Aguilera vs. Coca-Cola Femsa Philippines, G.R. No. 238941, September 29, 2021 First Division, Lazaro-Javier, J. [Case Digest]

 

Aguilera vs. Coca-Cola Femsa Philippines,

G.R. No. 238941, September 29, 2021

First Division, Lazaro-Javier, J.

Case Digest

Topics:

            Authorized Caused of Termination

            Redundancy

 

Facts:

            Bernilo M. Aguilera averred that on July 1, 1995, CCFPI, formerly COCA-COLA BOTTLERS PHILIPPINES, INC. hired him as Refrigeration Technician with assignment at the company's South Luzon Cold Drink Equipment Group. He later on got promoted as Trade Asset Controller and Maintenance Coordinator, and much later, as Cold Drink Associate. He was principally tasked to supervise the maintenance work of third-party service providers on the electric coolers of the company installed in the stores of its customers.

            In May 2013, a new management group took over the company's operations. It marked the change of the company name to CCFPI. On May 6, 2013, CCFPI's Regional Director Chuck Jereos notified him that the new management would review the existing positions and performance of all plant employees.

            On August 6, 2013, the Human Resource (HR) Manager of the company's Canlubang Plant, Marge Del Rosario (Del Rosario), informed him that he failed the assessment, albeit the results were not disclosed to him. On even date, he received a notice of termination due to redundancy purportedly brought about by changes in the company's organizational structure and the consequent abolition of his position as Cold Drink Associate. His termination was to take effect on September 6, 2013.

            He pleaded with the company to reconsider his termination or at least just transfer him to another position, but his plea fell on deaf ears. Prior to his dismissal or sometime in August 2013, the company informed him that there were several vacancies available for Cold Drink Equipment Analyst. Thus, he immediately applied for this position but he failed to get the job. He later discovered that the company hired new employees for the position whose assigned tasks he used to do as a Cold Drink Associate.

            CCFPI countered that it had been compliant with all the requirements for redundancy under the Labor Code.[13] It did a regular review of its organizational structure for the purpose of achieving improved business efficiency and profitability. In the exercise of its management prerogative, it decided to outsource services for its non-core activities or activities other than manufacturing. This consequently rendered certain existing positions in the company redundant, including the position of Cold Drink Associate which petitioner used to hold. It did assess petitioner's performance to determine his qualifications for another available position in the company. Unfortunately, he was one of those who scored a below satisfactory rating, hence, the company had no choice but to let him go.

                        It adopted fair and reasonable criteria in determining who among the employees should go or stay. It considered the employees' assessment profiles, backgrounds, experiences, performance ratings for the last three (3) years, current salary bases, and locations.

            In keeping with due process, it served a notice of termination on petitioner. Also, in compliance with Article 298 of the Labor Code, it submitted an Employment Termination Report to the Department of Labor and Employment (DOLE) a month before petitioner's dismissal took effect. It also paid petitioner a total separation package of P1,840,681.72 comprising a) two hundred percent (200%) separation pay per year of service; b) commutation of earned and unused sick and vacation leaves; c) proportionate thirteenth (13th) month pay; and d) HMO coverage for five (5) years (effective September 6, 2013 to September 5, 2018) or upon turning sixty-five (65) years old, whichever comes first.

            LA held that Coca-Cola is guilty of illegal dismissal. NLRC. Labor Arbiter Guan noted that the company did not show good faith in abolishing petitioner's position as Cold Drink Associate. Nor did it follow fair and reasonable criteria in determining the positions to be declared redundant and the employees who ought to go or stay. The mere fact that petitioner got served with a notice of termination and signed a quitclaim did not automatically make the supposed redundancy valid. NLRC affirmed the Labor Arbiter with modification.  CA reversed the decision of NLRC.  CA found that CCFPI did comply with all the requisites for a valid redundancy program: 1) it sent a timely notice of termination to petitioner and submitted an Establishment Termination Report to the DOLE; 2) petitioner's separation pay was more than what the Labor Code requires; 3) it acted in good faith in abolishing petitioner's position, impelled by the streamlining of its organizational structure with the end in view of maximizing its workforce at a lesser operating cost - a valid exercise of management prerogative. The reorganization was demanded by the need to boost efficiency and increase profitability in accordance with the new plans of the company under the new management; and 4) it used fair and reasonable standards in determining the positions to be abolished or declared redundant. It was done only after consultation and deliberation with the other department heads of the company. Petitioner was properly informed of the basis of abolishing his position during a meeting held for that purpose.

 

Issue:

            Whether petitioner validly dismissed on the ground of redundancy.

 

Held:

            No; redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the business enterprise. A position is redundant where it had become superfluous. Superfluity of a position or positions may be the outcome of a number of factors such as over-hiring of workers, decrease in volume of business, or dropping a particular product line or service activity previously manufactured or undertaken by the enterprise.

            The characterization of an employee's services as redundant, and therefore, properly terminable, is an exercise of management prerogative, considering that an employer has no legal obligation to keep more employees than are necessary for the operation of its business. But the exercise of such prerogative "must not be in violation of the law, and must not be arbitrary or malicious."

            For a redundancy program to be valid, the following requisites must concur: (a) written notice served on both the employees and the DOLE at least one (1) month prior to the intended date of termination of employment; (b) payment of separation pay equivalent to at least one (1) month pay for every year of service; (c) good faith in abolishing the redundant positions; and (d) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished, taking into consideration such factors as (i) preferred status; (ii) efficiency; and (iii) seniority, among others.

                        The burden is on the employer to prove by substantial evidence the factual and legal basis for the dismissal of its employees on the ground of redundancy.

            The presence of the first two (2) requisites is not in issue here. Both parties agree that petitioner and the DOLE were notified of the redundancy; and that petitioner was paid his corresponding separation pay.

            As for third and fourth requisites, however, the parties sharply disagree. On one hand, petitioner claims that although CCFPI supposedly abolished his position, it thereafter, simply adopted a different name therefor and hired new employees, albeit, in reality, the position carried essentially the same functions attached to his abolished position. On the other hand, CCFPI asserts that it did adopt a program to restructure its organization and streamline its workforce, the implementation of which called for the abolition of petitioner's position.

           

            CCFPI did not follow any set of criteria in determining the positions to be abolished and the employees to be dismissed. An employer cannot simply claim that it has become overmanned and thereafter declare the abolition of an employee's position without adequate proof of such redundancy. Nor can the employer just claim that it has reviewed its organizational structure and decided that a certain position has become redundant. Adequate proof of redundancy and criteria in the selection of the employees to be affected must be presented to dispel any suspicion of bad faith on the part of the employer."

            Here, CCFPI claims that its redundancy program called for organizational restructuring and streamlining of the then existing positions in the company. One of the positions it abolished was that of petitioner, in lieu of which, it opted to outsource its non-manufacturing activities.

            In Feati University v. Pangan, the Court rejected the bare claim of Feati that the decision to declare Pangan's position as Assistant Coordinator redundant came only after a review of its organizational structure. This did not establish good faith, much less, the use of fair and reasonable criteria in declaring the redundancy. Neither did the employer's general averment that Pangan's position was no longer necessary in the university in view of the reduced number of enrollees there at that time. The Court emphasized that proof of such alleged review and specific criteria used by Feati must be presented, otherwise, the dismissal of the employee cannot be sustained.

            Here, CCFPI presented the self-serving affidavit of its HR Manager Del Rosario that the department where petitioner belonged was restructured and that after assessments and meetings, petitioner's position was found to be redundant.

            The company also submitted, albeit belatedly on appeal the result of petitioner's psychometric examination which merely showed the numerical equivalent of the latter's IQ sans the accompanying interpretation as to his ability to comprehend or the lack thereof. This would have served as a competent basis of the management's decision to retain him or to let him go as an employee.

            Applying Feati University and Yulo, the bare declaration of CCFPI's HR Manager, without more, does not comply with the requirements of good faith and necessity. Neither does petitioner's "below ideal" IQ score conform with the presence of criteria in determining who among the employees should be dismissed. To repeat, CCFPI did not bother laying down the import of petitioner's psychometric examination on his chances of being retained in the company. No comparison was even drawn between petitioner's IQ score vis-à-vis the scores of the retained employees to show that indeed there are more qualified employees other than him. The validity of the company's action is further negated by the fact that just barely two (2) months before he was dismissed, petitioner was even given a merit increase in recognition of his successful work performance.

            Notably, for the longest time since 2014, starting when the complaint here was filed until seven years later, CCFPI never presented any single substantiating evidence of good faith and necessity. This notwithstanding petitioner's vigorous and relentless protestation that the company's so called redundancy program was tainted with bad faith and was not necessary at all.

            In any event, based on the documents submitted by the company itself, the so-called newly created Cold Drink Equipment Analyst position and petitioner's abolished Cold Drink Associate position have essentially similar, if not exactly the same functions.

            As a Cold Drink Associate, petitioner was responsible for updating CCFPI's data system on transactions and actions involving its cold drink equipment. He prepares and releases work orders to third party service providers. He also processes the work done by third party service providers. He prepares the inventories, evaluates documents, and conducts performance review meetings for all the services rendered. All these functions are basically the same, if not identical with the four (4) responsibilities attached to the newly created Cold Drink Equipment Analyst position (i.e. responsible for Accuracy of System and Trade reports; updates logistics on Cold Drinks Equipment; releases work orders; and processes finished work orders by third party). Clearly, the former position was simply replaced by another albeit the latter carried a different name and with a much lower compensation.

            On this score, Abbott Laboratories (Philippines), Inc. v. Torralba ordained that an employer's subsequent creation of new positions or the hiring of additional employees is inconsistent with the termination on the ground of redundancy; it exhibits the employer's intent to circumvent the employee's right to security of tenure.

            In Abbott, the company merged its PediaSure Division and Medical Nutrition Division pursuant to a study which recommended the restructuring of the sales force of its Specialty Nutrition Group. The Medical Nutrition Division allegedly generates a larger share in the Philippine market, as compared to the PediaSure Division, and for this reason Abbott retained the structure of the former division. As a result, Almazar, Navarre and Torralba's respective positions as National Sales Manager and Regional Sales Managers under the PediaSure Division were declared redundant.

            The Court found that Abbott failed to prove that it followed a set of criteria in determining the positions to be abolished and the employees to be dismissed or retained. Meanwhile, its bad faith was manifested by its subsequent creation of new positions in the company.

            In the notice furnished by Abbott to the DOLE, the company declared that the reason for the redundancy program, affecting four (4) of its employees, is to reduce the company's manpower by eliminating positions that were allegedly superfluous. However, this proffered justification is readily contradicted by the fact that the affected employees were offered newly-created District Sales Manager positions that were entitled to lower pay and benefits. To Our mind, the redundancy program is then a mere subterfuge to circumvent respondents' right to security of tenure. Hence, just as uniformly found by the Labor Arbiter. NLRC, and the CA, the redundancy program cannot be considered lawful.

            Consequently, the Deeds signed by the respondents could not therefore be deemed valid, premised as they were on an invalid termination. The case of Philippine Carpet Manufacturing Corporation v. Tagyamon (Philippine Carpet) is illustrative on this point.

            In the said case, the Court listed three specific instances wherein a waiver cannot estop a terminated employee from questioning the validity of his or her dismissal, in wit: (1) the employer used fraud or deceit in obtaining the waivers.

            In the same view, CCFPI here did not have an honest to goodness redundancy program. It did not have a definite set of criteria in determining who among its employees should stay and who should go. It abolished petitioner's position for being supposedly redundant only to later on recreate it assigning it another name and a reduced salary rate.

            Petitioner's quitclaim was void. Quitclaims and waivers are oftentimes frowned upon and are considered as ineffective in barring recovery for the full measure of the worker's rights and that acceptance of the benefits therefrom does not amount to estoppel. The reason being that the employer and employee, obviously do not stand on the same footing. But not all waivers and quitclaims art invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of change of mind.

            There are three (3) instances, however, where a waiver cannot preclude a dismissed employee from questioning the validity of his or her dismissal: (1) if the employer used fraud or deceit in obtaining the waivers; (2) if the consideration the employer paid is incredible and unreasonable; or (3) if the terms of the waiver are contrary to law, public order, public policy, morals, or good customs or prejudicial to a third person with a right recognized by law.

            Before the courts can consider a waiver valid, the legality of the termination itself should be able to withstand judicial scrutiny. Should the court find that either of the foregoing exceptions is attendant, the dismissed employee cannot be deemed barred from contesting the validity of the termination.

            In Becton Dickinson Phils., Inc. v. National Labor Relations Commission, the Court declared as invalid the quitclaims signed by the dismissed employees due to a supposed redundancy. The Court recognized the fact that the risk of not receiving anything, whatsoever, coupled with the probability of not being able to immediately secure a new job or means of income, constitutes enough pressure upon anyone who is asked to sign a release and quitclaim in exchange for some amount of money. That the employee may have held a supervisory position did not make him any less susceptible to accept the separation package forced as he is with the real threat of unemployment. So must it be.

            Here, CCFPI is liable to reinstate petitioner to his former position or to any similar or equivalent position. If reinstatement is no longer feasible, petitioner shall be entitled to separation pay equivalent to one (1) month salary for every year of service which shall be offset against the separation pay he initially received from CCFPI. In either case, he shall receive full backwages computed from the time compensation was withheld up to the date of actual reinstatement. Since petitioner had been momentarily reinstated pursuant to the labor arbiter's order of actual reinstatement, albeit he was again subsequently dismissed on November 13, 2017 following the contrary ruling of the Court of Appeals, the award of backwages shall be reckoned from November 13, 2017 until actual reinstatement or payment of separation pay, as the case may be.

Celestino vs. Belchem Philippines, Inc. G.R. No. 246929. March 02, 2022 Third Division, LAZARO-JAVIER, J. [Case Digest]

 

Celestino vs. Belchem Philippines, Inc.

G.R. No. 246929. March 02, 2022

Third Division, LAZARO-JAVIER, J.

Case Digest

 

Topic:

            Seafarer

            Start of Counting of 240 Days

 

Facts:

            On June 22, 2012, respondent Belchem Singapore Pte. Ltd., through its local agent, respondent Belchem Philippines, Inc., hired petitioner Nelson M. Celestino as third officer for a period of nine months.

            Prior to his deployment, petitioner underwent routinary pre-employment medical examination (PEME). When asked whether he had or had been told he had suffered from, among others, any of the following conditions: heart trouble, diabetes mellitus, endocrine disorders, kidney or bladder trouble, he answered in the negative. He then got deployed on July 1, 2012.

            On December 8, 2012, petitioner experienced severe body discomfort with high fever, chills, and convulsions. Because his condition persisted despite medication, petitioner was admitted on December 11, 2012, at the Fiden Medical Center in Tema, Ghana, West Africa, where he was diagnosed as a "Diabetic de Novo," or someone in the early stages of diabetes. After confinement and medication, he was repatriated on December 14, 2012.

            On the same day he arrived in the country, petitioner reported to Belchem Philippines, Inc. for post-employment medical examination. He got referred to the company-designated medical facility, the Metropolitan Medical Center, Manila. After the requisite laboratory examination, Dr. Quan issued an initial impression on December 18, 2012, noting that petitioner was suffering from "Diabetes Mellitus" and prescribing medication to manage the illness. Dr. Quan then advised him to return on January 3, 2013 for further treatment, and accordingly informed Belchem of his condition.

            Under the care of an endocrinologist, petitioner continued his treatment on January 8, 2013, and consulted a nephrologist on January 22, 2013. His laboratory examinations on both days showed elevated fasting blood sugar.9 Petitioner was, thus, advised to undergo continuous monitoring and check-up by the company-designated physicians until August 31, 2013. He consulted these physicians on March 5, April 22, May 21, and June 4, 2013. In the interim, or on May 9, 2013, Dr. Quan confirmed that petitioner was suffering from "Diabetes Mellitus" with incidental finding of "Ureterolithiasis".

            On July 1, 2013, petitioner filed a complaint for total and permanent disability benefits, damages, and attorney's fees against respondents.

            On September 2, 2013, or two months after filing the complaint, petitioner decided to consult his own physician, Dr. May S. Donato-Tan (Dr. Tan), who issued a medical certificate diagnosing him with permanent disability, thus: [Seafarer] Celestino had Extracorporeal Shockwave Lithotripsy Left and the procedure does not guarantee that the stones will not recur and a possibility of a recurrent stone formation can damage the parenchyma of the kidney's ureters, that's why the [Seafarer] Celestino is very apprehensive. He is also with BP Elevation coupled with the presence of DM Type II. He already had chest pain and the occurrence/presence of elevated BP and diabetes puts [Seafarer] Celestino at a high-risk situation. He is therefore given a permanent disability for he will not be able to do his job effectively, efficiently, and productively as a [Seafarer].

            Petitioner alleged that his illnesses were work-related, having been acquired in the performance of his strenuous duties. Notably, his PEME initially declared him "fit to work," but he is now unable to carry out his job as seafarer for more than 120 days from repatriation. Therefore, he should be deemed to have suffered total and permanent disability.

            Respondents, on the other hand, maintained that diabetes is a metabolic and genetic disease that is not work-related and not considered an occupational disease under settled jurisprudence, hence, not compensable. There is nothing in petitioner's work conditions or duties that would make him prone to either illness. Consequently, he would have developed those diseases regardless of whether he was deployed at sea as third officer. Petitioner also prematurely filed his claim since he did so without yet even seeking the opinion of his own physician; in fact, he was still undergoing treatment when he filed his complaint.

            Labor arbiter ruled that petitioner was entitled to total and permanent disability benefits but dismissed his other claims and charges. NLRC ruled that petitioner is not entitled to total and permanent disability benefits because petitioner prematurely filed his complaint for total and permanent disability benefits because he was then still under treatment at that time and had not yet procured the medical opinion of his physician of choice.  CA affirmed the decision of NLRC; it was held that when petitioner filed his complaint for disability benefits on July 1, 2013, he was still on his 199th day of treatment since he was referred to the company-designated physician upon his repatriation on December 14, 2012. In fact, even petitioner himself admitted that he was still undergoing treatment when he filed his complaint and that his treatment ended on August 31, 2013. Thus, petitioner was still under total and temporary disability inasmuch as the extension of the 240-day period provided under the POEA-SEC had not yet lapsed. There being no final assessment, petitioner's condition could not be considered as a total and permanent disability.

 

Issue:

            Whether petitioner is entitled to total and permanent disability benefits.

 

Held:

            Yes; in Orient Hope Agencies v. Jara set out the guidelines to determine a seafarer's disability, viz.:

1. The company-designated physician must issue a final medical assessment on the seafarer's disability grading within a period of 120 days from the time the seafarer reported to [them];

2. If the company-designated physician fails to give [their] assessment within the period of 120 days, without any justifiable reason, then the seafarer's disability becomes (total and permanent);

3. If the company-designated physician fails to give [their] assessment within the period of 120 days with a sufficient justification (e.g., seafarer required further medical treatment or seafarer was uncooperative), then the period of diagnosis and treatment shall be extended to 240 days. The employer has the burden to prove that the company-designated physician has sufficient justification to extend the period; and

4. If the company-designated physician still fails to give [their] assessment within the extended period of 240 days, then the seafarer's disability becomes permanent and total, regardless of any justification.

            Verily, if the company-designated physician still fails to give their assessment within the extended period of 240 days, then the seafarer's disability becomes permanent and total, regardless of any justification, as in this case.

            Here, petitioner got repatriated and referred to one of the company-designated physicians on December 14, 2012. He was told to return regularly during the succeeding months, which he heeded conscientiously. Thus, he went and consulted with at least three company-designated physicians on the same days set by the latter for that purpose. Thereafter, he was eventually told that his "ongoing treatment" shall last until August 31, 2013. Notably, however, the 240-day maximum period for assessment of petitioner's disability grading started on December 14, 2012, and already ended on August 11, 2013. The advice therefore of the company-designated physicians for petitioner to undergo further treatment to last until August 31, 2013, or 20 days beyond the 240-day period, was an effective declaration that his "Diabetes Mellitus and Ureterolithiasis" are permanent, and his disability, total.

                All told, petitioner cannot be faulted for filing his complaint on the 199th day of his ongoing treatment even before the lapse of the 240-day period, nor can he be faulted for acquiring a second opinion from his own physician only after he had already initiated his complaint. For even prior to such date, he was already deemed to be suffering from total and permanent disability when the company-designated physicians assessed that his treatment shall last well- beyond the 240-day maximum period.

 

                Petitioner is entitled to total and permanent disability benefits. The employment of seafarers is governed by the contracts they enter into at the time of their engagement. So long as the contract is not contrary to law, morals, public order, or public policy, they have the force of law as between the parties themselves. The POEA Rules and Regulations require that the POEA-SEC be integrated in every seafarer's contract, therefore, it is also integrated into the provisions of petitioner's employment contract with respondents.

                The POEA-SEC provides that if the employee is suffering from any of the occupational diseases or illnesses listed under its Section 32(A), such disease is deemed to be work-related, provided the conditions set therein are satisfied. Section 20(B)(4) of the POEA-SEC, on the other hand, states that if the illness, such as "Diabetes Mellitus," is not listed as an occupational disease under Section 32(A), there is still a disputable presumption that the ailment is work-related. This means that there is a legal presumption in favor of the seafarer that their illness is work-related, and the employer has the burden of presenting evidence to overcome such presumption.

                As third officer for respondents, petitioner performed duties that exposed him to various hazards and stresses. He was constantly placed in harsh conditions and exposed to perils of the sea. His work consisted of physically strenuous tasks that lasted anywhere from eight to sixteen hours a day. He was constrained to eat only food from the vessel that regularly consisted of preserved meats high in fats and cholesterol.

                On December 8, 2012, or after more than five months of rendering services for respondents, his body finally broke. He experienced severe fever, body aches, chills, and convulsions until he had to be brought to a hospital where he was diagnosed as "Diabetic De Novo." He was confined there for three days and had to be repatriated back to the Philippines on December 18, 2012, where he was diagnosed by company-designated physicians with "Diabetes Mellitus and Ureterolithiasis" and was thereafter advised to undergo monitoring and check-up for the next several months until August 31, 2013, a span of 260 days.

                Notably, prior to assuming his duties as third officer, he was declared "fit to work" in his PEME. It was only during his work therein that he was diagnosed with "Diabetes Mellitus" and "Ureterolithiasis". While these illnesses are not listed as occupational diseases under Section 32(A) of the POEA-SEC, said ailments are still presumed to be work-related under Section 20(B)(4) of the contract. Respondents have the burden of overcoming such presumption.

                In Zonio v. 88 Aces Maritime Services, the Court ruled in favor of the compensability of "Diabetes Mellitus" that afflicted the seafarer, thus: As earlier stated, respondents herein failed to adduce any contrary medical findings from the company-designated physician to show that Apolinario's illness was not caused or aggravated by his working conditions on board the vessel. There was also no showing that Apolinario is predisposed to the illness by reason of genetics, obesity or old age. Such being the case, this Court considers that the stress and strains he was exposed to on board contributed, even to a small degree, to the development of his disease. Inasmuch as, compensability is the entitlement to receive disability compensation upon a showing that a seafarer's work conditions caused or at least increased the risk of contracting the disease, We find Apolinario's disease as compensable at bar.

                As held in Flores v. Workmen's Compensation Commission, "Diabetes Mellitus" is generally not compensable. It is, however, compensable in instances when it is complicated with other illnesses.

                Here, petitioner was diagnosed by the company-designated physicians with "Diabetes Mellitus" complicated with "Ureterolithiasis", another illness previously deemed as compensable in GSIS v. Court of Appeals and Lilia S. Arreola.

                Although a PEME is not conclusive proof to show that a seafarer is free from any ailment, the Court, in previous cases, has referred to the results of a PEME to conclude that a disability only arose during employment.

                In Magat v. Interorient Maritime Enterprises, Inc., the Court ruled that petitioner Alfredo Magat was entitled to permanent disability benefits when, after passing his PEME, he developed a heart ailment. Although nothing in the records showed that Magat contracted his illness aboard M/T North Star, the fact that petitioner passed his PEME without any finding that he had a preexisting heart ailment before boarding the vessel strongly indicates that such illness developed while he was on board the same vessel.

                Here, petitioner, too, passed his PEME prior to embarking on his duties and thereafter developed "Diabetes Mellitus" complicated with "Ureterolithiasis." This clearly creates the legal presumption that petitioner's illnesses are work-related. Respondents, however, were unable to overcome such presumption in favor of petitioner, thus, his illnesses are deemed work-related and compensable.

               

Steelweld Construction vs. Echano, G.R. No. 200986. September 29, 2021, First Division, Lazaro-Javier, J. [Case Digest]

 

Steelweld Construction vs. Echano,

G.R. No. 200986. September 29, 2021,

First Division, Lazaro-Javier, J.

Case Digest

 

Topics:

            Remedial:        On Motion for Reconsideration

            Substantive:     Project Employee

                                    Termination

                                    Abandonment

                                    Gross Negligence

Facts:

            Respondents sued petitioners Steelweld Construction and its President Joven Sta. Ana, and Architect Josephine Sta. Ana (petitioners), for illegal dismissal, underpayment and non-payment of wages, separation pay, holiday pay, 13th month pay, overtime pay, and moral and exemplary damages.

            Echano essentially alleged that sometime in 2006, petitioners hired him as carpenter for its construction projects. He was also given additional assignment as "bodegero" to safeguard the construction materials at petitioners' jobsite in Floraville Subdivision, Mayamot, Antipolo City. He was required to work from 8 o'clock in the morning until 2 o'clock in the morning of the next day, Mondays to Sundays. Petitioners also required him to report for work during holidays.

            Sometime in January 2009, he was diagnosed with tuberculosis. On February 7, 2009, petitioners ordered him to go on leave of absence, which he heeded. After completing his three (3) months of treatment, he reported back for work. But just after two (2) months, he was, this time, ordered to go on "sick leave" for another three (3) months, which he again heeded. After completing his second round of sick leave, he reported back for work on November 13, 2009. The first thing he did was present his medical certificate of fitness to work, but petitioners no longer took him back. For his part, Salazar claimed that sometime in 2005, petitioners hired him as a painter. His work schedule went from 8 o'clock in the morning until 5 o'clock in the afternoon, Mondays to Saturdays. From 2005 to December 4, 2009, petitioners asked him to work during the holidays, albeit without holiday pay. Petitioners never paid him his 13th month pay. On June 28, 2009, he and his co-workers wrote petitioners for their grievances. But petitioners simply ignored them. Then, on December 4, 2009, petitioners illegally terminated him.

            In response, petitioners countered that Steelweld is a corporation engaged in the construction business and respondents were its project employees. Respondents' employment got terminated because the projects where they were respectively assigned already got completed. They submitted in evidence the supposed employment contracts of Echano, Salazar, and Copillo, albeit the same did not bear their signatures.

            In the case of Echano, he was advised to rest for six (6) months after he contracted tuberculosis. But he never again reported back for work, thus, the company was constrained to terminate him for abandonment of work. With respect to Salazar, a notice of termination was sent to him on December 4, 2009 because the project he was working on, the Patio Rosario Townhomes, was already almost complete. Finally, in the case of Copillo, he got terminated because of gross and habitual neglect of duties. He was engaged to paint Unit 33 of the Patio Rosario Townhomes. In October 2009, they received a letter from the unit owner that Copillo used a wrong paint color on the living room. In his written explanation, Copillo admitted the mistake claiming though that it was unintentional. Copillo was served with another Notice to Explain dated November 12, 2009 on account of the numerous complaints they received regarding his poor performance. Eventually, the company decided to terminate his services.

            As for respondents' compensation and benefits, the same were paid in accordance with law, albeit they (petitioners) could not produce their payrolls and pay slips as these documents were washed out during typhoon Ondoy which hit Manila and Rizal on September 26-27, 2009.

            Labor arbiter dismissed the complaint for lack of merit. The labor arbiter found that Echano's termination was justified since he failed to report for work after the lapse of his six-month medical leave. Salazar's termination was also valid since the last project where he got assigned had already been completed. As for Copillo, he himself admitted the infraction levelled against him, hence, he was terminated for cause. NLRC found that respondents were regular employees, not project employees of Steelweld. The employment contracts presented by petitioners had no evidentiary weight since they were not even signed by the respondents. The absence of the employment contracts raised a serious question on whether respondents were properly informed at the onset of their employment status as project employees. NLRC held that respondents were illegally dismissed. Petitioners were unable to prove that Echano abandoned his work. No proof was presented either that the phase of the project where Salazar got assigned was already almost complete as of December 4, 2009. Lastly, Copillo's mistake in using a wrong paint on Unit 33 of Patio Rosario Townhomes did not amount to "gross" negligence since it was not habitual but just an isolated incident.

            Without filing a motion for reconsideration, petitioners went straight to the Court of Appeals via a petition for certiorari. They manifested that it was the negligence of their former lawyer which prevented them from seeking a reconsideration of the assailed resolution from the NLRC.

            Court of Appeals dismissed the petition outright for petitioners' failure to file a motion for reconsideration of the questioned resolution before the NLRC.

 

Issue 1:

            Whether Court of Appeals erred in dismissing the petition for petitioners' failure to file a motion for reconsideration of the questioned resolution before the NLRC.

 

Held:

            No; a motion for reconsideration is a condition sine qua non to the filing of a petition for certiorari under Rule 65 of the Rules of Court.

            A special civil action for certiorari under Rule 65 of the Rules of Court is an extraordinary remedy which can only be availed of when there is no appeal or any plain, speedy, or adequate remedy available in the ordinary course of law. It is settled that a motion for reconsideration is a plain, speedy, and adequate remedy which should be resorted to before one may avail of the extraordinary remedy of certiorari. In Audi AG v. Mejia, the Court stressed that it is an indispensable condition before an aggrieved party can resort to a special civil action for certiorari. The purpose is to afford the tribunal, board, or office an opportunity to ratify its own errors or mistakes before the extraordinary remedy of certiorari comes into play through judicial process. Thus, a party's omission or failure to file a motion for reconsideration before the NLRC is a fatal infirmity which warrants the outright dismissal of the special civil action for certiorari it may have prematurely filed.

            The Court, nonetheless, has declined from applying the rule rigidly in the following instances, viz.:

(a) Where the order is a patent nullity, as where the court a quo has no jurisdiction;

(b) Where the questions raised in the certiorari proceedings have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court;

(c) Where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the Government or of the petitioner or the subject matter of the action is perishable;

(d) Where, under the circumstances, a motion for reconsideration would be useless;

(e) Where petitioner was deprived of due process and there is extreme urgency for relief;

(f) Where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable;

(g) Where the proceedings in the lower court are a nullity for lack of due process

(h) Where the proceeding was ex parte or in which the petitioner had no opportunity to object; and

(i) Where the issue raised is one purely of law or where public interest is involved.

 

            As earlier stated, petitioners here fault their previous counsel who allegedly neglected to file a motion for reconsideration of the assailed NLRC resolution We are not persuaded. It is hornbook doctrine that the negligence of counsel binds the client. In Bejarasco, Jr. v. People, the Court underscored that even a counsel's mistake in the realm of procedural technique binds his or her client. For a counsel, once retained, holds the implied authority to do all acts necessary or, at least, incidental to the management of the suit in behalf of his or her client. As such, any act or omission by counsel within the scope of the authority is regarded, in the eyes of the law, as the act or omission of the client himself or herself. Otherwise, there would be no end to litigation since every defeated party would just have to claim neglect or mistake of counsel as ground to salvage his or her case.

 

 

Issue 2:

            Whether or not the petitioners were regular employees of Steelweld Construction.

 

Held:

            Yes; there is no showing that upon their engagement, respondents were informed that they would be assigned to a specific project or undertaking. Neither was it established that they were made aware of the duration and scope of such project or undertaking. In Inocentes, Jr. v. R. Syjuco Construction, Inc., the Court stressed that to ascertain whether employees were project employees, it is necessary to determine whether notice was given them at the time of hiring that they were being engaged just for a specific project.

            Notably, the only "pieces of evidence" adduced by petitioners here were the so-called employment contracts of respondents which incidentally did not even bear the signatures of these employees. As aptly found by the NLRC, these "unsigned employment contracts" cannot be given any probative weight.

            In this case, records fail to disclose that petitioners were engaged for a specific project and that they were duly informed of its duration and scope at the time that they were engaged.

            As for Ramon, respondents submitted his WTRs as primary proof of his alleged project employment status. While these WTRs do indicate Ramon's particular assignments for certain weeks starting from November 8, 2013 to May 27, 2015, they do not, however, indicate that he was particularly engaged by JCDC for each of the projects stated therein, and that the duration and scope thereof were made known to him at the time his services were engaged. At best, these records only show that he had worked for such projects. By and of themselves, they do not show that Ramon was made aware of his status as a project employee at the time of hiring, as well as of the period of his employment for a specific project or undertaking.

            Likewise, same as in Ramon's case, Ranil and Edwin's project employment contracts for their engagement were not even shown. These contracts would have shed light to what projects or undertakings they were engaged; but all the same, none were submitted. As case law holds, the absence of the employment contracts puts into serious question the issue of whether the employees were properly informed of their employment status as project employees at the time of their engagement, especially if there were no other evidence offered.

            Second. Petitioners did not report the termination of the supposed project employment (on account of project completion) to the Department of Labor and Employment (DOLE), in violation of Department Order No. 19. In Freyssinet Filipinas Corp. v. Lapuz, the Court explained that the failure on the part of the employer to file with the DOLE a termination report every time a project or its phase is completed is an indication that the workers are not project employees but regular ones.

            Third. It is undisputed that Steelweld is engaged in the construction business and respondents had been continuously employed with the company for many years as construction workers in its various projects: Echano for three (3) years, Salazar, four (4) years; and Copillo, eight (8) years. Their employment had not been interrupted ever since they got hired. Too, petitioners never required them to execute a new employment contract with the company each time they got assigned to a new project.

            Abandonment requires the deliberate and unjustified refusal of the employee to perform his employment responsibilities. Mere absence or failure to work, even after notice to return, is not tantamount to abandonment. To justify the dismissal of an employee on this ground, two (2) elements must concur, viz.: (a) the failure to report for work or absence without valid or justifiable reason; and (b) a clear intention to sever the employer-employee relationship which is manifested through the employee's overt acts. These elements, however, are conspicuously absent here. For apart from petitioners' self-serving allegation, there was no proof of any overt act on the part of Echano showing his intention to abandon his work. On the contrary, records reveal that Echano sought permission to return to work and even presented a fit to work medical certificate, but the company simply informed him that he should no longer report for work.

            In any event, even if it were true that Echano failed to report for work after his medical leave, there is no showing that petitioners sent the following notices to Echano, viz.: (1) first notice asking him to explain why he should not be declared to have abandoned his job; and (2) second notice to inform him of the company's decision to dismiss him on ground of abandonment. But the most telling of all is the complaint for illegal dismissal filed by Echano, et al. against petitioners. An employee who takes steps to protest his or her dismissal cannot logically be said to have abandoned his work.

            Finally, we go to Copillo's termination. Petitioners point that he got dismissed on December 12, 2009 due to, first – his negligence in using a wrong paint on Unit 33 of the Patio Rosario Townhomes; and second – there were other complaints against his poor performance.

            To warrant removal from employment on ground of negligence, the negligence must not only be gross but habitual. While Copillo admitted that he used a wrong paint on Unit 33, he convincingly explained it was an honest mistake. He said he was not instructed what specific color he should use on Unit 33. Petitioner have not refuted this.

            In any case, the supposed infraction of Copillo was hardly gross, much less, habitual. Petitioners do not dispute that it happened only once. On the so-called other infractions or complaints against Copillo's poor performance, there is no evidence at all that he was ever confronted with the same. What is on record though is that for the past eight (8) years, he did not have a rating of unsatisfactory in terms of his performance as a painter.

 

Philippine National Construction Corp. vs. NLRC, G.R. No. 248401, June 23, 2021, Second Division, Lazaro-Javier, J. [Case Digest]

 

Philippine National Construction Corp. vs. NLRC,

G.R. No. 248401, June 23, 2021,

Second Division, Lazaro-Javier, J.

Topic:

                        Bonus

 

Facts:

                        In 1992, PNCC started giving mid-year bonuses to its employees every fifteenth (15th) of May pursuant to a Collective Bargaining Agreement (CBA) with its then employees' union. Long after the CBA expired though, the grant of mid-year bonus to the employees continued until 2012.

            Atty. Luis F. Sison, then PNCC President and Chief Executive Officer sought the opinion of PNCC's statutory counsel, the Office of the Government Corporate Counsel (OGCC) on the release of mid-year bonus for the year 2013 pursuant to Presidential Decree No. 1597. Under Letter dated May 29, 2013, PNCC sought GCG's approval for the grant of mid-year bonus to is employees.

            In its Letter-Reply dated June 20, 2013, the GCG advised PNCC that it was not forwarding the request for approval to then President Benigno Aquino III because the grant was legally infirm and its abrogation does not violate the non-diminution rule.  Pursuant thereto, Atty. Sison circulated a memorandum to all PNCC employees informing them that the 2013 Mid-year Bonus shall not be released.

            PNCC employees filed before the NLRC Arbitration Branch a complaint for non-payment of mid-year bonus and diminution of wages and benefits.

            LA ordered PNCC to give respondents their mid-year bonus for 2013, and every year thereafter in the amount equivalent to one month of their respective salaries. The labor arbiter held that the practice of granting mid-year bonus to PNCC employees since 1992 had ripened into a benefit or supplement which may not be reduced, diminished, discontinued, or eliminated in accordance with Article 100 of the Labor Code on non-diminution of benefits. NLRC affirmed the decision of LA. NLRC held that PNCC is not a GOCC since - it was created under the Corporation Code of the Philippines. Too, PNCC remains to be a private corporation despite the fact that the government is its majority stockholder. As such, it is covered by the provisions of the Labor Code, not by the Civil Service laws.

            Court of Appeals dismissed the petition on the ground that PNCC failed to file a motion for reconsideration of the assailed ruling of the NLRC. CA affirmed the status of PNCC as a private corporation. It further pronounced that even assuming PNCC to be a GOCC, PD 1597 and RA 10149 are inapplicable to GOCCs without original charter, like PNCC.

 

Issue 1:

            Whether PNCC a private corporation or a government owned and controlled corporation (GOCC).

 

Held:

            PNCC is a non-chartered government owned and controlled corporation. n Strategic Alliance v. Radstock Securities, the Court pronounced with finality that PNCC is a GOCC: The PNCC is not 'just like any other private corporation precisely because it is not a private corporation' but indisputably government owned corporation. Neither is PNCC "an autonomous entity" considering that PNCC is under the Department of Trade and Industry, over which the President exercises control. To claim that PNCC is an "autonomous entity" is to say that it is a lost command in the Executive branch, a concept that violates the President's constitutional power or control over the entire Executive branch of government.

            The Court emphasized that PNCC is 90.3% owned by the government and may not be considered an autonomous entity just because it got incorporated under the Corporation Code. Additionally, Executive Order No. 331, series of 2014 has placed the PNCC under the Department of Trade and Industry (DTI), thus, confirming its character as a GOCC

 

Issue 2:

            Whether PNCC employees covered by the provisions of the Labor Code or by the Civil Service Law.

 

Held:

            Being a GOCC without original charter, PNCC is covered by the Labor Code.  Under Article IX-B, Section 2, paragraph 1 of the 1987 Constitution, only GOCCs with original charters are covered by civil service laws. Since PNCC is a non-chartered GOCC, incorporated under the Corporation Code, it is governed by the Labor Code, not by the Civil Service Law.

 

Issue 3:

            Whether PNCC governed by RA 10149.

 

Held:

            Yes; although governed by the Labor Code, as a GOCC, PNCC is not exempt from the coverage of the National Position Classification and Compensation Plan approved by the President.

            In GSIS Family Bank Employees Union v. Villanueva, the Court had the occasion to illustrate the interplay between the provisions of the Labor Code and the provisions of RA 10149 on the life of a non-chattered GOCC.  In that case, employees of GSIS Family Bank demanded for the payment of their Christmas bonus which had been annually given them pursuant to their CBA with GSIS Family Bank, a non-chartered GOCC. GSIS Family Bank was advised by the Governance Commission that in view of the enactment of RA 10149, GSIS Family Bank should no longer grant any additional benefits to its employees without the requisite authority from the President. Thenceforth, GSIS Family Bank stopped granting Christmas bonus to its employees. The Court ruled that while GOCCs without original chatters are covered by the Labor Code, employees of GOCCs 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 the Department of Budget and Management and applicable laws. GSIS clarified that RA 10149 applies to both chartered and non-chartered GOCCs.

            Consequently, therefore, PNCC did not violate the non-diminution rule when it desisted from granting mid-year bonus to its employees starting 2013. True, between 1992 and 2011, PNCC invariably granted this benefit to its employees and never before revoked this grant in strict adherence to the non-diminution rule under Article 100 of the Labor Code. Nonetheless, with the subsequent enactment of RA 10149 in 2011, PNCC may no longer grant this benefit without first securing the requisite authority from the President. As borne by the records, PNCC failed to obtain this authority in view of the position taken by the GCG not to forward the request to the President. GCG cited as reasons the infirmity of the grant and the extraneous application of the non-diminution rule thereto.