Summary of Doctrines Labor Law

SUMMARY OF DOCTRINES LABOR STANDARDS BONUS Eastern Telecommunications Philippines, Inc. v. Eastern Telecoms Employees Union G.R. No. 185665, February 8, 2012

A bonus is a gratuity or act of liberality of the giver which the recipient has no right to demand as a matter of right. The grant of a bonus is basically a management prerogative which cannot be forced upon the employer who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employee’s basic salaries or wages. A bonus, however, becomes a demandable or enforceable obligation when it is made part of the wage or salary or compensation of the employee.

HEALTH AND SAFETY BENEFITS Conditions for Entitlement under POEA-SEC Loadstar International Shipping, Inc. vs. The Heirs of the Late Enrique C. Calawigan G.R. No. 187337, December 5, 2012

Section 20-B (3) of the 2000 POEA-SEC states that “for the seaman's claim to prosper, however, it is mandatory that he should be examined by a company-designated physician within three days from his repatriation. Failure to comply with this mandatory reporting requirement without justifiable cause shall result in forfeiture of the right to claim the compensation and disability benefits provided under the POEA-SEC. For an occupational disease and the resulting disability to be compensable, all of the following conditions must be satisfied under the POEA-SEC: (1) the seafarer’s work must involve the risks described in the contract; (2) the disease was contracted as a result of the seafarer's exposure to the described risks; (3) the disease was contracted within a period of exposure and under such other factors necessary to contract it; and (4) there was no notorious negligence on the part of the seafarer.

DISABILITY BENEFITS Determination of Seafarers Degree of Disability Daniel M. Ison v. Crewserve, Inc., Antonio Galvez, Jr., and Marlow Navigation Co., Ltd. G.R. No. 173951 April 16, 2012

For purposes of determining the seafarer’s degree of disability, it is the company-designated physician who must proclaim that he sustained a permanent disability, whether total or partial, due to either injury or illness, during the term of his employment. The Court shall thus evaluate the findings of petitioner’s physicians viś-a-viś the findings of the company-designated physician

DISABILITY BENEFITS Disability Benefits Alen H. Santiago v. Pacbasin ShipManagement, Inc. and/or Majestic Carriers, Inc. G.R. No. 194677 April 18, 2012

The POEA Standard Employment Contract clearly provides that when a seafarer sustains a work-related illness or injury while on board the vessel, his fitness or unfitness for work shall be determined by the company-designated physician. However, if the doctor appointed by the seafarer makes a finding contrary to that of the assessment of the company-designated physician, the opinion of a third doctor may be agreed jointly between the employer and the seafarer as the decision final and binding on both of them.

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San Beda College of Law 2013 Centralized Bar Operations DEATH BENEFITS Crew and Ship Management International Inc. and Salena Inc. vs. Jina T. Soria G.R. No. 175491 December 10, 2012

The mandate of Section C(4)(c) of the 1989 POEA SEC which provides for mandatory 72-hour post-employment medical examination deadline is to make the post-employment examination within three (3) working days from the seafarer’s arrival/repatriation to the Philippines compulsory, except when the seafarer is physically incapacitated to do so, before a claim for disability or death benefits can validly prosper. The purpose of the 3-day mandatory reporting requirement can easily be ascertained. Within 3 days from repatriation, it would be fairly manageable for the physician to identify whether the disease for which the seaman died was contracted during the term of his employment or that his working conditions increased the risk of contracting the ailment.

Crewlink, Inc, and/or Gulf Marine Services vs. Editha Teringtering G.R. No. 166803 October 11, 2012

Under No. 6, Section C, Part II of the POEA "Standard Employment Contract Governing the Employment of All Filipino Seamen On-Board Ocean-Going Vessels" (POEA-SEC), the death of a seaman during the term of employment makes the employer liable to his heirs for death compensation benefits. This rule, however, is not absolute. The employer may be exempt from liability if it can successfully prove that the seaman's death was caused by an injury directly attributable to his deliberate or wilful act.

LABOR RELATIONS LABOR ARBITER Jurisdiction Estate of Nestor Dulay, represented by his wife Merridy Jane P. Dulay, v. Aboitiz Jebsen Maritime Inc. and General Charterers Inc. G.R. No. 172642 June 13, 2012

With respect to disputes involving claims of Filipino seafarers wherein the parties are covered by a collective bargaining agreement, the dispute or claim should be submitted to the jurisdiction of a voluntary arbitrator or panel of arbitrators. It is only in the absence of a collective bargaining agreement that parties may opt to submit the dispute to either the NLRC or to voluntary arbitration.

KINDS OF EMPLOYMENT Regular Employment D.M. Consuji, Inc. and/or David M. Consuji v. Estelito L. Jamin G.R. No. 192514 April 18, 2012

In all the 38 projects where DMCI engaged Jamin’s services, the tasks he performed as a carpenter were indisputably necessary and desirable in DMCI’s construction business. He might not have been a member of a work pool as DMCI insisted that it does not maintain a work pool, but his continuous rehiring and the nature of his work unmistakably made him a regular employee.

DISMISSAL Existence of Employer-Employee Relationship Duty Free Philippines Services, Inc. v. Manolito Q. Tria G.R. No. 174809 June 27, 2012

The alleged absence of employer-employee relationship cannot be raised for the first time on appeal. The resolution of this issue requires the admission and calibration of evidence and the LA and the NLRC did not pass upon it in their decisions. The SC cannot permit petitioner to change its theory on appeal. It would be unfair to the adverse party who

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SUMMARY OF DOCTRINES would have no more opportunity to present further evidence, material to the new theory, which it could have done had it been aware earlier of the new theory before the LA and the NLRC.

Polyfoam-Rgc International, Corporation and Precilla A. Gramaje v. Edgardo Concepcion G.R. No. 172349 June 13, 2012

In labor-only contracting, the following elements are present: (a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account and responsibility; and (b) The employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal. The test of independent contractorship is "whether one claiming to be an independent contractor has contracted to do the work according to his own methods and without being subject to the control of the employer, except only as to the results of the work. A finding that a contractor is a "labor-only" contractor, as opposed to permissible job contracting, is equivalent to declaring that there is an employer-employee relationship between the principal and the employees of the supposed contractor, and the "labor-only" contractor is considered as a mere agent of the principal, the real employer.

Charlie Jao v. BCC Products Sales Inc., and Terrance Ty G.R. No. 163700 April 18, 2012

In determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the certain incidents. The last element, the so-called control test, is the most important element.

DISMISSAL Management Prerogative Salvador O. Mojar, Edgar B. Begonia, Heirs of the Late Jose M. Cortez, Restituto Gaddi, Virgilio M. Monana, Freddie Rances and Edson D. Tomas v. Agro Commercial Security Service Agency, Inc., et al. G.R. No. 187188 June 27, 2012

Employees have the right to security of tenure, but this does not give them such a vested right to their positions as would deprive the company of its prerogative to change their assignment or transfer them where their services, as security guards, will be most beneficial to the client. An employer has the right to transfer or assign its employees from one office or area of operation to another in pursuit of its legitimate business interest, provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the transfer is not motivated by discrimination or bad faith, or effected as a form of punishment or demotion without sufficient cause.

DISMISSAL Right to Contract University Of The East, Dean Eleanor Javier, Ronnie Gillego and Dr. Jose C. Benedicto vs. Analiza F. Pepanio and Mariti D. Bueno G.R. No. 193897 January 23, 2013

A school CBA must be read in conjunction with statutory and administrative regulations governing faculty qualifications. Such regulations form part of a valid CBA without need for the parties to make express reference to it. While the contracting parties may establish such stipulations, clauses, terms and conditions, as they may see fit, the right to contract is still subject to the limitation that the agreement must not be contrary to law or public policy.

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San Beda College of Law 2013 Centralized Bar Operations DISMISSAL Due Process Skippers United Pacific, Inc. and Skippers Maritime Services, Inc., Ltd. v. Nathaniel Doza, Napoleon De Gracia, Isidro L. Lata and Charlie Aprosta G.R. No. 175558 February 8, 2012

The Labor Code recognizes termination by the employee of the employment contract by "serving written notice on the employer at least one (1) month in advance." Given that provision, the law contemplates the requirement of a written notice of resignation. In the absence of a written resignation, it is safe to presume that the employer terminated the seafarers

DISMISSAL Substantial Evidence Romeo E. Paulino v. National Labor Relations Commission and Philippine Long Distance Telephone Company, Incorporated. G.R. No. 176184 June 13, 2012

Proof beyond reasonable doubt of an employee’s misconduct is not required in dismissing an employee. Rather, as opposed to the “proof beyond reasonable doubt” standard of evidence required in criminal cases, labor suits require only substantial evidence to prove the validity of the dismissal. Notwithstanding petitioner’s acquittal in the criminal case for qualified theft, respondent PLDT had adequately established the basis for the company’s loss of confidence as a just cause to terminate petitioner.

DISMISSAL Submission of Evidence on Appeal Misamis Oriental II electric service Cooperative (MORESCO II) v. Virgilio Cagalawan G.R. No. 175170 September 5, 2012

Labor tribunals, such as the NLRC, are not precluded from receiving evidence submitted on appeal as technical rules are not binding in cases submitted before them. However, any delay in the submission of evidence should be adequately explained and should adequately prove the allegations sought to be proven.

DISMISSAL Burden of Proof Norkis Distributors, Inc. and Alex D. Buat v. Delfin S. Descallar G.R. No. 185255 March 14, 2012

In termination cases, the burden of proof rests upon the employer to show that the dismissal is for a just and valid cause and failure to do so would necessarily mean that the dismissal was illegal. The employer’s case succeeds or fails on the strength of its evidence and not on the weakness of the employee’s defense. If doubt exists between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. Moreover, the quantum of proof required in determining the legality of an employee’s dismissal is only substantial evidence or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.

DISMISSAL Just Cause Apo Cement Corporation v. Zaldy E. Baptisma G.R. No. 176671

To validly dismiss an employee on the ground of loss of trust and confidence under Article 282 (c) of the Labor Code of the Philippines, the following guidelines must be observed: "1) loss of confidence should

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SUMMARY OF DOCTRINES June 20, 2012

not be simulated; 2) it should not be used as subterfuge for causes which are improper, illegal or unjustified; 3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and 4) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith." More important, it "must be based on a willful breach of trust and founded on clearly established facts."

DISMISSAL Wilful Disobedience Kakampi and its Members, Victor Panuelos, et al., represented by David Dayalo, Kakampi Vice President and Attorneyin-Fact v. Kingspoint Express and Logistic and/or Mary Ann Co G.R. No. 194813 April 25, 2012

An employer may terminate an employment on the ground of serious misconduct or wilful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. Willful disobedience requires the concurrence of two elements: (1) the employee's assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge.

Billy M. Realda v. New Age Graphics, Inc. and Julian I. Mirasol, Jr. G.R. No. 192190 April 25, 2012

An employer has the right to require the performance of overtime service in any of the situations contemplated under Article 89 of the Labor Code and an employee’s non-compliance is willful disobedience.

DISMISSAL Redundancy Lenn Morales v. Metropolitan Bank and Trust Company G.R. No. 182475 November 21, 2012

For the implementation of a redundancy program to be valid, the employer must comply with the following requisites: (1) written notice served on both the employees and the DOLE at least one month prior to the intended date of termination of employment; (2) payment of separation pay equivalent to at least one month pay for every year of service; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. In implementing a redundancy program, it has been ruled that the employer is required to adopt a fair and reasonable criteria, taking into consideration such factors as (a) preferred status; (b) efficiency; and (c) seniority, among others.

General Milling Corporation v. Violeta L. Viajar G.R. No. 181738 January 30, 2013

While it is true that the “characterization of an employee’s services as superfluous or no longer necessary and, therefore, properly terminable, is an exercise of business judgment on the part of the employer,” the exercise of such judgment, however, must not be in violation of the law, and must not be arbitrary or malicious. The Court has always stressed that a company cannot simply declare redundancy without basis. To exhibit its good faith and that there was a fair and reasonable criteria in ascertaining redundant positions, a company claiming to be over manned must produce adequate proof of the same.

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San Beda College of Law 2013 Centralized Bar Operations DISMISSAL Termination of Union Members Due to an Illegal Strike C. Alcantara & Sons, Inc. v. Court of Appeals G.R. No. 155109 September 29, 2010

Since the Union’s strike has been declared illegal, the Union officers can, in accordance with law be terminated from employment for their actions. As regards the rank and file Union members, Article 264 of the Labor Code provides that termination from employment is not warranted by the mere fact that a union member has taken part in an illegal strike. It must be shown that such a union member, clearly identified, performed an illegal act or acts during the strike. The mere fact that the criminal complaints against the terminated Union members were subsequently dismissed for one reason or another does not extinguish their liability under the Labor Code. Nor does such dismissal bar the admission of the affidavits, documents, and photos presented to establish their identity and guilt during the hearing of the petition to declare the strike illegal.

DISMISSAL Analogous Cases Cosmos Bottling Corp. v. Wilson Fermin G.R. No. 193676 June 20, 2012

Theft committed against a co-employee is considered as a case analogous to serious misconduct, for which the penalty of dismissal from service may be meted out to the erring employee. Misconduct involves "the transgression of some established and definite rule of action, forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment." For misconduct to be serious and therefore a valid ground for dismissal, it must be: (1) of grave and aggravated character and not merely trivial or unimportant; and (2) connected with the work of the employee.

DISMISSAL Constructive Dismissal Mindanao Terminal and Brokerage Service, Inc. vs. Nagkahiusang Mamumuo sa MinterbroSouthern Philippines Federation of Labor G.R. No. 174300 December 5, 2012

Article 286 (now Article 292) of the Labor Code provides that the bona fide suspension of the operation of a business or undertaking for a period not exceeding six months shall not terminate employment. Consequently, when the bona fide suspension of the operation of a business or undertaking exceeds six months, then the employment of the employee shall be deemed terminated. By the same token and applying said rule by analogy, if the employee was forced to remain without work or assignment for a period exceeding six months, then he is in effect constructively dismissed.

DISMISSAL Separation Pay Ma. Corina C. Jiao, et. al v. National Labor Relations Commission G.R. No. 182331 April 18, 2012

For as long as the minimum requirements of the Labor Code are met, it is within the management prerogatives of employers to come up with separation packages that will be given in lieu of what is provided under the Labor Code.

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SUMMARY OF DOCTRINES DISMISSAL Recomputation of Backwages Leo Gonzales v. Solid Cement Corporation G.R. No. 198423 October 23, 2012

By the nature of an illegal dismissal case, the reliefs continue to add on until full satisfaction, as expressed under Article 279 of the Labor Code. The re-computation of the consequences of illegal dismissal upon execution of the decision does not constitute an alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only the computation of monetary consequences of this dismissal is affected and this is not a violation of the principle of immutability of final judgments.

DISMISSAL Prescriptive Period of Injury to Rights Teekay Shipping Phils., Inc., and/or Teekay Shipping Canada v. Ramier C. Concha G.R. No. 185463 February 22, 2012

It is a principle in American jurisprudence which, undoubtedly, is wellrecognized in this jurisdiction that one’s employment, profession, trade or calling is a "property right," and the wrongful interference therewith is an actionable wrong. The right is considered to be property within the protection of a constitutional guaranty of due process of law. Clearly then, when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to contest the legality of one’s dismissal from employment constitutes, in essence, an action predicated "upon an injury to the rights of the plaintiff," as contemplated under Article 1146 of the New Civil Code, which must be brought within four (4) years.

CLOSURE OF ESTABLISHMENT Retrenchment Waterfront Cebu City Hotel v. Ma. Melanie P. Jimenez, Jacqueline C. Baguio, Lovella V. Carillo and Maila G. Roble G.R. No. 174214 June 13, 2012

For a valid retrenchment, the following elements must be present: (1) That retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (3) That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least ½ month pay for every year of service, whichever is higher; (4) That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure; and (5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.

REINSTATEMENT Execution of Reinstatement Order rd

3 Alert Security and Detective Services, Inc. v. Romualdo Navia G.R. No. 200653 June 13, 2012

Article 223 (now Article 229) of the Labor Code provides that in case there is an order of reinstatement, the employer must admit the dismissed employee under the same terms and conditions, or merely reinstate the employee in the payroll. The order shall be immediately executory. Thus, 3rd Alert cannot escape liability by simply invoking that Navia did not report for work. The law states that the employer must still reinstate the employee in the payroll. Where reinstatement is no longer

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San Beda College of Law 2013 Centralized Bar Operations viable as an option, separation pay equivalent to one (1) month salary for every year of service could be awarded as an alternative. It is also proper to impose treble costs against 3rd Alert for its utter disregard to comply with the writ of execution.

RETIREMENT BENEFITS Banco Filipino Savings and Mortgage Bank v. Miguelito M. Lazaro G.R. No. 185346 June 27, 2012

Banks under liquidation retain their legal personality. In fact, even if they are prohibited from conducting regular banking business, it is necessary that debts owed to them be collected. Thus, the period of liquidation shall still be included in computing the retirement benefits if Lazaro. Only in the absence of an applicable retirement agreement shall Article 287 (now Article 293) of the Labor Code apply providing for the rounding of a fraction of 6 months being considered as 1 year. Moreover, there is a proviso however, that an employee's retirement benefits under any agreement shall not be less than those provided in the said article. In fact, the bank offers a retirement pay equivalent to one and one-half month salary for every year of service, a rate over and above the one-half month salary threshold provided by the law. Moreover, although the Rules of the Banco Filipino Retirement Fund do not grant a rounding off scheme, they nonetheless provide that prorated credit shall be given for incomplete years, regardless of the fraction of months in the retiree’s length of service.

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