480 San Pedro Hospital v Secretary of Labor 263 SCRA
98Employment Not Deemed Terminated/Temporary Suspension of
Operations
FACTSPetitioner San Pedro Hospital of Digos and private
respondent Nagkabiusang Mamumuo sa San Pedro Hospital of Digos
National Federation of Labor (NAMASAP-NFL) were negotiating on a
new Collective Bargaining Agreement (CBA). The union demands wage
increases and a provision for a union shop.When both parties failed
to reach an agreement, members of the union abandoned their
respective department and conducted a strike. Doctors began leaving
the hospital and number of patients dwindled to nothing. On June
12, 1991, petitioner hospital filed a Notice of Temporary
Suspension of Operation; that it would temporarily suspend
operations for six (6) months effective June 15, 1991, or up to
December 15, 1991.Private respondent union alleged that petitioner
was not in serious financial condition and that petitioner acted in
bad faith and circumvented the return-to-work order when it
suspended operations.Secretary of Labor Nieves held that suspension
of operations was not for a valid or justifiable cause but was
actually for the purpose of defeating the workers' right to
self-organization. But because the hospital had actually cease
operations, he decided to grant, by way of penalty, backwages for
the workers from June 21, 1991, the date they were refused
admittance by petitioner, until December 15, 1991, the expiration
of the temporary suspension of the hospital's operation. He also
enjoined petitioner to enter in a new CBA with respondent
union.Petitioner hospital insists that the union members were not
entitled to backwages because the temporary cessation of
petitioner's operation suspended the employer-employee relationship
between the union members and petitioner. They also failed to
negotiate on a new CBA. On December 15, 1991, petitioner hospital
formally ceased operations.
ISSUEWON the secretary gravely abused his discretion when he
granted backwages to employee and enjoined petitioner to enter in a
new CBA with respondent union.
RULINGNO. Article 286 of the Labor Code provides: "The bona fide
suspension of the operation of a business or undertaking for a
period not exceeding six (6) months . . . shall not terminate
employment." Section 12, Rule 1, Book VI of the Omnibus Rules
Implementing the Labor Code provides that the employer-employee
relationship shall be deemed suspended in case of the suspension of
operation referred to above, it being implicitly assumed that once
operations are resumed, the employer-employee relationship is
revived and restored.In the absence of any other information, the
plain and natural presumption will be that petitioner would resume
operations after six months, and therefore, it follows that a new
CBA will be needed to govern the employment relations of the
parties, the old one having already expired. Clearly then, under
the circumstances, the respondent Secretary cannot be faulted nor
considered to have gravely abused his discretion for ordering the
parties to enter into a new CBA.The Court, however, cannot ignore
the supervening event of permanent closure of the petitioner
hospital. Business reverses or losses are recognized by law as a
just cause for terminating employment. Thus, despite the absence of
grave abuse of discretion on the part of the respondent Secretary,
this Court cannot impose upon petitioner the directive to enter
into a new CBA with the union for the very simple reason that it
had already decided to close shop.The court affirmed the grant of
backwages from June 21 December 15. But set aside the order for the
parties to enter into a new collective agreement for it being moot
and academic.
481 De Guzman v NLRC 540 SCRA 21 Employment Not Deemed
Terminated/Temporary Suspension of Operations
FACTSPetitioner De Guzman was employed as a bus conductor by
private respondent Philippine Rabbit Bus Line Company. Petitioner
filed an application for leave of absence alleging that he was
experiencing chronic pain from the gunshot wounds he sustained in
January 1984 when he tried to defend the earnings of the company
from "brigands."Respondent company placed petitioner under
preventive suspension for his absence without an approved leave of
absence. Petitioner was directed to report to a certain Mr. T.
Cunanan within three (3) days from receipt of the notice at the
companys Main Office to explain his side in a formal
investigation.Petitioner tried to talk to company president Nisce
and he was told that he would be allowed to report to work the next
day. When he reported for work, however, he was not given any
assignment. Petitioner filed a complaint against respondents for
illegal dismissal, underpayment/nonpayment of overtime pay, premium
pay for holiday and rest day and service incentive leave pay, as
well as moral and exemplary damages.Private respondents (company)
contend that petitioner was validly dismissed for abandonment of
work.The Labor Arbiter stated that "[a]n unacted application for
leave has the effect of abandonment if an employee begins to enjoy
a leave of absence even before its approval."
ISSUEWON Petitioner De Guzman was illegally dismissed from
employment
RULINGYES. To constitute abandonment, two elements must concur:
(1) the failure to report for work or absence without valid or
justifiable reason, and (2) a clear intention to sever the
employer-employee relationship, with the second element as the more
determinative factor and being manifested by some overt acts. Mere
absence is not sufficient. The burden of proof is on the employer
to show an unequivocal intent on the part of the employee to
discontinue employment. In this case, the respondent company failed
to discharge this burden. Certain facts dissuade the Court from
believing that petitioner intended to sever his employment
relations with respondent company. Notably, petitioner commenced
this suit on May 24, 1996 or more than six (6) months after
respondent company stopped giving him any work assignment.Under
Article 286 of the Labor Code, the bona fide suspension of the
operation of a business or undertaking for a period not exceeding
six months shall not terminate employment. Consequently, when the
bona fide suspension of the operation of a business or undertaking
exceeds six months, then the employment of the employee shall be
deemed terminated. By the same token and applying said rule by
analogy, if the employee was forced to remain without work or
assignment for a period exceeding six months, then he is in effect
constructively dismissed.Petitioners dismissal by reason of
abandonment has not been convincingly established.The Court granted
the petitioner separation pay; full backwages; unpaid overtime pay,
premium pay for holiday and rest day, and service incentive leave
pay; moral and exemplary damages.
482 Sentinel Security v NLRC 295 SCRA 123 Temporary Off Detail
or Floating Status
FACTSThe complainants were employees of Sentinel Security Agency
(SSA) and were assigned as guards at the premises of Philippine
American Life Insurance (PALI). PALI asked for the replacement of
all the security guards in certain offices including the
complainants. Complainants reported to SSA but instead of being
reassigned to other clients, they were told that they were replaced
because they are already old.The decision of the Court declared
that complainants were illegally dismissed by the agency and was
ordered to pay back wages.
ISSUE(1) WON respondents employees were illegally dismissed. (2)
WON Petitioner-Client is liable for back wages.
RULING(1) YES. There was no suspension of operation, business or
undertaking, bona fide or not, that would have justified placing
the complainants off-detail and making them wait for a period of
six months. The only logical conclusion from the foregoing
discussion is that the Agency illegally dismissed the
complainants.(2) NO. The Court held that Client (PALI) was not
responsible for the illegal dismissal of the complainants. Thus, it
should not be held liable for back wages. However, the court did
not absolve PALI which, as an indirect employer, is solidarily
liable with Petitioner Agency for complainants unpaid service
incentive leave.
483 Namawu v Marcopper 570 SCRA 637 Stoppage of Operations by
Government
FACTSDepartment of Environment and Natural Resources (DENR)
ordered the indefinite suspension of MARCOPPER's operations for
causing damage to the environment of the Province of Marinduque by
spilling the company's mine waste or tailings from an old
underground impounding area into the Boac River, in violation of
its Environmental Compliance Certificate (ECC). Subsequently, DENR
Secretary ordered the cancellation of MARCOPPERs ECC.NATIONAL MINES
and ALLIED WORKERS UNION (NAMAWU), petitioner, claimed that due to
the indefinite suspension of MARCOPPER's operations, its members
were not paid the wages due them and separation pay. Prior to the
case arising from the suspension of operations, there is already a
pending case between the same parties of an illegal strike. Three
(3) employees in the present case did not participate in the
illegal strike case to which 615 NAMAWU members were parties.The
Court of Appeals, in deciding the illegal strike case, decided in
favour of the company and denied the separation pay award.The NLRC,
on the other hand, decided on the suspension of operation case
granting the employees separation pay.The respondent company claim
that CA had already confirmed the dismissal of the 615 NAMAWU
members and had already decided on the grant of the separation
pay.
ISSUEWON the employees are to be granted their separation
pay.
RULINGRegarding the 615 NAMAWU members who participated in the
illegal strike case, the Court held that NLRC cannot reverse the
decision of a higher tribunal in a case with the same claim already
decided. The Court dismissed the petition with respect to the 615
NAMAWU members for they are no longer employees at the time
MARCOPPER suspended its operations.Regarding the 3
non-participating employees, the Court granted them separation
pay.As of the day the companys ECC was cancelled, the temporary
suspension of operations became permanent so that MARCOPPER did not
have to wait for the end of the six-month suspension of operations
before the services of the three employees were deemed terminated.
In Labor Code terms, the cancellation of the ECC amounted to a
company closure governed by Article 283 of the Labor Code - the
provision that governs the relationship of employers and employees
in closure situations. Pursuant to Article 283 of the Labor Code,
MARCOPPER is ordered to pay the 3 non-participating employees their
separation pay.
484 Pres. Decree No. 183 May 6, 1973Fulfillment of Military Duty
or Civil Duty
PROVIDING FOR THE ANNUAL REGISTRATION OF RESERVISTS OF THE ARMED
FORCES OF THE PHILIPPINES; GRANTING SECURITY OF TENURE TO
RESERVISTS EMPLOYED IN PRIVATE FIRMS WHILE UNDERGOING REFRESHER
TRAINING, MOBILIZATION OR ASSEMBLY TESTS OR ANNUAL ACTIVE DUTY
TRAINING IN FULFILLMENT OF THEIR MILITARY OBLIGATIONS; AND FOR
OTHER PURPOSES
WHEREAS, to provide for a more effective reserve training and
defense build-up program, it is further necessary to grant security
of tenure for reservists employed in private firms and
establishment during periods of absence while fulfilling their
military obligations to the Republic, subject to certain
conditions.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the
Constitution as Commander-in-Chief of all the Armed Forces of the
Philippines, and pursuant to Proclamation No. 1081, dated September
21, 1972, continued in Proclamation No. 1104, dated January 17,
1973, and General Order No. 1, dated September 22, 1972, as
amended, do hereby order and decree that henceforth:
(f) Any employee of any private commercial, industrial, or
agricultural firm, with an annual gross volume of business of not
less than two hundred and fifty thousand pesos and with a personnel
force of at least twenty employees, who is called to undergo
refresher training, or a mobilization or assembly test, or annual
active duty training in the Armed Forces of the Philippines, shall
not loss his position or suffer any loss of pay due to his absence
in the fulfillment of his military obligation: Provided, That said
firm shall be entitled to claim the salaries paid to such employee
during such training period as a deductible item in its income tax
return.
485 Llora v Drilon 179 SCRA 175RA 7641 Retirement Pay Law Dec 9,
1992
FACTSPrimitivo V. Alviar was a truck driver of petitioner. At
the time he stopped working, he was 65 years of age. He filed a
complaint and was asking for his retirement benefits.Petitioners
opposed the complaint and alleged that all of the employment
benefits claimed by private respondent Alviar had already been
fully paid. On the matter of retirement benefits, it was contended
that Mr. Alviar had not been dismissed by Llora Motors, it was
complainant who abandoned his work since the last week of April
1985 and never reported since then. Neither had Mr. Alviar been
retired for the simple reason that respondent corporation does not
have any retirement plan or any collective bargaining agreement
with the employees for no union exists within the company because
the employees, drivers included, received more than the standard
benefits for their labor.Labor Arbiter granted Alviar a total of
P16, 164.87 money claims including the P9,985.80 retirement
benefits.
ISSUEWON Alviar is legally entitled to receive retirement
benefits from petitioners.
RULINGNO. Our Labor Code has only one article that deals with
the subject of "retirement from the service." Article 287 of the
Code reads as follows:Article 287. Retirement. Any employee may be
retired upon reaching the retirement age established in the
Collective Bargaining Agreement or other applicable employment
contract. In case of retirement, the employee shall be entitled to
receive such retirement benefits as he may have earned under
existing laws and any collective bargaining or other
agreement.Article 287 above shows that entitlement to retirement
benefits may accrue either (a) under existing laws or (b) under a
collective bargaining agreement or other employment contract. It is
at once apparent that Article 287 does not itself purport to impose
any obligation upon employers to set up a retirement scheme for
their employees over and above that already established under
existing laws.Article 287 recognizes that existing laws already
provide for a scheme by which retirement benefits may be earned or
accrue in favor of employees, as part of a broader social security
system that provides for retirement benefits. It is not disputed
that Alviar already received his retirement benefits as provided in
the Social Security Act.Article 287 of the Labor Code also
recognizes that employers and employees may, by a collective
bargaining or other agreement, set up a retirement plan in addition
to that established by the Social Security law, but prescribes at
the same time that such consensual additional retirement plan
cannot be substituted for or reduce the retirement benefits
available under the compulsory scheme established by the Social
Security law. As been reiterated by petitioners, there is no
collective bargaining between them and employees nor was there an
agreement about retirement benefits.There being no contractual or
statutory basis on the payment of retirement by the petitioners to
private respondent Alviar, the decision of the Labor Arbiter
regarding the retirement is set aside.
486 Abaquin v Atienza 190 SCRA 460RA 7641 Retirement Pay Law Dec
9, 1992
FACTSPetitioner security agency employed private respondent
Antonio B. Jose as a security guard. Almost twenty-five (25) years
later, Jose voluntarily resigned in view of his failing health and
his desire to withdraw his cash deposits with petitioner. He was
then sixty-one (61) years old. The petitioner company, relying on
the absence of any management policy or agreement between them
regarding retirement or termination benefits, paid Jose only his
cash deposits. Feeling aggrieved, Jose filed a complaint against
petitioner for separation pay.Labor Arbiter dismissed Jose's
complaint on the ground that an employee's enjoyment of retirement
benefits or separation pay under Article 288 of the Labor Code and
Sections 13 and 14 (a), Rule I, Book VI of the Rules and
Regulations Implementing the Labor Code is subject to the existence
of a retirement plan, individual or collective agreement or
established management policy.NLRC set aside Labor Arbiters
decision and held that Jose be paid his retirement or termination
pay equivalent to month salary for every year of service
ISSUEWON Jose is entitled to retirement or termination pay.
RULINGYes, he is entitled to termination pay but not retirement
pay.The legal provisions involved in this petition provide as
follows: Art, 288. * Retirement. Any employee may be retired upon
reaching the retirement age established in the collective
bargaining agreement or other applicable employment contract. In
case of retirement, the employee shall be entitled to receive such
retirement benefits as he may have earned under existing laws and
any collective bargaining or other agreement. (Labor Code) Sec. 14.
Retirement benefits. An employee who is retired pursuant to a
bona-fide retirement plan or in accordance with the applicable
individual or collective agreement or established employer policy
shall be entitled to all the retirement benefits provided therein
or to termination pay equivalent at least to one-half month salary
for every year of service, whichever is higher, a fraction of at
least six (6) months being considered as one whole year.There being
no individual or collective agreement between the parties or
established employer's policy regarding retirement benefits,
petitioner's resistance to private respondent's claim therefore is
legally defensible.Be that as it may, the Court is not prepared to
altogether set aside the award of termination pay, considering that
there exists another legal basis. The Court applied Article 285,
which considers disease as a ground for termination, in justifying
the grant for termination pay.The Court also reiterated the
distinction made in the Llora case between retirement benefits and
termination pay: Termination pay or separation pay is required to
be paid by an employer in particular situations Identified by the
Labor Code itself or by Implementing Rule I. Termination pay where
properly due and payable under some applicable provision of the
Labor Code or under Section 4 (b) of Implementing Rule I, must be
paid whether or not an additional retirement plan has been set up
under an agreement with the employer or under an "established
employer policy."The Court dismissed the petition and granted the
monetary award. The monetary award in favor of private respondent
Antonio B. Jose is understood to be in the concept of termination
pay, rather than retirement benefits.
487 Esco Hale Shoe Company v NLRC 193 SCRA 678RA 7641 Retirement
Pay Law Dec 9, 1992
FACTSPrivate respondent Casimira Pedrosa was employed by
petitioner Esco Hale Shoe Company as a shoebox maker, then as a
heel pad attacher. Having reached 65, Pedrosa applied for
retirement with the Social Security Commission and received
retirement benefits therefrom. However, Pedrosa continued working
for petitioner until years after when petitioner excluded her from
the regular work schedule.Private respondent filed a complaint and
asked for the payment of retirement benefits or separation
pay.Petitioner argued that it has neither separate retirement nor
private benefit plan and all its employees, including the private
respondent, are reported to the SSS for coverage; that private
respondent had effectively retired from the petitioner in 1982 when
she received retirement benefits from the SSS.
ISSUEWON private respondent Casimira Pedrosa be granted
retirement benfits.
RULINGYES. Art 287 states:Art. 287. Retirement. any employee may
be retired upon reaching the retirement age established in the
collective bargaining agreement or other applicable employment
contract.In case of retirement, the employee shall be entitled to
receive such retirement benefits as he may have earned under
existing laws and any collective bargaining or other agreement.
(Section 287, Labor Code, as amended)However, since private
respondent had worked with the petitioner for such a long time, We
deem it just and equitable to grant her separation pay as she is
retiring from the service of the petitioner ten (10) years beyond
the statutory age of sixty 60).In computing the separation or
retirement benefits of complainants, we have to consider the period
when the country was at war with Japan and also the occupation
years which started in December, 1941 up to 1945. The separation
benefits, therefore, have to be based on forty-five (45) years
instead of forty-nine years as claimed and computed on the basis of
the minimum wage rate in 1986 at P37.00 a day when complainant was
separated from work. And being a daily paid employee, the
computation has to be computed at 13 days per year of service, as
follows:P37.00 x 13/days = P481.00/mo.P481.00 x 45 years =
P21,645.00
488 Oxales v United Laboratories 559 SCRA 26 Retirement Plan
FACTSUNILAB established the United Retirement Plan (URP). The
plan is a comprehensive retirement program aimed at providing for
retirement, resignation, disability, and death benefits of its
members. An employee of UNILAB becomes a member of the URP upon his
regularization in the company. The URP mandates the compulsory
retirement of any member-employee who reaches the age of 60.As
retirement benefits, the employee receives (1) from Trust Fund A a
lump sum of 1 months pay per year of service "based on the members
last or terminal basic monthly salary,"5 and (2) whatever the
employee has contributed to Trust Fund B, together with the income
minus any losses incurred. The URP excludes commissions, overtime,
bonuses, or extra compensations in the computation of the basic
salary for purposes of retirement.Petitioner Oxales was the
Director of Manufacturing Services Group when he retired from
Unilab after more than 25 years of service. He received a total
amount of P2,173,230.39 as retirement benefits. Oxales claimed that
he shouldve received more than a million more for his retirement
benefits. He insisted that his bonuses, allowances, and 13th month
pay should have been factored in the computation of his retirement
benefits.UNILAB disagreeing, reminded Oxales about the provision of
the URP excluding any commissions, overtime, bonuses or extra
compensations in the computation of the basic salary of the
retiring employee.
ISSUEWON petitioners bonuses, allowances and 13th month pay
should be included in the computation of retirement benefits.
RULINGNO. The clear language of the URP should be respected.A
retirement plan in a company partakes the nature of a contract,
with the employer and the employee as the contracting parties. It
creates a contractual obligation in which the promise to pay
retirement benefits is made in consideration of the continued
faithful service of the employee for the requisite period.The Court
ruled that Oxales is not entitled to the additional retirement
benefits he is asking. The URP is very clear: "basic monthly
salary" for purposes of computing the retirement pay is "the basic
monthly salary, or if daily[,] means the basic rate of pay
converted to basic monthly salary of the employee excluding any
commissions, overtime, bonuses, or extra compensations."R.A. No.
7641 also does not apply to this case because the URP grants to the
retiring employee more than what the law gives. Under the URP, the
employee receives a lump sum of 1 pay per year of service, compared
to the minimum month salary for every year of service set forth by
R.A. No. 7641.489 PAL v ALPAP 373 SCRA 302Retirement Plan
FACTSThe case stemmed from the unilateral act of petitioner to
retire airline pilot Captain Albino Collantes under Section 2,
Article VII, of the 1967 PAL-ALPAP Retirement Plan. Contending,
inter alia, that the retirement of Captain Collantes constituted
illegal dismissal and union busting, ALPAP filed a Notice of Strike
with the Department of Labor and Employment (DOLE). Pursuant of
Article 263 (g) of the Labor Code, the Secretary of the DOLE
(hereafter referred to as Secretary) assumed jurisdiction over the
labor dispute.The retirement plan between PAL and ALPAP stated two
types of retirement: (1) Normal Retirement after 20 years of
service or 20,000 hours as pilot for PAL, a retired employee shall
receive P100,000 lumpsum or legally entitled benefits whichever is
higher (2) Late Retirement any member who remains in the service
after his normal retirement date may retire either at his option or
at the option of the Company and when so retired he shall be
entitled either to a lump sum payment of P5,000.00 for each
completed year of service rendered as a pilot, or to such
termination pay benefits to which he may be entitled under existing
laws, whichever is the greater amount.Article 287 provides that
employees, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year
of service, a fraction of at least six (6) months being considered
as one whole year.
ISSUEWhether the CBA or Art. 287 of the Labor Code should be the
basis for computation of retirement pay in this case.
RULINGCBA. An employees retirement benefits under any collective
bargaining agreement shall not be less than those provided in the
Labor Code.Under the CBA, an employee upon retirement gets an
amount equivalent to 240% of his gross monthly income for every
year of service he rendered to petitioner. This is in addition to
the amount of not less than P100,000.00 that he shall receive under
the 1967 Retirement Plan.The benefits from CBA is clearly higher
than those he would receive under Article 287 of the Civil Code.490
Eastern Shipping v Sedan 486 SCRA 565Option
FACTSPetitioners hired on a per-voyage basis private respondent
Dioscoro Sedan as 3rd marine engineer and oiler in one of the
vessels owned by petitioners. His last voyage was on July 27, 1997
on board the vessel M/V Eastern Universe. He said he was
disembarking because he was going to take the board examinations
for marine engineers.Two months later, on September 27, 1997, Sedan
sent a letter to petitioners applying for optional retirement,
citing as reason the death of his only daughter, hence the
retirement benefits he would receive would ease his financial
burden. However, petitioners deferred action on his application for
optional retirement since his services on board ship were still
needed.
ISSUEWON private respondent Sedan may exercise the option to
retire.
RULINGNO. The age of retirement is primarily determined by the
existing agreement between the employer and the employees. However,
in the absence of such agreement, the retirement age shall be fixed
by law. Under Art 287 of the Labor Code, the legally mandated age
for compulsory retirement is 65 years, while the set minimum age
for optional retirement is 60 years.In the instant case, there is
an agreement between petitioner shipping company and its employees.
The agreement states:C. Optional Retirement:It will be the
exclusive prerogative and sole option of this company to retire any
covered employee who shall have rendered at least fifteen (15)
years of credited service for land based employees and 3,650 days
actually on board vessel for shipboard personnel.Clearly, the
eligibility age for optional retirement is set at 60 years.
However, employees of herein petitioners who are under the age of
60 years, but have rendered at least 3650 days (10 years) on board
ship or fifteen (15) years of service for land-based employees may
also avail of optional retirement, subject to the exclusive
prerogative and sole option of petitioner company.Records show that
private respondent was only 48 years old when he applied for
optional retirement. Thus he cannot claim optional retirement
benefits as a matter of right. His application for optional
retirement was subject to the exclusive prerogative and sole option
of the shipping company pursuant to the above cited agreement
between the workers and the company.
491JACULBE vs. SILLIMAN UNIVERSITY518 SCRA 445OPTION
FACTS Sometime in 1958, petitioner began working for respondents
university medical center as a nurse. In a letter in December 1992,
respondent, through its Human Resources Development office,
informed petitioner that she was approaching her 35thyear of
service with the university and was due for automatic retirement on
November 18, 1993, at which time she would be 57years old. This was
pursuant to respondents retirement plan for its employees which
provided that its members could be automatically retired upon
reaching the age of 65 or after 35 years of uninterrupted serviceto
the university.Respondent requiredcertain documents
inconnectionWith petitioners impending
retirement.Abriefexchangeoflettersbetweenpetitionerandrespondentfollowed.Petitioner
emphatically insisted that the compulsory retirement under the plan
was tantamount to a dismissal and pleaded with respondent to be
allowed to work until the age of 60 because this was the minimum
age at which she could qualify for SSS pension. But respondent
stood pat on its decision to retire her, citing company policy.On
November 15, 1993, petitioner filed a complaint in the National
Labor Relations Commission (NLRC) for termination of service with
preliminary injunction and/or restraining order. On November 18,
1993, respondent compulsorily retired petitioner. The labor arbiter
rendered a decision finding respondent guilty of illegal dismissal
and ordered that petitioner instated and paid full back wages. On
appeal, the NLRC reversed the labor arbiters decision and dismissed
the complaint. The CA affirmed the NLRC.
ISSUE Whether or not the respondent has the option on retirement
or the employers can compulsory make them retire?
RULING Retirement plans allowing employers to retire employees
who are less than the compulsory retirement age of 65 are not per
se repugnant to the constitutional guaranty of security of
tenure.Article 287 of the Labor Code provides: Retirement - Any
employee may be retired upon reaching the retirement age
established in the collective bargaining agreement orother
applicable employment contract. By its express language, the Labor
Code permits employers and employees to fix the applicable
retirement age at below 60 years. The rules and regulations of the
plan show that participation therein was not voluntary at all. It
was through no voluntary act of her own that petitioner became a
member of the plan. In fact, the only way she could have ceased to
be a member thereof was if she stopped working for respondent
altogether. Retirement is the result of a bilateral act of the
parties, a voluntary agreement between the employer and the
employee whereby the latter, after reaching a certain age agrees to
severe his or her employment with the former. The truth was that
petitioner had no choice but to participate in the plan, given that
the only way she could refrain from doing so was to resign or lose
her job. It is axiomatic that employer and employee do not stand on
equal footing, a situation which often causes an employee to act
out of need instead of any genuine acquiescence to the employer.
This was clearly just such
ainstance.Anemployerisfreetoimposearetirementagelessthan65foraslongasithasthe
empoyeesconsent. Stated conversely, employees are free to accept
the employers offer to lower the retirement age if they feel they
can get a better deal with the retirement plan presented by the
employer. Thus, having terminated petitioner solely on the basis of
a provision of a retirement plan which was not freely assented to
by her. Respondent was guilty of illegal dismissal.
492PRODUCERS BANK VS NLRC 298 SCRA 517EXTENSION OF SERVICE
FACTSPetitioner was placed by Central Bank of thePhilippines
(BangkoSentral ngPilipinas) under a conservator for the purpose of
protecting its assets. When the respondents ought to implement the
CBA (Sec. 1,Art. 11)regarding the retirement plan and pertaining to
uniform allowance, the acting conservator of the petition expressed
objection resulting an impasse between the petitioner bank and
respondent union. The deadlock continued for at least six months.
The private respondent, to resolve the issue filed a case against
petitioner for unfair labor practice and flagrant violation of the
CBA. The Labor Arbiter dismissed the petition. NLRC reversed the
findings and ordered the implementation of the CBA.
ISSUEWON the employees who have retired have no personality to
file an action since there is no longer an employer-employee
relationship.
RULINGEmployees who have retired still have the personality to
file a complaint. Retirement results from a voluntary agreement
between the employer and the employee whereby the latter after
reaching a certain age agrees to sever his employment with the
former. The very essence of retirement is the termination of
employer-employee relationship. Retirement of the employee does not
in itself affect his employment status especially when it involves
all rights and benefits due to him, since these must be protected
as though there had been no interruption of service. It must be
borne in mind that the retirement scheme was part of the employment
package and the benefits to be derived therefrom constituted as it
were a continuing consideration of services rendered as well as an
effective inducement foe remaining with the corporation. It is
intended to help the employee enjoy the remaining years of his
life. When the retired employees were requesting that their
retirement benefits be granted, they were not pleading for
generosity but merely demanding that their rights, embodied in the
CBA, be recognized. When an employee has retired but his benefits
under the law or CBA have not yet been given, he still retains, for
the purpose of prosecuting his claims, the status of an employee
entitled to the protection of the Labor Code, one of which is the
protection of the labor union
493CARLOS F. SALOMON, vs.ASSOCIATE INTERNATIONAL SHIPPING
LINES457 SCRA254BENEFITS
FACTSThe Association of International Shipping Lines, Inc.,
respondent, is a corporation engaged in the principal business of
shipping and container and/or cargo services. As a result of a
decline in the volume of cargo measuring activities and shipping
transactions, respondent suffered substantial financial losses With
this development, respondent adopted an organizational streamlining
program that resulted in the closure of its Measuring Department
and retrenchment or termination from the service of seventeen (17)
workers. Among them were Carlos F. Salomon, Stephen L. Bathan,
Nicolas E. Camara, Emmanuel B. Dela Torre, Leonilo C. Donato,
Segundo E. Ferrer, Jesus L. Guela, Jr., Amado P. Liongson,
Deogracias C. Manalanzan, Gerundio A. Natanauan, Ricardo D. Parza,
Ricardo R. Samaniego, Jr., Valentin R. Urrea, Jr., and Francisco H.
Villanueva, herein petitioners who occupied booking coordinator and
measurer positions. Respondent terminated petitioners services
effective April 30, 1998.Simultaneously, respondent filed with the
Department of Labor and Employment (DOLE) a Notice of Closure or
report of petitioners retrenchment from the service.Aggrieved,
petitioners filed with the National Conciliation and Mediation
Board (NCMB) a complaint for illegal dismissal and payment of
retirement benefits against respondent.During the conciliation
proceedings, respondent paid petitionerstheir retirement pay at the
rate of 1 month salary per year of service. Petitioners filed with
the Labor Arbiter a complaint for payment ofretirement benefits,
damages and attorneys fees against respondent, They alleged that
what each received was a separation pay, not retirement
benefits.Labor Arbiter rendered a Decision dismissing the
complaint.Petitioners then filed a motion for reconsideration but
was denied by the NLRC in a Resolution dated January 8, 2001.
Hence, they filed with the Court of Appeals a petition
forcertiorarialleging that the NLRC committed grave abuse of
discretion in declaring that they are not entitled to retirement
benefits and in holding that they are precluded from claiming such
benefits because of their quitclaims.On November 28, 2002, the
Court of Appeals issued a Resolution denying petitioners motion for
reconsideration.
ISSUEDoes the petitioner entitled for optional retirement
benefits?
RULINGPetitioners wereseparated from the service for
cause.Consequently, pursuant to the CBA, what each actually
received is a separation pay. Accordingly and considering their
Releases and Quitclaims, they are no longer entitled to retirement
benefits.It bears stressing that as held by the Labor Arbiter, the
NLRC and the Court of Appeals, there is no provision in the parties
CBA authorizing the grant to petitioners of retirement benefits in
addition to their retrenchment pay; and that there is no indication
that they were forced by respondent to sign the Releases and
Quitclaims. WHEREFORE, the petition is DENIED. The assailed
Decision dated June 13, 2002 and Resolution dated November 28, 2002
of the Court of Appeals in CA-G.R. SP No. 63176 are hereby
AFFIRMED. Costs against petitioners.
494 SMC VS NLRCG.R. No. 107693.July 23, 1998FORCED
RETIREMENT
FACTSComplainants allege that on March 14, 1984 the respondent
company notified them that effective at the close of the business
hours on April 15, 1984, it will exercise its option to retire them
from the service; that complainants would not anymore be allowed to
work from March 14, 1984 but that they would continue to receive
their compensation up to April 15, 1984; that at the time the
respondent corporation exercised the said option, all the
complainants have not yet reached the compulsory retirable age of
sixty (60) years old; The complainants allege that they had no bad
record with the respondent corporation as they were never
admonished, reprimanded or suspended during the term of their
employment; that their retirement from work effected at the option
of therespondent corporation violated their tenurial security of
employment, as provided for in Article 280 of the LaborCode. They
were informed on respondents option to retire them from the
service, the latters prerogative was solely premised on the
companys retirement and deathbenefit plan; that the said plan or
company policy violated the security of tenure of the complainants
as it is not one of the grounds enumerated in Art. 183 of the Labor
Code for terminating the services of an employee. Complainants
claim that their unceremonious and unlawful retirement amount to
constructive dismissal. Respondents further aver that complainants
were correctly and completely paid their separation benefits; that
complainants received twice than what is provided for by the Labor
Code of the Philippines,
ISSUEIs the force retirement lawful or the employer is guilty of
illegal dismissal?
RULINGAll things studiedly considered, we are therefore of the
opinion, and so find, that the dismissal of the herein private
respondents was involuntary and therefore illegal. Continuing
accretion of case law upholds the nullity of quitclaims especially
if undertaken under questionable or doubtful circumstances.It bears
stressing that, the private respondents had no choice but to sign
subject quitclaims without which they could not receive the
benefits due them, amounts they badly needed while out of work. t
is hard to believe that the private respondents would voluntarily
retire.It should be borne in mind that the original complainants,
Messrs. Chu, Teddy Jr. and Adad, were all in their advanced years
and could not expect to get a similar employment.In the case of
private respondent Torres, he was 41 years old when he was forced
to retire.At that age, it would not be easy for him to land a job
with the same high benefits.In the case of Mr. Castellano, he was
only 36 years old when forced to resign.It was inconceivable for
him to resign from a secure position considering the minimal
financial benefits accruing from voluntary retirement at age 36,
and the scarcity of employment opportunities.Under its last
assigned error, petitioner maintains that the provision in the
Collective Bargaining Agreement (CBA) reducing the retirable period
of service from 20 to 15 years is applicable to private
respondents. As can be gleaned from the petition itself, not only
were private respondents supervisory employees, they were also with
thesales force.Mr. Edmundo Torres, Jr. was a Regional Sales Manager
while Mr. Castellano was a District Sales Supervisor of
petitioner.WHEREFORE, for lack of merit, the petition is hereby
DISMISSED. There is an illegal dismissal.
495Sulit v. EMPLOYEES COMPENSATION COMMISSION 98 SCRA 483LAW
CONCEPTS
FACTSThis is a claim for employees compensation. Gregorio S.
Sulit was employed as a mechanic in the Cavite Naval Shipyard,
Naval Shore Establishment, Cavite Naval Base of the Philippine Navy
from May 26, 1966 up to his death on December 17, 1975 at the age
of fifty three years. libraryDue to persistent backaches and
bilateral lumbar pains, accompanied by fever and chills, he was
confined in the Philippine General Hospital from December 11, 1975
up to his death six days later. He died of acute pyelonephritis and
bronchopneumonia.Fe N. Sulit, the widow of the deceased mechanic,
filed a claim for employees compensation under Presidential Decree
No. 626. She contended that her husbands work was postural in
nature and time consuming and that his repairing of a motor vehicle
while in a prone position under it for long perspiring hours daily
in the span of his working career produced a kinking of his
ureters, thereby causing a constant and progressive stagnancy of
urine flow which led to infection in the urinary tract and stone
formation therein.The Government Service Insurance System and the
Employees Compensation Commission rejected the claim because
pyelonephritis and bronchopneumonia are not occupational diseases
since they do not usually and directly result from the occupation
or profession of the worker. Mrs. Sulit appealed to this Court. She
contends that she was denied due process because she was not
accorded an opportunity to be heard.
ISSUEIs GSIS correct in ruling that the petitioner is not
entitled for the benefit?
RULING"SEC. 2. Grounds for compensation. When an employee
suffers personal injury from any accident arising out of and in the
course of his employment, or contracts tuberculosis or other
illness directly caused by such employment, or either aggravated by
or the result of the nature of such employment, his employer shall
pay compensation in the sums and to the persons hereinafter
specified. The right to compensation as provided in this Act shall
not be defeated or impaired on the ground that the death, injury or
disease was due to the negligence of a fellow servant or employee,
without prejudice to the right of the employer to proceed against
the negligent party." Hence, to restore a sensible equilibrium
between the employers obligation to pay workmens compensation and
the employees right to receive reparation for work-connected death
or disability.As correctly observed by the learned Government
Corporate Counsel, Manuel M. Lazaro, the Labor Code abolished the
presumption of compensability and the rule on aggravation of
illness caused by the nature of the employment. This Court is
powerless to apply those rules under the Labor Code (WHEREFORE, the
appeal is dismissed and the decisions of the GSIS and the Employees
Compensation Commission, denying the claim, are affirmed.
496Santosvs. EMPLOYEES' COMPENSATION COMMISSION221 SCRA 182LAW
CONCEPT
FACTSCarmen Santoss husband died of liver cirrhosis while still
a civilian employee of the Philippine Navy. Francisco Santos was
employed as welder at the Philippine Navy and its Naval Shipyard as
early as March 22, 1955. He spent the last 32 years of his life in
the government service, the first year as a welder helper and the
last two years as shipyard assistant. On January 11, 1987, he died,
the cause of which as indicated in the Death Certificate was liver
cirrhosis.Mrs. Carmen A. Santos filed a claim for the death benefit
of her husband, Francisco, on January 28, 1987, pursuant to
Presidential Decree No. 626, as amended. However, on a letter dated
April 30, 1987, the Government Service Insurance System (GSIS),
denied the claim on the ground that upon proofs and evidence
submitted, Francisco's ailment cannot be considered an occupational
disease as contemplated under P.D. 626, as amended.On appeal to the
Employees' Compensation Commission (ECC), the Commission affirmed
the denial of the GSIS on petitioner's but took cognizant of the
fact that the deceased employee did not have a previous history of
alcoholism, hepatitis or a previous history of biliary condition
which could give a clue to the nature of cirrhosis he had.Where the
claimant's illness is not listed in the Table of Occupational
Diseases embodied in Annex A of the Rules of Employees'
Compensation, said claimant must positively prove that the risk of
contracting the disease is increased by the working conditions. In
the case at bar, the Commission said that liver cirrhosis may be
classified by a mixture of etiologically and morphologically
defined entities.As a welder, Francisco was exposed to heat, gas
fumes and chemical substances coming from the burning electrodes
caused by welding. Research shows that ingestion or inhalation of
small amounts of iron over a number of years may lead to siderosis.
Acute poisoning brings about circulatory collapse which may occur
rapidly or be delayed to 48 hours with liver failure. These are
industrial hazards to which Francisco was exposed. And in the long
course of time, 32 years at that, his continuous exposure to burned
electrodes and chemicals emitted therefrom would likely cause
poisoning and malfunction of the liver.
ISSUECan Mrs. Santos claim the benefit even if the death of his
husband is not listed to the guidelines of what are
compensable?
RULINGThe Employees' Compensation Act is basically a social
legislation designed to afford relief to the working man and woman
in our society. The Employees' Compensation Commission, as the
agency tasked with implementing the social justice mandate
guaranteed by the Constitution, should be more liberal in resolving
compensation claims of employees especially where there is some
basis in the facts for inferring a work connection to the cause of
death.This interpretation gives meaning and substance to the
liberal and compassionate spirit of the law as embodied in Article
4 of the New Labor Code which states that "all doubts in the
implementation and interpretation of the provisions of the Labor
Code including its implementing rules and regulations shall be
resolved in favor of labor."The policy is to extend the
applicability of PD 626 to a greater number of employees who can
avail of the benefits under the law, which is in consonance with
the avowed policy of the state to give maximum aid and protection
to labor.Premises considered, We find the petition meritorious.
Liver cirrhosis, although not one among those listed as compensable
ailment, as considered in the case at bar as covered under the Act,
on the ground that the nature of the work of petitioner's husband,
exposed him to the risk of contracting the same.WHEREFORE, petition
is hereby GRANTED and the decision of the Employees' Compensation
Commission is REVERSED.
497Latagan v. EMPLOYEES COMPENSATION COMMISSION213 SCRA 715LAW
CONCEPT
FACTSJosue A. Latagan, who was employed in the Philippine Navy
from 1949 up to the time he died in 1978. She claims that his fatal
ailment known as bronchogenic carcinoma was caused by his
employment, and that the risk of contracting the disease was
aggravated by the working conditions attendant to his duties as
gunnersmate in the Philippine Navy.Petitioners husband died on 29
January 1978. Subsequently, she filed a claim for death benefits
with the Survivorship Benefits Department, Government Service
Insurance System (GSIS).Petitioner now assails the denial of her
claim for death benefits on the ground that respondent ECC
committed reversible error in sustaining the position of GSIS that
the fatal ailment of her husband was not an occupational disease,
hence, not compensable, and in affirming the denial sans formal
hearing. The cause of her husbands death, bronchogenic carcinoma,
is not an occupational disease.
ISSUE: Can the widow of Josue Latagan entitled to get
occupational death benefit even if the disease of his husband is
not enlisted to the guidelines?
RULING: Admittedly, petitioner failed to present substantial
evidence to prove that the decedents working conditions as
gunnersmate increased the risk of his contracting the fatal
illness. Consequently, We quote with approval the findings of
respondent ECC careful review of the records show that petitioner
did not present any evidence to establish work connection. She
relied solely on the theory of aggravation and presumption of
compensability under the old compensation law. In the absence of
proof, and none appears on record, We cannot conclude that the
employment of the decedent increased the risk of his contracting
the disease. As regards the contention of petitioner that she was
denied a formal hearing and thus deprived of an opportunity to
present additional substantial evidence to support her claim, Our
ruling in Sulit v. ECC 10 is enlightening "The filing with the GSIS
of a claim for income benefits is in its inception not an adversary
proceeding. The claim is filed on a prescribed form. The claimant
may present with the claim supporting papers or proof that the
disability or death was work-connected or that the risk of
contracting the disease involved in the claim was increased by the
working conditions."The claim is processed by the GSIS. No formal
hearing is required in the processing of the claim."If after
processing, the GSIS finds, as in this case, that on its face the
claim has no basis, then it is rejected outright. The claim becomes
controversial when the claimant appeals to the Employees
Compensation Commission, or when an aggrieved party appeals from
the Commission to this Court (Arts. 180 and 181, Labor Code; Secs.
3 to 5, Rule XVIII and sec. 1, Rule XVII, Amended Rules on
Employees Compensation."Petitioner, on the instant case, was
afforded the fair and reasonable opportunity to prove that her
husbands death was work-connected. The respondent agencies appear
to have taken into account her application for death benefits, her
supporting documents, her motion for reconsideration of the denial
of her claim, and her appeal before respondent ECC. Unfortunately,
however, We cannot like respondents find any legal justification
for a favorable award on her claim.WHEREFORE, the petition is
DENIED for lack of merit, and the decisions of respondents
Government Service Insurance System (GSIS) and Employees
Compensation Commission (ECC) are hereby AFFIRMED. No costs.
498Orate v CA399 SCRA 572EMPLOYER
FACTSOn December 5, 1972, petitioner Norma Orate was employed by
Manila Bay Spinning Mills, Inc., as a regular machine operator. she
was diagnosed to be suffering from invasive ductal carcinoma
(breast, left), commonly referred to as cancer of the
breast.Consequently, she underwent modified radical mastectomy on
June 9, 1995.The operation incapacitated her from performing heavy
work, for which reason she was forced to go on leave and,
eventually, to retire from service at the age of 44.On November 17,
1995, petitioner applied for employees compensation benefits with
the Social Security System (SSS), but the same was denied on the
ground that her illness is not work-related.On January 22, 1996,
she moved for reconsideration contending that her duties as machine
operator which included lifting heavy objects increased the risk of
contracting breast cancer. The SSS, however, reiterated its denial
of petitioners claim for benefits. The Court of Appeals reversed
the decision of the ECC, and granted petitioners claim for
compensation benefit under the Workmens Compensation Act (Act No.
3428). it held that petitioners breast cancer must have intervened
before the effectivity of Title II, Book IV of the Labor Code on
Employees Compensation and State Insurance Fund on January 1, 1975,
hence, the governing law on petitioners claim for compensation
benefit is Act No. 3428, which works upon the presumption of
compensability, and not the provisions of the Labor Code on
employees compensation.Petitioner instead should be entitled to the
benefits under Act No. 3428, as amended, together with the
medical-surgical expenses, including doctors bill. Petitioner filed
a motion for reconsiderationarguing that it is the Labor Code which
should be applied to her case inasmuch as there is no evidence that
the onset of her breast carcinoma occurred before January 1,
1975.She claimed that the basis of the computation of her
compensation benefits should be the Labor Code and not the Workmens
Compensation Act.ISSUEIs the Court of Appeals correct in ruling
that the benefit is not compensable against the employer or the
State fund?RULINGIn workmens compensation cases, the governing law
is determined by the date when the claimant contracted the
disease.An injury or illness which intervened prior to January 1,
1975, the effectivity date of P.D. No. 626, shall be governed by
the provisions of the Workmen's Compensation Act,while those
contracted on or after January 1, 1975 shall be governed by the
Labor Code, as amended by P.D. No. 626. Corollarily, where the
claim for compensation benefit was filed after the effectivity of
P.D. No. 626 without any showing as to when the disease intervened,
the presumption is that the disease was contracted after the
effectivity of P.D. No. 626In the case at bar, petitioner was found
to be positive for breast cancer on March 22, 1995.No evidence,
however, was presented as to when she contracted said
ailment.Hence, the presumption is that her illness intervened when
P.D. No. 626 was already the governing law. Hence, while we sustain
petitioners claim that it is the Labor Code that applies to her
case, we are nonetheless constrained to rule that under the same
code, her disability is not compensable.Much as we commiserate with
her, our sympathy cannot justify an award not authorized by law.It
is well to remember that if diseases not intended by the law to be
compensated are inadvertently or recklessly included, the integrity
of the State Insurance Fund is endangered. Compassion for the
victims of diseases not covered by law ignores the need to show a
greater concern for the trust fund to which the tens of millions of
workers and their families look to for compensation whenever
covered accidents, diseases and deaths occur. This stems from the
development in the law that no longer is the poor employee still
arrayed against the might and power of his rich corporate employer,
hence the necessity of affording all kinds of favorable
presumptions to the employee. It is now the trust fund and not the
employer which suffers if benefits are paid to claimants who are
not entitled under the law
WHEREFORE, in view of all the foregoing, the decision of the
Court of The decision of the Employees Compensation Commission
dismissing petitioners claim for compensation benefits under the
Employees Compensation Program isREINSTATED.
499PHILIPPINE BLOOMING MILLS CO., INC. vs SOCIAL SECURITY
SYSTEM17 SCRA 107COVERAGE
FACTSThe Philippine Blooming Mills Co., Inc., a domestic
corporation since the start of its operations in 1957, has been
employing Japanese technicians under a pre-arranged contract of
employment, the minimum period of which employment is 6 months and
the maximum is 24 months.From April 28, 1957, to October 26, 1958,
the corporation had in its employ 6 Japanese technicians. In
connection with the employment of these aliens, it sent an inquiry
to the Social Security System (SSS) whether these employees are
subject to compulsory coverage under the System, which inquiry was
answered by the First Deputy Administrator of the SSS.Starting
September, 1957, and until the aforementioned Japanese employees
left the Philippines on October 26, 1958, the corresponding premium
contributions of the employer and the employees on the latter's
memberships in the SSS On October 7, 1958, the Assistant General
Manager of the corporation, on its behalf and as attorney-in-fact
of the Japanese technicians, filed a claim with the SSS for the
refund of the premiums paid to the System, on the ground of
termination of the members' employment. As this claim was denied,
they filed a petition with the Social Security Commission for the
return or refund of the premiums, in the total sum of P2,520.00,
paid by the employer corporation and the 6 Japanese employees, plus
attorneys' fees. This claim was controverted by the SSS, alleging
that Rule IX of the Rules and Regulations of the System,After
hearing, the Commission denied the petition for the reason that,
although under the original provisions of Section 3 (d) of Rule I
of the Rules and Regulations of the SSS, alien-employees (who are
employed temporarily) and their employers are entitled to a rebate
of a proportionate amount of their respective contributions upon
the employees' departure from the Philippines, said rule was
amended by eliminating that portion granting a return of the
premium contributions. Republic Act 1161 requires compulsory
coverage of employers and employees under the System. It is
actually a legal imposition, on said employers and employees,
designed to provide social security to the workingmen. Membership
in the SSS is, therefore, in compliance with a lawful exercise of
the police power of the State, to which the principle of
non-impairment of the obligation of contract is not a proper
defense. As pointed out by the Solicitor General, the issue that
should be determined in this case is whether, in implementing the
SSS law and denying appellants' claim for refund of their premium
contributions, due process was observed.ISSUEIs the compulsory
contribution of the temporary alien-employees lawful? Can the
employer get a refund?RULINGThese rules and regulations were
promulgated to provide guidelines to be observed in the enforcement
of the law. As a matter of fact, Section 3 of Rule I is merely an
enumeration of the "general principles to (shall) guide the
Commission" in the determination of the extent or scope of the
compulsory coverage of the law. One of these guiding principles is
paragraph (d) relied upon by appellants, on the coverage of
temporarily-employed aliens. It is not here pretended, that the
amendment of this Section 3(d) of Rule I, as to eliminate the
provision granting to these aliens the right to a refund of part of
their premium contributions upon their departure from the
Philippines, is not in implementation of the law or beyond the
authority of the Commission to do.It may be argued, however, that
while the amendment to the Rules may have been lawfully made by the
Commission and duly approved by the President on January 14, 1958,
such amendment was only published in the November 1958 issue of the
Official Gazette, and after appellants' employment had already
ceased. Suffice it to say, in this regard, that under Article 2 of
the Civil Code,the date of publication of laws in the Official
Gazette is material for the purpose of determining their
effectivity, only if the statutes themselves do not so provide.In
the present case, the original Rules and Regulations of the SSS
specifically provide that any amendment thereto subsequently
adopted by the Commission, shall take effect on the date of its
approval by the President. Consequently, the delayed publication of
the amended rules in the Official Gazette did not affect the date
of their effectivity, which is January 14, 1958, when they were
approved by the President. It follows that when the Japanese
technicians were separated from employment in October, 1958, the
rule governing refund of premiums is Rule IX of the amended Rules
and Regulations, which requires membership for 2 years before such
refund of premiums may be allowed.Wherefore, finding no error in
the resolution of the Commission appealed from, the same is hereby
affirmed, with costs against the appellants.
500Sta. Rita v. CA247 SCRA 487COVERAGEFACTSPetitioner Sta. Rita
was charged in the RTC with violating Section 2(a) in relation to
Sections 22(d) and 28(e) of Republic Act No. 1161, as amended,
otherwise known as the Social Security Law. The RTC sustained
petitioner's motion and dismissed the criminal case filed against
him. It ruled that the Memorandum of Agreement entered into between
the Department of Labor and Employment ("DOLE") and the Social
Security System ("SSS") extending the coverage of Social Security,
Medical Care and Employment Compensation laws to Filipino seafarers
on board foreign vessels was null and void as it was entered into
by the Administrator of the SSS without the sanction of the
Commission and approval of the President of the Philippines, in
contravention of Section 4 (a) of R.A. No. 1161, as amended.In the
Petition for Review, petitioner Sta. Rita contends that the
Filipino seafarers recruited by B. Sta. Rita Co. and deployed on
board foreign vessels outside the Philippines are exempt from the
coverage.
ISSUEIs the Sta. Rita exempted of the SSS Law because he was
deployed on foreign vessel?
RULING:Terms DefinedEMPLOYMENT Any service performed by an
employee for his employer, except (5) Service performed on or in
connection with an alien vessel by an employee if he is employed
when such vessel is outside the Philippines.According to
petitioner, the Memorandum of Agreement entered into by the DOLE
and the SSS is null and void as it has the effect of amending the
aforequoted provision of R.A. No. 1161 by expanding its coverage.
This allegedly cannot be done as only Congress may validly amend
legislative enactments.Petitioner prays that the Court set aside
the decision of the Court of Appeals ordering the reinstatement of
Criminal Case No. Q-92-35426 and that the Order of the RTC
dismissing the same be upheld.It is well-settled in our
jurisdiction that the right to appeal is a statutory right and a
party who seeks to avail of the right must comply with the
rules.These rules, particularly the statutory requirement for
perfecting an appeal within the reglementary period laid down by
law, must be strictly followed as they are considered indispensable
interdictions against needless delays and for orderly discharge of
judicial business.Petitioner's failure to seasonably file the
Petition and its failure to comply with the aforequoted Circulars
of the Court necessitate the denial of the Petition.Besides, even
if the Petition had been filed on time and had complied with the
Circulars, it would still have to be denied as petitioner has
failed to show that respondent appellate court committed any
reversible error in rendering the assailed decision.The Court
agrees with the CA that the Information filed against petitioner
was sufficient as it clearly stated the designation of the offense
by the statute. Thus, the Standard Contract of Employment to be
entered into between foreign shipowners and Filipino seafarers is
the instrument by which the former express their assent to the
inclusion of the latter in the coverage of the Social Security Act.
In other words, the extension of the coverage of the Social
Security System to Filipino seafarers arises by virtue of the
assent given in the contract of employment signed by employer and
seafarer; that same contract binds petitioner Sta. Rita or B. Sta.
Rita Company, who is solidarily liable with the foreign
shipowners/employers.It may be noted that foreign shipowners and
manning agencies had generally expressed their conformity to the
inclusion of Filipino seafarers within the coverage of the Social
Security Act even prior to the signing of the DOLE-SSS Memorandum
of Agreement.The Court of Appeals properly held that the
reinstatement of the criminal case against petitioner did not
violate his right against double jeopardy since the dismissal of
the information by the trial court had been effected at his own
instance.There are only two (2) instances where double jeopardy
will attach notwithstanding the fact that the case was dismissed
with the express consent of the accused WHEREFORE, the Court
Resolved to DENY the Petition for having been filed late, for
failure to comply with applicable Court Circulars and for lack of
merit. The assailed Decision of the Court of Appeals is hereby
AFFIRMED.
501Corporal, Sr. v. NLRC341 SCRA 658COVERAGE
FACTSThe records of the case show that the five male
petitioners, namely, Osias I. Corporal, Sr., Pedro Tolentino,
Manuel Caparas, Elpidio Lacap, and Simplicio Pedelos worked as
barbers, while the two female petitioners, Teresita Flores and
Patricia Nas worked to private respondent Lao Enteng Co.
Inc..Petitioner Nas alleged that she also worked as watcher and
marketer of private respondent.Petitioners claim that at the start
of their employment with the New Look Barber Shop, it was a single
proprietorship owned and managed by Mr. Vicente Lao.The children of
Vicente Lao organized a corporation which was registered with the
Securities and Exchange Commission as Lao Enteng Co. Inc. with
Trinidad Ong as President of the said corporation.Upon its
incorporation, the respondent company took over the assets,
equipment, and properties of the New Look Barber Shop and continued
the business.All the petitioners were allowed to continue working
with the new company until April 15, 1995 when respondent Trinidad
Ong informed them that the building wherein the New Look Barber
Shop was located had been sold and that their services were no
longer needed. Petitioners filed with the Arbitration Branch of the
NLRC, a complaint for illegal dismissal, illegal deduction,
separation pay, non-payment of 13th month pay, and salary
differentialsIn a Decision dated September 28, 1995, Labor Arbiter
Potenciano S. Caizares, Jr. ordered the dismissal of the complaint
on the basis of his findings that the complainants and the
respondents were engaged in a joint venture and that there existed
no employer-employee relation between them.Complainants failed to
show the existence of employer-employee relationship under the
fourway test established by the Supreme Court.It is a common
practice in the Barber Shop industry that barbers supply their own
scissors and razors and they split their earnings with the owner of
the barber shop.The only capital of the owner is the place of work
whereas the barbers provide the skill and expertise in servicing
customers.The only control exercised by the owner of the barber
shop is to ascertain the number of customers serviced by the barber
in order to determine the sharing of profits.The barbers maybe
characterized as independent contractors because they are under the
control of the barber shop owner only with respect to the result of
the work, but not with respect to the details or manner of
performance.The barbers are engaged in an independent calling
requiring special skills available to the public at large. ISSUEIs
NLRC correct that the respondent is an independent contractor and
should not be covered and be given corresponding benefits? RULINGIn
our view, this case is an exception to the general rule that
findings of facts of the NLRC are to be accorded respect and
finality on appeal.We have long settled that this Court will not
uphold erroneous conclusions unsupported by substantial evidence.We
must also stress that where the findings of the NLRC contradict
those of the labor arbiter, the Court, in the exercise of its
equity jurisdiction, may look into the records of the case and
reexamine the questioned findings.The issues raised by petitioners
boil down to whether or not an employer-employee relationship
existed between petitioners and private respondent Lao Enteng
Company, Inc.The Labor Arbiter has concluded that the petitioners
and respondent company were engaged in a joint venture.The NLRC
concluded that the petitioners were independent contractors.While
it is no longer true that membership to SSS is predicated on the
existence of an employee-employer relationship since the policy is
now to encourage even the self-employed dressmakers, manicurists
and jeepney drivers to become SSS members, we could not agree with
private respondents that petitioners were registered with the
Social Security System as their employees only as an
accommodation.As we have earlier mentioned private respondent
showed no proof to their claim that petitioners were the ones who
solely paid all SSS contributions.It is unlikely that respondents
would report certain persons as their workers, pay their SSS
premium as well as their wages if it were not true that they were
indeed their employees. An employer may adopt policies or changes
or adjustments in its operations to insure profit to itself or
protect investment of its stockholders.In the exercise of such
management prerogative, the employer may merge or consolidate its
business with another, or sell or dispose all or substantially all
of its assets and properties which may bring about the dismissal or
termination of its employees in the process.The petition is
GRANTED. Private respondents are hereby ordered to pay, severally
and jointly, the seven (7) petitioners their(1) 13thmonth pay and
(2) separation pay equivalent to one month pay for every year of
service, to be computed at the then prevailing minimum wage at the
time of their actual termination which was April 15, 1995.
502CHUA vs CA440SCRA121COVERAGEFACTSOn 20 August 1985, private
respondents Andres Paguio, Pablo Canale, Ruel Pangan, Aurelio
Paguio, Rolando Trinidad, Romeo Tapang and Carlos Maliwat filed
aPetition with the SSC for SSS coverage and contributions against
petitioner Reynaldo Chua, owner of Prime Mover Construction
Development, claiming that they were all regular employees of the
petitioner in his construction business.Private respondents alleged
that petitioner dismissed all of them without justifiable grounds
and without notice to them and to the then Ministry of Labor and
Employment.They further alleged that petitioner did not report them
to the SSS for compulsory coverage in flagrant violation of the
Social Security Act. Petitioner claimed that private respondents
had no cause of action against him, and assuming there was any, the
same was barred by prescription and laches.In addition, he claimed
that private respondents were not regular employees, but project
employees whose work had been fixed for a specific project or
undertaking the completion of which was determined at the time of
their engagement.This being the case, he concluded that said
employees were not entitled to coverage under the Social Security
Act.[9]The SSS stated that it is the mandatory obligation of every
employer to report its employees to the SSS for coverage and to
remit the required contribution, including the penalty imposed for
late premium remittances.The SSC, relying on NLRC Case No.
RAB-III-8-2373-85, declared private respondents to be petitioners
regular employees.It ordered petitioner to pay the SSS the unpaid
SS/ECandMedicarecontributionspluspenalty for
thedelayedremittancethereof,withoutprejudiceto any other penalties
which may have accrued.The SSC denied theMotion for Reconsideration
of petitioner for lack of merit. The Court of Appeals, citing
Article 280 of the Labor Code, declared that private respondents
were all regular employees of the petitioner in relation to certain
activities since they all worked either as masons, carpenters and
fine graders in petitioners various construction projects for at
least one year, and that their work was necessary and desirable to
petitioners business which involved the construction of roads and
bridges.
ISSUEIs the CA correct in granting that there is an employee-
employer relationship and the employees should be covered by
SSS?RULINGStripped of the lengthy, if not repetitive, disquisition
of the private parties in the case, and also of the public
respondents, on the nature of private respondents employment, the
controversy boils down to one issue:the entitlement of private
respondents to compulsory SSS coverage. The Social Security Act was
enacted pursuant to the policy of the government to develop,
establish gradually and perfect a social security system which
shall be suitable to the needs of the laborers throughout the
Philippines, and shall provide protection against the hazards of
disability, sickness, old age and death.It provides for compulsory
coverage of all employees not over sixty years of age and their
employers. This Court has held that an employment ceases to be
co-terminus with specific projects when the employee is
continuously rehired due to the demands ofthe employers business
and re-engaged for many more projects without interruption. The
Court likewise takes note of the fact that, as cited by the SSC,
even the National Labor Relations Commission in a labor case
involving the same parties, found that private respondents were
regular employees of the petitioner.Anent the issue of
prescription, this Court rules thatprivate respondentsright to file
their claim had not yet prescribed at the time of the filing of
their petition, considering that a mere eight (8) years had passed
from the time delinquency was discovered or the proper assessment
was made. Republic Act No. 1161, as amended,prescribes a period of
twenty (20) years, from the time the delinquency is known or
assessment is made by the SSS, within which to file a claim for
non-remittance against employers. Likewise, this Court is in full
accord with the findings of the Court of Appeals that private
respondents are not guilty of laches.The principle of laches or
stale demands ordains that the failure or neglect, for an
unreasonable and unexplained length of time, to do that which by
exercising due diligence could or should have been done earlier, or
the negligence or omission to assert a right within a reasonable
time, warrants a presumption that the party entitled to assert it
either has abandoned it or declined to assert it.In the instant
case, this Court finds no proof that private respondents had failed
or neglected to assert their right, considering that they filed
their claim within the period prescribed by law. WHEREFORE,
thePetitionis DENIED.TheDecisionandResolutionof the Court of
Appeals promulgated on 6 March 1996 and 30 July 1996 respectively,
are AFFIRMED.Costs against petitioner.
503POBLETE CONSTRUCTION CO. vs. JUDITH ASIAIN20 SCRA 1143SSS
Reporting Requirements
FACTSMiguel Asiain was an employee of the Poblete Construction
Company from 1956 until his death on November 22, 1959, with a
monthly salary of P300. Upon his death his widow, Judith Asiain,
for herself and her minor children, filed a petition before the
Social Security Commission against the company and its manager,
Domingo Poblete (Case No. 78), to recover the following sum: (1)
P3,600.00 equivalent to one year's salary of the deceased; (2)
P600.00 representing his unpaid salary for two months; (3) P288.00
"representing the cash received by respondents from their laborers
as contribution to the family of the deceased;" and (4) P2,000.00
by way of attorney's fees. The respondents below moved to dismiss
the petition on the grounds that the Social Security Commission had
no jurisdiction over the subject-matter and that the petitioner
Judith Asiain had no capacity to sue. The Commission denied the
motion to dismiss in its order of February 25, 1960 and ordered the
respondents to file their answer. When no answer was forthcoming,
the respondents were declared in default in an order dated March 9,
1960, and the petitioners were allowed to present their evidence.
It appears that although the deceased Miguel Asiain had been
employed in the Poblete Construction Company since 1956 and had
accomplished SSS Form E-1 (Employees' Date Record) and transmitted
the same to the said company's Manila Office, it was never filed
with the Social Security System for the reason, according to the
company, that he refused to have his share of the corresponding
monthly contributions deducted from his salary.
ISSUEWhether or not the SSS had no jurisdiction to entertain the
claim of P3,600, which should have been presented before the
ordinary courts.
RULINGYes. There is no question that the deceased Miguel Asiain
was subject to compulsory coverage in the Social Security System.
It was the duty of the employer to "report immediately to the
System" his name, age, civil status, occupation, salary and
dependents. Compliance with this duty did not depend upon the
employee's willingness to give his share of the contribution.
Section 24 is mandatory, to such an extent that if the employee
should die or become sick or disabled without the report having
been made by the employer, the latter is liable for an amount
equivalent to the benefits to which the employee would have been
entitled had such report been made. It is true that the provision
uses the word "damages" in referring to the amount that may be
claimed. But this fact alone does not mean that the Social Security
Commission lacks jurisdiction to award the same. Section 5(a) of
the Social Security Act provides that "the filing, determination
and settlement of claims shall be governed by the rules and
regulations promulgated by the Commission;" and the rules and
regulations thus promulgated state that "the effectivity of
membership in the System, as well as the final determination and
settlement of claims, shall be vested in the Commission.Otherwise
an employer could nullify the jurisdiction of the Commission by the
simple expedient of not making a report as required by said
Section. The collection of the employee's share is a duty imposed
by law, and his unwillingness to have it deducted from his salary
does not excuse the employer's failure to make the report
aforesaid. It is precisely in this situation that the employer is
liable, and there is no question as to the amount of such liability
in this case.The decision of the Social Security Commission is
affirmed.
504CMS ESTATE, INC. vs. SOCIAL SECURITY SYSTEM132 SCRA 108SSS
Fund Ownership
FACTSPetitioner CMS Estate Inc is a domestic corporation engaged
in the real estate business. In December 1952, it began with only 6
employees. In 1956, it also engaged in the logging business and
obtained an ordinary license from the Bureau of Forestry to operate
forest concession (13,000 hectares) in Baganga, Davao. In January
1957, CMS Estate entered into a contract of management with
Eufracio Rojas for the operation of the logging concession which
began in April 1957 with four employees earning monthly salaries.
By September 1957, CMS Estate had 89 employees in the logging
operation. But on December 1957, CMS Estate revoked its contract
with Rojas. By August 1958, CMS Estate became a member of SSS with
respect to its real estate business and remitted to the SSS P203.13
representing the initial premium of the salaries of the employees
in the logging business. But on October 1958, petitioner demanded
the refund ofthe amount, alleging that it is not yet subject to
compulsory coverage in its logging business. Respondent SSS denied
the petition on the ground that the logging business is only an
expansion of the companys existing activities and that it should be
considered a member since December 1952 when it opened its
business. CMS Estate contends that the SSS contributions required
of employees and employers under the SSS Act of 1954 are not in the
nature of excise taxes and therefore, not compulsory
ofemployers.ISSUEW/N Petitioners logging business is subject to
compulsory coverage in the SSS.
RULINGPrior to its amendment, Sec. 9 of the Act provides that
before an employer could be compelled to become a member of the
System, he must have been in operation for at least two years and
has at the time of admission at least six employees. It should be
pointed out that it is the employer, either natural, or judicial
person, who is subject to compulsory coverage and not the business.
If the intention of the legislature was to consider every venture
of the employer as the basis of a separate coverage, an express
provision to that effect could have been made. Unfortunately,
however, none of that sort appeared provided for in the said law.
Should each business venture of the employer be considered as the
basis of the coverage, an employer with more than one line of
business but with less than six employees in each, would never be
covered although he has in his employ a total of more than six
employees which is sufficient to bring him within the ambit of
compulsory coverage. This would frustrate rather than foster the
policy of the Act. The legislative intent must be respected. In the
absence of an express provision for a separate coverage for each
kind of business, the reasonable interpretation is that once an
employer is covered in a particular kind of business, he should be
automatically covered with respect to any new name. Any
interpretation which would defeat rather than promote the ends for
which the Social Security Act was enacted should be eschewed. The
Social Security Law was enacted pursuant to the policy to develop,
establish gradually and perfect a social security system which
shall be suitable to the needs of the people throughout the
Philippines and provide protection against the hazards of
disability, sickness, old age and death. It is clear then that the
implementation of the SSS Law is in line with the general welfare
mandate of the Constitution and as such, is a legitimate exercise
of the police power. As held in Philippine Blooming Mills Co. vs.
SSS: membership in the SSS is not a bilateral, consensual agreement
where obligations and rights of the parties are subject to their
will. RA 1161 requires compulsory coverage of employees and
employers under the system. As such, the principle of
non-impairment of obligation of contract cannot be raised as a
defense. The taxing power of the State is exercised for the purpose
of raising revenues. However, under our Social Security Law, the
emphasis is more on the promotion of the general welfare. The Act
is not part of our Internal Revenue Code nor are the contributions
and premiums therein dealt with and provided for, collectible by
the BIR.
505Santiago v. CA133 SCRA 34Effect of Non-remittance SSS Failure
Remit
FACTSPetitioners were employees of I-Feng Enamelling Company
(Phil.) Inc. for several years, some from 1950 up to the time the
company closed its business in 1965. Since the enactment of the
Social Security Act, Republic Act No. 1161, as amended, said
employees have been paying, through salary deductions, their
personal contributions to the System. Appellants, during their
employment, also enjoyed salary loan benefits, their installment
payments deducted and collected by their employer, and said
employer failed to remit to the System not only the installment
payments to their salary loans (P7,940.13) but also the back
premiums (P137,787.90), excluding of course the penalties therefor
(P63,734.97).Petitioners argue that they are entitled to full
credit for the unremitted premium contributions and salary loan
installment payments deducted from their wages because, by law, a
contract of agency exists between the SSS and the Employer in the
collection of the salary loan installment payments, and therefore,
as such agent, payment to the Employer is payment to the principal,
which is the System.
ISSUEW/N the premium contributions and payments of salary loans
by petitioners, which were deducted and collected from their
salaries by their Employer, but not remitted to the System, should
be credited in their favor by the System
RULINGOnly the premium contributions paid by petitioners to its
employer shall be credited in petitioners' favor.SSS Circular No.
52 states: V. Service and Collection Fee. -The System shall charge
a service fee of P3.50 for every approved application deductible in
advance from the proceeds of the loan.However, the employer shall
be entitled to deduct from the total quarterly collections that he
remits to the System a collection fee of seven centavos (P.07) for
every ten pesos (P10.00) or fraction thereof. The fee was devised
to encourage employers to be prompt in the remittance of their
collections to the System.There is a difference, however, in
respect of premium contributions, by reason of the explicit
provision of Section 22(b) of the Social Security Act, reading: (b)
The contributions payable under this Act in cases where an employer
refuses or neglects to pay the same shall be collected by the
System in the same manner as taxes are made collectible under the
National Internal Revenue Code, as amended, Failure or refusal of
the employer to pay or remit the contributions herein prescribed
shall not prejudice the right of the covered employee to the
benefits of the coverage.Clearly, if the employer neglects to pay
the premium contributions, the System may proceed with the
collection in the same manner as the Bureau of Internal Revenue in
case of unpaid taxes. Plainly, too, notwithstanding non-remittance
by employers of the premium contributions, covered employees are
entitled to the benefits of the coverage, such as death sickness,
retirement, and permanent disability benefits. These benefits
continue to be enjoyed by the employees by operation of law and
not, as petitioners allege, because the premium contributions and
salary loan installment payments have already became the money of
the System upon payment by the employees to the employer. It should
be remembered that funds contributed to the System by compulsion of
law are funds belonging to the members, which are merely held in
trust by the government. The mentioned benefits, however, do not
include the salary loan privileges that member-employees apply for.
The System may or may not grant those loans pursuant to its rules
and regulations. The salary loans are not covered by law but by
contract between the System as lender, and the private employee, as
borrower.Contrary to petitioners' contention, the penalty of 3% per
month imposed on the employer, if any premium contribution is not
paid to the System, prescribed by Section 22 of the Act from the
date the contribution falls due until paid, does not necessarily
make the employer the agent of the System. The prescribed penalty
is intended to exact compliance by the employer. It is evidently of
a punitive character.
506Benedicto v. Abad183 SCRA 434Effect of Non-remittance SSS
Failure Remit
FACTSPetitioner Benedicto started a trucking business in which
he employed the late Salvador Pillon as truck driver. Petitioner,
however, did not report Pillon's employment to the Social Security
System ("SSS") for compulsory coverage and did not pay the
corresponding SSS contributions.The above facts came to the
knowledge of the SSS. After Pillon's death, an investigator of the
SSS Regional Office in Bacolod City was deputized to conduct an
enquiry in respect of Benedicto's alleged violations of the Social
Security Act (RA 1161). In his Field Investigation Report, he
stated that Benedicto had admitted having failed to report and to
register with the SSS Pillon's employment for the period from his
employment up to the time of his death, and to pay the
corresponding SSS contributions; that upon the inspectors
suggestion, petitioner Benedicto had accomplished and submitted SSS
Forms reporting himself and Pillon for SSS compulsory coverage;
that Benedicto and Pillon were assigned SSS Identification numbers;
that Benedicto was assessed SSS premiums in the total amount of
P491.70 excluding penalties. The inspector recommended that his
report be transmitted to the Legal Department of the SSS in Quezon
City for appropriate action. Approximately ten (10) years later,
upon complaint of the Legal Department of the SSS, the Assistant
City Fiscal of Bacolod City filed an information charging
petitioner Benedicto with violations of Section 24 (a) in relation
to Section 28 (e) of the Social Security Act. Before arraignment,
petitioner Benedicto moved to quash the information asserting that
his liability thereunder had already been extinguished by
prescription. Upon the other hand, the complainant SSS opposed the
Motion to Quash contending that the offense charged in the
information had not yet prescribed since the applicable
prescriptive period was twenty (20) years and since the information
was filed within this 20-year period. Respondent Judge