G.R. No. 185449, November 12, 2014 - GOODYEAR PHILIPPINES, INC. AND REMEGIO M.

RAMOS,
Petitioners, v. MARINA L. ANGUS, Respondent.

SECOND DIVISION
G.R. No. 185449, November 12, 2014
GOODYEAR PHILIPPINES, INC. AND REMEGIO M. RAMOS, Petitioners, v. MARINA L. ANGUS, Respondent.
DECISION
DEL CASTILLO, J.:
In the absence of an express or implied prohibition against it, collection of both retirement benefits and
separation pay upon severance from employment is allowed. This is grounded on the social justice policy
that doubts should always be resolved in favor of labor rights.1
By this Petition for Review on Certiorari with Prayer for Injunctive Relief,2 petitioners Goodyear
Philippines, Inc. (Goodyear) and Remigio M. Ramos (Ramos) assail the May 13, 2008 Decision 3 and
November 17, 2008 Resolution4 of the Court of Appeals (CA) in CA-G.R. SP No. 98418. The CA partly
granted the Petition for Certiorari filed therewith by modifying the September 30, 2005 Decision[5 of the
National Labor Relations Commission (NLRC) in that it ordered petitioners to pay respondent Marina L.
Angus (Angus) separation pay, attorney's fees equivalent to 10% of the separation pay, and moral
damages.
Factual Antecedents
Angus was employed by Goodyear on November 16, 1966 and occupied the position of Secretary to the
Manager of Quality and Technology.
In order to maintain the viability of its operations in the midst of economic reversals, Goodyear
implemented cost-saving measures which included the streamlining of its workforce. Consequently, on
September 19, 2001, Angus received from Ramos, the Human Resources Director of Goodyear, a letter
which reads as follows:chanroblesvirtuallawlibrary
September 18, 2001
xxxx
Dear Ms. Angus:chanroblesvirtuallawlibrary

Please be advised that, based on a thorough study made by Management, the position of Secretary to the
Manager of Quality & Technology is already redundant or is no longer necessary for its effective
operation and is to be abolished effective today, September 18,2001.
In view of the above, we regret to inform you that your services, as Secretary to the Manager of Quality &
Technology, will be terminated effective October 18, 2001. Your last day of work, however, will be
effective today, September 18, 2001, to give you a month's time to look for another employment.
As Company practice, termination due to redundancy or retrenchment is paid at 45 days' pay per year of
service. Considering, that you have rendered 34.92 years of service to the Company as of October 18,
2001, and have reached the required minimum age of 55 to qualify for early retirement, Management
has decided to grant you early retirement benefit at 47 days' per year of service.
The Company will pay you the following termination benefits on October 18, 2001: 47 days' pay per year
of service (which will come from the Pension Fund), fractions of 13thand 14th months pay, longevity pay,
emergency leave and any earned and unused vacation and/or sick leave. The refund of your contributions
to the Goodyear Savings Plan, as well as the Company's share will be handled separately by Security Bank
Corporation, the Administrator of said Plan.
Should the Company find in the future that your services are again needed, it shall inform you of the
opportunity so you can apply. The Company will try to assist you find-new work elsewhere, and you may
use Goodyear as a reference, if needed.
We thank you for your 34.92 years of loyal service with Goodyear Philippines, and we wish you success in
your future endeavours.
Very truly yours,
GOODYEAR PHILIPPINES INC.
(signed)
(signed)
LUIS J. ISON
REMIGIO M. RAMOS
Manager-Quality & Technology
Human Resources Director6
Upon receipt, Angus responded through a letter of even date, viz:chanroblesvirtuallawlibrary
Dear Sirs:chanroblesvirtuallawlibrary
With reference to the attached letter dated September 18, 2001,1 accept Management decision to avail
early retirement benefit. However, I do not agree on the terms stated therein. I suggest I be given a
premium of additional 3 days for every year of service which is only 6.3% or a total of 50 days. I gathered
it is Philippine industry's practice to give premium to encourage employees to avail of the early
retirement benefit.
Acceptance of this proposal will make my separation from Goodyear pleasant.
Very truly yours,

(signed)
MARINA L. ANGUS7
Meanwhile and in connection with the retrenchment of Angus, an Establishment Termination Report8was
filed by Goodyear with the Department of Labor and Employment (DOLE).
On November 20, 2001, Angus accepted the checks which covered payment of her retirement benefits
computed at 47 days' pay per year of service and other company benefits. However, she put the following
annotation in the acknowledgement receipt thereof:chanroblesvirtuallawlibrary
Received under protest - amount is not acceptable. Acceptance is on condition that I will be given a
premium of additional 3 days for every year of service.
Since my service was terminated due to redundancy, I now claim my separation pay as mandated by law.
This is a separate claim from my early retirement benefit.ChanRoblesVirtualawlibrary
(Signed)
Marina L. Angus
11-20-019
Allegedly because of the above-quoted annotation, and also of Angus' refusal to sign a Release and
Quitclaim, petitioners took back the checks.10
In response to Angus' protest, Ramos wrote her a letter11dated November 29, 2001 explaining that the
company has already offered her the most favorable separation benefits due to redundancy, that is, 47
days' pay per year of service instead of the applicable rate of 45 days' pay per year of service. And based
on the Retirement Plan under the Collective Bargaining Agreement (CBA) and the parties' Employment
Contract, Angus is entitled to only one of the following kinds of separation pay: (1) normal retirement
which is payable at 47 days' pay per year of service; (2) early retirement at a maximum of 47 days' pay per
year of service; (3) retrenchment, redundancy, closure of establishment at 45 days' pay per year of
service; (4) medical disability at 45 days' pay per year of service; or (5) resignation at 20 days' pay per year
of service. Because of these, Ramos informed Angus that the company cannot anymore entertain any of
her additional claims.
In reply,12 Angus reiterated her claim for both termination pay and early retirement benefits. She also
demanded that she be given a copy of the Notice of Redundancy filed with the DOLE and a copy of the
specific provisions in the Retirement Plan, CBA and Employment Contract which could justify the
prohibition against the grant of both to a separated employee as asserted by petitioners. However,
Ramos merely reminded Angus to claim her checks and brushed aside her demands in a letter13 dated
December 19, 2001.
On January 17, 2002, Angus finally accepted a check in the amount of P1,958,927.89 purportedly
inclusive of all termination benefits computed at 47 days' pay per year of sendee. She likewise executed a
Release and Quitclaim[14 in favor of Goodyear.
On February 5, 2002, Angus filed with the Labor Arbiter a complaint for illegal dismissal with claims for
separation pay, damages and attorney's fees against petitioners.

In her Position Paper,15 Angus claimed that her termination by reason of redundancy was effected in
violation of the Labor Code for it was not timely reported to the DOLE and no separation pay was given to
her; that the separation pay to which she is entitled by law is entirely different from the retirement
benefits that she received; that nothing in the company's Retirement Plan under the CBA, the CBA itself
or the Employment Contract prohibits the grant of more than one land of separation pay; and, that she
was only forced to sign a quitclaim after accepting her retirement benefits.
On the other hand, petitioners asseverated in their Position Paper16 that Angus was validly dismissed for
an authorized cause; that she voluntarily accepted her termination benefits and freely executed the
corresponding quitclaim; that her receipt of early retirement benefits equivalent to 47 days' pay for every
year of service, which amount is higher than the regular separation pay, had effectively barred her from
recovering separation pay due to redundancy; and, that the following Section 1, Article XI of the last
company CBA supports the grant of only one benefit:chanroblesvirtuallawlibrary
It is hereby understood that the availment of the retirement benefits herein provided for shall exclude
entitlement to any separation pay, termination pay, redundancy pay, retrenchment pay or any other
severance pay.
The parties finally agree that an employee shall be entitled to only one (1) benefit, whichever is
higher.17chanrobleslaw
In her Rejoinder,18 Angus disputed the existence of the aforesaid provision in the company's CBA. She
presented a copy of the latest CBA19 between Goodyear and Unyon ng mga Manggagawa sa Goma sa
Goodyear Phils., Inc. effective for the period July 25, 2001 to July 24, 2004, to show that the provisions
alluded to by the petitioners do not exist. In contrast, she pointed to Section 5, Article VIII of the latest
CBA which she claimed to be the one applicable to her case, viz:chanroblesvirtuallawlibrary
SECTION 5. Retirement Plan.
At normal retirement age of 60 years, a worker shall be entitled to a lump sum retirement benefit in an
amount equivalent to his daily rate (base rate x 8) multiplied by 47 days, and further multiplied by his
years of service.
A worker who is at least 50 years old and with at least 15 years of service, and who has been
recommended by the President of the UNION for early retirement and duly approved by the Human
Resources Director, shall be paid a lump sum retirement benefit as follows:chanroblesvirtuallawlibrary
Years of
Service Rendered
15 - less than 21
21 - less than 26
26 - less than 31
31 and up

Retirement Benefit
Equivalent to
34 days pay per year of service
35 days pay per year of service
36 days pay per year of service
47 days pay per year of service20

Ruling of the Labor Arbiter

In a Decision21 dated January 23, 2004, the Labor Arbiter upheld the validity of Angus' termination from

employment. It likewise declared that the amount she received from the company was actually payment
of separation pay due to redundancy, only that it was computed under the CBA's retirement plan since
the same was more advantageous to her. Anent her claim for both separation pay and retirement
benefits, the Labor Arbiter held that the grant of both is not allowed under the Retirement Plan/CBA.
Moreover, it was held that her claim of vitiated consent in signing the quitclaim is unworthy of credence
considering that she fairly negotiated the matter with the management and that the consideration for its
execution is higher than what she is mandated to receive.
Hence, the dispositive portion of the Labor Arbiter's Decision, viz:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the instant complaint is hereby dismissed for lack of merit.
SO ORDERED.22chanrobleslaw
Ruling of the National Labor Relations Commission
Angus appealed to the NLRC, but was unsuccessful as it rendered a Decision23 dated September 30, 2005
affirming the ruling of the Labor Arbiter. Thus:chanroblesvirtuallawlibrary
WHEREFORE, finding no cogent reason to modify, alter, much less reverse the decision appealed from,
the same is AFFIRMED and the instant appeal is DISMISSED for lack of merit.
SO ORDERED.24chanrobleslaw
Angus filed a motion for reconsideration, but was denied by the NLRC in a Resolution25cralawred dated
January 9, 2007.
Ruling of the Court of Appeals
Still undeterred, Angus filed a Petition for Certiorari26 with the CA. She attributed grave abuse of
discretion amounting to lack of or in excess of jurisdiction on the part of the NLRC in sustaining the ruling
of the Labor Arbiter.
On May 13, 2008, the CA rendered a Decision27 partially granting Angus' Petition. While it found her
dismissal valid in both substance and procedural aspects, it declared Angus entitled to separation pay in
addition to the retirement pay she already received. Citing Cruz v. Philippine Global Communications,
Inc.,[28 the CA ruled that Angus is entitled to the payment of both retirement benefit and separation pay
in view of the absence of any provision in the CBA prohibiting the payment of both. It also concluded that
Angus did not voluntarily sign the release and quitclaim as under its terms, she would receive less than
what she is legally entitled to. Further, Angus was granted attorney's fees as she was forced to litigate to
protect her rights and interest, as well as moral damages for the anxiety and distress that she suffered
because of the pressure exerted on her to avail of early retirement and accept her retirement pay.
The dispositive portion of the CA Decision reads:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the petition for certiorari is hereby partially GRANTED. The NLRC
Decision dated September 30, 2005 is modified by ordering Goodyear to pay Angus: (1) separation pay

pursuant to Article 283 of the Labor Code, (2) attorney's fees equivalent to ten percent (10%) of her
separation pay, and (3) moral damages in the amount of five thousand pesos (P5,000.00).
SO ORDERED.[29chanrobleslaw
Petitioners filed a Partial Motion for Reconsideration30 vehemently questioning the awards for separation
pay, attorney's fees and moral damages. This was, however, denied by the CA in its Resolution31 dated
November 17, 2008.
Hence, the present Petition.ChanRoblesVirtualawlibrary
Issues
Petitioners raise the following grounds for this Court's review:chanroblesvirtuallawlibrary
I.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW WHEN IT ORDERED THE PAYMENT OF
SEPARATION PAY TO RESPONDENT ON TOP OF THE RETIREMENT PAY DESPITE THE FACT THAT IT IS VERY
CLEAR IN THE COLLECTIVE BARGAINING AGREEMENT THAT RESPONDENT IS ENTITLED TO ONLY ONE TYPE
OF BENEFIT, EITHER SEPARATION PAY OR RETIREMENT BENEFIT, WHICHEVER IS
HIGHER.ChanRoblesVirtualawlibrary
II.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW WHEN IT ORDERED GOODYEAR TO PAY
AGAIN SEPARATION PAY TO RESPONDENT DESPITE THE FACT THAT RESPONDENT EXECUTED A VALID AND
BINDING QUITCLAIM, THE CONSEQUENCES AND EFFECTS OF WHICH SHE FULLY UNDERSTOOD, AND
WHICH SHE CANNOT NOW UNILATERALLY REVOKE.ChanRoblesVirtualawlibrary
III.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW WHEN IT ORDERED THE PAYMENT OF
MORAL DAMAGES AND ATTORNEY'S FEES NOTWITHSTANDING THAT THE COMPLAINT FOR ILLEGAL
DISMISSAL AND MONEY CLAIMS LACKED MERIT.32chanrobleslaw
Petitioners argue that the CA erred in ordering them to still pay Angus separation pay as she was already
paid the same at the rate used for computing early retirement benefits. They insist that Angus is entitled
to only one kind of pay as the recovery of both retirement benefits and separation pay is proscribed by
the company's CBA. Petitioners further contend that the CA has no basis in disregarding the quitclaim
since it was knowingly and voluntarily executed by Angus. And such voluntary execution, coupled with her
acceptance of separation pay computed at early retirement rate, had effectively barred Angus from
demanding for more. ChanRoblesVirtualawlibrary
Our Ruling
The Petition is devoid of merit.

Angus is entitled to both separation pay

and early retirement benefit due to the
absence of a specific provision in the
CBA prohibiting recovery of both.
In Aquino v. National Labor Relations Commission,33 citing Batangas Laguna Tayabas Bus Company v.
Court of Appeals34 and University of the East v. Hon. Minister of Labor35 the Court held that an employee
is entitled to recover both separation pay and retirement benefits in the absence of a specific prohibition
in the Retirement Plan or CBA. Concomitantly, the Court ruled that an employee's right to receive
separation pay in addition to retirement benefits depends upon the provisions of the company's
Retirement Plan and/or CBA.36
Here, petitioners allege that there is a provision in the last CBA against the recovery of both retirement
benefits and separation pay. To support their claim, petitioners submitted a copy of what appears to be a
portion of the company CBA entitled "Retirement Plan, Life Insurance, Physical Disability Pay and
Resignation Pay." Section 1, Article XI thereof provides that the availment of retirement benefits
precludes entitlement to any separation pay. The same, however, can hardly be considered as substantial
evidence because it does not appear to be an integral part of Goodyear's CBA. Even assuming that it is, it
would still not suffice as there is no showing if the CBA under which the said provision is found was the
one in force at the time material to this case. On the other hand, Angus presented the parties' 2001-2004
CBA and upon examination of the same, the Court agrees with her that it does not contain any restriction
on the availment of benefits under the company's Retirement Plan and of separation pay. Indeed, the
Labor Arbiter and the NLRC erred in ignoring this material piece of evidence which is decisive of the issue
presented before them. The CA, thus, committed no error in reversing the Decisions of the labor tribunals
when it ruled in favor of Angus' entitlement to both retirement benefits and separation pay.
Moreover, the Court agrees with the CA that the amount Angus received from petitioners represented
only her retirement pay and not separation pay. A cursory reading of petitioners' September 18, 2001
letter notifying Angus of her termination from employment shows that they granted her early retirement
benefits pegged at 47 days' pay per year of service. This rate was arrived at after petitioners considered
respondent's length of service with the company, as well as her age which qualified her for early
retirement. In fact, petitioners were even explicit in stating in the said letter that the amount she was to
receive would come from the company's Pension Fund, which, as correctly asserted by Angus, was
created to cover retirement benefit payment of employees. In addition, the document37 showing a
detailed account of Angus' termination benefits speaks for itself as the same is entitled "Summary of
Retirement Pay and other Company Benefits." In view therefore of the clear showing that what
petitioners decided to grant Angus was her early retirement benefits, they cannot now be permitted to
deny having paid such benefit.
Petitioners further argue that Angus is not entitled to retirement pay because she does not meet the
requirements enumerated in the Retirement Plan provision of the CBA. The Court disagrees. While it is
obvious that Angus is not entitled to compulsory retirement as she has not yet reached the age of 60,
there is no denying, however, that she is qualified for early retirement. Under the provision of the
Retirement Plan of the CBA as earlier quoted, a worker who is at least 50 years old and with at least 15
years of service, and who has been recommended by the President of the Union for early retirement and
duly approved by the Human Resources Director, shall be entitled to lump sum retirement benefits. At
the time of her termination, Angus was already 57 years of age and had been in the service for more than
34 years. The exchange of correspondence between Angus and Ramos also shows that the latter, as

Goodyear's Human Resources Director, offered, recommended and approved the grant of early
retirement in favor of the former. Clearly, all the requirements for Angus' availment of early retirement
under the Retirement Plan of CBA were substantially complied with.
It is worthy to mention at this point that retirement benefits and separation pay are not mutually
exclusive.38 Retirement benefits are a form of reward for an employee's loyalty and service to an
employer39 and are earned under existing laws, CBAs, employment contracts and company policies.40 On
the other hand, separation pay is that amount which an employee receives at the time of his severance
from employment, designed to provide the employee with the wherewithal during the period that he is
looking for another employment and is recoverable only in instances enumerated under Articles 283 and
284 of the Labor Code or in illegal dismissal cases when reinstatement is not feasible. 41 In the case at bar,
Article 283[42 clearly entitles Angus to separation pay apart from the retirement benefits she received
from petitioners.
Release and Quitclaim signed by Angus
is invalid.
The release and quitclaim signed by Angus cannot be used by petitioners to legalize the denial of Angus'
rightful claims. As aptly observed by the CA, the terms of the quitclaim authorizes Angus to receive less
than what she is legally entitled to. "Under prevailing jurisprudence, x x x a quitclaim cannot bar an
employee from demanding benefits to which he is legally entitled."43 It was held to be "ineffective in
barring claims for the full measure of the worker's rights and the acceptance of benefits therefrom does
not amount to estoppel".44 Moreover, release and quitclaims are often looked upon with disfavor when
the waiver was not done voluntarily by employees who were pressured into signing them by
unscrupulous employers seeking to evade their obligations.45
Angus is entitled to moral damages and attorney's fees.
The Court likewise finds no cogent reason to overturn the CA's award of moral damages in the amount of
P5,000.00 and attorney's fees. Moral damages is awarded when fraud and bad faith have been
established,46 as in this case. Petitioners' false contention over what has been paid to Angus suggests an
attempt to feign compliance with their legal obligation to grant their employee all the benefits provided
for by agreement and law. Their bad faith is evident in the intent to circumvent this legal mandate. And as
Angus was then forced to litigate her just claims when petitioners refused to heed her demands for the
payment of separation pay, the award of attorney's fees equivalent to 10% of the amount of separation
pay is also in order.47
ART. 283. Closure of establishment and reduction of personnel. - The employer may also terminate the
employment of any employee due to the installation of labor saving devices, redundancy, retrenchment
to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the
workers and the [Department] of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay
or to at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least

six (6) months shall be considered one (1) whole year.

WHEREFORE, the Petition is DENIED. The May 13, 2008 Decision and November 17, 2008 Resolution of
the Court of Appeals in CA-G.R. SP No. 98418, are AFFIRMED.
SO ORDERED.

G.R. No. 192531, November 12, 2014 - BERNARDINA P. BARTOLOME, Petitioner, v. SOCIAL SECURITY
SYSTEM AND SCANMAR MARITIME SERVICES, INC., Respondents.

THIRD DIVISION
G.R. No. 192531, November 12, 2014
BERNARDINA P. BARTOLOME, Petitioner, v. SOCIAL SECURITY SYSTEM AND SCANMAR MARITIME SERVICES,
INC., Respondents.
DECISION
VELASCO JR., J.:
Nature of the Case
This Appeal, filed under Rule 43 of the Rules of Court, seeks to annul the March 17, 2010 Decision 1 of the
Employees' Compensation Commission (ECC) in ECC Case No. SL-18483-0218-10, entitledBernardina P.
Bartolome v. Social Security System (SSS) [Scanmar Maritime Services, Inc.], declaring that petitioner is not
a beneficiary of the deceased employee under Presidential Decree No. (PD) 442, otherwise known as
the Labor Code of the Philippines, as amended by PD 626.2ChanRoblesVirtualawlibrary
The Facts
John Colcol (John), born on June 9, 1983, was employed as electrician by Scanmar Maritime Services, Inc.,
on board the vessel Maersk Danville, since February 2008. As such, he was enrolled under the
government's Employees' Compensation Program (ECP).3 Unfortunately, on June 2, 2008, an accident
occurred on board the vessel whereby steel plates fell on John, which led to his untimely death the
following day.4
John was, at the time of his death, childless and unmarried. Thus, petitioner Bernardina P. Bartolome,
John's biological mother and, allegedly, sole remaining beneficiary, filed a claim for death benefits under
PD 626 with the Social Security System (SSS) at San Fernando City, La Union. However, the SSS La Union
office, in a letter dated June 10, 20095 addressed to petitioner, denied the claim,
stating:chanroblesvirtuallawlibrary
We regret to inform you that we cannot give due course to your claim because you are no longer
considered as the parent of JOHN COLCOL as he was legally adopted by CORNELIO COLCOL based on
documents you submitted to us.
The denial was appealed to the Employees' Compensation Commission (ECC), which affirmed the ruling of

the SSS La Union Branch through the assailed Decision, the dispositive portion of which
reads:chanroblesvirtuallawlibrary
WHEREFORE, the appealed decision is AFFIRMED and the claim is hereby dismissed for lack of merit.
SO ORDERED.6
In denying the claim, both the SSS La Union branch and the ECC ruled against petitioner's entitlement to
the death benefits sought after under PD 626 on the ground she can no longer be considered John's
primary beneficiary. As culled from the records, John and his sister Elizabeth were adopted by their great
grandfather, petitioner's grandfather, Cornelio Colcol (Cornelio), by virtue of the Decision7in Spec. Proc.
No. 8220-XII of the Regional Trial Court in Laoag City dated February 4, 1985, which decree of adoption
attained finality.8 Consequently, as argued by the agencies, it is Cornelio who qualifies as John's primary
beneficiary, not petitioner.
Neither, the ECC reasoned, would petitioner qualify as John's secondary beneficiary even if it were proven
that Cornelio has already passed away. As the ECC ratiocinated:chanroblesvirtuallawlibrary
Under Article 167 (j) of P.D. 626, as amended, provides (sic) that beneficiaries are the "dependent spouse
until he remarries and dependent children, who are the primary beneficiaries. In their absence, the
dependent parents and subject to the restrictions imposed on dependent children, the illegitimate
children and legitimate descendants who are the secondary beneficiaries; Provided; that the dependent
acknowledged natural child shall be considered as a primary beneficiary when there are no other
dependent children who are qualified and eligible for monthly income benefit."
The dependent parent referred to by the above provision relates to the legitimate parent of the covered
member, as provided for by Rule XV, Section 1 (c) (1) of the Amended Rules on Employees'
Compensation. This Commission believes that the appellant is not considered a legitimate parent of the
deceased, having given up the latter for adoption to Mr. Cornelio C. Colcol. Thus, in effect, the adoption
divested her of the status as the legitimate parent of the deceased.
xxxx
In effect, the rights which previously belong [sic] to the biological parent of the adopted child shall now
be upon the adopting parent. Hence, in this case, the legal parent referred to by P.D. 626, as amended, as
the beneficiary, who has the right to file the claim, is the adoptive father of the deceased and not herein
appellant.9 (Emphasis supplied)
Aggrieved, petitioner filed a Motion for Reconsideration, which was likewise denied by the ECC.10Hence,
the instant petition.ChanRoblesVirtualawlibrary
The Issues
Petitioner raises the following issues in the petition:chanroblesvirtuallawlibrary
ASSIGNMENT OF ERRORS

I.

The Honorable ECC's Decision is contrary to evidence on record.

II.

The Honorable ECC committed grave abuse in denying the just, due and lawful claims of
the petitioner as a lawful beneficiary of her deceased biological son.

III.

The Honorable ECC committed grave abuse of discretion in not giving due course /
denying petitioner's otherwise meritorious motion for reconsideration.11

In resolving the case, the pivotal issue is this: Are the biological parents of the covered, but legally
adopted, employee considered secondary beneficiaries and, thus, entitled, in appropriate cases, to
receive the benefits under the ECP?ChanRoblesVirtualawlibrary
The Court's Ruling
The petition is meritorious.
The ECC's factual findings
are not consistent with the
evidence on record
To recall, one of the primary reasons why the ECC denied petitioner's claim for death benefits is that even
though she is John's biological mother, it was allegedly not proven that his adoptive parent, Cornelio, was
no longer alive. As intimated by the ECC:chanroblesvirtuallawlibrary
Moreover, there had been no allegation in the records as to whether the legally adoptive parent, Mr.
Colcol, is dead, which would immediately qualify the appellant [petitioner] for Social Security benefits.
Hence, absent such proof of death of the adoptive father, this Commission will presume him to be alive
and well, and as such, is the one entitled to claim the benefit being the primary beneficiary of the
deaceased. Thus, assuming that appellant is indeed a qualified beneficiary under the Social Security law,
in view of her status as other beneficiary, she cannot claim the benefit legally provided by law to the
primary beneficiary, in this case the adoptive father since he is still alive.
We disagree with the factual finding of the ECC on this point.
Generally, findings of fact by administrative agencies are generally accorded great respect, if not finality,
by the courts by reason of the special knowledge and expertise of said administrative agencies over
matters falling under their jurisdiction.[12 However, in the extant case, the ECC had overlooked a crucial
piece of evidence offered by the petitioner- Cornelio's death certificate.13
Based on Cornelio's death certificate, it appears that John's adoptive father died on October 26,
1987,14 or only less than three (3) years since the decree of adoption on February 4, 1985, which attained
finality.15 As such, it was error for the ECC to have ruled that it was not duly proven that the adoptive
parent, Cornelio, has already passed away.
The rule limiting death benefits
claims to the legitimate
parents is contrary to law

This brings us to the question of whether or not petitioner is entitled to the death benefits claim in view
of John's work-related demise. The pertinent provision, in this regard, is Article 167 (j) of the Labor Code,
as amended, which reads:chanroblesvirtuallawlibrary
ART. 167. Definition of terms. - As used in this Title unless the context indicates
otherwise:chanroblesvirtuallawlibrary
xxxx
(j) 'Beneficiaries' means the dependent spouse until he remarries and dependent children, who are the
primary beneficiaries. In their absence, the dependent parentsand subject to the restrictions imposed on
dependent children, the illegitimate children and legitimate descendants who are the secondary
beneficiaries; Provided, that the dependent acknowledged natural child shall be considered as a primary
beneficiary when there are no other dependent children who are qualified and eligible for monthly
income benefit. (Emphasis supplied)
Concurrently, pursuant to the succeeding Article 177(c) supervising the ECC "[T]o approve rules and
regulations governing the processing of claims and the settlement of disputes arising therefrom as
prescribed by the System," the ECC has issued the Amended Rules on Employees' Compensation,
interpreting the above-cited provision as follows:chanroblesvirtuallawlibrary
RULE XV - BENEFICIARIES
SECTION 1. Definition, (a) Beneficiaries shall be either primary or secondary, and determined at the time
of employee's death.
(b) The following beneficiaries shall be considered primary:chanroblesvirtuallawlibrary
(1) The legitimate spouse living with the employee at the time of the employee's death until he
remarries; and
(2) Legitimate, legitimated, legally adopted or acknowledged natural children, who are unmarried not
gainfully employed, not over 21 years of age, or over 21 years of age provided that he is incapacitated
and incapable of self - support due to physical or mental defect which is congenital or acquired during
minority; Provided, further, that a dependent acknowledged natural child shall be considered as a
primary beneficiary only when there are no other dependent children who are qualified and eligible for
monthly income benefit; provided finally, that if there are two or more acknowledged natural children,
they shall be counted from the youngest and without substitution, but not exceeding five.
(c) The following beneficiaries shall be considered secondary:chanroblesvirtuallawlibrary
(1) The legitimate parents wholly dependent upon the employee for regular support;cralawlawlibrary
(2) The legitimate descendants and illegitimate children who are unmarried, not gainfully employed, and
not over 21 years of age, or over 21 years of age provided that he is incapacitated and incapable of self support due to physical or mental defect which is congenital or acquired during minority. (Emphasis
supplied)

Guilty of reiteration, the ECC denied petitioner's claim on the ground that she is no longer the deceased's
legitimate parent, as required by the implementing rules. As held by the ECC, the adoption decree
severed the relation between John and petitioner, effectively divesting her of the status of a legitimate
parent, and, consequently, that of being a secondary beneficiary.
We disagree.
Rule XV, Sec. l(c)(l) of the Amended
Rules on Employees' Compensation
deviates from the clear language of
Art. 167 (j) of the Labor Code,
as amended
Examining the Amended Rules on Employees' Compensation in light of the Labor Code, as amended, it is
at once apparent that the ECC indulged in an unauthorized administrative legislation. In net effect, the
ECC read into Art. 167 of the Code an interpretation not contemplated by the provision. Pertinent in
elucidating on this point is Article 7 of the Civil Code of the Philippines, which
reads:chanroblesvirtuallawlibrary
Article 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not be
excused by disuse, or custom or practice to the contrary.
When the courts declared a law to be inconsistent with the Constitution, the former shall be void and the
latter shall govern.
Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to
the laws or the Constitution. (Emphasis supplied)
As applied, this Court held in Commissioner of Internal Revenue v. Fortune Tobacco
Corporation16that:chanroblesvirtuallawlibrary
As we have previously declared, rule-making power must be confined to details for regulating the mode
or proceedings in order to carry into effect the law as it has been enacted, and it cannot be extended to
amend or expand the statutory requirements or to embrace matters not covered by the
statute. Administrative regulations must always be in harmony with the provisions of the law because any
resulting discrepancy between the two will always be resolved in favor of the basic law. (Emphasis
supplied)
Guided by this doctrine, We find that Rule XV of the Amended Rules on Employees' Compensation is
patently a wayward restriction of and a substantial deviation from Article 167 (j) of the Labor Code when
it interpreted the phrase "dependent parents" to refer to "legitimate parents."
It bears stressing that a similar issue in statutory construction was resolved by this Court in Diaz v.
Intermediate Appellate Court17 in this wise:chanroblesvirtuallawlibrary
It is Our shared view that the word "relatives" should be construed in its general acceptation. Amicus
curiae Prof. Ruben Balane has this to say:

The term relatives, although used many times in the Code, is not defined by it. In accordance therefore
with the canons of statutory interpretation, it should be understood to have a general and inclusive
scope, inasmuch as the term is a general one. Generalia verba sunt generaliter intelligenda. That the law
does not make a distinction prevents us from making one: Ubi lex non distinguit, nee nos distinguera
debemus. xxx
According to Prof. Balane, to interpret the term relatives in Article 992 in a more restrictive sense than it
is used and intended is not warranted by any rule of interpretation. Besides, he further states that when
the law intends to use the term in a more restrictive sense, it qualifies the term with the word collateral,
as in Articles 1003 and 1009 of the New Civil Code.
Thus, the word "relatives" is a general term and when used in a statute it embraces not only collateral
relatives but also all the kindred of the person spoken of, unless the context indicates that it was used in a
more restrictive or limited sense which as already discussed earlier, is not so in the case at bar.(Emphasis
supplied)
In the same vein, the term "parents" in the phrase "dependent parents" in the afore-quoted Article 167
(j) of the Labor Code is used and ought to be taken in its general sense and cannot be unduly limited to
"legitimate parents" as what the ECC did. The phrase "dependent parents" should, therefore, include all
parents, whether legitimate or illegitimate and whether by nature or by adoption. When the law does not
distinguish, one should not distinguish. Plainly, "dependent parents" are parents, whether legitimate or
illegitimate, biological or by adoption, who are in need of support or assistance.
Moreover, the same Article 167 (j), as couched, clearly shows that Congress did not intend to limit the
phrase "dependent parents" to solely legitimate parents. At the risk of being repetitive, Article 167
provides that "in their absence, the dependent parents and subject to the restrictions imposed on
dependent children, the illegitimate children and legitimate descendants who are secondary
beneficiaries." Had the lawmakers contemplated "dependent parents" to mean legitimate parents, then it
would have simply said descendants and not "legitimate descendants." The manner by which the
provision in question was crafted undeniably show that the phrase "dependent parents" was intended to
cover all parents - legitimate, illegitimate or parents by nature or adoption.
Rule XV, Section l(c)(l) of the
Amended Rules on Employees'
Compensation is in contravention
of the equal protection clause
To insist that the ECC validly interpreted the Labor Code provision is an affront to the Constitutional
guarantee of equal protection under the laws for the rule, as worded, prevents the parents of an
illegitimate child from claiming benefits under Art. 167 (j) of the Labor Code, as amended by PD 626. To Our
mind, such postulation cannot be countenanced.
As jurisprudence elucidates, equal protection simply requires that all persons or things similarly situated
should be treated alike, both as to rights conferred and responsibilities imposed. It requires public bodies
and institutions to treat similarly situated individuals in a similar manner.18 In other words, the concept of
equal justice under the law requires the state to govern impartially, and it may not draw distinctions
between individuals solely on differences that are irrelevant to a legitimate governmental objective. 19

The concept of equal protection, however, does not require the universal application of the laws to all
persons or things without distinction. What it simply requires is equality among equals as determined
according to a valid classification. Indeed, the equal protection clause permits classification. Such
classification, however, to be valid must pass the test of reasonableness. The test has four requisites: (1)
The classification rests on substantial distinctions; (2) It is germane to the purpose of the law; (3) It is not
limited to existing conditions only; and (4) It applies equally to all members of the same class. "Superficial
differences do not make for a valid classification."20
In the instant case, there is no compelling reasonable basis to discriminate against illegitimate parents.
Simply put, the above-cited rule promulgated by the ECC that limits the claim of benefits to the legitimate
parents miserably failed the test of reasonableness since the classification is not germane to the law
being implemented. We see no pressing government concern or interest that requires protection so as to
warrant balancing the rights of unmarried parents on one hand and the rationale behind the law on the
other. On the contrary, the SSS can better fulfill its mandate, and the policy of PD 626 - that employees
and their dependents may promptly secure adequate benefits in the event of work-connected disability
or death -will be better served if Article 167 (j) of the Labor Code is not so narrowly interpreted.
There being no justification for limiting secondary parent beneficiaries to the legitimate ones, there can
be no other course of action to take other than to strike down as unconstitutional the phrase
"illegitimate" as appearing in Rule XV, Section l(c)(l) of the Amended Rules on Employees' Compensation.
Petitioner qualifies as John's
dependent parent
In attempting to cure the glaring constitutional violation of the adverted rule, the ECC extended
illegitimate parents an opportunity to file claims for and receive death benefits by equating dependency
and legitimacy to the exercise of parental authority. Thus, as insinuated by the ECC in its assailed
Decision, had petitioner not given up John for adoption, she could have still claimed death benefits under
the law.
To begin with, nowhere in the law nor in the rules does it say that "legitimate parents" pertain to those
who exercise parental authority over the employee enrolled under the ECP. It was only in the assailed
Decision wherein such qualification was made. In addition, assuming arguendo that the ECC did not
overstep its boundaries in limiting the adverted Labor Code provision to the deceased's legitimate
parents, and that the commission properly equated legitimacy to parental authority, petitioner can still
qualify as John's secondary beneficiary.
True, when Cornelio, in 1985, adopted John, then about two (2) years old, petitioner's parental authority
over John was severed. However, lest it be overlooked, one key detail the ECC missed, aside from
Cornelio's death, was that when the adoptive parent died less than three (3) years after the adoption
decree, John was still a minor, at about four (4) years of age.
John's minority at the time of his adopter's death is a significant factor in the case at bar. Under such
circumstance, parental authority should be deemed to have reverted in favor of the biological parents.
Otherwise, taking into account Our consistent ruling that adoption is a personal relationship and that
there are no collateral relatives by virtue of adoption,[21 who was then left to care for the minor adopted
child if the adopter passed away?

To be sure, reversion of parental authority and legal custody in favor of the biological parents is not a
novel concept. Section 20 of Republic Act No. 855222 (RA 8552), otherwise known as the Domestic
Adoption Act, provides:chanroblesvirtuallawlibrary
Section 20. Effects of Rescission. - If the petition [for rescission of adoption] is granted, the parental
authority of the adoptee's biological parent(s), if known, or the legal custody of the Department shall be
restored if the adoptee is still a minoror incapacitated. The reciprocal rights and obligations of the
adopter(s) and the adoptee to each other shall be extinguished, (emphasis added)
The provision adverted to is applicable herein by analogy insofar as the restoration of custody is
concerned. The manner herein of terminating the adopter's parental authority, unlike the grounds for
rescission,23 justifies the retention of vested rights and obligations between the adopter and the adoptee,
while the consequent restoration of parental authority in favor of the biological parents, simultaneously,
ensures that the adoptee, who is still a minor, is not left to fend for himself at such a tender age.
To emphasize, We can only apply the rule by analogy, especially since RA 8552 was enacted after
Cornelio's death. Truth be told, there is a lacuna in the law as to which provision shall govern
contingencies in all fours with the factual milieu of the instant petition. Nevertheless, We are guided by
the catena of cases and the state policies behind RA 855224 wherein the paramount consideration is the
best interest of the child, which We invoke to justify this disposition. It is, after all, for the best interest of
the child that someone will remain charged for his welfare and upbringing should his or her adopter fail
or is rendered incapacitated to perform his duties as a parent at a time the adoptee is still in his formative
years, and, to Our mind, in the absence or, as in this case, death of the adopter, no one else could
reasonably be expected to perform the role of a parent other than the adoptee's biological one.
Moreover, this ruling finds support on the fact that even though parental authority is severed by virtue of
adoption, the ties between the adoptee and the biological parents are not entirely eliminated. To
demonstrate, the biological parents, in some instances, are able to inherit from the adopted, as can be
gleaned from Art. 190 of the Family Code:chanroblesvirtuallawlibrary
Art. 190. Legal or intestate succession to the estate of the adopted shall be governed by the following
rules:chanroblesvirtuallawlibrary
xxx
(2) When the parents, legitimate or illegitimate, or the legitimate ascendants of the adopted concur with
the adopter, they shall divide the entire estate, one-half to be inherited by the parents or ascendants and
the other half, by the adopters;cralawlawlibrary
xxx
(6) When only collateral blood relatives of the adopted survive, then the ordinary rules of legal or
intestate succession shall apply.
Similarly, at the time of Cornelio Colcol's death, which was prior to the effectivity of the Family Code, the
governing provision is Art. 984 of the New Civil Code, which provides:chanroblesvirtuallawlibrary

Art. 984. In case of the death of an adopted child, leaving no children or descendants, his parents and
relatives by consanguinity and not by adoption, shall be his legal heirs.
From the foregoing, it is apparent that the biological parents retain their rights of succession to the estate
of their child who was the subject of adoption. While the benefits arising from the death of an SSS
covered employee do not form part of the estate of the adopted child, the pertinent provision on legal or
intestate succession at least reveals the policy on the rights of the biological parents and those by
adoption vis-a-vis the right to receive benefits from the adopted.
In the same way that certain rights still attach by virtue of the blood relation, so too should certain
obligations, which, We rule, include the exercise of parental authority, in the event of the untimely
passing of their minor offspring's adoptive parent. We cannot leave undetermined the fate of a minor
child whose second chance at a better life under the care of the adoptive parents was snatched from him
by death's cruel grasp. Otherwise, the adopted child's quality of life might have been better off not being
adopted at all if he would only find himself orphaned in the end. Thus, We hold that Cornelio's death at
the time of John's minority resulted in the restoration of petitioner's parental authority over the adopted
child.
On top of this restoration of parental authority, the fact of petitioner's dependence on John can be
established from the documentary evidence submitted to the ECC. As it appears in the records,
petitioner, prior to John's adoption, was a housekeeper. Her late husband died in 1984, leaving her to
care for their seven (7) children. But since she was unable to "give a bright future to her growing children"
as a housekeeper, she consented to Cornelio's adoption of John and Elizabeth in 1985.
Following Cornelio's death in 1987, so records reveal, both petitioner and John repeatedly reported
"Brgy. Capurictan, Solsona, Ilocos Norte" as their residence. In fact, this very address was used in John's
Death Certificate25cralawred executed in Brazil, and in the Report of Personal Injury or Loss of Life
accomplished by the; master of the vessel boarded by John.26 Likewise, this is John's known address as
per the ECC's assailed Decision.27 Similarly, this same address was used by petitioner in filing her claim
before the SSS La Union branch and, thereafter, in her appeal with the ECC. Hence, it can be assumed
that aside from having been restored parental authority over John, petitioner indeed actually execised
the same, and that they lived together under one roof.
Moreover, John, in his SSS application,28 named petitioner as one of his beneficiaries for his benefits
under RA 8282, otherwise known as the "Social Security Law." While RA 8282 does not cover
compensation for work-related deaths or injury and expressly allows the designation of beneficiaries who
are not related by blood to the member unlike in PD 626, John's deliberate act of indicating petitioner as
his beneficiary at least evinces that he, in a way, considered petitioner as his dependent. Consequently,
the confluence of circumstances - from Cornelio's death during John's minority, the restoration of
petitioner's parental authority, the documents showing singularity of address, and John's clear intention
to designate petitioner as a beneficiary - effectively made petitioner, to Our mind, entitled to death
benefit claims as a secondary beneficiary under PD 626 as a dependent parent.
All told, the Decision of the ECC dated March 17, 2010 is bereft of legal basis. Cornelio's adoption of John,
without more, does not deprive petitioner of the right to receive the benefits stemming from John's
death as a dependent parent given Cornelio's untimely demise during John's minority. Since the parent by
adoption already died, then the death benefits under the Employees' Compensation Program shall accrue

solely to herein petitioner, John's sole remaining beneficiary.

WHEREFORE, the petition is hereby GRANTED. The March 17, 2010 Decision of the Employees'
Compensation Commission, in ECC Case No. SL-18483-0218-10, is REVERSED and SET ASIDE. The ECC is
hereby directed to release the benefits due to a secondary beneficiary of the deceased covered employee

G.R. No. 198408, November 12, 2014 - CONCHITA J. RACELIS, Petitioner, v. UNITED PHILIPPINE LINES, INC.
AND/OR HOLLAND AMERICA LINES, INC.,* AND FERNANDO T. LISING, Respondents.

FIRST DIVISION
G.R. No. 198408, November 12, 2014
CONCHITA J. RACELIS, Petitioner, v. UNITED PHILIPPINE LINES, INC. AND/OR HOLLAND AMERICA LINES,
INC.,* AND FERNANDO T. LISING, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated March 28, 2011 and the
Resolution3 dated August 26, 2011 of the Court of Appeals (CA) in CA-G.R. SP. No. 113835 which reversed
and set aside the Decision4 dated November 10, 2009 of the National Labor Relations Commission (NLRC)
in NLRC LAC Case No. OFW (M)-05-000277-09, thereby dismissing the complaint for death benefits, burial
assistance, moral and exemplary damages, and attorneys fees filed by petitioner Conchita J. Racelis
(petitioner).
The Facts
On January 15, 2008, Rodolfo L. Racelis (Rodolfo) was recruited and hired by respondent United
Philippine Lines, Inc. (UPL) for its principal, respondent Holland America Lines, Inc. (HAL) to serve as
Demi Chef De Partie on board the vessel MS Prinsendam, with a basic monthly salary of
US$799.55.5 The Contract of Employment6 was for a term of four (4) months, extendible for another two
(2) months upon mutual consent. After complying with the required pre-employment medical
examination where he was declared fit to work, Rodolfo joined the vessel on January 25, 2008. 7 Prior
thereto, Rodolfo was repeatedly contracted by said respondents and was deployed under various
contracts since December 17, 1985.8chanroblesvirtuallawlibrary
In the course of his last employment contract, Rodolfo experienced severe pain in his ears and high blood
pressure causing him to collapse while in the performance of his duties. He consulted a doctor in
Argentina and was medically repatriated on February 20, 2008 for further medical treatment.9Upon arrival
in Manila, he was immediately brought to Medical City, Pasig City, where he was seen by a companydesignated physician, Dr. Gerardo Legaspi, M.D. (Dr. Legaspi), and was diagnosed to be suffering from
Brainstem (pontine) Cavernous10 Malformation.11 He underwent surgery twice for the said ailment but
developed complications12 and died on March 2, 2008.13 Through an electronic mail14 (e-mail) dated July
22, 2008, a certain Dr. Antonio Toby Abaya (Dr. Abaya) informed Atty. Florencio L. Aquino, Managing
Associate of the law firm of Del Rosario and Del Rosario,15 counsel for UPL, HAL, and its officer, Fernando

T. Lising (respondents),16 that Rodolfos illness was congenital and that there may be familial strains in his
case, hence, his death was not work-related.17chanroblesvirtuallawlibrary
Rodolfos surviving spouse, herein petitioner, sought to claim death benefits pursuant to the International
Transport Workers Federation-Collective Bargaining Agreement (ITWF-CBA),18 of which her husband was
a member, but to no avail. Consequently, she filed a Complaint19 for death benefits, burial assistance,
moral and exemplary damages, and attorneys fees against herein respondents before the NLRC,
docketed as NLRC OFW Case No. (M) NCR-06-08452-08.
In their defense,20 respondents maintained that petitioner is not entitled to death benefits under Section
20 (A) (1) of the 2000 Philippine Overseas Employment Administration Standard Employment Contract
(2000 POEA-SEC). They averred that Rodolfos illness, i.e., Brainstem (pontine) Cavernous Malformation,
was not work-related, considering that said illness is not listed as an occupational disease under the 2000
POEA-SEC.21 They likewise pointed out that Rodolfos death on March 2, 2008 did not occur during the
term of his employment contract in view of his prior repatriation on February 20, 2008, hence, was noncompensable.22 Moreover, they denied the claim for damages and attorneys fees for lack of factual and
legal bases.23chanroblesvirtuallawlibrary
The LA Ruling
In a Decision24 dated November 28, 2008, the Labor Arbiter (LA) ruled in favor of petitioner, and thereby
ordered respondents to pay her death benefits pursuant to the ITWF-CBA in the amount of
US$60,000.00, burial assistance in the amount of US$1,000.00, and attorneys fees equivalent to 10% of
the total monetary awards.25cralawredchanroblesvirtuallawlibrary
The LA held that Rodolfos death was compensable as the illness that caused his death occurred in the
course of his employment contract.26 It was likewise ruled that while Brainstem (pontine) Cavernous
Malformation is not among the listed occupational diseases under the 2000 POEA-SEC, the same was still
compensable, noting that the same may have been contracted in the course of his engagement with
respondents, which started back in 1985 under various employment contracts.27Also, the LA did not give
credence to the medical opinion28 of Dr. Abaya which was unsigned and not certified by said doctor
himself, hence, had no evidentiary value. Further, the LA observed that there is no certainty as to the
accuracy of the statement therein that the disease is congenital in origin.29chanroblesvirtuallawlibrary
Unconvinced, respondents filed an appeal30 before the NLRC.
The NLRC Ruling
In a Decision31 dated November 10, 2009, the NLRC affirmed the LAs verdict, holding that Rodolfos
illness is disputably presumed to be work-related and that since it supervened in the course of his
employment, the burden is on the respondents to prove otherwise.32 It held that the medical opinion of
the company-designated physician, which showed that Rodolfos ailment is not work-connected and may
have pre-existed, is insufficient to rebut the presumption of compensability.33 It likewise pointed out that
the occurrence of death after the term of the contract was immaterial since the proximate cause of
Rodolfos death was the illness that supervened during his employment.34 Finally, the NLRC sustained the
award of attorneys fees as petitioner was compelled to litigate to protect her rights and
interests.35chanroblesvirtuallawlibrary

Dissatisfied, respondents filed a motion for reconsideration36 which was denied by the NLRC in a
Resolution37 dated March 11, 2010; hence, they elevated the matter to the CA via a petition
forcertiorari.38chanroblesvirtuallawlibrary
Meanwhile, petitioner moved for the execution of the affirmed LA Decision, which was granted by the
NLRC.39 In consequence, respondents paid petitioner the amount of P3,031,683.0040 as full and complete
satisfaction of the said NLRC Decision, without prejudice to the outcome of the certioraricase before the
CA.41chanroblesvirtuallawlibrary
The CA Ruling
In a Decision42 dated March 28, 2011, the CA granted respondents certiorari petition, and thereby
annulled and set aside the ruling of the NLRC granting petitioners claim for death benefits.
It held that Rodolfos death on March 2, 2008 did not occur while he was in the employ of respondents,
as his contract of employment ceased when he was medically repatriated on February 20, 2008 pursuant
to Section 18 (B) (1) of the 2000 POEA-SEC.43 Moreover, it observed that Rodolfos illness cannot be
presumed to be work-related, absent any proof to show that his death was connected to his work or that
his working conditions increased the risk of contracting Brainstem (pontine) Cavernous Malformation that
eventually caused his death.44chanroblesvirtuallawlibrary
Aggrieved, petitioner sought for reconsideration45 but was denied in a Resolution46 dated August 26,
2011, hence, the instant petition.
The Issue Before the Court
The essential issue for the Courts resolution is whether or not the CA erred in annulling the NLRCs grant
of death benefits to petitioner on certiorari.
The Courts Ruling
Deemed incorporated in every seafarers employment contract, denominated as the POEA-SEC or the
Philippine Overseas Employment Administration-Standard Employment Contract, is a set of standard
provisions determined and implemented by the POEA, called the Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on Board Ocean Going Vessels, which are considered to
be the minimum requirements acceptable to the government for the employment of Filipino seafarers on
board foreign ocean-going vessels.47chanroblesvirtuallawlibrary
Among other basic provisions, the POEA-SEC specifically, its 2000 version stipulates that the
beneficiaries of a deceased seafarer may be able to claim death benefits for as long as they are able to
establish that (a) the seafarers death is work-related, and (b) such death had occurred during the term of
his employment contract. These requirements are explicitly stated in Section 20 (A) (1) thereof, which
reads:chanroblesvirtuallawlibrary
SECTION 20. COMPENSATION AND BENEFITS
A. COMPENSATION AND BENEFITS FOR DEATH

1. In the case of work-related death of the seafarer, during the term of his
contract the employer shall pay his beneficiaries the Philippine Currency
equivalent to the amount of Fifty Thousand US dollars (US$50,000) and an
additional amount of Seven Thousand US dollars (US$7,000) to each child under
the age of twenty-one (21) but not exceeding four (4) children, at the exchange
rate prevailing during the time of payment. (Emphases supplied)

After an assiduous examination of the records, and as will be expounded on below, the Court, similar to
both the LA and the NLRC, finds that the above-stated requirements positively attend petitioners claim
for death benefits.
I. The Death of the Seafarer is Work-Related.
In the recent case of Canuel v. Magsaysay Maritime Corporation48 (Canuel), the Court clarified that the
term work-related death refers to the seafarers death resulting from a work-related injury or illness.
Under the 2000 POEA-SEC, the terms work-related injury and work-related illness are, in turn, defined
as follows:chanroblesvirtuallawlibrary
Definition of Terms:
For purposes of this contract, the following terms are defined as follows:cralawlawlibrary
xxxx
11. Work-Related Injury injury(ies) resulting in disability or death arising out of and in the course of
employment.
12. Work-Related Illness any sickness resulting to disability or death as a result of an occupational
disease listed under Section 32-A of this contract with the conditions set therein satisfied. (Emphases
supplied)
Case law explains that [t]he words arising out of refer to the origin or cause of the accident, and are
descriptive of its character, while the words in the course of refer to the time, place, and circumstances
under which the accident takes place. As a matter of general proposition, an injury or accident is said to
arise in the course of employment when it takes place within the period of the employment, at a place
where the employee reasonably may be, and while he is fulfilling his duties or is engaged in doing
something incidental thereto.49chanroblesvirtuallawlibrary
In this case, respondents submit that petitioner was unable to prove that Rodolfos illness, i.e., Brainstem
(pontine) Cavernous Malformation, which had supposedly supervened during the term of his
employment on board the vessel MS Prinsendam, was not related to his work.50 To bolster the argument,
respondents point to the fact that Brainstem (pontine) Cavernous Malformation is not listed as an
occupational disease under Section 32-A51 of the 2000 POEA-SEC.
The contention is untenable.

While it is true that Brainstem (pontine) Cavernous Malformation is not listed as an occupational disease
under Section 32-A of the 2000 POEA-SEC, Section 20 (B) (4) of the same explicitly provides that [t[he
liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his
contract are as follows: (t)hose illnesses not listed in Section 32 of this Contract are disputably presumed as
work related. In other words, the 2000 POEA-SEC has created a disputable presumption in favor of
compensability[,] saying that those illnesses not listed in Section 32 are disputably presumed as workrelated. This means that even if the illness is not listed under Section 32-A of the POEA-SEC as an
occupational disease or illness, it will still be presumed as work-related, and it becomes incumbent on the
employer to overcome the presumption.52 This presumption should be overturned only when the
employers refutation is found to be supported by substantial evidence,53 which, as traditionally defined is
such relevant evidence as a reasonable mind might accept as sufficient to support a conclusion.54 As
held in the case of Magsaysay Maritime Services v. Laurel:55chanroblesvirtuallawlibrary
Anent the issue as to who has the burden to prove entitlement to disability benefits, the petitioners argue
that the burden is placed upon Laurel to prove his claim that his illness was work-related and
compensable. Their posture does not persuade the Court.
True, hyperthyroidism is not listed as an occupational disease under Section 32-A of the 2000 POEA-SEC.
Nonetheless, Section 20 (B), paragraph (4) of the said POEA-SEC states that those illnesses not listed in
Section 32 of this Contract are disputably presumed as work-related. The said provision explicitly
establishes a presumption of compensability although disputable by substantial evidence. The presumption
operates in favor of Laurel as the burden rests upon the employer to overcome the statutory
presumption. Hence, unless contrary evidence is presented by the seafarers employer/s, this disputable
presumption stands. In the case at bench, other than the alleged declaration of the attending physician
that Laurels illness was not work-related, the petitioners failed to discharge their burden. In fact, they
even conceded that hyperthyroidism may be caused by environmental
factor.56ChanRoblesVirtualawlibrary
Similarly in Jebsens Maritime, Inc. v. Babol:57chanroblesvirtuallawlibrary
The Principle of Work-relation
The 2000 POEA-SEC contract governs the claims for disability benefits by respondent as he was employed
by the petitioners in September of 2006.
Pursuant to the said contract, the injury or illness must be work related and must have existed during the
term of the seafarers employment in order for compensability to arise. Work-relation must, therefore,
be established.
As a general rule, the principle of work-relation requires that the disease in question must be one of
those listed as an occupational disease under Sec. 32-A of the POEA-SEC. Nevertheless, should it be not
classified as occupational in nature, Section 20 (B) paragraph 4 of the POEA-SEC provides that such diseases
are disputed are disputably presumed as work-related.
In this case, it is undisputed that NPC afflicted respondent while on board the petitioners vessel. As a
non-occupational disease, it has the disputable presumption of being work-related. This presumption
obviously works in the seafarers favor. Hence, unless contrary evidence is presented by the employers, the
work-relatedness of the disease must be sustained.

And in Fil-Star Maritime Corporation v. Rosete:58chanroblesvirtuallawlibrary

Although Central Retinal Vein Occlusion is not listed as one of the occupational diseases under Section
32-A of the 2000 Amended Terms of POEA-SEC, the resulting disability which is loss of sight of one eye, is
specifically mentioned in Section 32 thereof (Schedule of Disability or Impediment for Injuries Suffered
and Diseases Including Occupational Diseases or Illness Contracted). More importantly, Section 20 (B),
paragraph (4) states that those illnesses not listed in Section 32 of this Contract are disputably presumed
as work-related.
The disputable presumption that a particular injury or illness that results in disability, or in some cases
death, is work-related stands in the absence of contrary evidence. In the case at bench, the said
presumption was not overturned by the petitioners. Although, the employer is not the insurer of the
health of his employees, he takes them as he finds them and assumes the risk of liability. Consequently,
the Court concurs with the finding of the courts below that respondents disability is
compensable.59ChanRoblesVirtualawlibrary
Records show that respondents sole evidence to disprove that Rodolfos illness is work-related was the
medical opinion of Dr. Abaya, wherein it was explained that Rodolfos ailment is a congenital
malformation of blood vessels in the brain that may be due to familial strains.60 However, as correctly
observed by the LA, the document presented cannot be given probative value as it was a mere print out
of an e-mail that was not signed or certified to by the doctor.61 Moreover, records reveal that Rodolfo
was attended by Dr. Legaspi from the time he was admitted at the Medical City on February 20, 2008 up
to his death on March 2, 200862 and not by Dr. Abaya whose qualifications to diagnose such kind of illness
was not even established. Likewise, the medical opinion was not backed up by any medical findings to
substantiate the claim that Rodolfos ailment was congenital in origin or that there were traces of the
disease in Rodolfos family history. Under the foregoing premises, the unsubstantiated and
unauthenticated medical findings of Dr. Abaya are therefore highly suspect and cannot be considered as
substantial evidence to support respondents postulation. Thus, with no substantial evidence on the part
of the employer and given that no other cogent reason exists to hold otherwise, the presumption under
Section 20 (B) (4) should stand. Accordingly, the Court is constrained to pronounce that Rodolfos death,
which appears to have been proximately caused by his Brainstem (pontine) Cavernous Malformation, was
work-related, in satisfaction of the first requirement of compensability under Section 20 (A) (1) of the
2000 POEA-SEC.
II. The Seafarers Death Occurred During the Term of Employment.
Moving to the second requirement, respondents assert that Rodolfos death on March 2, 2008 had
occurred beyond the term of his employment, considering his prior medical repatriation on February 20,
2008 which had the effect of contract termination. The argument is founded on Section 18 (B) (1) of the
2000 POEA-SEC, which reads:chanroblesvirtuallawlibrary
SECTION 18. TERMINATION OF EMPLOYMENT
xxxx
B. The employment of the seafarer is also terminated when the seafarer arrives at the point of hire for
any of the following reasons:

1. when the seafarer signs-off and is disembarked for medical reasons pursuant to Section
20(B)[5]63 of this Contract.

While it is true that a medical repatriation has the effect of terminating the seafarers contract of
employment, it is, however, enough that the work-related illness, which eventually becomes the
proximate cause of death, occurred while the contract was effective for recovery to be had. A further
exposition is apropos.
Consistent with the States avowed policy to afford full protection to labor as enshrined in Article XIII of
the 1987 Philippine Constitution,64 the POEA-SEC was designed primarily for the protection and benefit of
Filipino seafarers in the pursuit of their employment on board ocean-going vessels. As such, it is a
standing principle that its provisions are to be construed and applied fairly, reasonably, and liberally in
their favor.65chanroblesvirtuallawlibrary
Guided by this principle, the Court, in the recent case of Canuel, recognized that a medical repatriation
case constitutes an exception to the second requirement under Section 20 (A) (1) of the 2000 POEASEC, i.e., that the seafarers death had occurred during the term of his employment, in view of the
terminative consequences of a medical repatriation under Section 18 (B) of the same. In essence, the
Court held that under such circumstance, the work-related death need not precisely occur during the
term of his employment as it is enough that the seafarers work-related injury or illness which eventually
causes his death had occurred during the term of his employment. As rationalized in that
case:chanroblesvirtuallawlibrary
With respect to the second requirement for death compensability, the Court takes this opportunity to
clarify that while the general rule is that the seafarers death should occur during the term of his
employment, the seafarers death occurring after the termination of his employment due to his medical
repatriation on account of a work-related injury or illness constitutes an exception thereto. This is based
on a liberal construction of the 2000 POEA-SEC as impelled by the plight of the bereaved heirs who stand
to be deprived of a just and reasonable compensation for the seafarers death, notwithstanding its
evident work-connection. The present petition is a case in point.
Here, Nancings repatriation occurred during the eighth (8th) month of his one (1) year employment
contract. Were it not for his injury, which had been earlier established as work-related, he would not have
been repatriated for medical reasons and his contract consequently terminated pursuant to Part 1 of
Section 18 (B) of the 2000 POEA-SEC as hereunder quoted:cralawlawlibrary
xxxx
The terminative consequence of a medical repatriation case then appears to present a rather prejudicial
quandary to the seafarer and his heirs. Particularly, if the Court were to apply the provisions of Section 20
of the 2000 POEA-SEC as above-cited based on a strict and literal construction thereof, then the heirs of
Nancing would stand to be barred from receiving any compensation for the latters death despite its
obvious work-relatedness. Again, this is for the reason that the work-related death would, by mere legal
technicality, be considered to have occurred after the term of his employment on account of his medical
repatriation. It equally bears stressing that neither would the heirs be able to receive any disability
compensation since the seafarers death in this case precluded the determination of a disability grade,
which, following Section 20 (B) in relation to Section 32 of the 2000 POEA-SEC, stands as the basis

therefor.
However, a strict and literal construction of the 2000 POEA-SEC, especially when the same would result
into inequitable consequences against labor, is not subscribed to in this jurisdiction. Concordant with the
States avowed policy to give maximum aid and full protection to labor as enshrined in Article XIII of the
1987 Philippine Constitution, contracts of labor, such as the 2000 POEA-SEC, are deemed to be so
impressed with public interest that the more beneficial conditions must be endeavoured in favor of the
laborer. The rule therefore is one of liberal construction. As enunciated in the case ofPhilippine
Transmarine Carriers, Inc. v. NLRC [(405 Phil. 487 [2001])]:chanroblesvirtuallawlibrary
The POEA Standard Employment Contract for Seamen is designed primarily for the protection and benefit
of Filipino seamen in the pursuit of their employment on board ocean-going vessels. Its provisions must
[therefore] be construed and applied fairly, reasonably and liberally in their favor [as it is only] then can
its beneficent provisions be fully carried into effect. (Emphasis supplied)
Applying the rule on liberal construction, the Court is thus brought to the recognition that medical
repatriation cases should be considered as an exception to Section 20 of the 2000 POEA-SEC. Accordingly,
the phrase work-related death of the seafarer,during the term of his employment contract under Part A
(1) of the said provision should not be strictly and literally construed to mean that the seafarers workrelated death should have precisely occurred during the term of his employment. Rather, it is enough
that the seafarers work-related injury or illness which eventually causes his death should have occurred
during the term of his employment. Taking all things into account, the Court reckons that it is by this
method of construction that undue prejudice to the laborer and his heirs may be obviated and the State
policy on labor protection be championed. For if the laborers death was brought about (whether fully or
partially) by the work he had harbored for his masters profit, then it is but proper that his demise be
compensated. Here, since it has been established that (a) the seafarer had been suffering from a workrelated injury or illness during the term of his employment, (b) his injury or illness was the cause for his
medical repatriation, and (c) it was later determined that the injury or illness for which he was medically
repatriated was the proximate cause of his actual death although the same occurred after the term of his
employment, the above-mentioned rule should squarely apply. Perforce, the present claim for death
benefits should be granted.66 (Citations omitted)
As elucidated in Canuel, the foregoing liberal approach was applied in Inter-Orient Maritime, Incorporated
v. Candava,67Interorient Maritime Enterprises, Inc. v. Remo,68 and Wallem Maritime Services, Inc. v.
NLRC,69 wherein the Court had previously allowed the recovery of death benefits even if the seafarers in
those cases had died after repatriation, given that there was proof of a clear causal connection between
their work and the illness which was contracted in the course of employment, and their eventual death.
The converse conclusion was reached in the cases of Gau Sheng Phils., Inc. v. Joaquin70 (Gau
Sheng), Spouses Aya-ay, Sr. v. Arpaphil Shipping Corp.71(Spouses Aya-ay, Sr.), Hermogenes v. Osco
Shipping Services, Inc.,72Prudential Shipping and Management Corp. v. Sta. Rita73 (Prudential), and Ortega
v. CA74 (Ortega), since the element of work-relatedness had not been established. All in all, the sense
gathered from these cases, as pointed out in Canuel, is that it is crucial to determine whether the death
of the deceased was reasonably connected with his work, or whether the working conditions increased
the risk of contracting the disease that resulted in the seafarers death. If the injury or illness is the
proximate cause, or at least increased the risk of his death for which compensation is sought, recovery
may be had for said death, or for that matter, for the injury or illness. Thus, in Seagull Shipmanagement
and Trans., Inc. v. NLRC,75 the Court significantly observed that:chanroblesvirtuallawlibrary

Even assuming that the ailment of the worker was contracted prior to his employment, this still would not
deprive him of compensation benefits. For what matters is that his work had contributed, even in a small
degree, to the development of the disease and in bringing about his eventual death. Neither is it necessary,
in order to recover compensation, that the employee must have been in perfect health at the time he
contracted the disease. A worker brings with him possible infirmities in the course of his employment,
and while the employer is not the insurer of the health of the employees, he takes them as he finds them
and assumes the risk of liability. If the disease is the proximate cause of the employees death for which
compensation is sought, the previous physical condition of the employee is unimportant, and recovery may
be had for said death, independently of any pre-existing disease.76 (Emphases and underscoring supplied;
citations omitted)
Employing the same spirit of liberality as fleshed out in Canuel, the Court finds that it would be highly
inequitable and even repugnant to the States policy on labor to deny petitioners claim for death benefits
for the mere technicality triggered by Rodolfos prior medical repatriation. As it has been clearly
established that Rodolfo had been suffering from a work-related illness during the term of his
employment that caused his medical repatriation and, ultimately, his death on March 2, 2008, it is but
proper to consider the same as a compensable work-related death despite it having occurred after his
repatriation. To echo Canuel, it is enough that the seafarers work-related injury or illnesswhich eventually
causes his death should have occurred during the term of his employment. Taking all things into account,
the Court reckons that it is by this method of construction that undue prejudice to the laborer and his
heirs may be obviated and the State policy on labor protection be championed. For if the laborers death
was brought about (whether fully or partially) by the work he had harbored for his masters profit, then it
is but proper that his demise be compensated.77chanroblesvirtuallawlibrary
Lest it be misunderstood, the conclusion above-reached does not run counter to the Courts ruling
inKlaveness Maritime Agency, Inc. v. Beneficiaries of the Late Second Officer Anthony s. Allas
(Klaveness),78 which the CA inaccurately relied on. As similarly pointed out in Canuel, the Klavenesscase
involved a seafarer who was not medically repatriated but was actually signed off from the vessel after
the completion of his contract, his illness not proven to be work-related, and died almost two (2) years
after the termination of his contract. Since the employment contract was terminated without any
connection to a work-related cause, but rather because of its mere lapse, death benefits were denied to
the seafarers heirs.79 This is definitely not the case here since Rodolfos employment contract was
terminated only because of his medical repatriation. Were it not for his illness, Rodolfo would not have
been medically repatriated and his employment contract, in turn, terminated. Evidently, the termination
of employment was forced upon by a work-related cause and it would be in contrast to the States policy
on labor to deprive the seafarers heirs of death compensation despite its ascertained workconnection.80chanroblesvirtuallawlibrary
This variance also exists as to the cases of Gau Sheng,81Spouses Aya-ay,
Sr.,82Prudential,83 andOrtega,84 which respondents invoke in their Comment dated February 16,
2012.85 As a common denominator, the element of work-relatedness was not established in those cases.
Thus, being the primary factor considered in granting compensation, the Court denied the beneficiaries
respective claims. Again, the Court has pored over the records and remains satisfied that Rodolfos death
is work-related. Accordingly, this precludes the application of the above-stated rulings.
III. Amount of Death Benefits.

With the compensability of Rodolfos death now traversed, a corollary matter to determine is the amount
of benefits due petitioner.
Records show that respondents do not deny and therefore admit the late Rodolfos membership in
the AMOSUP that had entered into a collective bargaining agreement with HAL, or the ITWF-CBA.86Its
provisions therefore must prevail over the standard terms and benefits formulated by the POEA in its
Standard Employment Contract.87 Hence, the NLRCs award of US$60,000.00 as compensation for the
death of Rodolfo in accordance with Article 21.2.188 of the ITWF-CBA was in order. The same holds true
for the award of burial assistance in the amount of US$1,000.00 which is provided under Section 20 (A)
(4) (c)89 of the 2000 POEA-SEC. Moreover, conformably with existing case law, the NLRCs grant of
attorneys fees in the amount of US$6,100.00 was called for since petitioner was forced to litigate to
protect her valid claim. Where an employee is forced to litigate and incur expenses to protect his right
and interest, he is entitled to an award of attorneys fees equivalent to 10% of the
award.90chanroblesvirtuallawlibrary
All in all, the NLRCs award of US$67,100.0091 which, as the records bear, had already been paid92 by
respondents is hereby sustained.
IV. A Final Point.
As a final point of rumination, it must be highlighted that the CAs parameter of analysis in cases elevated
to it from the NLRC is the existence of the latters grave abuse of discretion, considering that they come
before the appellate court through petitions for certiorari. This delimitation, in relation to the Courts task
of reviewing the case eventually appealed before it, was explained in Montoya v. Transmed Manila
Corporation93 as follows:chanroblesvirtuallawlibrary
[W]e review in this Rule 45 petition the decision of the CA on a Rule 65 petition filed by Montoya with
that court. In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast with
the review for jurisdictional error that we undertake under Rule 65. Furthermore, Rule 45 limits us to the
review of questions of law raised against the assailed CA decision. In ruling for legal correctness, we have
to view the CA decision in the same context that the petition for certiorari it ruled upon was presented to
it; we have to examine the CA decision from the prism of whether it correctly determined the presence or
absence of grave abuse of discretion in the NLRC decision before it, not on the basis of whether the NLRC
decision on the merits of the case was correct. In other words, we have to be keenly aware that the CA
undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it. This is the
approach that should be basic in a Rule 45 review of a CA ruling in a labor case. In question form, the
question to ask is: Did the CA correctly determine whether the NLRC committed grave abuse of discretion
in ruling on the case?94ChanRoblesVirtualawlibrary
Given that the NLRCs ruling was amply supported by the evidence on record and current jurisprudence
on the subject matter, the Court, in opposition to the CA, finds that no grave abuse of discretion had
been committed by the labor tribunal. Hence, the CAs grant of respondents certioraripetition before it
ought to be reversed, and consequently the NLRC Decision be reinstated.
WHEREFORE, the petition is GRANTED. The Decision dated March 28, 2011 and the Resolution dated
August 26, 2011 of the Court of Appeals in CA-G.R. SP. No. 113835 are hereby reversed and SET

ASIDE and the Decision dated November 10, 2009 of the National Labor Relations Commission
isREINSTATED.
SO ORDERED.

G.R. No. 204699, November 12, 2014 - BAHIA SHIPPING SERVICES, INC., FRED OLSEN CRUISE LINE, AND
MS. CYNTHIA C. MENDOZA, Petitioners, v. JOEL P. HIPE, JR., Respondent.

FIRST DIVISION
G.R. No. 204699, November 12, 2014
BAHIA SHIPPING SERVICES, INC., FRED OLSEN CRUISE LINE, AND MS. CYNTHIA C.
MENDOZA, Petitioners, v. JOEL P. HIPE, JR., Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Amended Decision2 dated May 2, 2012 and the
Resolution3 dated December 3, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 115888 which
reversed and set aside the Decision4 dated March 17, 2010 and the Resolution5 dated June 22, 2010 of
the National Labor Relations Commission (NLRC) in NLRC NCR Case No. OFW(M) 02-02484-09 denying the
claim for disability benefits of respondent Joel P. Hipe, Jr. (Hipe).
The Facts
Hipe had been continuously hired by petitioner Bahia Shipping Services, Inc. (Bahia) for its foreign
principal, Fred Olsen Cruise Line (Olsen), and deployed to the latters various vessels under seven (7)
consecutive contracts. He was last employed by Bahia as plumber for the vessel M/S Braemar (vessel)
under a six-month contract6 commencing on the day of his embarkation on December 6, 2007, with a
basic monthly salary of US$708.007 exclusive of overtime and other benefits.8chanroblesvirtuallawlibrary
Despite the lapse of the six-month contract on June 6, 2008,9 Hipe continued to work aboard the vessel
without any new contract. On June 22, 2008, in the course of the performance of his duties as plumber,
he sustained a back injury while carrying heavy equipment for use in his plumbing job. He was advised to
rest and perform only light jobs, and was given the assurance that he will be repatriated at the next
convenient port. After one (1) month, however, he claimed that his condition worsened and, upon his
request, he was repatriated to Manila on August 5, 2008.10chanroblesvirtuallawlibrary
Upon Hipes arrival, he was examined by the company-designated physician, Dr. Robert Lim (Dr. Lim).
Results of the Magnetic Resonance Imaging revealed that he was suffering from Lumbosacral Strain with
right L5 Radiculopathy.11 Thereafter, he was referred to an orthopedic surgeon and a psychiatrist for
supervision and therapy.12chanroblesvirtuallawlibrary
On October 2, 2008, Dr. Lim issued a medical assessment that [Hipe] still has had considerable

improvement with less pain and negligible tenderness at the lumbosacral area,13 and that, per advise of
the attending orthopedic surgeon, Hipe was to continue his rehabilitation and medications (Methycobal,
Voltaren gel), and to return on October 9, 2008 for re-evaluation and possible resumption of sea
duties.14 On the latter date, Hipe was declared fit to work,15 and thus executed the corresponding
Certificate of Fitness for Work.16chanroblesvirtuallawlibrary
Subsequently, or on February 25, 2009,17 Hipe, however, sought a second opinion from Dr. Venancio P.
Garduce, Jr. (Dr. Garduce) of the UP-PGH Medical Center18 who (a) opined that he was suffering from +
Tenderness on low back area, + Straight leg raising test @ Associated with numbness and weakness of
both lower extremities, (b) declared him unfit to work as seaman-plumber, and (c) assessed his disability
rating at Grade 5.19chanroblesvirtuallawlibrary
Thereafter, Hipe filed a complaint before the Labor Arbiter (LA) for the payment of permanent disability
compensation, sick wages, reimbursement of medical and transportation expenses, moral and exemplary
damages, and attorneys fees against Bahia, its President, Cynthia C. Mendoza, and its foreign principal,
Olsen (respondents).20chanroblesvirtuallawlibrary
In his Position Paper21 dated March 25, 2009, Hipe averred that he: (a) sustained his injury on board the
vessel during the course of his employment with Bahia;22 (b) was assessed to be unfit to work as seamanplumber with a disability classified as disability Grade 5 by Dr. Garduce, an independent, neutral, and
impartial medical practitioner, whose findings must be given weight and credence over that of the
company-designated physician;23 (c) has been unfit for sea work beyond 120 days;24 and (d) remained
unemployed from the time of his medical repatriation on August 5, 2008.25cralawred Since he had lost his
capacity to obtain further sea employment or resume sea duties, he therefore claimed entitlement to the
following benefits26 provided under the Total Crew Cost27 Collective Bargaining Agreement (CBA): (a)
maximum disability compensation of US$89,100.0028 regardless of the disability grading,29 and (b) sick
pay for 130 days at a rate equivalent to his US$583.00 basic monthly salary.30 Further, in view of
respondents unjustified withholding of the payment of his permanent disability benefits and sick wages
and clear bad faith in their dealings with him, he sought the payment of moral and exemplary
damages,31 as well as attorneys fees for having been compelled to litigate.32chanroblesvirtuallawlibrary
For their part, respondents claimed that Hipe is not entitled to the payment of salaries for the unexpired
portion of the contract of three (3) months per year, permanent disability compensation, sick wages, and
medical and transportation expenses because: (a) he was deployed back to the Philippines due to the
termination of his contract and not for medical reasons;33 (b) all the expenses appurtenant to his
assessment and treatment/rehabilitation were shouldered by respondents;34 (c) he was declared fit to
resume sea duties and had executed/signed the corresponding Certificate of Fitness for Work, 35 agreeing
thereto and releasing respondents from any liability concerning his medical condition.36 Also, they posited
that there lies no factual or legal basis justifying the award of moral and exemplary damages, and
attorneys fees.37chanroblesvirtuallawlibrary
The LA Ruling
In a Decision38 dated May 29, 2009, the LA ordered respondents to jointly and severally pay Hipe the sum
of: (a) US$89,100.00 as permanent disability benefits, as well as US$2,915.00 as sickness allowance, to be
paid in Philippine currency at the time of payment; (b) P200,000.00 as exemplary damages; (c)
P200,000.00 as moral damages; and (d) attorneys fees equivalent to 10% of the total monetary
award.39chanroblesvirtuallawlibrary

The LA found that Hipe was medically repatriated as a consequence of an accident which transpired on
board respondents vessel during the course of his employment,40 and that his injuries had caused him to
be unfit for sea work permanently.41 The LA gave more credence to Dr. Garduces findings as being more
reflective of Hipes actual physical condition, compared to that of the company-designated physician
which was palpably self-serving and biased in favor of respondents.42chanroblesvirtuallawlibrary
Unconvinced, respondents filed an appeal43 to the NLRC.
The NLRC Ruling
In a Decision44 dated March 17, 2010, the NLRC reversed and set aside the LA Ruling and dismissed Hipes
complaint for permanent disability compensation.
It found that Hipe was repatriated due to the expiration of his six-month employment contract, not for
medical reasons, and that the delay in his repatriation was because the ship has not reached the
port.45 Corollarily, it found the CBA provisions on sick pay inapplicable.46 Moreover, the NLRC observed
that the averred CBA which contains essentially the same provisions as the Philippine Overseas
Employment Administration Standard Employment Contract (POEA-SEC) with regard to (a) the authority
of the company-designated physician to assess a seafarers disability, (b) the right of the seafarer to seek
another opinion, and (c) the opinion from a third doctor jointly nominated by the parties whose
assessment shall be final and binding, was not complied with by the parties in this case.47 Accordingly, the
NLRC held that the fit-to-work certification of the company-designated physician who has treated Hipe
over a period of time should prevail over the finding of the latters physician who has examined him only
once.48chanroblesvirtuallawlibrary
Hipe moved for reconsideration49 which the NLRC, however, denied in a Resolution dated June 22, 2010,
prompting the filing of a petition for certiorari before the CA.50chanroblesvirtuallawlibrary
The CA Proceedings
In a Decision51 dated January 31, 2011, the CA dismissed the petition for certiorari, and thereby upheld
the NLRC Ruling in toto. It fully subscribed to the findings of the NLRC that Hipe was repatriated due to
the completion/expiration of his six-month employment contract, not for medical reasons, hence,
effectively debunking Hipes contention that he is entitled to permanent disability compensation. It found
that Hipe remained in the ship two (2) months after the completion of his employment contract because
the ship has not reached any port and such fact should not be construed to mean that his contract was
extended.52chanroblesvirtuallawlibrary
Aggrieved, Hipe filed a motion for reconsideration,53 alleging that the CA has misappreciated the facts and
misinterpreted the applicable laws in not finding that (a) his original six-month employment contract was
in fact extended, and (b) the injury sustained during such period was
compensable.54chanroblesvirtuallawlibrary
The CA resolved to hear the parties in an oral argument on the issue of whether or not Hipe was
repatriated on account of injuries sustained while on board the vessel or on account of expiration of
contract.55 After the parties were heard and the required memoranda were filed, the CA issued an
Amended Decision56 dated May 2, 2012 setting aside its January 31, 2011 Decision and the NLRCs March

17, 2010 Decision and June 22, 2010 Resolution. In effect, the LAs May 29, 2009 Decision granting Hipes
claim for permanent disability compensation, sick wages, damages and attorneys fees was reinstated.
The CA found that while Hipes employment contract shows that he was indeed employed as plumber for
a six-month period, the addendum thereto provides for possible extension of up to 10 months, at the
companys discretion.57 Hipe was, thus, still under the employ of respondents when he sustained his
injury.58 Hence, the referral to the company-designated physician after his repatriation and the
subsequent fit-to-work certification issued in his favor support the claim that he was medically
repatriated.59 Accordingly, the CA declared that Hipe was entitled to his earned wages and benefits,
including permanent disability benefits.60chanroblesvirtuallawlibrary
Dissatisfied, respondents filed a motion for reconsideration61 which was, however, denied in a
Resolution62 dated December 3, 2012, hence, the instant petition.63chanroblesvirtuallawlibrary
The Issue Before the Court
The essential issue for the Courts resolution is whether or not the CA erred in granting Hipes petition
for certiorari, thereby setting aside the NLRC Decision dismissing the complaint and adjudging Hipes
entitlement to permanent disability benefits.
The Courts Ruling
The petition is meritorious.
To justify the grant of the extraordinary remedy of certiorari, the petitioner must satisfactorily show that
the court or quasi-judicial authority gravely abused the discretion conferred upon it. Grave abuse of
discretion connotes a capricious and whimsical exercise of judgment, done in a despotic manner by
reason of passion or personal hostility, the character of which being so patent and gross as to amount to
an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act all in
contemplation of law.64chanroblesvirtuallawlibrary
In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and
conclusions are not supported by substantial evidence,65 or that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.66 The onus probandi falls on the
seafarer to establish his claim for disability benefits by the requisite quantum of evidence to justify the
grant of relief.67chanroblesvirtuallawlibrary
Guided by the foregoing considerations, the Court finds that the CA committed reversible error in
granting Hipes certiorari petition since the NLRC did not gravely abuse its discretion in dismissing the
complaint for permanent disability benefits for Hipes failure to establish his claim through substantial
evidence.
The issue of whether the seafarer can legally demand and claim disability benefits from the
employer/manning agency for an injury or illness suffered may be determined from the pertinent
provisions of Section 20 (B) of the 2000 POEA-SEC68 which enumerates the duties of an employer to his
employee who suffers a work-related injury or disease during the term of his
employment,69viz.:chanroblesvirtuallawlibrary

SECTION 20. COMPENSATION AND BENEFITS

xxxx
B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of
his contract are as follows:cralawlawlibrary
xxxx
2. x x x.
However, if after repatriation, the seafarer still requires medical attention arising from said
injury or illness, he shall be so provided at cost to the employer until such time he is
declared fit or the degree of his disability has been established by the company-designated
physician.
3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness
allowance equivalent to his basic wage until he is declared fit to work or the degree of
permanent disability has been assessed by the company-designated physician but in no
case shall this period exceed one hundred twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three working days upon his
return except when he is physically incapacitated to do so, in which case, a written notice
to the agency within the same period is deemed as compliance. Failure of the seafarer to
comply with the mandatory reporting requirement shall result in his forfeiture of the
right to claim the above benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be
agreed jointly between the Employer and the seafarer. The third doctor's decision shall be
final and binding on both parties. (Emphases supplied)

xxxx
Pursuant to the afore-quoted provision, two (2) elements must concur for an injury or illness of a seafarer
to be compensable: (a) the injury or illness must be work-related; and (b) that the work-related injury or
illness must have existed during the term of the seafarers employment
contract.70chanroblesvirtuallawlibrary
In the present case, Hipe was made to continuously perform work aboard the vessel beyond his sixmonth contract without the benefit of a formal contract. Considering that any extension of his
employment is discretionary on the part of respondents and that the latter offered no explanation why
Hipe was not repatriated when his contract expired on June 5, 2008, the CA correctly ruled that he was
still under the employ of respondents when he sustained an injury on June 22, 2008. Consequently, the
injury suffered by Hipe was a work-related injury and his eventual repatriation on August 5, 2008, for

which he was treated/rehabilitated can only be considered as a medical repatriation.

Nonetheless, Hipe was subsequently declared fit to work by the company-designated physician on
October 9, 2008, or merely 65 days after his repatriation, thus negating the existence of any permanent
disability for which compensability is sought. Said fit-to-work certification must stand for two (2)
reasons:cralawlawlibrary
First, while Hipes personal doctor disagreed with the above-mentioned assessment, opining that it
would be impossible for him to work as seaman-plumber71 and recommending a disability grade of five,
records show, however, that such opinion was not supported by any diagnostic tests and/or procedures
as would adequately refute the fit-to-work assessment, but merely relied on a review of Hipes medical
history and his physical examination;72 and
Second, Hipe failed to comply with the procedure laid down under Section 20 (B) (3) of the 2000 POEASEC with regard to the joint appointment by the parties of a third doctor whose decision shall be final and
binding on them in case the seafarers personal doctor disagrees with the company-designated
physicians fit-to-work assessment. In Philippine Hammonia Ship Agency, Inc. v. Dumadag73 (Philippine
Hammonia), the Court held that the seafarers non-compliance with the said conflict-resolution
procedure results in the affirmance of the fit-to-work certification of the company-designated
physician, viz.:74chanroblesvirtuallawlibrary
The filing of the complaint constituted a breach of [the seafarers] contractual obligation to have the
conflicting assessments of his disability referred to a third doctor for a binding opinion. x x x Thus, the
complaint should have been dismissed, for without a binding third opinion, the fit-to-work certification of
the company-designated physician stands x x x.
xxxx
Whatever his reasons might have been, [the seafarers] disregard of the conflict-resolution procedure
under the POEA-SEC and the CBA cannot and should not be tolerated and allowed to stand, lest it
encourage a similar defiance. x x x The third-doctor-referral provision of the POEA-SEC, it appears to us,
has been honored more in the breach than in the compliance. This is unfortunate considering that the
provision is intended to settle disability claims voluntarily at the parties level where the claims can be
resolved more speedily than if they were brought to court.
Given the circumstances under which [the seafarer] pursued his claim, especially the fact that he caused
the non-referral to a third doctor, [the company doctors] fit-to-work certification must be
upheld. In Santiago v. Pacbasin Ship Management, Inc., the Court declared: [t]here was no agreement on
a third doctor who shall examine him anew and whose finding shall be final and binding. x x x [T]his Court
is left without choice but to uphold the certification made by [the company doctor] with respect to [the
seafarers] disability. (Emphases and underscoring supplied; citations omitted)
In light of the contrasting diagnoses of the company-designated physician and Hipes personal doctor,
Hipe filed his complaint before the NLRC but prematurely did so without any regard to the conflictresolution procedure under Section 20 (B) (3) of the 2000 POEA-SEC. Thus, consistent with Philippine
Hammonia, the fit-to-work certification of the company-designated physician ought to be upheld.

In fine, given that Hipes permanent disability was not established through substantial evidence for the
reasons above-stated, the NLRC did not gravely abuse its discretion in dismissing the complaint for
permanent disability benefits, thereby warranting the reversal of the CAs contrary ruling. Verily, while
the Court adheres to the principle of liberality in favor of the seafarer in construing the POEA-SEC, when
the evidence presented then negates compensability, the claim for disability benefits must necessarily
fail,75 as in this case.
WHEREFORE, the petition is GRANTED. The Decision dated May 2, 2012 and the Resolution dated
December 3, 2012 of the Court of Appeals in CA-G.R. SP No. 115888 are hereby REVERSED and SET
ASIDE. Respondent Joel P. Hipe, Jr.s claim for disability benefits is DENIED.
SO ORDERED

G.R. No. 184618, November 19, 2014 - PEAK VENTURES CORPORATION AND/OR EL TIGRE SECURITY AND
INVESTIGATION AGENCY, Petitioners, v. HEIRS OF NESTOR B. VILLAREAL, Respondents.

SECOND DIVISION
G.R. No. 184618, November 19, 2014
PEAK VENTURES CORPORATION AND/OR EL TIGRE SECURITY AND INVESTIGATION
AGENCY,Petitioners, v. HEIRS OF NESTOR B. VILLAREAL, Respondents.
DECISION
DEL CASTILLO, J.:
The twin reliefs that should be given to an illegally dismissed employee are full backwages and
reinstatement.1 Backwages restore the lost income of an employee and is computed from the time
compensation was withheld up to actual reinstatement.2 Anent reinstatement, only when it is not viable
is separation pay given.3chanroblesvirtuallawlibrary
This Petition for Review on Certiorari4 assails the March 28, 2008 Decision5 of the Court of Appeals (CA) in
CA-G.R. SP No. 99440, which dismissed the Petition for Certiorari filed therewith by petitioners Peak
Ventures Corporation (Peak Ventures) and/or El Tigre Security and Investigation Agency (El Tigre), and in
effect affirmed the October 18, 2005 Decision6 and March 20, 2007 Resolution7 of the National Labor
Relations Commission (NLRC) in NLRC NCR CA No. 038029-03. The NLRC affirmed in toto the July 30,
2003 Decision8 of the Labor Arbiter in NLRC NCR 00-08-06823-2002 declaring Nestor B. Villareal (Villareal)
to have been illegally dismissed by petitioners and ordering them to reinstate him to his former position
without loss of seniority rights, to pay him backwages and attorneys fees equivalent to 10% of the total
monetary award. Likewise assailed is the CAs September 16, 2008 Resolution9 which denied petitioners
Motion for Reconsideration.
Factual Antecedents
On June 16, 1989, Peak Ventures, the owner/operator of El Tigre, hired Villareal as security guard and
assigned him at East Greenhills Village. On May 14, 2002, however, he was relieved from duty without
any apparent reason. Villareal was later informed by the management that he would no longer be given
any assignment because of his age. At that time, he was 42. His repeated requests for a new posting
during the months of June and July of 2002 were likewise declined.
Due to his prolonged lack of assignment and dwindling resources, Villareal was constrained to claim his
security bond deposits from petitioners. However, he was advised to first tender a letter of resignation
before the same could be released to him. Out of sheer necessity, Villareal submitted a letter of

resignation.10 He stated therein that he was constrained to resign effective July 31, 2002 since he cannot
expect to be given any assignment for another one and a half months and that he can no longer afford
the fare going to petitioners office. Villareal alleged that the tenor of his resignation letter was not
acceptable to petitioners, who required him to submit another one stating that his resignation is
voluntary.11 In the first week of August 2002, petitioners released to Villareal his security bond deposits.
Proceedings before the Labor Arbiter
On August 27, 2002, Villareal filed before the Labor Arbiter a Complaint12 for illegal dismissal with prayer
for reinstatement, backwages, 13th month pay, holiday pay, service incentive leave pay, moral and
exemplary damages and attorneys fees against petitioners. He asserted that petitioners have no valid
and authorized cause to relieve him from duty and place him on floating status. For one, he had
dedicated almost 14 years of outstanding work performance to petitioners as shown by his
commendation13 and award.14 For another, petitioners still had an existing security services contract with
East Greenhills Village at the time he was relieved from his post. Villareal averred that the dire financial
strait brought about by his unjustified relief from duty had made it unbearable for him to continue his
employment with petitioners. Further, his illegal dismissal was effected without due process.
Petitioners denied the charge and asserted that it was Villareal who voluntarily severed his employment
with them as shown by: 1) his handwritten letter of resignation, 2) a Talaan ng Pakikipanayam sa
Pagbibitiw15 duly accomplished by Villareal which negates any act of coercion on petitioners part, and 3)
a notarized Clearance16 showing Villareals receipt of his security deposits amounting to P12,700.00 and
waiver of all his claims against petitioners.
The Labor Arbiter, in a Decision17 dated July 30, 2003, concluded that there was no valid and effective
resignation on the part of Villareal; that he was constructively dismissed by petitioners; and that his
dismissal was carried out without due process of law. The dispositive portion of the Labor Arbiters
Decision is as follows:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of [Villareal]
by the [petitioners] in the above-entitled case was illegal and the [petitioners are] hereby ordered to
reinstate immediately [Villareal] to his former position without loss of seniority rights and other
privileges. The [petitioners are] directed to comply with this reinstatement order upon receipt of this
decision.
Furthermore, the [petitioners are] ordered to pay [Villareal] his backwages for the period from July 3,
2002 up to July 4, 2003, in the amount of P100,800.00, subject to further adjustment or computation up
to the reinstatement of [Villareal] or the finality of this decision, as the case may be.
In addition, the [petitioners are] hereby ordered to pay [Villareal] attorneys fees equivalent to ten
percent (10%) of the total monetary award.
All other claims are dismissed.
SO ORDERED.18ChanRoblesVirtualawlibrary
Proceedings before the National Labor Relations Commission

Petitioners appealed to the NLRC. In a Decision19 dated October 18, 2005, the NLRC agreed with the
Labor Arbiters findings and conclusion. Hence, the dispositive portion of its
Decision, viz:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, [petitioners] appeal is hereby DENIED. Accordingly, the assailed
Decision is hereby AFFIRMED in toto.
SO ORDERED.20
Petitioners filed a Motion for Reconsideration21 but the same was likewise denied in a Resolution22dated
March 20, 2007.
Proceedings before the Court of Appeals
In their Petition for Certiorari with Prayer for the Issuance of Temporary Restraining Order and/or Writ of
Preliminary Injunction23 filed before the CA, petitioners, aside from still insisting that Villareal voluntarily
resigned and is not entitled to the awards made in his favor, also called attention to the fact that they
already required Villareal to return to work, in compliance with the reinstatement aspect of the Labor
Arbiters Decision.24chanroblesvirtuallawlibrary
On December 1, 2005, Villareal died.25cralawred The CA, in a Resolution26 dated August 22, 2007,
required Villareals counsel of record, Atty. Alex B. Carpela, Jr. (Atty. Carpela) to cause the substitution of
Villareals heirs as respondents. However, per Manifestation27 of Atty. Carpela, the said heirs cannot be
located.
Nevertheless, the CA proceeded to resolve the case. On March 28, 2008, it rendered a
Decision28upholding the NLRC. The CA noted that petitioners failed to afford Villareal substantive and
procedural due process when he was relieved from duty and also when he was not given a new post. And
as a result of the unjustified relief and non-posting, his situation became unbearable, leaving him with no
choice but to forego employment. To the CA, this is a clear case of constructive dismissal. On the other
hand, petitioners evidence did not suffice to support the alleged voluntariness of Villareals resignation.
In view of the finding of illegal dismissal, the CA made the following disquisition as to the monetary
awards in favor of Villareal:chanroblesvirtuallawlibrary
An illegally dismissed employee is entitled to the twin relief[s] of (a) either reinstatement or separation
pay, if reinstatement is no longer viable, and (b) backwages. The award of one does not bar the
other. Moreover, illegally dismissed employees are entitled to full backwages, inclusive of allowances and
other benefits or their monetary equivalent, computed from the time their actual compensation was
withheld from them up to the time of actual reinstatement. If reinstatement is not possible, the same
shall be computed from the time of their illegal termination up to the finality of the decision.
The amount of backwages shall be computed from the time he was separated from the company, that is
July 3, 2002 up to the finality of this Decision, as [Villareal] already died. Moreover, since reinstatement is
now impossible, the petitioners shall give separation pay of one month pay for every year of service to
[Villareal] in lieu of reinstatement.

The petitioners must also be held liable to pay [Villareal] attorneys fees equivalent to ten percent (10%)
of the total monetary award. This Court deems it just and equitable that attorneys fees should be
recovered pursuant to Article 2208 (11) of the New Civil Code.29ChanRoblesVirtualawlibrary
Ultimately, the CA dismissed the Petition, viz:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the instant petition is hereby DISMISSED.
SO ORDERED.30
In their Motion for Reconsideration,31 petitioners questioned, among others, the award of
backwages. They asserted that the backwages should be computed from the time of Villareals relief
from duty on May 14, 2002 until his actual reinstatement and not until the finality of the Decision. And
since Villareal was actually reinstated and has rendered duty from November 1, 2003 to March 16, 2004,
he is only entitled to backwages computed up to his actual reinstatement on November 1, 2003. To
support this, petitioners presented Assignment Orders dated November 8, 200332 and March 15,
2004,33 as well as Villareals Daily Time Record (DTR) from November 8-30,34 December 1-16, 200335 and
March 16, 2004.36 To show that Villareal was paid his wages and salaries during his actual reinstatement,
petitioners also presented the Payroll Registry Receipts37 and Bank Advice Slips.38 Petitioners further
explained that Villareal went on Absence Without Official Leave since March 22, 2004.39 After submitting
his letter40 dated June 18, 2004 explaining his absences due to poor health, nothing was heard from him
since then.
Aside from backwages, petitioners also questioned the computation of separation pay. They contended
that the amount should be computed at month pay for every year of service and not one month pay for
every year of service as awarded by the CA.
In the Comment41 he submitted, Atty. Carpela argued, among others, that petitioners are barred from
asserting that they have already complied with the order of reinstatement as to question the
computation of backwages for failure to raise the same at the first instance.
In a Resolution42 dated September 16, 2008, the CA denied petitioners Motion for Reconsideration.
Hence, this Petition.
The Parties Arguments
Petitioners insist that Villareal was not illegally dismissed. He voluntarily resigned from his work. Hence,
he is not entitled to backwages and separation pay. Even assuming that he is entitled to backwages, the
same should be computed only from the time of Villareals relief on May 14, 2002 up to his actual
reinstatement and not up to the finality of the decision. Neither should Villareal be awarded attorneys
fees as there is no showing of bad faith on petitioners part.
In Atty. Carpelas Comment,43 he seeks for the dismissal of the Petition as it raises factual issues. He also
points out that the Petition contains a defective verification and certification against forum-shopping
because while the same was verified and certified by one Cirilo A. Almario (Almario) on November 6,
2008, the Petition is actually dated November 10, 2008. He thus argues that petitioners could not

possibly verify and certify an inexistent petition. Besides, he maintains that the CA Decision is in accord
with law and jurisprudence.
Meanwhile, the heirs of Villareal, namely: his surviving spouse, Julieta Villareal, and his children, Jocelyn
and Lilybeth Villareal, filed on November 10, 2011 a Motion for Substitution of Parties44wherein they
prayed to be substituted as parties-respondents to the case. This was granted by the Court in the
Resolution45 dated June 20, 2012.
Our Ruling
The Petition is partly meritorious.
Variance between the date of the Petition
and the date when it was verified/ certified
does not render the Petition fatally defective.
Before delving into the issues raised by petitioners, the Court shall first resolve the technical defect
pointed out by respondents.
In explaining the variance between the date of the Petition and the date it was verified, petitioners
submitted Almarios Affidavit46 dated May 22, 2009. Almario, the Director for Security Operations of Peak
Ventures, attested to the fact that the final draft of the Petition was shown to him on November 6, 2008
and on the same date, he read the same and executed a verification and certification of non-forum
shopping. He further affirmed that the final draft of the Petition shown to him on November 6, 2008 is
the same Petition dated November 10, 2008 that was filed in this Court. He explained that the variance in
dates came about because petitioners wanted the Petition to bear the same date as the date of its actual
filing.
[T]he requirement regarding verification of a pleading is formal, not jurisdictional and x x x the noncompliance of which does not necessarily render the pleading fatally defective. Verification is simply
intended to secure an assurance that the allegations in the pleading are true and correct and not the
product of the imagination or a matter of speculation, and that the pleading is filed in good faith. 47 With
respect to the requirement of a certification of non-forum shopping, [t]he fact that the [Rules] require
strict compliance merely underscores its mandatory nature that it cannot be dispensed with or its
requirements altogether disregarded, but it does not thereby interdict substantial compliance with its
provisions under justifiable circumstances.48chanroblesvirtuallawlibrary
In Spouses Valmonte v. Alcala,49 the Court held that the variance between the dates of the
verification/certification and the Petition does not necessarily contradict the categorical declaration made
by petitioners in their affidavit that they read and understood the contents of the pleading. In that case,
the Court noted that as the pleading and the verification are prepared separately, a variance in their
dates is a matter that may satisfactorily be explained. It held that to demand the litigants to read the very
same document that is to be filed in court is too rigorous a requirement since what the Rules require is
for a party to read the contents of a pleading without any specific requirement on the form or manner in
which the reading is to be done. The Court stressed that what is important is that efforts were made to
satisfy the objective of the Rule, that is, to ensure good faith and veracity in the allegations of a pleading,
thereby allowing the courts to act on the case with reasonable certainty that the petitioners real
positions have been pleaded.

Thus, here, the variance between the date of the Petition and the date it was verified is not fatal to
petitioners case. As explained, any variance does not necessarily mean that no valid
verification/certification was made. Moreover, it must be emphasized that the rules of procedure,
especially in labor cases, ought not to be applied in a very rigid, technical sense for they have been
adopted to help secure, not override, substantial justice.50chanroblesvirtuallawlibrary
Villareal was constructively dismissed.
Coming now to the substantive issues, the Court subscribes to the uniform rulings of the Labor Arbiter,
the NLRC and the CA that Villareal was constructively and illegally dismissed.
Petitioners anchor their claim of voluntary resignation on Villareals resignation letter, the Talaan ng
Pakikipagpanayam sa Pagbibitiw (exit interview form) accomplished by him, and his notarized
clearance. However, the circumstances surrounding the execution of these documents prove otherwise.
When Villareal was relieved from duty, he was placed on floating status. A floating status requires the
dire exigency of the employers bona fide suspension of operation, business or undertaking. 51It takes
place when the security agencys clients decide not to renew their contracts with the agency x x x and
also in instances where contracts for security services stipulate that the client may request the agency
for the replacement of the guards assigned to it x x x.52 In the latter case, the employer should prove
that there are no posts available to which the employee temporarily out of work can be
assigned.53chanroblesvirtuallawlibrary
As pointed out by the labor tribunals, petitioners failed to discharge the burden of proving that there
were no other posts available for Villareal after his recall from his last assignment. Worse, no sufficient
reason was given for his relief and continued denial of a new assignment. And because of the dire
financial straits brought about by these unjustified acts of petitioners, Villareal was forced to resign and
execute documents in a manner as directed by petitioners in order to claim his security bond
deposits. From these circumstances, petitioners claim of voluntary resignation is untenable. What is
clear instead is that Villareal was constructively dismissed. There is constructive dismissal when an act of
clear discrimination, insensitivity or disdain on the part of the employer has become so unbearable as to
leave an employee with no choice but to forego continued employment. Constructive dismissal exists
where there is cessation of work because continued employment is rendered impossible, unreasonable
or unlikely, as an offer involving a demotion in rank and a diminution in pay.54 Moreover, Villareals
immediate filing of a Complaint for illegal dismissal to ask for reinstatement negates the fact of voluntary
resignation.55chanroblesvirtuallawlibrary
The Court, thus, finds that the CA did not err in declaring that Villareal was constructively and illegally
dismissed by petitioners.
Villareals backwages must be computed
from the time of his unjustified relief from
duty up to his actual reinstatement; the award
of separation pay must be deleted.
The awards granted by the CA in favor of Villareal must, however, be modified.

Under Article 279 of the Labor Code, as amended by Republic Act No. 6715, an employee who is unjustly
dismissed shall be entitled to (1) reinstatement without loss of seniority rights and other privileges; and,
(2) full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed
from the time his compensation was withheld up to the time of actual reinstatement. If reinstatement is
no longer viable, separation pay is granted.56 [S]eparation pay is intended to provide the employee
money during the period in which he will be looking for another employment.57 Backwages, on the
other hand, are granted on grounds of equity for earnings lost by an employee due to his illegal
dismissal.58chanroblesvirtuallawlibrary
As may be recalled, the CA, in granting monetary awards to Villareal, concluded that reinstatement is no
longer possible since he was already dead. Hence, it ordered the computation of backwages from the
time of Villareals separation from the company on July 3, 2002 up to the finality of the Decision and
awarded separation pay. However, records reveal that Villareal was actually reinstated. As shown by his
duly signed DTRs, Villareal rendered work on November 8-30, December 1-16, 2003 and March 16,
2004. Also, in his letter of June 18, 2004 where he explained his continued absence from work, he
specifically mentioned that he last rendered duty in March 2004. Notably, these substantial evidence of
Villareals actual reinstatement was not disputed by respondents.
Anent the assertion that petitioners belatedly raised before the CA the fact of Villareals reinstatement,
suffice it to say that petitioners could not be faulted for the same. The need to raise the matter only
came up when the said court did not consider Villareals reinstatement and rendered its Decision
ordering petitioners to pay him backwages from July 3, 2002 up to the finality of its Decision.
In view therefore of Villareals reinstatement, modifications with respect to the awards of backwages and
separation pay must necessarily be made. The award of separation pay must be deleted because as
mentioned, separation pay is only granted as an alternative to reinstatement. Regarding backwages,
aside from computing it up to Villareals actual reinstatement and not up to the finality of the Decision,
the reckoning point of the computation as also pointed out by petitioners themselves, must likewise be
corrected. It must not be reckoned from July 3, 2002, the date when Villareal submitted his resignation
letter and considered by the CA as the date of his separation from the company. Rather, it must be
computed from May 14, 2002 or the time he was unjustly relieved from duty since it was from this time
that his compensation was withheld from him. Hence, Villareals backwages must be computed from the
time he was unjustly relieved from duty on May 14, 2002 up to his actual reinstatement on November 8,
2003.
As to the grant of 10% of the total award as attorneys fees, the same is warranted because Villareal was
impelled to litigate to protect his interests.59chanroblesvirtuallawlibrary
WHEREFORE, the Petition is PARTLY GRANTED. The March 28, 2008 Decision of the Court of Appeals in
CA-G.R. SP No. 99440 is hereby MODIFIED in that (1) the award of full backwages, inclusive of allowances,
and other benefits or their monetary equivalent, shall be computed from the time Nestor B. Villareal was
unjustly relieved from duty on May 14, 2002 up to his actual reinstatement on November 8, 2003; and (2)
the award of separation pay is deleted.
SO ORDERED.