Marina's Creation Enterprises vs. Ancheta

A regular employee cannot be refused work and effectively dismissed on the ground of disease unless the employer first secures a competent public health authority's certification that the disease cannot be cured within six months even with proper medical treatment; absent that certification, the refusal to give work assignments amounts to illegal dismissal.

Marina's Creation Enterprises is a business engaged in making shoes and bags, and Jerry B. Alfonso is its registered owner. Romeo V. Ancheta was employed by Marina as a sole attacher. The dispute concerns the Labor Code's protection of regular employees and the Implementing Rules' requirement of a competent public health authority certification before an employee may be terminated on the ground of disease.

Marina's Creation Enterprises, a business engaged in making shoes and bags, hired Romeo V. Ancheta as a sole attacher in January 2010; Jerry B. Alfonso is Marina's registered owner. In March 2011, Ancheta suffered an intra-cranial hemorrhage (stroke) and was placed under home care. On 12 May 2011, he suffered a second stroke and was confined at St. Victoria Hospital in Marikina City for four days. On 26 May 2011, he filed a Sickness Notification with the SSS and was paid sickness benefits of P8,100. The physician who physically examined him stated that he would be fit to resume work after ninety days, or on 12 August 2011.

On 13 August 2011, Ancheta reported for work. Marina wanted him to submit a new medical certificate before he could resume work; Ancheta did not comply and was not able to resume his work. On 8 November 2011, Ancheta filed a complaint with the Labor Arbiter against Marina and Alfonso for illegal dismissal and non-payment of separation pay.

In his Position Paper, Ancheta alleged that after recovering he reported for work but was advised by Marina to just wait for the company's call; when he went back, he was told to take more rest. He claimed that Marina had employed two new workers as his replacement and that he was not served a notice of termination and a subsequent notice of hearing as mandated by the Labor Code. He claimed he was illegally dismissed.

In its Position Paper, Marina claimed that Ancheta was employed on a piece-rate basis and was not terminated but was refused job assignments due to his failure to submit a medical clearance showing he was fit to resume work. Marina claimed the medical certificate was a precautionary measure to avoid any incident to Ancheta, who had a pre-existing medical condition, and alleged that Ancheta did not present evidence to prove illegal dismissal. The Labor Arbiter found no positive or overt act on Marina's part that would support Ancheta's claim of illegal dismissal; the NLRC found that Ancheta did not establish the fact of dismissal and that Marina's requirement of a new medical certificate was reasonable.

• Management Prerogative: Marina argued that requiring Ancheta to undergo a medical examination and to submit a medical certificate was a valid exercise of management prerogative.
• No Dismissal: Marina claimed that Ancheta was employed on a piece-rate basis and was not terminated but was refused job assignments due to his failure to submit a medical clearance showing that he was fit to resume work.
• Precautionary Measure: Marina claimed that the medical certificate was a precautionary measure imposed to avoid any incident to Ancheta, who had a pre-existing medical condition.
• Lack of Evidence: Marina alleged that Ancheta did not present any evidence to prove that he was illegally dismissed.

• Illegal Dismissal: Ancheta alleged that after recovering he reported for work but was advised by Marina to just wait for the company's call; when he returned, he was told to take more rest, and he was not served a notice of termination and a subsequent notice of hearing as mandated by the Labor Code.
• Replacement: Ancheta claimed that Marina had employed two new workers as his replacement.

• Illegal Dismissal: Whether Ancheta was illegally dismissed by Marina.

• Illegal Dismissal: Yes. Marina illegally dismissed Ancheta when it refused him work assignments pending a new medical certificate despite the physician's certification that he was fit to resume work on 12 August 2011, and without the public health authority certification required by the Implementing Rules.

• Illegal Dismissal: Article 280 of the Labor Code recognizes two types of regular employees: those engaged to perform activities usually necessary or desirable in the usual business or trade of the employer, and those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed. Under De Leon vs. National Labor Relations Commission, the test is whether the employee performs work usually necessary or desirable in the usual business or trade of the employer, determined by the nature of the work and its relation to the business scheme; if the employee has performed the job for at least one year, even if not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability, of the activity to the business. Ancheta was a regular employee: as a sole attacher in Marina's shoe-and-bag business, he performed work usually necessary or desirable in Marina's usual business or trade, and he had worked in that capacity from January 2010 to March 2011, or at least one year. Because he was a regular employee, Article 279 of the Labor Code prohibited Marina from terminating his services except for a just cause or when authorized by the Code. Marina admitted in its position paper that it refused to give Ancheta work assignments until he submitted a new medical certificate, and its position was that his employment would not continue without that certificate. The medical certificate attached to Ancheta's SSS Sickness Notification stated that he was physically fit to resume work on 12 August 2011; Marina's refusal to accept him notwithstanding that certification amounted to illegal dismissal. Book VI, Rule I, Section 8 of the Implementing Rules of the Labor Code provides that where an employee suffers from a disease and continued employment is prohibited by law or prejudicial to his health or that of co-employees, the employer shall not terminate his employment unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within six months even with proper medical treatment. Marina terminated Ancheta without seeking that prior certification, so the dismissal was illegal. The CA did not err in awarding full backwages and separation pay. Under Reyes vs. R.P. Guardians Security Agency, Inc., an unjustly dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges, full backwages inclusive of allowances and other benefits or their monetary equivalent computed from the time compensation was withheld up to actual reinstatement; if reinstatement is not possible, separation pay is proper. Backwages and separation pay are separate and distinct reliefs.

• Regular Employment under Article 280 — Article 280 recognizes two types of regular employees: (1) those engaged to perform activities usually necessary or desirable in the usual business or trade of the employer, and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed. The test is whether the employee performs work usually necessary or desirable in the usual business or trade of the employer, determined by the nature of the work and its relation to the business scheme. If the employee has performed the job for at least one year, even if not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability, of the activity to the business. The SC applied this to Ancheta, a sole attacher in Marina's shoe-and-bag business who had worked from January 2010 to March 2011.
• Disease as Ground for Dismissal — Under Book VI, Rule I, Section 8 of the Implementing Rules of the Labor Code, where an employee suffers from a disease and continued employment is prohibited by law or prejudicial to his health or that of co-employees, the employer shall not terminate his employment unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within six months even with proper medical treatment. If the disease can be cured within that period, the employer shall not terminate the employee but shall ask him to take a leave and shall reinstate him upon restoration of normal health. The SC applied this to Marina, which terminated Ancheta without seeking the required prior certification.
• Management Prerogative and Security of Tenure — Marina's claim that requiring a medical examination and medical certificate was a valid exercise of management prerogative did not justify termination. Because Ancheta was a regular employee, Article 279 of the Labor Code allowed termination only for a just cause or when authorized by the Code. Marina's refusal to give Ancheta work assignments until he submitted a new medical certificate amounted to illegal dismissal.
• Backwages and Separation Pay — An employee unjustly dismissed from work is entitled to reinstatement without loss of seniority rights and other privileges, and to full backwages inclusive of allowances and other benefits or their monetary equivalent computed from the time compensation was withheld up to actual reinstatement. If reinstatement is not possible, separation pay is proper. Backwages and separation pay are separate and distinct reliefs. The SC applied this in affirming the CA's award to Ancheta.

• "Since Ancheta was a regular employee of Marina, Ancheta's employment can only be terminated by Marina based on just or authorized causes provided in the Labor Code." — This states the security-of-tenure consequence of Ancheta's regular status.
• "Marina's action in refusing to accept Ancheta notwithstanding the medical certificate attached to Ancheta's SSS Sickness Notification stating that Ancheta was physically fit to resume his work in Marina on 12 August 2011 amounts to an illegal dismissal of Ancheta." — This is the core application: Marina's refusal despite the fit-to-work certification was illegal dismissal.
• "The Implementing Rules of the Labor Code impose upon the employer the duty not to terminate an employee until there is a certification by a competent public health authority that the employee's disease is of such nature or at such a stage that it cannot be cured within a period of six months even with proper medical treatment." — This states the Section 8 requirement that Marina failed to satisfy.
• "Notably, backwages and separation pay are separate and distinct reliefs available to Ancheta who was illegally dismissed by Marina." — This confirms that the two monetary awards are distinct.

• De Leon vs. National Labor Relations Commission, 257 Phil. 626 (1989) — Controlling precedent for the test of regular employment; the SC cited it for the rule that the test is whether the employee performs work usually necessary or desirable in the usual business or trade of the employer.
• Reyes vs. R.P. Guardians Security Agency, Inc., 708 Phil. 598 (2013) — Cited for the remedies of an illegally dismissed employee, including reinstatement, full backwages, and separation pay if reinstatement is not possible.

• Article 280, Labor Code — Defines the two types of regular employees and supplies the test applied to Ancheta as a sole attacher who had worked for at least one year.
• Article 279, Labor Code — Provides that in cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by the Code; applied because Ancheta was a regular employee.
• Book VI, Rule I, Section 8, Implementing Rules of the Labor Code — Requires a competent public health authority's certification that the employee's disease cannot be cured within six months even with proper medical treatment before the employer may terminate on the ground of disease; applied because Marina terminated Ancheta without such certification.