480 San Pedro Hospital v Secretary of Labor 263 SCRA 98Employment Not Deemed Terminated/Temporary Suspension of Operations

FACTSPetitioner San Pedro Hospital of Digos and private respondent Nagkabiusang Mamumuo sa San Pedro Hospital of Digos National Federation of Labor (NAMASAP-NFL) were negotiating on a new Collective Bargaining Agreement (CBA). The union demands wage increases and a provision for a union shop.When both parties failed to reach an agreement, members of the union abandoned their respective department and conducted a strike. Doctors began leaving the hospital and number of patients dwindled to nothing. On June 12, 1991, petitioner hospital filed a Notice of Temporary Suspension of Operation; that it would temporarily suspend operations for six (6) months effective June 15, 1991, or up to December 15, 1991.Private respondent union alleged that petitioner was not in serious financial condition and that petitioner acted in bad faith and circumvented the return-to-work order when it suspended operations.Secretary of Labor Nieves held that suspension of operations was not for a valid or justifiable cause but was actually for the purpose of defeating the workers' right to self-organization. But because the hospital had actually cease operations, he decided to grant, by way of penalty, backwages for the workers from June 21, 1991, the date they were refused admittance by petitioner, until December 15, 1991, the expiration of the temporary suspension of the hospital's operation. He also enjoined petitioner to enter in a new CBA with respondent union.Petitioner hospital insists that the union members were not entitled to backwages because the temporary cessation of petitioner's operation suspended the employer-employee relationship between the union members and petitioner. They also failed to negotiate on a new CBA. On December 15, 1991, petitioner hospital formally ceased operations.

ISSUEWON the secretary gravely abused his discretion when he granted backwages to employee and enjoined petitioner to enter in a new CBA with respondent union.

RULINGNO. Article 286 of the Labor Code provides: "The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months . . . shall not terminate employment." Section 12, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code provides that the employer-employee relationship shall be deemed suspended in case of the suspension of operation referred to above, it being implicitly assumed that once operations are resumed, the employer-employee relationship is revived and restored.In the absence of any other information, the plain and natural presumption will be that petitioner would resume operations after six months, and therefore, it follows that a new CBA will be needed to govern the employment relations of the parties, the old one having already expired. Clearly then, under the circumstances, the respondent Secretary cannot be faulted nor considered to have gravely abused his discretion for ordering the parties to enter into a new CBA.The Court, however, cannot ignore the supervening event of permanent closure of the petitioner hospital. Business reverses or losses are recognized by law as a just cause for terminating employment. Thus, despite the absence of grave abuse of discretion on the part of the respondent Secretary, this Court cannot impose upon petitioner the directive to enter into a new CBA with the union for the very simple reason that it had already decided to close shop.The court affirmed the grant of backwages from June 21 December 15. But set aside the order for the parties to enter into a new collective agreement for it being moot and academic.

481 De Guzman v NLRC 540 SCRA 21 Employment Not Deemed Terminated/Temporary Suspension of Operations

FACTSPetitioner De Guzman was employed as a bus conductor by private respondent Philippine Rabbit Bus Line Company. Petitioner filed an application for leave of absence alleging that he was experiencing chronic pain from the gunshot wounds he sustained in January 1984 when he tried to defend the earnings of the company from "brigands."Respondent company placed petitioner under preventive suspension for his absence without an approved leave of absence. Petitioner was directed to report to a certain Mr. T. Cunanan within three (3) days from receipt of the notice at the companys Main Office to explain his side in a formal investigation.Petitioner tried to talk to company president Nisce and he was told that he would be allowed to report to work the next day. When he reported for work, however, he was not given any assignment. Petitioner filed a complaint against respondents for illegal dismissal, underpayment/nonpayment of overtime pay, premium pay for holiday and rest day and service incentive leave pay, as well as moral and exemplary damages.Private respondents (company) contend that petitioner was validly dismissed for abandonment of work.The Labor Arbiter stated that "[a]n unacted application for leave has the effect of abandonment if an employee begins to enjoy a leave of absence even before its approval."

ISSUEWON Petitioner De Guzman was illegally dismissed from employment

RULINGYES. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts. Mere absence is not sufficient. The burden of proof is on the employer to show an unequivocal intent on the part of the employee to discontinue employment. In this case, the respondent company failed to discharge this burden. Certain facts dissuade the Court from believing that petitioner intended to sever his employment relations with respondent company. Notably, petitioner commenced this suit on May 24, 1996 or more than six (6) months after respondent company stopped giving him any work assignment.Under Article 286 of the Labor Code, the bona fide suspension of the operation of a business or undertaking for a period not exceeding six months shall not terminate employment. Consequently, when the bona fide suspension of the operation of a business or undertaking exceeds six months, then the employment of the employee shall be deemed terminated. By the same token and applying said rule by analogy, if the employee was forced to remain without work or assignment for a period exceeding six months, then he is in effect constructively dismissed.Petitioners dismissal by reason of abandonment has not been convincingly established.The Court granted the petitioner separation pay; full backwages; unpaid overtime pay, premium pay for holiday and rest day, and service incentive leave pay; moral and exemplary damages.

482 Sentinel Security v NLRC 295 SCRA 123 Temporary Off Detail or Floating Status

FACTSThe complainants were employees of Sentinel Security Agency (SSA) and were assigned as guards at the premises of Philippine American Life Insurance (PALI). PALI asked for the replacement of all the security guards in certain offices including the complainants. Complainants reported to SSA but instead of being reassigned to other clients, they were told that they were replaced because they are already old.The decision of the Court declared that complainants were illegally dismissed by the agency and was ordered to pay back wages.

ISSUE(1) WON respondents employees were illegally dismissed. (2) WON Petitioner-Client is liable for back wages.

RULING(1) YES. There was no suspension of operation, business or undertaking, bona fide or not, that would have justified placing the complainants off-detail and making them wait for a period of six months. The only logical conclusion from the foregoing discussion is that the Agency illegally dismissed the complainants.(2) NO. The Court held that Client (PALI) was not responsible for the illegal dismissal of the complainants. Thus, it should not be held liable for back wages. However, the court did not absolve PALI which, as an indirect employer, is solidarily liable with Petitioner Agency for complainants unpaid service incentive leave.

483 Namawu v Marcopper 570 SCRA 637 Stoppage of Operations by Government

FACTSDepartment of Environment and Natural Resources (DENR) ordered the indefinite suspension of MARCOPPER's operations for causing damage to the environment of the Province of Marinduque by spilling the company's mine waste or tailings from an old underground impounding area into the Boac River, in violation of its Environmental Compliance Certificate (ECC). Subsequently, DENR Secretary ordered the cancellation of MARCOPPERs ECC.NATIONAL MINES and ALLIED WORKERS UNION (NAMAWU), petitioner, claimed that due to the indefinite suspension of MARCOPPER's operations, its members were not paid the wages due them and separation pay. Prior to the case arising from the suspension of operations, there is already a pending case between the same parties of an illegal strike. Three (3) employees in the present case did not participate in the illegal strike case to which 615 NAMAWU members were parties.The Court of Appeals, in deciding the illegal strike case, decided in favour of the company and denied the separation pay award.The NLRC, on the other hand, decided on the suspension of operation case granting the employees separation pay.The respondent company claim that CA had already confirmed the dismissal of the 615 NAMAWU members and had already decided on the grant of the separation pay.

ISSUEWON the employees are to be granted their separation pay.

RULINGRegarding the 615 NAMAWU members who participated in the illegal strike case, the Court held that NLRC cannot reverse the decision of a higher tribunal in a case with the same claim already decided. The Court dismissed the petition with respect to the 615 NAMAWU members for they are no longer employees at the time MARCOPPER suspended its operations.Regarding the 3 non-participating employees, the Court granted them separation pay.As of the day the companys ECC was cancelled, the temporary suspension of operations became permanent so that MARCOPPER did not have to wait for the end of the six-month suspension of operations before the services of the three employees were deemed terminated. In Labor Code terms, the cancellation of the ECC amounted to a company closure governed by Article 283 of the Labor Code - the provision that governs the relationship of employers and employees in closure situations. Pursuant to Article 283 of the Labor Code, MARCOPPER is ordered to pay the 3 non-participating employees their separation pay.

484 Pres. Decree No. 183 May 6, 1973Fulfillment of Military Duty or Civil Duty

PROVIDING FOR THE ANNUAL REGISTRATION OF RESERVISTS OF THE ARMED FORCES OF THE PHILIPPINES; GRANTING SECURITY OF TENURE TO RESERVISTS EMPLOYED IN PRIVATE FIRMS WHILE UNDERGOING REFRESHER TRAINING, MOBILIZATION OR ASSEMBLY TESTS OR ANNUAL ACTIVE DUTY TRAINING IN FULFILLMENT OF THEIR MILITARY OBLIGATIONS; AND FOR OTHER PURPOSES

WHEREAS, to provide for a more effective reserve training and defense build-up program, it is further necessary to grant security of tenure for reservists employed in private firms and establishment during periods of absence while fulfilling their military obligations to the Republic, subject to certain conditions.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated September 21, 1972, continued in Proclamation No. 1104, dated January 17, 1973, and General Order No. 1, dated September 22, 1972, as amended, do hereby order and decree that henceforth:

(f) Any employee of any private commercial, industrial, or agricultural firm, with an annual gross volume of business of not less than two hundred and fifty thousand pesos and with a personnel force of at least twenty employees, who is called to undergo refresher training, or a mobilization or assembly test, or annual active duty training in the Armed Forces of the Philippines, shall not loss his position or suffer any loss of pay due to his absence in the fulfillment of his military obligation: Provided, That said firm shall be entitled to claim the salaries paid to such employee during such training period as a deductible item in its income tax return.

485 Llora v Drilon 179 SCRA 175RA 7641 Retirement Pay Law Dec 9, 1992

FACTSPrimitivo V. Alviar was a truck driver of petitioner. At the time he stopped working, he was 65 years of age. He filed a complaint and was asking for his retirement benefits.Petitioners opposed the complaint and alleged that all of the employment benefits claimed by private respondent Alviar had already been fully paid. On the matter of retirement benefits, it was contended that Mr. Alviar had not been dismissed by Llora Motors, it was complainant who abandoned his work since the last week of April 1985 and never reported since then. Neither had Mr. Alviar been retired for the simple reason that respondent corporation does not have any retirement plan or any collective bargaining agreement with the employees for no union exists within the company because the employees, drivers included, received more than the standard benefits for their labor.Labor Arbiter granted Alviar a total of P16, 164.87 money claims including the P9,985.80 retirement benefits.

ISSUEWON Alviar is legally entitled to receive retirement benefits from petitioners.

RULINGNO. Our Labor Code has only one article that deals with the subject of "retirement from the service." Article 287 of the Code reads as follows:Article 287. Retirement. Any employee may be retired upon reaching the retirement age established in the Collective Bargaining Agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining or other agreement.Article 287 above shows that entitlement to retirement benefits may accrue either (a) under existing laws or (b) under a collective bargaining agreement or other employment contract. It is at once apparent that Article 287 does not itself purport to impose any obligation upon employers to set up a retirement scheme for their employees over and above that already established under existing laws.Article 287 recognizes that existing laws already provide for a scheme by which retirement benefits may be earned or accrue in favor of employees, as part of a broader social security system that provides for retirement benefits. It is not disputed that Alviar already received his retirement benefits as provided in the Social Security Act.Article 287 of the Labor Code also recognizes that employers and employees may, by a collective bargaining or other agreement, set up a retirement plan in addition to that established by the Social Security law, but prescribes at the same time that such consensual additional retirement plan cannot be substituted for or reduce the retirement benefits available under the compulsory scheme established by the Social Security law. As been reiterated by petitioners, there is no collective bargaining between them and employees nor was there an agreement about retirement benefits.There being no contractual or statutory basis on the payment of retirement by the petitioners to private respondent Alviar, the decision of the Labor Arbiter regarding the retirement is set aside.

486 Abaquin v Atienza 190 SCRA 460RA 7641 Retirement Pay Law Dec 9, 1992

FACTSPetitioner security agency employed private respondent Antonio B. Jose as a security guard. Almost twenty-five (25) years later, Jose voluntarily resigned in view of his failing health and his desire to withdraw his cash deposits with petitioner. He was then sixty-one (61) years old. The petitioner company, relying on the absence of any management policy or agreement between them regarding retirement or termination benefits, paid Jose only his cash deposits. Feeling aggrieved, Jose filed a complaint against petitioner for separation pay.Labor Arbiter dismissed Jose's complaint on the ground that an employee's enjoyment of retirement benefits or separation pay under Article 288 of the Labor Code and Sections 13 and 14 (a), Rule I, Book VI of the Rules and Regulations Implementing the Labor Code is subject to the existence of a retirement plan, individual or collective agreement or established management policy.NLRC set aside Labor Arbiters decision and held that Jose be paid his retirement or termination pay equivalent to month salary for every year of service

ISSUEWON Jose is entitled to retirement or termination pay.

RULINGYes, he is entitled to termination pay but not retirement pay.The legal provisions involved in this petition provide as follows: Art, 288. * Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining or other agreement. (Labor Code) Sec. 14. Retirement benefits. An employee who is retired pursuant to a bona-fide retirement plan or in accordance with the applicable individual or collective agreement or established employer policy shall be entitled to all the retirement benefits provided therein or to termination pay equivalent at least to one-half month salary for every year of service, whichever is higher, a fraction of at least six (6) months being considered as one whole year.There being no individual or collective agreement between the parties or established employer's policy regarding retirement benefits, petitioner's resistance to private respondent's claim therefore is legally defensible.Be that as it may, the Court is not prepared to altogether set aside the award of termination pay, considering that there exists another legal basis. The Court applied Article 285, which considers disease as a ground for termination, in justifying the grant for termination pay.The Court also reiterated the distinction made in the Llora case between retirement benefits and termination pay: Termination pay or separation pay is required to be paid by an employer in particular situations Identified by the Labor Code itself or by Implementing Rule I. Termination pay where properly due and payable under some applicable provision of the Labor Code or under Section 4 (b) of Implementing Rule I, must be paid whether or not an additional retirement plan has been set up under an agreement with the employer or under an "established employer policy."The Court dismissed the petition and granted the monetary award. The monetary award in favor of private respondent Antonio B. Jose is understood to be in the concept of termination pay, rather than retirement benefits.

487 Esco Hale Shoe Company v NLRC 193 SCRA 678RA 7641 Retirement Pay Law Dec 9, 1992

FACTSPrivate respondent Casimira Pedrosa was employed by petitioner Esco Hale Shoe Company as a shoebox maker, then as a heel pad attacher. Having reached 65, Pedrosa applied for retirement with the Social Security Commission and received retirement benefits therefrom. However, Pedrosa continued working for petitioner until years after when petitioner excluded her from the regular work schedule.Private respondent filed a complaint and asked for the payment of retirement benefits or separation pay.Petitioner argued that it has neither separate retirement nor private benefit plan and all its employees, including the private respondent, are reported to the SSS for coverage; that private respondent had effectively retired from the petitioner in 1982 when she received retirement benefits from the SSS.

ISSUEWON private respondent Casimira Pedrosa be granted retirement benfits.

RULINGYES. Art 287 states:Art. 287. Retirement. any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract.In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining or other agreement. (Section 287, Labor Code, as amended)However, since private respondent had worked with the petitioner for such a long time, We deem it just and equitable to grant her separation pay as she is retiring from the service of the petitioner ten (10) years beyond the statutory age of sixty 60).In computing the separation or retirement benefits of complainants, we have to consider the period when the country was at war with Japan and also the occupation years which started in December, 1941 up to 1945. The separation benefits, therefore, have to be based on forty-five (45) years instead of forty-nine years as claimed and computed on the basis of the minimum wage rate in 1986 at P37.00 a day when complainant was separated from work. And being a daily paid employee, the computation has to be computed at 13 days per year of service, as follows:P37.00 x 13/days = P481.00/mo.P481.00 x 45 years = P21,645.00

488 Oxales v United Laboratories 559 SCRA 26 Retirement Plan

FACTSUNILAB established the United Retirement Plan (URP). The plan is a comprehensive retirement program aimed at providing for retirement, resignation, disability, and death benefits of its members. An employee of UNILAB becomes a member of the URP upon his regularization in the company. The URP mandates the compulsory retirement of any member-employee who reaches the age of 60.As retirement benefits, the employee receives (1) from Trust Fund A a lump sum of 1 months pay per year of service "based on the members last or terminal basic monthly salary,"5 and (2) whatever the employee has contributed to Trust Fund B, together with the income minus any losses incurred. The URP excludes commissions, overtime, bonuses, or extra compensations in the computation of the basic salary for purposes of retirement.Petitioner Oxales was the Director of Manufacturing Services Group when he retired from Unilab after more than 25 years of service. He received a total amount of P2,173,230.39 as retirement benefits. Oxales claimed that he shouldve received more than a million more for his retirement benefits. He insisted that his bonuses, allowances, and 13th month pay should have been factored in the computation of his retirement benefits.UNILAB disagreeing, reminded Oxales about the provision of the URP excluding any commissions, overtime, bonuses or extra compensations in the computation of the basic salary of the retiring employee.

ISSUEWON petitioners bonuses, allowances and 13th month pay should be included in the computation of retirement benefits.

RULINGNO. The clear language of the URP should be respected.A retirement plan in a company partakes the nature of a contract, with the employer and the employee as the contracting parties. It creates a contractual obligation in which the promise to pay retirement benefits is made in consideration of the continued faithful service of the employee for the requisite period.The Court ruled that Oxales is not entitled to the additional retirement benefits he is asking. The URP is very clear: "basic monthly salary" for purposes of computing the retirement pay is "the basic monthly salary, or if daily[,] means the basic rate of pay converted to basic monthly salary of the employee excluding any commissions, overtime, bonuses, or extra compensations."R.A. No. 7641 also does not apply to this case because the URP grants to the retiring employee more than what the law gives. Under the URP, the employee receives a lump sum of 1 pay per year of service, compared to the minimum month salary for every year of service set forth by R.A. No. 7641.489 PAL v ALPAP 373 SCRA 302Retirement Plan

FACTSThe case stemmed from the unilateral act of petitioner to retire airline pilot Captain Albino Collantes under Section 2, Article VII, of the 1967 PAL-ALPAP Retirement Plan. Contending, inter alia, that the retirement of Captain Collantes constituted illegal dismissal and union busting, ALPAP filed a Notice of Strike with the Department of Labor and Employment (DOLE). Pursuant of Article 263 (g) of the Labor Code, the Secretary of the DOLE (hereafter referred to as Secretary) assumed jurisdiction over the labor dispute.The retirement plan between PAL and ALPAP stated two types of retirement: (1) Normal Retirement after 20 years of service or 20,000 hours as pilot for PAL, a retired employee shall receive P100,000 lumpsum or legally entitled benefits whichever is higher (2) Late Retirement any member who remains in the service after his normal retirement date may retire either at his option or at the option of the Company and when so retired he shall be entitled either to a lump sum payment of P5,000.00 for each completed year of service rendered as a pilot, or to such termination pay benefits to which he may be entitled under existing laws, whichever is the greater amount.Article 287 provides that employees, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.

ISSUEWhether the CBA or Art. 287 of the Labor Code should be the basis for computation of retirement pay in this case.

RULINGCBA. An employees retirement benefits under any collective bargaining agreement shall not be less than those provided in the Labor Code.Under the CBA, an employee upon retirement gets an amount equivalent to 240% of his gross monthly income for every year of service he rendered to petitioner. This is in addition to the amount of not less than P100,000.00 that he shall receive under the 1967 Retirement Plan.The benefits from CBA is clearly higher than those he would receive under Article 287 of the Civil Code.490 Eastern Shipping v Sedan 486 SCRA 565Option

FACTSPetitioners hired on a per-voyage basis private respondent Dioscoro Sedan as 3rd marine engineer and oiler in one of the vessels owned by petitioners. His last voyage was on July 27, 1997 on board the vessel M/V Eastern Universe. He said he was disembarking because he was going to take the board examinations for marine engineers.Two months later, on September 27, 1997, Sedan sent a letter to petitioners applying for optional retirement, citing as reason the death of his only daughter, hence the retirement benefits he would receive would ease his financial burden. However, petitioners deferred action on his application for optional retirement since his services on board ship were still needed.

ISSUEWON private respondent Sedan may exercise the option to retire.

RULINGNO. The age of retirement is primarily determined by the existing agreement between the employer and the employees. However, in the absence of such agreement, the retirement age shall be fixed by law. Under Art 287 of the Labor Code, the legally mandated age for compulsory retirement is 65 years, while the set minimum age for optional retirement is 60 years.In the instant case, there is an agreement between petitioner shipping company and its employees. The agreement states:C. Optional Retirement:It will be the exclusive prerogative and sole option of this company to retire any covered employee who shall have rendered at least fifteen (15) years of credited service for land based employees and 3,650 days actually on board vessel for shipboard personnel.Clearly, the eligibility age for optional retirement is set at 60 years. However, employees of herein petitioners who are under the age of 60 years, but have rendered at least 3650 days (10 years) on board ship or fifteen (15) years of service for land-based employees may also avail of optional retirement, subject to the exclusive prerogative and sole option of petitioner company.Records show that private respondent was only 48 years old when he applied for optional retirement. Thus he cannot claim optional retirement benefits as a matter of right. His application for optional retirement was subject to the exclusive prerogative and sole option of the shipping company pursuant to the above cited agreement between the workers and the company.

491JACULBE vs. SILLIMAN UNIVERSITY518 SCRA 445OPTION

FACTS Sometime in 1958, petitioner began working for respondents university medical center as a nurse. In a letter in December 1992, respondent, through its Human Resources Development office, informed petitioner that she was approaching her 35thyear of service with the university and was due for automatic retirement on November 18, 1993, at which time she would be 57years old. This was pursuant to respondents retirement plan for its employees which provided that its members could be automatically retired upon reaching the age of 65 or after 35 years of uninterrupted serviceto the university.Respondent requiredcertain documents inconnectionWith petitioners impending retirement.Abriefexchangeoflettersbetweenpetitionerandrespondentfollowed.Petitioner emphatically insisted that the compulsory retirement under the plan was tantamount to a dismissal and pleaded with respondent to be allowed to work until the age of 60 because this was the minimum age at which she could qualify for SSS pension. But respondent stood pat on its decision to retire her, citing company policy.On November 15, 1993, petitioner filed a complaint in the National Labor Relations Commission (NLRC) for termination of service with preliminary injunction and/or restraining order. On November 18, 1993, respondent compulsorily retired petitioner. The labor arbiter rendered a decision finding respondent guilty of illegal dismissal and ordered that petitioner instated and paid full back wages. On appeal, the NLRC reversed the labor arbiters decision and dismissed the complaint. The CA affirmed the NLRC.

ISSUE Whether or not the respondent has the option on retirement or the employers can compulsory make them retire?

RULING Retirement plans allowing employers to retire employees who are less than the compulsory retirement age of 65 are not per se repugnant to the constitutional guaranty of security of tenure.Article 287 of the Labor Code provides: Retirement - Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement orother applicable employment contract. By its express language, the Labor Code permits employers and employees to fix the applicable retirement age at below 60 years. The rules and regulations of the plan show that participation therein was not voluntary at all. It was through no voluntary act of her own that petitioner became a member of the plan. In fact, the only way she could have ceased to be a member thereof was if she stopped working for respondent altogether. Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age agrees to severe his or her employment with the former. The truth was that petitioner had no choice but to participate in the plan, given that the only way she could refrain from doing so was to resign or lose her job. It is axiomatic that employer and employee do not stand on equal footing, a situation which often causes an employee to act out of need instead of any genuine acquiescence to the employer. This was clearly just such ainstance.Anemployerisfreetoimposearetirementagelessthan65foraslongasithasthe empoyeesconsent. Stated conversely, employees are free to accept the employers offer to lower the retirement age if they feel they can get a better deal with the retirement plan presented by the employer. Thus, having terminated petitioner solely on the basis of a provision of a retirement plan which was not freely assented to by her. Respondent was guilty of illegal dismissal.

492PRODUCERS BANK VS NLRC 298 SCRA 517EXTENSION OF SERVICE

FACTSPetitioner was placed by Central Bank of thePhilippines (BangkoSentral ngPilipinas) under a conservator for the purpose of protecting its assets. When the respondents ought to implement the CBA (Sec. 1,Art. 11)regarding the retirement plan and pertaining to uniform allowance, the acting conservator of the petition expressed objection resulting an impasse between the petitioner bank and respondent union. The deadlock continued for at least six months. The private respondent, to resolve the issue filed a case against petitioner for unfair labor practice and flagrant violation of the CBA. The Labor Arbiter dismissed the petition. NLRC reversed the findings and ordered the implementation of the CBA.

ISSUEWON the employees who have retired have no personality to file an action since there is no longer an employer-employee relationship.

RULINGEmployees who have retired still have the personality to file a complaint. Retirement results from a voluntary agreement between the employer and the employee whereby the latter after reaching a certain age agrees to sever his employment with the former. The very essence of retirement is the termination of employer-employee relationship. Retirement of the employee does not in itself affect his employment status especially when it involves all rights and benefits due to him, since these must be protected as though there had been no interruption of service. It must be borne in mind that the retirement scheme was part of the employment package and the benefits to be derived therefrom constituted as it were a continuing consideration of services rendered as well as an effective inducement foe remaining with the corporation. It is intended to help the employee enjoy the remaining years of his life. When the retired employees were requesting that their retirement benefits be granted, they were not pleading for generosity but merely demanding that their rights, embodied in the CBA, be recognized. When an employee has retired but his benefits under the law or CBA have not yet been given, he still retains, for the purpose of prosecuting his claims, the status of an employee entitled to the protection of the Labor Code, one of which is the protection of the labor union

493CARLOS F. SALOMON, vs.ASSOCIATE INTERNATIONAL SHIPPING LINES457 SCRA254BENEFITS

FACTSThe Association of International Shipping Lines, Inc., respondent, is a corporation engaged in the principal business of shipping and container and/or cargo services. As a result of a decline in the volume of cargo measuring activities and shipping transactions, respondent suffered substantial financial losses With this development, respondent adopted an organizational streamlining program that resulted in the closure of its Measuring Department and retrenchment or termination from the service of seventeen (17) workers. Among them were Carlos F. Salomon, Stephen L. Bathan, Nicolas E. Camara, Emmanuel B. Dela Torre, Leonilo C. Donato, Segundo E. Ferrer, Jesus L. Guela, Jr., Amado P. Liongson, Deogracias C. Manalanzan, Gerundio A. Natanauan, Ricardo D. Parza, Ricardo R. Samaniego, Jr., Valentin R. Urrea, Jr., and Francisco H. Villanueva, herein petitioners who occupied booking coordinator and measurer positions. Respondent terminated petitioners services effective April 30, 1998.Simultaneously, respondent filed with the Department of Labor and Employment (DOLE) a Notice of Closure or report of petitioners retrenchment from the service.Aggrieved, petitioners filed with the National Conciliation and Mediation Board (NCMB) a complaint for illegal dismissal and payment of retirement benefits against respondent.During the conciliation proceedings, respondent paid petitionerstheir retirement pay at the rate of 1 month salary per year of service. Petitioners filed with the Labor Arbiter a complaint for payment ofretirement benefits, damages and attorneys fees against respondent, They alleged that what each received was a separation pay, not retirement benefits.Labor Arbiter rendered a Decision dismissing the complaint.Petitioners then filed a motion for reconsideration but was denied by the NLRC in a Resolution dated January 8, 2001. Hence, they filed with the Court of Appeals a petition forcertiorarialleging that the NLRC committed grave abuse of discretion in declaring that they are not entitled to retirement benefits and in holding that they are precluded from claiming such benefits because of their quitclaims.On November 28, 2002, the Court of Appeals issued a Resolution denying petitioners motion for reconsideration.

ISSUEDoes the petitioner entitled for optional retirement benefits?

RULINGPetitioners wereseparated from the service for cause.Consequently, pursuant to the CBA, what each actually received is a separation pay. Accordingly and considering their Releases and Quitclaims, they are no longer entitled to retirement benefits.It bears stressing that as held by the Labor Arbiter, the NLRC and the Court of Appeals, there is no provision in the parties CBA authorizing the grant to petitioners of retirement benefits in addition to their retrenchment pay; and that there is no indication that they were forced by respondent to sign the Releases and Quitclaims. WHEREFORE, the petition is DENIED. The assailed Decision dated June 13, 2002 and Resolution dated November 28, 2002 of the Court of Appeals in CA-G.R. SP No. 63176 are hereby AFFIRMED. Costs against petitioners.

494 SMC VS NLRCG.R. No. 107693.July 23, 1998FORCED RETIREMENT

FACTSComplainants allege that on March 14, 1984 the respondent company notified them that effective at the close of the business hours on April 15, 1984, it will exercise its option to retire them from the service; that complainants would not anymore be allowed to work from March 14, 1984 but that they would continue to receive their compensation up to April 15, 1984; that at the time the respondent corporation exercised the said option, all the complainants have not yet reached the compulsory retirable age of sixty (60) years old; The complainants allege that they had no bad record with the respondent corporation as they were never admonished, reprimanded or suspended during the term of their employment; that their retirement from work effected at the option of therespondent corporation violated their tenurial security of employment, as provided for in Article 280 of the LaborCode. They were informed on respondents option to retire them from the service, the latters prerogative was solely premised on the companys retirement and deathbenefit plan; that the said plan or company policy violated the security of tenure of the complainants as it is not one of the grounds enumerated in Art. 183 of the Labor Code for terminating the services of an employee. Complainants claim that their unceremonious and unlawful retirement amount to constructive dismissal. Respondents further aver that complainants were correctly and completely paid their separation benefits; that complainants received twice than what is provided for by the Labor Code of the Philippines,

ISSUEIs the force retirement lawful or the employer is guilty of illegal dismissal?

RULINGAll things studiedly considered, we are therefore of the opinion, and so find, that the dismissal of the herein private respondents was involuntary and therefore illegal. Continuing accretion of case law upholds the nullity of quitclaims especially if undertaken under questionable or doubtful circumstances.It bears stressing that, the private respondents had no choice but to sign subject quitclaims without which they could not receive the benefits due them, amounts they badly needed while out of work. t is hard to believe that the private respondents would voluntarily retire.It should be borne in mind that the original complainants, Messrs. Chu, Teddy Jr. and Adad, were all in their advanced years and could not expect to get a similar employment.In the case of private respondent Torres, he was 41 years old when he was forced to retire.At that age, it would not be easy for him to land a job with the same high benefits.In the case of Mr. Castellano, he was only 36 years old when forced to resign.It was inconceivable for him to resign from a secure position considering the minimal financial benefits accruing from voluntary retirement at age 36, and the scarcity of employment opportunities.Under its last assigned error, petitioner maintains that the provision in the Collective Bargaining Agreement (CBA) reducing the retirable period of service from 20 to 15 years is applicable to private respondents. As can be gleaned from the petition itself, not only were private respondents supervisory employees, they were also with thesales force.Mr. Edmundo Torres, Jr. was a Regional Sales Manager while Mr. Castellano was a District Sales Supervisor of petitioner.WHEREFORE, for lack of merit, the petition is hereby DISMISSED. There is an illegal dismissal.

495Sulit v. EMPLOYEES COMPENSATION COMMISSION 98 SCRA 483LAW CONCEPTS

FACTSThis is a claim for employees compensation. Gregorio S. Sulit was employed as a mechanic in the Cavite Naval Shipyard, Naval Shore Establishment, Cavite Naval Base of the Philippine Navy from May 26, 1966 up to his death on December 17, 1975 at the age of fifty three years. libraryDue to persistent backaches and bilateral lumbar pains, accompanied by fever and chills, he was confined in the Philippine General Hospital from December 11, 1975 up to his death six days later. He died of acute pyelonephritis and bronchopneumonia.Fe N. Sulit, the widow of the deceased mechanic, filed a claim for employees compensation under Presidential Decree No. 626. She contended that her husbands work was postural in nature and time consuming and that his repairing of a motor vehicle while in a prone position under it for long perspiring hours daily in the span of his working career produced a kinking of his ureters, thereby causing a constant and progressive stagnancy of urine flow which led to infection in the urinary tract and stone formation therein.The Government Service Insurance System and the Employees Compensation Commission rejected the claim because pyelonephritis and bronchopneumonia are not occupational diseases since they do not usually and directly result from the occupation or profession of the worker. Mrs. Sulit appealed to this Court. She contends that she was denied due process because she was not accorded an opportunity to be heard.

ISSUEIs GSIS correct in ruling that the petitioner is not entitled for the benefit?

RULING"SEC. 2. Grounds for compensation. When an employee suffers personal injury from any accident arising out of and in the course of his employment, or contracts tuberculosis or other illness directly caused by such employment, or either aggravated by or the result of the nature of such employment, his employer shall pay compensation in the sums and to the persons hereinafter specified. The right to compensation as provided in this Act shall not be defeated or impaired on the ground that the death, injury or disease was due to the negligence of a fellow servant or employee, without prejudice to the right of the employer to proceed against the negligent party." Hence, to restore a sensible equilibrium between the employers obligation to pay workmens compensation and the employees right to receive reparation for work-connected death or disability.As correctly observed by the learned Government Corporate Counsel, Manuel M. Lazaro, the Labor Code abolished the presumption of compensability and the rule on aggravation of illness caused by the nature of the employment. This Court is powerless to apply those rules under the Labor Code (WHEREFORE, the appeal is dismissed and the decisions of the GSIS and the Employees Compensation Commission, denying the claim, are affirmed.

496Santosvs. EMPLOYEES' COMPENSATION COMMISSION221 SCRA 182LAW CONCEPT

FACTSCarmen Santoss husband died of liver cirrhosis while still a civilian employee of the Philippine Navy. Francisco Santos was employed as welder at the Philippine Navy and its Naval Shipyard as early as March 22, 1955. He spent the last 32 years of his life in the government service, the first year as a welder helper and the last two years as shipyard assistant. On January 11, 1987, he died, the cause of which as indicated in the Death Certificate was liver cirrhosis.Mrs. Carmen A. Santos filed a claim for the death benefit of her husband, Francisco, on January 28, 1987, pursuant to Presidential Decree No. 626, as amended. However, on a letter dated April 30, 1987, the Government Service Insurance System (GSIS), denied the claim on the ground that upon proofs and evidence submitted, Francisco's ailment cannot be considered an occupational disease as contemplated under P.D. 626, as amended.On appeal to the Employees' Compensation Commission (ECC), the Commission affirmed the denial of the GSIS on petitioner's but took cognizant of the fact that the deceased employee did not have a previous history of alcoholism, hepatitis or a previous history of biliary condition which could give a clue to the nature of cirrhosis he had.Where the claimant's illness is not listed in the Table of Occupational Diseases embodied in Annex A of the Rules of Employees' Compensation, said claimant must positively prove that the risk of contracting the disease is increased by the working conditions. In the case at bar, the Commission said that liver cirrhosis may be classified by a mixture of etiologically and morphologically defined entities.As a welder, Francisco was exposed to heat, gas fumes and chemical substances coming from the burning electrodes caused by welding. Research shows that ingestion or inhalation of small amounts of iron over a number of years may lead to siderosis. Acute poisoning brings about circulatory collapse which may occur rapidly or be delayed to 48 hours with liver failure. These are industrial hazards to which Francisco was exposed. And in the long course of time, 32 years at that, his continuous exposure to burned electrodes and chemicals emitted therefrom would likely cause poisoning and malfunction of the liver.

ISSUECan Mrs. Santos claim the benefit even if the death of his husband is not listed to the guidelines of what are compensable?

RULINGThe Employees' Compensation Act is basically a social legislation designed to afford relief to the working man and woman in our society. The Employees' Compensation Commission, as the agency tasked with implementing the social justice mandate guaranteed by the Constitution, should be more liberal in resolving compensation claims of employees especially where there is some basis in the facts for inferring a work connection to the cause of death.This interpretation gives meaning and substance to the liberal and compassionate spirit of the law as embodied in Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor."The policy is to extend the applicability of PD 626 to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the state to give maximum aid and protection to labor.Premises considered, We find the petition meritorious. Liver cirrhosis, although not one among those listed as compensable ailment, as considered in the case at bar as covered under the Act, on the ground that the nature of the work of petitioner's husband, exposed him to the risk of contracting the same.WHEREFORE, petition is hereby GRANTED and the decision of the Employees' Compensation Commission is REVERSED.

497Latagan v. EMPLOYEES COMPENSATION COMMISSION213 SCRA 715LAW CONCEPT

FACTSJosue A. Latagan, who was employed in the Philippine Navy from 1949 up to the time he died in 1978. She claims that his fatal ailment known as bronchogenic carcinoma was caused by his employment, and that the risk of contracting the disease was aggravated by the working conditions attendant to his duties as gunnersmate in the Philippine Navy.Petitioners husband died on 29 January 1978. Subsequently, she filed a claim for death benefits with the Survivorship Benefits Department, Government Service Insurance System (GSIS).Petitioner now assails the denial of her claim for death benefits on the ground that respondent ECC committed reversible error in sustaining the position of GSIS that the fatal ailment of her husband was not an occupational disease, hence, not compensable, and in affirming the denial sans formal hearing. The cause of her husbands death, bronchogenic carcinoma, is not an occupational disease.

ISSUE: Can the widow of Josue Latagan entitled to get occupational death benefit even if the disease of his husband is not enlisted to the guidelines?

RULING: Admittedly, petitioner failed to present substantial evidence to prove that the decedents working conditions as gunnersmate increased the risk of his contracting the fatal illness. Consequently, We quote with approval the findings of respondent ECC careful review of the records show that petitioner did not present any evidence to establish work connection. She relied solely on the theory of aggravation and presumption of compensability under the old compensation law. In the absence of proof, and none appears on record, We cannot conclude that the employment of the decedent increased the risk of his contracting the disease. As regards the contention of petitioner that she was denied a formal hearing and thus deprived of an opportunity to present additional substantial evidence to support her claim, Our ruling in Sulit v. ECC 10 is enlightening "The filing with the GSIS of a claim for income benefits is in its inception not an adversary proceeding. The claim is filed on a prescribed form. The claimant may present with the claim supporting papers or proof that the disability or death was work-connected or that the risk of contracting the disease involved in the claim was increased by the working conditions."The claim is processed by the GSIS. No formal hearing is required in the processing of the claim."If after processing, the GSIS finds, as in this case, that on its face the claim has no basis, then it is rejected outright. The claim becomes controversial when the claimant appeals to the Employees Compensation Commission, or when an aggrieved party appeals from the Commission to this Court (Arts. 180 and 181, Labor Code; Secs. 3 to 5, Rule XVIII and sec. 1, Rule XVII, Amended Rules on Employees Compensation."Petitioner, on the instant case, was afforded the fair and reasonable opportunity to prove that her husbands death was work-connected. The respondent agencies appear to have taken into account her application for death benefits, her supporting documents, her motion for reconsideration of the denial of her claim, and her appeal before respondent ECC. Unfortunately, however, We cannot like respondents find any legal justification for a favorable award on her claim.WHEREFORE, the petition is DENIED for lack of merit, and the decisions of respondents Government Service Insurance System (GSIS) and Employees Compensation Commission (ECC) are hereby AFFIRMED. No costs.

498Orate v CA399 SCRA 572EMPLOYER

FACTSOn December 5, 1972, petitioner Norma Orate was employed by Manila Bay Spinning Mills, Inc., as a regular machine operator. she was diagnosed to be suffering from invasive ductal carcinoma (breast, left), commonly referred to as cancer of the breast.Consequently, she underwent modified radical mastectomy on June 9, 1995.The operation incapacitated her from performing heavy work, for which reason she was forced to go on leave and, eventually, to retire from service at the age of 44.On November 17, 1995, petitioner applied for employees compensation benefits with the Social Security System (SSS), but the same was denied on the ground that her illness is not work-related.On January 22, 1996, she moved for reconsideration contending that her duties as machine operator which included lifting heavy objects increased the risk of contracting breast cancer. The SSS, however, reiterated its denial of petitioners claim for benefits. The Court of Appeals reversed the decision of the ECC, and granted petitioners claim for compensation benefit under the Workmens Compensation Act (Act No. 3428). it held that petitioners breast cancer must have intervened before the effectivity of Title II, Book IV of the Labor Code on Employees Compensation and State Insurance Fund on January 1, 1975, hence, the governing law on petitioners claim for compensation benefit is Act No. 3428, which works upon the presumption of compensability, and not the provisions of the Labor Code on employees compensation.Petitioner instead should be entitled to the benefits under Act No. 3428, as amended, together with the medical-surgical expenses, including doctors bill. Petitioner filed a motion for reconsiderationarguing that it is the Labor Code which should be applied to her case inasmuch as there is no evidence that the onset of her breast carcinoma occurred before January 1, 1975.She claimed that the basis of the computation of her compensation benefits should be the Labor Code and not the Workmens Compensation Act.ISSUEIs the Court of Appeals correct in ruling that the benefit is not compensable against the employer or the State fund?RULINGIn workmens compensation cases, the governing law is determined by the date when the claimant contracted the disease.An injury or illness which intervened prior to January 1, 1975, the effectivity date of P.D. No. 626, shall be governed by the provisions of the Workmen's Compensation Act,while those contracted on or after January 1, 1975 shall be governed by the Labor Code, as amended by P.D. No. 626. Corollarily, where the claim for compensation benefit was filed after the effectivity of P.D. No. 626 without any showing as to when the disease intervened, the presumption is that the disease was contracted after the effectivity of P.D. No. 626In the case at bar, petitioner was found to be positive for breast cancer on March 22, 1995.No evidence, however, was presented as to when she contracted said ailment.Hence, the presumption is that her illness intervened when P.D. No. 626 was already the governing law. Hence, while we sustain petitioners claim that it is the Labor Code that applies to her case, we are nonetheless constrained to rule that under the same code, her disability is not compensable.Much as we commiserate with her, our sympathy cannot justify an award not authorized by law.It is well to remember that if diseases not intended by the law to be compensated are inadvertently or recklessly included, the integrity of the State Insurance Fund is endangered. Compassion for the victims of diseases not covered by law ignores the need to show a greater concern for the trust fund to which the tens of millions of workers and their families look to for compensation whenever covered accidents, diseases and deaths occur. This stems from the development in the law that no longer is the poor employee still arrayed against the might and power of his rich corporate employer, hence the necessity of affording all kinds of favorable presumptions to the employee. It is now the trust fund and not the employer which suffers if benefits are paid to claimants who are not entitled under the law

WHEREFORE, in view of all the foregoing, the decision of the Court of The decision of the Employees Compensation Commission dismissing petitioners claim for compensation benefits under the Employees Compensation Program isREINSTATED.

499PHILIPPINE BLOOMING MILLS CO., INC. vs SOCIAL SECURITY SYSTEM17 SCRA 107COVERAGE

FACTSThe Philippine Blooming Mills Co., Inc., a domestic corporation since the start of its operations in 1957, has been employing Japanese technicians under a pre-arranged contract of employment, the minimum period of which employment is 6 months and the maximum is 24 months.From April 28, 1957, to October 26, 1958, the corporation had in its employ 6 Japanese technicians. In connection with the employment of these aliens, it sent an inquiry to the Social Security System (SSS) whether these employees are subject to compulsory coverage under the System, which inquiry was answered by the First Deputy Administrator of the SSS.Starting September, 1957, and until the aforementioned Japanese employees left the Philippines on October 26, 1958, the corresponding premium contributions of the employer and the employees on the latter's memberships in the SSS On October 7, 1958, the Assistant General Manager of the corporation, on its behalf and as attorney-in-fact of the Japanese technicians, filed a claim with the SSS for the refund of the premiums paid to the System, on the ground of termination of the members' employment. As this claim was denied, they filed a petition with the Social Security Commission for the return or refund of the premiums, in the total sum of P2,520.00, paid by the employer corporation and the 6 Japanese employees, plus attorneys' fees. This claim was controverted by the SSS, alleging that Rule IX of the Rules and Regulations of the System,After hearing, the Commission denied the petition for the reason that, although under the original provisions of Section 3 (d) of Rule I of the Rules and Regulations of the SSS, alien-employees (who are employed temporarily) and their employers are entitled to a rebate of a proportionate amount of their respective contributions upon the employees' departure from the Philippines, said rule was amended by eliminating that portion granting a return of the premium contributions. Republic Act 1161 requires compulsory coverage of employers and employees under the System. It is actually a legal imposition, on said employers and employees, designed to provide social security to the workingmen. Membership in the SSS is, therefore, in compliance with a lawful exercise of the police power of the State, to which the principle of non-impairment of the obligation of contract is not a proper defense. As pointed out by the Solicitor General, the issue that should be determined in this case is whether, in implementing the SSS law and denying appellants' claim for refund of their premium contributions, due process was observed.ISSUEIs the compulsory contribution of the temporary alien-employees lawful? Can the employer get a refund?RULINGThese rules and regulations were promulgated to provide guidelines to be observed in the enforcement of the law. As a matter of fact, Section 3 of Rule I is merely an enumeration of the "general principles to (shall) guide the Commission" in the determination of the extent or scope of the compulsory coverage of the law. One of these guiding principles is paragraph (d) relied upon by appellants, on the coverage of temporarily-employed aliens. It is not here pretended, that the amendment of this Section 3(d) of Rule I, as to eliminate the provision granting to these aliens the right to a refund of part of their premium contributions upon their departure from the Philippines, is not in implementation of the law or beyond the authority of the Commission to do.It may be argued, however, that while the amendment to the Rules may have been lawfully made by the Commission and duly approved by the President on January 14, 1958, such amendment was only published in the November 1958 issue of the Official Gazette, and after appellants' employment had already ceased. Suffice it to say, in this regard, that under Article 2 of the Civil Code,the date of publication of laws in the Official Gazette is material for the purpose of determining their effectivity, only if the statutes themselves do not so provide.In the present case, the original Rules and Regulations of the SSS specifically provide that any amendment thereto subsequently adopted by the Commission, shall take effect on the date of its approval by the President. Consequently, the delayed publication of the amended rules in the Official Gazette did not affect the date of their effectivity, which is January 14, 1958, when they were approved by the President. It follows that when the Japanese technicians were separated from employment in October, 1958, the rule governing refund of premiums is Rule IX of the amended Rules and Regulations, which requires membership for 2 years before such refund of premiums may be allowed.Wherefore, finding no error in the resolution of the Commission appealed from, the same is hereby affirmed, with costs against the appellants.

500Sta. Rita v. CA247 SCRA 487COVERAGEFACTSPetitioner Sta. Rita was charged in the RTC with violating Section 2(a) in relation to Sections 22(d) and 28(e) of Republic Act No. 1161, as amended, otherwise known as the Social Security Law. The RTC sustained petitioner's motion and dismissed the criminal case filed against him. It ruled that the Memorandum of Agreement entered into between the Department of Labor and Employment ("DOLE") and the Social Security System ("SSS") extending the coverage of Social Security, Medical Care and Employment Compensation laws to Filipino seafarers on board foreign vessels was null and void as it was entered into by the Administrator of the SSS without the sanction of the Commission and approval of the President of the Philippines, in contravention of Section 4 (a) of R.A. No. 1161, as amended.In the Petition for Review, petitioner Sta. Rita contends that the Filipino seafarers recruited by B. Sta. Rita Co. and deployed on board foreign vessels outside the Philippines are exempt from the coverage.

ISSUEIs the Sta. Rita exempted of the SSS Law because he was deployed on foreign vessel?

RULING:Terms DefinedEMPLOYMENT Any service performed by an employee for his employer, except (5) Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines.According to petitioner, the Memorandum of Agreement entered into by the DOLE and the SSS is null and void as it has the effect of amending the aforequoted provision of R.A. No. 1161 by expanding its coverage. This allegedly cannot be done as only Congress may validly amend legislative enactments.Petitioner prays that the Court set aside the decision of the Court of Appeals ordering the reinstatement of Criminal Case No. Q-92-35426 and that the Order of the RTC dismissing the same be upheld.It is well-settled in our jurisdiction that the right to appeal is a statutory right and a party who seeks to avail of the right must comply with the rules.These rules, particularly the statutory requirement for perfecting an appeal within the reglementary period laid down by law, must be strictly followed as they are considered indispensable interdictions against needless delays and for orderly discharge of judicial business.Petitioner's failure to seasonably file the Petition and its failure to comply with the aforequoted Circulars of the Court necessitate the denial of the Petition.Besides, even if the Petition had been filed on time and had complied with the Circulars, it would still have to be denied as petitioner has failed to show that respondent appellate court committed any reversible error in rendering the assailed decision.The Court agrees with the CA that the Information filed against petitioner was sufficient as it clearly stated the designation of the offense by the statute. Thus, the Standard Contract of Employment to be entered into between foreign shipowners and Filipino seafarers is the instrument by which the former express their assent to the inclusion of the latter in the coverage of the Social Security Act. In other words, the extension of the coverage of the Social Security System to Filipino seafarers arises by virtue of the assent given in the contract of employment signed by employer and seafarer; that same contract binds petitioner Sta. Rita or B. Sta. Rita Company, who is solidarily liable with the foreign shipowners/employers.It may be noted that foreign shipowners and manning agencies had generally expressed their conformity to the inclusion of Filipino seafarers within the coverage of the Social Security Act even prior to the signing of the DOLE-SSS Memorandum of Agreement.The Court of Appeals properly held that the reinstatement of the criminal case against petitioner did not violate his right against double jeopardy since the dismissal of the information by the trial court had been effected at his own instance.There are only two (2) instances where double jeopardy will attach notwithstanding the fact that the case was dismissed with the express consent of the accused WHEREFORE, the Court Resolved to DENY the Petition for having been filed late, for failure to comply with applicable Court Circulars and for lack of merit. The assailed Decision of the Court of Appeals is hereby AFFIRMED.

501Corporal, Sr. v. NLRC341 SCRA 658COVERAGE

FACTSThe records of the case show that the five male petitioners, namely, Osias I. Corporal, Sr., Pedro Tolentino, Manuel Caparas, Elpidio Lacap, and Simplicio Pedelos worked as barbers, while the two female petitioners, Teresita Flores and Patricia Nas worked to private respondent Lao Enteng Co. Inc..Petitioner Nas alleged that she also worked as watcher and marketer of private respondent.Petitioners claim that at the start of their employment with the New Look Barber Shop, it was a single proprietorship owned and managed by Mr. Vicente Lao.The children of Vicente Lao organized a corporation which was registered with the Securities and Exchange Commission as Lao Enteng Co. Inc. with Trinidad Ong as President of the said corporation.Upon its incorporation, the respondent company took over the assets, equipment, and properties of the New Look Barber Shop and continued the business.All the petitioners were allowed to continue working with the new company until April 15, 1995 when respondent Trinidad Ong informed them that the building wherein the New Look Barber Shop was located had been sold and that their services were no longer needed. Petitioners filed with the Arbitration Branch of the NLRC, a complaint for illegal dismissal, illegal deduction, separation pay, non-payment of 13th month pay, and salary differentialsIn a Decision dated September 28, 1995, Labor Arbiter Potenciano S. Caizares, Jr. ordered the dismissal of the complaint on the basis of his findings that the complainants and the respondents were engaged in a joint venture and that there existed no employer-employee relation between them.Complainants failed to show the existence of employer-employee relationship under the fourway test established by the Supreme Court.It is a common practice in the Barber Shop industry that barbers supply their own scissors and razors and they split their earnings with the owner of the barber shop.The only capital of the owner is the place of work whereas the barbers provide the skill and expertise in servicing customers.The only control exercised by the owner of the barber shop is to ascertain the number of customers serviced by the barber in order to determine the sharing of profits.The barbers maybe characterized as independent contractors because they are under the control of the barber shop owner only with respect to the result of the work, but not with respect to the details or manner of performance.The barbers are engaged in an independent calling requiring special skills available to the public at large. ISSUEIs NLRC correct that the respondent is an independent contractor and should not be covered and be given corresponding benefits? RULINGIn our view, this case is an exception to the general rule that findings of facts of the NLRC are to be accorded respect and finality on appeal.We have long settled that this Court will not uphold erroneous conclusions unsupported by substantial evidence.We must also stress that where the findings of the NLRC contradict those of the labor arbiter, the Court, in the exercise of its equity jurisdiction, may look into the records of the case and reexamine the questioned findings.The issues raised by petitioners boil down to whether or not an employer-employee relationship existed between petitioners and private respondent Lao Enteng Company, Inc.The Labor Arbiter has concluded that the petitioners and respondent company were engaged in a joint venture.The NLRC concluded that the petitioners were independent contractors.While it is no longer true that membership to SSS is predicated on the existence of an employee-employer relationship since the policy is now to encourage even the self-employed dressmakers, manicurists and jeepney drivers to become SSS members, we could not agree with private respondents that petitioners were registered with the Social Security System as their employees only as an accommodation.As we have earlier mentioned private respondent showed no proof to their claim that petitioners were the ones who solely paid all SSS contributions.It is unlikely that respondents would report certain persons as their workers, pay their SSS premium as well as their wages if it were not true that they were indeed their employees. An employer may adopt policies or changes or adjustments in its operations to insure profit to itself or protect investment of its stockholders.In the exercise of such management prerogative, the employer may merge or consolidate its business with another, or sell or dispose all or substantially all of its assets and properties which may bring about the dismissal or termination of its employees in the process.The petition is GRANTED. Private respondents are hereby ordered to pay, severally and jointly, the seven (7) petitioners their(1) 13thmonth pay and (2) separation pay equivalent to one month pay for every year of service, to be computed at the then prevailing minimum wage at the time of their actual termination which was April 15, 1995.

502CHUA vs CA440SCRA121COVERAGEFACTSOn 20 August 1985, private respondents Andres Paguio, Pablo Canale, Ruel Pangan, Aurelio Paguio, Rolando Trinidad, Romeo Tapang and Carlos Maliwat filed aPetition with the SSC for SSS coverage and contributions against petitioner Reynaldo Chua, owner of Prime Mover Construction Development, claiming that they were all regular employees of the petitioner in his construction business.Private respondents alleged that petitioner dismissed all of them without justifiable grounds and without notice to them and to the then Ministry of Labor and Employment.They further alleged that petitioner did not report them to the SSS for compulsory coverage in flagrant violation of the Social Security Act. Petitioner claimed that private respondents had no cause of action against him, and assuming there was any, the same was barred by prescription and laches.In addition, he claimed that private respondents were not regular employees, but project employees whose work had been fixed for a specific project or undertaking the completion of which was determined at the time of their engagement.This being the case, he concluded that said employees were not entitled to coverage under the Social Security Act.[9]The SSS stated that it is the mandatory obligation of every employer to report its employees to the SSS for coverage and to remit the required contribution, including the penalty imposed for late premium remittances.The SSC, relying on NLRC Case No. RAB-III-8-2373-85, declared private respondents to be petitioners regular employees.It ordered petitioner to pay the SSS the unpaid SS/ECandMedicarecontributionspluspenalty for thedelayedremittancethereof,withoutprejudiceto any other penalties which may have accrued.The SSC denied theMotion for Reconsideration of petitioner for lack of merit. The Court of Appeals, citing Article 280 of the Labor Code, declared that private respondents were all regular employees of the petitioner in relation to certain activities since they all worked either as masons, carpenters and fine graders in petitioners various construction projects for at least one year, and that their work was necessary and desirable to petitioners business which involved the construction of roads and bridges.

ISSUEIs the CA correct in granting that there is an employee- employer relationship and the employees should be covered by SSS?RULINGStripped of the lengthy, if not repetitive, disquisition of the private parties in the case, and also of the public respondents, on the nature of private respondents employment, the controversy boils down to one issue:the entitlement of private respondents to compulsory SSS coverage. The Social Security Act was enacted pursuant to the policy of the government to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the laborers throughout the Philippines, and shall provide protection against the hazards of disability, sickness, old age and death.It provides for compulsory coverage of all employees not over sixty years of age and their employers. This Court has held that an employment ceases to be co-terminus with specific projects when the employee is continuously rehired due to the demands ofthe employers business and re-engaged for many more projects without interruption. The Court likewise takes note of the fact that, as cited by the SSC, even the National Labor Relations Commission in a labor case involving the same parties, found that private respondents were regular employees of the petitioner.Anent the issue of prescription, this Court rules thatprivate respondentsright to file their claim had not yet prescribed at the time of the filing of their petition, considering that a mere eight (8) years had passed from the time delinquency was discovered or the proper assessment was made. Republic Act No. 1161, as amended,prescribes a period of twenty (20) years, from the time the delinquency is known or assessment is made by the SSS, within which to file a claim for non-remittance against employers. Likewise, this Court is in full accord with the findings of the Court of Appeals that private respondents are not guilty of laches.The principle of laches or stale demands ordains that the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier, or the negligence or omission to assert a right within a reasonable time, warrants a presumption that the party entitled to assert it either has abandoned it or declined to assert it.In the instant case, this Court finds no proof that private respondents had failed or neglected to assert their right, considering that they filed their claim within the period prescribed by law. WHEREFORE, thePetitionis DENIED.TheDecisionandResolutionof the Court of Appeals promulgated on 6 March 1996 and 30 July 1996 respectively, are AFFIRMED.Costs against petitioner.

503POBLETE CONSTRUCTION CO. vs. JUDITH ASIAIN20 SCRA 1143SSS Reporting Requirements

FACTSMiguel Asiain was an employee of the Poblete Construction Company from 1956 until his death on November 22, 1959, with a monthly salary of P300. Upon his death his widow, Judith Asiain, for herself and her minor children, filed a petition before the Social Security Commission against the company and its manager, Domingo Poblete (Case No. 78), to recover the following sum: (1) P3,600.00 equivalent to one year's salary of the deceased; (2) P600.00 representing his unpaid salary for two months; (3) P288.00 "representing the cash received by respondents from their laborers as contribution to the family of the deceased;" and (4) P2,000.00 by way of attorney's fees. The respondents below moved to dismiss the petition on the grounds that the Social Security Commission had no jurisdiction over the subject-matter and that the petitioner Judith Asiain had no capacity to sue. The Commission denied the motion to dismiss in its order of February 25, 1960 and ordered the respondents to file their answer. When no answer was forthcoming, the respondents were declared in default in an order dated March 9, 1960, and the petitioners were allowed to present their evidence. It appears that although the deceased Miguel Asiain had been employed in the Poblete Construction Company since 1956 and had accomplished SSS Form E-1 (Employees' Date Record) and transmitted the same to the said company's Manila Office, it was never filed with the Social Security System for the reason, according to the company, that he refused to have his share of the corresponding monthly contributions deducted from his salary.

ISSUEWhether or not the SSS had no jurisdiction to entertain the claim of P3,600, which should have been presented before the ordinary courts.

RULINGYes. There is no question that the deceased Miguel Asiain was subject to compulsory coverage in the Social Security System. It was the duty of the employer to "report immediately to the System" his name, age, civil status, occupation, salary and dependents. Compliance with this duty did not depend upon the employee's willingness to give his share of the contribution. Section 24 is mandatory, to such an extent that if the employee should die or become sick or disabled without the report having been made by the employer, the latter is liable for an amount equivalent to the benefits to which the employee would have been entitled had such report been made. It is true that the provision uses the word "damages" in referring to the amount that may be claimed. But this fact alone does not mean that the Social Security Commission lacks jurisdiction to award the same. Section 5(a) of the Social Security Act provides that "the filing, determination and settlement of claims shall be governed by the rules and regulations promulgated by the Commission;" and the rules and regulations thus promulgated state that "the effectivity of membership in the System, as well as the final determination and settlement of claims, shall be vested in the Commission.Otherwise an employer could nullify the jurisdiction of the Commission by the simple expedient of not making a report as required by said Section. The collection of the employee's share is a duty imposed by law, and his unwillingness to have it deducted from his salary does not excuse the employer's failure to make the report aforesaid. It is precisely in this situation that the employer is liable, and there is no question as to the amount of such liability in this case.The decision of the Social Security Commission is affirmed.

504CMS ESTATE, INC. vs. SOCIAL SECURITY SYSTEM132 SCRA 108SSS Fund Ownership

FACTSPetitioner CMS Estate Inc is a domestic corporation engaged in the real estate business. In December 1952, it began with only 6 employees. In 1956, it also engaged in the logging business and obtained an ordinary license from the Bureau of Forestry to operate forest concession (13,000 hectares) in Baganga, Davao. In January 1957, CMS Estate entered into a contract of management with Eufracio Rojas for the operation of the logging concession which began in April 1957 with four employees earning monthly salaries. By September 1957, CMS Estate had 89 employees in the logging operation. But on December 1957, CMS Estate revoked its contract with Rojas. By August 1958, CMS Estate became a member of SSS with respect to its real estate business and remitted to the SSS P203.13 representing the initial premium of the salaries of the employees in the logging business. But on October 1958, petitioner demanded the refund ofthe amount, alleging that it is not yet subject to compulsory coverage in its logging business. Respondent SSS denied the petition on the ground that the logging business is only an expansion of the companys existing activities and that it should be considered a member since December 1952 when it opened its business. CMS Estate contends that the SSS contributions required of employees and employers under the SSS Act of 1954 are not in the nature of excise taxes and therefore, not compulsory ofemployers.ISSUEW/N Petitioners logging business is subject to compulsory coverage in the SSS.

RULINGPrior to its amendment, Sec. 9 of the Act provides that before an employer could be compelled to become a member of the System, he must have been in operation for at least two years and has at the time of admission at least six employees. It should be pointed out that it is the employer, either natural, or judicial person, who is subject to compulsory coverage and not the business. If the intention of the legislature was to consider every venture of the employer as the basis of a separate coverage, an express provision to that effect could have been made. Unfortunately, however, none of that sort appeared provided for in the said law. Should each business venture of the employer be considered as the basis of the coverage, an employer with more than one line of business but with less than six employees in each, would never be covered although he has in his employ a total of more than six employees which is sufficient to bring him within the ambit of compulsory coverage. This would frustrate rather than foster the policy of the Act. The legislative intent must be respected. In the absence of an express provision for a separate coverage for each kind of business, the reasonable interpretation is that once an employer is covered in a particular kind of business, he should be automatically covered with respect to any new name. Any interpretation which would defeat rather than promote the ends for which the Social Security Act was enacted should be eschewed. The Social Security Law was enacted pursuant to the policy to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines and provide protection against the hazards of disability, sickness, old age and death. It is clear then that the implementation of the SSS Law is in line with the general welfare mandate of the Constitution and as such, is a legitimate exercise of the police power. As held in Philippine Blooming Mills Co. vs. SSS: membership in the SSS is not a bilateral, consensual agreement where obligations and rights of the parties are subject to their will. RA 1161 requires compulsory coverage of employees and employers under the system. As such, the principle of non-impairment of obligation of contract cannot be raised as a defense. The taxing power of the State is exercised for the purpose of raising revenues. However, under our Social Security Law, the emphasis is more on the promotion of the general welfare. The Act is not part of our Internal Revenue Code nor are the contributions and premiums therein dealt with and provided for, collectible by the BIR.

505Santiago v. CA133 SCRA 34Effect of Non-remittance SSS Failure Remit

FACTSPetitioners were employees of I-Feng Enamelling Company (Phil.) Inc. for several years, some from 1950 up to the time the company closed its business in 1965. Since the enactment of the Social Security Act, Republic Act No. 1161, as amended, said employees have been paying, through salary deductions, their personal contributions to the System. Appellants, during their employment, also enjoyed salary loan benefits, their installment payments deducted and collected by their employer, and said employer failed to remit to the System not only the installment payments to their salary loans (P7,940.13) but also the back premiums (P137,787.90), excluding of course the penalties therefor (P63,734.97).Petitioners argue that they are entitled to full credit for the unremitted premium contributions and salary loan installment payments deducted from their wages because, by law, a contract of agency exists between the SSS and the Employer in the collection of the salary loan installment payments, and therefore, as such agent, payment to the Employer is payment to the principal, which is the System.

ISSUEW/N the premium contributions and payments of salary loans by petitioners, which were deducted and collected from their salaries by their Employer, but not remitted to the System, should be credited in their favor by the System

RULINGOnly the premium contributions paid by petitioners to its employer shall be credited in petitioners' favor.SSS Circular No. 52 states: V. Service and Collection Fee. -The System shall charge a service fee of P3.50 for every approved application deductible in advance from the proceeds of the loan.However, the employer shall be entitled to deduct from the total quarterly collections that he remits to the System a collection fee of seven centavos (P.07) for every ten pesos (P10.00) or fraction thereof. The fee was devised to encourage employers to be prompt in the remittance of their collections to the System.There is a difference, however, in respect of premium contributions, by reason of the explicit provision of Section 22(b) of the Social Security Act, reading: (b) The contributions payable under this Act in cases where an employer refuses or neglects to pay the same shall be collected by the System in the same manner as taxes are made collectible under the National Internal Revenue Code, as amended, Failure or refusal of the employer to pay or remit the contributions herein prescribed shall not prejudice the right of the covered employee to the benefits of the coverage.Clearly, if the employer neglects to pay the premium contributions, the System may proceed with the collection in the same manner as the Bureau of Internal Revenue in case of unpaid taxes. Plainly, too, notwithstanding non-remittance by employers of the premium contributions, covered employees are entitled to the benefits of the coverage, such as death sickness, retirement, and permanent disability benefits. These benefits continue to be enjoyed by the employees by operation of law and not, as petitioners allege, because the premium contributions and salary loan installment payments have already became the money of the System upon payment by the employees to the employer. It should be remembered that funds contributed to the System by compulsion of law are funds belonging to the members, which are merely held in trust by the government. The mentioned benefits, however, do not include the salary loan privileges that member-employees apply for. The System may or may not grant those loans pursuant to its rules and regulations. The salary loans are not covered by law but by contract between the System as lender, and the private employee, as borrower.Contrary to petitioners' contention, the penalty of 3% per month imposed on the employer, if any premium contribution is not paid to the System, prescribed by Section 22 of the Act from the date the contribution falls due until paid, does not necessarily make the employer the agent of the System. The prescribed penalty is intended to exact compliance by the employer. It is evidently of a punitive character.

506Benedicto v. Abad183 SCRA 434Effect of Non-remittance SSS Failure Remit

FACTSPetitioner Benedicto started a trucking business in which he employed the late Salvador Pillon as truck driver. Petitioner, however, did not report Pillon's employment to the Social Security System ("SSS") for compulsory coverage and did not pay the corresponding SSS contributions.The above facts came to the knowledge of the SSS. After Pillon's death, an investigator of the SSS Regional Office in Bacolod City was deputized to conduct an enquiry in respect of Benedicto's alleged violations of the Social Security Act (RA 1161). In his Field Investigation Report, he stated that Benedicto had admitted having failed to report and to register with the SSS Pillon's employment for the period from his employment up to the time of his death, and to pay the corresponding SSS contributions; that upon the inspectors suggestion, petitioner Benedicto had accomplished and submitted SSS Forms reporting himself and Pillon for SSS compulsory coverage; that Benedicto and Pillon were assigned SSS Identification numbers; that Benedicto was assessed SSS premiums in the total amount of P491.70 excluding penalties. The inspector recommended that his report be transmitted to the Legal Department of the SSS in Quezon City for appropriate action. Approximately ten (10) years later, upon complaint of the Legal Department of the SSS, the Assistant City Fiscal of Bacolod City filed an information charging petitioner Benedicto with violations of Section 24 (a) in relation to Section 28 (e) of the Social Security Act. Before arraignment, petitioner Benedicto moved to quash the information asserting that his liability thereunder had already been extinguished by prescription. Upon the other hand, the complainant SSS opposed the Motion to Quash contending that the offense charged in the information had not yet prescribed since the applicable prescriptive period was twenty (20) years and since the information was filed within this 20-year period. Respondent Judge