1) Bright Maritime Corporation vs.

Fantonial

G.R. No. 165935

February 8, 2012
Subject Matter: Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean-Going Vessels,
Illegal Dismissal, Employer-Employee Relationship

Facts: On January 15, 2000, a Contract of Employment was executed by petitioner

Bright Maritime Corporation (BMC) and respondent Ricardo B. Fantonial, which contract
was verified and approved by the Philippine Overseas Employment Administration
(POEA) on January 17, 2000. The employment contract provided that respondent shall
be employed as boatswain of the foreign vessel M/V AUK for one year, with a basic
monthly salary of US$450, plus an allowance of US$220.

Respondent was made to undergo a medical examination and was issued a Medical
Certificate dated January 17, 2000, which certificate had the phrase FIT TO WORK
stamped on its lower and upper portion.

On January 17, 2000, respondent, after having undergone the pre-departure orientation
seminar and being equipped with the necessary requirements and documents for travel,
went to the Airport upon instruction of petitioners. Petitioners told respondent that he
would be departing on that day, and that a liaison officer would be delivering his plane
ticket to him. Petitioners liaison officer met respondent at the airport and told him that
he could not leave on that day due to some defects in his medical certificate. The
liaison officer instructed respondent to return to the Christian Medical Clinic.

Respondent went back to the Christian Medical Clinic the next day, and he was told by
the examining physician, Dr. Lyn dela Cruz-De Leon, that there was nothing wrong or
irregular with his medical certificate. Respondent went to petitioners office for an
explanation, but he was merely told to wait for their call, as he was being lined-up for a
flight to the ship's next port of call. However, respondent never got a call from
petitioners.

On May 16, 2000, respondent filed a complaint against petitioners for illegal dismissal,
payment of salaries for the unexpired portion of the employment contract.
Petitioners argued that they cannot be held liable for illegal dismissal as the contract of
employment had not yet commenced based on Section 2 of the Standard Terms and
Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going
Vessels (POEA Memorandum Circular No. 055-96), which states:

SEC 2. COMMENCEMENT/DURATION OF CONTRACT

A. The employment contract between the employer and the seafarer shall
commence upon actual departure of the seafarer from the airport or seaport in
the point of hire and with a POEA approved contract. It shall be effective until the
seafarers date of arrival at the point of hire upon termination of his employment
pursuant to Section 18 of this Contract.

Issues:

1) Whether or not petitioners reason for preventing respondent from leaving Manila and
joining the vessel M/V AUK in Germany on January 17, 2000 is valid.

2)Whether or not respondents employment contract was perfected pursuant to the

POEA Standard Employment Contract.

Held:
1) No. The Court held that respondents Medical Certificate dated January 17,
2000, stamped with the words FIT TO WORK, proves that respondent was medically
fit to leave Manila on January 17, 2000 to join the vessel M/V AUK in Germany. The
Affidavit of Dr. Lyn dela Cruz-De Leon that respondent was declared fit to work only on
January 21, 2000 cannot overcome the evidence in the Medical Certificate dated
January 17, 2000, which already stated that respondent had Class-B Non-Infectious
Hepatitis-B, and that he was fit to work. The explanation given by Dr. Lyn dela Cruz-De
Leon in her affidavit that the Medical Certificate was dated January 17, 2000, since it
carries the date when they started to examine the patient per standard operating
procedure, does not persuade as it goes against logic and the chronological recording
of medical procedures. The Medical Certificate submitted as documentary evidence is
proof of its contents, including the date thereof which states that respondent was
already declared fit to work on January 17, 2000, the date of his scheduled deployment.

2) No.
SEC 2. COMMENCEMENT/DURATION OF CONTRACT
A. The employment contract between the employer and the seafarer shall
commence upon actual departure of the seafarer from the airport or
seaport in the point of hire and with a POEA approved contract. It shall be
effective until the seafarers date of arrival at the point of hire upon termination of
his employment pursuant to Section 18 of this Contract.

Petitioners argument is partly meritorious.

An employment contract, like any other contract, is perfected at the moment (1) the
parties come to agree upon its terms; and (2) concur in the essential elements thereof:
(a) consent of the contracting parties, (b) object certain which is the subject matter of
the contract, and (c) cause of the obligation. The object of the contract was the rendition
of service by respondent on board the vessel for which service he would be paid the
salary agreed upon.

Hence, in this case, the employment contract was perfected on January 15,
2000 when it was signed by the parties, respondent and petitioners, who entered into
the contract in behalf of their principal, Ranger Marine S.A., thereby signifying their
consent to the terms and conditions of employment embodied in the contract, and the
contract was approved by the POEA on January 17, 2000. However, the employment
contract did not commence, since petitioners did not allow respondent to leave on
January 17, 2000 to embark the vessel M/V AUK in Germany on the ground that he was
not yet declared fit to work on the day of departure, although his Medical Certificate
dated January 17, 2000 proved that respondent was fit to work.
The Court agrees with the NLRC that a recruitment agency, like petitioner BMC, must
ensure that an applicant for employment abroad is technically equipped and physically
fit because a labor contract affects public interest. Nevertheless, in this case, petitioners
failed to prove with substantial evidence that they had a valid ground to prevent
respondent from leaving on the scheduled date of his deployment. While the POEA
Standard Contract must be recognized and respected, neither the manning agent nor
the employer can simply prevent a seafarer from being deployed without a valid reason.

Petition denied.
2) Wuerth Philippines vs. Ynson
G.R. No. 175932
February 15, 2012
Subject Matter: Illegal Dismissal

Facts: In 2001, petitioner Wuerth Philippines, Inc., a subsidiary of Wuerth Germany,

hired respondent Rodante Ynson, as its National Sales Manager (NSM) for Automotive.
As NSM, respondent was required to travel to different parts of the country so as to
supervise the sales activities of the companys sales managers, make a schedule of
activities geared towards increasing the sales of petitioner's products, and submit said
schedule to Marlon Ricanor, Chief Executive Officer of Petitioner Company.

On January 24, 2003, he suffered a stroke, and on the succeeding days, he was
confined at the Davao Doctor's Hospital. He immediately informed petitioner about his
ailment. In another Medical Certificate dated June 4, 2003, the doctor certified that
respondent may return to work, but advised him to continue with his rehabilitation
regimen for another month and a half.

On June 9, 2003, respondent sent an e-mail to Hans Sigrit of Wuerth Germany,

informing the latter that he can return to work on June 19, 2003, but in view of the
recommendation of doctors that he should continue with his rehabilitation until July, he
requested that administrative work be given to him while in Davao City, until completion
of his therapy. Thereafter, Ricanor sent a letter dated June 12, 2003 to respondent,
directing him to appear before the formers office in Manila, on July 1, 2003 at 9:00 a.m.,
for an investigation, relative to the following violations which carry the penalty of
suspension and/or dismissal, based on the following alleged violations: (1) absences
without leave since January 24, 2003 to date, and (2) abandonment of work. In a
letter dated June 26, 2003, respondent replied that his attending physician advised him
to refrain from traveling, in order not to disrupt his daily schedule for therapy and
medication.

Ricanor sent two letters, dated July 4, 2003 and July 31, 2003, to respondent, resetting
the investigation to July 25, 2003, at 9:00 a.m., and August 18, 2003, respectively. Both
letters reiterated the contents of his first letter to respondent dated June 12, 2003, but
included gross inefficiency as an additional ground for possible suspension or dismissal.

In his letters dated July 21, 2003 and August 12, 2003, respondent reiterated the
reasons for his inability to attend the investigation proceedings in Manila and, instead,
suggested that Ricanor come to Davao and conduct the investigation there.

Finally, in a letter dated August 27, 2003, Ricanor informed respondent of the decision
of petitioner's management to terminate his employment, effective upon date of receipt,
on the ground of continued absences without filing a leave of absence.

Issue: Whether or not Respondent Ynson was illegally dismissed.

Held: No. Respondent alleged in his letters dated July 21, 2003 and August 12,
2003 that he is not capable of returning to work, because he is still undergoing
medications and therapy. However, apart from the clearance of respondent's doctors
allowing him to return to work, he has failed to provide competent proof that he was
actually undergoing therapy and medications. It is puzzling why despite respondent's
submission that he was still undergoing treatment in July and August 2003, he failed to
submit official receipts showing the medical expenses incurred and physicians
professional fees paid by reason of such treatment. This casts serious doubt on the
true condition of the respondent during the prolonged period he was absent from work
and investigations, and as to whether he is still suffering from any form of illness from
July to August 2003.

Being the NSM, respondent should have reported back to work or attended the
investigations conducted by petitioner immediately upon being permitted to work by his
doctors, knowing that his position remained vacant for a considerable length of time.
During his absence, nobody was performing the duties of NSM, which included, among
others, supervising and monitoring of respondent's sales area which is vital to the
companys orderly operation and viability. He did not even show any sincere effort to
return to work. Since there is no more hindrance for him to return to work and attend the
investigations set by petitioner, respondent's failure to do so was without any valid or
justifiable reason. Respondent's conduct shows his indifference and utter disregard of
his work and his employer's interest, and displays his clear, deliberate, and gross
dereliction of duties.

Clearly, since there is no more hindrance for him to return to work and attend the
investigations set by petitioner, respondent's failure to do so was without any valid or
justifiable reason. Respondent's conduct shows his indifference and utter disregard of
his work and his employer's interest, and displays his clear, deliberate, and gross
dereliction of duties.

The mere existence of a basis for believing that such employee has breached the trust
and confidence of his employer would suffice for his dismissal. Needless to say, an
irresponsible employee like respondent does not deserve a place in the workplace, and
it is petitioner's management prerogative to terminate his employment. To be sure, an
employer cannot be compelled to continue with the employment of workers when
continued employment will prove inimical to the employer's interest.
3) Wilfredo Aro vs. NLRC

G.R. No. 174792

March 7, 2012
Subject Matter: Project Employees, Computation of Backwages for
Project Employees
Facts: Several employees of private respondent Benthel Development Corporation
(Benthel), including the petitioners, filed a Complaint for illegal dismissal with various
money claims and prayer for damages against the latter, in the NLRC of Cebu City.
Thereafter, Labor Arbiter Carreon rendered a decision finding private respondent guilty
of illegal dismissal and ordering it to pay its thirty-six (36) employees P446,940.00 as
separation pay.

Private respondent Benthel, unsatisfied with the modification made by the NLRC, filed a
motion for reconsideration with the contention that, since it has been found by the Labor
Arbiter and affirmed in the assailed decision that the employees were project
employees, the computation of backwages should be limited to the date of the
completion of the project and not to the finality of the decision. The NLRC, however,
denied the motion ruling that private respondent failed to establish the date of the
completion of the project.

As recourse, private respondent filed a petition for certiorari with the CA, alleging that
public respondent committed grave abuse of discretion in promulgating its assailed
decision and denying its motion for reconsideration. The CA granted the petition,
therefore, annulling and setting aside the decision and resolution of the NLRC as to the
award for backwages and remanded the case to the same public respondent for the
proper computation of the backwages due to each of the petitioners herein. Hence, this
petition to the Supreme Court.
Issues:

1) Whether or not petitioners are project employees.

2) Whether or not the NLRC committed grave abuse of discretion in the computation of
backwages.

Held:

1) Yes, this Court agrees with the findings of the CA that petitioners were project
employees. It is not disputed that petitioners were hired for the construction of the
Cordova Reef Village Resort in Cordova, Cebu. By the nature of the contract alone, it is
clear that petitioners' employment was to carry out a specific project.

2) Yes. Private respondents are only entitled to payment of the same until the date of
the completion of the project. It is settled that, without a valid cause, the employment of
project employees cannot be terminated prior to expiration. Otherwise, they shall be
entitled to reinstatement with full backwages. However, if the project or work is
completed during the pendency of the ensuing suit for illegal dismissal, the employees
shall be entitled only to full backwages from the date of the termination of their
employment until the actual completion of the work. In utter disregard of the law and
prevailing jurisprudence, the public respondents capriciously and arbitrarily ordered that
the said backwages be computed until the finality of its decision instead of only until the
date of the project completion.

Therefore, being project employees, petitioners are only entitled to full backwages,
computed from the date of the termination of their employment until the actual
completion of the work. Illegally dismissed workers are entitled to the payment of their
salaries corresponding to the unexpired portion of their employment where the
employment is for a definite period.
4. C. Alcantara and Sons vs. Court of Appeals (G.R. No. 155109)
NAGKAHIUSANG MAMUMUO SA ALSONS-SPFL (NAMAAL-SPFL),
vs. C. Alcantara and Sons (G.R. No. 155135 and G.R. No. 179220)
(Consolidated Cases)
March 14, 2012
Subject Matter: Strikes, Picketing and Lockouts; Prohibited Activities,
Appeal (Art. 223), Separation Pay

Facts: The negotiation between C. Alcantara and Sons (CASI) and the Union on the
economic provisions of the Collective Bargaining Agreement (CBA) ended in a deadlock
prompting the Union to stage a strike but the strike was later declared by the Labor
Arbiter (LA) to be illegal having been staged in violation of the CBAs no strike-no
lockout provision. Consequently, the Union officers were deemed to have forfeited their
employment with the company and made them liable for actual damages plus interest
and attorneys fees, while the Union members were ordered to be reinstated without
backwages there being no proof that they actually committed illegal acts during the
strike.

Notwithstanding the provision of the Labor Code mandating that the reinstatement
aspect of the decision be immediately executory, the LA refused to reinstate the
dismissed Union members. The NLRC affirmed the LA decision insofar as it declared
the strike illegal and ordered the Union officers dismissed from employment and liable
for damages but modified the same by considering the Union members to have been
validly dismissed from employment for committing prohibited and illegal acts.

The SC agreed with the CA on the illegality of the strike as well as the termination of the
Union officers, but disagreed with the CA insofar as it affirmed the reinstatement of the
Union members. The SC sustained the dismissal not only of the Union officers but also
the Union members who, during the illegal strike, committed prohibited acts by
threatening, coercing, and intimidating non-striking employees, officers, suppliers and
customers; obstructing the free ingress to and egress from the company premises; and
resisting and defying the implementation of the writ of preliminary injunction issued
against the strikers.

The Court further held that the terminated Union members, who were ordered reinstated
by the LA, should have been immediately reinstated due to the immediate executory
nature of the reinstatement aspect of the LA decision. In view, however, of CASIs failure
to reinstate the dismissed employees, the Court ordered CASI to pay the terminated
Union members their accrued backwages from the date of the LA decision until the
eventual reversal by the NLRC of the order of reinstatement. In addition to the accrued
backwages, the Court awarded separation pay as a form of financial assistance to the
Union members equivalent to one-half month salary for every year of service to the
company up to the date of their termination.

Not satisfied, CASI filed a Motion for Partial Reconsideration.

Issues:

1) Whether or not the dismissed Union officers and members committed an illegal
strike and were legally dismissed.

2) Whether or not the decision of the LA reinstating a dismissed or separated

employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory.

3) Whether or not the Court was correct in awarding the separation pay as a form of
financial assistance to the dismissed employees.

Held:

1) Yes. The LA, the NLRC, the CA and the Court are one in saying that the strike
staged by the Union, participated in by the Union officers and members, is illegal being
in violation of the no strike-no lockout provision of the CBA which enjoined both the
Union and the company from resorting to the use of economic weapons available to
them under the law and to instead take recourse to voluntary arbitration in settling their
disputes. We, therefore, find no reason to depart from such conclusion.

Article 264 (a) of the Labor Code lays down the liabilities of the Union officers and
members participating in illegal strikes and/or committing illegal acts, to wit:
ART. 264. PROHIBITED ACTIVITIES

(a) xxx

Any worker whose employment has been terminated as a consequence of

an unlawful lockout shall be entitled to reinstatement with full backwages.
Any Union officer who knowingly participates in an illegal strike and any
worker or Union officer who knowingly participates in the commission of
illegal acts during a strike may be declared to have lost his employment
status: Provided, That mere participation of a worker in a lawful strike shall
not constitute sufficient ground for termination of his employment, even if
a replacement had been hired by the employer during such lawful strike.

Thus, the above-quoted provision sanctions the dismissal of a Union officer who
knowingly participates in an illegal strike or who knowingly participates in the
commission of illegal acts during a lawful strike. In this case, the Union officers were in
clear breach of the above provision of law when they knowingly participated in the illegal
strike.

As to the Union members, the same provision of law provides that a member is liable
when he knowingly participates in the commission of illegal acts during a strike. We find
no reason to reverse the conclusion of the Court that CASI presented substantial
evidence to show that the striking Union members committed the following prohibited
acts:
a. They threatened, coerced, and intimidated non-striking employees,
officers, suppliers and customers;

b. They obstructed the free ingress to and egress from the company
premises; and

c. They resisted and defied the implementation of the writ of preliminary

injunction issued against the strikers.

The commission of the above prohibited acts by the striking Union members warrants
their dismissal from employment.

2) Yes. The LA found the strike illegal and sustained the dismissal of the Union officers
but ordered the reinstatement of the striking Union members for lack of evidence
showing that they committed illegal acts during the illegal strike. Pursuant to Article
223 of the Labor Code and well-established jurisprudence, the decision of the LA
reinstating a dismissed or separated employee, insofar as the reinstatement
aspect is concerned, shall immediately be executory, pending appeal. The
employee shall either be admitted back to work under the same terms and conditions
prevailing prior to his dismissal or separation, or, at the option of the employee, merely
reinstated in the payroll. It is obligatory on the part of the employer to reinstate and pay
the wages of the dismissed employee during the period of appeal until reversal by the
higher court. If the employer fails to exercise the option of re-admitting the employee to
work or to reinstate him in the payroll, the employer must pay the employees salaries
during the period between the LAs order of reinstatement pending appeal and the
resolution of the higher court overturning that of the LA. In this case, CASI is liable to
pay the striking Union members their accrued wages for four months and nine
days, which is the period from the notice of the LAs order of reinstatement until
the reversal thereof by the NLRC.

3) No. The Court found it necessary to reconsider the same and delete the award
pursuant to prevailing jurisprudence.

Separation pay may be given as a form of financial assistance when a worker is

dismissed in cases such as the installation of labor-saving devices, redundancy,
retrenchment to prevent losses, closing or cessation of operation of the establishment,
or in case the employee was found to have been suffering from a disease such that his
continued employment is prohibited by law. It is a statutory right defined as the amount
that an employee receives at the time of his severance from the service and is designed
to provide the employee with the wherewithal during the period that he is looking for
another employment. It is oriented towards the immediate future, the transitional period
the dismissed employee must undergo before locating a replacement job. As a general
rule, when just causes for terminating the services of an employee exist, the
employee is not entitled to separation pay because lawbreakers should not
benefit from their illegal acts.

The rule, however, is subject to exceptions in lieu of social justice and when validly
dismissed for causes other than serious misconduct or those reflecting on his moral
character. In the case at bar, not only did the Court declare the strike illegal, rather, it
also found the Union officers to have knowingly participated in the illegal strike. Worse,
the Union members committed prohibited acts during the strike. Thus, as we concluded
in Toyota, Telefunken, Chua and the other cases, we delete the award of separation pay
as a form of financial assistance.
5) International Management Services vs. Logarta

G.R. No. 163657

April 18, 2012

Subject Matter: Closure of Establishment and Reduction of Personnel,

Retrenchment, Management Prerogative, Separation Pay

Facts: Sometime in 1997, the petitioner recruitment agency, International Management

Services (IMS), a single proprietorship owned and operated by Marilyn C. Pascual,
deployed respondent Roel P. Logarta to work for Petrocon Arabia Limited (Petrocon) in
Saudi Arabia, in connection with general engineering services of Petrocon for the Saudi
Arabian Oil Company (Saudi Aramco).

Consequently, due to the considerable decrease in the work requirements of Saudi

Aramco, Petrocon was constrained to reduce its personnel that were employed as piping
designers, instrument engineers, inside plant engineers, etc., which totaled to some 73
personnel, one of whom was respondent.

In 1998, Petrocon gave respondent a written notice informing the latter that due to the lack
of project works related to his expertise, he was given a 30-day notice of termination.
Petrocon also informed respondent that all due benefits in accordance with the terms and
conditions of his employment contract will be paid to respondent, including his ticket back
to the Philippines.

Upon his return, respondent filed a complaint with the National Labor Relations
Commission (NLRC), Cebu City, against petitioner as the recruitment agency which
employed him for employment abroad. In filing the complaint, respondent sought to
recover his unearned salaries covering the unexpired portion of his employment contract
with Petrocon on the ground that he was illegally dismissed.

Issues:

1) Whether or not respondent as an OFW in Saudi Arabia and his employer are subject to
the provisions of the Labor Code with regard to the requirements of a valid termination due
to retrenchment.

2) Whether or not employer Petrocon considered fair and reasonable criteria in

ascertaining who would be dismissed and who would be retained among the employees.

3) Whether or not respondent should be paid his separation pay in accordance with the
provision of Section 10 of R.A. No. 8042.
Held:

1) Yes. In the case at bar, despite the fact that respondent was employed by Petrocon as
an OFW in Saudi Arabia, still both he and his employer are subject to the provisions of the
Labor Code when applicable. The basic policy in this jurisdiction is that all Filipino
workers, whether employed locally or overseas, enjoy the protective mantle of Philippine
labor and social legislations.

Philippine Law recognizes retrenchment as a valid cause for the dismissal of a migrant or
overseas Filipino worker under Article 283 of the Labor Code, which provides:
Closure of establishment and reduction of personnel. - The employer may
also terminate the employment of any employee due to the installation of
labor-saving devices, redundancy, retrenchment to prevent losses or the
closing or cessation of operations of the establishment or undertaking unless
the closing is for the purpose of circumventing the provisions of this Title, by
serving a written notice on the workers and the Department of Labor and
Employment at least one (1) month before the intended date thereof. In case
of termination due to the installation of labor-saving devices or redundancy,
the worker affected thereby shall be entitled to a separation pay equivalent
to at least one (1) month pay or to at least one (1) month pay for every year
of service, whichever is higher. In case of retrenchment to prevent losses
and in cases of closure or cessation of operations of establishment or
undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to at least one (1) month pay or at least
one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered as one (1) whole year.

Thus, retrenchment is a valid exercise of management prerogative subject to the strict

requirements set by jurisprudence, to wit:

(1) That the retrenchment is reasonably necessary and likely to prevent

business losses which, if already incurred, are not merely de minimis, but
substantial, serious, actual and real, or if only expected, are reasonably
imminent as perceived objectively and in good faith by the employer;

(2) That the employer served written notice both to the employees and to the
Department of Labor and Employment at least one month prior to the
intended date of retrenchment;

(3) That the employer pays the retrenched employees separation pay
equivalent to one month pay or at least month pay for every year of
 service, whichever is higher;

(4) That the employer exercises its prerogative to retrench employees in

good faith for the advancement of its interest and not to defeat or circumvent
the employees' right to security of tenure; and

(5) That the employer used fair and reasonable criteria in ascertaining who
would be dismissed and who would be retained among the employees, such
as status, x x x efficiency, seniority, physical fitness, age, and financial
hardship for certain workers.

Applying the above-stated requisites for a valid retrenchment in the case at bar, it is
apparent that the first, fourth and fifth requirements were complied with by
respondents employer. However, the second and third requisites were absent
when Petrocon terminated the services of respondent.

2) Yes. The primary reason for respondents termination is lack of work project specifically
related to his expertise as piping designer. Due to the highly specialized nature of
Logartas job, we find that the availability of work and number of allocated man-hours for
pipeline projects are sufficient and reasonable criteria in determining who would be
dismissed and who would be retained among the employees.

The list of terminated employees submitted by Petrocon, shows that other employees,
with the same designation as Logartas (Piping Designer II), were also
dismissed. Terminated, too, were employees designated as Piping Designer I and Piping
Designer. Hence, employees whose job designation involves pipeline works were without
bias terminated.

3) No. Respondent is entitled to the payment of his separation pay. However, this Court
disagrees with the conclusion of the Labor Arbiter, the NLRC and the CA, that respondent
should be paid his separation pay in accordance with the provision of Section 10 of R.A.
No. 8042. A plain reading of the said provision clearly reveals that it applies only to an
illegally dismissed overseas contract worker or a worker dismissed from overseas
employment without just, valid or authorized cause, the pertinent portion of which
provides:

Sec. 10. Money Claims. x x x In case of termination of overseas

employment without just, valid or authorized cause as defined by law or
contract, x x x
In the case at bar, notwithstanding the fact that respondents termination from his
employment was procedurally infirm, having not complied with the notice requirement,
nevertheless the same remains to be for a just, valid and authorized cause, i.e.,
retrenchment as a valid exercise of management prerogative. To stress, despite the
employers failure to comply with the one-month notice to the DOLE prior to respondents
termination, it is only a procedural infirmity which does not render the retrenchment illegal

It is Article 283 of the Labor Code and not Section 10 of R.A. No. 8042 that is
controlling. Thus, respondent is entitled to payment of separation pay equivalent to one
(1) month pay, or at least one-half (1/2) month pay for every year of service, whichever is
higher. Petition denied.
6) Polyfoam-RGC International vs. Concepcion

G.R. No. 172349

June 13, 2012

Subject Matter: Contractor or Subcontracting, Employer-Employee

Relationship, Illegal Dismissal

Facts: Respondent filed a Complaint for illegal dismissal, non-payment of wages,

premium pay for rest day, separation pay, service incentive leave pay, 13 th month pay,
damages, and attorneys fees against Polyfoam and Ms. Natividad Cheng
(Cheng). Respondent alleged that he was hired by Polyfoam as an all-around factory
worker and served as such for almost six years. On January 14, 2000, he allegedly
discovered that his time card was not in the rack and was later informed by the security
guard that he could no longer punch his time card. When he protested to his supervisor,
the latter allegedly told him that the management decided to dismiss him due to an
infraction of a company rule. Cheng, the companys manager, also refused to face
him. Respondents counsel later wrote a letter to Polyfoams manager requesting that
respondent be re-admitted to work, but the request remained unheeded prompting the
latter to file the complaint for illegal dismissal.

Gramaje filed a Motion for Intervention claiming to be the real employer of

respondent. On the other hand, Polyfoam and Cheng filed a Motion to Dismiss on the
grounds that the NLRC has no jurisdiction over the case, because of the absence of
employer-employee relationship between Polyfoam and respondent and that the money
claims had already prescribed.

In her Position Paper, Gramaje claimed that P.A. Gramaje Employment Services (PAGES)
is a legitimate job contractor who provided some manpower needs of Polyfoam. It was
alleged that respondent was hired as packer and assigned to Polyfoam, charged with
packing the latters finished foam products. She argued, however, that respondent was
not dismissed from employment; rather, he simply stopped reporting for work.

Issues:

1) Whether or not Gramaje is an independent job contractor.

2) Whether or not an employer-employee relationship exists between Polyfoam and

respondent.

3) Whether or not respondent was illegally dismissed from employment.

Held:

1) Yes. Gramaje is a Labor-Only Contractor. There is labor-only contracting where the

person supplying workers to an employer does not have substantial capital or investment
in the form of tools, equipment, machineries, work premises, among others, and the
workers recruited and placed by such person are performing activities which are directly
related to the principal business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer who shall be
responsible to the workers in the same manner and extent as if the latter were directly
employed by him.

First, Gramaje has no substantial capital or investment. The presumption is that a

contractor is a labor-only contractor unless he overcomes the burden of proving that it has
substantial capital, investment, tools, and the like. The employee should not be expected
to prove the negative fact that the contractor does not have substantial capital, investment
and tools to engage in job-contracting.

Aside from her own bare statement, neither Gramaje nor Polyfoam presented evidence
showing Gramajes ownership of the equipment and machineries used in the performance
of the alleged contracted job. Considering that these machineries are found in Polyfoams
premises, there can be no other logical conclusion but that the tools and equipment
utilized by Gramaje and her employees are owned by Polyfoam. Neither did Polyfoam
nor Gramaje show that the latter had clients other than the former. Since petitioners failed
to adduce evidence that Gramaje had any substantial capital, investment or assets to
perform the work contracted for, the presumption that Gramaje is a labor-only contractor
stands.

Second, Gramaje did not carry on an independent business or undertake the performance
of its service contract according to its own manner and method, free from the control and
supervision of its principal, Polyfoam, its apparent role having been merely to recruit
persons to work for Polyfoam.

2) Yes. A finding that a contractor is a labor-only contractor, as opposed to permissible

job contracting, is equivalent to declaring that there is an employer-employee relationship
between the principal and the employees of the supposed contractor, and the labor-only
contractor is considered as a mere agent of the principal, the real employer.

In this case, Polyfoam is the principal employer and Gramaje is the labor-only
contractor. Polyfoam and Gramaje are, therefore, solidarily liable for the rightful claims of
respondent.

3) Yes. Petitioners failed to show any valid or authorized cause under the Labor Code
which allowed it to terminate the services of respondent. Neither was it shown that
respondent was given ample opportunity to contest the legality of his dismissal. No notice
of termination was given to him. Clearly, respondent was not afforded due process.
Having failed to establish compliance with the requirements of termination of employment
under the Labor Code, the dismissal of respondent was tainted with illegality.
Consequently, respondent is entitled to reinstatement without loss of seniority rights, and
other privileges and to his full backwages inclusive of allowances and to his other benefits
or their monetary equivalent computed from the time his compensation was withheld up to
the time of his actual reinstatement. However, if reinstatement is no longer feasible as in
this case, separation pay equivalent to one month salary for every year of service shall be
awarded as an alternative. Petition denied.
7) Duty Free Philippines vs. Tria

G.R. No. 174809

June 27, 2012

Subject Matter: Illegal Dismissal, Employer-Employee Relationship

Facts: Petitioner Duty Free Philippines Services, Inc. is a manpower agency that provides
personnel to Duty Free Philippines (DFP). Respondent Manolo Tria was employed by
Petitioner and was seconded to DFP as a Warehouse Supervisor.

In an Audit Report it was revealed that 1,020 packs of Marlboro were not included in the
condemnation proceedings and that there were glaring discrepancies in the related
documents which indicate a malicious attempt to conceal an anomalous irregularity. The
relevant Request for Condemnation was found to have been fabricated and all signatories
therein.

After further investigation, it was discovered that the subject merchandise was illegally
brought out of the warehouse and it was made to appear that in all the documents
prepared said goods were legally condemned. Ed Garcia, one of the respondents in the
Audit Review, implicated Respondent and [two] others. Garcia claimed that he was
unaware of the illegality of the transaction as he was only obeying the orders of his
superiors who included Respondent. Garcia disclosed that it was [respondent] who
ordered him to look for a van for the supposed direct condemnation of the subject
merchandise. Consequently, the Discipline Committee requested Tria to submit a written
reply/explanation regarding the findings in the Audit Report and the allegations of Garcia.

Tria denied his participation in the illegal transaction. Although he admitted that he
instructed Garcia to look for a van, it was for the purpose of transferring the damaged
merchandise from the main warehouse to the proper warehouse for damaged goods.

Eventually, the DFP Discipline Committee [DFPDC] issued a Joint Resolution holding
[respondent] GUILTY OF DISHONESTY for (his) direct participation in the fake
condemnation and pilferage of the missing 1,020 Marlboro Pack of 5s cigarettes and
orders (his) DISMISSAL from the service for cause and for loss of trust and confidence,
with forfeiture of all rights and privileges due them from the company, except earned
salaries and leave credits. Petitioner sent [respondent] a memorandum terminating his
employment with Petitioner and his concurrence to DFP on the basis of the findings and
recommendation of the (DFPs) Discipline Committee.
Aggrieved, Tria filed a Complaint against Petitioner for Illegal Dismissal and for payment of
backwages, attorneys fees and damages.

When petitioner elevated the case to the CA, it denied for the first time the existence of
employer-employee relationship and pointed to DFP as respondents real employer. The
appellate court, however, considered said defense barred by estoppel for its failure to
raise the defense before the LA and the NLRC

Issues:

1) Whether or not the alleged absence of employer-employee relationship can be raised

for the first time on appeal by Petitioner.

2) Whether or not Respondent was illegally dismissed.

Held:

1) No. The alleged absence of employer-employee relationship cannot be raised for the
first time on appeal. In its Position Paper, petitioner highlighted respondents complicity
and involvement in the alleged fake condemnation of damaged cigarettes as found by
the DFPDC. This, according to petitioner, was a just cause for terminating an employee.
With the pleadings submitted by petitioner, together with the corresponding pleadings filed
by respondent, the LA and the NLRC declared the dismissal of respondent illegal. These
decisions were premised on the finding that there was an employer-employee relationship.
Nowhere in said pleadings did petitioner deny the existence of said relationship. Rather,
the line of its defense impliedly admitted said relationship. The issue of illegal dismissal
would have been irrelevant had there been no employer-employee relationship in the first
place. In this case, petitioner insisted that respondent was dismissed from employment for
cause and after the observance of the proper procedure for termination. Consequently,
petitioner cannot now deny that respondent is its employee. While indeed, jurisdiction
cannot be conferred by acts or omission of the parties, petitioners belated denial that it is
the employer of respondent is obviously an afterthought, a devise to defeat the law and
evade its obligations.

2) Yes. Petitioner dismissed respondent from employment based on the recommendation

of the DFPDC holding respondent guilty of dishonesty for his direct participation in the
fake condemnation and pilferage of the missing 1,020 Marlboro Pack of 5
cigarettes. Respondent was implicated in the anomalous transaction by his co-employees
who pointed to the former as the one who ordered the other suspects to look for a vehicle
that would be used to transport the subject cigarettes. This, according to the DFPDC, was
odd and strange. With this act alone and by reason of his position, the DFPDC concluded,
and affirmed by petitioner, that respondent definitely had knowledge of the fake
condemnation. From these circumstances, petitioner sustained the findings of dishonesty
and dismissed respondent from employment.

DFPDCs conclusions are not supported by clear and convincing evidence to warrant the
dismissal of respondent. In illegal dismissal cases, the employer is burdened to prove just
cause for terminating the employment of its employee with clear and convincing evidence.
This principle is designed to give flesh and blood to the guaranty of security of tenure
granted by the Constitution to employees under the Labor Code. In this case, petitioner
failed to submit clear and convincing evidence of respondents direct participation in the
alleged fake condemnation proceedings. To be sure, unsubstantiated suspicions,
accusations, and conclusions of employers do not provide for legal justification for
dismissing employees. In case of doubt, such cases should be resolved in favor of labor,
pursuant to the social justice policy of labor laws and the Constitution.

Petition denied.

8) Estate of Nelson Dulay vs. Aboitiz Jebsen Maritime

G.R. No. 172642
June 13, 2012
Subject Matter: Employer-Employee Relationship, Jurisdiction of the
Labor Arbiters and the Commission (Article 217), Jurisdiction of
Voluntary Arbitrators or Panel of Voluntary Arbitrators

Facts: Nelson R. Dulay (Nelson, for brevity) was employed by respondent General
Charterers Inc. (GCI), a subsidiary of respondent Aboitiz Jebsen Maritime Inc. He initially
worked as an ordinary seaman and later as bosun on a contractual basis. From
September 3, 1999 up to July 19, 2000, Nelson was detailed in petitioners vessel, the MV
Kickapoo Belle.

On August 13, 2000, or 25 days after the completion of his employment contract, Nelson
died due to acute renal failure secondary to septicemia. At the time of his death, Nelson
was a bona fide member of the Associated Marine Officers and Seamans Union of the
Philippines (AMOSUP), GCIs collective bargaining agent. Nelsons widow, Merridy Jane,
thereafter claimed for death benefits through the grievance procedure of the Collective
Bargaining Agreement (CBA) between AMOSUP and GCI. However, on January 29, 2001,
the grievance procedure was declared deadlocked as petitioners refused to grant the
benefits sought by the widow.

Merridy Jane filed a complaint with the NLRC against GCI for death and medical benefits
and damages. Joven Mar, Nelsons brother, received P20,000.00 from respondents
pursuant to article 20(A)2 of the CBA and signed a Certification acknowledging receipt of
the amount and releasing AMOSUP from further liability. Merridy Jane contended that she
is entitled to the aggregate sum of Ninety Thousand Dollars ($90,000.00) pursuant to
[A]rticle 20 (A)1 of the CBA. Merridy Jane averred that the P20,000.00 already received by
Joven Mar should be considered advance payment of the total claim of US$90,000.

Respondents, on the other hand, asserted that the NLRC had no jurisdiction over the
action on account of the absence of employer-employee relationship between GCI and
Nelson at the time of the latters death. Nelson also had no claims against petitioners for
sick leave allowance/medical benefit by reason of the completion of his contract with GCI.
They further alleged that private respondent is not entitled to death benefits because
petitioners are only liable for such in case of death of the seafarer during the term of his
contract pursuant to the POEA contract and the cause of his death is not work-related.
Petitioners admitted liability only with respect to article 20(A) 2 of the CBA.
The CA ruled that while the suit filed by Merridy Jane is a money claim, the same basically
involves the interpretation and application of the provisions in the subject CBA. As such,
jurisdiction belongs to the voluntary arbitrator and not the labor arbiter.

Petitioner contends that Section 10 of Republic Act (R.A.) 8042, otherwise known as the
Migrant Workers and Overseas Filipinos Act of 1995, vests jurisdiction on the appropriate
branches of the NLRC to entertain disputes regarding the interpretation of a collective
bargaining agreement involving migrant or overseas Filipino workers.

The pertinent provisions of Section 10 of R.A. 8042 provide as follows:

SEC. 10. Money Claims. - Notwithstanding any provision of law to the

contrary, the Labor Arbiters of the National Labor Relations Commission
(NLRC) shall have the original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after filing of the complaint, the claims
arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damages.

Issue: Whether or not the CA committed error in ruling that the Labor Arbiter has no
jurisdiction over the case.

Held: No. The petition is without merit.

It is true that R.A. 8042 is a special law governing overseas Filipino workers. However, a
careful reading of this special law would readily show that there is no specific provision
thereunder which provides for jurisdiction over disputes or unresolved grievances
regarding the interpretation or implementation of a CBA. Section 10 of R.A. 8042, which
is cited by petitioner, simply speaks, in general, of claims arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual, moral, exemplary and other forms of
damages. On the other hand, Articles 217(c) and 261 of the Labor Code are very
specific in stating that voluntary arbitrators have jurisdiction over cases arising
from the interpretation or implementation of collective bargaining agreements.
Stated differently, the instant case involves a situation where the special statute (R.A.
8042) refers to a subject in general, which the general statute (Labor Code) treats in
particular. In the present case, the basic issue raised by Merridy Jane in her complaint
filed with the NLRC is: which provision of the subject CBA applies insofar as death
benefits due to the heirs of Nelson are concerned. The Court agrees with the CA in
holding that this issue clearly involves the interpretation or implementation of the
said CBA. Thus, the specific or special provisions of the Labor Code govern.

The CBA is the law or contract between the parties. Article 13.1 of the CBA entered into by
and between respondent GCI and AMOSUP, the union to which petitioner belongs,
provides as follows:

The Company and the Union agree that in case of dispute or conflict in
the interpretation or application of any of the provisions of this
Agreement, or enforcement of Company policies, the same shall be
settled through negotiation, conciliation or voluntary arbitration. The
Company and the Union further agree that they will use their best endeavor
to ensure that any dispute will be discussed, resolved and settled amicably
by the parties hereof within ninety (90) days from the date of filing of the
dispute or conflict and in case of failure to settle thereof any of the parties
retain their freedom to take appropriate action.

It is clear that the parties, in the first place, really intended to bring to conciliation or
voluntary arbitration any dispute or conflict in the interpretation or application of the
provisions of their CBA. It is settled that when the parties have validly agreed on a
procedure for resolving grievances and to submit a dispute to voluntary arbitration then
that procedure should be strictly observed.

Article 211 of the Labor Code provides the declared policy of the State [t]o promote and
emphasize the primacy of free collective bargaining and negotiations, including voluntary
arbitration, mediation and conciliation, as modes of settling labor or industrial disputes.
The voluntary arbitrator has jurisdiction over the instant case. Petition denied.
9) Park Hotel vs. Soriano

G.R. No. 171118

September 10, 2012
Subject Matter: Illegal Dismissal, Unfair Labor Practice

Facts: Petitioner Park Hotel is a corporation engaged in the hotel business. Petitioners
Gregg Harbutt (Harbutt) and Bill Percy (Percy) are the General Manager and owner,
respectively, of Park Hotel. Percy, Harbutt and Atty. Roberto Enriquez are also the officers
and stockholders of Burgos Corporation (Burgos), a sister company of Park Hotel.

Respondent Manolo Soriano (Soriano) was hired by Park Hotel in July 1990 as
Maintenance Electrician, and then transferred to Burgos in 1992. Respondent Lester
Gonzales (Gonzales) was employed by Burgos as Doorman, and later promoted as
Supervisor. Respondent Yolanda Badilla (Badilla) was a bartender of J's Playhouse
operated by Burgos.

In October of 1997, Soriano, Gonzales and Badilla were dismissed from work for allegedly
stealing company properties. As a result, respondents filed complaints for illegal dismissal,
unfair labor practice, and payment of moral and exemplary damages and attorney's fees,
before the Labor Arbiter (LA). In their complaints, respondents alleged that the real reason
for their dismissal was that they were organizing a union for the company's employees.

On the other hand, petitioners alleged that aside from the charge of theft, Soriano and
Gonzales have violated various company rules and regulations8 contained in several
memoranda issued to them. After dismissing respondents, Burgos filed a case for qualified
theft against Soriano and Gonzales before the Makati City Prosecutor's Office, but the
case was dismissed for insufficiency of evidence.

Issues:

1) Whether or not the respondents were validly dismissed.

2) Whether or not Park Hotel, Percy and Harbutt are jointly and severally liable with
Burgos for the dismissal of respondents.

Held:

1) Yes. The requisites for a valid dismissal are: (a) the employee must be afforded due
process, i.e., he must be given an opportunity to be heard and defend himself; and (b) the
dismissal must be for a valid cause as provided in Article 282 of the Labor Code, or for
any of the authorized causes under Articles 283 and 284 of the same Code.

In the case before us, both elements are completely lacking. Respondents were dismissed
without any just or authorized cause and without being given the opportunity to be heard
and defend themselves. The law mandates that the burden of proving the validity of the
termination of employment rests with the employer. Failure to discharge this evidentiary
burden would necessarily mean that the dismissal was not justified and, therefore, illegal.
Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for
legal justification for dismissing employees. In case of doubt, such cases should be
resolved in favor of labor, pursuant to the social justice policy of labor laws and the
Constitution. Anent the unfair labor practice, Article 248 (a) of the Labor Code considers it
an unfair labor practice when an employer interferes, restrains or coerces employees in
the exercise of their right to self-organization or the right to form an association. In order
to show that the employer committed unfair labor practice under the Labor Code,
substantial evidence is required to support the claim. Substantial evidence has been
defined as such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion. In the case at bar, respondents were indeed unceremoniously
dismissed from work by reason of their intent to form and organize a union.

2) No. In the case at bar, respondents utterly failed to prove by competent evidence that
Park Hotel was a mere instrumentality, agency, conduit or adjunct of Burgos, or that its
separate corporate veil had been used to cover any fraud or illegality committed by
Burgos against the respondents. Accordingly, Park Hotel and Burgos cannot be
considered as one and the same entity, and Park Hotel cannot be held solidary liable with
Burgos. In addition, corporate officers may be deemed solidarily liable with the corporation
for the termination of employees if they acted with malice or bad faith. In the present case,
the lower tribunals unanimously found that Percy and Harbutt, in their capacity as
corporate officers of Burgos, acted maliciously in terminating the services of respondents
without any valid ground and in order to suppress their right to self-organization.
 10) Cecilia Manese vs. Jollibee Foods

G.R. No. 170454

October 11, 2012

Subject Matter: Illegal Dismissal, Managerial Employees

Facts: Petitioners were part of the team tasked to open a new Jollibee branch at
Festival Mall, Level 4, in Alabang, Muntinlupa City on December 12, 2000. In
preparation for the opening of the new branch, petitioner Cruz requested the
Commissary Warehouse and Distribution (commissary) for the delivery of wet and
frozen goods on December 9, 2000 to comply with the 30-day thawing process of the
wet goods, particularly the Jollibee product called Chickenjoy.

On December 23, 2000, 450 packs of Chickenjoy were delivered and petitioners placed
them in the freezer. On December 26, 2000, petitioner Cruz thawed the 450 packs of
Chickenjoy (ten pieces in each pack), or 4,500 pieces of Chickenjoy, in time for the
branch opening on December 28, 2000.

The shelf life of the Chickenjoy is 25 days from the time it is marinated; and, once
thawed, it should be served on the third day. Its shelf life cannot go beyond three days
from thawing. After that, the remaining Chickenjoy products are no longer served, and
they are packed in plastic, ten pieces in each pack, and placed in a garbage bag to be
stored in the freezer. Within the period provided for in the company policy, valid
Chickenjoy rejects are usually returned to the commissary, while rejects which are
unreturnable are wasted and disposed of properly.

In January 2001, petitioner Cruz attempted to return 150 pieces of Chickenjoy rejects to
the commissary, but the driver of the commissary refused to accept them due to the
discoloration and deteriorated condition of the Chickenjoy rejects, and for fear that the
rejects may be charged against him. Thus, the Chickenjoy rejects were returned to the
freezer.

During the first week of March 2001, the team of petitioners had a meeting on what to
do with the stored Chickenjoy rejects. They decided to soak and clean the Chickenjoy
rejects in soda water and segregate the valid rejects from the wastes.

On April 2, 2001, petitioner Cruz was transferred to another Jollibee branch. She failed
to make the proper indorsement as the area manager directed her to report immediately
to her new assignment.

On May 3, 2001, the area manager, Divina Evangelista, visited four stores, including the
subject Jollibee branch. When Evangelista arrived, she saw petitioner Peano cleaning
the Chickenjoy rejects. Evangelista told petitioner Manese to dispose of the Chickenjoy
rejects, but Manese replied that they be allowed to find a way to return them to the
Commissary.

On May 8, 2001, Evangelista required petitioners Cruz and Manese to submit an

incident report on the Chickenjoy rejects. Evangelista issued a memorandum with a
charge sheet, requiring petitioners to explain in writing within 48 hours from receipt why
they should not be meted the appropriate penalty under the respondent company's
Code of Discipline for extremely serious misconduct, gross negligence, product
tampering, fraud or falsification of company records and insubordination in connection
with their findings that 2,130 pieces of Chickenjoy rejects were kept inside the walk-in
freezer, which could cause product contamination and threat to food safety.

Thereafter, respondents Human Resource Manager Sylvia Mariano, Operations

Manager Elizabeth dela Cruz, and Atty. Rey Montoya, lawyer for corporate affairs,
conducted an administrative hearing on the incident. The Investigating Committee sent
petitioners a Memorandum on its administrative findings and decision, and the said
memorandum notified her that she was terminated from employment due to loss of trust
and confidence.

Petitioners filed a Complaint against respondents for illegal dismissal with a claim for
separation pay, retirement benefits, illegal deduction, unfair labor practice, damages,
non-payment of maternity leave, non-payment of last salary, non-payment of sick leave
and release of cooperative contributions and damages and attorney's fees. Petitioners
further argued that there was no product contamination, as the rejects were packed by
tens and wrapped in plastic, placed in garbage bags, then placed in a crate before
being stored in the freezer.

Jollibee contended that there was no illegal dismissal, as petitioners were dismissed for
gross negligence and/or incompetence, and for breach of trust and confidence reposed
in them as managerial employees.

Issue: Whether or not the Court of Appeals erred in its appreciation of facts when it
affirmed the legal dismissal of Petitioners on the ground of loss of trust and confidence.

Held: The mere existence of a basis for the loss of trust and confidence justifies the
dismissal of the managerial employee because when an employee accepts a promotion
to a managerial position or to an office requiring full trust and confidence, such
employee gives up some of the rigid guaranties available to ordinary
workers.Infractions, which if committed by others would be overlooked or condoned or
penalties mitigated, may be visited with more severe disciplinary action. Proof beyond
reasonable doubt is not required provided there is a valid reason for the loss of trust and
confidence, such as when the employer has a reasonable ground to believe that the
managerial employee concerned is responsible for the purported misconduct and the
nature of his participation renders him unworthy of the trust and confidence demanded
by his position.

However, the right of the management to dismiss must be balanced against the
managerial employees right to security of tenure which is not one of the guaranties he
gives up. This Court has consistently ruled that managerial employees enjoy security of
tenure and, although the standards for their dismissal are less stringent, the loss of trust
and confidence must be substantial and founded on clearly established facts sufficient
to warrant the managerial employees separation from the company. Substantial
evidence is of critical importance and the burden rests on the employer to prove it.

In this case, the acts and omissions enumerated in the respective memorandum with
notice of termination of petitioners were valid bases for their termination, which was
grounded on gross negligence and/or loss of trust and confidence.
11) Crewlink Inc. vs. Editha Teringterring

G.R. No. 166803

October 11, 2012

Subject Matter: Death Benefits, Standard Employment Contract

Governing the Employment of All Filipino Seamen On-Board Ocean-
Going Vessels (POEA-SEC)

Facts: Petitioner Crewlink alleged that sometime on April 9, 2001, around 8:20 p.m.
while at on board the ship, Jacinto Teringtering suddenly jumped into the sea, but the
second engineer was able to recover him. Because of said incident, one personnel was
directed to watch Jacinto. However, around 10:30 p.m., while the boat dropped anchor
south of the ship and went on standby, Jacinto jumped off the boat again. Watchman
reported that Jacinto was recovered but despite efforts to revive him, he was already
dead from drowning.

Respondent claimed that in order for her husband's death to be compensable it is

enough that he died during the term of his contract and while still on board. Respondent
asserted that Jacinto was suffering from a psychotic disorder, or Mood Disorder Bipolar
Type, which resulted to his jumping into the sea and his eventual death. Respondent
further asserted that her husbands death was not deliberate and not of his own will, but
was a result of a mental disorder, thus, compensable.

Petitioner on the other hand asserted that Teringtering was not entitled to the benefits
being claimed because Jacinto committed suicide.

Issue: Whether or not Jacintos death is compensable.

Held: No. Jacinto's death is not compensable, considering that the latter's death
resulted from his willful act. The rule that the employer becomes liable once it is
established that the seaman died during the effectivity of his employment contract is not
absolute. The employer may be exempt from liability if he can successfully prove that
the seaman's death was caused by an injury directly attributable to his deliberate or
willful act, as in this case.

As found by the Labor Arbiter, Jacinto's jumping into the sea was not an accident but
was deliberately done. Indeed, Jacinto jumped off twice into the sea and it was on his
second attempt that caused his death. The accident report of Captain Oscar Morado
narrated in detail the circumstances that led to Jacinto's death. The circumstances of
Jacinto's actions before and at the time of his death were likewise entered in the Chief
Officer's Log Book and were attested to by Captain Morado before the Philippine
Embassy. Even the A/B personnel, Ronald Arroga, who was tasked to watch over
Jacinto after his first attempt of committing suicide, testified that despite his efforts to
prevent Jacinto from jumping again overboard, Jacinto was determined and even
shoved him and jumped anew which eventually caused his death.

The relationship between the petitioner and Jacinto is one based on contract of
employment and not one of contract of carriage. Under No. 6, Section C, Part II of the
POEA "Standard Employment Contract Governing the Employment of All Filipino
Seamen On-Board Ocean-Going Vessels" (POEA-SEC), it is provided that:

xxxx
6. No compensation shall be payable in respect of any injury, incapacity, disability
or death resulting from a willful act on his own life by the seaman, provided,
however, that the employer can prove that such injury, incapacity, disability or
death is directly attributable to him.

Indeed, in order to avail of death benefits, the death of the employee should occur
during the effectivity of the employment contract. The death of a seaman during the
term of employment makes the employer liable to his heirs for death compensation
benefits. This rule, however, is not absolute. The employer may be exempt from liability
if it can successfully prove that the seaman's death was caused by an injury directly
attributable to his deliberate or willful act.

In the instant case, petitioner was able to substantially prove that Jacinto's death was
attributable to his deliberate act of killing himself by jumping into the sea. Meanwhile,
respondent, other than her bare allegation that her husband was suffering from a mental
disorder, no evidence, witness, or any medical report was given to support her claim of
Jacinto's insanity. The record does not even show when the alleged insanity of Jacinto
did start. Homesickness and/or family problems may result to depression, but the same
does not necessarily equate to mental disorder. The issue of insanity is a question of
fact; for insanity is a condition of the mind not susceptible of the usual means of proof.
12) Building Care Corporation vs. Macaraeg

G.R. No. 198357

December 10, 2012
The opinion of the Supreme Court on this case solely discussed a procedural
matter with regard to a dismissal of the respondents appeal which was filed out
of time.