SERRANO v. GALLANT MARITIME SERVICES INC. & MARLOWE NAVIGATION CO., INC. G.R. No. 167614.

March 24, 2009 Facts: Petitioner was hired by Gallant Maritime er!ices, "nc. and Marlow Na!i#ation $o., %td. &res'ondents( )nder a P*+,-a''ro!ed $ontract o. +m'loyment. *n March 19, 199/, the date o. his de'art)re, 'etitioner was constrained to acce't a down#raded em'loyment contract .or the 'osition o. econd *..icer with a monthly salary o. 0 11,000.00, )'on the ass)rance and re'resentation o. res'ondents that he wo)ld be made $hie. *..icer by the end o. ,'ril. 2owe!er, res'ondents did not deli!er on their 'romise to ma3e 'etitioner $hie. *..icer. 2ence, 'etitioner re.)sed to stay on as econd *..icer and was re'atriated to the Phili''ines on May. Petitioner4s em'loyment contract was .or a 'eriod o. 12 months or .rom March 19, 199/ )' to March 19, 1999, b)t at the time o. his re'atriation on May 26, 199/, he had ser!ed only two &2( months and se!en &7( days o. his contract, lea!in# an )ne5'ired 'ortion o. nine &9( months and twenty-three &26( days. Petitioner .iled with the %abor ,rbiter &%,( a $om'laint a#ainst res'ondents .or constr)cti!e dismissal and .or 'ayment o. his money claims. %, rendered the dismissal o. 'etitioner ille#al and awardin# him monetary bene.its. Res'ondents a''ealed to the N%R$ to 7)estion the .indin# o. the %,. %i3ewise, 'etitioner also a''ealed to the N%R$ on the sole iss)e that the %, erred in not a''lyin# the r)lin# o. the $o)rt in Triple Integrated Services, Inc. v. National Labor Relations Commission that in case o. ille#al dismissal, *89s are entitled to their salaries .or the )ne5'ired 'ortion o. their contracts. Petitioner also a''ealed to the N%R$ on the sole iss)e that the %, erred in not a''lyin# the r)lin# o. the $o)rt in Triple Integrated Services, Inc. v. National Labor Relations Commission that in case o. ille#al dismissal, *89s are entitled to their salaries .or the )ne5'ired 'ortion o. their contracts. Petitioner .iled a Motion .or Partial Reconsideration: he 7)estioned the constit)tionality o. the s)b;ect cla)se. Petitioner .iled a Petition .or Certiorari with the $,, reiteratin# the constit)tional challen#e a#ainst the s)b;ect cla)se. $, a..irmed the N%R$ r)lin# on the red)ction o. the a''licable salary rate: howe!er, the $, s3irted the constit)tional iss)e raised by 'etitioner. <he last cla)se in the =th 'ara#ra'h o. ection 10, Re')blic ,ct &R.,.( No. /042, to wit> ec. 10. Money Claims. - 5 5 5 "n case o. termination o. o!erseas em'loyment witho)t ;)st, !alid or a)thori?ed ca)se as de.ined by law or contract, the wor3ers shall be entitled to the .)ll reimb)rsement o. his 'lacement .ee with interest o. twel!e 'ercent &12@( 'er ann)m, 'l)s his salaries .or the )ne5'ired 'ortion o. his em'loyment contract or for three (3) months for every year of the unexpired term, whichever is less. ,''lyin# the s)b;ect cla)se, the N%R$ and the $, com')ted the l)m'-s)m salary o. 'etitioner at the monthly rate o. 0 11,400.00 co!erin# the 'eriod o. three months o)t o. the )ne5'ired 'ortion o. nine months and 26 days o. his em'loyment contract or a total o. 0 14,200.00. "m')#nin# the constit)tionality o. the s)b;ect cla)se, 'etitioner contends that, in addition to the 0 14,200.00 awarded by the N%R$ and the $,, he is entitled to 0 121,1/2.26 more or a total o. 0 12=,6/2.26, e7)i!alent to his salaries .or the entire nine months and 26 days le.t o. his em'loyment contract, com')ted at the monthly rate o. 0 12,=90.00 Issue:
1.) "s 'etitioner entitled to his monetary claim which is the l)m'-s)m salary .or the entire )ne5'ired 'ortion o. his

12-month em'loyment contract, and not ;)st .or a 'eriod o. three monthsA 2.) ho)ld 'etitionerBs o!ertime and lea!e 'ay .orm 'art o. the salary basis in the com')tation o. his monetary award, beca)se these are .i5ed bene.its that ha!e been sti')lated into his contractA

Held: 1. Ces. Petitioner is awarded his salaries .or the entire )ne5'ired 'ortion o. his em'loyment contract consistin# o. nine months and 26 days com')ted at the rate o. 0 11,400.00 'er month. <he s)b;ect cla)se Dor .or three months .or e!ery year o. the )ne5'ired term, whiche!er is lessE in the =th 'ara#ra'h o. ection 10 o. Re')blic ,ct No. /042 is decla!ed u"c#"st$tut$#"al. In sum, prior to R.A. No. 8 !", #$%s and local &or'ers &it( )i*ed+term employment &(o &ere illegally disc(arged &ere treated ali'e in terms o) t(e computation o) t(eir money claims, t(ey &ere uni)ormly entitled to t(eir salaries )or t(e entire une*pired portions o) t(eir contracts. F)t with the enactment o. R.,. No. /042, s'eci.ically the ado'tion o. the s)b;ect cla)se, ille#ally dismissed *89s with an )ne5'ired 'ortion o. one year or more in their em'loyment contract ha!e since been di..erently treated in that their money claims are s)b;ect to a 6-month ca', whereas no s)ch limitation is im'osed on local wor3ers with .i5ed-term em'loyment. The Court concludes that the subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed-term employees who are ille ally dischar ed, it imposes a 3-month cap on the claim of !"#s with an unexpired portion of one year or more in their contracts, but none on the claims of other !"#s or local wor$ers with fixed-term employment. The subject clause sin les out one classification of !"#s and burdens it with a peculiar disadvanta e. <he $o)rt .)rther holds that the s)b;ect cla)se !iolates 'etitioner4s ri#ht to s)bstanti!e d)e 'rocess, .or it de'ri!es him o. 'ro'erty, consistin# o. monetary bene.its, witho)t any e5istin# !alid #o!ernmental ')r'ose. <he s)b;ect cla)se bein# )nconstit)tional, 'etitioner is entitled to his salaries .or the entire )ne5'ired 'eriod o. nine months and 26 days o. his em'loyment contract, ')rs)ant to law and ;)ris'r)dence 'rior to the enactment o. R.,. No. /042. %. N#. <he word salaries in ection 10&=( does not incl)de o!ertime and lea!e 'ay. 8or sea.arers li3e 'etitioner, G*%+ Ge'artment *rder No. 66, series 1996, 'ro!ides a tandard +m'loyment $ontract o. ea.arers, in which salary is )nderstood as the basic wa#e, e5cl)si!e o. o!ertime, lea!e 'ay and other bon)ses: whereas o!ertime 'ay is com'ensation .or all wor3 D'er.ormedE in e5cess o. the re#)lar ei#ht ho)rs, and holiday 'ay is com'ensation .or any wor3 D'er.ormedE on desi#nated rest days and holidays. Fy the .ore#oin# de.inition alone, there is no basis .or the a)tomatic incl)sion o. o!ertime and holiday 'ay in the com')tation o. 'etitioner4s monetary award: )nless there is e!idence that he 'er.ormed wor3 d)rin# those 'eriods.