SEPTEMBER CASES

Cameron Granville 3 Asset Management, Inc. vs. UE Monthly Associated, et al.

G.R. No. 181387
September 5, 2016

Facts:

The dispute in this case stemmed from the levy and execution sale made by NLRC Sheriff Manolito G. Manuel. The
subject of the execution were certain machinery, equipment, tools and implements owned by UE Automotive
Manufacturing, Inc. (UEAMI). The levy was made pursuant to a final and executory NLRC judgment against UEAMI in an
illegal dismissal case, in which it was ordered to pay P53,729,534 to complainants UEAMI Monthly Associates and UE
Automotive Workers Union-NFL.

Metrobank filed an Affidavit of Third-Party Claim with the LA. The bank claimed that the machines and equipment levied
upon by Sheriff Manuel were covered by three mortgage documents executed in favor of the bank by UEAMI.
Respondents opposed Metrobank's third-party claim. They asserted that they were not bound by the mortgage
agreements cited by the bank, because the instruments were not registered and consequently had no effect on third
parties. Aside from emphasizing the superiority of its claim over the property, the bank also manifested its intention to
present evidence of its mortgage lien over the chattels.

The LA denied Metrobank's third-party claim for failure to [establish] proof of their actual ownership of the contested
properties owned by UEAMI. However, in the interest of justice, the LA directed Metrobank and other third-party
claimants to post a bond to defer the execution sale. The bank complied with the Order by posting a surety bond.

the NLRC affirmed the Order of the LA denying Metrobank's third-party claim. In addition to the grounds cited by the LA,
the NLRC rejected the claim for the following reasons: (a) the bank's failure to attach a board resolution showing that
Ramon S. Miranda was authorized by the board of directors to prepare and file its Affidavit of Third-party Claim; (b)
absence of substantial evidence in support of the assertion that the mortgage documents were duly registered with the
Register of Deeds of Kalookan City, and that the proper documentary stamp taxes were paid; and ( c) failure to establish
its right over the properties as against respondents.

The CA dismissed the Petition for Certiorari and ruled that the NLRC did not act with grave abuse of discretion in
affirming the LA's denial of the third-party claim filed by Metrobank.

Issues:

Whether the CA erred in applying the Revised Rules of Procedure of the NLRC, which does not require the LA to conduct
a hearing before deciding Metrobank's third-party claim.
Whether the CA erred in denying Metrobank's third-party claim.

Held:

A hearing is not required before a third-party claim can be decided by the LA. Third-party claims may be resolved even
without a full-blown hearing provided claimants are given an opportunity to be heard. The LA was allowed to decide the
claim based only on the evidence submitted. Here, the LA decided that no further hearing was necessary, given the
failure of Metrobank to submit proof of its claim to the properties. No merit in the assertion that petitioner was denied
due process. The decision of the LA not to conduct a formal evidentiary hearing before resolving the case was justified,
as the conduct of those hearings is not mandatory in all instances, particularly in administrative proceedings. In any case,
Metrobank was given additional opportunities to argue its case and present its evidence before the NLRC and the CA.
These subsequent proceedings were more than enough to rectify any alleged procedural flaw and satisfy the
requirements of due process.
Metrobank and petitioner failed to prove their right to the properties. The bank failed to present a single piece of
evidence in support of a crucial point, i.e., that the properties subject of the chattel mortgage in its favor were among
those levied upon and sold by the NLRC sheriff. There was insufficient evidence that the properties, subject of the levy,
had indeed been mortgaged to the bank. It must be pointed out that third-party claimants in execution proceedings
have the burden of proving their right or title to the subject properties, if they want to defeat the judgment lien. To do
so, they must submit evidence not only of the basis of their entitlement, but also of the fact that the properties they are
claiming were indeed the subject of the execution. Failure to submit that evidence will justify the denial of the third
party claim, as in this case.

SSS vs. COA

G.R. No. 210940
September 6, 2016

Facts:

On May 14, 1997, the Social Security Commission (SSC) of the Social Security System (SSS) approved a resolution
granting a new compensation package for its members, including medical benefits, rice allowance, and a provident fund.
These benefits were incorporated in the SSS Manual. On September 22, 1999, the SSC issued a resolution granting EME
to its members at similar rates then given to members of the Government Service Insurance System (GSJS). In the same
resolution, the SSC further approved additional budgetary appropriations in the amount of approximately P 4.49 million
to cover the payment of EME.

On July 4, 2007, the Legal and Adjudication Office-Corporate Government Sector (LAO-CGS) of the COA disallowed the
total amount of P4,314,683.99 anchored on these grounds:

1. For Extraordinary and Miscellaneous Expenses (EME) - The same is disallowed in audit for lack of legal authority of the
SSC Commissioners to claim EME either under the SSS Charter or under the General Appropriations Act (GAA). The GAA
does not include members of the Board of Directors in the enumeration of persons allowed to claim the same. Hence,
the payment is considered "irregular" expenditures.

2. Medical expenses, rice allowances and provident fund - These allowances/benefits which are included in the
Collective Negotiation Agreement (CNA) were disallowed in audit. Said Resolution provides that only rank and file
employees of the GOCC are entitled to CNA Incentives. Members of the Commission are considered high-level
employees, whose functions are normally considered as policy making or managerial, hence, they are not allowed to join
the organization.

Issue:

Whether the members of the SSC are entitled to the EME, medical benefit, rice allowance and the provident fund.

Held:

Section 3(a) of the SS Law specified the benefits which SSC members may receive. The limitation on benefits was not
subject to any exception and, as such, EME and other benefits were without legal basis as they were not included in
Section 3(a) of the said law. The said benefits are exclusive in consonance with the principle of expressio unius est
exclusio alterius. Thus, if Congress had intended to grant additional benefits to SSC members, it would have expressly
provided the same in the SS Law on top of the benefits already suggested by the SSS administrator himself. It must be
reiterated that Congress crafted the SS Law to spell out the specific benefits and/or allowances to be received by SSC
members. The SSC members cannot receive any amount other than the per diems and reasonable transportation and
representation allowances (RA TA). The reliance on Section 3(c) of the SS Law by the SSS was misplaced because it
merely granted to the SSC the authority to fix the reasonable compensation, allowances and other benefits of the
employees it may appoint. There was no showing that the other benefits were approved by the President.
Leonis Navigation Co., Inc. and World Marine Panama S.A. vs. Obrero
G.R. No. 192754
September 7, 2016

FACTS:

Obrero was hired as a mess man onboard M/V Brilliant Arc by the Petitioners. His fellow crewmates noticed that
something is strange with him. Obrero was seen by Dr. Cruz, the company-designated physician, and diagnosed him
with schizophreniform disorder. Dr.Cruz further stated in his certification that such disorder is not work-related because
it is related to abnormalities in the structure and chemistry of the brain, and appears to have strong genetic links.
Dissatisfied with the diagnosis, Obrero also sought the opinion of a psychiatrist, Dr. Salceda. In her psychiatric
evaluation, Dr. Salceda noted that although Obrero was initially able to cope with the rigors and stress of his occupation,
his coping abilities were eventually taxed as he was continuously exposed to the adverse situation of repeatedly being at
sea for prolonged periods of time. Additionally, he was not able to handle the stress of being demoted from seaman to
messman as a result of the discovery of his color blindness.

Issue:

Whether or not Schizophrenia is a work-related disease;

Held:

With regard to this specific case, yes. The Supreme Court stated that:
Stressful life events are identified as one of the risk factors in most etiological models of schizophrenia, with many
studies reporting an excess of stressful life events in the few weeks prior to the onset of psychotic and affective
disorders. Therefore, it is possible that work-related stress may precipitate the disorder-contrary to the statement of Dr.
Cruz. Furthermore, we have already held that schizophrenia may be compensable, which negates any blanket exception
against it as a compensable illness. In Cabuyoc v. Inter-Orient Navigation Ship management, lnc., we allowed permanent
disability compensation for schizophrenia after finding that the seafarers illness and disability were the direct results of
the demands of his shipboard employment contract and the harsh and inhumane treatment of the officers onboard the
vessel. In NFD International Manning Agents, Inc. v. NLRC, we found schizophrenia to be work-related after the
employer failed to negate the causal confluence between the epilepsy suffered by the seafarer after a mauling incident
while onboard the vessel and his subsequent affliction of schizophrenia. Notwithstanding the factual differences
between those two cases and the case at bar, the underlying principle remains the same: work environment can trigger
schizophrenia. We reiterate that in compensation and disability claims, probability and not the ultimate degree of
certainty is the test of proof. The precise medical causation of the illness is not significant, as long as the illness
supervened in the course of employment and is reasonably shown to have been either precipitated or aggravated by
work condition.

LEAP VS. LWUA

G.R. No. 192754
September 7, 2016

Facts:

Petitioner LWUA Employees' Association for Progress (LEAP) filed a petition for certiorari, prohibition and mandamus
with prayer for temporary restraining order (TRO) and preliminary injunction. Alleging that Local Water Utilities
Administration (LWUA) and Department of Budget and Management (DBM) acted with grave abuse of discretion in
adopting and implementing the reorganization plan of LWUA, petitioners prayed that LWUA and DBM be restrained
from implementing the following: (1) DBM approved staffing pattern; (2) Resolution No. 69 of the LWUA Board of
Trustees, and (3) E.O. Nos. 279, 366 and 421, on the ground that petitioners will suffer injustice and sustain irreparable
injury as 233 LWUA employees face immediate and outright dismissal from service.
Issues:

1. The CA acted with grave abuse of discretion amounting to lack and/or excess of jurisdiction in denying the instant
motion for reconsideration filed by the petitioners and affirming the decision promulgated.
2. The respondent court acted with grave abuse of discretion amounting to lack and/or excess of jurisdiction in holding
that the petitioners are not entitled to the injunctive writ.
3. there is no appeal, or any plain and speedy remedy in the ordinary course of law other than the instant petition.

Held:

The Court deems it proper to address the procedural matters raised by respondents as it finds the instant petition
dismissible for reasons to be discussed hereunder.

First, is the propriety of the remedy availed of by petitoners. Petitioners come to this Court questioning the Decision and
Resolution of the CA via a special civil action for certiorari contending that there is "a very urgent need to resolve the
issues presented herein and considering that public respondents are hell-bent on proceeding with [the] removal and
deprivation of economic benefits, causing great injury to petitioners and LWUA employees, and having no other plain,
speedy and adequate remedy in the ordinary course of the law.

By filing the present special civil action for certiorari under Rule 65, petitioners, therefore, clearly availed themselves of
the wrong remedy. Under Supreme Court Circular 2-90, an appeal taken to this Court or to the CA by a wrong or an
inappropriate mode merits outright dismissal. On this score alone, the instant petition is dismissible.

Finally, the Court agrees with the RTC and the CA that even assuming that petitioners have a valid cause of action, in
that their security of tenure may be violated as a result of their transfer or termination from service, the law provides
them with ample remedies to address their alleged predicament, prior to filing an action in court.

Under the doctrine of exhaustion of administrative remedies, before a party is allowed to seek the intervention of the
court, he or she should have availed himself or herself of all the means of administrative processes afforded him or her.
Hence, if resort to a remedy within the administrative machinery can still be made by giving the administrative officer
concerned every opportunity to decide on a matter that comes within his or her jurisdiction, then such remedy should
be exhausted first before the court's judicial power can be sought. The premature invocation of the intervention of the
court is fatal to one's cause of action. 33 The doctrine of exhaustion of administrative remedies is based on practical and
legal reasons. The availment of administrative remedy entails lesser expenses and provides for a speedier disposition of
controversies. Furthermore, the courts of justice, for reasons of comity and convenience, will shy away from a dispute
until the system of administrative redress has been completed and complied with, so as to give the administrative
agency concerned every opportunity to correct its error and dispose of the case.

NARCISO T. MATIS vs. MANILA ELECTRIC COMPANY

G.R. No. 206629
September 14, 2016

FACTS:

PETITIONER Narciso T. Matis was a foreman of respondent Manila Electric Company (Meralco). At 10:30 p.m. last May
25, 2006, while the Meralco crews including Matis were working, Norberto Llanes, a non-Meralco employee, was
hanging around the work site. Llanes boarded the truck manned by Matis and other crew and filched materials while
Matis was around. For more than two hours, Llanes was walking around, boarding the trucks, freely sorting and choosing
materials and tools inside the trucks then putting them in his backpack, talking casually with the crew, and even drinking
water from the crews jug.
Unknown to Matis and company, a Meralco surveillance team was monitoring their activities and recording them with a
Sony Video 8 camera.
 Consequently, on July 27, 2006, Matis and the others were dismissed on the grounds of serious misconduct, fraud or
willful breach of trust.
The Labor Arbiter (LA) ruled that Matis and the others were not illegally dismissed. The National Labor Relations
Commission (NLRC) reversed the LA decision and ruled that they were validly dismissed.
It held that they were guilty of gross negligence amounting to a breach of trust and confidence reposed upon them. The
Court of Appeals (CA) affirmed the decision of the NLRC. Matis argued that as a foreman he was not a managerial
employee and did not occupy a position of trust.

ISSUES:

Did the CA commit a reversible error?

Does the argument of Matis that he was not a managerial employee and did not occupy a position of trust have merit?

HELD:

Ruling:
No. Proof beyond reasonable doubt is not needed to justify the loss of confidence as long as the employer has
reasonable ground to believe that the employee is responsible for the misconduct and his participation therein renders
him unworthy of the trust and confidence demanded of his position.
Meralco was able to establish through substantial evidence that it has reasonable ground to believe that Matiss
involvement in the incident rendered him unworthy of the trust and confidence reposed upon him as a foreman of
Meralco.
As settled in Vergara v. NLRC, 347 Phil. 161 (1997), the filing of the complaint by the public prosecutor is sufficient
ground for a dismissal of an employee for loss of trust and confidence.

Ruling:
No. The Supreme Court was not persuaded. Loss of confidence applies to: (1) employees occupying positions of trust
and confidence, the managerial employees; and (2) employees who are routinely charged with the care and custody of
the employers money or property which may include rank-and-file employees, e.g., cashiers, auditors, property
custodians, or those who, in the normal routine exercise of their functions, regularly handle significant amounts of
money or property.
It is established that Matis was a foreman with a monthly salary of P57,000 at the time of his dismissal. The vehicles
being utilized in the repair and maintenance of Meralcos distribution lines ordinarily carried necessary equipment,
tools, supplies and materials. Thus, Matis, as the foreman, is routinely entrusted with the care and custody of Meralcos
properties in the exercise of his function.
In the case of Apo Cement Corp. v. Baptisma, 688 Phil. 468, 480-481 (2012), it was held that for an employer to validly
dismiss an employee on the ground of loss of trust and confidence, the following guidelines must be observed: (1) loss of
confidence should not be simulated; (2) it should not be used as subterfuge for causes which are improper, illegal or
unjustified; (3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and (4) it must be
genuine, not a mere afterthought to justify earlier action taken in bad faith. More importantly, the loss must be founded
on clearly established facts sufficient to warrant the employees separation from work.

FALLARME et al. vs. SAN JUAN DE DIOS EDUCATIONAL FOUNDATION, INC.

G.R. Nos. 1900015 & 190019
September 14, 2016

FACTS:

Petitioners were hired by San Juan de Dios Educational Foundation, Inc., for full-time teaching positions and additional
positions for Fallarme, as personnel officer and to serve as head of the Human Development Counseling Services.
The appointment of petitioners was effective at the start of the first semester of School Year (SY) 2003-2004 as signified
by a memorandum issued by the school informing them that they had been hired. It did not specify whether they were
being employed on a regular or a probationary status. They served for SY 2003-2004 and were only asked on March
2006 to submit a written contract on the nature of employment and obligations (Appointment contract for faculty on
probation). Its effectivity period covered the second semester of SY 2005-2006 The appointment contract specified their
status as a probationary faculty member. After the expiration of the contract, respondent informed them that it would
not be renewed for the SY 2006-2007and when they asked on what basis, they were informed that it was the school's
"administrative prerogative."

Petitioners submitted a letter to respondent Hernandez, questioning the nonrenewal of their respective employment
contracts. Not satisfied with the reply, they filed a Complaint against respondents for illegal dismissal, reinstatement,
back wages, and damages before the labor arbiter.

Respondents claimed that petitioners had been remiss in their duties. Specifically, both of them reportedly sold
computerized final examination sheets to their students without prior school approval. Allegedly, Fallarme also sold
sociology books to students, while Martinez-Gacos served as part-time faculty in another school and organized out-of-
campus activities, all without the permission of respondent college

The labor arbiter ruled that petitioners were regular employees who were entitled to security of tenure but upon
respondents' appeal, the NLRC reversed the Decision of the labor arbiter. It held that petitioners had failed to meet the
third requirement for regularization as prescribed by the 1992 Manual; that is, they had not served respondent college
satisfactorily. Petitioners then proceeded to the CA which also affirmed the decision of the NLRC.

ISSUES:
Were petitioners regular employees of respondent college?
Was petitioners' dismissal for a valid cause?
If the dismissal of petitioners was for a valid cause, was the proper dismissal procedure observed?
HELD:

Petition Denied. While we agree with petitioners that they were regular employees of the college, we differ on the basis
they invoke for their regularization. Nevertheless, we agree with respondents that as regular employees, petitioners
were dismissed for a valid cause. But due to respondents' failure to observe the proper procedure, petitioners are
entitled to nominal damages.

Petitioners are deemed regular employees.

In Abbott Laboratories v. Alcaraz,this Court explained that valid probationary employment under Art. 281 presupposes
the concurrence of two requirements: (1) the employer must have made known to the probationary employee the
reasonable standard that the latter must comply with to qualify as a regular employee; and (2) the employer must have
informed the probationary employee of the applicable performance standard at the time of the latter's engagement.
Failing in one or both, the employee, even if initially hired as a probationary employee, shall be considered a regular
employee.

The records lack evidence that respondent college clearly and directly communicated to petitioners, at the time they
were hired, what reasonable standards they must meet for the school to consider their performance satisfactory and for
it to grant them regularization as a result.
The appointment contracts invoked by respondents appear to be an afterthought, as they asked petitioners to sign the
contracts only when the latter's three-year probationary period was about to expire. Apparently, this act was an effort
to put a stamp of validity on respondents' refusal to renew petitioners' contracts.

Respondents were clearly remiss in their duty under the Labor Code to inform petitioners of the standards for the
latter's regularization. Consequently, petitioners ought to be considered as regular employees of respondent college
right from the start.
Petitioners' dismissal was for a valid cause.
To be considered as a valid cause analogous to that specified in the law, it is simply required that the cause must be due
to the voluntary or willful act or omission of the employee.
First, the act of selling computerized final examination sheets to students without respondent college's permission,
despite the prior advice of their subject area coordinator, indicated a knowing disregard by petitioners of their superior's
express order not to do so. We find that order to be lawful as well as reasonable
Second, when petitioner Fallarme sold textbooks to her students without permission, even after the act had been clearly
prohibited in a general meeting, her act also indicated her willful disregard of a school policy. That policy, which was
made known to her beforehand, was lawful in light of the recognized authority exercised by schools over their students
and personnel.
Third, petitioner Martinez-Gacos' act of organizing out-of-campus activities without the consent of respondent college
and in violation of its Student Handbook likewise shows traces of insubordination or acts analogous thereto. Martinez-
Gacos undertook the activities complained of in 2005, or two years after she was hired. Her awareness of the Student
Handbook's provisions, which she cavalierly disregarded, can therefore be reasonable expected. It is notable that she
never disputed or debunked the existence of the Student Handbook provisions invoked by the Dean of Student Services.

All told, not just one but three infractions show that the continued service of petitioners in respondent college was
inimical to its interest, as their actions indicated lack of respect for the school authorities. It is settled that an employer
has the right to dismiss its erring employees as a measure of self-protection against acts inimical to its interest.
Respondents failed to observe the proper procedure in petitioners' dismissal.
Although the dismissal of petitioner was for a valid cause, we nevertheless find that respondent college failed to comply
with the proper procedure for their dismissal in violation of procedural due process.

For termination based on a just cause, as in this case, the law requires two written notices before the termination of
employment: (1) a written notice served by the employer on the employee specifying the ground for termination and
giving a reasonable opportunity for that employee to explain the latter's side; and (2) a written notice of termination
served by the employer on the employee indicating that upon due consideration of all the circumstances, grounds have
been established to justify the latter's termination

We find a complete deviation from the two-notice rule in this case. The records show that respondent college effectively
dismissed petitioners by sending them a written notice informing them that the school would no longer renew their
contracts for the forthcoming semester. We find that the letters were abruptly sent and lacked any specification of the
grounds for their termination. Neither did the letters give petitioners the opportunity to explain their side. To aggravate
the matter, upon their inquiry into the reason behind their termination, all that respondent college cited was its
supposed "administrative prerogative," which was misplaced.