The Board of Directors of NAPOCOR (a government-owned utility firm) engaged in electric power distribution issued a Board Resolution granting a step [salary] increment to all qualified officials and employees. The Dept. of Budget and (DBM), however, turned down the NAPOCOR request for clearance to implement the step increment for lack of legal basis. The NAPOCOR corporate auditor then enjoined the management to suspend/stop payments of the subject step increment.
Arguing that the step increment grant is legal, and that they have already acquired a vested interest in it, the NAPOCOR labor union (NECU) challenged the DBM order before the Quezon City RTC with a petition for prohibition with application for TRO/Preliminary Injunction. The trial court granted the writ of preliminary injunction which was affirmed by the Court of Appeals.
DBM’s petition for certiorari at the Supreme Court raises two issues:
a) whether or not the issuance of the injunctive writ constitutes grave abuse of discretion
b) whether or not suspension of the step [salary] increment violates a vested right and the “non-diminution of benefits” principle (Article 100, Labor Code).
The grant of injunctive writ is conditioned on the existence of the movant’s clear and positive right. A clear legal right is one clearly founded in or granted by law or is “enforceable as a matter of law.”
Absent any clear and unquestioned legal right, issuance of an injunctive writ would constitute grave abuse of discretion. Injunction is not intended to protect contingent, abstract or future rights whose existence is doubtful or disputed.
The NAPOCOR union contends that its members have already acquired a vested right to the suspended step increment which they have been enjoying prior to its suspension. It argues that the suspension constitutes a salary diminution clearly prejudicial to them.
There must be a lawful decree or order supporting an employee’s claim. Since the step increments were granted without the required DBM approval, no vested rights to the increments could have been acquired. Thus, the Court reversed and set aside the RTC decision, directing the trial court to proceed with the trial on the merits of the case (G.R. 162716, 9/27/06).
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Shipowner’s liability limited to declared value
The shipowner should not be held liable for more than what was declared by the shippers/consignees as the value of the goods in the bill of lading (404 SCRA 706).
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SC clarifies meaning of “vested right”
A vested right, said the Court, is one that is absolute and unconditional; to its exercise, no obstacle exists; and it is immediate and perfect in itself and not dependent upon any contingency. To be vested, a right must have become a title --- legal or equitable --- to the present or future enjoyment of property (G.R. 162716, 9/27/06).
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Dismissal for willful disobedience
Dismissal of an employee on ground of willful disobedience requires concurrence of at least two requisites: (1) the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude, and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge (G.R. 171703, 9/22/06).
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Documents required for Special Work Permit (to avoid denial or delay of applications)
To avoid summary denial or delay of applications for special work permit, the Bureau of Immigration (BI) advises applicants to observe the following steps:
1) All sworn statement must be duly notarized
2) Documents executed outside the Philippines must be authenticated by the Philippine embassy/consulate official of the Philippine foreign service at the place of issuance or nearest to it, with English translation if written in other foreign language. Any document executed within the Philippines must be duly certified by the offices having custody of the originals.
For immediate processing of the application, the required documents must be arranged in the order listed below:
1) Duly notarized letter request from petitioner company with undertaking to withhold and remit to the BIR taxes due on all income of the applicant;
2) Plain photo-copy of passport bio-page and valid authorized stay;
3) Plain photo-copy of SEC registration, By-Laws, Articles of Incorporation of the company;
4) Plain photo-copy of contract specifying the exact compensation to be earned; and
5) Bureau of Immigration Clearance Certificate (MCL-08).
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PEME (Pre-employment medical examination)
does not reveal true state of seaman’s health
(Pre-existing illnessdoes not entitleto disabilitycompensation)
Under the POEA standard employment contract respondent boarded the vessel on January 28, 1999 but was repatriated on February 21, 1999 on account of his ailment. When examined at the Davao Doctor Hospital on February 22, 1999, respondent admitted that as early as January 17, 1999 or nine days prior to his deployment he has been experiencing “fever… moderate to high grade, intermittent,” associated with chills, body malaise and pain… etc.”
Acting on respondent’s complaint praying for disability compensation benefits, the Labor Arbiter ruled that respondent was entitled to disability benefits. The decision was affirmed by both the NLRC and the Court of Appeals.
Respondent contends that prior to his employment he underwent a thorough PEME (pre-employment medical examination) conducted by the company designated physician and was pronounced “fit to work.”
The Supreme Court held that while PEME may reveal enough for the petitioner company to decide whether a seafarer is fit for overseas employment, it does not reveal a true state of the seafarer’s health. The PEME could not have divulged respondent’s actual illness considering that the examinations were not exploratory. After respondent was subjected to extensive medical procedures it was satisfactorily shown that respondent was not really fit to work due to his pre-existing illness, and hence, he is not entitled to disability compensation and attorney’s fees (G.R. 161104, 9/27/06).
Legal effects of consignation cannot be availed of in the absence of creditor-debtor relationship between the parties. As ruled by the SC in Roxas v. Court of Appeals; “A person who occupies the land of another at the latter’s tolerance or permission, without any contract between them is necessarily bound by an implied promise that he will vacate upon demand, failing which a summary action for ejectment is the proper remedy against him. Thus, the alleged consignation of the monthly rental to the bank account of the property owner cannot have any legal effect absent any contractual basis for the claim to rightful possession of the subject property (G.R. 142882,5/2/06).
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Judicial admission deemed waiver of proof
(A party who judicially admits a fact cannot later challenge that fact)
When called to testify, the petitioner admitted several times that she knew about the first marriage of her deceased husband. In fact, petitioner and her co-heirs had already admitted the existence of the first marriage in their Reply-in-intervention filed in the RTC.
This admission, declared the court, constitutes a “clear and unequivocal” statement, and made as it was in the course of judicial proceedings, such statement qualifies as a judicial admission. A party who judicially admits a fact cannot later challenge that fact as judicial admissions are a waiver of proof. Consequently an admission made in the pleadings are conclusive as to such party, and all proofs to the contrary or inconsistent therewith should be ignored whether objection is interposed or not (G.R. 165987, 3/31/06).
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Briefly Noted
Moral damages
In culpa contractual or breach of contract moral damages are recoverable only if the defendant has acted fraudulently or in bad faith, or is found guilty of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligations (G.R. 146918, 5/2/06).
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Due process: hearing before conviction
Due process as a constitutional precept does not always and in all situations require a trial-type proceeding. The essence of due process demands the reasonable opportunity to be heard and submit any evidence in support of one’s defense. “To be heard” does not only mean verbal arguments in court --- one may also be heard through pleadings (G.R. 168498, 6/16/06, citing Batongbakal v. Zafra).
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Error of judgment or error of jurisdiction?
An error of judgment is one which a court may commit in the exercise of its jurisdiction and which error is reviewable only by an appeal [under Rule 45].
An error of jurisdiction is one where the act complained of was issued by the court, officer or a quasi-judicial body without or in excess of jurisdiction or with grave abuse of discretion tantamount to lack or in excess of jurisdiction [correctible only under Rule 65]. The SC stressed that the remedy of appeal under Rule 45 and a petition for certiorari under Rule 65 are mutually exclusive (G.R. 165910, 4/10/06).
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Contract of adhesion is as binding
as ordinary contracts
The Pre-Need Agreement between the petitioner and respondent is in fact a contract of adhesion since the stipulations therein were unilaterally prepared and imposed by the private respondent on a take-it- or leave-it basis. Petitioner is, however, bound by the terms of the contract nor can she unilaterally change it to suit her whim. A contract of adhesion, said the Court, is “as binding as ordinary contracts, the reason being that the party who adheres to the contract is free to reject it entirely.” Moreover, the Court will not interpret the terms and conditions of the pre-need plan since its language is explicit and leave no doubt as to the intention of the parties. As held by the Court in Insular Life v. Court of Appeals:
A court, even the Supreme Court, has no right to, make new contract for the parties or ignore those already made by them, simply to avoid seeming hardships. Neither abstract justice nor the rule of liberal construction justifies the creation of a contract for the parties which they did not make themselves or the imposition upon one party to a contract of an obligation not assumed (G.R. 147748, 4/9/06).
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Cases need resolution on the merits rather than on technicality
Rules of procedure are mere tools designed to expedite the decision or resolution of cases and other matters pending in court. A strict and rigid application of rules that would result in technicalities that tend to frustrate rather that promote substantial justice must be avoided.
In the Cusi-Hernandez case, the Court held:
“We must stress that cases should be determined on the merits, after full opportunity to all parties for ventilation of their causes and defenses, rather than on technicality or some procedural imperfections. In that way, the ends of justice would be better served. Moreover, the Court has held:
“Dismissal of appeals purely on technical grounds is frowned upon and the rules of procedure ought not to be applied in a very rigid, sense, for they are adopted to help secure, not override, substantial justice and thereby defeat their very aims,” (cited in G.R. 148852, 9/27/06).
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Two Kinds of regular employees
The Labor Code defines regular employment as comprising two kinds of regular employees: (1) those engaged to perform activities necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which they are employed.
Project employment, on the other hand, refers to two distinct types of activities. First, a project may refer to a particular undertaking that is within the regular or usual business of the employer, but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such undertaking or job begins and ends at specified or determinable times. Second, project may also refer to a particular job or undertaking that is not within the regular business of the employer, but also identifiably separate and distinct from the regular business operations of the employer. The undertaking likewise begins and ends at determined or determinable times (G.R. 164156, 9/26/06).
