FIRST DIVISION

June 7, 2017

G.R. No. 202091

SUMIFRU (PHILIPPINES) CORP. (surviving entity of a merger with Fresh Banana Agricultural
Corporation and other corporations), Petitioner
vs.
NAGKAHIUSANG MAMUMUO SA SUYAPA FARM 1 (NAMASUFA-NAFLU-KMU), Respondent

DECISION

CAGUIOA, J.:

Before the Court is a Petition for Review on Certiorari 2 under Rule 45 of the Rules of Court filed by
petitioner Sumifru (Philippines) Corp. (Sumifru), assailing the Decision 3 dated February 8, 2012 and
Resolution 4 dated May 18, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 03574. The CA
affirmed the Resolution dated February 8, 2010 5 of the Secretary of the Department of Labor and
Employment (DOLE) which, in turn, affirmed the Order dated July 28, 2008 6 of DOLE Regional
Office No. XI Circuit Mediator-Arbiter (Med-Arbiter), which ordered the conduct of certification
election of the rank-and-file employees of Sumifru in P-1 Upper Siocon, Compostela, Comval
Province.

Facts

Sumifru is a domestic corporation and is the surviving corporation after its merger with Fresh
Banana Agricultural Corporation (FBAC) in 2008. 7 FBAC was engaged in the buying, marketing, and
exportation of Cavendish bananas. 8

Respondent Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUF ANAFLU-KMU) (NAMASUFA)

is a labor organization affiliated with the National Federation of Labor Unions and Kilusang Mayo
Uno. 9

The CA summarized the start of the proceedings with the Med-Arbiter as follows:

On March 14, 2008, the private respondent Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUF
A-NAFLU-KMU), a legitimate labor organization, filed a Petition for Certification Election before the
Department of Labor and Employment, Regional Office No. XI in Davao City. NAMASUFA sought to
represent all rank-and-file employees, numbering around one hundred forty, of packing plant 90 (PP
90) of Fresh Banana Agricultural Corporation (FBAC). NAMASUF A claimed that there was no
existing union in the aforementioned establishment.

On May 9, 2008 FBAC filed an Opposition to the Petition. It argued that there exists no employer -
employee relationship between it and the workers involved. It alleged that me mbers of NAMASUF A
are actually employees of A2Y Contracting Services (A2Y), a duly licensed independent contractor,
as evidenced by the payroll records of the latter.

NAMASUFA, in its Comment to Opposition countered, among others, that its members were fo rmer
workers of Stanfilco before FBAC took over its operations sometime in 2002. The said former
employees were then required to join the Compostela Banana Packing Plant Workers' Cooperative
(CBPPWC) before they were hired and allowed to work at the Packin g Plant of FBAC. It further
alleged that the members of NAMASUF A were working at PP 90 long before A2Y came.

In June 20, 2008, pending resolution of the petition, FBAC was merged with SUMIFRU, the latter
being the surviving corporation. 10

On July 28, 2008, the DOLE Med-Arbiter issued an Order granting the Petition for Certification
Election of NAMASUF A and declared that Sumifru was the employer of the workers con cerned. The
dispositive portion of the Order states:

WHEREFORE, premises considered, the petition for certification election filed by Nagkahiusang
Mamumuo sa Suyapa Farm (NAMASUFA) - NAFLU - KMU is hereby GRANTED. Let a certification
election among the rank-and-file workers of Fresh Banana Agricultural Corporation be conducted at
the company premises located at P-1 Upper Siocon, Compostela, Comval Province with the
following as choices:

1. Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUF A) - NAFLU -KMU; and

2. No Union

Let the entire records of this case be forwarded to Comval Field Office, this Department, for the
usual pre-election conference.

The employer Fresh Banana Agricultural Corporation is hereby DIRECTED to submit within five (5)
days from receipt of this Order, a certified list of the rank-and-file employees in the establishment or
the payrolls covering the members of the bargaining unit for the last three (3) months prior to the
issuance of this Order.

SO ORDERED. 11

In ruling that an employer-employee relationship existed, the MedArbiter stated:

The "four-fold test" will show that respondent FBAC is the employer of petitioner's members. The
elements to determine the existence of an employment relationship are: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer's power to control the employee's conduct. The most important element is the e mployer's
control of the employee's conduct, not only as to the result of the work to be done, but also as to the
means and methods to accomplish it.

On the first factor, (selection and engagement of the employer), it is apparent that the staff of
respondent FBAC advised those who are interested to be hired in the Packing Plant to become
members first of CBPPWC and get a recommendation from it.

On the second factor (payment of wages), while the respondent tried to impress upon us that
workers are paid by A2Y Contracting Services, this at best is but an administrative arrangement. We
agree with petitioner that the payroll summary submitted does not contain the relevant information
such as the employee's rate of pay, deductions made and the amount actually pai d to the employee.

On the third factor, (the power of dismissal), it is very clear that respondent FBAC is the authority
that imposes disciplinary measures against erring workers. This alone proves that it wields
disciplinary authority over them.
Finally, on the fourth factor which is the control test, the fact that the respondent FBAC gives
instructions to the workers on how to go about their work is sufficient indication that it exercises
control over their movements. The workers are instructed as to what time they are supposed to
report and what time they are supposed to return. They were required to fill up monitoring sheets as
they go about their jobs and even the materials which they used in the packing plant were supplied
by FBAC.

Viewed from the above circumstances, it is clear that respondent FBAC is the real employer of the
workers of Packing Plant 90. They are in truth and in fact the employees of the respondent and its
attempt to seek refuge on A2Y Contracting Services as the ostensible employer was nothing but an
elaborate scheme to deprive them their right to self-organization. 12

Sumifru appealed to the DOLE Secretary and in a Resolution dated February 8, 2010, the DOLE
Secretary dismissed the appeal, the dispositive portion of which states:

WHEREFORE, considering the foregoing, the appeal is hereby PISMISSED for lack of merit and the
assailed Order dated 28 July 2008 of DOLE Regional Office No. XI Circu it Mediator-Arbiter
Gerardine A. Jamora is AFFIRMED.

Let the entire records of this case be remanded to the Regional Office of origin for the immediate
conduct of a certification election subject to the usual pre-election conference.

SO RESOLVED.13

The DOLE Secretary ruled that Sumifru is the true employer of the workers, as follows:

In the present case, it is undisputed that CBPPWC is supplying workers to FBAC (now Sumifru). In
fact, FBAC required its applicants to become members of the cooperative first and seek
recommendation from it before hiring them. Appellant Sumifru failed to proffer evidence to prove that
CBPPWC is duly registered under Department Order No. 18-02. Also, it does not appear on record
that CBPPWC possesses substantial capital or investment in relation with the work or services that
are being performed by its members and that the employees placed by CBPPWC in Sumifru are
performing activities distinct and independent from that of the main business of Sumifru. As such,
this Office is inclined to believe that CBPPWC is engaged in labor -only contracting and the true
employer of the subject workers is Sumifru.

The alleged partnership agreement between CBPPWC and A2Y is of no moment. It is well-settled
that mere allegation without evidence to prove the same is self-serving that should not be given
weight in any proceedings. Nonetheless, even if the alleged agreement indeed took place, the four -
fold test in determining the existence of an employer-employee relationship still points to Sumifru as
the employer.

xxxx

In this case, Sumifru's control over the subject employees is evident. The fact that the subject
workers are required by Sumifru to fill up monitoring sheets as they go about their jobs and the
imposition of disciplinary actions for non-compliance with the "No Helmet - No Entry and No ID - No
Entry" policies prove that it is indeed Sumifru, and not A2Y Contracting Services, that exercises
control over the conduct of the subject workers. 14
Sumifru then filed a Petition for Certiorari with the CA raising the issue of whether the DOLE
Secretary committed grave abuse of discretion in declaring it as the employer of the workers at PP
90.15 But the CA dismissed the petition. The dispositive portion of the CA Decision states:

WHEREFORE, finding no grave abuse of discretion on the part of the public respondent, the petition
is DENIED. The Resolution dated February 8, 2010 issued by the public respondent Honorable
Secretary of the Department of Labor and Employment is her eby AFFIRMED.

SO ORDERED. 16

The CA ruled that the DOLE Secretary did not commit grave abuse of discretion because the latter's
ruling that Sumifru was the employer of the workers was anchored on substantial evidence, thus:

SUMIFRU raises the same issue of non-existence of employeremployee relationship, which had
been squarely resolved in the negative by the Med-Arbiter and the DOLE Secretary. We find no
traces of abuse in discretion in the ruling of the DOLE Secretary anchored as it is on substantial
evidence.

The Court has consistently applied the "four-fold test" to determine the existence of an employer-
employee relationship: the employer (a) selects and engages the employee; (b) pays his wages; (c)
has power to dismiss him; and (d) has control over his work. Of these, the most crucial is the
element of control. Control refers to the right of the employer, whether actually exercised or
reserved, to control the work of the employee as well as the means and methods by which he
accomplishes the same.

In this case, the records are replete with evidence which would show that SUMIFRU has control over
the concerned workers, to wit:

1. FBAC memorandum on "Standardized Packing Plant Breaktime";

2. Material Requisition for PP 90;

3. Memorandum dated February 9, 2008 on "no helmet, no entry" policy posted at

the packing plant;

4. Memorandum dated October 15, 2007 on "no ID, no entry policy";

5. Attendance Sheet for General Assembly Meeting called by FBAC on February

18[,] 2004;

6. Attendance Sheet for Packers ISO awareness seminar on February 11, 2004
called by FBAC;

7. FBAC Traypan Fruit Inspection Packer's Checklist issued by FBAC for the use of
workers in the Packing Plant;

8. FBAC KD Gluing Pattern Survey.

The above orders issued by SUMIFRU/FBAC would show that not only does it have control over the
results of the workers in PP 90 but also in the manners and methods of its accomplishment. 17
The CA, after reviewing the records, accorded respect to the findings of facts of the DOLE
Secretary, which affirmed the Med-Arbiter, as they have special knowledge and expertise over
matters under their jurisdiction. The CA ruled:

As stated beforehand, there is no cogent reason to set aside the ruling of the DOLE Secretary which
affirmed the findings of the Med-Arbiter. By reason of their special knowledge and expertise over
1âwphi1

matters falling under their jurisdiction, they are in a better position to pass judgment thereon and
their findings of fact in that regard are generally accorded respect and even finality by the courts
when supported by substantial evidence, as in this case. 18

Sumifru moved for reconsideration but the CA denied this in its Resolution dated May 18, 2012.

Hence, this Petition.

Issues

As stated in its Petition, Sumifru raised the following:

THE COURT OF APPEALS COMMITTED PALPABLE MISTAKE AND RULED CONTRARY TO

LAW AND SETTLED JURISPRUDENCE WHEN IT AFFIRMED THE FINDINGS OF THE DOLE
SECRETARY AND CONCLUDED THAT HEREIN PETITIONER, SUMIFRU, IS THE EMPLOYER
OF THE WORKERS ENGAGED BY THE COOPERATIVE AND/OR A2Y FOR THE UPPER
SIOCON GROWERS' PACKAGING OPERATIONS IN PACKING PLANT 90.

A. A2Y Contracting Services was engaged either by the Upper Siocon Growers or
the Cooperative for the packing operations at PP 90.

B. Even assuming, for the sake of argument, that the Cooperative and/or A2Y are not
legitimate labor contractors, only the Upper Siocon Growers, and not SUMIFRU, may
be deemed the employer of the workers at PP 90.

C. The Department of Labor and Employment committed grave and palpable mistake
when it grossly misapprehended the facts and evidence on record, that if properly
appreciated will clearly establish that SUMIFRU is not the employer of the members
of NAMASUFA working at PP 90.

D. The reliance on the alleged inconsistencies in the pleadings submitted by

SUMIFRU is misplaced as there are no inconsistencies at all. 19 (Emphasis omitted)

The Court's Ruling

The Petition is denied.

Sumifru's arguments raise questions of facts. Indeed, it even submitted to this Court, as annexes to
its Petition, the very same evidence it had presented before the Med -Arbiter, the DOLE Secretary,
and the CA in its attempt to try to convince the Court that the members of NAMASUFA are not its
employees.

It is fundamental that in a petition for review on certiorari, the Court is limited to only questions of
law. As specifically applied in a labor case, the Court is limited to reviewing only whether the CA
1âwphi1
was correct in determining the presence or absence of grave abuse of discretion on the part of the
DOLE Secretary. Thus, in Holy Child Catholic School v. Sta. Tomas, 20 the Court ruled:

Our review is, therefore, limited to the determination of whether the CA correctly resolved the
presence or absence of grave abuse of discretion in the decision of the [Secretary of Labor and
Employment (SOLE)], not on the basis of whether the latter's decision on the merits of the case was
strictly correct. Whether the CA committed grave abuse of discretion is not what is ruled upon but
whether it correctly determined the existence or want of grave abuse of discretion on the part of the
SOLE. 21

FFW v. Court of Appeals, 22 findings of fact of quasi-judicial agencies are entitled to great respect
when they are supported by substantial evidence and, in the absence of any showing of a whimsical
or capricious exercise of judgment, the factual findings bind the Court:

We take this occasion to emphasize that the office of a petition for review on certiorari under Rule 45
of the Rules of Court requires that it shall raise only questions of law. The factual findings by quasi -
judicial agencies, such as the Department of Labor and Employment, when supported by su bstantial
evidence, are entitled to great respect in view of their expertise in their respective fields. Judicial
review of labor cases does not go so far as to evaluate the sufficiency of evidence on which the
labor official's findings rest. It is not our function to assess and evaluate all over again the evidence,
testimonial and documentary, adduced by the parties to an appeal, particularly where the findings of
both the trial court (here, the DOLE Secretary) and the appellate court on the matter coincid e, as in
this case at bar. The Rule limits that function of the Court to the review or revision of errors of law
and not to a second analysis of the evidence. Here, petitioners would have us re -calibrate all over
again the factual basis and the probative value of the pieces of evidence submitted by the Company
to the DOLE, contrary to the provisions of Rule 45. Thus, absent any showing of whimsical or
capricious exercise of judgment, and unless lack of any basis for the conclusions made by the
appellate court be amply demonstrated, we may not disturb such factual findings. 23 (Emphasis
supplied.)1âwphi1

Here, the CA was correct in finding that the DOLE Secretary did not commit any whimsical or
capricious exercise of judgment when it found substantial evidence to support the DOLE Secretary's
ruling that Sumifru was the employer of the members of NAMASUFA.

As defined, substantial evidence is "that amount of relevant evidence as a reasonable mind might
accept as adequate to support a conclusion, even if other minds, equally reasonable, might
conceivably opine otherwise." 24Here, the Med-Arbiter found, based on documents submitted by the
parties, that Sumifru gave instructions to the workers on how to go about their work, what time they
were supposed to report for work, required monitoring sheets as they went about their jobs, and
provided the materials used in the packing plant. 25

In affirming the Med-Arbiter, the DOLE Secretary relied on the documents submitted by the parties
and ascertained that Sumifru indeed exercised control over the workers in PP 90. The DOLE
Secretary found that the element of control was present because Sumifru required monitoring sheets
and imposed disciplinary actions for non-compliance with "No Helmet - No Entry" "No ID - No Entry"
policies. 26

In turn, the CA, even as it recognized that the findings of facts of the DOLE Secretary and the Med -
Arbiter were binding on it because they were supported by substantial evidence, even went further
and itself reviewed the records - to arrive, as it did arrive, at the same conclusion reached by the
DOLE Secretary and Med-Arbiter: that is, that Sumifru exercised control over the workers in PP 90. 27
In light of the foregoing, the Court cannot re-calibrate the factual bases of the Med-Arbiter, DOLE
Secretary, and the CA, contrary to the provisions of Rule 45, especially where, as here, the Petition
fails to show any whimsicality or capriciousness in the exercise of judgment of the Med -Arbiter or the
DOLE Secretary in finding the existence of an employer-employee relationship.

WHEREFORE, premises considered, the petition for review is hereby DENIED. The Decision of the
Court of Appeals dated February 8, 2012 and Resolution dated May 18, 2012 are
hereby AFFIRMED.

SO ORDERED.

ALFREDO BENJAMIS S. CAGUIOA

Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice
Chairperson

TERESITA J. LEONARDO-DE CASTRO MARIANO C. DEL CASTILLO

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
THIRD DIVISION

July 26, 2017

G.R. No. 230481

HOEGH FLEET SERVICES PHILS., INC., and/or HOEGH FLEET SERVICES AS, Petitioners
vs.
BERNARDO M. TURALLO, Respondent

x-- - -- -- -- -- - -- -- -- -- - -- x

G.R. No. 230500

BERNARDO M. TURALLO, Petitioner,

vs.
HOEGH FLEET SERVICES PHILS., INC., and/or HOEGH FLEET SERVICES AS, Respondents

RESOLUTION

VELASCO, JR., J.:

These are consolidated Petitions for Review on Certiorari under Rule 45 of the Rules of Court, which
seek to reverse and set aside the Decision 1 dated November 8, 2016 of the Court of Appeals (CA)
and its Resolution 2 dated March 8, 2017 in CA-G.R. SP No. 142979. There, Hoegh Fleet Services
Phils., Inc. and/or Hoegh Fleet Services AS (hereinafter referred to as Hoegh Fleet) was ordered to
pay Turallo US$90,000.00, US$3,084.54 and US$1,000.00 as disability compensation, sickness
allowance and attorney's fees, respectively. 3

The facts, as found by the CA, are as follows:

On 9 November 2012, petitioners hired Turallo as a Messman on board vessel "Hoegh Tokyo" for
nine (9) months. The employment contract was signed on 27 December 2012, which was also
covered by a Collective Bargaining Agreement between the Associated Marine Officers' and
Seaman's Union of the Philippines and Hoegh Fleet Services AS, represented by Hoegh Fleet
Services Phils., Inc.

Turallo was found "fit for sea duty" in the Pre-Employment Medical Examination (PEME).

On 2 January 2013, Turallo boarded the vessel.

Sometime in September 2013 while on board the vessel, Turallo felt pain on the upper back of his
body and chest pain, which was reported to his superiors on 23 September 2013, as evidenced by
the "Incident/ Accidents Personnel" signed by Turallo' s department head and the master of the
vessel. On 24 September 2013, Turallo was referred to a doctor by the ship's captain. Said referral
also mentioned that Turallo was discharged from the ship on 23 September 2013.

Upon arrival in Manila, Turallo was referred to the company-designated physician, who in turn
referred him to an orthopedic surgeon and cardiologist. He underwent medical and laboratory tests
and was advised to return on 27 September 2013 for re-evaluation.

On 27 September 2013, Turallo underwent MRI of the cervical spine and left shoulder and EMG -
NCV on 30 September 2013.

On 4 October 2013, after the said tests, the company-designated physician diagnosed Turallo with
"Acromioclavicular Joint Arthritis; Bicep Tear and Cuff Tear, Left Shoulder; Cervical Spondylosis
Secondary to C4-C5, C5-C6; Disc Protrusion; Rule Out Ischemic Heart Disease" and recommended
that he undergo the following procedures: "Dobutamine Stress Echocardiogram Arthroscopic
Surgery, Acromioclavicular Joint Debridgment, Subacrominal Decompression Cuff Repair using
Double Row 3-4 anchors, Biceps Tenodesis using 1-2 anchors".

In a "private and confidential" correspondence dated 23 December 2013 to Capt. Desabille, head of
the crew operations, the company-designated physician reported that Turallo had undergone a C4 -
C5, C5-C6 Discectomy Fusion with PEEK Prevail on 19 December 2013, and that the specialist
opined that the estimated length of treatment after surgery is three (3) months of rehabilitati on for
strengthening and mobilization exercise. The letter further stated that based on Turallo' s condition at
that time, if the latter is entitled to disability, the closest interim assessments are Grade 8 (shoulder) -
ankylosis of one shoulder and Grade 10 (neck)"moderate stiffness or 2/3 loss of motion in neck.

In another correspondence of same date addressed to Capt. Desabille, the company -designated
physician noted Turallo's condition and stated the treatment and processes that the latter has
undergone and further noted that Turallo was in stable condition, he was advised to continue
physical therapy on out-patient basis and was prescribed seven (7) different take home medications.

On 10 January 2014, the company-designated physician certified that Turallo was undergoing
medical/surgical treatment from 25 September 2013 up to the said date.
Despite Turallo' s continuous rehabilitation treatment, pain in his left shoulder persisted, hence, he
followed up his pending surgery therefor several times to no avail. This prompted Turallo to seek a
second opinion.

On 13 May 2014, Turallo consulted with Dr. Manuel Fidel Magtira, a government physician of the
Vizcarra Diagnostic Center who, after x-ray of his left wrist and shoulder joints, found him to be
"partially and permanently disabled with separate impediments for the different affected parts of (his)
body of Grade 8, Grade 10 and Grade 11, based on the POEA contract" but declared him as
"permanently unfit in any capacity for further sea duties".

On 23 May and 2 June 2014, grievance proceedings were held between the parties at the AMOSUP,
where the petitioners offered the amount of Thirty Thousand Two Hundred Thirty One US Dollars
(US$30,231. 00) corresponding to .a Grade 8 disability compensation based on the maximum
amount of Ninety Thousand US Dollars (US$90,000.00). Turallo, however proposed the settlement
.amount of Sixty Thousand US Dollars (US$60,000.00). The parties failed to reach an agreement.

Turallo then filed a Notice to Arbitrate with the National Conciliation and Mediation Board. At this
point, petitioners increased their offer from Thirty Thousand Two Hundred Thirty One US Dollars
(US$30,231.00) to Fifty Thousand US Dollars (US$50,000.00) plus allowances for further medical
treatments and expenses. Turallo, however still refused to accept such amount.

Despite efforts to arrive at an agreement, the parties failed to settle their differences, hence, they
were directed to submit their pleadings and evidence for the resolution of the issues before the panel
of arbitrators.

On 27 May 2015, the Panel rendered its assailed Decision, disposing, thus:

"WHEREFORE, judgment is hereby rendered ordering [petitioners], jointly and severally, to pay
complainant the following amounts:

1. Disability compensation in the amount of US$90,000.00, to be paid in the equivalent peso amount
at the rate prevailing at the time of payment.

2. Sickness Allowance in the amount of US$3,084.54 to be paid in its peso equivalent as in number
l; and

3. Attorney's fees equivalent to ten percent (10%) of the total monetary award.

Finally, legal interests shall be imposed on the monetary awards herein granted at the rate of 6% per
annum from finality of this judgment until fully paid.

SO ORDERED."

In its 16 September 2015 Resolution, the Panel denied petitioners' motion for reconsideration, thus:

"WHEREFORE, the Decision and Award dated 27 May 2015 stays.

SO ORDERED."4

The Ruling of the CA

In assailing the Panel of Arbitrator's decision, Hoegh Fleet argued that the Panel erred in ruling that
Turallo is entitled to total and permanent disability benefits, finding that he was not issued a final
disability grade. It averred that the final assessment of Grade 8 disability was given by the company-
designated physician but was not attached to their Position Paper before the Panel, hence, it was
not considered. It also questioned the award of attorney's fees for being unwarranted as there was
no showing of an unjustified act or evident bad faith on its part for denying Turallo's claim.

The CA found no cogent reason to reverse the findings of the Panel. It explained that the
employment of seafarers and its incidents, including claims for death benefits, ar e governed by the
contracts they sign every time they are hired or rehired. Also, while the seafarers and their
employees are governed by their mutual agreements, the Philippine Overseas Employment Agency
(POEA) rules and regulatioi1s require the POEA-Standard Employment Contract (SEC), which
contains the standard terms and conditions of the seafarer's employment in ocean -going vessels, be
integrated in every seafarer's contract. Entitlement, thus, to disability benefits by seamen is a matter
governed not only by medical findings but by law and contract.

In saying that the Panel correctly considered Turallo as totally and permanently disabled, it referred
to Section 32 of the POEA-SEC which states that a seafarer shall be deemed totally and
permanently disabled if the company-designated physician fails to arrive at a definite assessment of
the seafarer's fitness to work or permanent disability within the period of 120 to 240 days. The CA
was not persuaded with Hoegh Fleet's allegation that its company-designated physician actually
issued a final assessment, invoking the document signed by its orthopedic and spinal surgery
specialist dated 29 January 2014 as Turallo is still undergoing surgery during this period.

Even assuming that the company-designated physician's disability rating was actually given and
considered definitive, the CA ruled that Turallo would still have a cause of action for total and
permanent disability compensation as he remained incapacitated to perform his usual sea duties
after the lapse of 120 or 240 days, such being the period for the company-designated physician to
issue a declaration of his fitness to engage in sea duty.

Finally, with regard to the award of attorney's fees, while the CA did not dispute Turallo' s entitlement
to the same, it ruled that reducing the amount from ten percent (10%) of the total monetary award to
just One Thousand US Dollars (US$1,000.00) would be reasonable. The dispositive portion of the
assailed Decision reads:

WHEREFORE, premises considered, the assailed Decision dated 27 May 2015 and Resolution
dated 16 September 2015 of the Panel of Voluntary Arbitrators composed of AVA Orlalyn Suarez-
Fetesio, AVA Generoso Mamaril and AVA Jaime Montealegre in Case No. AC-949- RCMB-NCR-
MVA-075-06-08-2014 are hereby AFFIRMED with MODIFICATION only as to the award of
attorney's fees, herein reduced to One Thousand Dollars (US$1,000.00).

SO ORDERED.5

The Motion for Reconsideration was denied in a Resolution 6 dated March 8, 2017. From the CA
ruling, Hoegh Fleet and Turallo filed separate petitions for review on certiorari, which were
consolidated by the Court through its April 24, 2016 Resolution. 7

The Issue

In G.R. No. 230481, Hoegh Fleet questioned Turallo's claim for total and permanent disability
benefits. It raised that its company-designated physician issued a final disability assessment of
Grade 8 well within the 240-day period. Thus, Turallo's compensation should only be confined to the
amount corresponding to the Grade 8 assessment, a partial disability. 8

Meanwhile in G.R. No. 230500, Turallo questioned the award of US$1,000.00 attorney's fees for
being wanting in any factual and legal justification. He furthered that the judgment of the Panel of
Voluntary Arbitrators awarding him 10% of the total monetary award should be reinstated as it is in
accord with prevailing jurisprudence. 9

The Ruling of the Court

The petitions are unmeritorious.

The POEA-SEC governs. Under
Section 32 thereof, Turallo is entitled
to a total and permanent disability
compensation

In Kestrel Shipping Co., Inc. v. Munar, 10 the Court reads Section 32 of PQEA-SEC in harmony with
the Labor Code and explained, viz:

Indeed, under Section 32 of the POEA-SEC, only those injuries or disabilities that are classified as
Grade 1 may be considered as total and permanent. However, if those injuries or disabilities with a
disability grading from 2 to 14, hence, partial and permanent, would incapacitate a seafarer from
performing his usual sea duties for a period of more than 120 or 240 days, depending on the need
for further medical treatment, then he is, under legal contemplation, totally and permanently
disabled. In other words, an impediment should be characterized as partial and permanent not only
under the Schedule of Disabilities found in Section 32 of the POEA-SEC but should be so under the
relevant provisions of the Labor Code and the Amended Rules on Employee Compensation (AREC)
implementing Title II, Book IV of the Labor Code. That while the seafarer is partially injured or
disabled, he is not precluded from earning doing the same work he had before his injury or disability
or that he is accustomed or trained to do. Otherwise, if his illness or injury prevents him from
engaging in gainful employment for more than 120 or 240 days, as the case may be, he shall be
deemed totally and permanently disabled.

Moreover, the company-designated physician is expected to arrive at a definite assessment of the

seafarer's fitness to work or permanent disability within the period of 120 or 240 days. That should
he fail to do so and the seafarer's medical condition remains unresolved, the seafarer shall be
deemed totally and permanently disabled. 11 (emphasis ours)

It cannot be any clearer that the company-designated physician's failure to arrive at a definite
assessment of the seafarer's fitness to work or permanent disability within the prescribed periods
would hold the seafarer's disability total and permanent.

The Court does not wish to disturb the factual findings of the Panel and the CA that indeed the
company-designated physician failed to issue a final assessment of Turallo's disability grading as
this Court is not a trier of facts. 12 Hence, under the contemplation of the law abovementioned, Turallo
is considered as totally and permanently disabled. The Panel, as affirmed by the CA, is correct in
concluding that the Grade 8 disability grading given, as reflected in the 23 December 2013
correspondence, cannot be considered as a final assessment as the said letter expressly states that
it was merely an "interim" assessment. In Fil-Star Maritime Corporation v. Rosete 13 and Tamin v.
Magsaysay Maritime Corporation, 14 We concluded that the company-designated doctor's certification
issued within the prescribed periods must be a final and definite assessment of the seafarer's fitness
to work or disability, not merely interim, as in this case. Thus, the award of US$90,000, as the
maximum disability compensation stipulated in their Collective Bargaining Agreement (CBA) 15 is
warranted.

Article 111 of tile Labor Code

fixes the limit on the amount
of attorney's fees a party may
recover

The Court agrees with the CA that attorney's fees should be reduced, not to US$1,000.00, however,
but to five percent (5%) of the total monetary award. Article 111 of the Labor Code indeed provides
1âwphi1

that the culpable party may be assessed attorney's fees equivalent to 10 percent of the amount of
wages recovered. It also provides that it shall be unlawful for any person to demand or accept, in
any judicial or administrative proceedings for the recovery of wages, attorney's fees which exceed 10
percent of the amount of wages recovered. Section 8, Rule VIII, Book III of the Implementing Rules
of the Labor Code sustains the same and states that attorney's fees shall not exceed 10 percent of
the amount awarded. 16 A closer reading of these provisions, however, would lead us to the
conclusion that the 10 percent only serves as the maximum of the award that may be
granted.17 Relevantly, We have ruled in the case of Taganas v. National Labor Relations
Commission18 that Article 111 does not even prevent the NLRC from fixing an amount lower than the
ten percent ceiling prescribed by the article when the circumstances warrant it. With that, the Court
is not tied to award 10 percent attorney's fees to the winning party, as what Turallo wishes to imply.

Despite this, We deem it more reasonable to grant five percent (5%) of the total monetary award as
attorney's fees to Turallo, instead of the US$1,000.00 awarded by the CA.

In PCL Shipping Philippines, Inc. v. National Labor Relations Commission, 19 the Court discussed that
there are two commonly accepted concepts of attorney's fees, the so -called ordinary and
extraordinary. In its ordinary concept, an attorney's fee is the reasonable compensation paid to a
lawyer by his client for the legal services he has rendered to the latter. The basis of this
compensation is the fact of his employment by and his agreement with the client. In its extraordinary
concept, attorney's fees are deemed indemnity for damages ordered by the court to be paid by the
losing party in a litigation. The instances where these may be awarded are those enumerated in
Article 2208 of the Civil Code, specifically par. 7 thereof which pertains to actions for recovery of
wages, and is payable not to the lawyer but to the client, unless they have agreed that the award
shall pertain to the lawyer as additional compensation or as part thereof. The extraordinary concept
of attorney's fees is the one contemplated in Article 111 of the Labor Code. This is awarded by the
court to the successful party to be paid by the losing party as indemnity for damages sustained by
the former in prosecuting, through counsel, his cause in court. 20

Clearly, Turallo incurred legal expenses after he was forced to file an action to recover his disability
benefits. Considering that he was constrained to litigate with counsel in all the stages of this
proceeding, and keeping in mind the liberal and compassionate spirit of the Labor Code, where the
employees' welfare is the paramount consideration, 21 this Court considers five percent (5%) of the
total monetary award as more appropriate and commensurate under the circumstances of this
petition.

WHEREFORE, the instant petitions are hereby DENIED. The November 8, 2016 Decision and
March 8, 2017 Resolution issued by the Court of Appeals are hereby AFFIRMED WITH
MODIFICATION that the attorney's fees to be awarded to Turallo is increased to five (5) percent of
the total monetary award to him.

SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate Justice

WE CONCUR:

DIOSDADO M. PERALTA*
Associate Justice

LUCAS P. BERSAMIN FRANCIS H. JARDELEZA

Associate Justice Associate Justice

ANDRES B. REYES, JR.

Associate Justice

FIRST DIVISION

G.R. No. 207156, January 16, 2017

TURKS SHAWARMA COMPANY/GEM ZEÑAROSA , Petitioners, v. FELICIANO Z. PAJARON AND LARRY

A. CARBONILLA, Respondent.

DE CISIO N

DEL CASTILLO, J.:

The liberal interpretation of the rules applies only to justifiable causes and meritorious circumstanc es.

By this Petition for Review on Certiorari,1 petitioner Turks Shawarma C ompany and its owner, petitioner
Gem Zeñarosa (Zeñarosa), assail the May 8, 2013 Decision 2 of the C ourt of Appeals (C A) in C A-G.R. SP No.
121956, which affirmed the Orders dated March 18, 20113 and September 29, 2011 4 of the National Labor
Relations C ommission (NLRC ) dismissing their appeal on the ground of non -perfection for failure to post the
required bond.

Factual Antecedents

Petitioners hired Feliciano Z. Pajaron (Pajaron) in May 2007 as service crew and Larry A. C arbonilla
(C arbonilla) in April 2007 as head crew. On April 15, 2010, Pajaron and C arbonilla filed their respective
C omplaints 5 for constructive and actual illegal dismissal, non-payment of overtime pay, holiday pay, holiday
premium, rest day premium, service incentive leave pay and 13 th month pay against petitioners. Both
C omplaints were consolidated.

Pajaron alleged that on April 9, 2010, Zeñarosa asked him to sign a piece of paper 6 stating that he was
receiving the correct amount of wages and that he had no claims whatsoever from petitioners. Disagreeing
to the truthfulness of the statements, Pajaron refused to sign the paper prompting Zeñarosa to fire him from
work. C arbonilla, on the other hand, alleged that some time in June 2008, he had an altercation with his
supervisor C onchita Marcillana (Marcillana) while at work. When the incident was brought to the attention of
Zeñarosa, he was immediately dismissed from service. He was also asked by Zeñarosa to sign a piec e of
paper acknowledging his debt amounting to P7,000.00.

Both Pajaron and C arbonilla claimed that there was no just or authorized cause for their dismissal and that
petitioners also failed to comply with the requirements of due process. As such, they pra yed for separation
pay in lieu of reinstatement due to strained relations with petitioners and backwages as well as nominal,
moral and exemplary damages. Petitioners also claimed for non payment of just wages, overtime pay,
holiday pay, holiday premium, service incentive leave pay and 13 th month pay.

Petitioners denied having dismissed Pajaron and C arbonilla; they averred that they actually abandoned their
work. They alleged that Pajaron would habitually absent himself from work for an unreasonable length of
time without notice; and while they rehired him several times whenever he returned, they refused to rehire
him this time after he abandoned work in April 2009. As for C arbonilla, he was reprimanded and
admonished several times for misbehavior and disobedience of lawful orders and was advised that he could
freely leave his work if he could not follow instructions. Unfortunately, he left his work without any reason
and without settling his unpaid obligation in the an1ount of P78,900.00, which compelled th em to file a
criminal case 7 for estafa against him. In addition, criminal complaints 8 tor slander were filed against both
Pajaron and C arbonilla for uttering defamatory words that allegedly compromised Zeñarosa's reputation as a
businessman. Petitioners, thus, insisted that their refusal to rehire Pajaron and C arbonilla was for valid
causes and did not amount to dismissal from employment. Finally, petitioners claimed that Pajaron and
C arbonilla failed to substantiate their claims that they were not paid lab or standards benefits.

Proceedings before the Labor Arbiter

In a Decision9 dated December 102010, the Labor Arbiter found credible Pajaron and C arbonilla's version
and held them constructively and illegally dismissed by petitioners. The Labor Arbiter fou nd it suspicious for
petitioners to file criminal cases against Pajaron and C arbonilla only after the complaints for illegal dismissal
had been filed. Pajaron and C arbonilla were thus awarded the sum of P148,753.61 and P49,182.66,
respectively, representing backwages, separation pay in lieu of reinstatement, holiday pay, service incentive
leave pay and 13th month pay, The dispositive portion of the Labor Arbiter's Decision reads: ChanRobl esVi rt ua
l awlibrary

WHEREFORE, in light of the foregoing, judgment is he reby rendered declaring respondent TURKS
SHAWARMA C OMPANY, [liable] to pay complainants as follows: chanRobl esvi rtualLawli b
r ary

I. FELIC IANO Z. PAJARON, JR.

1. Limited backwages computed from April 9, 2010 up to the date of this Decision, in the
amount of SIXTY EIGHT THOUSAND NINE HUNDRED NINETY EIGHT PESOS & 74/100
(Php68,998.74)

2. Separation pay, in lieu of reinstatement equivalent to one month's salary for every year of
service computed from May 1, 2007 up to the date of this decision, in the amount of
THIRTY ONE THOUS[A]ND FIVE HUNDRED TWELVE PESOS (Php31,512.00); chanrobl esl aw

3. Holiday pay, in the amount of TWELVE THOUSAND SIX HUNDRED EIGHTY ONE PESOS
(Php12,681.00); chanrobl esl aw

4. Service incentive leave pay, in the amount of FIVE THOUSAND FOUR HUNDRED THREE
PESOS & 46/100 (Php5,403.46); and

5. Thirteenth month pay, in the amount of THIRTY THOUSAND ONE HUNDRED FIFTY EIGHT
PESOS & 41/100 (Php30,158.41).

II. LARRY A. C ARBONILLA

1. Separation pay, in lieu of reinstatement equivalent to one month's salary for every yea r of
service computed from April 1, 2007 up to the date of this decision, in the amount of FORTY
TWO THOUSAND AND SIXTEEN PESOS (Php42,016.00); chanrobl esl aw

2. Holiday pay, in the amount of TWO THOUSAND PESOS (Php2,000.00); chanrobl esl aw

3. Service incentive leave pay, in the amount of EIGHT HUNDRED THIRTY THREE PESOS &
33/100 (Php833.33); and

4. Thirteenth month pay, in the amount of FOUR THOUSAND THREE HUNDRED THIRTY THREE
PESOS & 33/100 (Php4,333.33).

Other claims herein sought and prayed for are hereby denied for lack of legal and factual bases.

SO ORDERED.10 chanrobl esvi rtuall a

wl ibra
ry
Proceedings before the National Labor Relations Commission

Due to alleged non-availability of counsel, Zeñarosa himself filed a Notice of Appeal with Memorandum and
Motion to Reduce Bond 11 with the NLRC . Along with this, Zeñarosa posted a partial cash bond in the amount
of P15,000.00,12 maintaining that he cannot afford to post the full amount of the award since he is a mere
backyard micro-entrepreneur. He begged the NLRC to re duce the bond.

The NLRC , in an Order 13 dated March 18, 2011, denied the motion to reduce bond. It ruled that financial
difficulties may not be invoked as a valid ground to reduce bond; at any rate, it was not even substantiated
by proof. Moreover, the partial bond in the amount of P15,000.00 is not reasonable in relation to the award
which totalled to P197,936.27. Petitioners' appeal was thus dismissed by the NLRC for non -perfection.

On April 7, 2011, petitioners, through a new counsel, filed a Motion for Reconsideration (with plea to give
due course to the appeal) 14 averring that the outright dismissal of their appeal was harsh and oppressive
considering that they had substantially complied with the Rules through the posting of a partial bond and
their willingness to post additional bond if necessary. Moreover, their motion to reduce bond was meritorious
since payment of the full amount of the award will greatly affect the company's operations; besides the
appeal was filed by Zeñarosa without the assistance of a counsel. Petitioners thus implored for a more liberal
application of the Rules and prayed that their appeal be given due course. Along with this motion for
reconsideration, petitioners tendered the sum of P207,435.53 representing the deficiency of t he appeal
bond.15

In an Order 16 dated September 29, 2011, the NLRC denied the Motion for Reconsideration, reiterating that
the grounds for the reduction of the appeal bond are not meritorious and that the partial bond posted is not
reasonable. The NLRC further held that the posting of the remaining balance on April 7, 2011 or three
months and eight days from receipt of the Labor Arbiter's Decision on December 30, 2010 cannot be
allowed, otherwise, it will be tantamount to extending the period to appeal whi ch is limited only to 10 days
from receipt of the assailed Decision.

Proceedings before the Court of Appeals

Petitioners filed a Petition for Certiorari with application for Writ of Preliminary Injunction and Temporary
Restraining Order 17 with the C A. They insisted that the NLRC gravely abused its discretion in dismissing the
appeal for failure to post the required appeal bond.

On May 8, 2013, the C A rendered a Decision 18 dismissing the Petition for Certiorari. It held that the NLRC
did not commit any grave abuse of discretion in dismissing petitioners' appeal for non -perfection because
petitioners failed to comply with the requisites in filing a motion to reduce bond, namely, the presence of a
meritorious ground and the posting of a reasonable amount of bond. The C A stated that financial difficulties
is not enough justification to dispense with the mandatory posting of a bond inasmuch as there is an option
of posting a surety bond from a reputable bonding company duly accredited by the NLRC , which,
unfortunately, petitioners failed to do. The C A noted that the lack of assistance of a counsel is not an excuse
because petitioners ought to know the Rules in filing an appeal; moreover, ignorance of the law does not
excuse them from compliance therewith.

Hence, this present Petition.

Issue

Petitioners insist that the C A erred in affirming the NLRC 's dismissal of their appeal for the following
reasons: first, there was substantial compliance with the Rules on perfection of appeal; second, the
surrounding facts and circumstances constitute meritorious grounds to reduce the appeal bond; third, they
exhibited willingness and good faith by posting a partial bond during the reglementary period; and lastly, a
liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving
controversies on the merits. Petitioners claim that there is a necessity to resolve the merits of their appeal
since the Labor Arbiter's Decision declaring Pajaron and C arbonilla illegally terminated from emp loyment
was not based on substantial evidence.

Our Ruling

The Petition has no merit.

The C ourt has time and again held that "[t]he right to appeal is neither a natural right nor is it a component
of due process. It is a mere statutory privilege, and may be exercised only in the manner and in accordance
with the provisions of the law." 19 "The party who seeks to avail of the same must comply with the
requirements of the rules. Failing to do so the right to appeal is lost." 20

Article 223 of the Labor C ode, which sets forth the rules on appeal from the Labor Arbiter's monetary award,
provides:ChanRobl esVi rt ua
l awlibrary

ART. 223. Appeal. - Decisions, awards, or orders of the Labor Arbiter are final and executory unless
appealed to the C ommission by any or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: chanRobl esvi rt ua
lL
awl ibrary

(a) If there is prima facie evidence of abuse of discretion on the pa rt of the Labor Arbiter; chanrobl eslaw

(b) If the decision, order or award was secured through fraud or coercion, including graft and corruption; chanrobl esl aw

(c) If made purely on questions of law; and

(d) If serious errors in the finding of facts are raised which would cause grave or irreparable damage or
injury to the appellant.

In case of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding compa ny duly
accredited by the Commission in the amount equivalent to the monetary award in the judgment
appealed from.

x x x x. (Emphasis supplied)
Meanwhile, Sections 4 and 6 of Rule VI of the 2005 Revised Rules of Procedure of the NLRC , which were in
effect when petitioners filed their appeal, provide:ChanRobl esVi rt u
al a
w libra
ry

Section 4. Requisites for perfection of appeal. - (a) The Appeal shall be: 1) filed within the reglementary
period as provided in Section 1 of this Rule; 2) verified by the appellant himself in accordance with Section
4, Rule 7 of the Rules of C ourt, as amended; 3) in the form of a memorandum of appeal which shall state
the grounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of
the date the appellant received the appealed decision, resolution or order; 4) in three (3) legibly typewritten
or printed copies; and 5) accompanied by i) proof of payment of the required appeal fee; ii) posting of a
cash or surety bond as provided in Section 6 o f this Rule; iii) a certificate of non-forum shopping; and iv)
proof of service upon the other parties.

b) A mere notice of appeal without complying with the other requisites aforestated shall not stop the running
of the period for perfecting an appeal.

x xx x

Section 6. Bond. - In case the decision of the Labor Arbiter or the Regional Director involves a monetary
award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be
in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of
damages and attorney's fees.

x xx x

No motion to reduce bond shall be entertained except on meritorious grounds, and upon the posting of a
bond in a reasonable amount. The mere filing of a motion to reduce bond without complying with the
requisites in the preceding paragraphs shall not stop the running of the period to perfect an appeal.
"It is clear from both the Labor C ode and the NLRC Rules of Procedure that there is legislative and
administrative intent to strictly apply the appeal bond requirement, and the C ourt should give utmost regard
to this intention."21 The posting of cash or surety bond is therefore mandatory and jurisdictional; failure to
comply with this requirement renders the decision of the Labor Arbiter final and executory. 22This
indispensable requisite for the perfection of an appeal "is to assure the workers that if they finally prevail in
the case[,] the monetary award will be given to them upon the dismissal of the employ er's appeal [and] is
further meant to discourage employers from using the appeal to delay or evade payment of their obligations
to the employees."23
However, the C ourt, in special and justified circumstances, has relaxed the requirement of posting a
supersedeas bond for the perfection of an appeal on technical considerations to give way to equity and
justice.24 Thus, under Section 6 of Rule VI of the 2005 NLRC Revised Rules of Procedure, the reduction of
the appeal bond is allowed, subject to the following conditions: (1) the motion to reduce the bond shall be
based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by
the appellant. C ompliance with these two conditions will stop the running of the period to perf ect an appeal.

In the case at bar, petitioners filed a Motion to Reduce Bond together with their Notice of Appeal and posted
a cash bond ofP15,000.00 within the 10-day reglementary period to appeal. The C A correctly found that the
NLRC did not commit grave abuse of discretion in denying petitioners' motion to reduce bond as such motion
was not predicated on meritorious and reasonable grounds and the amount tendered is not reasonable in
relation to the award. The NLRC correctly held that the supposed ground cited in the motion is not well-
taken tor there was no evidence to prove Zeñarosa's claim that the payment of the full amount of the award
would greatly affect his business due to financial setbacks. Besides, "the law does not require outright
payment of the total monetary award; [the appellant has the option to post either a cash or surety bond. In
the latter case, appellant must pay only a] moderate and reasonable sum for the premium to ensure that
the award will be eventually paid should the appeal fail."25 Moreover, the absence of counsel is not a valid
excuse for non-compliance with the rules. As aptly observed by the C A, Zeñarosa cannot feign ignorance of
the law considering that he was able to post a partial bond and ask for a reduction of the appeal bond. At
any rate, petitioners did not advance any reason for the alleged absence of counsel except that they were
simply abandoned. Neither did petitioners explain why they failed to procure a new counsel to properly
assist them in filing the appeal. Moreover, the partial bond posted was not reasonable. In the case
of McBurnie v. Ganzon,26 the C ourt has set a provisional percentage of 10% of the monetary award
(exclusive of damages and attorney's fees) as reasonable amount of bond that an appellant should post
pending resolution by the NLRC of a motion for a bond's reduction. Only after the posting of this required
percentage shall an appellant's period to perfect an appeal be suspended. Applying this parameter, the
P15,000.00 partial bond posted by petitioners is not considered reasonable in relation to the total monetary
award of P197,936.27.

Petitioners, nevertheless, rely on a number of cases wherein the C ourt allowed the relaxation of the
stringent requirement of the rule. In Nicol v. Footjoy Industrial Corporation,27 the C ourt reversed the NLRC 's
denial of the appellant's motion to reduce bond upon finding adequate evidence to justify the reduction.
In Rada v. National Labor Relations Commission 28 and Blancaflor v. National Labor Relations
Commission,29 the NLRC allowed the late payment of the bond because the appealed Decision of the Labor
Arbiter did not state the exact amount to be awarded, hence there could be no basis for determining the
amount of the bond to be filed. It was only after the amount of superseades bond was specified by the
NLRC that the appellants filed the bond. In YBL (Your Bus Line) v. National Labor Relations
Commission,30 the C ourt was propelled to relax the requirements relating to appeal bonds as there were
valid issues raised in the appeal. In Dr. Postigo v. Philippine Tuberculosis Society, Inc.,31 the respondent
therein deferred the posting of the bond and instead filed a motion to reduce bond on the ground that the
Labor Arbiter's computation of the award is erroneous which circumstance justified the relaxation of the
appeal bond requirement. In all of these cases, though, there were meritorious grounds that warranted the
reduction of the appeal bond, which, as discussed, is lacking in the case at bench.

Petitioners, furthermore, claim that the NLRC 's outright dismissal of their appeal was harsh and oppressive
since they should still be given opportunity to complete the required bond upon the filing of their motion for
reconsideration. Thus, they insist that their immediate posting of the deficiency when they filed a motion for
reconsideration constituted substantial compliance with the Rules.

The contention is untenable.

The NLRC exercises full discretion in resolving a motion for the reduction of bond 32 in accordance with the
standards of meritorious grounds and reasonable amount. The "reduction of the bond is not a matter of right
on the part of the movant [but] lies within the sound discretion of the NLRC x x x." 33
In order to give full effect to the provisions on motion to reduce bond, the appellant must be allowed to wait
for the ruling of the NLRC on the motion even beyond the 10-day period to perfect an appeal. If the NLRC
grants the motion and rules that there is indeed meritorious ground and that the amount of the b ond posted
is reasonable, then the appeal is perfected. If the NLRC denies the motion, the appellant may still file a
motion tor reconsideration as provided under Section 15, Rule VII of the Rules. If the NLRC grants the
motion for reconsideration and rules that there is indeed meritorious ground and that the amount of the
bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion. then the decision of
the Labor Arbiter becomes final and executory. 34 chanrobl esvi rt ua
l lawli brary
The rulings in Garcia v. KJ Commercial 35 and Mendoza v. HMS Credit Corporation 36 cannot dissuade this
C ourt from relaxing the rules. In Garcia, the NLRC initially denied the appeal of respondent therein due to
the absence of meritorious grounds in its motion to reduce bond and unreasonable amount of partial bond
posted. However, upon the posting of the full amount of bond when respondent filed its motion for
reconsideration, the NLRC granted the motion for reconsideration on the ground of substantial complian ce
with the rules after considering the merits of the appeal. Likewise, in Mendoza, the NLRC initially denied
respondents' Motion to Reduce Appeal Bond with a partial bond. Respondents thereafter promptly complied
with the NLRC 's directive to post the differential amount between the judgment award and the sum
previously tendered by them. The C ourt held that the appeal was filed timely on account of respondents'
substantial compliance with the requirements on appeal bond. In both Garcia and Mendoza, however, the
NLRC took into consideration the substantial merits of the appealed cases in giving due course to the
appeals. It, in fact, reversed the Labor Arbiters' rulings in both cases. In contrast, petitioners in the case at
bench have no meritorious appeal as would convince this C ourt to liberally apply the rule.

Stated otherwise, petitioners' case will still fail on its merits even if we are to allow their appeal to be given
due course. After scrupulously examining the contrasting positions and arguments of the parties, we find
that the Labor Arbiter's Decision declaring Pajaron and C arbonilla illegally dismissed was supported by
substantial evidence. While petitioners vehemently argue that Pajaron and C arbonilla abandoned their work,
the records are devoid of evidence to show that there was intent on their part to forego their employment.
In fact, petitioners adamantly admitted that they refused to rehire Pajaron and C arbonilla despite persistent
requests to admit them to work. Hence, petitioners essentially admitted the fact of dismissal. However,
except tor their empty and general allegations that the dismissal was for just causes, petitioners did not
proffer any evidence to support their claim of misconduct or misbehavior on the part of Pajaron and
C arbonilla. "In termination cases, the burden of proof rests on the employer to show that the dismissal is for
a Just cause."37 For lack of any clear, valid, and just cause in terminating Pajaron and C arbonilla's
employment, petitioners are indubitably guilty of illegal dismissal.

All told, we find no error on the part of the C A in ruling that the NLRC did not gravely abused its discretion in
dismissing petitioners' appeal for non-perfection due to non compliance with the requisites of filing a motion
to reduce bond.
[T]he merit of [petitioners'] case does not warrant the liberal application of the x x x rules x x x. While it is
true that litigation is not a game of technicalities and that rules of procedure shall not be strictly enforced at
the cost of substantial justice, it must be emphasized that procedural rules should not likewise be belittled
or dismissed simply because their non-observance might result in prejudice to a party's substantial rights.
Like all rules, they are required to be followed, except only for the most persuasive of reasons. 38 chanrobl esvi rtuall a
wl ibra
ry

WHEREFORE, the Petition is DENIED. The May 8, 2013 Decision of the C ourt of Appeals in C A -G.R SP No.
121956 is AFFIRMED.

SO ORDERED. chanrobl esvi rt ual lawli brary

Sereno, C.J., (Chairperson), Leonardo-De Castro, Perlas-Bernabe, and Caguioa, JJ., concur. cral aw l a
w libra
ry

THIRD DIVISION

June 1, 2017

G.R. No. 214301

RAMON MANUEL T. JAVINES, Petitioner

vs.
XLIBRIS a.k.a. AUTHOR SOLUTIONS, INC., JOSEPH STEINBACH, and STELLA MARS
OUANO,, Respondents

DECISION

TIJAM, J.:
Challenged in this Petition for Review 1 under Rule 45 are the Decision 2 dated June 26, 2014 and
Resolution 3dated August 28, 2014 of the Court of Appeals 4 (CA) in CA G.R. SP No. 08126, which
affirmed the decision of the National Labor Relations Commission (NLRC) of Cebu City holding that
petitioner Ramon T. Javines (Javines) had been dismissed with just cause but lacked compliance
with procedural due process. For lack of procedural due process, the CA modified the NLRC's award
of nominal damages from PhP l0,000 to PhP l,000 .

The facts of the instant case are simple and undisputed:

Javines was hired by respondent Xlibris as Operations Manager on September 1, 2011.

Approximately 10 months after, or on July 27, 2012, J a vines was terminated for falsifying/tampering
three meal receipts.

The falsification was discovered on July 5, 2012 when Javines submitted the meal receipts for
reimbursement to the finance department. Prompted by said discovery, the company's Finance
Officer prepared an incident report on the same day.

Consequently, a Notice to Explain was issued on July 6, 2012 to Javines for alleged violation of
Sections 9.5 and 9.6 of the Employee's Code of Conduct and charging him with acts constituting
dishonesty. 5 Xlibris obtained certified copies of the meal receipts from the fast food chains
concerned and Javines was notified that the following receipts were tampered:

a. Franckfort, Inc. (KFC) O.R. No. 3452 dated 3/31/12 from PhP 540.00 to PhP 5,4 50.00;

b. McDonald's O.R. No. 027900 from PhP 107.00 to PhP 2,207.00; and

c. McDonald's O.R. No. 027822 dated 4/3/12 from PhP 164.00 to PhP 3,164.00.

On July 10, 2012, Javines submitted his written explanation, denying having tampered the receipts.
He explained that as Operations Manager, he is responsible for securing reimbursement for
expenses incurred by the supervisors under him. He further explained that it is the supervisors who
subinit the receipts to him and for which, he prepares a reimbursement re quest. Once the
reimbursement is made, Javines distributes the cash to the supervisor concerned. J a vines argued
that while he prepares the request for reimbursement, he has no knowledge or part in the tampered
receipts. 6

On July 13, 2012, an administrative hearing was held. Javines failed to explain why and how the
incident transpired. Instead, Javines requested for further investigation since, at that time, h e
allegedly could not recall who submitted the receipts to him. 7

Consequently, on the same day, notices to explain were sent to the supervisors under Javines. In
their written accounts, the supervisors· denied participation in the tampered receipts. 8

On July 27, 2012, Xlibris terminated Javines' employment through an "end of employment notice." 9

Javines then filed a complaint 10 for illegal dismissal. The complaint was, however, dismissed by the
Labor Arbiter who found that J a vines' dismissal was for just cause and with due process.

On appeal 11 , the NLRC modified the decision of the Labor Arbiter, finding that, while Javines was
dismissed for just cause, he was not afforded procedural due process. In particular, the NLRC noted
that after the administrative hearing, notices to explain were immediately sent to the supervisors who
denied participation in the falsification of the receipts. The NLRC noticed that no other hearing was
called thereafter so as to afford Javines the opportunity to confront the witnesses against him before
he was dismissed. As such, the NLRC awarded nominal damages in the amount of PhPl 0,000 in
Javines' favor. 12

Javines failed to move for reconsideration 13 of the NLRC's decision while Xlibris' motion for partial
reconsideration was denied. Thus, only Xlibris elevated the case to the CA on certiorari on the sole
issue that the NLRC gravely abused its discretion in holding that it failed to comply with the
requirements of procedural due process. 14

By way of comment 15 , Javines reiterated his position that he was not afforded procedural due
process because his request for further investigation for purposes of identifying the source of the
questioned meal receipts was never granted. Additionally, Javines questioned the cause of his
dismissal on the argument that Xlibris failed to prove by substantial evidence the misconduct
imputed against him. 16

The Ruling of the CA

The CA partially granted the petition. 17 it observed that while Javines was given a chance to explain
his side and adduce evidence in his defense through his written explanation and through the
administrative hearing, he was nevertheless not given the opportunity to rebut the additional pieces
of evidence secured by Xlibris thereafter and considered by Xlibris in arriving at the decision to
terminate him.

However, the CA reduced the award of nominal damages from PhPl0,000 to PhPl,000 considering
that the altered meal receipts show a discrepancy of PhPl0,010.

The CA thus disposed:

IN LIGHT OF ALL THE FOREGOING, the instant petition for certiorari is PARTIALLY GRANTED.
The Decision dated July 16, 2013 arid Resolution dated September 30, 2013 of the NLRC of Cebu
City in NLRC Case No. YAC-05-000300-2013 (RAB Case No. VII-08-1185-2012), are MODIFIED, in
that the NLRC's award of nominal damages in favor of Ramon Manuel T. Javines is REDUCED to
PhP1,000.00.

SO ORDERED. 18

Only Javines moved for reconsideration 19 of the CA Decision, arguing that he was not dismissed for
just cause. Xlibris opposed 20 Javines' motion for reconsideration on the ground that the issue as to
whether or not Javines was dismissed for cause was never raised in its petition for certiorari filed
before the CA nor discussed in the CA Decision. Xlibris further argued that the Labor Arbiter and the
NLRC unanimously found that Javines was dismissed for just cause, which findings Javines failed to
challenge by interposing a timely appeal therefrom.

The CA denied 21 Javines' motion for reconsideration, prompting Javines to file the instant Petition.

The Issue

The lone issue to be resolved is whether the CA erred in affirming the NLRC'S finding that Javines
was dismissed for just cause.
 The Ruling of this Court

The petition lacks merit.

The Labor Arbiter and the NLRC uniformly held that Javines' employment was te rminated for just
cause under Article 297 (formerly Article 282) of the Labor Code. It is undisputed that from this
1âwphi1

unanimous finding, Javines failed to move for reconsideration nor challenged said.ruling before the
CA. Consequently, the NLRC decision finding Javines to have been dismissed for just cause.
became final. For failure to file the requisite petition before the CA, the NLRC decision had attained
finality and had been placed beyond the appellate court's power of review. Although appea l is an
essential part of judicial process, the right thereto is not a natural right or a part of due process but is
merely a statutory privilege. Settled are the rules that a decision becomes final as against a party
who does not appeal the same 22 and an appellee who has not himself appealed cannot obtain from
the appellate court any affirmative relief other than those granted in the decision of the court
below. 23 Hence, the finding that Javines was dismissed for just cause must be upheld.

Javines' insistence that the petition for certiorari filed by Xlibris throws open the entire case for
review such that the issue of whether or not he was dismissed for just cause ought to have been
addressed by the CA is entirely misplaced.

While it is true that the appellate court is given broad discretionary power to waive the l ack of proper
assignment of errors and to consider errors not assigned 24 , it has authority to do so in the following
instances: (a) when the question affects jurisdiction over the subject matter; (b) matters that are
evidently plain or clerical errors within contemplation of law; (c) matters whose consideration is
necessary in arriving at a just decision and complete resolution of the case, or in serving the
interests of justice or avoiding dispensing piecemeal justice; (d) matters raised in the trial court and
are of record having some bearing on the issue submitted that the parties failed to raise or that the
lower court ignored; (e) matters closely related to an error assigned; and (f) matters upon which the
determination of a question properly assigned is dependent. 25

None of the aforesaid instances exists in the instant case. Thus, the CA. cannot be faulted for no
longer discussing the issue of whether indeed there exists just cause for his dismissal.

Instead, in the petition for certiorari filed before the CA, Xlibris only questioned the award of nominal
damages for failure to comply with procedural due process. Emphatically, neither Xlibris nor Javines
further questioned the CA' s award on this point. As such, the issue as to whether the requirements
of procedural due process to constitute a valid dismissal wer e complied with has been resolved with
finality. In any event, such involves a question of fact which the Court does not allow in a petition
filed under Rule 45. 26 It has been consistently held that the jurisdiction of the Court in cases brought
before it from the CA via Rule 45 is generally limited to reviewing errors of law and does not extend
to a re-evaluation of the sufficiency of evidence upon which the courts a quo had based its
determination. 27 What is more, findings of fact of labor tribunals when affirmed by the CA bind this
Court. We find no compelling reason in this case to depart from the foregoing settled rules.

WHEREFORE, the petition is DENIED. The Decision dated June 26, 2014 and Resolution dated
August 28, 2014 of the Court of Appeals finding petitioner Ramon Manuel T. Javines to have been
dismissed for just cause and awarding nominal damages in the amount of PhPl,000 in his favor
are AFFIRMED in toto.

SO ORDERED.
NOEL GIMENEZ TIJAM
Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate Justice
Chairperson

LUCAS P. BERSAMIN BIENVENIDO L. REYES

Associate Justice Associate Justice

FRANCIS H. JARDELEZA
Associate Justice

PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari[1] are the Decision[2 ] dated
February 11, 2010 and the Resolution[3 ] dated May 27, 2010 of the Court of
Appeals (CA) in CA-G.R. SP No. 108036, which affirmed the
Decision[4 ] dated March 28, 2008 and the Resolution[5]dated November 28,
2008 of the National Labor Relations Commission (NLRC) in NLRC NCR
CA No. 049079-06 / NLRC NCR OFW (M) 04-12-03296-00, dismissing
petitioner Benedict N. Romana's (petitioner) claim for disability benefits.
The Facts
Petitioner was employed[6 ] by respondents Magsaysay Maritime
Corporation, Eduardo Manese and/or Princess Cruise Lines, Ltd.
(respondents) as a Mechanical Fitter and boarded the vessel M/V Golden
Princess[7] on August 7, 2003.[8] He claimed that while he and fellow
shipmates Alexander Mapa and Rogelio Acdal were walking along the ship
alley on April 20, 2004, the metal ceiling fell and wounded his head. [9] A
few days thereafter, he experienced persisting headache and blurring of
vision and consulted the ship's doctor who prescribed him medicines. [10] As
his condition did not improve, he was referred to a specialist in Barbados,
West Indies, and was found to have a tumor (or hemangioblastoma) at the
left side of his brain, for which he underwent left posterior fossa
craniectomy.[11]
He was repatriated on May 23, 2004 and the company-designated
physician, in a medical report [12] dated May 24, 2004, issued a finding that
petitioner's illness is not work-related[13] given that the same is an
"abnormal growth of tissues in the brain's blood vessels." [1 4 ] He was later
cleared and discharged on May 27, 2004. [15] No further consultations were
made. On October 12, 2004, petitioner consulted an independent physician,
who on the other hand, declared his illness to be work-related and gave him
a Grade 1 impediment after finding him unfit to resume work as a seaman
and incapable of landing a gainful employment because of his medical
background.[16] As a result, petitioner filed a complaint, [17] seeking payment
of his disability benefits, illness allowance, reimbursement of medical
expenses, damages, and attorney's fees,[1 8] docketed as NLRC NCR OFW
Case No. (M) 04-12-03296-00.
For their part, respondents denied petitioner's claim, contending that brain
tumor is not listed as an occupational disease under Section 32-A of the
2000 Philippine Overseas Employment Administration-Standard
Employment Contract (2000 POEA-SEC), and that the company-
designated physician declared said illness to be not work-related, hence,
not compensable.[19]
The Labor Arbiter's Ruling
In a Decision[2 0] dated March 30, 2006, the Labor Arbiter (LA) dismissed
the complaint, finding that petitioner failed to establish that his illness is
work-related.[21] In so ruling, the LA gave more credence to the findings of
the company-designated physician that his employment did not increase
the risk of contracting his illness, nor did his working conditions contribute
to his illness.[2 2 ]
Thus, petitioner appealed[23] the LA ruling, contending that Section 20 (B)
(4)[2 4 ] of the 2000 POEA-SEC expressly provides that his illness shall be
disputably presumed to be work-related, and that it is compensable since
the nature of his work constantly exposed him to harmful chemicals,
extreme changes of temperature in the engine room, as well as to harsh sea
weather conditions.[25] He likewise maintained that his injury on the head
after having been hit by a falling metal ceiling on board the vessel may have
contributed to his brain tumor.[26]
The NLRC Ruling
In a Decision[27] dated March 28, 2008, the NLRC affirmed the LA ruling,
holding that there was no evidence to support petitioner's claim that the
nature of his work exposed him to risks of contracting a brain tumor. [28]
Petitioner moved for reconsideration,[29] but the same was denied in a
Resolution[3 0] dated November 28, 2008. Hence, petitioner elevated his
case to the CA via a petition for certiorari.[31]
The CA Ruling
In a Decision[32] dated February 11, 2010, the CA dismissed
the certiorari petition, finding no grave abuse of discretion on the part of
the NLRC. It debunked petitioner's claims that he was hit on the head by a
falling metal while on board the vessel, and that he was exposed to different
chemicals that aggravated his condition, for lack of substantiation. [33] The
CA likewise did not give credence to the independent physician's finding
that petitioner's illness is work-related, noting that said physician is a
specialist in internal medicine and not in diseases of the brain. [34] Besides,
petitioner failed to observe the conflict resolution procedure on the
appointment of a third doctor as provided under the 2000 POEA-SEC.[35]
Aggrieved, petitioner filed a motion for reconsideration,[36] which was,
however, denied in a Resolution[37] dated May 27, 2010; hence this petition.
The Issue Before the Court
The main issue in this case is whether or not petitioner is entitled to
disability benefits pursuant to the 2000 POEA-SEC.
The Court's Ruling
The petition is denied.
The Court affirms the CA's ruling that the NLRC did not gravely abuse its
discretion as it, in fact, correctly dismissed petitioner's claim for disability
benefits. Nonetheless, the Court finds it opportune to elucidate on certain
principles relevant to the matter of seafarers' compensation.
Under the 2000 POEA-SEC, "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" is deemed to be a "work-
related illness."[3 8] On the other hand, Section 20 (B) (4) of the 2000
POEA-SEC declares that "[t]hose illnesses not listed in Section 32 of this
Contract are disputably presumed as work related." The legal presumption
of work-relatedness was borne out from the fact that the said list cannot
account for all known and unknown illnesses/diseases that may be
associated with, caused or aggravated by such working conditions, and
that the presumption is made in the law to signify that the non-
inclusion in the list of occupational diseases does not translate to
an absolute exclusion from disability benefits.[39] Given the legal
presumption in favor of the seafarer, he may rely on and invoke such legal
presumption to establish a fact in issue. "The effect of a presumption upon
the burden of proof is to create the need of presenting evidence to overcome
the prima facie case created, thereby which, if no contrary proof is offered,
will prevail."[4 0]
Thus, in Racelis v. United Philippine Lines, Inc.[4 1] and David v. OSG
Shipmanagement Manila, Inc.,[4 2] the Court held that the legal
presumption of work-relatedness of a non-listed illness should
be overturned only when the employer's refutation is found to be
supported by substantial evidence, which, as traditionally defined, is
"such relevant evidence as a reasonable mind might accept as sufficient to
support a conclusion."[43]
Nonetheless, the presumption provided under Section 20 (B) (4) is only
limited to the "work-relatedness" of an illness. It does not cover and
extend to compensability. In this sense, there exists a fine line
between the work-relatedness of an illness and the matter of
compensability. The former concept merely relates to the assumption
that the seafarer's illness, albeit not listed as an occupational disease, may
have been contracted during and in connection with one's work, whereas
compensability pertains to the entitlement to receive compensation and
benefits upon a showing that his work conditions caused or at least
increased the risk of contracting the disease. This can be gathered from
Section 32-A of the 2000 POEA-SEC which already qualifies the listed
disease as an "occupational disease" (in other words, a "work-related
disease"), but nevertheless, mentions certain conditions for said disease to
be compensable:
SECTION 32-A OCCUPATIONAL DISEASES
For an occupational disease and the resulting disability or death
to be compensable, all of the following conditions must be
satisfied:

1. The seafarer's work must involve the risks described herein;

2. The disease was contracted as a result of the seafarer's exposure to

the described risks;
 3. The disease was contracted within a period of exposure and under
such other factors necessary to contract it;

4. There was no notorious negligence on the part of the seafarer.

(Emphasis and underscoring supplied)

As differentiated from the matter of work-relatedness, no legal

presumption of compensability is accorded in favor of the seafarer. As such,
he bears the burden of proving that these conditions are met.
Thus, in Tagle v. Anglo-Eastern Crew Management, Phils., Inc.,[4 4] the
Court ruled that while work-relatedness is indeed presumed, "the legal
presumption in Section 20 (B) (4) of the [20001 PQEA-SEC
should be read together with the requirements specified by
Section 32-A of the same contract."[45]
Similarly, in Licayan v. Seacrest Maritime Management, Inc.,[4 6] it was
explicated that the disputable presumption does not signify an automatic
grant of compensation and/or benefits claim, and that while the law
disputably presumes an illness not found in Section 32-A to be also work-
related, the seafarer/claimant nonetheless is burdened to present
substantial evidence that his work conditions caused or at least increased
the risk of contracting the disease and only a reasonable proof of work-
connection, not direct causal relation is requiredto establish its
compensability.[47] The proof of work conditions referred thereto
effectively equates with the conditions for compensability imposed under
Section 32-A of the 2000 POEA-SEC.
In Jebsen Maritime, Inc. v. Ravena,[4 8] it was likewise elucidated that there
is a need to satisfactorily show the four (4) conditions under Section 32-A
of the 2000 POEA-SEC in order for the disputably presumed disease
resulting in disability to be compensable. [4 9]
To note, while Section 32-A of the 2000 POEA-SEC refers to conditions for
compensability of an occupational disease and the resulting disability or
death, it should be pointed out that the conditions stated therein should
also apply to non-listed illnesses given that: (a) the legal presumption
under Section 20 (B) (4) accorded to the latter is limited only to "work-
relatedness"; and (b) for its compensability, a reasonable connection
between the nature of work on board the vessel and the illness contracted
or aggravated must be shown.[50]
The absurdity of not requiring the seafarer to prove compliance with
compensability for non-listed illnesses, when proof of compliance is
required for listed illnesses, was pointed out by the Court in Casomo v.
Career Philippines Shipmanagement, Inc.,[51] to wit:
A quick perusal of Section 32 of the [2000 POEA-SEC], in particular the
Schedule of Disability or Impediment for Injuries Suffered and Diseases
including Occupational Diseases or Illnesses Contracted, and the List of
Occupational Diseases, easily reveals the serious and grave nature of the
injuries, diseases and/or illnesses contemplated therein, which are clearly
specified and identified.
We are hard pressed to adhere to Casomo's position as it would
result in a preposterous situation where a seafarer, claiming an
illness not listed under Section 32 of the [2000 POEA-SEC]
which is then disputably presumed as work-related and is
ostensibly not of a serious or grave nature, need not satisfy the
conditions mentioned in Section 32-A of the [2000 POEA-SEC].
In stark contrast, a seafarer suffering from an occupational
disease would still have to satisfy four (4) conditions before his
or her disease may be compensable.
xxxx
Government Service Insurance System (GSIS) v. Cuntapay [576 Phil. 482,
492 (2008)] iterates that the burden of proving the causal link between a
claimant's work and the ailment suffered rests on a claimant's shoulder:
The claimant must show, at least, by substantial evidence that the
development of the disease was brought about largely by the conditions
present in the nature of the job. What the law requires is a reasonable work
connection and not a direct causal relation. It is enough that the hypothesis
on which the workmen's claim is based is probable. Probability, not the
ultimate degree of certainty, is the test of proof in compensation
proceedings. And probability must be reasonable; hence it should, at least,
be anchored on credible information. Moreover, a mere possibility will not
suffice; a claim will fail if there is only a possibility that the employment
caused the disease.[52] (Emphasis supplied)
Therefore, it is apparent that for both listed occupational disease and a
non-listed illness and their resulting injury to be compensable, the seafarer
must sufficiently show by substantial evidence compliance with the
conditions for compensability.
At this juncture, it is significant to point out that the delineation between
work-relatedness and compensability in relation to the legal presumption
under Section 20 (B) (4) has been often overlooked in our
jurisprudence. This gave rise to the confusion that despite the
presumption of work-relatedness already accorded by law,
certain cases confound that the seafarer still has the burden of
proof to show that his illness, as well as the resulting disability is
work-related.
Among these cases is Quizora v. Denholm Crew Management (Phils.),
Inc.,[53 ] wherein the Court failed to discern that the presumption of work-
relatedness did not extend or equate to presumption of compensability,
and concomitantly, that the burden of proof required from the seafarer was
to establish its compensability not the work-relatedness of the illness:
At any rate, granting that the provision of the 2000 POEA-SEC apply, the
disputable presumption provision in Section 20 (B) does not allow him to
just sit down and wait for respondent company to present evidence to
overcome the disputable presumption of work-relatedness of the illness.
Contrary to his position, he still has to substantiate his claim in order to be
entitled to disability compensation. He has to prove that the illness he
suffered was work-related and that it must have existed during
the term of his contract. He cannot simply argue that the burden of
proof belongs to the respondent company.[54] (Emphasis and underscoring
supplied)
Later, in Magsaysay Maritime Services v. Laurel,[55] Section 20 (B) (4)
(which pertains to a presumption of work-relatedness) was
mischaracterized as a presumption of compensability which stands absent
contrary proof:
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 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 seafarer's employer/s, this disputable
presumption stands.[56](Emphasis and underscoring supplied)
Similarly, in Dohle-Philman Manning Agency, Inc. v. Gazzingan,[57] a
"presumption of compensability" was declared for illnesses not listed as an
occupational disease:
More importantly, the 2000 POEA-SEC has created a presumption of
compensability for those illnesses which are not listed as an
occupational disease. Section 20 (B), paragraph (4) states that "those
illnesses not listed in Section 32 of this Contract are disputably presumed
as work-related." Concomitant with this presumption is the burden placed
upon the claimant to present substantial evidence that his work conditions
caused or at least increased the risk of contracting the disease and only a
reasonable proof of work-connection, not direct causal relation is required
to establish compensability of illnesses not included in the list of
occupational diseases.[58] (Emphasis supplied)
To address this apparent confusion, the Court thus clarifies that there lies a
technical demarcation between work-relatedness and compensability
relative to how these concepts operate in the realm of disability
compensation. As discussed, work-relatedness of an illness is presumed;
hence, the seafarer does not bear the initial burden of proving the same.
Rather, it is the employer who bears the burden of disputing this
presumption. If the employer successfully proves that the illness suffered
by the seafarer was contracted outside of his work (meaning, the illness is
pre-existing), or that although the illness is pre-existing, none of the
conditions of his work affected the risk of contracting or aggravating such
illness, then there is no need to go into the matter of whether or not said
illness is compensable. As the name itself implies, work-relatedness means
that the seafarer's illness has a possible connection to one's work, and thus,
allows the seafarer to claim disability benefits therefor, albeit the same is
not listed as an occupational disease.
The established work-relatedness of an illness does not, however, mean
that the resulting disability is automatically compensable. As also
discussed, the seafarer, while not needing to prove the work-relatedness of
his illness, bears the burden of proving compliance with the conditions of
compensability under Section 32 (A) of the 2000 POEA-SEC. Failure to do
so will result in the dismissal of his claim.
Notably, it must be pointed out that the seafarer will, in all
instances, have to prove compliance with the conditions for
compensability, whether or not the work-relatedness of his
illness is disputed by the employer:
On the one hand, when an employer attempts to discharge the burden of
disputing the presumption of work-relatedness (i.e., by either claiming that
the illness is pre-existing or, even if pre-existing, that the risk of contracting
or aggravating the same has nothing do with his work), the burden of
evidence now shifts to the seafarer to prove otherwise (i.e., that the illness
was not pre-existing, or even if pre-existing, that his work affected the risk
of contracting or aggravating the illness). In so doing, the
seafarer effectively discharges his own burden of proving compliance with
the first three (3) conditions of compensability under Section 32-A of the
2000 POEA-SEC, i.e., that (1) the seafarer's work must involve the risks
described herein; (2) the disease was contracted as a result of the seafarer's
exposure to the described risks; and (3) the disease was contracted within a
period of exposure and under such other factors necessary to contract it.
Thus, when the presumption of work-relatedness is contested by the
employer, the factors which the seafarer needs to prove to rebut the
employer's contestation would necessarily overlap with some of the
conditions which the seafarer needs to prove to establish the
compensability of his illness and the resulting disability. In this regard,
the seafarer, therefore, addresses the refutation of the employer
against the work-relatedness of his illness and, at the same time,
discharges his burden of proving compliance with certain
conditions of compensability.
On the other hand, when an employer does not attempt to discharge the
burden of disputing the presumption of work-relatedness, the seafarer
must still discharge his own burden of proving compliance with the
conditions of compensability, which does not only include the three (3)
conditions above-mentioned, but also, the distinct fourth condition, i.e.,
that there was no notorious negligence on the part of the seafarer.
Thereafter, the burden of evidence shifts to the employer to now disprove
the veracity of the information presented by the seafarer. The employer
may also raise any other affirmative defense which may preclude
compensation, such as concealment under Section 20 (E) [59] of the 2000
POEA-SEC or failure to comply with the third-doctor referral provision
under Section 20 (B) (3)[6 0] of the same Contract.
Subsequently, if the work-relatedness of the seafarer's illness is not
successfully disputed by the employer, and the seafarer is then able to
establish compliance with the conditions of compensability, the matter now
shifts to a determination of the nature and, in turn, the amount of disability
benefits to be paid to the seafarer.
In this case, petitioner's illness, hemangioblastoma or brain tumor, is a
benign tumor, slow-growing and well-defined. Medical studies show that
brain tumors arise from cells in the linings of blood vessels. The most
common symptoms include headache, nausea and vomiting, gait
disturbances, and poor coordination of the limbs. [61] Its exact cause is
unknown and no risk factor accounting for the majority of brain tumors has
been identified. However, exposure to ionizing radiation increases the risk
of developing brain tumor.[62]
As records show, the company-designated physician, after due assessment
of petitioner's condition, found that his illness was caused by an abnormal
growth of tissue in the brain's blood vessels (brain tumor) and
therefore not work-related. To refute the same, petitioner argued that he
accidentally injured his head when a metal ceiling fell on his head that
caused lesion and bleeding.[6 3] However, as correctly pointed out by the CA,
no evidence was presented to substantiate the said incident. [64]
For another, petitioner asserted that the nature of his work may have
contributed to his illness having been previously employed on board the
same vessel under two (2) contracts, and that as a fitter, he was constantly
exposed to inhalation of and direct contact to harmful chemicals,
formaldehyde, hydrocarbons, fumes, and other deleterious emissions,
changes of temperature of extreme hot and freezing colds at the engine
room and deck areas and as the vessel crossed ocean
boundaries.[65] However, there is no showing that the foregoing work
conditions increased the risk of contracting his illness. While petitioner
pointed out that brain tumors are linked to a genetic syndrome called Von
Hippel-Lindau disease (the risk factors of which include radiation or
chemical exposure),[66] and in such regard, had been recommended by the
Neurosurgeon specialist to undergo screening for said illness,[67 ] petitioner
failed to establish that he underwent such screening. It is therefore
speculative to conclude that his exposure to "benzene, formaldehyde,
hydrocarbons, chemicals, crude oil, gasoline, lubricants and other harmful
cleaning solutions"[6 8] may have caused, aggravated, or contributed to his
brain tumor. Probability, not the ultimate degree of certainty, is the test of
proof in disability compensation proceedings. Nevertheless, probability
must be reasonable; hence it should, at least, be anchored
on credible information. A mere possibility will not suffice, and
a claim will fail if there is only a possibility that the employment
caused the disease.[69]
In fine, petitioner's claim for disability benefits should be denied,
considering that respondents were able to successfully debunk the
presumption of work-relatedness and concomitantly, petitioner failed to
prove by substantial evidence his compliance with the conditions for
compensability set forth under Section 32-A of the 2000 POEA-SEC.
WHEREFORE, the petition is DENIED. The Decision dated February 11,
2010 and the Resolution dated May 27, 2010 of the Court of Appeals (CA)
in CA-G.R. SP No. 108036 are hereby AFFIRMED.
SO ORDERED
Leonardo-De Castro, Del Castillo, and Caguioa, JJ., concur.
Sereno, C.J., see concurring and dissenting opinion.