Burden of Proof in Illegal Dismissal Cases: Employer's Duty to Certify Illness

When illness is the reason a worker loses a job, Philippine law puts the proof on the employer. That was the holding in Duterte v. Kingswood Trading Co., Inc., G.R. No. 160325 (October 4, 2007), where the Supreme Court reversed both the National Labor Relations Commission and the Court of Appeals for placing on the employee a burden that belongs to the company. The ruling matters to anyone dismissed on health grounds — and to employers who assume that a company doctor's findings are enough.

A note on sourcing: the statutory text discussed below is reproduced as it appears in the Court's decision. The article numbers are those the decision itself cites. The decision also relies on the Omnibus Implementing Rules of the Labor Code, but the firm's library copy of the Labor Code (Presidential Decree No. 442) does not contain the implementing rules — they are a separate issuance — so the exact rule and section number cannot be confirmed from that source and is not cited here.

Disease as a ground for termination

Article 284 of the Labor Code, as quoted in the decision, allows an employer to terminate the services of an employee found to be suffering from a disease whose continued employment is prohibited by law or prejudicial to the employee's health or that of co-workers. The same provision requires separation pay of at least one month's salary, or one-half month's salary for every year of service, whichever is greater, with a fraction of at least six months counted as one whole year.

That provision does not stand alone. The Omnibus Implementing Rules of the Labor Code, again as quoted in the decision, state that the employer shall not terminate the employee unless there is a certification by a competent public health authority that the disease is of such nature or 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 must instead ask the employee to take a leave, and must reinstate the employee once normal health returns.

What happened to the driver

Roque Duterte was hired in September 1993 as a truck and trailer driver by Kingswood Trading Company, Inc., whose president was Filemon Lim. He worked a 6:00 a.m. to 6:00 p.m. shift, averaged about 21 trips a month at P700 per trip, and when not driving was paid P125 a day to clean and maintain the company's vehicles and equipment.

In November 1998 he suffered a heart attack and was confined at the Philippine Heart Center. A month later he returned with a medical certificate from his attending physician stating he was fit to work; the company refused to let him resume. In February 1999 he suffered a second heart attack. When he tried to report back in June 1999, he was told to look for another job because he was unfit. The company wanted him examined by its own physician, promised separation pay that never came, and presented him a document for signature acknowledging receipt of P14,375.00 as an SSS benefit installment — an amount he had not actually received.

He filed a complaint for illegal dismissal and damages in November 1999. The labor arbiter found the dismissal illegal but applied the disease provision, awarding separation pay and some benefits. The NLRC set that aside and dismissed the complaint; the Court of Appeals upheld the NLRC.

Where the lower tribunals went wrong

Both the NLRC and the CA reasoned that a dismissal on the ground of disease is illegal only if the employee presents the certification from a competent public health authority. Because Duterte had not produced one, they concluded there was no illegal dismissal.

The Supreme Court disagreed. The law, it said, is unequivocal: the employer, before it can legally dismiss an employee on the ground of disease, must adduce the certification from a competent public authority. The employer's unilateral declaration of unfitness — even if backed by its company doctors — does not meet the standard the law requires. The Court pointed to its earlier ruling in Tan v. National Labor Relations Commission (G.R. No. 116807, April 14, 1997), which held that the burden is on the employer, and to Triple Eight Integrated Services, Inc. v. NLRC, which warned that dispensing with the medical certificate would sanction the employer's unilateral and arbitrary determination of the gravity of an employee's illness.

The Court also rejected the argument that insubordination — refusing to submit to a company examination — justified keeping the employee in a floating status. Even if such refusal were insubordination, it did not warrant depriving him of his livelihood. And since Duterte's job placed public safety at stake, the company could have assigned him to other tasks, such as cleaning and maintaining its vehicles.

Regular employee, not field personnel

The NLRC had treated Duterte as a field worker, which disqualified him from holiday pay and service incentive leave pay under Articles 94 and 95 of the Labor Code. The Court held otherwise. A driver required to be at specific places at specific times is not field personnel, even if the work is performed away from the principal office; the test is whether actual hours of work can be determined with reasonable certainty and whether time and performance are supervised. Duterte was based at the principal office, his hours were fixed, and he therefore remained entitled to those benefits.

Practical takeaways

• An employer dismissing on the ground of disease must obtain a certification from a competent public health authority — not merely an opinion from its own company physician.
• The burden of producing that certification rests on the employer. An employee is not required to prove fitness as a condition of keeping a job.
• Refusing to accept a worker back without complying with that requirement can itself support a finding of illegal dismissal.
• Where the