition with the CA,whichdonotmeritfurtherconsiderationas
theyhadalreadybeencorrectlypasseduponbytheappellatecourt.
Adidas bewails the petitioner's repeated reference to her regular employment with it and not with PRIME,
"adducing inevidenceonlyherselfservingSalaysaywhichsimplystatedherbaselessclaims."36Ontheother
hand, it was able to present proof, together with JCA and PRIME, showing that PRIME was the petitioner's
employer,itbeing,likeJCA,anindependentanddistinctbusinessentity.
The respondents JCA and PRIME opted not to comment onthepetition,despitebeingrequiredbytheCourt

todoso.37
TheCourt'sRuling
Wefindmeritinthepetitionbasedontheevidenceonrecord.
The evidence relied upon by LA Salinas, the NLRC, and the CA was insufficient to support their conclusion
that the petitioner was an employee of PRIME. On the contrary, the evidence points to Adidas as the
petitioner'sandthecomplainants'realemployer.
PRIMEisalaboronlycontractorJCAanagent/intermediaryofAdidas
One of the criteria the CA cited as a basis of its conclusion that PRIME was a legitimatejobcontractorwas
its possession of "substantial capital to finance its undertakings,"38 yet it was silent on what these
undertakings were. It merely said: "We reached this conclusion based on records whichshowedPRIMEhas
fulfilled its obligations towards its employees as regards remittances to Philhealth, theSSSandPagibig."39
The CA conclusion, to our mind, fell short of establishing that PRIME satisfied the substantialcapital
requirementforlegitimatejobcontractorsunderthelawandtherules.
Article 106 of the Labor Code provides that "There is 'laboronly' contracting where the person supplying
workers to an employer does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal business of the employer. In such cases,
the person or intermediary shall be considered merely an agent of the employer who shall be
responsible to theworkersinthesamemannerandextentasifthelatterweredirectlyemployed
byhim.(emphasissupplied)
Sec. 5. Department Order No. 1802, s. of 2002, implementing Articles 106 to 109 of the Labor
Code,prohibits laboronly contracting and defines it as "an arrangement where the contractor or
subcontractor merely recruits, supplies or places workers to perform a job, work or serviceforaprincipal,
and any of the following is present: (i) The contractor or subcontractor doesnothavesubstantialcapitalor
investment which relates to the job, work or servicetobeperformedandtheworkersrecruited,suppliedor
placed by such contractor or subcontractor are performing activities which are directly related to the
principal business of the employer or (ii) the contractor does not exercise the right to control over the
performance of the workofthecontractualemployee,xxx'substantialcapitalorinvestment'refersto
capital stocks and subscribed capitalization in the case of corporations, tools, equipment,
implements, machineries and work premises, actually and directly used by the contractor or
subcontractor in the performance or completion of the job, work or service contracted out."
(emphasissupplied)
Aside from PRIME'SremittancesofemployeecontributionstoPhilhealth,SSS,andPagibigandthepayment

for the complainants' and the petitioner's wages, we find no indication, except mostly general
statements from Adidas, PRIME and JCA, that PRIME possessed substantial capital or investment to
operateasalegitimatejobcontractororsubcontractor.
According to Adidas, not only did PRIME have substantial capital or investment to run its own business
operations independent of its clients, it also has sufficient capabilitytocontrolandsuperviseitsemployees.
Yet it offered no proof to substantiate its claim,40otherthanitsrecognitionofPRIME'Scapabilitytofulfillits
obligationstowardsitsemployees.
The same thing is true with PRIME. It likewise offered no proof of how or in what manner its purported
substantial capital financed its "promotional and intermarketing business"41 with JCA, excepttosaythatin
the pursuit of its business operations, "it has complied with all the requirements of law anent the rights,
privilegesandbenefitsofitsemployees."42
For its part, JCA relied principally on its promotional contract with PRIME to avoid liability, saying that the
terms of their service agreement demonstrate the earmarks of an employer under the fourfold
employeremployee relationship test.43 It also presented no proof of how or in what manner PRIME carried
out its undertaking under the contract although like Adidas, it acknowledged PRIME'S payment of the
petitioners'andthecomplainants'wages,andremittancestoPhilhealth,SSS,andPagibig.
While the payment of wages and workers' benefits is one of the determinants of an employeremployee
relationship, we do not find it a reliable basis in this case. Infact,acloserlookatthepayslips44ofPRIME'S
supposed employees reveals that the complainants' salaries and benefits were under the account of
Adidas,45 giving credence to their claim that their compensation was charged to Adidas. If indeed JCA and
PRIME were an independent contractor and a subcontractor, respectively, why would the name "ADIDAS"
stillappearonthepayslipsofPRIME'Semployees.
The answer lies in the fact that Adidasavoidedbeingidentifiedasthecomplainants'directemployersothat

it would nothavetobeartheconsequencesofthecomplainants'andthepetitioner'sregularization.Notably,
the records show46 that these complainants and the petitioner were engaged not only in 2002, but much
earlier some were even hired in 1995, including the petitioner, who started selling Adidas products on
October 28, 1995. In fact, LA Salinas relied on the complainants' several years of service of selling Adidas
productsinawardingfinancialassistancetothem.
Under these circumstances, we have reason to believe that PRIME, the supposed JCA subcontractor, just
assumed the act ofpayingthecomplainants'wagesandbenefitsonbehalfofAdidas,indicatingtherebythat
itwasamereagentofAdidasoralaboronlycontractor.47
In the light of the complete absence of proof that PRIME applied its "substantial capital or investment" in
performing the promotional job it contracted with JCA, we find credence in the petitioner'ssubmissionthat
the products shewassellingremainedtobethepropertyandunderthecontrolofAdidasthatitwasAdidas
who owned the warehouse where they were stored that leased the sales outlets from department stores
and that provided regular training to her and to the other complainants. The record shows that this
particularclaimbythepetitionerhadnotbeendisputedbyeitherAdidasorJCA.
Moreover, if in fact Adidas entered a distribution agreement with JCA, we wonder why the products the
petitioner and the other supposed "contractual employees" were selling were retained and remained to be
under the control of Adidas, and also, why the proceeds of the sales went into Adidas' bank account. The
answer is because JCA itself is not an independent contractor. It was merely an agent or intermediary of
Adidas, despite the distribution agreement between them which they did not even honorsince,asrequired
under Section 2.2 of the agreement,48 thedistributorshallpurchasetheAdidasproductsandselltheminits
ownnameandforitsownaccount.
Although Adidas claims that by virtue of the agreement, JCA did not purchase butratherhadinitscustody
andsafekeepingdifferentAdidasproducts,fordistributiontodifferentsalesoutletsinthecountry,49nowhere
in the record does it appear that the agreementhadbeenamendedtoallowsucharrangement.Neitherhas
it been shown how or in what manner the distributionwastobedone.Itwasnotalsoshownwhomanaged
andprovidedthestorageplacesandthesalesoutletsfortheproducts.
Again, in the absence ofevidencethatJCAhadthewherewithaltoundertakeitsdistributionagreementwith

Adidas, except to enter into a promotions contract with PRIME, we find merit in the petitioner's contention
that Adidas and JCA,atatime,heldofficeinthesameaddressandthatAdidasprovidedthestorageplaces
and the outlets forthedistributionofitsproducts,notPRIMEorJCA.Asthepetitionerpointsout,formerlyit
wasWOSIandlaterJCAwhichactedasagentofAdidas.Therecordbearsoutherobservations.
ThepetitionerperformedactivitiesnecessarytotheprincipalbusinessofAdidas
Thus, the petitioner and the complainants (who withdrew from the case) were performing activities that
were necessary tomarkettheproductsthatAdidasitselfmanufactured.Theysoldtheseproductsforseveral
years, starting in June 1995 until December 9, 2000. While Adidas explains that it amended its articles of
incorporationinOctober2002toengageinretail,itcannotbedeniedthatin1995itwasalreadyintheretail
business through its agents WOSI and JCA and laboronly contractor PRIME. Thus, the petitioner had
become an Adidas regular employee a long timebeforeshewassupposedlymadea"contractualemployee"
ofPRIME.
Adidasexercisedcontrolandsupervisionovertheperformanceofthepetitioner'swork
In the absence of evidence showing how or in what manner PRIMEcarriedoutitspromotionworkunderits

contract with JCA and how it provided the necessary requirements for such undertaking (such as the
maintenance of storage areas and engagement of sales outlets), we likewise find merit in the petitioner's
submission that itwasAdidaswhoexercisedcontrolandsupervisionoverthepetitioner'sworkperformance,
through its Sales Manager Sonny Niebres, its President Philip Go, and even Cornelia Indon, head of the
WOSIconcession.
In sum, we hold that PRIME failed to satisfythefourfoldemployeremployeerelationshiptest,50makingita

laboronly contractor under the law and the rules. Like JCA, it was merely an agent of Adidas,
notwithstanding thequitclaimsofsomeofthecomplainantsinitsfavor.Adidas,therefore,ispetitioner'sreal
employer who shall be responsible to her in the same manner and extent as if she were directly
employed by the company.51
In this light, we find the petitioner to have been illegally dismissed,
therebeingobviouslynovalidcausetoandabsentdueprocessinherdismissal.
Consequently, the petitioner is entitled under thelaw52toreinstatement,withoutlossofseniorityrightsand

other privileges, and with full back wages. Should reinstatement no longerbefeasible,sheshallbeentitled
to full back wages and separation pay at one month's pay for everyyearofservice.However,herclaimfor
other monetary benefits is denied as she failed to refute LA Salinas' rulingthatshehadbeenpaidher13th
monthpayandserviceincentiveleavepay.
Further, we find the respondentstohaveshownbadfaithinthepetitioner'sdismissalasitresultedfromthe

prohibited laboronly contracting arrangement imposed on her since October 28,1995.Thus,thepetitioner
is also entitled to damages and to attorney's fees as she was compelled to litigate to protect her rights.
Under the circumstances, we deem an award to the petitioner of P50,000.00 each in moral andexemplary
damages, plus ten percent attorney's fees reasonable, to be paid jointly and solidarity by Adidas, PRIME,
andJCA.
WHEREFORE, premises considered, the petition is GRANTED. The assailed decision and resolution of the
Court of Appeals are SET ASIDE. The respondent Adidas Philippines, Inc., is ORDERED to reinstate the
petitioner Marites R.Cusaptoherformerpositionwithoutlossofseniorityrightsandotherprivileges,andto
pay her back wages from her illegal dismissal on December 9, 2002, up to her actual reinstatement and
should reinstatement no longer be feasible, to pay her back wages and separation pay at onemonth'spay
foreveryyearofservice.
Adidas Philippines, Inc., Promotion Resources & InterMarketing Exponents, Inc., and JC Athletes Inc., are
ORDERED to pay the petitioner, jointly and solidarity, moral damages of P50,000.00, exemplary damages
ofP50,000.00and10%ofallthesumsdueunderthisDecisionasattorney'sfees.
SOORDERED.
SECONDDIVISION
G.R.No.215568,August03,2015
RICHARDN.RIVERA,P
etitioner,v
.G
ENESISTRANSPORTSERVICE,INC.ANDRIZAA.
MOISES,R
espondents.
DECISION
LEONEN,J
.:
This resolves a Petition for Review on Certiorari under Rule 45 of the 1997RulesofCivilProcedurepraying
that the July8,2014Decision1andtheNovember20,2014Resolution2oftheCourtofAppealsFifthDivision
in CAG.R. SP No. 130801 be reversed and set aside, and that new judgment be enteredfindingpetitioner
RichardN.Riveratohavebeenillegallydismissedandawardingtohimhismonetaryclaims.
The assailed July8,2014DecisionoftheCourtofAppealsdismissedthePetitionforCertiorariunderRule65

of the 1997 Rules of Civil Procedure filedbyRichardN.Rivera(Rivera)andaffirmedtheFebruary28,20133
and April 30, 20134 Resolutions of the National Labor Relations Commission Second Division. These
Resolutions sustained the ruling of Labor Arbiter Gaudencio P. Demaisip, Jr. who, in his June 26, 2012
Decision,5dismissedRivera'sComplaint6forillegaldismissal.
The assailed November 20, 2014 Resolution of the Court of Appeals denied Rivera's Motion for
Reconsideration.
Rivera wasemployedbyrespondentGenesisTransportService,Inc.(Genesis)beginningJune2002asabus
conductor, assigned to the CubaoBaler, Aurora route. As part of therequisitesforhisemployment,hewas
required to post a cash bond of P6,000.00. Respondent Riza A. Moises is Genesis' President and General
Manager.7
In his Position Paper before the Labor Arbiter, Rivera acknowledged that he was dismissed by Genesis on
accountofadiscrepancyintheamounthedeclaredonbusticketreceipts.HeallegedthatonJune10,2010,
he received a Memorandum8 giving him twentyfour (24) hours to explainwhyheshouldnotbesanctioned
for reporting and remitting the amount of P198.00 instead of the admittedly correct amount of P394.00
worth of bus ticket receipts. He responded that it was an honest mistake, which he was unable to correct
"becausethebusencounteredmechanicalproblems."9
The discrepancy between the reported and remitted amount as against the correct amount was detailed in
the"IrregularityReport"preparedbyGenesis'Inspector,ArnelVillaseran(Villaseran).10
According to Villaseran, on May 25, 2010, he conducted a "man to man" inspection on the tickets held by
the passengersonboardBusNo.8286whohadtransferredfromBusNo.1820inSanFernando,Pampanga.
(Bus No. 1820 broke down.) In the course of his inspection, he noticed that Ticket No. 723374 VA had a
written corrected amount of P394.00. However, the amount marked by perforations made on the ticket,
which was the amount originally indicated by the bus conductor,wasonlyP198.00.Uponinquiringwiththe
passenger holding the ticket, Villaseran found out that the passengerpaidP500.00toRivera,whogaveher
changeintheamountofP106.00.11
Subsequently, Villaseran conducted verification works withtheTicketSectionofGenesis'CubaoMainOffice.

Per his inquiries, the duplicate ticket surrendered by Rivera to Genesis indicated only the unconnected
amountofP198.00.ItwasalsofoundthatRiveraremittedonlyP198.00.12
On July 20, 2010, Genesis served on Rivera a written notice13 informing him that ahearingofhiscasewas
set on July 23, 2010. Despite his explanations, Rivera's services were terminated through a written notice
dated July 30, 2010.14 Contending that this termination was arbitrary and not based on just causes for
terminatingemployment,hefiledtheComplaint15forillegaldismissal,whichissubjectofthisPetition.16
For their defense, Genesis and Riza A. Moises claimedthatRivera'smisdeclarationoftheamountinthebus

ticket receipts and failure to remit the correct amount clearly violated Genesis' policies and amounted to
seriousmisconduct,fraud,andwillfulbreachoftrusttherebyjustifyinghisdismissal.17
In a Decision18 dated June 26, 2012, Labor Arbiter Gaudencio P. Demaisip gave credence to respondents'
appreciation of the gravity of Rivera's acts of misdeclaring the amount of bus ticket receipts and failing to
remitthecorrectamount.Thus,hedismissedRivera'sComplaint.
In a Resolution19 dated February 28, 2013, the National Labor Relations Commission Second Division
affirmed the Decision of Labor Arbiter Demaisip. In a Resolution20 dated April 30, 2013, the NationalLabor
RelationsCommissiondeniedRivera'sMotionforReconsideration.
Thereafter, Rivera filed a Rule 65 Petition before the Court of Appeals. In the assailed July 8, 2014
Decision,21 the Court of Appeals Fifth Division sustained the rulings of Labor Arbiter Demaisip and the
National Labor Relations Commission. In the assailedNovember20,2014Resolution,22theCourtofAppeals
deniedRivera'sMotionforReconsideration.
Hence,thisPetitionwasfiled.
For resolution is the issue of whether petitioner Richard N. Rivera's employment was terminated for just
causebyrespondentGenesisTransport,Inc.
As Riza A. Moises, Genesis' President and General Manager, has been impleaded, this court must also rule
onherpersonalliability,shouldtheterminationofpetitioner'semploymentbefoundinvalid.
chanrobleslaw
Our laws on labor, foremost of which is the Labor Code, are pieces of social legislation. They have been
adopted pursuant to the constitutional recognition of "laborasaprimarysocialeconomicforce"23andtothe
constitutional mandates for the state to "protect the rights of workers and promote their welfare"24and for
Congress to "givehighestprioritytotheenactmentofmeasuresthatprotectandenhancetherightofallthe
peopletohumandignity,[and]reducesocial,economic,andpoliticalinequalities."25
cralawred
They are means for effecting socialjustice,i.e.,the"humanizationoflawsandtheequalizationofsocialand

economic forces by the State so that justice in the rational and objectively secular conceptionmayatleast
beapproximated."26
Article XIII, Section 3 of the 1987 Constitution guaranteestherightofworkerstosecurityoftenure."One's

employment, profession, trade or calling is a 'property right,'"27 of which a worker may be deprived only
uponcompliancewithdueprocessrequirements:
It is the policy of the state to assure the right of workers to "security of tenure" (ArticleXIII,Sec.3ofthe
New Constitution, Section 9, Article II of the 1973 Constitution). The guarantee is an act of social justice.
When a person has no property, his job may possibly be his only possession or means of livelihood.
Therefore, he should be protected against anyarbitrarydeprivationofhisjob.Article280oftheLaborCode
has construed security of tenure as meaning that "the employer shall not terminate the services of an
employee except for a just cause or when authorized by" the code. Dismissal is not justified for being
arbitrary where the workers were denied due process and a clear denial of due process, or constitutional
rightmustbesafeguardedagainstatalltimes.28(Citationsomitted)
Conformably,liberalconstructionofLaborCodeprovisionsinfavorofworkersisstipulatedbyArticle4ofthe
LaborCode:
Art. 4. Constructioninfavoroflabor.Alldoubtsintheimplementationandinterpretationoftheprovisionsof
thisCode,includingitsimplementingrulesandregulations,shallberesolvedinfavoroflabor.
This case is quintessentially paradigmatic of the need for the law to be applied in order to ensure social
justice. The resolution of this case should be guided by the constitutional command for courts to take a
preferentialviewinfavoroflaborinambitiouscases.
This case revolves around an alleged discrepancy between the amountsindicatedonasingleticket.Forthe

paltry sum of P196.00 that petitioner failed to remit in his sole documented instance of apparent
misconduct,petitioner'semploymentwasterminated.Hewasdeprivedofhismeansofsubsistence.
chanrobleslaw
II
Misconduct and breach of trust are just causes for terminating employment only when attended by such
gravityaswouldleavetheemployernootherviablerecoursebuttocutoffanemployee'slivelihood.
The Labor Code recognizes serious misconduct, willful breach of trust or loss of confidence, and other
analogouscausesasjustcausesforterminationofemployment:
Article 282. Termination by employer. An employer may terminate an employment for any of thefollowing
justcauses:
(a)
Serious misconduct or willful disobedience by the employee of the lawful orders of

hisemployerorrepresentativeinconnectionwithhiswork
(b)
Grossandhabitualneglectbytheemployeeofhisduties
(c)
Fraud or willful breach by the employee of thetrustreposedinhimbyhisemployer

ordulyauthorizedrepresentative
(d)
Commission of a crime or offense by the employee against the person of his

employer or any immediate member of his family or his duly authorized
representativeand
(e)
Othercausesanalogoustotheforegoing.
SeriousmisconductasajustcauseforterminationwasdiscussedinY
abutv.ManilaElectricCo.:29
Misconductisdefinedasthe"transgressionofsomeestablishedanddefiniteruleofaction,aforbiddenact,a
dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment." For
serious misconduct to justify dismissal, the following requisites mustbepresent:(a)itmustbeserious(b)
it must relate to the performance of the employee's duties and (c) it must show that the employee has
becomeunfittocontinueworkingfortheemployer.30
(Emphasissupplied,citationomitted)
Thus, it is not enough for an employee to be found to have engaged in improper or wrongful conduct. To
justify termination of employment, misconduct must be so severe as to make it evident that no other
penaltybuttheterminationoftheemployee'slivelihoodisviable.
In PhilippinePlazaHoldingsv.Episcope,31
wediscussedtherequisitesforvaliddismissalonaccountofwillful
breachoftrust:
Among the just causes for termination is theemployer'slossoftrustandconfidenceinitsemployee.Article
296 (c) (formerly Article 282 [c]) of the Labor Code provides that an employer mayterminatetheservices
of an employee for fraud or willful breach of the trust reposed in him. But in orderforthesaidcausetobe
properly invoked, certain requirements must be complied with[,] namely[:] (1) the employee concerned
must beholdingapositionoftrustandconfidenceand(2)theremustbeanactthatwouldjustifythelossof
trustandconfidence.32
Relating to the first requisite, Philippine Plaza Holdings clarified that two (2) classes of employees are
consideredtoholdpositionsoftrust:
It is noteworthy to mention that there are two classes of positions of trust: on the one hand, there are
managerial employees whose primary duty consists of the management of the establishment inwhichthey
are employed or of a department or a subdivision thereof, and to other officers or members of the
managerial staff on the otherhand,therearefiduciaryrankandfileemployees,suchascashiers,auditors,
property custodians, or those who, in the normal exercise of their functions, regularly handle significant
amounts of money or property. These employees, though rankandfile,areroutinelychargedwiththecare
and custody oftheemployer'smoneyorproperty,andarethusclassifiedasoccupyingpositionsoftrustand
confidence.33
(E
mphasissupplied)
The position an employee holds is not the solecriterion.Moreimportantthanthisformalisticrequirementis
that loss of trust andconfidencemustbejustified.Aswithmisconductasbasisforterminatingemployment,
breach of trust demands that a degree of severity attend the employee's breach of trust. In China City
Restaurant Corporation v. National Labor Relations Commission,34
this court emphasized the need for
caution:
For loss of trust and confidence to be a valid ground for the dismissal of employees, itmustbesubstantial
andnotarbitrary,whimsical,capriciousorconcocted.
Irregularities or malpractices should not be allowed to escape the scrutiny of this Court. Solicitude for the
protection of the rights of the working class [is] of prime importance. Although this is not [al license to
disregard the rights of management, still the Court must be wary of the ploys ofmanagementtogetridof
employeesitconsidersasundesirable.35(Emphasissupplied)
III
Thesocialjusticesuppositionsunderlyinglaborlawsrequirethatthestatutorygroundsjustifyingtermination
of employment should not be read to justify the view that bus conductorsshould,inallcases,befreefrom
anykindoferror.Noteveryimproperactshouldbetakentojustifytheterminationofemployment.
Concededly, bus conductors handle money. To this extent, their work may be analogous to that of tellers,
cashiers, and other similarly situated rankandfileemployeeswhooccupypositionsoftrustandconfidence.
However, even granting that thefirstrequisiteforterminationofemploymentonaccountofwillfulbreachof
trust has been satisfied, we find it improper to sustain the validity of the termination of petitioner's
employment.
We take judicial notice of bus conductors' everyday work. Bus conductors receive, exchange, and keep
money paid by passengers by way of transportation fare. They keep track of payments and make
computationsdowntothelastcentavo,literallyontheirfeetwhileabusisintransit.
Regardless of whether a bus is driving through awkward spacesthrough steep inclines, rugged roads, or
sharp turnsor of whether a bus ispackedwithstandingpassengers,thelonesometaskofkeepingtrackof
thepassengers'paymentsfallsuponabusconductor.
Thus, while they do handle money, their circumstances are notatallthesameasthoseofregularcashiers.

They have to think quickly, literally on their feet. Regular cashiers, on the other hand, have the time and
comforttodeliberatelyandcarefullyexaminethetransactionsoftheiremployer.
However, handling passengers' fare payments is not their sole function. Bus conductors assist drivers as
they maneuver buses through tight spaces while they are in transit, depart, or park. They often act as
dispatchers inbusstopsandothersuchplaces,assistpassengersastheyembarkandalight,andsometimes
even help passengers load and unload goods and cargo. They manage the available space in a bus and
ensure that no space is wasted as the bus accommodates more passengers. Along with drivers, bus
conductorscommittomemorythedestinationofeachpassengersothattheycananticipatetheirstops.
There are several ways to manifest the severity that suffices to qualify petitioner's alleged misconduct or
breach of trust as so grave that terminating his employment is warranted. It maybethroughthenatureof
the act itself: spanninganentirespectrumbetween,ononeend,anoverlookederror,madeentirelyingood
faith and, on another end, outright larceny. It may be through the sheer amount mishandled. It may be
through frequency of acts.Itmaybethroughotherattendantcircumstances,suchasattemptstodestroyor
concealrecordsandotherevidence,orevidenceofamotivetounderminethebusinessofanemployer.
Wefailtoappreciateanyoftheseinthiscase.
To reiterate, what is involved is a paltry amount of P196.00. All that has been proven is theexistenceofa
discrepancy. No proof has been adduced of illmotive or even of gross negligence. From all indications,
petitionerstoodchargedwithalone,isolatedinstanceofapparentwrongdoing.
The records are bereft of evidenceshowingapatternofdiscrepancieschargeableagainstpetitioner.Seenin

the context of his many years of service to his employer and in the absence of clear proof showing
otherwise, the presumption should be that he has performedhisfunctionsfaithfullyandregularly.Itcanbe
assumed that he has issued the correct tickets and given accurate amounts of change to the hundreds or
even thousands of passengers that he encountered throughout his tenure. Itismorereasonabletoassume
thatexcept for a single error costing a loss of only P196.00the company would have earnedthecorrect
expectedmarginsperpassenger,pertrip,andperbusthatitallowedtotravel.
Absent any other supporting evidence, the error inasingleticketissuedbypetitionercanhardlybeusedto

justify the inference that he has committed serious misconduct or has acted in a mannerthatrunsafoulof
his employer's trust. More so, petitioner cannot be taken to have engaged in a series of acts evincing a
pattern or a design to defraud his employer. Terminating his employment on these unfounded reasons is
manifestlyunjust.
To infer from a singleerrorthatpetitionercommittedseriousmisconductorbesmirchedhisemployer'strust

is grave abuse of discretion. It is an inference that is arbitrary and capricious. It is contrary to the high
regardforlaborandsocialjusticeenshrinedinourConstitutionandourlaborlaws.
The Court of Appeals committed an error of law correctible by a petition for review under Rule45.Iterred
when it held that the National Labor Relations did not commit grave abuseofdiscretionwhenthelatterdid
notengageintherequisitescrutinytoreviewtheinferenceanditsbases.
chanrobleslaw
IV
As his employmentwasillegallyandunjustlyterminated,petitionerisentitledtofullbackwagesandbenefits
from the time of his termination untilthefinalityofthisDecision.Heislikewiseentitledtoseparationpayin
the amount of one (1) month's salary for every year of service until the finality of this Decision, with a
fractionofayearofatleastsix(6)monthsbeingcountedasone(1)wholeyear.
As he was compelled to litigate in order to seek relief for the illegal and unjust termination of his
employment, petitioner is likewise entitled to attorney's fees in the amount of 10% of the total monetary
award.36
"Moral damages are awarded in termination cases where the employee's dismissal was attended by bad
faith, malice or fraud, or where it constitutes an act oppressive to labor, or where itwasdoneinamanner
contrary to morals, good customs or public policy."37 Also, to provide an "example or correction for the
publicgood,"38exemplarydamagesmaybeawarded.
However, we find no need to award these damages in favor of petitioner. While the termination of his
employment was invalid, we nevertheless do not find respondent Genesis tohaveactedwithsuchadegree
of malice as to act out of a design to oppress petitioner. It remains that a discrepancy and shortage
chargeabletopetitionerwasuncovered,althoughthisdiscrepancyandshortagedoesnotjustifyapenaltyas
graveasterminationofemployment.
chanrobleslaw
Respondent Riza A. Moises may not be held personally liable for the illegal termination of petitioner's
employment.
AsweexplainedinS
audiArabianAirlinesv.Rebesencio:39
A corporation has a personality separate and distinct from those of the persons composing it. Thus, as a
rule, corporate directorsandofficersarenotliablefortheillegalterminationofacorporation'semployees.It
isonlywhentheyactedinbadfaithorwithmalicethattheybecomesolidarityliablewiththecorporation.
In Ever Electrical Manufacturing, Inc. (EEMI) v. Samahang Manggagawa ng Ever Electrical, this court
clarified that "[b]ad faith does not connote bad judgment or negligence it imports a dishonest purpose or
some moral obliquity and conscious doing of wrong itmeansbreachofaknowndutythroughsomemotive
orinterestorillwillitpartakesofthenatureoffraud."40
Petitioner has not produced proof to show that respondent Riza A. Moises acted in bad faith orwithmalice
asregardstheterminationofhisemployment.Thus,shedidnotincuranypersonalliability.
WHEREFORE, the Petition for Review on Certiorari is PARTIALLY GRANTED. The assailedDecisiondated
July 8, 2014 and the assailed Resolution dated November 20, 2014 of theCourtofAppealsFifthDivisionin
CAG.R. SP No. 130801, which dismissed the Petition for CertiorarifiledbypetitionerRichardN.Riveraand
affirmed the February 28, 2013 and April 30, 2013 Resolutions of the NationalLaborRelationsCommission
Second Division, as well as the June 26, 2012 Decision of Labor Arbiter Gaudencio P. Demaisip, Jr., are
REVERSED and SET ASIDE. Accordingly, respondent Genesis Transport Service, Inc. is ordered to pay
petitioner:
(1)
Full backwages and other benefits computed from July 30, 2010, when petitioner's employment
wasillegallyterminated,untilthefinalityofthisDecision
(2)
Separation pay computed from June 2002, when petitioner commenced employment, until the
finality of this Decision, at the rate of one (1) month's salary for every year of service, with a
fractionofayearofatleastsix(6)monthsbeingcountedasone(1)wholeyearand
(3)
Attorney'sfeesequivalenttotenpercent(10%)ofthetotalaward.
The case is REMANDED to the Labor Arbiter to make a detailed computation of the amounts due to
petitioner,whichrespondentsshouldpaywithoutdelay.
ThecaseisD
ISMISSEDwithrespecttorespondentRizaA.Moises.
SOORDERED.
chanro
FIRSTDIVISION
G.R.No.206032,August19,2015
JOSERUDYL.BAUTISTA,P
etitioner,v
.E
LBURGSHIPMANAGEMENTPHILIPPINES,INC.,AUGUSTEA
SHIPMANAGEMENTITALY,AND/ORCAPTAINANTONIOS.NOMBRADO,*Respondents.
DECISION
PERLASBERNABE,J
.:
Assailed in this petition for review on certiorari1 are the Decision2 dated September 6, 2012 and the
Resolution3 datedFebruary19,2013oftheCourtofAppeals(CA)inCAG.R.SPNo.117921,whichreversed
and set aside the Decision4 dated September 20,2010andtheResolution5datedDecember20,2010ofthe
National Labor Relations Commission (NLRC) in NLRC NCR Case No. (M) 091324909, and dismissed
petitionerJoseRudyL.Bautista's(petitioner)claimfortotalandpermanentdisabilitybenefits.
TheFacts
On August 7, 2008, petitioner entered into a nine (9)month Contract of Employment with respondent
Elburg Shipmanagement Philippines, Inc. (Elburg) on behalf of its foreign principal, respondent Augustea
Shipmanagement Italy(Augustea),asChiefCookonboardthevessel"MVLemno."Priortohisembarkation,
petitioner underwent aPreEmploymentMedicalExamination(PEME),andwascertifiedasfitforseadutyby
thecompanydesignatedphysician.HethenboardedthevesselonAugust14,2008.6
During petitioner's employment, he complained of breathing difficulty, weakness, severe fatigue, dizziness,
and grogginess. Upon referral to a portside hospital, he was suspected to have "thoracic aneurysm," and
thus, was recommended for medical repatriation. Following his repatriation on May 8, 2009, petitionerwas
referred to Elburg's designated physicians at the Metropolitan Medical Center (MMC) for further evaluation
and medical treatment. After several tests, he was diagnosed with "Hypertensive Cardiovascular Disease"
and "Diabetes Mellitus II," and thoracic aneurysm was eventually ruled out.7 On September 4, 2009, the
companydesignated physician, Dr. Melissa Co Sia (Dr.Sia)issuedaworkingimpressionthatpetitionerwas
suffering from "Hypertension", "Dyslipidemia", and "Chronic Obstructive Pulmonary Disease," with a
declaration that he wouldbeclearedtogobacktohisdutiesasaseafarerassoonashisbloodpressureand
lipidlevelsstabilize.8
On September 16, 2009, petitioner filed a complaint against respondentsAugustea,Elburg,andthelatter's

President, Captain Antonio S. Nombrado (respondents), seeking to recover disability benefits applicable to
officers amounting to US$118,800.009 pursuant to their Collective Bargaining Agreement10(CBA),aswellas
damages, and attorney's fees, alleging that: (a) his illnesses were occupational diseases as they were
developed, enhanced, and aggravated by the nature of his work, as wellastheenvironmentatthejobsite
and (b) he was unable to return to work within 120 days, thereby rendering his disability permanent and
total.11
For their part,12 respondents maintained that petitioner's Diabetes Mellitus II was familial or genetic in
nature, and thus, not workconnected. Additionally, they averred that his Hypertensive Cardiovascular
Diseasewasamerecomplicationthereof,andassuch,isalsonotworkrelated.13
Thereafter, petitioner submitted the medical certificate and evaluation dated January 6, 2010 of his own
physician, Dr. Efren R. Vicaldo (Dr. Vicaldo), who opined that his illnesses i.e., "Hypertensive
atherosclerotic cardiovascular disease" and "Diabetes mellitus" rendered him unfit to work as seaman in
any capacity, and were considered workrelated/ aggravated.14 The said documents were only attached by
petitionerinhisreplyduringtheproceedingsbeforetheLaborArbiter(LA).15
TheLARuling
In a Decision16 datedFebruary19,2010,theLAorderedrespondents,jointlyandseverally,topaypetitioner
US$89,100.00 representing total and permanent disability benefits under the CBA, plus ten percent (10%)
thereofasattorney'sfees.
The LA ruled that petitioner's condition wasundoubtedlycontractedduringthetermofhiscontractwhenhe

experienced the symptoms of his ailment, consideringthathewasdeclaredfitforseadutyinhisPEME.The
LA also lent more credence to the medical certificate issued by Dr. Vicaldo, as being more reflective of
petitioner's actual condition. Moreover, while the LA conceded that Diabetes Mellitus II was not a
compensable ailment, since petitioner was likewise diagnosedwithHypertensiveCardiovascularDisease,an
occupational disease, by no less than the companydesignated doctor, his illness remained compensable.
Finally, the LA upheld the presumption of incapacity in favor of petitioner considering that his ailment
subsistedformorethan120days.17
Aggrieved,respondentsappealedtotheNLRC.18
TheNLRCRuling
In a Decision19 dated September 20, 2010, the NLRC dismissed respondents' appeal and affirmed the LA's
findings. It ruled that while it is true that Diabetes Mellitus II is not an occupational disease, still, the
medical diagnosis of petitioner included a finding of Hypertensive Cardiovascular Disease which is listed
under Section 32A of the Philippine OverseasEmploymentAdministrationStandardEmploymentContract
(POEASEC). It further noted that petitioner's medical reports did not state that he suffered from Diabetes
Mellitus II with Hypertensive Cardiovascular Disease which wouldhaveimpliedthatthelatterailmentwasa
mere necessary complication thereof. Aside from echoing the findings of Dr. Viealdo that petitioner's
illnesses wereworkrelated,theNLRCruledthatabsentanyshowingthathisillnesseswerepreexisting,the
reasonable presumption is that he obtained them during the period of his employment, andthattheywere
aggravatedbythenatureofhisworkasChiefCook.20
Respondents moved for reconsideration21 which the NLRC denied in a Resolution22 dated December 20,
2010.Undeterred,theyfiledapetitionforc
ertioraribeforetheCourtofAppeals(CA).
Meanwhile, the NLRC issued an entry of judgment in the case, constraining respondents to settle the full
judgmentaward.23
TheCARuling
In a Decision24 dated September 6, 2012, the CA granted respondents' certiorari petition and thereby
dismissed petitioner's complaint for disability benefits. It ruled that petitioner failed to prove, through
substantial evidence, that his Hypertension and Cardiovascular Disease were suffered during the effectivity
of his employment,andthattheywereconnectedtohisworkasChiefCook.Itdidnotgiveprobativeweight
to the medical evaluation issued by Dr. Viealdo as he attended to petitioner only onceandneverconducted
any medical tests on him, and in fact, merely limited himself to a medical history review and physical
examination of petitioner, noting too that petitioner only sought Dr. Viealdo's medical opinion four months
after he filed his complaint. Finally, the CA concluded that the "120day rule" is not absolute but is
dependent on the circumstances of each case, and that petitioner's mere failure to return to hisworkafter
120daysdoesnotipsofactoentitlehimtomaximumdisabilitybenefits.25
cralawred
Undaunted, petitioner sought reconsideration, which was, however, denied inaResolution26datedFebruary

19,2013hence,thispetition.
The core issue in this case is whether or not the the CA correctly ruled that the NLRC committed grave
abuseofdiscretioningrantingpetitioner'sclaimfortotalandpermanentdisabilitybenefits.
TheCourt'sRuling
Thepetitionismeritorious.
The entitlement of overseas seafarers to disability benefits is a matter governed, not only by medical
findings, but alsobylawandcontract.27ThepertinentstatutoryprovisionsareArticles197to19928(formerly
Articles 191 to 193) of the Labor Code in relation to Section 2,29 Rule X of the Rules implementingTitleII,
Book IV of the said Code30 while the relevant contracts are: (a) the POEASEC, which is a standard setof
provisions that is deemed incorporated ineveryseafarer'scontractofemployment(b) theCBA,ifanyand
(c) theemploymentagreementbetweentheseafarerandhisemployer.31
In this case, petitioner executed hisemploymentcontractwithrespondentsonAugust7,2008.Accordingly,

the provisions of the 2000 POEASEC are applicable and should govern their relations. Sec. 20 (B) (6), of
the2000POEASECprovides:
cralawlawlibrary
SECTION20.COMPENSATIONANDBENEFITS
xxxx
B.COMPENSATIONANDBENEFITSFORINJURYORILLNESS
The liabilities of the employer when the seafarer suffers workrelated injury orillnessduringtheterm
ofhiscontractareasfollows:
xxxx
6. In case of permanent total or partial disability of theseafarercausedbyeitherinjuryorillness

the seafarer shall be compensated in accordance with the schedule of benefits arising from an illness or
disease shall be governed by the rates and the rules of compensation applicable at the time the illness or
diseasewascontracted.(E
mphasissupplied.)
chanrobleslaw
Pursuant to the aforequoted provision, two (2) elements must concur for an injury or illness to be
compensable: first, that the injury or illnessmustbeworkrelatedandsecond,thattheworkrelatedinjury
orillnessmusthaveexistedduringthetermoftheseafarersemploymentcontract.32
The 2000 POEASEC defines "workrelated injury" as "injury(ies)" resulting in disabilityordeatharisingout

of and in the course of employment" and "workrelated illness" as "any sickness resulting to disability or
death as aresultofanoccupationaldiseaselistedunderSection32Aofthiscontractwiththeconditionsset
thereinsatisfied,"v
iz.:
cralawlawlibrary
1.
2.
Theseafarer'sworkmustinvolvetherisksdescribedherein
Thediseasewascontractedasaresultoftheseafarer'sexposuretothedescribedrisks
3.
4.
Thediseasewascontractedwithinaperiodofexposureandundersuchotherfactorsnecessaryto
contractitand
Therewasnonotoriousnegligenceonthepartoftheseafarer.
chanrobleslaw
Section 32A (11) of the 2000 POEASEC expressly considers Cardiovascular Disease (CVD) as an
occupationaldiseaseifitwascontractedundera
nyo
fthefollowinginstances,towit:
cralawlawlibrary
(a) If the heart disease was known to have been present during employment, there must be proof thatan
acuteexacerbationwasclearlyprecipitatedbytheunusualstrainbyreasonsofthenatureofhiswork.
(b)Thestrainofworkthatbringsaboutanacuteattackmustbesufficient
severity and must be followed within 24 hours by the clinical signs of cardiac insult to constitute causal
relationship.
(c) If a person who was apparently asymptomatic before being subjected to strain at work
showed signs and symptoms of cardiac injury during the performance of his work and such
symptomsandsignspersisted,itisreasonabletoclaimacausalrelationship.(E
mphasissupplied)
chanrobleslaw
Consequently, for CVD to constitute as an occupational disease for which the seafarer may claim
compensation, it is incumbent upon said seafarer to show that he developed the same under any of the
threeconditionsidentifiedabove.33
Records reveal that sometime during the performance of his duties as Chief Cook on board MV Lemno,
petitioner complained of breathing difficulty, weakness, severe fatigue, dizziness, and grogginess,
necessitating portside medical intervention and consequent medical repatriation, albeit, on the basis of
suspected "thoracic aneurysm." Shortly after repatriation, he was diagnosed, inter alia, with Hypertensive
Cardiovascular Disease, also known as hypertensive heart disease, which refers to a heart condition
causedbyhighbloodpressure.34
Petitioner's condition was apparently asymptomatic35 since he manifested no signs and symptoms of any
cardiac injury priortohisdeploymentonboardMVLemnoandwas,infact,declaredfitforseadutyfollowing
his PEME. Notably, petitioner's physical discomforts onboard the vessel already bore the hallmarksofCVD
for which he was eventually diagnosed upon hisrepatriation.Thesaiddiagnosiswasrecognizedbyboththe
companydesignated doctors and petitioner's own doctor, and was welldocumented. Thus, absent any
showing that petitioner had a preexisting cardiovascular ailment prior to his embarkation, the reasonable
presumption is that he acquired his hypertensive cardiovasculardiseaseinthecourseofhisemployment
pursuanttoSection32A(11)(c)ofthe2000POEASEC,whichrecognizesa"causalrelationship"betweena
seafarer's CVD and his job, and qualifies his CVDasanoccupationaldisease.Ineffect,thesaidprovisionof
lawestablishesinfavorofaseafarerthepresumptionofcompensabilityofhisdisease.
A party in whose favor the legal presumption exists may rely on and invoke such legal presumption to
establish a fact in issue.36 The effect of a presumption upon the burden of proof is to create the need of
presenting evidencetoovercometheprimafaciecasecreated,therebywhich,ifnocontraryproofisoffered,
will prevail.37 However, other than their bare and selfserving assertion that petitioner's Hypertensive
Cardiovascular Disease was a mere complication of his Diabetes Mellitus II, respondents failedtointroduce
countervailing evidence that would otherwise overcomethedisputablepresumptionofcompensabilityofthe
saiddisease.
Verily, it is not required that the employment of petitioner as Chief Cook should be the sole factor in the
development of his hypertensive cardiovascular disease so as to entitle him to claim the benefits provided
therefor. It suffices that his employment as such had contributed, even in a small degree, to the
development of the disease.38 Thus, it is safe to presume that, at the very least, the nature of petitioner's
employment had contributed to the aggravation of his illness, considering that as Chief Cook, he was
exposedtoconstanttemperaturechanges,stress,andphysicalstrain.

The fact that petitioner was also diagnosed as having Diabetes Mellitus II was of no moment since the
incidence of a listed occupational disease, whether or not associated with a nonlisted ailment, is enough
basis forcompensation,althoughmodernmedicinehasinfactrecognizedthatdiabetes,heartcomplications,
hypertension and even kidney disorders are all interrelated diseases.39 Besides, Section 20(B)(4)40ofthe
2000 POEASEC explicitly establishes a disputable presumption of compensability in favor of the seafarer
and the burden rests upon the employer to overcome the statutorypresumption,41whichrespondentsfailed
to discharge. Notably, it wasnotdisputedthatfromthetimeofpetitioner'srepatriationuntilthefilingofthe
presentpetition,hewasnotabletoreturntohiscustomarywork.
Accordingly, the Court finds that the CA committed reversible error in granting respondents'
certioraripetition since the NLRC did not gravely abuse its discretion in awarding total and permanent
disabilitybenefitsinfavorofpetitioner,thesamebeingamplysupportedbysubstantialevidence.
WHEREFORE, the petition is GRANTED. The Decision dated September 6, 2012 and the Resolution dated
February 19, 2013 of the Court of Appeals in CAG.R. SP No. 117921 are hereby REVERSED andSET
ASIDE. The Decision dated September 20, 2010 and the Resolution dated December 20, 2010 of the
National Labor Relations Commission in NLRC NCRCaseNo.(M)091324909grantingpetitionerJoseRudy
L.Bautista'sclaimfortotalandpermanentdisabilitybenefitsareREINSTATED.
SOORDERED.
IRSTDIVISION
G.R.No.213729,September02,2015
PHILIPPINEAIRLINES,INC.,P
etitioner,v
.A
LEXANDERP.BICHARA,R
espondent.
DECISION
PERLASBERNABE,J
.:
Assailed in this petition for review on certiorari1 are the Decision2 dated January 24, 2014 and the
Resolution3 dated July 30, 2014 rendered by the Court of Appeals (CA) in CAG.R. SP. No. 118777, which
reversed and set aside the Decision4 dated November23,2010andtheResolution5datedJanuary21,2011
of the National Labor Relations Commission (NLRC) in NLRC NCR 00040341494 (CA No. 01352897)
(AE0309), and thereby, ordered petitioner Philippine Airlines, Inc. (PAL) to pay respondent Alexander P.
Bichara(Bichara)salarydifferentials,backwages,andretirementbenefits.
TheFacts
On October 28, 1968, PAL hired Bichara as a flight attendant. Sometime in 1971, PAL implemented a
retrenchment program. By April of that year, Bichara voluntarily resigned. On May 15, 1975, he was
rehired.6
In August 1993, Bichara was included in PAL's Purser Upgrading Program in which he graduated on
December 13, 1993. As flight purser, he was required to take five (5) check rides for his performance
evaluation and earn at least an 85% rating foreachride.However,Bicharafailedinthetwo(2)checkrides
with ratings of 83.46% and 80.63%. Consequently, on March 21, 1994, Bichara was demoted to the
positionofflightsteward.7
On March 22, 1994, Bichara appealed his demotion to PAL, but no action was taken hence, he filed a
complaint for illegal demotion against PAL8 before the NLRCRegional Arbitration Branch, docketed as
NLRC NCR 040341494 (illegaldemotioncase).Eventually,oronJune16,1997,LaborArbiterRicardo
C. Nora (LANora)issuedaDecision9(June16,1997Decision)declaringBichara'sdemotionasillegal,and
accordingly, ordered PAL to reinstateBicharatohispositionasflightpurser.10PALfiledanappealbeforethe
NLRC and later before the CA, both of which, however, upheldLANora'sfinding.PALnolongerappealedto
theCourt,thus,itrenderedtheJune16,1997DecisionfinalandexecutoryonFebruary5,2004.11
During the pendency of the illegal demotion case12 before the CA, however, or on July 15, 1998, PAL
implemented another retrenchment program that resulted in the termination of Bichara's employment.13
Thispromptedhim,alongwithmorethan1,400otherretrenchedflightattendants,representedbytheFlight
Attendants and Stewards Association of the Philippines (FASAP), to file on June 22, 1998, a separate
complaint for unfair labor practice, illegal retrenchment with claims for reinstatement and payment of
salaries, allowances, backwages, and damages14 against PAL, docketed as NLRCNCR Case No.
06051009815 (illegal retrenchment case)16
This case was appealed allthewaytothisCourt,docketed
as G.R. No.178083entitled"FlightAttendantsandStewardsAssn.ofthePhils,v.PAL,PatriaT.Chiong,and
CA"(F
ASAPcase),whichr emainspendingasofthistime.17
On July 9, 2005, Bichara reached the 60 yearold compulsory retirement age under the PALFASAP
CollectiveBargainingAgreement(CBA).18
On January 31, 2008, Bichara filed a motion forexecutionofLANora'sJune16,1997Decision,19whichPAL

opposed20 by arguing that the "complaint for illegal demotion x x x was overtaken by supervening events,
i.e., the retrenchment of [Bichara] in 1998 and his having reached [the] compulsory retirement age in
2005."21
TheLARuling
In an Order22 dated February 4, 2009 (February 4, 2009 Order), Labor Arbiter Antonio R. Macam (LA
Macam) granted Bichara's motion for execution, thus, directing the issuance of a writ of execution against
PAL and/or a certain Jose Garcia to jointly and severally pay Bichara: (a) separation pay in lieu of
reinstatement equivalent to one (1) month's pay for every year of service counting from October28,1968
up to the present, excluding the period from April 1, 1971 until May15,1975,oraperiodof35yearsand
(b) attorney'sfeesintheamountofP20,000.00.23
LA Macam declared that, notwithstanding the pendency before this Court of the illegal retrenchment case,
i.e., FASAP case, Bichara's termination was invalid, given that: (a) PAL did not use a fair and reasonable
criteria in effecting the retrenchment (b) PAL disregarded the labor arbiters' rulingsintheillegaldemotion
and illegal retrenchment cases which were both immediately executory and (c) retrenchment was made
during the pendency of the illegal demotion case without the permission of the court where the case was
pending.24 For thesereasons,Bicharawasentitledtoreinstatementtohispositionasflightpurser.However,
since Bichara may no longer be reinstatedinviewofhiscompulsoryretirementinaccordancewiththeCBA,
LAMacam,instead,orderedPALtopayBicharaseparationpaywiththesalarybaseofaflightpurser.25
cralawred
Aggrieved,PALappealedtotheNLRC.
TheNLRCRuling
In a Decision26 dated November 23, 2010, the NLRC reversed and set aside LA Macam's February 4, 2009
Order and denied the motion for execution for being moot and academic, consideringBichara'scompulsory
retirement in 2005,27 without prejudice tothelatter'sentitlementtobackwagesandretirementbenefitsofa
flightstewardpursuanttothisCourt'sfinaldecisionintheF
ASAPcase.28
At the outset, the NLRC ruled that Bichara'sreinstatementcouldhavetakeneffect,ifatall,onlyonJanuary

31, 2008 when he sought the execution of the said relief.29 In this light, his reinstatement and
corresponding backwages prior to said date must therefore be based on the salary rate and other
benefits attached to the position of flight steward to which he was demoted/reverted.30(However, it
declared that reinstatement is no longer possible as the same was rendered moot and academic when he
compulsorily retired in 2005.31 On the other hand, the NLRC concluded that the matter of payment of
monetary benefits is not for it to order since it is a relief pertaining to the pendingFASAP case as such,
Bichara should pursue payment of backwages when the decision in the FASAPcase is due for execution. In
this relation, theNLRCremarkedthatLAMacamexceededhisauthorityinawardingseparationpayinlieuof

reinstatement, since such relief is notcontemplatedinthedecisionsoughttobeexecuted,i.e.,theJune16,
1997Decision.32
Both parties moved for reconsideration, which were, however, denied in a Resolution33 dated January 21,
2011.Dissatisfied,BicharaelevatedthecasetotheCAthroughapetitionforreviewonc
ertiorari.
TheCARuling
In a Decision34 dated January 24, 2014, the CA reversed and set aside the NLRC's ruling.ItdidnotfindLA
Macam to have exceeded his authority in ordering the payment of separation pay in lieu of reinstatement
since, in a long line of cases,thisCourthasconsistentlyheldthatwhenreinstatementisnotpossibledueto
over age, payment of separation pay is inplace.35TheCA,however,observedthatsinceBicharawasoneof
the retrenched employees involved in the FASAPcase,thisCourt'sDecisiondatedOctober2,2009,wherein
it ruled that the retrenchment was illegal and thereby stated that "[f]light attendants who have reached
their compulsory retirement age of retirement shall receive backwages up to the date of their retirement
only,"36 should be made to apply.Thus,insteadofseparationpay,Bicharaisentitledtobackwagesfromthe
time of his retrenchment up to the time he reached thecompulsoryretirementageof60.Inaddition,since
the June 16, 1997 Decision, rendered in the illegaldemotioncase,hadalreadybecomefinalandexecutory,
he is entitled to salary differentials of a flight purser from a flight attendant from March 21,1994,i.e.,the
date of his demotion, up to the time of his retrenchment in July 1998.37 He is also entitled to retirement
benefitsinaccordancewiththeexistingCBAatthetimeofhisretirement.38
PAL moved for reconsideration39 which was denied in a Resolution40 dated July 30, 2014 hence, this
petition.
The essential issue to be resolved is whether or not the CA erred in reversing the NLRC's Decision and
therebyawardingBicharatheaforementionedmonetaryawards.
TheCourt'sRuling
Thepetitionispartlymeritorious.
A judgment should be implemented according to the terms of its dispositive portion is a long and
wellestablished rule.41 As such, where the writofexecutionisnotinharmonywithandexceedsthe
judgmentwhichgivesitlife,thewrithasp
rotantonovalidity.42
A companion to this rule is the principle of immutability of final judgments, which states that a final
judgment may no longer be altered, amended or modified, even if the alteration, amendment or
modification is meant to correct what is perceived to be an erroneous conclusion of fact or law and
regardless of what court renders it. Any attempt to insert, change or add mattersnotclearlycontemplated
in the dispositive portion violates the rule on immutability of judgments.43 But like any other rule, this
principle has exceptions, namely: (1) the correctionofclericalerrors(2)thesocallednuncprotuncentries
which cause no prejudice to any party (3) void judgments and (4) whenevercircumstancestranspire
afterthefinalityofthedecisionrenderingitsexecutionunjustandinequitable.44
In this case, the final judgment sought to be executed is LA Nora's June 16, 1997 Decision, which
wasconfined to the directive that PAL reinstate Bichara as a flight purser in view of his illegal
demotiontothepositionofflightattendant:
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered declaring the illegality of complainant's
[Bichara] demotion/reversion to Flight Steward and ordering the respondents [PAL] to reinstate the
complainanttohispositionasFlightPurserwithinten(10)daysfromreceiptofthisDecision.

Theclaimfordamagesisdismissedforlackofmerit.
SOORDERED.45
Evidently, LAMacamwentbeyondthetermsoftheJune16,1997Decisionwhenhe,inhisFebruary4,2009
Order, directed the issuance of a writ of execution ordering the payment of separation pay in lieu of
reinstatement:
WHEREFORE, finding merit in the complainant's [Bichara] Motion for Execution, the same is hereby
GRANTED. Let a Writ of Execution be issued ordering the respondents Philippine Airlines, Inc. and/or Jose
Garcia, in lieu of reinstating the complainant to the position of Flight Purser, to jointlyandseverallyPAYto
the complainant his separation pay equivalent to one (1) month's pay for every year of service counting
from October 28, 1968 up to the present, excluding the period from April 1, 1971 until May15,1975,ora
period of thirtyfive (35)yearsandtopaythecomplainantthesumofTwentyThousandPesos(P20,000.00)
forandasattorney'sfees.
SOORDERED.46
Unlike the cases47 citedbytheCA,whichallinvolvedillegaldismissalcases,itwouldnotbepropertoaccord
such relief in this case since, in those cases, the awards of separation pay in lieu ofreinstatementwereall
hinged on the validity of the employee's dismissal. Here, the validity of Bichara's termination is the
subject matter of a separate case, i.e., the FASAP case, which is still pending beforethisCourt,andisalso
beyond the ambit of the illegal demotion proceedings. Hence, LA Macam exceeded his authority when he
ruledonthisissueanddirectedPALtopayBicharaseparationpayinlieuofreinstatement.
PAL's supervening retrenchment of its employees, which included Bichara, in July 1998, and his
compulsory retirement in July 2005, however, prevent the enforcement of the reinstatement of Bichara to
the position of flight purser under the June 16, 1997Decision.Nonetheless,sincethisDecisionhadalready
settled the illegality of Bichara's demotion with finality, this Court findsthatBicharashould,instead,
be awarded the salary differential of a flight purser from a flight steward from the time of his illegal
demotion on March 21, 1994 up until the time he was retrenched in July1998.Notably,unlikeLAMacam's
award of separation pay in lieu of reinstatement, the award of salary differential is not dependent on the
validity of his termination, as it is, in fact, intrinsically linked to the illegality of Bichara'sdemotion.Hence,
withthisdirectrelation,thereshouldbenoobstacleinrenderingthisaward.
Further, it should be pointed out that the principle of immutability of judgments, from which the
abovestated rule on writ of executions proceed, allow courts, as an exception, to recognize circumstances
that transpire after the finality of the decision which would render its execution unjust and inequitableand
act accordingly. Thus, in view of the supervening events abovementioned, this Court deems the award of
salary differential to be the just and equitable award under the circumstances herein prevailing.
Jurisprudence holds that courts may modify or alter the judgment to harmonize the same with justice and
the facts when after judgment has been rendered and the latter has become final,factsandcircumstances
transpirewhichrenderitsexecutionimpossibleorunjust,48asinthiscase.
As a last point, it deserves mentioning that since Bichara's illegal demotion has been finally decreed, he
should be entitled to (a) backwages, at the salary rate of aflightpurser,fromthetimeofretrenchment
in July 1998 up until his compulsory retirement in July 2005 (b) retirement benefits of aflight purser in
accordance with the existing CBA at the time of Bichara's retirement and (c) attorney's fees, moral, and
exemplary damages, if any, but only if this Court, in the FASAP case, finally rules that the subject
retrenchment is invalid. Otherwise, he should only be entitled to the abovestated salary differential, as
well as the corresponding separation pay required under the relevant CBA,orArticle29749(formerlyArticle
283) of the Labor Code if no such CBA provision exists. Theawardsofbackwages,andretirementbenefits,
including attorney's fees, moral, and exemplary damages, if any, cannot, however, be executed in these
proceedings since they are incidents which pertain to the illegal retrenchment case,hence,executableonly
whentheF
ASAPcaseisfinallyconcluded.
WHEREFORE, the petition is PARTLY GRANTED. The Decision datedJanuary24,2014andtheResolution

dated July 30, 2014 of Court ofAppealsinCAG.R.SP.No.118777areherebyREVERSEDandSETASIDE.
A new one is entered ORDERING petitioner PhilippineAirlines,Inc.topayrespondentAlexanderP.Bichara
the salary differentialofaflightpurserfromaflightattendantfromthetimeofhisillegaldemotiononMarch
21,1994upuntilthetimehewasretrenchedonJuly15,1998.
SOORDERED.
chanroblesvirtu

Labor 1 Cases 1-10

Diunggah oleh

Informasi Dokumen

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Labor 1 Cases 1-10

Diunggah oleh

Hak Cipta:

Format Tersedia

THIRDDIVISION

This Court has already ruled thatcompetentevidenceofidentityisnotrequiredincaseswheretheaffiantis

Thus, as earlier stated, iftheaffiantispersonallyknowntothenotarypublic,thelatterneednotrequirethe

What should guide judicial action is the principle thatapartylitigantshouldbegiventhefullestopportunity

Well settled is the rule that where a person who worksforanotherperformshisjobmoreorlessathisown

In the instant case, as shown by theresumeof[petitioner],heconcurrentlyheldconsultancypositionswith

Lastly, the Court does not agree withpetitioner'sinsistencethathisbeinghiredasrespondentcorporation's

the hospital over the objection of hisphysician.InamedicalcertificatedatedOctober7,2006, Dr.

In a Resolution dated November 25,2011,theCAdeniedpetitionersMotionforReconsideration.

contract." The 2000 POEASECdefinesworkrelatedinjuryandworkrelatedillnessas"injuries

dissecting aneurysm, is a potentially life threatening condition in which there isbleedingintoand

exact cause ofaorticdissectionisstillunknownandremainsunderinvestigation. Nonetheless,the

compensability of illnesses not included in the list ofoccupationaldiseases. Asdiscussedabove,

assessing the seamans disability." It is the companydesignated physicians findings which

not bound by the assessment of the companydesignated physician. While the

Records show that the evidence submitted by complainant insupportofherclaimfordeathbenefits

The motion for reconsideration was denied by the NLRC initsResolutiondatedJanuary31,2006.

It is well settled in jurisprudence thatfactualfindingsofadministrativeorquasijudicialbodies,which

evidence. Consistent therewithisthedoctrinethatthisCourtisnotatrieroffacts,andthisisstrictly

The NLRC, as affirmed by the CA, found thattherecordsarebereftofshowingthatAwatin'sillness,

The law in protecting the rights of the employees,authorizesneitheroppressionnorselfdestruction

incentive leave (SIL) pay,overtimepay,holidaypay,13thmonthpay,restdayandpremiumpay,andsalary

For their part, respondents denied having illegally dismissedpetitioner,claimingthathewasamereproject

Dissatisfied, respondents moved for reconsideration whichwasdeniedinaResolution26datedDecember2,

In a Decision28 dated April 8, 2013, the CA annulled and setasidetheNLRC'srulingandreinstatedtheLA's

Petitioner moved for reconsideration31 but was denied in aResolution32datedOctober11,2013hence,this

Further, pursuant to Department Order No. 19, orthe"GuidelinesGoverningtheEmploymentofWorkersin

On even date, respondent filed a complaint for the payment ofpermanenttotaldisabilitycompensationin

In his Position Paper,13 respondentaverredthathewasunfittoperformhisjobformorethan120days,and

In this case, the parties entered into a contract of employment in accordancewiththePOEASECwhich,as

For this purpose,theseafarershallsubmithimselftoapostemploymentmedicalexaminationby

However, recent jurisprudence now holds that the said 120dayruleisnotamagicwandthatautomatically

In this relation, the Court, in the recent case ofC.F.SharpCrewManagement,Inc.v.Taok,41

the companydesignated physician acknowledged that he is partially permanently disabled but

The filing of the complaint constituted a breach of Dumadag's contractual obligationtohavethe

Resignation is the formal pronouncement or relinquishment of a position or office. It isthevoluntaryactof

In contrast, constructive dismissal existswherethereiscessationofworkbecausecontinuedemploymentis

Taking into considerationSiason'slongtenureatCABI,aswellashercloserelationshipwithChan,thelatter

2011, Atty. NerTiangco sentSiasonanotherletter,essentiallyconfirmingifthelatterwasgoingtoresignor

In sum, petitioners didnotconstructivelydismissSiasonbutrather,thelattervoluntarilyresignedfromher

They pointed out that for theyearsthattheywereemployed,theyworkedforAdidas,underthesupervision

The complainants asserted that the products they weresellingatvariousoutletsremainedthepropertyand

To substantiate their assertion that PRIME was justanintermediaryofAdidas,theysubmitteddocumentary

Also, Adidas turned down the complainants' demand for regularizationastheywereemployeesofPRIME.It

In a decision23 dated February 23, 2004,LaborArbiter(LA)EliasH.Salinasdismissedthecomplaintforlack

The petitioner and 15 of the othercomplainantsappealed.The15howevermovedtowithdrawtheirappeal,

Before the CA, thepetitionerreiteratedherpositionincompulsoryarbitrationthatAdidaswasheremployer,

Before the Court, the petitioner reiterates the argumentsshepresentedtotheCA,particularlythefollowing

In its Comment35 filed on June7,2012,Adidasasksforthedismissalofthepetition,arguingprincipallythat

The respondents JCA and PRIME opted not to comment onthepetition,despitebeingrequiredbytheCourt

Aside from PRIME'SremittancesofemployeecontributionstoPhilhealth,SSS,andPagibigandthepayment

The answer lies in the fact that Adidasavoidedbeingidentifiedasthecomplainants'directemployersothat

Again, in the absence ofevidencethatJCAhadthewherewithaltoundertakeitsdistributionagreementwith

In the absence of evidence showing how or in what manner PRIMEcarriedoutitspromotionworkunderits

In sum, we hold that PRIME failed to satisfythefourfoldemployeremployeerelationshiptest,50makingita

Consequently, the petitioner is entitled under thelaw52toreinstatement,withoutlossofseniorityrightsand

Further, we find the respondentstohaveshownbadfaithinthepetitioner'sdismissalasitresultedfromthe

The assailed July8,2014DecisionoftheCourtofAppealsdismissedthePetitionforCertiorariunderRule65

Subsequently, Villaseran conducted verification works withtheTicketSectionofGenesis'CubaoMainOffice.

For their defense, Genesis and Riza A. Moises claimedthatRivera'smisdeclarationoftheamountinthebus

They are means for effecting socialjustice,i.e.,the"humanizationoflawsandtheequalizationofsocialand

Article XIII, Section 3 of the 1987 Constitution guaranteestherightofworkerstosecurityoftenure."One's

This case revolves around an alleged discrepancy between the amountsindicatedonasingleticket.Forthe

Serious misconduct or willful disobedience by the employee of the lawful orders of