CASE DIGESTS (LABOR LAW)

Team Pacific Corp. v. Parente, G.R. No. 206789, July 15, 2020

“No Alternative But to Implement a Retrenchment Program”

In February 1999, the employee was hired to work as a production operator in the
hermetic department of the employer corporation. Later, the employee was promoted to
the position of quality assurance calibration technician.

On 23 April 2009, the employee filed for and commenced her 60-day maternity leave,
which was to end on 21 June 2009. She gave birth on 27 April 2009.

On 8 May 2009, while on her maternity leave, the employee was asked to see the
employer’s human resource and administrative manager. During their meeting on 21
May 2009, the employee received a letter informing her of her dismissal from
employment, effective on 22 June 2009, or the day after the end of her maternity leave.
She was told that she would receive her separation pay on the same date. The employer
explained that it had to implement survival measures (such as energy saving programs,
forced leaves, and compressed workweek arrangements) in view of the global economic
crisis that started in the previous year. The employer added that it also suffered a 30%
reduction in business volume resulting to substantial losses that threatened its survival.
According to the employer, to minimize continuing losses and to ensure survival of the
company, it had no alternative but to implement a retrenchment program.

The employee then went to the Department of Labor and Employment, where she was
advised to first accept her separation pay before filing a complaint. Thus, on 8 June
2009, after she had been required to process her clearance and sign several
documents, the employee received her separation pay.

On 9 July 2009, the employee lodged her complaint for illegal dismissal against her
employer.

Was the dismissal from employment on the ground of retrenchment valid?

In Team Pacific Corp. v. Parente1, the Supreme Court declared the illegality of the
employee’s dismissal from employment.

Under Article 2982 of the Labor Code of the Philippines, retrenchment is one of the
authorized causes to dismiss an employee. It involves a reduction in the workforce and
is resorted to when the employer encounters business reverses, losses, or economic
difficulties, such as “recessions, industrial depressions, or seasonal fluctuations.” This is
usually done as a last recourse when other methods are found inadequate. 3

There is a valid retrenchment if the employer had complied with the procedural and
substantive requisites of valid retrenchment.

With regard to the procedural requisites for a valid retrenchment, the employer must:
  serve a written notice on the employee and the Department of Labor and
Employment one month before the date of the dismissal; and
 pay the required amount of separation pay.

As to the substantive requisites, the employer must show that:

 the retrenchment was a necessary measure to prevent substantial and serious

business losses;
 the retrenchment was done in good faith and not to defeat employees’ rights; and
 it was fair and reasonable in selecting the employees who will be retrenched. 4

Absent any of these, the dismissal is illegal.

In the said case, the Court found that the employer failed to comply with all the requisites
for a valid retrenchment.

Record revealed that the employer submitted the following documents:

 Audited Financial Statements for the years 2006 to 2009, showing its net losses
and deficits amounting to millions;
 Letter dated 29 April 2008 advising the Department of Labor and Employment of
the compressed work week arrangement it will be implementing;
 Notice of Retrenchment dated 8 May 2009, served on the Department of Labor
and Employment;
 Duly accomplished Establishment Employment Report received by the
Department of Labor and Employment on 8 May 2009;
 List of Affected Workers by Displacements received by the Department of Labor
and Employment on 8 May 2009; and
 The Decision granting the employer’s Petition for Corporate Rehabilitation.

Although the Court acknowledged that these documents would suffice to show business
losses and compliance with notice requirements, it, nonetheless, ruled that the employer
failed to establish that the employees chosen for retrenchment were selected through
fair and reasonable criteria. According to the Court, the employer failed to prove that it
used fair and reasonable criteria in carrying out the retrenchment program. It also failed
to justify why it included the employee, who had already been employed for 10 years.
The Court thus ordered the employer to reinstate the employee to her former position
and pay her backwages.

Did the acts of accepting separation pay from the employer and signing a waiver
and quitclaim bar the employee from questioning the illegality of her dismissal?

The Court held that the employee was not barred by estoppel. According to the Court,
such acts are generally taken with a grain of salt, considering that employees are usually
at an economic disadvantage and are often left with no choice, since they are suddenly
faced with the pressure to meet financial burdens. Here, the Court found that the
employee was dismissed from employment when she had just given birth. Her
dismissal’s effectivity was set on the date she was supposed to return from her maternity
leave. For the Court, the employee was at a clear disadvantage, having found herself
without a job and a source of income right at a time when finances were crucial. Thus,
the employee could not be deemed to have waived her right to file a complaint. She was
not estopped from contesting the legality of her dismissal.

Can the officers be held solidarily liable with the employer corporation?

The Supreme Court ruled in the negative in view of the principle that corporate directors
and officers are solidarily liable with the corporation for the termination of employees
done with malice or bad faith. According to the Court, although the employer was unable
to show that it applied fair and reasonable criteria in selecting the employees to be
entrenched, it did not mean that the dismissals were automatically done in bad faith or
with malice. It may have simply failed to strictly comply or to sufficiently prove
compliance with the stringent rules for a valid retrenchment. As such, bad faith or malice
must still be proved. Since the employee failed to present clear and convincing evidence
that the officers of the employer corporation acted in bad faith or with malice, breached
any duty, or were motivated by ill will, the employer corporation’s separate and distinct
personality was respected.

Paragele v. GMA Network, Inc., G.R. No. 235315, July 13, 2020

The complainants here were engaged on various dates as camera operators and were
later dismissed in May 2013.

Because of the termination of their employment, the said camera operators filed
a complaint for illegal dismissal and regularization against GMA Network, Inc. (GMA).

The camera operators asserted that they were assigned to several television programs
of GMA and had performed functions that were necessary and desirable to GMA’s
business as both a television and broadcasting company. They further contended that
their repeated and continuous employment with GMA after each television program they
covered showed the necessity and desirability of their functions. The camera operators
concluded they have already attained the status of regular employees.

On the other hand, GMA asserted that the camera operators were never hired as
employees, as they were merely pinch-hitters or freelancers engaged on a per-shoot
basis whenever the need for additional workforce arose. Further, GMA asserted that the
“service fees” given to the camera operators were “not compensation paid to an
employee, but rather remuneration for the services rendered” as pinch-
hitters/freelancers. GMA also belied the contention that it exercised control over the
camera operators. It claimed that it only monitored the performance of their work to
ensure that the “end result” is compliant with company standards.

GMA added that, even assuming that an employer-employee relationship did exist
between them, the camera operators could not have attained regular status considering
their failure to render “at least one year of service” as required by law.

Specifically, with respect to one of the camera operators, named Adonis, GMA added
that he was engaged as a fixed-term employee under a valid “Talent Agreement.”
Accordingly, Adonis’ employment was automatically terminated upon the happening of
the day certain stipulated in the contract. GMA further maintained that it may not be
obliged to re-engage Adonis.

Did an employer-employee relationship exist between GMA and the camera

operators?

The Supreme Court did not agree with GMA’s assertion as it found that the four-fold test
in determining the existence of an employer-employee relationship was met.

Jurisprudence1 dictates that 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. 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.

On the power of hiring, the Court found that the camera operators were engaged by
GMA and had rendered services directly to it. GMA was found to have engaged the
camera operators to perform functions necessary and desirable to its usual business as
both a television and broadcasting company.

On the payment of wages, there was no question that GMA directly compensated the
camera operators for their services. Although GMA paid the camera operators “service
fees” or “talent fees,” the Court ruled that this was merely a matter of nomenclature. The
Court further ruled that although the camera operators were paid on a per-shoot basis,
this was only a mode of computing compensation and did not, in any way, preclude
GMA’s control over the distribution of their wages and the manner by which they carried
out their work. According to the Court, what matters is that the employee received
compensation from the employer for the services that he or she rendered. 2

On the power to dismiss, the Court found that GMA’s act of disengaging the camera
operators from service amounted to a dismissal from employment.

Finally, on the element of control, the Court noted GMA’s implicit assertion that it
engaged the camera operators as independent contractors in view its denial of an
employer-employee relationship, coupled with the claim that it merely exercised control
over the output required of the camera operators. The Court thus inquired whether the
camera operators fell within the concept of an independent contractor.

Jurisprudence3 has recognized a certain kind of independent contractor: individuals with

unique skills and talents that set them apart from ordinary employees. In such a situation
there is no trilateral relationship (as in legitimate contracting provided under Article 106
of the Labor Code of the Philippines) because the independent contractor himself or
herself performs the work for the principal. In other words, the relationship is bilateral.
In the present case, the Court found that the relationship between GMA and the camera
operators was bilateral since the camera operators themselves performed work for
GMA. Therefore, in order to be considered independent contractors GMA should
establish that the camera operators were hired because of their “unique skills and
talents” and that they were not controlled over the means and methods of their work.

However, the Court found no proof that they were hired because of their unique skills,
talent and celebrity status not possessed by ordinary employees.

Significantly, there was a showing that the camera operators were subject to GMA’s
control in that:

 Their recordings and shoots were never left to their own discretion and craft;
 They were required to follow the work schedules which GMA provided to them;
 They were not allowed to leave the work site during tapings, which often lasted
for days;
 They were also required to follow company rules like any other employee.

The Court also found that GMA provided the equipment they used during tapings and
assigned supervisors to monitor their performance and guarantee their compliance with
company protocols and standards.

Are the camera operators regular employees of GMA?

The Supreme Court ruled in the affirmative.

It found that GMA is primarily engaged in the business of broadcasting, which

encompasses the production of television programs. Following the nature of its
business, GMA was naturally and logically expected to engage the service of camera
operators, such as the camera operators. The Court said that there was no denying that
a reasonable connection exists between camera operators’ work and GMA’s business
as both a television and broadcasting company. The repeated engagement of camera
operators over the years only reinforces the indispensability of their services to GMA’s
business. For the Court, the camera operators were GMA’s regular employees.

The Court did not accept GMA’s assertion that the camera operators were mere casual
employees.

The Court stated that it is clear from the law that the requirement of rendering “at least
one (1) year of service[,]” before an employee is deemed to have attained regular status,
only applies to casual employees. An employee is regarded a casual employee if he or
she was engaged to perform functions which are NOT necessary and desirable to the
usual business and trade of the employer. Thus, when one is engaged to perform
functions which are necessary and desirable to the usual business and trade of the
employer, engagement for a year-long duration is not a controlling consideration.

The Court stressed that GMA’s claim that the camera operators were required to render
at least one (1) year of service before they may be considered regular employees had
no basis in law. This was because the camera operators were never casual employees
as they performed functions that were necessary and desirable to the usual business of
GMA. For the Court, the camera operators need not render a year’s worth of service to
be considered regular employees.

Although the Court noted that the camera operators’ functions could mean that they
were project employees whose engagements were fundamentally time-bound, the Court
ruled that they were not. The Court found that GMA repeatedly engaged them as
camera operators for its television programs. As camera operators, they performed
activities which were within the regular and usual business of GMA and NOT identifiably
distinct or separate from the other undertakings of GMA. According to the Court, it would
be absurd to consider the nature of their work of operating cameras as distinct or
separate from the business of GMA, a broadcasting company that produces, records,
and airs television programs. From this alone, the camera operators could not be
considered project employees for there was no distinctive “project” to even speak of.

On GMA’s assertion that the camera operators were merely pinch-hitters or substitutes,
the Court did not lend credence to the same. According to the Court, every industry has
to deal with securing substitutes for employees who are absent or on leave. Such tasks,
whether performed by the usual employee or by a substitute, cannot be considered
separate and distinct from the other undertakings of the company. While it is
management’s prerogative to device a method to deal with this issue, such prerogative
is not absolute and is limited to systems wherein employees are not ingeniously and
methodically deprived of their constitutionally protected right to security of tenure. It is
unlikely that a big corporation could not device a system wherein a sufficient number of
technicians can be hired with a regular status who can take over when their colleagues
are absent or on leave, especially when it appears from the records that petitioner hires
so-called pinch-hitters regularly every month.

Finally, on GMA’s assertion of Adonis’ fixed-term employment, the Court did not accept
the same. The Court said that it would be improper to classify Adonis as a fixed-term
employee considering that GMA did not even allege the manner as to how the terms of
the contract with him were agreed upon. The Court stressed that it is “the employer
which must satisfactorily show that it was not in a dominant position of advantage in
dealing with its prospective employee.” Thus, GMA as the employer had the burden to
prove that it dealt with Adonis in more or less equal terms in the execution of the talent
agreements with him. Sweeping guarantees that the contract was knowingly and
voluntarily agreed upon by the parties and that the employer and the employee stood on
equal footing will not suffice. The Court added that although Adonis never contested the
execution of his talent agreements, such could not preclude him from attaining regular
employment status. In the words of the Court, it is not blind to the unfortunate tendency
for many employees to cede their right to security of tenure rather than face total
unemployment.

Were the camera operators validly dismissed from employment?

The Supreme Court ruled that the camera operators were illegally dismissed from
employment since GMA failed to allege and that the camera operators’ dismissals were
impelled by any of the just or authorized causes recognized in the Labor Code of the
Philippines. The camera operators were thus awarded the reliefs
of reinstatement and backwages.
Cuadra v. San Miguel Corp., G.R. No. 194467, July 13, 2020

Z was hired in 1985 by LS, Inc. He filed a case on 4 January 1991 for illegal dismissal
and regularization against LS, Inc. and SM Corp. before the National Labor Relations
Commission.

In its Decision dated 15 December 1994, the Office of the Labor Arbiter ruled that Z was
a regular employee of SM Corp., as LS, Inc. was declared to be a labor-only contractor.
It was also ruled that Z was illegally dismissed from employment in 1990. Thus, SM
Corp. (the true employer) was ordered to reinstate Z to his former position as regular
employee, his regular status “effective as of the date of the Office of the Labor Arbiter’s
decision.” Z was also awarded backwages.

Should Z’s employment be reckoned from 15 December 1994 (the date of the
Office of the Labor Arbiter’s decision), or should it be reckoned from 1985 (the
year when Z was hired to work in SM Corp)?

The Supreme Court ruled that Z’s employment started from 1985. This is because
service to an employer is presumed continuous unless there is evidence that employer-
employee relations were validly severed in the interim. If an employee returns to work
upon an order of reinstatement, he or she is not considered a new hire.

Following this principle, the employment relationship between Z and SM Corp. should
have been considered as continuous and not validly severed when Z was illegally
dismissed from employment. When Z was returned to work upon an order of
reinstatement, Z was not a new hire. Thus, the reckoning point of his length of service
must be in 1985, or that date when he first started working in SM Corp.

Toliongco v. Court of Appeals, G.R. No. 231748, July 8, 2020

On 30 October 2013, the seafarer entered into a 7-month employment contract with
Anglo-Eastern (ANTWERP), NV, through its agent, Anglo-Eastern Crew Management
Philippines (Anglo-Eastern Crew), Inc., to work as a Messman aboard the M/V Mineral
Water. On 23 February 2014, the seafarer boarded the vessel.

The seafarer claimed that sometime in June 2014, he was sexually harassed by the
chief officer of the vessel during the course of his employment. He also claimed that the
chief officer also threatened to kill him upon learning that he filed a complaint against the
latter before the ship captain. After the incident, the seafarer opted for voluntary
repatriation and was able to return to the Philippines on 12 July 2014.

On 24 November 2014 the seafarer consulted his personal doctor, a clinical

psychologist, who diagnosed him with Post Traumatic Stress Disorder (PTSD). The
diagnosis of this doctor was verified by another doctor, who concluded that the seafarer
cannot return to his job as a seafarer.
Due to his illness, the seafarer requested for compensation from Anglo-Eastern Crew.
However, his request remained unheeded.

On 2 March 2015, the seafarer filed a complaint for constructive dismissal, sexual
harassment and maltreatment. In addition, he prayed for the payment of disability
benefits, damages and attorney’s fees since he claims to have been rendered
permanently and totally disabled due to his post-traumatic stress disorder from his
unfortunate experience onboard the vessel.

The Office of the Labor Arbiter awarded the salaries of the seafarer for the unexpired
portion of his employment contract because of the finding that the seafarer was forced to
repatriate himself due to the hostile environment brought about by the filing of the
complaint. The Office of the Labor Arbiter also awarded him moral damages for the
mental torture that he endured and exemplary damages to dissuade such incident from
further occurring. It also granted the claim for attorney’s fees since the seafarer was
constrained to avail the services of a lawyer.

When the case reached the Supreme Court, the seafarer insisted on his entitlement to
disability benefits. However, the Court denied his claim for said benefits. The Court
ruled:

To support his claim for disability benefits, petitioner presented a psychiatric

report and a medical certificate. These documents only prove that he was
diagnosed with PTSD, prescribed to take medication, and recommended for
psychotherapy sessions. However, there was no disability grading.

The medical certificate states that “[a]t this point in time he cannot return to
his work as a seafarer.” This statement is not sufficient for this court to
conclude that petitioner is permanently and totally disabled to work as a
seafarer. It does not instruct us how petitioner’s PTSD is work-related or
work-aggravated. It also does not tell us whether petitioner underwent
psychotherapy sessions, as recommended by his physicians. Assuming that
petitioner underwent psychotherapy sessions and took his prescribed
medication, no evidence was presented showing how he responded to
treatment.

It is established that petitioner suffered some form of injury, but the pieces of
evidence he submitted are not sufficient to convince this Court that he has
been rendered permanently and totally disabled. Thus, this Court is
precluded from awarding disability benefits, not because of his non-
compliance with the 3-day reportorial requirement, but because there is
barely any evidence to support the claim for disability benefits.

Jacob v. First Step Manpower Int’l. Services, Inc., G.R. No. 229984, July 8,
2020

In early August of 2014, Donna entered into a 2-year employment contract to work as a
household service worker with a foreign employer in the Kingdom of Saudi Arabia
through its local agent, FS Manpower. She was deployed overseas on January 11,
2015.

Donna only stayed abroad for less than 3 months before an early repatriation. She
narrated that at around noontime on January 31, 2015, she was washing the dishes
when she felt a hard object rubbing against her bottom and was surprised to see her
male employer attempting to rape her. She went upstairs to report the matter to her
female employer, but the latter did not believe her. Instead, the female employer began
to ill-treat her. On February 16, 2015, her female employer violently threw a shoe at her.

Donna escaped and went to her agency’s counterpart in the KSA where she met another
Overseas Filipino Worker who mentioned that they might be sold to other Arab
employers. That fellow OFW suggested that they escape the agency through the window
of the second-floor comfort room, since the agency keeps their doors locked at night.
The fellow OFW succeeded in escaping the agency. Donna, however, fell and injured
her back. The case mentioned a rather unsavory experience they had with a passerby
during that time, anyway, an ambulance later took Donna to a hospital where she
underwent surgery on February 28, 2015. After a few days, representatives from the
Overseas Workers Welfare Administration brought them to bahay kalinga where they
waited for their ticket exit visas.

On July 2, 2015, Donna filed a case for constructive illegal dismissal before the Office of
the Labor Arbiter. She claimed that her working environment abroad allegedly became
so intolerable that she was impelled to leave her job. She also assailed the validity of
Final Settlement.

On the other hand, FS Manpower countered that Donna was the one who commenced
the pre-termination of her contract since she was feeling “homesick.” Donna allegedly
requested to be repatriated as soon as possible. When her foreign employer tried
convincing her to stay, she repeatedly threatened to run away if she will not be permitted
to leave.

Was Donna constructively dismissed from employment?

The Supreme Court found that Donna was constructively dismissed.

The Court said that in resolving issues of constructive dismissal, courts do not only
weigh the evidence presented by the parties, but also delve into the totality of
circumstances in a case.

The Court found that the controversy emanated from the lewd actuations of her male
foreign employer on January 31, 2015. To avert a commotion, she reported the matter to
her female employer but unfortunately, she was merely discredited and even blamed for
the incident. From then on, Donna’s female foreign employer treated her differently.
Donna was subjected to physical and verbal harm that she was left with no other choice
but to relinquish her employment.

The treatment Donna experienced in the hands of her foreign employers fostered a
hostile and unbearable work setting which impelled her not only to leave her employers
but also, as in Donna’s words, to escape (or the Filipino word tumakas).
For the Court, it was clear that there existed a well-grounded fear on her part prompting
her to run away despite having been employed overseas for barely 2 months. The
cessation of Donna’s employment was not of her own doing but was brought about by
unfavorable circumstances created by her foreign employers. If Donna failed to continue
her job, it was because she refused to be further subjected to the ordeal caused by the
her employers’ conduct.

Donna, the Court added, could not have gone to the counterpart agency and eventually
injure herself in the course of escape were it not for the hostile treatment afforded by her
foreign employers which made her run away.

The Court concluded that all of these evidently constituted a case of constructive
dismissal.

Clemente v. Status Maritime Corp., G.R. No. 238933, July 1, 2020

On 7 August 2015, the seafarer entered into a 9-month employment contract with Beks
Gemi Isletmeciligi Ve Ticaret A.S. through its agent, Status Maritime Corporation, to
work as a fitter.

Before boarding the vessel, the seafarer underwent a pre-employment medical

examination and was declared fit to work.

On 25 March 2016, the seafarer’s shoulder snapped and was dislocated while he was
allegedly lifting a heavy object. He was repatriated and recommended for surgical repair
after being diagnosed with recurrent left shoulder dislocation.

Immediately after repatriation, the seafarer reported to Status Maritime, which referred
him to the company-designated physician. Although the company-designated physician
initially recommended that the seafarer undergo an MRI, Status Maritime disapproved of
the procedure and rejected the seafarer’s sickness allowance claim.

The seafarer then consulted his personal doctor. After undergoing an MRI, the seafarer
was diagnosed with “Rotator cuff tear (Supraspinatus), left shoulder.” Said personal
doctor declared him permanently disabled and “unfit to work” as a seafarer.

On 16 June 2016, the seafarer filed a complaint for permanent total

disability benefits before the Office of the Labor Arbiter.

The Office of the Labor Arbiter found that when the seafarer underwent pre-employment
medical examination, he misrepresented that he was not suffering from any illness.
However, when he was diagnosed abroad, he admitted to a certain Dr. Selvarajah that it
was already his third time to sustain a left shoulder dislocation and that two episodes
occurred before he boarded the vessel.

The Office of the Labor Arbiter added that even if the seafarer did not conceal his
medical history, he still could not claim disability benefits because his injury was not
work-related. While his condition manifested onboard, the seafarer failed to show the
connection of his injury to the nature of his work as a fitter. For his failure to
present substantial evidence that his work condition caused or aggravated his injury, the
seafarer was accordingly denied his claim for disability benefits.

When the case reached the Supreme Court, the seafarer asserted the following:

 No diagnosis was made by a company-designated physician. Dr. Selvarajah, a

foreign doctor, was not a company-designated physician and, therefore, not
qualified to make conclusive findings. The failure of a company-designated
physician to give a definite medical finding after the period set under the
POEA Standard Employment Contract renders his disability permanent and total.
 He did not willfully conceal his medical condition during his pre-employment
medical examination. He merely forgot to disclose his medical history and, being
a layman without medical background, thought there was no need to disclose this
information.
 There was a presumption of fitness which was uncontroverted by evidence.
 His medical condition should have been detected during the pre-employment
medical examination because it was an apparent and external injury. Status
Maritime was estopped because it had all the opportunity to screen him for the
injury.

Did Status Maritime comply with its obligation to refer the seafarer to a company-
designated physician?

The requirement of a post-employment medical examination can be gleaned in the

provisions of Section 20 (A) of the POEA Standard Employment Contract. 1

Jurisprudence teaches that the conduct of the post-employment medical examination is

a reciprocal obligation shared by the seafarer and the employer. The seafarer is obliged
to submit to an examination within 3 working days from his or her arrival, and the
employer is correspondingly obliged to conduct a meaningful and timely examination of
the seafarer.2

This post-employment medical examination is primarily conducted by the company-

designated physician.3 However, to be reliable, the assessment or findings of the
company-designated physician must be “complete and definite to give the proper
disability benefits to seafarers.” When the employer refuses to comply with its obligation
to have the seafarer examined, the seafarer may rely on the medical findings of his or
her chosen doctor.4 Between a non-existent medical assessment of a company-
designated physician and the medical assessment of the seafarer’s doctor of choice, the
latter evidently stands.5

In the present case, the Supreme Court found that the seafarer went to Status Maritime
immediately after arriving in the Philippines. However, when he requested a medical
diagnosis of his condition, Status Maritime refused to subject him to a post-employment
medical examination. This compelled the seafarer to go to a doctor of his choice. As
noted above, this personal doctor declared him permanently disabled and “unfit to work”
as a seafarer.
On the other hand, the Court ruled that Dr. Selvarajah’s diagnosis could not be
considered as that rendered by a company-designated physician. This is because a
strict reading of the POEA Standard Employment Contract requires that the company-
designated physician be the one to diagnose the seafarer upon repatriation.

The Court further stated that even if the rules were to be applied liberally, the
assessment of Dr. Selvarajah could not be considered thorough, final, and definitive, as
it was merely for the seafarer’s urgent medical care. In Dr. Selvarajah’s medical report,
there was no showing that he conducted tests to arrive at a proper diagnosis. In fact, he
even recommended for the seafarer to undergo further tests to determine the extent of
the injury. Furthermore, Dr. Selverajah’s report explicitly stated that it was not meant for
any medicolegal proceedings, that it should not be used as a reference in any court
hearing and that it does not support any compensation claim. The provisional nature of
Dr. Selvarajah’s diagnosis was further supported by his act of recommending that the
seafarer see an orthopedic surgeon for further assessment.

The Court thus ruled that when there is no post-employment medical examination by a
company-designated physician, the evaluation of the seafarer’s personal doctor is
considered by law as binding between the parties. The refusal of Status Maritime to
submit the seafarer to a medical examination was a contravention of its responsibility
under the POEA Standard Employment Contract. Thus, the Court upheld the permanent
disability rating of the seafarer’s personal doctor.

Was the seafarer qualified to claim disability benefits?

Despite the conclusion of his personal doctor, the Supreme Court declared that the
seafarer was disqualified from claiming disability benefits on the ground of
fraudulent concealment.

Section 20 (E) of the POEA Standard Employment Contract states that “[a] seafarer who
knowingly conceals a pre-existing illness or condition” is disqualified from claiming
compensation and benefits.6

In the present case, the Court found that the seafarer knowingly concealed his history of
shoulder dislocation. According to the Court, the seafarer had two instances of left
shoulder dislocation prior to his employment — once in June 2015 and another in July
2015. Knowing that he had this recurring condition, the seafarer should have disclosed
this fact during his pre-employment medical examination. This non-disclosure was
apparent in his medical certificate, wherein he answered “no” to the question “Is
applicant suffering from any medical condition likely to be aggravated by service at sea
or to render the seafarer unfit for service. . .?”

The Court further stated that the seafarer could not bank on the fact that he was cleared
during the pre-employment medical examination. Jurisprudence dictates that this
examination is not exploratory in nature and employers are not burdened to discover any
and all pre-existing medical condition of the seafarer during its conduct. Pre-employment
medical examinations are only summary examinations. They only determine whether
seafarers are fit to work and does not reflect a comprehensive, in-depth description of
the health of an applicant. This is precisely why Section 20 (E) mandates the seafarer to
disclose his or her medical history during the pre-employment medical examination.7
According to the Court, intentional concealment of a pre-existing illness or injury is a
ground for disqualification for compensation and benefits under the POEA Standard
Employment Contract. While the laws give ample protection to our seafarers, this
protection does not condone fraud and dishonesty.

In the present case, the seafarer could not feign ignorance and downplay the
concealment of his medical condition. The seafarer knew that he had a recurring
shoulder dislocation and never denied this fact. Hence, his disability claim was not
granted.

Father Saturnino Urios University (FSUU), Inc. v. Curaza, G.R. No. 223621,
June 10, 2020

The university hired Atty. C to teach commercial law subjects in its Commerce
Department during the second semester of school year 1979 to 1980. Atty. C was
subsequently given teaching loads in the College of Engineering and the College of Arts
and Sciences. He later taught subjects as a pioneering professor in its College of Law.

On 21 November 2008, Atty. C wrote a letter applying for early retirement, under the
university’s Personnel Policy and Procedure and the Retirement Pay Law. He was
informed that his retirement application could not be approved as the university did not
grant retirement benefits to its part-time teachers.

On 25 June 2010, Atty. C filed a complaint against the university for retirement benefits
before the Arbitration Branch of the National Labor Relations Commission.

The university contended that the provision on retirement benefits under Article 302 1 of
the Labor Code of the Philippines does not apply to part-time teachers, because they
cannot acquire regular permanent status. A “regular permanent status” is a precondition
for entitlement to retirement benefits.

Is the university’s contention correct?

The Court ruled that the university’s contention was not correct. Atty C. is entitled to
retirement benefits.

Article 302 of the Labor Code of the Philippines specifically states that “any employee
may be retired upon reaching the retirement age[,]” and that in case of retirement, in the
absence of a retirement agreement, an employee who reaches the retirement age “who
has served at least five (5) years . . . may retire and shall be entitled to retirement pay[.]”
No exception is made for part-time employees.

The only exemptions specifically identified by the law and its Implementing Rules are:

 employees of the National Government and its political subdivisions, including

government-owned and/or controlled corporations, if they are covered by the
Civil Service Law and its regulations; and
  employees of retail, service and agricultural establishments or operations
regularly employing not more than 10 employees.2

According to the Court, the law encompasses all private sector employees, save for
those specifically exempted. Part-time employees, not being among those exempted
from coverage, may qualify for retirement benefits.

In the present case, Atty C was found to have rendered service in favor of the university
for 22 years. Thus, he was ruled to be entitled to retirement benefits.

Adamson University Faculty and Employees Union v. Adamson University,

G.R. No. 227070, March 9, 2020

“O” was a professor and the assistant chairperson of the Social Sciences Department of
a university. “O” was also the president of the university union, a duly registered labor
union and the sole and exclusive bargaining agent of the university’s faculty and non-
academic personnel.

On 5 September 2014, the university received an administrative complaint filed by a

student against “O.” The student claimed that “O” abused her and accordingly violated
the university’s code of conduct and Republic Act No. 7610.

According to the student, she encountered “O” as the latter was about to enter the
university’s faculty room. She held the doorknob on her way out of the office, while “O”
held the opposite end of the doorknob. When she stepped aside, “O” allegedly
exclaimed the words “anak ng puta” and walked on without any remorse. The student
claims that she experienced emotional trauma from “O”‘s conduct.

The university thus charged “O” with gross misconduct and unprofessional behavior in
violation of Section 16 (4) of Batas Pambansa Blg. 232, or the Education Act of 1982. 1

The university eventually dismissed “O” after complying with the requirements of
procedural due process. “O” then proceeded to file a complaint for illegal dismissal
and unfair labor practice against the university.

“O” denied that he “unjustifiably, angrily” yelled “anak ng puta” at the student. He pointed
out inconsistencies in her testimony, arguing that he was in his classroom, and not
where she had claimed, when the incident happened. In any case, “O” insisted that he
had no motive to malign the student, who was never enrolled in any of his classes, and
whom he did not know before the alleged incident.

“O” also contended that “anak ng puta” per se is neither defamatory nor constitutive of
gross misconduct and unprofessional behavior. He argued that there was no proof that
he had perverse or corrupt motivations in violating the school policy.

“O” added that should he be found guilty, dismissal was too harsh a penalty for the
alleged infraction, especially since it would have been his first offense after 20 years of
service. He believed that he was well loved by his students and that he had been
professional throughout his stint, mindful of others’ feelings.

“O” further contended that his dismissal constituted unfair labor practice as it was done
on account of his union activities, which involved taking a stand against the school’s K-
12 policies. He claimed that the university saw the complaint as an opportunity to get rid
of him for being critical of the university’s actions. He also asserted that the dismissal
was done at the time the union was mourning the death of its secretary.

Was “O” validly dismissed from employment?

The Supreme Court ruled that “O”‘s dismissal was valid.

Article 297 of the Labor Code of the Philippines provides that an employer may
terminate an employment for serious misconduct.

Misconduct is defined as improper or wrong conduct. It is the transgression of some

established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character and implies wrongful intent and not mere error of judgment. The misconduct to
be serious within the meaning of the act must be of such a grave and aggravated
character and not merely trivial or unimportant. Such misconduct, however serious, must
nevertheless be in connection with the work of the employee to constitute just cause
from his separation.

In order to constitute serious misconduct which will warrant the dismissal of an employee
under paragraph (a) of Article [297] of the Labor Code, it is not sufficient that the act or
conduct complained of has violated some established rules or policies. It is equally
important and required that the act or conduct must have been performed with wrongful
intent.

Misconduct is not considered serious or grave when it is not performed with wrongful
intent. If the misconduct is only simple, not grave, the employee cannot be validly
dismissed.2

The Court stated that a teacher exclaiming “anak ng puta” after having encountered a
student is an unquestionable act of misconduct. However, the Court also clarified that
whether the said expression constitutes serious misconduct that warrants the teacher’s
dismissal will depend on the context of the phrase’s use. “Anak ng puta” is similar to
“putang ina” in that it is an expletive sometimes used as a casual expression of
displeasure, rather than a personal attack or insult. 3

In the present case, the Court found that the utterance in question, “anak ng puta,” was
an expression of annoyance or exasperation. Both “O” and the student were pulling from
each side of the door, prompting “O” to exclaim frustration without any clear intent to
maliciously damage or cause emotional harm upon the student. That they had not
personally known each other before the incident, and that “O” had no personal vendetta
against the student as to mean those words to insult her, confirm this conclusion.

However, the Court considered other relevant circumstances that aggravated the
misconduct he committed.
First, he not only denied committing the act, but he also refused to apologize for it and
even filed a counter-complaint against the student for supposedly tarnishing his
reputation. He even refused to sign the receiving copy of the notices that sought to hold
him accountable for his act.

According to the Court, while uttering an expletive out loud in the spur of the moment is
not grave misconduct per se, the refusal to acknowledge this mistake and the attempt to
cause further damage and distress to a minor student cannot be mere errors of
judgment. “O”‘s subsequent acts are willful, which negate professionalism in his
behavior. They contradict a professor’s responsibility of giving primacy to the students’
interests and respecting the institution in which he teaches. In the interest of self-
preservation, “O” refused to answer for his own mistake; instead, he played the victim
and sought to find fault in a student who had no ill motive against him.

The Court added that had he been modest enough to own up to his first blunder, “O”‘s
case would have gone an entirely different way.

Second, a similar complaint had already been filed against “O”: that of verbal abuse
against another student.

And third, “O” was found to have exhibited aggressive behavior to his colleagues in that
he shouted at co-professors, displayed a dirty finger sign against his immediate superior,
and challenged a co-professor to a fist-fight.

For the Court, the foregoing circumstances revealed “O”‘s pugnacious character and ill-
mannered conduct.

The Court stressed that in determining the sanction imposable on an employee, the
employer may consider the former’s past misconduct and previous infractions.4

Employers are not expected to retain an employee whose behavior causes harm to its
establishment. The law also recognizes the right of the employer to expect from its
workers not only good performance, adequate work and diligence, but also good
conduct and loyalty. The employer may not be compelled to continue to employ such
persons whose continuance in the service will patently be inimical to its interests. 5

In the present case, “O” cannot rely on his 20-year stay in the university to shield him
from liability. The longer an employee stays in the service of the company, the greater is
his responsibility for knowledge and compliance with the norms of conduct and the code
of discipline in the company.6

For the Court, “O”‘s dismissal was valid.

Did “O”‘s dismissal from employment constitute unfair labor practice?

The Supreme Court ruled that the university was not guilty of unfair labor practice.

Under Article 258 of the Labor Code of the Philippines, unfair labor practices are
violative of the constitutional right of workers to self-organize.
Jurisprudence teaches that the person who alleges the unfair labor practice has the
burden of proving it with substantial evidence.7 In determining whether an act of unfair
labor practice was committed, the totality of the circumstances must be considered. If
the unfair treatment does not relate to or affect the workers’ right to self-organize, it
cannot be deemed unfair labor practice. A dismissal of a union officer is not necessarily
discriminatory, especially when that officer committed an act of misconduct. In
fact, union officers are held to higher standards.8

In the present case, the Court found that “O”‘s dismissal, which was brought about by his
personal acts, did not constitute unfair labor practice as provided under the Labor Code
of the Philippines. Dismissing him was not meant to violate the right of the university
employees to self-organize. Neither was it meant to interfere with the Union’s activities.
The Court further stated that “O” failed to prove that the proceedings against him were
done with haste and bias. And although the Court noted “O”‘s defense that he was the
union president, this does not make him immune from liability for his acts of misconduct.

The Court reiterated the principle that the employer’s management prerogative to
dismiss an employee is valid as long as it is done in good faith and without malice.9 In
this case, this Court found no bad faith on the part of the university when it dismissed
“O” from employment. “O”‘s claim of unfair labor practice thus failed.

LBC Express-Vis, Inc. v. Palco, G.R. No. 217101, February 12, 2020

On 16 January 2009, MCP started working for LBC as a customer associate in one of its
branches. The branch’s team leader and officer-in-charge, AAB, endorsed her
application for the post and acted as her immediate superior.

However, during her employment with LBC, MCP was sexually harassed by AAB.

On 5 May 2010, MCP reported the incident to the LBC Head Office and also prepared
a resignation letter in case management would not act on her complaint. Management
acted on her complaint by advising her to request for a transfer to another team while
they investigated the matter.

On 8 May 2010, MCP returned to the LBC Head Office and submitted her formal
complaint against AAB. MCP also reported AAB’s acts of sexual harassment to the
police.

On 14 May 2010, MCP resigned from her employment since LBC management did not
immediately act on her complaint. According to MCP, she was forced to quit since she
no longer felt safe at work.

On 20 July 2010, MCP filed a complaint for illegal dismissal against LBC.

Was MCP constructively dismissed from employment?

The Supreme Court reiterated the principle that constructive dismissal occurs when an
employer makes an employee’s continued employment impossible, unreasonable or
unlikely, or has made an employee’s working conditions or environment harsh, hostile
and unfavorable, such that the employee feels obliged to resign from his or her
employment. Common examples are when the employee is demoted, or when his or her
pay or benefits are reduced. However, constructive dismissal is not limited to these
instances. The gauge to determine whether there is constructive dismissal, is whether a
reasonable person would feel constrained to resign from his or her employment because
of the circumstances, conditions, and environment created by the employer for the
employee1 There may be constructive dismissal if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable on the part of the
employee that it could foreclose any choice by him except to forego his continued
employment.2

In the present case, the Court found no proof that LBC acted on MCP’s report before
they issued AAB a notice to explain. The Court further found that LBC only commenced
the formal investigation 41 days after MCP reported the incident. Another month passed
before it held an administrative hearing for the case against AAB. 2 more months passed
before LBC resolved the matter.

The Court viewed LBC’s delay in acting on MCP’s complaint as an instance of

insensibility, indifference, and disregard for its employees’ security and welfare. In failing
to act promptly on MCP’s complaint and in choosing to let the resolution of the complaint
hang in the air for a long period of time, LBC had shown that it did not accord her claims
the necessary degree of importance, and at best considered it a minor infraction that
could wait. LBC, the Court said, belittled her allegations.

Furthermore, the Court found that during the investigation, AAB resumed his duties as
usual. In the meantime, MCP was found to have consumed her vacation leaves just to
avoid him while waiting for the approval of her transfer to another branch. LBC’s acts
showed that it was MCP who had to change and adjust, and even transfer from her
place of work, instead of AAB. For the Court, LBC created create a hostile, unfavorable,
unreasonable work atmosphere for MCP.

Stated otherwise LBC’s insensibility to MCP’s sexual harassment case was a ground for
constructive dismissal. MCP was compelled to leave her employment because of the
hostile and offensive work environment created and reinforced by AAB and LBC. MCP
was thus clearly constructively dismissed.

Acosta v. Matiere SAS, G.R. No. 232870, June 3, 2019

On November 1, 2009, the employer hired Manuel as a technical consultant. Under the
agreement, Manuel was tasked to:

 Prepare reports;
 Be the intermediary of certain teams;
 Attend coordination meetings;
 Evaluate billings; and
  Conduct Site visits.

Through a letter dated June 27, 2013, the employer informed Manuel of the termination
of his employment due to the cessation of delivery operations and diminution of
activities. Aggrieved by the actions of his employer, Manuel filed a complaint for illegal
dismissal against it.

The employer contended that it had sufficiently established redundancy of Manuel’s

position. It presented certain documents to prove that there was a significant diminution
in the volume of materials business and that the completion of shipment had rendered
his position irrelevant. The employer further argued that it did not dismiss Manuel in bad
faith, contending that it complied with labor law requirements in terminating his
employment. The employer pointed out that he was given a notice of termination with
computation of his separation pay, and that the Department of Labor and Employment
was also notified.

Was Manuel validly dismissed from employment on the ground of redundancy?

The Supreme Court ruled that Manuel was not validly dismissed on said ground.

The Court stated that redundancy is recognized as one of the authorized causes for
dismissing an employee under the Labor Code of the Philippines. Redundancy exists
where the services of an employee are in excess of what is reasonably demanded by
the actual requirements of the enterprise. A position is redundant where it is superfluous,
and superfluity of a position or positions may be the outcome of a number of factors,
such as overhiring of workers, decreased volume of business, or dropping of a particular
product line or service activity previously manufactured or undertaken by the enterprise.
The employer has no legal obligation to keep in its payroll more employees than are
necessary for the operation of its business.

The Court further stated that for the implementation of a redundancy program to be
valid, the employer must comply with the following requisites:

 written notice served on both the employees and the Department of Labor and
Employment at least one month prior to the intended date of retrenchment;
 payment of separation pay equivalent to at least one month pay or at least one
month pay for every year of service, whichever is higher;
 good faith in abolishing the redundant positions in that the employer must provide
substantial proof that the services of the employees are in excess of what it
requires; and
 fair and reasonable criteria in ascertaining what positions are to be declared
redundant and accordingly abolished.

In the present case, the Court acknowledged that the employer complied with the first
and second requisites. It was able to notify Manuel and the Department of Labor and
Employment at least a month before the planned redundancy. Manuel also received a
computation of his separation pay corresponding to at least one month pay for every
year of service with additional payment for economic assistance.
However, the Court found that the employer failed to establish compliance with the third
and fourth requisites.

The Court discovered that the employer’s only basis for declaring petitioner’s position
redundant was that his function, which was to monitor the delivery of supplies, became
unnecessary upon completion of shipment.

However, the Court discovered that Manuel’s employment agreement reveals the
contrary as there was no mention of monitoring shipment as part of his tasks. The Court
said that if his work pertains mainly to the delivery of supplies, it should have been
specifically stated in his job description. Thus, the Court found no basis for the employer
to consider Manuel’s position irrelevant when shipment had been completed.

The Court also found that the employer failed to show that they used fair and reasonable
criteria in determining what positions should be declared redundant.

The Court explained that fair and reasonable criteria may take into account the preferred
status, efficiency, and seniority of employees to be dismissed due to redundancy.

However, the Court found that the employer never showed that it used any of these in
choosing Manuel as among the employees affected by redundancy.

The Court accordingly declared Manuel to have been illegally dismissed from
employment.

GSIS Family Bank Employees Union v. Villanueva, G.R. No. 210773,

January 23, 2019

On December 20, 2013, employees of GSIS Family Bank, a non-chartered Government-

Owned or Controlled Corporation, demanded for the payment of their Christmas bonus
which had been annually given them pursuant to their Collective Bargaining
Agreement with said bank.

GSIS Family Bank refused to grant the said bonus. This was because it was advised by
the Governance Commission for Government-Owned or Controlled Corporations (or the
Governance Commission) that it could not grant incentives and other benefits to its
employees, without authority from the President of the Philippines. According to the
Governance Commission, as a government financial institution, GSIS Family Bank was
not authorized to enter into a collective bargaining agreement with its employees based
on the principle that compensation and position classification system of its employees is
provided for by law and not subject to private bargaining.

Was the refusal valid?

The Supreme Court ruled that it was valid. The Court found that GSIS Family Bank could
not be faulted for refusing to enter into a new collective bargaining agreement with
petitioner as it lacked the authority to negotiate economic terms with its employees.

In denying the claims of the employees of GSIS Family Bank, the Supreme Court
illustrated the interplay between the provisions of the Labor Code of the Philippines and
the provisions of the GOCC Governance Act of 2011 (or Republic Act Number 10149)
on the life of a non-chartered government-owned or controlled corporation.

The Court ruled that the power of a government-owned or controlled corporation to fix
salaries or allowances of its employees is subject to and must conform to the
compensation and classification standards laid down by applicable law, specifically the
GOCC Governance Act of 2011. According to the Court, the said law does not
differentiate between chartered and non-chartered government-owned or controlled
corporations; hence, the provisions of this law equally apply to all GOCCs.

Furthermore, the Court ruled that while government-owned or controlled corporations

without original charters are covered by the Labor Code of the Philippines, employees of
said government-owned or controlled corporations are bereft of any right to negotiate the
economic terms of their employment, i.e., salaries, emoluments, incentives and other
benefits, with their employers since these matters are covered by compensation and
position standards issued by applicable law.

According to the Court, the law1 categorically states, “Any law to the contrary
notwithstanding, no [government-owned or controlled corporation] shall be exempt from
the coverage of the Compensation and Position Classification System developed by the
[Governance Commission] under this Act.” The law also directed the Governance
Commission to develop a Compensation and Position Classification System, to be
submitted for the approval of the President of the Philippines, which shall apply to all
officers and employees of government-owned or controlled corporations, whether
chartered or non-chartered. When it comes to collective bargaining agreements and
collective negotiation agreements in government-owned or controlled corporations, the
President of the Philippines, through Executive Order No. 2032 issued on March 22,
2016, stated that while it recognized the right of workers to organize, bargain, and
negotiate with their employers, “the Governing Boards of all covered [government-owned
or controlled corporations], whether Chartered or Non-chartered, may not negotiate with
their officers and employees the economic terms of their [collective bargaining
agreements].”

Claret School of Quezon City v. Sinday, G.R. No. 226358, October 9, 2019

Madelyn narrated that in April 2010, the school engaged her as a releasing clerk in its
book sale, tasking her with the inventory and release of books to the school’s students.

In July 2010, Madelyn worked as a filing clerk at the school’s Human Resources
Department, where she updated employees’ files, delivered memoranda to different
departments, and assisted in school programs. In April 2011, she was posted back as a
releasing clerk. She held this position until July 14, 2011.
On July 15, 2011, she worked as a secretary at the school’s Technical-Vocational
Training Center (Claretech), which taught vocational and technical skills to
underprivileged students. There she prepared materials, assisted in the delivery of
correspondence to other departments, and encoded and filed documents.

In May 2013, the school asked Madelyn to sign a Probationary Employment Contract
covering the period of January 16, 2013 to July 15, 2013. When the contract expired,
she was told that her tenure would expire on July 31, 2013 because of a change in
school administration and due to cost-cutting.

But Madelyn was able to work for the school starting August 1, 2013 as a substitute
teacher aide at the school’s Child Study Center. When the permanent teacher aide
returned on October 25, 2013, Madelyn stopped working for the school.

Madelyn repeatedly pleaded to be reinstated at least as a checker at the school’s water

station, but the school denied her requests.

Thus, Madelyn filed her Complaint, claiming that she had been a regular employee since
she performed various jobs that were usually necessary and desirable in the usual
business of the school.

The school denied Madelyn’s claims averring that she was merely a part-time fixed-term
contractual employee whom the school accommodated because her husband was its
longtime driver. It also argued that Madelyn was well aware of her fixed-term
employment as confirmed by her application letters and biodata, which showed her
employment’s duration.

Moreover, the school claimed that Madelyn’s position at Claretech was not a plantilla
position because the department was only at its experimental stage, merely relying on
donations and the school’s marketing research fund. When Claretech began incurring
deficits, the clerical functions were allegedly absorbed by the administrator’s functions,
dissolving Madelyn’s position.

Was Madelyn engaged under a fixed-term employment?

The Supreme Court ruled in the negative.

The Supreme Court reiterated the principles in Brent School v. Zamora which
recognized the validity of fixed-term employment under both the Civil Code and the
Labor Code of the Philippines, as follows:

Brent recognized that the Civil Code and the Labor Code of the Philippines allow
the execution of fixed-term employment contracts. But when periods have been imposed
to prevent an employee from acquiring his or her security of tenure, the contract
effectively runs counter to public policy and morals, and must, therefore, be disregarded.

In drawing the line, Brent laid down the criteria under which a fixed-term employment
cannot be deemed in circumvention of the security of tenure:
  When the parties have knowingly and voluntarily agreed upon a fixed period of
employment “without any force, duress[,] or improper pressure being brought to
bear upon the employee and absent any other circumstances vitiating his
consent”; or
 When “it satisfactorily appears that the employer and employee dealt with each
other on more or less equal terms” with the employer not having exercised any
moral dominance over the employee.

The rationale behind this safeguard is that when a prospective employee, on account of
special skills or market forces, is in a position to make demands upon the prospective
employer, such prospective employee needs less protection than the ordinary worker.
Lesser limitations on the parties’ freedom of contract are thus required for the protection
of the employee.

The Supreme Court has emphasized that Brent is the exception rather than the general
rule, and a fixed-term employment is recognized as valid only under certain
circumstances, particularly when a fixed-term is an essential and natural appurtenance.

Moreover, the Court held that in determining the validity of a fixed-term employment, the
level of protection accorded to labor is ascertained based on the nature of the work,
qualifications of the employee, and other relevant circumstances.

Hence, the criteria limit the application of Brent to particular cases where the employer
and the employee are on a more or less equal footing in entering into the contract. If
none of the aforementioned criteria are present, the Court will strike down a fixed-term
employment contract.

In the present case, the Supreme Court found no contract evidencing Madelyn’s fixed-
term employment. The Court said that this militated against the school’s assertion of
fixed-term employment. According to the Court, the decisive determinant in fixed-term
employments is the day certain agreed upon by the parties for the commencement and
termination of their employment relationship. For the Court no day certain was agreed
upon by the parties.

The Court added that although school persistently asserted that Madelyn should have
known that her employment was only for a fixed term given the circumstances and
nature of her job. However, the Court found that the school failed to present the
contracts for the positions held by Madelyn. The Court said that absent any contract, it
cannot be said that Madelyn was informed of the nature of her employment, as well as
the duration and scope of her work. A fixed-term employment, the Court said, cannot be
held valid based on mere allegations and speculations.

Furthermore, although the school argued that she executed a Memorandum of

Agreement that provided for the terms of her employment, the Court found that such
agreement referred to her engagement as a substitute teacher aide. As for the rest of
the positions she held, the school failed to provide any contract.

The Court ruled even then the criteria in Brent were absent. According to the Court the
school did not deal with Madelyn in more or less equal terms with no moral dominance
on its part. Madelyn’s whole family depended on the school. Her husband was the
school’s longtime driver and their children were its scholars. Madelyn was a high school
graduate whose ordinary qualifications compelled her to accept the various positions
offered by the school. The Court said that given these circumstances, Madelyn was not
in a position to bargain on the terms of her employment. It could not be said that no
moral dominance was exerted by the school merely because both parties benefitted
from the fixed-term employment.

The Court added that there could be no genuine freedom to contract when a fixed-term
employment is used as a vehicle to exploit the economic disadvantage of workers like
Madelyn. Plain wage earners should not be faulted for tolerating jobs they desperately
need. Brent recognized the validity of fixed-term employments only within the context
that employers and employees are on an equal footing. That employees agree to be
repeatedly hired on a fixed-term basis only reveals the deeper problem of poverty and
growing economic inequality between labor and capital.

The Court declared that Madelyn was a regular employee of the school for her repeated
engagement under contract of hire was indicative of the necessity and desirability of her
work. Her services as a clerk at the book sale, as a secretary at Claretech, and as a
substitute teacher aide were found to be necessary and desirable to the school’s
business as an educational institution. The school’s repeated hiring of Madelyn for over
three (3) years only strengthened the conclusion that her services are necessary and
desirable to its business.