Title
Manly Express Inc. vs. Payong, Jr.
Case
G.R. No. 167462
Decision Date
Oct 25, 2005
Employees Balena and Payong filed complaints against Manly Express for constructive dismissal and illegal termination due to partial blindness, respectively. The Supreme Court ruled Balena’s claim lacked merit, while Payong’s dismissal was unlawful due to insufficient medical certification and procedural lapses.
illegal dismissal
constructive dismissal
medical certification

Case Summary (G.R. No. 167462)

Factual Background

The Court of Appeals found that petitioners’ employees Hercules Balena and Romualdo Payong, Jr. worked for Manly Express, Inc. and/or Siy Eng T. Ching on different dates and in different capacities—Balena as tour coordinator (dispatcher) and Payong as welder. Balena alleged that during his employment he demanded correct employee benefits, but each time he made the demand he was told not to report for work anymore if he was not contented with the wages he received. The record also showed that private respondents called Balena’s attention to alleged tardiness. On May 16, 2000, Balena commenced a case for constructive dismissal and various monetary claims.

Payong’s version differed. The Court of Appeals found that in December 1999 Payong complained of eyesight problems. He was brought by Ching to an eye specialist and was diagnosed with cataract. After cataract surgery in January 2000, Ching disallowed Payong from returning to work. Later, on August 1, 2000, Payong received a termination letter stating that the company was suffering from a reduced demand for bus services and increased operating costs, leaving it with a difficult cash position. The letter further stated that Payong’s “partial blindness” prevented him from continuing in his position, and it declared that termination would take effect immediately, while granting a grace period of fifteen days to remove personal belongings and to coordinate payment of financial assistance and other benefits.

Termination Letter and Causes of Action

The termination letter dated 01 August 2000 served as the company’s formal basis for Payong’s separation. The company attributed termination both to business conditions and to the medical condition that allegedly made continued employment impossible in the position he held. Acting on these events, Payong filed a complaint for illegal dismissal with money claims, which was consolidated with separate illegal dismissal complaints filed by Francisca Adsuara and Flor Palisoc.

Labor Arbiter Proceedings

On July 31, 2001, the labor arbiter rendered judgment that dismissed Balena’s complaint for want of cause of action. The labor arbiter, however, ordered the company to pay Payong, Adsuara, and Palisoc the total amount of P75,900.00, as discussed in the body of the decision.

NLRC Modification

The NLRC modified the labor arbiter’s ruling. It directed the payment of specific amounts to each complainant. As to Payong, it ordered payment of P3,352.00 as service incentive leave pay and P20,115.00 as 13th month pay, for a total of P23,467.00. The other findings of the labor arbiter remained affirmed.

Court of Appeals Ruling

Upon denial of motions for reconsideration, Balena and Payong elevated the case to the Court of Appeals. In its November 22, 2004 Decision, the Court of Appeals denied Balena’s petition and affirmed the NLRC decision insofar as Balena was concerned. It ruled that Balena had prematurely filed his complaint because he was still gainfully employed when the complaint was filed, and because he failed to allege the details of the alleged dismissal and to prove the fact of severance. The Court of Appeals also held that the management’s statement that Balena would not have to report if he was not contented with his wages did not amount to constructive dismissal.

As to Payong, the Court of Appeals granted the petition and declared his dismissal unlawful. It ordered reinstatement and separation pay in case reinstatement was no longer viable, and it ordered backwages, with no pronouncement as to costs. The Court of Appeals grounded illegality primarily on the employer’s failure to present a certification by a competent public health authority to substantiate that Payong’s partial blindness was of such nature or stage as to make it incurable within six months even with proper medical treatment. Without such certification, it held that the dismissal was illegal.

Petitioners’ Position and the Issues

Petitioners came before the Supreme Court through a petition for review on certiorari under Rule 45, assailing both the Court of Appeals decision and the resolution denying partial reconsideration. The Supreme Court framed the governing legal inquiry around whether Payong’s termination could be validly sustained under Article 284 of the Labor Code and Section 8, Rule I, Book VI of the Omnibus Rules. The petitioners argued, in substance, that the medical certification requirement should not apply based on their asserted circumstances, including alleged refusal to undergo medical treatment and purported resignation by Payong.

Legal Basis Under Article 284 and the Omnibus Rules

The Court reiterated that Article 284 authorizes termination on the ground of disease, provided specific requisites concur. The Omnibus Rules implementing the Labor Code—specifically Section 8, Rule I, Book VI—require that the employer cannot terminate unless there is a certification by a competent public health authority that the disease is such that it cannot be cured within six months even with proper medical treatment. If the disease can be cured within that period, the employer must ask the employee to take a leave, and the employer must reinstate the employee immediately upon restoration of normal health.

The Court held that the rule was explicit and that two requisites must concur: first, that the employee suffers from a disease which cannot be cured within six months and that continued employment is prohibited by law or prejudicial to the employee’s health and to the health of co-employees; and second, that a certification to that effect has been issued by a competent public health authority.

Supreme Court’s Ruling: Illegal Dismissal Due to Lack of Certification

Applying the above legal framework, the Court held that there was no proof that Payong’s continued employment was prohibited by law or prejudicial to his health or that of his co-employees. More importantly, there was no medical certificate by a competent public health authority stating that Payong’s disease could not be cured within six months even with proper medical treatment. In the absence of the required certification, the Court ruled that Payong’s dismissal was necessarily illegal.

Rejection of Petitioners’ Arguments and Burden of Proof

The Court rejected petitioners’ contention that the certification requirement should not apply because Payong allegedly refused medical treatment and voluntarily resigned. The Court found that petitioners had not established that Payong refused to undergo medical examination or that Payong resigned of his own free will. To the contrary, the termination letter showed that it was the company that initiated the termination, citing Payong’s partial blindness. The evidence also showed that Payong had been prevented from working even before the termination letter was served, which demonstrated the employer’s intent to dismiss him.

The Court further emphasized that the burden of proving the validity of the dismissal rested on the employer. It cited precedent holding that the medical certificate requirement under Article 284 could not be dispensed with, because otherwise it would sanction the employer’s unilateral and arbitrary determination of the gravity or extent of the employee’s illness and would defeat the public policy protecting labor. It also noted that the employer failed to co

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