October 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected October 2010 rulings of the Supreme Court of the Philippine on labor law and procedure:

Compensable illness. Respondent is entitled to sickness wages because the shooting pain in his right foot is an injury which he suffered during the course of his employment. This is in consonance with the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On Board Ocean-Going Vessels of the Department of Labor and Employment. Applying the said provisions of this standard contract, respondent is entitled to receive sickness wages covering the maximum period of 120 days. Moreover, petitioners violated the contract when it failed to provide continuous treatment for respondent in accordance with the recommendation of their company physician.  Because of this failure, respondent was forced to seek immediate medical attention at his own expense.  Thus, he is also entitled to reimbursement of his medical expenses. Varorient Shipping Co., Inc., et al. vs. Gil Flores, G.R. No. 161934, October 6, 2010

Compensable illness. For an injury or illness to be duly compensated under the terms of the Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC), there must be a showing that the injury or illness and the ensuing disability occurred during the effectivity of the employment contract. Moreover, all of these conditions must be satisfied — 1.) The seafarer’s work must involve the risks described in the POEA-SEC; 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.  Specifically, with respect to mental diseases, the POEA-SEC requires that it must be due to traumatic injury to the head which did not occur in this case.  In fact, respondent claimed that he became depressed due to the frequent verbal abuse he received from his German superiors. However, he failed to show concrete proof that, if indeed he was subjected to abuse, it directly resulted in his depression.  Philippine Transmarine Carriers, Inc., Global Navigation, Ltd. vs.. Silvino A. Nazam, G.R. No. 190804. October 11, 2010.

Constructive dismissal; transfer. It is management prerogative to transfer or assign employees from one office or area of operation to another. However, the employer must show that the transfer is not unreasonable, inconvenient or prejudicial to the employee, or that it does not involve a demotion in rank or a diminution of his salaries, privileges and other benefits.  Should the employer fail to overcome this burden, the employee’s transfer shall be tantamount to constructive dismissal. In the instant case, Del Villar’s demotion is readily apparent in his new designation as a mere Staff Assistant to the Corporate Purchasing and Materials Control Manager from being Transportation Services Manager. The two posts are not of the same weight in terms of duties and responsibilities. Moreover, while Del Villar’s transfer did not result in the reduction of his salary, there was a diminution in his benefits because as a mere Staff Assistant, he could no longer enjoy the use of a company car, gasoline allowance, and annual foreign travel, which he previously enjoyed as Transportation Services Manager. Thus, Del Villar was clearly constructively dismissed. Coca Cola Bottlers Philippines, Inc. vs. Angel U. Del Villar, G.R. No. 163091, October 6, 2010.

Dismissal; closure of business. Petitioner terminated the employment of respondents on the ground of closure or cessation of operation of the establishment which is an authorized cause for termination under Article 283 of the Labor Code. While it is true that a change of ownership in a business concern is not proscribed by law, the sale or disposition must be motivated by good faith as a condition for exemption from liability. In the instant case, however, there was, in fact, no change of ownership. Petitioner did not present any documentary evidence to support its claim that it sold the same to ALPS Transportation.  On the contrary, it continuously operates under the same name, franchises and routes and under the same circumstances as before the alleged sale. Thus, no actual sale transpired and, as such, there is no closure or cessation of business that can serve as an authorized cause for the dismissal of respondents. Peñafrancia Tours and Travel Transport, Inc. vs. Joselito P. Sarmiento and Ricardo S. Catimbang, G.R. No. 178397, October 20, 2010.

Continue reading

August 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Labor Law

Dismissal; abandonment. Time and again, the Supreme Court has held that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so if the same is accompanied by a prayer for reinstatement. In the present case, however, petitioner filed his complaint more than one year after his alleged termination from employment. Moreover, petitioner did not ask for reinstatement in the complaint form, which he personally filled up and filed with the NLRC. The prayer for reinstatement is made only in the Position Paper that was later prepared by his counsel. This is an indication that petitioner never had the intention or desire to return to his job. Elpidio Calipay vs. National Labor Relations Commission, et al., G.R. No. 166411, August 3, 2010.

Dismissal; burden of proof. In termination cases, the employer has the burden of proving, by substantial evidence that the dismissal is for just cause. If the employer fails to discharge the burden of proof, the dismissal is deemed illegal. In the present case, BCPI failed to discharge its burden when it failed to present any evidence of the alleged fistfight, aside from a single statement, which was refuted by statements made by other witnesses and was found to be incredible by both the Labor Arbiter and the NLRC. Alex Gurango vs. Best Chemicals and Plastic, Inc., et al., G.R. No. 174593, August 25, 2010.

Dismissal; burden of proof. The law mandates that the burden of proving the validity of the termination of employment rests with the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and, therefore, illegal. Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal justification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution. Century Canning Corporation, Ricardo T. Po, Jr., et al. vs. Vicente Randy R. Ramil, G.R. No. 171630, August 8, 2010.

Dismissal; due process. In termination proceedings of employees, procedural due process consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second informs the employee of the employer’s decision to dismiss him. The requirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted. Pharmacia and Upjohn, Inc., et al. vs. Ricardo P. Albayda, Jr., G.R. No. 172724, August 23, 2010.

Continue reading

April 2010 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Labor Law

Dismissal; backwages. Article 279 of the Labor Code provides that “an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.”

Thus, a number of cases holds that an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement.  The two reliefs are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted.  In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement.  Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative.  The payment of separation pay is in addition to the payment of backwages.

Since reinstatement is no longer feasible in the present case, the award of separation pay in lieu of reinstatement is in order.  Petitioner’s prayer for the award of backwages is meritorious, it, and the award of separation pay not being mutually exclusive. Ferdinand A. Pangilinan vs. Wellmade Manufacturing Corporation, G.R. No. 187005, April 7, 2010.

Dismissal; backwages. Reprimand being the appropriate imposable penalty for respondent’s actuations from the very beginning, the Court finds that respondent was unfairly denied from reporting for work and earning his keep, thus, entitling him to the payment of backwages.

The Court is not unmindful of our previous pronouncements in similar cases involving suspension or dismissal from service, wherein the penalty imposed was reduced, but the award of backwages was denied.

Given the circumstances of the case, however, where the proper penalty should only be a reprimand, the Court finds the aforementioned cases to be inapplicable herein. On this note, the Court deems it proper to distinguish between the penalties of dismissal or suspension and reprimand and their respective effects on the grant or award of backwages. When an employee is dismissed or suspended it is but logical that since he is barred from reporting to work the same negates his right to be paid backwages. He has no opportunity to work during the period he was dismissed or suspended and, therefore, he has no salary to expect. However, the same does not hold true for an employee who is reprimanded. A reprimand usually carries a warning that a repetition of the same or similar act will be dealt with more severely. Under normal circumstances, an employee who is reprimanded is never prevented from reporting to work. He continues to work despite the warning. Thus, in the case at bar, since respondent’s penalty should only be a reprimand, the Court deems it proper and equitable to affirm the Court of Appeals’ (CA’s) award of backwages.

Continue reading

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.

Continue reading

December 2009 Philippine Supreme Court Decisions on Legal and Judicial Ethics

Here are selected December 2009 rulings of the Supreme Court of the Philippines on legal and judicial ethics:

Legal Ethics

Abuse of court processes and legal procedure; forum shopping  The successive filings of a petition for certiorari, petition for annulment of judgment, two petitions for annulment of the complainant’s certificate of title, and a petition for declaratory relief, all containing a prayer for injunctive relief, reveal the respondent’s persistence in preventing and avoiding the execution of the final decisions of the lower courts against his client.  Under the circumstances, the respondent lawyer’s repeated attempts go beyond the legitimate means allowed by professional ethical rules in defending the interests of his client.  These are already uncalled for measures to avoid the enforcement of the final judgment of the lower courts.  The respondent violated Rule 10.03, Canon 10 of the Code of Professional Responsibility.

The respondent also violated Rule 12.02 and Rule 12.04, Canon 12 of the Code of Professional Responsibility, as well as the rule against forum shopping, both of which are directed against the filing of multiple actions to attain the same objective.  Conrado Que v. Atty. Anastacio Revilla, Jr.A.C. No. 7054, December 4, 2009.

Gross negligence.  A lawyer, when he undertakes a client’s cause, makes a covenant that he will exert all efforts for its prosecution until its final conclusion.  He should undertake the task with dedication and care, and he should do no less, otherwise, he is not true to his lawyer’s oath.  Respondent was woefully remiss in his duty to display utmost diligence and competence in protecting the interests of his clients.  Petitioners lost the civil case in the trial court because they were barred from presenting their evidence as a result of their being declared in default as a consequence of respondent’s failure to submit a pre-trial brief and to attend the pre-trial conference.  Petitioners’ appeal to the Court of Appeals from the adverse default judgment of the trial court was dismissed on account of respondent’s failure to file an appeal brief.  Respondent is guilty of gross negligence and misconduct in violation of Canon 17, and Rules 18.02 and 18.03, Canon 18 of the Code of Professional Responsibility.  Cesar Talento and Modesta Herrera Talento v. Atty. Agustin Paneda, A.C. No. 7433, December 23, 2009.

Judicial ethics 

Bad faith defined; absence of proof.   Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of a sworn duty through some motive or intent or ill-will; it partakes of the nature of fraud.  It contemplates a state of mind affirmatively operating with furtive design or some motive or self-interest or ill-will for ulterior purposes.  Evident bad faith connotes a manifest deliberate intent on the part of the accused to do wrong or cause damage.  In issuing, ex parte, an order which was effectively a Temporary Restraining Order with an indefinite term, the respondent judge was found to have violated Rule 58, Section 5 of the Rules of Court.  However, the charge of bad faith and manifest partiality was rejected by the Supreme Court.  No evidence was adduced to prove that the issuance of the assailed order was motivated by bad faith.  Further, the Supreme Court found that in issuing the assailed order, respondent judge was not at all motivated by bad faith, dishonesty, hatred and some other motive; rather, he took into account the circumstances obtaining between the parties.   Mayor Hadji Amer R. Sampiano, et al. v. Judge Cader P. Indar,  A.M. RTJ-05-1953, December 21, 2009.

Continue reading

October 2009 Philippine Supreme Court Decisions on Labor Law

Here are selected October 2009 Supreme Court decisions on labor law:

Dismissal; abandonment. To constitute abandonment, there must be a clear and deliberate intent to discontinue one’s employment without any intention of returning. Two elements must concur: (1) failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts. It is the employer who has the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment without any intention of returning.

In the instant case, petitioners failed to prove that it was Bolanos who refused to report for work despite being asked to return to work. Petitioners merely presented the affidavits of the officers of Henlin Panay narrating their version of the facts. These affidavits, however, are not only insufficient but also undeserving of credit as they are self-serving. Petitioners failed to present memoranda or show-cause letters served on Bolanos at her last known address requiring her to report for work or to explain her absence, with a warning that her failure to report would be construed as abandonment of work. Also, if indeed Bolanos abandoned her work, petitioners should have served her a notice of termination as required by law. Petitioners’ failure to comply with said requirement bolsters Bolanos’s claim that she did not abandon her work but was dismissed.

Moreover, if Bolanos had indeed forsaken her job, she would not have bothered to file a complaint for illegal dismissal. It is well settled that the filing by an employee of a complaint for illegal dismissal is proof of her desire to return to work, thus negating the employer’s charge of abandonment.  Henlin Panay Company and/or Edwin Francisco/Angel Lazaro III vs. National Labor Relations Commission and Nory A. Bolanos, G.R. No. 180718, October 23, 2009.

Dismissal; attorney’s fees. It is settled that in actions for recovery of wages or when the employee is illegally dismissed in bad faith or where an employee was forced to litigate and incur expenses to protect his rights and interests by reason of the unjustified acts of his employer, he is entitled to an award of attorney’s fees. This award is justifiable under Article 111 of the Labor Code, Section 8, Rule VIII, Book III of its Implementing Rules; and paragraph 7, Article 2208 of the Civil Code.

Moreover, in cases for recovery of wages, the award of attorney’s fees is proper and there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. There need only be a showing that the lawful wages were not paid accordingly.  Baron Republic Theatrical Major Cinema, et al. vs. Normita P. Peralta and Edilberto H. Aguilar, G.R. No. 170525, October 2, 2009.

Continue reading

May 2009 Decisions on Commercial, Tax and Labor Laws

Here are selected May 2009 decisions of the Supreme Court on commercial, tax and labor laws.

Commercial Law

Collecting bank; liability. A collecting bank where a check is deposited, and which endorses the check upon presentment with the drawee bank, is an endorser. Under Section 66 of the Negotiable Instruments Law, an endorser warrants “that the instrument is genuine and in all respects what it purports to be; that he has good title to it; that all prior parties had capacity to contract; and that the instrument is at the time of his endorsement valid and subsisting.” The Supreme Court has repeatedly held that in check transactions, the collecting bank or last endorser generally suffers the loss because it has the duty to ascertain the genuineness of all prior endorsements considering that the act of presenting the check for payment to the drawee is an assertion that the party making the presentment has done its duty to ascertain the genuineness of the endorsements.

When Associated Bank stamped the back of the four checks with the phrase “all prior endorsements and/or lack of endorsement guaranteed,” that bank had for all intents and purposes treated the checks as negotiable instruments and, accordingly, assumed the warranty of an endorser. Being so, Associated Bank cannot deny liability on the checks.  Bank of America, NT and SA Vs. Associated Citizens Bank, et al./Associated Citizens Bank vs. BA Finance Corporation, et al., G.R. Nos. 141001/141018,  May 21, 2009.
Continue reading