PCL Shipping Philippines, Inc.

vs NLRC and Steve Rusel

FACTS: In April 1996, Rusel was employed as GP/AB seaman by manning agency, PCL Shipping for
and in behalf of its foreign principal, U-Ming Marine. Rusel thereby joined the vessel MV Cemtex for the
contract period of twelve months.

On June 16, 1996, while Rusel was cleaning the vessel’s kitchen, he slipped, and a consequence thereof,
he suffered a broken and/or sprained ankle on his left foot. A request for medical examination was flatly
denied by the captain of the vessel. On August 13, 1996, feeling an unbearable pain in his ankle, Rusel
jumped off the vessel using a life jacket and swam to shore. He was bought to a hospital where he was
confined for eight (8) days.

He was fetched by a vessel’s agent from the hospital and was required to board a plane bound for the
Philippines. On September 26, 1996, Rusel filed a complaint for illegal dismissal among other claims
against PCL Shipping and U-Ming Marine. In their answer, the latter alleged that Rusel deserted his
employment by jumping off the vessel.

The LA rendered a decision finding the respondent liable for unjust repatriation of the complaint.
Awarding $2,625.00 or its peso equivalent representing the three months’ salary due to illegal dismissal,
sick wage benefit, and 10% of the attorney’s fees among others.

The NLRC affirmed the findings of the LA but modified in so far as the amount representing three months’
salary of the complainant due to dismissal is reduced to $1,620.00. Further the award of sick wage benefit
is deleted.

The CA dismissed the petition and affirmed the NLRC.

Petitioners raised three arguments. (1) That CA erred in ruling that private respondent was illegally
dismissed from employment since Rusel’s very act of jumping from the vessel and swimming to shore is
evidence that he has no intention of returning to his job; that it is a grave and serious offense; (2)
Petitioners contend that even assuming arguendo, that Rusel is not guilty of desertion, they acted through
valid management prerogative; and (3) that private respondent is not entitled to other money claims,
particularly as to the award of attorney’s fees.

ISSUES: 1) Whether or not private respondent is guilty of desertion; 2) Whether petitioners acted through
valid management prerogative; and 3) Whether or not petitioner is entitled to his money claims.

RULING:
1. NO. Private respondent is not guilty of desertion. It is a settled rule that under Rule 45 of the Rules of
Court, only questions of law may be raised in this Court. In the present case, the question is factual. The
LA, NLRC, and the CA unanimously found that he is not guilty, but actually illegally terminated from his
employment. Moreover, in order to constitute dissertation in maritime law, an element is “to have an
intention not to return to service”, a burden of the employer failed to discharge.

2. NO. Petitioners cite Section 19(C) of POEA Memorandum Circular No. 055-96 that gives employers the
prerogative under certain conditions to repatriate an employee. However, this was not still in effect when
the contract of employment between the parties were created, hence not binding. Even if the closest
provision to Sec. 19(C), Memorandum Circular No. 41, is applied to the contract, it will still fall because
the ground for termination are inconsistent with each other (last paragraph: “shall not apply to dismissal
for cause”) and also because respondent’s termination did not meet the “not within a 3-month period
before expiration” condition (From April 1996, 12 month contract. He was repatriated on August 1996).
The Contract of Employment being entered into by and between the parties was executed in the
Philippines, hence, (by principle of lex loci contractus) the Labor Code and its IRR applies, consequently,
the twin-notice rule. Which petitioners failed to comply with.

3. YES. The Court found for private respondent. However, the NLRC’s decision was modified since
according the RA 8042, what is included in the computation of the amount due to the overseas worker are
only his salaries. Allowances excluded. The awards of living allowance etc. under the Contract of
Employment were also granted. However, not the overtime pays, since private respondent failed to
present any evidence to prove that he rendered service in excess of the regular eight working hours a
day.

As to the award of attorney’s fees, the Court ruled in Reyes vs CA that there are two commonly
accepted concepts of attorney’s fees:

A. The so-called ORDINARY. It its ordinary concept, an attorney’s fee is the reasonable compensation
paid to a lawyer by his client for the legal services he rendered to the latter. The basis of this
compensation is the fact of his employment by and his agreement with the client.

B. The EXTRAORDINARY. In its extraordinary concept, attorney’s fees are deemed indemnity for
damages ordered by the Court to be paid by the losing party in litigation. The instances where these may
be awarded are those enumerated in Art. 2208, specifically par. 7 (In actions for the recovery of wages of
household helpers, laborers and skilled workers) thereof which pertains to actions for recovery of wages,
and is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to
the lawyer as additional compensation or as part thereof. The extraordinary concept of attorney’s fee is
one contemplated in Art. 111 of the LC, which provides:

Art. 111. Attorney’s fees. – (a) In cases of unlawful withholding of wages, the culpable party may
be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered…

The afore-quoted Art. 111 is an exception to the declared policy of strict construction in awarding
of attorney’s fees. Although an express finding of facts and law is still necessary to prove the
merit of the award, there need not be any showing that the employer acted maliciously or in bad
faith when it withheld the wages. There need only be a showing that the lawful wages were not
paid accordingly, as in this case.

In the present case, it is true that the Labor Arbiter and the NLRC failed to state the reasons why
attorney’s fees are being awarded. However, it is clear that private respondent was illegally
terminated from his employment and that his wages and other benefits were withheld from him
without any valid and legal basis. As a consequence, he is compelled to file an action for the
recovery of his lawful wages and other benefits and, in the process, incurred expenses. On these
bases, the Court finds that he is entitled to attorney’s fees.
Eleazar S. Padillo vs Rural Bank of Nabunturan, Inc. and Oropeza
G.R. No. 199338. January 21, 2013.
TOPIC: Retirement Benefit

FACTS: On October 1, 1977, petitioner, the late Padillo, was employed by respondent Rural Bank of
Nabunturan, Inc. (Bank) as its SA Bookkeeper. Due to liquidity problems which arose sometime in 2003,
the Bank took out retirement/insurance plans with Philam Life for all its employees in anticipation of its
possible closure and the concomitant severance of its personnel. In this regard, the Bank produced
Philam Life Plan in favor of Padillo for a benefit amount of P100,000.00 and which was set to mature on
July 11, 2009.

Respondent Mark S. Oropeza, the President of the Bank, bought majority shares of stock in the Bank and
took over its management which brought about its gradual rehabilitation. The Bank’s finances improved
and eventually, its liquidity was regained.

During the latter part of 2007, Padillo suffered a mild stroke due to hypertension which consequently
impaired his ability to effectively pursue his work (Hypertension S/P CVA (Cerebrovascular Accident) with
short term memory loss, the nature of which had been classified as a total disability. On September 10,
2007, he wrote a letter addressed to respondent Oropeza expressing his intention to avail of an early
retirement package. Despite several follow-ups, his request remained unheeded.

On October 3, 2007, Padillo was separated from employment due to his poor and failing health in a
Certification 2007 issued by the Bank. Not having received his claimed retirement benefits, Padillo filed a
complaint for the recovery of unpaid retirement benefits. He asserts that the Bank had adopted a
policy of granting its aging employees early retirement packages, pointing out that one of his co-
employees, Lusan, was accorded retirement benefits when she retired at the age of only 53.

The LA dismissed Padillo’s complaint but directed the Bank to pay him the amount of P100,000.00 as
financial assistance, treated as an advance from the amount receivable under the Philam Life Plan. It
found Padillo disqualified to receive any benefits under Art. 300 of the LC as he was only 55 years old.

The NLRC reversed and set aside the LA’s ruling and ordered respondents to pay Padillo the amount of
P164,903.70 as separation pay, on top of the P100,000.00 Philam Life Plan benefit. NLRC applied Art.
297, LC holding that while Padillo did resign, he did so only because of his poor health condition.

The CA granted respondent’s petition and set aside the NLRC decision; reinstating the LA’s decision. It
directed the respondents to pay Padillo the amount of of P50,000.00 as financial assistance exclusive of
the P100,000.00 Philam Life benefit which already mature on July 11, 2009. CA held that Padillo could
not, absent any agreement with the Bank, receive any retirement benefits pursuant to Art. 300 of the LC
considering that he was only 55 years old when he retired. Finally citing the Villaruel case, it
pronounced that separation pa on the ground of disease under Aart. 297 of the LC should not be
given to Padillo because he was the one who initiated the severance of his employment.

ISSUE: 1) Whether or not Padillo is entitled to separation pay; 2) Whether or not Padillo is entitled to the
early retirement benefit.

RULING:
1. NO. The Labor Code provision on termination on the ground of disease under Art. 299 does not apply
in this case, considering that it was the petitioner and not the Bank who severed the employment
relations. It was Padillo who voluntarily retired and that he was not terminated by the Bank. As held in the
Villaruel case, a situation where the employer, and not the employee, initiates the termination of
employment on the ground of the latter’s disease or sickness, is not contemplated by Art. 299. Thus,
given the inapplicability of Art. 299 of the Labor Code to the case at bar, it necessarily follows that
petitioners’ claim for separation pay anchored on such provision must be denied.
2. What remains applicable, however, is the Labor Code provision on retirement, in particular Art. 300, as
amended by RA 7631 and 8558. Simply stated, in the absence of any applicable agreement, an
employee must (1) retire when he is at least 60 years of age and (2) serve at least 5 years in the
company to entitle him/her to a retirement benefit of at least ½ month salary for every year of
service, with a fraction of at least 6 months being considered as one whole year.

In this case, it is undisputed that there exists no retirement plan, CBA or any other equivalent contract
between the parties which set out the terms and condition for the retirement of employees, with the sole
exception of the Philam Life Plan which premiums had already been paid by the Bank.

Neither was it proven that there exists an established company policy of giving early retirement packages
to the Bank’s aging employees. All told, in the absence of any applicable contract or any evolved
company policy, Padillo should have met the age and tenure requirements set forth under Art. 300 of
the LC to be entitled to the retirement benefits provided therein. Unfortunately, while Padillo was able
to comply with the five (5) year tenure requirement – as he served for 29 years – he, however, fell
short with respect to the 60-year age requirement given that he was only 55 years old when he
retired. Therefore, without prejudice to the proceeds due under the Philam Life Plan, petitioners’
claim for retirement benefits must be denied.

Nevertheless, the Court concurs with the CA that financial assistance should be awarded but at an
increased amount, considering as well the supervening length of time which had sadly overtaken the point
of Padillo’s death – an employee who had devoted 29 years of dedicated service to the Bank – the Court,
in light of social justice, increased the financial assistance award from P50,000.00 to P75,000.00, still
exclusive of the P100,000.00 benefit receivable by the petitioners under the Philam Life Plan which
remains undisputed.

While the Court mindfully notes that damages may be recoverable due to an abuse of right under Art. 21
in conjunction with Art. 19 of the Civil Code of the Philippines, the following elements must, however,
obtain: (1) there is a legal right or duty; (2) exercised in bad faith; and (3) for the sole intent of prejudicing
or injuring another. Records reveal that none of these elements exists in the case at bar and thus, no
damages on account of abuse of right may be recovered.
De La Salle Araneta University vs Juanito C. Bernardo
G.R. No. 190809. February 13, 2017
TOPIC: RETIREMENT

FACTS: Bernardo filed a complaint against DLS-AU and its owner/manager, Dr. Bautista, for the payment
of retirement benefits. Bernardo alleged that he STARTED working as a part-time professional lecturer
at DLS-AU on June 1, 1974 at an hourly rate of P20.00 for two semesters and the summer for the school
year 1974-1975. Bernardo took a LEAVE OF ABSENCE from 1975 to 1977 when he was assigned by the
Philippine Government to work in Papua New Guinea. When Bernardo CAME BACK in 1977, he resumed
teaching at DLSU-AU until October 2003, the end of the first semester for SY 2003-2004.

Bernardo’s teaching contract was renewed at the start of every semester and summer. However, on
November 8, 2003, DLS-AU informed Bernardo through a telephone call that he could not teach at the
school anymore as the school was implementing the retirement age limit for its faculty members. As
he was already 75 years old, Bernardo had no choice but to retire. At that time, was paid P246.50.

Bernardo immediately sought the advice from DOLE regarding his retirement benefits after 27 years of
employment. To which, DOLE PAC-LSO, opined that Bernardo was entitled to the benefits under RA
7641 (“New Retirement Law,” and its IRR.

Herein petitioners maintained that (1) Bernardo was not entitled to retirement benefits since he is a part-
time employee; and (2) The contract between DLS-AU and Bernardo was for a fixed term. Further
contending that (3) Bernardo was effectively separated from the service upon reaching the age of 65
years old, that DLS-AU merely granted the privilege to teach after reaching the compulsory retirement
age; and (5) even assuming arguendo that Bernardo is entitled to retirement beenfits, he should have
claimed the same upon reaching the age of 65 years old (according to Art. 291 of the LC, all money
claims arising from ER-EP relations shall be filed within three years from the time the cause of action
accrues.

The LA dismissed Bernardo’s complaint on the ground of prescription. Hinging on the UST Faculty Union
vs NLRC, “when the compulsory retirement age is reached by an employee or official, he is thereby
separated from the service.” He should have claimed the same 10 years ago upon reaching the age of
65. The 3-year prescription period for money claims under Art. 291 was also applied.

The NLRC reversed the LA’s ruling and found that Bernardo timely filed his complaint for retirement
benefits on the ground that herein petitioners knew fully well that Bernardo has already reached the
compulsory age of retirement but still extended the employment. The principle of estoppel applies.

The CA affirmed in toto the NLRC judgement. It determined that Bernardo’s cause of action accrued only
upon his separation from employment and the subsequent denial of his demand for retirement benefits.

ISSUES: (1) Whether or not PART-TIME EMPLOYEES are excluded from the coverage of those entitled
to retirement benefits under RA 7641; and (2) Whether or not a claim for retirement benefits filed beyond
the period provided under Art. 291 of the Labor Code has PRESCRIBED
RULING:
1. Part-time employees are ENTITLED to retirement benefits. There is no dispute that Bernardo was a
part-time lecturer at DLS-AU, with a fixed-term employment. As a part-time lecturer, Bernardo did not
attain permanent status, no matter how long he had served the school. Nonetheless, these are immaterial
in this case. Bernardo is NOT alleging illegal dismissal nor claiming separation pay. Bernardo is asserting
his right to retirement benefits given the termination pay of his employment with DLS-AU when he was
already 75 years old.

Bernardo is entitled to retirement benefits as supported by three legislation and resolutions:

(1) Art. 302 [287] of the Labor Code, as amended by RA 7641. The LC provision with regards to
Retirement. It states that ANY employee may be retired upon reaching the retirement age;
(2) Book VI, Rule II of the Rules Implement the LC clearly describes the coverage of RA 7641 as
applicable to all employees in private sector, regardless of their position, designation or status etc.
except those (1) covered by the Civil Service Law; and (2) Employees of retail, service and agricultural
establishments or operations regularly employing not more than ten (10) employees.

(3) Through a Labor Advisory, then-Secretary of Labor, and later SCJ Leonardo Quisumbing, provided
the Guidelines for the Effective Implementation of RA 7641, further clarifies that the Retirement Pay
Law shall (as expressly stated by Quisumbing) shall include part-time employees, employees of
service and other job contractors and domestic helpers or persons in the personal service of
another. [Except the aforementioned exceptions in the 2nd provision discussed].

Based on RA 7641, IRR and Sec. Quisumbing’s Labor Advisory, Bernardo, as a part-time
employee of DLS-AU, is entitled to retirement benefits. Expression unius est exclusion alterius (The
expression of, is the exclusion of others).

Also, for the availment of the retirement benefit under Art. 302 of LC, the following requisites must concur:
1. The employee has reached the age of 60 years for optional retirement or 65 years for compulsory
retirement;
2. The employee has served at least five years in the establishment; and
3. There is no retirement plan or other applicable agreement providing for retirement benefits of
employees in the establishment.

Bernardo – being 75 years old at the time of his retirement, having served DLS-AU for a total of 27
years, and not being covered by the grant of retirement benefits in the CBA – is unquestionably
qualified to avail himself of retirement benefits under said statutory provision.

2. Bernardo’s employment was extended beyond the compulsory age and the cause of action for
his retirement benefits accrued only upon the termination of his extended employment with DLS-
AU.

A cause of action has three elements: (1) A right in favor of the plaintiff by whatever means and under
whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect of not
to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the
plaintiff or constituting a breach of the obligation of the defendant to plaintiff.

There was a violation of Bernardo’s right only after DLS-AU informed him on November 8 2003 that the
University no longer intended to offer him another contract of employment. Therefore, the cause of action
for Bernardo’s retirement only accrued after the refusal of DLS-AU to pay him the same. The complaint
was filed within the three-year prescriptive period.

Even assuming arguendo that Bernardo’s cause of action already accrued when he reached 65 years
old, DLSU-AU had repeatedly extended Bernardo’s employment even when he already reached 65 years
old. The equitable doctrine of estoppel is thus applicable against DLS-AU.

The concurrence of the following requisites is necessary for the principle of equitable estoppel to apply:
(a) conduct amounting to false representation or concealment of material facts or at least calculated to
convey the impression that the facts are otherwise than, and inconsistent with, those which the party
subsequently attempts to assert; (b) intent, or at least expectation that this conduct shall be acted upon,
or at least influenced by the other party; and (c) knowledge, actual or constructive, of the actual facts.

DLS-AU, in this case, not only kept its silence that Bernardo had already reached the compulsory
retirement age of 65 years old, but even continuously offered him contracts of employment for the next 10
years. It should not be allowed to escape its obligation to pay Bernardo’s retirement benefits by putting
entirely the blame for the deferred claim on Bernardo’s shoulders.