General Principles Case No.

2 on him that they were out looking for every means possible to pin him down.
Nonetheless, he reported to his reassignment in FTI Taguig on April 3, 2009. There
LEO T. MAULA v. XIMEX DELIVERY EXPRESS, INC.
he was served with the memorandum suspending him from work for thirty 30 days
G.R. No. 207838, January 25, 2017
effective April 4, 2009 for alleged "Serious misconduct and willful disobedience by
Second Division
the employee of the lawful orders of his employer or representative in connection
Peralta, J.:
with his work."
FACTS: With this, Maula filed a case with the NCMB but the respondents
never appeared. Thereafter, he was refused entry in the office and a dismissal letter
Petitioner Maula was hired by respondent Ximex Inc. as Operation
was handed to him. He re-file his complaint with the Arbitration Branch of the
Staff for seven years. His employment was uneventful until on 2009, Ximex’ HR
NLRC. Efforts were exerted by the LA but there came no amicable settlement. The
Department required the employees to sign a form sub-titled "Personal Data for New
LA ruled that Maula is illegally dismissed on the ground that the alleged
Hires" changing the designated salary/wage to daily instead of monthly, which Maula
mishandling turned out to be baseless, the reassignment was without clear
questioned. The parties entered into an amicable settlement before the NCMB.
explanation and the charge for disobedience was not eventually acted upon and does
Thereafter, a problem was brought up in the company about a misrouted cargo. Said
not constitute serious misconduct. The NLRC affirmed in toto the LA's decision. The
incident was blamed on Maula as he has the duty of, among others, documentation,
CA reversed the decision of NLRC on the ground that Maula’s behavior constitutes
checker, dispatcher or airfreight coordinator. The imputation is quite absurd because
grave misconduct and that accusatory and inflammatory language used by an
it was the client who actually wrote the name and destination, whereas, it was not the
employee to the employer or superior can be a ground for dismissal or termination.
petitioner but his co-employee who checked the cargo.
The following day, March 26, 2009, he received a memorandum
charging him with "negligence in performing his duties." On April 2, 2009, he ISSUE: Whether or not the Maula is illegally dismissed.
received another memorandum of '"reassignment" wherein he was directed to report
immediately in another department of the company. But on the same day, he was
instructed by the HR manager to proceed to his former office for him to train his RULING: Yes. Maula is illegally dismissed.
replacement, to which he complied. However, upon some time of teaching inside the Dismissal from employment have two facets: first, the legality of the
warehouse, his replacement then went home. Then, the supervisor insisted Maula to act of dismissal, which constitutes substantive due process; and, second, the legality
continue with his former work, but due to the "reassignment paper" he had some of the manner of dismissal, which constitutes procedural due process. The burden of
reservations. Sensing he might again be framed up and maliciously accused of such proof rests upon the employer to show that the disciplinary action was made for
as what happened on the misrouted cargo, he thus refused and went home. lawful cause or that the termination of employment was valid. In administrative and
An attempt to serve another memorandum was made on him obligating quasi-judicial proceedings, the quantum of evidence required is substantial evidence
him to explain why he did not perform his former work (in Paranaque) and not or "such relevant evidence as a reasonable mind might accept as adequate to support a
report to his reassignment (in Taguig). It validated his apprehension of a set-up. At conclusion." Thus, unsubstantiated suspicions, accusations, and conclusions of the
this point, petitioner lost his composure. Exasperated, he refused to receive the employer do not provide legal justification for dismissing the employee. When in
memorandum and thus retorted "Seguro na abnormal na ang utak mo" as it dawned
doubt, the case should be resolved in favor of labor pursuant to the social justice Decision of the National Labor Relations Commission that affirmed the February 18,
policy of our labor laws and the 1987 Constitution. 2010 Decision of the Labor Arbiter finding the illegal dismissal of petitioner, are
hereby REVERSED AND SET ASIDE. The Labor Arbiter is DIRECTED to
While an employer is given a wide latitude of discretion in managing
recompute the proper amount of backwages and separation pay due to petitioner in
its own affairs, such as in the imposition of disciplinary measures, the exercise of
accordance with this decision.
disciplining and imposing appropriate penalties on erring employees must be
practiced in good faith and for the advancement of the employer's interest and not for
the purpose of defeating or circumventing the rights of employees under special laws
or under valid agreements. The reason being that - security of tenure of workers is not
only statutorily protected, it is also a constitutionally guaranteed right having the
status of a vested right. Thus, any deprivation of this right must be attended by due
process of law.
Respondents manifestly failed to prove that petitioner’s alleged act
constitutes serious misconduct. For misconduct or improper behavior to be a just
cause for dismissal, (a) it must be serious; (b) it must relate to the performance of the
employee’s duties; and, (c) it must show that the employee has become unfit to
continue working for the employer. The admittedly insulting and unbecoming
language uttered by petitioner to the HR Manager should be viewed with reasonable
leniency in light of the fact that it was committed under an emotionally charged state.
Furthermore, respondent cannot invoke the principle of totality of infractions
considering that petitioner’s alleged previous acts of misconduct were not established
in accordance with the requirements of procedural due process.
Petitioner's termination from employment is inappropriate considering
that he had been with respondent company for a considerable length of time, seven
years, and he had no previous derogatory record. It is settled that notwithstanding the
existence of a just cause, dismissal should not be imposed. Petitioner’s preventive
suspension of 30 days was also inappropriate.

DISPOSITIVE PORTION:
WHEREFORE, premises considered, the petition is GRANTED. The November 20,
2012 Decision and June 21, 2013 Resolution of the Court of Appeals in CA G.R. SP
No. 121176, which set aside the December 15, 2010 Resolution and July 20, 2011
General Principles Case No. 3 holiday, service incentive leave, 13th month pay, separation pay, retirement benefits,
actual damages, moral damages, exemplary damages and attorney’s fees against the
PERFECTO M. PASCUA v. BANK WISE, INC. and PHILIPPINE VETERANS
banks.
BANK
G.R. No. 191460
The Labor Arbiter dismissed the case on the ground that Pascua had
January 31, 2008
voluntarily resigned. NLRC reversed the LA’s decision and held that Pascua is
constructively dismissed.
BANKWISE INC., v. PERFECTO M. PASCUA and PHILIPPINES
VETERANS BANK
ISSUE:
G.R. No. 191464
January 31, 2008
Whether or not Pascua is constructively dismissed?

HELD:
FACTS:
No. Perfecto Pascua held a highly technical position in the company and he
would have supervised several employees in his long years in service and might have
Perfecto M. Pascua was employed by Philippine Veterans Bank as Executive
even processed their resignation letters. He would have been completely aware of the
Vice President for Marketing. In a Memorandum of Agreement, Philippine Veterans
implications of signing a categorically worded resignation letter. If he did not intend
Bank obliged itself to purchase the entire outstanding capital stock of Bankwise.
to resign, he would not have submitted a resignation letter. He would have continued
Thereafter, the Philippine Veterans Bank elected a new set of members of board of
writing letters to Bankwise signifying his continued refusal to resign.
directors and appointed a new set of officers. Pascua was reassigned to a Special
Accounts Unit without specification as to his duties and responsibilities.
Pascua's resignation letter was unconditional. It contained no reservations that
Pascua was then instructed to tender his resignation as part of the merger it was premised on his subsequent claim for severance pay and other benefits. His
agreement of the Bank with the guarantee that Pascua would receive all his money resignation was also accepted by his employers. In this instance, Pascua is not
claims during the transition. He pleaded through a letter that he may be allowed to considered to have been constructively dismissed.
stay until the end of the year. Seeing as Pascua had yet to submit his resignation, the
The employer has the burden of proving, in illegal dismissal cases, that the
director of Bankwise told Pascua that it was imperative that he submit his resignation
employee was dismissed for a just or authorized cause. Even if the employer claims
and assured his continued service with Philippine Veterans Bank. Thereafter, Pascua
that the employee resigned, the employer still has the burden of proving that the
tendered his resignation.
resignation was voluntary.
Despite repeated demands for his money claims, Philippine Veterans and
It is constructive dismissal when resignation "was made under compulsion or
Bankwise failed to release Pascua’s remuneration. Pascua then filed a complaint for
under circumstances approximating compulsion, such as when an employee's act of
illegal dismissal, non-payment of salary, overtime pay, holiday pay, premium pay for
handing in his or her resignation was a reaction to circumstances leaving him or her
no alternative but to resign."

The Court also discussed that "Resignation is the voluntary act of an

employee who is in a situation where one believes that personal reasons cannot be
sacrificed in favor of the exigency of the service, and one has no other choice but to
dissociate oneself from employment." In order to prove that resignation is voluntary,
"the acts of the employee before and after the alleged resignation must be considered
in determining whether he or she, in fact, intended to sever his or her employment."

However, Pascua admitted that he filed a categorical letter of resignation.

General Principles Case No. 5 On appeal, the NLRC reversed the L.A.’s Decision holding that the
optional retirement plan was never presented in this case, casting a doubt on
(G.R. No. 209468, December 13, 2017) whether or not the plan required an application for optional retirement
benefits before an employee could become entitled to them, inclined with the
UNITED DOCTORS MEDICAL CENTER v. CESARIO BERNADAS, principle laid by the Constitution full protection to labor.
REPRESENTED BY LEONILA BERNADAS
M.R. was denied. On petition for certiorari to C.A., the latter sustained
FACTS: the NLRC’s decision. Also, the M.R. was denied. Hence, this petition.

Cesario is a rank and file employee of United Doctors Medical Center, Petitioner argues that respondent Cesario's beneficiaries do not have
as a housekeeper but eventually promoted to be a utility man. United Doctors legal capacity to apply for Cesario's optional retirement benefits since
Medical Center and its rank and file employees had a collective bargaining respondent himself never applied for it in his lifetime. It asserts that even
agreement (CBA), under which rank and file employees were entitled to assuming respondent Cesario was already qualified to apply for optional
optional retirement benefits. Under the optional retirement policy, an retirement three (3) years prior to his death, he never did. Thus, there would
employee who has rendered at least 20 years of service is entitled to have been no basis for respondent Cesario's beneficiaries to be entitled to his
optionally retire. The optional retirement pay is equal to a retiree's salary for optional retirement benefits.
11 days per year of service.
On the other hand, Leonila counters that had her husband died "under
On October 20, 2009, Cesario died from a "freak accident" while normal circumstances," he would have applied for optional retirement
working in a doctor's residence. He was 53 years old. benefits. That Cesario was unable to apply before his death "is a procedural
technicality" that should be set aside so that "full protection to labor" is
Leonila Bernadas (Leonila), representing her deceased husband, afforded and "the ends of social and compassionate justice" are met.
Cesario, filed a Complaint for payment of retirement benefits, damages, and
attorney's fees with the National Labor Relations Commission. Leonila and
her son also claimed and were able to receive insurance proceeds of
P180,000.00 under the CBA. ISSUE: Whether or not Leonila Bernadas as her husband's
representative, may claim his optional retirement benefits in consonance
The Labor Arbiter dismissed Leonila's Complaint, ruling that Cesario with whether or not Cesario Bernadas is entitled to receive his optional
should have applied for optional retirement benefits during his lifetime, the retirement benefits despite his untimely death.
benefits being optional. Since he did not apply for it, his beneficiaries were
not entitled to claim his optional retirement benefits.
HELD: YES. first be filed by the employee before the right to the optional retirement
benefits may vest. Thus, this ambiguity should be resolved in favor of the
The CBA between the parties provides: retiree.

ARTICLE XI  Retirement benefits are the property interests of the retiree and his or her
RETIREMENT AND SEVERANCE PAY beneficiaries. The CBA does not prohibit the employee's beneficiaries from
claiming retirement benefits if the retiree dies before the proceeds could be
SECTION 1. RETIREMENT AND SEVERANCE PAY. The CENTER shall released. Even compulsory retirement plans provide mechanisms for a
grant each employee retirement and severance pay in accordance with law. It retiree's beneficiaries to claim any pension due to the retiree. Thus, Leonila,
shall also continue its present policy on optional retirement. being the surviving spouse of respondent Cesario, is entitled to claim the
optional retirement benefits on his behalf.
The terms and conditions of a CBA "constitute the law between the
parties." However, this CBA does not provide for the terms and conditions of
the "present policy on optional retirement." Leonila merely alleged before the
Labor Arbiter that petitioner "grants an employee a retirement or separation
equivalent to eleven (11) days per year of service after serving for at least
twenty (20) years," which was not disputed by petitioner. Therefore, doubt
arises as to what petitioner's optional retirement package actually entails.

It is settled that doubts must be resolved in favor of labor. Moreover,

"retirement laws should be liberally construed and administered in favor of
the persons intended to be benefited and all doubts as to the intent of the law
should be resolved in favor of the retiree to achieve its humanitarian
purposes."

Petitioner's optional retirement plan is premised on length of service,

not upon reaching a certain age. It rewards loyalty and continued service by
granting an employee an earlier age to claim his or her retirement benefits
even if the employee has not reached his or her twilight years. It would be the
height of inequity to withhold respondent Cesario's retirement benefits
despite being qualified to receive it, simply because he died before he could
apply for it. In any case, the CBA does not mandate that an application must
General Principles Case No. 6 Contracts take effect only between the parties, their assigns and heirs, except
in case where the lights and obligations arising from the contract are not transmissible
Rolando de Roca vs Eduardo C. Dabuyan, et al.
by their nature, or by stipulation or by provision of law.
G.R. No. 215281 March 05, 2018
Contract of employment between Dabuyan, et al. on the one hand, and
Oceanic and Ewayan on the other, is effective only between them; it does not extend
FACTS:
to Roca, who is not a party thereto. His only role is a lessor of the premises which
Dabuyan, et al. filed a complaint for illegal dismissal against “RAF Mansion
Oceanic leased to operate the hotel; he cannot be deemed as Dabuyan et al.’s
Hotel Oki Management and New Management and Victoriano Erawan”. Later, they
employer –not even under the pretext that he took over as the “new management” of
amended the complaint and included petitioner de Roca as co-respondent. Summons
the hotel operated by Oceanic. There simply is no truth to such claim. Thus, to allow
were served on de Roca but it was returned. Another summons was issued and
Dabuyan, et al. to recover their monetary claims from Roca would necessarily result
personally served to the petitioner. Despite service of summons, petitioner did not
in their unjust enrichment.
attend the subsequent hearings prompting the labor to direct Dabuyan, et al. to submit
their position paper.
Upon filing their position paper, de Roca filed his motion to dismiss on the
ground of lack of jurisdiction, on the same day. He alleged that, while he is the owner
of RAF Mansion Hotel Building, the same was being leased by Victoriano Ewayan,
the owner of Oceanics Travel and Tour Agency.
De Roca claims that Ewayan was the employer of Dabuyan, et al.
Consequently, he asserted that there was no employer-employee relationship between
him and Dabuyan, et al. and the labor arbiter has no jurisdiction.
The LA rendered a decision directing de Roca to pay backwages and other
monetary awards to Dabuyan, et al.
De Roca then filed a petition for annulment of judgment on the ground of
jurisdiction before the NLRC. However, it was dismissed because it was filed beyond
the allowable period.
De Roca filed a Petition for Certiorari before the Court of Appeals, but the
latter dismissed the petition. Petitioner then filed a motion for reconsideration but also
denied. Hence, this petition.

ISSUE:
Whether or not a lessor of a hotel business can be held liable for the labor
obligation of the lessee who also use the name of the hotel in his operations.
HELD:
No. The Supreme Court granted de Roca’s petition.
General Principles Case No. 7 as regular employees would be taken away from them. Upon inquiry, petitioners were
informed by Lagatic that their 201 files did not contain their appointment papers, and
BRAZIL ET. AL V. STI EDUCATION SER GROUP INC. ET. AL
that they failed to conform with the standards set out in the 2008 MORPHE .
G.R. NO. 233314, NOVEMBER 21, 2019
Petitioners alleged that despite their repeated requests for the amendment of
Facts:
their respective job offers on the basis of their belief that they are regular employees,
Petitioner Luningning Z. Brazil was first employed by STI College-Legazpi on
Lagatic still handed to them the same job offers. As they still refused to sign the said
June 3, 1997 as a part-time faculty member. Petitioner Salvacion L. Garcera and
contracts, they were replaced with six newly-hired faculty members on the following
petitioner Rita S. De Mesa were next hired in June 2000 and June 2001, respectively,
day. They also did not receive any teaching load at the start of the school year,
also as part-time faculty members by STI-Legazpi. The services of the petitioners
although they still received their respective salaries for the period of June 1 to 15,
continued until June 2011, for which they filed a Complaint for illegal constructive
2011. Petitioners averred that the addendum regarding the additional two years to
dismissal and non-payment of salaries/wages, separation pay and 131h month pay,
comply with the CHED requirement was absent in the job offers handed to them. The
with claims for moral and exemplary damages and attorney's fees before the National
memorandum also came late as classes have already started on June 13, 2011. Since
Labor Relations Commission.
they were placed in a floating status and no longer received their salary for the period
Brazil claimed that she was hired as a "full-load faculty member" of STI-
of June 16 to 30, 2011, petitioners stopped reporting for work and filed complaints for
Legazpi in June 2002, when she started receiving a fixed monthly salary. On
illegal constructive dismissal with monetary claims.
February 1, 2004, she was regularized as evidenced by STI-Legazpi's Personnel
The LA declared petitioners as regular employees. Thus, respondents were
Action Form. Likewise, Garcera claimed that in a written evaluation of her teaching
found guilty of illegal dismissal and were ordered to pay the petitioners their
performance, acknowledged by her on October 12, 2004, STI-Legazpi categorized
respective separation pay in lieu of reinstatement as well as other monetary claims.
her employment status as regular. Moreover, in an electronic mail correspondence
The LA ratiocinated that although the 2008 MORPHE applies in the determination of
dated April 24, 2008 with Joseluis Geronimo of the STI Headquarters, the latter
whether a faculty is a regular employee or not, it does not apply in a case where
confirmed the status of Brazil and Garcera as regular employees. De Mesa claimed
regular employment status has already been achieved or had already been granted to
that she was employed as a "full-load faculty member" in 2003, as indicated in her
faculty members. TheNLRC, affirmed the LA's finding of illegal dismissal except for
faculty employment contract. She further advanced that as of June 2009, she was
De Mesa. The CA ruled that the NLRC did not commit grave abuse of discretion in
already considered a regular employee as she started to receive a fixed monthly salary
dismissing the petitioners' complaints for illegal dismissal with money claims.
for twelve months. Petitioners alleged that they were required to submit letters of
Petitioners were merely separated from service as a result of their stubborn refusal to
intent and to sign contracts with STI for each semester. However, upon their alleged
sign their respective job offers which were made in accordance with the 2008
regularization, STI no longer required them to do so. In addition, they enjoyed the
MORPHE.
same benefits granted to regular employees such as full payment of salary and
Issue: Whether or not there was reversible error on the part of the CA?
statutory benefits during summer, semestral and Christmas breaks.
Held:
Thereafter, Lagatic, the school administrator, handed to the petitioners separate
The SC finds no reversible error on the part of the CA in ruling that the NLRC
job offers for the first semester of academic year 2011-2012. The job offers for Brazil
did not commit any grave abuse of discretion when it dismissed the petitioners'
and De Mesa were for part-time faculty members, whereas the job offer for Garcera
complaints for illegal dismissal with money claims. The Court do not intend to
was for a probationary faculty member. Petitioners refused to sign the said job offers
disturb the factual antecedents of this case as found by the courts a quo. As aptly
because although the same stipulated a higher monthly salary, their security of tenure
observed by the CA, "the parties do not contest that, either expressly or impliedly,
STI granted petitioners the status of a regular faculty member.” As such, an
examination of the evidence pertaining to how the petitioners were granted a regular
status by the STI is unnecessary.
Petitioners also do not question the applicability of the 1992 MO RPS and/or
the 2008 MORPHE to them and their failure to qualify thereunder for lack of a
master's degree. They merely insist that despite the application of the 2008
MORPHE, an employer educational institution that has granted or treated its
employees as regular or permanent employees can be held liable for illegal
constructive dismissal, and consequently liable to pay separation pay, back wages,
etc. Subsequent compliance with the MORPHE is not an available defense for
employers in such cases.
Courts may resort to application of equity only when there is insufficiency or
absence of law. The principle of equity cannot prevail over the positive mandate of
the law, such as the 2008 MORPHE in this case. Application of equity "would be
tantamount to overruling or supplanting the express provisions of the law."
EER Case No. 1 The proper standard of economic dependence is whether the worker is dependent on
the alleged employer for his continued employment in that line of business. In the
Francisco vs NLRC United States, the touchstone of economic reality in analyzing possible employment
FACTS: relationships for purposes of the Federal Labor Standards Act is dependency. By
In 1995, petitioners was hired by Kasei Corporation during its incorporation stage. analogy, the benchmark of economic reality in analyzing possible employment
She was designated as accountant, Corporate Secretary and Liaison Officer. In 1996, relationships for purposes of the Labor Code ought to be the economic dependence of
she was designated as acting manager. For five years, she performed the duties of the worker on his employer.
acting manager with monthly salary of P27, 500. In 2001, petitioner was replaced by
a certain Liza R. Fuentes as Manager. She was required to sign a resolution for her By applying the control test, there is no doubt that petitioner is an employee of Kasei
replacement but she was assured that she would still be connected with Kasei Corp. Corporation because she was under the direct control and supervision of Seiji
However, Kasei Corporation reduced her salary, she was not paid her mid-year bonus Kamura, the corporation’s Technical Consultant. She reported for work regularly and
allegedly because the company was not earning well. Later, she was informed that served in various capacities as Accountant, Liaison Officer, Technical Consultant,
she is no longer connected with the company. Thus, she filed an action for Acting Manager and Corporate Secretary, with substantially the same job functions,
constructive dismissal before the Labor Arbiter. that is, rendering accounting and tax services to the company and performing
functions necessary and desirable for the proper operation of the corporation such as
The Labor Arbiter found that petitioner was illegally dismissed, NLRC affirmed with securing business permits and other licenses over an indefinite period of engagement.
modification the Decision of the Labor Arbiter. On appeal, CA reversed the NLRC
decision. CA denied petitioner’s MR, hence, the present recourse. Under the broader economic reality test, the petitioner can likewise be said to be an
employee of respondent corporation because she had served the company for six
ISSUE: years before her dismissal, receiving check vouchers indicating her salaries/wages,
Whether there was an employer-employee relationship between petitioner and private benefits, 13th month pay, bonuses and allowances, as well as deductions and Social
respondent Security contributions from August 1, 1999 to December 18, 2000. When petitioner
was designated General Manager, respondent corporation made a report to the SSS
RULING: signed by Irene Ballesteros. Petitioner’s membership in the SSS as manifested by a
Yes. Petition Granted. In certain cases, the control test is not sufficient to give a copy of the SSS specimen signature card which was signed by the President of Kasei
complete picture of the relationship between the parties, owing to the complexity of Corporation and the inclusion of her name in the on-line inquiry system of the SSS
such a relationship where several positions have been held by the worker. The better evinces the existence of an employer-employee relationship between petitioner and
approach would therefore be to adopt a two-tiered test involving: respondent corporation.
(1) the putative employer’s power to control the employee with respect to the means
and methods by which the work is to be accomplished; and It is therefore apparent that petitioner is economically dependent on respondent
(2) the underlying economic realities of the activity or relationship. corporation for her continued employment in the latter’s line of business.
Furthermore, the affidavit of Seiji Kamura dated December 5, 2001 has clearly
established that petitioner never acted as Corporate Secretary and that her designation
as such was only for convenience. The actual nature of petitioner’s job was as
Kamura’s direct assistant with the duty of acting as Liaison Officer in representing
the company to secure construction permits, license to operate and other requirements
imposed by government agencies. Petitioner was never entrusted with corporate
documents of the company, nor required to attend the meeting of the corporation. She
was never privy to the preparation of any document for the corporation, although
once in a while she was required to sign prepared documentation for the company.

Based on the foregoing, there can be no other conclusion that petitioner is an

employee of respondent Kasei Corporation. She was selected and engaged by the
company for compensation, and is economically dependent upon respondent for her
continued employment in that line of business. Her main job function involved
accounting and tax services rendered to respondent corporation on a regular basis
over an indefinite period of engagement. Respondent corporation hired and engaged
petitioner for compensation, with the power to dismiss her for cause. More
importantly, respondent corporation had the power to control petitioner with the
means and methods by which the work is to be accomplished.

The corporation constructively dismissed petitioner when it reduced her salary by

P2,500 a month from January to September 2001. This amounts to an illegal
termination of employment, where the petitioner is entitled to full backwages. Since
the position of petitioner as accountant is one of trust and confidence, and under the
principle of strained relations, petitioner is further entitled to separation pay, in lieu of
reinstatement.
EER Case No. 4 No, Sonza is not an employee of ABS-CBN, but an independent contractor.
Sonza vs. ABS-CBN (G.R. No. 138051)
The ruling of the Supreme Court can be best explained using the four—fold
Facts: test.

Respondent ABS-CBN signed an Agreement with the Mel and Jay A. Selection and Engagement of Employee
Management and Development Corporation (MJMDC). The latter agreed to provide
SONZA’s services exclusively to ABS-CBN as talent for radio and television. ABS-CBN engaged SONZA’s services to co-host its television and radio
However, SONZA wrote a letter to ABS-CBN irrevocably resigning from the programs because of SONZA’s peculiar skills, talent and celebrity status.
position they have contracted to in the agreement. Later, SONZA filed a complaint Independent contractors often present themselves to possess unique skills, expertise
against ABS-CBN before the Department of Labor and Employment asking for his or talent to distinguish them from ordinary employees. The specific selection and
salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, hiring of SONZA, because of his unique skills, talent and celebrity status not
travel allowance and amounts due under the Employees Stock Option Plan. ABS- possessed by ordinary employees, is a circumstance indicative, but not conclusive, of
CBN argued and filed a Motion to Dismiss on the ground that no employer-employee an independent contractual relationship. If SONZA did not possess such unique skills,
relationship existed between the parties. talent and celebrity status, ABS-CBN would not have entered into the Agreement
with SONZA but would have hired him through its personnel department just like any
Labor Arbiter: Sonza is not an employee of ABS-CBN. It must be noted other employee.
that complainant was engaged by respondent by reason of his peculiar skills and
talent as a TV host and a radio broadcaster. Unlike an ordinary employee, he was free B. Payment of Wages
to perform the services he undertook to render in accordance with his own style.
SONZA’s talent fees, amounting to ₱317,000 monthly in the second and third
NLRC: Affirmed the decision of the Labor Arbiter. year, are so huge and out of the ordinary that they indicate more an independent
contractual relationship rather than an employer-employee relationship. ABS-CBN
CA: Upon elevation of the case to the CA, it was dismissed for lack of merit. agreed to pay SONZA such huge talent fees precisely because of SONZA’s unique
The Court of Appeals has given weight and credence to the ruling of the NLRC that skills, talent and celebrity status not possessed by ordinary employees. Obviously,
there is no employer-employee relationship between SONZA and ABS-CBN. SONZA acting alone possessed enough bargaining power to demand and receive such
huge talent fees for his services. The power to bargain talent fees way above the
Issue: salary scales of ordinary employees is a circumstance indicative, but not conclusive,
of an independent contractual relationship.
WON Sonza is an employee of ABS-CBN.
C. Power of Dismissal
Ruling:
 For violation of any provision of the Agreement, either party may terminate how to perform his job. ABS-CBN merely reserved the right to modify the program
their relationship. SONZA failed to show that ABS-CBN could terminate his services format and airtime schedule for more effective programming. ABS-CBN’s sole
on grounds other than breach of contract, such as retrenchment to prevent losses as concern was the quality of the shows and their standing in the ratings. Clearly, ABS-
provided under labor laws. During the life of the Agreement, ABS-CBN agreed to CBN did not exercise control over the means and methods of performance of
pay SONZA’s talent fees as long as "AGENT and Jay Sonza shall faithfully and SONZA’s work. No doubt, ABS-CBN supplied the equipment, crew and airtime
completely perform each condition of this Agreement." Even if it suffered severe needed to broadcast the "Mel & Jay" programs. However, the equipment, crew and
business losses, ABS-CBN could not retrench SONZA because ABS-CBN remained airtime are not the "tools and instrumentalities" SONZA needed to perform his job.
obligated to pay SONZA’s talent fees during the life of the Agreement. This What SONZA principally needed were his talent or skills and the costumes necessary
circumstance indicates an independent contractual relationship between SONZA and for his appearance. Even though ABS-CBN provided SONZA with the place of work
ABS-CBN. and the necessary equipment, SONZA was still an independent contractor since ABS-
CBN did not supervise and control his work. ABS-CBN’s sole concern was for
D. Power of Control SONZA to display his talent during the airing of the programs.

Applying the control test to the present case, we find that SONZA is not an
employee but an independent contractor. The control test is the most important test
our courts apply in distinguishing an employee from an independent contractor. This
test is based on the extent of control the hirer exercises over a worker. The greater the
supervision and control the hirer exercises, the more likely the worker is deemed an
employee. The converse holds true as well – the less control the hirer exercises, the
more likely the worker is considered an independent contractor.

ABS-CBN did not assign any other work to SONZA. To perform his work,
SONZA only needed his skills and talent. How SONZA delivered his lines, appeared
on television, and sounded on radio were outside ABS-CBN’s control. SONZA did
not have to render eight hours of work per day. The Agreement required SONZA to
attend only rehearsals and tapings of the shows, as well as pre- and post-production
staff meetings. ABS-CBN could not dictate the contents of SONZA’s script.
However, the Agreement prohibited SONZA from criticizing in his shows ABS-CBN
or its interests. The clear implication is that SONZA had a free hand on what to say or
discuss in his shows provided he did not attack ABS-CBN or its interests.

We find that ABS-CBN was not involved in the actual performance that
produced the finished product of SONZA’s work. ABS-CBN did not instruct SONZA
 make all talent contracts valid and compliant with labor law. The assertion that a
talent contract exists does not necessarily prevent a regular employment status.
Further, the Sonza case is not applicable. In Sonza, the television station did not
exercise control over the means and methods of the performance of Sonza’s work. In
EER Case No. 5 the case at bar, ABC had control over the performance of petitioner’s work.
THELMA DUMPIT-MURILLO, petitioner, Noteworthy too, is the comparatively low P28,000 monthly pay of petitioner vis the
vs. P300,000 a month salary of Sonza, that all the more bolsters the conclusion that
COURT OF APPEALS, ASSOCIATED BROADCASTING COMPANY, JOSE petitioner was not in the same situation as Sonza. The duties of petitioner as
JAVIER AND EDWARD TAN, respondents. enumerated in her employment contract indicate that ABC had control over the work
G.R. No. 164652 June 8, 2007 of petitioner. Aside from control, ABC also dictated the work assignments and
payment of petitioner’s wages. ABC also had power to dismiss her. All these being
FACTS: present, clearly, there existed an employment relationship between petitioner and
Associated Broadcasting Company (ABC) hired Thelma Dumpit-Murillo ABC.
under a talent contract as a newscaster and co-anchor for Balitang-Balita, an early
evening news program. The contract was for a period of three months. After four Concerning regular employment, the requisites for regularity of employment
years of repeated renewals, petitioner’s talent contract expired. Two weeks after the have been met in the instant case. Petitioner’s work was necessary or desirable in the
expiration of the last contract, petitioner sent a letter to Mr. Jose Javier, Vice usual business or trade of the employer which includes, as a pre-condition for its
President for News and Public Affairs of ABC, informing the latter that she was still enfranchisement, its participation in the government’s news and public information
interested in renewing her contract subject to a salary increase. Thereafter, petitioner dissemination. In addition, her work was continuous for a period of four years. This
stopped reporting for work. She sent a demand letter to ABC, demanding repeated engagement under contract of hire is indicative of the necessity and
reinstatement, payment of unpaid wages and full backwages, payment of 13th month desirability of the petitioner’s work in private respondent ABC’s business. As a
pay, vacation/sick/service incentive leaves and other monetary benefits due to a regular employee, petitioner is entitled to security of tenure and can be dismissed only for
regular employee. ABC replied that a check covering petitioner’s talent fees had just cause and after due compliance with procedural due process. Since private respondents
been processed and prepared, but that the other claims of petitioner had no basis in did not observe due process in constructively dismissing the petitioner, there was an illegal
fact or in law. The Labor Arbiter dismissed the complaint for illegal constructive dismissal.
dismissal. NLRC reversed.

ISSUE: Whether or not Murillo is an employee of Associated Broadcasting

Company.

RULING:
Thelma Dumpit-Murillo was a regular employee under contemplation of law.
The practice of having fixed-term contracts in the industry does not automatically
 On September 10, 2009, Labor Arbiter dismissed the complaint and held that Arlene
was not a regular employee but an independent contractor.

EER Case No. 6 On March 5, 2010, The NLRC reversed the Labor Arbiter’s decision and ruled that
Arlene was a regular employee since she continuously rendered services that were
FUJI TELEVISION NETWORK, INC. VS. ARLENE S. ESPIRITU G.R. NO. necessary and desirable to Fuji’s business.
204944-45 DECEMBER 3, 2014
The Court of Appeals affirmed that NLRC ruling with modification that Fuji
FACTS: immediately reinstate Arlene to her position without loss of seniority rights and that
she be paid her backwages and other emoluments withheld from her. The Court of
In 2005, Arlene S. Espiritu was engaged by Fuji Television Network, Inc. as a news Appeals agreed with the NLRC that Arlene was a regular employee, engaged to
correspondent/producer tasked to report Philippine news to Fuji through its Manila perform work that was necessary or desirable in the business of Fuji, and the
Bureau field office. The employment contract was initially for one year, but was successive renewals of her fixed-term contract resulted in regular employment. The
successively renewed on a yearly basis with salary adjustments upon every renewal. case of Sonza does not apply in the case because Arlene was not contracted on
account of a special talent or skill. Arlene was illegally dismissed because Fuji failed
In January 2009, Arlene was diagnosed with lung cancer. She informed Fuji about her to comply with the requirements of substantive and procedural due process. Arlene, in
condition, and the Chief of News Agency of Fuji, Yoshiki Aoki, informed the former fact, signed the non-renewal contract under protest as she was left without a choice.
that the company had a problem with renewing her contract considering her
condition. Arlene insisted she was still fit to work as certified by her attending Fuji filed a petition for review on certiorari under Rule 45 before the Supreme Court,
physician. alleging that Arlene was hired as an independent contractor; that Fuji had no control
over her work; that the employment contracts were renewed upon Arlene’s insistence;
After a series of verbal and written communications, Arlene and Fuji signed a non- that there was no illegal dismissal because she freely agreed not to renew her fixed-
renewal contract. In consideration thereof, Arlene acknowledged the receipt of the term contract as evidenced by her email correspondences.
total amount of her salary from March-May 2009, year-end bonus, mid-year bonus
and separation pay. However, Arlene affixed her signature on the nonrenewal Arlene filed a manifestation stating that the SC could not take jurisdiction over the
contract with the initials "U.P." for "under protest." case since Fuji failed to authorize Corazon Acerden, the assigned attorney-in-fact for
Fuji, to sign the verification.
On May 6, 2009, Arlene filed a complaint for illegal dismissal with the NCR
Arbitration Branch of the NLRC, alleging that she was forced to sign the non-renewal
contract after Fuji came to know of her illness. She also alleged that Fuji withheld her ISSUE:
salaries and other benefits when she refused to sign, and that she was left with no
other recourse but to sign the non-renewal contract to get her salaries. 1. Whether or not Arlene was an independent contractor?
 2. Whether or not Arlene was a regular employee?
3. Whether or not Arlene was illegally dismissed? Fuji’s argument that Arlene was an independent contractor under a fixed-term
4. Whether or not the Court of Appeals correctly awarded reinstatement, contract is contradictory. Employees under fixed-term contracts cannot be
damages and attorney’s fees? independent contractors because in fixed-term contracts, an employer-
HELD: employee relationship exists. The test in this kind of contract is not the
necessity and desirability of the employee’s activities, “but the day certain
1. Arlene was not an independent contractor. agreed upon by the parties for the commencement and termination of the
employment relationship.” For regular employees, the necessity and
Fuji alleged that Arlene was an independent contractor citing the Sonza case. desirability of their work in the usual course of the employer’s business are
She was hired because of her skills. Her salary was higher than the normal the determining factors. On the other hand, independent contractors do not
rate. She had the power to bargain with her employer. Her contract was for a have employer-employee relationships with their principals.
fixed term. It also stated that Arlene was not forced to sign the non-renewal
agreement, considering that she sent an email with another version of her non- To determine the status of employment, the existence of employer-employee
renewal agreement. relationship must first be settled with the use of the four-fold test, especially
the qualifications for the power to control.
Arlene argued (1) that she was a regular employee because Fuji had control
and supervision over her work; (2) that she based her work on instructions The distinction is in this guise:
from Fuji; (3) that the successive renewal of her contracts for four years Rules that merely serve as guidelines towards the achievement of a mutually
indicated that her work was necessary and desirable; (4) that the payment of desired result without dictating the means or methods to be employed creates
separation pay indicated that she was a regular employee; (5) that the Sonza no employer-employee relationship; whereas those that control or fix the
case is not applicable because she was a plain reporter for Fuji; (6) that her methodology and bind or restrict the party hired to the use of such means
illness was not a ground for her dismissal; (7) that she signed the non-renewal creates the relationship.
agreement because she was not in a position to reject the same.
In appliacation, Arlene was hired by Fuji as a news producer, but there was no
The level of protection to labor should vary from case to caese. When a evidence that she was hired for her unique skills that would distinguish her
prospective employee, on account of special skills or market forces, is in a from ordinary employees. Her monthly salary appeared to be a substantial
position to make demands upon the prospective employer, such prospective sum. Fuji had the power to dismiss Arlene, as provided for in her employment
employee needs less protection than the ordinary worker. contract. The contract also indicated that Fuji had control over her work as she
was rquired to report for 8 hours from Monday to Friday. Fuji gave her
The level of protection to labor must be determined on the basis of the nature instructions on what to report and even her mode of transportation in carrying
of the work, qualifications of the employee, and other relevant circumstances out her functions was controlled.
such as but not limited to educational attainment and other special
qualifications. Therefore, Arlene could not be an independent contractor.
 Arlene’s contract indicating a fixed term did not automatically mean that she
2. Arlene was a regular employee with a fixed-term contract. could never be a regular employee. For as long as it was the employee who
requested, or bargained, that the contract have a “definite date of termination,”
In determining whether an employment should be considered regular or non- or that the fixed-term contract be freely entered into by the employer and the
regular, the applicable test is the reasonable connection between the particular employee, then the validity of the fixed-term contract will be upheld.
activity performed by the employee in relation to the usual business or trade
of the employer. The standard, supplied by the law itself, is whether the work 3. Arlene was illegally dismissed.
undertaken is necessary or desirable in the usual business or trade of the
employer, a fact that can be assessed by looking into the nature of the services As a regular employee, Arlene was entitled to security of tenure under Article
rendered and its relation to the general scheme under which the business or 279 of the Labor Code and could be dismissed only for just or authorized
trade is pursued in the usual course. It is distinguished from a specific causaes and after observance of due process.
undertaking that is divorced from the normal activities required in carrying on
the particular business or trade. The expiration of the contract does not negate the finding of illegal dismissal.
The manner by which Fuji informed Arlene of non-renewal through email a
However, there may be a situation where an employee’s work is necessary but month after she informed Fuji of her illness is tantamount to constructive
is not always desirable in the usual course of business of the employer. In this dismissal. Further, Arlene was asked to sign a letter of resignation prepared by
situation, there is no regular employment. Fuji. The existence of a fixed-term contract should not mean that there can be
no illegal dismissal. Due process must still be observed.
Fuji’s Manila Bureau Office is a small unit213 and has a few employees.
Arlene had to do all activities related to news gathering. Moreoever, disease as a ground for termination under Article 284 of the Labor
Code and Book VI, Rule 1, Section 8 of the Omnibus Rules Implementing the
A news producer “plans and supervises newscast [and] works with reporters Labor Code require two requirements to be complied with: (1) the employee’s
in the field planning and gathering information, including monitoring and disease cannot be cured within six months and his continued employment is
getting news stories, rporting interviewing subjects in front of a video camera, prohibited by law or prejudicial to his health as well as to the health of his co-
submission of news and current events reports pertaining to the Philippines, employees; and (2) certification issued by a competent public health authority
and traveling to the regional office in Thailand.” She also had to report for that even with proper medical treatment, the disease cannot be cured within
work in Fuji’s office in Manila from Mondays to Fridays, eight per day. She six months. The burden of proving compliance with these requisites is on the
had no equipment and had to use the facilities of Fuji to accomplish her tasks. employer. Non-compliance leads to illegal dismissal. blesvirtualLawlibrary

The successive renewals of her contract indicated the necessity and Arlene was not accorded due process. After informing her employer of her
desirability of her work in the usual course of Fuji’s business. Because of this, lung cancer, she was not given the chance to present medical certificates. Fuji
Arlene had become a regular employee with the right to security of tenure. immediately concluded that Arlene could no longer perform her duties
 because of chemotherapy. Neither did it suggest for her to take a leave. It did
not present any certificate from a competent public health authority. After Arlene had informed Fuji of her cancer, she was informed that there
would be problems in renewing her contract on account of her condition. This
Therefore, Arlene was illegally dismissed. information caused Arlene mental anguish, serious anxiety, and wounded
feelings. The manner of her dismissal was effected in an oppressive approach
4. The Court of Appeals correctly awarded reinstatement, damages and with her salary and other benefits being withheld until May 5, 2009, when she
attorney’s fees. had no other choice but to sign the non-renewal contract.

The Court of Appeals awarded moral and exemplary damages and attorney’s With regard to the award of attorney’s fees, Article 111 of the Labor Code
fees. It also ordered reinstatement, as the grounds when separation pay was states that “[i]n cases of unlawful withholding of wages, the culpable party
awarded in lieu of reinstatement were not proven. may be assessed attorney’s fees equivalent to ten percent of the amount of
wages recovered.” In actions for recovery of wages or where an employee was
The Labor Code provides in Article 279 that illegally dismissed employees forced to litigate and, thus, incur expenses to protect his rights and interest, the
are entitled to reinstatement, backwages including allowances, and all other award of attorney’s fees is legally and morally justifiablen.” Due to her illegal
benefits. dismissal, Arlene was forced to litigate.

Separation pay in lieu of reinstatement is allowed only (1) when the employer Therefore, the awards for reinstatement, damages and attorney’s fees were
has ceased operations; (2) when the employee’s position is no longer proper.
available; (3) strained relations; and (4) a substantial period has lapsed from
date of filing to date of finality.

The doctrine of strained relations should be strictly applied to avoid

deprivation of the right to reinstatement. In the case at bar, no evidence was
presented by Fuji to prove that reinstatement was no longer feasible. Fuji did
not allege that it ceased operations or that Arlene’s position was no longer
feasible. Nothing showed that the reinstatement would cause an atmosphere of
antagonism in the workplace.

Moral damages are awarded “when the dismissal is attended by bad faith or
fraud or constitutes an act oppressive to labor, or is done in a manner contrary
to good morals, good customs or public policy.” On the other hand, exemplary
damages may be awarded when the dismissal was effected “in a wanton,
oppressive or malevolent manner.
 Bustamante failed to pay for the annual registration fees of the vehicle, but Villamaria
allowed him to continue driving the jeepney.Villamaria took back the jeepney driven
by Bustamante and barred the latter from driving the vehicle.Bustamante filed a
Complaint for Illegal Dismissal against Villamaria and his wife Teresita.
EER Case No. 8
LA: the Labor Arbiter rendered judgment in favor of the spouses Villamaria and
G.R. No. 165881             April 19, 2006 ordered the complaint dismissed on ground that the contract of Boundary-Hulog, as
well as the PAALALA, to prove their claim that complainant violated the terms of
OSCAR VILLAMARIA, JR. Petitioner,  their contract and afterwards abandoned the vehicle assigned to him.
vs.
COURT OF APPEALS and JERRY V. BUSTAMANTE, Respondents NLRC: The NLRC rendered judgment dismissing the appeal for lack of merit. The
NLRC ruled that under the Kasunduan, the juridical relationship between Bustamante
CALLEJO, SR., J.: and Villamaria was that of vendor and vendee, hence, the Labor Arbiter had no
jurisdiction over the complaint.
Facts:
CA: the CA reversed and set aside the NLRC decision. the appellate court ruled that
Petitioner Oscar Villamaria, Jr. was the owner of Villamaria Motors. One of those the Labor Arbiter had jurisdiction over Bustamante’s complaint. The CA ratiocinated
drivers was respondent Bustamante. Bustamante remitted P450.00 a day to Villamaria that Villamaria’s exercise of control over Bustamante’s conduct in operating the
as boundary and kept the residue of his daily earnings as compensation for driving the jeepney is inconsistent with the former’s claim that he was not engaged in the
vehicle. Villamaria verbally agreed to sell the jeepney to Bustamante under the transportation business.
"boundary-hulog scheme," where Bustamante would remit to Villarama P550.00 a
day for a period of four years; Bustamante would then become the owner of the Issue:
vehicle and continue to drive the same under Villamaria’s franchise. The parties WON employer-employee relationship exists between the parties
agreed that if Bustamante failed to pay the boundary-hulog for three days, Villamaria Ruling:
Motors would hold on to the vehicle until Bustamante paid his arrears, including a Yes. The SC ruled that Article 217 of the Labor Code, an employer-employee
penalty of P50.00 a day; in case Bustamante failed to remit the daily boundary-hulog relationship is an indispensable jurisdictional requisite. The jurisdiction of Labor
for a period of one week, the Kasunduan would cease to have legal effect and Arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes
Bustamante would have to return the vehicle to Villamaria Motors.Under the arising from an employer-employee relationship which can only be resolved by
Kasunduan, Bustamante was prohibited from driving the vehicle without prior reference to the Labor Code, other labor statutes or their collective bargaining
authority from Villamaria Motors. Thus, Bustamante was authorized to operate the agreement. Not every dispute between an employer and employee involves matters
vehicle to transport passengers only and not for other purposes. Bustamante continued that only the Labor Arbiter and the NLRC can resolve in the exercise of their
driving the jeepney under the supervision and control of Villamaria. As agreed upon, adjudicatory or quasi-judicial powers. Actions between employers and employees
he made daily remittances of P550.00 in payment of the purchase price of the vehicle. where the employer-employee relationship is merely incidental is within the exclusive
original jurisdiction of the regular courts. When the principal relief is to be granted mean that private respondent never exercised such power, or could not exercise such
under labor legislation or a collective bargaining agreement, the case falls within the power.
exclusive jurisdiction of the Labor Arbiter and the NLRC even though a claim for
damages might be asserted as an incident to such claim. The Supreme Court denied the petition.

Under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical

relationship was created between petitioner and respondent: that of employer-
employee and vendor-vendee. The Kasunduan did not extinguish the employer-
employee relationship of the parties extant before the execution of said deed.The
boundary system is a scheme by an owner/operator engaged in transporting
passengers as a common carrier to primarily govern the compensation of the driver,
that is, the latter’s daily earnings are remitted to the owner/operator less the excess of
the boundary which represents the driver’s compensation. Under this system, the
owner/operator exercises control and supervision over the driver. It is unlike in lease
of chattels where the lessor loses complete control over the chattel leased but the
lessee is still ultimately responsible for the consequences of its use. The management
of the business is still in the hands of the owner/operator, who, being the holder of the
certificate of public convenience, must see to it that the driver follows the route
prescribed by the franchising and regulatory authority, and the rules promulgated with
regard to the business operations. The fact that the driver does not receive fixed
wages but only the excess of the "boundary" given to the owner/operator is not
sufficient to change the relationship between them. Indubitably, the driver performs
activities which are usually necessary or desirable in the usual business or trade of the
owner/operator.

The exercise of control by private respondent over petitioner’s conduct in operating

the jeepney he was driving is inconsistent with private respondent’s claim that he is,
or was, not engaged in the transportation business; that, even if petitioner was
allowed to let some other person drive the unit, it was not shown that he did so; that
the existence of an employment relation is not dependent on how the worker is paid
but on the presence or absence of control over the means and method of the work;
that the amount earned in excess of the "boundary hulog" is equivalent to wages; and
that the fact that the power of dismissal was not mentioned in the Kasunduan did not
 affirmed the decision of the LA. On appeal, Court of Appeals reversed the decision
of the NLRC declaring that petitioner was not an employee of PBA but an
independent contractor. It ruled that PBA did not exercise control over the means and
methods in the performance of the complainant’s work. Hence the instant appeal.
ISSUE
EER Case No. 9 Whether or not the petitioner was illegally dismissed as an employee of the
respondent PBA?
G.R. No. 192084               September 14, 2011
RULING
JOSE MEL BERNARTE, Petitioner,  No. The petition is bereft of merit.
vs.
PHILIPPINE BASKETBALL ASSOCIATION (PBA), JOSE EMMANUEL M. To determine the existence of an employer-employee relationship, case law has
EALA, and PERRY MARTINEZ,Respondents. consistently applied the four-fold test, to wit: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
FACTS employer's power to control the... employee on the means and methods by which the
work is accomplished. The so-called "control test" is the most important indicator of
Complainant Bernarte, along with fellow PBA referee Renato Guevarra, alleged that the presence or absence of an employer-employee relationship. The allegation by the
they were illegally dismissed by PBA when their respective retainer contracts as complainant of the control imposed on him by the respondent was not sustained by
referees were not renewed after two successive contracts in 2003. As a result, they the Court ruling that those are mere guidelines towards the achievement of the
filed a complaint of illegal dismissal before the Labor Arbiter. Complainant alleged mutually desired result without dictating the means or methods to be employed in
that their repeated rehiring by PBA made them employees of the latter. In addition, attaining it quoting from Sonza V. ABS-CBN and Insular Life V. NLRC.
complainant alleged that PBA exercised control over the performance of his work as The Court held that the referees exercise their own independent judgement, based on
evidenced by the stipulations on his contract which therefore rendered him an the rules of the game, as to when and how a call or decision is to be made which
employee of PBA. Among the stipulations raised by the petitioner where his being decision PBA cannot overrule. The referees are the only, absolute, and final authority
subjected to rating as referee, being required to attend all basketball games by the on the playing court and respondent cannot control the referee when he blows the
PBA, to comply with all the requirements of the PBA governing the conduct of the whistle because such authority exclusively belongs to the referee.
referees in and out of the court, to keep himself in good physical, mental and
emotional condition during the term of the contract, and being prohibited to officiate The Court ruled petitioner is an Independent Contractor as indicated by the
other basketball games outside the PBA and to conduct himself according to the circumstances of his contract particularly the number of hours required from him in
highest standards of honesty or morality, among others. the performance of his work and the non-deduction from his fees of the statutory
deductions such as the SSS, Philhealth and PagIBIG contributions which are regularly
Labor Arbiter declared petitioner was an employee of PBA who was illegally deducted from employees. As an independent contractor, the repeated rehiring of the
dismissed and ordered the latter to reinstate him with backwages and damages. NLRC
petitioner does not prove that he is an employee but a mere renewal of the contract
between him and the PBA which the latter may or may not renew upon expiration
either for unsatisfactory performance or violation of its terms and conditions.
The Court also cited applicable foreign case law declaring that a referee is an
independent contractor, whose special skills and independent judgment are required
specifically for such position and cannot possibly be controlled by the hiring party
(Yonan V. US Soccer Federation, Inc.).
Wherefore, we DENY the petition and AFFIRM the decision of the Court of Appeals.
 respondents as employees of the petitioner and awarding them their money claims.
The NLRC explained that the act of the petitioner on repeated re-hiring of
Concepcion clearly shows that she is indeed an employee of the petitioner. The
petitioner moved for reconsideration, however NLRC denied the same. The CA
upheld the ruling of the NLRC but increased the monetary amount of the claim.
Hence, this present petition before the Court.
EER Case No. 11
Issue:
Whether or not the respondents are employees of the petitioner.
G.R. No. 220978, July 05, 2016
Ruling:
CENTURY PROPERTIES, INC., Petitioner, v. EDWIN J. BABIANO AND EMMA Yes. They are to be considered as employees of the petitioner.
B. CONCEPCION, Respondents.
The Supreme Court stressed in their rulings that the control over the manner
Facts: and execution of the duties of an engaged person for services is the determining factor
Respondent Babiano has been hired by the petitioner as Director of Sales and of an employer-employee relationship. Clearly, the petitioner has control over the
eventually, he was promoted as Vice President of Sales. On the other hand, performance of the respondents without using their discretion in completing the task.
respondent Concepcion became a sales agent of the petitioner. As provided in both of Anent thereto, the money claims of the respondents has been filed correctly due to the
their contracts, the respondents shall forfeit their commission on each sale in cases existence of an employer-employee relationship. Therefore, the respondents are
where a disclosure of information has been committed. Moreover, the respondents are declared employees.
also prohibited to engage in the same line of service in favour of the competitor of the
petitioner. Notably, the contract states that no employer-employee relationship shall
arise from such contract. In 2009, Babiano tendered a resignation letter containing
therein that he already accepted a position in the competitor company of the
petitioner. The petitioner forfeited the benefits of Babiano as to the commission due
to him. On the same year, Concepcion also rendered her resignation letter as Project
Director, effective immediately. In 2011, the respondents filed a complaint for non-
payment of commission and benefits. The petitioner argued that the respondents are
mere agents of the petitioner and no employer-employee relationship exists among
them. The Labor Arbiter ruled in favour of the petitioner declaring that the claims of
the respondents lack merits and such case should have been filed through an ordinary
civil action because no employer-employee relationship exists. On appeal before the
NLRC, the ruling of the Labor Arbiter have been reversed and set aside, declaring the
 only roughly 5 to 6 times per month whenever their contracted hauler (Milmar
Hauling Services) was not available.
Fly Ace also submitted their contract with Milmar, and copies of acknowledgement
receipts evidencing the payment for the petitioner’s services with the words “daily
manpower (pakyaw/piece rate pay) with the petitioner’s signature / initials to try and
prove that petitioner was not one of their employees.
EER Case No. 12
BITOY JAVIER (DANILO P. JAVIER), Petitioner, LABOR ARBITER
 vs.  LA dismissed the complaint for lack of merit, saying that the petitioner failed
FLY ACE CORPORATION/FLORDELYN CASTILLO, Respondents. to present proof of his regular employment with the company:

FACTS o Complainant has no employee ID showing his employment with the

Respondent nor any document showing that he received the benefits
On May 23, 2008, the petitioner Danilo (Bitoy) Javier filed a complaint against the accorded to regular employees of the Respondents. His contention that
respondents (Fly Ace Corporation / Flordelyn Castillo) for underpayment of salaries Respondent failed to give him said ID and payslips implies that indeed
and other labor standard benefits. Javier worked for the respondent’s company since he was not a regular employee of Fly Ace considering that
September 2007 as an all around worker around the respondent’s warehouse and a complainant was a helper and that Respondent company has
pahinante for the company’s deliveries. contracted a regular trucking for the delivery of its products.

The petitioner claims that he worked for the respondent from 7:00 AM to 5:00 PM, o Respondent Fly Ace is not engaged in trucking business but in the
Monday to Saturday during his time of employment but was never issued a importation and sales of groceries. Since there is a regular hauler to
company ID nor any payslips like the other employees, and on May 6, 2008, the deliver its products, we give credence to Respondents’ claim that
petitioner was barred from entering the company’s premises and despite repeated complainant was contracted on "pakiao" basis.
pleading to allow him to resume work he was not allowed too.
o As to the claim for underpayment of salaries, the payroll presented by
To support his allegations, the petitioner presented an affidavit of one Bengie the Respondents showing salaries of workers on "pakiao" basis has
Valenzuela who alleged that petitioner was a stevedore or pahinante of Fly Ace from evidentiary weight because although the signature of the complainant
September 2007 to January 2008. The said affidavit was subscribed before the Labor appearing thereon are not uniform, they appeared to be his true
Arbiter. signature.
NLRC
Fly Ace on the other hand claims that the petitioner was contracted by its employee  On appeal at the NLRC, Javier was favored. It ruled that the LA skirted the
Mr. Ong as a pahinante on a pakyaw (or per work) basis at an agreed rate of 300 per argument of Javier and immediately concluded that he was not a regular
trip (later increased to 325 on January 2008). Mr. Ong had contracted the petitioner employee simply because he failed to present proof. It was of the view that a
 pakyaw-basis arrangement did not preclude the existence of employer- cleaning grocery items for delivery to clients, no other proof was submitted to
employee relationship. fortify his claim. The lone affidavit executed by one Bengie Valenzuela was
CA unsuccessful in strengthening Javier’s cause. The Court cannot ignore the
 On March 18, 2010, the CA annulled the NLRC findings that Javier was inescapable conclusion that his mere presence at the workplace falls short in proving
indeed a former employee of Fly Ace and reinstated the dismissal of Javier’s employment therein. The supporting affidavit could have, to an extent, bolstered
complaint as ordered by the LA. Javier’s claim of being tasked to clean grocery items when there were no scheduled
delivery trips, but no information was offered in this subject simply because the
 In an illegal dismissal case the onus probandi rests on the employer to prove witness had no personal knowledge of Javier’s employment.
that its dismissal was for a valid cause. However, before a case for illegal
dismissal can prosper, an employer-employee relationship must first be The Court is of the considerable view that on Javier lies the burden to pass the well-
established. It is incumbent upon private respondent to prove the employee- settled tests to determine the existence of an employer-employee relationship; (1) the
employer relationship by substantial evidence. selection and engagement of the employee; (2) the payment of wages; (3) the power
of dismissal; and (4) the power to control the employee’s conduct. Of these elements,
 It is incumbent upon private respondent to prove, by substantial evidence, that the most important criterion is whether the employer controls or has reserved the right
he is an employee of petitioners, but he failed to discharge his burden. The to control the employee not only as to the result of the work but also as to the means
non-issuance of a company-issued identification card to private respondent and methods by which the result is to be accomplished.
supports petitioners’ contention that private respondent was not its employee.
 Case was elevated to the SC on appeal. In this case, Javier was not able to persuade the Court that the above elements exist in
his case. Further, Fly Ace does not dispute having contracted Javier and paid him on a
ISSUES "per trip" rate as a stevedore, albeit on a pakyaw basis.
1. WON the CA erred in holding that the petitioner was not a regular
employee of FLY ACE The Court cannot fail to note that Fly Ace presented documentary proof that Javier
was indeed paid on a pakyaw basis per the acknowledgment receipts admitted as
RULING: competent evidence by the LA. Unfortunately for Javier, his mere denial of the
 NO, Javier is not a regular employee. signatures affixed therein cannot automatically sway us to ignore the documents
because "forgery cannot be presumed and must be proved by clear, positive and
 The Court affirms the assailed CA decision.
convincing evidence and the burden of proof lies on the party alleging forgery.
It must be noted that the issue of Javier’s alleged illegal dismissal is anchored on the
existence of an employer-employee relationship between him and Fly Ace.
Javier failed to adduce substantial evidence as basis for the grant of relief.

While Javier remains firm in his position that as an employed stevedore of Fly Ace,
he was made to work in the company premises during weekdays arranging and
 Ruling:
Yes. He is an employee of the petitioner.
Considering that the nature of work engaged by the respondent in favour of
the petitioner, a sizing machine operator is necessary and desirable to the purpose of
the petitioner as a compny. Moreover, as to the "control test", the following facts
indubitably reveal that respondents wielded control over the work performance of
petitioner, to wit: (1) they required him to work within the company premises; (2)
they obliged petitioner to report every day of the week and tasked him to usually
perform the same job; (3) they enforced the observance of definite hours of work
from 8 o’clock in the morning to 5 o’clock in the afternoon; (4) the mode of payment
of petitioner’s salary was under their discretion, at first paying him on pakiao basis
EER Case No. 13 and thereafter, on daily basis; (5) they implemented company rules and regulations;
(6) [Estanislao] Agbay directly paid petitioner’s salaries and controlled all aspects of
G.R. No. 186621 March 12, 2014 his employment and (7) petitioner rendered work necessary and desirable in the
SOUTH EAST INTERNATIONAL RATTAN, INC. and/or ESTANISLAO business of the respondent company.
AGBAY, Petitioners,
vs.
JESUS J. COMING, Respondent.
Facts:
Respondent filed an illegal dismissal complaint against the petitioner. He has
been engaged by the petitioner as an operator of a sizing machine used for the
operations of the company. Allegedly, the petitioner told Jesus that his services shall
be terminated due to the financial crisis of the company, however his services may be
re-hired in case the company shall need him again. After a year of waiting, the
petitioner did not call the respondent, thus, he filed a complaint against the petitioner.
On their part, the petitioner stressed that the respondent is not their employee, using
the SSS employee list as their basis. Respondent then filed affidavits of the pioneer
employees of the petitioner stating that the respondent is one of them as pioneers. The
Labor Arbiter ruled favouring Jesus. Before the NLRC, the ruling had a reversal
declaring that no employer-employee relationship exist. Another reversal took place
before the CA. hence, this present petition.
Issue:
Whether or not Jesus is an employee of the petitioner.
 was Maricalum Mining who entered into an agreement with the manpower
cooperatives for the employment of complainants' services.
The LA ruled in favor of complainants and held that G Holdings connived
with Marcalum Mining in orchestrating the formation of manpower cooperatives to
circumvent complainants' labor standards rights. On appeal, the NLRC imposed the
liability of paying the monetary awards imposed by the LA against Maricalum
Mining, instead of G Holdings, on the ground that it was Maricalum Mining who
entered into service contracts with each of the manpower cooperatives. The Court of
Appeals affirmed the decision of the NLRC.

Issue: Whether or not there is employer-employee relationship between G Holdings

EER Case No. 15 and the employees of Sipalay Hospital.

Maricalum Mining Corporation vs Ely G . Florentino et. Al. Ruling: NO.

G.R. No. 221813 July 23, 2018 In this case, the Supreme Court applied the four-fold test: a) the selection and
engagement of the employee; b) the payment of wages; c) the power of dismissal; and
Facts: In 1992, respondent G Holdings Inc. bought 90% of petitioner Maricalum d) the power to control the employee's conduct, or the so-called "control test."
Mining Corporation’s shares and thereafter immediately took possession of its Complainant failed to show that their services were selected and engaged by
Sipalay Mining Complex and took full control of its management and operations. In either Maricalum Mining or G Holdings. However, the cash vouchers and notices of
1999, the Sipalay General Hospital, Inc. was duly incorporated. Afterwards, some of termination are reasonable enough to draw an inference that G Holdings and
Maricalum Mining's employees retired and formed several manpower cooperatives Maricalum Mining may have had a hand in the complainants' payment of salaries and
each of which executed identical sets of Memorandum of Agreement with Maricalum dismissal.
Mining wherein they undertook, among others, to provide the latter with a steady Further, in order to determine the presence or absence of an employment
supply of workers, machinery and equipment for a monthly fee. In 2001, Maricalum relationship between G Holdings and the employees of Sipalay Hospital by using the
Mining decided to stop its mining operations to avert continuing losses. Its properties control test, the Court examined Sipalay Hospital's Articles of Incorporation
were foreclosed and sold to G Holdings as the highest bidder. imparting its 'primary purpose, to wit:
In 2010, some of Maricalum Mining's workers and Sipalay General Hospital's “ To own, manage, lease or operate hospitals or clinics offering and providing
employees jointly filed a Complaint with the Labor Arbiter (LA) against G Holdings, medical services and facilities to the general public, provided that purely
and the cooperatives for illegal dismissal, underpayment and nonpayment of salaries professional, medical or surgical services shall be performed by duly qualified
and benefits, and damages. physicians or surgeons who may or may not be connected with the corporation
Complainants posited that: the Sipalay Hospital is "among the assets" of and who shall be freely and individually contracted by patients.”
Maricalum Mining acquired by G Holdings; and their payroll were prepared by G It is immediately apparent that Sipalay Hospital, even if its facilities are
Holdings' accounting department. Correspondingly, G Holdings maintained that: it located inside the Sipalay Mining Complex, does not limit its medical services only to
the employees and officers of Maricalum Mining and/or G Holdings. Moreover, G Appeals reversed the ruling of the NLRC and found that there was an employer-
Holdings is a holding company primarily engaged in investing substantially in the employee relationship since there was the element of control.
stocks of another company-not in directing and managing the latter's daily business ISSUE: Whether or not there is an employer-employee relationship?
operations. Because of this corporate attribute, the Court can reasonably draw an
inference that G Holdings does not have a considerable ability to control means and
methods of work of Sipalay Hospital employees. Markedly, the records are simply HELD: Yes, there is an employer-employee relationship. It was shown as evidence
bereft of any evidence that G Holdings had, in fact, used its ownership to control the that the employer stated in their Social Security System (SSS) online inquiry system
daily operations of Sipalay Hospital as well as the working methods of the latter's printouts was MGTR, which is the company of Lu.The coverage of the Social
employees. Security Law is predicated on the existence of an employer-employee relationship.
The 4% backing incentive fee which was divided among the fishermen engaged in the
EER Case No. 16 fishing operations approved by Lu was paid to them after deducting the latter's
respective vale or cash advance. If indeed a joint venture was agreed upon between
Lu vs. Enopia et al., GR No. 197899, March 6, 2017 petitioner and respondents, why would these fishermen obtain vale or cash advance
from petitioner and not from the piado who allegedly hired and had control over
them. | Communications between the respondents and the petitioner were made
FACTS: Tirso Enopia and 34 others were hired from January 20, 1994 to March 20, through radio operators and checkers. Such allows constantly monitoring or checking
1996 as crew members of the fishing mother boat F/BMG-28 owned by Joaquin Lu the progress of respondents' fishing operations throughout the duration thereof, which
who is the sole proprietor of Mommy Gina Tuna Resources (MGTR) based in showed their control and supervision over respondents' activities. It was established
General Santos City. Parties had an income-sharing arrangement wherein 55% goes that petitioner exercised control over respondents. It should be remembered that the
to Lu, 45% to the crew members, with an additional 4% as "backing incentive.” They control test merely calls for the existence of the right to control, and not necessarily
also equally share the expenses for the maintenance and repair of the mother boat, the exercise thereof. It is not essential that the employer actually supervises the
and for the purchase of nets, ropes and payaos. Sometime in August 1997, Lu performance of duties by the employee. It is enough that the former has a right to
proposed the signing of a Joint Venture Fishing Agreement between them, but wield the power. Finally, the power of dismissal over the fishermen were shown
complainants refused to sign the same as they opposed the one-year term provided in when Lu dismissed them after they refused to sign the joint fishing venture
the agreement. According to complainants during their dialogue on August 18, 1997, agreement.
Lu terminated their services right there and then because of their refusal to sign the
agreement. On the other hand, Lu alleged that the master fisherman (piado) Ruben
Salili informed him that Enopia et al. still refused to sign the agreement and have
decided to return the vessel F/B MG-28. On August 25, 1997, complainants filed their
complaint for illegal dismissal, monetary claims and damages. The Labor Arbiter
dismissed the complaint and found that no employer-employee relationship exists but
a joint venture. The NLRC affirmed the decision of the LA. On appeal, the Court of
 On the other hand, private respondent Arturo Siapno is petitioner's nephew.
Sometime in August 2000, he went to petitioner's stall. He was convinced by the
petitioner that if he could give her US$3,600.00 for the processing of his papers, he
could leave the country after 2weeks. Arturo contacted a relative in the U.S. to ask the
latter to cover the expenses for the former's overseas job placement. The relative sent
the US$3,000.00 to Teresita D. Visperas, petitioner's sister in Israel.  He left for Israel
in September 2000; was able to work and receive US$800.00 salary per
month. 3months after, he was also caught by the immigration officials, incarcerated
for ten days and was eventually deported. After arriving in the country, Arturo
immediately sought the petitioner. Petitioner promised him that she would send him
Recruitment Case No. 1 back to Israel, which did not happen.
Romero vs. People of the PH
G.R. No. 171644. November 23, 2011 After learning that Padlan suffered the same fate, Siapno checked with the
J. Peralta DOLE Dagupan whether petitioner, Visperas and Mokra had any license or authority
Facts: to recruit employees for overseas employment. Finding that petitioner and the others
Private respondent Romulo Padlan was a former classmate of petitioner in were not authorized to recruit for overseas employment, Arturo and Romulo filed a
college. Sometime in September 2000 Romulo went to petitioner's stall to inquire complaint against petitioner, Teresita and Jonney before the National Bureau of
about securing a job in Israel. Convinced by petitioner's words of encouragement and Investigation (NBI).
inspired by the potential salary, Romulo asked petitioner the amount of money
required in order for him to be able to go to Israel. Petitioner informed him that as Consequently, a complaint was filed against petitioner and Mokra for the
soon as he could give her US$3,600.00, his papers would be immediately processed.  crime of Illegal Recruitment. Trial on the merits ensued and the RTC found petitioner
When he was able to raise the amount, Romulo went back to petitioner and handed guilty beyond reasonable doubt of the crime of Illegal Recruitment as defined in
her the money, after a briefing with one Mokra, conducted at a later time, Romulo paragraph (a) of Article 38 of Presidential Decree No. 442. On appeal, the CA
was able to left for Israel; was able to work and receive US$800.00 salary per month. affirmed in toto the decision of the court a quo. Hence, this petition.
Two and a half months after, he was caught by Israel's immigration police and was
detained. He was subsequently deported because he did not possess a working visa. Issues:
On his return, Romulo demanded from petitioner the return of his money, but the 1. Whether or not the CA erred in affirming the conviction of the accused based
latter refused and failed to do so. merely on a certification from the DOLE-Dagupan District Office without
said certification being properly identified and testified by the POEA.
 Petitioner’s claim that the prosecution committed a procedural lapse in not
2. Whether the CA erred in affirming the conviction of the accused in procuring a certification from the agency primarily involved, the Philippine Overseas
interpreting the gesture of good faith of the petitioner as referral in the guise Employment Administration (POEA) is flawed. Thus, the trial court did not err in
of illegal recruitment. considering the certification from the DOLE-Dagupan District Office stating that
petitioner has not been issued any license by the POEA nor is a holder of an authority
Ruling: to engage in recruitment and placement activities. 
1. No. The crime of illegal recruitment is committed when two elements concur,
namely: 2. No. Article 13 (b) of the same Code defines, "recruitment and placement" as:

(1) the offender has no valid license or "any act of canvassing, enlisting,
authority required by law to enable one contracting, transporting, utilizing, hiring
to lawfully engage in recruitment and or procuring workers, and includes
placement of workers; and referrals, contract services, promising or
advertising for employment, locally or
(2) he undertakes either any activity within abroad, whether for profit or not:
the meaning of "recruitment and Provided, that any person or entity which,
placement" defined under Article 13 (b), in any manner, offers or promises for a
or any prohibited practices enumerated fee, employment to two or more persons
under Article 34 of the Labor Code. shall be deemed engaged in recruitment
and placement."
Under the first element, a non-licensee or non-holder of authority is any
person, corporation or entity which has not been issued a valid license or authority to The testimonies of the private respondents clearly establish the fact that
engage in recruitment and placement by the Secretary of Labor, or whose license or petitioner's conduct falls within the term recruitment as defined by law. As testified
authority has been suspended, revoked or cancelled by the POEA or the Secretary. by Romulo Padlan, petitioner convinced him and Arturo Siapno to give her
Clearly, the creation of the POEA did not divest the Secretary of Labor of his/her US$3,600.00 for the processing of their papers.
jurisdiction over recruitment and placement of activities. The governing rule is still
Article 35 of the Labor Code. It is apparent that petitioner was able to convince the private respondents to
apply for work in Israel after parting with their money in exchange for the services
she would render. The said act of the petitioner, without a doubt, falls within the
meaning of recruitment and placement as defined in Article 13 (b) of the Labor Code.
 Premises considered, the Petition for Review on Certiorari is denied.

D: Consequently, the Decision dated July 18, 2005 and Resolution dated February 13,
2006 of the Court of Appeals, affirming the Decision dated February 24, 2004 of the
Regional Trial Court, finding petitioner guilty beyond reasonable doubt of the crime
of Illegal Recruitment as defined in paragraph (a) of Article 38 of Presidential Decree
(P.D.) No. 2018, are hereby AFFIRMED with the MODIFICATION that the
penalty imposed should be imprisonment of four (4) years, as minimum, to seven (7)
years, as maximum, and a fine of ₱100,000.00 plus cost and for petitioner to return
the amount of $3,600.00 or its equivalent to Romulo Padlan and the amount of
$3,600.00 or its equivalent to Arturo Siapno.

NOTE:
In illegal recruitment, mere failure of the complainant to present written
receipts for money paid for acts constituting recruitment activities is not fatal to the
prosecution, provided the payment can be proved by clear and convincing testimonies
of credible witnesses.

The Court has already ruled that the absence of receipts in a case for illegal
recruitment is not fatal, as long as the prosecution is able to establish through credible
testimonial evidence that accused-appellant has engaged in illegal recruitment. Such
case is made, not by the issuance or the signing of receipts for placement fees, but by
engagement in recruitment activities without the necessary license or authority.

In People v. Pabalan, the Court held that the absence of receipts for some of
the amounts delivered to the accused did not mean that the appellant did not accept or
receive such payments. Neither in the Statute of Frauds nor in the rules of evidence is
the presentation of receipts required in order to prove the existence of a recruitment
agreement and the procurement of fees in illegal recruitment cases. Such proof may
come from the testimonies of witnesses.
 HARVEL sometime in December 2002 and just like the rest of the complainants, she
was required to submit certain documents and to pay processing fee. Diala and
Inovero promised the applicants that they will be deployed in three (3) months or in
June 2003 however, the promised deployment never materialized. Later, they found
out that neither HARVEL nor Inovero was authorized to recruit workers for overseas
employment as per records at the POEA Licensing Branch.

In her defense, Inovero denied the allegations claiming that she is the niece of
accused Velasco, the owner of HARVEL, but denied working there. Explaining her
presence in HARVEL, she alleged that she worked for her uncle, Velasco’s husband,
Recruitment Case No. 2 as an office assistant, hence, for at least two or three times a week, she had to go to
PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. MA. HARVEL on alleged errands for her uncle. She also testified that her alleged errands
HARLETA VELASCO Y BRIONES, MARICAR B. INOVERO, MARISSA mainly consisted of serving food and refreshments during orientations at HARVEL.
DIALA, AND BERNA M. PAULINO, ACCUSED; Inovero likewise denied receiving any money from the complainants, nor issuing
MARICAR B. INOVERO, ACCUSED-APPELLANT. receipts therefor.
[ G.R. No. 195668, June 25, 2014 ]
BERSAMIN, J.: The RTC rendered judgment acquitting Inovero of five counts of estafa but
convicting her for the crime of illegal recruitment committed in large scale as defined
and penalized by Section 6 and Section 7 of Republic Act No. 8042 (Migrant
FACTS: Workers and Overseas Filipinos Act of 1995).

The several accused were charged for violation of Section 6 of RA No. 8042 On appeal, the decision of the RTC is affirmed.
(illegal recruitment) and estafa as defined and penalized under Article 315, paragraph
2(a) of the Revised Penal Code. In such case, only Inovero was arrested and ISSUE
prosecuted, while the other accused having remained at large.
WON CA erred in affirming Inovero’s conviction by the RTC.
The prosecution presented five (5) private complainants as witnesses to prove
the crime of Illegal Recruitment. Four of them testified that on different occasions on RULING:
year 2003, they went to Harvel International Talent Management and Promotion
(“HARVEL”) upon learning that recruitment for caregivers to Japan was on-going NO, the appeal lacks merit.
there. They met Inovero, Velasco, and Diala; Inovero was conducting a briefing on
the applicants, while, Diala, the alleged talent manager, directed the applicants to The essential elements of illegal recruitment committed in large scale are: (1)
submit certain documents, and to pay placement and processing fees. The last that the accused engaged in acts of recruitment and placement of workers as defined
complainant to testify alleged that she applied for the position of janitress at under Article 13(b) of the Labor Code, or in any prohibited activities under Article 34
of the same Code; (2) that the accused had not complied with the guidelines issued by It is basic that the Court, not being a trier of facts, must of necessity rely on
the Secretary of Labor and Employment with respect to the requirement to secure a the findings of fact by the trial court which are conclusive and binding once affirmed
license or authority to recruit and deploy workers; and (3) that the accused committed by the CA on intermediate review. The Court leaves its confined precinct of dealing
the unlawful acts against 3 or more persons. In simplest terms, illegal recruitment is only with legal issues in order to deal with factual ones only when the appellant
committed by persons who, without authority from the government, give the persuasively demonstrates a clear error in the appreciation of the evidence by both the
impression that they have the power to send workers abroad for employment trial and the appellate courts. In this case, all that Inovero’s appeal has offered was
purposes. her denial of complicity in the illegal recruitment of the complainants, while the
complainants credibly described and affirmed her specific acts during the commission
Despite Inovero’s protestations that she did not commit illegal recruitment, of the crime of illegal recruitment. Their positive assertions were far trust worthier
the following circumstances contrarily convince the Honorable Court that she was than her mere denial.
into illegal recruitment.
First, private complainants Baful and Brizuela commonly testified that Hence, the Court upholds the CA’s affirmance of the factual findings by the
Inovero was the one who conducted orientations/briefings on them; informed them, trial court.
among others, on how much their salary would be as caregivers in Japan; and what to
wear when they finally will be deployed. DISPOSITIVE PORTION:
Second, when Diala introduced her (Inovero) to private complainant Amoyo
as one of the owners of HARVEL, Inovero did not bother to correct said WHEREFORE, the Court AFFIRMS the decision promulgated on August
representation. Inovero’s silence is clearly an implied acquiescence to said 26, 2010, subject to the MODIFICATION that appellant Maricar B. Inovero is
representation. ordered to pay by way of actual damages to each of the complainants the amounts
Third, Inovero, while conducting orientation on private complainant Brizuela, paid by them for placement, training and processing fees, respectively as follows:
represented herself as the one expediting the release of applicants’ working visa for
Japan. (a) Noveza Baful – P28,500.00;
Fourth, in a Certification issued and attested to by POEA’s Versoza – (b) Danilo Brizuela – P38,600.00;
Inovero had no license nor authority to recruit for overseas employment. (c) Rosanna Aguirre – P38,600.00;
(d) Annaliza Amoyo – P39,000.00; and
Therefore, there is no doubt that the RTC correctly found that Inovero (e) Teresa Marbella – P20,250.00.
committed illegal recruitment in large scale by giving private complainants
the impression that she can send them abroad for employment purposes, despite
the fact that she had no license or authority to do so. plus interest on such amounts at the rate of six percent (6%) per annum from the
finality of this judgment until fully paid. Inovero shall further pay the costs of suit.
SO ORDERED.

Recruitment Case No. 4 G.R. No. 146964 August 10, 2006

ROSA C. RODOLFO, Petitioner, vs. Specialist" was in a building situated at Bautista St. Buendia, Makati, Metro Manila. In
that office, private complainants gave certain amounts to appellant for processing and
PEOPLE OF THE PHILIPPINES, Respondent. other fees. Ferre gave P1,000.00 as processing fee (Exhibit A) and another P4,000.00
(Exhibit B). Likewise, Corpus gave appellant P7,000.00 (Exhibit D). Appellant then told
Facts: private complainants that they were scheduled to leave for Dubai on September 8, 1984.
Petitioner was charged before the Regional Trial Court (RTC) of Makati for illegal However, private complainants and all the other applicants were not able to depart on
recruitment alleged to have been committed as follows: the said date as their employer allegedly did not arrive. Thus, their departure was
rescheduled to September 23, but the result was the same. Suspecting that they were
That in or about and during the period from August to September 1984, in Makati, Metro being hoodwinked, private complainants demanded of appellant to return their money.
Manila, Philippines, and within the jurisdiction of this Honorable Court, the said accused Except for the refund of P1,000.00 to Ferre, appellant was not able to return private
representing herself to have the capacity to contract, enlist and transport Filipino workers complainants’ money. Tired of excuses, private complainants filed the present case for
for employment abroad, did then and there willfully and unlawfully, for a fee, recruit and illegal recruitment against the accused-appellant.
promise employment/job placement abroad to VILLAMOR ALCANTARA, NARCISO
CORPUZ, 1 NECITAS R. FERRE, GERARDO H. TAPAWAN and JOVITO L. CAMA, To prove that accused-appellant had no authority to recruit workers for overseas
without first securing the required license or authority from the Ministry of Labor and employment, the prosecution presented Jose Valeriano, a Senior Overseas Employment
Employment. 2 Officer of the Philippine Overseas Employment Agency (POEA), who testified that
accused-appellant was neither licensed nor authorized by the then Ministry of Labor and
After trial on the merits, Branch 61 of the Makati RTC rendered its Judgment on the Employment to recruit workers for overseas employment.
case, 3 the decretal portion of which reads:
For her defense, appellant denied ever approaching private complainants to recruit them
WHEREFORE, PREMISES ABOVE CONSIDERED, the Court finds the accused ROSA for employment in Dubai. On the contrary, it was the private complainants who asked her
C. RODOLFO as GUILTY of the offense of ILLEGAL RECRUITMENT and hereby help in securing jobs abroad. As a good neighbor and friend, she brought the private
sentences her [to] a penalty of imprisonment of EIGHT YEARS and to pay the costs. 4 complainants to the Bayside Manpower Export Specialist agency because she knew
(Underscoring supplied) Florante Hinahon, 5 the owner of the said agency. While accused-appellant admitted that
she received money from the private complainants, she was quick to point out that she
received the same only in trust for delivery to the agency. She denied being part of the
In so imposing the penalty, the trial court took note of the fact that while the information
agency either as an owner or employee thereof. To corroborate appellant’s testimony,
reflected the commission of illegal recruitment in large scale, only the complaint of the
Milagros Cuadra, who was also an applicant and a companion of private complainants,
two of the five complainants was proven.
testified that appellant did not recruit them. On the contrary, they were the ones who
asked help from appellant. To further bolster the defense, Eriberto C. Tabing, the
On appeal, the Court of Appeals correctly synthesized the evidence presented by the accountant and cashier of the agency, testified that appellant is not connected with the
parties as follows: agency and that he saw appellant received money from the applicants but she turned
them over to the agency through either Florantino Hinahon or Luzviminda Marcos. 6
[The evidence for the prosecution] shows that sometime in August and September (Emphasis and underscoring supplied)
1984, accused-appellant approached private complainants Necitas Ferre and Narciso
Corpus individually and invited them to apply for overseas employment in Dubai. The In light thereof, the appellate court affirmed the judgment of the trial court but modified
accused-appellant being their neighbor, private complainants agreed and went to the the penalty imposed due to the trial court’s failure to apply the Indeterminate Sentence
former’s office. This office which bore the business name "Bayside Manpower Export Law.
The appellate court thus disposed: that is essentially committed by a non-licensee or non-holder of authority. A non-licensee
means any person, corporation or entity to which the labor secretary has not issued a
WHEREFORE, finding no merit in the appeal, this Court DISMISSES it and AFFIRMS valid license or authority to engage in recruitment and placement; or whose license or
the appealed Decision EXCEPT the penalty x x x which is hereby changed to five (5) authority has been suspended, revoked or cancelled by the POEA or the labor secretary.
years as minimum to seven (7) years as maximum with perpetual disqualification from A license authorizes a person or an entity to operate a private employment agency, while
engaging in the business of recruitment and placement of workers authority is given to those engaged in recruitment and placement activities.

Issue: That appellant in this case had been neither licensed nor authorized to recruit workers for
Whether or not the respondent is guilty of illegal recruitment. overseas employment was certified by Veneranda C. Guerrero, officer-in-charge of the
Licensing and Regulation Office; and Ma. Salome S. Mendoza, manager of the Licensing
Ruling: Branch – both of the Philippine Overseas Employment Administration. Yet, as
YES. The elements of the offense of illegal recruitment, which must concur, are: (1) that complainants convincingly proved, she recruited them for jobs in Taiwan. 17 (Italics in the
the offender has no valid license or authority required by law to lawfully engage in original; underscoring supplied)
recruitment and placement of workers; and (2) that the offender undertakes any activity
within the meaning of recruitment and placement under Article 13(b), or any prohibited The second element is doubtless also present. The act of referral, which is included in
practices enumerated under Article 34 of the Labor Code. 13 If another element is present recruitment, 18 is "the act of passing along or forwarding of an applicant for employment
 that the accused commits the act against three or more persons, individually or as a after an initial interview of a selected applicant for employment to a selected employer,
group, it becomes an illegal recruitment in a large scale. 14 placement officer or bureau." 19 Petitioner’s admission that she brought private
complainants to the agency whose owner she knows and her acceptance of fees
That the first element is present in the case at bar, there is no doubt. Jose Valeriano, including those for processing betrays her guilt.
Senior Overseas Employment Officer of the Philippine Overseas Employment
Administration, testified that the records of the POEA do not show that petitioner is That petitioner issued provisional receipts indicating that the amounts she received from
authorized to recruit workers for overseas employment. 15 A Certification to that effect the private complainants were turned over to Luzviminda Marcos and Florante Hinahon
was in fact issued by Hermogenes C. Mateo, Chief of the Licensing Division of POEA. 16 does not free her from liability. For the act of recruitment may be "for profit or not." It is
sufficient that the accused "promises or offers for a fee employment" to warrant
Petitioner’s disclaimer of having engaged in recruitment activities from the very start conviction for illegal recruitment. 20 As the appellate court stated:
does not persuade in light of the evidence for the prosecution. In People v. Alvarez, this
Court held: Parenthetically, why petitioner accepted the payment of fees from the private
complainants when, in light of her claim that she merely brought them to the agency, she
Appellant denies that she engaged in acts of recruitment and placement without first could have advised them to directly pay the same to the agency, she proferred no
complying with the guidelines issued by the Department of Labor and Employment. She explanation.
contends that she did not possess any license for recruitment, because she never
engaged in such activity. On petitioner’s reliance on Señoron, 22 true, this Court held that issuance of receipts for
placement fees does not make a case for illegal recruitment. But it went on to state that it
We are not persuaded. In weighing contradictory declarations and statements, greater is "rather the undertaking of recruitment activities without the necessary license or
weight must be given to the positive testimonies of the prosecution witnesses than to the authority" that makes a case for illegal recruitment. 23
denial of the defendant. Article 38 (a) clearly shows that illegal recruitment is an offense
A word on the penalty. Indeed, the trial court failed to apply the Indeterminate Sentence
Law which also applies to offenses punished by special laws.

While the penalty of imprisonment imposed by the appellate court is within the prescribed
penalty for the offense, its addition of "perpetual disqualification from engaging in the
business of recruitment and placement of workers" is not part thereof. Such additional
penalty must thus be stricken off.

WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the
Court of Appeals are AFFIRMED with MODIFICATION in that the accessory penalty
imposed by it consisting of "perpetual disqualification from engaging in the business of
recruitment and placement of workers" is DELETED.

OFW Case No. 1

1. STOLT-NIELSEN TRANSPORTATION GROUP, INC. AND CHUNG GAI

SHIP MANAGEMENT, vs. SULPECIO MEDEQUILLO, JR.G.R. No. 177498
January 18, 2012PEREZ, J.:

Doctrine:
Even before the start of any employer-employee relationship, contemporaneous with upon the effectivity of the Migrant Workers and Overseas Filipinos Act of 1995.
the perfection of the employment contract was the birth of certain rights and
obligations, the breach of which may give rise to a cause of action against the erring LA RULING:
party.
The LA declared the respondents guilty of constructively dismissing the complainant
FACTS: by not honoring the employment contract. Accordingly, respondents are hereby
ordered jointly and solidarily to pay complainant $12,537.00 or its peso equivalent at
On 6 March 1995, Sulpecio Madequillo (respondent) filed a complaint before the the time of payment. The LA found the first contract entered into by and between the
Adjudication Office of the POEA against the petitioners for illegal dismissal under a complainant and the respondents to have been novated by the execution of the second
first contract and for failure to deploy under a second contract. In his complaint- contract. In other words, respondents cannot be held liable for the first contract but
affidavit, respondent alleged that: are clearly and definitely liable for the breach of the second contract. However, he
ruled that there was no substantial evidence to grant the prayer for moral and
1. Respondent was hired by Stolt-Nielsen Marine Services, Inc on behalf of its exemplary damages.
principal Chung-Gai Ship Management of Panama as Third Assistant Engineer on
board the vessel "Stolt Aspiration" for a period of nine (9) for $1,212.00 per month NLRC RULING: Affirmed with modification the Decision of the LA.
commencing on 6 November 1991;
NLRC deleted the award of overtime pay in the total amount of US $3,636.00.
2. He then joined the vessel MV "Stolt Aspiration", but only after three (3) months,
he was ordered by the ship’s master to disembark the vessel and repatriated back to ISSUE: Whether or not petitioners have the obligation to deploy the respondent by
Manila for no reason or explanation;3. Upon his return to Manila, he immediately virtue of the perfected contract, and thus will be held liable for damages in case of
proceeded to the petitioner’s office where he was transferred employment with non-deployment.
another vessel named MV "Stolt Pride" under the same terms and conditions of the
SC RULING:Yes. The petitioners argue that under the POEA Contract, actual
First Contract;4. POEA approved the Second Contract, however, respondent was not
deployment of the seafarer is a suspensive condition for the commencement of the
deployed by petitioners despite the commencement of the contract. POEA
employment. The Court agreed with petitioners on such point. However, even without
subsequently certified the Second Employment Contract without the knowledge that
actual deployment, the perfected contract gives rise to obligations on the part of
petitioners failed to deploy the respondent.5. Because of petitioners alleged non-
petitioners. Parties are bound not only to the fulfillment of what has been expressly
compliance with the Second Contract, respondent Medequilla demanded for the
stipulated but also to all the consequences which, according to their nature, may be in
return of his passport and other employment documents from the petitioners. He
keeping with good faith, usage and law.
claimed that he was made to involuntarily sign a document in order to recover his
employment papers. Medequilla prayed for payment of damages as well as attorney’s Thus, even if by the standard contract employment commences only "upon actual
fees for his illegal dismissal and in view of the Petitioners’ bad faith in not complying departure of the seafarer", this does not mean that the seafarer has no remedy in case
with the Second Contract. The case was transferred to the Labor Arbiter of the DOLE
of non-deployment without any valid reason.The Court further made a distinction
between the perfection of the employment contract and the commencement of the
employer-employee relationship. The perfection of the contract occurred when
petitioner and respondent agreed on the object and the cause, as well as the rest of the
terms and conditions therein. The commencement of the employer-employee
relationship would have taken place had petitioner been actually deployed from the
point of hire. Thus, even before the start of any employer-employee relationship,
contemporaneous with the perfection of the employment contract was the birth of
certain rights and obligations, the breach of which may give rise to a cause of action
against the erring party.

Respondent is thus liable to pay petitioner actual damages in the form of the loss of
nine (9) months’ worth of salary as provided in the contract. This is but proper
because of the non-deployment of respondent without just cause.

OFW Case No. 3

ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC. AND

MARLOW NAVIGATION CO., INC.

GR No. 167614 - March 24, 2009 

FACTS:
Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042,
and Marlow Navigation Co., Inc., under a POEA-approved contract of employment which reads:
for 12 months, as Chief Officer, with the basic monthly salary of US$1,400, plus Sec. 10. Money Claims. - x x x In case of termination of overseas employment
$700/month overtime pay, and 7 days paid vacation leave per month. without just, valid or authorized cause as defined by law or contract, the workers shall
be entitled to the full reimbursement of his placement fee with interest of twelve
On March 19, 1998, the date of his departure, Serrano was constrained to accept a percent (12%) per annum, plus his salaries for the unexpired portion of his
downgraded employment contract for the position of Second Officer with a monthly employment contract or for three (3) months for every year of the unexpired term,
salary of US$1,000 upon the assurance and representation of respondents that he whichever is less.
would be Chief Officer by the end of April 1998. The NLRC denied the Motion; hence, Serrano filed a Petition for Certiorari with the
Court of Appeals (CA), reiterating the constitutional challenge against the subject
Respondents did not deliver on their promise to make Serrano Chief Officer. Hence, clause. The CA affirmed the NLRC ruling on the reduction of the applicable salary
Serrano refused to stay on as second Officer and was repatriated to the Philippines on rate, but skirted the constitutional issue raised by herein petitioner Serrano.
May 26, 1998, serving only two (2) months and seven (7) days of his contract, ISSUES:
leaving an unexpired portion of nine (9) months and twenty-three (23) days. Whether or not the subject clause violate Section 1, Article III of the Constitution,
and Section 18, Article II and Section 3, Article XIII on labor as a protected sector.
Serrano filed with the Labor Arbiter (LA) a Complaint against respondents for
constructive dismissal and for payment of his money claims in the total amount of
US$26,442.73 (based on the computation of $2590/month from June 1998 to
February 199, $413.90 for March 1998, and $1640 for March 1999) as well as moral HELD:
and exemplary damages.
On the first issue.
The LA declared the petitioner's dismissal illegal and awarded him US$8,770, The answer is in the negative. Petitioner's claim that the subject clause unduly
representing his salaray for three (3) months of the unexpired portion of the aforesaid interferes with the stipulations in his contract on the term of his employment and the
contract of employment, plus $45 for salary differential and for attorney's fees fixed salary package he will receive is not tenable.
equivalent to 10% of the total amount; however, no compensation for damages as Section 10, Article III of the Constitution
prayed was awarded. provides: No law impairing the obligation of contracts shall be passed.
The prohibition is aligned with the general principle that laws newly enacted have
On appeal, the NLRC modified the LA decision and awarded Serrano $4669.50, only a prospective operation, and cannot affect acts or contracts already perfected;
representing three (3) months salary at $1400/month, plus 445 salary differential and however, as to laws already in existence, their provisions are read into contracts and
10% for attorney's fees. This decision was based on the provision of RA 8042, which deemed a part thereof. Thus, the non-impairment clause under Section 10, Article II is
was made into law on July 15, 1995. limited in application to laws about to be enacted that would in any way derogate
from existing acts or contracts by enlarging, abridging or in any manner changing the
Serrano filed a Motion for Partial Reconsideration, but this time he questioned the intention of the parties thereto.
 be borne by them in equal degree; none should be denied the protection of the laws
As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the which is enjoyed by, or spared the burden imposed on, others in like circumstances.
execution of the employment contract between petitioner and respondents in
1998.Hence, it cannot be argued that R.A. No. 8042, particularly the subject clause, Such rights are not absolute but subject to the inherent power of Congress to
impaired the employment contract of the parties. Rather, when the parties executed incorporate, when it sees fit, a system of classification into its legislation; however, to
their 1998 employment contract, they were deemed to have incorporated into it all the be valid, the classification must comply with these requirements: 1) it is based on
provisions of R.A. No. 8042. substantial distinctions; 2) it is germane to the purposes of the law; 3) it is not limited
to existing conditions only; and 4) it applies equally to all members of the class.
But even if the Court were to disregard the timeline, the subject clause may not be
declared unconstitutional on the ground that it impinges on the impairment clause, for There are three levels of scrutiny at which the Court reviews the constitutionality of a
the law was enacted in the exercise of the police power of the State to regulate a classification embodied in a law: a) the deferential or rational basis scrutiny in which
business, profession or calling, particularly the recruitment and deployment of OFWs, the challenged classification needs only be shown to be rationally related to serving a
with the noble end in view of ensuring respect for the dignity and well-being of legitimate state interest; b) the middle-tier or intermediate scrutiny in which the
OFWs wherever they may be employed. Police power legislations adopted by the government must show that the challenged classification serves an important state
State to promote the health, morals, peace, education, good order, safety, and general interest and that the classification is at least substantially related to serving that
welfare of the people are generally applicable not only to future contracts but even to interest; and c) strict judicial scrutiny in which a legislative classification which
those already in existence, for all private contracts must yield to the superior and impermissibly interferes with the exercise of a fundamental right or operates to the
legitimate measures taken by the State to promote public welfare. peculiar disadvantage of a suspect class is presumed unconstitutional, and the burden
is upon the government to prove that the classification is necessary to achieve
On the second issue. a compelling state interest and that it is the least restrictive means to protect such
The answer is in the affirmative. interest.
Section 1, Article III of the Constitution guarantees: No person shall be deprived of
life, liberty, or property without due process of law nor shall any person be denied the Upon cursory reading, the subject clause appears facially neutral, for it applies to all
equal protection of the law. OFWs. However, a closer examination reveals that the subject clause has a
discriminatory intent against, and an invidious impact on, OFWs at two levels:
Section 18, Article II and Section 3, Article XIII accord all members of the labor First, OFWs with employment contracts of less than one year vis-à-vis OFWs with
sector, without distinction as to place of deployment, full protection of their rights employment contracts of one year or more;
and welfare. Second, among OFWs with employment contracts of more than one year; and
Third, OFWs vis-à-vis local workers with fixed-period employment;
To Filipino workers, the rights guaranteed under the foregoing constitutional In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment
provisions translate to economic security and parity: all monetary benefits should be who were illegally discharged were treated alike in terms of the computation of their
equally enjoyed by workers of similar category, while all monetary obligations should money claims: they were uniformly entitled to their salaries for the entire unexpired
portions of their contracts. But with the enactment of R.A. No. 8042, specifically the
adoption of the subject clause, illegally dismissed OFWs with an unexpired portion of Constitution commands. The idea that private business interest can be elevated to the
one year or more in their employment contract have since been differently treated in level of a compelling state interest is odious.
that their money claims are subject to a 3-month cap, whereas no such limitation is Moreover, even if the purpose of the subject clause is to lessen the solidary liability of
imposed on local workers with fixed-term employment. placement agencies vis-a-vis their foreign principals, there are mechanisms already in
The Court concludes that the subject clause contains a suspect classification in place that can be
that, in the computation of the monetary benefits of fixed-term employees who are employed to achieve that purpose without infringing on the constitutional rights of
illegally discharged, it imposes a 3-month cap on the claim of OFWs with an OFWs.
unexpired portion of one year or more in their contracts, but none on the claims of The POEA Rules and Regulations Governing the Recruitment and Employment of
other OFWs or local workers with fixed-term employment. The subject clause Land-Based Overseas Workers, dated February 4, 2002, imposes administrative
singles out one classification of OFWs and burdens it with a peculiar disadvantage. disciplinary measures on erring foreign employers who default on their contractual
There being a suspect classification involving a vulnerable sector protected by the obligations to migrant workers and/or their Philippine agents. These disciplinary
Constitution, the Court now subjects the classification to a strict judicial scrutiny, and measures range from temporary disqualification to preventive suspension. The POEA
determines whether it serves a compelling state interest through the least restrictive Rules and Regulations Governing the Recruitment and Employment of Seafarers,
means. dated May 23, 2003, contains similar administrative disciplinary measures against
erring foreign employers.
What constitutes compelling state interest is measured by the scale of rights and Resort to these administrative measures is undoubtedly the less restrictive means of
powers arrayed in the Constitution and calibrated by history. It is akin to the aiding local placement agencies in enforcing the solidary liability of their foreign
paramount interest of the state for which some individual liberties must give way, principals.
such as the public interest in safeguarding health or maintaining medical standards, or
in maintaining access to information on matters of public concern. Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is
In the present case, the Court dug deep into the records but found no compelling state violative of the right of petitioner and other OFWs to equal protection.
interest that the subject clause may possibly serve. The subject clause “or for three months for every year of the unexpired term,
In fine, the Government has failed to discharge its burden of proving the existence of whichever is less” in the 5th paragraph of Section 10 of Republic Act No. 8042
a compelling state interest that would justify the perpetuation of the discrimination is DECLARED UNCONSTITUTIONAL.
against OFWs under the subject clause.
Assuming that, as advanced by the OSG, the purpose of the subject clause is to
protect the employment of OFWs by mitigating the solidary liability of placement
agencies, such callous and cavalier rationale will have to be rejected. There can never
be a justification for any form of government action that alleviates the burden of one
sector, but imposes the same burden on another sector, especially when the favored
sector is composed of private businesses such as placement agencies, while the
disadvantaged sector is composed of OFWs whose protection no less than the
 FACTS:

Petitioner Sameer Overseas Placement Agency is a recruitment and placement

agency sending workers to Taiwan while respondent Joy Cabiles was one of those
hired and has signed a one-year employment contract as a quality control personnel,
with a monthly salary of NTS 15,360.00. Upon her deployment, Cabiles was made to
work a cutter. Petitioner claimed that a certain Mr. Hwang from Wacoal informed
Joy, without prior notice, that she was terminated and that she should “immediately
report to their office to get her salary and passport” and she was asked to “prepare for
repatriation”. Cabiles claimed that she was told that from June 26 to July 14, 1997,
she only earned NTS 9,000.15. Moreover, Wacoal deducted NTS3,000.00 to cover
her plane ticket to Manila.

Respondent filed a complaint for illegal dismissal with the NLRC against
Sameer and Wacoal, with claims for unpaid salary, overpayment of placement fees,
and damages. The petitioner Sameer was substituted by Pacific Manpower and moved
to dismiss the case alleging the absence of employer-employee relationship between
them and denied liability. The LA dismissed the case but upon appeal before the
NLRC, such was reversed as Sameer failed to prove that there were just causes for
termination. Three (3) months’ worth of salary, reimbursement for placement fees,
and attorney’s fees were awarded.

Aggrieved, Sameer filed a petition for certiorari against the NLRC before the
CA but the latter affirmed the decision of the NLRC, with respect to the issues on
dismissal, unpaid wages, and benefits. Hence, this petition.
OFW Case No. 4
ISSUES:

G.R. No. 170139. August 5, 2014.* WON the CA erred in affirming the ruling of the NLRC as to terms,
SAMEER OVERSEAS PLACEMENT AGENCY, INC., petitioner, vs. JOY C. conditions, and benefits.
CABILES, respondent.
RULING:
LEONEN, J.
 NO. Respondent Joy Cabiles, having been illegally dismissed, is entitled to BRION, J.:
her salary for the unexpired portion of the employment contract that was violated
together with attorney’s fees and reimbursement of amounts withheld from her salary. FACTS:
Section 10 of Republic Act No. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, states that overseas workers who were terminated Petitioner Jesus Vergara was hired by respondent Hammonia Maritime
without just, valid, or authorized cause „shall be entitled to the full reimbursement of Services for its foreign principal, respondent Atlantic Marine. He was hired for a
his placement fee with interest of twelve (12%) per annum, plus his salaries for the contract of nine months and a basic monthly salary of USD 642.00 as a pumpman.
unexpired portion of his employment contract or for three (3) months for every year Vergara is a member of AMOSUP, a union which has a CBA with Atlantic Marine,
of the unexpired term, whichever is less.” represented by Hammonia. While on work, he felt he was losing his vision and
according to the medical log in the vessel, it was glaucoma. Upon landing on Texas,
Section 15 of Republic Act No. 8042 states that „repatriation of the worker he consulted a physician who advised him to see an ophthalmologist upon his return
and the transport of his [or her] personal belongings shall be the primary to the Philippines. He was sent home where the company-designated physician
responsibility of the agency which recruited or deployed the worker overseas. The confirmed the diagnosis of the Texas-based doctor. Upon undergoing two treatments,
exception is when „termination of employment is due solely to the fault of the he was declared fit to resume his seafaring duties.
worker, which as we have established, is not the case. It reads: SEC. 15.
REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND.--The Claiming he was still experiencing gradual visual loss, he sought the opinion
repatriation of the worker and the transport of his personal belongings shall be the of another doctor not designated by his company, who pronounced that although he
primary responsibility of the agency which recruited or deployed the worker overseas. was fit to word, he is suffering from a permanent partial disability (Grade X). Then,
All costs attendant to repatriation shall be borne by or charged to the agency he claimed payment of disability and sickness benefits pursuant to the POEA
concerned and/or its principal. Likewise, the repatriation of remains and transport of Standard Employment Contract and the existing CBA in the company. Hammonia
the personal belongings of a deceased worker and all costs attendant thereto shall be denied the claim, prompting Vergara to file a complaint before the NLRC. The LA
borne by the principal and/or local agency. However, in cases where the termination favored the petitioner Vergara but was reversed on appeal before the NLRC. Vergara
of employment is due solely to the fault of the worker, the principal/employer or then filed a petition for certiorari under Rule 65 before the CA but was dismissed,
agency shall not in any manner be responsible for the repatriation of the former even on reconsideration. Hence, this petition.
and/or his belongings.
ISSUE:
OFW Case No. 5
WON the claims of Vergara for sickness and disability benefits have merit.

G.R. No. 172933             October 6, 2008 RULING:

JESUS E. VERGARA, petitioner, vs. HAMMONIA MARITIME SERVICES,
INC. and ATLANTIC MARINE LTD., respondents. NO. Petition denied.
 The seafarer, upon sign-off from his vessel, must report to the company- declaration of either fitness to work or the existence of a permanent disability. In the
designated physician within three (3) days from arrival for diagnosis and treatment. present case, while the initial 120-day treatment or temporary total disability period
For the duration of the treatment but in no case to exceed 120 days, the seaman is was exceeded, the company-designated doctor duly made a declaration well within
on temporary total disability as he is totally unable to work. He receives his basic the extended 240-day period that the petitioner was fit to work. Viewed from this
wage during this period until he is declared fit to work or his temporary disability is perspective, both the NLRC and CA were legally correct when they refused to
acknowledged by the company to be permanent, either partially or totally, as his recognize any disability because the petitioner had already been declared fit to resume
condition is defined under the POEA Standard Employment Contract and by his duties. In the absence of any disability after his temporary total disability was
applicable Philippine laws. If the 120 days initial period is exceeded and no such addressed, any further discussion of permanent partial and total disability, their
declaration is made because the seafarer requires further medical attention, then the existence, distinctions and consequences, becomes a surplusage that serves no useful
temporary total disability period may be extended up to a maximum of 240 days, purpose. 
subject to the right of the employer to declare within this period that a permanent
partial or total disability already exists. The seaman may of course also be declared fit
to work at any time such declaration is justified by his medical condition. 

Thus, upon petitioner's return to the country for medical treatment, both he
and the respondent company acted correctly in accordance with the terms of the
POEA Standard Employment Contract and the CBA; he reported to the company-
designated doctor for treatment and the latter properly referred him to an
ophthalmologist at the Chinese General Hospital. No dispute existed on the medical
treatment the petitioner received, to the point that the petitioner executed a "certificate
of fitness for work" based on the assessment/certification by the company-designated
physician.

Problems only arose when despite the certification, the petitioner sought
second and third opinions from his own doctors, one of whom opined that he could no
longer resume work as a pumpman while the other recognized a Grade X (20.15%)
partial permanent disability. Based on these opinions, the petitioner demanded that he
be paid disability and sickness benefits; when the company refused, the demand
metamorphosed into an actual case before the NLRC Arbitration Branch.

As we outlined above, a temporary total disability only becomes permanent

when so declared by the company physician within the periods he is allowed to do so,
or upon the expiration of the maximum 240-day medical treatment period without a
 vs.
FRANCISCO D. MUNAR, Respondent.

REYES, J.:

FACTS

On March 23, 2006, Munar signed up for a 6-month contract as Pump Man for MV
Southern Italy, a vessel operated by Atlantic Manning, Ltd, through its agent Kestrel
Shipping Co. On October 12, 2006, after Munar assisted in manually lifting the ship’s
anchor windlass motor that weighs about 350 kilograms, he started to limp and
experience severe pain in his lumbar region causing him to suffer an injury which
prevented him to work for more than 120 days qualifying him for a claim for disability
benefits. After the agency-appointed doctor’s recommended surgery and continued
physiotherapy, Munar’s condition was recommended for Grade 8 disabilty (with
corresponding US$16,795 benefits) pursuant POEA-SEC provisions. Consequently,
Munar was offered by Krestel Shipping Co. disability benefits for Grade 8 disability
contrary to the Grade 1 assessment of Dr. Chiu, an independent orthopedic hired by
Munar.

Meantime, on April 17, 2007, Munar filed a complaint for total and permanent disability
benefits claiming that since his incapacity to engage in any gainful employment persisted
for more than 120 days, it automatically entitles him to total and permanent disability
benefits. The LA awarded him with maximum total and permanent disability benefits as
provided under the POEA Standard Employment Contract in the amount of
US$60,000.00. The LA’s decision argued that the recommendation by company
designated physician cannot prevail over the specific assessment made by the
independent physician since the former’s assessment is not accompanied by any
justification, other than the vague qualification on the length of time of recovery. This
was affirmed by the NLRC and later by the Court of Appeals.
OFW Case No. 6
ISSUE
G.R. No. 198501               January 30, 2013 Whether or not the award of total and permanent disability to Munar was proper.
RULING
KESTREL SHIPPING CO., INC./ CAPT. AMADOR P. SERVILLON and ATLANTIC
MANNING LTD., Petitioners,  Yes. Permanent disability is the inability of a worker to perform his job for more than 120
days, regardless of whether or not he loses the use of any part of his body. As gleaned
from the records, respondent was unable to work for more than 120 days, due to his
medical treatment. This clearly shows that his disability was permanent. FACTS:
On May 30, 2008, Doehle-Philman, in behalf of its foreign principal, Dohle Ltd.,
Total disability, on the other hand, means the disablement of an employee to earn wages hired respondent as oiler aboard the vessel MV CMA CGM Providencia for a period
in the same kind of work of similar nature that he was trained for, or accustomed to
perform, or any kind of work which a person of his mentality and attainments could do. It
of nine months with basic monthly salary of US$547.00 and other benefits. Before
does not mean absolute helplessness. In disability compensation, it is not the injury deployment, respondent underwent pre-employment medical examination (PEME)
which is compensated, but rather it is the incapacity to work resulting in the impairment and was declared fit for sea duty.
of one’s earning capacity. Disability should not be understood more on its medical
significance but on the loss of earning capacity. Respondent stated that on June 1, 2008, he boarded the vessel and assumed his duties
as oiler; however, in November 2008, he experienced heartache and loss of energy
Consequently, after the expiration of the 120-day period, Dr. Chua had not yet made any after hammering and lifting a 120-kilogram machine; thereafter, he was confined at a
declaration as to Munar’s fitness to work and Munar had not yet fully recovered and was hospital in Rotterdam where he was informed of having a hole in his heart that
still incapacitated to work sufficed to entitle the latter to total and permanent disability
needed medical attention.
benefits.

After his repatriation on December 6, 2008, respondent reported to Doehle-Philman

which in turn referred him to Clinico-Med. Respondent claimed that he was confined
for two days in UST Hospital and that a heart operation was recommended to him. He
nevertheless admitted that he has not yet undergone any surgery. On April 24, 2009,
respondent’s personal doctor, Dr. Luminardo M. Ramos (Dr. Ramos), declared him
not fit to work.

Consequently, on June 19, 2009, respondent filed a Complaint for disability benefits,
reimbursement of medical expenses, moral and exemplary damages, and attorney’s
fees against petitioners. Respondent claimed that since he was declared fit to work
before his deployment, this proved that he sustained his illness while in the
performance of his duties aboard the vessel; that he was unable to work for
more than 120 days; and that he lost his earning capacity to engage in a work he
was skilled to do. Thus, he insisted he is entitled to permanent and total
OFW Case No. 8 disability benefits.

DOEHLE-PHILMAN MANNING AGENCY INC. vs. HENRY C. HARO For their part, petitioners alleged that respondent boarded the vessel on June 2, 2008;
G.R. No. 206522. April 18, 2016. that on or about November 21, 2008, respondent was confined at a hospital in
DEL CASTILLO, J. Rotterdam; and that upon repatriation, he was referred to Dr. Leticia Abesamis (Dr.
Abesamis), the company-designated doctor, for treatment.17 Petitioners denied that those not listed as occupational diseases, this presumption does not necessarily result
respondent has a hole in his heart. Instead, they pointed out that on December 27, in an automatic grant of disability compensation. The claimant still has the burden to
2008, Dr. Abesamis diagnosed him of “aortic regurgitation, moderate” but present substantial evidence or “such relevant evidence as a reasonable mind might
declared that his condition is not work-related. Petitioners further argued that since accept as adequate to support a conclusion” that his work conditions caused or at least
respondent’s illness is not an occupational disease, then he must prove that his work increased the risk of contracting the illness.
caused his illness; because of his failure to do so, then he is not entitled to disability
benefits. In this case, considering that respondent did not suffer from any occupational
disease listed under Section 32(A) of the POEA-SEC, then to be entitled to
The LA dismissed the case for lack of merit. The LA noted that Dr. Abesamis disability benefits, the respondent has the burden to prove that his illness is
declared that respondent’s illness is not work-related; therefore, it is incumbent upon work-related. Unfortunately, he failed to discharge such burden. Records reveal
respondent to prove otherwise. The NLRC dismissed the appeal. It found no that respondent was diagnosed of aortic regurgitation, a heart “condition whereby the
sufficient evidence that respondent’s illness is work-connected. The CA granted the aortic valve permits blood ejected from the left ventricle to leak back into the left
Petition and concomitantly reversed and set aside the September 28, 2010 and ventricle.” Although this condition manifested while respondent was aboard the
November 30, 2010 NLRC Resolutions. vessel, such circumstance is not sufficient to entitle him to disability benefits as it is
of equal importance to also show that respondent’s illness is work-related.
ISSUE:
Is the CA correct in setting aside the NLRC Resolutions denying respondent’s claim In Ayungo v. Beamko Shipmanagement Corporation, the Court held that for a
for permanent and total disability benefits? disability to be compensable, the seafarer must prove a reasonable link between
his work and his illness in order for a rational mind to determine that such work
RULING: contributed to, or at least aggravated, his illness. It is not enough that the
The Court finds merit in the Petition. seafarer’s injury or illness rendered him disabled; it is equally necessary that he
establishes a causal connection between his injury or illness, and the work for
The Standard Terms and Conditions Governing the Employment of Filipino Seafarers which he is engaged. Here, respondent argues that he was unable to work as a
On-Board Ocean-Going Vessels, particularly Section 20(B) thereof, provides that the seaman for more than 120 days, and that he contracted his illness while under the
employer is liable for disability benefits when the seafarer suffers from a work- employ of petitioners. However, he did not at all describe his work as an oiler, and
related injury or illness during the term of his contract. To emphasize, to be neither did he specify the connection of his work and his illness.
compensable, the injury or illness 1) must be work-related and 2) must have arisen
during the term of the employment contract. Moreover, the company-designated doctor determined that respondent’s
condition is not work-related. Section 20(B)(3) of the POEA-SEC provides that the
In Jebsen Maritime, Inc. v. Ravena, the Court held that those diseases not listed as company-designated doctor is tasked to determine the fitness or the degree of
occupational diseases may be compensated if it is shown that they have been caused disability of a medically repatriated seafarer. In addition, the company-designated
or aggravated by the seafarer’s working conditions. The Court stressed that while doctor was shown to have closely examined and treated respondent from his
the POEA-SEC provides for a disputable presumption of work-relatedness as regards repatriation up to four months thereafter. Thus, the LA and the NLRC’s reliance on
the declaration of the company-designated doctor that respondent’s condition is not Facts: Petitioner Industrial Personnel & Management Services, Inc.
work-related is justified. (IPAMS) is a local placement agency duly organized and existing
under Philippine laws. Petitioner SNC Lavalin Engineers &
Lastly, the Court holds that the fact that respondent passed the PEME is of no Contractors, Inc. (SNC-Lavalin) is the principal of IPAMS, a
moment in determining whether he acquired his illness during his employment. The Canadian company with business interests in several countries.
PEME is not exploratory in nature. It is not intended to be a thorough examination of Alberto Arriola was then hired by SNC-Lavalin, through its local
a person’s medical condition, and is not conclusive evidence that one is free from any
manning agency, IPAMS. He signed the contract of employment in
ailment before deployment.54 Hence, it does not follow that because respondent was
the Philippines and started working in Madagascar.
declared fit to work prior to his deployment, then he necessarily sustained his illness
After three months, Arriola received a notice of pre-termination of
while aboard the vessel.
employment due to diminishing workload in the area of his
Given all these, the Court finds that the CA erred in setting aside the NLRC expertise and the unavailability of alternative assignments.
Resolutions, which affirmed the dismissal of the Complaint. The Petition is granted. Aggrieved, Arriola filed a complaint against the petitioners for illegal
dismissal and non-payment of overtime pay, vacation leave and
sick leave pay before the Labor Arbiter (LA). He claimed that SNC-
Lavalin still owed him unpaid salaries equivalent to the three-month
unexpired portion of his contract, amounting to, more or less, One
Million Sixty-Two Thousand Nine Hundred Thirty-Six Pesos
(P1,062,936.00). He asserted that SNC-Lavalin never offered any
valid reason for his early termination and that he was not given
sufficient notice regarding the same. Arriola also insisted that the
petitioners must prove the applicability of Canadian law before the
OFW Case No. 9 same could be applied to his employment contract.
The petitioners denied the charge of illegal dismissal against them.
G.R. No. 205703, March 07, 2016 They claimed that SNC-Lavalin was greatly affected by the global
financial crises during the latter part of 2008. The economy of
INDUSTRIAL PERSONNEL & MANAGEMENT SERVICES, INC.
Madagascar, where SNC-Lavalin had business sites, also slowed
(IPAMS), SNC LAVALIN ENGINEERS & CONTRACTORS, INC. AND
down. As proof of its looming financial standing.
ANGELITO C. HERNANDEZ, Petitioners, v. JOSE G. DE VERA AND
The petitioners continued that the pre-termination of Arriola's
ALBERTO B. ARRIOLA, Respondents.
contract was valid for being consistent with the provisions of both
the Expatriate Policy and laws of Canada. The said foreign law did
not require any ground for early termination of employment, and
the only requirement was the written notice of termination.
The LA dismissed Arriola's complaint for lack of merit. The NLRC 3. That the foreign law stipulated in the overseas employment
reversed the LA decision and ruled that Arriola was illegally contract must not be contrary to law, morals, good customs,
dismissed by the petitioners. The CA affirmed that Arriola was public order, or public policy of the Philippines; and
illegally dismissed by the petitioners. It opined that Philippine’s
labor law shall be applied. However, it decreased the award of 4. That the overseas employment contract must be processed
backpay to Arriola because the NLRC made a wrong calculation. through the POEA.
Issue:
1. WHETHER OR NOT RESPONDENT ARRIOLA WAS Here, the petitioners were able to observe the second requisite, or
VALIDLY DISMISSED PURSUANT TO THE EMPLOYMENT that the foreign law must be proven before the court pursuant to
the Philippine rules on evidence. The petitioners were able to
CONTRACT.
present the ESA, duly authenticated by the Canadian authorities
Held: Yes, Philippine law shall be applied. and certified by the Philippine Embassy, before the LA and The
The general rule is that Philippine laws apply even to overseas fourth requisite was also followed because Arriola's employment
employment contracts. This rule is rooted in the constitutional contract was processed through the POEA. The petitioners
provision of Section 3, Article XIII that the State shall afford full miserably failed to adhere to the two other requisites.
protection to labor, whether local or overseas. Hence, even if the
OFW has his employment abroad, it does not strip him of his rights
to security of tenure, humane conditions of work and a living wage
under our Constitution.
As an exception, the parties may agree that a foreign law shall
govern the employment contract. A synthesis of the existing laws
and jurisprudence reveals that this exception is subject to the
following requisites:

1. That it is expressly stipulated in the overseas employment

contract that a specific foreign law shall govern;

2. That the foreign law invoked must be proven before the

courts pursuant to the Philippine rules on evidence;
 FACTS:

Petitioner Maersk ltd., through its local manning agent petitioner Maersk Inc.,
employed private respondent as able-seaman of M/V NKOSSA II for a period of four
(4) months. Within the contract period and while on board the vessel, private
respondent’s left eye was hit by a screw. He was repatriated to Manila and was
referred to Dr. Salvador Salceda, the company-designated physician, for [a] check-up.

Private respondent was examined by Dr. Anthony Martin S. Dolor at the

Medical Center Manila and was diagnosed with "corneal scar and cystic macula, left,
post-traumatic." He underwent a "repair of corneal perforation and removal of foreign
body to anterior chamber, left eye." He was discharged with prescribed home
medications and had regular check-ups. He was referred to another ophthalmologist
who opined that "no more improvement can be attained on the left eye but patient can
return back to duty with the left eye disabled by 30%." He was then examined by Dr.
Angel C. Aliwalas, Jr. at the Ospital ng Muntinlupa (ONM), Alabang, Muntinlupa
City, and was diagnosed with "corneal scar with post-traumatic cataract formation,
left eye." He underwent [an] eye examination and glaucoma test at the Philippine
General Hospital (PGH), Manila.

Since private respondent's demand for disability benefit[s] was rejected by

petitioners, he then filed with the NLRC a complaint for total permanent disability,
illness allowance, moral and exemplary damages and attorney's fees.

Meanwhile, in his medical report, Dr. Dolor stated that although private
respondent's left eye cannot be improved by medical treatment, he can return to duty
OFW Case No. 11
and is still fit to work. His normal right eye can compensate for the discrepancy with
FIRST DIVISION the use of correctional glasses. Private respondent visited again the ophthalmologist at
January 18, 2017 the Medical Center Manila who recommended "cataract surgery with intra-ocular lens
G.R. No. 184256 implantation," after evaluation of the retina shall have been done." In his letter
MAERSK FILIPINAS CREWING INC., and MAERSK CO. IOM LTD., addressed to Jerome de los Angeles, General Manager of petitioner Maersk Inc., Dr.
Petitioners, vs. Dolor answered that the evaluation of the physician from ONM could not have
JOSELITO R. RAMOS, Respondent. SERENO, CJ.: progressed in such a short period of time, which is approximately one month after he
issued the medical report, and a review of the medical reports from PGH and the issues, but deleted the award of moral and exemplary damages, because there was no
tonometry findings on the left and right eye showed that they were within normal "sufficient factual legal basis for the awards. Hence, this petition.
range, hence, could not be labeled as glaucoma. Private respondent decided to be
examined by physician of his choice, Dr. Roseny Mae Catipon-Singson of Casa ISSUE:
Medica, Inc. (formerly MEDISERV Southmall, Inc.), Alabang, Muntinlupa City and
was diagnosed to have ''traumatic cataract with corneal scaring, updrawn pupil of the WON respondent is partially disabled and therefore entitled to disability
anterior segment of maculapathy OS. His best corrected vision is 20/400 with compensation.
difficulty." Dr. Catipon-Singson opined that private respondent "cannot be employed
for any work requiring good vision unless condition improves." RULING:

The labor arbiter (LA) rendered a Decision7 dismissing the Complaint. It held YES.
that the Philippine Overseas Employment Administration (POEA)-approved contract Disability does not refer to the injury or the pain that it has occasioned, but to the
and Collective Bargaining Agreement expressly provided for a situation in which the loss or impairment of earning capacity. There is disability when there is a diminution
seafarer's appointed doctor disagrees with the company-designated physician. In this of earning power because of actual absence from work. This absence must be due to
case, both parties may agree to the appointment of a third doctor, whose assessment the injury or illness arising from, and in the course of, employment. Thus, the basis of
would then be final on both parties. 9 According to the LA, both failed to avail compensation is reduction of earning power.
themselves of this remedy.
Permanent partial disability occurs when an employee loses the use of any
In the meantime, respondent underwent cataract extraction on both eyes. He13
particular anatomical part of his body which disables him to continue with his former
was fitted with correctional glasses and evaluated. Dr. Dolor found that the former's work. In this case, while petitioners’ own company-designated physician, Dr. Dolor,
"right eye is 20/20, the left eye is 20/70, and when both eyes are being used, his best certified that respondent was still fit to work, the former admitted in the same breath
corrected vision is 20/20." On the basis of that report, respondent was pronounced fit that respondent’s left eye could no longer be improved by medical treatment. As early
to work. 14 as 13 April 2002, Dr. Dolor had in fact diagnosed respondent’s left eye as
permanently disabled, to wit: Present ophthalmologic examination showed corneal
At the NLRC, the latter granted respondent's appeal and setting aside the LA's scar and a cystic macula at the left eye. Vision on the right eye is 20/20 and JI while
decision, that, as regards the need to appoint a third doctor, the NLRC found it the left showed only 20/60 and J6. Our ophthalmologist opined that no more
unnecessary considering that "there is really no disagreement between respondents' improvement can be attained on the left eye but patient can return back to duty with
company-designated physician and Complainant's physicians as to the percentage left eye disabled by 30%. Petitioners’ argument that the injury was curable because
[30%] of visual impairment of his left eye." 18 Thus, respondent was awarded respondent underwent cataract extraction in on both eyes in 2003, and Dr. Dolor
disability compensation benefit in the amount of USD6,270 for Grade 12 issued a medical evaluation finding that respondent’s best corrected vision for both
impediment, moral and exemplary damages, and attorney's fees. On appeal with the eyes was 20/20 (with correctional glasses), are thus inconsequential. The curability of
CA, it affirmed all the findings of the NLRC on both procedural and substantive the injury “does not preclude an award for disability because, in labor laws, disability
need not render the seafarer absolutely helpless or feeble to be compensable; it is WHEREFORE, the Petition for Review on Certiorari is hereby DENIED. The
enough that it incapacitates him to perform his customary work.” assailed Decision60 and Resolution61 of the Court of Appeals in CA-G.R. SP No.
94964 are hereby AFFIRMED.
Moreover, under the POEA-Standard Employment Contract, which was
designed primarily for the protection and benefit of Filipino seamen in the pursuit of
their employment on board ocean-going vessels? In resolving disputes regarding
disability benefits, its provisions must be “construed and applied fairly, reasonably,
and liberally in the seamen’s favor, because only then can the provisions be given full
effect.” Besides, the schedule of disabilities under Section 32 is in no way exclusive.
Section 20.B.4 of the same POEA-Standard Employment Contract clearly provides
that “[t]hose illnesses not listed in Section 32 of this Contract are disputably
presumed as work related.” This provision only means that the disability schedule
also contemplates injuries not explicitly listed under it.

It is clear from the latter provision that for a seafarer to be entitled under said
CBA to 100% compensation for less than 50% disability, it must be the company
doctor who should certify that the seafarer is permanently unfit for further sea service
in any capacity.

In the case at bar, Complainant had corneal scar, a cystic macula and 30% loss
of vision on his left eye. Thus, applying Section 3056 of the standard contract, We hold
that Complainant's impediment grade is Grade 12. Under Section 30-A 57 of the
standard contract, a seafarer who suffered an impediment grade of Grade 12 is
entitled to 10.45% of the maximum rate. Significantly, the company physician did not
certify Complainant as permanently unfit for further sea service in any capacity. The
company physician certified that'' xxx patient can return back to duty with the left eye
disabled by 301Y.1" (Page 39, Records). Complainant, therefore, is not entitled to
100% disability compensation benefit, but merely 10.451Yo of US$60,000.00, which
is computed as follows: US$60,000.00 x 10.45% = US$6,270.00. Respondents,
therefore, are liable to Complainant for US$6,270.00 as compensation benefit for his
permanent partial disability, to be paid in Philippine Currency equivalent at the
exchange rate prevailing during the time of payment.
 2012, he immediately underwent a post-employment medical examination and
treatment wherein the company-designated physician diagnosed him to be suffering
from a "Fractured, Right Femur; S/P Intramedullary Nailing, Right Femur." After 92
days of treatment, the company-designated doctor issued a Medical Report giving
petitioner an interim disability Grade of 10.
Dissatisfied with the medical report, petitioner sought the opinion of another doctor,
Dr. Venancio Garduce, who recommended a disability Grade of 3. After further
medical treatment, petitioner was assessed with a final disability grade of 10 by the
company physician of respondent OSM, Dr. William Chuasuan, Jr.
Respondents offered disability benefit of $30,225 in accordance with the disability
Grade 10 that the company-designated doctor issued. Petitioner refused and filed a
claim for a disability benefit of $150,000.00.
During the pendency of the case with the Labor Arbiter, the parties agreed to consult
Dr. Lyndon L. Bathan for a third opinion. Dr. Bathan issued a Medical Certificate
recommending a Grade 9 disability and stated therein that petitioner is "not yet fit to
work."
The LA awarded disability benefit in the amount of $13,060. The NLRC modified the
LA's findings and awarded permanent and total disability benefit in the amount of
OFW Case No. 12 $150,000. The NLRC reasoned that petitioner is considered as totally and
permanently disabled since Dr. Bathan, the third doctor, issued the Grade 9
REYNALDO Y. SUNIT v. OSM MARITIME SERVICES, INC. recommendation after the lapse of the 240-day period required for the determination
G.R. No. 223035 of a seafarer's fitness to work or degree of disability under the POEA-SEC.
February 27, 2017 In reversing the NLRC, the CA held that the 240-day period for assessing the degree
of disability only applies to the company-designated doctor, and not to the third
Facts: doctor. It is only upon the company-designated doctor's failure to render a final
Respondent OSM Maritime Services, Inc. (OSM), hired petitioner Reynaldo Sunit assessment of petitioner's condition within 240 days from repatriation that he will be
(Sunit) to work onboard vessel Skandi Texel as Able Body Seaman for three months considered permanently and totally disabled and, hence, entitled to maximum
with a monthly salary of $689. Deemed incorporated in the employment contract is disability benefit. In petitioner's case, the company-designated doctor was able to
the 2010 Philippine Overseas Employment Agency Standard Employment Contract make a determination of his disability within the 240-day period; hence, he is not
(POEA-SEC) and the NIS AMOSUP CBA. considered as totally and permanently disabled despite the opinion of the third doctor
During his employment, petitioner fell from the vessel's tank and suffered a broken having been rendered after the lapse of 240 days from repatriation.
right femur. He was immediately brought to a hospital for treatment and was Issue:
eventually repatriated due to medical reason. Upon arrival in Manila on October 6, Whether or not petitioner is entitled to permanent and total disability benefits.
Ruling:
YES. Petitioner's disability is permanent and total despite the Grade 9 partial
disability that Dr. Bathan issued since his incapacity to work lasted for more than 240
days from his repatriation. While the Court ruled that Dr. Bathan is not bound to
render his assessment within the 120/240 day period, and that the said period is
inconsequential and has no application on the third doctor, petitioner's disability and
incapacity to resume working clearly continued for more than 240 days. Applying
Article 192 (c)(1) of the Labor Code, petitioner's disability should be considered
permanent and total.
In disability compensation, it is not the injury which is compensated, but rather it is
the incapacity to work resulting in the impairment of one's earning capacity.
Note:
Below are the procedural requisites under the rules and established jurisprudence
where the parties can opt to resort to the opinion of a third doctor:
First, 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.
Second, if the seafarer disagrees with the findings of the company doctor, then he has
the right to engage the services of a doctor of his choice. If the second doctor
appointed by the seafarer disagrees with the findings of the company doctor, and the
company likewise disagrees with the findings of the second doctor, then a third doctor
may be agreed jointly between the employer and the seafarer, whose decision shall be
final and binding on both of them.
It must be emphasized that the language of the POEA-SEC is clear in that both the
seafarer and the employer must mutually agree to seek the opinion of a third doctor.
In the event of disagreement on the services of the third doctor, the seafarer has the
right to institute a complaint with the LA or NLRC.
Third, despite the binding effect of the third doctor's assessment, a dissatisfied party
may institute a complaint with the LA to contest the same on the ground of evident
partiality, corruption of the third doctor, fraud, other undue means, lack of basis to
support the assessment, or being contrary to law or settled jurisprudence.
 urinal area. After examination by a physician, he was diagnosed with
acute lumbago and recommended for immediate repatriation.
On 10 February 2010, upon arrival in the Philippines, he
immediately reported for post-employment examination. He was found to
be suffering from minimal compression fracture of his first lumbar
vertebra and underwent physical therapy for the same. He underwent
MRI scanning, was made to wear a lumbar corset, and was given neuron
enhancers and pain relievers. The MRI results came out and he was
accordingly temporarily diagnosed with lumbosacral muscular spasm
with mild spondylosis on his second and third lumbar vertebrae, and it
was concluded the he suffered no compression fracture. He was then
given a provisional Grade 10 partial disability rating and was scheduled
to undergo a bone scan on 16 July 2010. However, he failed to appear
and instead consulted with an independent orthopedic surgeon, Dr.
Escutin, who recommended for him to undergo a Bone Scan and EMG-
OFW Case No. 13
NCV, and found him to be permanently disabled and unfit for sea duty.
CF Sharp Crew Management, Inc. v. Noel Orbeta Instead of following the recommendation for bone scan, he filed a
GR No. 211111 25 September 2017 case before the labor arbiter for payment of permanent and total disability
Del Castillo, J. benefits, medical expenses, damages, and attorney’s fees. The LA ruled
in favor of Orbeto, awarding him disability benefits in the amount of
FACTS: $44,550 and 10% attorney’s fees, stating that the rating of the company
Noel Orbeta was hired by CF Sharp Crew on behalf of its physician was premature as Orbeto was yet to undergo a bone scan. Dr.
principal, Gulf Energy Maritime (GEM) as a Seaman on the vessel M/T Escutin’s findings were likewise disregarded due to being merely based
Gulf Coral. While on duty, he slipped and fell on his bank and landed on on presumption.
the vessel’s metal floor. Upon docking in the United Arab Emirates, Upon appeal to the NLRC, the commission merely reiterated the
Orbeta was referred for medical examination after complaining of pain in LA’s ruling, but increased the award to $89,100 as Orbeto was ruled to
his lower right abdomen, difficulty urinating, and slight irritation in the deserve a Grade 1 disability rating, having failed to obtain employment
for more than 120 days from repatriation, but the award of attorney’s fees
was deleted. The Court of Appeals reiterated the NLRC’s ruling; thus, employment relation, his distrust for the petitioners is not completely
this appeal. unwarranted.
Consequently, respondent is entitled only to compensation
ISSUE: equivalent to or commensurate with his injury. As such, the Labor
Whether or not permanent disability has been established. Arbiter’s findings to be correct and in point, even with respect to his
RULING: ruling on respondent’s entitlement to attorney’s fees. As far as Orbeta is
No. The company-designated physician and Dr. Escutin are one in concerned, his work-related condition was serious enough to require
recommending that respondent undergo at least a bone scan to determine further medical care, yet it could have been resolved if he had undergone
his current condition while undergoing treatment, thus indicating that the procedure prescribed by the company-designated physician and his
respondent’s condition needed further attention. In this regard, petitioners own appointed doctor. For his omissions, he is only entitled to disability
are correct in arguing that respondent abandoned treatment, as under the benefits consistent with his injury suffered.
law and the POEA contract of the parties, the company physician is given
up to 240 days to treat him. On the other hand, the fact that Dr. Escutin
required the conduct of further tests on respondent is an admission that
his diagnosis of permanent total disability is incomplete and
inconclusive, and thus unreliable. It can only corroborate the company-
designated physician’s finding that further tests and treatment are
required. In New Filipino Maritime Agencies, Inc. v. Despabeladeras,
this Court held that a seafarer is guilty of medical abandonment for his
failure to complete his treatment before the lapse of the 240-day period,
which prevents the company physician from declaring him fit to work or
assessing his disability.
Nevertheless, respondent might have treated the company-
designated physician’s 16 June 2010 temporary diagnosis as the final
assessment of his condition, which prompted him to secure the opinion of
Dr. Escutin and thereafter file the case prematurely. For this he cannot be
completely blamed; indeed, he might have proceeded under the
impression that he was being shortchanged. Given his position in the
 deployed in Saudi Arabia under a one-year contract. When Dagasdas arrived in Saudi
Arabia, he signed with ITM a new employment contract which stipulated that the
latter contracted him as Superintendent or in any capacity within the scope of his
abilities. Under this contract, Dagasdas shall be placed under a three-month
probationary period; and this new contract shall cancel all contracts prior to its date
from any source. However, Dagasdas allegedly was given tasks which are not suited
with the job he applied for so he was transferred to Civil Engineering dept. However,
before Dagasdas’ case was investigated, Siddiqui, the site Manager had severed his
employment with ITM.
ITM gave him a termination notice indicating that his last day of work was on
April 30, 2008, and he was dismissed pursuant to his contract, which provided that
ITM reserved the right to terminate any employee within the three-month
probationary period without need of any notice to the employee. Dagasdas signed a
Statement of Quitclaim stating that ITM paid him all the salaries and benefits for his
services from February 11, 2008 to April 30, 2008 and ITM was relieved from all
financial obligations due to Dagasdas.
Dagasdas returned to the Philippines and filed an illegal dismissal case
against GPGS, ITM, and Aramco and accused the same of misrepresentation,
resulting in the mismatch in the work assigned to him and claimed that he was
dismissed without cause and due process of law. GPGS, ITM, and Aramco countered
that Dagasdas was legally dismissed and averred that Dagasdas was aware that he
was employed as Network Technician as a probationary employee but he could not
OFW Case No. 14 perform his work in accordance with the standards of his employer.
The Labor Arbiter dismissed the case for lack of merit and pointed out that
RUTCHER T. DAGASDAS vs. GRAND PLACEMENT AND GENERAL SERVICES
when Dagasdas signed his new employment contract in Saudi Arabia, he accepted its
CORPORATION
stipulations, including the fact that he had to undergo probationary status and
G.R. No. 205727 January 18, 2017
decreed that Dagasdas fell short of the expected work performance; as such, his
employer dismissed him as part of its management prerogative. However, the NLRC
FACTS:
reversed the decision of the Labor Arbiter and held that Dagasdas was illegally
In November 2007, Grand Placement and General Services Corp. (GPGS), for
dismissed and held that GPGS erroneously recruited Dagasdas, and failed to inform
and on behalf of Industrial & Management Technology Methods Co. Ltd. (ITM) - the
him that he was hired as a “Mechanical Superintendent” meant for a Mechanical
principal of GPGS, employed Dagasdas as Network Technician and was to be
Engineer. It declared that while ITM has the prerogative to continue the Dagasdas. He was simply given a notice of termination. In fact, it appears that ITM
employment of individuals only if they were qualified, Dagasdas’ dismissal intended not to comply with the twin notice requirement.
amounted to illegal termination since the mismatch between his qualifications and As above quoted, under the new contract, ITM reserved in its favor the right
the job given him was no fault of his. The CA set aside the NLRC Resolutions and to terminate the contract without serving any notice to Dagasdas in specified cases,
reinstated the LA Decision dismissing the case for lack of merit, hence the petition. which included such situation where the employer decides to dismiss the employee
ISSUE: within the probationary period. Without doubt, ITM violated the due process
Whether or not the second contract providing that ITM can terminate requirement in dismissing an employee.
without due process be a valid basis for Dagasdas’ dismissal As regards a probationary employee, his may be allowed only if there is just
RULING: cause or such reason to conclude that the employee fails to qualify as regular
No. The Court held that while our Civil Code recognizes that parties may employee pursuant to reasonable standards made known to the employee at the
stipulate in their contracts such terms and conditions as they may deem convenient, time of engagement. In the contract he signed while still in the Philippines, Dagasdas
these terms and conditions must not be contrary to law, morals, good customs, was employed as Network Technician; on the other hand, his new contract indicated
public order or policy. The clause in the contract providing to terminate Dagasdas that he was employed as Superintendent. However, no job description — or such
without due process is contrary to law because our Constitution guarantees that duties and responsibilities attached to either position — was adduced in evidence. It
employees, local or overseas, are entitled to security of tenure. To allow the thus means that the job for which Dagasdas was hired was not definite from the
employers to reserve a right to terminate employees without cause is in violation of beginning. Indeed, Dagasdas was not sufficiently informed of the work standards for
the latter’s Constitutional right to security of tenure. which his performance will be measured. ITM failed to show that it set and
Well-entrenched is the rule that employers have the prerogative to impose communicated work standards for Dagasdas to follow, and on which his efficiency
standards on the work quantity and quality of their employees and provide (or the lack thereof) may be determined.
measures to ensure compliance therewith. Noncompliance with work standards may Furthermore, the new contract was not shown to have been processed
thus be a valid cause for dismissing an employee. Nonetheless, to ensure that through the POEA. Under our Labor Code, employers hiring OFWs may only do so
employers will not abuse their prerogatives, the same is tempered by security of through entities authorized by the Secretary of the DOLE. Unless the employment
tenure whereby the employees are guaranteed substantive and procedural due contract of an OFW is processed through the POEA, the same does not bind the
process before they are dismissed from work. concerned OFW because if the contract is not reviewed by the POEA, certainly the
A valid dismissal requires substantive and procedural due process. As regards State has no means of determining the suitability of foreign laws to our overseas
the latter, the employer must give the concerned employee at least two notices workers.
before his or her termination. Specifically, the employer must inform the employee
of the cause or causes for his or her termination, and thereafter, the employer’s
decision to dismiss him. Aside from the notice requirement, the employee must be
accorded the opportunity to be heard. Here, no prior notice of purported infraction,
and such opportunity to explain on any accusation against him was given to
 severally pay complainants. Pursuant to this Decision, Labor Arbiter Ramos issued a
Writ of Execution, was returned unsatisfied, an Alias Writ of Execution was issued,
but was likewise disregarded. Respondents filed a Motion to Implead Respondent Pro
Agency Manila, Inc.’s Corporate Officers and Directors as Judgment Debtors
including Petitioner Gagui as the Vice-President/Stockholder/Director of PRO
Agency, Manila, Inc.
After due hearing, Executive Labor Arbiter Voltaire A. Balitaan granted
respondents’ motion. A 2nd Alias Writ of Execution was issued which resulted in the
garnishment of petitioner’s bank deposit in the amount of P85,430.48.13 However,
since the judgment remained unsatisfied, respondents sought the issuance of a third
alias writ of execution. Accordingly, the 3rd Alias Writ of Execution was issued
resulting in the levying of two parcels of lot owned by petitioner.
Petitioner filed a Motion to Quash 3rd Alias Writ of Execution alleging that
apart from not being made aware that she was impleaded as one of the parties to the
case, the dispositive portion of the Decision did not hold her liable in any form
whatsoever. Labor Arbiter Lita V. Aglibut denied petitioner’s motions on the
following grounds: (1) records disclosed that despite having been given sufficient
notices to be able to register an opposition, petitioner refused to do so, effectively
waiving her right to be heard; and (2) under Section 10 of Republic Act No. 8042
(R.A. 8042) or the Migrant Workers and Overseas Filipinos Act of 1995, corporate
officers may be held jointly and severally liable with the placement agency for the
judgment award.
Petitioner appealed to the NLRC, which the latter denied for lack of merit.
The CA affirmed Decision of NLRC stating that there is “no need for petitioner to be
OFW Case No. 15 impleaded x x x because by express provision of the law, she is made solidarily liable
with PRO Agency Manila, Inc., for any and all money claims filed by private
ELIZABETH M. GAGUI v. SIMEON DEJERO AND TEODORO R.
respondents.” The general rule is that corporate officers, directors and stockholders
PERMEJO
are not liable, except when they are made liable for their corporate act by a specific
provision of law, such as R.A. 8042.
FACTS:
ISSUE:
Simeon Dejero and Teodoro Permejo filed separate Complaints for illegal
Whether or not petitioner may be held jointly and severally liable with PRO
dismissal against PRO Agency Manila, Inc., and Abdul Rahman Al Mahwes. After
Agency Manila, Inc. in accordance with Section 10 of R.A. 8042, despite not having
due proceedings, Labor Arbiter Pedro Ramos rendered a Decision, ordering
been impleaded in the Complaint and named in the Decision
respondents Pro Agency Manila, Inc., and Abdul Rahman Al Mahwes to jointly and
RULING: Facts:
Section 10, R.A 8042 provides “The liability of the principal/employer and These consolidated cases pertain to the constitutionality of certain provisions
the recruitment/placement agency for any and all claims under this section shall be of Republic Act 8042, otherwise known as the Migrant Workers and Overseas
joint and several. This provision shall be incorporated in the contract for overseas Filipinos Act of 1995.
employment and shall be a condition precedent for its approval.” G.R. 167590, G.R. 182978-79,and G.R. 184298-99(Constitutionality of Section
In the case of Sto. Tomas V Salac, the Court passed the constitutionality of 10, last sentence of 2nd paragraph)
this provision and maintained “But the Court has already held, pending adjudication Respondent spouses Simplicio and Mila Cuaresma filed a claim for death and
of this case, that the liability of corporate directors and officers is not automatic. To insurance benefits and damages against petitioners Becmen Service Exporter and
make them jointly and solidarily liable with their company, there must be a finding Promotion, Inc. and White Falcon Services, Inc. for the death of their daughter
that they were remiss in directing the affairs of that company, such as sponsoring or Jasmin Cuaresma while working as staff nurse in Riyadh, Saudi Arabia.
tolerating the conduct of illegal activities. “ The Labor Arbiter (LA) dismissed the claim on the ground that the Cuaresmas
Hence, for petitioner to be found jointly and solidarily liable, there must be a had already received insurance benefits arising from their daughter’s death from the
separate finding that she was remiss in directing the affairs of the agency, resulting in Overseas Workers Welfare Administration (OWWA). The LA also gave due
the illegal dismissal of respondents. Examination of the records would reveal that credence to the findings of the Saudi Arabian authorities that Jasmin committed
there was no finding of neglect on the part of the petitioner in directing the affairs of suicide.
the agency. In fact, respondents made no mention of any instance when petitioner On appeal, the National Labor Relations Commission (NLRC) found Becmen
allegedly failed to manage the agency in accordance with law, thereby contributing to and White Falcon jointly and severally liable for Jasmin’s death and ordered them to
their illegal dismissal. pay the Cuaresmas the amount of US$113,000.00 as actual damages. The NLRC
relied on the Cabanatuan City Health Office’s autopsy finding that Jasmin died of
criminal violence and rape.The CA held Becmen and White Falcon jointly and
severally liable with their Saudi Arabian employer for actual damages.
On April 7, 2009 the Court found Jasmin’s death not work-related or work-
OFW Case No. 16 connected since her rape and death did not occur while she was on duty at the hospital
or doing acts incidental to her employment. The Court deleted the award of actual
G.R. No. 152642           damages but ruled that Becmen’s corporate directors and officers are solidarily liable
    November 13, 2012 with their company for its failure to investigate the true nature of her death.
The corporate directors and officers of Becmen, namely, Eufrocina Gumabay,
HON. PATRICIA A. STO.TOMAS, ROSALINDA BALDOZ and LUCITA Elvira Taguiam, Lourdes Bonifacio and Eddie De Guzman (Gumabay, et al.) filed a
LAZO, Petitioners, motion for leave to Intervene. They questioned the constitutionality of the last
vs. sentence of the second paragraph of Section 10, R.A. 8042 which holds the corporate
REY SALAC, WILLIE D. ESPIRITU, MARIO MONTENEGRO, DODGIE directors, officers and partners jointly and solidarily liable with their company for
BELONIO, LOLIT SALINEL and BUDDY BONNEVIE, Respondents. money claims filed by OFWs against their employers and the recruitment firms.
Issue: Whether or not the 2nd paragraph of Section 10, R.A. 8042, which holds the
corporate directors, officers, and partners of recruitment and placement agencies
jointly and solidarily liable for money claims and damages that may be adjudged
against the latter agencies, is unconstitutional.
Ruling:
But the Court has already held, pending adjudication of this case, that the
liability of corporate directors and officers is not automatic. To make them jointly and
solidarily liable with their company, there must be a finding that they were remiss in
directing the affairs of that company, such as sponsoring or tolerating the conduct of
illegal activities. In the case of Becmen and White Falcon, while there is evidence that
these companies were at fault in not investigating the cause of Jasmin’s death, there is
no mention of any evidence in the case against them that intervenors Gumabay, et al.,
Becmen’s corporate officers and directors, were personally involved in their
company’s particular actions or omissions in Jasmin’s case.
Dispositive Portion: WHEREFORE, x x x
In G.R. 182978-79 and G.R. 184298-99 as well as in G.R. 167590, the Court
HOLDS the last sentence of the second paragraph of Section 10 of Republic Act 8042
valid and constitutional. The Court, however, RECONSIDERS and SETS ASIDE the
portion of its Decision in G.R. 182978-79 and G.R. 184298-99 that held intervenors
Eufrocina Gumabay, Elvira Taguiam, Lourdes Bonifacio, and Eddie De Guzman
jointly and solidarily liable with respondent Becmen Services Exporter and
Promotion, Inc. to spouses Simplicia and Mila Cuaresma for lack of a finding in those
cases that such intervenors had a part in the act or omission imputed to their
corporation.
 On 18 February 2010, Ramoga entered into a contract of overseas
employment with Teekay Shipping Ltd. represented by its local manning agency,
Teekay Shipping Philippines Inc., to work on board the vessel M/T "SEBAROK
SPIRIT.”

After the mandatory pre-employment medical examination (PEME), Ramoga

was declared fit for sea duty. He joined the vessel on April 9, 2010. Barely six (6)
months after, he slipped and twisted his left ankle while climbing the stairs on board
the said vessel. He underwent an x-ray examination at the Bangkok Hospital in
Pattaya City, Chonburi, Thailand. He was diagnosed to be suffering from a non-
displaced fracture base of 2nd and mild displaced fracture base of 3rd metatarsal
bone. A surgery was recommended for open reduction and internal fixation of the
injured ankle to prevent its further displacement. He was later repatriated and referred
for further treatment. The company doctor later issued a certification stating that he
was fit to return

Unsatisfied with the assessment, Ramoga sought the help of his own doctor,
Dr. Rogelio P. Catapang who is an orthopedic and traumatology flight surgeon at Sta.
Teresita General Hospital. The said doctor issued a medical report declaring that
[respondent] still continues to have pain and discomfort on his left foot and ankle
even after his continuous physiotherapy. He likewise cannot ambulate for long
distances, unable to tolerate prolonged walking and squat especially if the weight is
OFW Case No. 18 borne on the left foot. Since the time of his injury, he is unable to work at his previous
occupation. Thus, he was declared to be permanently unfit in any capacity to resume
Teekay Shipping Philippines v. Roberto Ramoga, Jr. his sea duties. He then lodged a complaint for permanent tital disability benefits,
sickness allowance, medical expenses, damages and attorney's fees in accordance
GR No. 209582 19 January 2018 with the terms and conditions of the Revised Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on Board Ocean-going Vessels.
Tijam, Jr., J.
The LA ruled in favor of Ramoga. Upon appeal, the NLRC affirmed the same
FACTS: with the modification that the sickness allowance was deleted. Before the CA, the
NLRC decision was affirmed.
ISSUE: his rehabilitation and medications and to come back on 1 February 2011 for his repeat
x-ray of the left foot and for re-evaluation. The company-designated physician has
Whether or not Ramoga is entitled to permanent total disability benefits. determined that respondent's condition needed further medical treatment and
evaluation. Thus, it was premature for the respondent to file a case for permanent
RULING: total disability benefits on 4 March 2011 because at that time, respondent is not yet
entitled to such benefits. The company-designated physician has until 1 June 2011 or
No. Article 198(c)(1) of the Labor Code states that disability which lasts for the 240th day from his repatriation to make a declaration as to respondent's fitness to
more than 120 days is deemed total and permanent. While Section 2, Rule X of the work.
Amended Rules on Employees' Compensation provides that:
Neither is the declaration of respondent's own doctor that respondent is unfit
Sec. 2. Period of Entitlement – (a) The income benefit shall be paid to return to sea duties conclusive as to respondent's condition. It is well-settled that
beginning on the first day of such disability. If caused by an injury or sickness the assessment of the company-designated physician prevails over that of the
it shall not be paid longer than 120 consecutive days except where such injury seafarer's own doctor. The assessment of the company-designated physician is more
or sickness still requires medical attendance beyond 120 days but not to credible for having been arrived at after months of medical attendance and diagnosis,
exceed 240 days from onset of disability in which case benefit for temporary compared with the assessment of a private physician done in one day on the basis of
total disability shall be paid. However, the System may declare the total and an examination or existing medical records.
permanent status at any time after 120 days of continuous temporary total
disability as may be warranted by the degree of actual loss or impairment of
physical or mental functions as determined by the System.

The mere lapse of 120 days from the seafarer's repatriation without the
company-designated physician's declaration of the fitness to work of the seafarer does
not entitle the latter to his permanent total disability benefits.

Here, the records reveal that respondent was medically repatriated on 4

October 2010. It is undisputed that the company-designated physician issued a
declaration as to respondent's fitness to work on 8 April 2011 or 186 days from his
repatriation. Thus, to determine whether respondent is entitled to his permanent total
disability benefits it is necessary to examine whether the company-designated
physician has a sufficient justification to extend the period.

There is a sufficient justification for extending the period. In a Report dated

11 January 2011, the company-designated physician advised respondent to continue