REPUBLIC OF THE PHILIPPINES

TARLAC STATE UNIVERSITY

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CASE DIGEST IN
LABOR LAW
REVIEW

Submitted by:

JD IV Class of 2019-2020

Submitted to:
ATTY. RONEL U. BUENAVENTURA, M.A.
 CONTRIBUTORS

1. Amurao, Angelica
2. Barcelona, Aniway
3. Barrientos, Kenneth
4. Borja, Ronilo
5. Co, Ronna Rica
6. Generao, Christian
7. Gomez, Chelsea
8. Gonzales, Eula
9. Melegrito, Aria
10. Osongco, Tristan
11. Pacifico, Jonathan
12. Paclibare, Fred
13. Pagco, Christopher Ronn
14. Provido, Rosel Joy
15. Quiambao, Robert
16. Reyes, Maria Sheila
17. Silvestre, Renato Jr
18. Teofilo, Aiverlyn
19. Tomines, Alfreda
 PAL VS PALEA
G.R. No. 85985; August 13, 1993
DOCTRINE:
“A line must be drawn between management prerogatives regarding business operations per se and
those which affect the rights of the employees. In treating the latter, management should see to it that its
employees are at least properly informed of its decisions or modes action. It must be without abuse of
discretion and circumscribed by limitations found in law, a collective bargaining agreement, or the general
principles of fair play and justice.”
Facts:
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of
Discipline. The Code was circulated among the employees and was immediately implemented, and some
employees were subjected to the disciplinary measures embodied therein. On August 20, 1985, the
Philippine Airlines Employees Association (PALEA) filed a complaint before the National Labor Relations
Commission (NLRC) against PAL for unfair labor practice with the following remarks: “ULP with arbitrary
implementation of PAL’s Code of Discipline without notice and prior discussion with Union by
Management”, specifically Paragraphs E and G of Article 249 and Article 253 of the Labor Code.
PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescribe
rules and regulations regarding employees’ conduct in carrying out their duties and functions, and alleging
that by implementing the Code, it had not violated the collective bargaining agreement (CBA) or any
provision of the Labor Code.

Issue:
Whether PAL may be compelled to share with the PALEA its management prerogative of
formulating a code of discipline.

Held:
Yes. Even before Article 211 of the Labor Code (P.D. 442) was amended it was already declared a
policy of the State, to promote the enlightenment of workers concerning their rights and obligations. In Cruz
vs. Medina it was held that management's prerogatives must be without abuse of discretion. The exercise of
managerial prerogatives is not unlimited. It is circumscribed by limitations found in law, a collective
bargaining agreement (CBA), or the general principles of fair play and justice. However, even it was stated
in the CBA that “The Association recognizes the right of the Company to determine matters of management
it policy and Company operations…” Such provision may not be interpreted as cession of employees' rights
to participate in the deliberation of matters which may affect their rights. Indeed, industrial peace cannot be
achieved if the employees are denied their just participation in the discussion of matters affecting their rights.
Whatever disciplinary measures are adopted cannot be properly implemented in the absence of full
cooperation of the employees. Such cooperation cannot be attained if the employees are restive on account,
of their being left out in the determination of cardinal and fundamental matters affecting their employment.
 ARMANDO G. YRASUEGUI vs. PHILIPPINE AIRLINES, INC.,
G.R. No. 168081; October 17, 2008
DOCTRINE:
“Exceptionally, separation pay is granted to a legally dismissed employee as an act "social
justice," or based on "equity." In both instances, it is required that the dismissal (1) was not for serious
misconduct; and (2) does not reflect on the moral character of the employee.
Employment in particular jobs may not be limited to persons of a particular sex, religion, or
national origin unless the employer can show that sex, religion, or national origin is an actual
qualification for performing the job. The qualification is called a bona fide occupational qualification
(BFOQ).”
Facts:
Petitioner Armando G. Yrasuegui was a former international flight steward of Philippine
Airlines, Inc. (PAL). He stands five feet and eight inches (5’8") with a large body frame. The proper
weight for a man of his height and body structure is from 147 to 166 pounds, the ideal weight being 166
pounds, as mandated by the Cabin and Crew Administration Manual1 of PAL. The weight problem of
petitioner dates back to 1984. Back then, PAL advised him to go on an extended vacation leave to
address his weight concerns. Apparently, petitioner failed to meet the company’s weight standards,
prompting another leave without pay from March 5, 1985 to November 1985. After meeting the required
weight, petitioner was allowed to return to work. But petitioner’s weight problem recurred. He again
went on leave without pay from October 17, 1988 to February 1989. On February 25, 1989, petitioner
underwent weight check. It was discovered that he gained, instead of losing, weight. He was overweight
at 215 pounds, which is 49 pounds beyond the limit. Consequently, his off-duty status was retained He
was formally requested to trim down to his ideal weight and report for weight checks on several dates.
He was also told that he may avail of the services of the company physician should he wish to do so.
On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his
ideal weight, "and considering the utmost leniency" extended to him "which spanned a period covering a
total of almost five (5) years," his services were considered terminated "effective immediately."
The petitioner claims that he was illegally dismissed. The labor arbiter and the NLRC ruled in
favor of the petitioner, but was reversed by the CA. Hence this petition.
Issue:
Whether or not the petitioner was illegally dismissed.
Held:
No. The Supreme Court uphold the legality of dismissal. The standards violated in this case were
not mere "orders" of the employer; they were the "prescribed weights" that a cabin crew
must maintain in order to qualify for and keep his or her position in the company. In other words, they
were standards that establish continuing qualifications for an employee’s position. By its nature, these
"qualifying standards" are norms that apply prior to and after an employee is hired.
They apply prior to employment because these are the standards a job applicant must initially
meet in order to be hired. They apply after hiring because an employee must continue to meet these
standards while on the job in order to keep his job. Under this perspective, a violation is not one of the
faults for which an employee can be dismissed pursuant to pars. (a) to (d) of Article 282; the employee
can be dismissed simply because he no longer "qualifies" for his job irrespective of whether or not the
failure to qualify was willful or intentional. However, separation pay is granted to a legally dismissed
employee as an act "social justice,"101 or based on "equity."102 In both instances, it is required that the
dismissal (1) was not for serious misconduct; and (2) does not reflect on the moral character of the
employee.
 HUBILLA vs. HSY MARKETING
G.R No. 207354; January 10, 2018
DOCTRINE:
“When the evidence in labor cases is in equipoise, doubt is resolved in favor of the employee”
Facts:
Petitioners in this case, being employees of respondent, went to the radio program of Raffy Tulfo
to air their grievances because of alleged labor violations. Then they were suddenly dismissed after said
program. Due to employment termination, the case was filed with the Labor Arbiter. However,
respondent contends that it was the voluntary action of the petitioners to terminate their employment.
The Labor Arbiter ruled in favor of respondent employer because no concrete evidence were given by
petitioners as to unlawful termination. When it was appealed to the National Labor Relations
Commission, it was ruled inn favor of petitioner employees because of the equipoise principle, and that
there was an illegal termination on the side of respondent. The Court of Appeals then reversed the
decision of the National Labor Relations Commission on the ground that due notice was served by
respondent when petitioners did not report for work suddenly on the day of the radio program of Raffy
Tulfo.
Issue:
Whether or not the equipoise rule is applicable in this case?
Held:
Yes. The Supreme Court held that the Labor Arbiter and the National Labor Relations
Commission made contradictory factual findings. Where both parties in a labor case have not presented
substantial evidence to prove their allegations, the evidence is considered to be in equipoise. In such a
case, the scales of justice are tilted in favor of labor. Thus, petitioners are hereby considered to have
been illegally dismissed.
 LEO T. MAULA vs. XIMEX DELIVERY EXPRESS, INC.
G.R. No. 207838; January 25, 2017
DOCTRINE:
“Security of tenure of workers is not only statutorily protected, it is also a constitutionally
guaranteed right. Thus, any deprivation of this right must be attended by due process of law.”
"The right of a person to his labor is deemed to be property within the meaning of constitutional
guarantees."
Facts:
Petitioner Maula was hired by respondent as Operation Staff sometime in March 2002 wherein
he performed a variety of duties such as but not limited to documentation, checker, dispatcher or
airfreight coordinator. Several memoranda were given to the petitioner during the course of his
employment with the respondent, the first being for negligence of duty (imputation on a misroute of a
cargo), a re-assignment and finally for serious misconduct and willful disobedience by the employee of
the lawful orders of his employer (for allegedly failing to report to his re-assigned office). Eventually, he
was dismissed for work and he filed a complaint for illegal dismissal, underpayment of salary/wages,
non-payment/underpayment of overtime pay, underpayment of holiday premium, underpayment of
13th month pay, non-payment of ECOLA, non-payment/underpayment of night shift differential, illegal
deduction, illegal suspension, regularization, harassment, under-remittance of SSS premiums, deduction
of tax without tax identification number, moral and exemplary damages, and attorney's fees. The Labor
Arbiter ruled in favor of the petitioner and on appeal with the NLRC, it was partly modified as to the
liable officers of the company. On appeal with the Court of Appeals, the decision was reversed.
Issue:
Is the petitioner validly dismissed?
Held:
No. 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. Petitioner's purported "thug-like" demeanor is not
serious in nature. Despite the "grave embarassment" supposedly caused on Gorospe, she did not even
take any separate action independent of the company. Likewise, respondent did not elaborate exactly
how and to what extent that its "nature of business" and "industrial peace" were damaged by petitioner's
misconduct. It was not shown in detail that he has become unfit to continue working for the company
and that the continuance of his services is patently inimical to respondent's interest.
 PASCUA vs. BANK WISE, INC.
G.R. No. 191460, January 31, 2018
Doctrine:
“There is constructive dismissal when an employee is compelled by the employer to resign or is
placed in a situation where there would be no other choice but to resign. An unconditional and
categorical letter of resignation cannot be considered indicative of constructive dismissal if it is
submitted by an employee fully aware of its effects and implications.”
Facts:
Pascua was employed by Bankwise as its Executive Vice President for Marketing on July 1,
2002.In 2004, Philippine Veterans Bank and Bankwise entered into a Memorandum of Agreement for
the purchase of Bankwise's entire outstanding capital stock. Campa, a director of Bankwise, told him
that it was imperative that he submit his resignation and assured his continued service with Philippine
Veterans Bank. Based on Campa's assurance, Pascua tendered his resignation on February 22, 2005.Due
to the inaction of Philippine Veterans Bank and Bankwise, Pascua sent Buhain a letter, demanding the
early settlement of his money claims. The demand was not heeded. Thus, Pascua filed a Complaint for
illegal dismissal.
Issue:
Was Pascua constructively dismissed?
Held:
The presumption is that the employer and the employee are on unequal footing so the State has
the responsibility to protect the employee. This presumption, however, must be taken on a case-to-case
basis.In situations where special qualifications are required for employment, such as a Master's degree or
experience as a corporate executive, prospective employees are at a better position to bargain or make
demands from the employer. Employees with special qualifications would be on equal footing with their
employers, and thus, would need a lesser degree of protection from the State than an ordinary rank-and-
file worker.
Pascua, as the Head of Marketing with annual salary of P2,250,000.00, would have been in
possession of the special qualifications needed for his post. He would have supervised several
employees in his long years in service and might have even processed their resignation letters. He would
have been completely aware of the implications of signing a categorically worded resignation letter. If
he did not intend to resign, he would not have submitted a resignation letter. He would have continued
writing letters to Bankwise signifying his continued refusal to resign.
 MAMARIL vs. THE RED SYSTEM
G.R. No. 229920, July 04, 2018
DOCTRINE:
"The law and jurisprudence guarantee to every employee security of tenure. This textual and the
ensuing jurisprudential commitment to the cause and welfare of the working class proceed from the
social justice principles of the Constitution that the Court zealously implements out of its concern for
those with less in life."
“An employer has free reign over every aspect of its business, including the dismissal of its
employees, as long as the exercise of its management prerogative is done reasonably, in good faith, and
in a manner not otherwise intended to defeat or circumvent the rights of workers.”
Facts:
On June 1, 2011, Red System employed Mamaril as a delivery service representative. Three days
after Mamaril's employment, he failed to put a tire choke, and worse, shifted the gear to neutral after
parking the truck he was driving. This caused the truck to move, which caused damage to Coca-Cola
products valued at Php 14,556.00. Mamaril did not report the incident, and even concealed the matter.
Upon discovering Mamaril's mishap, Red System immediately re-assigned the former as a warehouse
yard driver. However, days after Mamaril's transfer, he was involved in yet another accident. On
November 12, 2011, Mamaril parked the truck with plate number PIK 726, without again putting a tire
choke and engaging the hand break. As a result, the parked truck moved and hit another vehicle.After
the completion of the administrative investigation, Red System found Mamaril guilty of violating the
Company Code of Conduct, Mamaril was terminated for willful disobedience and willful breach of trust
as provided under Article 297 of the Labor Code

Issue:
Was Mamaril illegally dismissed by Red System?
Held:
No. The records show that three days after Mamaril was employed, he failed to put a tire choke,
and worse, shifted the truck's gear to neutral. As a result, the parked vehicle moved causing damage to
Coca-Cola products valued at Php 14,556.00, in addition to the damage he caused to the truck. To make
matters worse, instead of reporting the incident to his supervisor, as mandated under Red System's rules,
Mamaril deliberately concealed the incident. If not for his belated admission in an administrative
hearing on a different incident, Red System would not have learned about his prior misdeed. Mamaril's
acts constituted a violation of Red System's company policy, and therefore there was a valid dismissal
on his part.
 UNITED DOCTORS MEDICAL CENTER v. CESARIO BERNADAS
G.R. No. 209468, December 13, 2017

DOCTRINE:
"An employee who has already qualified for optional retirement but dies before the option to
retire could be exercised is entitled to his or her optional retirement benefits, which may be claimed by
the qualified employee's beneficiaries on his or her behalf.”
Facts:
Cesario Bernadas, an employee of United Doctors Medical Center, died from a "freak
accident" while working in a doctor's residence. Pursuant to UDMC and its rank-and-file employees’
CBA, under which rank-and-file employees were entitled to optional retirement benefits, Cesarios’s
wife, Leonila, filed a Complaint for payment of retirement benefits with NLRC. The LA dismissed
Leonila's Complaint on the ground that Cesario should have applied for optional retirement benefits
during his lifetime, the benefits being optional. On appeal, the NLRC reversed the LA’s Decision and
found that the optional retirement plan casts a doubt on whether or not the plan required an application
for optional retirement benefits before an employee could become entitled to them. Considering the
"constitutional mandate to afford full protection to labor," the NLRC resolved the doubt in favor of
Cesario.
Issue:
Whether or not Cesario Bernadas is entitled to receive his optional retirement benefits despite his
untimely death.
Held:
Yes. 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, and 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 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 retiree.
 ROLANDO DE ROCA vs. EDUARDO DABUYAN
G.R. No. 215281; March 5, 2018
DOCTRINE:
"Contracts take effect only between the parties, their assigns and heirs, except in case where the
tights and obligations arising from the contract are not transmissible by their nature, or by stipulation
or by provision of law. Thus, in a contract of employment between an employee on the one hand, the
employer on the other is effective only between them and no third person can be bound thereto."
Facts:
A complaint for illegal dismissal was filed by Dabuyan et.al., against RAF Mansion and Hotel
Old Management and New Management, petitioner De Roca, and Victoriano Ewayan. De Roca, in his
position paper, moved for the dismissal of the complaint against him considering that allegedly,
Dabuyan et.al. are employed by Ewayan and thus, no employer-employee exists between De Roca and
the complainants. The Labor Arbiter ruled in favor of Dabuyan et.al and ordered De Roca to pay the
former. Instead of appealing, De Roca instituted a petition for annulment of judgment which the NLRC
dismissed. On appeal, the same was denied by the Court of Appeals.
Issue:
Is De Roca liable?
Held:
No. The labor tribunals and the CA should have considered petitioner's repeated pleas to
scrutinize the facts and particularly the lease agreement executed by him and Oceanic, which would
naturally exculpate him from liability as this would prove the absence of an employment relation
between him and respondents. Instead, the case was determined on pure technicality which in labor
disputes, is not necessarily sanctioned - given that proceedings before the Labor Arbiter and the NLRC
are non-litigious in nature where they are encouraged to avail of all reasonable means to ascertain the
facts of the case without regard to technicalities of law or procedure.
 LUNINGNING BRAZIL vs. STI EDUCATION SER GROUP INC
G. R. No. 233314, November 21, 2018
DOCTRINE:
“Enshrined in our Constitution is the State's policy to afford full protection to labor and its right
to security of tenure. This, however, must be balanced against the State's policy to protect and promote
the right to quality education at all levels as embodied in our laws and regulations prescribing
qualifications for the teaching profession.”
Facts:
Petitioners were fired as part-time faculty members of respondent STI Education Services
Group, Inc. (STI). Petitioners filed a Complaint for Illegal Constructive Dismissal and non-payment of
salaries/wages, separation pay and 13th month pay, with claims for moral and exemplary damages and
attorney’s fees before the NLRC averring that the 2008 Manual of Regulations for Private Higher
education (MORPHE) requirement that a faculty member must be a holder of a Master’s Degree
relevant to the field he/she is teaching, and that the addendum regarding the additional two years to
comply with the aforesaid requirement was absent in the job offers handed to them. Petitioners further
claimed that they were regular employees of STI as evidenced by STI’s records, and that they enjoyed
the same benefits granted to regular employees such as full payment of salary and statutory benefits
during summer, semestral and Christmas breaks, although they were made to sign contracts every
semester. The Labor Arbiter declared petitioners as regular employees since the 2008 MORPHE does
not apply in a case where regular employment status has already been achieved or had already been
granted to faculty members, thus, respondents were found guilty of illegal dismissal and were ordered to
pay the petitioners their respective separation pay in lieu of reinstatement as well as other monetary
claims. The NLRC, however, ruled that Brazil and De Mesa are ineligible for regularization and Garcera
could be considered a full-time faculty member qualified for probationary status as she earned her
Master’s Degree in 2011, which the CA affirmed.
Issue:
WON petitioners are regular employees of STI
Held:
NO. As already settled by this Court in a plethora of cases, a faculty who does not qualify as a
full-time faculty under the 1992 MORPS and/or 2008 MORPHE can never attain the status of a
permanent or regular employee and it necessarily follows that only a full-time faculty can be considered
a permanent or regular employee, thus, said faculty who does not meet all the minimum academic
requirement is automatically a part-time faculty. Since a part-time faculty can neither attain a
probationary nor regular status due to lack of all the academic qualifications, the only conclusion
therefore is that a part-time faculty will always be a fixed-term employee. Applying these guidelines,
petitioners are clearly part-time faculty with a fixed-term status since they were hired on a semestral
basis, they do not possess the required master’s degrees, in fact their failure to obtain the said degrees is
the same reason why they cannot attain the status of probationary employees, and finally, there is no
showing that the terms of contracts under which petitioners served as faculty in STI were illegal
according to the criteria set in Brent.
 ANTONIO P. SALENGA vs. COURT OF APPEALS
G.R. Nos. 174941; February 1, 2012
DOCTRINE:
“The authorization of the board of directors of a corporation is needed before a representative
can represent the corporation as an “employer”.
Facts:
On 22 September 1998, petitioner Antonio Salenga was made redundant. On 17 September 1999,
petitioner filed a Complaint for illegal dismissal with a claim for reinstatement and payment of back
wages, benefits, and moral and exemplary damages against respondent CDC and its CEO Colayco.On
29 February 2000, labor arbiter (LA) Florentino R. Darlucio issued a Decision in favor of petitioner
Salenga. The LA held that the NLRC had jurisdiction over the Complaint, considering that petitioner
was not a corporate officer but a managerial employee.The also LA pointed out that respondent CDC
and Colayco failed to establish a valid cause for the termination of petitioner’s employment and that
respondent corporation had not disputed the argument of petitioner Salenga that his position was that of
a regular employee.
Issue:
Whether Timbol-Roman and OGCC lawyer Roy Christian Mallari represent the corporation as
“employer”
Held:
No. A corporation can only exercise its powers and transact its business through its board of
directors and through its officers and agents when authorized by a board resolution or its bylaws. The
power of a corporation to sue and be sued is exercised by the board of directors. Thus, we agree with
petitioner that, absent the requisite board resolution, neither Timbol-Roman nor Atty. Mallari, who
signed the Memorandum of Appeal and Joint Affidavit of Declaration allegedly on behalf of respondent
corporation, may be considered as the "appellant" and "employer" referred to by Rule VI, Sections 4 to 6
of the NLRC Rules of Procedure.
 FRANCISCO vs. NLRC
GR. No.170087; Aug. 31, 2006
DOCTRINE:
“In certain cases the control test is not sufficient to give a complete picture of the relationship between
the parties, owing to the complexity of such a relationship where several positions have been held by the worker.”
Facts:
Angelina Francisco has held several positions in Kasei Corporation, to wit: (1) Accountant and Corporate
Secretary; (2) Liaison Officer to the City of Makati; (3) Corporate Secretary; and (4)Acting Manager. She
performed the work of Acting Manager for five years but later she was replaced by Liza R. Fuentes as Manager.
Then, Kasei Corporation reduced her salary and was not paid her mid-year bonus allegedly because the company
was not earning well. She made repeated follow-ups with the company cashier but she was advised that the
company was not earning well. Ultimately, she did not report for work and filed an action for constructive
dismissal before the labor arbiter.
Issue:
Was Francisco an employee of Kasei Corporation?
Held:
In certain cases where the control test is not sufficient to give a complete picture of the relationship
between the parties, owing to the complexity of such a relationship where several positions have been held by the
worker. There are instances when, aside from the employer’s power to control the employee with respect to the
means and methods by which the work is to be accomplished, economic realities of the employment relations help
provide a comprehensive analysis of the true classification of the individual, whether as employee, independent
contractor, corporate officer or some other capacity. The better approach would therefore be to adopt a two-tiered
test involving:
(1) the putative employer’spower to control the employee with respect to the means and methods by which the
work is to be accomplished; and
(2) the underlying economic realities of the activity or relationship. This two-tiered test would provide us with a
framework of analysis, which would take into consideration the totality of circumstances surrounding the true
nature of the relationship between the parties.This is especially appropriate in this case where there is no written
agreement or terms of reference to base the relationship on; and due to the complexity of the relationship based on
the various positions and responsibilities given to the worker over the period of the latter’s employment.
Thus, the determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as:
1. the extent to which the services performed are an integral part of the employer’s business;
2. the extent of the worker’s investment in equipment and facilities;
3. the nature and degree of control exercised by the employer;
4. the worker’s opportunity for profit and loss;
5. the amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise;
6. the permanency and duration of the relationship between the worker and the employer; and
7. the degree of dependency of the worker upon the employer for his continued employment in
that line of business.
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. By applying the control test, there is no doubt that
petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji
Kamura, the corporation’s Technical Consultant. She reported for work regularly and served in various capacities,
with substantially the same job functions, 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 securing business
permits and other licenses over an indefinite period of engagement.
There can be no other conclusion that she 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 the corporation on a regular basis over an indefinite period of engagement. The corporation hired and
engaged her for compensation, with the power to dismiss for cause. More importantly, the corporation had the
power to control her with the means and methods by which the work is to be accomplished.
 GREAT PACIFIC LIFE ASSURANCE CORP. vs. JUDICO
G.R. no. 73887 December 21, 1989
DOCTRINE:
“The test whether the "employer" controls or has reserved the right to control the "employee"
not only as to the result of the work to be done but also as to the means and methods by which the same
is to be accomplished.”
Facts:
The records of the case show that Honorato Judico filed a complaint for illegal dismissal against
Grepalife, a duly organized insurance firm, before the NLRC Regional Arbitration Branch. Said
complaint prayed for award of money claims consisting of separation pay, unpaid salary and 13th month
pay, refund of cash bond, moral and exemplary damages and attorney's fees. Petitioner defines a debit
agent as "an insurance agent selling/servicing industrial life plans and policy holders. Such admission is
in line with the findings of public respondent that as such debit agent, private respondent Judico had
definite work assignments including but not limited to collection of premiums from policy holders and
selling insurance to prospective clients. Public respondent NLRC also found out that complainant was
initially paid P 200. 00 as allowance for thirteen (13) weeks regardless of production and later a certain
percentage denominated as sales reserve of his total collections but not lesser than P 200.00. Sometime
in September 1981, complainant was promoted to the position of Zone Supervisor and was given
additional (supervisor's) allowance fixed at P110.00 per week. During the third week of November
1981, he was reverted to his former position as debit agent but, for unknown reasons, not paid so-called
weekly sales reserve of at least P 200.00. Finally on June 28, 1982, complainant was dismissed by way
of termination of his agency contract.
Issue:
Whether the relationship between insurance agents and their principal, the insurance company, is
one of employer-employee, to be governed by the Labor Code.
Held:
Yes. Petitioner admits that private respondent Judico entered into an agreement of agency with
petitioner Grepalife to become a debit agent attached to the industrial life agency in Cebu City. That
private respondent Judico was an agent of the petitioner is unquestionable. An insurance company may
have two classes of agents who sell its insurance policies: (1) salaried employees who keep definite
hours and work under the control and supervision of the company; and (2) registered representatives
who work on commission basis. The test therefore is whether the "employer" controls or has reserved
the right to control the "employee" not only as to the result of the work to be done but also as to the
means and methods by which the same is to be accomplished.Applying the aforementioned test to the
case at bar, it can be readily seenthat the element of control by the petitioner on Judico was very much
present.
 TONGKO V MANUFACTURERS LIFE INSURANCE
GR NO 167622, JUNE 29, 2010
DOCTRINE:
“Control over the performance of the task of one providing service - both with respect to the
means and manner, and the results of the service - is the primary element in determining whether an
employment relationship exists. This control is one of labor law control.”
“There are built-in elements of control specific to an insurance agency, which do not amount to
the elements of control that characterize an employment relationship governed by the Labor Code. Read
without any clear understanding of fine legal distinctions, appear to speak of control by the insurance
company over its agents, not labor law control.”
Facts:
Petitioner argues that for 19 years, he performed administrative functions and exercised
supervisory authority over employees and agents of Manulife, in addition to his insurance agent
functions. In these 19 years, he was designated as a Unit Manager, a Branch Manager and a Regional
Sales Manager, and now posits that he was not only an insurance agent for Manulife but was its
employee as well.
The petitioner asserts that Manulife's labor law control over him was demonstrated (1) when it
set the objectives and sales targets regarding production, recruitment and training programs; and (2)
when it prescribed the Code of Conduct for Agents and the Manulife Financial Code of Conduct to
govern his activities.
Issue:
Whether the respondent insurance company exercised labor law control over petitioner Tongko.
Held:
No. Petitioner failed to show that the control Manulife exercised over him was the control
required to exist in an employer-employee relationship; Manulife's control fell short of this norm and
carried only the characteristic of the relationship between an insurance company and its agents, as
defined by the Insurance Code and by the law of agency under the Civil Code.
Guidelines indicative of labor law "control" do not merely relate to the mutually desirable result
intended by the contractual relationship; they must have the nature of dictating the means and methods
to be employed in attaining the result. Tested by this norm, Manulife's instructions regarding the
objectives and sales targets, in connection with the training and engagement of other agents, are among
the directives that the principal may impose on the agent to achieve the assigned tasks. They are targeted
results that Manulife wishes to attain through its agents. Manulife's codes of conduct, likewise, do not
necessarily intrude into the insurance agents' means and manner of conducting their sales. Codes of
conduct are norms or standards of behavior rather than employer directives into how specific tasks are to
be done. These codes, as well as insurance industry rules and regulations, are not per se indicative of
labor law control under our jurisprudence.
 SONZA v. ABS-CBN
G.R. No. 138051; June 10, 2004
DOCTRINE:
“A radio broadcast specialist who works under minimal supervision is an independent
contractor.”
Facts:
ABS-CBN signed an Agreement with the Mel and Jay Management Development Corporation
where the latter agreed to provide petitioner Sonza’s services exclusively to ABS-CBN as talent for
radio and television. Later, Sonza tendered a letter rescinding their agreement and filed a complaint
before the DOLE for payment of his labor standard benefits (his salaries, separation pay, service
incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the
Employees Stock Option Plan). ABS-CBN contends on the ground that no employer-employee
relationship existed between the parties. The Labor Arbiter found for respondent citing that Sonza as a
‘talent’ cannot be considered an employee of petitioner. Both NLRC and CA affirmed.
Issue:
Whether or not employer-employee relationship existed between Sonza and ABS-CBN.
Held:
No employer-employee relationship existed between Sonza and ABS-CBN. ABS-CBN engaged
SONZA’s services specifically to co-host the "Mel & Jay" programs. 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. ABS-CBN
was not involved in the actual performance that produced the finished product of SONZA’s work. ABS-
CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the right to modify
the program format and airtime schedule "for more effective programming." ABS-CBN’s sole concern
was the quality of the shows and their standing in the ratings. Clearly, ABS-CBN did not exercise
control over the means and methods of performance of SONZA’s work.
 DUMPIT-MURILLO v CA
GR No. 164652 June 8, 2007
DOCTRINE:
“The law provides for two kinds of employees, namely: (1) those who are engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer; and
(2) those who have rendered at least one year of service, whether continuous or broken, with respect to
the activity in which they are employed. In other words, regular status arises from either the nature of
work of the employee or the duration of his employment.”
Facts:
Private respondent Associated Broadcasting Company (ABC) hired petitioner Thelma Dumpit-
Murillo as a newscaster and co-anchor of news program. The contract was for a period of 3 months and
repeatedly renewed. After 4 years of repeated renewals, petitioner’s talent contract expired.
Two weeks after the expiration of the last contract, petitioner sent a letter to Mr. Jose Javier, Vice
President for news and public affairs of ABC, informing the latter that she was still interested in
renewing her contract subject to a salary increase, thereafter, petitioner stopped reporting for work.
Complaint for illegal dismissal followed.
Issue:
Whether or not the continuous renewal of petitioner’s talent contracts constitute regularity in the
employment status.
Held:
Yes. Petitioner was a regular employee under contemplation of law. The practice of having
fixed-term contracts in the industry does not automatically 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.
The primary standard of determining regular employment is the reasonable connection between the
particular activity performed by the employee vis-a-vis the usual trade or business of the employer. This
connection can be determined by considering the nature of the work performed and its relation to the
scheme of the particular business or trade in its entirety. If the employee has been performing the job for
at least a year, even if the performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business.
 FUJI TELEVISION NETWORK, INC., Vs. ARLENE S. ESPIRITU
G.R. No. 204944-45, December 3, 2014

DOCTRINE:
“It is the burden of the employer to prove that a person whose services it pays for is an independent
contractor rather than a regular employee with or without a fixed term. That a person has a disease does not per
se entitle the employer to terminate his or her services. Termination is the last resort. At the very least, a
competent public health authority must certify that the disease cannot be cured within six ( 6) months, even with
appropriate treatment.”

Facts:
Arlene S. Espiritu (Arlene) was engaged by Fuji Television Network, Inc. (Fuji) as a news
correspondent/producer tasked to report Philippine news to Fuji through its Manila Bureau field office. The
employment contract was initially for one year, but was successively renewed on a yearly basis with salary
adjustments upon every renewal.
In January 2009, Arlene was diagnosed with lung cancer. She informed Fuji about her condition, and the
Chief of News Agency of Fuji, Yoshiki Aoki, informed the former 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
physician.
Labor Arbiter dismissed the complaint and held that Arlene was not a regular employee but an
independent contractor. The NLRC reversed the Labor Arbiter’s decision and ruled that Arlene was a regular
employee since she continuously rendered services that were necessary and desirable to Fuji’s business. The
Court of Appeals affirmed that NLRC ruling with modification that Fuji 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 Appeals agreed with the NLRC that Arlene was a regular employee, engaged to perform work
that was necessary or desirable in the business of Fuji, and the successive renewals of her fixed-term contract
resulted in regular employment.
Issue:
Whether or not Arlene is an independent contractor or a regular employee.
Held:
Fuji’s argument that Arlene was an independent contractor under a fixed-term contract is contradictory.
Employees under fixed-term contracts cannot be independent contractors because in fixed-term contracts, an
employer-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 agreed upon by the parties for the commencement and termination of
the employment relationship.” For regular employees, the necessity and desirability of their work in the usual
course of the employer’s business are the determining factors. On the other hand, independent contractors do not
have employer-employee relationships with their principals.
To determine the status of employment, the existence of employer-employee relationship must first be
settled with the use of the four-fold test, especially the qualifications for the power to control.
 NELSON V. BEGINO VS. ABS-CBN CORPORATION
G.R. No. 199166; April 20, 2015
DOCTRINE:
“The test to determine whether employment is regular or not is the reasonable connection
between the activity performed by the employee in relation to the business or trade of the employer.”
FACTS:
ABS-CBN Corporation is a television and radio broadcasting corporation which, for its Regional
Network Group in Naga City, employed respondents. While specifically providing that nothing in the
contract shall be deemed or construed to establish an employer-employee relationship between the
parties, the same included, among other matters, provisions on the following matters: (a) xxx
performance of work in accordance with the ABS-CBN’s professional standards and compliance with its
policies and guidelines xxx; (b) the Talent’s non-engagement in similar work for a person or entity
directly or indirectly in competition with or adverse to the interests of ABS-CBN and non-promotion of
any product or service without prior written consent; and (c) the results-oriented nature of the talent’s
work which did not require them to observe normal or fixed working hours.
ISSUE:
Whether or not the hired workers are regular employees
RULING:
Yes. To determine the existence of said relation, case law has consistently applied the four-fold
test. Of these criteria, the so-called “control test” is generally regarded as the most crucial and
determinative indicator of the presence or absence of an employer-employee relationship. Under this
test, an employer-employee relationship is said to exist where the person for whom the services are
performed reserves the right to control not only the end result but also the manner and means utilized to
achieve the same. Jurisprudence has added that of contractual or fixed term employee which, if not for
the fixed term, would fall under the category of regular employment in view of the nature of the
employee’s engagement, which is to perform activity usually necessary or desirable in the employer’s
business. The Court finds that, notwithstanding the nomenclature of their Talent Contracts and/or
Project Assignment Forms and the terms and condition embodied therein, petitioners are regular
employees of ABS-CBN. Time and again, it has been ruled that the test to determine whether
employment is regular or not is the reasonable connection between the activity performed by the
employee in relation to the business or trade of the employer. If the employee has been performing the
job for at least one year, even if the performance is not continuous or merely intermittent, the law deems
the repeated or continuing performance as sufficient evidence of the necessity, if not indispensability of
that activity in the business. Indeed, an employment stops being co-terminous with specific projects
where the employee is continuously re-hired due to the demands of the employer’s business. The nature
of the employment depends, after all, on the nature of the activities to be performed by the employee,
considering the nature of the employer’s business, the duration and scope to be done, and, in some cases,
even the length of time of the performance and its continued existence. In the same manner that the
practice of having fixed-term contracts in the industry does not automatically make all talent contracts
valid and compliant with labor law, it has, consequently, been ruled that the assertion that a talent
contract exists does not necessarily prevent a regular employment status.
 VILLAMARIA vs. CA
GR No. 165881 April 19, 2006
DOCTRINE:
“Under the boundary-hulog scheme, a dual juridical relationship is created that of employer -
employee and that of vendor-vendee.”
Facts:
Villamaria was the owner of Villamaria Motors engaged in assembling passenger jeepneys with
a public utility franchise to operate. By 1995, Villamaria stopped assembling jeepneys and retained only
nine, four of which operated by employing drivers on a boundary basis. One of which is Bustamante.
Bustamante remitted 450 a day to Villamaria as boundary and kept the residue as compensation for
driving the vehicle. In August 1997, Villamaria verbally agreed to sell the jeepney to Bustamante under
a “boundary-hulog scheme”, where Bustamante would remit to Villamaria 550 a day for a period of 4
years. Bustamane would then become the owner of the vehicle and continue to drive the same under
Villamaria’s franchise, but with Php 10,000 down payment. Villamaria executed a contract entitled
“Kasunduan ng Bilihan ng Sasakyan sa Pamamagitan ng Boundary Hulog”. The parties agreed that if
Bustamante failed to pay the boundary- hulog for 3 days, Villamaria Motors would hold on to the
vehicle until Bustamante paid his arrears, including a penalty of 50 a day; in case Bustamante failed to
remit the daily boundary-hulog for a period of one week, the Kasunduan would cease to have the legal
effect and Bustamante would have to return the vehicle to Villamaria motors.
In 1999, Bustamante failed to pay boundary-hulog. This prompted Villamaria to serve a
“Paalala”. In 2000, Villamaria took back the jeepney driven by Bustamante and barred the latter from
driving the vehicle. Bustamante filed a complaint for Illegal Dismissal.
Issue:
Whether or not the existence of a boundary-hulog agreement negates the employer - employee
relationship between the vendor and vendee.
Held:
No. Under the boundary-hulog scheme, a dual juridical relationship is created: that of employer -
employee and vendor - vendee. The Kasunduan did not extinguish the employer employee relationship
of the parties existing before the execution of said deed. Under this system the owner/operator exercises
control and supervision over the driver. The management of the business is still in the hands of the
owner/operator, being the holder of the certificate of public convenience. The driver performs activities
which are usually necessary or desirable in the usual business or trade of the owner/operator. Under the
Kasunduan, respondent was required to remit Php 550 daily to petitioner, an amount which represented
the boundary of petitioner as well as respondent’s partial payment of the purchase price of the jeepney.
The obligation is not novated by an instrument that expressly recognizes the old one, it changes
only the terms of payment and adds other obligations not incompatible with the old provisions or where
the contract merely supplements the previous one. 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. The amount earned in excess of the “boundary hulog” is equivalent to wages and
the fact that the power of dismissal was not mentioned in the Kasunduan did not mean that private
respondent never exercised such power, or could not exercise such power.
 JOSE MEL BERNARTE vs. PBA
G.R. No. 192084; September 14, 2011
DOCTRINE:
“To determine the existence of an employer-employee relationship, case law has
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 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 the presence or absence of an employer-
employee relationship.”
Facts:
Jose Mel Bernabe joined PBA as a referee who was made to sign contract on a year to
year basis during the leadership of Commissioner Emilio Bernardino. However, during the term
of Commissioner Eala, changes were made on the terms of his employment. The signing of
contract was no longer on a year to year basis. After the lapse of Petitioner last contract signing,
PBA decided not to renew his contract. The ruling of the Labor Arbiter and the NLRC on the
illegal dismissal case filed by the petitioner: that the petitioner was an employee of PBA, on
appeal, the Court of Appeals found that the petitioner was an independent contractor since the
respondents did not exercise any form of control over the means and methods by which
petitioner performed his work as a basketball referee.
Issue:
Is petitioner an employee of respondent?
Held:
A position that requires special skills and independent judgment weighs in favor of
independent contractor status. Unskilled work on the other hand, suggests an employment
relationship. In addition, the fact that PBA repeatedly hired petitioner does not by itself prove
that petitioner is an employee of the former. For a hired party to be considered an employee, the
hiring party must have control over the means and methods by which the hired party is to
perform his work, which is absent in this case. The non-renewal of the contract does not
constitute illegal dismissal of petitioner by respondent.
 REYES VS GLAUCOMA RESEARCH FOUNDATION
G.R. No. 189255, June 17, 2015
DOCTRINE:
“The most determinative among the four (4) standards in determining the existence of an employer-
employee relationship is the so-called "control test. This control test is premised on whether the person for
whom the services are performed reserves the right to control both the end achieved and the manner and
means used to achieve that end.”
FACTS:
Petitioner Jesus Reyes alleged that he was hired by Glaucoma Research corporation as administrator
of the latter’s Eye Referral Center (ERC). He allegedly performed his duties as administrator but beginning
February 2005, Glaucoma Research withheld Reyes’s salary without notice but he still continued to report
for work. On April 11, 2005, Reyes wrote a letter to Manuel Agulto (Agulto), who is the Executive Director
of Glaucoma Research, informing the latter that he has not been receiving his salaries since February 2005 as
well as his 14th month pay for 2004. Subsequently, Reyes was informed that he is no longer the
Administrator of the ERC. Thereafter, Reyes’s office was padlocked and closed without notice. He still
continued to report for work but he was no longer allowed by the security guard.
On their part, Glaucoma Researchs contended that there is no employer-employee relationship
between them because Glaucoma Researchs had no control over Reyes in terms of working hours as he
reports for work at anytime of the day and leaves as he pleases. It also had no control as to the manner in
which he performs his alleged duties as consultant. Likewise, Reyes was not dismissed as he was the one
who voluntarily severed his relations with Glaucoma Research.
ISSUE:
Whether an employer-employee relationship exists between Reyes and respondent
RULING:
No. In an illegal dismissal case, before it can prosper, an employer-employee relationship must first
be established. It is incumbent upon Reyes to prove the employer-employee relationship by substantial
evidence. There are four standards in determining the existence of an employer-employee relationship,
namely: (a) selection of employee; (b) payment of wages; (c) power of dismissal; and, (d) right to control.
Most determinative among these factors is the so-called "control test. This control test is premised on
whether the person for whom the services are performed reserves the right to control both the end achieved
and the manner and means used to achieve that end.
In the case at bar, the undisputed fact was that petitioner was never subject to definite working hours.
He never denied that he goes to work and leaves therefrom as he pleases. The SC has held that there is no
employer-employee relationship where the supposed employee is not subject to a set of rules and regulations
governing the performance of his duties under the agreement with the company and is not required to report
for work at any time, nor to devote his time exclusively to working for the company.
In addition, the designation of the payments to petitioner as salaries, is not determinative of the
existence of an employer-employee relationship. Salary is a general term defined as a remuneration for
services given. Also, the fact alone that petitioner was designated as an administrator does not necessarily
mean that he is an employee of respondents. Mere title or designation in a corporation will not, by itself,
determine the existence of an employer-employee relationship.
 CENTURY PROPERTIES, INC., vs. EDWIN J. BABIANO AND EMMA B. CONCEPCION,
G.R. No. 220978, July 05, 2016
DOCTRINES:
1. Article 1370 of the Civil Code provides that if the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its stipulations shall control."51 In Norton Resources
and Development Corporation v. All Asia Bank Corporation,
2. Four-Fold Test in establishing an employer-employee relationship: (a) the power to hire, i.e., the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power
to control the employee's conduct, or the so called "control test."
Facts:
On October 2, 2002, Babiano was hired by CPI as Director of Sales, and was eventually appointed as
Vice President for Sales effective September 1, 2007. As CPFs Vice President for Sales, Babiano was
remunerated with, inter alia, the following benefits: (a) monthly salary of P70,000.00; (b) allowance of
P50,000.00; and (c) 0.5% override commission for completed sales. His employment contract7 also contained a
"Confidentiality of Documents and Non-Compete Clause"8 which, among others, barred him from disclosing
confidential information, and from working in any business enterprise that is in direct competition with CPI
"while [he is] employed and for a period of one year from date of resignation or termination from [CPI]." Should
Babiano breach any of the terms thereof, his "forms of compensation, including commissions and incentives will
be forfeited.
During the same period, Concepcion was initially hired as Sales Agent by CPI and was
eventually promoted as Project Director on September 1, 2007.11 As such, she signed an employment agreement,
denominated as "Contract of Agency for Project Director"12 which provided, among others, that she would
directly report to Babiano, and receive, a monthly subsidy of P60,000.00, 0.5% commission, and cash
incentives.13 On March 31, 2008, Concepcion executed a similar contract14 anew with CPI in which she would
receive a monthly subsidy of P50,000.00, 0.5% commission, and cash incentives as per company policy. Notably,
it was stipulated in both contracts that no employer-employee relationship exists between Concepcion and CPI
After receiving reports that Babiano provided a competitor with information regarding CPFs marketing
strategies, spread false information regarding CPI and its projects, recruited CPI's personnel to join the
competitor, and for being absent without official leave (AWOL) for five (5) days, CPI, through its Executive Vice
President for Marketing and Development, Jose Marco R. Antonio (Antonio), sent Babiano a Notice to Explain.
On February 25, 2009, Babiano tendered his resignation and revealed that he had been accepted as Vice President
of First Global, a competitor of CPI.On March 3, 2009, Babiano was served a Notice of Termination for: (a)
incurring AWOL; (b) violating the "Confidentiality of Documents and Non-Compete Clause" when he joined a
competitor enterprise while still working for CPI and provided such competitor enterprise information regarding
CPFs marketing strategies; and (c) recruiting CPI personnel to join a competitor.
On the other hand, Concepcion resigned as CPFs Project Director through a letter dated February 23,
2009, effective immediately.
On August 8, 2011, respondents filed a complaint for non-payment of commissions and damages against
CPI and Antonio before the NLRC, claiming that their repeated demands for the payment and release of their
commissions remained unheeded.
Issues:
1. Whether or not Babiano is entitled to its commissions.
2. Whether or not Concepcion is an employee of CPI and is entitled to its commissions.
Held:
1. No. Article 1370 of the Civil Code provides that "[i]f the terms of a contract are clear and leave no doubt
upon the intention of the contracting parties, the literal meaning of its stipulations shall control. (Norton
Resources and Development Corporation v. All Asia Bank Corporation). The rule is that where the language of a
contract is plain and unambiguous, its meaning should be determined without reference to extrinsic facts or aids.
In the case at bar, there is a glaring violation of the "Confidentiality of Documents and Non-Compete Clause" in
his employment contract with CPI, thus, justifying the forfeiture of his unpaid commissions.
2. Yes. Employee-employer relationship has been established in the case of Concepcion. For, the
employment status of a person is defined and prescribed by law and not by what the parties say it should
be. Hence, since there exists an employee-employer relationship between CPI and Concepcion, CPI remains liable
for the unpaid commissions of Concepcion in the sum of P591,953.05.
 JAVIER vs. FLYACE CORPORATION
G.R No. 192558; February 15, 2012
DOCTRINE:
“Tests to determine the existence of an employer-employee relationship, viz: (1) the 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, the most important criterion is whether the
employer controls or has reserved the right to control the employee not only as to the result of the work
but also as to the means and methods by which the result is to be accomplished.”
Facts:
Petitioner in this case works for respondent as a stevedore. However, one day he was barred from
entering the work premises and was informed that he was already dismissed. Petitioner then filed for
illegal dismissal, but respondent alleged that petitioner was not an employee because petitioner works on
a “pakyaw” basis. The Labor Arbiter ruled that petitioner was not a regular employee of respondent
because respondent was in the business of importation of groceries does, do not need a regular
stevedore. The National Labor Relations Commission meanwhile ruled that petitioner was a regular
employee because there was reasonable connection between the particular activity performed by the
employee in relation to the usual business of the employer. The Court of Appeals ruled however, that
petitioner was not an employee of respondent being that the employee-employer relationship is absent.
Issue:
Whether or not petitioner, being a stevedore was an employee of respondent
Held:
No. The Supreme Court held that, petitioner was made to work in the company premises during
weekdays arranging and cleaning grocery items for delivery to clients, no other proof was submitted to
fortify his claim. In gauging the evidence presented by Javier, the Supreme Court cannot ignore the
inescapable conclusion that his mere presence at the workplace falls short in proving employment.
 SOUTHEAST INTERNATIONAL RATTAN, INC. vs. JESUS COMING
G.R. No. 186621; March 12, 2014
DOCTRINE:
“To ascertain the existence of an employer-employee relationship jurisprudence has invariably
adhered to the four-fold test, to wit: (1) the 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, or the so-
called "control test."
“The fact that a worker was not reported as an employee to the SSS is not conclusive proof of the
absence of employer-employee relationship. Otherwise, an employer would be rewarded for his failure
or even neglect to perform his obligation.”
“For a payroll to be utilized to disprove the employment of a person, it must contain a true and
complete list of the employee.”
Facts:
Respondent Coming was hired by petitioner company as Sizing Machine Operator in 1984
wherein he was paid on a pakiao basis until eventually in June 1984, he was paid a daily wage of
P150.00. Subsequently, sometime in 2002, respondent was suddenly terminated by the petitioner
without lawful cause. Petitioner reasoned that the company is not doing well financially and that he
would be called back to work only if they need his services again. Even after the lapse of one year,
respondent was never re-hired by the petitioner which prompted the former to file a complaint. The
Labor Arbiter ruled in favor of respondent finding him to be a regular employee and his termination
thereof, illegal; on appeal with the NLRC, the decision was reversed and finally in the Court of Appeals,
the decision of the Labor Arbiter was reinstated.
Issue:
Is respondent an employee of petitioner?
Held:

Yes. The exhibits offered by petitioners before the NLRC consisting of copies of payrolls and pay
earnings records are only for the years 1999 and 2000; they do not cover the entire 18-year period during
which respondent supposedly worked for SEIRI. Likewise, Petitioners’ admission that the five affiants
were their former employees is binding upon them. While they claim that respondent was the employee
of their suppliers Mayol and Apondar, they did not submit proof that the latter were indeed independent
contractors; clearly, petitioners failed to discharge their burden of proving their own affirmative
allegation. There is thus no showing that the five former employees of SEIRI were motivated by malice,
bad faith or any ill-motive in executing their affidavit supporting the claims of respondent.
 MARS AN & COMPANY, INC. vs. STA. RITA
G.R. No. 194765, April 23, 2018

DOCTRINE:
“In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal
of an employee was for a valid cause. However, before a case for illegal dismissal can prosper, an
employer-employee relationship must first be established.”
Facts:
Marsman hired Sta. Rita as a warehouseman and controlled his warehouse assignments.
Marsman thereafter purchased Metro Drug, now CPDSI, which was engaged in a similar business.
Marsman then entered into a MOA with MEU, its bargaining representative, integrating its employees
with CPDSI and transferring its employees, and employment obligation to CPDSI. Sta. Rita was
assigned as a warehouseman in one of the warehouses serviced by CPDSI. CPDSI terminated his
employment due to redundancy. Sta. Rita thus filed an illegal dismissal case with the NLRC against
Marsman.
Issue:
W/N an employer-employee relationship existed between Marsman and Sta. Rita at the time of
the latter’s dismissal.
Held:
NO. Here, it was incumbent upon Sta. Rita as the complainant to prove the employer-employee
relationship by substantial evidence, but he failed to discharge the burden to prove his allegations. Sta.
Rita failed to satisfy the four-fold test which determines the existence of an employer-employee
relationship.
Power of Selection
There was nothing in the agreement to negate CPDSI' s power to select its employees and to
decide when to engage them.
Payment of wages
The form for leave application bearing Marsman’s logo did not sufficiently establish that
Marsman paid Sta. Rita's wages. He could have presented pay slips, salary vouchers, payrolls,
certificates of withholding tax on compensation income or testimonies of his witnesses.
Power of dismissal
The letter dated January 14, 2000 clearly indicated that CPDSI, and not Marsman, terminated
Sta. Rita's services.
Finally, Sta. Rita failed to prove that Marsman had the power of control over his employment at
the time of his dismissal.
 MARICULUM MINING vs. FLORENTINO
G.R. No. 221813, July 23, 2018
DOCTRINE:

Facts:
On June 1, 2001, Maricalum Mining's Vice President and Resident Manager Jesus H. Bermejo
wrote a Memorandum to the cooperatives informing them that Maricalum Mining has decided to stop its
mining and milling operations effective July 1, 2001 in order to avert continuing losses brought about by
the low metal prices and high cost of production. In July 2001, the properties of Maricalum Mining,
which had been mortgaged to secure the PNs, were extrajudicially foreclosed and eventually sold to G
Holdings as the highest bidder on December 3, 2001. On September 23, 2010, some of Maricalum
Mining's workers, including complainants, and some of Sipalay General Hospital's employees jointly
filed a Complaint[15] with the LA against G Holdings, its president, and officer-in-charge, and the
cooperatives and its officers for illegal dismissal, underpayment and nonpayment of salaries,
underpayment of overtime pay, underpayment of premium pay for holiday, nonpayment of separation
pay, underpayment of holiday pay, nonpayment of service incentive leave pay, nonpayment of vacation
and sick leave, nonpayment of 13th month pay, moral and exemplary damages, and attorneys fees.
Issue:
Whether Maricalum Mining entered into labor-only contracting with the manpower cooperatives
Held:
Here, the virtually identical sets of memorandum of agreement with the manpower cooperatives
state among others that: (a) the services covered shall consist of operating loading, drilling and various
auxiliary equipments; and (b) the cooperative members shall abide by the norms and standards of the
Maricalum Mining. These services and guidelines are essential to the operations of Maricalum Mining.
Thus, since the cooperative members perform the work vital to the operation of the Sipalay Mining
Complex, they were being contracted in a labor-only arrangement. Moreover, the burden of proving the
supposed status of the contractor rests on the principal and Maricalum Mining, being the principal, also
failed to present any evidence before the NLRC that each of the manpower cooperatives had an
independent viable business.
The records show that Maricalum Mining was guilty of entering into a labor-only contracting
arrangement with the manpower cooperatives, thus, all of them are solidarily liable to the
complainants by virtue of Article 106 of the Labor Code.
 JOAQUIN LU v. TIRSO ENOPIA
G.R. No. 197899, March 06, 2017
DOCTRINE:
“In determining the existence of an employer-employee relationship, the following elements are
considered: (1) the selection and engagement of the workers; (2) the power to control the worker's
conduct; (3) the payment of wages by whatever means; and (4) the power of dismissal.”
Facts:
Respondents were hired as crew members of the fishing mother boat owned by petitioner Lu
who is the sole proprietor of Mommy Gina Tuna Resources. Respondents alleged that Lu terminated
their services because of their refusal to sign the Joint Venture Fishing Agreement between them.
Respondents then filed a complaint and Lu alleged that there was no employer-employee relationship as
its elements were not present. The LA dismissed the case and found that there was no employer-
employee relationship existing between the parties but a joint venture, on appeal, the NLRC affirmed the
same, while the CA reversed and found that petitioner exercised control over respondents.
Issue:
Whether or not an employer-employee relationship existed between petitioner and respondents.
Held:
Yes. In this case, petitioner contends that it was the piado who hired respondents, however, it
was shown by the latter's evidence that the employer stated in their SSS online inquiry system printouts
was MGTR, which is owned by petitioner; It was also established that petitioner exercised control over
respondents since although the former claimed that the use of the radio was only for the purpose of
receiving requisitions for the needs of the fishermen in the high seas and to receive reports of fish catch,
such communication would establish that he was constantly monitoring or checking the progress of
respondents' fishing operations throughout the duration thereof, which showed their control and
supervision over respondents' activities; The payment of respondents' wages based on the percentage
share of the fish catch would not be sufficient to negate the employer-employee relationship existing
between them; and lastly, petitioner wielded the power of dismissal over respondents when he dismissed
them after they refused to sign the joint fishing venture agreement.
The primary standard for determining regular employment is the reasonable connection between
the particular activity performed by the employee in relation to the usual trade or business of the
employer. In this case, petitioners’ services to MGTR are so indispensable and necessary that without
them MGTR's deep-sea fishing industry would not have come to existence, much less fruition.
 BERNARD TENAZAS et.al. vs. R. VILLEGAS TAXI TRANSPORT
G.R. No. 192998; April 2, 2014
DOCTRINE:
“It is an oft–repeated rule that in labor cases, as in other administrative and quasi–judicial
proceedings, “the quantum of proof necessary is substantial evidence, or such amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion. The burden of proof
rests upon the party who asserts the affirmative of an issue.”
Facts:
Tenazas, Francisco, and Endraca alleged that they were hired and dismissed by respondent.
Respondent admitted that Tenazas and Endraca were hired as driver and spare driver respectively but
denied having hired or employed Francisco. The Labor Arbiter dismissed the complaint ratiocinating
that there was no actual dismissal. On appeal with the NLRC, the LA’s decision was reversed, and it
found out that petitioners were employees of respondents and that they were illegally dismissed. On
appeal with the Court of Appeals, it modified the NLRC’s decision and held that only Tenazas and
Endraca were illegally dismissed and that Francisco was not even an employee of respondent.
Issue:
Is Francisco an employee of the respondent?
Held:
No, Francisco failed to present any proof substantial enough to establish his relationship with the
respondents. He failed to present documentary evidence like attendance logbook, payroll, SSS record or
any personnel file that could somehow depict his status as an employee. Anent his claim that he was not
issued with employment records, he could have, at least, produced his social security records which state
his contributions, name and address of his employer, as his co–petitioner Tenazas did. He could have
also presented testimonial evidence showing the respondents’ exercise of control over the means and
methods by which he undertakes his work. This is imperative considering the respondents’ denial of his
employment and the claim of another taxi operator, Emmanuel Villegas (Emmanuel), that he was his
employer.
 DELIA ROMERO vs. PEOPLE OF THE PHILIPPINES
G.R. No. 171644, November 23, 2011
DOCTRINE:
“A non-licensee or non-holder of authority means any person, corporation or entity which has
not been issued a valid license or authority to engage in recruitment and placement by the Secretary of
Labor, or whose license or authority has been suspended, revoked or cancelled by the POEA or the
Secretary.”
Facts:
Private respondents Romulo Padlan and Arturo Siapno were convinced by petitioner that if they
could give her the amount of US$3,600.00, their papers would be immediately processed for their
employment in Israel, which they did, and were able to secure a job in therein, however, after only three
months, both private respondents were caught by the Israel’s immigration police and were deported
because they did not possess working visas. Both demanded from petitioner the return of their money,
but the latter refused and failed to do so. Upon checking with the DOLE Dagupan District that
petitioner, along with Teresita Visperas and Jonrey Erez Mokra, had no license or authority to recruit for
overseas employment, private respondents filed a complaint for Illegal Recruitment. Petitioner,
however, contends that it was Teresita Visperas, her sister, that communicated with the private
respondents and that the latter only asked her how Visperas was able to secure a job in Israel. The RTC
found petitioner guilty as charged, which the CA affirmed.
Issue:
WON petitioner is guilty of Illegal Recruitment
Held:
YES. The crime of illegal recruitment is committed when two elements concur, namely: (1) the
offender has no valid license or authority required by law to enable one to lawfully engage in
recruitment and placement of workers; and (2) he undertakes either any activity within the meaning of
"recruitment and placement" defined under Article 13 (b), or any prohibited practices enumerated under
Article 34 of the Labor Code. The contention of petitioner that the prosecution should have secured a
certification from the Philippine Overseas Employment Administration (POEA) and not from the DOLE
is flawed, since the creation of POEA did not divest the Secretary of Labor of his/her jurisdiction over
recruitment and placement of activities. Anent the second element, petitioner insists that her conduct
does not fall within the term recruitment, which is likewise flawed, since 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 their services she would render. Further, 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.
 PEOPLE OF THE PHILIPPINES vs. MA. HARLETA VELASCO
G.R. No. 195668; June 25, 2014
DOCTRINE:
“In simplest terms, illegal recruitment is committed by persons who, without authority from the
government, give the impression that they have the power to send workers abroad for employment
purposes.”
Facts:
On March 17, 2004, the Office of the City Prosecutor of Makati City filed in the RTC two
informations charging Inovero, Ma. Harleta Velasco y Briones, Marissa Diala and Berna Paulino with
illegal 11 informations charging the same accused with estafa. Only Inovero was arrested and
prosecuted, the other accused having remained at large. The prosecution presented the five (5) private
complainants as witnesses to prove the crime of Illegal Recruitment. In her defense, Inovero denied the
allegations hurled against her. As summarized in the assailed Decision, she claimed that she is the niece
of accused Velasco, the owner of HARVEL, but denied working there.
Issue:
Whether Inovero is guilty of illegal recruitment?
Held:
Yes. The essential elements of illegal recruitment committed in large scale are: (1) that the
accused engaged in acts of recruitment and placement of workers as defined 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 the Secretary of Labor and Employment with respect to the
requirement to secure a license or authority to recruit and deploy workers; and (3) that the accused
committed the unlawful acts against 3 or more persons. In simplest terms, illegal recruitment is
committed by persons who, without authority from the government, give the impression that they have
the power to send workers abroad for employment purposes. In Our view, despite Inovero’s
protestations that she did not commit illegal recruitment, the following circumstances contrarily
convince us that she was into illegal recruitment.
 PEOPLE OF THE PHILIPPINES vs. ALELIE TOLENTINO
G.R. No. 208686 July 1, 2015
DOCTRINE:
“Under RA 8042, a non-licensee or non-holder of authority commits illegal recruitment for
overseas employment in two ways: (1) by any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers, and includes referring, contract services, promising or
advertising for employment abroad, whether for profit or not; and (2) by undertaking any of the acts
enumerated under Section 6 of RA 8042. On the other hand, a licensee or holder of authority is also
liable for illegal recruitment for overseas employment when he or she undertakes any of the thirteen acts
or practices [(a) to (m)] listed under Section 6 of RA 8042. To constitute illegal recruitment in large
scale, the offense of illegal recruitment must be committed against three or more persons, individually
or as a group.”
Facts:
Appellant was charged with illegal recruitment and five (5) counts of estafa under Article 315,
paragraph 2(a) of the Revised Penal Code. ALELIE TOLENTINO of the crime of Illegal Recruitment,
that on or about [or sometime in] the last week of August, 2001 and 1st week of November, jointly with
NARCISA SANTOS did advertise for employment, enlist, contract and promise employment to the
following persons: LEDERLE PANESA, ORLANDO LAYOSO, JIMMY LEJOS, MARCELINO
LEJOS and DONNA MAGBOO for a fee without first securing license and/or permit from the
government agency concerned.
The trial court rendered a decision finds accused Alelie (also known as Alelie Tolentino) guilty
beyond reasonable doubt of the offense of large scale illegal recruitment, which constitutes economic
sabotage in Criminal Case Case No. 02-755 and sentences her to life imprisonment and to pay a fine of
₱500,000.00; and five counts of estafa under Article 315 2(a) of the Revised Penal Code. On appeal, the
Court of Appeals affirmed the trial court’s decision.
Issue:
Whether or not Court of Appeal is correct in its ruling.
Held:
The Court find the appeal without merit. The Court of Appeals was correct in affirming the
ruling of the trial court that the appellant’s guilt of the crimes she was accused of was clearly established
by the witnesses and the evidence of the prosecution.
The Court finds that the prosecution adequately proved that appellant engaged in illegal
recruitment in large scale. The Court noted that appellant admitted that she had no authority or valid
license to engage in recruitment and placement of workers. The testimonies and the documentary
evidence submitted by the prosecution showed that appellant led complainants to believe that she had
the power or ability to send private complainants to Korea to work as factory workers and that the latter
were convinced to give their payment to appellant in order to be employed. Appellant even issued petty
cash vouchers acknowledging receipt of private complainants’ payment and she made them sign Trainee
Agreements, which were purportedly their contract with their Korean employer. Based on the facts and
evidence presented, the Court concluded that appellant clearly engaged in illegal recruitment activities.
Appellant’s claim that it was Narcisa Santos who recruited the private complainants and who profited
from the illegal transaction was disregarded by the Court of Appeals for lack of evidence. The Court
noted that it was appellant who dealt directly with private complainants.

On the charge of estafa, the Court likewise upheld appellant’s conviction for said crime. The
evidence presented to prove appellant’s liability for illegal recruitment also established her liability for
estafa. The Court ruled that a person may be charged and convicted separately of illegal recruitment
under Republic Act No. 8042 (RA 8042) in relation to the Labor Code, and estafa under Article 315,
paragraph 2(a) of the Revised Penal Code.
 ROSA RODOLFO vs. PEOPLE OF THE PHILIPPINES
G.R. No. 146964; August 10, 2006
DOCTRINE:
“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 conviction for illegal recruitment.”
Facts:
The said accused representing herself to have the capacity to contract, enlist and transport
Filipino workers for employment abroad, did then and there willfully and unlawfully, for a fee, recruit
and promise employment/job placement abroad to VILLAMOR ALCANTARA, NARCISO CORPUZ,
NECITAS R. FERRE, GERARDO H. TAPAWAN and JOVITO L. CAMA, without first securing the
required license or authority from the Ministry of Labor and Employment. The evidence for the
prosecution shows that accused-appellant approached private complainants Necitas Ferre and Narciso
Corpus individually and invited them to apply for overseas employment in Dubai. The accused-appellant
being their neighbor, private complainants agreed and went to the former’s office. In that office, private
complainants gave certain amounts to appellant for processing and other fees. Likewise, Corpus gave
appellant money for processing. Appellant then told private complainants that they were scheduled to
leave for Dubai. However, private complainants and all the other applicants were not able to depart on
the said date as their employer allegedly did not arrive.
To prove that accused-appellant had no authority to recruit workers for overseas employment,
the prosecution presented Jose Valeriano, a Senior Overseas Employment Officer of the Philippine
Overseas Employment Agency (POEA).
Issue:
Whether or not appellant commit illegal recruitment.
Held:
Yes. The elements of the offense of illegal recruitment, which must concur, are: (1) that the
offender has no valid license or authority required by law to lawfully engage in 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 practices enumerated under Article 34
of the Labor Code. If another element is present that the accused commits the act against three or more
persons, individually or as a group, it becomes an illegal recruitment in a large scale. The Labor Code
does not require that the recruiter receives and keeps the placement money for himself or herself. For as
long as a person who has no license to engage in recruitment of workers for overseas employment offers
for a fee an employment to two or more persons, then he or she is guilty of illegal recruitment. The 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 is "rather the undertaking of recruitment activities without the necessary license or
authority" that makes a case for illegal recruitment.
 PEOPLE V MATEO
GR NO 198012, APRIL 22, 2015
DOCTRINE:
“A person convicted for illegal recruitment under the law may, for the same acts, be separately
convicted for estafa under Article 315, par. 2(a) of the Revised Penal Code.”
Facts:
The five private complainants, namely, Abel, Emilio, Victorio, Manuel and Virgilio, met
appellants on separate occasions at Plaza Ferguzon, Malate, Manila to apply for overseas employment.
Appellant Mateo, representing himself to have a tie-up with some Japanese firms, promised them
employment in Japan as conversion mechanics, welders, or fitters for a fee. Appellants also promised
that they could facilitate private complainants' employment as direct hires and assured their departure
within three weeks. However, after the private complainants paid the required fees ranging from
P18,555.00 to P25,000.00, appellants failed to secure any overseas employment for them. Appellants
likewise failed to return private complainants' money. This prompted Manuel to go to the POEA where
he was issued a Certification stating that appellants are not licensed to recruit applicants for overseas
employment. Thereupon, the private complainants filed their Complaint and executed their respective
affidavits with the NBI. The NBI referred the charges to the Department of Justice which subsequently
found probable cause against appellants for large scale illegal recruitment and estafa.
Issue:
Whether appellants can be convicted of both illegal recruitment and estafa.
Held:
Yes. The accused may be convicted of both illegal recruitment punishable under a special law
and estafa under the revised penal code for acts arising from the same cause of action.
The offense of illegal recruitment in large scale has the following elements: (1) the person
charged undertook any recruitment activity as defined under Section 6 of RA 8042; (2) accused did not
have the license or the authority to lawfully engage in the recruitment of workers; and, (3) accused
committed the same against three or more persons individually or as a group. These elements are
obtaining in this case, to wit: a) appellants to have undertaken a recruitment activity when they
promised private complainants employment in Japan for a fee; b) the Certification issued by the POEA
unmistakably reveals that appellants neither have a license nor authority to recruit workers for overseas
employment and c) it was established that there were five complainants. Clearly, the existence of the
offense of illegal recruitment in large scale was duly proved by the prosecution.
The elements of estafa are: (1) the accused defrauded another by abuse of confidence or by
means of deceit; and (2) the offended party or a third party suffered damage or prejudice capable of
pecuniary estimation. All these elements are likewise present in this case.
 SALAZAR vs. ACHACOSO
G.R. No. 81510 March 14, 1990
DOCTRINE:
“The Secretary of Labor, not being a judge, may no longer issue search or arrest warrants.
Hence, the authorities must go through the judicial process. To that extent, SC declared Article 38,
paragraph (c), of the Labor Code, unconstitutional and of no force and effect.”
Facts:
On October 21, 1987, Rosalie Tesoro filed with the POEA a complaint against Hortencia
Salazar. Having ascertained that the petitioner had no license to operate a recruitment agency, public
respondent Administrator Tomas D. Achacoso issued his challenged CLOSURE AND SEIZURE
ORDER. The POEA brought a team to the premises of Salazar to implement the order. There it was
found that petitioner was operating Hannalie Dance Studio. Mrs. Flora Salazar informed the team that
Hannalie Dance Studio was accredited with Moreman Development (Phil.). However, when required to
show credentials, she was unable to produce any. The team confiscated assorted costumes which were
duly receipted for by Mrs. Asuncion Maguelan and witnessed by Mrs. Flora Salazar. A few days after,
petitioner filed a letter with the POEA demanding the return of the confiscated properties. They alleged
lack of hearing and due process, and that since the house the POEA raided was a private residence, it
was robbery. On February 2, 1988, the petitioner filed this suit for prohibition. Although the acts sought
to be barred are already fait accompli, thereby making prohibition too late, SC considered the petition as
one for certiorari in view of the grave public interest involved.
Issue:
Whether or not the Philippine Overseas Employment Administration (or the Secretary of Labor)
can validly issue warrants of search and seizure (or arrest) under Article 38 of the Labor Code.
Held:
No. It is only a judge who may issue warrants of search and arrest. Neither may it be done by a
mere prosecuting body. The Secretary of Labor, not being a judge, may no longer issue search or arrest
warrants. Hence, the authorities must go through the judicial process. To that extent, SC declared Article
38, paragraph (c), of the Labor Code, unconstitutional and of no force and effect.
For the guidance of the bench and the bar, we reaffirm the following principles:
1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and no other, who may
issue warrants of arrest and search:
2. The exception is in cases of deportation of illegal and undesirable aliens, whom the President or
the Commissioner of Immigration may order arrested, following a final order of deportation, for
the purpose of deportation.
 GAGUI v. DEJERO
G.R. No. 196036 : OCTOBER 23, 2013
DOCTRINE:
“While labor laws should be construed liberally in favor of labor, we must be able to balance
this with the equally important right of petitioner to due process.”
FACTS:
Respondents Dejero filed Complaint for illegal dismissal against PRO Agency Manila, Inc., and
Abdul Rahman Al Mahwes. Rendering decision in favor of the complainant, the LA issued a Writ of
Execution but returned unsatisfied. Respondent impleaded petitioner as the Vice-President / Stockholder
/ Director of said agency and a 2nd Alias Writ of Execution was issued. This resulted in the garnishment
of petitioner’s properties. Petitioner filed a Motion to Quash alleged that apart from not being made
aware that she was impleaded as one of the parties to the case, the LA decision did not hold her liable in
any form whatsoever. Upon appeal, NLRC denied the appeal for lack of merit and ruled that in so far as
overseas migrant workers are concerned, it is R.A. 8042 itself that describes the nature of the liability of
the corporation and its officers and directors. It is not essential that the individual officers and directors
be impleaded as party respondents to the case instituted by the worker. A finding of liability on the part
of the corporation will necessarily mean the liability of the corporate officers or directors.
ISSUE:
Whether or not petitioner may be held jointly and severally liable with PRO Agency Manila, Inc.
in accordance with Section 10 of R.A. 8042
HELD:
No. The Court has already held 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. Hence, for petitioner to be found jointly and solidarily liable, there must be a separate
finding that she was remiss in directing the affairs of the agency, resulting in the illegal dismissal of
respondents. Examination of the records would reveal that there was no finding of neglect on the part of
the petitioner in directing the affairs of the agency.
 REPUBLIC OF THE PHILIPPINES v. HUMANLINK MANPOWER CONSULTANTS, INC.
G.R. No. 205188; April 22, 2015
DOCTRINE :
“Aware that overseas workers are vulnerable to exploitation, the State sought to protect the interests and
well-being of these workers with creation of specialized bodies such as the POEA under the direct supervision of
the DOLE Secretary.”
Facts:
Renelson Carlos applied at Worldview Internation Services Corporation as a heavy equipment driver with
a salary of U$700 in Doha, Qatar. His recruiting agency Humanlink Manpower Consultants, Inc. made him sign
an employment contract stating that he was going to work as a duct man instead of the position he applied for but
he was told that this is only for purposes of entering the country. Humanlink promised that he would work as a
heavy equipment driver as applied for. However, upon his arrival in Doha, he worked as a duct installer with a
salary of U$400. Carlos filed a complaint with the Philippine Overseas Labor Office but the complaint was not
acted upon. This prompted him to speak with the Qatar Labor Office where he discussed his grievance.
Consequently, Carlos was informed that his visa was cancelled and that he was being repatriated at his own
expense. POEA Adjudication Office found Carlos’ assertions credible. POEA cancelled Humanlink’s license and
automatically disqualified it from participating in any overseas employment program.
Issue:
Whether the POEA can automatically disqualify officers and directors from participating in the
government's overseas employment program upon the cancellation of a license
Held:
Yes. One of the roles of the POEA is the regulation and adjudication of private sector participation in the
recruitment and placement of overseas workers. Article 25 of the Labor Code, as amended, reads that pursuant to
national development objectives and in order to harness and maximize the use of private sector resources and
initiative in the development and implementation of a comprehensive employment program, the private
employment sector shall participate in the recruitment and placement of workers, locally and overseas, under such
guidelines, rules and regulations as may be issued by the Secretary of Labor. This is echoed in Article 35 of the
Labor Code, as amended, and Section 23(b.l), R.A. No. 8042 as amended by R.A. No. 9422, where the legislature
empowered the DOLE and POEA to regulate private sector participation in the recruitment and overseas
placement of workers, to wit: The Secretary of Labor shall have the power to suspend or cancel any license or
authority to recruit employees for overseas employment for violation of rules and regulations issued by the
Secretary of Labor, the Overseas Employment Development Board, and the National Seamen Board, or for
violation of the provisions of this and other applicable laws, General Orders and Letters of Instruction.
Section 23 (b.1) states that the Philippine Overseas Employment Administration shall regulate private
sector participation in the recruitment and overseas placement of workers by setting up a licensing and
registration system. Sections 1 and 2, Rule I, Part II of the POEA Rules and Regulations provide the
qualifications and disqualifications for private sector participation in the overseas employment program. Section 1
of this rule provides that for persons to participate in recruitment and placement of land-based overseas Filipino
workers, they must not possess any of the disqualifications as provided in Section
2. xxx
Section 2. Disqualification. The following are not qualified to engage in the business of recruitment and
placement of Filipino workers overseas. d. Persons, partnerships or corporations which have derogatory records,
such as but not limited to the following:
xxx Those agencies whose licenses have been previously revoked or cancelled by the Administration for violation
of RA 8042, PD 442 as amended and their implementing rules and regulations as well as these rules and
regulations.
f. Persons or partners, officers and Directors of corporations whose licenses have been previously cancelled or
revoked for violation of recruitment laws.
Thus, upon the cancellation of a license, persons, officers and directors of the concerned corporations are
automatically prohibited from engaging in recruiting and placement of land-based overseas Filipino workers. The
grant of a license is a privilege and not a right thus making it a proper subject of its regulatory powers.
 PEOPLE OF THE PHILIPPINES VS. ANGELITA I. DAUD
G.R. No. 197539; June 2, 2014
DOCTRINE:
“The crime of illegal recruitment, according to the Supreme Court is committed when, among
other things, a person, who without being duly authorized according to law, represents or gives the
distinct impression that he or she has the power or the ability to provide work abroad convincing those
to whom the representation is made or to whom the impression is given to thereupon part with their
money in order to be assured of that employment.”
Facts:
Marcelo de Guzman, a dentist by profession, testified that he was introduced by his patient to her
cousin, accused Daud. Accused encouraged him to apply for work abroad and convinced him that she
would be able to send him to Korea. Having been convinced De Guzman paid him the amount of
P35,000 as initial payment for his placement fee. When their departure date was getting near, accused
postponed it thrice. Eventually, De Guzman asked from accused a photocopy of his passport with a
stamped Korean Visa. Upon inquiry with the Korean Embassy, he was told that it was fake.
Issue:
Whether or not herein accused is guilty of Illegal Recruitment
Held:
Yes. Illegal recruitment is committed by persons who, without authority from the government,
give the impression that they have the power to send workers abroad for employment purposes.
Republic Act No. 8042 broadened the concept of illegal recruitment under the Labor Code and provided
stiffer penalties, especially for those that constitute economic sabotage, i.e., Illegal Recruitment in Large
Scale and Illegal Recruitment Committed by a Syndicate. Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one
another. It is deemed committed in large scale if committed against three (3) or more persons
individually or as a group. To constitute illegal recruitment in large scale, three elements must
concur: (a) the offender has no valid license or authority required by law to enable him to lawfully
engage in recruitment and placement of workers; (b) the offender undertakes any of the activities within
the meaning of “recruitment and placement” under Article 13(b) of the Labor Code, or any of the
prohibited practices enumerated under Article 34 of the said Code (now Section 6 of Republic Act No.
8042); and (c) the offender committed the same against three or more persons, individually or as a
group.
The crime of illegal recruitment, according to the Supreme Court is committed when, among other
things, a person, who without being duly authorized according to law, represents or gives the distinct
impression that he or she has the power or the ability to provide work abroad convincing those to whom
the representation is made or to whom the impression is given to thereupon part with their money in
order to be assured of that employment.
This is what obtains in this case.
Contrary to appellant’s mistaken notion, it is not the issuance or signing of receipts for the placement
fees that makes a case for illegal recruitment, but rather the undertaking of recruitment activities without
the necessary license or authority. The absence of receipts to evidence payment is not necessarily fatal
to the prosecution’s cause. A person charged with the illegal recruitment may be convicted on the
strength of the testimony of the complainants, if found to be credible and convincing.
 PEOPLE vs. MOLINA
G.R. No. 229712 February 28, 2018
DOCTRINE:
“Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or
more persons conspiring or confederating with one another. It is deemed committed in large scale if
committed against three (3) or more persons individually or as a group.”
FACTS:
Appellant was charged for the crime of Illegal Recruitment in Large Scale under Sections 6 and
7 of Republic Act No. 8042 in an Information which alleges that the accused, mutually helping and
aiding one another, feloniously recruit for a fee, promise employment/job placement abroad to five (5)
persons, hence, committed in large scale, and received payments from complainants in connection with
the documentation and processing of their papers for purposes of their deployment, but said accused
failed or refused to deploy herein complainants abroad without the fault of the latter and to reimburse
the amounts to said complainants, to the damage and prejudice of the latter.
Appellant claimed that she has not met personally all the private complainants in this case. On
cross-examination, accused Molina admitted that there were about 100 cases of illegal recruitment filed
against her in different courts and that she was convicted of illegal recruitment in the RTC of Makati
City, Branch 148 and Branch 150.
Issue:
Whether or not appellant is guilty of the crime of illegal recruitment in large scale.
Held:
Yes. Illegal recruitment when committed by a syndicate or in large scale shall be considered an
offense involving economic sabotage. Illegal recruitment is deemed committed by a syndicate if carried
out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed
committed in large scale if committed against three (3) or more persons individually or as a group.
In this case, appellant cannot escape from liability for large scale illegal recruitment as the
recruitment was made in the recruitment agency of which accused-appellant is the President. Moreover,
private complainants testified that they saw accused-appellant at the agency and she was introduced to
them by Pacon as the owner of the agency, and she even assured them that they would be deployed for
employment soon. Appellant, as President of the recruitment agency, is therefore liable for failure to
reimburse the expenses incurred by private complainants in connection with their documentation and
processing for purposes of deployment to South Korea, which did not actually take place without their
fault.
 PEOPLE OF THE PHILIPPINES vs. JOEL ABAT
G.R. No. 202704; April 2, 2014
DOCTRINE:
“Illegal recruitment is deemed committed by a syndicate if carried out by a group of three or more
persons conspiring and/or confederating with one another in carrying out any unlawful or illegal
transaction or scheme; Illegal recruitment is deemed committed in large scale if committed against
three or more persons, individually or as a group.”
Facts:
Accused/appellant Edith Ramos Abat was convicted for Large Scale Illegal Recruitment and meted
a Life Imprisonment and Php100,000.00 fine and reimbursement of the amounts paid to the accused on
their recruitment. Without the necessary license or permit to do the same she recruited and duped to part
with their money for a supposed job in Taiwan nine (9) persons in violation of Art. 13(b) of the Labor
Code of the Philippines and punished under Art. 39.
Issue:
Whether or not the accused appellant is guilty of large scale illegal recruitment.
Held:
The elements of illegal recruitment in large scale are: 1) the accused engages in acts of recruitment
and placement of workers defined under Art. 13(b) of the Labor Code or in any prohibited activities
under art. 43 of the Labor Code; 2) the accused has not complied with the guidelines issued by the
Secretary of Labor and Employment, particularly with respect to the securing of licensed or an authority
to recruit and deploy workers, either local or overseas; 3) the accused commits the unlawful acts against
three or more persons individually or as a group. The lower Court correctly found the accused’s acts fell
squarely under Art 13(b) of the Labor Code due to the number of her victims.
 STOLT-NIELSEN TRANSPORTATION GROUP VS MEDEQUILLO
G.R. No. 177498; January 18, 2012
DOCTRINE:
“Distinction must be made between the perfection of the employment contract and the
commencement of the employer-employee relationship. The perfection of the contract, which in this case
coincided with the date of execution thereof, 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.”
Facts:
Medequillo filed a complaint before the POEA against the petitioners for illegal dismissal and failure
to deploy. On 06 November 1991, he was hired by Stolt Nielsen on behalf of its principal Chung-Gai
Management on board the vessel Stolt Aspiration. While the vessel was docked at MV Stolt Aspiration, he
joined the crew for nearly three months. However, he was ordered by the ship’s master to disembark the
vessel and he was repatriated back to Manila for no reason or explanation.
He was transferred to Stolt Pride under a second contract, with approval of the POEA. Despite the
commencement of the second contract, he was not deployed despite follow-ups from Medequillo. When he
sought for the return of his passport, seaman’s book and other papers, he was made to sign a document that
he cannot seek for employment with other agencies. He filed a complaint for his illegal dismissal in view of
the petitioners’ bad faith in not complying with the Second Contract. The LA found that Medequillo was
cannot be considered as having been illegally dismissed because he had not even been deployed yet.
Issue:
Whether or not the first employment contract between the petitioner and Medequillo is separate and
distinct from the second one.
Held:
Yes. With the finding that respondent was still employed under the first contract when he negotiated
with the petitioners on the second contract, novation became an unavoidable conclusion.
The POEA Standard Employment Conract provides that employment shall commence upon the actual
departure of the seafarer from the airport or seaport in the port of hire. Thus, the contention of the petitioners
of the alleged poor performance of the respondent while on board the first ship cannot be sustained to justify
non-deployment. Under the POEA Rules, failure of an agency to deploy a worker within the prescribed
period without valid reasons shall be a cause for the suspension or cancellation of license or fine. Thr
distinction must be made between the perfection of the employment contract and the commencement of the
employer-employee relationship. The perfection of the contract, which in this case coincided with the date of
execution thereof, 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.
 ACE NAVIGATION CO., INC., vs. TEODORICO FERNANDEZ
G.R. No. 197309; October 10, 2012
DOCTRINE:
“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.”
Facts:
On October 9, 2008, seaman Teodorico Fernandez (Fernandez), assisted by his wife, Glenita
Fernandez, filed with the National Labor Relations Commission (NLRC) a complaint for disability
benefits, with prayer for moral and exemplary damages, plus attorney’s fees, against Ace Navigation
Co., Inc., Vela International Marine Ltd., and/or Rodolfo Pamintuan.
The petitioners moved to dismiss the complaint,4 contending that the labor arbiter had no
jurisdiction over the dispute. They argued that exclusive original jurisdiction is with the voluntary
arbitrator or panel of voluntary arbitrators, pursuant to Section 29 of the POEA Standard Employment
Contract (POEA-SEC), since the parties are covered by the AMOSUP-TCC or AMOSUP-VELA
collective bargaining agreement (CBA). Under Section 14 of the CBA, a dispute between a seafarer
and the company shall be settled through the grievance machinery and mandatory voluntary
arbitration.
Fernandez opposed the motion. He argued that inasmuch as his complaint involves a money
claim, original and exclusive jurisdiction over the case is vested with the labor arbiter. Labor Arbiter
Rioflorido denied the motion to dismiss, holding that under Section 10 of Republic Act (R.A.) No. 8042,
the Migrant Workers and Overseas Filipinos Act of 1995, the labor arbiter has original and exclusive
jurisdiction over money claims arising out of an employer-employee relationship or by virtue of any law
or contract, notwithstanding any provision of law to the contrary.
The NLRC and CA upheld the decision of the LA. Hence this petition.
Issue:
Whether or not the voluntary arbitrator or panel of voluntary arbitrators has the original and
exclusive jurisdiction.
Held:
Yes. There is no dispute that the claim arose out of Fernandez’s employment with the petitioners
and that their relationship is covered by a CBA — the AMOSUP/TCC or the AMOSUP-VELA CBA.
The CBA provides for a grievance procedure for the resolution of grievances or disputes which occur
during the employment relationship and, like the grievance machinery created under Article 261 of the
Labor Code, it is a two-tiered mechanism, with voluntary arbitration as the last step.
Furthermore, the POEA-SEC, which governs the employment of Filipino seafarers, provides in
its Section 29 on Dispute Settlement Procedures: “In cases of claims and disputes arising from this
employment, the parties covered by a collective bargaining agreement shall submit the claim or
dispute to the original and exclusive jurisdiction of the voluntary arbitrator or panel of voluntary
arbitrators. If the parties are not covered by a collective bargaining agreement, the parties may at their
option submit the claim or dispute to either the original and exclusive jurisdiction of the National Labor
Relations Commission (NLRC), pursuant to Republic Act (RA) 8042 otherwise known as the Migrant
Workers and Overseas Filipinos Act of 1995 or to the original and exclusive jurisdiction of the voluntary
arbitrator or panel of voluntary arbitrators. If there is no provision as to the voluntary arbitrators to be
appointed by the parties, the same shall be appointed from the accredited voluntary arbitrators of the
National Conciliation and Mediation Board of the Department of Labor and Employment.
It bears stressing at this point that the SC is upholding the jurisdiction of the voluntary arbitrator
or panel of voluntary arbitrators over the present dispute, not only because of the clear language of the
parties’ CBA on the matter; but more importantly, the voluntary arbitrator’s jurisdiction, in
recognition of the State’s express preference for voluntary modes of dispute settlement, such as
conciliation and voluntary arbitration as expressed in the Constitution, the law and the rules.
 SERRANO vs. GALLANT MARITIME SERVICES INC.
G.R. No. 167614; March 24, 2009
DOCTRINE:
“In case of termination of overseas employment 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 percent (12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the unexpired term, whichever is less.”
Facts:
Petitioner was hired by respondent under an approved employment contract of POEA. The said
contract applies for a Chief Officer position, but petitioner was downgraded to Second Offices, once his
work started. Due to this reason of demotion, petitioner refused to stay at work and went back to the
Philippines. The Labor arbiter, ruled in favor of petitioner and ordered respondent to pay petitioner the
three months’ worth of salary pursuant to R.A 8042. The Court of Appeals and the NLRC upheld the
Labor Arbiter’s ruling.
Issue:
Whether or not this case violates the equal protection clause in the constitution by providing a
cap on the amount of the lump sum of the salary of petitioner?
Held:
No. The Supreme Court held that, the constitutional mandates of protection to labor and security
of tenure may be deemed as self-executing in the sense that these are automatically acknowledged and
observed without need for any enabling legislation. Under Section 10 of R.A. No. 8042, a worker
dismissed from overseas employment without just, valid or authorized cause is entitled to his salary for
the unexpired portion of his employment contract or for three (3) months for every year of the unexpired
term, whichever is less.
 EDGARDO PANGANIBAN vs. TARA TRADING SHIPMANAGEMENT INC.
G.R. No. 187032; October 18, 2010
DOCTRINE:
“While it is true that labor contracts are impressed with public interest and the provisions of the
POEA SEC must be construed logically and liberally in favor of Filipino seamen in the pursuit of their
employment on board ocean-going vessels, still the rule is that justice is in every case for the deserving,
to be dispensed with in the light of established facts, the applicable law, and existing jurisprudence.”
“In order to claim disability benefits under the Standard Employment Contract, it is the
"company-designated" physician who must proclaim that the seaman suffered a permanent disability,
whether total or partial, due to either injury or illness, during the term of the latter’s employment.”
Facts:
Panganiban was hired by respondent Tara Trading in behalf of its foreign principal, Shinline as
an Oiler to board MV Thailine sometime in November 2005. In April 2006, Panganiban showed signs of
mental instability and was later repatriated to the Philippines wherein he was diagnosed to be suffering
from brief psychotic disorder. He demanded from Tara Trading and Shinline a disability compensation
for his permanent disability but to no avail which prompted him to file a complaint against Tara and
Shinline. The LA ruled in favor of Panganiban and demanded Tara Trading and Shinline to compensate
the former for his disability and on appeal with the NLRC, the same was upheld. On appeal with the
Court of Appeals, the decision of the LA and NLRC was reversed, the appellate court stating that the
sickness contracted by Panganiban was not work related, hence, Tara and Shinline cannot be made
liable.
Issue:
Is Tara Trading and Shinline liable to Panganiban?
Held:

No. Firstly, petitioner’s illness was not work related considering he failed to establish, by
substantial evidence, that his brief psychotic disorder was caused by the nature of his work as oiler of
the company-owned vessel. Secondly, the finding of Shinline’s designated physician that Panganiban
has been suffering from brief psychotic disorder and that it is not work-related must be respected. Lastly,
it appears premature at this time to consider petitioners disability as permanent and total because the
severity of his ailment has not been established with finality to render him already incapable of
performing the work of a seafarer.
 SAMEER OVERSEAS PLACEMENT AGENCY, INC. vs. CABILES
G.R. No. 170139, August 05, 2014
DOCTRINE:
“Employees are not stripped of their security of tenure when they move to work in a different
jurisdiction. With respect to the rights of overseas Filipino workers, we follow the principle of lex loci
contractus.”
“To show that dismissal resulting from inefficiency in work is valid, it must be shown that: 1) the
employer has set standards of conduct and workmanship against which the employee will be judged; 2)
the standards of conduct and workmanship must have been communicated to the employee; and 3) the
communication was made at a reasonable time prior to the employee’s performance assessment.”
Facts:
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement agency. Joy
submitted her application for a quality control job in Taiwan. Joy’s application was accepted. Joy was
later asked to sign a one-year employment contract for a monthly salary of NT$15,360.00. She alleged
that Sameer Overseas Agency required her to pay a placement fee of P70,000.00 when she signed the
employment contract.
In Taiwan, she was asked to work as a cutter. Subsequently, a certain Mr. Huwang 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. Thereafter, Joy filed a complaint against petitioner and
Wacoal. She claimed that she was illegally dismissed. Petitioner reiterates that there was just cause for
termination because there was a finding of Wacoal that respondent was inefficient in her work.
Therefore, it claims that respondent’s dismissal was valid.
Issue:
Whether or not Sameer Overseas Placement Agency failed to show that there was just cause for
causing Joy’s dismissal.
Held:
Petitioner’s allegation that respondent was inefficient in her work and negligent in her duties
may, therefore, constitute a just cause for termination under Article 282(b), but only if petitioner was
able to prove it. To show that dismissal resulting from inefficiency in work is valid, it must be shown
that: 1) the employer has set standards of conduct and workmanship against which the employee will be
judged; 2) the standards of conduct and workmanship must have been communicated to the employee;
and 3) the communication was made at a reasonable time prior to the employee’s performance
assessment.
In this case, petitioner merely alleged that respondent failed to comply with her foreign
employer’s work requirements and was inefficient in her work. No evidence was shown to support such
allegations. Petitioner did not even bother to specify what requirements were not met, what efficiency
standards were violated, or what particular acts of respondent constituted inefficiency.
There was also no showing that respondent was sufficiently informed of the standards against
which her work efficiency and performance were judged. The parties’ conflict as to the position held by
respondent showed that even the matter as basic as the job title was not clear.
The bare allegations of petitioner are not sufficient to support a claim that there is just cause for
termination. There is no proof that respondent was legally terminated.
 VERGARA vs. HAMMONIA MARITIME
G.R. NO. 172933 : October 6, 2008
DOCTRINE:
“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. If the physician
appointed by the seafarer disagrees with the company-designated physician's assessment, the opinion of
a third doctor may be agreed jointly between the employer and the seafarer to be the decision final and
binding on them.”

Facts:
Petitioner was hired by respondent Hammonia Maritime Services, IncHe was assigned to work
on board the vessel British Valour under contract for nine months. Sometime in April 2000, Petitioiner
suffered from glaucoma. On January 31, 2001, the ophthalmologist pronounced the petitioner fit to
resume his seafaring duties per the report of Dr. Robert D. Lim, Medical Coordinator. Claiming that he
continued to experience gradual visual loss despite the treatment, he sought a second opinion from
another ophthalmologist, Dr. Patrick Rey R. Echiverri. He gave the opinion that the petitioner was not fit
to work. On March 20, 2001, the petitioner submitted himself to another examination, this time by Dr.
Efren R. Vicaldo. Dr. Vicaldo opined that he had a Grade X (20.15%) disability which he considered as
permanent partial disability.
Petitioner demanded from his employer payment of disability and sickness benefits. The
company did not heed his demand, prompting the petitioner to file a complaint for disability benefits,
sickness allowance, damages and attorney's fees
Issue:
Whether Petitioner is entitled for benefit of temporary disability
Held:
The Labor Code - states:
Period of entitlement. - (a) The income benefit shall be paid beginning on the first day of such disability.
If caused by an injury or sickness it shall not be paid longer than 120 consecutive days except where
such injury or sickness still requires medical attendance beyond 120 days but not to exceed 240 days
from onset of disability in which case benefit for temporary total disability shall be paid. However, the
System may declare the total and permanent status at anytime 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.
However, The POEA Standard Employment Contract and the CBA clearly provide that when a
seafarer sustains a work-related illness or injury while on board the vessel, his fitness or unfitness for
work shall be determined by the company-designated physician. If the physician appointed by the
seafarer disagrees with the company-designated physician's assessment, the opinion of a third doctor
may be agreed jointly between the employer and the seafarer to be the decision final and binding on
them.
Thus, while petitioner had the right to seek a second and even a third opinion, the final
determination of whose decision must prevail must be done in accordance with an agreed procedure.
Unfortunately, the petitioner did not avail of this procedure; hence, we have no option but to declare that
the company-designated doctor's certification is the final determination that must prevail.
 KESTREL SHIPPING CO., INC. vs. FRANCISCO D. MUNAR
G.R. No. 198501; January 30, 2013

DOCTRINE:
“Nonetheless, Vergara was promulgated on October 6, 2008, or more than two (2) years from
the time Munar filed his complaint and observance of the principle of prospectivity dictates that Vergara
should not operate to strip Munar of his cause of action for total and permanent disability that had
already accrued as a result of his continued inability to perform his customary work and the failure of
the company-designated physician to issue a final assessment.”

FACTS:
Kestrel, on behalf of its principal, and Munar forged a six-month employment contract
designating Munar as pump man for M/V Southern Unity. Munar then suffered work-related spine
injury which prevented him to work for more than 120 days, thus, Munar thereafter filed a complaint for
total and permanent disability benefits. There is a conflict, however, between the disability ratings made
by the company-designated physician (Dr. Chua) and Munar’s doctor-of-choice (Dr. Chiu) and
petitioners claim that holding the latter’s determination to be more credible is contrary to the provisions
of the POEA-SEC and prevailing jurisprudence. Petitioners insist that Munar cannot claim that he is
totally and permanently disabled and claim the benefits corresponding to Grade 1 disabilities simply
because he has not yet fully recovered after the lapse of 120 days from the time he signed-off from M/V
Southern Unity.
ISSUE:
Whether or not Munar should be awarded total and permanent disability benefits.
HELD:
Yes. In this case, the following are undisputed: (a) when Munar filed a complaint for total and
permanent disability benefits, 181 days had lapsed from the time he signed-off from M/V Southern
Unity; (b) Dr. Chua issued a disability grading after the lapse of 197 days; and (c) Munar secured the
opinion of Dr. Chiu; (d) no third doctor was consulted by the parties; and (e) Munar did not question the
competence and skill of the company-designated physicians and their familiarity with his medical
condition. It may be argued that these provide sufficient grounds for the dismissal of Munar’s complaint
since considering that the 240-day period had not yet lapsed when the NLRC was asked to intervene. It
must be noted, however, that when Munar filed his complaint, Dr. Chua had not yet determined the
nature and extent of Munar’s disability and that Munar was still undergoing physical therapy and his
spine injury had yet been fully addressed. Also, when Munar filed a claim for total and permanent
disability benefits, more than 120 days had gone by and the prevailing rule then was that enunciated by
this Court in Crystal Shipping, Inc. v. Natividad that total and permanent disability refers to the
seafarer’s incapacity to perform his customary sea duties for more than 120 days. Consequently, that
after the expiration of the 120-day period, Dr. Chua had not yet made any declaration as to Munar’s
fitness to work and Munar had not yet fully recovered and was still incapacitated to work sufficed to
entitle the latter to total and permanent disability benefits.
 JULIUS TAGALOG vs. CROSSWORLD MARINE SERVICES INC.
G.R. No. 191899; June 22, 2015
DOCTRINE:
“The mere lapse of the 120-day period itself does not automatically warrant the payment of
permanent total disability benefits.”
“If a doctor appointed by the seafarer disagrees with the assessment of the company-designated
doctor, a third doctor may be agreed jointly between the employer and the seafarer, and the third
doctor’s decision shall be final and binding on both parties.”
“Labor tribunals and the courts are not bound by the medical findings of the company-
designated physician and that the inherent merits of its medical findings will be weighed and duly
considered.”
Facts:
Petitioner Tagalog was hired by Ocean Liberty, Ltd., as a wiper/oiler on board M/V Ocean
Breeze, with respondent as the manning agency. Petitioner injured his eye during the voyage and was
brought to a hospital in Spain where he underwent operations on both of his eyes. When he signed off
from the vessel, respondent directed him to report to their company designated physician where he was
diagnosed to have aggressive fleshy pterygium S/P Excision of Pterygium and Granuloma, both eyes,
S/P excision of pterygium with conjunctival grafting, right eye and thereafter he was operated to treat his
injuries and was declared fit to work after recuperating. Petitioner sought a second opinion from another
doctor, who found him unfit to work, prompting him to file claims against respondents. The Labor
Arbiter ruled in favor of the petitioner; the NLRC affirmed said decision but deleted the award of
damages; and, the CA annulled and set aside the decision of the labor tribunals.
Issue:
Is petitioner entitled to his claim?
Held:
No. Following jurisprudence, the Court of Appeals correctly upheld the fit-to-work order issued
by the company-designated physician. After the certification on the fitness for sea duties was issued by
the company-designated physician, petitioner sought a second opinion from a private doctor. When the
private doctor opined that petitioner was unfit to work, petitioner wasted no time in filing the instant
complaint. Verily, he did not bother to seek the opinion of a third person as mandated by the POEA-
SEC. Furthermore, the private doctor had only examined petitioner once while the company-designated
physician had monitored petitioner’s medical condition for several months.
 DOEHLE-PHILMAN MANNING AGENCY, INC. vs. HENRY HARO
G.R. No. 206522, April 18, 2016
DOCTRINE:
“The constitutional policy to provide full protection to labor is not meant to be a sword to
oppress employers.”
Facts:
Respondent was hired as an oiler for a period of nine months with basic monthly salary of
US$547.00 and other benefits by Doehle-Philman, in behalf of its foreign principal, Dohle Ltd.; before
he was deployed, respondent underwent pre-employment medical examination (PEME) and was
declared fir for sea duty. In November 2008, however, he experienced heartache and loss of energy after
hammering and lifting a 120-kilogram machine, which caused his repatriation in December 2008, and
thus, he learned from his personal doctor that he is not fit to work. He, therefore, filed a Complaint for
disability benefits, reimbursement of medical expenses, moral and exemplary damages, and attorney’s
fees against petitioners, claiming that since he was declared fit to work before his deployment, his
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 that he is entitled to permanent and total disability benefits. Petitioners,
however, pointed out that the company doctor diagnosed respondent of aortic regurgitation, moderate,
but declared that his condition is not work-related and that the determination of the fitness or unfitness
of a medically repatriated seafarer rests with the company-designated physician; and since Dr.
Abesamis, the company doctor, declared that respondent’s illness of not work-related, such
determination must prevail, and firther argued that since respondent's illness is not an occupational
disease, then he must prove that his work caused his illness; because of his failure to do so, then he is
not entitled to disability benefits. The LA dismissed the case for lack of merit, while the NLRC found no
sufficient evidence that respondent's illness is work-connected, which the CA reversed and set aside.
Issue:
WON respondent’s illness is work-related so as to entitle him to permanent and total disability
benefits
Held:
NO. Section 20(B) POEA-SEC provides that the employer is liable for disability benefits when
the seafarer suffers from a work-related injury or illness during the term of his contract. To emphasize,
to be compensable, the injury or illness 1) must be work-related and 2) must have arisen during the term
of the employment contract. 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 disability
benefits, the respondent has the burden to prove that his illness is work-related, which he failed to do.
For a 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 contributed to, or at least aggravated, his
illness; it is not enough that the 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 which he is
engaged. However, respondent did not at all describe his work as an oiler, and neither did he specify the
connection of his work and his illness.
 INDUSTRIAL PERSONNEL & MANAGEMENT SERVICES, INC. vs. JOSE G. DE
VERA
G.R. No. 205703; March 7, 2016
DOCTRINE:
“The general rule is that Philippine laws apply even to overseas employment contracts. This rule
is rooted in the constitutional provision of Section 3, Article XIII that the State shall afford full
protection to labor, whether local or overseas.”
Facts:
Arriola was hired by SNC-Lavalin, through its local manning agency, IPAMS, and his overseas
employment contract was processed with the Philippine Overseas Employment Agency. After three
months, Arriola received a notice of pre-termination of employment. 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 same could be
applied to his employment contract.
Issue:
Whether Philippine laws apply to overseas employment contract?
Held:
Yes. The Court finds that Arriola was not validly dismissed. The petitioners simply argued that
they were suffering from financial losses and Arriola had to be dismissed. It was not even clear what
specific authorized cause, whether retrenchment or redundancy, was used to justify Arriola's dismissal.
Worse, the petitioners did not even present a single credible evidence to support their claim of financial
loss. They simply offered an unreliable news article which deserves scant consideration as it is
undoubtedly hearsay.
 PENTAGON INTERNATIONAL SHIPPING SERVICES, INC., vs. COURT OF APPEALS
G.R. No. 169158 July 1, 2015
DOCTRINE:
“Joint and solidary liability is meant to assure aggrieved workers of immediate and sufficient payment of what is
due them. The fact that petitioner and its principal have already terminated their agency agreement does not relieve the
former of its liability.”
Facts:
Pentagon International Shipping Services, Inc. (Pentagon), a domestic corporation, was a private manning agency
licensed by the Philippine Overseas Employment Administration (POEA) to engage in the recruitment of seafarers to service
the crewing and personnel management needs of shipping companies accredited to it. Respondent JDA Inter-Phil, also a
domestic corporation, was similarly engaged in the recruitment of seafarers.
On March 27, 1998, Pentagon hired respondents Madrio and Rubiano as chief officer and second engineer,
respectively, in behalf of its foreign principal, Baleen Marine, a corporation based in Singapore. When their 10-month
contract expired, they were repatriated to the Philippines. Alleging non-payment and underpayment of wages, and claiming
damages and attorney's fees, they separately brought claims against Pentagon and the owners and managers of Baleen Marine
on January 13, 2000 and January 31, 2000, stating that Pentagon and Baleen Marine had reduced their monthly gross salary
by 20% without the prior approval by the POEA; and that Pentagon and Baleen Marine had not paid their salaries from
November 1, 1998 until their repatriation on March 24, 1999.
Pentagon denied liability, countering that it had ceased to be the manning agency of Baleen Marine effective
October 1, 1998; that on June 25, 1998, its Executive Vice-President, Meynardo Bugia, Jr., had met with Baleen Marine in
Singapore to notify the latter that it had been meanwhile appointed by Neptank Bunkering Services Pte., Ltd. as its exclusive
local manning agency; that as one of the conditions of its appointment, it was to immediately sever its manning contract with
Baleen Marine; and that on October 9, 1998, Baleen Marine had appointed JDA Inter-Phil as its new local agent for Baleen
Marine's vessels NP Trader No. 3 and NP Prima On its part, JDA Inter-Phil insisted that although it had applied with the
POEA for the transfer and accreditation of Baleen Marine' s vessels in its favor, it withdrew the application and did not
execute an affidavit of assumption and responsibility as required; that, consequently, Pentagon continued to be jointly and
severally liable with Baleen Marine for the money claims of Madrio and Rubiano.
National Labor Relations Commission (NLRC)2 declaring respondent JDA Inter-Phil Maritime Services (JDA Inter-
Phil) as the manning agency of Baleen Marine Pte. Ltd. (Baleen Marine) liable to pay respondents Filomeno V. Madrio and
Luisito G. Rubiano the total amount of US$31,254.65 or its peso equivalent at the time of payment. Court of Appeals (CA)
annulled and set aside the resolutions.
Issue:
The court of appeals erred in absolving private respondent jda of the liabilities notwithstanding the agreement dated
october 9, 1998.
Held:
No. It is relevant to observe that Pentagon cannot feign ignorance of Section 10, paragraph 2, of the Migrant
Workers' Act of 1995 to the effect that its liabilities would continue during the entire period or duration of the employment
contract, and would not be affected by any substitution, amendment or modification of the contract made either locally or in a
foreign country. The provisions of the POEA Rules and Regulations to the effect that the manning agreement extends up to
and until the expiration of the employment contracts of the employees recruited and employed pursuant to the recruitment
agreement are also clear enough. As such, Pentagon is not exempt from its liabilities and responsibilities towards Madrio and
Rubiano. In this regard, we reiterate the pronouncement in OSM Shipping Philippines, Inc. vs. National Labor Relations
Commission, as follows:
x x x Joint and solidary liability is meant to assure aggrieved workers of immediate and sufficient payment of what is due
them. The fact that petitioner and its principal have already terminated their agency agreement does not relieve the former of
its liability.
This must be so, because the obligations covenanted in the [manning] agreement between the local agent and its
foreign principal are not coterminous with the term of such agreement so that if either or both of the parties decide to end the
agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all end, but
the same extends up to and until the expiration of the, employment contracts of the employees recruited and employed
pursuant to the said recruitment agreement. Otherwise, this will render nugatory the very purpose for which the law
governing the employment of workers for foreign jobs abroad was enacted.
Although IDA Inter-Phil undertook in the meeting of October 1, 1998 to assume the responsibility as the local agent
to Baleen Marine, the actual transfer of the accreditation would not be completed without IDA Inter-Phil 's compliance with
the requirements under the aforementioned rules. What actually happened between the time the meeting took place and the
eventual withdrawal of the application by the JDA Inter-Phil remained to be mere conjecture. Nevertheless, Madrio and
Rubiano should not be prejudiced by any; purported transfer of accreditation or agreement that they were not privy to. For
sure, Pentagon remained under the law the only recognized manning agent of Baleen Marine.
 HERNANDEZ vs. MAGSAYSAY MARITIME CORPORATION
G.R. no. 226103, Jan. 24, 2018
DOCTRINE:
“Third doctor rule, that when a seafarer sustains a work-related illness or injury while on board the
vessel, his fitness or unfitness for work shall be determined by the company-designated physician. If the physician
appointed by the seafarer disagrees with the company-designated physician's assessment, the opinion of a third
doctor may be agreed jointly between the employer and the seafarer to be the decision final and binding on
them.”
Facts:
Petitioner alleges: that he has been under the employ of respondent agency since 1991 and was rehired
consistently by the said agency, he was hired by respondent agency to work as Head Wine Waiter, everything
went well without any trouble until he had an accident; that he was then lifting a box of wine when the vessel
suddenly rolled causing him to lose his balance; that he fell on the floor with his back hitting the steel pavement;
that he felt a sharp snap on his lower back accompanied by extreme pain radiating down to his lower extremities;
that the ship doctor gave him a pain reliever and recommended his medical repatriation with a view to
physiotherapy; that he was repatriated and upon arrival he reported to respondents' office for post employment
medical examination; that he was referred to the company-designated physicians at the Manila Doctors Hospital
where he underwent MRI; that the results of the MRI revealed Lumbar Spondylosis, Disc Protrusion, and Disc
Bulges; that he underwent extensive physical therapy, his latest medical evaluation considered petitioner for
disability assessment of slight rigidity or one-third loss of lifting power ; that petitioner sought consult Dr.
Rogelio P. Catapang, Jr., Orthopaedic Surgeon and Traumatology expert.
Respondents, on the other hand, admitted the fact of petitioner's employment on board the vessel "MV
Saga Sapphire" as Head Wine Waiter, that he was later on disembarked for medical treatment; that after his
repatriation, petitioner was referred to the company physician, that petitioner was assessed a partial permanent
disability grade 11–slight rigidity or one-third loss of lifting power.
Issue:
Whether or not the petitioner can ignore the third doctor rule, in claiming permanent disability benefit.
Held:
No. It bears to stress that there is no issue as to the compensability of petitioner's health condition since
the parties do not dispute that it is work-related. What remains to be resolved is whether he is entitled to the
payment of permanent total disability benefits or to that which corresponds to Disability Grade 11 of the POEA-
SEC.Under Section 20(A)(3) of the 2010 POEA-SEC, "if a doctor appointed by the seafarer disagrees with the
assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third doctors
decision shall be final and binding on both parties."
 MAERSK FILIPINAS V RAMOS
GR NO 184256, JANAURY 18, 2017
DOCTRINE:
“Disability does not refer to the injury or the pain that it has occasioned, but to the loss or
impairment of earning capacity. There is disability when there is a diminution of earning power because
of actual absence from work. This absence must be due to the injury or illness arising from, and in the
course of employment. Thus, the basis of compensation is reduction of earning power.”
Facts:
Petitioner Maersk Ltd., through its local manning agent 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 on
November 21, 2001 and was referred to Dr. Salceda, the company-designated physician, for a check-up
who diagnosed him diagnosed with "corneal scar and cystic macula, left, post-traumatic. 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 went to another doctor. Dr
Catipon-Singson of Casa Medica, Inc diagnosed him to have "traumatic cataract with corneal scaring,
updrawn pupil of the anterior segment of maculapathy OS. His best corrected vision is 20/400 with
difficulty." Dr. Catipon-Singson opined that private respondent "cannot be employed for any work
requiring good vision unless condition improves."
Issue:
Whether respondent is partially disabled and therefore entitled to disability compensation
Held:
Yes. Respondent suffers from permanent partial disability and is entitled to disability
compensation. Disability does not refer to the injury or the pain that it has occasioned, but to the loss or
impairment of earning capacity. There is disability when there is a diminution of earning power because
of actual absence from work. This absence must be due to the injury or illness arising from, and in the
course of employment. Thus, the basis of compensation is reduction of earning power. Permanent partial
disability occurs when an employee loses the use of any particular anatomical part of his body which
disables him to continue with his former work. In this case, while petitioners' own company-designated
physician, Dr. Dolor, certified that respondent was still tit to work, the former admitted in the same
breath that respondent's left eye could no longer be improved by medical treatment. Dr. Dolor had in
fact diagnosed respondent's left eye as permanently disabled.
 SOUTHEASTERN SHIPPING vs. NAVARRA
G.R. No. 167678; June 22, 2010
Doctrine:
“Money claims arising from employer-employee relations, including those specified in the
Standard Employment Contract for Seafarers, prescribe within three years from the time the cause of
action accrues. However, for death benefit claims to prosper, the seafarer’s death must have occurred
during the effectivity of said contract.”
Facts:
Petitioner Southeastern Shipping, hired Federico to work on board the vessel. Federico signed 10
successive separate employment contracts of varying. He worked as roustabout during the first contract
and as a motorman during the succeeding contracts. Federico, while on board the vessel, complained of
having a sore throat and on and off fever with chills. He also developed a soft mass on the left side of his
neck. Federico arrived back in the Philippines and was diagnosed to be suffering from a form of cancer
called Hodgkin's Lymphoma. Federico filed a complaint against petitioners with the arbitration branch
of the NLRC claiming entitlement to disability benefits, loss of earning capacity, moral and exemplary
damages, and attorney's fees. During the pendency of the case, Federico died. His widow, Evelyn,
substituted him as party complainant. The claim for disability benefits was then converted into a claim
for death benefits. Labor Arbiter rendered a Decision dismissing the complaint on the ground that
"Hodgkin's Lymphoma is not one of the occupational or compensable diseases or the exact cause is not
known". NLRC rendered a Decision reversing that of the Labor Arbiter. Petitioners filed a Motion for
Reconsideration which was denied by the NLRC. The CA found that the claim for benefits had not yet
prescribed despite the complaint being filed more than one year after Federico's return to the Philippines.
It also found that although Federico died 17 months after his contract had expired, his heirs could still
claim death benefits because the cause of his death was the same illness for which he was repatriated.
Issue:
Whether or not Evelyn, the widow of Federico, is entitled to death benefits.
Held:
No. SC declared in a plethora of cases that in order to avail of death benefits, the death of the
employee should occur during the effectivity of the employment contract. For emphasis, SC reiterate
that the death of a seaman during the term of employment makes the employer liable to his heirs for
death compensation benefits, but if the seaman dies after the termination of his contract of employment,
his beneficiaries are not entitled to the death benefits. Federico did not die while he was under the
employ of petitioners. His contract of employment ceased when he arrived in the Philippines on March
30, 1998, whereas he died on April 29, 2000. Thus, his beneficiaries are not entitled to the death benefits
under the Standard Employment Contract for Seafarers. Moreover, there is no showing that the cancer
was brought about by Federico's stint on board petitioners' vessel. The records show that he got sick a
month after he boarded M/V George Mcleod. He was then brought to a doctor who diagnosed him to
have acute respiratory tract infection. It was only on June 6, 1998, more than two months after his
contract with petitioners had expired, that he was diagnosed to have Hodgkin's Disease. There is no
proof and SC is not convinced that his exposure to the motor fumes of the vessel, as alleged by Federico,
caused or aggravated his Hodgkin's Disease.
 SUNIT v. OSM MARITIME SERVICES, INC.
G.R. No. 223035, February 27, 2017
DOCTRINE:
“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.”
Facts:
Respondent hired Sunit to work onboard vessel as a Seaman. During his employment, petitioner fell
from the vessel's tank and suffered a broken right femur. He was immediately brought to a hospital for
treatment and was eventually repatriated due to medical reason. 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 who recommended
a disability Grade of 3. Respondents offered disability benefit of $30,225 but petitioner refused and filed
a claim for a disability benefit of $150,000.00.
During the pendency the parties agreed to for a third opinion. The doctor 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 $150,000. The CA Reversed the
decision of the NLRC.
ISSUE:
Whether or not petitioner is entitled to permanent and total disability benefits?
Held:
Yes. Under Section 32 of the POEA-SEC, only those injuries or disabilities that are classified as
Grade 1 may be considered as total and permanent. However, if those injuries or disabilities with a
disability grading from 2 to 14, hence, partial and permanent, would incapacitate a seafarer from
performing his usual sea duties for a period of more than 120 or 240 days, depending on the need for
further medical treatment, then be is, under legal contemplation, totally and permanently disabled.
In the case at bar, both parties consulted a third doctor to assess petitioner’s disability. The result
came 499 days from his repatriation finding Petitioner still unfit and recommended him to undergo
further rehabilitation.
As petitioner was actually unable to work even after the expiration of the 240-day period and there
was no final and conclusive disability assessment made by the third doctor on his medical condition, it
would be inconsistent to declare him as merely permanently and partially disabled. It should be stressed
that a total disability does not require that the employee be completely disabled, or totally paralyzed.
 C.F. SHARP CREW MANAGEMENT, INC VS. NOEL N. ORBETA
G.R. No. 211111, September 25, 2017
DOCTRINE:
“An employee's disability becomes permanent and total [only 1)] when so declared by the company-
designated physician, or, [2)] in case of absence of such a declaration either of fitness or permanent total
disability, upon the lapse of the 120- or 240-day treatment periods, while the employee's disability continues
and he is unable to engage in gainful employment during such period, and the company-designated
physician fails to arrive at a definite assessment of the employee's fitness or disability.' The 'mere lapse of
the 120-day period itself does not automatically warrant the payment of permanent total disability benefits.'
'If the 120 days initial period is exceeded and no such declaration is made because the seafarer requires
further medical attention, then the temporary total disability period may be extended up to a maximum of
240 days, 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.”
FACTS
On June 11, 2009, respondent Noel N. Orbeta was hired by petitioner C.F. Sharp Crew Management,
Inc. (CF Sharp), on behalf of its foreign principal and co-petitioner herein, Gulf Energy Maritime (GEM), as
Able Seaman on board the vessel "M/T Gulf Coral". He boarded on September 9, 2009 and thereupon
commenced his work. It appears that on January 3, 2010, while on duty, respondent, as he was closing the
vessel's air valve, slipped and fell on his back, and landed on the vessel's metal floor. On February 8, 2010,
while the vessel was docked in the United Arab Emirates, respondent was referred for medical examination
after complaining of pain in his lower right abdomen, difficulty in passing urine, and slight irritation in the
urinal area. After examination by a physician, he was diagnosed with acute lumbago and recommended for
immediate repatriation.[7]
On February 10, 2010, respondent was repatriated and, upon arrival, he immediately reported for
post-employment examination and treatment to the company-designated physician, to whom he disclosed the
January 3, 2010 accident. He was placed under the care of an orthopedic surgeon, who found him to be
suffering from "compression fracture, L1, minimal."[8] As a result, respondent underwent physical therapy
to rehabilitate his back, and was advised to wear a lumbar corset and undergo magnetic resonance imaging
(MRI) of the lumbosacral spine. For medication, he was given neuron enhancers and pain relievers. He is
given a PERMANENT DISABILITY. He is UNFIT FOR SEA-DUTY in whatever capacity as a SEAMAN.
Instead of following the respective medical opinions of his and the company-designated physician, as
well as subjecting himself to the required bone scan and other tests to fully determine and treat his condition,
respondent filed on July 20, 2010 a complaint for payment of permanent and total disability benefits, medical
expenses, damages, and attorney's fees against petitioners before the NLRC NCR, Quezon City, docketed as
NLRC--NCR Case No. (M) 07-09911-10. On February 23, 2011, a Decision[22] was rendered by Labor
Arbiter Catalino R. Laderas granting disability benefits and attorney's fees in favor of respondent. NLRC
modified the decision of the Labor Arbiter, which the Court of Appeals affirmed.
Issue:
Whether or not respondent is not automatically entitled to total permanent disability benefits.
Held:
The Petition is GRANTED IN PART. The assailed October 18, 2013 Decision and January 28, 2014
Resolution of the Court of Appeals in CA-G.R. SP No. 125046 are REVERSED and SET ASIDE. The
February 23, 2011 Decision of Labor Arbiter Catalino R. Laderas is REINSTATED and AFFIRMED.
Respondent is entitled only to compensation equivalent to or commensurate with his injury. In this
regard, the Court finds the Labor Arbiter's findings to be correct and in point, even with respect to his ruling
on respondent's entitlement to attorney's fees. As far as respondent is concerned, his work-related condition
was serious enough to require further medical care, yet it could have been resolved if he had undergone the
procedure prescribed by the company-designated physician and his own appointed doctor. For his omissions,
he is only entitled to disability benefits consistent with his injury suffered .
 RUTCHER DAGASDAS vs. GRAND PLACEMENT AND GENERAL SERVICES
CORPORATION
G.R. No. 205727; JANUARY 18, 2017
DOCTRINE:
“Security of tenure remains even if employees, particularly the overseas Filipino workers
(OFW), work in a different jurisdiction. Employment contracts of OFWs that are perfected in the
Philippines, following the principle of lex loci contractus (the law of the place where the contract is
made), are governed by the Labor Code of the Philippines and its IRR. At the same time, our laws
generally apply even to employment contracts of OFWs as our Constitution explicitly provides that the
State shall afford full protection to labor, whether local or overseas.”
FACTS:
Respondent Corporation, for and on behalf of ITM, employed Dagasdas as Network Technician.
He was to be deployed in Saudi Arabia under a one year contract. On February 8, 2008, Dagasdas
arrived in Saudi Arabia. Thereafter, 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.
Dagasdas reported at ITM's worksite in Khurais, Saudi Arabia and he was allegedly given tasks suited
for a Mechanical Engineer, which were foreign to the job he applied for and to his work experience.
Later, ITM gave him a termination notice indicating that his last day of work was on April 30,
2008, and he was dismissed pursuant to clause 17.4.3 of 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.
ISSUE:
Whether or not the contract is valid
RULING:
No. Security of tenure remains even if employees, particularly the overseas Filipino workers
(OFW), work in a different jurisdiction. Since the employment contracts of OFWs are perfected in the
Philippines, and following the principle of lex loci contractus (the law of the place where the contract is
made), these contracts are governed by our laws, primarily the Labor Code of the Philippines and its
implementing rules and regulations. At the same time, our laws generally apply even to employment
contracts of OFWs as our Constitution explicitly provides that the State shall afford full protection to
labor, whether local or overseas. Thus, even if a Filipino is employed abroad, he or she is entitled to
security of tenure, among other constitutional rights. In this case, prior to his deployment and while still
in the Philippines, Dagasdas was made to sign a POEA-approved contract with respondent corporation,
on behalf of ITM; and, upon arrival in Saudi Arabia, ITM made him sign a new employment contract.
Nonetheless, this new contract, which was used as basis for dismissing Dagasdas, is void. Dagasdas'
new contract is in clear violation of his right to security of tenure.
While our Civil Code recognizes that parties may stipulate in their contracts such terms and
conditions as they may deem convenient, these terms and conditions must not be contrary to law,
morals, good customs, public order or policy. 17.4.3 of 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, is contrary to law because our Constitution guarantees that employees, local or
overseas, are entitled to security of tenure. To allow employers to reserve a right to terminate employees
without cause is violative of this guarantee of security of tenure.
 GAGUI vs. DEJERO
G.R. No. 196036 OCTOBER 23, 2013
DOCTRINE:
“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.”
Facts:
On 14 December 1993, respondents Dejero and Permejo filed separate Complaints for illegal
dismissal, nonpayment of salaries and overtime pay, refund of transportation expenses, damages, and
attorney fees against PRO Agency Manila, Inc., and Abdul Rahman Al Mahwes. The Labor Arbiter
rendered a decision ordering respondents to pay complainants. The LA also issued a Writ of Execution.
When the writ was returned unsatisfied, an Alias Writ of Execution was issued, but was also returned
unsatisfied. Respondents filed a Motion to Implead Pro Agency Corporate Officers and Directors as
Judgment Debtor. It included petitioner being the Vice-president / Stockholder / Director. The LA
granted the motion.
A 2nd Alias Writ of Execution was issued, which resulted in the garnishment of petitioner bank
deposit in the amount of P85,430.48. Since, judgment remained unsatisfied, respondents sought a 3rd
alias writ of execution. The motion was granted resulting in the levying of two parcels of lot owned by
petitioner located in San Fernando, Pampanga. Petitioner filed a Motion to Quash 3rd Alias Writ of
Execution. Petitioner alleged that apart from not being made aware that she was impleaded as one of the
parties to the case, the LA decision did not hold her liable in any form whatsoever. Executive Labor
Arbiter denied the motion.
Issue:
Whether or not petitioner may be held jointly and severally liable with PRO Agency Manila, Inc.
in accordance with Section 10 of R.A. 8042?
Held:
No. The Petitioner may not be held jointly and severally liable. Section 10, R.A. 8042 states that:
The liability of the principal/employer and the recruitment / placement agency for any and all claims
under this section shall be joint and several. This provision shall be incorporated in the contract for
overseas employment and shall be a condition precedent for its approval.
In Sto. Tomas v. Salac, we had the opportunity to pass upon the constitutionality of Section 10,
R.A. 8042. We have thus maintained: 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. Hence, for petitioner to be
found jointly and solidarily liable, there must be a separate finding that she was remiss in directing the
affairs of the agency, resulting in the illegal dismissal of respondents. Examination of the records would
reveal that there was no finding of neglect on the part of the petitioner in directing the affairs of the
agency. In fact, respondents made no mention of any instance when petitioner allegedly failed to
manage the agency in accordance with law, thereby contributing to their illegal dismissal.
 HON. PATRICIA STO. TOMAS vs. REY SALAC
G.R. No. 152642; November 13, 2012
DOCTRINE:
“R.A. 8042 is a police power measure intended to regulate the recruitment and deployment of
OFWs. It aims to curb, if not eliminate, the injustices and abuses suffered by numerous OFWs seeking
to work abroad. The rule is settled that every statute has in its favor the presumption of
constitutionality.”
Facts:
These consolidated cases pertain to the constitutionality of certain provisions of Republic Act
8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995.
In G.R. 152642 and G.R. 152710, the petitioners questioned the Constitutionality of Sections 29 and
30, R.A. 8042)
In G.R. 167590, the petitioners questioned the Constitutionality of Sections 6, 7, and 9 of R.A. 8042.
Section 6 for being vague as it fails to distinguish licensed and non-licensed recruiters; Section 7 for
being sweeping in its application of penalties and section 9 for allowing the offended parties to file the
criminal case in their place of residence instead of filing it at the place where the crime or any of its
essential elements were committed.
In G.R. 167590, G.R. 182978-79 and G.R. 184298-99 questioned the Constitutionality of Section
10, last sentence of 2nd paragraph on the liability of the principal employer and the
recruitment/placement agency.
Issue:
Whether or not the questioned sections of RA 8042 are unconstitutional
Held:
The petitions in G.R. 152642 and G.R. 152710 questioning the constitutionality of Sections 29
and 30, R.A. 8042 was rendered moot and academic by the signing into law by former President Gloria
Macapagal-Arroyo R.A. 9422 which expressly repealed Sections 29 and 30 of R.A. 8042 and adopted
the policy of close government regulation of the recruitment and deployment of OFWs.
Section 6 "illegal recruitment" as defined, was declared clear and ambiguous; Section 7 which
provides the penalties for prohibited acts; the Court declared that they are valid and constitutional;
Section 9 of R.A. 8042 which allowed the filing of criminal actions arising from "illegal recruitment"
before the RTC of the province or city where the offense was committed or where the offended party
actually resides at the time of the commission of the offense, the Court said that there is nothing
arbitrary; Section 10, last sentence of 2nd paragraph, the Court declared that it is valid and
constitutional.
 SUNACE INTERNATIONAL MANAGEMENT SERVICES INC. vs. NLRC
G.R. No.161757; January 25, 2006
DOCTRINE:
“The theory of imputed knowledge ascribes the knowledge of the agent to the principal not the
other way around.”
Facts:
Montehermozo was deployed as a domestic helper in Taiwan by petitioner Sunace with the
assistance of Wang, a Taiwanese broker for 12-months. After her contract with her Taiwanese employer,
she continued to work there for two years. After returning, she filed a complaint with the NLRC against
the petitioner, the Taiwanese broker, a certain Perez and her employer since allegedly, she was
imprisoned for three months and was underpaid. The Labor Arbiter ruled in favor of Montehermozo and
rejected Sunace’s contention that the extension made was without its consent. On appeal with the
NLRC, the LA’s decision was upheld. The Court of Appeals likewise affirmed the decision of the labor
tribunals.
Issue:
Is Sunace liable?
Held:
No. The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the
principal, employer Xiong, not the other way around. There being no substantial proof that Sunace knew
of and consented to be bound under the 2-year employment contract extension, it cannot be said to be
privy thereto. As such, it and its "owner" cannot be held solidarily liable for any of Divina’s claims
arising from the 2-year employment extension. Furthermore, there was an implied revocation of its
agency relationship with its foreign principal when, after the termination of the original employment
contract, the foreign principal directly negotiated with Divina and entered into a new and separate
employment contract in Taiwan.
 TEEKAY SHIPPING PHILIPPINES, INC VS. ROBERTO M. RAMOGA, JR.
G.R. No. 209582, January 19, 2018
DOCTRINE:
“The company-designated physician must perform some significant act before he can invoke the
exceptional 240-day period under the IRR. It is only fitting that the company-designated physician must
provide a sufficient justification to extend the original 120-day period. Otherwise, under the law, the
seafarer must be granted the relief of permanent and total disability benefits due to such non-
compliance.”
“On the contrary, if we completely ignore the general 120-day period under the Labor Code and
POEA-Contract and apply the exceptional 240-day period under the IRR unconditionally, then the IRR
becomes absolute and it will render the law forever inoperable. Such interpretation is contrary to the
tenets of statutory construction.”

Facts:
Respondent entered into a contract of overseas employment with Teekay Shipping Ltd.
represented by its local manning agency. After the mandatory pre-employment medical examination
(PEME), [respondent] 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.
Respondent was repatriated to the Philippines on October 4, 2010. The following day, he was
immediately referred for further evaluation and treatment at the Metropolitan Medical Center. He
underwent a rehabilitation program under the supervision of Dr. Esther G. Go. On October 9, 2010, he
was operated for open reduction with internal fixation with intramedullary pinning of his left 3rd
metatarsal bone by the company designated physician, Dr. William Chuasuan, Jr. He was advised to
continue using crutches to aid ambulation and was given medications. On April 8, 2011, Dr. Chuasuan,
Jr. issued a certification stating that [respondent] was fit to return to work.
Unsatisfied with the company doctor's assessment, [respondent] sought the help of his own
doctor, Dr. Rogelio P. Catapang who is an orthopedic and traumatology flight surgeon at Sta. Teresita
General Hospital. 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 his sea duties. Consequently,
[respondent] lodged a complaint for permanent total disability benefits, sickness allowance, medical
expenses, damages and attorney's fees in accordance with the terms and conditions of the Revised
Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-going
Vessels.
Labor arbiter rendered finding [herein petitioners] jointly and solidarily liable to pay [herein
respondent] the amount of US$60,000.00 or its peso equivalent at the time of payment, illness allowance
in the amount of US$648.27 and ten percent (10%) of the total award as attorney's fees. NLRC and CA
affirmed.
Issue:
Whether or not Court of Appeals was correct in affirming the NLRC decision.
Held:
The Decision dated May 30, 2013 and Resolution dated October 18, 2013 of the Court of
Appeals in CA-G.R. SP No. 125706 are hereby REVERSED and SET ASIDE. It is well-settled that the
assessment of the company-designated physician prevails over that of the seafarer's own doctor. "[T]he
assessment of the company-designated physician is more credible for having been arrived at after
months of medical attendance and diagnosis, compared with the assessment of a private physician done
in one day on the basis of an examination or existing medical records. With the declaration of the
company-designated physician that respondent is already fit to return to work, the latter is not entitled to
his permanent total disability benefits.
 C.F. SHARP CREW MANAGEMENT, INC. VS. JOEL D. TAOK
G.R. No. 193679 July 18, 2012
DOCTRINE:
“A seafarer’s right to disability benefits is a matter governed by law, contract and medical
findings. The Labor Code provides that the 120-day period must lapsed first before claiming permanent
disability benefits.”
Facts:
Petitioner C.F. Sharp Crew Management, Inc. (C.F. Sharp) is a domestic corporation engaged in
the recruitment and placement of Filipino seafarers abroad entered into a ten (10)-month employment
contract with respondent Joel D. Taok (Taok) where the latter was engaged as cook on board M/V
Norwegian Sun. On July 25, 2006, Taok complained of pain in his left parasternal area, dizziness,
difficulty in breathing and shortness of breath prompting the ship physician to bring him to Prince
Rupert Regional Hospital in Canada and diagnosed him with atrial fibrillation. The physician projected
that Taok may resume his ordinary duties within six (6) to eight (8) weeks. On August 5, 2006, Taok
was repatriated to the Philippines for further treatment. Taok then did not subject himself to further
examination, instead, he filed a complaint for total and permanent disability benefits.
Issue:
Whether or not herein Respondent may claim disability benefits based on the applicable laws and
his employment contract
Held:
No. A seafarer’s right to disability benefits is a matter governed by law, contract and medical
findings. The relevant legal provisions are Articles 191 to 193 of the Labor Code and Section 2, Rule X
of the Amended Rules on Employee Compensation (AREC). The relevant contracts are the POEASEC,
the collective bargaining agreement (CBA), if any, and the employment agreement between the seafarer
and his employer.
When Taok filed his complaint on September 19, 2006, the 120-day period for him to be considered in
legal contemplation as totally and permanently disabled under Article 192(c)(1) of the Labor Code had
not yet lapsed. The Supreme Court discussed the significance of the 120-day period as one when the
seafarer is considered to be totally yet temporarily disabled, thus, entitling him to sickness wages. This
is also the period given to the employer to determine whether the seafarer is fit for sea duty or
permanently disabled and the degree of such disability.
As these provisions operate, the seafarer, upon sign-off from his vessel, must report to the company-
designated physician within three (3) days from arrival for diagnosis and treatment. For the duration of
the treatment but in no case to exceed 120 days, the seaman is on temporary total disability as he is
totally unable to work. He receives his basic wage during this period until he is declared fit to work or
his temporary disability is acknowledged by the company to be permanent, either partially or totally, as
his condition is defined under the POEA Standard Employment Contract and by applicable Philippine
laws. If the 120 days initial period is exceeded and no such declaration is made because the seafarer
requires further medical attention, then the temporary total disability period may be extended to a
maximum of 240 days, 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 be declared fit to work at any time
such declaration is justified by his medical condition.