January 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected January 2011 rulings of the Supreme Court of the Philippines on labor law and procedure:

Apprenticeship agreement; validity. The apprenticeship agreements did not indicate the trade or occupation in which the apprentice would be trained; neither was the apprenticeship program approved by the Technical Education and Skills Development Authority (TESDA). These were defective as they were executed in violation of the law and the rules. Moreover, with the expiration of the first agreement and the retention of the employees, the employer, to all intents and purposes, recognized the completion of their training and their acquisition of a regular employee status. To foist upon them the second apprenticeship agreement for a second skill which was not even mentioned in the agreement itself, is a violation of the Labor Code’s implementing rules and is an act manifestly unfair to the employees. Atlanta Industries, Inc. and/or Robert Chan vs.  Aprilito R. Sebolino, et al., G.R. No. 187320, January 26, 2011.

Complaint; reinstatement. Petitioners question the order to reinstate respondents to their former positions, considering that the issue of reinstatement was never brought up before the Court of Appeals and respondents never questioned the award of separation pay to them. Section 2 (c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief sought, but may add a general prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can grant the relief warranted by the allegation and the evidence even if it is not specifically sought by the injured party; the inclusion of a general prayer may justify the grant of a remedy different from or in addition to the specific remedy sought, if the facts alleged in the complaint and the evidence introduced so warrant. The prayer in the complaint for other reliefs equitable and just in the premises justifies the grant of a relief not otherwise specifically prayed for. Therefore, the court may grant relief warranted by the allegations and the proof even if no such relief is prayed for. In the instant case, aside from their specific prayer for reinstatement, respondents, in their separate complaints, prayed for such reliefs which are deemed just and equitable. Prince Transport, Inc. and Mr. Renato Claros vs. Diosdado Garcia, et al., G.R. No. 167291, January 12, 2011.

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November 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected November 2010 rulings of the Supreme Court of the Philippines on labor law and procedure:

Appeal; determination of date of filing. Under Section 3, Rule 13 of the Rules of Court, where the filing of pleadings, appearances, motions, notices, orders, judgments, and all other papers with the court/tribunal is made by registered mail, the date of mailing, as shown by the post office stamp on the envelope or the registry receipt, shall be considered as the date of filing. Thus, the date of filing is determinable from two sources:  from the post office stamp on the envelope or from the registry receipt, either of which may suffice to prove the timeliness of the filing of the pleadings. If the date stamped on one is earlier than the other, the former may be accepted as the date of filing. In this case, to prove that it mailed the notice of appeal and appeal memorandum on October 27, 1997, instead of October 28, 1997, as shown by the stamped date on the envelope, petitioner presented Registry Receipt No. 34581 bearing the earlier date. Government Service Insurance System vs. National Labor Relations Commission (NLRC), Dionisio Banlasan, et al., G.R. No. 180045, November 17, 2010.

Appeal; filed out of time; exceptional cases. An appeal must be perfected within the statutory or reglementary period.  This is not only mandatory, but also jurisdictional.  Failure to perfect the appeal on time renders the assailed decision final and executory and deprives the appellate court or body of the legal authority to alter the final judgment, much less entertain the appeal. However, in exceptional cases, a belated appeal may be given due course if greater injustice will be visited upon the party should the appeal be denied. This is to serve the greater principles of substantial justice and equity. Technical rules are not binding in labor cases and are not to be applied strictly if the result would be detrimental to the working man. In the instant case, even if the appeal was filed one day late, the same should have been entertained by the NLRC. Government Service Insurance System vs. National Labor Relations Commission (NLRC), Dionisio Banlasan, et al., G.R. No. 180045, November 17, 2010.

Compensable illness; work-relatedness.  Granting arguendo that petitioner’s illness was not pre-existing, he still had to show that his illness not only occurred during the term of his contract but also that it resulted from a work-related injury or illness, or at the very least aggravated by the conditions of the work for which he was contracted for.  Petitioner failed to discharge this burden, however. That the exact and definite cause of petitioner’s illness is unknown cannot be used to justify grant of disability benefits, absent proof that there is any reasonable connection between work actually performed by petitioner and his illness.  Jerry M. Francisco, vs. Bahia Shipping Services, Inc. and/or Cynthia C. Mendoza, and Fred Olsen Cruise Lines, Ltd., G.R. No. 190545,  November 22, 2010.

Dismissal; illegal strike; distinction between union officers and mere members. The liabilities of individuals who participate in an illegal strike must be determined under Article 264 (a) of the Labor Code which makes a distinction between union officers and mere members.  The law grants the employer the option of declaring a union officer who knowingly participated in an illegal strike as having lost his employment. However, a worker merely participating in an illegal strike may not be terminated from employment if he does not commit illegal acts during a strike. Hence, with respect to respondents who are union officers, their termination by petitioners is valid.  Being fully aware that the proceedings before the Secretary of Labor were still pending as in fact they filed a motion for reconsideration, they cannot invoke good faith as a defense. For the rest of the individual respondents who are union members, they cannot be terminated for mere participation in the illegal strike.  Solid Bank Corp. Ernesto U. Gamier, et al. and Solid Bank Corp., et al. vs. Solid Bank Union and its Dismissed Officers and Members, et al. G.R. No. 159460 and G.R. No. 159461, November 15, 2010.

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September 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected September 2010 rulings of the Supreme Court of the Philippines on labor law and procedure:

Labor Law

Compensable illness. The CBA provision states: “If a seafarer/officer, due to no fault of his own, suffers permanent disability as a result of an accident while serving on board or while traveling to or from the vessel on Company’s business or due to marine peril, and as a result, his ability to work is permanently reduced, totally or partially, the Company shall pay him a disability compensation.” “Accident” has been defined as: A fortuitous circumstance, event, or happening, an event happening without any human agency, or if happening wholly or partly through human agency, an event which under the circumstances is unusual and unexpected by the person to whom it happens. The Court holds that the snap on the back of respondent was not an accident, but an injury sustained by respondent from carrying the heavy basketful of fire hydrant caps. The injury cannot be said to be the result of an accident or fortuitous event. It resulted from the performance of a duty.  Although the disability of respondent was not caused by an accident, his disability is still compensable under the CBA provision: “A seafarer/officer who is disabled as a result of any injury, and who is assessed as less than 50% permanently disabled, but permanently unfit for further service at sea in any capacity, shall also be entitled to a 100% compensation.” NFD International Manning Agents, Inc./Barber Ship Management Ltd.  vs. Esmeraldo C. Illescas, G.R. No. 183054, September 29, 2010.

Dismissal; due process. SPO2 Roaquin is entitled to reinstatement since he was dismissed from the service without administrative due process. No one ever filed an administrative action against him in connection with the crime of which he was charged in court. At any rate, assuming that someone filed an administrative charge against Roaquin, still the law required the PNP to give him notice of such charge and the right to answer the same. The PNP gave him no chance to show why he should not be discharged nor does the record show that the PNP investigated him or conducted a summary proceeding to determine his liability in connection with the murder of which he was charged in court.  While the PNP may have validly suspended Roaquin from the service pending the adjudication of the criminal case against him, he is entitled, after his acquittal, to reinstatement and payment of the salaries, allowances, and other benefits withheld from him by reason of his discharge from the service. P/Chief Superintendent Roberto L. Calinisan, etc., et al. vs. SPO2 Reynaldo L. Roaquin, G.R. No. 159588, September 15, 2010.

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March 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected March 2010 rulings of the Supreme Court of the Philippines on labor law and procedure:

Labor law

Cancellation of union registration. Art. 234(c) of the Labor Code requires the mandatory minimum 20% membership of rank-and-file employees in the employees’ union. Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a union membership of at least 22 employees (112 x 205 = 22.4).  When the EREU filed its application for registration on December 19, 2005, there were clearly 30 union members.  Thus, when the certificate of registration was granted, there is no dispute that the Union complied with the mandatory 20% membership requirement. Accordingly, the retraction of six union members who later severed and withdrew their union membership cannot cause the cancellation of the union’s registration.

Besides, it cannot be argued that the affidavits of retraction retroacted to the time of the application for union registration or even way back to the organizational meeting. Before their withdrawal, the six employees in question were bona fide union members. They never disputed affixing their signatures beside their handwritten names during the organizational meetings.  While they alleged that they did not know what they were signing, their affidavits of retraction were not re-affirmed during the hearings of the instant case rendering them of little, if any, evidentiary value. In any case, even with the withdrawal of six union members, the union would still be compliant with the mandatory membership requirement under Art. 234(c) since the remaining 24 union members constitute more than the 20% membership requirement of 22 employees.  Eagle Ridge Gold & Country Club vs. Court of Appeals, et al., G.R. No. 178989, March 18, 2010.

Cessation of operations; financial assistance.  Based on Article 283, in case of cessation of operations, the employer is only required to pay his employees a separation pay of one month pay or at least one-half month pay for every year of service, whichever is higher. That is all that the law requires.

In the case at bar, petitioner paid respondents the following: (a) separation pay computed at 150% of their gross monthly pay per year of service; and (b) cash equivalent of earned and accrued vacation and sick leaves. Clearly, petitioner had gone over and above the requirements of the law. Despite this, however, the Labor Arbiter ordered petitioner to pay respondents an additional amount, equivalent to one month’s salary, as a form of financial assistance.

The award of financial assistance is bereft of legal basis and serves to penalize petitioner who had complied with the requirements of the law. The Court also point out that petitioner may, as it has done, grant on a voluntary and ex gratia basis, any amount more than what is required by the law, but to insist that more financial assistance be given is certainly something that the Court cannot countenance. Moreover, any award of additional financial assistance to respondents would put them at an advantage and in a better position than the rest of their co-employees who similarly lost their employment because of petitioner’s decision to cease its operations. SolidBank Corporation vs. National Labor Relations Commission, et al., G.R. No. 165951, March 30, 2010.

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February 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected February 2010 rulings of the Supreme Court of the Philippines on labor law and procedure:

Labor Law

Agency; principle of apparent authority. There is ample evidence that the hospital held out to the patient that the doctor was its agent. The two factors that determined apparent authority in this case were: first, the hospital’s implied manifestation to the patient which led the latter to conclude that the doctor was the hospital’s agent; and second, the patient’s reliance upon the conduct of the hospital and the doctor, consistent with ordinary care and prudence.

It is of record that the hospital required a “consent for hospital care” to be signed preparatory to the surgery of the patient. The form reads: “Permission is hereby given to the medical, nursing and laboratory staff of the Medical City General Hospital to perform such diagnostic procedures and to administer such medications and treatments as may be deemed necessary or advisable by the physicians of this hospital for and during the confinement of xxx.

By such statement, the hospital virtually reinforced the public impression that the doctor was a physician of its hospital, rather than one independently practicing in it; that the medications and treatments he prescribed were necessary and desirable; and that the hospital staff was prepared to carry them out. Professional Services, Inc. vs. The Court of Appeals, et al./Natividad (substituted by her children Marcelino Agana III, Enrique Agana, Jr. Emma Agana-Andaya, Jesus Agana and Raymund Agana and Errique Agana) vs. The Court of Appeals and Juan Fuentes Miguel Ampil vs. Natividad and Enrique Agana, G.R. Nos. 126297/G.R. No. 126467/G.R. No. 127590, February 2, 2010.

Compensable illness. Since cholecystolithiasis or gallstone has been excluded as a compensable illness under the applicable standard contract for Filipino seafarers that binds the seafarer and the vessel’s foreign owner, it was an error for the CA to treat such  illness as “work-related” and, therefore, compensable.  The standard contract precisely did not consider gallstone as compensable illness because the parties agreed, presumably based on medical science, that such affliction is not caused by working on board ocean-going vessels.

Nor is there any evidence to prove that the nature of the seafarer’s work on board a ship aggravated his illness.  No one knows if he had gallstone at the time he boarded the vessel.  By the nature of this illness, it is highly probable that he already had it when he boarded his assigned ship although it went undiagnosed because he had yet to experience its symptoms. Bandila Shipping, Inc. et al. vs. Marcos C. Abalos, G.R. No. 177100, February 22, 2010.

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December 2009 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected December 2009 rulings of the Supreme Court of the Philippines on labor law and procedure:

Labor Law

Attorney’s fees;  actions for indemnity under employer liability laws. The claim for attorney’s fees is granted following Article 2208 of the New Civil Code which allows its recovery in actions for recovery of wages of laborers and actions for indemnity under the employer’s liability laws. The same fees are also recoverable when the defendant’s act or omission has compelled the plaintiff to incur expenses to protect his interest as in the present case following the refusal by the employer to settle the employee’s claims. Pursuant to prevailing jurisprudence, petitioner is entitled to attorney’s fees of ten percent (10%) of the monetary award. Leopoldo Abante vs. KJGS Fleet Management Manila and/or Guy Domingo A. Macapayag, Kristian Gerhard Jebsens Skipsrenderi A/S, G.R. No. 182430, December 4, 2009.

Compensability of death; requirements. To be entitled to compensation, a claimant must show that the sickness is either: (1) a result of an occupational disease listed under Annex “A” of the Amended Rules on Employees’ Compensation under the conditions Annex “A” sets forth; or (2) if not so listed, that the risk of contracting the disease is increased by the working conditions.

Based on Francisco’s death certificate, the immediate cause of his death was cardiac arrest; the antecedent cause was acute massive hemorrhage, and the underlying cause was bleeding peptic ulcer disease.

In determining the compensability of an illness, the worker’s employment need not be the sole factor in the growth, development, or acceleration of a claimant’s illness to entitle him to the benefits provided for. It is enough that his employment contributed, even if only in a small degree, to the development of the disease.

P.D. 626 is a social legislation whose primordial purpose is to provide meaningful protection to the working class against the hazards of disability, illness, and other contingencies resulting in loss of income. In employee compensation, persons charged by law to carry out the Constitution’s social justice objectives should adopt a liberal attitude in deciding compensability claims and should not hesitate to grant compensability where a reasonable measure of work-connection can be inferred. Only this kind of interpretation can give meaning and substance to the law’s compassionate spirit as expressed in Article 4 of the Labor Code – that all doubts in the implementation and interpretation of the provisions of the Labor Code, including their implementing rules and regulations, should be resolved in favor of labor. Government Service Insurance System vs. Jean E. Raoet, G.R. No. 157038, December 23, 2009.

Compensable injury; requirement. Section 20(B) of the POEA Standard Employment Contract provides for the liabilities of the employer only when the seafarer suffers from a work-related injury or illness during the term of his employment.

Petitioner claims to have reported his illness to an officer once on board the vessel during the course of his employment. The records are bereft, however, of any documentary proof that he had indeed referred his illness to a nurse or doctor in order to avail of proper treatment. It thus becomes apparent that he was repatriated to the Philippines, not on account of any illness or injury, but in view of the completion of his contract.

But even assuming that petitioner was repatriated for medical reasons, he failed to submit himself to the company-designated doctor in accordance with the post-employment medical examination requirement under the above-quoted paragraph 3 of Section 20(B) of the POEA Standard Employment Contract. Failure to comply with this requirement which is a sine qua non bars the filing of a claim for disability benefits. Dionisio M. Musnit vs. Sea Star Shipping Corporation and Sea Star Shipping Corporation, Ltd., G.R. No. 182623, December 4, 2009.

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July 2009 Philippine Supreme Court Decisions on Commercial, Tax and Labor Laws

Here are selected July 2009 Philippine Supreme Court decisions on commercial, tax and labor laws:

Commercial Law

Board action.  A corporate loan entered into by the President without board approval is binding on the corporation when the President is authorized under the by-laws to enter into loans on behalf of the corporation. Cebu Mactan Members Center, Inc. vs. Masahiro Tsukahara, G.R. No. 159624, July 17, 2009.

Tax Law

Franchise tax.  Jurisprudence suggests that aside from the national franchise tax, the franchisee is still liable to pay the local franchise tax, unless it is expressly and unequivocally exempted from the payment thereof under its legislative franchise. The “in lieu of all taxes” clause in a legislative franchise should categorically state that the exemption applies to both local and national taxes; otherwise, the exemption claimed should be strictly construed against the taxpayer and liberally in favor of the taxing authority.  Smart Communications, Inc., vs. The City of Davao, represented by its Mayor Hon. Rodrigo Duterte and the Sangguniang Panlunsod of Davao City, G.R. No. 155491, July 21, 2009.

Minimum corporate income tax. Under its charter, Philippine Airlines is exempt from the minimum corporate income tax. Commissioner of Internal Revenue vs.. Philippine Airlines, Inc., G.R. No. 180066, July 7, 2009.

Overseas communications tax.  Section 13 of Presidential Decree No. 1590, granting respondent tax exemption, is clearly all-inclusive. The basic corporate income tax or franchise tax paid by respondent shall be “in lieu of all other taxes, duties, royalties, registration, license, and other fees and charges of any kind, nature, or description imposed, levied, established, assessed or collected by any municipal, city, provincial, or national authority or government agency, now or in the future x x x,” except only real property tax.  Even a meticulous examination of Presidential Decree No. 1590 will not reveal any provision therein limiting the tax exemption of respondent to final withholding tax on interest income or excluding from said exemption the overseas communications tax.  Commissioner of Internal Revenue vs. Philippine Airlines, Inc. (PAL), G.R. No. 180043, July 14, 2009.

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