G.R. No.

152214

September 19, 2006

EQUI-ASIA PLACEMENT, INC., petitioner, vs. DEPARTMENT OF FOREIGN AFFAIRS (DFA) represented by the HON. DOMINGO L. SIAZON, JR., SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE), represented by HON. BIENVENIDO LAGUESMA, respondents. DECISION CHICO-NAZARIO, J.: This is a Petition for Review on Certiorari of the Decision dated 4 October 20011 and Resolution dated 18 February 2002 of the Court of Appeals in CA-G.R. SP No. 61904. The Decision denied petitioner's petition forcertiorari while the Resolution denied its Motion for Reconsideration. The Court of Appeals summarized the facts of this case in this wise: On September 16, 2000, Manny dela Rosa Razon, a native of Lemery, Batangas and an overseas Filipino worker, died of acute cardiac arrest while asleep at the dormitory of the Samsong Textile Processing Factory in South Korea. Informed thereof, the Philippine Overseas Labor Office (POLO) at South Korea immediately relayed the incident to the Philippine Embassy in South Korea. Forthwith, the [Labor] Attach of the Philippine Embassy dispatched a letter to Eleuterio N. Gardiner, administrator of the Overseas Workers Welfare Administration (OWWA). The letter reads: "VERY URGENT, POLO has recently received a report that OFW Manny dela Rosa RAZON, an undocumented worker, died last Saturday, 16 September, from an apparent pancreatic attack or 'bangungot.' According to the verbal reports of Moises and Ronald Recarde, Manny's coworkers, he was found already lifeless inside their quarters at around 11:00 in the morning of the above date. They rushed him to Uri Hospital where the Doctor declared him dead on arrival. Per information gathered, the deceased is single, 29 years old, from Bukal, Lemery, Batangas. His next-of-kins are Mrs. Rowena Razon (Auntie) and Mr. Razon (Uncle) with telephone number (043)411-2308. POLO is awaiting signed statements from the aforementioned workers who promised to send it by fax this afternoon. We are also coordinating with the deceased's employer for documentation requirements and financial assistance for the repatriation of the remains. We will highly appreciate if Home Office could advise the next-of-kins of the urgent need to issue a Special Power of Attorney (SPA) to facilitate the repatriation requirements of the subject.

In anticipation of the next-of-kins' likely move to seek financial assistance from OWWA for the repatriation of their loved [one], please be advised in advance that we will need about US$4,000.00 to repatriate the cadaver (to include hospital and morgue costs) to Manila. xxx" In turn, the OWWA, through Atty. Cesar L. Chavez, indorsed the matter, for appropriate action, to Director R. Casco of the Welfare Employment Office of the Philippine Overseas Employment Administration (WEO-POEA). Upon verification by the WEO-POEA on its data base, it was discovered that Manny Razon was recruited and deployed by petitioner Equi-Asia Placement, Inc., and was sent to South Korea on April 3, 2000 to work-train at Yeongjin Machinery, Inc. Thereupon, POEA addressed the herein first assailed telegramdirective dated September 22, 2000 to the President/General Manager of the petitioner. We quote the telegram: "PLEASE PROVIDE PTA [Prepaid Ticket Advice] FOR THE REPATRIATION OF REMAINS AND BELONGINGS OF OFW MANNY DELA ROSA RAZON AS PER REQUEST OF PHILIPPINE EMBASSY, KOREA, YOU CAN COORDINATE WITH YOUR FOREIGN EMPLOYER AND TO WAD/OWWA (MLA) AS REGARDS TO THIS MATTER. YOU ARE GIVEN TWO (2) DAYS FROM RECEIPT HEREOF WITHIN WHICH TO PROVIDE SAID TICKET AND ASSISTANCE, KINDLY SUBMIT YOUR REPORT TO ASSISTANCE AND WELFARE DIVISION (AWD), 2/F POEA, FAILURE TO DO SO WILL CONSTRAIN US TO IMPOSE APPROPRIATE SANCTION UNDER OUR RULES" Responding thereto, petitioner, thru its President Daniel Morga, Jr., faxed on September 26, 2000 the following message to the Assistance and Welfare Division of the POEA: "In connection with your telegram, dated 09/22/2000, requiring us to report the circumstances surrounding the death of OFW MANNY DELA ROSA RAZON in Korea and requesting us to issue a PTA, etc., for the repatriation of the remains of said OFW, this is to report to your good office the following: 1. The deceased was deployed by our agency on April 3, 2000 to Yeongjin Machine Company in South Korea; 2. He violated his employment/training/dispatching contracts on June 25, 2000 by unlawfully escaping/running away (TNT) from his company assignment without prior KFSMB authorization and working/staying in unknown company/place; 3. He allegedly died of 'bangungot' thereafter; In view thereof, we cannot heed your requests as embodied in your telegram. However, his relatives can avail of the benefits provided for by OWWA in cases involving undocumented/illegal Filipino workers abroad. Trusting for your kind understanding"

On the same date September 26, 2000 Director Ricardo R. Casco of the WEOPOEA sent to the petitioner the herein second assailed letter-directive, which pertinently reads: "We have received a copy of your fax message dated 26 September 2000 as regards to your response to our request for PTA for aforesaid deceased OFW. Nevertheless, may we remind you that pursuant to Sections 52, 53, 54 and 55 of the Implementing Rules Governing RA 8042, otherwise known as the Migrant Workers and Overseas Filipino Act of 1995, the repatriation of OFW, his/her remains and transport of his personal effects is the primary responsibility of the principal or agency and to immediately advance the cost of plane fare without prior determination of the cause of worker's repatriation. The Rules further provide for the procedure to be followed in cases when the foreign employer/agency fails to provide for the cost of the repatriation, compliance of which is punishable by suspension of the license of the agency or such sanction as the Administration shall deem proper. Hence, you are required to provide the PTA for the deceased OFW in compliance with the requirement in accordance with R.A. 8042. You are given forty-eight (48) hours upon receipt hereof within which to provide said ticket. Failure in this regard will constrain us to impose the appropriate sanction under our rules." On September 27, 2000, petitioner wrote back Director Ricardo R. Casco, thus: "In connection with your fax letter dated September 26, 2000, re: the repatriation of the remains of the deceased, ex-trainee (OFW) MANNY DELA ROSA RAZON, please be informed that the provisions of Section 53 as well as, and in relation to, Section 55 of the Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995 on the matters covering the following: 1. The responsibility of the agency to advance the cost of plane fare without prior determination of the cause of the deceased worker's termination. 2. The recovery of the same costs from the estate of the dead worker before the NLRC. 3. The action to be imposed by POEA for non-compliance therewith within 48 hours are violative of due process and/or the principle on due delegation of power. This is so because Sec. 15 of R.A. 8042 clearly contemplates prior notice and hearing before responsibility thereunder could be established against the agency that sets up the defense of sole fault in avoidance of said responsibility -. Besides, the sections in question unduly grant the powers to require advance payment of the plane fare, to impose the corresponding penalty of suspension in case of non-compliance therewith, within 48 hours and to recover said advance payment from the dead worker's estate upon the return of his remains to the country before the

NLRC, when the law itself does not expressly provide for the grant of such powers. x x x x x x x x x. Please provide us immediately with the death certificate/post mortem report/police report pertinent to above as proof of death and cause thereof." Nonetheless, and apprehensive of the adverse repercussions which may ensue on account of its non-compliance with the directive, petitioner, on September 29, 2000, advanced under protest the costs for the repatriation of the remains of the late Manny dela Rosa Razon. Thereafter, petitioner went to this Court via the instant petition for certiorari, posing, for Our consideration, the sole issue of "WHETHER OR NOT SECTIONS 52, 53, 54 AND 55 OF THE OMNIBUS RULES AND REGULATIONS IMPLEMENTING THE MIGRANT WORKERS AND OVERSEAS FILIPINOS ACT OF 1995 (R.A. 8042), ISSUED BY DFA AND POEA, WHICH POEA SUMMARILY ORDERED THE HEREIN PETITIONER TO COMPLY VIZ-A-VIZ THE PAYMENT IN ADVANCE OF THE EXPENSES FOR THE REPATRIATION OF THE REMAINS OF A DECEASED WORKER-TRAINEE WHO, AT THE TIME OF HIS DEATH, HAS NO EXISTING EMPLOYMENT (DISPATCHING) CONTRACT WITH EITHER SAID PETITIONER OR HIS FOREIGN PRINCIPAL AND NO VALID VISA OR IS NOT WORKING WITH THE FOREIGN PRINCIPAL TO WHICH PETITIONER DEPLOYED HIM, IS ILLEGAL AND/OR VIOLATIVE OF DUE PROCESS SUCH THAT POEA ACTED WITHOUT [OR IN] EXCESS OF ITS JURISDICTION AND/OR IN GRAVE ABUSE OF DISCRETION IN ISSUING SAID ORDER TO PAY SAID EXPENSES." 2 On 4 October 2001, the Court of Appeals rendered the Decision which is now the subject of the present petition. The dispositive portion of the Court of Appeals' Decision states: WHEREFORE, for lack of merit, the instant petition is DENIED and is accordingly DISMISSED.3 In dismissing the petition for certiorari, the Court of Appeals stated that petitioner was mainly accusing the Philippine Overseas Employment Administration (POEA) of grave abuse of discretion when it ordered petitioner to pay, in advance, the costs for the repatriation of the remains of the deceased Manny dela Rosa Razon. The Court of Appeals ruled that the POEA did not commit any grave abuse of discretion as its directives to petitioner were issued pursuant to existing laws and regulations. 4 It likewise held that a petition for certiorari, which was the remedy availed of by petitioner, is not the proper remedy as the same is only available when "there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law."5 Section 62 of the Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995 or Republic Act 8042 ("Omnibus Rules") states that "the Labor Arbiters of NLRC shall have the original and exclusive jurisdiction to hear and decide all claims arising out of employer-employee relationship or by virtue

of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages, subject to the rules and procedures of the NLRC." There is, therefore, an adequate remedy available to petitioner. Lastly, the Court of Appeals declared that it could not strike down as unconstitutional Sections 52, 53, 54, and 55 of the Omnibus Rules as the unconstitutionality of a statute or rules may not be passed upon unless the issue is directly raised in an appropriate proceeding.6 In the present recourse, petitioner submits the following issues for our consideration: 1. The Court of Appeals erred in the appreciation of the issue as it mistakenly considered, in dismissing the petition before it, that petitioner is contesting the compliance and conformity of the POEA directives with Sections 52, 53, 54, and 55 of the Omnibus Rules and Regulations implementing in particular Section 15 of RA 8042; 2. The Court of Appeals, in dismissing the petition, again erred in ruling that constitutional questions cannot be passed upon and adjudged in a special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure; 3. The Court of Appeals erred in not holding that, under the facts of the case that gave rise to the petition before it, the same sections of the said rules and regulations are illegal, invalid and/or violative of the right of petitioner to due process of law and, therefore, the POEA directives issued pursuant thereto constitute acts committed without, or in excess of, jurisdiction and/or in grave abuse of discretion.7 In Our Resolution of 20 November 2002, we gave due course to the present petition and directed the parties to submit their respective memoranda. 8 On 28 August 2006, we resolved to dispense with the memorandum of the estate/heirs of deceased Manny dela Rosa Razon. At the center of this petition are the following provisions of the omnibus rules: Section 52. Primary Responsibility for Repatriation. The repatriation of the worker, or his/her remains, and the transport of his/her personal effects shall be the primary responsibility of the principal or agency which recruited or deployed him/her abroad. All costs attendant thereto shall be borne by the principal or the agency concerned. Section 53. Repatriation of Workers. The primary responsibility to repatriate entails the obligation on the part of principal or agency to advance the cost of plane fare and to immediately repatriate the worker should the need for it arise, without a prior determination of the cause of the termination of the worker's employment. However, after the worker has returned to the country, the principal or agency may recover the cost of repatriation from the worker if the termination of employment was due solely to his/her fault.

Every contract for overseas employment shall provide for the primary responsibility of agency to advance the cost of plane fare, and the obligation of the worker to refund the cost thereof in case his/her fault is determined by the Labor Arbiter. Section 54. Repatriation Procedure. When a need for repatriation arises and the foreign employer fails to provide for it cost, the responsible personnel at site shall simultaneously notify OWWA and the POEA of such need. The POEA shall notify the agency concerned of the need for repatriation. The agency shall provide the plane ticket or the prepaid ticket advice (PTA) to the Filipinos Resource Center or to the appropriate Philippine Embassy; and notify POEA of such compliance. The POEA shall inform OWWA of the action of the agency. Section 55. Action on Non-Compliance. If the employment agency fails to provide the ticket or PTA within 48 hours from receipt of the notice, the POEA shall suspend the license of the agency or impose such sanctions as it may deem necessary. Upon notice from the POEA, OWWA shall advance the costs of repatriation with recourse to the agency or principal. The administrative sanction shall not be lifted until the agency reimburses the OWWA of the cost of repatriation with legal interest. Said provisions, on the other hand, are supposed to implement Section 15 of Republic Act No. 80429 which provides: SEC. 15. Repatriation of Workers; Emergency Repatriation Fund. The repatriation of the worker and the transport of his personal belongings shall be the primary responsibility of the agency which, recruited or deployed the worker overseas. All costs attendant to repatriation shall be borne by or charged to the agency concerned and/or its principal. Likewise, the repatriation of remains and transport of the personal belongings of a deceased worker and all costs attendant thereto shall be borne by the principal and/or the local agency. However, in cases where the termination of employment is due solely to the fault of the worker, the principal/employer or agency shall not in any manner be responsible for the repatriation of the former and/or his belongings. Petitioner contends that the Court of Appeals misappreciated the issue it presented in its petition for certiorariwhen, instead of resolving whether Sections 52, 53, 54, and 55 of the Omnibus Rules are illegal and violative of due process, it merely confined itself to the question of whether or not the POEA committed grave abuse of discretion in issuing its directives of 22 September 2000 and 27 September 2000. Petitioner also contends that, contrary to the finding of the Court of Appeals, a special civil action for certiorari is the appropriate remedy to raise constitutional issues. Also, petitioner insists that the subject portions of the omnibus rules are invalid on the ground that Section 15 of Republic Act No. 8042 does not impose on a recruitment agency the primary responsibility for the repatriation of a deceased Overseas Filipino Worker (OFW), while Section 52 of the Omnibus Rules unduly imposes such burden on a placement agency.

Moreover, petitioner argues that the word "likewise" at the start of the third sentence of Section 15 of Republic Act No. 8042 is used merely as a connective word indicating the similarity between a recruitment agency's financial obligation in the repatriation of living and a deceased OFW. It does not, however, necessarily make a placement agency primarily responsible for the repatriation of a deceased OFW unlike in the case of an OFW who is alive. As for Section 53 of the Omnibus Rules, petitioner submits that the same is invalid as Section 15 of Republic Act No. 8042 clearly states that a placement agency shall not in any manner be responsible for the repatriation of the deceased OFW and his or her belongings should the termination of the OFW's employment be due to his or her fault. However, as Section 53 of the Omnibus Rules stipulates that a placement agency or principal shall bear the primary responsibility of repatriating an OFW and of advancing the payment for his or her plane fare, the omibus rules, as far as this section is concerned, is an invalid exercise of legislative power by an administrative agency. In addition, petitioner claims Section 53 of the Omnibus Rules violates the due process clause of the constitution as it deprives the deploying agency of the right to prior notice and hearing through which it can prove that it should not bear the burden of repatriating an OFW. Finally, petitioner points out that it should be the Overseas Workers Welfare Administration which should advance the costs of repatriation of the deceased Razon with the resources coming out of the emergency repatriation fund of said agency. The Solicitor General for its part counters that Sections 52, 53, 54, and 55 of the Omnibus Rules are valid quasi-legislative acts of respondents Department of Foreign Affairs and Department of Labor and Employment.10Because of this, the requirements of prior notice and hearing are not essential. Besides, there are cases where even in the exercise of quasi-judicial power, administrative agencies are allowed, sans prior notice and hearing, to effectuate measures affecting private property, such as: 1) [F]or the summary abatement of nuisance per se which affects the immediate safety of persons and property, or 2) in summary proceedings of distraint and levy upon the property of delinquent taxpayers in the collection of internal revenue taxes, fees or charges or any increment thereto, or 3) in the preventive suspension of a public officer pending investigation. x x x. 11 The Solicitor General also adds that since petitioner is engaged in the recruitment of Filipino workers for work abroad, the nature of its business calls for the exercise of the state's police power in order to safeguard the rights and welfare of the Filipino laborers. One such measure is the primary responsibility imposed upon placement agencies with regard to the repatriation of an OFW or of his remains. The Solicitor General also argues that the wording of Section 15 of Republic Act No. 8042 leaves no doubt that a recruitment agency shall bear the primary responsibility for the repatriation of an OFW whether the latter is dead or alive. Lastly, the Solicitor General insists that actions assailing the validity of implementing rules and regulations are within the original jurisdiction of the regional trial courts.

We shall first address the procedural question involved in the present petition. There is no denying that regular courts have jurisdiction over cases involving the validity or constitutionality of a rule or regulation issued by administrative agencies. Such jurisdiction, however, is not limited to the Court of Appeals or to this Court alone for even the regional trial courts can take cognizance of actions assailing a specific rule or set of rules promulgated by administrative bodies. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts.12 Section 1, Rule 65 of the 1997 Rules of Civil Procedure states: SECTION 1. Petition for Certiorari. When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of Section 3, Rule 46. From this, it is clear that in order for a petition for certiorari to prosper, the following requisites must be present: (1) the writ is directed against a tribunal, a board or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law. It bears emphasizing that administrative bodies are vested with two basic powers, the quasi-legislative and the quasi-judicial.13 In Abella, Jr. v. Civil Service Commission,14 we discussed the nature of these powers to be In exercising its quasi-judicial function, an administrative body adjudicates the rights of persons before it, in accordance with the standards laid down by the law. The determination of facts and the applicable law, as basis for official action and the exercise of judicial discretion, are essential for the performance of this function. On these considerations, it is elementary that due process requirements, as enumerated in Ang Tibay, must be observed. These requirements include prior notice and hearing. On the other hand, quasi-legislative power is exercised by administrative agencies through the promulgation of rules and regulations within the confines of the granting statute and the doctrine of non-delegation of certain powers flowing from the separation of the great branches of the government. Prior notice to and

hearing of every affected party, as elements of due process, are not required since there is no determination of past events or facts that have to be established or ascertained. As a general rule, prior notice and hearing are not essential to the validity of rules or regulations promulgated to govern future conduct. In this case, petitioner assails certain provisions of the Omnibus Rules. However, these rules were clearly promulgated by respondents Department of Foreign Affairs and Department of Labor and Employment in the exercise of their quasi-legislative powers or the authority to promulgate rules and regulations. Because of this, petitioner was, thus, mistaken in availing himself of the remedy of an original action for certiorari as obviously, only judicial or quasi-judicial acts are proper subjects thereof. If only for these, the petition deserves outright dismissal. Be that as it may, we shall proceed to resolve the substantive issues raised in this petition for review in order to finally remove the doubt over the validity of Sections 52, 53, 54, and 55 of the Omnibus Rules. It is now well-settled that delegation of legislative power to various specialized administrative agencies is allowed in the face of increasing complexity of modern life. Given the volume and variety of interactions involving the members of today's society, it is doubtful if the legislature can promulgate laws dealing with the minutiae aspects of everyday life. Hence, the need to delegate to administrative bodies, as the principal agencies tasked to execute laws with respect to their specialized fields, the authority to promulgate rules and regulations to implement a given statute and effectuate its policies.15 All that is required for the valid exercise of this power of subordinate legislation is that the regulation must be germane to the objects and purposes of the law; and that the regulation be not in contradiction to, but in conformity with, the standards prescribed by the law.16 Under the first test or the so-called completeness test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate, the only thing he will have to do is to enforce it.17 The second test or the sufficient standard test, mandates that there should be adequate guidelines or limitations in the law to determine the boundaries of the delegate's authority and prevent the delegation from running riot. 18 We resolve that the questioned provisions of the Omnibus Rules meet these requirements. Basically, petitioner is impugning the subject provisions of the Omnibus Rules for allegedly expanding the scope of Section 15 of Republic Act No. 8042 by: first, imposing upon it the primary obligation to repatriate the remains of the deceased Razon including the duty to advance the cost of the plane fare for the transport of Razon's remains; and second, by ordering it to do so without prior determination of the existence of employeremployee relationship between itself and Razon. Petitioner's argument that Section 15 does not provide that it shall be primarily responsible for the repatriation of a deceased OFW is specious and plain nitpicking. While Republic Act No. 8042 does not expressly state that petitioner shall be primarily obligated to transport back here to the Philippines the remains of the deceased Razon, nevertheless, such duty is imposed upon him as the statute clearly dictates that "the repatriation of remains and transport of the personal belongings of a deceased worker and all costs attendant thereto shall be borne by the principal and/or the local agency." The mandatory nature of said obligation is characterized by the legislature's use of the word "shall." That the concerned government agencies opted to demand the

performance of said responsibility solely upon petitioner does not make said directives invalid as the law plainly obliges a local placement agency such as herein petitioner to bear the burden of repatriating the remains of a deceased OFW with or without recourse to the principal abroad. In this regard, we see no reason to invalidate Section 52 of the omnibus rules as Republic Act No. 8042 itself permits the situation wherein a local recruitment agency can be held exclusively responsible for the repatriation of a deceased OFW. Nor do we see any reason to stamp Section 53 of the Omnibus Rules as invalid for allegedly contravening Section 15 of the law which states that a placement agency shall not be responsible for a worker's repatriation should the termination of the employeremployee relationship be due to the fault of the OFW. To our mind, the statute merely states the general principle that in case the severance of the employment was because of the OFW's own undoing, it is only fair that he or she should shoulder the costs of his or her homecoming. Section 15 of Republic Act No. 8042, however, certainly does not preclude a placement agency from establishing the circumstances surrounding an OFW's dismissal from service in an appropriate proceeding. As such determination would most likely take some time, it is only proper that an OFW be brought back here in our country at the soonest possible time lest he remains stranded in a foreign land during the whole time that recruitment agency contests its liability for repatriation. As aptly pointed out by the Solicitor General Such a situation is unacceptable. 24. This is the same reason why repatriation is made by law an obligation of the agency and/or its principal without the need of first determining the cause of the termination of the worker's employment. Repatriation is in effect an unconditional responsibility of the agency and/or its principal that cannot be delayed by an investigation of why the worker was terminated from employment. To be left stranded in a foreign land without the financial means to return home and being at the mercy of unscrupulous individuals is a violation of the OFW's dignity and his human rights. These are the same rights R.A. No. 8042 seeks to protect.19 As for the sufficiency of standard test, this Court had, in the past, accepted as sufficient standards the following: "public interest," "justice and equity," "public convenience and welfare," and "simplicity, economy and welfare."20 In this case, we hold that the legislature's pronouncements that Republic Act No. 8042 was enacted with the thought of upholding the dignity of the Filipinos may they be here or abroad and that the State shall at all times afford full protection to labor, both here and abroad, meet the requirement and provide enough guidance for the formulation of the omnibus rules. WHEREFORE, the Petition for Review is DENIED. The Court of Appeals' Decision dated 4 October 2001 and Resolution dated 18 February 2002 are hereby AFFIRMED. With costs. SO ORDERED.

Panganiban, C.J., Chairperson, Ynares-Santiago, Austria-Martinez, Callejo, Sr., J.J., concur.

Footnotes

PEOPLE OF THEPHILIPPINES, PlaintiffAppellee,

G.R. No. 182232 Present: YNARES-SANTIAGO, J., Chairperson, AUSTRIA-MARTINEZ, CHICO-NAZARIO, NACHURA, and REYES, JJ. Promulgated: October 6, 2008

- versus -

NENITA B. HU, AccusedAppellant. x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION CHICO-NAZARIO, J.: This is a Petition for Review on Certiorari filed by accusedappellant Nenita B. Hu (Hu) seeking to reverse and set aside the Decision[1] of the Court of Appeals dated 9 October 2007 in CAG.R.-CR.-H.C. No. 02243, affirming with modification the Decision[2] dated 4 January 2005 of the Regional Trial Court (RTC) of Makati City, Branch 66, in Criminal Case No. 03-356. The RTC in its Decision found Hu guilty beyond reasonable doubt of the crime

of illegal recruitment in large scale, as defined and penalized under Section 7(b) of Republic Act No. 8042, [3] and accordingly, sentenced her to suffer the penalty of life imprisonment, to pay the fine ofP500,000.00, and to indemnify private complainants Paul Abril (Abril), Joel Panguelo (Panguelo) and Evangeline Garcia (Garcia) in the amounts of P44,000.00, P50,000 and P50,000, respectively. The decretal part of the assailed Court of Appeals Decision reads:
Wherefore, in the light of the foregoing disquisitions, the decision of the Regional Trial Court of Makati City, Branch 66, in Criminal Case No. 03-856, finding appellant Nenita B. Hu, guilty beyond reasonable doubt of the crime charged, is hereby AFFIRMED with MODIFICATION. As modified, the award of actual damages in the amount of P50,000 in favor of Evangeline Garcia, is DELETED.[4]

The antecedent facts are as follows: An Information[5] for Illegal Recruitment in Large Scale was filed against Hu and Ethel V. Genoves (Genoves) which reads:
The undersigned Prosecutor accuses Ethel V. Genoves a.k.a. Merry Ann Genoves and Nenita B. Hu, of the crime of Violation of Section 6 penalized under Section 7(b) of RA 8042[6] (Illegal Recruitment in Large Scale) committed as follows: That on or about the 9th day of October 2001, in the City of Makati, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, conspiring and confederating together and both of them helping and aiding one another, did then and there willfully, unlawfully and feloniously recruit, promise employment/job placement abroad for an overseas employment and collect fees from the following persons to wit: NOEL P. DELAYUN JOEL U. PANGUELO EVANGELINE E. GARCIA JOEY F. SILAO PAUL C. ABRIL ERIC V. ORILLANO

thus in large scale amounting to economic sabotage without any license or authorized by the POEA of the Department of Labor and Employment to recruit workers for an overseas employment.

Upon arraignment, Hu assisted by counsel entered a plea of not guilty while Genoves remained at large. [7] Subsequently, trial on the merits ensued. While the Information for illegal recruitment named several persons as having been promised jobs by Hu and Genoves, only four of them Panguelo, Garcia, Abril and Orillano -- testified. Hu was the President of Brighturn International Services, Inc. (Brighturn), a land-based recruitment agency duly licensed by the Philippine Overseas Employment Agency (POEA) to engage in the business of recruitment and placement of workers abroad, with principal address at No. 1916 San Marcelino St., Malate, Manila. Brighturn was authorized by the POEA to recruit, process and deploy land-based workers for the period 18 December 1999 to 17 December 2001.[8] Genoves worked as a consultant and marketing officer of Brighturn. Aside from her stint at Brighturn, Genoves was also connected with Riverland Consultancy Service (Riverland), another recruitment agency located at Room No. 210, LPL Building, Sen. Gil Puyat Avenue, Makati City. Private complainants Orillano, Panguelo, Abril and Garcia sought employment at Brighturn for the positions of factory worker and electronic operator inTaiwan. [9] Notwithstanding private complainants compliance with all of the pre-employment requirements, including the payment of placement fees, they were not able to leave the country to work abroad. Sometime in June 2001, Panguelo was informed by a friend that Brighturn was hiring factory workers for Taiwan. When Panguelo went to Brighturn, he was promised employment abroad by Hu for P50,000.00. Upon Hus instruction, Panguelo paid in full the placement fee in the amount of P50,000.00 to Genoves. The payment was evidenced by an Official Receipt dated 16 October 2001 bearing Genoves signature. Panguelo waited for three years to be deployed to Taiwan. His waiting was all for naught. Thus, Panguelo decided to abort his application and demanded from Hu

the return of the amount he paid for the placement fee, but Hu could no longer return the money.[10] Also sometime in September 2001, Abril went to Brighturn to apply as a factory worker in Taiwan. At Brighturn, Abril was entertained by Hu who oriented him on the necessary requirements for application which included a valid passport, National Bureau of Investigation (NBI) Clearance and ID pictures. After complying with the documentary requirements, Abril was required by Hu to pay the placement fee to Genoves in the amount of P44,000.00. As shown in Official Receipts dated 9 October 2001 and 26 October 2000, which were signed by Genoves, Abril paid the whole amount of P44,000.00 as placement fee. Abril was assured by Hu that he would be deployed to Taiwan by December 2001 which was subsequently reset to April 2002. Despite several postponements, Abril was not able to leave the country.[11] For his part, Orillano came to know of Brighturn thru Genoves. Orillano was interviewed at Brighturn by a Taiwanese principal in October 2001. After the interview, Hu informed Orillano to submit a medical certificate, NBI clearance and passport; and to pay the requisite placement fee in the amount of P50,000.00. Believing that Hu could send him abroad, Orillano faithfully complied with these requirements including the placement fee, the payment of which was made to Genoves at Brighturns office. Despite such payment, however, Orillano was not able to leave the country.[12] Garcia suffered the same fate as her co-applicants. In April 2002, Garcia applied as Electronic Operator at Brighturn wherein she was entertained by Hu who informed her that Brighturns license was suspended. Garcia was then referred by Hu to Best One International (Best One), another recruitment agency likewise located in Malate, Manila. While Garcia was told by Hu that the processing of her documents would be done at Best One, the placement fee, however, should be paid at Brighturn. Accordingly, the amount of P60,000.00 was paid by Garcia to Hu and Genoves as placement fee upon Hus

instruction. Almost predictably, the promise of an employment abroad never came to pass.[13] When Hu was not able to refund the amounts paid as placement fees upon demand, private complainants went to NBI to file a complaint for illegal recruitment against Hu and Genoves. For her defense, Hu claimed that she was the President of Brighturn, a duly authorized land-based recruitment agency. Brighturn had foreign principals in Taiwanwho were looking for skilled individuals willing to work in a foreign country. Hu alleged that Brighturn had an established recruitment procedure wherein applicants were only required to pay the corresponding placement fees after the POEA had already approved their employment contracts. According to Hu, announcements were posted all over Brighturns premises warning job applicants to pay placement fees only to the cashier. After the expiration of its license issued by the POEA on 18 December 1999, Brighturn failed to pursue its application for renewal due its inability to post the required cash bond. Brighturn was thus constrained to refer all pending applications to Best One. [14] Hu admitted knowing the private complainants because these individuals went to her office demanding the return of their placement fees by showing their official receipts. Hu averred that when she examined such receipts, she found that private complainants paid their placement fees to Riverland and not to Brighturn as shown in the heading of the said receipts which bore the name and address of Riverland and its proprietress, Genoves. Hu denied knowing Genoves.[15] On 4 January 2005, the trial court rendered a Decision[16] finding Hu guilty beyond reasonable doubt of the crime of illegal recruitment in large scale, the dispositive portion of which reads:
WHEREFORE, the Court finds the accused Nenita Hu guilty beyond reasonable doubt of the crime of illegal recruitment in large scale under Section 6 and 7(b) of Republic Act No. 8042,

and, accordingly, sentences the accused to suffer the penalty of life imprisonment, pay the fine of P500,000.00 and to indemnify private complainants Paul Abril in the amount ofP44,000.00, Joel Panguelo in the amount of P50,000.00 and Evangeline Garcia in the amount of P50,000.00.

The Court of Appeals, in its Decision [17] dated 9 October 2007, confirmed the presence of all the elements of illegal recruitment in large scale, and thereby affirmed the conviction of Hu with the modification that the amount of actual damages awarded to Garcia in the amount of P50,000.00 be deleted. Hence, this Petition raising the sole issue of:
WHETHER OR NOT THE LOWER COURT ERRED IN FINDING HU GUILTY BEYOND REASONABLE DOUBT OF ILLEGAL RECRUITMENT IN LARGE SCALE.

Hu was charged with and convicted by the trial court of the crime of Illegal Recruitment in Large Scale, which conviction was affirmed by the Court of Appeals. The appellate court found that Hu made enticing, albeit empty promises, which moved private complainants to part with their money and pay the placement fee. For its part, the Solicitor General joined the lower courts in finding that Hu was indeed guilty of Illegal Recruitment in Large Scale. According to the Solicitor General, all the elements of illegal recruitment in large scale had been established beyond reasonable doubt.[18] We cannot sustain the conviction for illegal recruitment in large scale. Illegal recruitment is committed when two elements concur, namely: (1) the offender has no valid license or authority required by law to enable him to lawfully engage in the recruitment and placement of workers; and (2) he undertakes any activity within the meaning of recruitment and placement defined under Article 13(b) of the Labor Code. [19] Recruitment and placement is

any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers; and includes referrals, contact services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, that any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement.[20] The crime becomes Illegal Recruitment in Large Scale when the foregoing two elements concur, with the addition of a third element the recruiter committed the same against three or more persons, individually or as group. [21] A conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group. While it is true that the law does not require that at least three victims testify at the trial, nevertheless, it is necessary that there is sufficient evidence proving that the offense was committed against three or more persons.[22] In the appreciation of evidence in criminal cases, it is a basic tenet that the prosecution has the burden of proof in establishing the guilt of the accused for the offense with which he is charged. Ei incumbit probation qui dicit non qui negat; i.e., he who asserts, not he who denies, must prove. The conviction of appellant must rest not on the weakness of his defense, but on the strength of the prosecutions evidence. [23] In the case at bar, the prosecution failed to adduce sufficient evidence to prove that illegal recruitment was committed against three or more persons. What we have uncovered upon careful scrutiny of the records was the fact that illegal recruitment was committed against only one person; that is, against Garcia alone. Illegal recruitment cannot successfully attach to the allegations of Panguelo, Abril and Orillano, since they testified that they accomplished their pre-employment requirements through Brighturn from June 2001 up to October of the same year,[24] a period wherein Brighturns

license to engage in recruitment and placement was still in full force and effect. [25] While there were six private complainants in this case, four of whom were presented during the trial, the prosecution, nonetheless, failed to establish that Hu engaged in illegal recruitment acts against at least three of these complainants. In offenses in which the number of victims is essential, such as in the present petition, failure of the prosecution to prove by convincing evidence that the offense is committed against the minimum number of persons required by law is fatal to its cause of action. Underscoring the significance of the number of victims was the disquisition of Justice Florenz Regalado in People v. OrtizMiyake[26]:
It is evident that in illegal recruitment cases, the number of persons victimized is determinative. Where illegal recruitment is committed against a lone victim, the accused may be convicted of simple illegal recruitment which is punishable with a lower penalty under Article 39(c)[27] of the Labor Code. Corollarily, where the offense is committed against three or more persons, it is qualified to illegal recruitment in large scale which provides a higher penalty under Article 39(a)[28] of the same Code. (Emphasis supplied.)

Regrettably, we cannot affirm the conviction of Hu for the offense of illegal recruitment in large scale. While we strongly condemn the pervasive proliferation of illegal job recruiters and syndicates preying on innocent people anxious to obtain employment abroad, nevertheless, we find the pieces of evidence insufficient to prove the guilt of Hu beyond reasonable doubt. It is unfortunate that the prosecution evidence did not pass the test of reasonable doubt, since the testimonies of its witnesses unveil a contradicting inference -- that the recruitment of Panguelo, Abril and Orillano was undertaken by Hu with the required authority from the POEA. Failure of the prosecution to prove the guilt of Hu beyond reasonable doubt does not absolve her of her civil obligation to return the money she collected from private complaints Panguelo,

Abril and Orillano, plus legal interest in accordance with our ruling in Domagsang v. Court of Appeals. [29] There, the prosecution failed to sufficiently establish a case to warrant a conviction, but clearly proved a just debt owed to the private complainant. Thus, the accused was ordered to pay the face value of the check with 12% legal interest per annum, reckoned from the filing of the information until the finality of the judgment. It is well settled that acquittal based on reasonable doubt does not preclude an award for civil damages. The judgment of acquittal extinguishes the liability of the accused only when it includes a declaration that the facts from which the civil liability might arise did not exist. Thus, civil liability is not extinguished where the acquittal is based on lack of proof beyond reasonable doubt, since only preponderance of evidence is required in civil cases. There appears to be no sound reason to require that a separate action be still filed considering that the facts to be proved in the civil case have already been established in the criminal proceedings. [30] In the present case, the prosecution explicitly proved that private complainants parted with substantial amounts of money upon the prodding and enticement of Hu on the false pretense that she had the capacity to deploy them for employment abroad. In the end, private complainants were not able to leave for work abroad or get their money back. Neither does her acquittal herein exempt Hu from subsequent criminal prosecution for estafa [31] provided that deceit, which is an essential element of estafa, be proven by the prosecution.[32] Apparently, Hu deluded private complainants into believing that she had the capacity to send them abroad for employment. Through this hoax, she was able to convince private complainants to surrender their money to her in the vain hope, as it turned out, of securing employment abroad. This leaves us a case of simple illegal recruitment committed against Garcia. Garcia testified that she applied for employment in Taiwan for the position of Electronic Operator thru Brighturn in April 2002. Due to the alleged suspension of Brighturns license,

Hu referred her to a neighboring agency (Best One), but Hu continued collecting placement fees from her. The act of referral, which means the act of passing along or forwarding an applicant after an initial interview to a selected employer, placement or bureau, is included in recruitment. [33] Undoubtedly, the act of Hu in referring Garcia to another recruitment agency squarely fell within the purview of recruitment that was undertaken by Hu after her authority to recruit and place workers already expired on 17 December 2001. Failure of Garcia to present proof of payment is irrelevant. The absence of receipts in the case of illegal recruitment does not warrant the acquittal of the appellant and is not fatal to the prosecutions case. As long as the prosecution is able to establish through credible and testimonial evidence, as in the case at bar, that the appellant had engaged in illegal recruitment, a conviction for the offense can be very well justified.
[34]

Irrefragably, the prosecution has proven beyond reasonable doubt the guilt of Hu of the charge of illegal recruitment against Garcia when the former referred the latter to another agency without the license or authority to do so. The trial court gave full credence to the testimony of Garcia, which unmistakably demonstrated how Hu successfully enticed her to part with a considerable amount of money in exchange for an employment abroad which was never realized. This finding was adopted by the appellate court, considering that that the trial court was in the best position to ascertain credibility issues, having heard the witnesses themselves and observed their deportment and manner of testifying during trial. Aptly, the bare denials of Hu have no probative value when ranged against the affirmative declarations of Garcia, even if the latter failed to present receipts for the payments she had made. In People v. Villas,[35] this Court affirmed the conviction of the appellant for illegal recruitment even if private complaints

were not able to present any receipt that they paid appellant anything, thus:
Neither is there merit in the contention of the defense that appellant should be exonerated for failure of the prosecution to present any receipt proving that private complainants paid her anything. The defense argues that a receipt is the best evidence to prove delivery of money and the absence thereof shows that no payment was made. This argument is not novel. The Court has previously ruled that the absence of receipts evidencing payment does not defeat a criminal prosecution for illegal recruitment. In People vs. Pabalan [262 SCRA 574, 30 September 1996], this Court ruled:
x x x the absence of receipts in a criminal case for illegal recruitment does not warrant the acquittal of the accused and is not fatal to the case of the prosecution. As long as the witnesses had positively shown through their respective testimonies that the accused is the one involved in the prohibited recruitment, he may be convicted of the offense despite the want of receipts. The Statute of Frauds and the rules of evidence do not require the presentation of receipts in order to prove the existence of recruitment agreement and the procurement of fees in illegal recruitment cases. The amounts may consequently be proved by the testimony of witnesses.

The private complainants have convincingly testified that the accused enticed them to apply and, in actual fact, received payments from them. And to these testimonies, the trial court accorded credence. On the other hand, appellant has not shown any reason to justify a modification or reversal of the trial courts finding.

Our ruling in People v. Villas[36] that the absence of receipts in illegal recruitment case does not warrant the acquittal of the accused has been reiterated in several cases. [37] We are not unaware of the proliferation of these scheming illegal recruiters who cunningly rob Filipino workers, desperate to work abroad, of their money in exchange of empty promises. This Court cannot be drawn to the ingenious ploy of these illegal recruiters in

withholding receipts from their victims in their vain attempt to evade liability. In fine, the Court will have to discard the conviction for illegal recruitment in large scale meted out by the RTC, since only one applicant abroad was recruited by Hu without license and authority from the POEA. Accordingly, Hu should be held responsible for simple illegal recruitment only. Hus unsuccessful indictment for illegal recruitment in large scale, however, does not discharge her from her civil obligation to return the placement fees paid by private complainants. Under Section 7(a) of Republic Act No. 8042,[38] simple illegal recruitment is punishable by imprisonment of not less than six (6) years and one (1) day but not more than twelve years and a fine of not less than two hundred thousand pesos (P200,000.00) nor more than five hundred thousand pesos (P500,000.00). Section 1 of the Indeterminate Sentence Law provides that if the offense is punishable by a special law, as in this case, the court shall impose on the accused an indeterminate sentence, the maximum term of which shall not exceed the maximum fixed by the said law and the minimum of which shall not be less than the minimum term prescribed by the same. Accordingly, a penalty of eight (8) to twelve (12) years of imprisonment should be meted out to Hu. In addition, a fine in the amount ofP500,000.00; and indemnity to private complainants -- Abril in the amount of P44,000.00, Panguelo in the amount of P50,000.00, Garcia in the amount of P60,000.00 and Orillano in the amount of P50,000.00, with 12% legal interest per annum, reckoned from the filing of the information until the finality of the judgment is imposed. WHEREFORE, IN VIEW OF THE FOREGOING, the instant petition is PARTIALLY GRANTED. The Decision dated 9 October 2007 of the Court of Appeals in CA-G.R.-CR.-H.C. No. 02243 affirming the conviction of the accused-appellant Nenita B. Hu for the offense of Illegal Recruitment in Large Scale and sentencing her to life imprisonment is hereby VACATED. A new Decision is

hereby entered convicting the accused-appellant of the offense of Simple Illegal Recruitment committed against private complainant Evangeline Garcia. She is sentenced to suffer the indeterminate penalty of eight (8) years to twelve (12) years of imprisonment. She is ordered to pay a fine in the amount of P500,000.00 and to indemnify private complainant Evangeline Garcia in the amount of P60,000.00, with 12% interest per annum, reckoned from the filing of the information until the finality of the judgment. Accused-appellant Nenita B. Hu is likewise ordered to indemnify private complainants Paul Abril in the amount of P44,000.00, Joel Panguelo in the amount ofP50,000.00, and Eric Orillano in the amount of P50,000.00, with 12% interest per annum, as reckoned above. ATCI OVERSEAS G.R. No. 178551 CORPORATION, AMALIA G. IKDAL and Present: MINISTRY OF PUBLIC HEALTH-KUWAIT CARPIO MORALES, Chairperson, Petitioner J., s, BRION, BERSAMIN, VILLARAMA, JR., and - versus SERENO, JJ. Promulgated: MA. JOSEFA ECHIN, Responde nt. October 11, 2010

x------------------------------------------------ - -x

DECISION

CARPIO MORALES, J.: Josefina Echin (respondent) was hired by petitioner ATCI Overseas Corporation in behalf of its principal-co-petitioner, the Ministry of Public Health of Kuwait (the Ministry), for the position of medical technologist under a two-year contract, denominated as a Memorandum of Agreement (MOA), with a monthly salary of US$1,200.00. Under the MOA,[1] all newly-hired employees undergo a probationary period of one (1) year and are covered by Kuwaits Civil Service Board Employment Contract No. 2. Respondent was deployed on February 17, 2000 but was terminated from employment on February 11, 2001, she not having allegedly passed the probationary period. As the Ministry denied respondents request for reconsideration, she returned to the Philippines on March 17, 2001, shouldering her own air fare. On July 27, 2001, respondent filed with the National Labor Relations Commission (NLRC) a complaint [2] for illegal dismissal against petitioner ATCI as the local recruitment agency, represented by petitioner, Amalia Ikdal (Ikdal), and the Ministry, as the foreign principal. By Decision[3] of November 29, 2002, the Labor Arbiter, finding that petitioners neither showed that there was just cause to warrant respondents dismissal nor that she failed to qualify as a regular employee, held that respondent was illegally dismissed and accordingly ordered petitioners to pay her US$3,600.00, representing her salary for the three months unexpired portion of her contract.

On appeal of petitioners ATCI and Ikdal, the [4] NLRC affirmed the Labor Arbiters decision by Resolution of January 26, 2004. Petitioners motion for reconsideration having been denied by Resolution[5] of April 22, 2004, they appealed to the Court of Appeals, contending that their principal, the Ministry, being a foreign government agency, is immune from suit and, as such, the immunity extended to them; and that respondent was validly dismissed for her failure to meet the performance rating within the one-year period as required under Kuwaits Civil Service Laws. Petitioners further contended that Ikdal should not be liable as an officer of petitioner ATCI. By Decision[6] of March 30, court affirmed the NLRC Resolution. 2007, the appellate

In brushing aside petitioners contention that they only acted as agent of the Ministry and that they cannot be held jointly and solidarily liable with it, the appellate court noted that under the law, a private employment agency shall assume all responsibilities for the implementation of the contract of employment of an overseas worker, hence, it can be sued jointly and severally with the foreign principal for any violation of the recruitment agreement or contract of employment. As to Ikdals liability, the appellate court held that under Sec. 10 of Republic Act No. 8042, the Migrant and Overseas Filipinos Act of 1995, corporate officers, directors and partners of a recruitment agency may themselves be jointly and solidarily liable with the recruitment agency for money claims and damages awarded to overseas workers. Petitioners motion for reconsideration having been denied by the appellate court by Resolution [7] of June 27, 2007, the present petition for review on certiorari was filed.

Petitioners maintain that they should not be held liable because respondents employment contract specifically stipulates that her employment shall be governed by the Civil Service Law and Regulations of Kuwait. They thus conclude that it was patent error for the labor tribunals and the appellate court to apply the Labor Code provisions governing probationary employment in deciding the present case. Further, petitioners argue that even the Philippine Overseas Employment Act (POEA) Rules relative to master employment contracts (Part III, Sec. 2 of the POEA Rules and Regulations) accord respect to the customs, practices, company policies and labor laws and legislation of the host country. Finally, petitioners posit that assuming arguendo that Philippine labor laws are applicable, given that the foreign principal is a government agency which is immune from suit, as in fact it did not sign any document agreeing to be held jointly and solidarily liable, petitioner ATCI cannot likewise be held liable, more so since the Ministrys liability had not been judicially determined as jurisdiction was not acquired over it. The petition fails. Petitioner ATCI, as a private recruitment agency, cannot evade responsibility for the money claims of Overseas Filipino workers (OFWs) which it deploys abroad by the mere expediency of claiming that its foreign principal is a government agency clothed with immunity from suit, or that such foreign principals liability must first be established before it, as agent, can be held jointly and solidarily liable. In providing for the joint and solidary liability of private recruitment agencies with their foreign principals, Republic Act No. 8042 precisely affords the OFWs with a recourse and assures

them of immediate and sufficient payment of what is due them. Skippers United Pacific v. Maguad[8] explains:
. . . [T]he obligations covenanted in the recruitment agreement entered into by and between the local agent and its foreign principal are not coterminous with the term of such agreement so that if either or both of the parties decide to end the agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all end, but the same extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Otherwise, this will render nugatory the very purpose for which the law governing the employment of workers for foreign jobs abroad was enacted . (emphasis supplied)

The imposition of joint and solidary liability is in line with the policy of the state to protect and alleviate the plight of the working class.[9] Verily, to allow petitioners to simply invoke the immunity from suit of its foreign principal or to wait for the judicial determination of the foreign principals liability before petitioner can be held liable renders the law on joint and solidary liability inutile. As to petitioners contentions that Philippine labor laws on probationary employment are not applicable since it was expressly provided in respondents employment contract, which she voluntarily entered into, that the terms of her engagement shall be governed by prevailing Kuwaiti Civil Service Laws and Regulations as in fact POEA Rules accord respect to such rules, customs and practices of the host country, the same was not substantiated. Indeed, a contract freely entered into is considered the law between the parties who can establish stipulations, clauses, terms and conditions as they may deem convenient, including the laws which they wish to govern their respective obligations, as long as

they are not contrary to law, morals, good customs, public order or public policy. It is hornbook principle, however, that the party invoking the application of a foreign law has the burden of proving the law, under the doctrine of processual presumption which, in this case, petitioners failed to discharge. The Courts ruling in EDIStaffbuilders Intl., v. NLRC[10] illuminates:
In the present case, the employment contract signed by Gran specifically states that Saudi Labor Laws will govern matters not provided for in the contract (e.g. specific causes for termination, termination procedures, etc.). Being the law intended by the parties (lex loci intentiones ) to apply to the contract, Saudi Labor Laws should govern all matters relating to the termination of the employment of Gran. In international law, the party who wants to have a foreign law applied to a dispute or case has the burden of proving the foreign law. The foreign law is treated as a question of fact to be properly pleaded and proved as the judge or labor arbiter cannot take judicial notice of a foreign law. He is presumed to know only domestic or forum law. Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the matter; thus, the International Law doctrine of presumed-identity approach or processual presumption comes into play. Where a foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign law is the same as ours. Thus, we apply Philippine labor laws in determining the issues presented before us. (emphasis and underscoring supplied)

The Philippines does not take judicial notice of foreign laws, hence, they must not only be alleged; they must be proven. To prove a foreign law, the party invoking it must present a copy thereof and comply with Sections 24 and 25 of Rule 132 of the Revised Rules of Court which reads:

SEC. 24. Proof of official record. The record of public documents referred to in paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office. (emphasis supplied)

SEC. 25. What attestation of copy must state. Whenever a copy of a document or record is attested for the purpose of the evidence, the attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the case may be. The attestation must be under the official seal of the attesting officer, if there be any, or if he be the clerk of a court having a seal, under the seal of such court.

To prove the Kuwaiti law, petitioners submitted the following: MOA between respondent and the Ministry, as represented by ATCI, which provides that the employee is subject to a probationary period of one (1) year and that the host countrys Civil Service Laws and Regulations apply; a translated copy[11] (Arabic to English) of the termination letter to respondent stating that she did not pass the probation terms, without specifying the grounds therefor, and a translated copy of the certificate of termination, [12] both of which documents were certified by Mr. Mustapha Alawi, Head of the Department of Foreign Affairs-Office of Consular Affairs Inslamic Certification and Translation Unit; and respondents letter[13] of reconsideration to the Ministry, wherein she noted that in her first eight (8) months

of employment, she was given a rating of Excellent albeit it changed due to changes in her shift of work schedule. These documents, whether taken singly or as a whole, do not sufficiently prove that respondent was validly terminated as a probationary employee under Kuwaiti civil service laws. Instead of submitting a copy of the pertinent Kuwaiti labor laws duly authenticated and translated by Embassy officials thereat, as required under the Rules, what petitioners submitted were mere certifications attesting only to the correctness of the translations of the MOA and the termination letter which does not prove at all that Kuwaiti civil service laws differ from Philippine laws and that under such Kuwaiti laws, respondent was validly terminated. Thus the subject certifications read:
xxxx This is to certify that the herein attached translation/s from Arabic to English/Tagalog and or vice versa was/were presented to this Office for review and certification and the same was/were found to be in order. This Office, however, assumes no responsibility as to the contents of the document/s. This certification is being issued upon request of the interested party for whatever legal purpose it may serve. (emphasis supplied)

Respecting Ikdals joint and solidary liability as a corporate officer, the same is in order too following the express provision of R.A. 8042 on money claims, viz:
SEC. 10. Money Claims.Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising

out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual moral, exemplary and other forms of damages. The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to be filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. (emphasis and underscoring supplied)

WHEREFORE, the petition is DENIED.

BRIGHT MARITIME CORPORATION (BMC)/DESIREE P. TENORIO, Petitioners,

G.R. No. 165935 Present: VELASCO, JR., J., Chairperson, PERALTA, ABAD, MENDOZA, and PERLAS-BERNABE, JJ. Promulgated:

- versus -

RICARDO B. FANTONIAL, Responde nt.

February 8, 2012

x-----------------------------------------------------------------------------------------x DECISION

PERALTA, J.: This is a petition for review on certiorari[1] of the Decision of the Court of Appeals in CA-G.R. SP No. 67571, dated October 25, 2004, reversing and setting aside the Decision of the National Labor Relations Commission (NLRC), and reinstating the Decision of the Labor Arbiter finding that respondent Ricardo B. Fantonial was illegally dismissed, but the Court of Appeals modified the award of damages. The facts are as follows: On January 15, 2000, a Contract of Employment [2] was executed by petitioner Bright Maritime Corporation (BMC), a manning agent, and its president, petitioner Desiree P. Tenorio, for and in behalf of their principal, Ranger Marine S.A., and respondent Ricardo B. Fantonial, which contract was verified and approved by the Philippine Overseas Employment Administration (POEA) on January 17, 2000. The employment contract provided that respondent shall be employed as boatswain of the foreign vessel M/V AUK for one year, with a basic monthly salary of US$450, plus an allowance of US$220. The contract also provided for a 90 hours per month of overtime with pay and a vacation leave with pay of US$45 per month. Respondent was made to undergo a medical examination at the Christian Medical Clinic, which was petitioners accredited medical clinic. Respondent was issued a Medical [3] Certificate dated January 17, 2000, which certificate had the phrase FIT TO WORK stamped on its lower and upper portion. At about 3:30 p.m. of January 17, 2000, respondent, after having undergone the pre-departure orientation seminar and being equipped with the necessary requirements and documents

for travel, went to the Ninoy Aquino International Airport upon instruction of petitioners. Petitioners told respondent that he would be departing on that day, and that a liaison officer would be delivering his plane ticket to him. At about 4:00 p.m., petitioners liaison officer met respondent at the airport and told him that he could not leave on that day due to some defects in his medical certificate. The liaison officer instructed respondent to return to the Christian Medical Clinic. Respondent went back to the Christian Medical Clinic the next day, and he was told by the examining physician, Dr. Lyn dela Cruz-De Leon, that there was nothing wrong or irregular with his medical certificate. Respondent went to petitioners office for an explanation, but he was merely told to wait for their call, as he was being lined-up for a flight to the ship's next port of call. However, respondent never got a call from petitioners. On May 16, 2000, respondent filed a complaint against petitioners for illegal dismissal, payment of salaries for the unexpired portion of the employment contract and for the award of moral, exemplary, and actual damages as well as attorneys fees before the Regional Arbitration Branch No. 7 of the NLRC in Cebu City.[4] In their Position Paper,[5] petitioners stated that to comply with the standard requirements that only those who meet the standards of medical fitness have to be sent on board the vessel, respondent was referred to their accredited medical clinic, the Christian Medical Clinic, for pre-employment medical examination on January 17, 2000, the same day when respondent was supposed to fly to Germany to join the vessel. Unfortunately, respondent was not declared fit to work on January 17, 2000 due to some medical problems.

Petitioners submitted the Affidavit[6] of Dr. Lyn dela Cruz-De Leon, stating that the said doctor examined respondent on January 17, 2000; that physical and laboratory results were all within normal limits except for the finding, after chest x-ray, of Borderline Heart Size, and that respondent was positive to Hepatitis B on screening; that respondent underwent ECG to check if he had any heart problem, and the result showed left axis deviation. Dr. De Leon stated that she requested for a Hepatitis profile, which was done on January 18, 2000; that on January 20, 2000, the result of the Hepatitis profile showed noninfectious Hepatitis B. Further, Dr. De Leon stated that respondent was declared fit to work only on January 21, 2000; however, the date of the Medical Certificate was January 17, 2000, which was the date when she started to examine the patient per standard operating procedure. Petitioners argued that since respondent was declared fit to work only on January 21, 2000, he could not join the vessel anymore as it had left the port in Germany. Respondent was advised to wait for the next vacancy for boatswain, but he failed to report to petitioners office, and he gave them an incorrect telephone number. During the mandatory conference/conciliation stage of this case, petitioners offered respondent to join one of their vessels, but he refused. Petitioners further argued that they cannot be held liable for illegal dismissal as the contract of employment had not yet commenced based on Section 2 of the Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (POEA Memorandum Circular No. 05596), which states:
SEC 2. COMMENCEMENT/DURATION OF CONTRACT A. The employment contract between the employer and the

seafarer shall commence upon actual departure of the seafarer from the airport or seaport in the point of hire and with a POEA approved contract. It shall be effective until the

seafarers date of arrival at the point of hire upon termination of his employment pursuant to Section 18 of this Contract.

Petitioners asserted that since respondent was not yet declared fit to work on January 17, 2000, he was not able to leave on the scheduled date of his flight to Germany to join the vessel. With his non-departure, the employment contract was not commenced; hence, there is no illegal dismissal to speak of. Petitioners prayed for the dismissal of the complaint. On September 25, 2000, Labor Arbiter Ernesto F. Carreon rendered a Decision[7] in favor of respondent. The pertinent portion of the decision reads:
Unarguably, the complainant and respondents have already executed a contract of employment which was duly approved by the POEA. There is nothing left for the validity and enforceability of the contract except compliance with what are agreed upon therein and to all their consequences. Under the contract of employment, the respondents are under obligation to employ the complainant on board M/V AUK for twelve months with a monthly salary of 450 US$ and 220 US$ allowance. The respondents failed to present plausible reason why they have to desist from complying with their obligation under the contract. The allegation of the respondents that the complainant was unfit to work is ludicrous. Firstly, the respondents' accredited medical clinic had issued a medical certificate showing that the complainant was fit to work. Secondly, if the complainant was not fit to work, a contract of employment would not have been executed and approved by the POEA. We are not also swayed by the argument of the respondents that since the complainant did not actually depart from Manila his contract of employment can be withdrawn because he has not yet commenced his employment. The commencement of the employment is not one of those requirements in order to make the contract of employment consummated and enforceable between the parties, but only as a gauge for the payment of salary. In this case, while it is true that the complainant is not yet entitled to the payment of wages because then his employment has not yet commenced, nevertheless, the same did not relieve the respondents from fulfilling their obligation by unilaterally revoking the contract as

the same amounted to pre-termination of the contract without just or authorized cause perforce, we rule to be constitutive of illegal dismissal. Anent our finding of illegal dismissal, we condemn the respondent corporation to pay the complainant three (3) months salary and the refund of his placement fee, including documentation and other actual expenses, which we fixed at one month pay. The granted claims are computed as follows: US$670 x 4 months US$ 2,680.00

WHEREFORE, premises considered, judgment is hereby rendered ordering the respondent Bright Maritime Corporation to pay the complainant Ricardo Fantonial the peso equivalent at the time of actual payment of US$ 2,680.00. The other claims and the case against respondent Desiree P. Tenorio are dismissed for lack of merit.[8]

Petitioners appealed the decision of the Labor Arbiter to the NLRC. On May 31, 2001, the NLRC, Fourth Division, rendered a Decision[9] reversing the decision of the Labor Arbiter. The dispositive portion of the NLRC decision reads:
WHEREFORE, premises considered, the decision of Labor Arbiter Ernesto F. Carreon, dated 25 September 2000, is SET ASIDE and a new one is entered DISMISSING the complaint of the complainant for lack of merit. SO ORDERED.[10]

The NLRC held that the affidavit of Dr. Lyn dela Cruz-De Leon proved that respondent was declared fit to work only on January 21, 2000, when the vessel was no longer at the port of Germany. Hence, respondents failure to depart on January 17, 2000 to join the vessel M/V AUK in Germany was due to

respondents health. The NLRC stated that as a recruitment agency, petitioner BMC has to protect its name and goodwill, so that it must ensure that an applicant for employment abroad is both technically equipped and physically fit because a labor contract affects public interest. Moreover, the NLRC stated that the Labor Arbiters decision ordering petitioners to refund respondents placement fee and other actual expenses, which was fixed at one month pay in the amount of US$670.00, does not have any bases in law, because in the deployment of seafarers, the manning agency does not ask the applicant for a placement fee. Hence, respondent is not entitled to the said amount. Respondent filed a motion for reconsideration of the NLRC decision, which motion was denied in a Resolution [11] dated July 23, 2001. Respondent filed a petition for certiorari before the Court of Appeals, alleging that the NLRC committed grave abuse of discretion in rendering the Decision dated May 31, 2001and the Resolution dated July 23, 2001. On March 12, 2002, respondents counsel filed a Manifestation with Motion for Substitution of Parties due to the death of respondent on November 15, 2001, which motion was granted by the Court of Appeals. On October 25, 2004, the Court of Appeals rendered a Decision, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us REVERSING and SETTING ASIDE the May 31, 2001 Decision and the July 23, 2001 Resolution of the NLRC, Fourth Division, and REINSTATING the September 25, 2000 Decision of the Labor Arbiter with the modification that the placement fee and other expenses equivalent to one (1) month salary is deleted and that the private respondent Bright Maritime Corporation must also pay the amounts of P30,000.00 and P10,000.00 as moral and exemplary damages, respectively, to the petitioner.[12]

The Court of Appeals held that the NLRC, Fourth Division, acted with grave abuse of discretion in reversing the decision of the Labor Arbiter who found that respondent was illegally dismissed. It agreed with the Labor Arbiter that the unilateral revocation of the employment contract by petitioners amounted to pre-termination of the said contract without just or authorized cause. The Court of Appeals held that the contract of employment between petitioners and respondent had already been perfected and even approved by the POEA. There was no valid and justifiable reason for petitioners to withhold the departure of respondent on January 17, 2000. It found petitioners argument that respondent was not fit to work on the said date as preposterous, since the medical certificate issued by petitioners accredited medical clinic showed that respondent was already fit to work on the said date. The Court of Appeals stated, thus:
Private respondent's contention, which was contained in the affidavit of Dr. Lyn dela Cruz-De Leon, that the Hepatitis profile was done only on January 18, 2000 and was concluded on January 20, 2000, is of dubious merit. For how could the said examining doctor place in the medical certificate dated January 17, 2000 the words "CLASS-B NON-Infectious Hepatitis" (Rollo, p. 17) if she had not conducted the hepatitis profile? Would the private respondent have us believe that its accredited physician would fabricate medical findings? It is obvious, therefore, that the petitioner had been fit to work on January 17, 2000 and he should have been able to leave for Germany to meet with the vessel M/V AUK, had it not been for the unilateral act by private respondent of preventing him from leaving. The private respondent was merely grasping at straws in attacking the medical condition of the petitioner just so it can justify its act in preventing petitioner from leaving for abroad.
[13]

The Court of Appeals held that petitioners act of preventing respondent from leaving for Germany was tainted with bad faith, and that petitioners were also liable to respondent for moral and exemplary damages. Thereafter, petitioners filed this petition raising the following issues:
I WHETHER OR NOT THE HONORABLE APPELLATE COURT COMMITTED A SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION WHEN IT HELD THE PETITIONERS LIABLE FOR ILLEGALLY TERMINATING THE PRIVATE RESPONDENT FROM HIS EMPLOYMENT. II WHETHER OR NOT THE HONORABLE APPELLATE COURT COMMITTED SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION IN SETTING ASIDE THE OVERWHELMING EVIDENCE SHOWING THAT THE PRIVATE RESPONDENT FAILED TO COMPLY WITH THE REQUIREMENTS SET BY THE POEA RULES REGARDING FITNESS FOR WORK.

III WHETHER OR NOT THE HONORABLE APPELLATE COURT SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT AWARDED MONETARY BENEFITS TO THE PRIVATE RESPONDENT DESPITE THE PROVISION OF THE POEA [STANDARD EMPLOYMENT CONTRACT] TO THE CONTRARY. IV WHETHER OR NOT THE HONORABLE APPELLATE COURT COMMITTED SERIOUS ERROR WITH REGARD TO ITS FINDINGS OF FACTS, WHICH, IF NOT CORRECTED, WOULD CERTAINLY CAUSE GRAVE OR IRREPARABLE DAMAGE OR INJURY TO THE PETITIONERS.[14]

The general rule that petitions for review only allow the review of errors of law by this Court is not ironclad. [15] Where the

issue is shrouded by a conflict of factual perceptions by the lower court or the lower administrative body, such as the NLRC in this case, this Court is constrained to review the factual findings of the Court of Appeals.[16] Petitioners contend that the Court of Appeals erred in doubting the Affidavit of Dr. Lyn dela Cruz-De Leon, which affidavit stated that the Hepatitis profile of respondent was done only on January 18, 2000 and was concluded on January 20, 2000. Petitioners stated that they had no intention to fabricate or mislead the appellate court and the Labor Arbiter, but they had to explain the circumstances that transpired in the conduct of the medical examination. Petitioners reiterated that the medical examination was conducted on January 17, 2000 and the result was released on January 20, 2000. As explained by Dr. Lyn dela Cruz-De Leon, the date January 17, 2000 was written on the medical examination certificate because it was the day when respondent was referred and initially examined by her. The medical examination certificate was dated January 17, 2000 not for any reason, but in accordance with a generally accepted medical practice, which was not controverted by respondent. Petitioners assert that respondents failure to join the vessel on January 17, 2000 should not be attributed to it for it was a direct consequence of the delay in the release of the medical report. Respondent was not yet declared fit to work at the time when he was supposed to be deployed on January 17, 2000, as instructed by petitioners principal. Respondents fitness to work is a condition sine qua non for purposes of deploying an overseas contract worker. Since respondent failed to qualify on the date designated by the principal for his deployment, petitioners had to find a qualified replacement considering the nature of the shipping business where delay in the departure of the vessel is synonymous to demurrage/damages on the part of the principal and on the vessels charterer. Without a clean bill of health, the

contract of employment cannot be considered to have been perfected as it is wanting of an important requisite. Based on the foregoing argument of petitioners, the first issue to be resolved is whether petitioners reason for preventing respondent from leaving Manila and joining the vessel M/V AUK in Germany on January 17, 2000 is valid. The Court rules in the negative. The Court has carefully reviewed the records of the case, and agrees with the Court of Appeals that respondents Medical Certificate[17] dated January 17, 2000, stamped with the words FIT TO WORK, proves that respondent was medically fit to leave Manila on January 17, 2000 to join the vessel M/V AUK in Germany. The Affidavit of Dr. Lyn dela Cruz-De Leon that respondent was declared fit to work only on January 21, 2000 cannot overcome the evidence in the Medical Certificate dated January 17, 2000, which already stated that respondent had Class-B Non-Infectious Hepatitis-B, and that he was fit to work. The explanation given by Dr. Lyn dela Cruz-De Leon in her affidavit that the Medical Certificate was dated January 17, 2000, since it carries the date when they started to examine the patient per standard operating procedure, does not persuade as it goes against logic and the chronological recording of medical procedures. The Medical Certificate submitted as documentary evidence[18] is proof of its contents, including the date thereof which states that respondent was already declared fit to work on January 17, 2000, the date of his scheduled deployment. Next, petitioners contend that respondents employment contract was not perfected pursuant to the POEA Standard Employment Contract, which provides:
SEC 2. COMMENCEMENT/DURATION OF CONTRACT

A. The employment contract between the employer and the seafarer shall commence upon actual departure of the seafarer from the airport or seaport in the point of hire and with a POEA approved contract . It shall be effective until the seafarers date of arrival at the point of hire upon termination of his employment pursuant to Section 18 of this Contract.[19]

Petitioners argue that, as ruled by the NLRC, since respondent did not actually depart from the Ninoy Aquino International Airport in Manila, no employer-employee relationship existed between respondent and petitioners principal, Ranger Marine S.A., hence, there is no illegal dismissal to speak of, so that the award of damages must be set aside. Petitioners assert that they did not conceal any information from respondent related to his contract of employment, from his initial application until the release of the result of his medical examination. They even tried to communicate with respondent for another shipboard assignment even after his failed deployment, which ruled out bad faith. They pray that respondents complaint be dismissed for lack of merit. Petitioners argument is partly meritorious. An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract, and (c) cause of the obligation. [20] The object of the contract was the rendition of service by respondent on board the vessel for which service he would be paid the salary agreed upon. Hence, in this case, the employment contract was perfected on January 15, 2000 when it was signed by the

parties, respondent and petitioners, who entered into the contract in behalf of their principal, Ranger Marine S.A., thereby signifying their consent to the terms and conditions of employment embodied in the contract, and the contract was approved by the POEA on January 17, 2000. However, the employment contract did not commence, since petitioners did not allow respondent to leave on January 17, 2000 to embark the vessel M/V AUK in Germany on the ground that he was not yet declared fit to work on the day of departure, although his Medical Certificate dated January 17, 2000 proved that respondent was fit to work. In Santiago v. CF Sharp Crew Management, Inc. ,[21] the Court held that the employment contract did not commence when the petitioner therein, a hired seaman, was not able to depart from the airport or seaport in the point of hire; thus, no employeremployee relationship was created between the parties. Nevertheless, even before the start of any employeremployee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party.[22] If the reverse happened, that is, the seafarer failed or refused to be deployed as agreed upon, he would be liable for damages.[23] The Court agrees with the NLRC that a recruitment agency, like petitioner BMC, must ensure that an applicant for employment abroad is technically equipped and physically fit because a labor contract affects public interest. Nevertheless, in this case, petitioners failed to prove with substantial evidence that they had a valid ground to prevent respondent from leaving on the scheduled date of his deployment. While the POEA Standard Contract must be recognized and respected, neither the manning agent nor the employer can simply prevent a seafarer from being deployed without a valid reason. [24] Petitioners act of preventing respondent from leaving and complying with his contract of employment constitutes breach of

contract for which petitioner BMC is liable for actual damages to respondent for the loss of one-year salary as provided in the contract.[25] The monthly salary stipulated in the contract is US$670, inclusive of allowance. The Court upholds the award of moral damages in the amount of P30,000.00, as the Court of Appeals correctly found petitioners act was tainted with bad faith, [26] considering that respondents Medical Certificate stated that he was fit to work on the day of his scheduled departure, yet he was not allowed to leave allegedly for medical reasons. Further, the Court agrees with the Court of Appeals that petitioner BMC is liable to respondent for exemplary damages, [27] which are imposed by way of example or correction for the public good in view of petitioners act of preventing respondent from being deployed on the ground that he was not yet declared fit to work on the date of his departure, despite evidence to the contrary. Such act, if tolerated, would prejudice the employment opportunities of our seafarers who are qualified to be deployed, but prevented to do so by a manning agency for unjustified reasons. Exemplary damages are imposed not to enrich one party or impoverish another, but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. [28] In this case, petitioner should be held liable to respondent for exemplary damages in the amount of P50,000.00,[29] following the recent case of Claudio S. Yap v. Thenamaris Ships [30] Management, et al., instead ofP10,000.00 The Court also holds that respondent is entitled to attorneys fees in the concept of damages and expenses of litigation. [31] Attorney's fees are recoverable when the defendant's act or omission has compelled the plaintiff to incur expenses to protect his interest.[32] Petitioners failure to deploy respondent based on an unjustified ground forced respondent to file this case, warranting the award of attorneys fees equivalent to ten percent (10%) of the recoverable amount.[33]

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 67571, dated October 25, 2004, is AFFIRMED with modification. Petitioner Bright Maritime Corporation is hereby ORDERED to pay respondent Ricardo B. Fantonial actual damages in the amount of the peso equivalent of US$8,040.00, representing his salary for one year under the contract; moral damages in the amount Thirty Thousand Pesos (P30,000.00); exemplary damages that is increased from Ten Thousand Pesos (P10,000.00) to Fifty Thousand Pesos (P50,000.00), and attorneys fees equivalent to ten percent (10%) of the recoverable amount. Costs against petitioners. SECOND DIVISION

WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN, MARK WEBSTER, and NOMINADA LANSANG, Petitioners, - versus JOCELYN M. GALERA, Respondent. x------------------ x JOCELYN M. GALERA, Petitioner, - versus -

G.R. No.

169207

G.R. No. 169239 Present: CARPIO, Acting C.J., Chairperson, BRION, DEL CASTILLO, ABAD, and PEREZ, JJ.

WPP MARKETING COMMUNICATIONS, INC., JOHN STEEDMAN, Promulgated: MARK WEBSTER, and NOMINADA LANSANG, March 25, 2010 Respondents. x------------------------------------------------- x

DECISION CARPIO, Acting C.J.: The Case

G.R. Nos. 169207 and 169239 are petitions for review[1] assailing the Decision[2] promulgated on 14 April 2005 as well as the Resolution[3] promulgated on 1 August 2005 of the Court of Appeals (appellate court) in CA-G.R. SP No. 78721. The appellate court granted and gave due course to the petition filed by Jocelyn M.Galera (Galera). The appellate courts decision reversed and set aside that of the National Labor Relations Commission (NLRC), and directed WPP Marketing Communications, Inc. (WPP) to pay Galera backwages, separation pay, unpaid housing benefit, unpaid personal and accident insurance benefits, cash value under the companys pension plan, 30 days paid holiday benefit, moral damages, exemplary damages, 10% of the total judgment award as attorneys fees, and costs of the suit. The Facts The appellate court narrated the facts as follows:
Petitioner is Jocelyn Galera (GALERA), a [sic] American citizen who was recruited from the United States of America by private respondent John Steedman, Chairman-WPP Worldwide and Chief Executive Officer of Mindshare, Co., a corporation based in Hong Kong, China, to work in the Philippines for private respondent WPP Marketing Communications, Inc. (WPP), a corporation registered and operating under the laws of Philippines. GALERA accepted the offer and she signed an Employment Contract entitled Confirmation of Appointment and Statement of Terms and Conditions (Annex B to Petition for Certiorari). The relevant portions of the contract entered into between the parties are as follows: Particulars: Name: Jocelyn M. Galera Address: 163 Mediterranean Avenue Hayward, CA 94544 Position: Managing Director Mindshare Philippines

Annual Salary: Peso 3,924,000 Start Date: 1 September 1999 Commencement Date: 1 September 1999 (for continuous service) Office: Mindshare Manila 6. Housing Allowance The Company will provide suitable housing in Manila at a maximum cost (including management fee and other associated costs) of Peso 576,000 per annum. 7. Other benefits. The Company will provide you with a fully maintained company car and a driver. The Company will continue to provide medical, health, life and personal accident insurance plans, to an amount not exceeding Peso 300,000 per annum, in accordance with the terms of the respective plans, as provided by JWT Manila. The Company will reimburse you and your spouse one way business class air tickets from USA to Manila and the related shipping and relocation cost not exceeding US$5,000 supported by proper documentation. If you leave the Company within one year, you will reimburse the Company in full for all costs of the initial relocation as described therein. You will participate in the JWT Pension Plan under the terms of this plan, the Company reserves the right to transfer this benefit to a Mindshare Pension Plan in the future, if so required. 8. Holidays You are entitled to 20 days paid holiday in addition to public holidays per calendar year to be taken at times agreed with the Company. Carry-over of unused accrued holiday entitlement into a new holiday year will not normally be allowed. No payment will be made for holidays not taken. On termination of your employment, unless you have been summarily dismissed, you will be entitled to receive payment for unused accrued holiday pay. Any holiday taken in excess of your entitlement shall be deducted from your final salary payment. 9. Leave Due to Sickness or Injury

The maximum provision for sick leave is 15 working days per calendar year. 12. Invention/Know-How Any discovery, invention, improvement in procedure, trademark, trade name, designs, copyrights or get-ups made, discovered or created by you during the continuance of your employment hereunder relating to the business of the Company shall belong to and shall be the absolute property of the Company. If required to do so by the Company (whether during or after the termination of your employment) you shall at the expense of the company execute all instruments and do all things necessary to vest in ownership for all other rights, title and interests (including any registered rights therein) in such discovery, invention, improvement in procedure, trademark, trade name, design, copyright or get-up in the Company (or its Nominee) absolutely and as sole beneficial owner. 14. Notice. The first three months of your employment will be a trial period during which either you or the Company may terminate your employment on one weeks notice. If at the end of that period, the Company is satisfied with your performance, you will become a permanent employee. Thereafter you will give Company and the Company will give you three months notice of termination of employment. The above is always subject to the following: (1) the Companys right to terminate the contract of employment on no or short notice where you are in breach of contract; (2) your employment will at any event cease without notice on your retirement date when you are 60 years of age. SIGNED JOCELYN M. GALERA 8-16-99 Date of Borth [sic] 12-25-55 Employment of GALERA with private respondent WPP became effective on September 1, 1999 solely on the instruction of the CEO and upon signing of the contract, without any further action from the Board of Directors of private respondent WPP.

Four months had passed when private respondent WPP filed before the Bureau of Immigration an application for petitioner GALERA to receive a working visa, wherein she was designated as Vice President of WPP. Petitioner alleged that she was constrained to sign the application in order that she could remain in the Philippines and retain her employment. Then, on December 14, 2000, petitioner GALERA alleged she was verbally notified by private respondent STEEDMAN that her services had been terminated from private respondent WPP. A termination letter followed the next day.[4]

On 3 January 2001, Galera filed a complaint for illegal dismissal, holiday pay, service incentive leave pay, 13 th month pay, incentive plan, actual and moral damages, and attorneys fees against WPP and/or John Steedman (Steedman), Mark Webster (Webster) and Nominada Lansang (Lansang). The case was docketed as NLRC NCR Case No. 30-01-00044-01. The Labor Arbiters Ruling

In his Decision dated 31 January 2002, Labor Arbiter Edgardo M. Madriaga (Arbiter Madriaga) held WPP, Steedman, Webster, and Lansang liable for illegal dismissal and damages. Arbiter Madriaga stated that Galera was not only illegally dismissed but was also not accorded due process. Arbiter Madriaga explained, thus:
[WPP] failed to observe the two-notice rule. [WPP] through respondent Steedman for a five (5) minute meeting on December 14, 2000 where she was verbally told that as of that day, her employment was being terminated. [WPP] did not give [Galera] an opportunity to defend herself and explain her side. [Galera] was even prohibited from reporting for work that day and was told not to report for work the next day as it would be awkward for her and respondent Steedman to be in the same premises after her termination. [WPP] only served [Galera] her written notice of termination only on 15 December 2001, one day after she was verbally apprised thereof.

The law mandates that the dismissal must be properly done otherwise, the termination is gravely defective and may be declared unlawful as we hereby hold [Galeras] dismissal to be illegal and unlawful. Where there is no showing of a clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid or authorized cause. The law mandates that both the substantive and procedural aspects of due process should be observed. The facts clearly show that respondents were remiss on both aspects. Perforce, the dismissal is void and unlawful. xxxx Considering the work performance and achievements of [Galera] for the year 2000, we do not find any basis for the alleged claim of incompetence by herein respondents. Had [Galera] been really incompetent, she would not have been able to generate enormous amounts [sic] of revenues and business for [WPP]. She also appears to be well liked as a leader by her subordinates, who have come forth in support of [Galera]. These facts remain undisputed by respondents. A mans job being a property right duly protected by our laws, an employer who deprives an employee [of] the right to defend himself is liable for damages consistent with Article 32 of the Civil Code. To allow an employer to terminate the employment of his worker based merely on allegations without proof places the [employee] in an uncertain situation. The unflinching rule in illegal dismissal cases is that the employer bears the burden of proof. In the instant case, respondents have not been able to muster evidence to counter [Galeras] allegations. [Galeras] allegations remain and stand absent proof from respondents rebutting them. Hence, our finding of illegal dismissal against respondents who clearly have conspired in bad faith to deprive [Galera] of her right to substantive and procedural due process.
[5]

The dispositive portion of Arbiter Madriagas decision reads as follows:

WHEREFORE, premises considered, we hereby hold herein respondents liable for illegal dismissal and damages, and award to [Galera], by virtue of her expatriate status, the following: a. Reinstatement without loss of seniority rights.

b. Backwages amounting to $120,000 per year at P50.00 to US $1 exchange rate, 13 th month pay, transportation and housing benefits. c. Remuneration for business acquisitions amounting to Two Million Eight Hundred Fifty Thousand Pesos (P2,850,000.00) and Media Plowback Incentive equivalent to Three Million Pesos (P3,000,000.00) or a total of not less than One Hundred Thousand US Dollars ($100,000.00). d. US Tax Protection of up to 35% coverage equivalent to Thirty Eight Thousand US Dollars ($38,000). e. Moral damages including implied defamation and punitive damages equivalent to Two Million Dollars (US$2,000,000.00). f. Exemplary damages equivalent to One Million Dollars ($1,000,000.00). g. Attorneys fees of 10% of the total award herein. SO ORDERED.[6]

The Ruling of the NLRC The First Division of the NLRC reversed the ruling of Arbiter Madriaga. In its Decision[7] promulgated on 19 February 2003, the NLRC stressed that Galerawas WPPs Vice-President, and therefore, a corporate officer at the time she was removed by

the Board of Directors on 14 December 2000. The NLRC stated thus:

It matters not that her having been elected by the Board to an added position of being a member of the Board of Directors did not take effect as her May 31, 2000 election to such added position was conditioned to be effective upon approval by SEC of the Amended By-Laws, an approval which took place only in February 21, 2001, i.e., after her removal on December 14, 2000. What counts is, at the time of her removal, she continued to be WPPs Vice-President, a corporate officer, on hold over capacity. Ms. Galeras claim that she was not a corporate officer at the time of her removal because her May 31, 2000 election as Vice President for Media, under WPPs Amended By-Laws, was subject to the approval by the Securities and Exchange Commission and that the SEC approved the Amended By-Laws only in February 2001. Such claim is unavailing. Even if Ms.Galeras subsequent election as Vice President for Media on May 31, 2000 was subject to approval by the SEC, she continued to hold her previous position as Vice President under the December 31, 1999 election until such time that her successor is duly elected and qualified. It is a basic principle in corporation law, which principle is also embodied in WPPs by-laws, that a corporate officer continues to hold his position as such until his successor has been duly elected and qualified. When Ms. Galera was elected as Vice President on December 31, 1999, she was supposed to have held that position until her successor has been duly elected and qualified. The record shows that Ms. Galera was not replaced by anyone. She continued to be Vice President of WPP with the same operational title of Managing Director for Mindshare and continued to perform the same functions she was performing prior to her May 31, 2000 election. In the recent case of Dily Dany Nacpil v. International Broadcasting Corp., the definition of corporate officer for purposes of intra-corporate controversy was even broadened to include a Comptroller/Assistant Manager who was appointed by the General Manager, and whose appointment was later approved by the Board of Directors. In this case, the position of comptroller was not even expressly mentioned in the By-Laws of the corporation, and yet, the Supreme Court found him to be a corporate officer. The Court ruled that

(since) petitioners appointment as comptroller required the approval and formal action of IBCs Board of Directors to become valid, it is clear therefore that petitioner is a corporate officer whose dismissal may be the subject of a controversy cognizable by the SEC... Had the petitioner been an ordinary employee, such board action would not have been required. Such being the case, the imperatives of law require that we hold that the Arbiter below had no jurisdiction over Galeras case as, again, she was a corporate officer at the time of her removal. WHEREFORE, the appeals of petitioner from the Decision of Labor Arbiter Edgardo Madriaga dated January 31, 2002 and his Order dated March 21, 2002, respectively, are granted. The January 31, 2002 decision of the Labor Arbiter is set aside for being null and void and the temporary restraining order we issued on April 24, 2002 is hereby made permanent. The complaint of Jocelyn Galera is dismissed for lack of jurisdiction. SO ORDERED.[8]

In its Resolution[9] promulgated on 4 June 2003, the NLRC further stated:

We are fully convinced that this is indeed an intracorporate dispute which is beyond the labor arbiters jurisdiction. These consolidated cases clearly [involve] the relationship between a corporation and its officer and is properly within the definition of an intra-corporate relationship which, under P.D. No. 902-A, is within the jurisdiction of the SEC (now the commercial courts). Such being the case, We are constrained to rule that the Labor Arbiter below had no jurisdiction over Ms. Galeras complaint for illegal dismissal. WHEREFORE, the motion for reconsideration filed by Ms. Galera is hereby denied for lack of merit. We reiterate our February 19, 2003 Decision setting aside the Labor Arbiters Decision dated January 31, 2002 for being null and void. SO ORDERED.[10]

Galera assailed the NLRCs decision and resolution before the appellate court and raised a lone assignment of error.
The National Labor Relations Commission acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it reversed the decision of the Labor Arbiter not on the merits but for alleged lack of jurisdiction. [11]

The Decision of the Appellate Court The appellate court reversed and set aside the decision of the NLRC. The appellate court ruled that the NLRCs dismissal of Galeras appeal is not in accord with jurisprudence. A person could be considered a corporate officer only if appointed as such by a corporations Board of Directors, or if pursuant to the power given them by either the Articles of Incorporation or the By-Laws.[12] The appellate court explained:
A corporation, through its board of directors, could only act in the manner and within the formalities, if any, prescribed by its charter or by the general law. If the action of the Board isultra vires such is motu proprio void ab initio and without legal effect whatsoever. The by-laws of a corporation are its own private laws which substantially have the same effect as the laws of the corporation. They are, in effect, written into the charter. In this sense, they beome part of the fundamental law of the corporation with which the corporation and its directors and officers must comply. Even if petitioner GALERA had been appointed by the Board of Directors on December 31, 1999, private respondent WPPs By-Laws provided for only one Vice-President, a position already occupied by private respondent Webster. The same defect also stains the Board of Directors appointment of petitioner GALERA as a Director of the corporation, because at that time the By-Laws provided for only five directors. In addition, the By-laws only empowered the Board of Directors to

appoint a general manager and/or assistant general manager as corporate officers in addition to a chairman, president, vicepresident and treasurer. There is no mention of a corporate officer entitled Managing Director. Hence, when the Board of Directors enacted the Resolutions of December 31, 1999 and May 31, 2000, it exceeded its authority under the By-Laws and are, therefore, ultra vires. Although private respondent WPP sought to amend these defects by filing Amended By-Laws with the Securities and Exchange Commission, they did not validate the ultra vires resolutions because the Amended By-Laws did not take effect until February 16, 2001, when it was approved by the SEC. Since by-laws operate only prospectively, they could not validate the ultravires resolutions.[13]

The dispositive portion of the appellate courts decision reads:

WHEREFORE, the petition is hereby GRANTED and GIVEN DUE COURSE. The assailed Decision of the National Labor Relations Commission is hereby REVERSED and SET ASIDE and a new one is entered DIRECTING private respondent WPP MARKETING COMMUNICATIONS, INC. to: 1. Pay [Galera] backwages at the peso equivalent of US$120,000.00 per annum plus three months from her summary December 14, 2000 dismissal up to March 14, 2001 because three months notice is required under the contract, plus 13th month pay, bonuses and general increases to which she would have been normally entitled, had she not been dismissed and had she not been forced to stop working, including US tax protection of up to 35% coverage which she had been enjoying as an expatriate; Pay x x x GALERA the peso equivalent US$185,000.00 separation pay (1 years); of

2. 3.

Pay x x x GALERA any unpaid housing benefit for the 18 months of her employment in the service to the Company as an expatriate in Manila, Philippines at the rate ofP576,000 per year; unpaid personal and accident insurance benefits for premiums at the rate

of P300,000.00 per year; whatever cash value in the JWT Pension Plan; and thirty days paid holiday benefit under the contract for the 1 calendar years with the Company; 4. 5. 6. 7. Pay x x x GALERA the reduced PhP2,000,000.00 as moral damages; amount of

Pay [Galera] the reduced amount of PhP1,000,000.00 as exemplary damages; Pay [Galera] an amount equivalent to 10% of the judgment award as attorneys fees; Pay the cost of the suit.

SO ORDERED.[14]

Respondents filed a motion for reconsideration on 5 May 2005. Galera filed a motion for partial reconsideration and/or clarification on the same date. The appellate court found no reason to revise or reverse its previous decision and subsequently denied the motions in a Resolution promulgated on 1 August 2005.[15] The Issues WPP, Steedman, Webster, and Lansang raised the following grounds in G.R. No. 169207:
I. The Court of Appeals seriously erred in ruling that the NLRC has jurisdiction over [Galeras] complaint because she was not an employee. [Galera] was a corporate officer of WPP from the beginning of her term until her removal from office.

II. Assuming arguendo that the Court of Appeals correctly ruled that the NLRC has jurisdiction over [Galeras] complaint, it should have remanded the case to the Labor Arbiter for reception of evidence on the merits of the case.

III. [Galera] is an alien, hence, can never attain a regular or permanent working status in the Philippines.

IV.

[Galera] is not entitled to recover backwages, other benefits and damages from WPP.[16]

On the other hand, in G.R. No. 169239, Galera raised the following grounds in support of her petition:
The CA decision should be consistent with Article 279 of the Labor Code and applicable jurisprudence, that full backwages and separation pay (when in lieu of reinstatement), should be reckoned from time of dismissal up to time of reinstatement (or payment of separation pay, in case separation instead of reinstatement is awarded). Accordingly, petitioner Galera should be awarded full backwages and separation pay for the period from 14 December 2000 until the finality of judgment by the respondents, or, at the very least, up to the promulgation date of the CA decision. The individual respondents Steedman, Webster and Lansang must be held solidarily liable with respondent WPP for the wanton and summary dismissal of petitioner Galera, to be consistent with law and jurisprudence as well as the specific finding of the CA of bad faith on the part of respondents.[17]

This Court ordered the consolidation of G.R. Nos. 169207 and 169239 in a resolution dated 16 January 2006.[18] The Ruling of the Court In its consolidated comment, the Office of the Solicitor General (OSG) recommended that (A) the Decision dated 14 April 2005 of the appellate court finding (1)Galera to be a regular employee of WPP; (2) the NLRC to have jurisdiction over the

present case; and (3) WPP to have illegally dismissed Galera, be affirmed; and (B) the case remanded to the Labor Arbiter for the computation of the correct monetary award. Despite the OSGs recommendations, we see that Galeras failure to seek an employment permit prior to her employment poses a serious problem in seeking relief before this Court. Hence, we settle the various issues raised by the parties for the guidance of the bench and bar. Whether Galera is an Employee or a Corporate Officer Galera, on the belief that she is an employee, filed her complaint before the Labor Arbiter. On the other hand, WPP, Steedman, Webster and Lansang contend that Galera is a corporate officer; hence, any controversy regarding her dismissal is under the jurisdiction of the Regional Trial Court. We agree with Galera. Corporate officers are given such character either by the Corporation Code or by the corporations by-laws. Under Section 25 of the Corporation Code, the corporate officers are the president, secretary, treasurer and such other officers as may be provided in the by-laws.[19] Other officers are sometimes created by the charter or by-laws of a corporation, or the board of directors may be empowered under the by-laws of a corporation to create additional offices as may be necessary. An examination of WPPs by-laws resulted in a finding that Galeras appointment as a corporate officer (Vice-President with the operational title of Managing Director of Mindshare) during a special meeting of WPPs Board of Directors is an appointment to a non-existent corporate office. WPPs by-laws provided for only one Vice-President. At the time of Galeras appointment on 31 December 1999, WPP already had one Vice-President in the person of Webster. Galera cannot be said to be a director of WPP also because all five directorship positions provided in the by-laws are already occupied. Finally,

WPP cannot rely on its Amended By-Laws to support its argument that Galera is a corporate officer. The Amended By-Laws provided for more than one Vice-President and for two additional directors. Even though WPPs stockholders voted for the amendment on 31 May 2000, the SEC approved the amendments only on 16 February 2001. Galera was dismissed on 14 December 2000. WPP, Steedman, Webster, and Lansang did not present any evidence that Galeras dismissal took effect with the action of WPPs Board of Directors. The appellate court further justified that Galera was an employee and not a corporate officer by subjecting WPP and Galeras relationship to the four-fold test: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employee with respect to the means and methods by which the work is to be accomplished. The appellate court found:
x x x Sections 1 and 4 of the employment contract mandate where and how often she is to perform her work; sections 3, 5, 6 and 7 show that wages she receives are completely controlled by x x x WPP; and sections 10 and 11 clearly state that she is subject to the regular disciplinary procedures of x x x WPP. Another indicator that she was a regular employee and not a corporate officer is Section 14 of the contract, which clearly states that she is a permanent employee not a Vice-President or a member of the Board of Directors. xxxx Another indication that the Employment Contract was one of regular employment is Section 12, which states that the rights to any invention, discovery, improvement in procedure, trademark, or copyright created or discovered by petitioner GALERA during her employment shall automatically belong to private respondent WPP. Under Republic Act 8293, also known as the Intellectual Property Code, this condition prevails if the creator of the work subject to the laws of patent or copyright is an employee of the one entitled to the patent or copyright.

Another convincing indication that she was only a regular employee and not a corporate officer is the disciplinary procedure under Sections 10 and 11 of the Employment Contract, which states that her right of redress is through Mindshares Chief Executive Officer for the AsiaPacific. This implies that she was not under the disciplinary control of private respondentWPPs Board of Directors (BOD), which should have been the case if in fact she was a corporate officer because only the Board of Directors could appoint and terminate such a corporate officer.

Although petitioner GALERA did sign the Alien Employment Permit from the Department of Labor and Employment and the application for a 9(g) visa with the Bureau of Immigration both of which stated that she was private respondents WPP Vice President these should not be considered against her. Assurming arguendo that her appointment as Vice-President was a valid act, it must be noted that these appointments occurred afater she was hired as a regular employee. After her appointments, there was no appreciable change in her duties.[20]

Whether the Labor Arbiter and the NLRC have jurisdiction over the present case Galera being an employee, then the Labor Arbiter and the NLRC have jurisdiction over the present case. Article 217 of the Labor Code provides:
Jurisdiction of Labor Arbiters and the Commission. (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide x x x the following cases involving all workers, whether agricultural or non-agricultural: 1. 2. Unfair labor practice cases; Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; 6. Except claims for Employees Compensation, Social Security, Medicare and other maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. (c) Cases arising from the interpretation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements.

In contrast, Section 5.2 of Republic Act No. 8799, or the Securities Regulation Code, states:
The Commissions jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the courts of general jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final

resolution which should be resolved within one year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.

The pertinent portions of Section 5 of Presidential Decree No. 902A, mentioned above, states:
b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity; c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or associations.

Whether WPP illegally dismissed Galera WPPs dismissal of Galera lacked procedural due process. both substantive and

Apart from Steedmans letter dated 15 December 2000 to Galera, WPP failed to prove any just or authorized cause for Galeras dismissal. Steedmans letter toGalera reads:
The operations are currently in a shamble. There is lack of leadership and confidence in your abilities from within, our agency partners and some clients. Most of the staff I spoke with felt they got more guidance and direction from Minda than yourself. In your role as Managing Director, that is just not acceptable.

I believe your priorities are mismanaged. The recent situation where you felt an internal strategy meeting was more important than a new business pitch is a good example. You failed to lead and advise on the two new business pitches. In both cases, those involved sort (sic) Mindas input. As I discussed with you back in July, my directive was for you to lead and review all business pitches. It is obvious [that] confusion existed internally right up until the day of the pitch. The quality output is still not to an acceptable standard, which was also part of my directive that you needed to focus on back in July. I do not believe you understand the basic skills and industry knowledge required to run a media special operation.[21]

WPP, Steedman, Webster, and Lansang, however, failed to substantiate the allegations in Steedmans letter. Galera, on the other hand, presented documentary evidence [22] in the form of congratulatory letters, including one from Steedman, which contents are diametrically opposed to the 15 December 2000 letter. The law further requires that the employer must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employers decision to dismiss him. Failure to comply with the requirements taints the dismissal with illegality.[23] WPPs acts clearly show that Galeras dismissal did not comply with the two-notice rule. Whether Galera is entitled to the monetary award WPP, Steedman, Webster, and Lansang argue that Galera is not entitled to backwages because she is an alien. They further

state that there is no guarantee that the Bureau of Immigration and the Department of Labor and Employment will continue to grant favorable rulings on the applications for a 9(g) visa and an Alien Employment Permit after the expiry of the validity of Galeras documents on 31 December 2000. WPPs argument is a circular argument, and assumes what it attempts to prove. Had WPP not dismissed Galera, there is no doubt in our minds that WPP would have taken action for the approval of documents required for Galerascontinued employment. This is Galeras dilemma: Galera worked in the Philippines without a proper work permit but now wants to claim employees benefits under Philippine labor laws.
Employment of GALERA with private respondent WPP became effective on September 1, 1999 solely on the instruction of the CEO and upon signing of the contract, without any further action from the Board of Directors of private respondent WPP. Four months had passed when private respondent WPP filed before the Bureau of Immigration an application for petitioner GALERA to receive a working visa, wherein she was designated as Vice President of WPP. Petitioner alleged that she was constrained to sign the application in order that she could remain in the Philippines and retain her employment.[24]

The law and the rules are consistent in stating that the employment permit must be acquired prior to employment. The Labor Code states: Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor.[25] Section 4, Rule XIV, Book 1 of the Implementing Rules and Regulations provides:
Employment permit required for entry. No alien seeking employment, whether as a resident or non-resident, may enter the Philippines without first securing an employment

permit from the Ministry. If an alien enters the country under a non-working visa and wishes to be employed thereafter, he may only be allowed to be employed upon presentation of a duly approved employment permit.

Galera cannot come to this Court with unclean hands. To grant Galeras prayer is to sanction the violation of the Philippine labor laws requiring aliens to secure work permits before their employment. We hold that the status quo must prevail in the present case and we leave the parties where they are. This ruling, however, does not bar Galera from seeking relief from other jurisdictions. WHEREFORE, we PARTIALLY GRANT the petitions in G.R. Nos. 169207 and 169239. We SET ASIDE the Decision of the Court of Appeals promulgated on 14 April 2005 as well as the Resolution promulgated on 1 August 2005 in CA-G.R. SP No. 78721.