Maternity Childrens Hospital vs. Secretary of Labor, 174 SCRA !

" ,
#$ne !%, 1&'&
Case (itle : MATERNITY CHILDRENS HOSPITAL, represented by ANTERA L.
DORADO, President, petitioner, s. THE HONORA!LE SECRETARY O" LA!OR
AND THE RE#IONAL DIRECTOR O" LA!OR, RE#ION $, respondents.Case
)at$re : PETITION %or &ertior'ri to reie( t)e de&ision o% t)e Se&ret'ry o%
L'bor.
Syllabi Class : L'bor L'(*L'bor St'nd'rds*&on&ept o%*Prior to E.O. No.
+++*Re,ion'- Dire&tors '.t)ority oer /oney &-'i/s ('s .n&-e'r*
Constit.tion'- L'(*So&i'- 0.sti&e
Syllabi:
1. Labor Law; Labor Standards, concept of; Presently a Regional
Director exercises both visitorial and enforcement power over labor
standards cases.-
Labor standards refer to the minimum requirements prescribed by existing
laws rules and regulations relating to wages hours of wor! cost of living
allowance and other monetary and welfare benefits including occupational
safety and health standards. "#ection $ Rule % Rules on the Disposition of
Labor #tandards &ases in the Regional 'ffice dated #eptember () (*+$,.
-nder the present rules a Regional Director exercises both visitorial and
enforcement power over labor standards cases and is therefore empowered
to ad.udicate money claims provided there still exists an employer-
employee relationship and the findings of the regional office is not
contested by the employer concerned.
". Labor Law; Labor Standards, concept of; Prior to E.O. No. 111,
Regional Directors at!ority o"er #oney clai#s was
nclear; Prevailing view then was that stated in the case of /ntonio 'ng
#r. vs. 0enry 1. Parel.2
!. Labor Law; Labor Standards, concept of; Prior to E.O. No. 111,
Regional Directors at!ority o"er #oney clai#s was nclear; 3ven in
the absence of 3.'. 4o. ((( &ourt believes that Regional Directors already
had enforcement powers over money claims under PD 4o. +56.2
4. Labor Law; Labor Standards, concept of; Prior to E.O. No. 111,
Regional Directors at!ority o"er #oney clai#s was nclear; PD +56
gives Regional Directors enforcement powers in addition to visitorial powers.
2
*. Labor Law; Labor Standards, concept of; Prior to E.O. No. 111,
Regional Directors at!ority o"er #oney clai#s was nclear; Policy
%nstruction 4o. $ assures an employee denied of his rights and benefits need
not litigate.-
-nder the foregoing a complaining employee who was denied his rights and
benefits due him under labor standards law need not litigate. 7he Regional
Director by virtue of his enforcement power assured 8expeditious delivery
to him of his rights and benefits free of charge9 provided of course he was
still in the employ of the firm.
. Labor Law; Labor Standards, concept of; Prior to E.O. No. 111,
Regional Directors at!ority o"er #oney clai#s was nclear; 7he
enforcement : ad.udication authority of the Regional Director over
uncontested money claims in cases where an employer-employee
relationship still exist confirmed and reiterated under 3.'. (((.2
7. Labor Law; Labor Standards, concept of; Prior to E.O. No. 111,
Regional Directors at!ority o"er #oney clai#s was
nclear; /mendment of the visito-rial and enforcement powers of the
Regional Director by 3.'. ((( reflects the intention enunciated in Policy
%nstructions 4os. ) and ;$.2
'. Labor Law; Labor Standards, concept of; Prior to E.O. No. 111,
Regional Directors at!ority o"er #oney clai#s was nclear; /ward
to employees who were not signatories to the complaint .ustified as the
visitorial and enforcement powers of the #ecretary of Labor is relevant to
and exercisable over establishments and not over the individual members
employees.2
&. Labor Law; $onstittional Law; Social %stice; %t has always been
the intention of our labor authorities to provide wor!ers immediate access to
their rights and benefits without being inconvenienced by arbitration and
litigation.2
1%. Labor Law; $onstittional Law; Social %stice; Labor laws are
meant to promote not defeat social .ustice.-
#ocial .ustice legislation to be truly meaningful and rewarding to our
wor!ers must not be hampered in its application by long-winded arbitration
and litigation. Rights must be asserted and benefits received with the least
inconvenience. Labor laws are meant to promote not defeat social .ustice.
+ivision: EN !ANC
+oc,et )$-ber: #.R. No. 12343
.onente: MEDIALDEA
+ispositive .ortion:
ACCORDIN#LY, t)is petition s)o.-d be dis/issed, 's it is )ereby DISMISSED,
's re,'rds '-- persons sti-- e/p-oyed in t)e Hospit'- 't t)e ti/e o% t)e %i-in,
o% t)e &o/p-'int, b.t #RANTED 's re,'rds t)ose e/p-oyees no -on,er
e/p-oyed 't t)'t ti/e.
This is a petition for certiorari seeking the annulment of the Decision of the respondent Secretary of
Labor dated September 24, 198, affirming !ith modification the "rder of respondent #egional
Director of Labor, #egion $, dated %ugust 4, 198, a!arding salary differentials and emergency cost
of li&ing allo!ances '()"L%S* to employees of petitioner, and the "rder denying petitioner+s motion
for reconsideration dated ,ay 1-, 198., on the ground of gra&e abuse of discretion/
0etitioner is a semi1go&ernment hospital, managed by the 2oard of Directors of the )agayan de "ro
3omen+s )lub and 0uericulture )enter, headed by ,rs/ %ntera Dorado, as holdo&er 0resident/ The
hospital deri&es its finances from the club itself as !ell as from paying patients, a&eraging 1-4 per
month/ 5t is also partly subsidi6ed by the 0hilippine )harity S!eepstakes "ffice and the )agayan De
"ro )ity go&ernment/
0etitioner has forty1one '41* employees/ %side from salary and li&ing allo!ances, the employees are
gi&en food, but the amount spent therefor is deducted from their respecti&e salaries 'pp/ ..1
.8, Rollo*/
"n ,ay 2-, 198, ten '14* employees of the petitioner employed in different capacities7positions
filed a complaint !ith the "ffice of the #egional Director of Labor and (mployment, #egion $, for
underpayment of their salaries and ()"L%S, !hich !as docketed as #"$ )ase 8o/ )31.118/
"n 9une 1, 198, the #egional Director directed t!o of his Labor Standard and 3elfare "fficers to
inspect the records of the petitioner to ascertain the truth of the allegations in the complaints 'p/
98, Rollo*/ 0ayrolls co&ering the periods of ,ay, 19.4, 9anuary, 198:, 8o&ember, 198: and ,ay,
198, !ere duly submitted for inspection/
"n 9uly 1., 198, the Labor Standard and 3elfare "fficers submitted their report confirming that
there !as underpayment of !ages and ()"L%s of all the employees by the petitioner, the
dispositi&e portion of !hich reads;
58 <5(3 "= T>( ="#(?"58?, deficiency on !age and ecola as &erified and
confirmed per re&ie! of the respondent payrolls and inter&ie!s !ith the complainant
!orkers and all other information gathered by the team, it is respectfully
recommended to the >onorable #egional Director, this office, that %ntera Dorado,
0resident be "#D(#(D to pay the amount of S5$ >@8D#(D =5=TA ="@#
T>"@S%8D S(<(8 >@8D#(D =5=TA S5$ B 417144 '0:4,.:/41*, representing
underpayment of !ages and ecola to the T>5#TA S5$ '-* employees of the said
hospital as appearing in the attached %nneC D=D !orksheets and7or !hate&er action
eEuitable under the premises/ 'p/ 99, Rollo*
2ased on this inspection report and recommendation, the #egional Director issued an "rder dated
%ugust 4, 198, directing the payment of 0.2-,888/:8, representing underpayment of !ages and
()"L%s to all the petitioner+s employees, the dispositi&e portion of !hich reads;
3>(#(="#(, premises considered, respondent ,aternity and )hildren >ospital is
hereby ordered to pay the abo&e1listed complainants the total amount indicated
opposite each name, thru this "ffice !ithin ten '14* days from receipt thereof/
Thenceforth, the respondent hospital is also ordered to pay its employees7!orkers
the pre&ailing statutory minimum !age and allo!ance/
S" "#D(#(D/ 'p/ -4, Rollo*
0etitioner appealed from this "rder to the ,inister of Labor and (mployment, >on/ %ugusto S/
Sanche6, !ho rendered a Decision on September 24, 198, modifying the said "rder in that
deficiency !ages and ()"L%s should be computed only from ,ay 2-, 198- to ,ay 2-, 198, the
dispositi&e portion of !hich reads;
3>(#(="#(, the %ugust 29, 198 order is hereby ,"D5=5(D in that the deficiency
!ages and ()"L%s should only be computed from ,ay 2-, 198- to ,ay 2-, 198/
The case is remanded to the #egional Director, #egion $, for recomputation
specifying the amounts due each the complainants under each of the applicable
0residential Decrees/ 'p/ 44, Rollo*
"n "ctober 24, 198, the petitioner filed a motion for reconsideration !hich !as denied by the
Secretary of Labor in his "rder dated ,ay 1-, 198., for lack of merit 'p/ 4- Rollo*/
The instant petition Euestions the all1embracing applicability of the a!ard in&ol&ing salary
differentials and ()"L%S, in that it co&ers not only the hospital employees !ho signed the
complaints, but also those 'a* !ho are not signatories to the complaint, and 'b* those !ho !ere no
longer in the ser&ice of the hospital at the time the complaints !ere filed/
0etitioner like!ise maintains that the "rder of the respondent #egional Director of Labor, as affirmed
!ith modifications by respondent Secretary of Labor, does not clearly and distinctly state the facts
and the la! on !hich the a!ard !as based/ 5n its D#eFoinder to )ommentD, petitioner further
Euestions the authority of the #egional Director to a!ard salary differentials and ()"L%s to pri&ate
respondents, 'relying on the case of (ncarnacion &s/ 2alta6ar, ?/#/ 8o/ L1188-, ,arch 2., 191, 1
S)#% 84, as authority for raising the additional issue of lack of Furisdiction at any stage of the
proceedings, p/ :2, Rollo*, alleging that the original and eCclusi&e Furisdiction o&er money claims is
properly lodged in the Labor %rbiter, based on %rticle 21., paragraph - of the Labor )ode/
The primary issue here is !hether or not the #egional Director had Furisdiction o&er the case and if
so, the eCtent of co&erage of any a!ard that should be forthcoming, arising from his &isitorial and
enforcement po!ers under %rticle 128 of the Labor )ode/ The matter of !hether or not the decision
states clearly and distinctly statement of facts as !ell as the la! upon !hich it is based, becomes
rele&ant after the issue on Furisdiction has been resol&ed/
This is a labor standards case, and is go&erned by %rt/ 1281b of the Labor )ode, as amended by
(/"/ 8o/ 111/ Labor standards refer to the minimum reEuirements prescribed by eCisting la!s, rules,
and regulations relating to !ages, hours of !ork, cost of li&ing allo!ance and other monetary and
!elfare benefits, including occupational, safety, and health standards 'Section ., #ule 5, #ules on
the Disposition of Labor Standards )ases in the #egional "ffice, dated September 1,
198.*/
1
@nder the present rules, a #egional Director eCercises both &isitorial and enforcement po!er
o&er labor standards cases, and is therefore empo!ered to adFudicate money claims, provided there
still exists an employer1employee relationship, and the findings of the regional office is not contested by
the employer concerned/
0rior to the promulgation of (/"/ 8o/ 111 on December 24, 198, the #egional Director+s authority
o&er money claims !as unclear/ The complaint in the present case !as filed on ,ay 2-, 198 !hen
(/"/ 8o/ 111 !as not yet in effect, and the pre&ailing &ie! !as that stated in the case of Antonio
Ong, Sr. vs. Henry M. Parel, et al., ?/#/ 8o/ ..14, dated December 21, 198., thus;
/ / / the #egional Director, in the eCercise of his &isitorial and enforcement po!ers
under %rticle 128 of the Labor )ode, has no authority to a!ard money claims,
properly falling !ithin the Furisdiction of the labor arbiter/ / / /
/ / / 5f the inspection results in a finding that the employer has &iolated certain labor
standard la!s, then the regional director must order the necessary rectifications/
>o!e&er, this does not include adFudication of money claims, clearly !ithin the ambit
of the labor arbiter+s authority under %rticle 21. of the )ode/
The "ng case relied on the ruling laid do!n in Zambales Base Metals nc. vs. !he Minister o" #abor,
et al., '?/#/ 8os/ .-184188, 8o&ember 2, 198, 14 S)#% :4* that the D#egional Director !as not
empo!ered to share in the original and eCclusi&e Furisdiction conferred on Labor %rbiters by %rticle
21./D
3e belie&e, ho!e&er, that e&en in the absence of (/ "/ 8o/ 111, #egional Directors already had
enforcement po!ers o&er money claims, effecti&e under 0/D/ 8o/ 8:4, issued on December 1,
19.:, !hich transferred labor standards cases from the arbitration system to the enforcement
system/
To clarify matters, it is necessary to enumerate a series of rules and pro&isions of la! on the
disposition of labor standards cases/
Prior to the promulgation of 0D 8:4, labor standards cases !ere an eCclusi&e function of labor
arbiters, under %rticle 21 of the then Labor )ode '0D 8o/ 442, as amended by 0D :.41a*, !hich
read in part;
%rt/ 21/ $%risdiction o" the &ommission/ G The )ommission shall ha&e eCclusi&e
appellate Furisdiction o&er all cases decided by the Labor %rbiters and compulsory
arbitrators/
The Labor %rbiters shall ha&e excl%sive '%risdiction to hear and decide the follo!ing
cases in&ol&ing all !orkers !hether agricultural or non1agricultural/
CCC CCC CCC
'c* %ll money claims of !orkers, in&ol&ing non1payment or
underpayment of !ages, o&ertime compensation, separation pay,
maternity lea&e and other money claims arising from employee1
employer relations, eCcept claims for !orkmen+s compensation,
social security and medicare benefitsH
'd* (iolations o" labor standard la)sH
CCC CCC CCC
'(mphasis supplied*
The #egional Director eCercised &isitorial rights only under then %rticle 12. of the )ode as follo!s;
%#T/ 12./ (isitorial Po)ers. G The Secretary of Labor or his duly authori6ed
representati&es, including, but not restricted, to the labor inspectorate, shall ha&e
access to employers+ records and premises at any time of the day or night !hene&er
!ork is being undertaken therein, and the right to copy therefrom, to Euestion any
employee and in&estigate any fact, condition or matter !hich may be necessary to
determine &iolations or in aid in the enforcement of this Title and of any 3age "rder
or regulation issued pursuant to this )ode/
3ith the promulgation of 0D 8:4, #egional Directors !ere gi&en enforcement po!ers, in addition to
&isitorial po!ers/ %rticle 12., as amended, pro&ided in part;
S()/ 14/ %rticle 12. of the )ode is hereby amended to read as follo!s;
%rt/ 12./ (isitorial and en"orcement po)ers/ G
CCC CCC CCC
'b* The Secretary of Labor or his duly authori6ed
representati&es shall have the po)er to order and
administer, after due notice and hearing, compliance
)ith the labor standards provisions of this )ode
based on the findings of labor regulation officers or
industrial safety engineers made in the course of
inspection, and to issue !rits of eCecution to the
appropriate authority for the enforcement of their
order/
CCC CCC CCC
Labor %rbiters, on the other hand, lost Furisdiction o&er labor standards cases/ %rticle 21, as then
amended by 0D 8:4, pro&ided in part;
S()/ 22/ %rticle 21 of the )ode is hereby amended to read as follo!s;
%rt/ 21/ $%risdiction o" #abor Arbiters and the &ommission/ G 'a*
The Labor %rbiters shall ha&e excl%sive '%risdiction to hear and
decide the follo!ing cases in&ol&ing all !orkers, !hether agricultural
or non1agricultural;
CCC CCC CCC
'-* %ll money claims of !orkers in&ol&ing non1
payment or underpayment of !ages, o&ertime or
premium compensation, maternity or ser&ice incenti&e
lea&e, separation pay and other money claims arising
from employer1employee relations, eCcept claims for
employee+s compensation, social security and
medicare benefits and as other)ise provided in
Article *+, o" this &ode/
CCC CCC CCC
'(mphasis supplied*
@nder the then Labor )ode therefore '0D 442 as amended by 0D :.41a, as further amended by 0D
8:4*, there !ere three adFudicatory units; The #egional Director, the 2ureau of Labor #elations and
the Labor %rbiter/ 5t became necessary to clarify and consolidate all go&erning pro&isions on
Furisdiction into one document/
2
"n %pril 2-, 19., ,"L( 0olicy 5nstructions 8o/ !as issued, and
pro&ides in part 'on labor standards cases* as follo!s;
0"L5)A 58ST#@)T5"8S 8"/
T"; %ll )oncerned
S@29()T; D5ST#52@T5"8 "= 9@#5SD5)T5"8 "<(# L%2"# )%S(S
CCC CCC CCC
1/ The follo!ing cases are under the excl%sive original '%risdiction o"
the Regional -irector.
a* Labor standards cases arising from &iolations of
labor standard la!sdiscovered in the co%rse o"
inspection or complaints )here employer.employee
relations still existH
CCC CCC CCC
2/ The follo!ing cases are under the excl%sive original '%risdiction of
the &onciliation Section of the #egional "ffice;
a* Labor standards cases !here employer1employee
relations no longer exist/
CCC CCC CCC
/ The follo!ing cases are certi"iable to the Labor %rbiters;
a* )ases not settled by the )onciliation Section of the
#egional "ffice, namely;
1* labor standard cases !here employer1employee
relations no longer existH
CCC CCC CCC
'(mphasis supplied*
,"L( 0olicy 5nstructions 8o/ . 'undated* !as like!ise subseEuently issued, enunciating the
rationale for, and the scope of, the enforcement po!er of the #egional Director, the first and second
paragraphs of !hich pro&ide as follo!s;
0"L5)A 58ST#@)T5"8S 8"/ .
T"; %ll #egional Directors
S@29()T; L%2"# ST%8D%#DS )%S(S
0nder P- 123, labor standards cases have been taken from the arbitration system
and placed %nder the en"orcement system, eCcept !here a* Euestions of la! are
in&ol&ed as determined by the #egional Director, b* the amount in&ol&ed eCceeds
0144,444/44 or o&er 44I of the eEuity of the employer, !hiche&er is lo!er, c* the
case reEuires e&identiary matters not disclosed or &erified in the normal course of
inspection, or d* there is no more employer.employee relationship.
The purpose is clear; to assure the !orker the rights and benefits due to him under
labor standards la!s )itho%t having to go thro%gh arbitration. !he )or4er need not
litigate to get )hat legally belongs to him/ The !hole enforcement machinery of the
Department of Labor eCists to insure its eCpeditious deli&ery to him free of charge/
'(mphasis supplied*
@nder the foregoing, a complaining employee !ho !as denied his rights and benefits due him under
labor standards la! need not litigate/ The #egional Director, by &irtue of his enforcement po!er,
assured DeCpeditious deli&ery to him of his rights and benefits free of chargeD, provided o" co%rse, he
)as still in the employ o" the "irm/
%fter 0D 8:4, %rticle 21 under!ent a series of amendments 'aside from being re1numbered as
%rticle 21.* and !ith it a corresponding change in the Furisdiction of, and super&ision o&er, the Labor
%rbiters;
1/ 0D 1-. ':111.8* G ga&e Labor %rbiters eCclusi&e Furisdiction
o&er %nresolved issues in collecti&e bargaining, etc/, and those cases
arising from employer1employee relationsd%ly indorsed by the
#egional Directors/ '5t also remo&ed his Furisdiction o&er moral or
other damages* 5n other !ords, the Labor %rbiter entertained
cases certi"ied to him/ '%rticle 228, 19.8 Labor )ode/*
2/ 0D 1-91 ':1291.8* G all regional units of the 8ational Labor
#elations )ommission '8L#)* !ere integrated into the #egional
"ffices 0roper of the ,inistry of LaborH effecti&ely transferring direct
administrati&e control and super&ision o&er the %rbitration 2ranch to
the Director of the #egional "ffice of the ,inistry of Labor/
D)onciliable casesD !hich !ere thus pre&iously under the Furisdiction
of the defunct )onciliation Section of the #egional "ffice for purposes
of conciliation or amicable settlement, became immediately
assignable to the %rbitration 2ranch for Foint conciliation and
comp%lsory arbitration/ 5n addition, the Labor %rbiter had Furisdiction
e&en o&er termination and labor1standards cases that may be
assigned to them for compulsory arbitration by the Director of the
#egional "ffice/ 0D 1-91 merged conciliation and compulsory
arbitration functions in the person of the Labor %rbiter/ The procedure
go&erning the disposition of cases at the %rbitration 2ranch paralleled
those in the Special Task =orce and =ield Ser&ices Di&ision, !ith one
maFor eCception; the Labor %rbiter eCercised full and untrammelled
authority in the disposition of the case, particularly in the substanti&e
aspect, his decisions and orders subFect to re&ie! only on appeal to
the 8L#)/
3
-/ ,"L( 0olicy 5nstructions 8o/ -. G 2ecause of the seemingly
o&erlapping functions as a result of 0D 1-91, ,"L( 0olicy
5nstructions 8o/ -. !as issued on "ctober ., 19.8, and pro&ided in
part;
0"L5)A 58ST#@)T5"8S 8"/ -.
T"; %ll )oncerned
S@29()T; %SS5?8,(8T "= )%S(S T" L%2"# %#25T(#S
0ursuant to the pro&isions of 0residential Decree 8o/ 1-91 and to
insure speedy disposition of labor cases, the follo!ing guidelines are
hereby established for the information and guidance of all concerned/
1/ )onciliable )ases/
)ases !hich are conciliable per se i/e/, 'a* labor standards cases
!here employer1employee relationship no longer existsH 'b* cases
in&ol&ing deadlock in collecti&e bargaining, eCcept those falling under
0/D/ 82-, as amendedH 'c* unfair labor practice casesH and 'd*
o&erseas employment cases, eCcept those in&ol&ing o&erseas
seamen, shall be assigned by the #egional Director to the Labor
%rbiter "or conciliation and arbitration )itho%t co%rsing them thro%gh
the conciliation section o" the Regional O""ice.
2/ Labor Standards )ases/
)ases in&ol&ing &iolation of labor standards la!s !here employer1
employee relationshipstill exists shall be assigned to the Labor
%rbiters !here;
a* intricate Euestions of la! are in&ol&edH or
b* e&identiary matters not disclosed or &erified in the
normal course of inspection by labor regulations
officers are reEuired for their proper disposition/
-/ Disposition of )ases/
3hen a case is assigned to a Labor %rbiter, all issues raised therein
shall be resol&ed by him including those !hich are originally
cogni6able by the #egional Director to a&oid multiplicity of
proceedings/ 5n other !ords, the !hole case, and not merely issues
in&ol&ed therein, shall be assigned to and resol&ed by him/
CCC CCC CCC
'(mphasis supplied*
4/ 0D 191':11184* G original and eCclusi&e Furisdiction
o&er %nresolved issues in collecti&e bargaining and money claims,
!hich incl%des moral or other damages/
Despite the original and eCclusi&e Furisdiction of labor arbiters o&er money claims,
ho!e&er, the #egional Director nonetheless retained his enforcement po!er, and
remained empo!ered to adFudicate %ncontested money claims/
:/ 20 1-4 '812118l* G strengthened &oluntary arbitration/ The decree
also returned the Labor %rbiters as part of the 8L#), operating as
%rbitration 2ranch thereof/
/ 20 22.'111 82* G original and eCclusi&e Furisdiction o&er
Euestions in&ol&ing legality of strikes and lock1outs/
The present petition Euestions the authority of the #egional Director to issue the "rder, dated %ugust
4, 198, on the basis of his &isitorial and enforcement po!ers under %rticle 128 'formerly %rticle 12.*
of the present Labor )ode/ 5t is contended that based on the rulings in the Ong vs. Parel 5s%pra6 and
the Zambales Base Metals, nc. vs. !he Minister o" #abor 5s%pra6 cases, a #egional Director is
precluded from adFudicating money claims on the ground that this is an eCclusi&e function of the
Labor %rbiter under %rticle 21. of the present )ode/
"n %ugust 4, 198, !hen the order !as issued, %rticle 128'b*
4
read as follo!s;
'b* The ,inister of Labor or his duly authori6ed representati&es shall
ha&e the po!er to order and administer, after due notice and hearing,
compliance !ith the labor standards pro&isions of this )ode based on
the findings of labor regulation officers or industrial safety engineers
made in the course of inspection, and to issue !rits of eCecution to
the appropriate authority for the enforcement of their order, except in
cases )here the employer contests the "indings of the labor
regulations officer and raises issues !hich cannot be resol&ed
!ithout considering e&identiary matters that are not &erifiable in the
normal course of inspection/ '(mphasis supplied*
"n the other hand, %rticle 21. of the Labor )ode as amended by 0/D/ 191, effecti&e ,ay 1, 1984H
2atas 0ambansa 2lg/ 1-4, effecti&e %ugust 21, 1981H and 2atas 0ambansa 2lg/ 22., effecti&e 9une
1, 1982, inter alia, pro&ides;
%#T/ 21./ $%risdiction o" #abor Arbiters and the &ommission/ G 'a* The Labor
%rbiters shall ha&e theoriginal and excl%sive Furisdiction to hear and decide !ithin
thirty '-4* !orking days after submission of the case by the parties for decision, the
follo!ing cases in&ol&ing all !orkers, !hether agricultural or non1agricultural;
1/ @nfair labor practice casesH
2/ Those that !orkers may file in&ol&ing !ages, hours of !ork and
other terms and conditions of employmentH
-/ %ll money claims of !orkers, including those based on non1
payment or underpayment of !ages, o&ertime compensation,
separation pay and other benefits pro&ided by la! or appropriate
agreement, eCcept claims for employees+ compensation, social
security, medicare and maternity benefitsH
4/ )ases in&ol&ing household ser&icesH and
:/ )ases arising from any &iolation of %rticle 2: of this )ode,
including Euestions in&ol&ing the legality of strikes and lock1outs/
'(mphasis supplied*
The "ng and Jambales cases in&ol&ed !orkers )ho )ere still connected )ith the company/
>o!e&er, in the "ng case, the employer disputed the adeEuacy of the e&identiary foundation
'employees+ affida&its* of the findings of the labor standards inspectors !hile in the Jambales case,
the money claims !hich arose from alleged &iolations of labor standards pro&isions !ere not
disco&ered in the course of normal inspection/ Thus, the pro&isions of ,"L( 0olicy 5nstructions 8os/
, 'Distribution of 9urisdiction "&er Labor )ases* and -. '%ssignment of )ases to Labor %rbiters*
gi&ing #egional Directors adFudicatory po!ers o&er uncontested money claims disco&ered in the
course of normal inspection, pro&ided an employer1employee relationship still eCists, are
inapplicable/
5n the present case, petitioner admitted the charge of underpayment of !ages to !orkers still in its
employH in fact, it pleaded for time to raise funds to satisfy its obligation/ There )as th%s no contest
against the "indings of the labor inspectors/
2arely less than a month after the promulgation on 8o&ember 2, 198 of the Jambales 2ase
,etals case, (Cecuti&e "rder 8o/ 111 !as issued on December 24, 198,
5
amending %rticle 128'b* of
the Labor )ode, to read as follo!s;
'b* T>( 0#"<5S5"8S "= %#T5)L( 21. "= T>5S )"D( T" T>(
)"8T#%#A 8"T35T>ST%8D58? %8D 58 )%S(S 3>(#( T>(
#(L%T5"8S>50 "= (,0L"A(#1(,0L"A(( ST5LL ($5STS, the
,inister of Labor and (mployment or his duly authori6ed
representati&es shall ha&e the po!er to order and administer, after
due notice and hearing, compliance !ith the labor standards
pro&isions of this )ode %8D "T>(# L%2"# L(?5SL%T5"8 based
on the findings of labor regulation officers or industrial safety
engineers made in the course of inspection, and to issue !rits of
eCecution to the appropriate authority for the enforcement of their
orders, eCcept in cases !here the employer contests the findings of
the labor regulation officer and raises issues !hich cannot be
resol&ed !ithout considering e&identiary matters that are not
&erifiable in the normal course of inspection/ '(mphasis supplied*
%s seen from the foregoing, (" 111 authori6es a #egional Director to order compliance by an
employer !ith labor standards pro&isions of the Labor )ode and other legislation/ 5t is "ur
considered opinion ho!e&er, that the inclusion of the phrase, D The pro&isions of %rticle 21. of this
)ode to the contrary not!ithstanding and in cases !here the relationship of employer1employee still
eCistsD /// in %rticle 128'b*, as amended, abo&e1cited, merelycon"irms7reiterates the enforcement
adFudication authority of the #egional Director o&er %ncontested money claimsin cases )here an
employer.employee relationship still exists/
6
<ie!ed in the light of 0D 8:4 and read in coordination !ith ,"L( 0olicy 5nstructions 8os/ , . and
-., it is clear that it has al!ays been the intention of our labor authorities to pro&ide our !orkers
immediate access '!hen still feasible, as !here an employer1employee relationship still eCists* to
their rights and benefits, !ithout being incon&enienced by arbitration7litigation processes that pro&e
to be not only ner&e1!racking, but financially burdensome in the long run/
8ote further the second paragraph of 0olicy 5nstructions 8o/ . indicating that the transfer of labor
standards cases from the arbitration system to the enforcement system is
/ / to assure the !orkers the rights and benefits due to him under labor standard
la!s, !ithout ha&ing to go through arbitration/ / /
so that
/ / the !orkers !ould not litigate to get !hat legally belongs to him/ // ensuring
deli&ery / / free of charge/
Social Fustice legislation, to be truly meaningful and re!arding to our !orkers, must not be hampered
in its application by long1!inded arbitration and litigation/ #ights must be asserted and benefits
recei&ed !ith the least incon&enience/ Labor la!s are meant to promote, not defeat, social Fustice/
This &ie! is in consonance !ith the present D#ules on the Disposition of Labor Standard )ases in
the #egional "ffices D
7
issued by the Secretary of Labor, =ranklin ,/ Drilon on September 1, 198./
Thus, Sections 2 and - of #ule 55 on D,oney )laims %rising from )omplaint #outine 5nspectionD,
pro&ide as follo!s;
Section 2/ &omplaint inspection/ G %ll such complaints shall immediately be
for!arded to the #egional Director !ho shall refer the case to the appropriate unit in
the #egional "ffice for assignment to a Labor Standards and 3elfare "fficer 'LS3"*
for field inspection/ 3hen the field inspection does not produce the desired results,
the #egional Director shall summon the parties for summary in&estigation to eCpedite
the disposition of the case/ / / /
Section -/ &omplaints )here no employer.employee relationship act%ally exists/ G
3here employer1employee relationship no longer eCists by reason of the fact that it
has already been se&ered, claims for payment of monetary benefits "all )ithin the
excl%sive and original '%risdiction o" the labor arbiters/ / / / '(mphasis supplied*
Like!ise, it is also clear that the limitation embodied in ,"L( 0olicy 5nstructions 8o/ . to amounts
not eCceeding 0144,444/44 has been dispensed !ith, in &ie! of the follo!ing pro&isions of pars/ 'b*
and 'c*, Section . on D#estitutionD, the same #ules, thus;
CCC CCC CCC
'b* 0lant1le&el restitutions may be effected for money claims not
eCceeding =ifty Thousand '0:4,444/44*/ / / /
'c* #estitutions in eCcess of the aforementioned amount shall be
effected at the #egional "ffice or at the !orksite subFect to the prior
appro&al of the #egional Director/
!hich indicate the intention to empo!er the #egional Director to a!ard money claims in excess of
0144,444/44Hprovided of course the employer does not contest the findings made, based on the
pro&isions of Section 8 thereof;
Section 8/ &ompromise agreement/ G Should the parties arri&e at an agreement as
to the !hole or part of the dispute, said agreement shall be reduced in !riting and
signed by the parties in the presence of the #egional Director or his duly authori6ed
representati&e/
(/"/ 8o/ 111 !as issued on December 24, 198 or three '-* months after the promulgation of the
Secretary of Labor+s decision upholding pri&ate respondents+ salary differentials and ()"L%s on
September 24, 198/ The amendment of the &isitorial and enforcement po!ers of the #egional
Director '%rticle 1281b* by said (/"/ 111 reflects the intention enunciated in 0olicy 5nstructions 8os/
and -. to empo!er the #egional Directors to resol&e%ncontested money claims in cases )here an
employer.employee relationship still exists/ This intention must be gi&en !eight and entitled to great
respect/ %s held in Progressive 7or4ers8 0nion, et. al. vs. 9.P. Ag%as, et. al/ ?/#/ 8o/ :9.11112, ,ay
29, 198:, 1:4 S)#% 429;
/ / The interpretation by officers of la!s !hich are entrusted to their administration is
entitled to great respect/ 3e see no reason to detract from this rudimentary rule in
administrati&e la!, particularly !hen later e&ents ha&e pro&ed said interpretation to
be in accord !ith the legislati&e intent/ //
The proceedings before the #egional Director must, perforce, be upheld on the basis of %rticle
128'b* as amended by (/"/ 8o/ 111, dated December 24, 198, this eCecuti&e order Dto be
considered in the nature of a curati&e statute !ith retrospecti&e application/D '0rogressi&e 3orkers+
@nion, et al/ &s/ >on/ =/0/ %guas, et al/ 'S%pra*H ,/ ?arcia &s/ 9udge %/ ,artine6, et al/, ?/#/ 8o/ L1
4.29, ,ay 28, 19.9, 94 S)#% --1*/
3e no! come to the Euestion of !hether or not the #egional Director erred in eCtending the a!ard
to all hospital employees/ 3e ans!er in the affirmati&e/
The #egional Director correctly applied the a!ard !ith respect to those employees !ho signed the
complaint, as !ell as those !ho did not sign the complaint, b%t )ere still connected )ith the hospital
at the time the complaint )as "iled 'See "rder, p/ -- dated %ugust 4, 198 of the #egional Director,
0edrito de Susi, p/ --, Rollo*/
The Fustification for the a!ard to this group of employees !ho !ere not signatories to the complaint
is that the &isitorial and enforcement po!ers gi&en to the Secretary of Labor is rele&ant to, and
eCercisable o&er establishments, not o&er the indi&idual members7employees, because !hat is
sought to be achie&ed by its eCercise is the obser&ance of, and7or compliance by, such
firm7establishment !ith the labor standards regulations/ 8ecessarily, in case of an a!ard resulting
from a &iolation of labor legislation by such establishment, the entire members7employees should
benefit therefrom/ %s aptly stated by then ,inister of Labor %ugusto S/ Sanche6;
/ / 5t !ould be highly derogatory to the rights of the !orkers, if after categorically
finding the respondent hospital guilty of underpayment of !ages and ()"L%s, !e
limit the a!ard to only those !ho signed the complaint to the eCclusion of the
maFority of the !orkers !ho are similarly situated/ 5ndeed, this !ould be not only
render the enforcement po!er of the ,inister of Labor and (mployment nugatory,
but !ould be the pinnacle of inFustice considering that it !ould not only discriminate
but also depri&e them of legislated benefits/
/ / / 'pp/ -81-9, Rollo*/
This &ie! is further bolstered by the pro&isions of Sec/ , #ule 55 of the D#ules on the Disposition of
Labor Standards cases in the #egional "fficesD 's%pra* presently enforced, &i6;
S()T5"8 / )o&erage of complaint inspection/ G % complaint inspection shall not
be limited to the specific allegations or &iolations raised by the complainants7!orkers
but shall be a thorough inEuiry into and &erification of the compliance by employer
!ith eCisting labor standards and shall cover all )or4ers similarly sit%ated/ '(mphasis
supplied*
>o!e&er, there is no legal Fustification for the a!ard in fa&or of those employees !ho )ere no longer
connected!ith the hospital at the time the complaint !as filed, ha&ing resigned therefrom in 1984,
&i6;
1/ 9ean '9oan* <en6on 'See "rder, p/ --, Rollo*
2/ #osario 0acliFan
-/ %dela 0eralta
4/ ,auricio 8agales
:/ )onsesa 2autista
/ Teresita %gcopra
./ =eliC ,onleon
8/ Teresita Sal&ador
9/ (dgar )atalunaH and
14/ #aymond ,aniFa ' p/., Rollo*
The enforcement po!er of the #egional Director cannot legally be upheld in cases of separated
employees/ %rticle 129 of the Labor )ode, cited by petitioner 'p/ :4, Rollo* is not applicable as said
article is in aid o" the en"orcement po)er of the #egional DirectorH hence, not applicable !here the
employee seeking to be paid underpayment of !ages is already separated from the ser&ice/ >is
claim is purely a money claim that has to be the subFect of arbitration proceedings and therefore
!ithin the original and eCclusi&e Furisdiction of the Labor %rbiter/
0etitioner has like!ise Euestioned the order dated %ugust 4, 198 of the #egional Director in that it
does not clearly and distinctly state the facts and the la! on !hich the a!ard is based/
3e in&ite attention to the ,inister of Labor+s ruling thereon, as follo!s;
=inally, the respondent hospital assails the order under appeal as null and &oid
because it does not clearly and distinctly state the facts and the la! on !hich the
a!ards !ere based/ )ontrary to the pretensions of the respondent hospital, !e ha&e
carefully re&ie!ed the order on appeal and !e found that the same contains a brief
statement of the 'a* facts of the caseH 'b* issues in&ol&edH 'c* applicable la!sH 'd*
conclusions and the reasons thereforH 'e* specific remedy granted 'amount
a!arded*/ 'p/ 44, Rollo*
%))"#D58?LA, this petition should be dismissed, as it is hereby D5S,5SS(D, as regards all
persons still employed in the >ospital at the time of the filing of the complaint, but ?#%8T(D as
regards those employees no longer employed at that time/
S" "#D(#(D/
9ernan, &.$., :arvasa, ;%tierre<, $r., &r%<, Paras, 9eliciano, ;ancayco, Padilla, Bidin, &ortes,
;ri=o.A>%ino and Regalado, $$., conc%r.


Separate Opinions

SARMIENTO, J., concurring;
SubFect to my opinion in ?/#/ 8os/ 8284: and 8-24:/
MELENCIO-HERRERA, J., concurring;
5 concur, !ith the obser&ation that e&en as reconciled, it !ould seem ine&itable to state that the
conclusion in the Jambales and "ng cases that, prior to (Cecuti&e "rder 8o/ 111, #egional
Directors !ere not empo!ered to share the original and eCclusi&e Furisdiction conferred on Labor
%rbiters o&er money claims, is no! deemed modified, if not superseded/
5t may not be amiss to state either that under Section 2, #epublic %ct 8o/ .1:, !hich amends
further the Labor )ode of the 0hilippines '0D 8o/ 442*, #egional Directors ha&e also been granted
adFudicati&e po!ers, albeit limited, o&er monetary claims and benefits of !orkers, thereby settling
any ambiguity on the matter/ Thus;
S()/ 2/ %rticle 129 of the Labor )ode of the 0hilippines, as amended, is hereby
further amended to read as follo!s;
%rt/ 129/ Recovery o" )ages, simple money claims and other
bene"its/ G @pon complaint of any interested party, the #egional
Director of the Department of Labor and (mployment or any of the
duly authori6ed hearing officers of the Department is empo!ered,
through summary proceeding and after due notice, to hear and
decide any matter in&ol&ing the reco&ery of !ages and other
monetary claims and benefits, including legal interest, o!ing to an
employee or person employed in domestic or household ser&ice or
househelper under this )ode, arising from employer1employee
relations; 0ro&ided, That such complaint does not include a claim for
reinstatement; 0ro&ided, further, That the aggregate money claims of
each employee or househelper do not eCceed fi&e thousand pesos
'0:,444/44*/ The #egional Director or hearing officer shall decide or
resol&e the complaint !ithin thirty '-4* calendar days from the date of
the filing of the same/ ///


Separate Opinions
SARMIENTO, J., concurring;
SubFect to my opinion in ?/#/ 8os/ 8284: and 8-24:/
MELENCIO-HERRERA, J., concurring;
5 concur, !ith the obser&ation that e&en as reconciled, it !ould seem ine&itable to state that the
conclusion in the Jambales and "ng cases that, prior to (Cecuti&e "rder 8o/ 111, #egional
Directors !ere not empo!ered to share the original and eCclusi&e Furisdiction conferred on Labor
%rbiters o&er money claims, is no! deemed modified, if not superseded/
5t may not be amiss to state either that under Section 2, #epublic %ct 8o/ .1:, !hich amends
further the Labor )ode of the 0hilippines '0D 8o/ 442*, #egional Directors ha&e also been granted
adFudicati&e po!ers, albeit limited, o&er monetary claims and benefits of !orkers, thereby settling
any ambiguity on the matter/ Thus;
S()/ 2/ %rticle 129 of the Labor )ode of the 0hilippines, as amended, is hereby
further amended to read as follo!s;
%rt/ 129/ Recovery o" )ages, simple money claims and other
bene"its/ G @pon complaint of any interested party, the #egional
Director of the Department of Labor and (mployment or any of the
duly authori6ed hearing officers of the Department is empo!ered,
through summary proceeding and after due notice, to hear and
decide any matter in&ol&ing the reco&ery of !ages and other
monetary claims and benefits, including legal interest, o!ing to an
employee or person employed in domestic or household ser&ice or
househelper under this )ode, arising from employer1employee
relations; 0ro&ided, That such complaint does not include a claim for
reinstatement; 0ro&ided, further, That the aggregate money claims of
each employee or househelper do not eCceed fi&e thousand pesos
'0:,444/44*/ The #egional Director or hearing officer shall decide or
resol&e the complaint !ithin thirty '-4* calendar days from the date of
the filing of the same/ ///
ootnotes
1 )ited in 9/ 8olledo, Labor )ode of the 0hilippines, %nn/, 1988 #e&/ (d/ p/ 21./
2 'See )ritical %reas in the %dministration of Labor 9ustice* '0roceedings of the 1th
%nnual 5nstitute on Labor #elations La! G 19.9, @/0/ La! )enter, p/ :*/
- bid.
4 as amended by Section 2, 0D 191/
: (" 111 eCpressly declared that its pro&isions !ould become effecti&e fifteen '1:*
days after publication in the "fficial ?a6ette/ The eCecuti&e order !as published on
=ebruary 1, 198. '8- "/?/ 8o/ ., p/ :..4* and therefore became effecti&e on ,arch
-, 198./
% present eCception may be found in Section 2 of #% .1:, effecti&e ,arch 24,
1989 !hich gi&es #egional Director, Dthrough summary proceeding, to hear and
decide any matter in&ol&ing the reco&ery of !ages and other monetary claims and
benefits, /// to an employee or person employed in domestic or household ser&ice or
househelper /// arising from employee1employer relations; 0ro&ided, That such
complaint does not incl%de a claim "or reinstatement/ Provided, "%rther, !hat the
aggregate money claims o" each employee or ho%sehelper do not exceed "ive
tho%sand pesos 5P2,333.336 ////
. )ited in 9/ 8olledo, Labor )ode of the 0hilippines, %nn/, 1988 #e&/ (d/, p/ 21/
Calalan/ vs. 0illia-s et al., 7% .hil., 7" , +ece-ber %", 1&4%
Case (itle : M'5i/o C'-'-'n,, petitioner, s. A. D. 6i--i'/s, et '-.,
respondents.Case )at$re : ORI#INAL ACTION in t)e S.pre/e Co.rt.
Pro)ibition.
Syllabi Class : Constit.tion'- L'(*Constit.tion'-ity o% Co//on(e'-t) A&t
No. 782*So&i'- 0.sti&e
Syllabi:
1. $onstittional Law; $onstittionality of $o##onwealt! &ct No.
'(); Delegation op Legislati"e Power; /uthority of Director of Public
<or!s and #ecretary of Public <or!s and &ommunications to Promulgate
Rules and Regulations.2
". *d.; *d.; #ocial =ustice.-
>#ocial .ustice is ?neither communism nor despotism nor atomism nor
anarchy? but the humani@ation of laws and the equali@ation of social and
economic forces by the #tate so that .ustice in its rational and ob.ectively
secular conception may at least be approximated. #ocial .ustice means the
promotion of the welfare of all the people the adoption by the Aovernment
of measures calculated to insure economic stability of all the competent
elements of society through the maintenance of a proper economic and
social equilibrium in the interrelations of the members of the community
constitutionally through the adoption of measures legally .ustifiable or
extra-constitutionally through the exercise of powers underlying the
existence of all governments on the time-honored principle of salus populi
est supremo lex. #ocial .ustice therefore must be founded on the
recognition of the necessity of interdependence among divers and diverse
units of a society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and economic life
consistent with the fundamental and paramount ob.ective of the state of
promoting the health comfort and quiet of all persons and of bringing
about ?the greatest good to the greatest number.?
!. *d.; *d.; Police Power; Personal Liberty; Aovernmental /uthority.-
>&ommonwealth /ct 4o. 5B+ was passed by the 4ational /ssembly in the
exercise of the paramount police power of the state. #aid /ct by virtue of
which the rules and regulations complained of were promulgated aims to
promote safe transit upon and avoid obstructions on national roads in the
interest and convenience of the public. %n enacting said law therefore the
4ational /ssembly was prompted by considerations of public convenience
and welfare. %t was inspired by a desire to relieve congestion of traffic
which is to say the least a menace to public safety. Public welfare then
lies at the bottom of the enactment of said law and the state in order to
promote the general welfare may interfere with personal liberty with
property and with business and occupations. Persons and property may be
sub.ected to all !inds of restraints and burdens in order to secure the
general comfort health and prosperity of the state "-. #. vs. Aome@ =esus
;( Phil. C(+,. 7o this fundamental aim of our Aovernment the rights of the
individual are subordinated. Liberty is a blessing without which life is a
misery but liberty should not be made to prevail over authority because
then society will fall into anarchy. 4either should authority be made to
prevail over liberty because then the individual will fall into slavery. 7he
citi@en should achieve the required balance of liberty and authority in his
mind through education and personal discipline so that there may be
established the resultant equilibrium which means peace and order and
happiness for all. 7he moment greater authority is conferred upon the
government logically so much is withdrawn from the residuum of liberty
which resides in the people. 7he paradox lies in the fact that the apparent
curtailment of liberty is precisely the very means of insuring its
preservation.
+oc,et )$-ber: No. 81244
Co$nsel: M'5i/o C'-'-'n,
.onente: L'.re-
+ispositive .ortion:
In ie( o% t)e %ore,oin,, t)e (rit o% pro)ibition pr'yed %or is )ereby denied,
(it) &osts ','inst t)e petitioner.
CALALANG v. WILLIAMS, 70 PHIL 726, GR No. 47800, December 2, 1940

AC!S" !#e N$%&o'$( !r$)c Comm&**&o' re*o(ve+ %#$% $'&m$(,+r$-' ve#&c(e* be
.ro#&b&%e+ /rom .$**&'0 $(o'0 *ome m$1or *%ree%* *2c# $ R&3$( Ave. &' M$'&($ /or $
.er&o+ o/ o'e 4e$r /rom %#e +$%e o/ %#e o.e'&'0 o/ %#e Co(0$'%e 5r&+0e %o %r$)c. !#e
Secre%$r4 o/ P2b(&c Wor6* $..rove+ %#e re*o(2%&o' o' A202*% 10,1940. !#e M$4or o/
M$'&($ $'+ %#e Ac%&'0 C#&e/ o/ Po(&ce o/ M$'&($ #$ve e'/orce+ %#e r2(e* $'+ re02($%&o'.
A* $ co'*e72e'ce, $(( $'&m$(,+r$-' ve#&c(e* $re 'o% $((o-e+ %o .$** $'+ .&c6 2.
.$**e'0er* &' %#e .($ce* $bove me'%&o'e+ %o %#e +e%r&me'% 'o% o'(4 o/ %#e&r o-'er* b2%
o/ %#e r&+&'0 .2b(&c $* -e((.

ISS89" Doe* %#e r2(e &'/r&'0e 2.o' %#e co'*%&%2%&o'$( .rece.% re0$r+&'0 %#e .romo%&o'
o/ *oc&$( 12*%&ce: W#$% &* Soc&$( ;2*%&ce:

H9LD" No. !#e re02($%&o' $&m* %o .romo%e *$/e %r$'*&% $'+ $vo&+ ob*%r2c%&o'* o'
'$%&o'$( ro$+* &' %#e &'%ere*% $'+ co've'&e'ce o/ %#e .2b(&c. Per*o'* $'+ .ro.er%4 m$4
be *2b1ec% %o $(( 6&'+* o/ re*%r$&'%* $'+ b2r+e'* &' or+er %o *ec2re %#e 0e'er$( com/or%,
#e$(%#, $'+ .ro*.er&%4 o/ %#e S%$%e. !o %#&* /2'+$me'%$( $&m* o/ %#e 0over'me'%, %#e
r&0#%* o/ %#e &'+&v&+2$( $re *2bor+&'$%e+.
Soc&$( 12*%&ce &* <'e&%#er comm2'&*m, 'or +e*.o%&*m, 'or $%om&*m, 'or $'$rc#4,= b2%
%#e #2m$'&3$%&o' o/ ($-* $'+ %#e e72$(&3$%&o' o/ *oc&$( $'+ eco'om&c /orce* b4 %#e
S%$%e *o %#$% 12*%&ce &' &%* r$%&o'$( $'+ ob1ec%&ve(4 *ec2($r co'ce.%&o' m$4 $% (e$*% be
$..ro>&m$%e+. Soc&$( 12*%&ce me$'* %#e .romo%&o' o/ %#e -e(/$re o/ $(( %#e .eo.(e, %#e
$+o.%&o' b4 %#e Gover'me'% o/ me$*2re* c$(c2($%e+ %o &'*2re eco'om&c *%$b&(&%4 o/ $((
%#e com.e%e'% e(eme'%* o/ *oc&e%4, %#ro20# %#e m$&'%e'$'ce o/ $ .ro.er eco'om&c $'+
*oc&$( e72&(&br&2m &' %#e &'%erre($%&o'* o/ %#e member* o/ %#e comm2'&%4,
co'*%&%2%&o'$((4, %#ro20# %#e $+o.%&o' o/ me$*2re* (e0$((4 12*%&?$b(e, or e>%r$,
co'*%&%2%&o'$((4, %#ro20# %#e e>erc&*e o/ .o-er* 2'+er(4&'0 %#e e>&*%e'ce o/ $((
0over'me'%* o' %#e %&me,#o'ore+ .r&'c&.(e* o/ Salus Populi est Suprema Lex.@;2*%&ce
L$2re(A
.hilippine Association ofService 12porters, 3nc. vs. +rilon, 1! SCRA
!' , #$ne !%, 1&''
Case (itle : PHI-LIPPINE ASSOCIATION O" SER9ICE E$PORTERS, INC,
petitioner, s. HON. "RAN:LIN M. DRILON 's Se&ret'ry o% L'bor 'nd
E/p-oy/ent, 'nd TOMAS D. ACHACOSO, 's Ad/inistr'tor o% t)e P)i-ippine
Oerse's E/p-oy/ent Ad/inistr'tion, respondents.Case )at$re : PETITION
to reie( t)e de&ision o% t)e Se&ret'ry o% L'bor 'nd E/p-oy/ent.
Syllabi Class : Constit.tion'- L'(*L'bor L'(s
Syllabi:
1. $onstittional Law; Labor Laws; Deployment Dan of Eemale Domestic
0elperF &oncept of Police Power.-
7he concept of police power is well-established in this .urisdiction. %t has
been defmed as the ?state authority to enact legislation that may interfere
with personal liberty or property in order to promote the general welfare.?
/s defined it consists of "(, an imposition of restraint upon liberty or
property "C, in order to foster the common good. %t is not capable of an
exact definition but has been purposely veiled in general terms to
underscore its all-comprehensive embrace. ?%ts scope ever-expanding to
meet the exigencies of the times even to anticipate the future where it
could be done provides enough room for an efficient and flexible response
to conditions and circumstances thus assuring the greatest benefits.?
". $onstittional Law; Labor Laws; Police power constitutes an implied
limitation on the Dill ofRights.-
%t constitutes an implied limitation on the Dill of Rights. /ccording to
Eernando it is ?rooted in the conception that men in organi@ing the state
and imposing upon its governxnent limitations to safeguard constitutional
rights did not intend thereby to enable an individual citi@en or a group of
citi@ens to obstruct unreasonably the enactment of such salutary measures
calculated to ensure communal peace safety good order and welfare.?
#ignificantly the Dill of Rights itself does not purport to be an absolute
guaranty of individual rights and liberties ?3ven liberty itself the greatest of
all rights is not unrestricted license to act according to oneGs will.? %t is
sub.ect to the far more overriding demands and requirements of the greater
number.
!. $onstittional Law; Labor Laws; 3quality before the law under the
&onstitutionF Requirements ofa valid classification satisfied.-
7he petitioner has shown no satisfactory reason why the contested measure
should be nullified. 7here is no question that Department 'rder 4o. (
applies only to ?female contract wor!ers? but it does not thereby ma!e an
undue discrimination between the sexes. %t is well-settled that ?equality
before the law? under the &onstitution does not import a perfect identity of
rights among all men and women. %t admits of classifications provided that
"(, such classiflcations rest on substantial distinctionsF "C, they are germane
to the purposes of the lawF ";, they are not confined to existing conditionsF
and "B, they apply equally to all members of the same class. 7he &ourt is
satisfied that the classification made>the preference for female wor!ers>
rests on substantial distinctions.
4. $onstittional Law; Labor Laws; Halid Discrimination between female
and male contract wor!ers under Department 'rder4o. l.ustified.-
7he same however cannot be said of our male wor!ers. %n the first place
there is no evidence that except perhaps for isolated instances our men
abroad have been afflicted with an identical predicament. 7he petitioner has
proffered no argument that the Aovernment should act similarly with
respect to male wor!ers. 7he &ourt of course is not impressing some male
chauvinistic notion that men are superior to women. <hat the &ourt is
saying is that it was largely a matter of evidence "that women domestic
wor!ers are being ill-treated abroad in massive instances, and not upon
some fanciful or arbitrary yardstic! that the Aovernment acted in this case.
%t is evidence capable indeed of unquestionable demonstration and evidence
this &ourt accepts. 7he &ourt cannot however say the same thing as far as
men are concerned. 7here is simply no evidence to .ustify such an inference.
#uffice it to state then that insofar as classification are concerned this
&ourt is content that distinctions are borne by the evidence. Discrimination
in this case is .ustified.
*. $onstittional Law; Labor Laws; Department 'rder 4o. ( does not
impair the right to travel.-
7he consequence the deployment ban has on the right to travel does not
impair the right. 7he right to travel is sub.ect among other things to the
requirements of ?public safety ?as may be provided by law.? Department
'rder 4o. ( is a valid implementation of the Labor &ode in particular its
basic policy to ?afford protection to labor? pursuant to the respondent
Department of LaborGs rulema!ing authority vested in it by the Labor &ode.
7he petitioner assumes that it is unreasonable simply because of its impact
on the right to travel but as we have stated the right itself is not absolute.
7he disputed 'rder is a valid qualification thereto.
. $onstittional Law; Labor Laws; 4o merit in the contention that
Department 'rder 4o. ( constitutes an invalid exercise of legislative power
since the Labor &ode itselfvests the D'L3 with rule-ma!ing powers.-
4either is there merit in the contention that Department 'rder 4o. (
constitutes an invalid exercise of legislative power. %t is true that police
power is the domain of the legislature but it does not mean that such an
authority may not be lawfully delegated. /s we have mentioned the Labor
&ode itself vests the Department of Labor and 3mployment with rule-ma!ing
powers in the enforcement whereof.
7. $onstittional Law; Labor Laws; ?Protection to Labor? does not signify
the promotion ofemployment alone.-
7rotection to labor? does not signify the promotion of einployment alone.
<hat concerns the &onstitution more paramountly is that such an
employment be above all decent .ust and humane. %t is bad enough that
the country has to send its sons and daughters to strange lands because it
cannot satisfy their employment needs at home. -nder these circumstances
the Aovernment is duty-bound to insure that our toiling expatriates have
adequate protection personally and economically while away from home. %n
this case the Aovernment has evidence an evidence the petitioner cannot
seriously dispuce of the lac! or inadequacy of auch protection and as part
of its duty it has precisely ordered an indefinite ban on deployment.
'. $onstittional Law; Labor Laws; 4on-impairment clause must yield to
the demands and necessities of #tateGs power of regulation to provide a
decent living to its citi@ens.-
7he petitionerGs reliance on the &onstitutional guaranty of wor!er
participation ?in policy and decisionma!ing processes affecting their rights
and benefits? is not wellta!en. 7he right granted by this provision again
must submit to the demands and necessities of the #tateGs power of
regulation. 7he nonimpairment clause of the &onstitution invo!ed by the
petitioner must yield to the loftier purposes targetted by the Aovernment.
Ereedom of contract and enterprise li!e all other freedoms is not free from
restrictions more so in this .urisdiction where laisse@ faire has never been
fully accepted as a controlling economic-way of life. 7his &ourt understands
the grave implications the questioned 'rder has on the business of
recruitment. 7he concern of the Aovernment however is not necessarily to
maintain profits of business firms. %n the ordinary sequence of events it is
profits that suffer as a result of Aovernment regulation. 7he interest of the
#tate is to provide a decent living to its citi@ens. 7he Aovernment has
convinced the &ourt in tbis case that this is its intent. <e do not find the
impugned 'rder to be tainted witb a grave abuse of discretion to warrant
the extraordinary relief prayed for.
+ivision: EN !ANC
+oc,et )$-ber: No. L;2+372
Co$nsel: #.tierre< = A-o L'( O%%i&es
.onente: SARMIENTO
+ispositive .ortion:
6HERE"ORE, t)e petition is DISMISSED. No &osts.
The petitioner, 0hilippine %ssociation of Ser&ice (Cporters, 5nc/ '0%S(5, for short*, a firm Dengaged
principally in the recruitment of =ilipino !orkers, male and female, for o&erseas
placement,D
1
challenges the )onstitutional &alidity of Department "rder 8o/ 1, Series of 1988, of the
Department of Labor and (mployment, in the character of D?@5D(L58(S ?"<(#858? T>(
T(,0"#%#A S@S0(8S5"8 "= D(0L"A,(8T "= =5L5058" D",(ST5) %8D >"@S(>"LD
3"#K(#S,D in this petition for certiorari and prohibition/ Specifically, the measure is assailed for
Ddiscrimination against males or femalesHD
2
that it Ddoes not apply to all =ilipino !orkers but only to
domestic helpers and females !ith similar skillsHD
3
and that it is &iolati&e of the right to tra&el/ 5t is held
like!ise to be an in&alid eCercise of the la!making po!er, police po!er being legislati&e, and not
eCecuti&e, in character/
5n its supplement to the petition, 0%S(5 in&okes Section -, of %rticle $555, of the )onstitution,
pro&iding for !orker participation Din policy and decision1making processes affecting their rights and
benefits as may be pro&ided by la!/D
4
Department "rder 8o/ 1, it is contended, !as passed in the
absence of prior consultations/ 5t is claimed, finally, to be in &iolation of the )harter+s non1impairment
clause, in addition to the Dgreat and irreparable inFuryD that 0%S(5 members face should the "rder be
further enforced/
"n ,ay 2:, 1988, the Solicitor ?eneral, on behalf of the respondents Secretary of Labor and
%dministrator of the 0hilippine "&erseas (mployment %dministration, filed a )omment informing the
)ourt that on ,arch 8, 1988, the respondent Labor Secretary lifted the deployment ban in the states
of 5raE, 9ordan, Latar, )anada, >ongkong, @nited States, 5taly, 8or!ay, %ustria, and S!it6erland/ ! 5n
submitting the &alidity of the challenged Dguidelines,D the Solicitor ?eneral in&okes the police po!er of the 0hilippine State/
5t is admitted that Department "rder 8o/ 1 is in the nature of a police po!er measure/ The only
Euestion is !hether or not it is &alid under the )onstitution/
The concept of police po!er is !ell1established in this Furisdiction/ 5t has been defined as the Dstate
authority to enact legislation that may interfere !ith personal liberty or property in order to promote
the general !elfare/D
5
%s defined, it consists of '1* an imposition of restraint upon liberty or property, '2*
in order to foster the common good/ 5t is not capable of an eCact definition but has been, purposely, &eiled
in general terms to underscore its all1comprehensi&e embrace/
D5ts scope, e&er1eCpanding to meet the eCigencies of the times, e&en to anticipate the future !here it
could be done, pro&ides enough room for an efficient and fleCible response to conditions and
circumstances thus assuring the greatest benefits/D
6
5t finds no specific )onstitutional grant for the plain reason that it does not o!e its origin to the
)harter/ %long !ith the taCing po!er and eminent domain, it is inborn in the &ery fact of statehood
and so&ereignty/ 5t is a fundamental attribute of go&ernment that has enabled it to perform the most
&ital functions of go&ernance/ ,arshall, to !hom the eCpression has been credited,
7
refers to it
succinctly as the plenary po!er of the State Dto go&ern its citi6ens/D
"
DThe police po!er of the State /// is a po!er coeCtensi&e !ith self1 protection, and it is not inaptly
termed the Dla! of o&er!helming necessity/D 5t may be said to be that inherent and plenary po!er in
the State !hich enables it to prohibit all things hurtful to the comfort, safety, and !elfare of society/D
#
5t constitutes an implied limitation on the 2ill of #ights/ %ccording to =ernando, it is Drooted in the
conception that men in organi6ing the state and imposing upon its go&ernment limitations to
safeguard constitutional rights did not intend thereby to enable an indi&idual citi6en or a group of
citi6ens to obstruct unreasonably the enactment of such salutary measures calculated to ensure
communal peace, safety, good order, and !elfare/D
1$
Significantly, the 2ill of #ights itself does not
purport to be an absolute guaranty of indi&idual rights and liberties D(&en liberty itself, the greatest of all
rights, is not unrestricted license to act according to one+s !ill/D
11
5t is subFect to the far more o&erriding
demands and reEuirements of the greater number/
8ot!ithstanding its eCtensi&e s!eep, police po!er is not !ithout its o!n limitations/ =or all its
a!esome conseEuences, it may not be eCercised arbitrarily or unreasonably/ "ther!ise, and in that
e&ent, it defeats the purpose for !hich it is eCercised, that is, to ad&ance the public good/ Thus,
!hen the po!er is used to further pri&ate interests at the eCpense of the citi6enry, there is a clear
misuse of the po!er/
12
5n the light of the foregoing, the petition must be dismissed/
%s a general rule, official acts enFoy a presumed &ahdity/
13
5n the absence of clear and con&incing
e&idence to the contrary, the presumption logically stands/
The petitioner has sho!n no satisfactory reason !hy the contested measure should be nullified/
There is no Euestion that Department "rder 8o/ 1 applies only to Dfemale contract !orkers,D
14
but it
does not thereby make an undue discrimination bet!een the seCes/ 5t is !ell1settled that DeEuality before
the la!D under the )onstitution
15
does not import a perfect 5dentity of rights among all men and !omen/ 5t
admits of classifications, pro&ided that '1* such classifications rest on substantial distinctionsH '2* they are
germane to the purposes of the la!H '-* they are not confined to eCisting conditionsH and '4* they apply
eEually to all members of the same class/
16
The )ourt is satisfied that the classification made1the preference for female !orkers G rests on
substantial distinctions/
%s a matter of Fudicial notice, the )ourt is !ell a!are of the unhappy plight that has befallen our
female labor force abroad, especially domestic ser&ants, amid eCploitati&e !orking conditions
marked by, in not a fe! cases, physical and personal abuse/ The sordid tales of maltreatment
suffered by migrant =ilipina !orkers, e&en rape and &arious forms of torture, confirmed by
testimonies of returning !orkers, are compelling moti&es for urgent ?o&ernment action/ %s precisely
the caretaker of )onstitutional rights, the )ourt is called upon to protect &ictims of eCploitation/ 5n
fulfilling that duty, the )ourt sustains the ?o&ernment+s efforts/
The same, ho!e&er, cannot be said of our male !orkers/ 5n the first place, there is no e&idence that,
eCcept perhaps for isolated instances, our men abroad ha&e been afflicted !ith an 5dentical
predicament/ The petitioner has proffered no argument that the ?o&ernment should act similarly !ith
respect to male !orkers/ The )ourt, of course, is not impressing some male chau&inistic notion that
men are superior to !omen/ 3hat the )ourt is saying is that it !as largely a matter of e&idence 'that
!omen domestic !orkers are being ill1treated abroad in massi&e instances* and not upon some
fanciful or arbitrary yardstick that the ?o&ernment acted in this case/ 5t is e&idence capable indeed of
unEuestionable demonstration and e&idence this )ourt accepts/ The )ourt cannot, ho!e&er, say the
same thing as far as men are concerned/ There is simply no e&idence to Fustify such an inference/
Suffice it to state, then, that insofar as classifications are concerned, this )ourt is content that
distinctions are borne by the e&idence/ Discrimination in this case is Fustified/
%s !e ha&e furthermore indicated, eCecuti&e determinations are generally final on the )ourt/ @nder
a republican regime, it is the eCecuti&e branch that enforces policy/ =or their part, the courts decide,
in the proper cases, !hether that policy, or the manner by !hich it is implemented, agrees !ith the
)onstitution or the la!s, but it is not for them to Euestion its !isdom/ %s a co1eEual body, the
Fudiciary has great respect for determinations of the )hief (Cecuti&e or his subalterns, especially
!hen the legislature itself has specifically gi&en them enough room on ho! the la! should be
effecti&ely enforced/ 5n the case at bar, there is no gainsaying the fact, and the )ourt !ill deal !ith
this at greater length shortly, that Department "rder 8o/ 1 implements the rule1making po!ers
granted by the Labor )ode/ 2ut !hat should be noted is the fact that in spite of such a fiction of
finality, the )ourt is on its o!n persuaded that pre&ailing conditions indeed call for a deployment ban/
There is like!ise no doubt that such a classification is germane to the purpose behind the measure/
@nEuestionably, it is the a&o!ed obFecti&e of Department "rder 8o/ 1 to Denhance the protection for
=ilipino female o&erseas !orkersD
17
this )ourt has no Euarrel that in the midst of the terrible
mistreatment =ilipina !orkers ha&e suffered abroad, a ban on deployment !ill be for their o!n good and
!elfare/
The "rder does not narro!ly apply to eCisting conditions/ #ather, it is intended to apply indefinitely
so long as those conditions eCist/ This is clear from the "rder itself 'D0ending re&ie! of the
administrati&e and legal measures, in the 0hilippines and in the host countries / / /D
1"
*, meaning to say
that should the authorities arri&e at a means impressed !ith a greater degree of permanency, the ban
shall be lifted/ %s a stop1gap measure, it is possessed of a necessary malleability, depending on the
circumstances of each case/ %ccordingly, it pro&ides;
9/ L5=T58? "= S@S0(8S5"8/ G The Secretary of Labor and (mployment 'D"L(*
may, upon recommendation of the 0hilippine "&erseas (mployment %dministration
'0"(%*, lift the suspension in countries !here there are;
1/ 2ilateral agreements or understanding !ith the 0hilippines, and7or,
2/ (Cisting mechanisms pro&iding for sufficient safeguards to ensure the !elfare and
protection of =ilipino !orkers/
1#
The )ourt finds, finally, the impugned guidelines to be applicable to all female domestic o&erseas
!orkers/ That it does not apply to Dall =ilipina !orkersD
2$
is not an argument for unconstitutionality/ >ad
the ban been gi&en uni&ersal applicability, then it !ould ha&e been unreasonable and arbitrary/ =or
ob&ious reasons, not all of them are similarly circumstanced/ 3hat the )onstitution prohibits is the
singling out of a select person or group of persons !ithin an eCisting class, to the preFudice of such a
person or group or resulting in an unfair ad&antage to another person or group of persons/ To apply the
ban, say eCclusi&ely to !orkers deployed by %, but not to those recruited by 2, !ould ob&iously clash !ith
the eEual protection clause of the )harter/ 5t !ould be a classic case of !hat )hase refers to as a la! that
Dtakes property from % and gi&es it to 2/D
21
5t !ould be an unla!ful in&asion of property rights and freedom
of contract and needless to state, an in&alid act/
22
'=ernando says; D3here the classification is based on
such distinctions that make a real difference as infancy, seC, and stage of ci&ili6ation of minority groups,
the better rule, it !ould seem, is to recogni6e its &alidity only if the young, the !omen, and the cultural
minorities are singled out for fa&orable treatment/ There !ould be an element of unreasonableness if on
the contrary their status that calls for the la! ministering to their needs is made the basis of discriminatory
legislation against them/ 5f such be the case, it !ould be difficult to refute the assertion of denial of eEual
protection/D
23
5n the case at bar, the assailed "rder clearly accords protection to certain !omen !orkers,
and not the contrary/*
5t is incorrect to say that Department "rder 8o/ 1 prescribes a total ban on o&erseas deployment/
=rom scattered pro&isions of the "rder, it is e&ident that such a total ban has hot been contemplated/
3e Euote;
:/ %@T>"#5J(D D(0L"A,(8T1The deployment of domestic helpers and !orkers
of similar skills defined herein to the follo!ing MsicN are authori6ed under these
guidelines and are eCempted from the suspension/
:/1 >irings by immediate members of the family of >eads of State
and ?o&ernmentH
:/2 >irings by ,inister, Deputy ,inister and the other senior
go&ernment officialsH and
:/- >irings by senior officials of the diplomatic corps and duly
accredited international organi6ations/
:/4 >irings by employers in countries !ith !hom the 0hilippines ha&e
MsicN bilateral labor agreements or understanding/
CCC CCC CCC
./ <%)%T5"858? D",(ST5) >(L0(#S %8D 3"#K(#S "= S5,5L%# SK5LLS11
<acationing domestic helpers and7or !orkers of similar skills shall be allo!ed to
process !ith the 0"(% and lea&e for !orksite only if they are returning to the same
employer to finish an eCisting or partially ser&ed employment contract/ Those
!orkers returning to !orksite to ser&e a ne! employer shall be co&ered by the
suspension and the pro&ision of these guidelines/
CCC CCC CCC
9/ L5=T58? "= S@S0(8S5"81The Secretary of Labor and (mployment 'D"L(*
may, upon recommendation of the 0hilippine "&erseas (mployment %dministration
'0"(%*, lift the suspension in countries !here there are;
1/ 2ilateral agreements or understanding !ith the 0hilippines, and7or,
2/ (Cisting mechanisms pro&iding for sufficient safeguards to ensure
the !elfare and protection of =ilipino !orkers/
24
CCC CCC CCC
The conseEuence the deployment ban has on the right to tra&el does not impair the right/ The right
to tra&el is subFect, among other things, to the reEuirements of Dpublic safety,D Das may be pro&ided
by la!/D
25
Department "rder 8o/ 1 is a &alid implementation of the Labor )ode, in particular, its basic
policy to Dafford protection to labor,D
26
pursuant to the respondent Department of Labor+s rule1making
authority &ested in it by the Labor )ode/
27
The petitioner assumes that it is unreasonable simply because
of its impact on the right to tra&el, but as !e ha&e stated, the right itself is not absolute/ The disputed
"rder is a &alid Eualification thereto/
8either is there merit in the contention that Department "rder 8o/ 1 constitutes an in&alid eCercise of
legislati&e po!er/ 5t is true that police po!er is the domain of the legislature, but it does not mean
that such an authority may not be la!fully delegated/ %s !e ha&e mentioned, the Labor )ode itself
&ests the Department of Labor and (mployment !ith rulemaking po!ers in the enforcement
!hereof/
2"
The petitioners+s reliance on the )onstitutional guaranty of !orker participation Din policy and
decision1making processes affecting their rights and benefitsD
2#
is not !ell1taken/ The right granted by
this pro&ision, again, must submit to the demands and necessities of the State+s po!er of regulation/
The )onstitution declares that;
Sec/ -/ The State shall afford full protection to labor, local and o&erseas, organi6ed
and unorgani6ed, and promote full employment and eEuality of employment
opportunities for all/
3$
D0rotection to laborD does not signify the promotion of employment alone/ 3hat concerns the
)onstitution more paramountly is that such an employment be abo&e all, decent, Fust, and humane/
5t is bad enough that the country has to send its sons and daughters to strange lands because it
cannot satisfy their employment needs at home/ @nder these circumstances, the ?o&ernment is
duty1bound to insure that our toiling eCpatriates ha&e adeEuate protection, personally and
economically, !hile a!ay from home/ 5n this case, the ?o&ernment has e&idence, an e&idence the
petitioner cannot seriously dispute, of the lack or inadeEuacy of such protection, and as part of its
duty, it has precisely ordered an indefinite ban on deployment/
The )ourt finds furthermore that the ?o&ernment has not indiscriminately made use of its authority/
5t is not contested that it has in fact remo&ed the prohibition !ith respect to certain countries as
manifested by the Solicitor ?eneral/
The non1impairment clause of the )onstitution, in&oked by the petitioner, must yield to the loftier
purposes targetted by the ?o&ernment/
31
=reedom of contract and enterprise, like all other freedoms, is
not free from restrictions, more so in this Furisdiction, !here laisse< "aire has ne&er been fully accepted as
a controlling economic !ay of life/
This )ourt understands the gra&e implications the Euestioned "rder has on the business of
recruitment/ The concern of the ?o&ernment, ho!e&er, is not necessarily to maintain profits of
business firms/ 5n the ordinary seEuence of e&ents, it is profits that suffer as a result of ?o&ernment
regulation/ The interest of the State is to pro&ide a decent li&ing to its citi6ens/ The ?o&ernment has
con&inced the )ourt in this case that this is its intent/ 3e do not find the impugned "rder to be
tainted !ith a gra&e abuse of discretion to !arrant the eCtraordinary relief prayed for/
3>(#(="#(, the petition is D5S,5SS(D/ 8o costs/
S" "#D(#(D/
C4(C 1-ployees 5nion vs. Clave, 141 SCRA & , #an$ary %7, 1&'
Case (itle : C!TC EMPLOYEES >NION, petitioner, s. THE HONORA!LE
0ACO!O C. CLA9E, Presidenti'- E5e&.tie Assist'nt, 'nd COMMERCIAL !AN:
= TR>ST COMPANY O" THE PHILIPPINES, respondents.Case )at$re :
PETITION %or &ertior'ri to reie( t)e de&ision o% t)e Presidenti'- E5e&.tie
Assist'nt.
Syllabi Class : L'bor L'(*St't.tes
Syllabi:
1. Labor Law; Stattes; 7he &ourt has already ruled that #ec. C Rule %H
Doo! %%% of the Rules implementing /rt. *B of the Labor &ode and Policy
%nstructions 4o. * excluding employees regularly paid by the month from
payment of holiday pay is null and void.-
%n %nsular Dan! of /sia and /merica 3mployeesI -nion "%D//3-, vs. %nciong
this &ourtIs #econd Division spea!ing through former =ustice 1a!asiar
expressed the view and declared that the aforementioned section and
interpretative bulletin are null and void having been promulgated by the
then #ecretary of Labor in excess of his rule-ma!ing authority. %t was
pointed out inter alia that in the guise of clarifying the provisions on
holiday pay said rule and policy instructions in effect amended the law by
enlarging the scope of the exclusions. <e further stated that the then
#ecretary of Labor went as far as to categorically state that the benefit is
principally intended for daily paid employees whereas the law clearly states
that every wor!er shall be paid their regular holiday pay>which is
incompatible with the mandatory directive in /rticle B of the Labor &ode
that 8all doubts in the implementation and interpretation of the provisions of
Labor &ode including its implementing rules and regulations shall be
resolved in favor of labor.9 7hus there was no basis at all to deprive the
union members of their right to holiday pay.
". Labor Law; Stattes; #ame.-
%n the more recent case of 7he &hartered Dan! 3mployees /ssociation vs.
0on. 'ple this &ourt in an en banc decision had the occasion to reiterate
the above-stated pronouncement. <e added: 87he questioned #ection C
Rule %H Doo! %%% of the %ntegrated Rules and the #ecretaryIs Policy
%nstruction 4o. * add another excluded group namely Jemployees who are
uniformly paid by the monthI. <hile the additional exclusion is only in the
form of a presumption that all monthly paid employees have already been
paid holiday pay it constitutes a ta!ing away or a deprivation which must be
in the law if it is to be valid. /n administrative interpretation which
diminishes the benefits of labor more than what the statute delimits or
withholds is obviously ultra vires.9
+ivision: "IRST DI9ISION
+oc,et )$-ber: No. L;8372?
Co$nsel: "r'n&is&o ". An,e-es, P'&is, Reyes, De Leon = Cr.< L'( O%%i&e,
Ed/.ndo R. Abi,'n, 0r.
.onente: DE LA ">ENTE
+ispositive .ortion:
6HERE"ORE, t)e @.estioned de&isions o% t)e respondent Presidenti'-
E5e&.tie Assist'nt 'nd t)e A&tin, Se&ret'ry o% L'bor 're )ereby set 'side,
'nd t)e '('rd o% t)e Arbitr'tor reinst'ted. Costs ','inst t)e pri'te
respondent.
0etition for certiorari seeking to annul and set aside the decision of the respondent 0residential
(Cecuti&e %ssistant
1
affirming that of the %cting Secretary of Labor !ho re&ersed the decision of the
8ational Labor #elations )omission !hich upheld the <oluntary %rbitrator+s order directing the pri&ate
respondent bank to pay its monthly paid employees their Dlegal holiday pay/D
0etitioner )ommercial 2ank and Trust )ompany (mployees+ @nion '@nion for short* lodged a
complaint !ith the #egional "ffice 8o/ 5<, Department of Labor, against pri&ate respondent bank
')omtrust* for non1payment of the holiday pay benefits pro&ided for under %rticle 9: of the Labor
)ode in relation to #ule $, 2ook 555 of the #ules and #egulations 5mplementing the Labor )ode/
=ailing to arri&e at an amicable settlement at conciliation le&el, the parties opted to submit their
dispute for &oluntary arbitration/ The issue presented !as; D3hether the permanent employees of
the 2ank !ithin the collecti&e bargaining unit paid on a monthly basis are entitled to holiday
pay effecti&e 8o&ember 1, 19.4, pursuant to %rticle 9: 'no! %rticle 94* of the Labor )ode, as
amended and #ule $ 'no! #ule 5<*, 2ook 555 of the #ules and #egulations 5mplementing the Labor
)ode/ D
5n addition, the disputants signed a Submission %greement stipulating as final, unappealable and
eCecutory the decision of the %rbitrator, including subseEuent issuances for clarificatory and7or relief
purposes, not!ithstanding %rticle 22 of the Labor )ode !hich allo! appeal in certain instances/
2
5n the course of the hearing, the %rbitrator apprised the parties of an interpretati&e bulletin on Dholiday
payD about to be issued by the Department of Labor/ 3hereupon, the @nion filed a ,anifestation
3
!hich
insofar as rele&ant stated;
/ That complainant union / / / has manifested its apprehension on the contents of
the said 5nterpretati&e 2ulletin in &ie! of a !ell1nigh irresistible mo&e on the part of
the employers to eCclude permanent !orkers similarly situated as the employees of
)omtrust from the co&erage of the holiday pay benefit despite the eCpress and self1
eCplanatory pro&isions of the la!, its implementing rules and opinions thereon / / / /
./ That in the e&ent that said 5nterpretati&e 2ulletin regarding holiday pay !ould be
ad&erse to the present claim / / / in that it !ould in effect eCclude the said employees
from enFoyment of said benefit, !hether !holly or partially, complainant union
respectfully reser&es the right to take such action as may be appropriate to protect its
interests, a Euestion of la! being in&ol&ed/ / / / %n 5nterpretati&e 2ulletin !hich !as
ineCistent at the time the said commitment !as made and !hich may be contrary to
the la! itself should not bar the right of the union to claim for its holiday pay benefits/
"n %pril 22, 19., the %rbitrator handed do!n an a!ard on the dispute/ #ele&ant portions thereof
read as follo!s;
The uncontro&erted facts of this case are as follo!s;
'1* That the complainant @nion is the recogni6ed sole and eCclusi&e collecti&e
bargaining representati&e of all the permanent rank1and1file employees of the 2ank
!ith an eCisting )ollecti&e 2argaining %greement co&ering the period from 9uly 1,
19.4 up to 9une -4, 19..H
'2* That /// the standard !ork!eek of the 2ank generally consists of fi&e ':* days of
eight '8* hours each day !hich, / / / said fi&e days are generally from ,onday thru
=ridayH and, as a rule, Saturdays, Sundays and the regular holidays are not
considered part of the standard !ork!eek/
'-* That, in computing the eEui&alent daily rate of its employees co&ered by the )2%
!ho are paid on a monthly basis, the follo!ing computation is used, as per the
pro&isions of Section 4, %rticle <55, of the )2% '%nneC D%D*;
Daily #ate O 2asic ,onthly Salary plus )L% C 12 2:4
2asic >ourly #ate O Daily #ate 8
'4* That the di&isor of +2:4+, / / / !as arri&ed at by subtracting the :2 Sundays, :2
Saturdays, the 14 regular holidays and December -1 'secured thru bargaining*, or a
total of 11: off1days from the -: days of the year or a difference of 2:4 days/
)onsidering the abo&e uncontro&erted facts, the principal Euestion to be resol&ed is
!hether or not the monthly pay of the co&ered employees already includes !hat
%rticle 94 of the Labor )ode reEuires as regular holiday pay benefit in the amount of
his regular daily !age '144I if un!orked or 244I if !orked* during the regular
holidays enumerated therein, i/e/, %rticle 94'c* of the Labor )ode/
5n its latest ,emorandum, filed on ,arch 2, 19., the 2ank relies
hea&ily on the pro&isions of Section 2, #ule 5<, 2ook 111, of the #ules
and #egulations implementing particularly %rticle 94 'formerly %rticle
248* of the Labor )ode, !hich Section reads as follo!s;
S()T5"8 2/ Stat%s o" employees paid by the month 1(mployees !ho are uniformly
paid by the month, irrespecti&e of the number of+ !orking days therein !ith a salary
of not less than the statutory or established minimum !age, shall be pres%med to be
paid for all days in the month !hether !orked or not/
=or this purpose, the monthly minimum !age shall not be less than the statutory
minimum !age multiplied by -: days di&ided by t!el&e/ '(mphasis supplied*/
3hile admitting that there has &irtually been no change effected by 0residential
Decree 8o/ 8:4, !hich amended the Labor )ode, other than the re1numbering of the
original %rticle 248 of said )ode to !hat is no! %rticle 94, the 2ank, ho!e&er,
attaches a great deal of significance in the abo&e1Euoted #ule as to render the
Euestion at issue +moot and academic+/
"n the other hand, the @nion maintains, in its o!n latest ,emorandum, filed also on
,arch 2, 19., that the legal presumption established in the abo&e1Euoted #ule is
merely a disputable presumption/ This contention of the @nion is no! supported by a
pronouncement categorically to that effect by no less than the 8ational Labor
#elations )ommission '8L#)* in the case of !he &hartered Ban4 ?mployees
Association vs. !he &hartered Ban4. :#R& &ase :o. 5s6 RB.(.*,@A.,2 5ROB.2.
@3+1.,26, !hich reads, in part, as follo!s;
/ / / % disp%table pres%mption )as sea in that it !ould be presumed
the salary of monthly1paid employees may already include rest days,
such as Saturdays, Sundays, special and legal holidays, !orked or
un!orked, in effect connoting that evidence to the contrary may
destroy s%ch a s%pposed legal pres%mption. 5ndeed, the #ule merely
sets a presumption/ 5t does not concl%sively pres%me that the salary
of monthly1paid employees already includes un!orked holidays/ / / /
The practice of the 2ank of paying its employees a sum eEui&alent to
2ase pay plus 0remium on Saturdays, Sundays and special and
legal holidays, destroys the legal presumption that monthly pay is for
an days of the month/ =or if the monthly pay is payment for all days
of the month, then !hy should the employee be paid again for
!orking on such rest days/ '(mphasis supplied*
There is no reason at present not to adopt the abo&e ruling of the >onorable
)omission, especially considering the fact that this %rbitrator, in asking a Euery on
the nature of the presumption established by the abo&e #ule, from the Director of
Labor Standards in the 0,%0 )onference held at the ,akati >otel on ,arch 1-,
19., !as gi&en the categorical ans!er that said presumption is merely disputable/
This ans!er from the Labor Standards Director is significant inasmuch as it is his
office, the 2ureau of Labor Standards, that is reportedly instrumental in the
preparation of the implementing #ules, particularly on 2ook 555 of the Labor )ode on
)onditions of (mployment, to !hich group the present #ule under discussion
belongs/
So, rather than rendering moot and academic the issue at hand, as suggested by the
2ank, the more logical step to take is to determine !hether or not there is sufficient
e&idence to o&ercome the disputable presumption established by the #ule/
5t is unEuestioned, and as pro&ided for in the )2% itself, that the di&isor used in
determining the daily rate of the monthly1paid employees is +2:4+/
CCC CCC CCC
%gainst this backdrop, certain rele&ant and logical conclusions result, namely;
'%* The 2ank maintains that, since its inception or start of operations in 19:4, all
monthly1paid employees in the 2ank are paid their monthly salaries !ithout any
deduction for un!orked Saturdays, Sundays, legals and special holidays/ "n the
other hand, it also maitains that, as a matter of fact, +al!ays conscious of its
employee !ho has to !ork, on respondent+s rest days of Saturdays and Sundays or
on a legal holiday, an employee !ho !orks o&ertime on any of said days is paid one
addition regular pay for the day plus :4I of said regular pay '2ank+s ,emorandum,
page -, filed 9anuary 21, 19.*/ / / /
CCC CCC CCC
"n the other hand, there is more reason to belie&e that, if the 2ank has ne&er made
any deduction from its monthly1paid employees for un!orked Saturdays, Sundays,
legal and special holidays, it is because there is really nothing to deduct properly
since the monthly, salary ne&er really included pay for such un!orked days1and
!hich gi&e credence to the conclusion that the di&isor +2:4+ is the proper one to use
in computing the eEui&alent daily rate of the monthly1paid employees/
'2* The 2ank further maintains that the holiday pay is intended only for daily1paid
!orkers/ 5n this regard, the 8L#) has this to say , in the same abo&e1Euoted
)hartered 2ank case;
5t is contended that holiday pay is primarily for daily !age earners/
Let us eCamine the la!, more specifically %rticle 9: 'no! %rticle 94* of
the Labor )ode to see !hether it supports this contention/ The !ords
used in the Decree are +e&ery !orker+, !hile the framers of the
5mplementing #ules preferred the use of the phrase +all employees/+
2oth the decree itself and the #ules mentioned enumerated the
eCcepted !orkers/ 5t is a basic rule of statutory construction that
putting an eCception limits or modifies the enumeration or meaning
made in the la!/ it is thus easy to see that a mere reading of the
Decree and of the #ules !ould sho! that the monthly1paid
employees of the 2ank are not eCpressly included in the enumeration
of the eCception/
Special notice is made of the fact that the criteria at once readable
from the eCception referred to is the nature of the Fob and the number
of employees in&ol&ed, and not !hether the employee is a daily1!age
earner or a regular monthly1paid employee/
There is no reason at all to digress from the abo&e1Euoted obser&ation of the
>onorable )ommission for purposes of the present case/
CCC CCC CCC
=inally, inasmuch as %rticle 94 of the Labor )ode is one of its so1called self1
eCecuting pro&isions, conFointly !ith its corresponding implementing #ules, it is to be
taken to ha&e taken effect, as of 8o&ember 1, 19.4, as per Section 5 '1*, #ule 5<,
2ook 555 , of the 5mplementing #ules/
3>(#(%S, all the abo&e premises considered, this %rbitrator rules that;
'1* %ll the monthly1paid employees of the 2ank herein represented by the @nion and
as go&erned by their )ollecti&e 2argaining %greement, are entitled to the holiday pay
benefits as pro&ided for in %rticle 94 of the labor )ode and as implemented by #ule
5<, 2ook 555, of the corresponding implementing #ules, eCcept for any day or any
longer period designated by la!or holding a general election or referendumH
'2* 0aragraph '1* hereof means that any co&ered employee !ho does not !ork on
any of the regular holidays enumerated in %rticle 94 'c* of the Labor )ode, eCcept
that !hich is designated for election or referendum purposes, is still entitled to
recei&e an amount eEui&alent to his regular daily !age in addition to his monthly
salary/ 5f he !ork on any of the regular holidays, other than that !hich is designated
for election or referendum purposes, he is entitled to t!ice, his regular daily !age in
addition to his monthly salary/ The :4I premium pay pro&ided for in the )2% for
!orking on a rest day '!hich has been interpreted by the parties to include the
holidays* shall be deemed already included in the 244I he recei&es for !orking on a
regular holiday/ 3ith respect to the day or any longer period designated by la! for
holding a general election or referendum, if the employee does not !ork on such day
or period he shall no longer be entitled to recei&e any additional amount other than
his monthly salary !hich is deemed to include already his regular daily !age for such
day or period/ 5f he !orks on such day or period, he shall be entitled to an amount
eEui&alent to his regular daily !age '144I* for that day or period in addition to his
monthly salary/ The :4I premium pay pro&ided for in the )2% for !orking on that
day or period shall be deemed already included in the additional 144I he recei&es
for !orking on such day or periodH and
'-* The 2ank is hereby ordered to pay all the abo&e employees in accordance !ith
the abo&e paragraphs '1* and '2*, retroacti&e from 8o&ember 1, 19.4/
S" "#D(#(D/
%pril 22, 19., ,anila, 0hilippines/
4
The neCt day, on %pril 2-, 19., the Department of Labor released 0olicy 5nstructions 8o/ 9, hereinbelo!
Euoted;
The #ules implementing 0D 8:4 ha&e clarified the policy in the implementation of the
ten '14* paid legal holidays/ 2efore 0D 8:4, the number of !orking days a year in a
firm !as considered important in determining entitlement to the benefit/ Thus, !here
an employee !as !orking for at least -1- days, he !as considered definitely already
paid/ 5f he !as !orking for less than -1-, there !as no certainty !hether the ten '14*
paid legal holidays !ere already paid to him or not/
The ten '14* paid legal holidays la!, to start !ith, is intended to benefit principally
daily employees/ 5n the case of monthly, only those !hose monthly salary did not yet
include payment for the ten '14* paid legal holidays are entitled to the benefit/
@nder the rules implementing 0D 8:4, this policy has been fully clarified to eliminate
contro&ersies on the entitlement of monthly paid employees/ The ne! determining
rule is this; 5f the monthly paid employee is recei&ing not less than 0 244, the
maCimum monthly minimum !age, and his monthly pay is uniform from 9anuary to
December, he is presumed to be already paid the ten '14* paid legal holidays/
>o!e&er, if deductions are made from his monthly salary on account of holidays in
months !here they occur, then he is still entitled to the ten '14* paid legal holidays/
These ne! interpretations must be uniformly and consistently upheld/
This issuance shall take effect immediately/
%fter receipt of a copy of the a!ard, pri&ate respondent filed a motion for reconsideration, follo!ed
by a supplement thereto/ Said motion for reconsideration !as denied/ % copy of the order of denial
!as recei&ed by pri&ate respondent on 9uly 8, 19./
Said pri&ate respondent interposed an appeal to the 8ational Labor #elations )ommission '8L#)*,
contending that the %rbitrator demonstrated gross incompetence and7or gra&e abuse of discretion
!hen he entirely premised the a!ard on the )hartered 2ank case and failed to apply 0olicy
5nstructions 8o/ 9/ This appeal !as dismissed on %ugust 1, 19., by the 8L#) because it !as filed
!ay beyond the ten1day period for perfecting an appeal and because it contra&ened the agreement
that the a!ard shall be final and unappealable/
0ri&ate respondent then appealed to the Secretary of Labor/ "n 9une -4, 19.., the %cting Secretary
of Labor re&ersed the 8L#) decision and ruled that the appeal !as filed on time and that a re&ie! of
the case !as ine&itable as the money claim eCceeded 0144,444/44/
5
#egarding the timeliness of the
appeal, it !as pointed out that the labor Department had on se&eral occasions treated a motion for
reconsideration 'here, filed before the %rbitrator* as an appeal to the proper appellate body in consonance
!ith the spirit of the Labor )ode to afford the parties a Fust, eCpeditious and ineCpensi&e disposition of
their claims, liberated from the strict technical rules obtaining in the ordinary courts/
%nent the issue !hether or not the agreement barred the appeal, it !as noted that the ,anifestation,
supra, Dis not of slight significance because it has in fact abrogated complainant+s commitment to
abide !ith the decision of the <oluntary %rbitrator !ithout any reser&ationD and amounted to a D&irtual
repudiation of the agreement &esting finalityD
6
on the arbitrator+s disposition/
%nd on the principal issue of holiday pay, the %cting Secretary, guided by 0olicy 5nstructions 8o/ 9,
applied thesame retrospectively, among other things/
5n due time, the @nion appealed to the "ffice of the 0resident/ 5n affirming the assailed decision,
0residential (Cecuti&e %ssistant 9acobo )/ )la&e relied hea&ily on the ,anifestation and 0olicy
5nstructions 8o/ 9/
>ence, this petition/
"n 9anuary 14, 1981, petitioner filed a motion to substitute the 2ank of the 0hilippine 5slands as
pri&ate respondent, as a conseEuence of the %rticles of ,erger eCecuted by said bank and
)ommercial 2ank B Trust )o/ !hich inter alia designated the former as the sur&i&ing corporate
entity/ Said motion !as granted by the )ourt/
3e find the petitioner impressed !ith merit/
5n eCcluding the union members of herein petitioner from the benefits of the holiday pay la!, public
respondent predicated his ruling on Section 2, #ule 5<, 2ook 555 of the #ules to implement %rticle 94
of the labor )ode promulgated by the then Secretary of labor and 0olicy 5nstructions 8o/ 9/
5n ns%lar Ban4 o" Asia and America ?mployees8 0nion 5BAA?06 vs. nciong,
7
this )ourt+s Second
Di&ision, speaking through former 9ustice ,akasiar, eCpressed the &ie! and declared that the
aforementioned section and interpretati&e bulletin are null and &oid, ha&ing been promulgated by the then
Secretary of Labor in eCcess of his rule1making authority/ 5t !as pointed out, inter alia, that in the guise of
clarifying the pro&isions on holiday pay, said rule and policy instructions in effect amended the la! by
enlarging the scope of the eCclusions/ 3e further stated that the then Secretary of Labor !ent as far as to
categorically state that the benefit is principally intended for daily paid employees !hereas the la! clearly
states that e&ery !orker shall be paid their regular holiday pay1!hich is incompatible !ith the mandatory
directi&e, in %rticle 4 of the Labor )ode, that Dall doubts in the implementation and interpretation of the
pro&isions of Labor )ode, including its implementing rules and regulations, shall be resol&ed in fa&or of
labor/D Thus, there !as no basis at all to depri&e the union members of their right to holiday pay/
5n the more recent case of !he &hartered Ban4 ?mployees Association vs. Hon. Ople,
"
this )ourt in
an en banc decision had the occasion to reiterate the abo&e1stated pronouncement/ 3e added;
The Euestioned Section 2, #ule 5<, 2ook 555 of the 5ntegrated #ules and the
Secretary+s 0olicy 5nstruction 8o/ 9 add another eCcluded group, namely, +employees
!ho are uniformly paid by the month+/ 3hile the additional eCclusion is only in the
form of a presumption that all monthly paid employees ha&e already been paid
holiday pay, it constitutes a taking a!ay or a depri&ation !hich must be in the la! if it
is to be &alid/ %n administrati&e interpretation !hich diminishes the benefits of labor
more than !hat the statute delimits or !ithholds is ob&iously ultra &ires/
5n &ie! of the foregoing, the challenged decision of public respondent has no leg to stand on as it
!as premised principally on the same Section 2, #ule 5<, 2ook 555 of the 5mplementing #ules and
0olicy 5nstructions 8o/ 9/ This being the decisi&e issue to be resol&ed, 3e find no necessity to pass
upon the other issues raised, such as the effects of the @nion+s ,anifestation and the propriety of
applying 0olicy 5nstructions 8o/ 9 retroacti&ely to the instant case/
3>(#(="#(, the Euestioned decisions of the respondent 0residential (Cecuti&e %ssistant and the
%cting Secretary of labor are hereby set aside, and the a!ard of the %rbitrator reinstated/ )osts
against the pri&ate respondent/
5T 5S S" "#D(#(D/
!eehan4ee 5&hairman6, Plana, Relova, ;%tierre<, $r., and Pata'o, $$., conc%r.
Melencio.Herrera, $., too4 no part.

ootnotes
1 dated Dec/ 8, 19.8, %nneC D9D , pp/ .-1.8, #ollo/
2 >o!e&er, &oluntary arbitration a!ards or decisions on money claims in&ol&ing an
amount eCceeding 0144,444 or forty percent '44I* of the paid1up capital of the
respondent employer, !hiche&er is lo!er, may be appealed to the 8ational Labor
#elations )ommission on any of the follo!ing grounds; 'a* %buse of discretionH and
'b* ?ross incompetence/
Lo6on vs. )ational Labor Relations Co--ission , "4% SCRA 1 , #an$ary
%", 1&&*
Case (itle : RAMON C. LOAON, petitioner, s. NATIONAL LA!OR RELATIONS
COMMISSION BSe&ond DiisionC 'nd PHILIPPINE AIRLINES, INC.,
respondents.Case )at$re : PETITION %or &ertior'ri to reie( ' de&ision o%
t)e N'tion'- L'bor Re-'tions Co//ission.
Syllabi Class : Corpor'tion L'(*L'bor L'(*P.D. 34?;A*Se&.rities 'nd
E5&)'n,e Co//ission*NLRC*L'bor Arbiter*0.risdi&tion*Estoppe-
Syllabi:
1. $orporation Law; P.D. +,-.&; Secrities and E/c!ange
$o##ission; =urisdiction.2
". $orporation Law; P.D. +,-.&; Secrities and E/c!ange
$o##ission; #3& has original and exclusive .urisdiction over intra-
corporate matters concerning the election or appointment of officers of a
corporation.2
!. $orporation Law; P.D. +,-.&; Secrities and E/c!ange
$o##ission; / corporate officerIs dismissal is always a corporate act
and:or intra-corporate controversy and that nature is not altered by the
reason or wisdom which the Doard of Directors may have in ta!ing such
action.2
4. $orporation Law; P.D. +,-.&; Secrities and E/c!ange
$o##ission; Kuestion of remuneration being asserted by an officer of a
corporation is 8not a simple labor problem but a matter that comes within
the area of corporate affairs and management and is in fact a corporate
controversy in contemplation of the &orporation &ode.9-
Petitioner contends that the .urisdiction of the #3& excludes its cogni@ance
over claims for vacation and sic! leaves (;th month pay &hristmas bonus
medical expenses car expenses and other benefits as well as for moral
and exemplary damages and attorneyIs fees. Dy v. 4LR& categorically states
that the question of remuneration being asserted by an officer of a
corporation is 8not a simple labor problem but a matter that comes within
the area of corporate affairs and management and is in fact a corporate
controversy in contemplation of the &orporation &ode.9 <ith regard to the
matter of damages in /ndaya v. /badia where in a complaint filed before
the Regional 7rial &ourt the president and general manager of the /rmed
Eorces and Police #avings and Loan /ssociation "8/EP#L/%9, questioned his
ouster from the stewardship of the association this &ourt in dismissing the
petition assailing the order of the trial court which ruled that #3& not the
regular courts had .urisdiction over the case.
*. Labor Law; NLR$; Labor &rbiter; %risdiction; Estoppel; %t has long
been the established rule that .urisdiction over a sub.ect matter is conferred
by law and the question of lac! of .urisdiction may be raised at anytime
even on appeal.-
%n the first place there would not be much basis to indicate that P/L was
8effectively barred by estoppel.9 /s early as the initial stages of the
controversy P/L had already raised the issue of .urisdiction albeit mista!enly
at first on the ground that petitionerIs recourse was an appeal to the 'ffice
of the President. 7he error could not alter the fact that P/L did question
even then the .urisdiction of both the labor arbiter and the 4LR&. %t has long
been the established rule moreover that .urisdiction over a sub.ect matter
is conferred by law and the question of lac! of .urisdiction may be raised at
anytime even on appeal.
. Labor Law; NLR$; Labor &rbiter; %risdiction; Estoppel; %f the lower
court had no .urisdiction but the case was tried and decided upon the theory
that it had .urisdiction the parties are not barred on appeal from assailing
such .urisdiction for the same must exist as a matter of law and may not
be conferred by consent of the parties or by estoppel.-
%n the recent case of La 4aval Drug &orporation vs. &ourt of /ppeals A.R.
4o. (6;C66 ;( /ugust (**B this &ourt said: 8Lac! of .urisdiction over the
sub.ect matter of the suit is yet another matter. <henever it appears that
the court has no .urisdiction over the sub.ect matter the action shall be
dismissed "#ection C Rule * Rules of &ourt,. 7his defense may be
interposed at any time during appeal "Roxas vs. Rafferty ;$ Phil. *5$, or
even after final .udgment "&ru@cosa vs. =udge &oncepcion et al. (6( Phil.
(B),. #uch is understandable as this !ind of .urisdiction is conferred by law
and not within the courts let alone the parties to themselves determine or
conveniently set aside. %n People vs. &asiano "((( Phil. $; *;L*B, this
&ourt on the issue of estoppel held: 87he operation of the principle of
estoppel on the question of .urisdiction seemingly depends upon whether the
lower court actually had .urisdiction or not. %f it had no .urisdiction but the
case was tried and decided upon the theory that it had .urisdiction the
parties are not barred on appeal from assailing such .urisdiction for the
same Jmust exist as a matter of law and may not be conferred by consent
of the parties or by estoppelI "5 &.=.#. +)(L+);,. 0owever if the lower
court had .urisdiction and the case was heard and decided upon a given
theory such for instance as that the court had no .urisdiction the party
who induced it to adopt such theory will not be permitted on appeal to
assume an inconsistent position>that the lower court had .urisdiction. 0ere
the principle of estoppel applies. 7he rule that .urisdiction is conferred by
law and does not depend upon the will of the parties has no bearing
thereon.I 9
+ivision: THIRD DI9ISION
+oc,et )$-ber: #.R. No. +41DD4
Co$nsel: T'nE.'t&o, Corp.s, T',-e;C).', Cr.< = A@.ino, Si,.ion Reyn',
Monte&i--o = On,si'Fo
.onente: 9IT>#
+ispositive .ortion:
6HERE"ORE, t)e )erein petition %or &ertior'ri is DISMISSED, 'nd t)e
de&ision 'ppe'-ed %ro/ is A""IRMED, (it)o.t preE.di&e to petitioners
seeFin,, i% &ir&./st'n&es per/it, ' re&o.rse in t)e proper %or./. No &osts.

%IT&', J.:
0etitioner #amon )/ Lo6on, a certified public accountant, !as a Senior
<ice10resident1=inance of 0ri&ate respondent 0hilippine %irlines, 5nc/ 'D0%LD*, !hen his ser&ices
!ere terminated on 19 December 1994 in the aftermath of the much1publici6ed Dt!o1billion1peso
0%Lscam/D Lo6on started to !ork for the national carrier on 2- %ugust 19. and, for t!enty1three
years, steadily climbed the corporate ladder until he became one of its &ice1presidents/
1
>is termination from the ser&ice !as spa!ned by a letter sent some time in 9une 1994 by a member
of 0%L+s board of directors, then Solicitor ?eneral =rancisco )ha&e6, to 0%L 0resident Dante
Santos/ )ha&e6 demanded an in&estigation of t!enty1three irregularities allegedly committed by
t!enty1t!o high1ranking 0%L officials/ %mong these officials !as petitionerH he had been
administrati&ely charged by #omeo Da&id, Senior <ice10resident for )orporate Ser&ices and
Logistics ?roup, for his 'Lo6on* purported in&ol&ement in four cases, labeled D?oldair,D
D%utographics,D D2ig 2ang of 198-D and D,iddle
(ast/D
2
0ending the in&estigation of these cases by a panel
3
constituted by then 0resident )ora6on )/
%Euino, petitioner !as placed under pre&enti&e suspension/
5n the organi6ational meeting of the 0%L board of directors on 19 "ctober 1994 !hich occasion
=eliciano #/ 2elmonte, 9r/, !as elected chairman of the board !hile Dante ?/ Santos !as
designated president and chief eCecuti&e officer,
4
the board deferred action on the election or
appointment of some senior officers of the company !ho, like petitioner, had been charged !ith &arious
offenses/
"n 18 9anuary 1991, the 0%L board of directors issued t!o resolutions relati&e to the in&estigation
conducted by the presidential in&estigating panel in the D%utographicsD and D?oldairD cases/ 5n
D%utographics,D petitioner !as charged, along !ith three other officials,
5
!ith Dgross inefficiency,
negligence, imprudence, mismanagement, dereliction of duty, failure to obser&e and7or implement
administrati&e and eCecuti&e policiesD and !ith the Dconcealment, or co&er1up and pre&ention of the
seasonal disco&ery of the anomalous transactionsD had !ith %utographics, 5nc/, resulting in, among other
things, an o&erpayment by 0%L to %utographics in the amount of around 012 million/ 0etitioner !as
forth!ith considered Dresigned from the ser&ice / / / for loss of confidence and for acts inimical to the
interests of the company/D
6
% similar conclusion !as arri&ed at by the 0%L board of directors !ith regard to
petitioner in the D?oldairD case !here he, together !ith siC other 0%L officials,
7
!ere charged !ith like
DoffensesD that had caused 0%L+s defraudation by ?oldair, 0%L+s general sales agent in %ustralia, of 14/
million %ustralian dollars/
"
%ggrie&ed by the action taken by the 0%L board of directors, petitioner, on 2 9une 1991 filed !ith
the 8ational Labor #elations )ommission 'D8L#)D* in ,anila a complaint 'docketed 8L#)18)#
)ase 8o/ 441414-84191* for illegal dismissal and for reinstatement, !ith back!ages and Dfringe
benefits such as <acation lea&e, Sick lea&e, 1-th month pay, )hristmas 2onus, ,edical (Cpenses,
car eCpenses, trip pass entitlement, etc/, plus moral damages of 044 ,illion, eCemplary damages of
014 ,illion and reasonable attorney+s fees/D
#
"n 49 %ugust 1991,
1$
the 0%L board of directors also held petitioner as Dresigned from the companyD for
loss of confidence and for acts inimical to the interests of the company in the D2ig 2ang of 198-D case for
his alleged role in the irregularities that had precipitated the !rite1do!n '!rite1off* of assets amounting to
0::- million from the books and financial statements of 0%L/
11
5n the D,iddle (astD case, the 0%L board
of directors, on the anomalous administration of commercial marketing arrangements in !hich 0%L had
lost an estimated 0124 million/
12
0%L defended the &alidity of petitioner+s dismissal before the Labor %rbiter/ 5t Euestioned at the same
time the Furisdiction of the 8L#), positing the theory that since the in&estigating panel !as
constituted by then 0resident %Euino, said panel, along !ith the 0%L board of directors, became Da
parallel arbitration unitD !hich, in legal contemplation, should be deemed to ha&e substituted for the
8L#)/ Thus, 0%L a&erred, petitioner+s recourse should ha&e been to appeal his case to the "ffice of
the 0resident/
13
"n the other hand, petitioner Euestioned the authority of the panel to conduct the
in&estigation, asse&erating that the charges le&eled against him !ere purely administrati&e in nature that
could ha&e !ell been &entilated under the grie&ance procedure outline in 0%L+s )ode of Discipline/
"n 1. ,arch 1992, Labor %rbiter 9ose ?/ de <era rendered a decision ruling for petitioner/
14
The
decretal portion of the decision read;
3>(#(="#(, all the foregoing premises being considered, Fudgment is hereby
rendered ordering the respondent 0hilippine %irlines, 5nc/, to reinstate the
complainant to his former position !ith all the rights, pri&ileges, and benefits
appertaining thereto plus back!ages, !hich as of ,arch 1:, 1992 already amounted
to 02,-2,:44/44, eCclusi&e of fringes/ =urther, the respondent company is ordered
to pay complainant as follo!s; 0:,444/44 as moral damagesH 01,444,444/44 as
eCemplary damages, and attorney+s fees eEui&alent to ten percent '14I* of all of the
foregoing a!ards/
S" "#D(#(D/
15
% day after promulgating the decision, the labor arbiter issued a !rit of eCecution/ 0%L filed a motion
to Euash the !rit petitioner promptly opposed/ %fter the labor arbiter had denied the motion to Euash,
0%L filed a petition for inFunction !ith the 8L#) 'docketed 8L#) 5) )ase 8o/ 4421192*/ 8o
decision !as rendered by 8L#) on this petition/
16
,ean!hile, 0%L appealed the decision of the labor arbiter by filing a memorandum on
appeal,
17
assailing, once again, the Furisdiction of the 8L#) but this time on the ground that the issue
pertaining to the remo&al or dismissal of petitioner, a corporate officer, !as !ithin the eCclusi&e and
original Furisdiction of the Securities and (Cchange )ommission 'DS()D*/ 0etitioner interposed a partial
appeal praying for an increase in the amount of moral and eCemplary damages a!arded by the labor
arbiter/
1"
"n 24 9uly 1992, the 8L#) rendered a decision 'in 8L#) 8)# )ase 8o/ 441414-841
91*
1#
dismissing the case on the strength of 0%L+s ne! argument on the issue of
Furisdiction/
2$
0etitioner+s motion for reconsideration !as denied by the 8L#)/
The instant petition for certiorari filed !ith this )ourt raises these issues; 'a* 3hether or not the
8L#) has Furisdiction o&er the illegal dismissal case, and 'b* on the assumption that the S() has
that Furisdiction, !hether or not pri&ate respondent is estopped from raising 8L#)+s lack of
Furisdiction o&er the contro&ersy/
3e sustain 8L#)+s dismissal of the case/
0residential Decree 8o/ 9421% confers on the S() original and eCclusi&e Furisdiction to hear and
decide contro&ersies and cases in&ol&ing G
a/ 5ntra1corporate and partnership relations bet!een or among the corporation,
officers and stockholders and partners, including their elections or appointmentsH
b/ State and corporate affairs in relation to the legal eCistence of corporations,
partnerships and associations or to their franchisesH and
c/ 5n&estors and corporate affairs, particularly in respect of de&ices and schemes,
such as fraudulent practices, employed by directors, officers, business associates,
and7or other stockholders, partners, or members of registered firmsH as !ell as
d/ 0etitions for suspension of payments filed by corporations, partnerships or
associations possessing sufficient property to co&er all their debts but !hich foresee
the impossibility of meeting them !hen they respecti&ely fall due, or possessing
insufficient assets to co&er their liabilities and said entities are upon petition or mot%
propio, placed under the management of a #ehabilitation #ecei&er or ,anagement
)ommittee/
Specifically, in intra1corporate matters concerning the election or appointment of officers of a
corporation, the decree pro&ides;
Sec/ :/ 5n addition to the regulatory and adFudicati&e functions of the Securities and
(Cchange )ommission o&er corporations, partnerships and other forms of
association registered !ith it as eCpressly granted under eCisting la!s and decrees, it
shall ha&e original and eCclusi&e Furisdiction to hear and decide cases in&ol&ing;
CCC CCC CCC
'c* )ontro&ersies in the election or appointments of directors, trustees, officers or
managers of such corporations, partnerships or association/
0etitioner himself admits that &ice presidents are senior members of
management,
21
!hose designations are no longer than Fust by means of ordinary promotions/ 5n his o!n
case, petitioner has been elected to the position of Senior <ice10resident G =inance ?roup by 0%L+s
board of directors at its organi6ational meeting held on 24 "ctober 1989 pursuant to the 2y1la!s,
22
under
!hich, he !ould ser&e for a term of one year and until his successor shall ha&e been elected and
Eualified/
23
0etitioner, for reasons already mentioned, did not get to be re1elected thereafter/
24
5n 9ort%ne &ement &orporation v/ :#R&,
25
the )ourt has Euoted !ith appro&al the Solicitor ?eneral+s
contention that Da corporate officer+s dismissal is al!ays a corporate act and7or intra1corporate
contro&ersy and that nature is not altered by the reason or !isdom !hich the 2oard of Directors may ha&e
in taking such action/D 8ot the least insignificant in the case at bench is that petitioner+s dismissal is
intert!ined !ith still another intra1corporate affair, earlier so ascribed as the Dt!o1billion1peso 0%Lscam,D
that ine&itably places the case under the speciali6ed competence of the S() and !ell beyond the ambit
of a labor arbiter+s normal Furisdiction under the general pro&isions of %rticle 21. of the Labor )ode/
26
0etitioner contends that the Furisdiction of the S() eCcludes its cogni6ance o&er claims for &acation
and sick lea&es, 1-th month pay, )hristmas bonus, medical eCpenses, car eCpenses, and other
benefits, as !ell as for moral damages and attorney+s fees/
27
-y v/ :#R&
2"
categorically states that
the Euestion of remuneration being asserted by an officer of a corporation is Dnot a simple labor problem
but a matter that comes !ithin the area of corporate affairs and management, and is in fact, a corporate
contro&ersy in contemplation of the )orporation )ode/D 3ith regard to the matter of damages, in Andaya
v/
Abadia
2#
!here, in a complaint filed before the #egional Trial )ourt, the president and general manager
of the %rmed =orces and 0olice Sa&ings and Loan %ssociation 'D%=0SL%5D* Euestioned his ouster from
the ste!ardship of the association, this )ourt, in dismissing the petition assailing the order of the trial
court !hich ruled that S(), not the regular courts, had Furisdiction o&er the case, has said;
The allegations against herein respondents in the amended complaint
unEuestionably re&eal intra1corporate contro&ersies cle&erly conceals, although
unsuccessfully, by use of ci&il la! terms and phrases/ The amended complaint
impleads herein respondents !ho, in their capacity as directors of %=0SL%5,
allegedly con&ened an illegal meeting and &oted for the reorgani6ation of
management resulting in petitioner+s ouster as corporate officer/ 7hile it may be said
that the same corporate acts also give rise to civil liability "or damages, it does not
"ollo) that the case is necessarily ta4en o%t o" the '%risdiction o" the S?& as it may
a)ard damages )hich can be considered conse>%ential in the exercise o" its
ad'%dicative po)ers/ Besides, incidental iss%es that properly "all )ithin the a%thority
o" a trib%nal may also be considered by it to avoid m%ltiplicity o"
actions/ &onse>%ently, in intra.corporate matters s%ch as those a""ecting the
corporation, its directors, tr%stees, o""icers, shareholders, the iss%e o" conse>%ential
damages may '%st as )ell be resolved and ad'%dicated by the S?&/ '(mphasis
supplied/*
3e here reiterate the abo&e holdings for, indeed, contro&ersies !ithin the pur&ie! of Section : of
0/D/ 8o/ 9421% must not be so constricted as to deny to the S() the sound eCercise of its eCpertise
and competence in resol&ing all closely related aspects of such corporate disputes/
0etitioner maintains that 0%L is estopped, ne&ertheless, from Euestioning the Furisdiction of the
8L#) considering that 0%L did not hold the dispute to be intra1corporate until after the case had
already been brought on appeal to the 8L#)/
5n the first place, there !ould not be much basis to indicate that 0%L !as Deffecti&ely barred by
estoppel/D
3$
%s early as the initial stages of the contro&ersy 0%L had already raised the issue of
Furisdiction albeit mistakenly at first on the ground that petitioner+s recourse !as an appeal to the "ffice of
the 0resident/ The error could not alter the fact that 0%L did Euestion e&en then the Furisdiction of both the
labor arbiter and the 8L#)/
5t has long been the established rule, moreo&er, that Furisdiction o&er a subFect matter is conferred by
la!,
31
and the Euestion of lack of Furisdiction may be raised at anytime e&en on appeal/
32
5n the recent
case of #a :aval -r%g &orporation vs/ &o%rt o" Appeals, ?/#/ 8o/ 14-244, -1 %ugust 1994, this )ourt
said;
Lack of Furisdiction o&er the subFect matter of the suit is yet another matter/
3hene&er it appears that the court has no Furisdiction o&er the subFect matter, the
action shall be dismissed 'Section 2, #ule 9, #ules of )ourt*/ This defense may be
interpose at any time, during appeal '#oCas &s/ #afferty, -. 0hil/ 9:.* or e&en after
final Fudgment ')ru6cosa &s/ 9udge )oncepcion, et al/, 141 0hil/ 14*/ Such is
understandable, as this kind of Furisdiction is conferred by la! and not !ithin the
courts, let alone the parties, to themsel&es determine or con&eniently set aside/
5n People vs/ &asiano '111 0hil/ .-, 9-194*, this )ourt, on the issue of estoppel, held;
DThe operation of the principle of estoppel on the Euestion of
Furisdiction seemingly depends upon !hether the lo!er court actually
had Furisdiction or not/ 5f it had no Furisdiction, but the case !as tried
and decided upon the theory that it had Furisdiction, the parties are
not barred, on appeal, from assailing such Furisdiction, for the same
Dmust eCist as a matter of la!, and may not be conferred by consent
of the parties or by estoppelD ': )/9/S/, 8118-*/ >o!e&er, if the
lo!er court had Furisdiction, and the case !as heard and decided
upon a gi&en theory, such, for instance, as that the court had no
Furisdiction, the party !ho induced it to adopt such theory !ill not be
permitted, on appeal, to assume a inconsistent position G that the
lo!er court had Furisdiction/ >ere, the principle of estoppel applies/
The rule that Furisdiction is conferred by la!, and does not depend
upon the !ill of the parties, has no bearing thereon/D
0etitioner points to D0%L+s scandalous duplicityD in Euestioning the Furisdiction of the 8L#) in this
particular contro&ersy !hile upholding it '8L#)+s Furisdiction* in DRobin -%i v/ Philippine AirlinesD
')ase 8o/ 44141242.* pending before the )ommission/ 3e need not del&e into !hether or not
0%L+s conduct does indeed smack of opportunitiesH suffice it to say that Robin -%i is entirely an
independent and separate case and, more than that, it is not before us in this instance/
3>(#(="#(, the herein petition for certiorari is D5S,5SS(D, and the decision appealed from is
%==5#,(D, !ithout preFudice to petitioner+s seeking, if circumstances permit, a recourse in the
proper forum/ 8o costs/
S" "#D(#(D/
Bidin, Romero and Melo, $$., conc%r.
9eliciano, $., is on leave.
1spino vs. )ational Labor Relations Co--ission, "4% SCRA *", #an$ary
%*, 1&&*
Case (itle7 LESLIE 6. ESPINO, petitioner, s. HON. NATIONAL LA!OR
RELATIONS COMMISSION 'nd PHILIPPINE AIR LINES, respondents.
Case )at$re7 PETITION %or &ertior'ri to reie( ' reso-.tion o% t)e N'tion'-
L'bor Re-'tions Co//ission.
Syllabi Class7 Corpor'tion L'(*Se&.rities 'nd E5&)'n,e Co//ission*P.D.
34?;A*0.risdi&tion*L'bor L'(*NLRC

Syllabi:
1. $orporation Law; Secrities and E/c!ange $o##ission; P.D. +,-.
&;%risdiction; Labor Law; NLR$; %t is the #ecurities and 3xchange
&ommission "#3&, and not the 4LR& which has original and exclusive
.urisdiction over cases involving the removal from employment of corporate
officers under P.D. *6C-/.-
7he &ourt citing Presidential Decree 4o. *6C-/ laid down the rule in the
case of Philippine #chool of Dusiness /dministration v. Leano and
consequently reiterated in three ";, other cases that it is the #ecurities and
3xchange &ommission "#3&, and not the 4LR& which has original and
exclusive .urisdiction over cases involving the removal from employment of
corporate officers.
". $orporation Law; Secrities and E/c!ange $o##ission; P.D. +,-.
&;%risdiction; #ection 5"c, P.D. *6C-/ specifically provides #3& original
and exclusive .urisdiction over matters concerning the election or
appointment of officers of a corporation.2
!. $orporation Law; Secrities and E/c!ange $o##ission; P.D. +,-.
&;%risdiction; Aenerally spea!ing the relationship of a person to a
corporation whether as officer or as agent or employee is not determined
by the nature of the services performed but by the incidents of the
relationship as they actually exist.-
7he matter of petitionerIs not being elected to the office of 3xecutive Hice
President&hief 'perating 'fficer thus falls squarely within the purview of
#ection 5 par. "c, of P.D. *6C-/. %n the case of P#D/ v. Leano supra which
involved an 3xecutive Hice-President who was not re-elected to the said
position during the election of officers on #eptember 5 (*+( by the P#D/Is
newly elected Doard of Directors the &ourt emphatically stated: J7his is not
a case of dismissal. 7he situation is that of a corporate office having been
declared vacant and that of 7/4Is not having been elected thereafter. 7he
matter of whom to elect is a prerogative that belongs to the Doard and
involves the exercise of deliberate choice and the faculty of discriminative
selection. Aenerally spea!ing the relationship of a person to a corporation
whether as officer or as agent or employee is not determined by the nature
of the services performed but by the incidents of the relationship as they
actually exist.9
4. $orporation Law; Secrities and E/c!ange $o##ission; P.D. +,-.
&;%risdiction; / corporate officerIs dismissal is always a corporate act.-
/ corporate officerIs dismissal is always a corporate act and:or an intra-
corporate controversy and that nature is not altered by the reason or
wisdom which the Doard of Directors may have in ta!ing such action.
Eurthermore it must be noted that the reason behind the non-election of
petitioner to the position of 3xecutive Hice President-&hief 'perating 'fficer
arose from or is closely connected with his involvement in the alleged
irregularities in the aforementioned cases which upon investigation and
recommendation were resolved by the P/L Doard of Directors against him
and other senior officers. 3vidently this intra-corporate ruling places the
instant case under the speciali@ed competence and expertise of the #3&.
*. $orporation Law; Secrities and E/c!ange $o##ission; P.D. +,-.
&;%risdiction; 7he principal function of the #3& is the supervision and
control over corporations partnerships and associations with the end in view
that investment in these entities may be encouraged and protected and
their activities pursued for the promotion of economic development.2
. $orporation Law; Secrities and E/c!ange $o##ission; P.D. +,-.
&;%risdiction; Requisites in order that #3& can ta!e cogni@ance of a case.
2
7. $orporation Law; Secrities and E/c!ange $o##ission; P.D. +,-.
&;%risdiction; 7he affirmative reliefs and monetary claims sought by
petitioner in his complaint reveal that they are actually part of the
perquisites of his elective positionF hence intimately lin!ed with his relations
with the corporation.2
'. $orporation Law; Secrities and E/c!ange $o##ission; P.D. +,-.
&;%risdiction; %t is still within the competence of and expertise of the #3&
to resolve all matters arising from or closely related with all intra-corporate
disputes.2
&. $orporation Law; Secrities and E/c!ange $o##ission; P.D. +,-.
&;%risdiction; 7he issue of .urisdiction is unavailing because estoppel does
not apply to confer .urisdiction upon a tribunal that has none over the cause
of action.2
+ivision: THIRD DI9ISION
+oc,et )$-ber: #.R. Nos. +43D8?G8H
Co$nsel: T'nE.'t&o, Corp.s, T',-e;C).', Cr.< = A@.ino
.onente: ROMERO
+ispositive .ortion:
6HERE"ORE, t)e inst'nt petition %or &ertior'ri is DISMISSED %or -'&F o%
/erit. T)e reso-.tion o% t)e N'tion'- L'bor Re-'tions Co//ission d'ted 0.-y
H+, +33? dis/issin, t)e &o/p-'int %or i--e,'- dis/iss'- %or -'&F o% E.risdi&tion
is A""IRMED, (it)o.t preE.di&e to petitioners seeFin, re-ie%, i% so /inded, in
t)e proper %or./.
The contro&ersy generated in the instant case once again calls for the resolution of the issue of
!hether or not the 8ational Labor #elations )ommission '8L#)* has Furisdiction o&er a complaint
filed by a corporate (Cecuti&e <ice 0resident1)hief "perating "fficer for illegal dismissal resulting
from the termination of his ser&ices as such officer by &irtue of four '4* separate resolutions of the
2oard of Directors %ir Lines '0%L*/
The undisputed facts are as follo!s;
0etitioner Leslie 3/ (spino !as the (Cecuti&e <ice 0resident1)hief "perating "fficer of pri&ate
respondent 0hilippine %irlines '0%L* !hen his ser&ices !ere terminated sometime in December
1994 by the 2oard of Directors of 0%L as a result of the findings of the panels created by then
0resident )ora6on )/ %Euino to in&estigate the administrati&e charges filed against him and other
senior officers for their purported in&ol&ement in four, denominated D?oldair,D D#obelle,D DKasbah7La
0rima&era,D and D,iddle (astD !hich allegedly preFudiced the interests of both 0%L and the
0hilippine ?o&ernment/
0etitioner started his employment !ith 0%L on =ebruary 2:, 194 as a Traffic and Sales Trainee and,
for -4 years, !as successi&ely promoted
1
until he became, by &irtue of an election in ,arch 1988
conducted by the 2oard of Directors, (Cecuti&e <ice 0resident and )hief "perating "fficer for a term of
one '1* year and !ho holds said office until his successor is elected and Eualified, pursuant to Section .,
%rticle 555 in relation to Section 1, %rticle 5< of the %mended 2y1La!s of 0%L/ The last time he !as elected
as such !as on "ctober 24, 1989/
Sometime on 9uly 2, 1994, petitioner and se&eral other senior officers of 0%L !ere administrati&ely
charged by #omeo S/ Da&id, Senior <ice 0resident for )orporate Ser&ices and Logistics ?roup, for
their purported in&ol&ement in four cases, labelled as D?oldair,D D#obelle,D DKasbah70rima&eraD and
D,iddle (ast/D
(Ccept for the conflict of interest charges in the D#obelleD case, petitioner and se&eral other senior
officers of 0%L !ere uniformly charged in the three '-* other aforementioned cases of gross
incompetence, mismanagement, inefficiency, negligence, mismanagement, dereliction of duty, failure
to obser&e and7or implement administrati&e and eCecuti&e policies, and related acts or omissions
resulting in the concealment or co&erup and pre&ention of the seasonable disco&ery of anomalous
transactions !hich, as a conseEuence, caused preFudice to the best interest of 0%L and the
?o&ernment/
0ending in&estigation by the panels created by then 0resident )ora6on )/ %Euino, petitioner and
other senior officers of 0%L !ere placed under suspension by the 2oard of Directors/
"n "ctober 19, 1994, during the organi6ational meeting of the 0%L 2oard of Directors, the election
or appointment of some senior officers of the company !ho, like petitioner, had been charged
administrati&ely !ith &arious offenses and accordingly suspended, !ere deferred by the 2oard of
Directors/ During the said organi6ational meeting, =eliciano 2elmonte !as elected )hairman of the
2oard !hile Dante Santos !as elected as 0resident and )hief (Cecuti&e "fficer/
"n the basis of the findings submitted by the presidential in&estigating panels, the 2oard issued
separate resolutions dated 9anuary 19, 1991 in the D?oldair,D D#obelle,D and Kasbah7La 0rima&era,D
cases and another dated %ugust 9, 1991 in the D,iddle (astD case !herein petitioner !as
considered resigned from the ser&ice effecti&e immediately for loss of confidence and for acts
inimical to the interests of the company/
%s a result of his termination, petitioner (spino filed a complaint for illegal dismissal against 0%L !ith
the 8ational Labor #elations )ommission, %rbitration 2ranch, 8)#, praying, among others, for
reinstatement !ith back!ages, reco&ery of 0:4 ,illion as moral damages, 014 ,illion as eCemplary
damages and attorney+s fees/ The case !as docketed as 8L#) )ase 8o/ 4414:14-214191/
0%L Fustified the legality of petitioner (spino+s dismissal from the ser&ice before the Labor %rbiter but
Euestioned the Furisdiction of the 8L#) contending that, because the in&estigating panels !ere
created by 0resident )ora6on )/ %Euino, it became, together !ith the 0%L 2oard of Directors, a
Dparallel arbitration unitD !hich substituted the 8L#)/ %s such, 0%L argued that since the 2oard
resolutions of the aforesaid casesH cannot be re&ie!ed by the 8L#), the recourse of petitioner
(spino should ha&e been addressed, by !ay of an appeal, to the "ffice of the 0resident of the
#epublic of the 0hilippines/
"n =ebruary 24, 1992, Labor %rbiter )resencio 9/ #amos rendered a decision
2
finding that petitioner
(spino !as dismissed Fust and &alid cause and accordingly ordered his reinstatement to his former
position as (Cecuti&e <ice10resident1)hief "perating "fficer !ithout loss of seniority rights plus full
back!ages and other benefits appurtenant thereto, !ithout Eualification or deduction from the time of his
illegal dismissal up to the date of his actual reinstatement/ The dispositi&e portion reads;
3>(#(="#(, premises considered, Fudgment is hereby rendered;
1/ "rdering complainant+s immediate reinstatement to his former position as (Cecuti&e
<ice 0resident1)hief "perating "fficer !ithout loss of seniority rights plus full
back!ages and other benefits appurtenant thereto, !ithout Eualification or deduction,
from the time of his illegal dismissal up to the time of his actual reinstatement/ >is
back!ages as of =ebruary 29, 1992 as computed are in the total sum of
02,92:,444/44 '019:,444/44 C 1: months, including the one month suspension*/
"rdering respondent 0%L to pay complainant Leslie (spino the follo!ing sums;
2ack!ages as of =ebruary 1992 02,92:,444/44
)ash eEui&alent of %nnual trip passes
on first class, '1 for international, 1
for regional, and 1 for domestic*
for complainant, his spouse,
Eualified dependent and parents
!orth approCimately @S P4:,444/44
at current rate of eCchange rate of
eCchange 02/:47dollar 1,192,444/44
,idyear and )hristmas bonuses
eEui&alent to t!o '2* months pay -94,444/44
%!arding moral damages to complainant in
the sum of 024 million plus eCemplary damages of 02/4 22,444,444/44
T"T%L 02,:4.,444/44
?ranting attorney+s fees of 14I of the total monetary a!ard 2,:4,.44
?#%8D T"T%L 028,1:.,.44/44
=rom the said decision, 0%L filed on ,arch :, 1992 an appeal !ith the 8L#) and submitted on
,arch 1-, 1992 a supplemental memorandum on appeal/ 0%L argued that the Labor %rbiter+s
decision is null and &oid for lack of Furisdiction o&er the subFect matter as it is the Securities and
(Cchange )ommission, and not the 8L#), !hich has original and eCclusi&e Furisdiction o&er cases
in&ol&ing dismissal or remo&al of corporate officers/
(arlier, or more specifically, on =ebruary 2:, 1992, petitioner (spino filed a motion for issuance of
!rit of eCecution on the ground that the decision of the Labor %rbiter ordering reinstatement is
immediately eCecutory e&en pending appeal pursuant to %rticle 22- of the Labor )ode, as amended/
"n =ebruary 28, 1992, the Labor %rbiter issued a !rit of eCecution/
0%L, for its part, filed a motion to Euash the !rit of eCecution reiterating its argument that the
Securities and (Cchange )ommission 'S()* and not the 8L#) has original and eCclusi&e
Furisdiction o&er the subFect matter in&ol&ing the dismissal or remo&al of corporate officers/
"n ,arch -1, 1992, after an eCchange of pleadings, Labor %rbiter #amos denied 0%L+s motion to
Euash the !rit of eCecution/ Thereafter, or on %pril 2, 1992, an alias !rit of eCecution !as issued/
0%L then filed on %pril 2-, 1992 !ith the 8L#) a petition for inFunction, later amended to implead the
Labor %rbiter, praying for the issuance of a temporary restraining order to enFoin the enforcement of
said alias !rit of eCecution/
"n %pril 2., 1992, the 8L#) issued a temporary restraining order enFoining (spino, Sheriff %nam
Timbayan, their agents and all persons acting under them, from implementing the alias !rit of
eCecution issued on %pril 2, 1992 upon 0%L+s posting of 0444,444/44 cash or surety bond/ "n ,ay
:, 1992, 0%L posted the 0444,444/44 surety bond/
"n 9uly -1, 1992, the 8L#) promulgated a resolution
3
dismissing the complaint for illegal dismissal for
lack of Furisdiction and declaring the nullity of the alias !rit of eCecution/ 0etitioner (spino, Labor %rbiter
)resencio #amos and Sheriff %nam Timbayan !ere permanently enFoined from enforcing the said alias
!rit of eCecution/
0etitioner (spino filed a motion for reconsideration but the same !as denied on 9anuary 8, 199-/
4
Dissatisfied, petitioner filed the instant petition for certiorari contending mainly that it is the 8L#)
!hich has Furisdiction under %rticle 21., par/ '2* of the Labor )ode, as amended, to hear the illegal
dismissal case he filed against 0%L as it in&ol&es the termination of a regular and permanent
employee and the issues in the dispute in&ol&ed, not only his remo&al from office, but also his claim
for back!ages and other benefits and damagesH that 0%L is estopped from Euestioning the
Furisdiction of the 8L#)/
3e rule that the petition lacks merit/
The )ourt, citing 0residential Decree 8o/ 9421%, laid do!n the rule in the case of Philippine School
o" B%siness Administration v/ #eano,
5
and conseEuently reiterated in three '-* other cases
6
that it is the
Securities and (Cchange )ommission 'S()* and not the 8L#) !hich has original and eCclusi&e
Furisdiction o&er cases in&ol&ing the remo&al from employment of corporate officers/
Sec/ :/ of 0residential Decree 8o/ 9421% regarding the Furisdiction of the Securities and (Cchange
)ommission pro&ides, as follo!s;
Sec/ :/ 5n addition to the regulatory and adFudicati&e functions of the Securities and
(Cchange )ommission o&er corporations, partnerships and other forms of
associations registered !ith it as eCpressly granted under eCisting la!s and decrees,
it shall ha&e original and eCclusi&e Furisdiction to hear and decide cases in&ol&ing;
'a* De&ices or schemes employed by or any acts of the board of
directors, business associates, its officers or partners, amounting to
fraud and misrepresentation !hich may be detrimental to the interest
of the public and7or of the stockholders, partners, members of
associations or organi6ations registered !ith the )ommission/
'b* &ontroversies arising o%t o" intracorporate or partnership
relations, bet)een and among stoc4holders, members, or
associatesH bet)een any or all o" them and the corporation,
partnership or association o" )hich they are stoc4holders, members,
or associates, respectivelyH and bet!een such corporation,
partnership or association and the state insofar as it concerns their
indi&idual franchise or right to eCist as such entity/
'c* )ontro&ersies in the election or appointments of directors,
trustees, officers or managers of such corporations, partnerships or
associations/
'd* 0etitions of corporations, partnerships or associations to be
declared in the state of suspension of payments in cases !here the
corporation, partnership or association possesses sufficient property
to co&er all its debts but foresees the impossibility of meeting them
!hen they respecti&ely fall due or in cases !here the corporation,
partnership or association has no sufficient assets to co&er its
liabilities, but is under the management of a #ehabilitation #ecei&er
or ,anagement )ommittee created pursuant to this Decree/
5n intra1corporate concerning the election or appointment of officers of a corporation, Section :, 0D
9421% specifically pro&ides;
Sec/ :/ 5n addition to the regulatory and adFudicati&e functions of the Securities and
(Cchange )ommission o&er corporations, partnerships and other forms of
associations registered !ith it as eCpressly granted under eCisting la!s and decrees,
it shall ha&e original and eCclusi&e Furisdiction to hear and decide cases in&ol&ing;
CCC CCC CCC
'c* &ontroversies in the election or appointments o" directors, tr%stees, o""icers or
managers o" s%ch corporations, partnerships or associations/
5ndisputably, the position of (Cecuti&e <ice 0resident1)hief "perating "fficer from !hich petitioner
(spino claims to ha&e been illegally dismissed, is an electi&e office under Section ., %rticle 555 is an
electi&e corporate office under Section 1, %rticle 5< of the %mended by1La!s of 0%L/ The said
corporate office has a fiCed term of one '1* year and the one elected shall hold office until a
successor shall ha&e been elected and Eualified/ >e lost that position !hen his appointment or
election as (Cecuti&e <ice 0resident1)hief "perating "fficer, together !ith other senior officers !ho
!ere similarly charged administrati&ely, !ere deferred by the 2oard of Directors in its organi6ational
meeting on "ctober 19, 1994/ >e !as later considered by the 2oard as resigned from the ser&ice,
for reasons earlier stated, and the said position !as later abolished/
The matter of petitioner+s not being elected to the office of (Cecuti&e
<ice10resident1)hief "perating "fficer thus falls sEuarely !ithin the pur&ie! of Section : par/ 'c* of
0/D/ 9421%/ 5n the case of PSBA v/ #eano, s%pra, !hich in&ol&ed an (Cecuti&e <ice 0resident !ho
!as not re1elected to the said position during the election of officers on September :, 1981 by the
0S2%+s ne!ly elected 2oard of Directors, the )ourt emphatically stated;
This is not a case of dismissal/ The situation is that of a corporate office ha&ing been
declared &acant, and that of T%8+s not ha&ing been elected thereafter/ The matter of
!hom to elect is a prerogati&e that belongs to the 2oard, and in&ol&es the eCercise of
deliberate choice and the faculty of discriminati&e selection/ ?enerally speaking, the
relationship of a person to a corporation, !hether as officer or as agent or employee,
is not determined by the nature of the ser&ices performed, but by the incidents of the
relationship as they actually eCists/
% corporate officer+s dismissal is al!ays a corporate act and7or an intra1corporate contro&ersy and
that nature is not altered by the reason or !isdom !hich the 2oard of Directors may ha&e in taking
such action/
7
=urthermore, it must be noted that the reason behind the non1election of petitioner to the position of
(Cecuti&e <ice 0resident1)hief "perating "fficer arose from, or is closely connected !ith, his
in&ol&ement in the alleged irregularities in the aforementioned cases !hich, upon in&estigation and
recommendation, !ere resol&ed by the 0%L 2oard of Directors against him and other senior officers/
(&idently, this intra1corporate ruling places the instant case under the speciali6ed competence and
eCpertise of the S()/
The Furisdiction of the S() has like!ise been clarified by this )ourt in the case of 0nion ;lass and
&ontainer &orporation, et al/ v/ S?&, et al/,
"
thus;
This grant of Furisdiction must be &ie!ed in the light of the nature and function of the
S() under the la!/ Section - of 0D 8o/ 9421% confers upon the latter Dabsolute
Furisdiction, super&ision, and control o&er all corporations, partnerships or
associations, !ho are grantees of primary franchise and7or license or permit issued
by the go&ernment to operate in the 0hilippines / / / /D The principal function of the
S() is the super&ision and control o&er corporations, partnerships and associations
!ith the end in &ie! that in&estment in these entities may be encouraged and
protected, and their acti&ities pursued for the promotion of economic de&elopment/
5t is in aid of this office that the adFudicati&e po!er of the S() must be
eCercised/ !h%s the la) explicitly speci"ied and delimited its '%risdiction to matters
intrinsically connected )ith the reg%lations o" corporations, partnerships and
associations and those dealing )ith the internal a""airs o" s%ch corporations,
partnerships or associations/
"ther!ise stated, in order that the S() can take cogni6ance of a case, the
contro&ersy must pertain to any of the follo!ing relationships; 'a* bet!een the
corporation, partnership or association and the publicH 'b* bet!een the corporation,
partnership or association and its stockholders, partners, members, or officersH 'c*
bet!een the corporation, partnership or association and the state in so far as its
franchise, permit or license to operate is concerned, and 'd* among the stockholders,
partners or associates themsel&es/
The fact that petitioner sought payment of his back!ages, other benefits, as !ell as moral and
eCemplary damages and attorney+s fees in his complaint for illegal dismissal !ill not operate to
pre&ent the S() from eCercising its Furisdiction under 0D 9421%/ 3hile the affirmati&e reliefs and
monetary claims sought by petitioner in his complaint may, at first glance, mislead one into placing
the case under the Furisdiction of the Labor %rbiter, a closer eCamination re&eals that they are
actually part of the perEuisites of his electi&e positionH hence, intimately linked !ith his relations !ith
the corporation/ 5n -y v/ :#R&, et al/,
#
the )ourt, confronted !ith the same issue ruled, thus;
The Euestion of remuneration, in&ol&ing as it does, a person !ho is not a mere
employee but a stockholder and officer, an integral part, it might be said, of the
corporation, is not a simple labor problem but a matter that comes !ithin the area of
corporate affairs and management, and is in fact a corporate contro&ersy in
contemplation of the )orporation )ode/
The )ourt has like!ise ruled in the case of Andaya v/ Abadia
1$
that in
intra1corporate matters, such as those affecting the corporation, its directors, trustees, officers and
shareholders, the issue of conseEuential damages may Fust as !ell be resol&ed and adFudicated by the
S()/ @ndoubtedly, it is still !ithin the competence and eCpertise of the S() to resol&e all matters arising
from or closely connected !ith all intra1corporate disputes/
0etitioner+s reliance on the principle of estoppel to Fustify the eCercise or Furisdiction by the 8L#)
o&er the instant complaint is misplaced/ it is not accurate for petitioner to conclude that 0%L did not
raise the issue of Furisdiction at the initial stages of the case, for, !hile it may be predicated on a
different ground, i.e/, that appeal from the resolution of the 2oard of Directors of 0%L as regards
termination of his ser&ices, is to the "ffice of the 0resident, 0%L did in fact Euestion the Furisdiction of
the Labor %rbiter/ %n error of this nature, under the circumstances, could not Fustify petitioner+s
insistence that 0%L did not raise the issue of Furisdiction at the outset, but only before the 8L#)/
5t is !ell1settled that Furisdiction o&er the subFect matter is conferred by la! and the Euestion of lack
of Furisdiction may be raised at anytime e&en on appeal/
11
The principle of estoppel cannot be in&oked
to pre&ent this )ourt from taking up the Euestion, !hich has been apparent on the face of the pleadings
since the start of the litigation before the Labor %rbiter/ 5n the case of -y v/ :#R&, s%pra, the )ourt, citing
the case of&alimlim v/ Ramire<
12
reiterated that the decision of a tribunal not &ested !ith appropriate
Furisdiction is null and &oid/ %gain, the )ourt in So%theast Asian 9isheries -evelopment &enter.
A>%ac%lt%re -epartment v/ :#R&
13
restated the rule that the in&ocation of estoppel !ith respect to the
issue of Furisdiction is una&ailing because estoppel does not apply to confer Furisdiction upon a tribunal
that has none o&er the cause of action/ The instant case does not pro&ide an eCception to the said rule/
5n fine, the issue of the S()+s Furisdiction is settled and the )ourt finds it unnecessary to d!ell
further on other Euestions raised by petitioner/ Thus, finding no gra&e abuse of discretion on the part
of 8L#) in dismissing the complaint for illegal dismissal, the instant petition must be dismissed/
3>(#(="#(, the instant petition for certiorari is D5S,5SS(D for lack of merit/ The resolution of the
8ational Labor #elations )ommission dated 9uly -1, 1992 dismissing the complaint for illegal
dismissal for lack of Furisdiction is %==5#,(D, !ithout preFudice to petitioner+s seeking relief, if so
minded, in the proper forum/
S" "#D(#(D/
Bidin, Melo and (it%g, $$., conc%r.
9eliciano, $., is on leave.



'(R( No( 7"742 )*+, 14, 1#"#
ASSOCIATION O SMALL LAN-O.NERS IN THE /HILI//INES, INC(, )&ANITO -( 'OME0,
'ERAR-O 1( ALARCIO, ELI/E A( '&ICO, )R(, 1ERNAR-O M( ALMONTE, CAN&TO RAMIR
1( CA1RITO, ISI-RO T( '&ICO, ELISA I( LLAMI-O, A&STO )( SAL%A, RE2NAL-O '(
ESTRA-A, ELISA C( 1A&TISTA, ESMENIA )( CA1E, TEO-ORO 1( MA-RIA'A, A&REA )(
/RESTOSA, EMERENCIANA )( ISLA, ELICISIMA C( ARRESTO, CONS&ELO M( MORALES,
1EN)AMIN R( SE'ISM&N-O, CIRILA A( )OSE 3 NA/OLEON S( ERRER,petitioners,
&s/
HONORA1LE SECRETAR2 O A'RARIAN REORM, respondent/
'(R( No( 7#31$ )*+, 14, 1#"#
ARSENIO AL( AC&NA, NE.TON )ISON, %ICTORINO ERRARIS, -ENNIS )ERE0A,
HERMINI'IL-O '&STILO, /A&LINO -( TOLENTINO an4 /LANTERS5 COMMITTEE, INC(,
%i6torias Mi++ -istri6t, %i6torias, Ne7ros O66i4enta+, petitioners,
&s/
)O8ER ARRO2O, /HILI/ E( )&ICO an4 /RESI-ENTIAL A'RARIAN REORM
CO&NCIL, respondents/
'(R( No( 7#744 )*+, 14, 1#"#
INOCENTES /A1ICO, petitioner,
&s/
HON( /HILI/ E( )&ICO, SECRETAR2 O THE -E/ARTMENT O A'RARIAN REORM, HON(
)O8ER ARRO2O, E9EC&TI%E SECRETAR2 O THE OICE O THE /RESI-ENT, an4
Messrs( SAL%A-OR TALENTO, )AIME A1O'A-O, CONRA-O A%ANCENA an4 RO1ERTO
TAA2, respondents/
'(R( No( 7#777 )*+, 14, 1#"#
NICOLAS S( MANAA2 an4 A'&STIN HERMANO, )R(, petitioners,
&s/
HON( /HILI/ ELLA )&ICO, as Se6retar, o: A7rarian Re:or;, an4 LAN- 1AN8 O THE
/HILI//INES,respondents/

CR&0, J.:
5n ancient mythology, %ntaeus !as a terrible giant !ho blocked and challenged >ercules for his life
on his !ay to ,ycenae after performing his ele&enth labor/ The t!o !restled mightily and >ercules
flung his ad&ersary to the ground thinking him dead, but %ntaeus rose e&en stronger to resume their
struggle/ This happened se&eral times to >ercules+ increasing ama6ement/ =inally, as they continued
grappling, it da!ned on >ercules that %ntaeus !as the son of ?aea and could ne&er die as long as
any part of his body !as touching his ,other (arth/ Thus fore!arned, >ercules then held %ntaeus
up in the air, beyond the reach of the sustaining soil, and crushed him to death/
,other (arth/ The sustaining soil/ The gi&er of life, !ithout !hose in&igorating touch e&en the
po!erful %ntaeus !eakened and died/
The cases before us are not as fanciful as the foregoing tale/ 2ut they also tell of the elemental
forces of life and death, of men and !omen !ho, like %ntaeus need the sustaining strength of the
precious earth to stay ali&e/
DLand for the LandlessD is a slogan that underscores the acute imbalance in the distribution of this
precious resource among our people/ 2ut it is more than a slogan/ Through the brooding centuries, it
has become a battle1cry dramati6ing the increasingly urgent demand of the dispossessed among us
for a plot of earth as their place in the sun/
#ecogni6ing this need, the )onstitution in 19-: mandated the policy of social Fustice to Dinsure the
!ell1being and economic security of all the people,D
1
especially the less pri&ileged/ 5n 19.-, the ne!
)onstitution affirmed this goal adding specifically that Dthe State shall regulate the acEuisition, o!nership,
use, enFoyment and disposition of pri&ate property and eEuitably diffuse property o!nership and
profits/D
2
Significantly, there !as also the specific inFunction to Dformulate and implement an agrarian
reform program aimed at emancipating the tenant from the bondage of the soil/D
3
The )onstitution of 198. !as not to be outdone/ 2esides echoing these sentiments, it also adopted
one !hole and separate %rticle $555 on Social 9ustice and >uman #ights, containing grandiose but
undoubtedly sincere pro&isions for the uplift of the common people/ These include a call in the
follo!ing !ords for the adoption by the State of an agrarian reform program;
S()/ 4/ The State shall, by la!, undertake an agrarian reform program founded on
the right of farmers and regular farm!orkers, !ho are landless, to o!n directly or
collecti&ely the lands they till or, in the case of other farm!orkers, to recei&e a Fust
share of the fruits thereof/ To this end, the State shall encourage and undertake the
Fust distribution of all agricultural lands, subFect to such priorities and reasonable
retention limits as the )ongress may prescribe, taking into account ecological,
de&elopmental, or eEuity considerations and subFect to the payment of Fust
compensation/ 5n determining retention limits, the State shall respect the right of
small lando!ners/ The State shall further pro&ide incenti&es for &oluntary land1
sharing/
(arlier, in fact, #/%/ 8o/ -844, other!ise kno!n as the %gricultural Land #eform )ode, had already
been enacted by the )ongress of the 0hilippines on %ugust 8, 19-, in line !ith the abo&e1stated
principles/ This !as substantially superseded almost a decade later by 0/D/ 8o/ 2., !hich !as
promulgated on "ctober 21, 19.2, along !ith martial la!, to pro&ide for the compulsory acEuisition
of pri&ate lands for distribution among tenant1farmers and to specify maCimum retention limits for
lando!ners/
The people po!er re&olution of 198 did not change and indeed e&en energi6ed the thrust for
agrarian reform/ Thus, on 9uly 1., 198., 0resident )ora6on )/ %Euino issued (/"/ 8o/ 228,
declaring full land o!nership in fa&or of the beneficiaries of 0/D/ 8o/ 2. and pro&iding for the
&aluation of still un&alued lands co&ered by the decree as !ell as the manner of their payment/ This
!as follo!ed on 9uly 22, 198. by 0residential 0roclamation 8o/ 1-1, instituting a comprehensi&e
agrarian reform program ')%#0*, and (/"/ 8o/ 229, pro&iding the mechanics for its implementation/
SubseEuently, !ith its formal organi6ation, the re&i&ed )ongress of the 0hilippines took o&er
legislati&e po!er from the 0resident and started its o!n deliberations, including eCtensi&e public
hearings, on the impro&ement of the interests of farmers/ The result, after almost a year of spirited
debate, !as the enactment of #/%/ 8o/ :., other!ise kno!n as the )omprehensi&e %grarian
#eform La! of 1988, !hich 0resident %Euino signed on 9une 14, 1988/ This la!, !hile considerably
changing the earlier mentioned enactments, ne&ertheless gi&es them suppletory effect insofar as
they are not inconsistent !ith its pro&isions/
4
The abo&e1captioned cases ha&e been consolidated because they in&ol&e common legal Euestions,
including serious challenges to the constitutionality of the se&eral measures mentioned abo&e/ They
!ill be the subFect of one common discussion and resolution, The different antecedents of each case
!ill reEuire separate treatment, ho!e&er, and !ill first be eCplained hereunder/
?/#/ 8o/ .9...
SEuarely raised in this petition is the constitutionality of 0/D/ 8o/ 2., (/"/ 8os/ 228 and 229, and
#/%/ 8o/ :./
The subFects of this petition are a 91hectare riceland !orked by four tenants and o!ned by petitioner
8icolas ,anaay and his !ife and a :1hectare riceland !orked by four tenants and o!ned by
petitioner %ugustin >ermano, 9r/ The tenants !ere declared full o!ners of these lands by (/"/ 8o/
228 as Eualified farmers under 0/D/ 8o/ 2./
The petitioners are Euestioning 0/D/ 8o/ 2. and (/"/ 8os/ 228 and 229 on grounds inter alia of
separation of po!ers, due process, eEual protection and the constitutional limitation that no pri&ate
property shall be taken for public use !ithout Fust compensation/
They contend that 0resident %Euino usurped legislati&e po!er !hen she promulgated (/"/ 8o/ 228/
The said measure is in&alid also for &iolation of %rticle $555, Section 4, of the )onstitution, for failure
to pro&ide for retention limits for small lando!ners/ ,oreo&er, it does not conform to %rticle <5,
Section 2:'4* and the other reEuisites of a &alid appropriation/
5n connection !ith the determination of Fust compensation, the petitioners argue that the same may
be made only by a court of Fustice and not by the 0resident of the 0hilippines/ They in&oke the
recent cases of ?PZA v. -%lay
5
and Manoto4 v. :ational 9ood A%thority.
6
,oreo&er, the Fust
compensation contemplated by the 2ill of #ights is payable in money or in cash and not in the form of
bonds or other things of &alue/
5n considering the rentals as ad&ance payment on the land, the eCecuti&e order also depri&es the
petitioners of their property rights as protected by due process/ The eEual protection clause is also
&iolated because the order places the burden of sol&ing the agrarian problems on the o!ners only of
agricultural lands/ 8o similar obligation is imposed on the o!ners of other properties/
The petitioners also maintain that in declaring the beneficiaries under 0/D/ 8o/ 2. to be the o!ners
of the lands occupied by them, (/"/ 8o/ 228 ignored Fudicial prerogati&es and so &iolated due
process/ 3orse, the measure !ould not sol&e the agrarian problem because e&en the small farmers
are depri&ed of their lands and the retention rights guaranteed by the )onstitution/
5n his )omment, the Solicitor ?eneral stresses that 0/D/ 8o/ 2. has already been upheld in the
earlier cases of&have< v. Zobel,
7
;on<ales v. ?strella,
8
and Association o" Rice and &orn Prod%cers o"
the Philippines, nc. v. !he :ational #and Re"orm &o%ncil.
#
The determination of Fust compensation by
the eCecuti&e authorities conformably to the formula prescribed under the Euestioned order is at best
initial or preliminary only/ 5t does not foreclose Fudicial inter&ention !hene&er sought or !arranted/ %t any
rate, the challenge to the order is premature because no &aluation of their property has as yet been made
by the Department of %grarian #eform/ The petitioners are also not proper parties because the lands
o!ned by them do not eCceed the maCimum retention limit of . hectares/
#eplying, the petitioners insist they are proper parties because 0/D/ 8o/ 2. does not pro&ide for
retention limits on tenanted lands and that in any e&ent their petition is a class suit brought in behalf
of lando!ners !ith landholdings belo! 24 hectares/ They maintain that the determination of Fust
compensation by the administrati&e authorities is a final ascertainment/ %s for the cases in&oked by
the public respondent, the constitutionality of 0/D/ 8o/ 2. !as merely assumed in &have<, !hile
!hat !as decided in ;on<ales !as the &alidity of the imposition of martial la!/
5n the amended petition dated 8o&ember 22, 1:88, it is contended that 0/D/ 8o/ 2., (/"/ 8os/ 228
and 229 'eCcept Sections 24 and 21* ha&e been impliedly repealed by #/%/ 8o/ :./ 8e&ertheless,
this statute should itself also be declared unconstitutional because it suffers from substantially the
same infirmities as the earlier measures/
% petition for inter&ention !as filed !ith lea&e of court on 9une 1, 1988 by <icente )ru6, o!ner of a
1/ 8-1 hectare land, !ho complained that the D%# !as insisting on the implementation of 0/D/ 8o/
2. and (/"/ 8o/ 228 despite a compromise agreement he had reached !ith his tenant on the
payment of rentals/ 5n a subseEuent motion dated %pril 14, 1989, he adopted the allegations in the
basic amended petition that the abo&e1 mentioned enactments ha&e been impliedly repealed by #/%/
8o/ :./
?/#/ 8o/ .9-14
The petitioners herein are lando!ners and sugar planters in the <ictorias ,ill District, <ictorias,
8egros "ccidental/ )o1petitioner 0lanters+ )ommittee, 5nc/ is an organi6ation composed of 1,444
planter1members/ This petition seeks to prohibit the implementation of 0roc/ 8o/ 1-1 and (/"/ 8o/
229/
The petitioners claim that the po!er to pro&ide for a )omprehensi&e %grarian #eform 0rogram as
decreed by the )onstitution belongs to )ongress and not the 0resident/ %lthough they agree that the
0resident could eCercise legislati&e po!er until the )ongress !as con&ened, she could do so only to
enact emergency measures during the transition period/ %t that, e&en assuming that the interim
legislati&e po!er of the 0resident !as properly eCercised, 0roc/ 8o/ 1-1 and (/"/ 8o/ 229 !ould still
ha&e to be annulled for &iolating the constitutional pro&isions on Fust compensation, due process,
and eEual protection/
They also argue that under Section 2 of 0roc/ 8o/ 1-1 !hich pro&ides;
%grarian #eform =und/1There is hereby created a special fund, to be kno!n as the %grarian #eform
=und, an initial amount of =5=TA 25LL5"8 0(S"S '0:4,444,444,444/44* to co&er the estimated cost
of the )omprehensi&e %grarian #eform 0rogram from 198. to 1992 !hich shall be sourced from the
receipts of the sale of the assets of the %sset 0ri&ati6ation Trust and #eceipts of sale of ill1gotten
!ealth recei&ed through the 0residential )ommission on ?ood ?o&ernment and such other sources
as go&ernment may deem appropriate/ The amounts collected and accruing to this special fund shall
be considered automatically appropriated for the purpose authori6ed in this 0roclamation the amount
appropriated is in futuro, not in esse/ The money needed to co&er the cost of the contemplated
eCpropriation has yet to be raised and cannot be appropriated at this time/
=urthermore, they contend that taking must be simultaneous !ith payment of Fust compensation as it
is traditionally understood, i/e/, !ith money and in full, but no such payment is contemplated in
Section : of the (/"/ 8o/ 229/ "n the contrary, Section , thereof pro&ides that the Land 2ank of the
0hilippines Dshall compensate the lando!ner in an amount to be established by the go&ernment,
!hich shall be based on the o!ner+s declaration of current fair market &alue as pro&ided in Section 4
hereof, but subFect to certain controls to be defined and promulgated by the 0residential %grarian
#eform )ouncil/D This compensation may not be paid fully in money but in any of se&eral modes that
may consist of part cash and part bond, !ith interest, maturing periodically, or direct payment in cash
or bond as may be mutually agreed upon by the beneficiary and the lando!ner or as may be
prescribed or appro&ed by the 0%#)/
The petitioners also argue that in the issuance of the t!o measures, no effort !as made to make a
careful study of the sugar planters+ situation/ There is no tenancy problem in the sugar areas that
can Fustify the application of the )%#0 to them/ To the eCtent that the sugar planters ha&e been
lumped in the same legislation !ith other farmers, although they are a separate group !ith problems
eCclusi&ely their o!n, their right to eEual protection has been &iolated/
% motion for inter&ention !as filed on %ugust 2.,198. by the 8ational =ederation of Sugarcane
0lanters '8%S0* !hich claims a membership of at least 24,444 indi&idual sugar planters all o&er the
country/ "n September 14, 198., another motion for inter&ention !as filed, this time by ,anuel
2arcelona, et al/, representing coconut and riceland o!ners/ 2oth motions !ere granted by the
)ourt/
8%S0 alleges that 0resident %Euino had no authority to fund the %grarian #eform 0rogram and that,
in any e&ent, the appropriation is in&alid because of uncertainty in the amount appropriated/ Section
2 of 0roc/ 8o/ 1-1 and Sections 24 and 21 of (/"/ 8o/ 229 pro&ide for an initial appropriation of fifty
billion pesos and thus specifies the minimum rather than the maCimum authori6ed amount/ This is
not allo!ed/ =urthermore, the stated initial amount has not been certified to by the 8ational
Treasurer as actually a&ailable/
T!o additional arguments are made by 2arcelona, to !it, the failure to establish by clear and
con&incing e&idence the necessity for the eCercise of the po!ers of eminent domain, and the
&iolation of the fundamental right to o!n property/
The petitioners also decry the penalty for non1registration of the lands, !hich is the eCpropriation of
the said land for an amount eEual to the go&ernment assessor+s &aluation of the land for taC
purposes/ "n the other hand, if the lando!ner declares his o!n &aluation he is unFustly reEuired to
immediately pay the corresponding taCes on the land, in &iolation of the uniformity rule/
5n his consolidated )omment, the Solicitor ?eneral first in&okes the presumption of constitutionality
in fa&or of 0roc/ 8o/ 1-1 and (/"/ 8o/ 229/ >e also Fustifies the necessity for the eCpropriation as
eCplained in the D!hereasD clauses of the 0roclamation and submits that, contrary to the petitioner+s
contention, a pilot proFect to determine the feasibility of )%#0 and a general sur&ey on the people+s
opinion thereon are not indispensable prereEuisites to its promulgation/
"n the alleged &iolation of the eEual protection clause, the sugar planters ha&e failed to sho! that
they belong to a different class and should be differently treated/ The )omment also suggests the
possibility of )ongress first distributing public agricultural lands and scheduling the eCpropriation of
pri&ate agricultural lands later/ =rom this &ie!point, the petition for prohibition !ould be premature/
The public respondent also points out that the constitutional prohibition is against the payment of
public money !ithout the corresponding appropriation/ There is no rule that only money already in
eCistence can be the subFect of an appropriation la!/ =inally, the earmarking of fifty billion pesos as
%grarian #eform =und, although denominated as an initial amount, is actually the maCimum sum
appropriated/ The !ord DinitialD simply means that additional amounts may be appropriated later
!hen necessary/
"n %pril 11, 1988, 0rudencio Serrano, a coconut planter, filed a petition on his o!n behalf, assailing
the constitutionality of (/"/ 8o/ 229/ 5n addition to the arguments already raised, Serrano contends
that the measure is unconstitutional because;
'1* "nly public lands should be included in the )%#0H
'2* (/"/ 8o/ 229 embraces more than one subFect !hich is not eCpressed in the titleH
'-* The po!er of the 0resident to legislate !as terminated on 9uly 2, 198.H and
'4* The appropriation of a 0:4 billion special fund from the 8ational Treasury did not
originate from the >ouse of #epresentati&es/
?/#/ 8o/ .9.44
The petitioner alleges that the then Secretary of Department of %grarian #eform, in &iolation of due
process and the reEuirement for Fust compensation, placed his landholding under the co&erage of
"peration Land Transfer/ )ertificates of Land Transfer !ere subseEuently issued to the pri&ate
respondents, !ho then refused payment of lease rentals to him/
"n September -, 198, the petitioner protested the erroneous inclusion of his small landholding
under "peration Land transfer and asked for the recall and cancellation of the )ertificates of Land
Transfer in the name of the pri&ate respondents/ >e claims that on December 24, 198, his petition
!as denied !ithout hearing/ "n =ebruary 1., 198., he filed a motion for reconsideration, !hich had
not been acted upon !hen (/"/ 8os/ 228 and 229 !ere issued/ These orders rendered his motion
moot and academic because they directly effected the transfer of his land to the pri&ate respondents/
The petitioner no! argues that;
'1* (/"/ 8os/ 228 and 229 !ere in&alidly issued by the 0resident of the 0hilippines/
'2* The said eCecuti&e orders are &iolati&e of the constitutional pro&ision that no
pri&ate property shall be taken !ithout due process or Fust compensation/
'-* The petitioner is denied the right of maCimum retention pro&ided for under the
198. )onstitution/
The petitioner contends that the issuance of (/4/ 8os/ 228 and 229 shortly before )ongress
con&ened is anomalous and arbitrary, besides &iolating the doctrine of separation of po!ers/ The
legislati&e po!er granted to the 0resident under the Transitory 0ro&isions refers only to emergency
measures that may be promulgated in the proper eCercise of the police po!er/
The petitioner also in&okes his rights not to be depri&ed of his property !ithout due process of la!
and to the retention of his small parcels of riceholding as guaranteed under %rticle $555, Section 4 of
the )onstitution/ >e like!ise argues that, besides denying him Fust compensation for his land, the
pro&isions of (/"/ 8o/ 228 declaring that;
Lease rentals paid to the lando!ner by the farmer1beneficiary after "ctober 21, 19.2
shall be considered as ad&ance payment for the land/
is an unconstitutional taking of a &ested property right/ 5t is also his contention that the inclusion of
e&en small lando!ners in the program along !ith other lando!ners !ith lands consisting of se&en
hectares or more is undemocratic/
5n his )omment, the Solicitor ?eneral submits that the petition is premature because the motion for
reconsideration filed !ith the ,inister of %grarian #eform is still unresol&ed/ %s for the &alidity of the
issuance of (/"/ 8os/ 228 and 229, he argues that they !ere enacted pursuant to Section , %rticle
$<555 of the Transitory 0ro&isions of the 198. )onstitution !hich reads;
The incumbent president shall continue to eCercise legislati&e po!ers until the first )ongress is
con&ened/
"n the issue of Fust compensation, his position is that !hen 0/D/ 8o/ 2. !as promulgated on
"ctober 21/ 19.2, the tenant1farmer of agricultural land !as deemed the o!ner of the land he !as
tilling/ The leasehold rentals paid after that date should therefore be considered amorti6ation
payments/
5n his #eply to the public respondents, the petitioner maintains that the motion he filed !as resol&ed
on December 14, 198./ %n appeal to the "ffice of the 0resident !ould be useless !ith the
promulgation of (/"/ 8os/ 228 and 229, !hich in effect sanctioned the &alidity of the public
respondent+s acts/
?/#/ 8o/ .8.42
The petitioners in this case in&oke the right of retention granted by 0/D/ 8o/ 2. to o!ners of rice and
corn lands not eCceeding se&en hectares as long as they are culti&ating or intend to culti&ate the
same/ Their respecti&e lands do not eCceed the statutory limit but are occupied by tenants !ho are
actually culti&ating such lands/
%ccording to 0/D/ 8o/ -1, !hich !as promulgated in implementation of 0/D/ 8o/ 2.;
8o tenant1farmer in agricultural lands primarily de&oted to rice and corn shall be
eFected or remo&ed from his farmholding until such time as the respecti&e rights of
the tenant1 farmers and the lando!ner shall ha&e been determined in accordance
!ith the rules and regulations implementing 0/D/ 8o/ 2./
The petitioners claim they cannot eFect their tenants and so are unable to enFoy their right of
retention because the Department of %grarian #eform has so far not issued the implementing rules
reEuired under the abo&e1Euoted decree/ They therefore ask the )ourt for a !rit of mandamus to
compel the respondent to issue the said rules/
5n his )omment, the public respondent argues that 0/D/ 8o/ 2. has been amended by L"5 4.4
remo&ing any right of retention from persons !ho o!n other agricultural lands of more than .
hectares in aggregate area or lands used for residential, commercial, industrial or other purposes
from !hich they deri&e adeEuate income for their family/ %nd e&en assuming that the petitioners do
not fall under its terms, the regulations implementing 0/D/ 8o/ 2. ha&e already been issued, to !it,
the ,emorandum dated 9uly 14, 19.: '5nterim ?uidelines on #etention by Small Lando!ners, !ith
an accompanying #etention ?uide Table*, ,emorandum )ircular 8o/ 11 dated %pril 21, 19.8,
'5mplementation ?uidelines of L"5 8o/ 4.4*, ,emorandum )ircular 8o/ 18181 dated December
29,1981 ')larificatory ?uidelines on )o&erage of 0/D/ 8o/ 2. and #etention by Small Lando!ners*,
and D%# %dministrati&e "rder 8o/ 1, series of 198: '0ro&iding for a )ut1off Date for Lando!ners to
%pply for #etention and7or to 0rotest the )o&erage of their Landholdings under "peration Land
Transfer pursuant to 0/D/ 8o/ 2.*/ =or failure to file the corresponding applications for retention
under these measures, the petitioners are no! barred from in&oking this right/
The public respondent also stresses that the petitioners ha&e prematurely initiated this case
not!ithstanding the pendency of their appeal to the 0resident of the 0hilippines/ ,oreo&er, the
issuance of the implementing rules, assuming this has not yet been done, in&ol&es the eCercise of
discretion !hich cannot be controlled through the !rit of mandam%s/ This is especially true if this
function is entrusted, as in this case, to a separate department of the go&ernment/
5n their #eply, the petitioners insist that the abo&e1cited measures are not applicable to them
because they do not o!n more than se&en hectares of agricultural land/ ,oreo&er, assuming
arguendo that the rules !ere intended to co&er them also, the said measures are ne&ertheless not in
force because they ha&e not been published as reEuired by la! and the ruling of this )ourt
in !anada v. !%vera/
1$
%s for L"5 4.4, the same is ineffecti&e for the additional reason that a mere letter
of instruction could not ha&e repealed the presidential decree/
5
%lthough holding neither purse nor s!ord and so regarded as the !eakest of the three departments
of the go&ernment, the Fudiciary is nonetheless &ested !ith the po!er to annul the acts of either the
legislati&e or the eCecuti&e or of both !hen not conformable to the fundamental la!/ This is the
reason for !hat some Euarters call the doctrine of Fudicial supremacy/ (&en so, this po!er is not
lightly assumed or readily eCercised/ The doctrine of separation of po!ers imposes upon the courts
a proper restraint, born of the nature of their functions and of their respect for the other departments,
in striking do!n the acts of the legislati&e and the eCecuti&e as unconstitutional/ The policy, indeed,
is a blend of courtesy and caution/ To doubt is to sustain/ The theory is that before the act !as done
or the la! !as enacted, earnest studies !ere made by )ongress or the 0resident, or both, to insure
that the )onstitution !ould not be breached/
5n addition, the )onstitution itself lays do!n stringent conditions for a declaration of
unconstitutionality, reEuiring therefor the concurrence of a maFority of the members of the Supreme
)ourt !ho took part in the deliberations and &oted on the issue during their session en banc/
11
%nd
as established by Fudge made doctrine, the )ourt !ill assume Furisdiction o&er a constitutional Euestion
only if it is sho!n that the essential reEuisites of a Fudicial inEuiry into such a Euestion are first satisfied/
Thus, there must be an actual case or contro&ersy in&ol&ing a conflict of legal rights susceptible of Fudicial
determination, the constitutional Euestion must ha&e been opportunely raised by the proper party, and the
resolution of the Euestion is una&oidably necessary to the decision of the case itself/
12
3ith particular regard to the reEuirement of proper party as applied in the cases before us, !e hold
that the same is satisfied by the petitioners and inter&enors because each of them has sustained or
is in danger of sustaining an immediate inFury as a result of the acts or measures complained
of/
13
%nd e&en if, strictly speaking, they are not co&ered by the definition, it is still !ithin the !ide
discretion of the )ourt to !ai&e the reEuirement and so remo&e the impediment to its addressing and
resol&ing the serious constitutional Euestions raised/
5n the first (mergency 0o!ers )ases,
14
ordinary citi6ens and taCpayers !ere allo!ed to Euestion the
constitutionality of se&eral eCecuti&e orders issued by 0resident Luirino although they !ere in&oking only
an indirect and general interest shared in common !ith the public/ The )ourt dismissed the obFection that
they !ere not proper parties and ruled that Dthe transcendental importance to the public of these cases
demands that they be settled promptly and definitely, brushing aside, if !e must, technicalities of
procedure/D 3e ha&e since then applied this eCception in many other cases/
15
The other abo&e1mentioned reEuisites ha&e also been met in the present petitions/
5n must be stressed that despite the inhibitions pressing upon the )ourt !hen confronted !ith
constitutional issues like the ones no! before it, it !ill not hesitate to declare a la! or act in&alid
!hen it is con&inced that this must be done/ 5n arri&ing at this conclusion, its only criterion !ill be the
)onstitution as ?od and its conscience gi&e it the light to probe its meaning and disco&er its
purpose/ 0ersonal moti&es and political considerations are irrele&ancies that cannot influence its
decision/ 2landishment is as ineffectual as intimidation/
=or all the a!esome po!er of the )ongress and the (Cecuti&e, the )ourt !ill not hesitate to Dmake
the hammer fall, and hea&ily,D to use 9ustice Laurel+s pithy language, !here the acts of these
departments, or of any public official, betray the people+s !ill as eCpressed in the )onstitution/
5t need only be added, to borro! again the !ords of 9ustice Laurel, that G
/// !hen the Fudiciary mediates to allocate constitutional boundaries, it does not
assert any superiority o&er the other departmentsH it does not in reality nullify or
in&alidate an act of the Legislature, but only asserts the solemn and sacred obligation
assigned to it by the )onstitution to determine conflicting claims of authority under
the )onstitution and to establish for the parties in an actual contro&ersy the rights
!hich that instrument secures and guarantees to them/ This is in truth all that is
in&ol&ed in !hat is termed DFudicial supremacyD !hich properly is the po!er of Fudicial
re&ie! under the )onstitution/
16
The cases before us categorically raise constitutional Euestions that this )ourt must categorically
resol&e/ %nd so !e shall/
55
3e proceed first to the eCamination of the preliminary issues before resol&ing the more serious
challenges to the constitutionality of the se&eral measures in&ol&ed in these petitions/
The promulgation of 0/D/ 8o/ 2. by 0resident ,arcos in the eCercise of his po!ers under martial la!
has already been sustained in ;on<ales v. ?strella and !e find no reason to modify or re&erse it on
that issue/ %s for the po!er of 0resident %Euino to promulgate 0roc/ 8o/ 1-1 and (/"/ 8os/ 228 and
229, the same !as authori6ed under Section of the Transitory 0ro&isions of the 198. )onstitution,
Euoted abo&e/
The said measures !ere issued by 0resident %Euino before 9uly 2., 198., !hen the )ongress of
the 0hilippines !as formally con&ened and took o&er legislati&e po!er from her/ They are not
DmidnightD enactments intended to pre1empt the legislature because (/"/ 8o/ 228 !as issued on
9uly 1., 198., and the other measures, i/e/, 0roc/ 8o/ 1-1 and (/"/ 8o/ 229, !ere both issued on
9uly 22, 198./ 8either is it correct to say that these measures ceased to be &alid !hen she lost her
legislati&e po!er for, like any statute, they continue to be in force unless modified or repealed by
subseEuent la! or declared in&alid by the courts/ % statute does not ipso "acto become inoperati&e
simply because of the dissolution of the legislature that enacted it/ 2y the same token, 0resident
%Euino+s loss of legislati&e po!er did not ha&e the effect of in&alidating all the measures enacted by
her !hen and as long as she possessed it/
Significantly, the )ongress she is alleged to ha&e undercut has not reFected but in fact substantially
affirmed the challenged measures and has specifically pro&ided that they shall be suppletory to #/%/
8o/ :. !hene&er not inconsistent !ith its pro&isions/
17
5ndeed, some portions of the said measures,
like the creation of the 0:4 billion fund in Section 2 of 0roc/ 8o/ 1-1, and Sections 24 and 21 of (/"/ 8o/
229, ha&e been incorporated by reference in the )%#0 La!/
1"
That fund, as earlier noted, is itself being Euestioned on the ground that it does not conform to the
reEuirements of a &alid appropriation as specified in the )onstitution/ )learly, ho!e&er, 0roc/ 8o/
1-1 is not an appropriation measure e&en if it does pro&ide for the creation of said fund, for that is
not its principal purpose/ %n appropriation la! is one the primary and specific purpose of !hich is to
authori6e the release of public funds from the treasury/
1#
The creation of the fund is only incidental to
the main obFecti&e of the proclamation, !hich is agrarian reform/
5t should follo! that the specific constitutional pro&isions in&oked, to !it, Section 24 and Section
2:'4* of %rticle <5, are not applicable/ 3ith particular reference to Section 24, this ob&iously could
not ha&e been complied !ith for the simple reason that the >ouse of #epresentati&es, !hich no!
has the eCclusi&e po!er to initiate appropriation measures, had not yet been con&ened !hen the
proclamation !as issued/ The legislati&e po!er !as then solely &ested in the 0resident of the
0hilippines, !ho embodied, as it !ere, both houses of )ongress/
The argument of some of the petitioners that 0roc/ 8o/ 1-1 and (/"/ 8o/ 229 should be in&alidated
because they do not pro&ide for retention limits as reEuired by %rticle $555, Section 4 of the
)onstitution is no longer tenable/ #/%/ 8o/ :. does pro&ide for such limits no! in Section of the
la!, !hich in fact is one of its most contro&ersial pro&isions/ This section declares;
#etention Limits/ G (Ccept as other!ise pro&ided in this %ct, no person may o!n or
retain, directly or indirectly, any public or pri&ate agricultural land, the si6e of !hich
shall &ary according to factors go&erning a &iable family1si6ed farm, such as
commodity produced, terrain, infrastructure, and soil fertility as determined by the
0residential %grarian #eform )ouncil '0%#)* created hereunder, but in no case shall
retention by the lando!ner eCceed fi&e ':* hectares/ Three '-* hectares may be
a!arded to each child of the lando!ner, subFect to the follo!ing Eualifications; '1*
that he is at least fifteen '1:* years of ageH and '2* that he is actually tilling the land or
directly managing the farmH 0ro&ided, That lando!ners !hose lands ha&e been
co&ered by 0residential Decree 8o/ 2. shall be allo!ed to keep the area originally
retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs !ho still o!n the original homestead at the time of the appro&al of
this %ct shall retain the same areas as long as they continue to culti&ate said
homestead/
The argument that (/"/ 8o/ 229 &iolates the constitutional reEuirement that a bill shall ha&e only one
subFect, to be eCpressed in its title, deser&es only short attention/ 5t is settled that the title of the bill
does not ha&e to be a catalogue of its contents and !ill suffice if the matters embodied in the teCt are
rele&ant to each other and may be inferred from the title/
2$
The )ourt !ryly obser&es that during the past dictatorship, e&ery presidential issuance, by !hate&er
name it !as called, had the force and effect of la! because it came from 0resident ,arcos/ Such
are the !ays of despots/ >ence, it is futile to argue, as the petitioners do in ?/#/ 8o/ .9.44, that L"5
4.4 could not ha&e repealed 0/D/ 8o/ 2. because the former !as only a letter of instruction/ The
important thing is that it !as issued by 0resident ,arcos, !hose !ord !as la! during that time/
2ut for all their peremptoriness, these issuances from the 0resident ,arcos still had to comply !ith
the reEuirement for publication as this )ourt held in !anada v. !%vera/
21
>ence, unless published in
the "fficial ?a6ette in accordance !ith %rticle 2 of the )i&il )ode, they could not ha&e any force and effect
if they !ere among those enactments successfully challenged in that case/ L"5 4.4 !as published,
though, in the "fficial ?a6ette dated 8o&ember 29,19./*
=inally, there is the contention of the public respondent in ?/#/ 8o/ .8.42 that the !rit of mandamus
cannot issue to compel the performance of a discretionary act, especially by a specific department of
the go&ernment/ That is true as a general proposition but is subFect to one important Eualification/
)orrectly and categorically stated, the rule is that mandamus !ill lie to compel the discharge of the
discretionary duty itself but not to control the discretion to be eCercised/ 5n other !ords, mandamus
can issue to reEuire action only but not specific action/
3hene&er a duty is imposed upon a public official and an unnecessary and
unreasonable delay in the eCercise of such duty occurs, if it is a clear duty imposed
by la!, the courts !ill inter&ene by the eCtraordinary legal remedy of mandamus to
compel action/ 5f the duty is purely ministerial, the courts !ill reEuire specific action/ 5f
the duty is purely discretionary, the courts by mandam%s !ill reEuire action only/ =or
eCample, if an inferior court, public official, or board should, for an unreasonable
length of time, fail to decide a particular Euestion to the great detriment of all parties
concerned, or a court should refuse to take Furisdiction of a cause !hen the la!
clearly ga&e it Furisdiction mandamus !ill issue, in the first case to reEuire a decision,
and in the second to reEuire that Furisdiction be taken of the cause/
22
%nd !hile it is true that as a rule the !rit !ill not be proper as long as there is still a plain, speedy
and adeEuate remedy a&ailable from the administrati&e authorities, resort to the courts may still be
permitted if the issue raised is a Euestion of la!/
23
555
There are traditional distinctions bet!een the police po!er and the po!er of eminent domain that
logically preclude the application of both po!ers at the same time on the same subFect/ 5n the case
of &ity o" Bag%io v. :A7ASA,
24
for eCample, !here a la! reEuired the transfer of all municipal
!ater!orks systems to the 8%3%S% in eCchange for its assets of eEui&alent &alue, the )ourt held that
the po!er being eCercised !as eminent domain because the property in&ol&ed !as !holesome and
intended for a public use/ 0roperty condemned under the police po!er is noCious or intended for a
noCious purpose, such as a building on the &erge of collapse, !hich should be demolished for the public
safety, or obscene materials, !hich should be destroyed in the interest of public morals/ The confiscation
of such property is not compensable, unlike the taking of property under the po!er of eCpropriation, !hich
reEuires the payment of Fust compensation to the o!ner/
5n the case of Pennsylvania &oal &o. v. Mahon,
25
9ustice >olmes laid do!n the limits of the police
po!er in a famous aphorism; DThe general rule at least is that !hile property may be regulated to a
certain eCtent, if regulation goes too far it !ill be recogni6ed as a taking/D The regulation that !ent Dtoo
farD !as a la! prohibiting mining !hich might cause the subsidence of structures for human habitation
constructed on the land surface/ This !as resisted by a coal company !hich had earlier granted a deed to
the land o&er its mine but reser&ed all mining rights thereunder, !ith the grantee assuming all risks and
!ai&ing any damage claim/ The )ourt held the la! could not be sustained !ithout compensating the
grantor/ 9ustice 2randeis filed a lone dissent in !hich he argued that there !as a &alid eCercise of the
police po!er/ >e said;
(&ery restriction upon the use of property imposed in the eCercise of the police
po!er depri&es the o!ner of some right theretofore enFoyed, and is, in that sense, an
abridgment by the State of rights in property !ithout making compensation/ 2ut
restriction imposed to protect the public health, safety or morals from dangers
threatened is not a taking/ The restriction here in Euestion is merely the prohibition of
a noCious use/ The property so restricted remains in the possession of its o!ner/ The
state does not appropriate it or make any use of it/ The state merely pre&ents the
o!ner from making a use !hich interferes !ith paramount rights of the public/
3hene&er the use prohibited ceases to be noCious G as it may because of further
changes in local or social conditions G the restriction !ill ha&e to be remo&ed and
the o!ner !ill again be free to enFoy his property as heretofore/
#ecent trends, ho!e&er, !ould indicate not a polari6ation but a mingling of the police po!er and the
po!er of eminent domain, !ith the latter being used as an implement of the former like the po!er of
taCation/ The employment of the taCing po!er to achie&e a police purpose has long been
accepted/
26
%s for the po!er of eCpropriation, 0rof/ 9ohn 9/ )ostonis of the @ni&ersity of 5llinois )ollege
of La! 'referring to the earlier case of (uclid &/ %mbler #ealty )o/, 2.2 @S -:, !hich sustained a 6oning
la! under the police po!er* makes the follo!ing significant remarks;
(uclid, moreo&er, !as decided in an era !hen Fudges located the 0olice and eminent
domain po!ers on different planets/ ?enerally speaking, they &ie!ed eminent
domain as encompassing public acEuisition of pri&ate property for impro&ements that
!ould be a&ailable for public use,D literally construed/ To the police po!er, on the
other hand, they assigned the less intrusi&e task of pre&enting harmful eCternalities a
point reflected in the (uclid opinion+s reliance on an analogy to nuisance la! to
bolster its support of 6oning/ So long as suppression of a pri&ately authored harm
bore a plausible relation to some legitimate Dpublic purpose,D the pertinent measure
need ha&e afforded no compensation !hate&er/ 3ith the progressi&e gro!th of
go&ernment+s in&ol&ement in land use, the distance bet!een the t!o po!ers has
contracted considerably/ Today go&ernment often employs eminent domain
interchangeably !ith or as a useful complement to the police po!er11 a trend
eCpressly appro&ed in the Supreme )ourt+s 19:4 decision in 2erman &/ 0arker, !hich
broadened the reach of eminent domain+s Dpublic useD test to match that of the police
po!er+s standard of Dpublic purpose/D
27
The 2erman case sustained a rede&elopment proFect and the impro&ement of blighted areas in the
District of )olumbia as a proper eCercise of the police po!er/ "n the role of eminent domain in the
attainment of this purpose, 9ustice Douglas declared;
5f those !ho go&ern the District of )olumbia decide that the 8ation+s )apital should
be beautiful as !ell as sanitary, there is nothing in the =ifth %mendment that stands
in the !ay/
"nce the obFect is !ithin the authority of )ongress, the right to reali6e it through the
eCercise of eminent domain is clear/
=or the po!er of eminent domain is merely the means to the end/
2"
5n Penn &entral !ransportation &o. v. :e) Cor4 &ity,
2#
decided by a 1- &ote in 19.8, the @/S
Supreme )ourt sustained the respondent+s Landmarks 0reser&ation La! under !hich the o!ners of the
?rand )entral Terminal had not been allo!ed to construct a multi1story office building o&er the Terminal,
!hich had been designated a historic landmark/ 0reser&ation of the landmark !as held to be a &alid
obFecti&e of the police po!er/ The problem, ho!e&er, !as that the o!ners of the Terminal !ould be
depri&ed of the right to use the airspace abo&e it although other lando!ners in the area could do so o&er
their respecti&e properties/ 3hile insisting that there !as here no taking, the )ourt nonetheless
recogni6ed certain compensatory rights accruing to ?rand )entral Terminal !hich it said !ould
Dundoubtedly mitigateD the loss caused by the regulation/ This Dfair compensation,D as he called it, !as
eCplained by 0rof/ )ostonis in this !ise;
5n return for retaining the Terminal site in its pristine landmark status, 0enn )entral !as authori6ed to
transfer to neighboring properties the authori6ed but unused rights accruing to the site prior to the
Terminal+s designation as a landmark G the rights !hich !ould ha&e been eChausted by the :91story
building that the city refused to countenance atop the Terminal/ 0re&ailing bulk restrictions on
neighboring sites !ere proportionately relaCed, theoretically enabling 0enn )entral to recoup its
losses at the Terminal site by constructing or selling to others the right to construct larger, hence
more profitable buildings on the transferee sites/
3$
The cases before us present no knotty complication insofar as the Euestion of compensable taking is
concerned/ To the eCtent that the measures under challenge merely prescribe retention limits for
lando!ners, there is an eCercise of the police po!er for the regulation of pri&ate property in
accordance !ith the )onstitution/ 2ut !here, to carry out such regulation, it becomes necessary to
depri&e such o!ners of !hate&er lands they may o!n in eCcess of the maCimum area allo!ed, there
is definitely a taking under the po!er of eminent domain for !hich payment of Fust compensation is
imperati&e/ The taking contemplated is not a mere limitation of the use of the land/ 3hat is reEuired
is the surrender of the title to and the physical possession of the said eCcess and all beneficial rights
accruing to the o!ner in fa&or of the farmer1beneficiary/ This is definitely an eCercise not of the police
po!er but of the po!er of eminent domain/
3hether as an eCercise of the police po!er or of the po!er of eminent domain, the se&eral
measures before us are challenged as &iolati&e of the due process and eEual protection clauses/
The challenge to 0roc/ 8o/ 1-1 and (/"/ 8os/ 228 and 299 on the ground that no retention limits are
prescribed has already been discussed and dismissed/ 5t is noted that although they eCcited many
bitter eCchanges during the deliberation of the )%#0 La! in )ongress, the retention limits finally
agreed upon are, curiously enough, not being Euestioned in these petitions/ 3e therefore do not
discuss them here/ The )ourt !ill come to the other claimed &iolations of due process in connection
!ith our eCamination of the adeEuacy of Fust compensation as reEuired under the po!er of
eCpropriation/
The argument of the small farmers that they ha&e been denied eEual protection because of the
absence of retention limits has also become academic under Section of #/%/ 8o/ :./
Significantly, they too ha&e not Euestioned the area of such limits/ There is also the complaint that
they should not be made to share the burden of agrarian reform, an obFection also made by the
sugar planters on the ground that they belong to a particular class !ith particular interests of their
o!n/ >o!e&er, no e&idence has been submitted to the )ourt that the reEuisites of a &alid
classification ha&e been &iolated/
)lassification has been defined as the grouping of persons or things similar to each other in certain
particulars and different from each other in these same particulars/
31
To be &alid, it must conform to
the follo!ing reEuirements; '1* it must be based on substantial distinctionsH '2* it must be germane to the
purposes of the la!H '-* it must not be limited to eCisting conditions onlyH and '4* it must apply eEually to
all the members of the class/
32
The )ourt finds that all these reEuisites ha&e been met by the measures
here challenged as arbitrary and discriminatory/
(Eual protection simply means that all persons or things similarly situated must be treated alike both
as to the rights conferred and the liabilities imposed/
33
The petitioners ha&e not sho!n that they belong
to a different class and entitled to a different treatment/ The argument that not only lando!ners but also
o!ners of other properties must be made to share the burden of implementing land reform must be
reFected/ There is a substantial distinction bet!een these t!o classes of o!ners that is clearly &isible
eCcept to those !ho !ill not see/ There is no need to elaborate on this matter/ 5n any e&ent, the )ongress
is allo!ed a !ide lee!ay in pro&iding for a &alid classification/ 5ts decision is accorded recognition and
respect by the courts of Fustice eCcept only !here its discretion is abused to the detriment of the 2ill of
#ights/
5t is !orth remarking at this Functure that a statute may be sustained under the police po!er only if
there is a concurrence of the la!ful subFect and the la!ful method/ 0ut other!ise, the interests of the
public generally as distinguished from those of a particular class reEuire the interference of the State
and, no less important, the means employed are reasonably necessary for the attainment of the
purpose sought to be achie&ed and not unduly oppressi&e upon indi&iduals/
34
%s the subFect and
purpose of agrarian reform ha&e been laid do!n by the )onstitution itself, !e may say that the first
reEuirement has been satisfied/ 3hat remains to be eCamined is the &alidity of the method employed to
achie&e the constitutional goal/
"ne of the basic principles of the democratic system is that !here the rights of the indi&idual are
concerned, the end does not Fustify the means/ 5t is not enough that there be a &alid obFecti&eH it is
also necessary that the means employed to pursue it be in keeping !ith the )onstitution/ ,ere
eCpediency !ill not eCcuse constitutional shortcuts/ There is no Euestion that not e&en the strongest
moral con&iction or the most urgent public need, subFect only to a fe! notable eCceptions, !ill
eCcuse the bypassing of an indi&idual+s rights/ 5t is no eCaggeration to say that a, person in&oking a
right guaranteed under %rticle 555 of the )onstitution is a maFority of one e&en as against the rest of
the nation !ho !ould deny him that right/
That right co&ers the person+s life, his liberty and his property under Section 1 of %rticle 555 of the
)onstitution/ 3ith regard to his property, the o!ner enFoys the added protection of Section 9, !hich
reaffirms the familiar rule that pri&ate property shall not be taken for public use !ithout Fust
compensation/
This brings us no! to the po!er of eminent domain/
5<
(minent domain is an inherent po!er of the State that enables it to forcibly acEuire
pri&ate lands intended for public use upon payment of Fust compensation to the
o!ner/ "b&iously, there is no need to eCpropriate !here the o!ner is !illing to sell
under terms also acceptable to the purchaser, in !hich case an ordinary deed of sale
may be agreed upon by the parties/
35
5t is only !here the o!ner is un!illing to sell, or
cannot accept the price or other conditions offered by the &endee, that the po!er of
eminent domain !ill come into play to assert the paramount authority of the State o&er
the interests of the property o!ner/ 0ri&ate rights must then yield to the irresistible
demands of the public interest on the time1honored Fustification, as in the case of the
police po!er, that the !elfare of the people is the supreme la!/
2ut for all its primacy and urgency, the po!er of eCpropriation is by no means absolute 'as indeed no
po!er is absolute*/ The limitation is found in the constitutional inFunction that Dpri&ate property shall
not be taken for public use !ithout Fust compensationD and in the abundant Furisprudence that has
e&ol&ed from the interpretation of this principle/ 2asically, the reEuirements for a proper eCercise of
the po!er are; '1* public use and '2* Fust compensation/
Let us dispose first of the argument raised by the petitioners in ?/#/ 8o/ .9-14 that the State should
first distribute public agricultural lands in the pursuit of agrarian reform instead of immediately
disturbing property rights by forcibly acEuiring pri&ate agricultural lands/ 0arenthetically, it is not
correct to say that only public agricultural lands may be co&ered by the )%#0 as the )onstitution
calls for Dthe Fust distribution of all agricultural lands/D 5n any e&ent, the decision to redistribute pri&ate
agricultural lands in the manner prescribed by the )%#0 !as made by the legislati&e and eCecuti&e
departments in the eCercise of their discretion/ 3e are not Fustified in re&ie!ing that discretion in the
absence of a clear sho!ing that it has been abused/
% becoming courtesy admonishes us to respect the decisions of the political departments !hen they
decide !hat is kno!n as the political Euestion/ %s eCplained by )hief 9ustice )oncepcion in the case
of !a=ada v. &%enco;
36
The term Dpolitical EuestionD connotes !hat it means in ordinary parlance, namely, a
Euestion of policy/ 5t refers to Dthose Euestions !hich, under the )onstitution, are to
be decided by the people in their so&ereign capacityH or in regard to !hich full
discretionary authority has been delegated to the legislati&e or eCecuti&e branch of
the go&ernment/D 5t is concerned !ith issues dependent upon the !isdom, not
legality, of a particular measure/
5t is true that the concept of the political Euestion has been constricted !ith the enlargement of
Fudicial po!er, !hich no! includes the authority of the courts Dto determine !hether or not there has
been a gra&e abuse of discretion amounting to lack or eCcess of Furisdiction on the part of any
branch or instrumentality of the ?o&ernment/D
37
(&en so, this should not be construed as a license for
us to re&erse the other departments simply because their &ie!s may not coincide !ith ours/
The legislature and the eCecuti&e ha&e been seen fit, in their !isdom, to include in the )%#0 the
redistribution of pri&ate landholdings 'e&en as the distribution of public agricultural lands is first
pro&ided for, !hile also continuing apace under the 0ublic Land %ct and other cognate la!s*/ The
)ourt sees no Fustification to interpose its authority, !hich !e may assert only if !e belie&e that the
political decision is not un!ise, but illegal/ 3e do not find it to be so/
5n 0.S. v. &handler.-%nbar 7ater Po)er &ompany,
3"
it !as held;
)ongress ha&ing determined, as it did by the %ct of ,arch -,1949 that the entire St/
,ary+s ri&er bet!een the %merican bank and the international line, as !ell as all of
the upland north of the present ship canal, throughout its entire length, !as
Dnecessary for the purpose of na&igation of said !aters, and the !aters connected
there!ith,D that determination is conclusi&e in condemnation proceedings instituted
by the @nited States under that %ct, and there is no room for Fudicial re&ie! of the
Fudgment of )ongress /// /
%s earlier obser&ed, the reEuirement for public use has already been settled for us by the
)onstitution itself 8o less than the 198. )harter calls for agrarian reform, !hich is the reason !hy
pri&ate agricultural lands are to be taken from their o!ners, subFect to the prescribed maCimum
retention limits/ The purposes specified in 0/D/ 8o/ 2., 0roc/ 8o/ 1-1 and #/%/ 8o/ :. are only an
elaboration of the constitutional inFunction that the State adopt the necessary measures Dto
encourage and undertake the Fust distribution of all agricultural lands to enable farmers !ho are
landless to o!n directly or collecti&ely the lands they till/D That public use, as pronounced by the
fundamental la! itself, must be binding on us/
The second reEuirement, i/e/, the payment of Fust compensation, needs a longer and more
thoughtful eCamination/
9ust compensation is defined as the full and fair eEui&alent of the property taken from its o!ner by
the eCpropriator/
3#
5t has been repeatedly stressed by this )ourt that the measure is not the taker+s gain
but the o!ner+s loss/
4$
The !ord DFustD is used to intensify the meaning of the !ord DcompensationD to
con&ey the idea that the eEui&alent to be rendered for the property to be taken shall be real, substantial,
full, ample/
41
5t bears repeating that the measures challenged in these petitions contemplate more than a mere
regulation of the use of pri&ate lands under the police po!er/ 3e deal here !ith an actual taking of
pri&ate agricultural lands that has dispossessed the o!ners of their property and depri&ed them of all
its beneficial use and enFoyment, to entitle them to the Fust compensation mandated by the
)onstitution/
%s held in Rep%blic o" the Philippines v. &astellvi,
42
there is compensable taking !hen the follo!ing
conditions concur; '1* the eCpropriator must enter a pri&ate propertyH '2* the entry must be for more than a
momentary periodH '-* the entry must be under !arrant or color of legal authorityH '4* the property must be
de&oted to public use or other!ise informally appropriated or inFuriously affectedH and ':* the utili6ation of
the property for public use must be in such a !ay as to oust the o!ner and depri&e him of beneficial
enFoyment of the property/ %ll these reEuisites are en&isioned in the measures before us/
3here the State itself is the eCpropriator, it is not necessary for it to make a deposit upon its taking
possession of the condemned property, as Dthe compensation is a public charge, the good faith of
the public is pledged for its payment, and all the resources of taCation may be employed in raising
the amount/D
43
8e&ertheless, Section 1'e* of the )%#0 La! pro&ides that;
@pon receipt by the lando!ner of the corresponding payment or, in case of reFection
or no response from the lando!ner, upon the deposit !ith an accessible bank
designated by the D%# of the compensation in cash or in L20 bonds in accordance
!ith this %ct, the D%# shall take immediate possession of the land and shall reEuest
the proper #egister of Deeds to issue a Transfer )ertificate of Title 'T)T* in the
name of the #epublic of the 0hilippines/ The D%# shall thereafter proceed !ith the
redistribution of the land to the Eualified beneficiaries/
"bFection is raised, ho!e&er, to the manner of fiCing the Fust compensation, !hich it is claimed is
entrusted to the administrati&e authorities in &iolation of Fudicial prerogati&es/ Specific reference is
made to Section 1'd*, !hich pro&ides that in case of the reFection or disregard by the o!ner of the
offer of the go&ernment to buy his land1
/// the D%# shall conduct summary administrati&e proceedings to determine the
compensation for the land by reEuiring the lando!ner, the L20 and other interested
parties to submit e&idence as to the Fust compensation for the land, !ithin fifteen '1:*
days from the receipt of the notice/ %fter the eCpiration of the abo&e period, the
matter is deemed submitted for decision/ The D%# shall decide the case !ithin thirty
'-4* days after it is submitted for decision/
To be sure, the determination of Fust compensation is a function addressed to the courts of Fustice
and may not be usurped by any other branch or official of the go&ernment/ ?PZA v. -%lay
44
resol&ed
a challenge to se&eral decrees promulgated by 0resident ,arcos pro&iding that the Fust compensation for
property under eCpropriation should be either the assessment of the property by the go&ernment or the
s!orn &aluation thereof by the o!ner, !hiche&er !as lo!er/ 5n declaring these decrees unconstitutional,
the )ourt held through ,r/ 9ustice >ugo (/ ?utierre6, 9r/;
The method of ascertaining Fust compensation under the aforecited decrees
constitutes impermissible encroachment on Fudicial prerogati&es/ 5t tends to render
this )ourt inutile in a matter !hich under this )onstitution is reser&ed to it for final
determination/
Thus, although in an eCpropriation proceeding the court technically !ould still ha&e
the po!er to determine the Fust compensation for the property, follo!ing the
applicable decrees, its task !ould be relegated to simply stating the lo!er &alue of
the property as declared either by the o!ner or the assessor/ %s a necessary
conseEuence, it !ould be useless for the court to appoint commissioners under #ule
. of the #ules of )ourt/ ,oreo&er, the need to satisfy the due process clause in the
taking of pri&ate property is seemingly fulfilled since it cannot be said that a Fudicial
proceeding !as not had before the actual taking/ >o!e&er, the strict application of
the decrees during the proceedings !ould be nothing short of a mere formality or
charade as the court has only to choose bet!een the &aluation of the o!ner and that
of the assessor, and its choice is al!ays limited to the lo!er of the t!o/ The court
cannot eCercise its discretion or independence in determining !hat is Fust or fair/
(&en a grade school pupil could substitute for the Fudge insofar as the determination
of constitutional Fust compensation is concerned/
C C C
5n the present petition, !e are once again confronted !ith the same Euestion of
!hether the courts under 0/D/ 8o/ 1:--, !hich contains the same pro&ision on Fust
compensation as its predecessor decrees, still ha&e the po!er and authority to
determine Fust compensation, independent of !hat is stated by the decree and to this
effect, to appoint commissioners for such purpose/
This time, !e ans!er in the affirmati&e/
C C C
5t is &iolati&e of due process to deny the o!ner the opportunity to pro&e that the
&aluation in the taC documents is unfair or !rong/ %nd it is repulsi&e to the basic
concepts of Fustice and fairness to allo! the hapha6ard !ork of a minor bureaucrat or
clerk to absolutely pre&ail o&er the Fudgment of a court promulgated only after eCpert
commissioners ha&e actually &ie!ed the property, after e&idence and arguments pro
and con ha&e been presented, and after all factors and considerations essential to a
fair and Fust determination ha&e been Fudiciously e&aluated/
% reading of the aforecited Section 1'd* !ill readily sho! that it does not suffer from the
arbitrariness that rendered the challenged decrees constitutionally obFectionable/ %lthough the
proceedings are described as summary, the lando!ner and other interested parties are ne&ertheless
allo!ed an opportunity to submit e&idence on the real &alue of the property/ 2ut more importantly,
the determination of the Fust compensation by the D%# is not by any means final and conclusi&e
upon the lando!ner or any other interested party, for Section 1'f* clearly pro&ides;
%ny party !ho disagrees !ith the decision may bring the matter to the court of proper
Furisdiction for final determination of Fust compensation/
The determination made by the D%# is only preliminary unless accepted by all parties concerned/
"ther!ise, the courts of Fustice !ill still ha&e the right to re&ie! !ith finality the said determination in
the eCercise of !hat is admittedly a Fudicial function/
The second and more serious obFection to the pro&isions on Fust compensation is not as easily
resol&ed/
This refers to Section 18 of the )%#0 La! pro&iding in full as follo!s;
S()/ 18/ <aluation and ,ode of )ompensation/ G The L20 shall compensate the
lando!ner in such amount as may be agreed upon by the lando!ner and the D%#
and the L20, in accordance !ith the criteria pro&ided for in Sections 1 and 1., and
other pertinent pro&isions hereof, or as may be finally determined by the court, as the
Fust compensation for the land/
The compensation shall be paid in one of the follo!ing modes, at the option of the
lando!ner;
'1* )ash payment, under the follo!ing terms and conditions;
'a* =or lands abo&e fifty ':4* hectares, insofar as the
eCcess hectarage is concerned G T!enty1fi&e percent
'2:I* cash, the balance to be paid in go&ernment
financial instruments negotiable at any time/
'b* =or lands abo&e t!enty1four '24* hectares and up
to fifty ':4* hectares G Thirty percent '-4I* cash, the
balance to be paid in go&ernment financial
instruments negotiable at any time/
'c* =or lands t!enty1four '24* hectares and belo! G
Thirty1fi&e percent '-:I* cash, the balance to be paid
in go&ernment financial instruments negotiable at any
time/
'2* Shares of stock in go&ernment1o!ned or controlled corporations, L20 preferred
shares, physical assets or other Eualified in&estments in accordance !ith guidelines
set by the 0%#)H
'-* TaC credits !hich can be used against any taC liabilityH
'4* L20 bonds, !hich shall ha&e the follo!ing features;
'a* ,arket interest rates aligned !ith 911day treasury
bill rates/ Ten percent '14I* of the face &alue of the
bonds shall mature e&ery year from the date of
issuance until the tenth '14th* year; 0ro&ided, That
should the lando!ner choose to forego the cash
portion, !hether in full or in part, he shall be paid
correspondingly in L20 bondsH
'b* Transferability and negotiability/ Such L20 bonds
may be used by the lando!ner, his successors1in1
interest or his assigns, up to the amount of their face
&alue, for any of the follo!ing;
'i* %cEuisition of land or other real properties of the
go&ernment, including assets under the %sset
0ri&ati6ation 0rogram and other assets foreclosed by
go&ernment financial institutions in the same pro&ince
or region !here the lands for !hich the bonds !ere
paid are situatedH
'ii* %cEuisition of shares of stock of go&ernment1
o!ned or controlled corporations or shares of stock
o!ned by the go&ernment in pri&ate corporationsH
'iii* Substitution for surety or bail bonds for the
pro&isional release of accused persons, or for
performance bondsH
'i&* Security for loans !ith any go&ernment financial
institution, pro&ided the proceeds of the loans shall be
in&ested in an economic enterprise, preferably in a
small and medium1 scale industry, in the same
pro&ince or region as the land for !hich the bonds are
paidH
'&* 0ayment for &arious taCes and fees to
go&ernment; 0ro&ided, That the use of these bonds
for these purposes !ill be limited to a certain
percentage of the outstanding balance of the financial
instrumentsH 0ro&ided, further, That the 0%#) shall
determine the percentages mentioned abo&eH
'&i* 0ayment for tuition fees of the immediate family of
the original bondholder in go&ernment uni&ersities,
colleges, trade schools, and other institutionsH
'&ii* 0ayment for fees of the immediate family of the
original bondholder in go&ernment hospitalsH and
'&iii* Such other uses as the 0%#) may from time to
time allo!/
The contention of the petitioners in ?/#/ 8o/ .9... is that the abo&e pro&ision is unconstitutional
insofar as it reEuires the o!ners of the eCpropriated properties to accept Fust compensation therefor
in less than money, !hich is the only medium of payment allo!ed/ 5n support of this contention, they
cite Furisprudence holding that;
The fundamental rule in eCpropriation matters is that the o!ner of the property
eCpropriated is entitled to a Fust compensation, !hich should be neither more nor
less, !hene&er it is possible to make the assessment, than the money eEui&alent of
said property/ 9ust compensation has al!ays been understood to be the Fust and
complete eEui&alent of the loss !hich the o!ner of the thing eCpropriated has to
suffer by reason of the eCpropriation /
45
'(mphasis supplied/*
5n 9/,/ Tua6on )o/ &/ Land Tenure %dministration,
46
this )ourt held;
5t is !ell1settled that Fust compensation means the eEui&alent for the &alue of the
property at the time of its taking/ %nything beyond that is more, and anything short of
that is less, than Fust compensation/ 5t means a fair and full eEui&alent for the loss
sustained, !hich is the measure of the indemnity, not !hate&er gain !ould accrue to
the eCpropriating entity/ The market &alue of the land taken is the Fust compensation
to !hich the o!ner of condemned property is entitled, the market &alue being that
sum of money !hich a person desirous, but not compelled to buy, and an o!ner,
!illing, but not compelled to sell, !ould agree on as a price to be gi&en and recei&ed
for such property/ '(mphasis supplied/*
5n the @nited States, !here much of our Furisprudence on the subFect has been deri&ed, the !eight
of authority is also to the effect that Fust compensation for property eCpropriated is payable only in
money and not other!ise/ Thus G
The medium of payment of compensation is ready money or cash/ The condemnor
cannot compel the o!ner to accept anything but money, nor can the o!ner compel or
reEuire the condemnor to pay him on any other basis than the &alue of the property
in money at the time and in the manner prescribed by the )onstitution and the
statutes/ 3hen the po!er of eminent domain is resorted to, there must be a standard
medium of payment, binding upon both parties, and the la! has fiCed that standard
as money in cash/
47
'(mphasis supplied/*
0art cash and deferred payments are not and cannot, in the nature of things, be
regarded as a reliable and constant standard of compensation/
4"
D9ust compensationD for property taken by condemnation means a fair eEui&alent in
money, !hich must be paid at least !ithin a reasonable time after the taking, and it is not
!ithin the po!er of the Legislature to substitute for such payment future obligations,
bonds, or other &aluable ad&antage/
4#
'(mphasis supplied/*
5t cannot be denied from these cases that the traditional medium for the payment of Fust
compensation is money and no other/ %nd so, conformably, has Fust compensation been paid in the
past solely in that medium/ >o!e&er, !e do not deal here !ith the traditional eCcercise of the po!er
of eminent domain/ This is not an ordinary eCpropriation !here only a specific property of relati&ely
limited area is sought to be taken by the State from its o!ner for a specific and perhaps local
purpose/
3hat !e deal !ith here is a re&olutionary kind of eCpropriation/
The eCpropriation before us affects all pri&ate agricultural lands !hene&er found and of !hate&er
kind as long as they are in eCcess of the maCimum retention limits allo!ed their o!ners/ This kind of
eCpropriation is intended for the benefit not only of a particular community or of a small segment of
the population but of the entire =ilipino nation, from all le&els of our society, from the impo&erished
farmer to the land1glutted o!ner/ 5ts purpose does not co&er only the !hole territory of this country
but goes beyond in time to the foreseeable future, !hich it hopes to secure and edify !ith the &ision
and the sacrifice of the present generation of =ilipinos/ ?enerations yet to come are as in&ol&ed in
this program as !e are today, although hopefully only as beneficiaries of a richer and more fulfilling
life !e !ill guarantee to them tomorro! through our thoughtfulness today/ %nd, finally, let it not be
forgotten that it is no less than the )onstitution itself that has ordained this re&olution in the farms,
calling for Da Fust distributionD among the farmers of lands that ha&e heretofore been the prison of
their dreams but can no! become the key at least to their deli&erance/
Such a program !ill in&ol&e not mere millions of pesos/ The cost !ill be tremendous/ )onsidering
the &ast areas of land subFect to eCpropriation under the la!s before us, !e estimate that hundreds
of billions of pesos !ill be needed, far more indeed than the amount of 0:4 billion initially
appropriated, !hich is already staggering as it is by our present standards/ Such amount is in fact
not e&en fully a&ailable at this time/
3e assume that the framers of the )onstitution !ere a!are of this difficulty !hen they called for
agrarian reform as a top priority proFect of the go&ernment/ 5t is a part of this assumption that !hen
they en&isioned the eCpropriation that !ould be needed, they also intended that the Fust
compensation !ould ha&e to be paid not in the orthodoC !ay but a less con&entional if more
practical method/ There can be no doubt that they !ere a!are of the financial limitations of the
go&ernment and had no illusions that there !ould be enough money to pay in cash and in full for the
lands they !anted to be distributed among the farmers/ 3e may therefore assume that their
intention !as to allo! such manner of payment as is no! pro&ided for by the )%#0 La!, particularly
the payment of the balance 'if the o!ner cannot be paid fully !ith money*, or indeed of the entire
amount of the Fust compensation, !ith other things of &alue/ 3e may also suppose that !hat they
had in mind !as a similar scheme of payment as that prescribed in 0/D/ 8o/ 2., !hich !as the la! in
force at the time they deliberated on the ne! )harter and !ith !hich they presumably agreed in
principle/
The )ourt has not found in the records of the )onstitutional )ommission any categorical agreement
among the members regarding the meaning to be gi&en the concept of Fust compensation as applied
to the comprehensi&e agrarian reform program being contemplated/ There !as the suggestion to
Dfine tuneD the reEuirement to suit the demands of the proFect e&en as it !as also felt that they
should Dlea&e it to )ongressD to determine ho! payment should be made to the lando!ner and
reimbursement reEuired from the farmer1beneficiaries/ Such inno&ations as Dprogressi&e
compensationD and DState1subsidi6ed compensationD !ere also proposed/ 5n the end, ho!e&er, no
special definition of the Fust compensation for the lands to be eCpropriated !as reached by the
)ommission/
5$
"n the other hand, there is nothing in the records either that militates against the assumptions !e
are making of the general sentiments and intention of the members on the content and manner of
the payment to be made to the lando!ner in the light of the magnitude of the eCpenditure and the
limitations of the eCpropriator/
3ith these assumptions, the )ourt hereby declares that the content and manner of the Fust
compensation pro&ided for in the afore1 Euoted Section 18 of the )%#0 La! is not &iolati&e of the
)onstitution/ 3e do not mind admitting that a certain degree of pragmatism has influenced our
decision on this issue, but after all this )ourt is not a cloistered institution remo&ed from the realities
and demands of society or obli&ious to the need for its enhancement/ The )ourt is as acutely
anCious as the rest of our people to see the goal of agrarian reform achie&ed at last after the
frustrations and depri&ations of our peasant masses during all these disappointing decades/ 3e are
a!are that in&alidation of the said section !ill result in the nullification of the entire program, killing
the farmer+s hopes e&en as they approach reali6ation and resurrecting the spectre of discontent and
dissent in the restless countryside/ That is not in our &ie! the intention of the )onstitution, and that is
not !hat !e shall decree today/
%ccepting the theory that payment of the Fust compensation is not al!ays reEuired to be made fully
in money, !e find further that the proportion of cash payment to the other things of &alue constituting
the total payment, as determined on the basis of the areas of the lands eCpropriated, is not unduly
oppressi&e upon the lando!ner/ 5t is noted that the smaller the land, the bigger the payment in
money, primarily because the small lando!ner !ill be needing it more than the big lando!ners, !ho
can afford a bigger balance in bonds and other things of &alue/ 8o less importantly, the go&ernment
financial instruments making up the balance of the payment are Dnegotiable at any time/D The other
modes, !hich are like!ise a&ailable to the lando!ner at his option, are also not unreasonable
because payment is made in shares of stock, L20 bonds, other properties or assets, taC credits, and
other things of &alue eEui&alent to the amount of Fust compensation/
%dmittedly, the compensation contemplated in the la! !ill cause the lando!ners, big and small, not
a little incon&enience/ %s already remarked, this cannot be a&oided/ 8e&ertheless, it is de&outly
hoped that these countrymen of ours, conscious as !e kno! they are of the need for their
forebearance and e&en sacrifice, !ill not begrudge us their indispensable share in the attainment of
the ideal of agrarian reform/ "ther!ise, our pursuit of this elusi&e goal !ill be like the Euest for the
>oly ?rail/
The complaint against the effects of non1registration of the land under (/"/ 8o/ 229 does not seem
to be &iable any more as it appears that Section 4 of the said "rder has been superseded by Section
14 of the )%#0 La!/ This repeats the reEuisites of registration as embodied in the earlier measure
but does not pro&ide, as the latter did, that in case of failure or refusal to register the land, the
&aluation thereof shall be that gi&en by the pro&incial or city assessor for taC purposes/ "n the
contrary, the )%#0 La! says that the Fust compensation shall be ascertained on the basis of the
factors mentioned in its Section 1. and in the manner pro&ided for in Section 1/
The last maFor challenge to )%#0 is that the lando!ner is di&ested of his property e&en before
actual payment to him in full of Fust compensation, in contra&ention of a !ell1 accepted principle of
eminent domain/
The recogni6ed rule, indeed, is that title to the property eCpropriated shall pass from the o!ner to the
eCpropriator only upon full payment of the Fust compensation/ 9urisprudence on this settled principle
is consistent both here and in other democratic Furisdictions/ Thus;
Title to property !hich is the subFect of condemnation proceedings does not &est the condemnor until
the Fudgment fiCing Fust compensation is entered and paid, but the condemnor+s title relates back to
the date on !hich the petition under the (minent Domain %ct, or the commissioner+s report under the
Local 5mpro&ement %ct, is filed/
51
/// although the right to appropriate and use land taken for a canal is complete at the time of entry,
title to the property taken remains in the o!ner until payment is actually made/
52
'(mphasis supplied/*
5n Kennedy &/ 5ndianapolis,
53
the @S Supreme )ourt cited se&eral cases holding that title to property
does not pass to the condemnor until Fust compensation had actually been made/ 5n fact, the decisions
appear to be uniformly to this effect/ %s early as 18-8, in R%bottom v. Mc#%re,
54
it !as held that Dactual
payment to the o!ner of the condemned property !as a condition precedent to the in&estment of the title
to the property in the StateD albeit Dnot to the appropriation of it to public use/D 5n Rex"ord v. Dnight,
55
the
)ourt of %ppeals of 8e! Aork said that the construction upon the statutes !as that the fee did not &est in
the State until the payment of the compensation although the authority to enter upon and appropriate the
land !as complete prior to the payment/ Kennedy further said that Dboth on principle and authority the
rule is /// that the right to enter on and use the property is complete, as soon as the property is actually
appropriated under the authority of la! for a public use, b%t that the title does not pass "rom the o)ner
)itho%t his consent, %ntil '%st compensation has been made to him.E
"ur o!n Supreme )ourt has held in (isayan Re"ining &o. v. &am%s and Paredes,
56
that;
5f the la!s !hich !e ha&e eChibited or cited in the preceding discussion are
attenti&ely eCamined it !ill be apparent that the method of eCpropriation adopted in
this Furisdiction is such as to afford absolute reassurance that no piece o" land can
be "inally and irrevocably ta4en "rom an %n)illing o)ner %ntil compensation is paid ...
. '(mphasis supplied/*
5t is true that 0/D/ 8o/ 2. eCpressly ordered the emancipation of tenant1farmer as "ctober 21, 19.2
and declared that he shall Dbe deemed the o!nerD of a portion of land consisting of a family1si6ed
farm eCcept that Dno title to the land o!ned by him !as to be actually issued to him unless and until
he had become a full1fledged member of a duly recogni6ed farmers+ cooperati&e/D 5t !as understood,
ho!e&er, that full payment of the Fust compensation also had to be made first, conformably to the
constitutional reEuirement/
3hen (/"/ 8o/ 228, categorically stated in its Section 1 that;
%ll Eualified farmer1beneficiaries are no! deemed full o!ners as of "ctober 21, 19.2
of the land they acEuired by &irtue of 0residential Decree 8o/ 2./ '(mphasis
supplied/*
it !as ob&iously referring to lands already &alidly acEuired under the said decree, after proof of full1
fledged membership in the farmers+ cooperati&es and full payment of Fust compensation/ >ence, it
!as also perfectly proper for the "rder to also pro&ide in its Section 2 that the Dlease rentals paid to
the lando!ner by the farmer1 beneficiary after "ctober 21, 19.2 'pending transfer of o!nership after
full payment of Fust compensation*, shall be considered as ad&ance payment for the land/D
The )%#0 La!, for its part, conditions the transfer of possession and o!nership of the land to the
go&ernment on receipt by the lando!ner of the corresponding payment or the deposit by the D%# of
the compensation in cash or L20 bonds !ith an accessible bank/ @ntil then, title also remains !ith
the lando!ner/
57
8o outright change of o!nership is contemplated either/
>ence, the argument that the assailed measures &iolate due process by arbitrarily transferring title
before the land is fully paid for must also be reFected/
5t is !orth stressing at this point that all rights acEuired by the tenant1farmer under 0/D/ 8o/ 2., as
recogni6ed under (/"/ 8o/ 228, are retained by him e&en no! under #/%/ 8o/ :./ This should
counter1balance the eCpress pro&ision in Section of the said la! that Dthe lando!ners !hose lands
ha&e been co&ered by 0residential Decree 8o/ 2. shall be allo!ed to keep the area originally
retained by them thereunder, further, That original homestead grantees or direct compulsory heirs
!ho still o!n the original homestead at the time of the appro&al of this %ct shall retain the same
areas as long as they continue to culti&ate said homestead/D
5n connection !ith these retained rights, it does not appear in ?/#/ 8o/ .8.42 that the appeal filed by
the petitioners !ith the "ffice of the 0resident has already been resol&ed/ %lthough !e ha&e said
that the doctrine of eChaustion of administrati&e remedies need not preclude immediate resort to
Fudicial action, there are factual issues that ha&e yet to be eCamined on the administrati&e le&el,
especially the claim that the petitioners are not co&ered by L"5 4.4 because they do not o!n other
agricultural lands than the subFects of their petition/
"b&iously, the )ourt cannot resol&e these issues/ 5n any e&ent, assuming that the petitioners ha&e
not yet eCercised their retention rights, if any, under 0/D/ 8o/ 2., the )ourt holds that they are
entitled to the ne! retention rights pro&ided for by #/%/ 8o/ :., !hich in fact are on the !hole
more liberal than those granted by the decree/
<
The )%#0 La! and the other enactments also in&ol&ed in these cases ha&e been the subFect of
bitter attack from those !ho point to the shortcomings of these measures and ask that they be
scrapped entirely/ To be sure, these enactments are less than perfectH indeed, they should be
continuously re1eCamined and rehoned, that they may be sharper instruments for the better
protection of the farmer+s rights/ 2ut !e ha&e to start some!here/ 5n the pursuit of agrarian reform,
!e do not tread on familiar ground but grope on terrain fraught !ith pitfalls and eCpected difficulties/
This is ine&itable/ The )%#0 La! is not a tried and tested proFect/ "n the contrary, to use 9ustice
>olmes+s !ords, Dit is an eCperiment, as all life is an eCperiment,D and so !e learn as !e &enture
for!ard, and, if necessary, by our o!n mistakes/ 3e cannot eCpect perfection although !e should
stri&e for it by all means/ ,eantime, !e struggle as best !e can in freeing the farmer from the iron
shackles that ha&e unconscionably, and for so long, fettered his soul to the soil/
2y the decision !e reach today, all maFor legal obstacles to the comprehensi&e agrarian reform
program are remo&ed, to clear the !ay for the true freedom of the farmer/ 3e may no! glimpse the
day he !ill be released not only from !ant but also from the eCploitation and disdain of the past and
from his o!n feelings of inadeEuacy and helplessness/ %t last his ser&itude !ill be ended fore&er/ %t
last the farm on !hich he toils !ill be his farm/ 5t !ill be his portion of the ,other (arth that !ill gi&e
him not only the staff of life but also the Foy of li&ing/ %nd !here once it bred for him only deep
despair, no! can he see in it the fruition of his hopes for a more fulfilling future/ 8o! at last can he
banish from his small plot of earth his insecurities and dark resentments and Drebuild in it the music
and the dream/D
3>(#(="#(, the )ourt holds as follo!s;
1/ #/%/ 8o/ :., 0/D/ 8o/ 2., 0roc/ 8o/ 1-1, and (/"/ 8os/ 228 and 229 are
S@ST%58(D against all the constitutional obFections raised in the herein petitions/
2/ Title to all eCpropriated properties shall be transferred to the State only upon full
payment of compensation to their respecti&e o!ners/
-/ %ll rights pre&iously acEuired by the tenant1 farmers under 0/D/ 8o/ 2. are retained
and recogni6ed/
4/ Lando!ners !ho !ere unable to eCercise their rights of retention under 0/D/ 8o/
2. shall enFoy the retention rights granted by #/%/ 8o/ :. under the conditions
therein prescribed/
:/ SubFect to the abo&e1mentioned rulings all the petitions are D5S,5SS(D, !ithout
pronouncement as to costs/
S" "#D(#(D/
L$6 8ar-s vs. Secretary of the +epart-ent of A/rarian Refor- , 1&"
SCRA *1,+ece-ber %4, 1&&%
Case (itle7 L>A "ARMS, petitioner, s. THE HONORA!LE SECRETARY O" THE
DEPARTMENT O" A#RARIAN RE"ORM, respondent.
Case )at$re7 PETITION %or pro)ibition to reie( t)e de&ision o% t)e
Se&ret'ry o% t)e Dep'rt/ent o% A,r'ri'n Re%or/.
Syllabi Class7 A,r'ri'n L'(*Constit.tion'- L'(

Syllabi:
1. &grarian Law; $onstittional Law; &omprehensive /grarian Reform
LawF #tatutesF %n construing constitutional provisions which are ambiguous
or of doubtful meaning the courts may consider the intent of the framers of
the &onstitution.-
%t is generally held that in construing constitutional provisions which are
ambiguous or of doubtful meaning the courts may consider the debates in
the constitutional convention as throwing light on the intent of the framers
of the &onstitution. %t is true that the intent of the convention is not
controlling by itself but as its proceeding was preliminary to the adoption by
the people of the &onstitution the understanding of the convention as to
what was meant by the terms of the constitutional provision which was the
sub.ect of the deliberation goes a long way toward explaining the
understanding of the people when they ratified it "/quino =r. v. 3nrile 5*
#&R/ (+; M(*$BN,.
". &grarian Law; $onstittional Law; #ection %% of R./. ))5$ which
includes ?private agricultural lands devoted to commercial livestoc! poultry
and swine raising? in the definition of ?commercial farms? is invalid.-
%t is evident from the foregoing discussion that #ection %% of R./. ))5$ which
includes ?private agricultural lands devoted to commercial livestoc! poultry
and swine raising? in the definition of ?commercial farms? is invalid to the
extent that the aforecited agro-industrial activities are made to be covered
by the agrarian reform program of the #tate. 7here is simply no reason to
include livestoc! and poultry lands in the coverage of agrarian reform.
!. &grarian Law; $onstittional Law; 3lements of =udicial %nquiry.-
%t has been established that this &ourt will assume .urisdiction over a
constitutional question only if it is shown that the essential requisites of a
.udicial inquiry into such a question are first satisfied. 7hus there must be
an actual case or controversy involving a conflict of legal rights susceptible
of .udicial determination the constitutional question must have been
opportunely raised by the proper party and the resolution of the question is
unavoidably necessary to the decision of the case itself "/ssociation of #mall
Landowners of the Philippines %nc. v. #ecretary of /grarian Reform A.R.
$+$BCF /cuna v. /rroyo A.R. $*;(6F Pabico v. =uico A.R. $*$BBF 1anaay
v. =uico A.R. $*$$$ (B =uly (*+* ($5 #&R/ ;B;,.
+ivision: EN !ANC
+oc,et )$-ber: #.R. No. 2D223
Co$nsel: Enri@.e M. !e-o
.onente: PARAS
+ispositive .ortion:
PREMISES CONSIDERED, t)e inst'nt petition is )ereby #RANTED. Se&tions
HBbC, ++, +H 'nd H? o% R.A. No. DD71 inso%'r 's t)e in&-.sion o% t)e r'isin, o%
-iesto&F, po.-try 'nd s(ine in its &oer',e 's (e-- 's t)e I/p-e/entin,
R.-es 'nd #.ide-ines pro/.-,'ted in '&&ord'n&e t)ere(it), 're )ereby
DECLARED n.-- 'nd oid %or bein, .n&onstit.tion'- 'nd t)e (rit o%
pre-i/in'ry inE.n&tion iss.ed is )ereby MADE per/'nent.
LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, respondent.

Enrique M. Belo for petitioner.

D E C I S I O N
PARAS, J p:
This is a petition for prohibition with prayer for restraining order and/or
preliminary and permanent injunction against the Honorable Secretary of the
Department of Agrarian Reform for acting without jurisdiction in enforcing the
assailed provisions of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988 and in promulgating the Guidelines and Procedure
Implementing Production and Proft Sharing under R.A. No. 6657, insofar as the
same apply to herein petitioner, and further from performing an act in violation of
the constitutional rights of the petitioner.
As gathered from the records, the factual background of this case, is as
follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657,
which includes the raising of livestock, poultry and swine in its coverage (Rollo, p.
80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the
Guidelines and Procedures Implementing Production and Proft Sharing as
embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules
and Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms).
(Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the livestock
and poultry business and together with others in the same business allegedly
stands to be adversely afected by the enforcement of Section 3(b), Section 11,
Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise
known as Comprehensive Agrarian Reform Law and of the Guidelines and
Procedures Implementing Production and Proft Sharing under R.A. No. 6657
promulgated on January 2, 1989 and the Rules and Regulations Implementing
Section 11 thereof as promulgated by the DAR on January 9, 1989 (Rollo, pp. 2-
36).
Hence, this petition praying that aforesaid laws, guidelines and rules be
declared unconstitutional. Meanwhile, it is also prayed that a writ of preliminary
injunction or restraining order be issued enjoining public respondents from
enforcing the same, insofar as they are made to apply to Luz Farms and other
livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among
others, Luz Farms' prayer for the issuance of a preliminary injunction in its
Manifestation dated May 26, and 31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved
to grant said Motion for Reconsideration regarding the injunctive relief, after the
fling and approval by this Court of an injunction bond in the amount of
P100,000.00. This Court also gave due course to the petition and required the
parties to fle their respective memoranda (Rollo, p. 119).
The petitioner fled its Memorandum on September 6, 1989 (Rollo, pp. 131-
168).
On December 22, 1989, the Solicitor General adopted his Comment to the
petition as his Memorandum (Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they
are made to apply to it:
(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the
defnition of "Agricultural, Agricultural Enterprise or Agricultural Activity."
(b) Section 11 which defnes "commercial farms" as "private agricultural
lands devoted to commercial, livestock, poultry and swine raising . . ."
(c) Section 13 which calls upon petitioner to execute a production-sharing
plan.
(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform
the authority to summarily determine the just compensation to be paid for
lands covered by the Comprehensive Agrarian Reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in
Section 13
". . . (W)hereby three percent (3%) of the gross sales from
the production of such lands are distributed within sixty (60) days
of the end of the fscal year as compensation to regular and
other farmworkers in such lands over and above the
compensation they currently receive: Provided, That these
individuals or entities realize gross sales in excess of fve million
pesos per annum unless the DAR, upon proper application,
determine a lower ceiling.
In the event that the individual or entity realizes a proft, an
additional ten (10%) of the net proft after tax shall be distributed
to said regular and other farmworkers within ninety (90) days of
the end of the fscal year . . ."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13
and 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988),
insofar as the said law includes the raising of livestock, poultry and swine in its
coverage as well as the Implementing Rules and Guidelines promulgated in
accordance therewith.
The constitutional provision under consideration reads as follows:
ARTICLE XIII
xxx xxx xxx
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers, who are landless, to
own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end, the State
shall encourage and undertake the just distribution of all agricultural lands,
subject to such priorities and reasonable retention limits as the Congress may
prescribe, taking into account ecological, developmental, or equity
considerations, and subject to the payment of just compensation. In
determining retention limits, the State shall respect the rights of small
landowners. The State shall further provide incentives for voluntary land-
sharing.
xxx xxx xxx"
Luz Farms contended that it does not seek the nullifcation of R.A. 6657 in its
entirety. In fact, it acknowledges the correctness of the decision of this Court in
the case of the Association of Small Landowners in the Philippines, Inc. vs.
Secretary of Agrarian Reform (G.R. 78742, 14 July 1989) afrming the
constitutionality of the Comprehensive Agrarian Reform Law. It, however, argued
that Congress in enacting the said law has transcended the mandate of the
Constitution, in including land devoted to the raising of livestock, poultry and
swine in its coverage (Rollo, p. 131). Livestock or poultry raising is not similar to
crop or tree farming. Land is not the primary resource in this undertaking and
represents no more than fve percent (5%) of the total investment of commercial
livestock and poultry raisers. Indeed, there are many owners of residential lands
all over the country who use available space in their residence for commercial
livestock and raising purposes, under "contract-growing arrangements," whereby
processing corporations and other commercial livestock and poultry raisers
(Rollo, p. 10). Lands support the buildings and other amenities attendant to the
raising of animals and birds. The use of land is incidental to but not the principal
factor or consideration in productivity in this industry. Including backyard raisers,
about 80% of those in commercial livestock and poultry production occupy fve
hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry
raising is embraced in the term "agriculture" and the inclusion of such enterprise
under Section 3(b) of R.A. 6657 is proper. He cited that Webster's International
Dictionary, Second Edition (1954), defnes the following words:
"Agriculture the art or science of cultivating the ground and raising and
harvesting crops, often, including also, feeding, breeding and management of
livestock, tillage, husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock domestic animals used or raised on a farm, especially for proft.
Farm a plot or tract of land devoted to the raising of domestic or other
animals." (Rollo, pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in
constitutional construction is to ascertain and thereafter assure the realization of
the purpose of the framers in the adoption of the Constitution (J.M. Tuazon & Co.
vs. Land Tenure Administration, 31 SCRA 413 [1970]).
Ascertainment of the meaning of the provision of Constitution begins with the
language of the document itself. The words used in the Constitution are to be
given their ordinary meaning except where technical terms are employed in which
case the signifcance thus attached to them prevails (J.M. Tuazon & Co. vs. Land
Tenure Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are
ambiguous or of doubtful meaning, the courts may consider the debates in the
constitutional convention as throwing light on the intent of the framers of the
Constitution. It is true that the intent of the convention is not controlling by itself,
but as its proceeding was preliminary to the adoption by the people of the
Constitution the understanding of the convention as to what was meant by the
terms of the constitutional provision which was the subject of the deliberation,
goes a long way toward explaining the understanding of the people when they
ratifed it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986
on the meaning of the word "agricultural," clearly show that it was never the
intention of the framers of the Constitution to include livestock and poultry
industry in the coverage of the constitutionally-mandated agrarian reform
program of the Government.
The Committee adopted the defnition of "agricultural land" as defned under
Section 166 of R.A. 3844, as laud devoted to any growth, including but not limited
to crop lands, saltbeds, fshponds, idle and abandoned land (Record, CONCOM,
August 7, 1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word
"agriculture." Commissioner Jamir proposed to insert the word "ARABLE" to
distinguish this kind of agricultural land from such lands as commercial and
industrial lands and residential properties because all of them fall under the
general classifcation of the word "agricultural". This proposal, however, was not
considered because the Committee contemplated that agricultural lands are
limited to arable and suitable agricultural lands and therefore, do not include
commercial, industrial and residential lands (Record, CONCOM, August 7, 1986,
Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court
Justice), posed several questions, among others, quoted as follows:
xxx xxx xxx
"Line 19 refers to genuine reform program founded on the primary right of
farmers and farmworkers. I wonder if it means that leasehold tenancy is
thereby proscribed under this provision because it speaks of the primary right
of farmers and farmworkers to own directly or collectively the lands they till. As
also mentioned by Commissioner Tadeo, farmworkers include those who work
in piggeries and poultry projects.
I was wondering whether I am wrong in my appreciation that if somebody puts
up a piggery or a poultry project and for that purpose hires farmworkers
therein, these farmworkers will automatically have the right to own eventually,
directly or ultimately or collectively, the land on which the piggeries and poultry
projects were constructed. (Record, CONCOM, August 2, 1986, p. 618).
xxx xxx xxx
The questions were answered and explained in the statement of then
Commissioner Tadeo, quoted as follows:
xxx xxx xxx
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan.
Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang
agricultural worker sa kadahilanang kasama rito ang piggery, poultry at
livestock workers. Ang inilagay namin dito ay farm worker kaya hindi kasama
ang piggery, poultry at livestock workers (Record, CONCOM, August 2, 1986,
Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657 which
includes "private agricultural lands devoted to commercial livestock, poultry and
swine raising" in the defnition of "commercial farms" is invalid, to the extent that
the aforecited agro-industrial activities are made to be covered by the agrarian
reform program of the State. There is simply no reason to include livestock and
poultry lands in the coverage of agrarian reform. (Rollo, p. 21).
Hence, there is merit in Luz Farms' argument that the requirement in
Sections 13 and 32 of R.A. 6657 directing "corporate farms" which include
livestock and poultry raisers to execute and implement "production-sharing plans"
(pending fnal redistribution of their landholdings) whereby they are called upon to
distribute from three percent (3%) of their gross sales and ten percent (10%) of
their net profts to their workers as additional compensation is unreasonable for
being confscatory, and therefore violative of due process (Rollo, p. 21).
It has been established that this Court will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites of a judicial
inquiry into such a question are frst satisfed. Thus, there must be an actual case
or controversy involving a confict of legal rights susceptible of judicial
determination, the constitutional question must have been opportunely raised by
the proper party, and the resolution of the question is unavoidably necessary to
the decision of the case itself (Association of Small Landowners of the
Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo,
G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July
1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted
with constitutional issues, it will not hesitate to declare a law or act invalid when it
is convinced that this must be done. In arriving at this conclusion, its only criterion
will be the Constitution and God as its conscience gives it in the light to probe its
meaning and discover its purpose. Personal motives and political considerations
are irrelevancies that cannot infuence its decisions. Blandishment is as
inefectual as intimidation, for all the awesome power of the Congress and
Executive, the Court will not hesitate "to make the hammer fall heavily," where the
acts of these departments, or of any ofcial, betray the people's will as expressed
in the Constitution (Association of Small Landowners of the Philippines, Inc. v.
Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico
v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its
constitutional powers, it becomes the duty of the judiciary to declare what the
other branches of the government had assumed to do, as void. This is the
essence of judicial power conferred by the Constitution "(I)n one Supreme Court
and in such lower courts as may be established by law" (Art. VIII, Section 1 of the
1935 Constitution; Article X, Section I of the 1973 Constitution and which was
adopted as part of the Freedom Constitution, and Article VIII, Section 1 of the
1987 Constitution) and which power this Court has exercised in many instances
(Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED.
Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the
raising of livestock, poultry and swine in its coverage as well as the Implementing
Rules and Guidelines promulgated in accordance therewith, are hereby
DECLARED null and void for being unconstitutional and the writ of preliminary
injunction issued is hereby MADE permanent.
SO ORDERED.
Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco,
Padilla, Bidin, Grio-Aquino, Medialdea and Regalado, JJ., concur.
Feliciano, J., is on leave.

Separate Opinions

SARMIENTO, J., concurring:
I agree that the petition be granted.
It is my opinion however that the main issue on the validity of the assailed
provisions of R.A. 6657 (the Comprehensive Agrarian Reform Law of 1988) and
its Implementing Rules and Guidelines insofar as they include the raising of
livestock, poultry, and swine in their coverage can not be simplistically reduced to
a question of constitutional construction.
It is a well-settled rule that construction and interpretation come only after it
has been demonstrated that application is impossible or inadequate without
them. A close reading however of the constitutional text in point, specifcally, Sec.
4, Art. XIII, particularly the phrase, ". . . in case of other farmworkers, to receive a
just share of the fruits thereof," provides a basis for the clear and possible
coverage of livestock, poultry, and swine raising within the ambit of the
comprehensive agrarian reform program. This accords with the principle that
every presumption should be indulged in favor of the constitutionality of a statute
and the court in considering the validity of a statute should give it such
reasonable construction as can be reached to bring it within the fundamental
law.
1
The presumption against unconstitutionality, I must say, assumes greater
weight when a ruling to the contrary would, in efect, defeat the laudable and
noble purpose of the law, i.e., the welfare of the landless farmers and
farmworkers in the promotion of social justice, by the expedient conversion of
agricultural lands into livestock, poultry, and swine raising by scheming
landowners, thus, rendering the comprehensive nature of the agrarian program
merely illusory.
The instant controversy, I submit, boils down to the question of whether or
not the assailed provisions violate the equal protection clause of the Constitution
(Article II, section 1) which teaches simply that all persons or things similarly
situated should be treated alike, both as to rights conferred and responsibilities
imposed.
2
There is merit in the contention of the petitioner that substantial distinctions
exist between land directed purely to cultivation and harvesting of fruits or crops
and land exclusively used for livestock, poultry and swine raising, that make real
diferences, to wit:
xxx xxx xxx
No land is tilled and no crop is harvested in livestock and poultry farming.
There are no tenants nor landlords, only employers and employees.
Livestock and poultry do not sprout from land nor are they "fruits of the land."
Land is not even a primary resource in this industry. The land input is
inconsequential that all the commercial hog and poultry farms combined
occupy less than one percent (1%) (0.4% for piggery, 0.2% for poultry) of the
5.45 million hectares of land supposedly covered by the CARP. And most
farms utilize only 2 to 5 hectares of land.
In every respect livestock and poultry production is an industrial activity. Its
use of an inconsequential portion of land is a mere incident of its operation, as
in any other undertaking, business or otherwise.
The fallacy of defning livestock and poultry production as an agricultural
enterprise is nowhere more evident when one considers that at least 95% of
total investment in these farms is in the form of fxed assets which are
industrial in nature.
These include (1) animal housing structures and facilities complete with
drainage, waterers, blowers, misters and in some cases even piped-in music;
(2) feedmills complete with grinders, mixers, conveyors, exhausts, generators,
etc.; (3) extensive warehousing facilities for feeds and other supplies; (4) anti-
pollution equipment such as bio-gas and digester plants augmented by
lagoons and concrete ponds; (5) deepwells, elevated water tanks,
pumphouses and accessory facilities; (6) modern equipment such as
sprayers, pregnancy testers, etc.; (7) laboratory facilities complete with
expensive tools and equipment; and a myriad other such technologically
advanced appurtances.
How then can livestock and poultry farmlands be arable when such are almost
totally occupied by these structures?
The fallacy of equating the status of livestock and poultry farmworkers with
that of agricultural tenants surfaces when one considers contribution to output.
Labor cost of livestock and poultry farms is no more than 4% of total operating
cost. The 98% balance represents inputs not obtained from the land nor
provided by the farmworkers inputs such as feeds and biochemicals (80%
of the total cost), power cost, cost of money and several others.
Moreover, livestock and poultry farmworkers are covered by minimum wage
law rather than by tenancy law. They are entitled to social security benefts
where tenant-farmers are not. They are paid fxed wages rather than crop
shares. And as in any other industry, they receive additional benefts such as
allowances, bonuses, and other incentives such as free housing privileges,
light and water.
Equating livestock and poultry farming with other agricultural activities is also
fallacious in the sense that like the manufacturing sector, it is a market for,
rather than a source of agricultural output. At least 60% of the entire domestic
supply of corn is absorbed by livestock and poultry farms. So are the by-
products of rice (rice-bran), coconut (copra meal), banana (banana pulp
meal), and fsh (fsh meal).
3
xxx xxx xxx
In view of the foregoing, it is clear that both kinds of lands are not similarly
situated and hence, can not be treated alike. Therefore, the assailed provisions
which allow for the inclusion of livestock and poultry industry within the coverage
of the agrarian reform program constitute invalid classifcation and must
accordingly be struck down as repugnant to the equal protection clause of the
Constitution.
Footnotes
.eople vs. .anis, 14" SCRA 4 , #$ly 11, 1&'
Case (itle : PEOPLE O" THE PHILIPPINES, petitioner, s. HON. DOMIN#O
PANIS, Presidin, 0.d,e o% t)e Co.rt o% "irst Inst'n&e o% A'/b'-es =
O-on,'po City, !r'n&) III 'nd SERAPIO A!>#, respondents.Case )at$re :
APPEAL by &ertior'ri to reie( t)e orders o% t)e Co.rt o% "irst Inst'n&e o%
A'/b'-es 'nd O-on,'po, !r. III. P'nis, 0.
Syllabi Class : L'bor*Re&r.it/ent 'nd p-'&e/ent*Interpret'tion*Arti&-e
+HBbC o% P.D. 88?*interpreted*Pres./ption t)'t t)e indiid.'- or entity is
en,',ed in re&r.it/ent 'nd p-'&e/ent ()eneer t(o or /ore persons 're
ino-ed
Syllabi:
1. Labor; Recrit#ent and place#ent; *nterpretation; &rticle 101b2
of P.D. ((-, interpreted;Pres#ption t!at t!e indi"idal or entity is
engaged in recrit#ent and place#ent w!ene"er two or #ore
persons are in"ol"ed; 4umber of persons not an essential ingredient of
the act of recruitment and placement of wor!ers.-
/s we see it the proviso was intended neither to impose a condition on the
basic rule nor to provide an exception thereto but merely to create a
presumption. 7he presumption is that the individual or entity is engaged in
recruitment and placement whenever he or it is dealing with two or more
persons to whom in consideration of a fee an offer or promise of
employment is made in the course of the 8canvassing enlisting contracting
transporting utili@ing hiring or procuring "of, wor!ers.9 7he number of
persons dealt with is not an essential ingredient of the act of recruitment
and placement of wor!ers. /ny of the acts mentioned in the basic rule in
/rticle (;"b, will constitute recruitment and placement even if only one
prospective wor!er is involved. 7he proviso merely lays down a rule of
evidence that where a fee is collected in consideration of a promise or offer
of employment to two or more prospective wor!ers the individual or entity
dealing with them shall be deemed to be engaged in the act of recruitment
and placement. 7he words 8shall be deemed9 create that presumption.
". Labor; Recrit#ent and place#ent; *nterpretation; &rticle 101b2
of P.D. ((-, interpreted; <ords 8shall be deemed9 in /rt. (;"b, of P.D.
BBC meaning of.-
%n the instant case the word 8shall be deemed9 should by the same to!en
be given the force of a disputable presumption or of prima facie evidence of
engaging in recruitment and placement. "Olepp v. 'din 7p. 1c0enry &ounty
B6 4D 4.<. ;(; ;(B.,
+ivision: EN !ANC
+oc,et )$-ber: Nos. L;72D18;11
.onente: CR>A
+ispositive .ortion:
6HERE"ORE, t)e Orders o% 0.ne ?8, +32+, 'nd Septe/ber +1, +32+, 're set
'side 'nd t)e %o.r in%or/'tions ','inst t)e pri'te respondent reinst'ted.
No &osts.
The basic issue in this case is the correct interpretation of %rticle 1-'b* of 0/D/ 442, other!ise kno!n
as the Labor )ode, reading as follo!s;
'b* #ecruitment and placement+ refers to any act of can&assing, enlisting,
contracting, transporting, hiring, or procuring !orkers, and includes referrals, contract
ser&ices, promising or ad&ertising for employment, locally or abroad, !hether for
profit or not; 0ro&ided, That any person or entity !hich, in any manner, offers or
promises for a fee employment to t!o or more persons shall be deemed engaged in
recruitment and placement/
=our informations !ere filed on 9anuary 9, 1981, in the )ourt of =irst 5nstance of Jambales and
"longapo )ity alleging that Serapio %bug, pri&ate respondent herein, D!ithout first securing a license
from the ,inistry of Labor as a holder of authority to operate a fee1charging employment agency, did
then and there !ilfully, unla!fully and criminally operate a pri&ate fee charging employment agency
by charging fees and eCpenses 'from* and promising employment in Saudi %rabiaD to four separate
indi&iduals named therein, in &iolation of %rticle 1 in relation to %rticle -9 of the Labor )ode/
1
%bug filed a motion to Euash on the ground that the informations did not charge an offense because
he !as accused of illegally recruiting only one person in each of the four informations/ @nder the
pro&iso in %rticle 1-'b*, he claimed, there !ould be illegal recruitment only D!hene&er t!o or more
persons are in any manner promised or offered any employment for a fee/ D
2
Denied at first, the motion !as reconsidered and finally granted in the "rders of the trial court dated
9une 24 and September 1., 1981/ The prosecution is no! before us on certiorari/
3
The posture of the petitioner is that the pri&ate respondent is being prosecuted under %rticle -9 in
relation to %rticle 1 of the Labor )odeH hence, %rticle 1-'b* is not applicable/ >o!e&er, as the first
t!o cited articles penali6e acts of recruitment and placement !ithout proper authority, !hich is the
charge embodied in the informations, application of the definition of recruitment and placement in
%rticle 1-'b* is una&oidable/
The &ie! of the pri&ate respondents is that to constitute recruitment and placement, all the acts
mentioned in this article should in&ol&e dealings !ith t!o or mre persons as an indispensable 
reEuirement/ "n the other hand, the petitioner argues that the reEuirement of t!o or more persons is
imposed only !here the recruitment and placement consists of an offer or promise of employment to
such persons and al!ays in consideration of a fee/ The other acts mentioned in the body of the
article may in&ol&e e&en only one person and are not necessarily for profit/
8either interpretation is acceptable/ 3e fail to see !hy the pro&iso should speak only of an offer or
promise of employment if the purpose !as to apply the reEuirement of t!o or more persons to all the
acts mentioned in the basic rule/ =or its part, the petitioner does not eCplain !hy dealings !ith t!o or
more persons are needed !here the recruitment and placement consists of an offer or promise of
employment but not !hen it is done through Dcan&assing, enlisting, contracting, transporting,
utili6ing, hiring or procuring 'of* !orkers/
%s !e see it, the pro&iso !as intended neither to impose a condition on the basic rule nor to pro&ide
an eCception thereto but merely to create a presumption/ The presumption is that the indi&idual or
entity is engaged in recruitment and placement !hene&er he or it is dealing !ith t!o or more
persons to !hom, in consideration of a fee, an offer or promise of employment is made in the course
of the Dcan&assing, enlisting, contracting, transporting, utili6ing, hiring or procuring 'of* !orkers/ D
The number of persons dealt !ith is not an essential ingredient of the act of recruitment and
placement of !orkers/ %ny of the acts mentioned in the basic rule in %rticle 1-'b* !in constitute
recruitment and placement e&en if only one prospecti&e !orker is in&ol&ed/ The pro&iso merely lays
do!n a rule of e&idence that !here a fee is collected in consideration of a promise or offer of
employment to t!o or more prospecti&e !orkers, the indi&idual or entity dealing !ith them shall be
deemed to be engaged in the act of recruitment and placement/ The !ords Dshall be deemedD create
that presumption/
This is not unlike the presumption in article 21. of the #e&ised 0enal )ode, for eCample, regarding
the failure of a public officer to produce upon la!ful demand funds or property entrusted to his
custody/ Such failure shall beprima "acie e&idence that he has put them to personal useH in other
!ords, he shall be deemed to ha&e mal&ersed such funds or property/ 5n the instant case, the !ord
Dshall be deemedD should by the same token be gi&en the force of a disputable presumption or
of prima "acie e&idence of engaging in recruitment and placement/ 'Klepp &s/ "din Tp/, ,c>enry
)ounty 44 8D 8/3/ -1-, -14/*
5t is unfortunate that !e can only speculate on the meaning of the Euestioned pro&ision for lack of
records of debates and deliberations that !ould other!ise ha&e been a&ailable if the Labor )ode
had been enacted as a statute rather than a presidential decree/ The trouble !ith presidential
decrees is that they could be, and sometimes !ere, issued !ithout pre&ious public discussion or
consultation, the promulgator heeding only his o!n counsel or those of his close ad&isers in their
lofty pinnacle of po!er/ The not infreEuent results are reFection, intentional or not, of the interest of
the greater number and, as in the instant case, certain esoteric pro&isions that one cannot read
against the background facts usually reported in the legislati&e Fournals/
%t any rate, the interpretation here adopted should gi&e more force to the campaign against illegal
recruitment and placement, !hich has &ictimi6ed many =ilipino !orkers seeking a better life in a
foreign land, and in&esting hard1 earned sa&ings or e&en borro!ed funds in pursuit of their dream,
only to be a!akened to the reality of a cynical deception at the hands of theiro!n countrymen/
3>(#(="#(, the "rders of 9une 24, 1981, and September 1., 1981, are set aside and the four
informations against the pri&ate respondent reinstated/ 8o costs/
S" "#D(#(D/
!eehan4ee, &$, Abad Santos, 9eria, Cap, 9ernan, :arvasa, Melencio.Herrera, Alampay, ;%tierre<,
$r. and Paras, $$., conc%r.
Marsa-an Mannin/ A/ency, 3nc. vs. )LRC, !1! SCRA '' , A$/$st "*,
1&&&
Case (itle : MARSAMAN MANNIN# A#ENCY, INC. 'nd DIAMANTIDES
MARITIME, INC., petitioners, s. NATIONAL LA!OR RELATIONS COMMISSION
'nd 6IL"REDO T. CA0ERAS, respondents.Case )at$re : SPECIAL CI9IL
ACTION in t)e S.pre/e Co.rt. Certior'ri.
Syllabi Class : L'bor L'(*I--e,'- Dis/iss'-s*Oerse's "i-ipino 6orFers*
Se'/en*6itnesses*E5pert Testi/ony*P)ysi&i'ns*0.di&i'- Noti&e*6ords 'nd
P)r'ses*Attorneys "ees*St't.tes*St't.tory Constr.&tion
Syllabi:
1. Labor Law; *llegal Dis#issals; O"erseas 3ilipino
4or5ers; Sea#en; -nder the #tandard 3mployment &ontract approved by
the Philippine 'verseas 3mployment /dministration:Department of Labor
and 3mployment the employment of a Eilipino seaman may be terminated
prior to the expiration of the stipulated period provided that the master and
the seaman "a, mutually consent thereto and "b, reduce their consent in
writing.2
". Labor Law; *llegal Dis#issals; O"erseas 3ilipino
4or5ers; Sea#en; #ince the #tandard 3mployment &ontract sets the
minimum terms and conditions of employment for the protection of Eilipino
seamen sub.ect only to the adoption of better terms and conditions over and
above the minimum standards the 4ational Labor Relations &ommission
could not be accused of grave abuse of discretion in not accepting anything
less.2
!. Labor Law; *llegal Dis#issals; O"erseas 3ilipino
4or5ers; Sea#en; 4itnesses; E/pert 6esti#ony;P!ysicians; %dicial
Notice; %t is a matter of .udicial notice that there are various speciali@ations
in medical science and that a general practitioner is not competent to
diagnose any and all !inds of illnesses and diseases>the findings of doctors
who are not proven experts are not binding on the #upreme &ourt.2
4. Labor Law; *llegal Dis#issals; O"erseas 3ilipino
4or5ers; Sea#en; 4itnesses; E/pert
6esti#ony;P!ysicians; Presumption of RegularityF 7he presumption of
regularity in the performance of official duties applies only to public officers
from the highest to the lowest in the service of the Aovernment
departments bureaus offices and:or its political subdivisions and cannot be
relied upon to ma!e the 1edical Report of a doctor engaged by a foreign
employer acceptable.2
*. Labor Law; *llegal Dis#issals; 4ords and P!rases; Arave abuse of
discretion is committed only when the .udgment is rendered in a capricious
whimsical arbitrary or despotic manner.2
. Labor Law; *llegal Dis#issals; O"erseas 3ilipino
4or5ers; &ttorneys 3ees; %n actions for recovery of wages or where an
employee was forced to litigate and thus incurred expenses to protect his
rights and interests a maximum award of ten percent "(6P, of the
monetary award by way of attorneyIs fees is legally and morally .ustifiable.2
7. Labor Law; *llegal Dis#issals; O"erseas 3ilipino
4or5ers; Stattes; Republic /ct 4o. +6BCF #ection (6 Republic /ct +6BC
applies to all overseas contract wor!ers dismissed on or after its effectivity
on (5 =uly (**5.2
'. Labor Law; *llegal Dis#issals; O"erseas 3ilipino
4or5ers; Stattes; Stattory $onstrction; 7he choice under #ection
(6 of Republic /ct +6BC of which amount to award an illegally dismissed
overseas contract wor!er i.e. whether his salaries for the unexpired portion
of his employment contract or three ";, monthsI salary for every year of the
unexpired term whichever is less comes into play only when the
employment contract concerned has a term of at least one "(, year or more.
2
&. Labor Law; *llegal Dis#issals; O"erseas 3ilipino
4or5ers; Stattes; Stattory $onstrction; %t is a well-established rule
in legal hermeneutics that in interpreting a statute care should be ta!en
that every part or word thereof be given effect since the lawma!ing body is
presumed to !now the meaning of the words employed in the statute and to
have used them advisedly.2
+ivision: SECOND DI9ISION
+oc,et )$-ber: #.R. No. +?1+37
Co$nsel: Orte,', De- C'sti--o, !'&orro, Od.-to, C'-/' = C'rbone-, D'ni-o L.
"r'n&is&o
.onente: !ELLOSILLO
+ispositive .ortion:
6HERE"ORE, t)e @.estioned De&ision 'nd Reso-.tion d'ted +D Septe/ber
+33D 'nd +? Noe/ber +33D, respe&tie-y, o% p.b-i& respondent N'tion'-
L'bor Re-'tions Co//ission 're A""IRMED. Petitioners MARSAMAN
MANNIN# A#ENCY, INC., 'nd DIAMANTIDES MARITIME, INC., 're ordered,
Eoint-y 'nd seer'--y, to p'y pri'te respondent 6IL"REDO T. CA0ERAS )is
s'-'ries %or t)e .ne5pired portion o% )is e/p-oy/ent &ontr'&t or
>SDI7,+44.44, rei/b.rse t)e -'tters p-'&e/ent %ee (it) t(e-e per&ent
B+?JC interest per 'nn./ &on%or/'b-y (it) Se&. +4 o% RA 248?, 's (e-- 's
'ttorneys %ees o% ten per&ent B+4JC o% t)e tot'- /onet'ry '('rd. Costs
','inst petitioners.
,%#S%,%8 ,%8858? %?(8)A, 58)/ ',%#S%,%8* and its foreign principal D5%,%8T5D(S
,%#5T5,(, 58)/ 'D5%,%8T5D(S* assail the Decision of public respondent 8ational Labor #elations
)ommission dated 1 September 199 as !ell as its #esolution dated 12 8o&ember 199 affirming
the Labor %rbiter+s decision finding them guilty of illegal dismissal and ordering them to pay
respondent 3ilfredo T/ )aFeras salaries corresponding to the uneCpired portion of his employment
contract, plus attorney+s fees/
0ri&ate respondent 3ilfredo T/ )aFeras !as hired by petitioner ,%#S%,%8, the local manning
agent of petitioner D5%,%8T5D(S, as )hief )ook Ste!ard on the M( Prigipos, o!ned and operated
by D5%,%8T5D(S, for a contract period of ten '14* months !ith a monthly salary of @SP44/44,
e&idenced by a contract bet!een the parties dated 1: 9une 199:/ )aFeras started !ork on 8 %ugust
199: but less than t!o '2* months later, or on 28 September 199:, he !as repatriated to the
0hilippines allegedly by Dmutual consent/D
"n 1. 8o&ember 199: pri&ate respondent )aFeras filed a complaint for illegal dismissal against
petitioners !ith the 8L#) 8ational )apital #egion %rbitration 2ranch alleging that he !as dismissed
illegally, denying that his repatriation !as by mutual consent, and asking for his unpaid !ages,
o&ertime pay, damages, and attorney+s fees/
1
)aFeras alleged that he !as assigned not only as )hief
)ook Ste!ard but also as assistant cook and messman in addition to performing &arious in&entory
and reEuisition Fobs/ 2ecause of his additional assignments he began to feel sick Fust a little o&er a
month on the Fob constraining him to reEuest for medical attention/ >e !as refused at first by )apt/
Kou&akas %lekos, master of the M( Prigipos, !ho Fust ordered him to continue !orking/ >o!e&er a
day after the ship+s arri&al at the port of #otterdam, >olland, on 2 September 199: )apt/ %lekos
relented and had him eCamined at the ,edical )enter for Seamen/ >o!e&er, the eCamining
physician, Dr/ 3den >oed, neither apprised pri&ate respondent about the diagnosis nor issued the
reEuested medical certificate allegedly because he himself !ould for!ard the results to pri&ate
respondent+s superiors/ @pon returning to the &essel, pri&ate respondent !as unceremoniously
ordered to prepare for immediate repatriation the follo!ing day as he !as said to be suffering from a
disease of unkno!n origin/*F)phi *.nGt
"n 28 September 199: he !as handed his Seaman+s Ser&ice #ecord 2ook !ith the follo!ing entry;
D)ause of discharge G ,utual )onsent/D
2
0ri&ate respondent promptly obFected to the entry but !as
not able to do anything more as he !as immediately ushered to a !aiting taCi !hich transported him
to the %msterdam %irport for the return flight to ,anila/ %fter his arri&al in ,anila on 29 September
199:/ )aFeras complained to ,%#S%,%8 but to no a&ail/
-
,%#S%,%8 and D5%,%8T5D(S, on the other hand, denied the imputation of illegal dismissal/ They
alleged that )aFeras approached )apt/ %lekos on 2 September 199: and informed the latter that he
could not sleep at night because he felt something cra!ling o&er his body/ =urthermore, )aFeras
reportedly declared that he could no longer perform his duties and reEuested for repatriation/ The
follo!ing paragraph in the &essel+s Deck Log !as allegedly entered by )apt/ %lekos, to !it;
)aFeras approached me and he told me that he cannot sleep at night and that he feels
something cra!ling on his body and he declared that he can no longer perform his duties
and he must be repatriated/
4
0ri&ate respondent !as then sent to the ,edical )enter for Seamen at #otterdam !here he !as
eCamined by Dr/ 3den >oed !hose diagnosis appeared in a ,edical #eport as DparanoiaD and
Dother mental problems/D
:
)onseEuently, upon Dr/ >oed+s recommendation, )aFeras !as repatriated
to the 0hilippines on 28 September 199:/
"n 29 9anuary 199 Labor %rbiter (rnesto S/ Dinopol resol&ed the dispute in fa&or of pri&ate
respondent )aFeras ruling that the latter+s discharge from the M( Prigipos allegedly by Dmutual
consentD !as not pro&ed by con&incing e&idence/ The entry made by )apt/ %lekos in the Deck Log
!as dismissed as of little probati&e &alue because it !as a mere unilateral act unsupported by any
document sho!ing mutual consent of )apt/ %lekos, as master of theM( Prigipos, and )aFeras to the
premature termination of the o&erseas employment contract as reEuired by Sec/ > of the Standard
(mployment )ontract ?o&erning the (mployment of all =ilipino Seamen on 2oard "cean1?oing
<essels/ Dr/ >oed+s diagnosis that pri&ate respondent !as suffering from DparanoiaD and Dother
mental problemsD !as like!ise dismissed as being of little e&identiary &alue because it !as not
supported by e&idence on ho! the paranoia !as contracted, in !hat stage it !as, and ho! it
affected respondent+s functions as )hief )ook Ste!ard !hich, on the contrary, !as e&en rated D<ery
?oodD in respondent+s Ser&ice #ecord 2ook/ Thus, the Labor %rbiter disposed of the case as
follo!s;
3>(#(="#(, Fudgment is hereby rendered declaring the repatriation and dismissal of
complaint 3ilfredo T/ )aFeras as illegal and ordering respondents ,arsaman ,anning
%gency, 5nc/ and Diamantides ,aritime, 5nc/ to Fointly and se&erally pay complainant the sum
of @SD :,144/44 or its peso eEui&alent at the time of payment plus @SD :14/44 as 14I
attorney+s fees it appearing that complainant had to engage the ser&ice of counsel to protect
his interest in the prosecution of this case/
The claims for nonpayment of !ages and o&ertime pay are dismissed for ha&ing been
!ithdra!n ',inutes, December 18, 199:*/ The claims for damages are like!ise dismissed
for lack of merit, since no e&idence !as presented to sho! that bad faith characteri6ed the
dismissal/

0etitioners appealed to the 8L#)/

.
"n 1 September 199 the 8L#) affirmed the appealed findings
and conclusions of the Labor %rbiter/
8
The 8L#) subscribed to the &ie! that )aFeras+ repatriation by
alleged mutual consent !as not pro&ed by petitioners, especially after noting that pri&ate respondent
did not actually sign his Seaman+s Ser&ice #ecord 2ook to signify his assent to the repatriation as
alleged by petitioners/ The entry made by )apt/ %lekos in the Deck Log !as not considered reliable
proof that pri&ate respondent agreed to his repatriation because no opportunity !as gi&en the latter
to contest the entry !hich !as against his interest/ Similarly, the ,edical #eport issued by Dr/ >oed
of >olland !as dismissed as being of dubious &alue since it contained only a s!eeping statement of
the supposed ailment of )aFeras !ithout any elaboration on the factual basis thereof/
0etitioners+ motion for reconsideration !as denied by the 8L#) in its #esolution dated 12 8o&ember
199/
9
>ence, this petition contending that the 8L#) committed gra&e abuse of discretion; 'a* in not
according full faith and credit to the official entry by )apt/ %lekos in the &essel+s Deck Log
conformably !ith the rulings in Haverton Shipping #td/ v/ :#R&
14
and 7allem Maritime
Services, nc/ v/ :#R&/
11
'b* in not appreciating the ,edical #eport issued by Dr/ 3den >oed as
conclusi&e e&idence that respondent )aFeras !as suffering from paranoia and other mental
problemsH 'c* in affirming the a!ard of attorney+s fees despite the fact that )aFeras+ claim for
eCemplary damages !as denied for lack of meritH and, 'd* in ordering a monetary a!ard beyond the
maCimum of three '-* months+ salary for e&ery year of ser&ice set by #% 8442/
3e deny the petition/ 5n the )ontract of (mployment
12
entered into !ith pri&ate respondent,
petitioners con&enanted strict and faithful compliance !ith the terms and conditions of the Standard
(mployment )ontract appro&ed by the 0"(%7D"L(
1-
!hich pro&ides;
1/ The employment of the seaman shall cease upon eCpiration of the contract period
indicated in the )re! )ontract %nless the Master and the Seaman, by m%t%al consent, in
)riting agree to an early termination / / / / 'emphasis our*/
)learly, under the foregoing, the employment of a =ilipino seaman may be terminated prior to the
eCpiration of the stipulated period pro&ided that the master and the seaman 'a* m%t%ally
consent thereto and 'b* reduce their consent in )riting/
5n the instant case, petitioners do not deny the fact that they ha&e fallen short of the reEuirement/ 8o
document eCists !hereby )apt/ %lekos and pri&ate respondent reduced to !riting their alleged
Dmutual consentD to the termination of their employment contract/ 5nstead, petitioners presented the
&essel+s Deck Log !herein an entry%nilaterally made by )apt/ %lekos purported to sho! that pri&ate
respondent himself asked for his repatriation/ >o!e&er, the 8L#) correctly dismissed its e&identiary
&alue/ =or one thing, it is a unilateral act !hich is &ehemently denied by pri&ate respondent/
Secondly, the entry in no !ay satisfies the reEuirement of a bilateral documentation to pro&e early
termination of an o&erseas employment contract by mutual consent reEuired by the Standard
(mployment )ontract/ >ence, since the latter sets the minimum terms and conditions of
employment for the protection of =ilipino seamen subFect only to the adoption of better terms and
conditions over and above the minimum standards,
14
the 8L#) could not be accused of gra&e abuse
of discretion in not accepting any thing less/
>o!e&er petitioners contend that the entry should be considered prima "acie e&idence that
respondent himself reEuested his repatriation conformably !ith the rulings in Haverton Shipping
#td/ v/ :#R&
1:
and Abacast Shipping and Management Agency, nc/ v/ :#R&.
1
5ndeed, >a&erton
says that a &essel+s log book is prima "acie e&idence of the facts stated therein as they are official
entries made by a person in the performance of a duty reEuired by la!/ >o!e&er, this Furisprudential
principle does not apply to !in the case for petitioners/ 5n 7allem Maritime
Services, nc/ v/ :#R&
1.
the >a&erton ruling !as not gi&en unEualified application because the log
book presented therein !as a mere type!ritten collation of eCcerpts from !hat could be the log
book/
18
The )ourt reasoned that since the log book !as the only piece of e&idence presented to
pro&e Fust cause for the termination of respondent therein, the log book had to be duly identified and
authenticated lest an inFustice !ould result from a blind adoption of its contents !hich !ere
but prima "acie e&idence of the incidents stated therein/
5n the instant case, the disputed entry in the Deck Log !as neither authenticated nor supported by
credible e&idence/ %lthough petitioners claim that )aFeras signed his Seaman+s Ser&ice #ecord 2ook
to signify his conformity to the repatriation, the 8L#) found the allegation to be actually untrue since
no signature of pri&ate respondent appeared in the #ecord 2ook/
8either could the D,edical #eportD prepared by Dr/ >oed be considered corroborati&e and
conclusi&e e&idence that pri&ate respondent !as suffering from DparanoiaD and Dother mental
problems,D supposedly Fust causes for his repatriation/ =irstly, absolutely no e&idence, not e&en an
allegation, !as offered to enlighten the 8L#) or this )ourt as to Dr/ >oed+s Eualifications to
diagnose mental illnesses/ 5t is a matter of Fudicial notice that there are &arious speciali6ations in
medical science and that a general practitioner is not competent to diagnose any and all kinds of
illnesses and diseases/ >ence, the findings of doctors !ho are not pro&en eCperts are not binding on
this )ourt/
19
Secondly, the ,edical #eport prepared by Dr/ >oed contained only a general statement
that pri&ate respondent !as suffering from DparanoiaD and Dother mental problemsD !ithout pro&iding
the details on ho! the diagnosis !as arri&ed at or in !hat stage the illness !as/ 5f Dr/ >oed indeed
competently eCamined pri&ate respondent then he !ould ha&e been able to discuss at length the
circumstances and precedents of his diagnosis/ 0etitioners cannot rely on the presumption of
regularity in the performance of official duties to make the ,edical #eport acceptable because the
presumption applies only to public officers from the highest to the lo!est in the ser&ice of the
?o&ernment, departments, bureaus, offices, and7or its political subdi&isions,
24
!hich Dr/ 3den >oed
!as not sho!n to be/ =urthermore, neither did petitioners pro&e that pri&ate respondent !as
incompetent or continuously incapacitated for the duties for !hich he !as employed by reason of his
alleged mental state/ "n the contrary his ability as )hief )ook Ste!ard, up to the &ery moment of his
repatriation, !as rated D<ery ?oodD in his Seaman+s Ser&ice #ecord 2ook as correctly obser&ed by
public respondent/
)onsidering all the foregoing !e cannot ascribe gra&e abuse of discretion on the part of the 8L#) in
ruling that petitioners failed to pro&e Fust cause for the termination of pri&ate respondent+s o&erseas
employment/ ?ra&e abuse of discretion is committed only !hen the Fudgment is rendered in a
capricious, !himsical, arbitrary or despotic manner, !hich is not true in the present case/
21
3ith respect to attorney+s fees, suffice it to say that in actions for reco&ery of !ages or !here an
employee !as forced to litigate and thus incurred eCpenses to protect his rights and interests, a
maCimum a!ard of ten percent '14I* of the monetary a!ard by !ay of attorney+s fees is legally and
morally Fustifiable under %rt/ 111 of the Labor )ode,
22
Sec/ 8, #ule <555, 2ook 555 of its 5mplementing
#ules,
2-
and par/ ., %rt/ 2248
24
of the )i&il )ode/
2:
The case of Albenson ?nterprises &orporation
v/ &o%rt o" Appeals
2
cited by petitioners in arguing against the a!ard of attorney+s fees is clearly not
applicable, being a ci&il action for damages !hich deals !ith only one of the ele&en '11* instances
!hen attorney+s fees could be reco&ered under %rt/ 2248 of the )i&il )ode/
Lastly, on the amount of salaries due pri&ate respondent, the rule has al!ays been that an illegally
dismissed !orker !hose employment is for a fiCed period is entitled to payment of his salaries
corresponding to the uneCpired portion of his employment/
2.
>o!e&er on 1: 9uly 199:, #% 8442
other!ise kno!n as the D,igrant 3orkers and "&erseas =ilipinos %ct of 199:D took effect, Sec/ 14 of
!hich pro&ides;
Sec/ 14/ 5n case of termination of o&erseas employment !ithout Fust, &alid or authori6ed
cause as defined by la! or contract, the !orker shall be entitled to the full reimbursement of
his placement fee !ith interest at t!el&e percent '12I* per ann%m, pl%s his salaries "or the
%nexpired portion o" the employment contract or "or three '@* months "or every year o" the
%nexpired term )hichever is less 'emphasis ours*/
The Labor %rbiter, rationali6ing that the aforesaid la! did not apply since it became effecti&e only
one '1* month after respondent+s o&erseas employment contract !as entered into on 1: 9une 199:,
simply a!arded pri&ate respondent his salaries corresponding to the uneCpired portion of his
employment contract, i/e/, for 8/ months/ The 8L#) affirmed the a!ard and the "ffice of the
Solicitor ?eneral '"S?* fully agreed/ 2ut petitioners no! insist that Sec/ 14, #% 8442 is applicable
because although pri&ate respondent+s contract of employment !as entered into before the la!
became effecti&e his alleged cause of action, i/e/, his repatriation on 28 September 199: !ithout
Fust, &alid or authori6ed cause, occurred !hen the la! !as already in effect/ 0etitioners+ purpose in
so arguing is to in&oke the la! in Fustifying a lesser monetary a!ard to pri&ate respondent, i/e/,
salaries for three '-* months only pursuant to the last portion of Sec/ 14 as opposed to the salaries
for 8/ months a!arded by the Labor %rbiter and affirmed by the 8L#)/
3e agree !ith petitioners that Sec/ 14, #% 8442, applies in the case of pri&ate respondent and to all
o&erseas contract !orkers dismissed on or after its effecti&ity on 1: 9uly 199: in the same !ay that
Sec/ -4,
28
#% .1:,
29
is made applicable to locally employed !orkers dismissed on or after 21 ,arch
1989/
-4
>o!e&er, !e cannot subscribe to the &ie! that pri&ate respondent is entitled to three '-*
months+ salary only/ % plain reading of Sec/ 14 clearly re&eals that the choice of !hich amount to
a!ard an illegally dismissed o&erseas contract !orker, i/e/, !hether his salaries for the uneCpired
portion of his employment contract or three '-* months+ salary for e&ery year of the uneCpired term,
!hiche&er is less, comes into play only !hen the employment contract concerned has a term of at
least one '1* year or more/ This is e&ident from the !ords Dfor e&ery year of the uneCpired termD
!hich follo!s the !ords Dsalaries / / / for three months/D To follo! petitioners+ thinking that pri&ate
respondent is entitled to three '-* months salary only simply because it is the lesser amount is to
completely disregard and o&erlook some !ords used in the statute !hile gi&ing effect to some/ This
is contrary to the !ell1established rule in legal hermeneutics that in interpreting a statute, care
should be taken that e&ery part or !ord thereof be gi&en effect
-1
since the la!1making body is
presumed to kno! the meaning of the !ords employed in the statue and to ha&e used them
ad&isedly/
-2
0t res magis valeat >%am pereat/
--
3>(#(="#(, the Euestioned Decision and #esolution dated 1 September 199 and 12
8o&ember 199, respecti&ely, of public respondent 8ational Labor #elations )ommission are
%==5#,(D/ 0etitioners ,%#S%,%8 ,%8858? %?(8)A, 58)/, and D5%,%8T5D(S ,%#5T5,(,
58)/, are ordered, Fointly and se&erally, to pay pri&ate respondent 35L=#(D" T/ )%9(#%S his
salaries for the uneCpired portion of his employment contract or @SDP:,144/44, reimburse the
latter+s placement fee !ith t!el&e percent '12I* interest per ann%m conformably !ith Sec/ 14 of #%
8442, as !ell as attorney+s fees of ten percent '14I* of the total monetary a!ard/ )osts against
petitioners/*F)phi*.nGt
S" "#D(#(D/
Athenna 3nternational Manpo9er Services, 3nc. vs. :illanos , 4* SCRA
!1! , April 1*, "%%*
Case (itle : ATHENNA INTERNATIONAL MANPO6ER SER9ICES, INC.,
petitioner, s. NONITO 9ILLANOS, respondent.Case )at$re : PETITION %or
reie( on &ertior'ri o% t)e de&ision 'nd reso-.tion o% t)e Co.rt o% Appe'-s.
Syllabi Class : L'bor L'(*Resi,n'tion*Dis/iss'-s*Prob'tion'ry E/p-oyees*
Oerse's "i-ipino 6orFers
Syllabi:
1. Labor Law; Resignation; /n employee voluntarily resigns when he finds
himself in a situation where he believes that personal reasons cannot be
sacrificed in favor of the exigency of the service.-
/n employee voluntarily resigns when he finds himself in a situation where
he believes that personal reasons cannot be sacrificed in favor of the
exigency of the serviceF thus he has no other choice but to disassociate
himself from his employment.
". Labor Law; Dis#issals; Probationary E#ployees; 3ven probationary
employees could only be terminated for a pertinent and .ust cause such as
when he fails to qualify as a regular employee in accordance with reasonable
standards of employment made !nown to him by his employer at the time of
his engagement.-
3ven assuming respondent was a mere probationary employee as claimed
by petitioner respondent could only be terminated for a pertinent and .ust
cause such as when he fails to qualify as a regular employee in accordance
with reasonable standards of employment made !nown to him by his
employer at the time of his engagement. 0ere it appears that the petitioner
failed to prove that at the time of respondentIs engagement the employerIs
reasonable standards for the .ob were made !nown to respondent.
1oreover in this case respondent was assigned to a .ob different from the
one he applied and was hired for.
!. Labor Law; Dis#issals; O"erseas 3ilipino 4or5ers; Pursuant to
#ection (6 of R./. 4o. +6BC an overseas wor!er who was dismissed after
only one month of service in an employment that was supposed to have a
duration of ( year (6 months and C+ days is entitled to ; months salary for
every year of the unexpired term.-
Pertinent to this issue is #ection (6 of Rep. /ct 4o. +6BC #3&. (6. 1oney
&laims.>. . . %n case of termination of overseas employment without .ust
valid or authori@ed cause as defined by law or contract the wor!er shall be
entitled to the full reimbursement of his placement fee with interest at
twelve percent "(CP, per annum plus his salaries for the unexpired portion
of his employment contract or for three ";, months for every year of the
unexpired term whichever is less. . . . 7hus for the computation of the
lump-sum salary due an illegally dismissed overseas employee there are
two clauses as points of rec!oning: first is the cumulative salary for the
unexpired portion of his employmentF and the other is the grant of three
months salary for every year of the unexpired term whichever is lesser.
#ince respondent was dismissed after only one month of service the
unexpired portion of his contract is admittedly one year nine months and
twenty-eight days. Dut the applicable clause is not the first but the second:
three months salary for every year of the unexpired term as the lesser
amount hence it is what is due the respondent.
+ivision: "IRST DI9ISION
+oc,et )$-ber: #.R. No. +7+H4H
Co$nsel: "r'n&is&o S. De #.</'n L'( O%%i&e, E-ie<er C. !'&)o
.onente: K>IS>M!IN#
+ispositive .ortion:
6HERE"ORE, t)e petition is DENIED. T)e 'ss'i-ed De&ision d'ted M'y ?H,
?44+, 'nd Reso-.tion d'ted Noe/ber ?H, ?44+, o% t)e Co.rt o% Appe'-s 're
A""IRMED (it) MODI"ICATION. Petitioner At)enn' Intern'tion'- M'npo(er
Seri&es, In&. is )ereby DECLARED so-id'ri-y -i'b-e (it) 6ei Y. Hsien to p'y
respondent NONITO 9ILLANOS t)e '/o.nt o% NTI37,484.44, s.bEe&t to
proper &onersion to P)i-ippine &.rren&y, 's .np'id s'-'ry o% respondent
e@.i'-ent to si5 /ont)s seri&e .nder Rep. A&t No. 248?, Se&tion +4 's (e--
's P74,444.44 in /or'- d'/',es, 'nd P74,444.44 's e5e/p-'ry d'/',es
s.%%ered by respondentL 'nd ten per&ent B+4JC o% t)e ',,re,'te /onet'ry
'('rds 's 'ttorneys %ees, p.rs.'nt to -'( 'nd E.rispr.den&e. Petitioner
)erein is '-so ordered to p'y respondent t)e '/o.nt o% PH4,444.44 's
rei/b.rse/ent o% t)e p-'&e/ent %ee, (it) +?J interest per 'nn./ .nti- %.--y
p'id.
=or re&ie! on certiorari are the -e6ision
M1N
dated ,ay 2-, 2441
and Reso+*tion
M2N
dated 8o&ember 2-, 2441, of the )ourt of %ppeals in )%1?/#/ S0 8o/
:9:94/ The )ourt of %ppeals re&ersed the #esolutions
M-N
of the 8ational Labor #elations
)ommission and reinstated the Labor %rbiterQs Decision
M4N
in 8L#) )ase 8o/ Sub1#%21
491"=31'L2*142144442199/
The antecedent facts, as summari6ed by the )ourt of %ppeals, are as follo!s;
0etitioner %thenna 5nternational ,anpo!er Ser&ices, 5nc/ is a domestic corporation
engaged in recruitment and placement of !orkers for o&erseas employment/
#espondent 8onito <illanos is a contract !orker recruited by petitioner to !ork as a
caretaker in Tai!an/
#espondent applied to !ork o&erseas thru petitioner sometime in =ebruary 1998/
>e alleged that he !as assessed 0144,444 placement fee by petitioner/ %s he had
only 0-4,444 to pay petitioner, respondent begged for a reduced fee/ 0etitioner agreed
and the placement fee !as reduced to 094,444 only, on the condition that the remaining
balance of 04,444 shall be paid through salary deductions upon his deployment/
#espondent recei&ed no receipt for the 0-4,444 cash that he ad&anced as partial
placement fee/ 5nstead, petitioner ga&e him a schedule of his monthly salary deduction
payments for one year for his balance, !hich included interest and other charges,
amounting to 094,.2:/
5n "ctober 1998, respondentQs )ontract of (mployment !ith a certain 3ei Au >sien
arri&ed/ @nder this contract, he !as to !ork as caretaker for one year, ten months and
t!enty1eight days !ith a monthly pay of 8e! Tai!an Dollars '8TP* 1:,844/
"n "ctober 1:, 1998, he fle! to Tai!an/ #espondent alleged that upon his arri&al
in Tai!an, he !as assigned to a mechanical shop, o!ned by >sien, as a hydraulic
installer7repairer for car lifters, instead of the Fob for !hich he !as hired/ >e found out
that >sien !as actually engaged in the installation and repair of hydraulic machines for
gasoline stations and other mechanical shops/ Since then, he tra&eled from one place
to another, e&en during nighttime as hydraulic installer7repair man for car lifters, as
reEuired by his employer/ >e did not, ho!e&er, complain because he needed money to
pay for the debts he incurred back home/
2arely a month after his placement, he !as terminated by >sien/ "n 8o&ember 14,
1998, respondent !as made to sign a document stating that he !as not Eualified for the
position/ >e did not, ho!e&er, sign the document/ %t da!n of 8o&ember 1, 1998,
M:N
respondent !as handed his salary, !ith the accompanying computation and
instruction for his departure to the 0hilippines/
@pon his arri&al in the 0hilippines, he immediately !ent to petitionerQs office and
confronted its representati&e, Loren6a )hing, about the assignment gi&en to him and
demanded that he be reimbursed the 0-4,444 he paid as do!npayment/ 5nstead of
returning the said amount, petitioner ga&e him a summary of eCpenses amounting
to 0-4,49-, !hich it allegedly incurred for his deployment abroad/
%ggrie&ed, respondent filed a complaint docketed as 0"(% )ase 8o/ #<981121
1:8, before the %dFudication "ffice of the 0hilippine "&erseas (mployment
%dministration '0"(%*/
>o!e&er, because of financial constraints, he had to go home to 0olanco,
Jamboanga del 8orte !here, on =ebruary 1., 1999, he filed a complaint against
petitioner for illegal dismissal, &iolation of contract, and reco&ery of unpaid salaries and
other benefits before the 8L#) Sub1#egional %rbitration 2ranch 8o/ 9, Dipolog )ity/
5n its defense, petitioner alleged that it hired respondent to !ork in Tai!an for one
year and that for his deployment, he !as charged a placement fee of merely 01:,844
plus 0:,4:4 for documentation eCpenses/ 0etitioner further claimed that under the
employment contract, respondent !as to undergo a probationary period of forty '44*
days/ >o!e&er, at the Fob site, respondent !as found to be unfit for his !ork, thus he
resigned from his employment and reEuested for his repatriation signing a statement to
that effect/
"n ,ay 14, 1999, the Labor %rbiter rendered a -e6ision holding petitioner and 3ei
Au >sien solidarily liable for the !ages representing the unser&ed portion of the
employment contract, the amount unla!fully deducted from respondentQs monthly !age,
moral damages, eCemplary damages and attorneyQs fees/ =or the remittance of illegal
placement fee in the amount of 099,114, petitioner !as held solely liable/ The
dispositi&e portion of the decision reads;
WHEREFORE, couched in the foregoing premises, judgment is hereby rendered:
(1) declring tht the respondents! ct for h"ing se"ered complinnt!s
employment, fter ser"ice of one (1) month founded on unjustifible
grounds nd encroching ginst the sfegurd of fundmentl due process
nd security of tenure cluses s #ell s for being in contrdiction to the
#ell engendered bsic policy of the stte to grnt mple protection to lbor,
to be illegl$ %hus, in effect hereof, on the bsis of estblished
jurisprudence nd mndte of the l#, complinnt &onito 'illnos, s
contrctul employee, is entitled to be pid of the supposed #ges #hich he
could h"e recei"ed throughout the period of employment mnifested in the
contrct, hd not becuse of the unceremonious, bnorml nd unl#ful ct
of respondents in h"ing put his employment to n end fter bout one (1)
month ser"ices, #hich entitlement shll be pid jointly nd se"erlly by
respondents (then )nterntionl *npo#er +er"ices, )nc$, ,r-epresented by
.oren/ 0hing nd1or Wei 2u Hsien, 1311 Hsi 2un Rd$ %li 0ity,
%ichung 0ountry, %i#n, RO0, ,#hich- specific mount is reflected in
prgrph 456 hereof$
(7) declring further tht the deductions mde by respondent Wei 2u Hsien,
from the monthly #ge of complinnt, to be illegl, since the ct is
incidentl to the unl#ful scheme of h"ing terminted complinnt!s
employment untimely in the guise of inefficiency in the performnce of
#or8 #rongly ssigned to him nd in brech of the pro"isions of the "lid
contrct of employment h"ing been entered into by the prties$ For this
reson, respondents re hereby jointly nd se"erlly directed to remit the
e9ct mount of complinnt!s slry #ithheld, #hich mount is specificlly
found in prgrph 456$
(:) holding tht the imposition of the plcement fee of ;17<,<<<$<< ginst
complinnt s illegl, #hich in effect m8ing respondent (then
)nterntionl *npo#er +er"ices, )nc$, ,r-epresented by .oren/ 0hing
indi"idully to py complinnt the e9ct mount #hich is li8e#ise found in
prgrph 456 hereof$
(=) imposing morl nd e9emplry dmges rising from brech of contrct
nd bd fith of respondents, #hich shll be pid by respondents in solidum,
nd #hich mounts re specificlly reflected in prgrph 456$
(>) estblishing libility upon respondents se"erlly to py ttorney!s fees
e?ui"lent to ten percent (1<@) of the ggregte mount pyble to
complinnt by respondents$
(5) (nd, specificlly ordering respondents to py complinnt the follo#ing,
s bsed on the preceding prgrphs:
($) AO)&% (&B +E'ER(..2 .)(C).)%)E+ OF RE+;O&3BE&%+ )&
%H)+ 0(+E:
$) +upposed #ges of the
unser"ed portion of
complinnt!s durtion
of employment D$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ &%E :=F,=F<$<<G
(subject to proper future
con"ersion to ;hilippine ;eso)
b$) (mount unl#fully deducted
from complinnt!s monthly
#ge $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ &%E 11, 11=$<<G
(subject to proper future
con"ersion to ;hilippine 0urrency)
(c$) *orl dmges DDDD$$$$$$$$$$$$$$$$$$$$$$$$ ; ><,<<<$<<G
d$) E9emplry dmges DDDDDDDD ; :<,<<<$<<G nd
e$) (ttorney!s fees D$$DDDDDDDD$ %en ;ercent
(1<@) of the ggregte mount
of libilities of respondents,
#hether joint or se"erl, or
indi"idul libilities$
C$) )&B)')BH(. OR ;ER+O&(. .)(C).)%2 OF RE+;O&BE&%
(%HE&( )&%ER&(%)O&(. *(&;OWER +ER')0E+, )&0$,
RE;RE+E&%EB C2 .ORE&I( 0H)&JG
$) Remittnce of illegl
plcement fee DDDDDDDDDD$ ; KK,11<$<<$
+O ORBEREB$
MN
"n appeal, the 8L#) re&ersed the Labor %rbiter and dismissed the complaint for
lack of merit/ 5t found that respondent !as not at all dismissed, much less illegally/
#espondent seasonably filed a motion for reconsideration, !hich the 8L#) denied in its
second resolution/
@ndaunted, respondent appealed to the )ourt of %ppeals ascribing gra&e abuse of
discretion to the 8L#) in its ruling that there !as no &iolation of the contract of
employment by petitioner and in holding that respondent !as not illegally dismissed/
The )ourt of %ppeals held that 3ei Au >sien &iolated the contract of employment
!hen respondent !as made to !ork as hydraulic installer7repairer, not as caretaker/
The appellate court concluded that the supposed &oluntary resignation of respondent
!as inconsistent !ith his immediate demand for refund of the placement fee upon his
arri&al in the 0hilippinesH his filing of an administrati&e case before the 0"(%
%dFudication "fficeH and his subseEuent filing of the complaint !ith the Labor %rbiter/
The )ourt of %ppeals decreed;
WHEREFORE, the petition is hereby JR(&%EB re"ersing the ?uestioned
resolutions of the &tionl .bor Reltions 0ommission, Fifth Bi"ision, 0gyn de
Oro 0ity nd RE)&+%(%)&J the decision of the .bor (rbiter in &.R0 0se &o$
+ub3R(C3<K3OFW3(.C)3<73<<<<73KK$
+O ORBEREB$
M.N
>ence, the instant appeal, raising the follo!ing issues;
1/ Did the respondent &oluntarily resign or !as he illegally dismissedR
2/ %ssuming that the respondent !as illegally dismissed, !as it proper for the )ourt of
%ppeals to affirm in toto the monetary a!ards in the Decision of the Labor %rbiter,
especially; 'a* the a!ard of his supposed salaries for the entire uneCpired portion of
his employment contract, i/e/, 8TP-48,484/44 and 'b* the a!ard of Sremittance of
placement feeT in the amount of 099,114/44R
M8N
%nent the "irst issue, petitioner insists that respondent !as not illegally dismissed
but &oluntarily resignedH that respondent failed to pro&e that he !as made to !ork as
hydraulic installer7repairer instead of a caretakerH and that the documents he adduced
!ere self1ser&ing and immaterial/
0etitioner further contends that although the resignation of respondent !as in a pre1
printed form, it did not mean his resignation !as in&oluntary/ The reEuirement that the
employer has the burden of proof that the employee !as illegally dismissed is, says
petitioner, applicable only !hen the fact of dismissal is established/ 0etitioner submits
that, in this case, respondent bore the burden of pro&ing that his resignation !as
in&oluntary/
=or his part, respondent a&ers that he did not resign &oluntarily but, he !as asked to
sign a letter of resignation/ =urthermore, he a&ers that petitioner did not eCplain !hy he
!as unEualified/ 8either !as he informed of any Eualifications needed for the Fob prior
to his deployment, as mandated by %rticle 281
M9N
of the Labor )ode/
#espondent points out that the allegation he resigned &oluntarily is belied by
petitionerQs o!n admission in its position paper that he !as, in fact, found unfit for the
Fob/ >e maintains that his purported resignation !as ob&iously inconsistent !ith his
filing a complaint for illegal dismissal against petitioner/
%fter a thorough consideration of the submissions of the parties, !e find no
persuasi&e grounds nor substantial basis to re&erse the decision and the resolution of
the appellate court/
%n employee &oluntarily resigns !hen he finds himself in a situation !here he
belie&es that personal reasons cannot be sacrificed in fa&or of the eCigency of the
ser&iceH thus, he has no other choice but to disassociate himself from his employment/
M14N
#ecords sho! that upon his repatriation from Tai!an, respondent immediately !ent
to petitionerQs office and confronted its representati&e, Loren6a )hing, about the
assignment gi&en to him !hich !as contrary to the agreed position of caretaker, for
!hich he specifically applied/ >e demanded that he be reimbursed the 0-4,444 he paid
as do!npayment/ 3hen refused, he lodged a complaint !ith the 0"(%/ >e also
immediately filed a complaint for illegal dismissal before Labor %rbiter )resencio #/
5niego, upon his arri&al in his hometo!n, indicating that respondent did not &oluntarily
resign, but !as forced to resign, !hich !as tantamount to a dismissal/
M11N
0etitioner did
not refute respondentQs contentions regarding these incidents/ =urther, it failed to pro&e
the legality of the dismissal, despite the fact that the burden of proof lies on the
employment and recruitment agency/ Thus, the presumption stands to the effect that
respondent !as illegally dismissed by his employer/
(&en assuming respondent !as a mere probationary employee as claimed by
petitioner, respondent could only be terminated for a pertinent and Fust cause, such as
!hen he fails to Eualify as a regular employee in accordance !ith reasonable standards
of employment made kno!n to him by his employer at the time of his engagement/
M12N
>ere, it appears that the petitioner failed to pro&e that, at the time of respondentQs
engagement, the employerQs reasonable standards for the Fob !ere made kno!n to
respondent/ ,oreo&er, in this case, respondent !as assigned to a Fob different from the
one he applied and !as hired for/
"n the second issue/ 0etitioner claims that Section 14 of #epublic %ct 8o/ 8442,
M1-N
entitles respondent only to siC months !orth of the unser&ed portion of his
employment contractH and that the order to refund the amount of 099,114 as placement
fee has no factual basis because respondent himself admitted he only paid 0-4,444 as
placement fee, albeit, he !as assessed the amount of 094,444/
#espondent counters that he !orked for only a month because he !as hastily and
unceremoniously terminatedH and that he !as entitled to his salary corresponding to the
remaining portion of the employment contract/ =urther, he demands full reimbursement
of the 0-4,444 he paid as placement fee/
0ertinent to this issue is Section 14 of #ep/ %ct 8o/ 8442
+E0$ 1<$ Money Claims. 3 $ $ $
)n cse of termintion of o"erses employment #ithout just, "lid or uthori/ed cuse
s defined by l# or contrct, the #or8er shll be entitled to the full reimbursement of
his plcement fee #ith interest t t#el"e percent (17@) per annum, plus his slries
for the une9pired portion of his employment contrct or for three (:) months for e"ery
yer of the une9pired term, #hiche"er is less$
$ $ $
Thus, for the computation of the lump1sum salary due an illegally dismissed
o&erseas employee, there are t!o clauses as points of reckoning; first is the cumulati&e
salary for the uneCpired portion of his employmentH and the other is the grant of three
months salary for e&ery year of the uneCpired term, !hiche&er is lesser/
Since respondent !as dismissed after only one month of ser&ice, the uneCpired
portion of his contract is admittedly one year, nine months and t!enty1eight days/ 2ut
the applicable clause is not the first but the second; three months salary for e&ery year
of the uneCpired term, as the lesser amount, hence it is !hat is due the respondent/
8ote that the fraction of nine months and t!enty1eight days is considered as one
!hole year follo!ing the Labor )ode/ Thus, respondentQs lump1sum salary should be
computed as follo!s;
: months 9 7 (yers) L 5 months #orth of slry
5 months 9 (&%E) 1>,F=< L &%EK>,<=<, subject to proper con"ersion
to ;hilippine currency by .bor (rbiter
0resencio )niego$
@nder the aforeEuoted pro&ision, an illegally dismissed o&erseas !orker is also
entitled to the full reimbursement of his placement fee !ith interest at t!el&e percent
'12I* per ann%m/
3e note that !hile respondent !as assessed 094,444 in placement fee, he paid
only 0-4,444 on the agreement that the balance of 04,444 !ould be paid on a monthly
salary deduction upon his deployment/ >ence, !e cannot grant respondent
reimbursement of the entire assessed amount of 094,444/ >e is only entitled to the
reimbursement of the amount of placement fee he actually paid, !hich is the 0-4,444
he ga&e as do!npayment plus interest at t!el&e percent '12I* per ann%m/
Lastly, because of the breach of contract and bad faith alleged against the employer
and the petitioner, !e must sustain the a!ard of 0:4,444 in moral damages
and 0:4,444 as eCemplary damages, in addition to attorneyQs fees of ten percent '14I*
of the aggregate monetary a!ards/
.HEREORE, the petition is D(85(D/ The assailed Decision dated ,ay 2-, 2441,
and #esolution dated 8o&ember 2-, 2441, of the )ourt of %ppeals are %==5#,(D !ith
,"D5=5)%T5"8/ 0etitioner %thenna 5nternational ,anpo!er Ser&ices, 5nc/ is hereby
D()L%#(D solidarily liable !ith 3ei Au >sien to pay respondent 8"85T" <5LL%8"S
the amount of 8TP9:,444/44, subFect to proper con&ersion to 0hilippine currency, as
unpaid salary of respondent eEui&alent to siC months ser&ice under #ep/ %ct 8o/ 8442,
Section 14 as !ell as 0:4,444/44 in moral damages, and 0:4,444/44 as eCemplary
damages suffered by respondentH and ten percent '14I* of the aggregate monetary
a!ards as attorneyQs fees, pursuant to la! and Furisprudence/ 0etitioner herein is also
ordered to pay respondent the amount of 0-4,444/44 as reimbursement of the
placement fee, !ith 12I interest per annum until fully paid/
SO OR-ERE-(
-avide, $r., &.$., 5&hairman6, Cnares.Santiago, &arpio, and A<c%na, $$., concur.
.
3nterorient Mariti-e 1nterprises, 3nc. vs. )LRC, "1 SCRA 7*7 ,
Septe-ber 1, 1&&
Case (itle : INTERORIENT MARITIME ENTERPRISES, INC., "IRCRO"T
SHIPPIN# CORPORATION 'nd TIMES S>RETY = INS>RANCE CO., INC.,
petitioners, s. NATIONAL LA!OR RELATIONS COMMISSION 'nd
CONSTANCIA PINEDA, respondents.Case )at$re : SPECIAL CI9IL ACTION
in t)e S.pre/e Co.rt. Certior'ri.
Syllabi Class : A&tions*L'bor L'(*Certior'ri*P-e'din,s 'nd Pr'&ti&e*
Oerse's Contr'&t 6orFers*Eiden&e*Ins'nity
Syllabi:
1. &ctions; $ertiorari; Pleadings and Practice; Petitioners act
prematurely when they immediately bring a petition for certiorari without
having filed any motion for reconsideration with the respondent agency.2
". &ctions; $ertiorari; Pleadings and Practice; / petition for certiorari
under Rule )5 of the Rules of &ourt will lie only in cases where a grave
abuse of discretion or an act without or in excess of .urisdiction is clearly
shown to have been committed by the respondent &ommission and the
#upreme &ourtIs .urisdiction to review decisions or resolutions of the
respondent 4LR& does not include a correction of its evaluation of the
evidence.2
!. Labor Law; O"erseas $ontract 4or5ers; E"idence; Pleadings and
Practice; &laims of overseas wor!ers against their foreign employers should
not be sub.ected to the rules of evidence and procedure that courts usually
apply to other complainants who have more facility in obtaining the required
evidence to prove their demands.2
4. Labor Law; O"erseas $ontract 4or5ers; *nsanity; 7he mental
disorder of a Eilipino overseas contract wor!er became evident when he
failed to .oin his connecting flight to 0ong!ong having during said stopover
wandered out of the Dang!o! airportIs immigration area on his own there
being no sane and sufficient reason for him to want to while away his time in
a foreign land when he is presumably unfamiliar with its native tongue with
nothing to do and no source of income and after having been absent from
!ith and !in hearth and home for almost an entire year.2
*. Labor Law; O"erseas $ontract 4or5ers; *nsanity; <here an
overseas contract wor!er attac!ed a 7hai policeman when he was no longer
in complete control of his mental faculties the provisions of the #tandard
Eormat &ontract of 3mployment exempting the employer from liability does
not apply.2
. Labor Law; O"erseas $ontract 4or5ers; *nsanity; 7he failure of a
foreign employer to observe some precautionary measures and in allowing
an overseas wor!er with mental disorder to travel home alone render it
liable for the death of said wor!er.2
7. Labor Law; O"erseas $ontract 4or5ers; 3ven if the termination of
the employment contract is duly effected in a foreign country still the
responsibility of the foreign employer to see to it that the wor!er is duly
repatriated to the point of hiring subsists.2
'. Labor Law; O"erseas $ontract 4or5ers; 7he foreign employer may
not be obligated by its contract to provide a companion for a returning
employee but it cannot deny that it is expressly tas!ed by its agreement to
assure the safe return of said wor!er.2
+ivision: THIRD DI9ISION
+oc,et )$-ber: #.R. No. ++7831
Co$nsel: M'ri-yn C'&)o;N'oe, Reyn'-do L. Lib'n'n
.onente: PAN#ANI!AN
+ispositive .ortion:
6HERE"ORE, pre/ises &onsidered, t)e petition is )ereby DISMISSED 'nd
t)e De&ision 'ss'i-ed in t)is petition is A""IRMED. Costs ','inst petitioners.
%re the local cre!ing or manning agent and its foreign principal 'the shipo!ner*
liable for the death of a =ilipino seaman1employee !ho, after ha&ing been discharged,
!as killed in transit !hile being repatriated homeR
The instant petition
M1N
seeks the re&ersal and7or modification of the
#esolution
M2N
dated ,arch -4, 1994 of public respondent 8ational Labor #elations
)ommission
M-N
dismissing the appeals of petitioners and affirming the decision
dated 8o&ember 1, 1992
M4N
of 0hilippine "&erseas (mployment %dministration '0"(%*
%dministrator =elicisimo )/ 9oson, !hich ordered that;
M:N
4WHEREFORE, in "ie# of the foregoing considertion, respondents re hereby
jointly nd se"erlly held lible to py the complinnt the follo#ing mounts:
1/ 01-4,444/44 as death compensation benefits/
2/ 018,444/44 as burial eCpenses/T
T<e a6ts
The proceedings belo! originated as a claim for death compensation benefits filed
by )onstancia 0ineda as heir of her deceased son, seaman 9eremias 0ineda, against
5nterorient ,aritime (nterprises, 5nc/ and its foreign principal, =ircroft Shipping
)orporation and the Times Surety and 5nsurance )o/, 5nc/ The follo!ing facts !ere
found by the 0"(% %dministrator;
MN
4(s cn be gthered from the records of the cse, it #s lleged tht decesed semn,
Aeremis ;ined #s contrcted to #or8 s Oiler on bord the "essel, M*' (m/oni!,
o#ned nd operted by its foreign principl, Fircroft +hipping 0orportion for
period of nine (K) months #ith dditionl three (:) months upon mutul consent of
both prties #ith monthly bsic slry of H+E7N5$<< plus fi9ed o"ertime rte of
H+EF:$<< nd le"e py of 7 117 dys per monthG tht on October 7, 1KFK, he met
his deth #hen he #s shot by %hi ;olicemn in Cng8o8, %hilndG tht
considering tht the decesed semn #s suffering from mentl disorders ggr"ted
by threts on his life by his fello# semen, the +hip 0ptin should not h"e llo#ed
him to tr"el lone$
C C C C C C C C C
)n its (ns#er1;osition ;per, respondent gency "erred tht decesed semn signed
contrct of employment s Oiler for period of nine (K) months #ith dditionl
three (:) months upon mutul consent of both prties #ith monthly slry of
H+E7N5$<<, fi9ed o"ertime rte of H+EF:$<<G tht on Becember 71, 1KFF, decesed
semn joined the "essel *' (m/oni nd proceeded to dischrge his duties s
OilerG tht on +eptember 7F, 1KFK, he finished his contrct nd #s dischrged from
the port of Bubi for reptrition to *nilG tht his flight schedule from Bubi to the
;hilippines necessitted stopo"er t Cng8o8, %hilnd, nd during sid stopo"er he
disembr8ed on his o#n free #ill nd filed to join the connecting flight to Hong8ong
#ith finl destintion to *nilG tht on October >, 1KK<, it recei"ed f9
trnsmission from the Beprtment of Foreign (ffirs to the effect tht Aeremis ;ined
#s shot by %hi Officer on duty on October 7, 1KFK t round =:<< ;$*$G tht the
police report submitted to the ;hilippine Embssy in Cng8o8 confirmed tht it #s
;ined #ho Mpproched nd tried to stb the police sergent #ith 8nife nd tht
therefore he #s forced to pull out his gun nd shot ;ined!G tht they re not lible to
py ny deth1buril benefits pursunt to the pro"isions of ;r$ 5, +ection 0, ;rt )),
;OE( +tndrd Formt of Employment #hich stte(s) tht Mno compenstion shll be
pyble in respect of ny injury, (in)cpcity, disbility or deth resulting from
#illful (sic) ct on his o#n life by the semn!G tht the decesed semn died due to
his o#n #ilfull (sic) ct in ttc8ing policemn in Cng8o8 #ho shot him in self3
defense$6
%fter the parties presented their respecti&e e&idence, the 0"(% %dministrator
rendered his decision holding petitioners liable for death compensation benefits and
burial eCpenses/
0etitioners appealed the 0"(% decision to the public respondent/ 5n a Decision
dated ,arch -4, 1994, public respondent upheld the 0"(%/
Thus, this recourse to this )ourt by !ay of a special ci&il action for certiorari per
#ule : of the #ules of )ourt/
T<e Iss*es
The petitioners made the follo!ing Sassignment of errorsT;
4Respondent &.R0 committed gr"e buse of discretion in ruling tht herein
petitioners re lible for deth compenstion benefits despite the fct tht there is no
direct e"idence pro"ing tht ;ined #s mentlly sic8 t the time of reptrition$
Respondent &.R0 committed serious error of l# in not upholding the pro"isions
of ;r$ 5, +ection 0, ;rt )) of the ;OE( stndrd formt 0ontrct of Employment$
Respondent &.R0 committed gr"e buse of discretion in finding for
compensbility of ;ined!s deth #hen respondents (should red Mpetitioners!) h"e
pro"en tht his deth #s not #or83connected$6
The principal issue in this case is !hether the petitioners can be held liable for the
death of seaman 9eremias 0ineda/
The petitioners challenge the factual bases of the 8L#) Decision, and argue that
there !as Sno e&idence, !hether documentary or testimonial, that the deceased 0ineda,
at the time of his repatriation !as not in full control of his mental facultiesT, and that
Sthere '!as* no sho!ing that seaman 0ineda acted strangely !hen he disembarked
from the &esselT in Dubai !here he !as discharged, and from !hich point he fle! to
2angkok !ithout any unto!ard incident during the entire trip/ They thus insist that they
!ere under no obligation to ha&e 0ineda accompanied home !hen he !as discharged
at the end of the contract term of nine months, that they !ere in no position to control
the deceasedQs mo&ements and beha&ior after he !as repatriated and therefore should
not be held ans!erable for the deceasedQs o!n &oluntary acts, and that the deceased
could ha&e, !hile in 2angkok, ingested some drugs or other mind1altering substance
resulting in his aggressi&e beha&ior and untimely demise/
T<e Co*rt=s R*+in7
Procedural and Substantive Defects
%t the outset, !e note that the petition suffers from serious procedural defects that
!arrant its being dismissed outright/ 0etitioners acted prematurely, not ha&ing filed any
motion for reconsideration !ith the public respondent before bringing the instant petition
to this )ourt/ This constitutes a fatal infirmity/
49 9 9 %he un?uestioned rule in this jurisdiction is tht certiorri #ill lie only if there
is no ppel or ny other plin, speedy nd de?ute remedy in the ordinry course of
l# ginst the cts of public respondent$ )n the instnt cse, the plin nd de?ute
remedy e9pressly pro"ided by the l# #s motion for reconsidertion of the ssiled
decision, bsed on plpble or ptent errors, to be mde under oth nd filed #ithin
ten (1<) clendr dys from receipt of the ?uestioned decision$6
M.N
4(%)he filing of such motion is intended to fford public respondent n opportunity
to correct ny ctul or fncied error ttributed to it by #y of re3e9mintion of the
legl nd fctul spects of the cse$ ;etitioner!s inction or negligence under the
circumstnces is tntmount to depri"tion of the right nd opportunity of the
respondent 0ommission to clense itself of n error un#ittingly committed or to
"indicte itself of n ct unfirly imputed$ 9 9 96
M8N
49 9 9 (nd for filure to "il of the correct remedy e9pressly pro"ided by l#,
petitioner hs permitted the subject Resolution to be come finl nd e9ecutory fter
the lpse of the ten dy period #ithin #hich to file such motion for reconsidertion$6
M9N
2ut e&en if the aforesaid procedural defect !ere to be o&erlooked, the instant
petition ne&ertheless suffers from serious substanti&e fla!s/ The petition assails the
#esolution of the respondent )ommission as lacking factual and legal bases to support
the same/ % petition for certiorari under #ule : of the #ules of )ourt !ill lie only in
cases !here a gra&e abuse of discretion or an act !ithout or in eCcess of Furisdiction is
clearly sho!n to ha&e been committed by the respondent )ommission, and this )ourtQs
Furisdiction to re&ie! decisions or resolutions of the respondent 8L#) does not include
a correction of its e&aluation of the e&idence/
M14N
,oreo&er, it is a fundamental rule that
the factual findings of Euasi1Fudicial agencies like the respondent 8L#), if supported by
substantial e&idence, are generally accorded not only great respect but e&en finality,
and are binding upon this )ourt, unless the petitioner is able to clearly demonstrate that
respondent )ommission had arbitrarily disregarded e&idence before it or had
misapprehended e&idence to such an eCtent as to compel a contrary conclusion if such
e&idence had been properly appreciated/
M11N
irst Iss*e> No Direct Evidence of Mental State?
%t any rate, e&en disregarding for the nonce the substanti&e as !ell as procedural
defects discussed abo&e, a Fudicious re&ie! of the records of this case turns up no
indication !hatsoe&er that the respondent )ommission committed any gra&e abuse or
acted beyond or !ithout Furisdiction/ "n the contrary, the petitionersQ contention that the
assailed #esolution has no factual and legal bases is belied by the adoption !ith
appro&al by the public respondent of the findings of the 0"(% %dministrator, !hich
recites at length the reasons for holding that the deceased 0ineda !as mentally sick
prior to his death and concomitantly, !as no longer in full control of his mental faculties/
=irst, a !ord about the e&idence supporting the findings of the 0"(%
%dministrator/ 3e ha&e held that claims of o&erseas !orkers against their foreign
employers should not be subFected to the rules of e&idence and procedure that courts
usually apply to other complainants !ho ha&e more facility in obtaining the reEuired
e&idence to pro&e their demands/
M12N
Section :, #ule 1-- of the #ules of )ourt pro&ides
that in cases filed before administrati&e or Euasi1Fudicial bodies 'like the 0"(%*, a fact
may be deemed established if it is supported by substantial e&idence, i/e/, that amount
of e&idence !hich a reasonable mind might accept as adeEuate to Fustify a conclusion/
M1-N
5n this instance, seaman 0ineda, !ho !as discharged in Dubai, a foreign land, could
not reasonably be eCpected to immediately resort to and a&ail of psychiatric
eCamination, assuming that he !as still capable of submitting himself to such
eCamination at that time, not to mention the fact that !hen he disembarked in Dubai, he
!as already discharged and !ithout employment 11 his contract ha&ing already run its
full term 11 and he had already been put on a plane bound for the 0hilippines/ This
eCplains the lack or absence of direct e&idence sho!ing his mental state/
The circumstances prior to and surrounding his death, ho!e&er, pro&ide substantial
e&idence of the eCistence of such mental defect or disorder/ Such mental disorder
became e&ident !hen he failed to Foin his connecting flight to >ongkong, ha&ing during
said stopo&er !andered out of the 2angkok airportQs immigration area on his o!n/ 3e
can percei&e no sane and sufficient reason for a 0inoy o&erseas contract !orker or
seaman to !ant to !hile a!ay his time in a foreign land, !hen he is presumably
unfamiliar !ith its nati&e tongue, !ith nothing to do and no source of income, and after
ha&ing been absent from kith and kin, hearth and home for almost an entire year/ 8or
can !e find any plausible reason for him to be !ielding a knife and scaring a!ay
passersby, and e&en taking a stab at an armed policeman, unless he is no longer in full
possession of his sanity/ To our mind, these circumstances are sufficient in themsel&es
to produce a firm con&iction that the deceased seaman in this case !as no longer in full
control of his senses !hen he left his !ork/ To reiterate, in this case, no more than
substantial e&idence is reEuired/
Se6on4 Iss*e> Emlo!er E"emted from #iabilit!?
5t is petitionersQ contention that S0inedaQs death caused by his o!n !illful act of
attacking a Thai policeman and getting shot at in self1defense is not compensableT,
inasmuch as 0ar/ , Section ), 0art 55 of the 0"(%Qs Standard =ormat )ontract of
(mployment for Seamen states that;
4&o compenstion shll be pyble in respect of ny injury, incpcity, disbility
or deth resulting from (deliberte or) #illful ct on his o#n life by the semn(,)
pro"ided, ho#e"er, tht the employer cn pro"e tht such injury, incpcity, disbility
or deth is directly ttributble to the semn$6 (underscoring supplied)$
,oreo&er, petitioners contend that this )ourt already held in the case of Mab%hay
Shipping Services, nc. vs. :#R& and &ecilia Sentina
M14N
that the employer is not liable for
the !illful act of an employee on his o!n life/ =urther, %rticle 1.2 of the Labor )ode
pro&ides for a limitation on the liability of the State 5nsurance =und !hen the Sdisability
or death !as occasioned by the employeeQs intoCication, !illful intention to inFure or kill
himself or another, notorious negligence C C C/T
0etitioners are in error/ This )ourt agrees !ith the 0"(% %dministrator that
seaman 0ineda !as no longer acting sanely !hen he attacked the Thai policeman/ The
report of the 0hilippine (mbassy in Thailand dated "ctober 9, 1994 depicting the
deceasedQs strange beha&ior shortly before he !as shot dead, after ha&ing !andered
around 2angkok for four days, clearly sho!s that the man !as not in full control of his
o!n self;
M1:N
4(0(B) )& RE;.2 %O %E.EO +E&% %O E*C(++2 C2 (B*$
+(R*)E&%O1BE.( RO+( OF OWW(1BO.E RE 0(H+E OF BE(%H OF
BE0E(+EB +E(*(& AERE*)(+ ;)&EB(, P)&B.2 (B')+E H)+ OFF)0E
%H(% +HCAE0% (RR)'EB C(&JPOP 1>1>H O& CO(RB O0K<: O& ( +%O;
O'ER F.)JH% FRO* BHC() O& H)+ W(2 %O HO&JPO&J ;RO0EEB)&J %O
*(&).($ H&FOR%H&(%E.2 ;)&EB( F().EB %O %(PE %HE +(*E F.)JH%
OH% (% 15:<H, 0HE0PEB OH% OF )**)JR(%)O&, WE&% OH% OF ()R;OR%
(&B W(&BEREB OH% (&B FEW B(2+ .(%ER *E% H)+ H&%)*E.2
BE*)+E$ ;.+$ REFER %O OHR(B B(%EB > O0% FK QHO%)&J FH.. %EO%
OF ;O.)0E RE;OR% (BBRE++EB %O %H)+ E*C(++2 RE0OH&%)&J
)&0)BE&% .E(B)&J %O F(%(. +HOO%)&J OF ;)&EB($ P)&B.2 FHR&)+H
OWW(1BO.E FH.. %EO% OF +()B RE;OR% FOR %HE)R )&FO$
;ER RE;OR% RE0E)'EB FRO* ()R;OR% ;ER+O&&E. ;)&EB( W(+
(0%)&J +%R(&JE.2, REFH+EB %O CO(RB H)+ +0HEBH.EB F.)JH% (&B
B)+(;;E(REB FRO* ()R;OR%$ ;O.)0E RE;OR% (.+O 0O&F)R*EB H)+
+%R(&JE CEH(')OR .E(B)&J %O H)+ (RRE+%, %HE& RH&&)&J (*OP
(&B 0(H+)&J %ROHC.E %O ;(++ER+ (&B (%%E*;% %O +%(C %HE BH%2
;O.)0E*(& WHO %R)EB %O ;(0)F2 H)*$
;)&EB( +EE*EB %O H('E CEE& +HFFER)&J FRO* +O*E *E&%(.
B)+ORBER (+ 0(& CE J.E(&EB FRO* H)+ ;ER+O&(. .E%%ER+
B)+0O'EREB (*O&J H)+ ;ER+O&(. EFFE0%+$ HE 0O*;.()&EB OF
+HFFER)&J FRO* +E'ERE HE(B ;()&+ (&B E'E& RE;OR%EB %O
0(;%()& OF ( +H); (COH% %HRE(%+ O& H)+ .)FE C2 FE..OW +E(*(&
WH)0H )&'(R)(C.2 .E(B (sic) %O H)+ CE)&J RE;(%R)(%EB HO*E
WH)0H JRE(%.2 (FFE0%EB H)+ B)+;O+)%)O&$
+HJJE+% BO.E 0O&%(0% 0(;%()& OF *1' (*(I+O& (sic) (&B
(+0ER%()& (+ %O WH2 ;)&EB( H('E (sic) %O B)+E*C(RP (&B
+HC+EQHE&%.2 RE;(%R)(%EB$ )F ;)&EB( W(+ (.RE(B2 +HFFER)&J
FRO* *E&%(. B)+ORBER (+ FE(REB, HE +HOH.B H('E &O% CEE&
(..OWEB %O %R('E. HO*E (.O&E (&B +HOH.B H('E CEE&
(00O*;(&)EB C2 ( ;H2+)0)(&.6 (underscoring supplied)
The 0"(% %dministrator ruled, and this )ourt agrees, that since 0ineda attacked
the Thai policeman !hen he !as no longer in complete control of his mental faculties,
the aforeEuoted pro&ision of the Standard =ormat )ontract of (mployment eCempting
the employer from liability should not apply in the instant case/ =irstly, the fact that the
deceased suffered from mental disorder at the time of his repatriation means that he
must ha&e been depri&ed of the full use of his reason, and that thereby, his !ill must
ha&e been impaired, at the &ery least/ Thus, his attack on the policeman can in no !ise
characteri6ed as a deliberate, !illful or &oluntary act on his part/ Secondly, and apart
from that, !e also agree that in light of the deceasedQs mental condition, petitioners
Sshould ha&e obser&ed some precautionary measures and should not ha&e allo!ed said
seaman to tra&el home aloneT,
M1N

and their failure to do so rendered them liable for the
death of 0ineda/ 5ndeed, Sthe obligations and liabilities of the 'herein petitioners* do not
end upon the eCpiration of the contracted period as 'petitioners are* duty bound to
repatriate the seaman to the point of hire to effecti&ely terminate the contract of
employment/T
M1.N
The instant case should be distinguished from the case of Mab%hay, !here the
deceased, #omulo Sentina, had been in a state of intoCication, then ran amuck and
inflicted inFury upon another person, so that the latter in his o!n defense fought back
and in the process killed Sentina/ 0re&ious to said incident, there !as no proof of
mental disorder on the part of Sentina/ The cause of SentinaQs death is categori6ed as
a deliberate and !illful act on his o!n life directly attributable to him/ 2ut seaman
0ineda !as not similarly situated/
5ncidentally, petitioners conFecture that the deceased could ha&e been on drugs
!hen he assaulted the policeman/ 5f this had been the case, the Thai police and the
0hilippine (mbassy in 2angkok !ould most certainly ha&e made mention thereof in
their respecti&e reports/ 2ut they did not do so/
T<ir4 Iss*e> $as Deat% $or&'(elated?
0etitioners further argue that the cause of 0inedaQs death Sis not one of the
occupational diseases listed by la!T, and that in the case of -e $es%s vs. ?mployeesH
&ompensation &ommission,
M18N
this )ourt held that SC C C for the sickness and the
resulting disability or death to be compensable, the sickness must be the result of an
occupational disease listed under %nneC U%Q of the #ules 'the %mended #ules on
(mployeesQ )ompensation* !ith the conditions set therein satisfiedH other!ise, proof
must be sho!n that the risk of contracting the disease is increased by the !orking
conditions/T
M19N
0etitionerQs reliance on -e $es%s is misplaced, as the death and burial benefits
being claimed in this case are not payable by the (mployeesQ )ompensation
)ommission and chargeable against the State 5nsurance =und/ These claims arose
from the responsibility of the foreign employer together !ith the local agency for the
safety of the employee during his repatriation and until his arri&al in this country, i/e/, the
point of hire/ Though the termination of the employment contract !as duly effected in
Dubai, still, the responsibility of the foreign employer to see to it that 0ineda !as duly
repatriated to the point of hiring subsisted/ Section 4, #ule <555 of the #ules and
#egulations ?o&erning "&erseas (mployment clearly pro&ides for the duration of the
mandatory personal accident and life insurance co&ering accidental death,
dismemberment and disability of o&erseas !orkers;
4+ection =$ Duration of Insurance Coverage$ 33 %he minimum co"erge shll t8e
effect upon pyment of the premium nd shll be e9tended #orld#ide, on nd off the
job, for the durtion of the #or8er!s contrct plus si9ty (5<) clendr dys fter
termintion of the contrct of employmentG pro"ided tht in no cse shll the durtion
of the insurnce co"erge be less thn one yer$6 (underscoring supplied)
The foreign employer may not ha&e been obligated by its contract to pro&ide a
companion for a returning employee, but it cannot deny that it !as eCpressly tasked by
its agreement to assure the safe return of said !orker/ The uncaring attitude displayed
by petitioners !ho, kno!ing fully !ell that its employee had been suffering from some
mental disorder, ne&ertheless still allo!ed him to tra&el home alone, is appalling to say
the least/ Such attitude harks back to another time !hen the landed gentry practically
o!ned the serfs, and disposed of them !hen the latter had gro!n old, sick or other!ise
lost their usefulness/
.HEREORE, premises considered, the petition is hereby -SMSS?- and the
Decision assailed in this petition is A99RM?-/ )osts against petitioners/
SO OR-ERE-(
:arvasa, &.$. 5&hairman6, -avide, $r., Melo, and 9rancisco, $$., concur.
)8+ 3nternational Mannin/ A/ents vs. )LRC, "'4 SCRA "!&, #an$ary
1, 1&&'
Case (itle7 N"D INTERNATIONAL MANNIN# A#ENTS 'nd !AR!ER
INTERNATIONAL AMS, petitioners, s. THE NATIONAL LA!OR RELATIONS
COMMISSION 'nd NELIA MISADA, %or )erse-% 'nd in be)'-% o% )er /inor
&)i-dren CAESAR 'nd ALPHA 0OY, '-- s.rn'/ed MISADA 'nd HIMAYA
EN9IDIADO, %or )erse-% 'nd in be)'-% o% )er /inor &)i-dren HEN;, REA,
HAAEL, 'nd HENDRIC:, '-- s.rn'/ed EN9IDIADO, respondents.
Case )at$re7 SPECIAL CI9IL ACTION in t)e S.pre/e Co.rt. Certior'ri.
Syllabi Class7 L'bor L'(*Appe'-s*N'tion'- L'bor Re-'tions Co//ission*
Eiden&e*D.e Pro&ess*Se'/en

Syllabi:
1. Labor Law; &ppeals; National Labor Relations
$o##ission; E"idence; 7he submission of additional evidence before the
4LR& is not prohibited by the 4ew Rules of Procedure of the 4LR& such
submission not being pre.udicial to the other party for the latter could
submit counter-evidence.2
". Labor Law; &ppeals; De Process; %t is not the denial of the right to
be heard but denial of the opportunity to be heard that constitutes violation
of due process of law.2
!. Labor Law; Sea#en; 7he death of a seaman during the term of his
employment ma!es the employer liable to the formerIs heirs for death
compensation benefits unless the employer can successfully prove that the
seamanIs death was caused by an in.ury directly attributable to his
deliberate or willful act.2
4. Labor Law; Sea#en; E"idence; 7he testimonies of ship officers who
merely observed and narrated the circumstances surrounding the deaths of
the two seamen and the illness of another are insufficient to prove the fact
that the deaths were caused by self-inflicted in.uries.2
*. Labor Law; Sea#en; E"idence; 8&ertificate for Removal of a Dead
Dody9 and 8&ertificate of 3mbalming9 are not proofs of the real cause of
death.2
+ivision: SECOND DI9ISION
+oc,et )$-ber: #.R. No. ++DD?3
Co$nsel: Soo, #.tierre<, Leo,'rdo = Lee, T'n, M'n<'no = 9e-e<
.onente: P>NO
+ispositive .ortion:
IN 9IE6 6HEREO", t)e petition is dis/issed 'nd t)e de&ision o% respondent
N'tion'- L'bor Re-'tions Co//ission in NLRC CA No. 44D834;38 is '%%ir/ed.
This special ci&il action for certiorari seeks to annul and set aside the decision dated %pril 2:, 1994
of the 8ational Labor #elations )ommission !hich ordered petitioners to pay a total of @/S/
P2,41/42 as death benefits to pri&ate respondents/
0etitioner 8=D 5nternational ,anning %gents, 5nc/, a domestic manning corporation, engaged the
ser&ices of (duardo 0/ ,isada and (nrico %/ (n&idiado to !ork for petitioner 2arber 5nternational %7S
'2arber*, a 8or!egian shipping company/ ,isada and (n&idiado !ere hired as second and third
officers, respecti&ely, on board the &essel ,7< 0an <ictoria/ They !ere to tra&el from S!eden to
South Korea for a period of ten months from 9anuary 1991 to 8o&ember 1991/
"n 9uly :, 1991, pri&ate respondent 8elia ,isada recei&ed notice that her husband, (duardo
,isada, died on 9une 28, 1991 !hile on board the ,7< 0an <ictoria/ "n 9uly 12 1991, pri&ate
respondent >imaya (n&idiado like!ise recei&ed notice that her husband, (nrico (n&idiado, died on
board the &essel/
%s heirs of the deceased seamen, pri&ate respondents, in their behalf and in behalf of their minor
children, filed for death compensation benefits under the 0hilippine "&erseas (mployment %gency
'0"(%* Standard )ontract of (mployment and the 8or!egian 8ational 5nsurance Scheme '85S* for
=ilipino "fficers/ Their claims !ere denied by petitioners/
0ri&ate respondents filed separate complaints before the 0"(% %dFudication "ffice/ They prayed for
@/S/ P1-,444/44 each as death compensation under the 0"(% Standard )ontract of (mployment
and @/S/ P-4,444/44 for each !ife and @/S/ P8,444/44 for each child under eighteen years under the
8or!egian 85S/
1
5n their %ns!er, petitioners claimed that pri&ate respondents are not entitled to death benefits on the
ground that the seamen+s deaths !ere due to their o!n !illful act/ They alleged that the deceased
!ere among three '-* =ilipino seamen !ho implanted fragments of reindeer horn in their respecti&e
seCual organs on or about 9une 18, 1991H that due to the lack of sanitary conditions at the time and
place of implantation, all three seamen suffered Dse&ere tetanusD and Dmassi&e &iral infectionsHD that
,isada and (n&idiado died !ithin days of the otherH that the third seaman, %rturo =aFardo, narro!ly
missed death only because the &essel !as at port in 0enang, ,alaysia at the time the tetanus
became critical/
2
The complaints !ere consolidated and the parties filed their respecti&e position papers and
documentary e&idence/ "n "ctober 24, 199-, the 0"(% %dministrator dismissed the case for lack of
merit/
0ri&ate respondents appealed to respondent )ommission/ During the pendency of the appeal,
pri&ate respondents submitted additional documentary e&idence in support of their ,emorandum on
%ppeal/
"n %pril 2:, 1994, respondent )ommission re&ersed the 0"(% %dministrator and ordered
petitioners to pay pri&ate respondents the follo!ing;
'a* To complainant 8elia =/ ,isada and her t!o minor children, 9ulius )aesar and %lpha 9oy,
all surnamed ,isada;
'1* Death compensation of @/S/ P1-,444/44 under the 0"(% Standard
=ormatH
'b* To complainant >imaya ?/ (n&idiado and her three '-* minor children, >enrea, >a6el and
>endrick, all surnamed (n&idiadoH
'1* Death compensation of @/S/ P1-,444/44 under the pro&isions of the
0"(% #ules and #egulationsH and
'2* 2ack!ages as of 9uly 1991 amounting to @/S/ P41/42 or its peso
eEui&alent/
S" "#D(#(D/
3
>ence this petition/ 0etitioners claim that;
5
=5#STLA, T>( 8L#) )",,5TT(D ?#%<( %2@S( "= D5S)#(T5"8 58 )"8S5D(#58?
D")@,(8TS 3>5)> D" 8"T ="#, 0%#T "= T>( (<5D(8)( 58 T>( 58ST%8T )%S(,
T>(#(2A D(0#5<58? 0(T5T5"8(#S "= D@( 0#")(SSH
55
S()"8DLA, T>( 8L#) )",,5TT(D ?#%<( %2@S( "= D5S)#(T5"8 3>(8 5T
"<(#T@#8(D 3>%T >%S 2((8 (ST%2L5S>(D 2A )5#)@,ST%8T5%L %8D
D")@,(8T%#A (<5D(8)( "8 T>( 2%S5S "= D")@,(8TS 3>5)> %T 2(ST %#(
>(%#S%AH and
555
T>5#DLA, T>( 8L#) )",,5TT(D ?#%<( %2@S( "= D5S)#(T5"8 58 #(<(#S58? T>(
0"(% D()5S5"8 "8 T>( 2%S5S "= D")@,(8TS 3>5)> %T 2(ST %#( 8"T
)"8)L@S5<( %S T" T>( )%@S( "= D(%T> "= S@29()T S(%,(8/
4
0etitioners claim respondent )ommission gra&ely abused its discretion in admitting pri&ate
respondent+s additional e&idence on appeal/ 0etitioners allege that the additional e&idence !ere
DsurreptitiouslyD submitted in &iolation of petitioner+s right to due process/
The submission of additional e&idence before the respondent )ommission is not prohibited by the
8e! #ules of 0rocedure of the 8L#)/ %fter all, rules of e&idence pre&ailing in courts of la! or eEuity
are not controlling in labor cases/
5
The 8L#) and labor arbiters are directed to use e&ery and all
reasonable means to ascertain the facts in each case speedily and obFecti&ely, !ithout regard to
technicalities of la! and procedure all in the interest of substantial Fustice/
6
5n keeping !ith this directi&e, it
has been held that the 8L#) may consider e&idence, such as documents and affida&its, submitted by the
parties for the first time on appeal/
7
The submission of additional e&idence on appeal does not preFudice
the other party for the latter could submit counter1e&idence/
"
5n the case at bar, the additional e&idence !as submitted by pri&ate respondents before the
respondent )ommission in their ,emorandum on %ppeal dated 8o&ember 8, 199-/ The decision of
respondent )ommission !as rendered on %pril 2:, 1994, i/e/, siC '* months after the additional
documents !ere submitted/ 0etitioners had ample opportunity to obFect and refute the documents/
They had the chance to submit counter1e&idence during this period but they did not do so/ 5t !as
only !hen they mo&ed for reconsideration of the decision of respondent )ommission that they
Euestioned the admission of these e&idence/
The essence of due process is simply an opportunity to be heard, or as applied to administrati&e
proceedings, a fair and reasonable opportunity to eCplain one+s side/
#
5t is also an opportunity to seek
a reconsideration of the action or ruling complained of/
1$
5t is not the denial of the right to be heard but
denial of the opportunity to be heard that constitutes &iolation of due process of la!/
11
0rocedural matters ha&ing been disposed of, the substanti&e issue in this case is !hether
respondent )ommission gra&ely erred in finding that the deaths of the t!o seamen, (duardo ,isada
and (nrico (n&idiado, did not come as a result of their !illful and deliberate act/
0art 55, Section ), 8o/ 1, 0aragraph 1 of the 0"(% DStandard (mployment )ontract ?o&erning the
(mployment of %ll =ilipino Seamen on 2oard "cean1?oing <esselsD
12
pro&ides that;
1/ 5n case of death of the seaman during the term of this contract, the employer shall pay his
beneficiaries the 0hilippine )urrency eEui&alent to the amount of @/S/ P:4,444/44 and an
additional amount of @/S/ P.,444/44 to each child under the age of t!enty1one '21* but not
eCceeding four children at the eCchange rate pre&ailing during the time of payment/
CCC CCC CCC
13
0art 55, Section ), 8o/ of the same Standards (mployment )ontract also pro&ides;
/ 8o compensation shall be payable in respect of any inFury, incapacity, disability or death
resulting from a !illful act on his o!n life by the seaman, pro&ided, ho!e&er, that the
employer can pro&e that such inFury, incapacity, disability or death is directly attributable to
him/
14
The death of a seaman during the term of his employment makes the employer liable to the former+s
heirs for death compensation benefits/ The 0"(% Standard (mployment )ontract fiCes the amount
at @/S/ P:4,444/44 and an additional amount of @/S/ P.,444/44 for each child, not eCceeding four,
under t!enty1one years of age/ The employer becomes liable once it is established that the seaman
died during the effecti&ity of his employment contract/ This rule, ho!e&er, is not absolute/ The
employer may be eCempt from liability if he can successfully pro&e that the seaman+s death !as
caused by an inFury directly attributable to his deliberate or !illful act/
15
5n the instant case, petitioners claim that the deaths of the t!o seamen came as a result of their self1
inflicted inFuries/ %s proof, petitioners presented !ritten from the master of the ,7< 0an <ictoria, the
medical reports of ,isada, (n&idiado and %rturo =aFardo, the seaman !ho sur&i&ed the infection,
and the !ritten statements of three '-* officers of the &essel taken during a special inEuiry conducted
after their deaths/
0etitioners contend that ,isada and (n&idiado and %rturo =aFardo implanted fragments of the horn
of a reindeer or antelope in their respecti&e seCual organs !hile on a &oyage on board the ,7< 0an
<ictoria/ The horn !as left by a ?reek officer from a pre&ious &oyage/ ,isada found the horn and
asked for it from the )hief "fficer/ ,isada ga&e the horn to the Second (ngineer to car&e and shape
for implantation/ Thereafter, shaped fragments of the horn !ere inserted by ,isada and (n&idiado
subcutaneously into their respecti&e seC organs on 9une 19, 1991 !hile that of =aFardo !as
implanted t!o or three days later/ The implantations !ere made surgically in the absence of sanitary
and sterile facilities/
Se&eral days later, ,isada complained of difficulty in s!allo!ing and breathing/ >e had se&ere
tonsillitis and !as suffering from spasms and con&ulsions/
16
The ship captain !as compelled to alter
course and drop anchor at )olombo, Sri Lanka for medical treatment/
17
,isada, ho!e&er, died on board
the &essel on 9une 28, 1991/ >is dead body !as eCamined at the )olombo ?eneral >ospital, )olombo,
Sri Lanka, !here the cause of his death !as placed as Dacute laryngo1trachea bronchitis !ith pneumonia
due to &iral infection/D
1"
5t !as after the &essel left )olombo on 9une -4, 1991 that (n&idiado started eChibiting the same
symptoms as ,isada/ The ship captain had to drop anchor at the nearest port !hich !as ?alle, Sri
Lanka/
1#
(n&idiado !as brought ashore and admitted to hospital/ >e died a fe! days later/
"n 9uly -, 1991, %rturo =aFardo started eChibiting the same symptoms as the t!o other seamen/ "n
inEuiry, the master of the &essel learned that ,isada, (n&idiado and =aFardo implanted pieces of
reindeer horn in their seC organs/ =aFardo+s condition !orsened and the master !as compelled to
drop anchor at 0enang, ,alaysia !here =aFardo !as admitted to hospital on 9uly :, 1991/ >e !as
diagnosed to be suffering from tetanus and gi&en medication for said illness/ =aFardo reco&ered t!o
!eeks later/
2$
%s a result of this chain of e&ents, the master of the &essel conducted a formal inEuiry to &erify the
cause of the seamen+s deaths and illness/ 3ritten testimonies as to the e&ents leading to their
deaths !ere taken from the master, the )hief "fficer, Second (ngineer and Second )ook/
The testimonies of the officers are insufficient to pro&e the fact that ,isada+s and (n&idiado+s deaths
!ere caused by self1inflicted inFuries/ The testimonies !ere gi&en by people !ho merely obser&ed
and narrated the circumstances surrounding the deaths of the t!o seamen and the illness of
=aFardo/ =aFardo himself did not submit any testimony regarding the implantation/ The testimonies of
the officers are, at best, hearsay/ ,oreo&er, the officers did not ha&e the competence to make a
medical finding as to the actual cause of the deaths/ 8o autopsy report !as presented to corroborate
their testimonies/ "n the contrary, (duardo ,isada !as medically diagnosed to ha&e died of Dacute
laryngo1trachea bronchitis !ith pneumonia probably due to &iral cause/D
21
This !as declared in his
D)ause of Death =ormD after his dead body !as eCamined on 9une 29, 1991 by Dr/ Sydney 0rematirat, a
9udicial ,edical "fficer at )olombo, Sri Lanka/
(nrico (n&idiado !as not issued a D)ause of Death =orm/D 3hile still ali&e, he !as eCamined in
?alle, Sri Lanka by )onsultant 0hysician )handima de ,el !ho found a !ound in his penis and
diagnosed his illness as Dse&ere tetanus/D
22
>is D)ertificate for #emo&al of % Dead 2odyD dated 9uly 8,
1991 issued by Dr/ T/L/ Sene&iratne, )hief ,edical "fficer of >ealth, ,unicipal )ouncil, )olombo, Sri
Lanka,
23
and D)ertificate of (mbalmingD dated 9uly 8, 1991 issued by Keith %nthony #aymond
24
stated
that (n&idiado died of D&iral myocarditis G natural causes/D
The D)ertificate for #emo&al of a Dead 2odyD and D)ertificate of (mbalmingD are not proofs of the
real cause of death/ Their probati&e &alue is confined only to the fact of death/
25
These documentary
e&idence, ho!e&er, did not at all indicate that (n&idiado died of tetanus as pre&iously diagnosed by Dr/ de
,el/ %nd despite Dr/ de ,el+s allegedly correct diagnosis, (n&idiado died a fe! days later/
%s correctly found by respondent )ommission, petitioners+ e&idence insufficiently pro&es the fact that
the deaths of the t!o seamen !ere caused by their o!n !illful and deliberate act/ %nd e&en if the
seamen implanted fragments of reindeer horn in their seC organs, the e&idence does not
substantially pro&e that they contracted tetanus as a result of the unsanitary surgical procedures
they performed on their bodies/ 8either does the e&idence sho! that the tetanus !as the direct
cause of their deaths/
58 <5(3 3>(#("=, the petition is dismissed and the decision of respondent 8ational Labor
#elations )ommission in 8L#) )% 8o/ 44494194 is affirmed/
S" "#D(#(D/
0alle- .hil. Shippin/, 3nc. vs. Minister of Labor, 1%" SCRA
'!*, 8ebr$ary "%, 1&'1
Case (itle7 6ALLEM PHILIPPINES SHIPPIN#, INC., petitioner, s. THE HON.
MINISTER O" LA!OR, in )is &'p'&ity 's C)'ir/'n o% t)e N'tion'- Se'/en
!o'rd Proper, 0AIME CA>NCA, ANTONIO CA!RERA, E"REN #ARCIA, 0OSE
O0EDA 'nd RODOL"O PA#6A#AN, respondents.
Case )at$re7 PETITION %or &ertior'ri (it) pre-i/in'ry inE.n&tion %ro/ t)e
Orders o% t)e N'tion'- Se'/en !o'rd.
Syllabi Class7 L'bor L'(*Contr'&ts

Syllabi:
1. Labor Law; $ontracts; / shipIs crew cannot be held liable for breach of
contract for accepting higher salary rates provided for in a #pecial
/greement between the %nternational 7ransport Eederation "%7E, and the
shipownerIs representative while the said crewIs contract for lower Ear 3ast
salary rates was in force.2
". Labor Law; &rewmembers of a vessel cannot be faulted for exerting
reasonable pressure on the shipownerIs representative to accept %7E
worldwide salary rates why are higher than the Ear 3ast rates as salary for
the crew.2
!. Labor Law; $ontracts; 7he shipowner is liable for breach of contract for
dismissing without a valid reason some members of the crew of a vessel
before the expiration of their employment contracts.2
+ivision: "IRST DI9ISION
+oc,et )$-ber: No. L;741H8;H1
.onente: DE CASTRO
+ispositive .ortion:
6HERE"ORE, pre/ises &onsidered, t)e de&ision d'ted M'r&) +8, +311 o% t)e
He'rin, O%%i&er is SET ASIDE 'nd t)e Orders d'ted De&e/ber +3, +311 'nd
Apri- H, +313 o% t)e N'tion'- Se'/en !o'rd 're A""IRMED in toto. T)is
de&ision is i//edi'te-y e5e&.tory. 6it)o.t &osts.
0etition for certiorari !ith preliminary inFunction !ith prayer that the "rders dated December 19,
19.. and %pril -, 19.9 of the 8ational Seamen 2oard '8S2* be declared null and &oid/ 0ri&ate
respondents !ere hired by petitioner sometime in ,ay 19.: to !ork as seamen for a period of ten
months on board the ,7< 3oermann Sanaga, a Dutch &essel o!ned and operated by petitioner+s
(uropean principals/ 3hile their employment contracts !ere still in force, pri&ate respondents !ere
dismissed by their employer, petitioner herein, and !ere discharged from the ship on charges that
they instigated the 5nternational Transport =ederation '5T=* to demand the application of !orld!ide
5T= seamen+s rates to their cre!/
0ri&ate respondents !ere repatriated to the 0hilippines on "ctober 2., 19.: and upon their arri&al in
,anila, they instituted a complaint against petitioner for illegal dismissal and reco&ery of !ages and
other benefits corresponding to the fi&e months+ uneCpired period of their shipboard employment
contract/
5n support of their complaint, pri&ate respondents submitted a 9oint %ffida&it
1
stating the
circumstances surrounding their employment and subseEuent repatriation to the 0hilippines, material
a&erments of !hich are herein belo! reproduced;
9 " 5 8 T % = = 5 D % < 5 T
CCC CCC CCC
:/ That aside from our basic monthly salary !e are entitled to t!o '2* months
&acation lea&e, daily subsistence allo!ance of @SP8/14 each, daily food allo!ance of
@SP2/:4/ as !ell as o&ertime pay !hich !e failed to recei&e because our Shipboard
(mployment )ontract !as illegally terminatedH
/ That !hile !e !ere in #otterdam, on or about 9uly 9, 19.:, representati&e of the
5T= boarded our &essel and talked !ith the Ship+s )aptainH
./ That the follo!ing day, the representati&es of the 5T= returned and !as follo!ed by
,r/ ,/S/K/ "gle !ho is the )ompany+s %dministrati&e ,anager, again !ent to see
the )aptainH
8/ That at around .;44 in the e&ening all the cre! members !ere called in the ,ess
>all !here the 5T= representati&es informed us that they ha&e Fust entered into a
DSpecial %greementD !ith the 3allem Shipping ,anagement, Ltd/, represented by
,r/ ,/S/K/ "gle, %dministrati&e ,anager, !herein ne! salary rates !as agreed upon
and that !e !ere going to be paid our salary differentials in &ie! of the ne! ratesH
9/ That in the same meeting, ,r/ ,/S/K/ "gle also spoke !here he told that a Special
%greement has been signed and that !e !ill be recei&ing ne! pay rate and enFoined
us to !ork hard and be good boysH
14/ That the same e&ening !e recei&ed our salary differentials based on the ne!
rates negotiated for us by the 5T=/
11/ That !hile !e !ere in the 0ort Dubai, Saudi %rabia, !e !ere not recei&ing our
pay, since the Ship+s )aptain refused to implement the !orld1!ide rates and insisted
on paying us the =ar (ast #ateH
12/ That the 0ort Dubai is one that is !ithin the 3orld!ide rates sphere/
1-/ That on "ctober 22, 19.:, ,r/ ?reg 8acional "peration ,anager of respondent
corporation, arri&ed in Dubai Saudi %rabia and boarded our shipH
14/ That on "ctober 2-, 19.:, ,r/ 8acional called all the cre! members, including us
to a meeting at the ,ess >all and there he eCplained that the )ompany cannot
accept the !orld!ide rate/ The Special %greement signed by ,r/ "gle in behalf of
the )ompany is nothing but a scrap of paper/ ,r/ 9aime )aunca then asked ,r/
8acional, in &ie! of !hat he !as saying, !hether the )ompany !ill honor the Special
%greement and ,r/ 8acional ans!ered DAesD/ That !e must accept the =ar (ast
#ates !hich !as put to a &ote/ "nly t!o &oted for accepting the =ar (ast #atesH
1:/ That immediately thereafter ,r/ 8acional left usH
1/ That same e&ening, ,r/ 8acional returned and threatened that he has recei&ed a
cable from the >ome "ffice that if !e do not accept the =ar (ast #ate, our ser&ices
!ill be terminated and there !ill be a change in cre!H
1./ That !hen ,r/ 8acional left, !e talked amongst oursel&es and decided to accept
the =ar (ast #atesH
18/ That in the meeting that e&ening because of the threat !e informed ,r/ 8acional
!e !ere accepting the =ar (ast #ate and he made us sign a document to that effectH
19/ That !e the complainants !ith the eCception of Leopoldo ,amaril and (fren
?arcia, !ere not able to sign as !e !ere at the time on !ork schedules, and ,r/
8acional did not bother anymore if !e signed or notH
24/ That after the meeting ,r/ 8acional cabled the >ome "ffice, informing them that
!e the complainants !ith the eCception of ,essrs/ ,amaril and ?arcia !ere not
accepting the =ar (ast #atesH
21/ That in the meeting of "ctober 2:, 19.:, ,r/ 8acional signed a document
!hereby he promised to gi&e no priority of first preference in Dboarding a &essel and
that !e are not blacklistedDH
22/ That in spite of our ha&ing accepted the =ar (ast #ate, our ser&ices !ere
terminated and ad&ised us that there !as a change in cre!H
2-/ That on "ctober 2., 19.:, !hich !as our scheduled flight home, nobody
attended us, not e&en our clearance for our group tra&el and conseEuently !e !ere
not able to board the plane, forcing us to sleep on the floor at the airport in the
e&ening of "ctober 2., 19.:H
24/ That the follo!ing day !e !ent back to the hotel in Dubai !hich !as a t!o hours
ride from the airport, !here !e !ere to a!ait another flight for home &ia %ir =ranceH
2:/ That !e !ere finally able to lea&e for home on 8o&ember 2, 19.: arri&ing here
on the -rd of 8o&emberH
2/ That !e paid for all eCcess baggagesH
2./ That ,r/ 8acional left us stranded, since he !ent ahead on "ctober 2., 19.:H
28/ That immediately upon arri&ing in ,anila, !e !ent to respondent )ompany and
sa! ,r/ 8acional, !ho informed us that !e !ere not blacklisted, ho!e&er, ,r/
,cken6ie, %dministrati&e ,anager did inform us that !e !ere all blacklistedH
29/ That !e !ere asking from the respondent )ompany our lea&e pay, !hich they
refused to gi&e, if !e did not agree to a @SP144/44 deductionH
-4/ That !ith the eCception of ,essrs/ 9aime )aunca %mado ,anansala and %ntonio
)abrera, !e recei&ed our lea&e pay !ith the @SP144/44 deductionH
-1/ That in &ie! of the !ritten promise of ,r/ 8acional in Dubai last "ctober 2-, 19.:
to gi&e us priority and preference in boarding a &essel and that !e !ere not
blacklisted !e ha&e on se&eral occasions approached him regarding his promise,
!hich up to the present he has refused to honor/
CCC CCC CCC
%ns!ering the complaint, petitioner countered that !hen the &essel !as in London, pri&ate
respondents together !ith the other cre! insisted on !orld!ide 5T= rate as per special agreementH
that said employees threatened the ship authorities that unless they agreed to the increased !ages
the &essel !ould not be able to lea&e port or !ould ha&e been picketed and7or boycotted and
declared a hot ship by the 5T=H that the ,aster of the ship !as left !ith no alternati&e but to agreeH
that upon the &essel+s arri&al at the %sian port of Dubai on "ctober 22, 19.:, a representati&e of
petitioner !ent on board the ship and reEuested the cre! together !ith pri&ate respondents to desist
from insisting !orld!ide 5T= rate and instead accept the =ar (ast rateH that said respondents refused
to accept =ar (ast 5T= rates !hile the rest of the =ilipino cre! members accepted the =ar (ast ratesH
that pri&ate respondents !ere replaced at the eCpense of petitioner and it !as prayed that
respondents be reEuired to comply !ith their obligations under the contract by reEuiring them to pay
their repatriation eCpenses and all other incidental eCpenses incurred by the master and cre! of the
&essel/
%fter the hearing on the merits, the hearing "fficer of the Secretariat rendered a decision
2
on ,arch
14, 19.. finding pri&ate respondents to ha&e &iolated their contract of employment !hen they accepted
salary rates different from their contract &erified and appro&ed by the 8ational Seamen 2oard/ %s to the
issue raised by pri&ate respondents that the original contract has been no&ated, it !as held that;
CCC CCC CCC
=or no&ation to be a &alid defense, it is a legal reEuirement that all parties to the
contract should gi&e their consent/ 5n the instant case only the complainants and
respondents ga&e their consent/ The 8ational Seamen 2oard had no participation in
the alleged no&ation of the pre&iously appro&ed employment contract/ 5t !ould ha&e
been different if the consent of the 8ational Seamen 2oard !as first secured before
the alleged no&ation of the appro&ed contract !as undertaken, hence, the defense of
no&ation is not in order/
CCC CCC CCC
The >earing "fficer like!ise rules that petitioner &iolated the contract !hen its representati&e signed
the Special %greement and he signed the same at his o!n risk and must bear the conseEuence of
such act, and since both parties are in paridelicto, complaint and counterclaim !ere dismissed for
lack of merit but petitioner !as ordered to pay respondents )aunca and )abrera their respecti&e
lea&e pay for the period that they ha&e ser&ed ,7< 3oermann Sanaga plus attorney+s fees/
0ri&ate respondents filed a motion for reconsideration !ith the 2oard !hich modified the decision of
the Secretariat in an "rder
3
of December 19, 19.. and ruled that petitioner is liable for breach of
contract !hen it ordered the dismissal of pri&ate respondents and their subseEuent repatriation before the
eCpiration of their respecti&e employment contracts/ The )hairman of the 2oard stressed that D!here the
contract is for a definite period, the captain and the cre! members may not be discharged until after the
contract shall ha&e been performedD citing the case of Madrigal Shipping &o., nc. vs. Ogilvie, et al/ '144
0hil/ .48*/ >e directed petitioner to pay pri&ate respondents the uneCpired portion of their contracts and
their lea&e pay, less the amount they recei&ed as differentials by &irtue of the special agreements entered
in #otterdam, and ten percent of the total amounts reco&ered as attorney+s fees/
0etitioner sought clarification and reconsideration of the said order and asked for a confrontation
!ith pri&ate respondents to determine the specific adFudications to be made/ % series of conferences
!ere conducted by the 2oard/ 5t !as claimed by petitioner that it did not ha&e in its possession the
records necessary to determine the eCact amount of the Fudgment since the records !ere in the sole
custody of the captain of the ship and demanded that pri&ate respondents produce the needed
records/ "n this score, counsel for respondents manifested that to reEuire the master of the ship to
produce the records !ould result to undue delay in the disposition of the case to the detriment of his
clients, some of !hom are still unemployed/
@nder the circumstances, the 2oard !as left !ith no alternati&e but to issue an "rder dated %pril -,
19.9
4
fiCing the amount due pri&ate respondents at their three '-* months+ salary eEui&alent !ithout
Eualifications or deduction/ >ence,the instant petition before @s alleging gra&e abuse of discretion on the
part of the respondent official as )hairman of the 2oard, in issuing said order !hich allegedly nullified the
findings of the Secretariat and premised adFudication on imaginary conditions !hich !ere ne&er taken up
!ith full e&idence in the course of hearing on the merits/
The !hole contro&ersy is centered around the liability of petitioner !hen it ordered the dismissal of
herein pri&ate respondents before the eCpiration of their respecti&e employment contracts/
5n its "rder of December 19, 19..
5
the 2oard, thru its )hairman, ,inister 2las =/ "ple, held that there
is no sho!ing that the seamen conspired !ith the 5T= in coercing the ship authorities to grant salary
increases, and the Special %greement !as signed only by petitioner and the 5T= !ithout any participation
from the respondents !ho, accordingly, may not be charged as they !ere, by the Secretariat, !ith
&iolation of their employment contract/ The 2oard like!ise stressed that the cre! members may not be
discharged until after the eCpiration of the contract !hich is for a definite period, and !here the cre!
members are discharged !ithout Fust cause before the contract shall ha&e been performed, they shall be
entitled to collect from the o!ner or agent of the &essel their unpaid salaries for the period they !ere
engaged to render the ser&ices, applying the case of Madrigal Shipping &o., nc. vs. $es%s Ogilivie et al.
)
The findings and conclusion of the 2oard should be sustained/ %s already intimated abo&e, there is
no logic in the statement made by the Secretariat+s >earing "fficer that the pri&ate respondents are
liable for breach of their employment contracts for accepting salaries higher than their contracted
rates/ Said respondents are not signatories to the Special %greement, nor !as there any sho!ing
that they instigated the eCecution thereof/ #espondents should not be blamed for accepting higher
salaries since it is but human for them to grab e&ery opportunity !hich !ould impro&e their !orking
conditions and earning capacity/ 5t is a basic right of all !orkingmen to seek greater benefits not only
for themsel&es but for their families as !ell, and this can be achie&ed through collecti&e bargaining
or !ith the assistance of trade unions/ The )onstitution itself guarantees the promotion of social
!elfare and protection to labor/ 5t is therefore the >earing "fficer that gra&ely erred in disallo!ing the
payment of the uneCpired portion of the seamen+s respecti&e contracts of employment/
0etitioner claims that the dismissal of pri&ate respondents !as Fustified because the latter threatened
the ship authorities in acceeding to their demands, and this constitutes serious misconduct as
contemplated by the Labor )ode/ This contention is not !ell1taken/ The records fail to establish
clearly the commission of any threat/ 2ut e&en if there had been such a threat, respondents+
beha&ior should not be censured because it is but natural for them to employ some means of
pressing their demands for petitioner, !ho refused to abide !ith the terms of the Special %greement,
to honor and respect the same/ They !ere only acting in the eCercise of their rights, and to depri&e
them of their freedom of eCpression is contrary to la! and public policy/ There is no serious
misconduct to speak of in the case at bar !hich !ould Fustify respondents+ dismissal Fust because of
their firmness in their demand for the fulfillment by petitioner of its obligation it entered into !ithout
any coercion, specially on the part of pri&ate respondents/
"n the other hand, it is petitioner !ho is guilty of breach of contract !hen they dismissed the
respondents !ithout Fust cause and prior to the eCpiration of the employment contracts/ %s the
records clearly sho!, petitioner &oluntarily entered into the Special %greement !ith 5T= and by &irtue
thereof the cre! men !ere actually gi&en their salary differentials in &ie! of the ne! rates/ 5t cannot
be said that it !as because of respondents+ fault that petitioner made a sudden turn1about and
refused to honor the special agreement/
5n brief, 3e declare petitioner guilty of breach of contract and should therefore be made to comply
!ith the directi&es contained in the disputed "rders of December 19, 19.. and %pril -, 19.9/
3>(#(="#(, premises considered, the decision dated ,arch 14, 19.. of the >earing "fficer is
S(T %S5D( and the "rders dated December 19, 19.. and %pril -, 19.9 of the 8ational Seamen
2oard are %==5#,(D in toto/ This decision is immediately eCecutory/ 3ithout costs/
S" "#D(#(D/
Ma4asiar, 9ernande<, ;%errero and Melencio.Herrera, $$., conc%r.
!eehan4ee 5&hairman6, $., conc%r in the res%lt.
:ir;#en Shippin/ and Marine Services, 3nc. vs. )LRC, 11* SCRA !47 ,
#$ly "%, 1&'"
Case (itle : 9IR;0EN SHIPPIN# AND MARINE SER9ICES, INC., petitioner, s.
NATIONAL LA!OR RELATIONS COMMISSION, RO#ELIO !IS>LA, R>!EN
ARROAA, 0>AN #AC>TNO, LEONILO ATO:, NILO CR>A, AL9ARO ANDRADA,
NEMESIO AD>#, SIMPLICIO !A>TISTA, ROMEO ACOSTA, 'nd 0OSE ENCA!O,
respondents.Case )at$re : PETITION %or &ertior'ri to reie( t)e de&ision o%
t)e N'tion'- L'bor Re-'tions Co//ission.
Syllabi Class : L'bor L'(*S)ippin,*Appe'-*Contr'&ts*0.risdi&tion
Syllabi:
1. Labor Law; S!ipping; &ppeal; 7he (6-day period for appeal to the
4ational Labor Relations &ommission contemplates calendar days not
wor!ing days. 7he 1inister of Labor cannot amend the law by promulgating
a rule that the appeal period shall be computed on the basis of wor!ing
days.2
". Sa#e; Sa#e; 7he court will not sanction acts of employees that are
meant to trap the employer and force the latter to agree to increase wages
such a crewIs demand for wage increase while en route at sea to a foreign
port.2
!. Sa#e; Sa#e; Sa#e; 4o bad faith can be inferred when shipowner and
crew enter into a side-agreement to go around %7E requirements.2
4. Sa#e; S!ipping; $ontracts; %t is of insubstantial moment that shipping
management and crew entered into a side agreement not approved by
4#D for higher rates of pay in order to go around %7E requirements. 7he
4#D-approved contract remains as the one binding agreement.2
*. Sa#e; &ppeal; 4LR& power over 4#D decisions are principally on
questions of law.-
>7he power of the 4LR& in relation to the wor!s and actuations of the 4#D
is only appellate according to /rticle C6 "b, read in relation to /rticle C;;
principally over questions of law since as to factual matters it may
exercise such appellate .urisdiction only 8if errors in the findings of fact are
raised which would cause grave or irreparable damage or in.ury to the
appellant.9
. Sa#e; Sa#e; #eamenIs contracts cannot be altered without the prior
approval of the 4#D.2
7. Sa#e; Sa#e; #ame.2
'. Sa#e; $ontracts; %risdiction; <hether or not respondents seamen
breach their 4#D-approved contracts by demanding higher wages in the
midst of a voyage is a question of fact and in such case the decision of the
4ational #eamens Doard that respondents did should prevail over the 4LR&
findings.2
&. Sa#e; Sa#e; $ontracts; #eamenIs contracts are not ordinary contracts
but are sub.ect to and are governed by various special laws.2
1%. Sa#e; Sa#e; Sa#e; #ame.-
>/ll the foregoing notwithstanding and bearing in mind the peculiar
circumstances of this case particularly the fact that private respondents
must have been misled by the implementing rules aforementioned <e have
opted to .ust the same pass on the merits of the substantial issues herein
even as <e admonish all concerned to henceforth act in accordance with our
foregoing view. Herily the 1inister of Labor has no legal power to amend or
alter in any material sense whatever the law itself unequivocally specifies or
fixes.
+ivision: SECOND DI9ISION
+oc,et )$-ber: No. L;724++;+?
Co$nsel: M'5i/o A. S'e--'no, 0r., So-i&itor #ener'-, Ro/eo M. Deer'
.onente: !ARREDO
+ispositive .ortion:
6HERE"ORE, t)e petition )erein is ,r'nted 'nd t)e de&ision o% t)e NLRC
&o/p-'ined o% )ereby set 'sideL t)e de&ision o% t)e NS! s)o.-d st'nd.
0etition for certiorari seeking the annulment or setting aside, on the grounds of eCcess of Furisdiction
and gra&e abuse of discretion, of the decision of the 8ational Labor #elations )ommission in
consolidated 8S2 )ases 8os/ 22:41.9 and 22:21.9 thereof,
1
the dispositi&e portion of !hich reads
thus;
3>(#(="#(, the Decision appealed from should be, as it is hereby modified in this
!ise;
#espondent <ir1Fen Shipping and ,arine Ser&ices, 5nc/, is hereby ordered to pay the
follo!ing to the complainant Seamen !ho ha&e not !ithdra!n from the case,
namely; )apt/ #ogelio >/ 2isula, #uben %rro6a, 9uan ?acutno, Leonilo %tok, 8ilo
)ru6, %l&aro %ndrada, 8emesio %dug, Simplicio 2autista, #omeo %costa and 9ose
(ncabo;
1/ their earned !ages corresponding to the period from 1 to 19 %pril
19.9H
2/ the !ages corresponding to the uneCpired portion of their
contracts, as adFusted by the respondent )ompany effecti&e 1 ,arch
19.9H
-/ the adFusted representation allo!ances of the complainant
Seamen !ho ser&ed as officers and !ho ha&e not !ithdra!n from the
case, namely; )apt/ #ogelio 2isula, #uben %rro6a, 9uan ?acutno,
Leonilo %tok and 8ilo )ru6H
4/ their &acation pay eEui&alent to one1half 'V* month+s pay after siC
'* months of ser&ice and another one1half 'V* month+s pay after the
completion of the one1year contractH
:/ their tanker ser&ice bonus eEui&alent to one1half 'V* month+s payH
and
/ their earned o&ertime pay from l to l9 %pril 19.9/
The Secretariat of the 8ational Seamen 2oard is also hereby directed to issue !ithin
fi&e ':* days from receipt of this Decision the necessary clearances to the suspended
Seamen/ 'pp/ 818., #ecord/*
The factual and legal background of these cases is related most comprehensi&ely in the
D,anifestation and )ommentD filed by the Solicitor ?eneral/ 5t is as follo!s;
The records sho! that pri&ate respondents ha&e a manning contract for a period of
one '1* year !ith petitioner in representation of its principal Kyoei Tanker )o/ Ltd/
The terms and conditions of said contract !ere based on the standard contract of the
8S2/ The manning contract !as appro&ed by the 8S2/ %!are of the problem that
&essels not paying rates imposed by the 5nternational Transport 3orkers =ederation
'5T=* !ould be detained or interdicted in foreign ports controlled by the 5T=, petitioner
and pri&ate respondents eCecuted a side contract to the effect that should the &essel
,7T 9annu be reEuired to pay 5T= rates !hen it calls on any 5T= controlled foreign
port, pri&ate respondents !ould return to petitioner the amounts so paid to them/
"n ,arch 2-, 19.9, the master of the &essel !ho is one of the pri&ate respondents
sent a cable to petitioner, !hile said &essel !as en route to %ustralia !hich is an 5T=
controlled port, stating that pri&ate respondents !ere not contented !ith the salary
and benefits stipulated in the manning contract, and demanded that they be gi&en
:4I increase thereof, as the Dbest and only solution to sol&e 5T= problem/D
%pparently, reference to D5T=D in pri&ate respondents+ cable made petitioner
apprehensi&e since the &essel at that time !as en route to %ustralia, an 5T= port, and
!ould be interdicted and detained thereat, should pri&ate respondents denounce the
eCisting manning contract to the 5T= and should petitioner refuse or be unable to pay
the 5T= rates, !hich represent more than 144I of !hat is stipulated in the manning
contract/ 0laced under such situation, petitioner replied by cable dated ,arch 24,
19.9 to pri&ate respondents, as follo!s;
/// 3( %#( S@#0#5S(D 35T> T>5S S@DD(8 )>%8?( "=
%TT5T@D( %8D D(,%8DS ="# 3( >%<( T>"#"@?>LA
($0L%58(D %8D D5S)@SS(D %LL ,%TT(#S 0(#T%5858? T"
A"@# 0#(S(8T (,0L"A,(8T %8D 2(L5(<(D T>%T 3( =@LLA
@8D(#ST""D (%)> "T>(# /// 3( S>%LL S@==(# %8D
%2S"#2 )"8S5D(#%2L( %,"@8T "= L"SS(S 35T> A"@#
D(,%8D "= =5=TA 0(#)(8T %S 3( %#( %L#(%DA
)",,5TT(D T" 0#58)50%LS T>(#(="#( T" ,585,5J( "@#
L"SS(S 3( 0#"0"S( %8 58)#(%S( "= T3(8TA =5<(
0(#)(8T "8 A"@# 2%S5) 0%AS 0L@S T>( S0()5%L
)",0(8S%T5"8 ="# T>5S 0%#T5)@L%# <"A%?( /// 'p/ .
)omment*
"n ,arch 2, 19.9, petitioner !rote a letter to the 8S2 denouncing the conduct of
pri&ate respondents as follo!s;
This is to inform you that on ,arch 24, 19.9, !e recei&ed a cable from )apt/ #ogelio
2isula, ,aster of the abo&e1reference &essel reading as follo!s;
@#58=" (8T5#( 9%88@ "==5)(#S %8D )#(3 8"T
)"8T(8T(D 35T> 0#(S(8T S%L%#A 2%S(D "8 <"L@,( "=
3"#K TA0( "= S>50 35T> >%J%#D"@S )%#?" %8D
#(?5ST(#(D 58 % 3"#LD35D( T#%D( ST"0 3>%T 3(
D(,%8D 5S "8LA =5=TA 0(#)(8T 58)#(%S( 2%S(D "8
0#(S(8T 2%S5) S%L%#A ST"0 T>5S D(,%8D T>( 2(ST %8D
"8LA S"L@T5"8 T" S"L<( 0#"2L(, D@( A"@# 0#(S(8T
#%T(S (S0()5%LLA T%8K(#S <(#A =%# 58 )",0%#5S"8 35T>
"T>(# S>50058? %?(8)5(S 58 ,%85L%/
to !hich !e replied on ,arch 24, 19.9, as follo!s;
3( %#( S@#0#5S(D 35T> S@DD(8 )>%8?(, "= %TT5T@D(
%8D D(,%8DS ="# 3( >%<( T>"#"@?>LA ($0L%58(D %8D
D5S)@SS(D %LL ,%TT(#S 0(#T%5858? T" A"@# 0#(S(8T
(,0L"A,(8T %8D 2(L5(<(D T>%T 3( =@LLA @8D(#ST""D
(%)> "T>(# ST"0 =#%8KLA S0(%K58? 3( S>%LL S@==(#
%8D %2S"#2 )"8S5D(#%2L( %,"@8T "= L"SS(S 35T>
A"@# D(,%8D "= =5=TA 0(#)(8T %S 3( %#( )",,5TT(D
T" 0#58)50%LS T>(#(="#( T" ,585,5J( "@# L"SS(S 3(
0#"0"S( %8 58)#(%S( "= T3(8TA =5<( 0(#)(8T "8 A"@#
2%S5) 0%A ST"0 A"@# @8D(#ST%8D58? %8D =@LL
)""0(#%T5"8 35LL 2( <(#A ,@)> %00#()5%T(D ST"0 0LS
)"8=5#, S""8(ST/
"n ,arch 2:, 19.9 !e recei&ed the follo!ing communication from the ,aster of said
&essel;
"==5)(#S %8D )#(3 >(S5T%T58? T" ?5<( @0 D(,%8D "=
=5=TA 0(#)(8T 58)#(%S( 2@T ="# T>( ?""D %8D
>%#,"85"@S #(L%T5"8S>50 "8 2"%#D %8D
#()"8S5D(#58? A"@# S@00"S(D T" 2( L"SS(S 58 )%S(
3( )"8D5T5"8%LLA )""0(#%T( 35T> A"@# 0#"0"S(D
58)#(%S( %8D T3(8TA =5<( 0(#)(8T 2%S(D "8 58D5<5D@%L
2%S5) 0%A 35T> T>( ="LL"358? T(#,S %8D )"8D5T5"8
ST"0 (==()T5<5TA "= T3(8TA =5<( 0(#)(8T 58)#(%S(
,@ST 2( ,%#)>7.9 ST"0 58)#(%S( ,@ST 2( )"LL()T52L(
"8 2"%#D (==()T5<( %2"<( D%T( @8T5L D5S(,2%#K%T5"8
ST"0 %LL"T,(8T T" %LL"T((S #(,%58 %S 5S ST"0
#(%S"8%2L( #(0%LL"3S ="# %LL "==5)(#S 2( ?5<(8
(==()T5<( ,%#)>7.9 ST"0 2"8@S ="# ,"8T>S S(#<5)(S
#(8D(#(D 2( )"LL()T52L( "8 2"%#D ST"0
"==5)(#S7)#(3 -40)T "7T S>@D 2( 2%S(D 8(3 @0?#%D(D
S%L%#A S)%L( ST"0 ,%ST(#7)>(8?#7)>,%T( S0()5%L
)",0(8S%T5"8 ?5<( 2A A"@# )",0%8A 0#5"# D(0%#T@#(
,%85L% #(,%58 %S 5S/
to !hich !e replied on ,arch 2:, 19.9, as follo!s;
3( %?#(( %LL )"8D5T5"8S %8D )"8=5#, 5T S>%LL 2(
0#"0(#LA (8="#)(D ST"0 35LL 0#(0%#( %LL #(L@5#(D
D")@,(8TS %8D 35LL 2( D(L5<(#(D "8 2"%#D/
=or your further information and guidance, the abo&ementioned demands of the
officers and cre! '2:I increase in basic pay, increase in o&ertime pay and increase
in representation allo!ance* in&ol&e an additional amount of @SP-,49/:4 per
month, !hich our company is not in a position to shoulder/
3e are, therefore, negotiating !ith our 0rincipals, ,essrs/ Kyoei Tanker )ompany,
Limited, for the amendment of our agency agreement in the sense that our monthly
fee be increased correspondingly/ 3e ha&e sent our (Cecuti&e <ice10resident, ,r/
(ricson ,/ ,arEue6, to 9apan to represent us in said negotiation and !e !ill inform
you of the results thereof/ '%nneC D(D of 0etition*
5n &ie! of pri&ate respondents+ conduct and breach of contract, petitioner+s principal,
Kyoei Tanker )o/, Ltd/ terminated the manning contract in a letter dated %pril 4,
19.9, !hich reads in partH
This is !ith reference to your letter of ,arch 2, 19.9 and our
conference !ith ,r/ (ricson ,arEue6 in Tokyo on ,arch 29, 19.9,
regarding the uneCpected and unreasonable demand for salary
increase of your officers and cre! on the abo&e &essel/
=rankly speaking, !e fully agree !ith you that this action taken by
your officers and cre! in demanding increase in their salaries and
o&ertime after being on board for only three months !as &ery
unreasonable/ )onsidering the circumstances !hen the demand !as
made, !e belie&e that their action !as definitely abusi&e and plain
blackmail/
3e regret to ad&ise you that since this &essel is only under our
management, !e also cannot afford to grant your reEuest for an
increase of @SP-,49/:4 effecti&e ,arch 1, 19.9, as demanded by
your cre!/ Aour cre! should respect their employment contracts
!hich !as appro&ed by your go&ernment and your 8ational Seamen
2oard should make sure that all seamen should follo! their contracts/
=or your information, !e ha&e discussed this matter !ith the o!ners
of the &essel, particularly the attitude and mentality of your cre! on
board/ "ur common and final decision is not to grant your reEuest but
also to terminate our ,anning %greement effecti&e upon cre!+s
change !hen the &essel arri&es at 9apan or at any possible port
about end %pril, 19.9/
3e regret that !e ha&e to take this drastic step in order to protect
oursel&es from further problem if !e continue !ith your present
officers and cre! because if their demand is granted, there is no
guarantee that they !ill not demand further increase in salaries in the
future !hen they ha&e chance/ %lso, as you kno! the present freight
market is &ery bad and !e cannot afford an uneCpected increase in
cost of operations and more so !ith a troublesome and unreliable
cre! that you ha&e on board/
5n &ie! of the circumstances mentioned abo&e, please consider this
letter as our official notice of cancellation of our ,anning %greement
effecti&e upon the date of cre!+s change/ '%nneC D=D of 0etition*/
"n %pril , 19.9, petitioner !rote the 8S2 asking permission to cancel the manning
contract !ith petitioner, said letter reading as follo!s;
This is !ith reference to our letter of ,arch 2, 19.9, informing you of
the sudden and uneCpected demands of the officers and cre! of the
abo&e &essel for a t!enty fi&e percent '2:I* increase in their basic
salaries and o&ertime, plus an increase of the officers+ representation
allo!ances, in&ol&ing a total of @SP-,49/:4 per month/
%s !e ha&e ad&ised in our afore1mentioned letter, !e ha&e
negotiated !ith our 0rincipals, ,essrs/ Kyoei Tanker )o/, Ltd/, to
amend our %gency %greement by increasing our monthly fee by
@SP-,49/:4, and attached here!ith is copy of our letter dated ,arch
2, 19.9 duly recei&ed by our 0rincipals on ,arch -1, 19.9/
5n this connection, !e !ish to inform your good office that our
0rincipals ha&e refused to consider our reEuest for an increase and
ha&e also ad&ised us of their final decision to terminate our ,anning
%greement effecti&e upon &essel+s arri&al in 9apan on or about %pril
1., 19.9/
=or your further information, !e enclose here!ith CeroC copy of the
Kyoei Tanker )o/, Ltd/ letter dated %pril 4, 19.9, !hich !e Fust
recei&ed today &ia airfreight/
This is the first time that a cancellation of this nature has been made
upon us, and needless to say, !e feel &ery embarrassed and
disappointed but !e ha&e no other alternati&e but to accept the said
cancellation/
5n &ie! of the foregoing, !e respectfully reEuest your authority to
cancel our )ontracts of (mployment and to disembark the entire
officers and cre! upon &essel+s arri&al in 9apan on or about 1.th
%pril, 19.9/ '%nneC D?D, of 0etition*/
"n %pril 14, 19.9, the 8S2 through its (Cecuti&e Director )resencio )/ Dayao !rote
petitioner authori6ing it to cancel the manning contract/ The 8S2 letter to petitioner
reads;
3e ha&e for ackno!ledgment your letter of %pril 19.9 in connection
!ith the abo&e1captioned subFect/
)onsidering the circumstances enumerated in your letter under reply
'and also in your letter of ,arch 19.9*, !e authori6e you to cancel
your contracts of employment !ith the cre!7members of the ,7T
D9annuD and you may no! disembark the !hole compliment upon the
&essel+s arri&al in 9apan on or about %pril 1., 19.9/
3e trust that you !ill not encounter any difficulty in connection !ith
the disembarkation of the cre!7members/ '%nneC D>D of 0etition*/
The seamen !ere accordingly disembarked in 9apan and repatriated to ,anila/ They
then filed a complaint !ith the 8S2 for illegal dismissal and non1payment of !ages/
%fter trial, the 8S2 found that the termination of the ser&ices of the seamen before
the eCpiration of their employment contract !as Fustified D!hen they demanded and
in fact recei&ed from the company !ages o&er and abo&e the contracted rates !hich
in effect !as an alteration and modification of a &alid and eCisting contract ///D '%nneC
DDD, 0etition*/ The seamen appealed the decision to the 8L#) !hich re&ersed the
decision of the 8S2 and reEuired the petitioner to pay the !ages and other monetary
benefits corresponding to the uneCpired portion of the manning contract on the
ground that the termination of the said contract by petitioner !as !ithout &alid cause/
>ence, the present petition/ '0p/ 219, ,anifestation B )omment*
5n its petition !hich contains practically the same facts and circumstances abo&e1Euoted, petitioner
submits for "ur resolution the follo!ing issues;
5/ That the respondent 8L#) acted !ithout or in eCcess of its Furisdiction, or !ith
gra&e abuse of discretion in said 8S2 )ases 8os/ 22:41.9 and 22:21.9 !hen it
adFudged the petitioner <ir1Fen liable to the respondents1seamen for terminating its
employment contracts !ith them despite the fact that prior a%thori<ation to terminate
or cancel said employment contracts and to disembar4 the said respondents )as
"irst sec%red "rom and )as granted by, the :ational Seamen Board, the go&ernment
agency primarily charged !ith the super&ision and discipline of seamen and the
appro&al and enforcement of employment contractsH
55/ That the respondent 8L#) acted !ith gra&e abuse of discretion, or !ithout or in
eCcess of its Furisdiction, or contrary to la! and the e&idence !hen it concluded that
Dthere is nothing on record to sho! that respondents1seamen made any threat that
they !ould complain or report to the 5T= their lo! !age rates if their demand or
proposal for a !age increase !as not metD, despite the fact that in their cable of
,arch 2-, 19.9 to the petitioner, the said respondents made the follo!ing threats
and impositions; D3>%T 3( -?MA:- 5S "8LA 23 P?R&?:! :&R?AS? 2%S(D
"8 0#(S(8T 2%S5) S%L%#A ST"0 !HS -?MA:- !H? 2(ST %8D O:#C
SO#0!O: !O SO#(? !9 PROB#?MSD, that there are other substantial and
conclusi&e e&idence to support the eCistence of such threats and intimidation !hich
the respondent 8L#) failed and refused to considerH and that the e&idence
substantially and conclusi&ely sho!s that the petitioner <ir1Fen !as, in fact,
threatened and intimidated into gi&ing such salary increases due to such cabled
threats and intimidation of the pri&ate respondentsH
555/ That the respondent 8L#) acted !ith gra&e abuse of discretion or !ithout or in
eCcess of Furisdiction !hen it concluded, in effect, that the respondents1seamen
acted !ithin their rights !hen they imposed upon their employer, the herein
petitioner, their demands for salary and !ages increases, in disregard of their
eCisting 8S21appro&ed contracts of employment, not!ithstanding the substantial and
conclusi&e findings of the 8S2, the trier of facts !hich is in the best position to
assess the special circumstances of the case, that the said respondents breached
their respecti&e contracts of employment !ith the petitioner, !ithout securing the
prior appro&al of the 8S2 as reEuired by the 8e! Labor )ode, as amended, and !ith
the use of threats, intimidation and coercion, !hen they demanded and, in fact,
recei&ed from the petitioner salaries or !ages o&er and abo&e their contracted rates
!hich the petitioner !as Dconstrained to makeD in order Dto pre&ent the &essel from
being interdicted and7or detained by the 5T= because at the time the demand for
salary increase !as made the &essel !as en route to K!inana, %ustralia '&ia
Senipah, 5ndonesia*, a port !ere the 5T= is strong and militant,D Dfor in the e&ent the
&essel !ould be detained and7or interdicted the company 'petitioner* !ould suffer
more losses than paying the seamen 2: I increase of their salaryDH
5</ That respondent 8L#) committed a gra&e abuse of discretion or eCceeded its
Furisdiction or acted contrary to la! !hen it failed and refused to admit and take into
account the %DD(8D@, %?#((,(8T, dated December 2., 19.8, entered into
bet!een the petitioner and the pri&ate respondents, !hich !ould ha&e further
enlightened the respondent 8L#) on the D5T= 0#"2L(,SD insinuated by the pri&ate
respondents in their cable of ,arch 2-, 19.9 to threaten and intimidate the petitioner
into granting the salary increases in EuestionH
</ That respondent 8L#) committed a gra&e abuse of discretion or acted !ithout or
in eCcess of its Furisdiction or contrary to la! !hen it ordered the petitioner <ir1Fen to
pay, among others, to the pri&ate respondents their D!ages corresponding to the
uneCpired portion of their contractsD the said petitioner ha&ing already lost its trust
and confidence on the pri&ate respondentsH that the employer cannot be legally
compelled to continue !ith the employment of persons in !hom it has already lost its
trust and confidenceH that payment to the pri&ate respondents of their !ages
corresponding to the uneCpired portion of their contract !ould be tantamount to
retaining their ser&ices after their employer, petitioner herein, had already lost its faith
and trust in themH
<5/ That the respondent 8L#) committed a gra&e abuse of discretion or eCceeded its
Furisdiction in still including and considering #",(" %)"ST% as one of the
appellants in the t!o '2* aforementioned 8S2 cases and making him a beneficiary of
its decision, dated 9uly 8, 1981, modifying the 8S2 decision, dated 9uly 2, 1984,
despite the fact that !ay back on "ctober 2-, 1984, %costa had already filed in said
8S2 cases a pleading, entitled DS%T5S=%)T5"8 "= 9@D?,(8TD in !hich he
manifested that he !as not appealing the 8S2 decision anymore as the Fudgment in
his fa&or !as already fully satisfied by the petitioner <ir1FenH
<55/ That the respondent 8L#) had no more Furisdiction to entertain pri&ate
respondents+ appeal because the 8S2 decision became final and eCecutory for
failure of said respondents to ser&e on he petitioner a copy of their D%00(%L %8D
,(,"#%8D@, "= %00(%LD !ithin the ten '14* day reglementary period for appeal
and e&en after the eCpiration of said periodH
<555/ That the respondent 8L#) had no Furisdiction to entertain the appeal by the
pri&ate respondents based on the supposedly &erified D%00(%L %8D
,(,"#%8D@, "= %00(%LD because the supposed signature of the person
purportedly &erifying the same is "orged/ and that the ne! counsel appearing for the
pri&ate respondents on appeal !as not e&en authori6ed by some of the pri&ate
respondents to appear for themH
5$/ That the respondent 8L#) committed a gra&e abuse of discretion or acted
!ithout or in eCcess of Furisdiction or contrary to la! !hen it misconstrued,
misinterpreted and misapplied to the instant case the ruling of this >onorable
Supreme )ourt in 7allem Philippines Shipping, nc. vs. !he Hon. Minister o" #abor,
et al/, ?/# 8o/ :4.-4, prom/ =ebruary 24, 1981, despite distinct and fundamental
differences in facts bet!een the 3allem )ase and the instant caseH
$/ That the respondent 8L#) committed a gra&e abuse of discretion or acted !ithout
or in eCcess of its Furisdiction or acted contrary to la! !hen it failed and refused to
consider and pass upon the substantial issues of Furisdiction, la! and facts and
matters of public interests raised by the petitioner in its @#?(8T
,"T5"87%00(LL((+S ,(,"#%8D@, "8 %00(%L, dated %pril 24, 1981, and in
its ,"T5"8 ="# #()"8S5D(#%T5"8 %8D7"# 8(3 T#5%L, dated 9uly 24, 1981,
filed in the t!o '2* casesH
$5/ That the respondent 8L#) committed a gra&e abuse of discretion or acted
!ithout or in eCcess of Furisdiction or contrary to la! !hen it failed and refused to
reconsider and set aside its decision subFect1matter of this petition for certiorari,
considering )hat if allo!ed to stand, the said decision !ill open the floodgates for
=ilipino seamen to disregard 8S21appro&ed contracts of employment !ith impunity,
leading to the destruction of the 0hilippine manning industry, !hich is a substantial
source of re&enue for the 0hilippine go&ernment, as !ell as the image of the =ilipino
seamen !ho !ill undoubtedly become kno!n far and !ide as one prone to &iolate
the solemnity of employment contracts, compounded !ith the use of threats,
intimidation and blackmail, thereby necessitating a policy decision by this >onorable
Supreme )ourt on the matter for the sur&i&al of the manning industry/ '0p/ :19,
#ecord/*
3e shall deal first !ith the Furisdictional issue '8o/ <55 abo&e* to the effect that the appeal of pri&ate
respondents from the decision of the 8ational Seamen+s 2oard against them !as filed out of time,
considering that copy of said decision !as recei&ed by them on 9uly 9, 1984 and they filed their
memorandum of appeal only on 9uly 2-, 1984 or fourteen '14* days later, !hereas under article 22-
of the Labor )ode !hich go&erns appeals from the 8ational Seamen+s 2oard to the 8ational Labor
#elations )ommission per %rticle 24'b* of the )ode pro&ides that such appeals must be made !ithin
ten '14* days/
5n this connection, it is contended in the comment of pri&ate respondents that petitioner has
o&erlooked that under Section ., #ule $555,, 2ook < of the 5mplementing #ules of the Labor )ode,
the ten1day period specified in %rticle 22- refers to )or4ing days and that this )ourt has already
upheld such construction and manner of computation in 9ab%la vs. :#R&, ?/#/ 8o/ :424.,
December 19, 1984/ 8o!, computing the number of !orking days from 9uly 9 to 9uly 2-, 1984 3e
find that there !ere eCactly ten '14* days, hence, if 3e adhere to =abula, the appeal in Euestion
must be held to ha&e been made on time/
2ut petitioner herein maintains that the ,inister of Labor may not, under the guise of issuing
implementing rules of a la) as authori6ed by the la! itself, go beyond the clear and unmistakable
language of the la! and eCpand it at his discretion/ 5n other !ords, since %rticle 22- of the Labor
)ode literally pro&ides thus;
Appeal. I Decisions, a!ards, or orders of the Labor %rbiters or compulsory
arbitrators are final and eCecutory unless appealed to the )ommission by any or both
of the parties !ithin ten '14* days from receipt of such a!ards, orders, or decisions/
Such appeal may be entertained only on any of the follo!ing grounds;
'a* 5f there is a prima facie e&idence of abuse of discretion on the part of the labor
%rbiter or compulsory arbitratorH
'b* 5f the decision, order, or a!ard !as secured through fraud or coercion, including
graft and corruptionH
'c* 5f made purely on Euestions of la!H and
'd* 5f serious errors in the findings of facts are raised !hich !ould cause gra&e or
irreparable damage or inFury to the appellant/
To discourage fri&olous or dilatory appeals, the )ommission or the Labor %rbiter shall
impose reasonable penalty, including fines or censures, upon the erring parties/
the implementing rules may not pro&ide that the said period should be computed on the basis
of )or4ing days/ This, indeed, is a legal issue not brought up nor passed upon sEuarely in =abula,
and petitioner prays that this )ourt rule on the point once and for all/
%fter mature and careful deliberation, 3e ha&e arri&ed at the conclusion that the shortened period of
ten '14* days fiCed by %rticle 22- contemplates calendar days and not !orking days/ 3e are
persuaded to this conclusion, if only because 3e belie&e that it is precisely in the interest of labor
that the la! has commanded that labor cases be promptly, if not peremptorily, dispose of/ Long
periods for any acts to be done by the contending parties can be taken ad&antage of more by
management than by labor/ ,ost labor claims are decided in their fa&or and management is
generally the appellant/ Delay, in most instances, gi&es the employers more opportunity not only to
prepare e&en ingenious defenses, !hat !ith !ell1paid talented la!yers they can afford, but e&en to
!ear out the efforts and meager resources of the !orkers, to the point that not infreEuently the latter
either gi&e up or compromise for less than !hat is due them/
%ll the foregoing not!ithstanding, and bearing in mind the peculiar circumstances of this case,
particularly, the fact that pri&ate respondents must ha&e been misled by the implementing rules
aforementioned/ 3e ha&e opted to Fust the same pass on the merits of the substantial issues herein,
e&en as 3e admonish all concerned to henceforth act in accordance !ith our foregoing &ie!/ <erily,
the ,inister of Labor has no legal po!er to amend or alter in any material sense !hate&er the la!
itself uneEui&ocally specifies or fiCes/
3e need not ponder long on the contention of petitioner regarding the alleged forgery of the
signature of respondent #ogelio 2isula and the alleged lack of authority of the ne! counsel of
respondents, %tty/ 2/ )/ ?on6ales, to appear for them/ #esolution of these minor points, considering
their highly contro&ersial nature, so much so that they could rationally to our mind, be decided either
!ay, may be dispensed !ith in order that 3e may go to the more transcendentally important main
issues before @s/
%s far as issue 8o/ <5 abo&e regarding the inclusion of #omeo %costa among the beneficiaries of the
decision herein in Euestion, there can be no reason !hy petitioner should not be sustained/ 5t is
undenied that %costa has filed a formal satisfaction of Fudgment/ 5ndeed, it is Euite rele&ant to
mention at this point that originally, there !ere t!enty1eight '28* claimants against petitioner, This
number !as first reduced to fifteen '1:* then to ten '14* and finally to nine '9* no!, by !ithdra!al of
the claimants themsel&es/ These series of !ithdra!als lend no little degree to added enlightenment
of the discussion hereunder of the ad&erse positions of the remaining claimants, on the one hand,
and the petitioner, on the other/
To begin !ith, let it be borne in mind that seamen+s contracts of the nature 3e ha&e before @s no!
are not ordinary ones/ There are specie, la!s and rules go&erning them precisely due to the peculiar
circumstances that surround them/ #elatedly, 3e Euote from the ,anifestation and )omment of the
Solicitor ?eneral;
The employment contract in Euestion is unlike any ordinary contract of employment,
for the reason that a manning contract in&ol&es the interests not only of the
signatories thereto, such as the local =ilipino recruiting agent 'herein petitioner*, the
foreign o!ner of the &essel, and the =ilipino cre! members 'pri&ate respondents*,
but also those of other =ilipino seamen in general as !ell as the country itself/
%ccordingly, %rticle 12 of the Labor )ode pro&ides that it is the policy of the State not
only Dto insure and regulate the mo&ement of !orkers in conformity !ith the national
interestD but also Dto insure careful selection of =ilipino !orkers for o&erseas
employment in order to protect the good name of the 0hilippines abroadD/ The
8ational Seamen 2oard '8S2*, !hich is the agency created to implement said state
policies, is thus empo!ered pursuant to %rticle 24 of the Labor )ode Dto secure the
best possible terms and conditions of employment for seamen, and to insure
compliance thereofD not only on the part of the o!ners of the &essel but also on the
part of the cre! members themsel&es/
)onformably to the po!er &ested in the 8S2, the la! reEuires that all manning
contracts shall be appro&ed by said agency/ 5t like!ise pro&ides that Dit shall be
unla!ful to substitute or alter any pre&iously appro&ed and certified employment
contract !ithout the appro&al of 8S2D 'Section -:, #ules and #egulations in the
recruitment and placement of =ilipino seamen aboard foreign going ships* and
authori6es the employer or o!ner of the &essel to terminate such contract for Fust
causes 'Section -2, 5bid*/ %mong such Fust causes for termination are Dbad conduct
and un!anted presence preFudicial to the safety of the shipD '?uidebook for shipping
employers, page 8* and material breach of said contract/
The stringent rules go&erning =ilipino seamen aboard foreign, going ships are
dictated by national interest/ There are about 124,444 registered seamen !ith the
8S2/ "nly about :4,444 of them are employed and .4,444 or so are still hoping to
be employed/ Those =ilipino seamen already employed on board foreign1going ships
should accordingly conduct themsel&es !ith utmost propriety and abide strictly !ith
the terms and conditions of their employment contract, and the 8S2 should see to
that, in order that o!ners of foreigno!ned &essels !ill not only be encouraged to
rene! their employment contract but !ill moreo&er be induced to hire other =ilipino
seamen as against other competing foreign sailors/ '0p/ 1:11., ,anifestation B
)omment of the Solicitor ?eneral*
0ertinently, the Labor )ode of the 0hilippines pro&ides for the creation of a 8ational Seamen 2oard
'8S2* thus;
%#T/ 24/ :ational Seamen Board/G'a* % 8ational Seamen 2oard is hereby created
!hich shall de&eloped and maintain a comprehensi&e program for =ilipino seamen
employed o&erseas/ 5t shall ha&e the po!er and duty;
'1* To pro&ide free placement ser&ices for seamenH
'2* To regulate and super&ise the acti&ities of agents or
representati&es of shipping companies in the hiring of seamen for
o&erseas employmentH and secure the best possible terms of
employment for contract seamen !orkers and secure compliance
there!ithH and
'-* To maintain a complete registry of all =ilipino seamen/
'b* The 2oard shall ha&e original and eCclusi&e Furisdiction o&er all matters or cases
including money claims, in&ol&ing employer1employee relations, arising out of or by
&irtue of any la! or contracts in&ol&ing =ilipino seamen for o&erseas employment/
The decision of the 2oard shall be appealable to the 8ational Labor #elations
)ommission upon the same grounds pro&ided in %rticle 22- hereof/ The decisions of
the 8ational Labor #elations )ommission shall be final and inappealable/
The finality and unappealability of the decisions of the 8ational Labor #elations )ommission
conferred by the abo&e pro&isions in cases of the nature no! before @s necessarily limits "ur po!er
in the premises to the eCercise of "ur plenary certiorari Furisdiction/ %nd under the scheme of said
%rticle 24, in relation to %rticle 22- of the same )ode, the re&ie!ing authority of the )ommission is
limited only to the follo!ing instances;
Appeal.GDecisions, a!ards, or orders of the Labor %rbiters or compulsory arbitrators
are final and eCecutory unless appealed to the )ommission by any or both of the
parties !ithin ten '14* days from receipt of such a!ards, orders, or decisions/ Such
appeal may be entertained only on any of the follo!ing grounds;
'a* 5f there is prima "acie e&idence of abuse of discretion on the part of the Labor
%rbiter or compulsory arbitratorH
'b* 5f the decision, order or a!ard !as secured through fraud or coercion, including
graft and corruptionH
'c* 5f made purely on Euestions of la!Hand
'd* 5f serious errors in the findings of facts are raised !hich !ould cause gra&e or
irreparable damage or inFury to the appellant/
To discourage fri&olous or dilatory appeals, the )ommission or the Labor %rbiter shall
impose reasonable penalty, including fines or censures, upon the erring parties/
5n all cases, the appellant shall furnish a copy of the memorandum of appeals to the
other party !ho shall file an ans!er not later than ten '14* days from receipt thereof/
CCC CCC CCC
5n the light of the foregoing perspecti&e of la! and policy, all the other issues raised by petitioner
may be disposed of together/ %ny!ay they re&ol&e basically around the follo!ing Euestions;
1/ 5n the e&ent of conflict in the conclusions of the 8ational Seamen 2oard, on the one hand, and the
8ational Labor #elations )ommission on the other, on a matter that is fundamentally an issue of
fact, !hich one should pre&ailR
2/ @nder the facts of this case, !as it legally proper for the )ommission to disregard the permission
granted by the 8S2 to the petitioner to disembark and discontinue the employment of herein
respondentsR
-/ %s a matter of fact, did respondent breach their contract !ith petitioner, so as to entitle the latter to
take the puniti&e action herein complained ofR
4/ 3as the conformity of petitioner to pay respondents additional compensation of 2:I secured by
said respondents thru threats of gra&e inFury to petitioner !ho, therefore, acceded to such increase
in&oluntarilyR
3e feel that the resolution of the instant contro&ersy hinges on !hether or not it !as &iolati&e of la!
and policy in the light of the peculiar nature of the contracts in Euestion as already eCplained at the
outset of this opinion, for the respondents to make the demand for an increase of :4I of their
respecti&e !ages stipulated in their 8S2 appro&ed contracts !hile they !ere already in the midst of
the &oyage to K!inana, %ustralia 'an 5T= controlled post*, pointedly mentioning in their cablegram
that such Ddemand '!as* the best and only solution to sol&e 5T= problemDR
"n these Euestions, the 8S2 found and held;
1/ 3hether or not the Seamen breached their respecti&e employment contractsH
2/ 3hether or not the Seamen !ere illegally dismissed by the )ompanyH
-/ 3hether or not the monetary claims of the seamen are &alid and meritoriousH
4/ 3hether or not the monetary claims of the )ompany are &alid and meritoriousH
:/ 3hether or not disciplinary action should be taken against the Seamen/
3ith respect to the first issue, the 2oard belie&es that the ans!er should be in the
affirmati&e/ This is so for the Seamen demanded and in fact recei&ed from the
)ompany !ages o&er and abo&e their contracted rates, !hich in effect is an
alteration or modification of a &alid and subsisting contractH and the same not ha&ing
been done thru mutual consent and !ithout the prior appro&al of the 2oard the
alteration or modification is contrary to the pro&isions of the 8e! Labor )ode, as
amended, more particularly %rt/ -4 'i* thereof !hich states that;
%rt/ -4/ 0rohibited practices/G5t shall be unla!ful for any indi&idual, entity, licensee
or holder of authority;
CCC CCC CCC
'i* To substitute or alter employment contracts appro&ed and &erified by the
Department of Labor from the time of actual signing thereof by the parties up to and
including the period of eCpiration of the same !ithout the appro&al of the Department
of LaborH
CCC CCC CCC
The re&ision of the contract !as not done thru mutual consent for the )ompany did
not &oluntarily agree to an increase of !age, but !as only constrained to make a
counter1proposal of 2:I increase to pre&ent the &essel from being interdicted and7or
detained by the 5T= because at the time the demand for salary increase !as made
the &essel !as enroute to K!inana, %ustralia '&ia Senipah, 5ndonesia*, a port !here
the 5T= is strong and militant/ >o!e&er, a perusal of the )ables '(Chs/ DDD B D=D, D-D
B D:D* coming from the Seamen addressed to the )ompany !ould sho! the
threatening manner by !hich the desire for a salary increase !as manifested,
contrary to their claim that it !as merely a reEuest/ %foresaid cables are hereby
Euoted for ready reference;
#A)<11111211-114 #()(5<(D @#58=" (8T5#( 9%88@ "==5)(#S %8D )#(3
8"T %?#((%2L( 35T> A"@# S@??(ST5"8S T>(A %#( 8"T )"8T(8T(D
35T> 0#(S(8T S%L%#A 2%S(D 58 <"L@,( "= 3"#KS TA0( "= S>50 35T>
>%J%#D"@S )%#?" %8D #(?5ST(#(D 58 % 3"#LD 35D( T#%D( ST"0
#(?%#D58? @#)%2<114 "==5)(#S %8D )#(3 8"T 58T(#(ST(D 58 5T=
,(,2(#S>50 5= 8"T %)T@%LLA 0%5D 35T> 5T= #%T( ST"0 3>%T 3(
D(,%8D 5S "8LA :4 0(#)(8T 58)#(%S( 2%S(D "8 0#(S(8T 2%S5)
S%L%#A ST"0 T>5S D(,%8D T>( 2(ST %8D "8LA S"L@T5"8 T" S"L<( 5T=
0#"2L(, D@( A"@# 0#(S(8T #%T( (S0()5%LLA 58 T%8K(#S <(#A =%# 58
)",0%#5S"8 35T> "T>(# S>50058? %?(8)5(S 58 ,%85L% ST"0 L(T @S
S>%#( (L@%LLA T>( =#@5TS "= L"8(L58(SS S%)#5=5)(S %8D >%#DS>50
3( %#( (8)"@8T(#58? "8 2"%#D 3( #(,%58 ///
#(@#<5#19(811: "==5)(#S %8D )#(3 >(S5T%T58? T" ?5<(
@0 D(,%8D "= :4 0(#)(8T 58)#(%S( 2@T ="# ?""D %8D
>%#,"85"@S #(L%T5"8S>50 "82"%#D %8D #()"8S5D(#58?
A"@# S@00"S( T" 2( L"SS(S 58 )%S( 3( )"8D5T5"8%LLA
)""0(#%T( 35T> A"@# 0#"0"S( 58)#(%S( "= 2:
0(#)(8T 2%S(D "8 58D5<5D@%L ,"8T>LA 2%S5) 0%A 35T>
="LL"358? T(#,S %8D )"8D5T5"8S %% (==()T5<5TA "= 2:
0(#)(8T 58)#(%S( ,@ST 2( ,%#)>7.9 0L@S S0()5%L
)",0(8S%T5"8 ,(8T5"8(D @#)%2 <5#9(8114 22 8(3
)",0%8A )5#)@L%# "8 @0?#%D(D 8(3 S%L%#A S)%L(
D@LA S5?8(D %8D %00#"<(D 2( ="#3%#D(D K358%8%
%@ST#%L5% "# >%8D)%##5(D 2A A"@# #(0#(S(8T%T5<( T"
D5S)@SS ,%TT(#S "==5)5%LLA )) 2: 0(#)(8T 58)#(%S(
,@ST 2( )"LL()T%2L( "82"%#D (==()T5<( %2"<( D%T(
@8T5L D5S(,2%#K%T5"8 ST"0 %LL"T,(8T T" %LL"TT((S
#(,%58 %S 5S DD #(%S"8%2L( #(0%LL"3S ="# %LL
"==5)(#S 2( ?5<(8 (==()T5<( ,%#)>7.9 (( 2"8@S ="#
,"8T>S S(#<5)( #(8D(#(D 2( )"LL()T52L( "82"%#D ==
"==5)(#S7)#(3 -4 0(#)(8T+ "T S>"@LD 2( 2%S(D 8(3
@0?#%D(D S%L%#A S)%L( ?? ,%ST(#7)>(8?#7)>,%T(
S0()5%L )",0(8S%T5"8 ?5<( 2A A"@# )",0%8A 0#5"#
D(0%#T@#( ,%85L% 2( #(,%58 %S 5S ST"0 T>( %2"<(
T(#,S %8D )"8D5T5"8S S>"@LD 2( 0#"0(#LA (8="#)(
%8D D")@,(8T(D %LS" )"05(S %8D ="#3%#D(D
"82"%#D "8 %##5<%L K358%8% %@ST#%L5% )"8=5#, ///
3hile the 2oard recogni6es the rights of the Seamen to seek higher !ages pro&ided
the increase is arri&ed at thru mutual consent, it could not ho!e&er, sanction the
same if the consent of the employer is secured thru threats, intimidation or force/ 5n
the case at bar, the )ompany !as compelled to accede to the demand of the
Seamen for a salary increase to forestall the possibility of the &essel being interdicted
by the 5T= at K!inana, %ustralia, for in the e&ent the &essel !ould be detained and7or
interdicted the )ompany !ould suffer more losses than paying the Seamen 2:I
increase of their
3ith respect to the second issue, the 2oard belie&es that the termination of the
ser&ices of the Seamen !as legal and in accordance !ith the pro&isions of their
respecti&e employment contracts/ )onsidering the findings of the 2oard that the
Seamen breached their contracts, their subseEuent repatriation !as Fustified/ 3hile it
may be true that the Seamen !ere hired for a definite period their ser&ices could be
terminated prior to the completion of the fun term thereof for a Fust and &alid cause/
5t may be stated in passing that <ir1Fen Shipping B ,arine Ser&ices, 5nc/, despite the
fact that it !as compelled to accede to a 2:I salary increase for the Seamen, tried
to con&ince its principal Kyoei Tanker, Ltd/ to an adFustment in their agency fee to
ans!er for the 2:I increase, but the latter not only denied the reEuest but like!ise
terminated their ,anning, %greement/ The Seamen+s breach of their employment
contracts and the subseEuent termination of the ,anning %greement of <ir1Fen
Shipping B ,arine Ser&ices, 5nc/ !ith the Kyoei Tanker, Ltd/, Fustified the termination
of the Seamen+s ser&ices/
3ith respect to the third issue the follo!ing are the findings of the 2oard;
%s regards the claim of the Seamen for the payment of their salaries for the
uneCpired portion of their employment contracts the same should be denied/ This is
so because of the findings of the 2oard that their dismissal !as legal and for a Fust
cause/ %!ards of this nature is proper only in cases !here a seafarer is illegally
dismissed/ '0p/ 14811:1, #ecord*
Disagreeing !ith the foregoing findings of the 8S2, the 8L#) held;
The more important issue to be resol&ed in this case, ho!e&er, is the Euestion of
!hether the Seamen &iolated their employment contracts !hen they demanded or
proposed and in fact accepted !ages o&er and abo&e their contracted rates/ Stated
other!ise, could the Seamen rightfully demand or propose the re&ision of their
employment contractsR 3hile they concede that they are bound by their contracts,
the Seamen claim that their cable asking for the re&ision of their contract rates !as a
&alid eCercise of their right to grie&ance/
The right to grie&ance is recogni6ed in this Furisdiction e&en if there is a &alid and
subsisting contract, especially !here there are super&ening facts or e&ents of !hich
a party to the contract !as not apprised at the time of its conclusion/ %s pointed out
by the Supreme )ourt in the 3allem case, s%pra, it Dis a basic right of all !orking
men to seek greater benefits not only for themsel&es but for their families as !ell ///D
and the D)onstitution itself guarantees the promotion of social !elfare and protection
to labor/D 5n this care, records sho! that it !as impressed on the Seamen that their
&essel !ould be trading only in )aribbean ports/ This !as admitted by the )ompany
in its cable to the Seamen on 14 9anuary 19.9/ %fter the conclusion of their
contracts, ho!e&er, and after they had boarded the &essel, the principals of the
)ompany directed the &essel to can at different ports or to engage in D!orld!ide
tradeD !hich is admittedly more difficult and ha6ardous than trading in only one
maritime area/ This is a substantial change in the original understanding of the
parties/ Thus, in their cable asking for a !age increase, the Seamen eCpressed their
dissatisfaction by informing the )ompany that they !ere Dnot contented !ith 'their*
present salary based on &olume of !ork, type of ship !ith ha6ardous cargo
and registered in )orld )ide trade/D'emphasis supplied/* 3ith such change in the
original agreement of the parties, !e find that the Seamen !ere !ell !ithin their
rights in demanding for the re&ision of their contract rates/
3e also note that the )ompany !as not eCactly in good faith in contracting the
ser&ice of the Seamen/ During his briefing in ,anila, the )ompany instructed the
master of the &essel, complainant 2isula, to prepare t!o '2* sets of payrolls, one set
reflecting the actual salary rates of the Seamen and the other sho!ing higher rates
based on 0anamanian Shipping articles !hich approCimate those prescribed by 5T=
for its member seafarers/ 5n compliance !ith this instruction, 2isula prepared the
latter payrolls/ These payrolls !ere intended for the consumption of 5T= if and !hen
the &essel called on ports !here 5T= rates !ere operational, the e&ident purpose
being to sho! 5T= that the )ompany !as paying the same rates prescribed by said
labor federation and thereby pre&ent the interdiction of the &essel/ %nd !hen the
&essel !as en route to %ustralia, an 5T=1controlled port, the )ompany arranged for
the Seamen+s membership !ith 5T= and actually paid their membership fees !ithout
their kno!ledge and consent, thereby eCposing them to the danger of being
disciplined by the 8S2 Secretariat for ha&ing affiliated !ith 5T=/ %ll these ha&e to be
mentioned here to better understand the feelings of the Seamen !hen they asked for
the re&ision of their !age rates/
2
'0p/ 8-18:, #ecord*
)omparing these t!o decisions, 3e do not hesitate to hold that the 8L#) o&erstepped the
boundaries of its re&ie!ing authority and !as o&erlenient/ 3hether or not respondents had breached
their contract !it petitioner is a factual issue, the peculiar nuances of !hich !ere better kno!n to the
8S2, the fact1finding authority/ 5ndeed, e&en if it !as nothing more than the interpretation of the
cablegram sent by respondents to petitioner on ,arch 2-, 19.9 that !ere the only Euestion to be
resol&ed, that is, !hether or not it carried !ith it or connoted a threat !hich naturally panicked
petitioner, !hich, to be sure, could be a Euestion of la!, still, as 3e see it, the conclusion of the
8L#) cannot be Fustified/
The 8L#) ruled that in the eCercise of their right to present any grie&ances they had and in their
desire to alle&iate their condition, it !as but !ell and proper for respondents to make a proposal for
increase of their !ages, !hich petitioner could accept or reFect/ 3e do not see it that !ay/
Definitely, the reference in the cablegram to the conformity of petitioner to respondents+ demand !as
Dthe best and only solution to 5T= problemD had an undertone !hich naturally placed petitioner hardly
in a position to ans!er them !ith a flat denial/ 5t !ould be the acme of nai&ete for @s to go along !ith
the contention that the cablegram of ,arch 2-, 19.9 !as a mere proposal and had no trace nor tint
of threat at all/ 5ndeed, it is alleged in the petition and there is no denial thereof that on %pril 2-,
19.9, )hief ,ate 9acobo )atabay of the ,7T 9annu, !ho !as among the claimants at first, re&ealed
that;
"n %pril 2-, 19.9, )hief ,ate 9acobo >/ )atabay of the ,7T 9annu, in a signed
statement1report to the petitioner, marked and admitted in e&idence as (Ch/ D141%D
during the trial stated, as follo!s;
"n our departure at Keelung, !e did not ha&e destination until three
'-* days later that >arman cabled us to proceed to Senipah,
5ndonesia to load fun cargo to be discharged at K!inana ,
%ustralia/ &aptain told everyone that i" only )e stayed so long )ith
the ship, he )ill report to !9 personally in order to get bac4 )ages/ 5n
&ie! that !e only !orked for three months so the back !ages is so
small and does not !orth/ 9rom that time on, &hie" ?ngr. and &aptain
have a nightly closed door con"erence they arrived at the concl%sion
to as4 "or 23J salary increase and they ha&e modified a certain
platforms/ !hey certainly believe that (ir.'en have no choice beca%se
the vessel is going to !9 port so they called a general meeting
cond%cted at the bridge d%ring my d%ty ho%rs in the a"ternoon. %ll
engine and deck personnel !ere present in that meeting/ '0p/ 19124,
#ecord/*
3ell taken, indeed, is the Solicitor ?eneral+s obser&ation that;
0ri&ate respondents+conduct is uncalled for/ 3hile employees may be free to reEuest
their employers to increase their !ages, they should not use threat of such a nature
and in such a situation as to put the employer at their complete mercy and !ith no
choice but to accede to their demands or to face bankruptcy/ This is !hat pri&ate
respondents did, !hich is an act of bad conduct preFudicial to the &essel, and a
material breach of the eCisting manning contract/ 5t has ad&erse conseEuences that
led not only to the termination of the eCisting manning contract but to the reFection by
Kyoei Tanker )o/ Ltd/ of petitioner+s offer to supply cre! members to three other
&essels, thereby depri&ing unemployed =ilipino seamen of the opportunity to !ork on
said &essels/ Thus, in a letter dated ,ay 1., 19.9, Kyoei Tanker )o/ Ltd/ !rote
petitioner as follo!s;
This is !ith reference to your letter of =eb/ 2-, 19.9, submitting your manning offers
on our three '-* managed &essels for deli&ery as follo!s;
1/ ,7< D,ayaD G cre!,deli&ery end ,ay, 19.9,
2/ ,7T D)edarD G 28 cre!, deli&ery end 9une, 19.9,
-/ ,7T D?lobal "athD G -4 cre!, deli&ery end, 9une 19.9/
5n this connection, !e !ish to ad&ise you that, as a result of our unpleasant
eCperience !ith your cre! on the ,7T D9annuD, o!ners ha&e decided to gi&e the
manning contracts on the abo&e three &essels to other foreign cre! instead of your
company/
3e deeply regret that although your cre! performance on our other four '4* &essels
ha&e been satisfactory, !e !ere unable to persuade o!ners to consider your
0hilippine cre! because of the bad attitude and actuation of your cre! manned on
board ,7T D9annuD/
%s !e ha&e already ad&ised you, o!ners ha&e spent more than @SP-4,444/44 to
replace the cre! of ,7T D9annuD in 9apan last %pril 19, 19.9 !hich !ould ha&e been
sa&ed if your cre! did not &iolate their employment contracts/'%nneC DKDof 0etition*,
5n the light of all the foregoing and the la! and policy on the matter, it is submitted
that there !as &alid Fustification on the part of petitioner and7or its principal to
terminate the manning contract/ '0p/ 12114, ,anifestation and )omment of the
Solicitor ?eneral/*
%t first glance it might seem that the Fudgment of the 8L#) should ha&e more !eight than that of
8S2/ >a&ing in &ie!, ho!e&er, the set up and relationship of these t!o entities framed by the Labor
)ode, the 8S2 is not only charged directly !ith the administration of shipping companies in the
hiring of seamen for o&erseas employment by seeing to it that our seamen Dsecure the best possible
terms of employment for contract seamen !orkers and secure compliance there!ith/D 5ts
composition as of the time this contro&ersy arose is !orth notingGfor it is made up of the ,inister of
Labor as )hairman, the Deputy ,inister as <ice )hairman, and a representati&e each of the
,inistries of =oreign %ffairs, 8ational Defense, (ducation and )ulture, the )entral 2ank, the 2ureau
of (mployment Ser&ice, a !orker+s organi6ation and an employee+s organi6ation and the (Cecuti&e
Director of the "&erseas (mployment De&elopment 2oard/ '%rticle 2-, Labor )ode* 5t is such a
board that has to appro&e all contracts of =ilipino seamen '%rticle 18, Labor )ode*/ %nd after such
appro&al, the contract becomes unalterable, it being Dunla!fulD under %rticle -4 of the )ode Dfor any
indi&idual, entity, licensee or holder of authority; 'i* to substitute or alter employment contracts
appro&ed and &erified by Department of Labor from the time of actual signing thereof by the parties
up to and including the period of eCpiration of the same !ithout the appro&al of the Department of
Labor/D 5n other !ords, it is not only that contracts may not be altered or modified or amended
!ithout mutual consent of the parties theretoH it is further necessary to ha&e the change appro&ed by
the Department, other!ise, the guilty parties !ould be penali6ed/
The po!er of the 8L#) in relation to the !orks and actuations of the 8S2 is only appellate,
according to %rticle 24 'b*, read in relation to %rticle 22-, principally, o&er Euestions of la!, since as
to factual matters, it may eCercise such appellate Furisdiction only Dif errors in the findings of fact are
raised !hich !ould cause gra&e or irreparable damage or inFury to the appellant/D 'par/ d*
The 8L#) has noted in its decision that respondents !ere originally made to belie&e that their ship
!ould go only to the )aribbean ports and yet after completing trips to 5nchon, Korea and Ku!ait and
Keelung, Tai!an, it !as suddenly directed to call at K!inana, %ustralia, an 5T= controlled port/ The
record sho!s that this imputation is more apparent than real, for respondents kne! from the &ery
moment they !ere hired that !orld1!ide &oyages or destinations !ere contemplated in their
agreement/ So much so that corresponding steps had to be taken to a&oid interference of or trouble
about the 5T= upon the ship+s arri&al at 5T= controlled ports/ %s already stated earlier, the 5T=
reEuires the seamen !orking on any &essel calling at ports controlled by them to be paid the rates
fiCed by the 5T= !hich are much higher than those pro&ided in the contract+s signed here, to the
eCtent of causing tremendous loss if not bankruptcy of the employer/
%nd so, as re&ealed to the 8L#) later, in anticipation precisely of such peril to the employer and
ultimate unemployment of the seamen, in the instant case, the usual procedure undeniably kno!n to
respondents of ha&ing t!o payroll+s, one containing the actually agreed rates and the other 5T=
rates, the latter to be sho!n to the 5T= in order that the ship may not be detained or interdicted in
K!inana, !as follo!ed/ 2ut according to the 8L#), this practice constitutes deception and bad faith,
and !orse, it is an effect !ithin the prohibition against alteration of contracts appro&ed by the 8S2,
considering there is nothing to sho! that 8S2 !as made a!are of the so1called addendum or side
agreement to the effect that should the ship manned by respondents be made to call an any 5T=
controlled port, the contract !ith 5T= rates !ould be sho!n and, if for any reason, the respondents
are reEuired to be actually paid higher rates and they are so paid, the eCcess o&er the rates agreed
in the 8S2 contract shall be returned to petitioner later/
5t is of insubstantial moment that the side agreement or addendum !as not made kno!n to or
presented as e&idence before the 8S2/ 3e are persuaded that more or less the 8S2 kno!s that the
general practice is to ha&e such side contracts/ ,ore importantly, the said side contracts are not
meant at all to alter or modify the contracts appro&ed by the 8S2/ #ather, they are precisely
purported to enforce them to the letter, making it clearer that e&en if the ships ha&e to call at 5T=
controlled ports, the same shall remain to be the real and binding agreement bet!een the parties, in
intentional disregard of !hate&er the 5T= may eCact/
3e hold that there !as no bad faith in ha&ing said side contracts, the intent thereof being to put into
effect the 8S2 directed arrangements that !ould protect the ship manning industry from unFust and
ruinning effects of 5T= inter&ention/ 5ndeed, eCamining the said side agreements, it is not correct to
say that the respondents !ere caught una!are, or by surprise !hen they !ere ad&ised that the ship
!ould proceed to K!inana, %ustralia, e&en assuming they had been someho! informed that they
!ould sail to the )aribbean/ Said side agreements teCtually pro&ide;
K8"3 %LL ,(8 2A T>(S( 0#(S(8TS;
This %ddendum %greement entered into by and bet!een KA"(5 T%8K(# )"/, LTD/,
0rincipals, of the &essel ,/T/ D9%88@D, represented herein by <5#19(8 S>50058? B
,%#58( S(#<5)(S, 58)/, ,anila, 0hilippines, as ,anning %gents 'hereinafter
referred to as the )ompany*,
G and G
The herein1mentioned officers and cre!, and engaged by the )ompany as
cre!members of the &essel ,7T D9%88@D !ith their positions, seaman certificate
numbers and signatures 'hereinafter referred to as the )re!member*, hereunder
sho!n;
3 5 T 8 ( S S ( T > that;
1/ 3>(#(%S, the )re!member is hired and recruited as a member of the cre! on
board the &essel ,7T D9%88@D !ith the corresponding )ontracts of (mployment
submitted to, &erified and duly appro&ed by the 8ational Seamen 2oardH that the
employment contract referred to, has clearly defined the rate of salary, !ages, and7or
employment benefits for a period of one '1* year 'or t!el&e '12* months*, and any
eCtension thereof/
2/ 3>(#(%S, the parties hereby further agree and co&enant that should the abo&e1
mentioned &essel enter, dock or drop anchor in ports of other countries, the
)re!member shall not demand, ask or recei&e, and the )ompany shall ha&e no
obligation to pay the )re!member, salaries,, !ages and7or benefits o&er and abo&e
those pro&ided for in the employment contract submitted to, &erified and appro&ed by
the 8ational Seamen 2oard, !hich shall remain in full force and effect bet!een the
parties/ The )ompany as !ell as the "!ners,, )harterers, %gents shall neither be
held accountable nor liable for any amount other than !hat is agreed upon and
stipulated in the aforesaid 8S21appro&ed )ontracts of (mployment/
-/ 3>(#(%S, the parties like!ise agree that should the &essel enter, dock or drop
anchor in any foreign port, and in the e&ent that the )ompany 'and7or its "!ners,
)harterers, %gents*, are forced, pressured, coerced or compelled, in any !ay and for
!hate&er cause or reason, to pay the )re!member either directly or thru their
respecti&e allottees or other persons, salaries and benefits higher than those rates
imposed in the 8S21appro&ed contract, the )re!member hereby agrees and binds
himself to recei&e the said payment in behalf of, and in trust for, the )ompany 'and7or
its "!ners, )harterers, %gents*, and to return the said amount in full to the )ompany
or to its agent7s in ,anila, 0hilippines immediately upon his and7or his allottees
receipt thereofH the )re!member hereby !ai&es formal !ritten demand by the
)ompany or its agent7s for the return thereof/ The )re!member hereby fully
understands that failure or refusal by him to return to the )ompany the said amount,
!ill render him criminally liable for (stafa, as pro&ided for in the #e&ised 0enal )ode
of the 0hilippines, and in such case, the parties hereby agree that any criminal
and7or ci&il action in connection there!ith shall be !ithin the eCclusi&e Furisdiction of
0hilippine )ourts/
4/ 3>(#(%S, if, in order to a&oid delays to the &essels, the )ompany is forced,
pressured, coerced or compelled to sign a )ollecti&e 2argaining %greement or any
other %greement !ith any foreign union, particularly 5T= or 5T= affiliated unions, and
to sign ne! cre!s+ contract of employment stipulating higher !ages, salaries or
benefits than the 8S21appro&ed contract, the said agreements and contracts shall be
&oid from the beginning and the )re!member shall be deemed to ha&e automatically
!ai&ed the increased salaries and benefits stipulated in the said agreements and
employment contracts unto and in fa&or of the )ompany, and shall remain
unalterably bound by the rates, terms, and conditions of the 8S21appro&ed contract/
:/ 3>(#(%S, the parties also agree that should the )ompany, as a precautionary or
anticipatory measure for the purpose of a&oiding costly delays to the &essel
preFudicial to its o!n interest, decide to negotiate and7or enter into any agreement in
ad&ance !ith any foreign based union, particularly 5T= or 5T= affiliated unions, in any
foreign port !here the &essel in&ol&ed herein may enter, dock or drop anchor,
!hate&er increases in salaries or benefits to the )re!member that the )ompany
may be compelled to gi&e, o&er and abo&e those stipulated in the 8S21appro&ed
employment contracts of the )re!member, shag, like!ise, be deemed ineffecti&e or
&oid from the beginning as far as the )re!member is concerned, and any such
increases in salaries or benefits !hich the )re!member shall recei&e pursuant
thereto shall be held by the )re!members in trust for the )ompany !ith the
obligation to return the same immediately upon receipt thereof, at the )ompany+s or
its agent+s office at ,anila, 0hilippines/ 5t is fully understood that the rates of pay and
all other terms and conditions embodied in the 8S21appro&ed employment contracts
shall be of continuing &alidity and effecti&ity bet!een the parties, irrespecti&e of the
countries or ports !here the said &essel shall enter, dock or drop anchor, and
irrespecti&e of any agreement !hich the )ompany may enter or may ha&e entered
into !ith any union, particularly 5T= or 5T= affiliated unions/
/ 3>(#(%S, it is like!ise agreed that any undertaking made by the )ompany
and7or the 8ational Seamen 2oard upon the reEuest of the )ompany, imposed by
any foreign union, particularly 5T= or 5T= affiliated unions, !hich !ill negate or render
in effecti&e any pro&isions of this agreement, shall also be considered null and &oid
from the beginning/
./ 3>(#(%S, lastly, this %ddendum %greement is entered into for the mutual
interest of both parties in line !ith the )ompany+s desire to continue the ser&ice of
the =ilipino cre!members on board their &essel and the )re!members+desire to
keep their employment on board the subFect &essel, thus maintaining the good image
of the =ilipino seamen and contributing to the de&elopment of the 0hilippine manning
industry/
8/ That both the )ompany and the )re!member agree and bind themsel&es that this
%greement shall be considered an addendum to, or as part of, the 8S21appro&ed
employment contract entered into by the )ompany and the )re!member/
58 35T8(SS 3>(#("=, !e ha&e hereunto affiCed our signatures this December
28, 19.8 at ,anila, 0hilippines/
T>( )",0%8A
<5#19(8 S>50058? B ,%#58( S(#<5)(S, 58)/
2y;
'S?D/* )%0T/ #@2(8 #/ 2%LT%J%#
"perations Dept/
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'0p/ 99114-, %nneC D11 of 0etition*
The 8L#) has cited 7allem Philippine Shipping nc. vs. !he Minister o" #abor, ?/ #/ 8o/ :4.-41-.,
=ebruary 24, 1981 '142 S)#% 8-:*/ 8o less than the Solicitor ?eneral maintains that said cited
case is not controlling;
% careful eCamination of 7allem Philippine Shipping nc. vs. !he Minister o" #abor,
?/ #/ 8o/ :4.-41-., =ebruary, 24, 1981 sho!s that the same is dissimilar to the case
at bar/ 5n the 3allem case, there !as an eCpress agreement bet!een the employer
and the 5T= representati&e, under !hich said employer bound itself to pay the cre!
members salary rates similar to those of 5T=/ 3hen the cre! members in the 3allem
case demanded that they be paid 5T= rates, they !ere merely asking their employer
to comply !ith !hat had been agreed upon !ith the 5T= representati&e, !hich
conduct on their part cannot be said to be a &iolation of contract but an effort to urge
performance thereof/ Such is not the situation in the case at bar/ 5n the case at bar,
petitioner and pri&ate respondents had a side agreement, !hereby pri&ate
respondents agreed to return to petitioner !hate&er amounts petitioner !ould be
reEuired to pay under 5T= rates/ 5n other !ords, petitioner and pri&ate respondents
agreed that petitioner !ould not pay the 5T= rate/ 3hen pri&ate respondents used
5T= as threat to secure increase in salary, they &iolated the manning contract/
,oreo&er, in the case at bar, petitioner terminated the manning contract only after the
8S2 authori6ed it to do so, after it found the grounds therefor to be &alid/ "n the
other hand, the termination of the manning contract in the 3allem case !as !ithout
prior authori6ation from the 8S2/
5t !ill be noted that pri&ate respondents sent a cable to petitioner demanding an
increase of :4I of their basic salary as the only solution to the 5T= problem at a time
!hen the &essel ,7T 9%88@ !as enroute to %ustralia, an 5T= port/ The fact that
pri&ate respondents mentioned 5T= in their cable clearly sho!s that if petitioner
!ould not accede to their demands, they !ould denounce petitioner to 5T=/ Thus,
)hief ,ate 9acobo )atabay in his report dated %pril 2-, 19.9 '(Ch/ 141%* stated;
"n our departure at Keelung, !e did not ha&e destination until three
days later that >arman cabled us to proceed to Senipah, 5ndonesia to
load fun cargo to be discharged at K!inana, %ustralia/ )aptain told
e&eryone that if only !e stayed so long !ith the ship, he )ill report to
!9 personally in order to get back !ages/ 5n &ie! that !e only
!orked for three months so the back !ages is so small and does not
!orth/ =rom that time on, )hief (ngr/ and )aptain ha&e a nightly
closed door conference until they arri&ed at the conclusion to ask for
:4I salary increase and they ha&e modified a certain platforms/
They certainly belie&e that (ir.'en have no choice beca%se the vessel
is going to !9 port so they called a general meeting conducted at the
bridge during my duty hours in the afternoon/ %ll engines and deck
personnel !ere present in that meeting/ '(mphasis supplied*
#eporting the !age scheme to the 5T= !ould mean that the &essel !ould be
interdicted and detained in %ustralia unless petitioner pay the 5T= rates, !hich
represent more than 144I of !hat is stipulated in the manning contract/ 0etitioner
!as thus forced to grant pri&ate respondents an increase of 2:I in their basic salary/
That such grant of a 2:I increase !as not &oluntary is sho!n by the fact that
petitioner immediately denounced the seamen+s conduct to 8S2 and subseEuently
asked said agency authority to terminate the manning contract/ '0p/ 14112,
,anifestation B )omment of Solicitor ?eneral*
Summari6ing, 3e are con&inced that since the 8S2, considering its official role in matters like those
no! before @s, is the fact1finding body, and there is no sufficient cogency in the 8L#)+s finding that
there !as no threat employed by respondents on petitioner, and, it appearing further that the !ell
prepared ,anifestation and )omment of the Solicitor ?eneral supports the decision of the 8S2,
!hich body, to "ur mind, !as in a better position than the 8L#) to appraise the rele&ant nuances of
the actuations of both parties, 3e are of the considered &ie! that the decision of the 8L#) under
Euestion constitutes gra&e abuse of discretion and should be set aside in fa&or of the 8S2+s
decision/
5n ?l Hogar 9ilipino M%t%al B%ilding and #oan Association vs. B%ilding ?mployees nc., 14. 0hil/ 4.-,
citing San Mig%el Bre)ery vs. :ational #abor 0nion, 9. 0hil/ -.8, 3e emphasi6ed;
,uch as !e should eCpand beyond economic orthodoCy, !e hold that an employer
cannot be legally compelled to contin%e )ith the employment o" a person )ho
admittedly )as g%ilty o" mis"easance or mal"easance to)ards his employer, and
)hose contin%ance in the service o" the latter is patently inimical to his interest. !he
la) in protecting the rights o" the laborer, a%thori<es neither the oppression nor sel".
destr%ction o" the employer/ '0age -, #ecord* '(mphasis supplied*
5t is timely to add here in closing that situations !herein employers are practically laid in ambush or
placed in a position not unlike those in a highFack !hether in the air, land or midsea must be
considered to be !hat they really are; acts of coercion, threat and intimidation against !hich the
&ictim has generally no recourse but to yield at the peril of irreparable loss/ %nd !hen such
happenings affect the national economy, as pointed out by the Solicitor ?eneral, they must be
treated to be in the nature of economic sabotage/ They should not be tolerated/ This )ourt has to be
careful not to sanction them/
3>(#(="#(, the petition herein is granted and the decision of the 8L#) complained of hereby set
asideH the decision of the 8S2 should stand/
8o costs/
&oncepcion, $r., ;%errero, Abad Santos, -e &astro and ?scolin, $$., conc%r.
A>%ino, $., conc%r in the res%lt.
:ir;#en Shippin/ and Marine Services, 3nc. vs. )LRC, 1"* SCRA *77 ,
)ove-ber 1', 1&'!
Case (itle : 9IR;0EN SHIPPIN# AND MARINE SER9ICES, INC., petitioner, s.
NATIONAL LA!OR RELATIONS COMMISSION, RO#ELIO !IS>LA, R>!EN
ARROAA 0>AN #AC>TNO, LEONILO ATO:, NILO CR>A, AL9ARO ANDRADA,
NEMESIO AD>#, SIMPLICIO !A>TISTA ROMEO ACOSTA, 'nd 0OSE ENCA!O,
respondents.Case )at$re : PETITION to reie( t)e de&ision o% t)e N'tion'-
L'bor Re-'tions Co//ission.
Syllabi Class : L'bor L'(
Syllabi:
1. Sa#e; Kuestions of policy are better left to the Datasan Pambansa. 7he
#upreme &ourt should confine itself to applying the law as it is. 7he Eirst
DivisionIs decision states the correct rule.-
>7his above ruling is the law on the matter and in my opinion controlling
on the case at bar. <hatever policy may prove more beneficial to the cause
of labor in general as is sought to be offered as argument in support of the
#econd Division decision is not a proper ground for ma!ing said policy
prevail over the applicable law or .urisprudence. Kuestions of policy are
better left to the Datasan Pambansa. <e should confine ourselves to
applying the law as it is. %n so doing <e are not allowed to apply it to suit
or to respond to the demands of what <e may deem the better policy than
what the law clearly intends. 7he policy is the law and the law is the policy.
<e might be treading on forbidden ground to bend the law to what <e
perceive to be a desirable policy.
". $orts; 7he #upreme &ourt remains one court with a single voice
although it now wor!s in two divisions.2
!. Sa#e; <hen case is decided by &ourt en banc.-
>/ny doctrine or principle of law laid down by the &ourt whether en banc
or in Division may be modified or reversed only by the &ourt en banc.
"#ection CM;N /rticle Q &onstitution., %n the rare instances when one
Division disagrees in its views with the other Division or the necessary
votes on an issue cannot be had in a Division the case is brought to the
&ourt en banc to reconcile any seeming conflict to reverse or modify an
earlier decision and to declare the &ourtIs doctrine. 7his is what has
happened in this case.
4. Sa#e; <here decision of one division deviates from decision of another
division case will be ta!en up by the #upreme &ourt en banc.2
*. Labor Law; 7ariti#e Law; 7he &ourts and the 1'L3 should not come
out with pronouncements based on the practices of unscrupulous and
inefficient shipowners who claim they cannot survive without resorting to
deceptive schemes.2
. Sa#e; Sa#e; Dubious arrangements whereby shipowners and seamen
enter into fictitious contracts cannot be legitimi@ed. 7he #upreme &ourtIs
original decision is reconsidered.2
7. Sa#e; Sa#e; $ontracts; Respondent seamen did not violate their
contracts in as!ing for higher salaries. 7he contract form made by the 4.#.D.
merely embodies the basic minimums which must be incorporated as parts
of an employment contract. %t is not meant to be a collective bargaining
agreement.2
'. Sa#e; Sa#e; Dismissal of sea crew based on their act of proposing
increase in pay while on the way to an %7E &ontrolled port is not .ustified.
RespondentIs motion for reconsideration is granted.-
>7he facts show that Hir-.en initiated the discussions which led to the
demand for increased wages. 7he seamen made a proposal and the
petitioner answered with a counter-proposal. 7he ship had not yet gone to
/ustralia or any %7E controlled port. 7here was absolutely no mention of any
stri!e much less a threat to stri!e. 7he seamen had done no act which
under Philippine law or any other civili@ed law would be termed illegal
oppressive or malicious. <hatever pressure existed it was mild compared
to accepted and valid modes of labor activity x x x <herefore the motions
for reconsiderations are hereby AR/473D. 7he petition is D%#1%##3D for
lac! of merit. 7he decision of the 4ational Labor Relations &ommission is
/EE%R13D. 4o cost.
&. De $astro, %., concrring8; / mista!e was committed in finding the
existence of a .ust cause for the instant termination of the services of the
seamen on the ground of threat.2
+ivision: EN !ANC
+oc,et )$-ber: Nos. L;724++ = L;724+?
Co$nsel: K.'s)', Asperi--', An&)et' = 9'-/onte, Pe)' = M'r&os L'(
O%%i&es %or pri'te respondents.
.onente: #>TIERREA, 0R.
+ispositive .ortion:
6HERE"ORE, t)e /otions %or re&onsider'tion 're )ereby #RANTED. T)e
petition is DISMISSED %or -'&F o% /erit. T)e de&ision o% t)e N'tion'- L'bor
Re-'tions Co//ission is A""IRMED. No &osts.
2efore the )ourt en banc is a motion to reconsider the decision promulgated on 9uly 24, 1982 !hich
set aside the decision of respondent 8ational Labor #elations )ommission and reinstated the
decision of the 8ational Seamen 2oard/
To better understand the issues raised in the motion for reconsideration, !e reiterate the background
facts of the case, Taken from the decision of the 8ational Labor #elations )ommission; tG=.KLh>)FK
5t appears that on different dates in December, 19.8 and 9anuary, 19.9, the Seamen
entered into separate contracts of employment !ith the )ompany, engaging them to
!ork on board ,7T+ 9annu for a period of t!el&e '12* months/ %fter &erification and
appro&al of their contracts by the 8S2, the Seamen boarded their &essel in 9apan/
"n 14 9anuary 1919, the master of the &essel complainant #ogelio >/ 2isula,
recei&ed a cable from the )ompany ad&ising him of the possibility that the &essel
might be directed to call at 5T=1controlled ports said at the same time informing him
of the procedure to be follo!ed in the computation of the special or additional
compensation of cre! members !hile in said ports/ 5T= is the acronym for the
5nternational Transport 3orkers =ederation, a militant international labor organi6ation
!ith affiliates in different ports of the !orld, !hich reputedly can tie do!n a &essel in
a port by pre&enting its loading or unloading, This is a sanction resorted to by 5T= to
enforce the payment of its !ages rates for seafarers the so1called 5T= rates, if the
!ages of the cre! members of a &essel !ho ha&e affiliated !ith it are belo! its
prescribed rates/* 5n the same cable of the )ompany, the eCpressed its regrets for
hot clarifying earlier the procedure in computing the special compensation as it
thought that the &essel !ould +trade in )aribbean ports only/
"n 22 ,arch 19.9, the )ompany sent another cable to complainant 2isula, this time
informing him of the respecti&e amounts each of the officers and cre! members
!ould recei&e as special compensation !hen the &essel called at the port of K!inana
%ustralia, an 5T=1controlled port/ This !as follo!ed by another cable on 2- ,arch
19.9, informing him that the officers and cre! members had been enrolled as
members of the 5T= in Sidney, %ustralia, and that the membership fee for the 28
personnel complement of the &essel had already been paid/
5n ans!er to the )ompany+s cable last mentioned, complainant 2isula, in
representation of the other officers and cre! members, sent on 24 ,arch 19.9 a
cable informing the )ompany that the officers and cre! members !ere not
agreeable to its +suggestion+H that they !ere not contented !ith their present salaries
+based on the &olume of !orks, type of ship !ith ha6ardous cargo and registered in a
!orld !ide trade+; that the +officers and cre! '!ere* not interested in 5T= membership
if not actually paid !ith 5T= rate that their +demand is only :4I increase based on
present basic salary and that the proposed !age increase is the +best and only
solution to sol&e 5T= problem+ since the )ompany+s salary rates +especially in tankers
'are* &ery far in comparison !ith other shipping agencies in ,anila ///
5n reply, the )ompany proposed a 2:I increase in the basic pay of the complainant
cre! members, although it claimed, that it !ould Dsuffer and absorb considerable
amount of losses/D The proposal !as accepted by the Seamen !ith certain
conditions !hich !ere accepted by the )ompany/ )onformably !ith the agreement
of the parties !hich !as effected through the cables abo&ementioned, the Seamen
!ere paid their ne! salary rates/
SubseEuently, the )ompany sought authority from the 8S2 to cancel the contracts of
employment of the Seamen, claiming that its principals had terminated their manning
agreement because of the actuations of the Seamen/ The reEuest !as granted by
the 8S2 (Cecuti&e Director in a letter dated 14 %pril 19.9/ Soon thereafter, the
)ompany cabled the Seamen informing them that their contracts !ould be
terminated upon the &essel+s arri&al in 9apan/ "n 19 %pril 19.9 they %rere asked to
disembark from the &essel, their contracts !ere terminated, and they !ere
repatriated to ,anila/ There is no sho!ing that the Seamen !ere gi&en the
opportunity to at least comment on the )ompany+s reEuest for the cancellation of
their contracts, although they had ser&ed only three '-* out of the t!el&e '12* months+
duration of their contracts/
The pri&ate respondents filed a complaint for illegal dismissal and non1payment of earned !ages
!ith the 8ational Seamen 2oard/ The <ir1Fen Shipping and ,arine Ser&ices 5nc/ in turn filed a
complaint for breach of contract and reco&ery of eCcess salaries and o&ertime pay against the
pri&ate respondents/ "n 9uly 2, 1984, the 8S2 rendered a decision declaring that the seamen
breached their employment contracts !hen they demanded and recei&ed from <ir1Fen Shipping
!ages o&er and abo&e their contracted rates/ The dismissal of the seamen !as declared legal and
the seamen !ere ordered suspended/
The seamen appealed the decision to the 8L#) !hich re&ersed the decision of the 8S2 and
reEuired the petitioner to pay the !ages and other monetary benefits corresponding to the uneCpired
portion of the manning contract on the ground that the termination of the contract by the petitioner
!as !ithout &alid cause/ <ir1Fen Shipping filed the present petition/
The pri&ate respondents submit the follo!ing issues in their motion for reconsideration; tG=.KLh>)FK
%/ T>5S >"8"#%2L( )"@#T D5D <5"L(8)( T" L%3 %8D 9@#5S0#@D(8)(
3>(8 5T >(LD T>%T T>( =58D58? "= =%)T "= T>( 8%T5"8%L S(%,(8
2"%#D T>%T T>( S(%,(8 <5"L%T(D T>(5# )"8T#%)TS 5S ,"#(
)#(D52L( T>%8 T>( =58D58? "= =%)T "= T>( 8%T5"8%L L%2"#
#(L%T5"8S )",,5SS5"8 T>%T T>( S(%,(8 D5D 8"T <5"L%T( T>(5#
)"8T#%)T/
2/ T>5S >"8"#%2L( )"@#T (##(D 58 =58D58? T>%T <5#19(8+S >%<58?
%?#((D T" % 2:I 58)#(%S( "= T>( S(%,(8+S 2%S5) 3%?( 3%S 8"T
<"L@8T%#A 2@T 3%S D@( T" T>#(%TS/
)/ T>5S >"8"#%2L( )"@#T (##(D 3>(8 5T T""K )"?85J%8)( "= T>(
%DD(8D@, %?#((,(8TH %SS@,58? T>%T T>( %DD(8D@, %?#((,(8T
)"@LD 2( T%K(8 )"?85J%8)( "=, T>5S >"8"#%2L( )"@#T (##(D 3>(8+
5T ="@8D T>%T 0#5<%T( #(S0"8D(8TS >%D <5"L%T(D T>( S%,(/
D, T>5S >"8"#%2L( )"@#T (##(D 3>(8 5T D5D 8"T =58D 0(T5T5"8(#
<5#9(8 L5%2L( ="# >%<58? T(#,58%T(D 2(="#( ($05#A D%T( T>(
(,0L"A,(8T )"8T#%)TS "= 0#5<%T( #(S0"8D(8TS, T>(#( 2(58? 8"
L(?%L %8D 9@ST5=5%2L( ?#"@8D ="# S@)> T(#,58%T5"8/
(/ T>5S >"8"#%2L( )"@#T (##(D 58 =58D58? T>%T T>( 0#(0%#%T5"8 2A
0(T5T5"8(# "= T>( T3" 0%A#"LLS %8D T>( ($()@T5"8 "= T>( S5D(
)"8T#%)T 3(#( 8"T ,%D( 58 2%D =%5T>/
=/ T>5S >"8"#%2L( )"@#T 58%D<(#T(8TLA D5S)#5,58%T(D %?%58ST
0#5<%T( #(S0"8D(8TS/
%t the outset, !e are faced !ith the Euestion !hether or not the )ourt en banc should gi&e due
course to the motion for reconsideration inspite of its ha&ing been denied t!ice by the )ourt+s
Second Di&ision/ The case !as referred to and accepted by the )ourt en banc because of the
mo&ants+ contention that the decision in this case by the Second Di&ision de&iated from 7allem Phil.
Shipping nc. v. Minister o" #abor 'L1:4.-41-., =ebruary 24, 1981*, a =irst Di&ision case !ith the
same facts and issues/ 3e are constrained to ans!er the initial Euestion in the affirmati&e/
% fundamental postulate of 0hilippine )onstitutional La! is the fact, that there is only one Supreme
)ourt from !hose decisions all other courts are reEuired to take their bearings/ '%lbert &/ )ourt of
=irst 5nstance, 2- S)#% 948H 2arrera &/ 2arrera, -4 S)#% 98H Tugade &/ )ourt of %ppeals, 8: S)#%
22*/ The maFority of the )ourt+s !ork is no! performed by its t!o Di&isions, but the )ourt remains
one court, single, unitary, complete, and supreme/ =lo!ing from this nature of the Supreme )ourt is
the fact that, !hile + indi&idual 9ustices may dissent or partially concur !ith one another, !hen the
)ourt states !hat the la! is, it speaks !ith only one &oice/ %nd that &oice being authoritati&e should
be a clear as possible/
%ny doctrine or principle of la! laid do!n by the )ourt, !hether en banc or in Di&ision, may be
modified or re&ersed only by the )ourt en banc/ 'Section 2'-*, %rticle $, )onstitution/* 5n the rare
instances !hen one Di&ision disagrees in its &ie!s !ith the other Di&ision, or the necessary &otes on
an issue cannot be had in a Di&ision, the case is brought to the )ourt en banc to reconcile any
seeming conflict, to re&erse or modify an earlier decision, and to declare the )ourt+s doctrine/ This is
!hat has happened in this case/
The decision sought to be reconsidered appears to be a de&iation from the )ourt+s decision,
speaking through the =irst Di&ision, in 7allem Shipping, nc. v. Hon. Minister o" #abor '142 S)#%
8-:*/ =aced !ith t!o seemingly conflicting resolutions of basically the same issue by its t!o
Di&isions, the )ourt/ therefore, resol&ed to transfer the case to the )ourt en banc/ 0arenthetically,
the petitioner+s comment on the third motion for reconsideration states that the resolution of the
motion might be the needed &ehicle to make the ruling in the 3allem case clearer and more in time
!ith the underlying principles of the Labor )ode/ 3e agree !ith the petitioner/
%fter an eChausti&e, painstaking, and perspicacious consideration of the motions for reconsideration
and the comments, replies, and other pleadings related thereto, the )ourt en banc is constrained to
grant the motions/ To grant the motion is to keep faith !ith the constitutional mandate to afford
protection to labor and to assure the rights of !orkers to self1organi6ation and to Fust and humane
conditions of !ork/ 3e sustain the decision of the respondent 8ational labor #elations )ommission/
There are &arious arguments raised by the petitioners but the common thread running through all of
them is the contention, if not the dismal prophecy, that if the respondent seamen are sustained by
this )ourt, !e !ould in effect Dkill the en that lays the golden egg/D 5n other !ords, =ilipino seamen,
admittedly among the best in the !orld, should remain satisfied !ith relati&ely lo!er if not the lo!est,
international rates of compensation, should not agitate for higher !ages !hile their contracts of
employment are subsisting, should accept as sacred, iron clad, and immutable the side contracts
!hich reEuire them to falsely pretend to be members of international labor federations, pretend to
recei&e higher salaries at certain foreign ports only to return the increased pay once the ship lea&es
that port, should stifle not only their right to ask for impro&ed terms of employment but their freedom
of speech and eCpression, and should suffer instant termination of employment at the slightest sign
of dissatisfaction !ith no protection from their ?o&ernment and their courts/ "ther!ise, the
petitioners contend that =ilipinos !ould no longer be accepted as seamen, those employed !ould
lose their Fobs, and the still unemployed !ould be left hopeless/
This is not the first time and it !ill not be the last !here the threat of unemployment and loss of Fobs
!ould be used to argue against the interests of laborH !here efforts by !orkingmen to better their
terms of employment !ould be characteri6ed as preFudicing the interests of labor as a !hole/
5n 18. or one hundred siCteen years ago/ )hief 9ustice 2easley of the Supreme )ourt of 8e!
9ersey !as ponente of the court+s opinion declaring as a conspiracy the threat of !orkingmen to
strike in connection !ith their efforts to promote unionism, tG=.KLh>)FK
5t is difficult to belie&e that a right eCists in la! !hich !e can scarcely concei&e can
produce, in any posture of affairs, other than inFuriois results/ 5t is simply the right of
!orkmen, by concert of action, and by taking ad&antage of their position, to control
the business of another, 5 am un!illing to hold that a right )hich cannot, in any,
event, be advantageo%s to the employee, and )hich m%st al)ays be h%rt"%l to the
employer, exists in la)/ 5n my opinion this indictment sufficiently sho!s that the force
of the confederates !as brought to bear upon their employer for the purpose of
oppression and mischief and that this amounts to a conspiracy, 'State &/ Donaldson,
-2 89L 1:1, 18./ )ited in )hamberlain, Sourcebook on Labor, p/ 1-/ (mphasis
supplied*
The same arguments ha&e greeted e&ery maFor ad&ance in the rights of the !orkingman/ And they
have invariably been proved %n"o%nded and "alse.
@nionism, employers+ liability acts, minimum !ages, !orkmen+s compensation, social security and
collecti&e bargaining to name a fe! !ere all initially opposed by employers and e&en !ell meaning
leaders of go&ernment and society as Dkilling the hen or goose !hich lays the golden eggs/D The
claims of !orkingmen !ere described as outrageously inFurious not only to the employer but more so
to the employees themsel&es before these claims or demands !ere established by la! and
Furisprudence as DrightsD and before these !ere pro&ed beneficial to management, labor, and the
nation as a !hole beyond reasonable doubt/
The case before us does not represent any maFor ad&ance in the rights of labor and the !orkingmen/
The pri&ate respondents merely sought rights already established/ 8o matter ho! much the
petitioner1employer tries to present itself as speaking for the entire industry, there is no e&idence that
it is typical of employers hiring =ilipino seamen or that it can speak for them/
The contention that manning industries in the 0hilippines !ould not sur&i&e if the instant case is not
decided in fa&or of the petitioner is not supported by e&idence/ The 3allem case !as decided on
=ebruary 24, 1981/ There ha&e been no se&ere repercussions, no drying up of employment
opportunities for seamen, and none of the dire conseEuences repeatedly emphasi6ed by the
petitioner/ 3hy should <ir1Fen be all eCceptionR
The !ages of seamen engaged in international shipping are shouldered by the foreign principal/ The
local manning office is an agent !hose primary function is recruitment and !ho /usually gets a lump
sum from the shipo!ner to defray the salaries of the cre!/ The hiring of seamen and the
determination of their compensation is subFect to the interplay of &arious market factors and one key
factor is ho! much in terms of profits the local manning office and the foreign shipo!ner may reali6e
after the costs of the &oyage are met/ %nd costs include salaries of officers and cre! members/
=ilipino seamen are admittedly as competent and reliable as seamen from any other country in the
!orld/ "ther!ise, there !ould not be so many of them in the &essels sailing in e&ery ocean and sea
on this globe/ 5t is competence and reliability, not cheap labor that makes our seamen so greatly in
demand/ =ilipino seamen ha&e ne&er demanded the same high salaries as seamen from the @nited
States, the @nited Kingdom, 9apan and other de&eloped nations/ 2ut certainly they are entitled to
go&ernment protection !hen they ask for fair and decent treatment by their employer/1, and !hen
they eCercise the right to petition for impro&ed terms of employment, especially !hen they feel that
these are sub1standard or are capable of impro&ement according to internationally accepted rules/ 5n
the domestic scene, there are marginal employers !ho prepare t!o sets of payrolls for their
employees G one in keeping !ith minimum !ages and the other recording the sub1standard !ages
that the employees really recei&e, The reliable employers, ho!e&er, not only meet the minimums
reEuired by fair labor standards legislation but e&en go !ay abo&e the minimums !hile earning
reasonable profits and prospering/ The same is true of international employment/ There is no reason
!hy this )ourt and the ,inistry of Labor and/ (mployment or its agencies and commissions should
come out !ith pronouncements based on the standards and practices of unscrupulous or inefficient
shipo!ners, !ho claim they cannot sur&i&e !ithout resorting to tricky and decepti&e schemes,
instead of ?o&ernment maintaining labor la! and Furisprudence according to the practices of
honorable, competent, and la!1abiding employers, domestic or foreign/
5f any minor ad&antages gi&en to =ilipino seamen may someho! cut into the profits of local manning
agencies and foreign shipo!ners, that is not sufficient reason !hy the 8S2 or the 5L#) should not
stand by the former instead of listening to unsubstantiated fears that they !ould be killing the hen
!hich lays the golden eggs/
0rescinding from the abo&e, !e no! hold that neither the 8ational Seamen 2oard nor the 8ational
Labor #elations )ommission should, as a matter of official policy, legitimi6e and enforce cubious
arrangements !here shipo!ners and seamen enter into fictitious contracts similar to the addendum
agreements or side contracts in this case !hose purpose is to decei&e/ The #epublic of the
0hilippines and its ministries and agencies should present a more honorable and proper posture in
official acts to the !hole !orld, not!ithstanding our desire to ha&e as many Fob openings both here
and abroad for our !orkers/ %t the &ery least, such as sensiti&e matter in&ol&ing no less than our
dignity as a people and the !elfare of our !orkingmen must proceed from the 2atasang 0ambansa
in the form of policy legislation, not from administrati&e rule making or adFudication
%nother issue raised by the mo&ants is !hether or not the seamen &iolated their contracts of
employment/
The form contracts appro&ed by the 8ational Seamen 2oard are designed to protect =ilipino seamen
not foreign shipo!ners !ho can take care of themsel&es/ The standard forms embody+ the basic
minimums !hich must be incorporated as parts of the employment contract/ 'Section 1:, #ule <,
#ules and #egulations 5mplementing the Labor )ode/* They are not collecti&e bargaining
agreements or immutable contracts !hich the parties cannot impro&e upon or modify in the course
of the agreed period of time/ To state, therefore, that the affected seamen cannot petition their
employer for higher salaries during the 12 months duration of the contract runs counter to
established principles of labor legislation/ The 8ational Labor #elations )ommission, as the
appellate tribunal from decisions of the 8ational Seamen 2oard, correctly ruled that the seamen did
not &iolate their contracts to !arrant their dismissal/
The respondent )ommission ruled; tG=.KLh>)FK
5n the light of all the foregoing facts, !e find that the cable of the seamen proposing
an increase in their !age rates !as not and could not ha&e been intended as a threat
to comp el the )ompany to accede to their proposals/ 2ut e&en assuming, if only for
the sake of argument, that the demand or G proposal for a !age increase !as
accompanied by a threat that they !ould report to 5T= if the )ompany did not accede
to the contract re&ision 1 although there really !as no such threat as pointed out
earlier G the Seamen should not be held at fault for asking such a demand/ 5n the
same case cited abo&e, the Supreme )ourt held; tG=.KLh>)FK
0etitioner claims that the dismissal of pri&ate respondents !as
Fustified because the latter threatened the ship authorities in acceding
to their demands, and this constitutes serious misconduct as
contemplated by the Labor )ode/ This contention is not !ell1
taken/ B%t even i" there had been s%ch a threat, respondents8
behavior sho%ld not be cens%red beca%se it is b%t nat%ral "or them to
employ some means o" pressing their demands "or petitioner, the
refusal to abide !ith the terms of the Special %greement, to honor
and respect the same, They !ere only acting in the eCercise of their
rights, and to depri&e them of their freedom of eCpression is contrary
to la! and public policy/ There is no serious misconduct to speak of in
the case at bar !hich !ould Fustify respondents+ dismissal Fust
because of their firmness in their demand for the fulfillment by
petitioner of its obligation it entered into !ithout any coercion,
specially on the part of pri&ate respondents/ '(mphasis supplied*/
The abo&e citation is from 7allem.
The facts sho! that !hen the respondents boarded the ,7T 9annu there !as no intention to send
their ship to %ustralia/ "n 9anuary 14, 19.9, the petitioner sent a cable to respondent shipmaster
2isula informing him of the procedure to be follo!ed in the computation of special compensation of
cre!members !hile in 5T= controlled ports and eCpressed regrets for not ha&ing earlier clarified the
procedure as it thought that the &essel !ould trade in )arribean ports only/
"n ,arch 22, 19.9, the petitioner sent another cable informing 2isula of the special compensation
!hen the ship !ould call at K!inana %ustralia/
The follo!ing day, shipmaster 2isula cabled <ir1Fen stating that the officers and cre!s !ere not
interested in 5T= membership if not paid 5T= rates and that their only demand !as a :4 percent
increase based on their then salaries/ 2isula also pointed out that <ir1Fen rates !ere D&ery far in
comparison !ith other shipping agencies in ,anila/D
5n reply, <ir1Fen counter proposed a 2: percent increase/ "nly after Kyoei Tanker )o/, Ltd/, declined
to increase the lumps sum amount gi&en monthly to <ir1Fen !as the decision to terminate the
respondents+ employment formulated/
The facts sho! that <irFen 5nitiated the discussions !hich led to the demand for increased / The
seamen made a proposal and the petitioner organi6ed !ith a counter1proposal/ The ship had not &et
gone to %ustralia or any 5T= controlled port/ There !as absolutely no mention of any strike/ much
less a threat to strike/ The seamen had done in act !hich under 0hilippine la! or any other ci&ili6ed
la! !ould be termed illegal, oppressi&e, or malicious/ 3hate&er pressure eCisted, it !as mild
compared to accepted &alid modes of labor acti&ity/
3e reiterate our ruling in 7allem. tG=.KLh>)FK
0etitioner claims that the dismissal of pri&ate respondents !as
Fustified because the latter threatened the ship authorities in acceding
to their demands, and this constitutes serious misconduct as
contemplated by the Labor )ode/ This contention is not !ell1taken/
The records fail to establish clearly the commission of any threat, 2ut
e&en if there had been such a threat, respondents+ beha&ior should
not be censured because it is but natural for them to employ some
means of pressing their demands for petitioner, !ho refused to abide
!ith the terms of the Special %greement, to honor and respect the
same, They !ere only acting in the eCercise of their rights, and to
depri&e them of their form of eCpression is contrary to la! and public
policy/ ///
"ur dismissing the petition is premised on the assumption that the ,inistry of Labor and
(mployment and all its agencies eCist primarily for the !orkinginan+s interests and, of course, the
nation as a !hole/ The points raised by the Solicitor1?eneral in his comments refer to the issue of
allo!ing !hat the petitioner importunes under the argument of Dkilling the hen !hich lays the golden
eggs/D This is one of policy !hich should perhaps be directed to the 2atasang 0ambansa and to our
country+s other policy makers for more specific legislation on the matter, subFect to the constitutional
pro&isions protecting labor, promoting social Fustice, and guaranteeing non1abridgement of the
freedom of speech, press, peaceable assembly and petition/ 3e agree !ith the mo&ants that there
is no sho!ing of any cause, !hich under the Labor )ode or any current applicable la!, !ould
!arrant the termination of the respondents+ ser&ices before the eCpiration of their contracts/ The
)onstitution guarantees State assurance of the rights of !orkers to security of tenure/ 'Sec/ 9, %rticle
55, )onstitution*/ 0resumptions and pro&isions of la!, the e&idence on record, and fundamental State
policy all dictate that the motions for reconsideration should be granted/
3>(#(="#(, the motions for reconsideration are hereby ?#%8T(D/ The petition is D5S,5SS(D
for lack of merit/ The decision of the 8ational Labor #elations )ommission is %==5#,(D/ 8o costs/
S" "#D(#(D/*M)phN*.=Ot
9ernando, &.$., ;%errero, Abad Santos, Plana, ?scolin and Relova, $$., conc%r.


Separate Opinions

-E CASTRO, J., concurring;
2eing the ponente of the 7allem case, upon !hose ruling the decision of the )ourt en banc in this
case is mainly made to rest, at least insofar as said )ourt no! finds that the respondent seamen
ha&e not committed any misconduct !hich !ould constitute a Fust cause for the termination of their
ser&ices Fust after three months of the 121month term of their contract, a brief eCplanation !hy 5
&oted in the Second Di&ision in fa&or of the petitioner company in the instant case, and not the
respondent seamen, as 5 did in the 3allem case, is ob&iously called for/
During our deliberations in the Di&ision, it !as made clear that in the instant case,+ threat !as
employed by the seamen against the company or shipo!ners to obtain consent to the :4I raise of
!ages as proposed by the seamen upon being informed that they !ould touch on 5T=1controlled
ports/ 5 Foined my colleagues in the Second Di&ision in concurring in the decision penned by 9ustice
2arredo, no! retired, in the belief that threat !as indeed committed, constituting a Fust cause for
termination of the ser&ices of the seamen !ith still nine months to go of their 121month contract !ith
the petitioner/ %s the facts are more thoroughly and accurately presented and discussed in the
decision so brilliantly !ritten by 9ustice ?utierre6, 5 am persuaded that on the basis of the ruling of
the 3allem case, a mistake !as committed in finding the eCistence of a Fust cause for the instant
and uneCpected termination of the ser&ices of the seamen/
The facts of this case sho! that to the proposal of the seamen for a :4I increase, made because
they !ere informed that they !ould touch on 5T=1controlled ports, the company countered !ith an
offer of only 2:I raised The proposal of :I !as much lo!er than the rates !hich the 5T= !ould
surely force upon the company 3hen the company made a counter proposal of 2:I raise the
seamen accepted/ The trip !ent on smoothly until upon arri&ing at a port !hich afforded ha&en and
safety to the shipo!ner, the latter suddenly, and !ith imperious finality, terminated the ser&ices of the
seamen and repatriated them to ,anila/ These are the simple facts that call for the application of the
la!, mainly the pro&isions of the Labor )ode/ That la! is none other than !hat is indicated in ho!
the 3alem case !as decided G in &indication of ho! the Seamen !ere gi&en a ra! deal in being
lulled into a false sense of security in their employment contract only to be rudely terminated and
ordered repatriated/
5n the 3allem case, the seamen pressed their demand for the enforcement of a special agreement
entered into by the shipo!ner or company !ith the 5T=/ =or this act, their ser&ices !ere terminated
and they !ere repatriated by their employer shipping company/ 3hat the =irst Di&ision said in fa&or
of the seamen, is in my opinion, the correct ruling !hich 3e should reaffirm in the instant case/ Thus
G tG=.KLh>)FK
0etitioner claims that the dismissal of pri&ate respondent !as Fustified because the
latter threatened the ship authorities in acceding to their demands, and this
constitutes serious misconduct as contemplated by the Labor )ode/ This contention
is not !elltaken/ B%t even en i" there had been s%ch a threat, respondents8 behavior
sho%ld not be cens%red beca%se it is b%t nat%ral "or them to employ some means o"
pressing their demands on petitioner, !ho refused to abide !ith the terms of the
Special %greement, to honor and respect the same/ They !ere only acting in the
eCercise of their rights, and to depri&e them of their freedom of eCpression is contrary
to la! and public policy/ There is no serious misconduct to speak of in the case at bar
!hich !ould Fustify respondents+ dismissal Fust because of their firmness in their
demand for the fulfillment by petitioner of its obligation it entered into !ithout any
coercion, specially on the part of pri&ate respondents/ '(mphasis supplied*/
This abo&e ruling is the la! on the matter and, in my opinion/ controlling on the case at bar/
3hate&er policy may pro&e more beneficial to the cause of labor in general, as is sought to be
offered as argument in support of the Second Di&ision decision, is not a proper ground for making
said policy pre&ail o&er the applicable la! or Furisprudence, Luestions of policy are better left to the
2atasan 0ambansa/ 3e should confine oursel&es to applying the la! as it is/ 5n so doing, 3e are
not allo!ed to apply it to suit, or to respond to, the demands of !hat 3e may deem the better policy
than !hat the la! clearly intends/ The policy is the la!, and the la! is the policy/ 3e might be
treading on forbidden ground to bend the la! to !hat 3e percei&e to be a desirable policy/
)ourts are called upon only to apply the la!/ Does the la! permit the termination of the ser&ices of
the seamen in &iolation of their contract eCcept only upon a Fust causeR This is the only Euestion to
be ans!ered in this case/ The ans!er is gi&en !ith eloEuent persuasi&eness in the decision in !hich
5 concur !holeheartedly/
!eehan4ee, Ma4asiar, A>%ino, ,&oncepcion, $r. and Melencio.Herrera, $$., too4 no part.



Separate Opinions

-E CASTRO, J., concurring;
2eing the ponente of the 7allem case, upon !hose ruling the decision of the )ourt en banc in this
case is mainly made to rest, at least insofar as said )ourt no! finds that the respondent seamen
ha&e not committed any misconduct !hich !ould constitute a Fust cause for the termination of their
ser&ices Fust after three months of the 121month term of their contract, a brief eCplanation !hy 5
&oted in the Second Di&ision in fa&or of the petitioner company in the instant case, and not the
respondent seamen, as 5 did in the 3allem case, is ob&iously called for/
During our deliberations in the Di&ision, it !as made clear that in the instant case,+ threat !as
employed by the seamen against the company or shipo!ners to obtain consent to the :4I raise of
!ages as proposed by the seamen upon being informed that they !ould touch on 5T=1controlled
ports/ 5 Foined my colleagues in the Second Di&ision in concurring in the decision penned by 9ustice
2arredo, no! retired, in the belief that threat !as indeed committed, constituting a Fust cause for
termination of the ser&ices of the seamen !ith still nine months to go of their 121month contract !ith
the petitioner/ %s the facts are more thoroughly and accurately presented and discussed in the
decision so brilliantly !ritten by 9ustice ?utierre6, 5 am persuaded that on the basis of the ruling of
the 3allem case, a mistake !as committed in finding the eCistence of a Fust cause for the instant
and uneCpected termination of the ser&ices of the seamen/
The facts of this case sho! that to the proposal of the seamen for a :4I increase, made because
they !ere informed that they !ould touch on 5T=1controlled ports, the company countered !ith an
offer of only 2:I raised The proposal of :I !as much lo!er than the rates !hich the 5T= !ould
surely force upon the company 3hen the company made a counter proposal of 2:I raise the
seamen accepted/ The trip !ent on smoothly until upon arri&ing at a port !hich afforded ha&en and
safety to the shipo!ner, the latter suddenly, and !ith imperious finality, terminated the ser&ices of the
seamen and repatriated them to ,anila/ These are the simple facts that call for the application of the
la!, mainly the pro&isions of the Labor )ode/ That la! is none other than !hat is indicated in ho!
the 3alem case !as decided G in &indication of ho! the Seamen !ere gi&en a ra! deal in being
lulled into a false sense of security in their employment contract only to be rudely terminated and
ordered repatriated/
5n the 3allem case, the seamen pressed their demand for the enforcement of a special agreement
entered into by the shipo!ner or company !ith the 5T=/ =or this act, their ser&ices !ere terminated
and they !ere repatriated by their employer shipping company/ 3hat the =irst Di&ision said in fa&or
of the seamen, is in my opinion, the correct ruling !hich 3e should reaffirm in the instant case/ Thus
G tG=.KLh>)FK
0etitioner claims that the dismissal of pri&ate respondent !as Fustified because the
latter threatened the ship authorities in acceding to their demands, and this
constitutes serious misconduct as contemplated by the Labor )ode/ This contention
is not !elltaken/ B%t even en i" there had been s%ch a threat, respondents8 behavior
sho%ld not be cens%red beca%se it is b%t nat%ral "or them to employ some means o"
pressing their demands on petitioner, !ho refused to abide !ith the terms of the
Special %greement, to honor and respect the same/ They !ere only acting in the
eCercise of their rights, and to depri&e them of their freedom of eCpression is contrary
to la! and public policy/ There is no serious misconduct to speak of in the case at bar
!hich !ould Fustify respondents+ dismissal Fust because of their firmness in their
demand for the fulfillment by petitioner of its obligation it entered into !ithout any
coercion, specially on the part of pri&ate respondents/ '(mphasis supplied*/
This abo&e ruling is the la! on the matter and, in my opinion/ controlling on the case at bar/
3hate&er policy may pro&e more beneficial to the cause of labor in general, as is sought to be
offered as argument in support of the Second Di&ision decision, is not a proper ground for making
said policy pre&ail o&er the applicable la! or Furisprudence, Luestions of policy are better left to the
2atasan 0ambansa/ 3e should confine oursel&es to applying the la! as it is/ 5n so doing, 3e are
not allo!ed to apply it to suit, or to respond to, the demands of !hat 3e may deem the better policy
than !hat the la! clearly intends/ The policy is the la!, and the la! is the policy/ 3e might be
treading on forbidden ground to bend the la! to !hat 3e percei&e to be a desirable policy/
)ourts are called upon only to apply the la!/ Does the la! permit the termination of the ser&ices of
the seamen in &iolation of their contract eCcept only upon a Fust causeR This is the only Euestion to
be ans!ered in this case/ The ans!er is gi&en !ith eloEuent persuasi&eness in the decision in !hich
5 concur !holeheartedly/

Separate Opinions
-E CASTRO, J., concurring;
2eing the ponente of the 7allem case, upon !hose ruling the decision of the )ourt en banc in this
case is mainly made to rest, at least insofar as said )ourt no! finds that the respondent seamen
ha&e not committed any misconduct !hich !ould constitute a Fust cause for the termination of their
ser&ices Fust after three months of the 121month term of their contract, a brief eCplanation !hy 5
&oted in the Second Di&ision in fa&or of the petitioner company in the instant case, and not the
respondent seamen, as 5 did in the 3allem case, is ob&iously called for/
During our deliberations in the Di&ision, it !as made clear that in the instant case,+ threat !as
employed by the seamen against the company or shipo!ners to obtain consent to the :4I raise of
!ages as proposed by the seamen upon being informed that they !ould touch on 5T=1controlled
ports/ 5 Foined my colleagues in the Second Di&ision in concurring in the decision penned by 9ustice
2arredo, no! retired, in the belief that threat !as indeed committed, constituting a Fust cause for
termination of the ser&ices of the seamen !ith still nine months to go of their 121month contract !ith
the petitioner/ %s the facts are more thoroughly and accurately presented and discussed in the
decision so brilliantly !ritten by 9ustice ?utierre6, 5 am persuaded that on the basis of the ruling of
the 3allem case, a mistake !as committed in finding the eCistence of a Fust cause for the instant
and uneCpected termination of the ser&ices of the seamen/
The facts of this case sho! that to the proposal of the seamen for a :4I increase, made because
they !ere informed that they !ould touch on 5T=1controlled ports, the company countered !ith an
offer of only 2:I raised The proposal of :I !as much lo!er than the rates !hich the 5T= !ould
surely force upon the company 3hen the company made a counter proposal of 2:I raise the
seamen accepted/ The trip !ent on smoothly until upon arri&ing at a port !hich afforded ha&en and
safety to the shipo!ner, the latter suddenly, and !ith imperious finality, terminated the ser&ices of the
seamen and repatriated them to ,anila/ These are the simple facts that call for the application of the
la!, mainly the pro&isions of the Labor )ode/ That la! is none other than !hat is indicated in ho!
the 3alem case !as decided G in &indication of ho! the Seamen !ere gi&en a ra! deal in being
lulled into a false sense of security in their employment contract only to be rudely terminated and
ordered repatriated/
5n the 3allem case, the seamen pressed their demand for the enforcement of a special agreement
entered into by the shipo!ner or company !ith the 5T=/ =or this act, their ser&ices !ere terminated
and they !ere repatriated by their employer shipping company/ 3hat the =irst Di&ision said in fa&or
of the seamen, is in my opinion, the correct ruling !hich 3e should reaffirm in the instant case/ Thus
G tG=.KLh>)FK
0etitioner claims that the dismissal of pri&ate respondent !as Fustified because the
latter threatened the ship authorities in acceding to their demands, and this
constitutes serious misconduct as contemplated by the Labor )ode/ This contention
is not !elltaken/ B%t even en i" there had been s%ch a threat, respondents8 behavior
sho%ld not be cens%red beca%se it is b%t nat%ral "or them to employ some means o"
pressing their demands on petitioner, !ho refused to abide !ith the terms of the
Special %greement, to honor and respect the same/ They !ere only acting in the
eCercise of their rights, and to depri&e them of their freedom of eCpression is contrary
to la! and public policy/ There is no serious misconduct to speak of in the case at bar
!hich !ould Fustify respondents+ dismissal Fust because of their firmness in their
demand for the fulfillment by petitioner of its obligation it entered into !ithout any
coercion, specially on the part of pri&ate respondents/ '(mphasis supplied*/
This abo&e ruling is the la! on the matter and, in my opinion/ controlling on the case at bar/
3hate&er policy may pro&e more beneficial to the cause of labor in general, as is sought to be
offered as argument in support of the Second Di&ision decision, is not a proper ground for making
said policy pre&ail o&er the applicable la! or Furisprudence, Luestions of policy are better left to the
2atasan 0ambansa/ 3e should confine oursel&es to applying the la! as it is/ 5n so doing, 3e are
not allo!ed to apply it to suit, or to respond to, the demands of !hat 3e may deem the better policy
than !hat the la! clearly intends/ The policy is the la!, and the la! is the policy/ 3e might be
treading on forbidden ground to bend the la! to !hat 3e percei&e to be a desirable policy/
)ourts are called upon only to apply the la!/ Does the la! permit the termination of the ser&ices of
the seamen in &iolation of their contract eCcept only upon a Fust causeR This is the only Euestion to
be ans!ered in this case/ The ans!er is gi&en !ith eloEuent persuasi&eness in the decision in !hich
5 concur !holeheartedly/
S$6ara vs. 4enipayo, 17 SCRA 4*, A$/$st 1*, 1&'&
Case (itle7 RES>RRECCION S>AARA, CESAR DIMAANDAL, AN#ELITO
MENDOAA, ANTONIO TANEDO, AMORSOLO CA!RERA, DOMINADOR SANTOS,
ISIDRO !RACIA, RAMON DE !ELEN, ERNESTO SA!ADO, MARTIN MALA;
!ANAN, ROMEO H>ERTO 'nd 9ITALIANO PAN#>E, petitioners, s. THE HON.
0>D#E AL"REDO L. !ENIPAYO 'nd MA#SAYSAY LINES, INC., respondents.,
RES>RRECCION S>AARA, CESAR DIMAANDAL, AN#ELITO MENDOAA,
ANTONIO TANEDO, RAYM>NDO PEREA, AMORSOLO CA!RERA, DOMINADOR
SANTOS, ISIDRO !RACIA, CATALINO CASICA, 9ITALIANO PAN#>E, RAMON
DE !ELEN, ED>ARDO PA#TAL>NAN, ANTONIO MIRANDA, RAMON >NIANA,
ERNESTO SA!ADO, MARTIN MALA!ANAN, ROMEO H>ERTO 'nd 6IL"REDO
CRISTO!AL, petitioners, s. THE HONORA!LE NATIONAL LA!OR RELATIONS
COMMISSION, THE NATIONAL SEAMEN !OARD Bno( t)e P)i-ippine Oerse's
E/p-oy/ent Ad/inistr'tionC, 'nd MA#SAYSAY LINES, INC., respondents.
Case )at$re7 PETITIONS to reie( t)e de&isions o% t)e N'tion'- Se'/en
!o'rd 'nd N'tion'- L'bor Re-'tions Co//ission.
Syllabi Class7 L'bor*N'tion'- Se'/ens !o'rd*Eiden&e

Syllabi:
1. Labor; National Sea#ens 9oard; E"idence; 4othing in the public and
private respondentsI pleadings to support the allegations that petitioners
used force and violence to secure the special agreement signed in
Hancouver Dritish &olumbia.2
". Labor; National Sea#ens 9oard; E"idence; 4o proof that petitioners
initiated a conspiracy with the %7E or deliberately sought its assistance in
order to receive higher wages.2
!. Labor; National Sea#ens 9oard; E"idence; &onclusion that it is %7EIs
policy not to intervene with the plight of crew members of a vessel unless its
intervention was sought is without basis.2
4. Labor; National Sea#ens 9oard; E"idence; &ourt cannot affirm the
4#D and 4LR&Is findings that there was violence physical or otherwise
employed by the petitioners in demanding for additional wages.2
*. Labor; National Sea#ens 9oard; E"idence; &onclusion that the acts
of the petitioners in demanding and receiving wages over and above the
4#D-approved contracts rates is in effect an alteration of their valid and
subsisting contract is without basis.2
+ivision: EN !ANC
+oc,et )$-ber: #. R. Nos. 71333, 72+8H;7H, #.R. Nos. D812+;33
Co$nsel: K.'s)', Asperi--', An&)et', PeN', No-'s&o, S'/son S. A-&'nt'r'
.onente: #>TIERREA, 0R.
+ispositive .ortion:
6HERE"ORE, t)e petitions 're )ereby #RANTED. T)e de&isions o% t)e
N'tion'- Se'/en !o'rd 'nd N'tion'- L'bor Re-'tions Co//ission in #. R.
Nos. D812+;33 're RE9ERSED 'nd SET ASIDE 'nd ' ne( one is entered
)o-din, t)e petitioners not ,.i-ty o% t)e o%%enses %or ()i&) t)ey (ere
&)'r,ed. T)e petitioners s.spension %ro/ t)e N'tion'- Se'/en !o'rds
Re,istry %or t)ree BHC ye'rs is LI"TED. T)e pri'te respondent is ordered to
p'y t)e petitioners t)eir e'rned b.t .np'id (',es 'nd oerti/e
p'yM'--o('n&e %ro/ Noe/ber +, +312 to De&e/ber +8, +312 '&&ordin, to
t)e r'tes in t)e Spe&i'- A,ree/ent t)'t t)e p'rties entered into in
9'n&o.er, C'n'd'.T)e &ri/in'- &'ses %or est'%', s.bEe&t /'tter o% #. R.
Nos. 71333 'nd 72+8H;7H, 're ordered DISMISSED.
These petitions ask for a re1eCamination of this )ourt+s precedent G setting decision in (ir.$en
Shipping and Marine Services nc. v. :ational #abor Relations &ommission, et al. '12: S)#% :..
M198-N*/ "n constitutional, statutory, and factual grounds, !e find no reason to disturb the doctrine in
<ir1$en Shipping and to turn back the clock of progress for sea1based o&erseas !orkers/ The
eCperience gained in the past fe! years sho!s that, follo!ing said doctrine, !e should neither deny
nor diminish the enFoyment by =ilipino seamen of the same rights and freedoms taken for granted by
other !orking1men here and abroad/
The cases at bar in&ol&e a group of =ilipino seamen !ho !ere declared by the defunct 8ational
Seamen 2oard '8S2* guilty of breaching their employment contracts !ith the pri&ate respondent
because they demanded, upon the inter&ention and assistance of a third party, the 5nternational
Transport 3orker+s =ederation '5T=*, the payment of !ages o&er and abo&e their contracted rates
!ithout the appro&al of the 8S2/ The petitioners !ere ordered to reimburse the total amount of
@SP91,-48/44 or its eEui&alent in 0hilippine )urrency representing the said o&er1payments and to
be suspended from the 8S2 registry for a period of three years/ The 8ational Labor #elations
)ommission '8L#)* affirmed the decision of the 8S2/
5n a corollary de&elopment, the pri&ate respondent, for failure of the petitioners to return the
o&erpayments made to them upon demand by the former, filed estafa charges against some of the
petitioners/ The criminal cases !ere e&entually consolidated in the sala of then respondent 9udge
%lfredo 2enipayo/ >ence, these consolidated petitions, ?/#/ 8o/ 4.81199 and ?/#/ 8os/ :.999 and
:814-1:-, !hich respecti&ely pray for the nullification of the decisions of the 8L#) and the 8S2,
and the dismissal of the criminal cases against the petitioners/
The facts are found in the Euestioned decision of the 8S2 in ?/#/ 8o/ 4.81199/
=rom the records of this case it appears that the facts established and7or admitted by
the parties are the follo!ing; that on different dates in 19.. and 19.8 respondents
entered into separate contracts of employment '(Chs/ D2D to D211.D, inclusi&e* !ith
complainant 'pri&ate respondent* to !ork aboard &essels o!ned7operated7manned
by the latter for a period of 12 calendar months and !ith different rating7position,
salary, o&ertime pay and allo!ance, hereinbelo! specified; ///H that aforesaid
employment contracts !ere &erified and appro&ed by this 2oardH that on different
dates in %pril 19.8 respondents 'petitioners* Foined the ,7< D?#%)( #5<(#DH that
on or about "ctober -4, 19.8 aforesaid &essel, !ith the respondents on board,
arri&ed at the port of <ancou&er, )anadaH that at this port respondent recei&ed
additional !ages under rates prescribed by the 5ntemational Transport 3orker+s
=ederation '5T=* in the total amount of @SP98,21/.4H that the respondents recei&ed
the amounts appearing opposite their names, to !it; ///H that aforesaid amounts !ere
o&er and abo&e the rates of pay of respondents as appearing in their employment
contracts appro&ed by this 2oardH that on 8o&ember 14, 19.8, aforesaid &essel, !ith
respondent on board, left <ancou&er, )anada for Aokohama, 9apanH that on
December 14, 19.8, !hile aforesaid &essel, !as at Aura, 9apan, they !ere made to
disembark/ 'pp/ 41, #ollo*
=urthermore, according to the petitioners, !hile the &essel !as docked at 8agoya, 9apan, a certain
%tty/ "scar Torres of the 8S2 Legal Department boarded the &essel and called a meeting of the
seamen including the petitioners, telling them that for their o!n good and safety they should sign an
agreement prepared by him on board the &essel and that if they do, the cases filed against them !ith
8S2 on 8o&ember 1., 19.8 !ould be dismissed/ Thus, the petitioners signed the/ D%greementD
dated December :, 19.8/ '%nneC ) of 0etition* >o!e&er, !hen they !ere later furnished CeroC
copies of !hat they had signed, they noticed that the line D!hich amount's* !as7!ere recei&ed and
held by )#(3,(,2(#S in trust for S>50"38(#SD !as inserted therein, thereby making it
appear that the amounts gi&en to the petitioners representing the increase in their !ages based on
5T= rates !ere only recei&ed by them in trust for the pri&ate respondent/
3hen the &essel reached ,anila, the pri&ate respondent demanded from the petitioners the
Do&erpaymentsD made to them in )anada/ %s the petitioners refused to gi&e back the said amounts,
charges !ere filed against some of them !ith the 8S2 and the 0rofessional #egulations
)ommission/ (stafa charges !ere also filed before different branches of the then )ourt of =irst
5nstance of ,anila !hich, as earlier stated, !ere subseEuently consolidated in the sala of the
respondent 9udge %lfredo 2enipayo and !hich e&entually led to ?/#/ 8os/ :.999 and :814-1:-/
5n ?/#/ 8os/ 4.81199, the petitioners claimed before the 8S2 that contrary to the pri&ate
respondent+s allegations, they did not commit any illegal act nor stage a strike !hile they !ere on
board the &esselH that the DSpecial %greementD entered into in <ancou&er to pay their salary
differentials is &alid, ha&ing been eCecuted after peaceful negotiations/ 0etitioners further argued
that the amounts they recei&ed !ere in accordance !ith the pro&ision of la!, citing among others,
Section 18, #ule <5, 2ook 5 of the #ules and #egulations 5mplementing the Labor )ode !hich
pro&ides that Dthe basic minimum salary of seamen shall not be less than the pre&ailing minimum
rates established by the 5nternational Labor "rgani6ation '5L"* or those pre&ailing in the country
!hose flag the employing &essel carries, !hiche&er is higher ///DH and that the D%greementD eCecuted
in 8agoya, 9apan had been forced upon them and that intercalations !ere made to make it appear
that they !ere merely trustees of the amounts they recei&ed in <ancou&er/
"n the other hand, the pri&ate respondent alleged that the petitioners breached their employment
contracts !hen they, acting in concert and !ith the acti&e participations of the 5T= !hile the &essel
!as in <ancou&er, staged an illegal strike and by means of threats, coercion and intimidation
compelled the o!ners of the &essel to pay to them &arious sums totalling @SP144,244/-:H that the
respondent entered into the DSpecial %greementD to pay the petitioners+ !age differentials because it
!as under duress as the &essel !ould not be allo!ed to lea&e <ancou&er unless the said agreement
!as signed, and to pre&ent the shipo!ner from incurring further delay in the shipment of goodsH and
that in &ie! of petitioners+ breach of contract, the latter+s names must be remo&ed from the 8S2+s
#egistry and that they should be ordered to return the amounts they recei&ed o&er and abo&e their
contracted rates/
The respondent 8S2 ruled that the petitioners !ere guilty of breach of contract because despite
subsisting and &alid 8S21appro&ed employment contracts, the petitioners sought the assistance of a
third party '5T=* to demand from the pri&ate respondent !ages in accordance !ith the 5T= rates,
!hich rates are o&er and abo&e their rates of pay as appearing in their 8S21appro&ed contracts/ %s
bases for this conclusion, the 8S2 stated;
1* The fact that respondents sought the aid of a third party '5T=* and demanded for
!ages and o&ertime pay based on 5T= rates is sho!n in the entries of their
respecti&e 0ay1"ff )learance Slips !hich !ere marked as their (Chs/ D1D to D18D, and
!e Euote DD(,%8D(D 5T= 3%?(S, "<(#T5,(, D5==(#(8T5%LS %0#5L T"
")T"2(# 19.8D/ #espondent Su6ara admitted that the entries in his 0ay1"ff
)learance Slip '(Ch/ D1D* are correct 'TS8/, p/ 1, Dec/ , 19.9*/lF)phL*.=Pt ,oreo&er, it is the
policy 'reiterated &ery often* by the 5T= that it does not interfere in the affairs of the
cre!members and masters and7or o!ners of a &essel unless its assistance is sought
by the cre!members themsel&es/ @nder this pronounced policy of the 5T=, it is
reasonable to assume that the representati&es of the 5T= in <ancou&er, )anada
assisted and inter&ened by reason of the assistance sought by the latter/
2* The fact that the 5T= assisted and inter&ened for and in behalf of the respondents
in the latter+s demand for higher !ages could be gleaned from the ans!er of the
respondents !hen they admitted that the 5T= acted in their behalf in the negotiations
for increase of !ages/ ,oreo&er, respondent )esar Dimaandal admitted that the 5T=
differential pay !as computed by the 5T= representati&e 'TS8, p/ ., Dec/ 12, 19.9*
-* The fact that complainant and the o!ner7operator of the &essel !ere compelled to
sign the Special %greement '(Ch/ D24D* and to pay 5T= differentials to respondents in
order not to delay the departure of the &essel and to pre&ent further losses is sho!n
in the D%greementD '(Chs/ D#121D* /// 'pp/ 91.4, #ollo*
The 8S2 further said;
3hile the 2oard recogni6es the rights of the respondents to demand for higher
!ages, pro&ided the means are peaceful and legal, it could not, ho!e&er, sanction
the same if the means employed are &iolent and illegal/ 5n the case at bar, the means
employed are &iolent and illegal for in demanding higher !ages the respondents
sought the aid of a third party and in turn the latter inter&ened in their behalf and
prohibited the &essel from sailing unless the o!ner and7or operator of the &essel
acceded to respondents+ demand for higher !ages/ To a&oid suffering further
incalculable losses, the o!ner and7or operator of the &essel had no altemati&e but to
pay respondents+ !ages in accordance !ith the 5T= scale/ The 2oard condemns the
act of a party !ho enters into a contract and !ith the use of force7or intimidation
causes the other party to modify said contract/ 5f the respondents belie&e that they
ha&e a &alid ground to demand from the complainant a re&ision of the terms of their
contracts, the same should ha&e been done in accordance !ith la! and not thru
illegal means/ 'at p/ .2, #ollo*/
%lthough the respondent 8S2 found that the petitioners !ere entitled to the payment of earned
!ages and o&ertime pay7allo!ance from 8o&ember 1, 19.8 to December 14, 19.8, it ne&ertheless
ruled that the computation should be based on the rates of pay as appearing in the petitioners+ 8S21
appro&ed contracts/ 5t ordered that the amounts to !hich the petitioners are entitled under the said
computation should be deducted from the amounts that the petitioners must return to the pri&ate
respondent/
"n appeal, the 8L#) affirmed the 8S2+s findings/ >ence, the petition in ?/#/ 8os/ 4.81199/
,ean!hile, the petitioners in ?/#/ 8os/ :.999 and :814-1:- mo&ed to Euash the criminal cases of
estafa filed against them on the ground that the alleged crimes !ere committed, if at all, in
<ancou&er, )anada and, therefore, 0hilippine courts ha&e no Furisdiction/ The respondent Fudge
denied the motion/ >ence, the second petition/
The principal issue in these consolidated petitions is !hether or not the petitioners are entitled to the
amounts they recei&ed from the pri&ate respondent representing additional !ages as determined in
the special agreement/ 5f they are, then the decision of the 8L#) and 8S2 must be re&ersed/
Similarly, the criminal cases of estafa must be dismissed because it follo!s as a conseEuence that
the amounts recei&ed by the petitioners belong to them and not to the pri&ate respondent/
5n arri&ing at the Euestioned decision, the 8S2 ruled that the petitioners are not entitled to the !age
differentials as determined by the 5T= because the means employed by them in obtaining the same
!ere &iolent and illegal and because in demanding higher !ages the petitioners sought the aid of a
third party, !hich, in turn, inter&ened in their behalf and prohibited the &essel from sailing unless the
o!ner and7or operator of the &essel acceded to respondents+ demand for higher !ages/ %nd as
proof of this conclusion, the 8S2 cited the follo!ing; 'a* the entries in the petitioners 0ay1"ff
)learance Slip !hich contained the phrase DD(,%8D(D 5T= 3%?(S ///DH 'b* the alleged policy of
the 5T= in not interfering !ith cre!members of a &essel unless its inter&ention is sought by the
cre!members themsel&esH 'c*, the petitioners+ admission that 5T= acted in their behalfH and 'd* the
fact that the pri&ate respondent !as compelled to sign the special agreement at <ancou&er, )anada/
There is nothing in the public and pri&ate respondents+ pleadings, to support the allegations that the
petitioners used force and &iolence to secure the special agreement signed in <ancou&er/ 2ritish
)olumbia/ There !as no need for any form of intimidation coming from the =ilipino seamen because
the )anadian 2rotherhood of #ail!ays and Transport 3orkers ')2#T*, a strong )anadian labor
union, backed by an international labor federation !as actually doing all the influencing not only on
the ship1o!ners and employers but also against third !orld seamen themsel&es !ho, by recei&ing
lo!er !ages and cheaper accommodations, !ere threatening the employment and li&elihood of
seamen from de&eloped nations/
The bases used by the respondent 8S2 to support its decision do not pro&e that the petitioners
initiated a conspiracy !ith the 5T= or deliberately sought its assistance in order to recei&e higher
!ages/ They only pro&e that !hen 5T= acted in petitioners+ behalf for an increase in !ages, the latter
manifested their support/ This !ould be a logical and natural reaction for any !orker in !hose
benefit the 5T= or any other labor group had inter&ened/ The petitioners admit that !hile they
eCpressed their conformity to and their sentiments for higher !ages by means of placards, they,
ne&ertheless, continued !orking and going about their usual chores/ 5n other !ords, all they did !as
to eCercise their freedom of speech in a most peaceful !ay/ The 5T= people, in turn, did not employ
any &iolent means to force the pri&ate respondent to accede to their demands/ 5nstead, they simply
applied effecti&e pressure !hen they intimated the possibility of interdiction should the shipo!ner fail
to heed the call for an up!ard adFustment of the rates of the =ilipino seamen/ 5nterdiction is nothing
more than a refusal of 5T= members to render ser&ice for the ship, such as to load or unload its
cargo, to pro&ision it or to perform such other chores ordinarily incident to the docking of the ship at
a certain port/ 5t !as the fear of 5T= interdiction, not any action taken by the seamen on board the
&essel !hich led the shipo!ners to yield/
The 8S2+s contusion that it is 5T=+s policy not to inter&ene !ith the plight of cre!members of a
&essel unless its inter&ention !as sought is !ithout basis/ This )ourt is cogni6ant of the fact that
during the period co&ered by the labor contro&ersies in 7allem Philippines Shipping, nc. v. Minister
o" #abor '142 S)#% 8-: M1981NH (ir.$en Shipping and Marine Services, nc. v. :#R& 'supra* and
these consolidated petitions, the 5T= !as militant !orld!ide especially in )anada, %ustralia,
Scandina&ia, and &arious (uropean countries, interdicting foreign &essels and demanding !age
increases for third !orld seamen/ There !as no need for =ilipino or other seamen to seek 5T=
inter&ention/ The 5T= !as !aiting on its o!n &olition in all )anadian ports, not particularly for the
petitioners+ &essel but for all ships similarly situated/ %s earlier stated, the 5T= !as not really acting
for the petitioners out of pure altruism/ The 5T= !as merely protecting the interests of its o!n
members/ The petitioners happened to be pa!ns in a higher and broader struggle bet!een the 5T=
on one hand and shipo!ners and third !orld seamen, on the other/ To subFect our seamen to
criminal prosecution and punishment for ha&ing been caught in such a struggle is out of the
Euestion/
%s stated in (ir.$en Shipping 'supra*;
The seamen had done no act !hich under 0hilippine la! or any other ci&ili6ed la!
!ould be termed illegal, oppressi&e, or malicious/ 3hate&er pressure eCisted, it !as
mild compared to accepted and &alid modes of labor acti&ity/ 'at page :91*
?i&en these factual situations, therefore, !e cannot affirm the 8S2 and 8L#)+s finding that there
!as &iolence, physical or other!ise employed by the petitioners in demanding for additional !ages/
The fact that the petitioners placed placards on the gang!ay of their ship to sho! support for 5T=+s
demands for !age differentials for their o!n benefit and the resulting 5T=+s threatened interdiction do
not constitute &iolence/ The petitioners !ere eCercising their freedom of speech and eCpressing
sentiments in their hearts !hen they placed the placard 3e 3ant 5T= #ates/D @nder the facts and
circumstances of these petitions, !e see no reason to depri&e the seamen of their right to freedom
of eCpression guaranteed by the 0hilippine )onstitution and the fundamental la! of )anada !here
they happened to eCercise it/
%s !e ha&e ruled in 7allem Phil. Shipping nc. v. Minister o" #abor, et al. s%praQ
0etitioner claims that the dismissal of pri&ate respondents !as Fustified because the
latter threatened the ship authorities in acceding to their demands, and this
constitutes serious misconduct as contemplated by the Labor )ode/ This contention
is no! !ell1taken/ The records fail to establish clearly the commission of any threat/
2ut e&en if there had been such a threat, respondents+ beha&ior should not be
censured because it is but natural for them to employ some means of pressing their
demands for petitioner, !ho refused to abide !ith the terms of the Special
%greement, to honor and respect the same/ They !ere only acting in the eCercise of
their rights, and to depri&e them of their freedom of eCpression is contrary to la! and
public policy/ /// 'at page 84-*
3e like!ise, find the public respondents+ conclusions that the acts of the petitioners in demanding
and recei&ing !ages o&er and abo&e the rates appearing in their 8S21appro&ed contracts is in effect
an alteration of their &alid and subsisting contracts because the same !ere not obtained through/
mutual consent and !ithout the prior appro&al of the 8S2 to be !ithout basis, not only because the
pri&ate respondent+s consent to pay additional !ages !as not &itiated by any &iolence or intimidation
on the part of the petitioners but because the said 8S21appro&ed form contracts are not unalterable
contracts that can ha&e no room for impro&ement during their effecti&ity or !hich ban any
amendments during their term/
=or one thing, the employer can al!ays impro&e the !orking conditions !ithout &iolating any la! or
stipulation/
3e stated in the (ir.$en case 's%pra* that;
The form contracts appro&ed by the 8ational Seamen 2oard are designed to protect
=ilipino seamen not foreign shipo!ners !ho can take care of themsel&es/ The
standard forms embody the basic minimums !hich must be incorporated as parts of
the employment contract/ 'Section 1:, #ule <, #ules and #egulations 5mplementing
the Labor )ode*/lF)phL*.=Pt They are not collecti&e bargaining agreements or immutable
contracts !hich the parties cannot impro&e upon or modify in the course of the
agreed period of time/ To state, therefore, that the affected seamen cannot petition
their employer for higher salaries during the 12 months duration of the contract runs
counter to estabhshed principles of labor legislation/ The 8ational Labor #elations
)ommission, as the appellate tribunal from the decisions of the 8ational Seamen
2oard, correctly ruled that the seamen did not &iolate their contracts to !arrant their
dismissal/ 'at page :89*
5t is impractical for the 8S2 to reEuire the petitioners, caught in the middle of a labor struggle
bet!een the 5T= and o!ners of ocean going &essels half!ay around the !orld in <ancou&er, 2ritish
)olumbia to first secure the appro&al of the 8S2 in ,anila before signing an agreement !hich the
employer !as !illing to sign/ 5t is also totally unrealistic to eCpect the petitioners !hile in )anada to
eChibit the !ill and strength to oppose the 5T=+s demand for an increase in their !ages, assuming
they !ere so minded/
%n eCamination of %nneC ) of the petition, the agreement signed in 9apan by the cre!members of
the ,7< ?race #i&er and a certain ,/ Tabei, representati&e of the 9apanese shipo!ner lends
credence to the petitioners+ claim that the clause D!hich amount's* !as recei&ed and held by
)#(3,(,2(#S in trust for S>50"38(#D !as an intercalation added after the eCecution of the
agreement/ The clause appears too closely typed belo! the names of the 19 cre!men and their
!ages !ith no similar inter&ening space as that !hich appears bet!een all the paragraphs and the
triple space !hich appears bet!een the list of cre!members and their !ages on one hand and the
paragraph abo&e !hich introduces the list, on the other/ The &erb D!ereD !as also inserted abo&e
the &erb D!asD to make the clause grammatically correct but the insertion of D!ereD is already on the
same line as D%ntonio ,iranda and :,221/4D !here it clearly does not belong/ There is no other
space !here the !ord D!ereD could be intercalated/ 'See #ollo, page 84*/
%t any rate, the proposition that the petitioners should ha&e pretended to accept the increased
!ages !hile in <ancou&er but returned them to the shipo!ner !hen they reached its country, 9apan,
has already been ans!ered earlier by the )ourt;
=ilipino seamen are admittedly as competent and reliable as seamen from any other
country in the !orld/ "ther!ise, there !ould not be so many of them in the &essels
sailing in e&ery ocean and sea on this globe/ 5t is competence and reliability, not
cheap labor that makes our seamen so greatly in demand/ =ilipino seamen ha&e
ne&er demanded the same high salaries as seamen from the @nited States, the
@nited Kingdom, 9apan and other de&eloped nations/ 2ut certainly they are entitled
to go&ernment protection !hen they ask for fair and decent treatment by their
employer and !hen they eCercise the right to petition for impro&ed terms of
employment, especially !hen they feel that these are sub1standard or are capable of
impro&ement according to internationally accepted rules/ 5n the domestic scene,
there are marginal employers !ho prepare t!o sets of payrolls for their employees G
one in keeping !ith minimum !ages and the other recording the sub1standard !ages
that the employees really recei&e/ The reliable employers, ho!e&er, not only meet
the minimums reEuired by fair labor standards legislation but e&en go a!ay abo&e
the minimums !hile earning reasonable profits and prospering/ The same is true of
international employment/ There is no reason !hy this court and the ,inistry of
Labor and (mployment or its agencies and commissions should come out !ith
pronouncements based on the standards and practices of unscrupulous or inefficient
shipo!ners, !ho claim they cannot sur&i&e !ithout resorting to tricky and decepti&e
schemes, instead of ?o&ernment maintaining labor la! and Furisprudence according
to the practices of honorable, competent, and la!1abiding employers, domestic or
foreign/ '<ir19en Shipping, s%pra, pp/ :8.1:88*
5t is note!orthy to emphasi6e that !hile the 5ntemational Labor "rgani6ation '5L"* set the minimum
basic !age of able seamen at @SP18./44 as early as "ctober 19., it !as only in 19.9 that the
respondent 8S2 issued ,emo )ircular 8o/ 4:, enFoining all shipping companies to adopt the said
minimum basic !age/ 5t !as correct for the respondent 8S2 to state in its decision that !hen the
petitioners entered into separate contracts bet!een 19..119.8, the monthly minimum basic !age
for able seamen ordered by 8S2 !as still fiCed at @SP1-4/44/ >o!e&er, it is not the fault of the
petitioners that the 8S2 not only &iolated the Labor )ode !hich created it and the #ules and
#egulations 5mplementing the Labor )ode but also seeks to punish the seamen for a shortcoming of
8S2 itself/
%rticle 21'c* of the Labor )ode, !hen it created the 8S2, mandated the 2oard to D'"*btain the best
possible terms and conditions of employment for seamen/D
Section 1:, #ule < of 2ook 5 of the #ules and #egulations 5mplementing the Labor )ode pro&ides;
Sec/ 1:/ Model contract o" employment/ G The 8S2 shall de&ise a model contract of
employment !hich shall embody all the reEuirements of pertinent labor and social
legislations and the pre&ailing standards set by applicable 5nternational Labor
"rgani6ation )on&entions/ The model contract shall set the minimum standards of
the terms and conditions to go&ern the employment of =ilipinos on board &essels
engaged in o&erseas trade/ %ll employers of =ilipinos shall adopt the model contract
in connection !ith the hiring and engagement of the ser&ices of =ilipino seafarers,
and in no case shall a shipboard employment contract be allo!ed !here the same
pro&ides for benefits less than those enumerated in the model employment contract,
or in any !ay conflicts !ith any other pro&isions embodied in the model contract/
Section 18 of #ule <5 of the same #ules and #egulations pro&ides;
Sec/ 18/ Basic minim%m salary o" able.seamen/ G The basic minimum salary of
seamen shall be not less than the pre&ailing minimCun rates established by the
5nternational Labor "rgani6ation or those pre&ailing in the country !hose flag the
employing &essel carries, !hiche&er is higher/ >o!e&er, this pro&ision shall not apply
if any shipping company pays its cre! members salaries abo&e the minimum herein
pro&ided/
Section 8, #ule $, 2ook 5 of the "mnibus #ules pro&ides;
Section 8/ 0se o" standard "ormat o" service agreement/ G The 2oard shall adopt a
standard format of ser&ice agreement in accordance !ith pertinent labor and social
legislation and pre&ailing standards set by applicable 5nternational Labor
"rgani6ation )on&entions/ The standard format shall set the minimum standard of
the terms and conditions to go&ern the employment of =ilipino seafarers but in no
case shall a shipboard employment contract 'sic*, or in any !ay conflict !ith any
other pro&ision embodied in the standard format/
5t took three years for the 8S2 to implement reEuirements !hich, under the la!, they !ere obliged to
follo! and eCecute immediately/ During those three years, the incident in <ancou&er happened/ The
terms and conditions agreed upon in <ancou&er !ere !ell !ithin 5L" rates e&en if they !ere abo&e
8S2 standards at the time/
The sanctions applied by 8S2 and affirmed by 8L#) are moreo&er not in keeping !ith the basic
premise that this )ourt stressed in the (ir.$en Shipping case 's%pra* that the ,inistry no! the
Department of Labor and (mployment and all its agencies eCist primarily for the !orkingman+s
interest and the nation+s as a !hole/
5mplicit in these petitions and the only reason for the 8S2 to take the side of foreign shipo!ners
against =ilipino seamen is the Dkilling the goose !hich lays the golden eggsD argument/ 3e reiterate
the ruling of the )ourt in (ir.$en Shipping 'supra*
There are &arious arguments raised by the petitioners but the common thread
running through all of them is the contention, if not the dismal prophecy, that if the
respondent seamen are sustained by this )ourt, !e !ould in effect Dkill the hen that
lays the golden egg/D 5n other !ords, =ilipino seamen, admittedly among the best in
the !orld, should remain satisfied !ith relati&ely lo!er if not the lo!est, international
rates of compensation, should not agitate for higher !ages !hile their contracts of
employment are subsisting, should accept as sacred, iron clad, and immutable the
side contracts !hich reEuire; them to falsely pretend to be members of international
labor federations, pretend to recei&e higher salaries at certain foreign ports only to
return the increased pay once the ship lea&es that port, should stifle not only their
right to ask for impro&ed terms of employment but their freedom of speech and
eCpression, and should suffer instant termination of employment at the slightest sign
of dissatisfaction !ith no protection from their ?o&ernment and their courts/
"ther!ise, the petitioners contend that =ilipinos !ould no longer be accepted as
seamen, those employed !ould lose their Fobs, and the still unemployed !ould be
left hopeless/
This is not the first time and it !ill not be the last !here the threat of unemployment and loss of Fobs
!ould be used to argue against the interests of laborH !here efforts by !orkingmen to better their
terms of employment !ould be characteri6ed as preFudicing the interests of labor as a !hole/
CCC CCC CCC
@nionism, employers+ liability acts, minimum !ages, !orkmen+s compensation, social
security and collecti&e bargaining to name a fe! !ere all initially opposed by
employers and e&en !ell meaning leaders of go&ernment and society as Dkilling the
hen or goose !hich lays the golden eggs/D The claims of !orkingmen !ere described
as outrageously inFurious not only to the employer but more so to the employees
themsel&es before these claims or demands !ere established by la! and
Furisprudence as DrightsD and before these !ere pro&ed beneficial to management,
labor, and the national as a !hole beyond reasonable doubt/
The case before us does not represent any maFor ad&ance in the rights of labor and
the !orkingmen/ The pri&ate respondents merely sought rights already established/
8o matter ho! much the petitioner1employer tries to present itself as speaking for the
entire industry, there is no e&idence that it is typical of employers hiring =ilipino
seamen or that it can speak for them/
The contention that manning industries in the 0hilippines !ould not sur&i&e if the
instant case is not decided in fa&or of the petitioner is not supported by e&idence/
The 3allem case !as decided on =ebruary 24, 1981/ There ha&e been no se&ere
repercussions, no drying up of employment opportunities for seamen, and none of
the dire conseEuences repeatedly emphasi6ed by the petitioner/ 3hy should <ir19en
be an eCceptionR
The !ages of seamen engaged in international shipping are shouldered by the
foreign principal/ The local manning office is an agent !hose primary function is
recruitment and !ho usually gets a lump sum from the shipo!ner to defray the
salaries of the cre!/ The hiring of seamen and the determination of their
compensation is subFect to the interplay of &arious market factors and one key factor
is ho! much in terms of profits the local manning office and the foreign shipo!ner
may reali6e after the costs of the &oyage are met/ %nd costs include salaries of
officers and cre! members/ 'at pp/ :8:1:8*
The 7allem Shipping case, !as decided in 1981/ (ir.$en Shipping !as decided in 198-/ 5t is no!
1989/ There has+been no drying up of employment opportunities for =ilipino seamen/ 8ot only ha&e
their !ages impro&ed thus leading 5T= to be placid and Euiet all these years insofar as =ilipinos are
concerned but the hiring of 0hilippine seamen is at its highest le&el e&er/
#eporting its acti&ities for the year 1988, the 0hilippine "&erseas (mployment %dministration
'0"(%* stated that there !ill be an increase in demand for seamen based o&erseas in 1989
boosting the number to as high as 14:,444/ This !ill represent a 9/: percent increase from the 1988
aggregate/ '2usiness 3orld, :e)s Brie"s,9anuary 11, 1989 at page 2* %ccording to the 0"(%,
seabased !orkers numbering 9:,91- in 1988 eCceeded by a !ide margin of 28/1: percent the year
end total in 198./ The report sho!s that sea1based !orkers posted bigger monthly increments
compared to those of landbased !orkers/ 'The 2usiness Star, ndicators, 9anuary 11, 1988 at page
2*
%ugmenting this optimistic report of 0"(% %dministrator Tomas %chacoso is the statement of
Secretary of Labor =ranklin ,/ Drilon that the 0hilippines has a big Fump o&er other cre!ing nations
because of the =ilipinos+ abilities compared !ith any (uropean or !estem cre!ing country/ Drilon
added that cruise shipping is also a gro!ing market for =ilipino seafarers because of their fleCibility
in handling odd Fobs and their eCpertise in handling almost all types of ships, including luCury liners/
',anila 2ulletin, More 9ilipino Seamen ?xpected -evelopment, December 2., 1988 at page
29*/l F)phL*.=Pt 0arenthetically, the minimum monthly salary of able bodied seamen set by the 5L" and adhered
to by the 0hilippines is no! P2./44 'id.* more than double the P1-4/44 sought to be enforced by the
public respondents in these petitions/
The eCperience from 1981 to the present &indicates the finding in (ir.$en Shipping that a decision in
fa&or of the seamen !ould not necessarily mean se&ere repercussions, drying up of employment
opportunities for seamen, and other dire conseEuences predicted by manning agencies and
recruiters in the 0hilippines/
=rom the foregoing, !e find that the 8S2 and 8L#) committed gra&e abuse of discretion in finding
the petitioners guilty of using intimidation and illegal means in breaching their contracts of
employment and punishing them for these alleged offenses/ )onseEuently, the criminal prosecutions
for estafa in ?/#/ 8os/ :.999 and :814-1:- should be dismissed/
3>(#(="#(, the petitions are hereby ?#%8T(D/ The decisions of the 8ational Seamen 2oard
and 8ational Labor #elations )ommission in ?/ #/ 8os/ 4.81199 are #(<(#S(D and S(T %S5D(
and a ne! one is entered holding the petitioners not guilty of the offenses for !hich they !ere
charged/ The petitioners+ suspension from the 8ational Seamen 2oard+s #egistry for three '-* years
is L5=T(D/ The pri&ate respondent is ordered to pay the petitioners their earned but unpaid !ages
and o&ertime pay7allo!ance from 8o&ember 1, 19.8 to December 14, 19.8 according to the rates in
the Special %greement that the parties entered into in <ancou&er, )anada/
The criminal cases for estafa, subFect matter of ?/ #/ 8os/ :.999 and :814-1:-, are ordered
D5S,5SS(D/
S" "#D(#(D/
:arvasa, Melencio.Herrera, &r%<, Paras, ;ancayco, Padilla, Bidin, Sarmiento, &ortes, ;ri=/o.
A>%ino, Medialdea and Regalado, $$., conc%r.
9ernan, &.$., is on leave.
9eliciano, $., too4 no part.
Chave6 vs. 4onto;.ere6, "4" SCRA 7! , March %1, 1&&*
Case (itle : ESALYN CHA9EA, petitioner, s. HON. EDNA !ONTO;PEREA,
HON. RO#ELIO T. RAYALA, HON. DOMIN#O H. AAPANTA, HON. 0OSE N.
SARMIENTO, CENTR>M PROMOTIONS = PLACEMENT CORPORATION, 0OSE A.
AA>CENA, 0R., 'nd TIMES S>RETY = INS>RANCE COMPANY, INC.,
respondents.Case )at$re : PETITION %or &ertior'ri to reie( ' de&ision o%
t)e N'tion'- L'bor Re-'tions Co//ission.
Syllabi Class : L'bor L'(*Cii- L'(*L'&)es
Syllabi:
1. Labor Law; &ourt holds that the managerial commission agreement
executed by petitioner to authori@e her =apanese employer to deduct 7wo
0undred Eifty -.#. Dollars from her monthly basic salary is void because it is
against our existing laws morals and public policy.2
". Sa#e; Sa#e; &ourt holds that the doctrine of laches is inapplicable to
petitioner.-
>%n the case at bench petitioner filed her claim well within the three-year
prescriptive period for the filing of money claims set forth in /rticle C*( of
the Labor &ode. Eor this reason we hold the doctrine of laches inapplicable
to petitioner.
!. Sa#e; Sa#e; 7here is no absolute rule as to what constitutes laches.-
>7he doctrine of laches is based upon grounds of public policy which
requires for the peace of society the discouragement of stale claims and is
principally a question of the inequity or unfairness of permitting a right or
claim to be enforced or asserted. 7here is no absolute rule as to what
constitutes lachesF each case is to be determined according to its particular
circumstances. 7he question of laches is addressed to the sound discretion
of the court and since it is an equitable doctrine its application is controlled
by equitable considerations. %t cannot be wor!ed to defeat .ustice or to
perpetrate fraud and in.ustice.
4. $i"il Law; Lac!es; Definition of Laches.-
>Laches has been defined as the failure or neglect for an unreasonable and
unexplained length of time to do that which by exercising due diligence
could or should have been done earlier thus giving rise to a presumption
that the party entitled to assert it either has abandoned or declined to assert
it. %t is not concerned with mere lapse of timeF the fact of delay standing
alone is insufficient to constitute laches.
*. Sa#e; 7he basic salary of 'ne 7housand Eive 0undred -.#. Dollars
guaranteed to petitioner under the partiesI standard employment contract is
in accordance with the minimum employment standards with respect to
wages set by the P'3/.2
+ivision: SECOND DI9ISION
+oc,et )$-ber: #.R. No. +43242
Co$nsel: "e-i5 C. C)'e<, An,e- E. #'rrido
.onente: P>NO
+ispositive .ortion:
IN 9IE6 6HEREO", t)e petition is #RANTED. T)e De&isions o% respondent
POEA Ad/inistr'tor 'nd NLRC Co//issioners in POEA C'se No. AdE. 3+;4?;
+33 BERC, respe&tie-y d'ted "ebr.'ry +1 'nd De&e/ber ?3, +33?, 'nd t)e
Reso-.tion o% t)e NLRC, d'ted M'r&) ?H, +33H, 're RE9ERSED 'nd SET
ASIDE. Pri'te respondents 're )e-d Eoint-y 'nd seer'--y -i'b-e to petitioner
%or t)e p'y/ent o% SI$ THO>SAND >S DOLLARS B>SID,444.44C in .np'id
(',es. Costs ','inst pri'te respondents.
"ne of the anguished cries in our society today is that !hile our la!s appear to protect the poor,
their interpretation is sometimes anti1poor/ 5n the case at bench, petitioner, a poor, uncounselled
entertainment dancer signed a contract !ith her 9apanese employer calling for a monthly salary of
"ne Thousand =i&e >undred @/S/ Dollars '@SP1,:44* but later had to sign an immoral side
agreement reducing her salary belo! the minimum standard set by the 0"(%/ 0etitioner in&oked the
la! to collect her salary differentials, but incredibly found public respondent straining the seams of
our la! to disfa&or her/ There is no greater disappointment to the poor like petitioner than to disco&er
the ugly reality behind the beautiful rhetoric of la!s/ 3e !ill not allo! this tra&esty/
This is a petition for certiorari to re&ie! the Decision of the 8ational Labor #elations )ommission
'8L#)*,
1
dated December 29, 1992, !hich affirmed the Decision of public respondent 0hilippine
"&erseas (mployment %gency '0"(%* %dministrator 9ose 8/ Sarmiento, dated =ebruary 1., 1992,
dismissing petitioner+s complaint for unpaid salaries amounting to SiC Thousand Dollars '@SP,444/44*/
The facts are undisputed/
"n December 1, 1988, petitioner, an entertainment dancer, entered into a standard employment
contract for o&erseas =ilipino artists and entertainers !ith 0lanning 9apan )o/, Ltd/,
2
through its
0hilippine representati&e, pri&ate respondent )entrum 0lacement B 0romotions )orporation/ The contract
had a duration of t!o '2* to siC '* months, and petitioner !as to be paid a monthly compensation of "ne
Thousand =i&e >undred Dollars '@SP1,:444/44*/ "n December :, 1888, the 0"(% appro&ed the
contract/ SubseEuently, petitioner eCecuted the follo!ing side agreement !ith her 9apanese employer
through her local manager, 9a6 Talents 0romotion;
Date; Dec/ 14, 1988
S@29()T; Salary Deduction
,%8%?(#5%L )",,5SS5"8
D%T( "= D(0%#T@#(; YYYYYYYYYYYYYYYYY
%TT(8T5"8; ,#/ 53%T%
5, ?SA#C: &HA(?Z, -A:&?R, do hereby !ith my o!n free !ill and &oluntarily ha&e
the honor to authori6e your good office to please deduct the amount of !7O
H0:-R?- 99!C -O##ARS 'P2:4* from my contracted monthly salary of S?(?:
H0:-R?- 99!C -O##ARS 5R,236 as monthly commission for my ,anager, ,r/
9ose %/ %6ucena, 9r/
That, my monthly salary 'net* is 9(? H0:-R?- -O##ARS 'P:44*/
'sgd/ by petitioner*
3
"n December 1, 1988, petitioner left for "saka, 9apan, !here she !orked for siC '* months, until
9une 14, 1989/ She came back to the 0hilippines on 9une 14, 1989/
0etitioner instituted the case at bench for underpayment of !ages !ith the 0"(% on =ebruary 21,
1991/ She prayed for the payment of SiC Thousand @/S/ Dollars '@SP,444/44*, representing the
unpaid portion of her basic salary for siC months/ )harged in the case !ere pri&ate respondent
)entrum 0romotions and 0lacement )orporation, the 0hilippine representati&e of 0lanning 9apan,
)o/, 5nc/, its insurer, Times Surety and 5nsurance )o/, 5nc/, and 9a6 Talents 0romotion/
The complaint !as dismissed by public respondent 0"(% %dministrator on =ebruary 1., 1992/ >e
ratiocinated,inter alia;
/ / / %pparently and from all indications, complainant 'referring to petitioner herein*
!as satisfied and did not ha&e any complaint 'about* anything regarding her
employment in 9apan until after almost t!o '2* years '!hen* she filed the instant
complaint on =ebruary 21, 1991/ The records sho! that after signing the Standard
(mployment )ontract on December 1, 1988, she entered into a side agreement !ith
the 9apanese employer thru her local manager, 9a6 Talents 0romotion consenting to
a monthly salary of @SP.:4/44 !hich she affirmed during the conference of ,ay 21,
1991/ #espondent agency had no kno!ledge nor participation in the said agreement
such that it could not be faulted for &iolation of the Standard (mployment )ontract
regarding the stipulated salary/ 3e cannot take cogni6ance of such &iolation !hen
one of the principal party 'sic* thereto opted to recei&e a salary different from !hat
has been stipulated in their contract, especially so if the contracting party did not
consent7participate in such arrangement/ )omplainant 'petitioner* cannot no!
demand from respondent agency to pay her the salary based 'on* the processed
(mployment )ontract for she is no! considered in bad faith and hence, estopped
from claiming thereto thru her o!n act of consenting and agreeing to recei&e a salary
not in accordance !ith her contract of employment/ ,oreo&er, her self1imposed
silence for a long period of time !orked to her o!n disad&antage as she allo!ed
laches to pre&ail !hich barred respondent from doing something at the outset/
8ormally, if a person+s right 'is* &iolated, she7he !ould immediately react to protect
her7his rights !hich is not true in the case at bar/
The term laches has been defined as one+s negligence or failure to assert his right in
due time or !ithin reasonable time from the accrual of his cause of action, thus,
leading another party to belie&e that there is nothing !rong !ith his o!n claim/ This
resulted in placing the negligent party in estoppel to assert or enforce his right/ / / /
Like!ise, the Supreme )ourt in one case held that not only is inaction !ithin
reasonable time to enforce a right the basic premise that underlies a &alid defense of
laches but such inaction e&inces implied consent or acEuiescence to the &iolation of
the right / / /
@nder the pre&ailing circumstances of this case, it is outside the regulatory po!ers of
the %dministration to rule on the liability of respondent 9a6 Talents 0romotions, if any,
'it* not being a licensed pri&ate agency but a promotion !hich trains entertainers for
abroad/
CCC CCC CCC
')itations omitted/*
"n appeal, the 8L#) upheld the Decision, thus;
3e fail to see any conspiracy that the complainant 'petitioner herein* imputes to the
respondents/ She has, to put it bluntly, not established and7or laid the basis for @s to
arri&e at a conclusion that the respondents ha&e been and should be held liable for
her claims/
The !ay 3e see it, the records do not at all indicate any connection bet!een
respondents )entrum 0romotion B 0lacement )orporation and 9a6 Talents
0romotion/
There is, therefore, no merit in the appeal/ >ence, 3e affirmed/
4
Dissatisfied !ith the 8L#)+s Decision, petitioner instituted the present petition, alleging that public
respondents committed gra&e abuse of discretion in finding; that she is guilty of lachesH that she
entered into a side contract on December 14, 1988 for the reduction of her basic salary to Se&en
>undred =ifty @/S/ Dollars '@SP.:4/44* !hich superseded, nullified and in&alidated the standard
employment contract she entered into on December 1, 1988H and that 0lanning 9apan )o/, Ltd/ and
pri&ate respondents are not solidarily liable to her for SiC Thousand @S Dollars '@SP,444/44* in
unpaid !ages/
5
The petition is meritorious/
=irstly, !e hold that the managerial commission agreement eCecuted by petitioner to authori6e her
9apanese (mployer to deduct T!o >undred =ifty @/S/ Dollars '@SP2:4/44* from her monthly basic
salary is &oid because it is against our eCisting la!s, morals and public policy/ 5t cannot supersede
the standard employment contract of December 1, 1988 appro&ed by the 0"(% !ith the follo!ing
stipulation appended thereto;
5t is understood that the terms and conditions stated in this (mployment )ontract are
in conformance !ith the Standard (mployment )ontract for (ntertainers prescribed
by the 0"(% under ,emorandum )ircular 8o/ 2, Series of 198/ Any alterations or
changes made in any part o" this contract )itho%t prior approval by the PO?A shall
be n%ll and voidH
6
'(mphasis supplied/*
The stipulation is in line !ith the pro&isions of #ule 55, 2ook < and Section 2'f*, #ule 5, 2ook <5 of the
1991 #ules and #egulations ?o&erning "&erseas (mployment, thus;
2ook <, #ule 55
Sec/ 1/ ?mployment Standards/ The %dministration shall determine, formulate and
re&ie! employment standards in accordance !ith the market de&elopment and
!elfare obFecti&es of the o&erseas employment program and the pre&ailing market
conditions/
Sec/ 2/ Minim%m Provisions "or &ontract/ The follo!ing shall be considered the
minimum reEuirements for contracts of employment;
a/ ?uaranteed !ages for regular !orking hours and o&ertime pay for
ser&ices rendered beyond regular !orking hours in accordance !ith
the standards established by the %dministrationH
CCC CCC CCC
Sec/ -/ Standard ?mployment &ontract/ The administration shall undertake
de&elopment and7or periodic re&ie! of region, country and skills specific employment
contracts for landbased !orkers and conduct regular re&ie! of standard employment
contracts 'S()* for seafarers/ These contracts shall pro&ide for minimum
employment standards herein enumerated under Section 2, of this #ule and shall
recogni6e the pre&ailing labor and social legislations at the site of employment and
international con&entions/ The S() shall set the minimum terms and conditions of
employment/ %ll employers and principals shall adopt the S() in connection !ith the
hiring of !orkers !ithout preFudice to their adoption of other terms and conditions of
employment o&er and abo&e the minimum standards of the %dministration/
'(mphasis supplied/*
and
2""K <5, #@L( 5
Sec/ 2/ ;ro%nds "or s%spensionScancellation o" license/
CCC CCC CCC
f/ Substituting or altering employment contracts and other documents appro&ed and
&erified by the %dministration from the time of actual signing thereof by the parties up
to and including the period of eCpiration of the same !ithout the %dministration+s
appro&al/
CCC CCC CCC
'(mphasis supplied/*
)learly, the basic salary of "ne Thousand =i&e >undred @/S/ Dollars '@SP1,:44/44* guaranteed to
petitioner under the parties+ standard employment contract is in accordance !ith
the minim%m employment standards !ith respect to !ages set by the 0"(%, Thus, the side
agreement !hich reduced petitioner+s basic !age to Se&en >undred =ifty @/S/ Dollars '@SP.:4/44*
is null and &oid for &iolating the 0"(%+s minimum employment standards, and for not ha&ing been
appro&ed by the 0"(%/ 5ndeed, this side agreement is a scheme all too freEuently resorted to by
unscrupulous employers against our helpless o&erseas !orkers !ho are compelled to agree to
satisfy their basic economic needs/
Secondly/ The doctrine of laches or Dstale demandsD+ cannot be applied to petitioner/ Laches has
been defined as the failure or neglect for an %nreasonable and %nexplained length time to do that
!hich, by eCercising due diligence, could or should ha&e been done earlier,
7
thus gi&ing rise to a
presumption that the party entitled to assert it either has abandoned or declined to assert it/
"
5t is not
concerned !ith mere lapse of timeH the fact of delay, standing alone, is insufficient to constitute laches/
#
The doctrine of laches is based upon grounds of public policy !hich reEuires, for the peace of
society, the discouragement of stale claims, and is principally a Euestion of the ineEuity or unfairness
of permitting a right or claim to be enforced or asserted/
1$
There is no absolute rule as to !hat
constitutes lachesH each case is to be determined according to its particular circumstances/ The Euestion
of laches is addressed to the sound discretion of the court, and since it is an eEuitable doctrine, its
application is controlled by eEuitable considerations/ 5t cannot be !orked to defeat Fustice or to perpetrate
fraud and inFustice/
11
5n the case at bench, petitioner filed her claim !ell !ithin the three1year prescripti&e period for the
filing of money claims set forth in %rticle 291 of the Labor )ode/
12
=or this reason, !e hold the doctrine
of laches inapplicable to petitioner/ %s !e ruled in mperial (ictory Shipping Agency v/ :#R&, 244 S)#%
1.8 '1991*;
/ / / Laches is a doctrine in eEuity !hile prescription is based on la!/ "ur courts are
basically courts of la! not courts of eEuity/ Thus, laches cannot be in&oked to resist
the enforcement of an eCisting legal right/ 3e ha&e ruled in Arsenal v/ ntermediate
Appellate &o%rt / / / that it is a long standing principle that eEuity follo!s the la!/
)ourts eCercising eEuity Furisdiction are bound by rules of la! and ha&e no arbitrary
discretion to disregard them/ 5n Zabat, $r/ v/ &o%rt o" Appeals / / /, this )ourt !as
more emphatic upholding the rules of procedure/ 3e said therein;
%s for eEuity, !hich has been aptly described as a DFustice outside
legality,D this applied only in the absence of, and ne&er against,
statutory la! or, as in this case, Fudicial rules of procedure/ Ae>%etas
n%ng%am contravenit legis/ The pertinent positi&e rules being present
here, they should pre1empt and pre&ail o&er all abstract arguments
based only on eEuity/
!h%s, )here the claim )as "iled )ithin the three.year stat%tory period, recovery
there"ore cannot be barred by laches/ &o%rts sho%ld never apply the doctrine o"
laches earlier than the expiration o" time limited "or the commencement o" actions at
la)/
CCC CCC CCC
'(mphasis supplied/ )itations omitted/*
Thirdly, pri&ate respondents )entrum and Times as !ell as 0lanning 9apan )o/, Ltd/ G the agency+s
foreign principal G are solidarily liable to petitioner for her unpaid !ages/ This is in accordance !ith
stipulation 1-/. of the parties+ standard employment contract !hich pro&ides;
1-/./ The (mployer 'in this case, 0lanning 9apan )o/, Ltd/ * and its locally 'sic*
agent7promoter7representati&e 'pri&ate respondent )entrum 0romotions B 0lacement
)orporation* shall be 'ointly and severally responsible for the proper implementation
of the terms and conditions in this )ontract/
13
'(mphasis supplied/*
This solidary liability also arises from the pro&isions of Section 14'a*'2*, #ule <, 2ook 5 of the
"mnibus #ules 5mplementing the Labor )ode, as amended, thus;
Sec/ 14/ Re>%irement be"ore recr%itment/ G 2efore recruiting any !orker, the pri&ate
employment agency shall submit to the 2ureau the follo!ing documents;
a* % formal appointment or agency contract eCecuted by a foreign1based employer in
fa&or of the license holder to recruit and hire personnel for the former / / / / Such
formal appointment or recruitment agreement shall contain the follo!ing pro&isions,
among others;
CCC CCC CCC
2/ Po)er o" the agency to s%e and be s%ed 'ointly and solidarily )ith the principal or
"oreign based employer "or any o" the violations o" the recr%itment agreement and
the contracts o" employment/
CCC CCC CCC
'(mphasis supplied/*
"ur o&erseas !orkers constitute an eCploited class/ ,ost of them come from the poorest sector of
our society/ They are thoroughly disad&antaged/ Their profile sho!s they li&e in suffocating slums,
trapped in an en&ironment of crime/ >ardly literate and in ill health, their only hope lies in Fobs they
can hardly find in our country/ Their unfortunate circumstance makes them easy prey to a&aricious
employers/ They !ill climb mountains, cross the seas, endure sla&e treatment in foreign lands Fust to
sur&i&e/ "ut of despondence, they !ill !ork under sub1human conditions and accept salaries belo!
the minimum/ The least !e can do is to protect them !ith our la!s in our land/ #egretfully,
respondent public officials !ho should sympathi6e !ith the !orking class appear to ha&e a different
orientation/
58 <5(3 3>(#("=, the petition is ?#%8T(D/ The Decisions of respondent 0"(% %dministrator
and 8L#) )ommissioners in 0"(% )ase 8o/ %dF/ 911421199 '(#*, respecti&ely dated =ebruary 1.
and December 29, 1992, and the #esolution of the 8L#), dated ,arch 2-, 199-, are #(<(#S(D
and S(T %S5D(/ 0ri&ate respondents are held Fointly and se&erally liable to petitioner for the
payment of S5$ T>"@S%8D @S D"LL%#S '@SP,444/44* in unpaid !ages/ )osts against pri&ate
respondents/
S" "#D(#(D/
Cadalin vs. .<1A=s Ad-inistrator, "!' SCRA 7"1 , +ece-ber %*, 1&&4
Case (itle : !IEN9ENIDO M. CADALIN, ROLANDO M. AM>L, DONATO !.
E9AN#ELISTA, 'nd t)e rest o% +,1D1 NAMED;COMPLAINANTS, t)r. 'nd by
t)eir Attorney;in;%'&t, Atty. #ERARDO A. DEL M>NDO, petitioners, s.
PHILIPPINE O9ERSEAS EMPLOYMENT ADMINISTRATIONS ADMIN;ISTRATOR,
NATIONAL LA!OR RELATIONS COMMISSION, !RO6N = ROOT
INTERNATIONAL, INC. ANDMOR ASIA INTER;NATIONAL !>ILDERS
CORPORATION, respondents., !IEN9ENIDO M. CADALIN, ET AL., petitioners,
s. HON. NATIONAL LA!OR RELATIONS COMMISSION, !RO6N = ROOT
INTERNATIONAL, INC. 'ndMor ASIA INTERNATIONAL !>ILDERS
CORPORATION, respondents., ASIA INTERNATIONAL !>ILDER
CORPORATION 'nd !RO6N = ROOT INTERNATIONAL, INC., petitioners, s.
NATIONAL LA!OR RELATIONS COMMISSION, !IEN9ENIDO M. CADALIN,
ROLANDO M. AM>L, DONATO !. E9AN#ELISTA, ROMEO PATA#, RIAALINO
REYES, I#NACIO DE 9ERA, SOLOMON !. REYES, 0OSE M. A!AN, EMI#DIO N.
A!ARK>EA, ANTONIO AC>PAN, ROMEO AC>PAN, !EN0AMIN ALE0ANDRE,
6IL"REDO D. ALI#ADO, MARTIN AMISTAD, 0R., ROLANDO !. AM>L,
AMORSOLO ANADIN#, ANTONIO T. AN#LO, 9ICENTE ARLITA, HER!ERT AYO,
SIL9ERIO !ALATAAO, AL"REDO !ALO!O, "ALCONERO !ANAA#, RAMON
!AR!OSA, "ELI$ !ARCENA, "ERNANDO !AS, MARIO !ATACLAN, RO!ERTO
S. !ATICA, ENRICO !ELEN, ARISTEO !ICOL, LARRY C. !ICOL, PETRONILLO
!ISCOCHO, "ELI$ M. !O!IER, DIONISIO !O!ON#O, !AYANI S.
!RACAMANTE, PA!LITO !>STILLO, #>ILLERMO CA!EAAS, !IEN9ENIDO
CADALIN, RODOL"O CA#ATAN, AMANTE CAILAO, IRENEO CANDOR, 0OSE
CASTILLO, MAN>EL CASTILLO, REMAR CASTRO0ERES, REYNALDO CAYAS,
ROMEO CECILIO, TEOD>LO CRE>S, !AYANI DAYRIT, RICARDO DAYRIT,
ERNESTO T. DELA CR>A, "RANCISCO DE #>AMAN, ONO"RE DE RAMA,
I#NACIO DE 9ERA, MODESTO DIAON, REYNALDO DIAON, ANTONIO S.
DOMIN#>EA, #IL!ERT E!RADA, RICARDO E!RADA, ANTONIO E0ERCITO,
0R., ED>ARTE ERIDAO, ELADIO ESCOTOTO, 0OHN ES#>ERRA, ED>ARDO
ESPIRIT>, ERNESTO ESPIRIT>, RODOL"O ESPIRIT>, NESTOR M. ESTE9A,
!EN0AMIN ESTRADA, 9ALERIO E9AN#ELISTA, OLI#ARIO "RANCISCO, 0ES>S
#A!A6AN, ROLANDO #ARCIA, AN#EL #>DA, PACITO HERNANDEA,
ANTONIO HILARIO, HENRY L. 0ACO!, HONESTO 0ARDINIANO, ANTONIO
0OCSON, #ERARDO LACSAMANA, E"REN >. LIRIO, LORETO LONTOC, ISRAEL
LORENAO, ALEN0ANDRO LORINO, 0OSE MA!ALAY, HERMIE MARANAN,
LEO9I#ILDO MARCIAL, NOEL MARTINEA, DANTE MATREO, L>CIANO
MELENDEA, RENATO MELO, "RANCIS MEDIODIA, 0OSE C. MILANES,
RAYM>NDO C. MILAY, CRESENCIANO MIRANDA,, ILDE"ONSO C. MOLINA,
ARMANDO !. MONDE0AR, RES>RRECCION D. NAAARENO, 0>AN OLINDO,
"RANCISCO R. OLI9ARES, PEDRO OR!ISTA, 0R., RICARDO ORDONEA, ERNIE
PANCHO, 0OSE PANCHO, #OR#ONIO P. PARALA, MODESTO PINPIN, 0>ANITO
PAREA, ROMEO I. PATA#, "RANCISCO PINPIN, LEONARDO PO!LETE, 0AIME
POLLOS, DOMIN#O PONDALIS, E>#ENIO RAMIREA, L>CIEN M. RESPALL,
#A>DENCIO RETANAN, 0R., TOMAS !. RETENER, AL9IN C. REYES, RIAALINO
REYES, SOLOMON !. REYES, 9IR#ILIO #. RICAAA, RODELIO RIETA, 0R.,
!ENITO RI9ERA, 0R., !ERNARDO 0. RO!ILLOS, PA!LO A. RO!LES, 0OSE
RO!LEAA, K>IRINO RONK>ILLO, A9ELINO M. ROK>E, MENANDRO L.
SA!INO, PEDRO SAL#ATAR, ED#ARDO SALON#A, N>MERIANO SAN MATEO,
"ELIAARDO DE LOS SANTOS, 0R., #A!RIEL SANTOS, 0>ANITO SANTOS,
PAK>ITO SOLANTE, CONRADO A. SOLIS, 0R., RODOL"O S>LTAN, ISAIAS
TALACTAC, 6ILLIAM TAR>C, MENANDRO TEMPROSA, !IEN9ENIDO S.
TOLENTINO, !ENEDICTO TORRES, MA$IMIANO TORRES, "RANCISCO #.
TRIAS, SER#IO A. >RSOLINO, RO#ELIO 9ALDEA, LE#ORIO E. 9ER#ARA,
DEL"IN 9ICTORIA, #IL!ERT 9ICTORIA, HERNANE 9ICTORIANO, "RANCISCO
9ILLA"LORES, DOMIN#O 9ILLAHERMOSA, ROLANDO 9ILLALO!OS, ANTONIO
9ILLA>A, DANILO 9ILLAN>E9A, RO#ELIO 9ILLAN>E9A, AN#EL 9ILLAR!A,
0>ANITO 9ILLARINO, "RANCISCO AARA, RO#ELIO AALA#OS, NICANOR !.
A!AD, ANDRES A!ANES, REYNALDO A!ANES, ED>ARDO A!ANTE, 0OSE
A!ARRO, 0OSE"INO A!ARRO, CELSO S. A!ELANIO, HERMINIO A!ELLA,
MI#>EL A!ESTANO, RODRI#O #. A!>!O, 0OSE !. A!>STAN, DANTE
ACERES, REYNALDO S. ACO0IDO, LEO6ILIN ACTA, E>#ENIO C. AC>EAA,
ED>ARDO AC>PAN, REYNALDO AC>PAN, SOLANO AC>PAN, MAN>EL P.
ADANA, "LORENTINO R. A#NE, K>ITERIO R. A#>DO, MAN>EL P.
A#>INALDO, DANTE A#>IRRE, HERMINIO A#>IRRE, #ONAALO AL!ERTO,
0R., CONRADO ALCANTARA, LAM!ERTO K. ALCANTARA, MARIANITO 0.
ALCANTARA, !ENCIO ALDO9ER, E>LALIO 9. ALE0ANDRO, !EN0AMIN
ALE0ANDRO, ED>ARDO L. ALE0ANDRO, MA$IMINO ALE0ANDRO, AL!ERTO,
ALMENAR, ARNALDO ALONAO, AMADO ALORIA, CAMILO AL9AREA, MAN>EL
C. AL9AREA, !EN0AMIN R. AM!ROCIO, CARLOS AMORES, !ERNARD P.
ANCHETA, TIMOTEO O. ANCHETA, 0EO"REY ANI, ELINO P. ANTILLON,
ARMANDRO !. ANTIPONO, LARRY T. ANTONIO, ANTONIO APILADO, ART>RO
P. APILADO, "RANCISCO APOLINARIO, !ARTOLOME M. AK>INO, ISIDRO
AK>INO, PASTOR AK>INO, ROSENDO M. AK>INO, RO!ERTO ARAN#ORIN,
!EN0AMIN O. ARATEA, ART>RO 9. ARA>LLO, PR>DENCIO ARA>LLO,
ALE$ANDER ARCAIRA, "RANCISCO ARCIA#A, 0OSE ARE9ALO, 0>ANTO
ARE9ALO, RAMON ARE9ALO, RODOL"O ARE9ALO, E>LALIO AR#>ELLES,
6IL"REDO P. ARICA, 0OSE M. ADESILLO, ANTONIO AS>NCION, ARTEMIO M.
AS>NCION, ED#ARDO AS>NCION, RE$Y M. AS>NCION, 9ICENTE A>RELIO,
AN#EL A>STRIA, RICARDO P. A9ERILLA, 0R., 9IR#ILIO A9ILA, !ARTOLOME
A$ALAN, AL"REDO !A!ILONIA, "ELIMON !ACAL, 0OSE L. !ACANI, ROM>LO
R. !AL!IERAN, 9ICENTE !AL!IERAN, RODOL"O !ALIT!IT, TEODORO Y.
!ALO!O, DANILO O. !AR!A, !ERNARDO !ARRO, 0>AN A. !ASILAN,
CE"ERINO !ATITIS, 9I9ENCIO C. !A>AN, #A>DENCIO S. !A>TISTA,
LEONARDO !A>TISTA, 0OSE D. !A>TISTA, ROSTICO !A>TISTA, R>PERTO !.
!A>TISTA, TEODORO S. !A>TISTA, 9IR#ILIO !A>TISTA, 0ES>S R. !AYA,
6INIE"REDO !AYACAL, 6INIE"REDO !E!IT, !EN #. !ELIR, ERIC !.
!ELTRAN, EMILIANO !ENALES, 0R., RA>L !ENITEA, PER"ECTO !ENSAN,
IRENEO !ER#ONIO, ISA!ELO !ERM>DEA, ROLANDO I. !ERM>DEA, DANILO
!ERON, !EN0AMIN !ERSAMIN, AN#ELITO !ICOL, ANSELMO !ICOL,
CELESTINO !ICOL, 0R., "RANCISCO !ICOL, RO#ELIO !ICOL, ROM>LO L.
!ICOL, RO#ELIO !ILLIONES, TEO"ILO N. !ITO, "ERNANDO !LANCO,
A>#>STO !ONDOC, DOMIN#O !ONDOC, PEPE S. !OOC, 0AMES R. !OR0A,
6IL"REDO !RACEROS, AN#ELES C. !RECINO, E>RECLYDON #. !RIONES,
AMADO !R>#E, PA!LITO !>DILLO, ARCHIMEDES !>ENA9ENT>RA, !ASILIO
!>ENA9ENT>RA, #>ILLERMO !>ENCONSE0O, ALE$ANDER !>STAMANTE,
9IR#ILIO !>TION#, 0R., HONESTO P. CA!ALLA, DEL"IN CA!ALLERO,
!ENEDICTO CA!ANI#AN, MOISES CA!ATAY, HERMANELI CA!RERA,, PEDRO
CA#ATAN, 0O9EN C. CA#AYAT, RO#ELIO L. CALA#OS, REYNALDO 9.
CALDE0ON, OSCAR C. CALDERON, NESTOR D. CALLE0A, RENATO R. CALMA,
NELSON T. CAMACHO, SANTOS T. CAMACHO, RO!ERTO CAMANA, "LORANTE
C. CAMANA#, ED#ARDO M. CANDA, SE9ERINO CANTOS, EPI"ANIO A.
CAPONPON, ELIAS D. CARILLO, 0R., ARMANDO CARREON, MENANDRO M.
CASTANEDA, !ENI#NO A. CASTILLO, CORNELIO L. CASTILLO, 0OSEPH !.
CASTILLO, ANSELMO CASTILLO, 0OAK>IN CASTILLO, PA!LO L. CASTILLO,
ROMEO P. CASTILLO, SESINANDO CATI!O#, DANILO CASTRO, PR>DENCIO
A. CASTRO, RAMO CASTRO, 0R., ROMEO A. DE CASTRO, 0AIME !. CATLI,
D>RANA D. CE"ERINO, RODOL"O !. CELIS, HERMINI#ILDO CEREAO,
9ICTORIANO CELESTINO, !EN0AMIN CHAN, ANTONIO C. CH>A, 9I9ENCIO
!. CIA!AL, RODRI#O CLARETE, A>#>STO COLOMA, T>RIANO CONCEPCION,
TERESITO CONSTANTINO, ARMANDO CORALES, RENATO C. CORC>ERA,
APOLINAR CORONADO, A!ELARDO CORONEL, "ELI$ CORONEL, 0R.,
LEONARDO CORP>A, 0ES>S M. CORRALES, CESAR CORTEMPRATO,
"RANCISCO O. COR9ERA, "RANCISCO COSTALES, SR., CELEDONIO
CREDITO, AL!ERTO A. CRE>S, ANACLETO 9. CR>A, DOMIN#O DELA CR>A,
EMILIANO DELA CR>A, 0R., PANCHITO CR>A, REYNALDO !. DELA CR>A,
RO!ERTO P. CR>A, TEODORO S. CR>A, AOSIMO DELA CR>A, DIONISIO A.
C>ARESMA, "ELIMON C>IAON, "ERMIN DA#ONDON, RICHARD DA#>INSIN,
CRISANTO A. DATAY, NICASIO DANTIN#>INOO, 0OSE DATOON, ED>ARDO
DA9ID, ENRICO T. DA9ID, "A9IO DA9ID, 9ICTORIANO S. DA9ID, ED#ARDO
N. DAYACAP, 0OSELITO T. DELOSO, CELERINO DE #>AMAN, ROM>LO DE
#>AMAN, LI!ERATO DE #>AMAN, 0OSE DE LEON, 0OSELITO L. DE L>M!AN,
NAPOLEON S. DE L>NA, RICARDO DE RAMA, #ENEROSO DEL ROSARIO,
AL!ERTO DELA CR>A, 0OSE DELA CR>A, LEONARDO DELOS REYES,
ERNESTO ". DIATA, ED>ARDO A. DIAA, "ELI$ DIAA, MELCHOR DIAA,
NICANOR S. DIAA, #ERARDO C. DI#A, CLEMENTE DIMAT>LAC, ROLANDO
DIONISIO, PHILIPP #. DISMAYA, !EN0AMIN DOCTOLERO, AL!ERTO STO.
DOMIN#O, !EN0AMIN E. DOAA, !EN0AMIN, D>PA, DANILO C. D>RAN,
#RE#ORIO D. D>RAN, RENATO A. ED>ARTE, #ODO"REDO E. EISMA, ARDON
!. ELLO, >!ED !. ELLO, 0OSE"INO ENANO, REYNALDO ENCARNACION,
ED#ARDO EN#>ANCIO, ELIAS EK>IPANO, "ELIAARDO ESCARMOSA, MI#>EL
ESCARMOSA, ARMANDO ESCO!AR, ROMEO T. ESC>YOS, AN#ELITO
ESPIRIT>, ED>ARDO S. ESPIRIT>, REYNALDO ESPIRIT>, ROLANDO
ESPIRIT>, 0>LIAN ESPRE#ANTE, I#MIDIO ESTANISLAO, ERNESTO M.
ESTE!AN, MELANIO R. ESTRO, ERNESTO M. ESTE9A, CONRADO EST>AR,
CLYDE EST>YE, ELISEO "A0ARDO, POR"IRIO "ALK>EAA, 6IL"REDO P.
"A>STINO, EMILIO E. "ERNANDEA, ARTEMIO "ERRER, MISAEL M.
"I#>RACION, ARMANDO ". "LORES, !EN0AMIN "LORES, ED#ARDO C.
"LORES, !>ENA9ENT>RA "RANCISCO, MAN>EL S. "RANCISCO, ROLANDO
"RANCISCO, 9ALERIANO "RANCISCO, RODOL"O #A!A6AN, ESMERALDO
#AH>TAN, CESAR C. #ALAN#, SANTIA#O N. #ALOSO, #A!RIEL #AM!OA,
!ERNARDO #ANDAMON, 0>AN #ANAON, ANDRES #ARCIA, 0R., ARMANDO
M. #ARCIA, E>#ENIO #ARCIA, MARCELO L. #ARCIA, PATRICIO L. #ARCIA,
0R., PONCIANO #. #ARCIA, PONCIANO #. #ARCIA, 0R., RA"AEL P. #ARCIA,
RO!ERTO S. #ARCIA, OSIAS #. #ARO"IL, RAYM>NDO C. #ARON, ROLANDO
#. #ATELA, A9ELINO #AYETA, RAYM>NDO #ERON, PLACIDO #ONAALES,
R>PERTO H. #ONAALES, RO#ELIO D. #>ANIO, MARTIN 9. #>ERRERO, 0R.,
ALE$IS #>NO, RICARDO L. #>NO, "RANCISCO #>PIT, DENNIS 0.
#>TIERREA, I#NACIO !. #>TIERREA, AN#ELITO DE #>AMAN, 0R., CESAR H.
HA!ANA, RA>L #. HERNANDEA, REYNALDO HERNANDEA, 0O9ENIANO D.
HILADO, 0>STO HILAPO, ROSTITO HINAHON, "ELICISIMO HIN#ADA,
ED>ARDO HIPOLITO, RA>L L. I#NACIO, MAN>EL L. ILA#AN, RENATO L.
ILA#AN, CONRADO A. INSION#, #RACIANO #. ISLA, ARNEL L. 0ACO!,
OSCAR 0. 0APITEN#A, CIRILO HIC!AN, MA$IMIANO HONRADES, #ENEROSO
I#NACIO, "ELIPE ILA#AN, E$PEDITO N. 0ACO!, MARIO 0ASMIN,
!IEN9ENIDO 0A9IER, ROMEO M. 0A9IER, PRIMO DE 0ES>S, REYNALDO DE
0ES>S, CARLOS A. 0IMENEA, DANILO E. 0IMENEA, PEDRO C. 0OAK>IN,
"ELIPE 6. 0OCSON, "ELINO M. 0OCSON, PEDRO N., 0OCSON, 9ALENTINO S.
0OCSON, PEDRO !. 0OLOYA, ESTE!AN P. 0OSE, 0R., RA>L 0OSE, RICARDO
SAN 0OSE, #ERTR>DO :A!I#TIN#, ED>ARDO S. :OLIMLIM, SR., LA>RO 0.
LA!AY, EMMAN>EL C. LA!ELLA, ED#ARDO !. LACERONA, 0OSE !. LACSON,
MARIO 0. LADINES, R>"INO LA#AC, RODRI#O LA#ANAPAN, E"REN M.
LAMADRID, #A>DENCIO LATANAN, 9IR#ILIO LATAYAN, EMILIANO LATO0A,
6ENCESLAO LA>REL, AL"REDO LA$AMANA, DANIEL R. LAAARO, ANTONIO
C. LEANO, ART>RO S. LE#ASPI, !ENITO DE LEMOS, 0R., PEDRO #. DE
LEON, MANOLITO C. LILOC, #ERARDO LIM>ACO, ERNESTO S. LISIN#,
RENATO LISIN#, 6IL"EREDO S. LISIN#, CRISP>LO LONTOC, PEDRO M.
LOPERA, RO#ELIO LOPERA, CARLITO M. LOPEA, CLODY LOPEA, #ARLITO
LOPEA, #EOR#E ". LOPEA, 9IR#ILIO M. LOPEA, !ERNARDITO #. LORE0A,
DOMIN#O !. LORICO, DOMIN#O LOYOLA, DANTE L>A#E, ANTONIO M.
L>ALHATI, EMMAN>EL L>ALHATI, 0R., LEONIDEA C. L>ALHATI, SE!ASTIAN
L>ALHATI, "RANCISCO L>!AT, ARMANDO L>CERO, 0OSELITO L. DE
L>M!AN, THOMAS 9ICENTE O. L>NA, NOLI MACALADLAD, AL"REDO
MACALINO, RICARDO MACALINO, ART>RO 9. MACARAI#, ERNESTO 9.
MACARAI#, RODOL"O 9. MACARAI#, !EN0AMIN MACATAN#AY,
HERMO#ENES MACATAN#AY, RODEL MACATAN#AY, ROM>LO MACATAN#AY,
OSIAS K. MADLAN#!AYAN, NICOLAS P. MADRID, EDEL!ERTO #. MA#AT,
E"REN C. MA#!AN>A, !EN0AMIN MA#!>HAT, AL"REDO C. MA#CALEN#,
ANTONIO MA#NAYE, AL"ONSO MA#PANTAY, RICARDO C. MA#PANTAY,
SIMEON M. MA#PANTAY, ARMANDO M. MA#SINO, MACARIO S. MA#SINO,
ANTONIO MA#TI!AY, 9ICTOR 9. MA#TI!AY, #ERONIMO MAHIL>M, MAN>EL
MALONAO, RICARDO MAMADIS, RODOL"O MANA, !ERNARDO A. MANALILI,
MAN>EL MANALILI, AN#ELO MANALO, A#>ILES L. MANALO, LEOPOLDO
MAN#AHAS, !AYANI MANI#!AS, ROLANDO C. MANIMTIM, DANIEL
MANONSON, ERNESTO ". MAN>EL, ED>ARDO MANAANO, RICARDO N. MAPA,
RAMON MAPILE, RO!ERTO C. MARANA, NEMESIO MARASI#AN, 6ENCESLAO
MARASI#AN, LEONARDO MARCELO, HENRY ". MARIANO, 0OEL MARIDA!LE,,
SANTOS E. MARINO, NARCISO A. MARK>EA, RICARDO MARTINEA, DIE#O
MASICAMPO, A>RELIO MATA!ERDE, RENATO MATILLA, 9ICTORIANO
MATILLA, 9IR#ILIO MEDEL, LOLITO M. MELECIO, !ENI#NO MELENDEA,
RENER 0. MEMI0E, REYNALDO ". MEMI0E, RODEL MEMI0E, A9ELINO
MENDOAA, 0R., CLARO MENDOAA, TIMOTEO MENDOAA, #RE#ORIO
MERCADO, ERNANI DELA MERCED, RICARDO MERCENA, NEMESIO
METRELLO, RODEL MEMI0E, #ASPAR MINIMO, !EN0AMIN MIRANDA,
"ELI$!ERTO D. MISA, CLA>DIO A. MODESTO, 0R., OSCAR MONDEDO,
#ENEROSO MONTON, RENATO MORADA, RICARDO MORADA, RODOL"O
MORADA, ROLANDO M. MORALES, "EDERICO M. MORENO, 9ICTORINO A.
MORTEL, 0R., ESPIRIT> A. M>NOA, I#NACIO M>NOA, ILDE"ONSO M>NOA,
RO#ELIO M>NOA, ERNESTO NAPALAN, MARCELO A. NARCIAO, REYNALDO
NATALIA, "ERNANDO C. NA9ARETTE, PACI"ICO D. NA9ARRO, "LORANTE
NAAARENO, RIAAL !. NAAARIO, 0OS>E NE#RITE, AL"REDO NEP>M>CENO,
HER!ERT #. N#, "LORENCIO NICOLAS, ERNESTO C. NINON, A9ELINO
N>K>I, NEMESIO D. O!A, DANILO OCAMPO, ED#ARDO OCAMPO, RODRI#O
E. OCAMPO, ANTONIO !. OCCIANO, REYNALDO P. OCSON, !EN0AMIN
ODESA, AN#EL OLASO, "RANCISCO OLI#ARIO, AOSIMO OLIM!O, !EN0AMIN
9. ORALLO, ROMEO S. ORI#INES, DANILO R. ORTANEA, 6IL"REDO OSIAS,
9IR#ILIO PA;A, DA9ID PAALAN, 0ES>S N. PACHECO, AL"ONSO L. PADILLA,
DANILO PA#SAN0AN, N>MERIANO PA#SISIHAN, RICARDO T. PA#>IO,
EMILIO PA:IN#AN, LEANDRO PALA!RICA, K>INCIANO PALO, 0OSE
PAMATIAN, #ONAALO PAN, POR"IRIO PAN, !IEN9ENIDO PAN#AN, ERNESTO
PAN#AN, "RANCISCO 9. PASIA, EDIL!ERTO PASIMIO, 0R., 0OSE 9. PASION,
AN#ELITO M. PENA, DIONISIO PENDRAS, HERMINIO PERALTA, REYNALDO
M. PERALTA, ANTONIO PEREA, ANTOLIANO E. PEREA, 0>AN PEREA, LEON
PEREA, ROMEO E. PEREA, ROM>LO PEREA, 6ILLIAM PEREA, "ERNANDO #.
PERINO, "LORENTINO DEL PILAR, DELMAR ". PINEDA, SAL9ADOR PINEDA,
ELIAALDE PINPIN, 6IL"REDO PINPIN, ART>RO PO!LETE, DOMINADOR R.
PRIELA, !>ENA9ENT>RA PR>DENTE, CARMELITO PR>DENTE,, DANTE
P>EYO, REYNALDO K. P>EYO, RODOL"O O. P>LIDO, ALE0ANDRO P>NIO,
"EDERICO K>IMAN, AL"REDO L. K>INTO, ROMEO K>INTOS, ED>ARDO 6.
RACA!O, RICARDO C. DE RAMA, RICARDO L. DE RAMA, ROLANDO DE RAMA,
"ERNANDO A. RAMIREA, LITO S. RAMIREA, RICARDO #. RAMIREA,
RODOL"O 9. RAMIREA, AL!ERTO RAMOS, ANSELMO C. RAMOS, TO!IAS
RAMOS, 6ILLAR"REDO RAYM>NDO, REYNADO RAK>EDAN, MAN>EL ".
RA9ELAS, 6IL"REDO D. RAYM>NDO, ERNESTO E. RECOLASO, AL!ERTO
REDAAA, ARTH>R RE0>SO, TORI!IO M. RELLAMA, 0AIME RELLOSA,
E>#ENIO A. REMOK>ILLO, #ERARDO RENTOAA, REDENTOR C. REY,
AL"REDO S. REYES, AMA!LE S. REYES, !ENEDICTO R. REYES, #RE#ORIO !.
REYES, 0OSE A. REYES, 0OSE C. REYES, ROM>LO M. REYES, SER#IO REYES,
ERNESTO ". RICO, "ERNANDO M. RICO, EMMAN>EL RIETA, RICARDO RIETA,
LEO !. RO!LES, R>!EN RO!LES, RODOL"O RO!LEAA, RODRI#O RO!LEAA,
ED>ARDO ROCA!O, ANTONIO R. RODRI#>EA, !ERNARDO RODRI#>EA,
ELI#IO RODRI#>EA, ALMONTE ROMEO, ELIAS RONK>ILLO, ELISE
RONK>ILLO, L>IS 9AL !. RONK>ILLO, REYNOSO P. RONK>ILLO, RODOL"O
RONK>ILLO, AN#EL ROSALES, RAMON ROSALES, AL!ERTO DEL ROSARIO,
#ENEROSO DEL ROSARIO, TEODORICO DEL ROSARIO, 9IR#ILIO L.
ROSARIO, CARLITO SAL9ADOR, 0OSE SAMPARADA, ERNESTO SAN PEDRO,
ADRIANO 9. SANCHA, #ERONIMO M. SANCHA, ARTEMIO !. SANCHEA,
NICASIO SANCHEA, APOLONIO P. SANTIA#O, 0OSELITO S. SANTIA#O,
SER#IO SANTIA#O, EDIL!ERTO C. SANTOS, E"REN S. SANTOS, RENATO D.
SANTOS, MI#>EL SAP>YOT, ALE$ S. SERK>INA, DOMINADOR P. SERRA,
ROMEO SIDRO, AMADO M. SILAN#, "A>STINO D. SILAN#, RODOL"O !. DE
SILOS, ANICETO #. SIL9A, ED#ARDO M. SIL9A, ROLANDO C. SIL9ERTO,
ARTH>R !. SIM!AHON, DOMIN#O SOLANO, 0OSELITO C. SOLANTE,
CARLITO SOLIS, CONRADO SOLIS, III, ED#ARDO SOLIS, ERNESTO SOLIS,
ISA#ANI M. SOLIS, ED>ARDO L. SOTTO, ERNESTO #. STA. MARIA, 9ICENTE
#. STELLA, "ELIMON S>PAN#, PETER TAN#>INOO, MA$IMINO TALI!SAO,
"ELICISMO P. TAL>SI:, "ERMIN TAR>C, 0R.,, LE9Y S. TEMPLO, RODOL"O S.
TIAMSON, LEONILO TIPOSO, ARNEL TOLENTINO, MARIO M. TOLENTINO,
"ELIPE TORRAL!A, 0O9ITO 9. TORRES, LEONARDO DE TORRES, #A9INO >.
T>AAON, A>#>STO !. T>N#>IA, "RANCISCO >MALI, SIMPLICIO >NIDA,
6IL"REDO 9. >NTALAN, ANTONIO 9ALDERAMA, RAMON 9ALDERAMA, NILO
9ALENCIANO, ED#ARDO C. 9ASK>EA, ELPIDIO 9ELASK>EA, NESTOR DE
9ERA, 6IL"REDO D. 9ERA, !IEN9ENIDO 9ER#ARA, AL"REDO 9ER#ARA,
RAMON R. 9ERAOSA, "ELICITO P. 9ICM>NDO, AL"REDO 9ICTORIANO,
TEO"ILO P. 9IDALLO, SA!INO N. 9IERNEA, 0ES>S 0. 9ILLA, 0O9EN
9ILLA!LANCO, ED#ARDO #. 9ILLA"LORES, CE"ERINO 9ILLA#ERA, ALE$
9ILLAHERMOAA, DANILO A. 9ILLAN>E9A, ELITO 9ILLAN>E9A, LEONARDO
M. 9ILLAN>E9A, MAN>EL R. 9ILLAN>E9A, NEPTHALI 9ILLAR, 0OSE 9.
9ILLAREAL, "ELICISIMO 9ILLARINO, RA"AEL 9ILLAROMAN, CARLOS
9ILLENA, "ERDINAND 9I9O, RO!ERTO YA!>T, 9ICENTE YN#ENTE, AND ORO
C. A>NI#A, respondents.Case )at$re : SPECIAL CI9IL ACTIONS in t)e
S.pre/e Co.rt. Certior'ri.
Syllabi Class : Con%-i&t o% L'(s*L'bor L'(*A&tions*0.risdi&tion*Eiden&e*
Contr'&ts*Ad/inistr'tie L'(*Pres&ription*A&tions*6ords 'nd
P)r'ses*O!orro(in, St't.te*P E5p-'ined*L'bor L'(*Oerse's Contr'&t
6orFers*Ri,)t to Speedy Disposition o% C'ses*C-'ss S.its*"or./ S)oppin,*
Le,'- Et)i&s*Attorneys*Attorneys Liens*Con%-i&t o% L'(s*Ad/inistr'tie L'(*
O%%er to Co/pro/ise*D.e Pro&ess
Syllabi:
1. $onflict of Laws; /s a general rule a foreign procedural law will not be
applied in the forum.2
". $onflict of Laws; Prescription; / law on prescription of actions is sui
generis in &onflict of Laws.2
!. $onflict of Laws; Prescription; &ctions; 4ords and
P!rases; :9orrowing Statte,; E/plained; 'ne form of 8borrowing
statutes9 provides that an action barred by the laws of the place where it
accrued will not be enforced in the forum even though the local statute has
not run against it.2
4. $onflict of Laws; Prescription; &ctions; #ection B+ of the &ode of &ivil
Procedure has not been repealed or amended by the &ivil &ode.2
*. $onflict of Laws; Prescription; Labor Law; 7he courts of the forum
will not enforce any foreign claim obnoxious to the forumIs public policy.-
%n the light of the (*+$ &onstitution however #ection B+ cannot be
enforced ex proprio vigore insofar as it ordains the application in this
.urisdiction of #ection (5) of the /miri Decree 4o. C; of (*$). 7he courts of
the forum will not enforce any foreign claim obnoxious to the forumIs public
policy "&anadian 4orthern Railway &o. v. 3ggen C5C -.#. 55; B6 #. &t.
B6C )B L. ed. $(; M(*C6N,. 7o enforce the one-year prescriptive period of
the /miri Decree 4o. C; of (*$) as regards the claims in question would
contravene the public policy on the protection to labor.
. Labor Law; O"erseas $ontract 4or5ers; Prescription; /rticle C*( of
the Labor &ode applies to money claims arising from employer-employee
relations including those arising from application of foreign laws providing
for greater employee benefits.2
7. Labor Law; O"erseas $ontract 4or5ers; Rig!t to Speedy
Disposition of $ases; 8#peedy disposition of cases9 is a relative term a
flexible concept consistent with delays and depends upon the circumstances
of each case.2
'. Labor Law; O"erseas $ontract 4or5ers; Rig!t to Speedy
Disposition of $ases; 3ven if the cases too! seven years to be disposed of
in the administrative level there is no violation of the constitutional right to
speedy disposition of cases where the cases are not of the run-of-the-mill
variety involve a total of ($)$ claimants hired on various dates with
claims totalling more than -#R)5 million.2
&. Labor Law; O"erseas $ontract 4or5ers; &ctions; $lass
Sits; <here the claims are for benefits granted under the Dahrain law only
the claimants who wor!ed in Dahrain shall be entitled to file their claims in a
class suit excluding those who wor!ed elsewhere.2
1%. Labor Law; O"erseas $ontract 4or5ers; &ctions; $lass Sits; /
principle basic to the concept of 8class suit9 is that plaintiffs brought on the
record must fairly represent and protect the interests of the others such
that if it appears that each claimant is only interested in collecting his own
claims and has no concern in protecting the interests of the others the most
that can be accorded to them is to be allowed to .oin as plaintiffs in one
complaint.2
11. Labor Law; O"erseas $ontract 4or5ers; &ctions; $lass Sits; 7he
#upreme &ourt is extra-cautious in allowing class suits because they are the
exceptions to the condition sine qua non requiring the .oinder of all
indispensable parties.2
1". &ctions; 3or# S!opping; Defore /dministrative &ircular 4o. 6B-*B
the /nti-Eorum #hopping Rule "Revised &ircular 4o. C+-*(, applied only to
petitions filed with the #upreme &ourt and the &ourt of /ppeals.2
1!. %risdiction; Legal Et!ics; &ttorneys; 7he 4LR& and the P'3/ have
no .urisdiction to investigate charges of unethical conduct of lawyers.2
14. %risdiction; Legal Et!ics; &ttorneys; &omplaints for violation of the
&ode of Professional Responsibility should be filed in a separate and
appropriate proceeding.2
1*. %risdiction; &ttorneys Liens; / statement of a claim for a charging
lien should be filed with the court or administrative agency which renders
and executes the money .udgment.2
1. E"idence; $onflict of Laws; &d#inistrati"e Law; /n official
document from a foreign government can be admitted in evidence in
proceedings before an administrative body even without observing the rule
provided in #ection CB Rule (;C of the (*+* Revised Rules on 3vidence.2
17. E"idence; Offer to $o#pro#ise; %n civil cases an offer to settle a
claim is not an admission that anything is due and is not admissible in
evidence against the offeror.2
1'. $ontracts; O"erseas $ontract 4or5ers; /ny ambiguity in the
overseas-employment contracts should be interpreted against the parties
who drafted them.2
1&. $ontracts; $onflict of Laws; Parties to a contract may select the law
by which it is to be governed and instead of adopting the entire mass of the
foreign law the parties may .ust agree that specific provisions of a foreign
statute shall be deemed incorporated into their contract 8as a set of
terms.92
"%. $ontracts; $onflict of Laws; 7he choice of law must however bear
some relationship to the parties or their transaction.2
"1. &d#inistrati"e Law; De Process; 7here is no denial of due process
even if the respondents had no opportunity to refute the evidence of the
claimants before the P'3/ where they had all the opportunity to rebut said
evidence and to present their counter-evidence before the 4LR&.2
"". &d#inistrati"e Law; De Process; <hile technical rules of procedure
and evidence do not apply to the proceedings conducted by administrative
agencies there are cardinal rules which must be observed by the hearing
officers in order to comply with the due process requirements of the
&onstitution.2
+ivision: "IRST DI9ISION
+oc,et )$-ber: #.R. No. +4811D, #.R. Nos. +483++;+8, #.R. Nos.
+474?3;H?
Co$nsel: #er'rdo A. De- M.ndo 'nd Asso&i'tes, Ro/.-o, M'b'nt', S'yo&,
!.en'ent.r', De -os An,e-es L'( O%%i&es, "-or'nte M. De C'stro
.onente: K>IASON
+ispositive .ortion:
6HERE"ORE, '-- t)e t)ree petitions 're DISMISSED.
The petition in ?/#/ 8o/ 144.., entitled D2ien&enido ,/ )adalin, et/ al/ &/ 0hilippine "&erseas
(mployment %dministration+s %dministrator, et/ al/,D !as filed under #ule : of the #e&ised #ules of
)ourt;
'1* to modify the #esolution dated September 2, 1991 of the 8ational Labor
#elations )ommission '8L#)* in 0"(% )ases 8os/
L184141:::, L18:1141..., L18:1141..9 and L1814:144H '2* to render a ne!
decision; 'i* declaring pri&ate respondents as in defaultH 'ii* declaring the said labor
cases as a class suitH 'iii* ordering %sia 5nternational 2uilders )orporation '%52)* and
2ro!n and #oot 5nternational 5nc/ '2#55* to pay the claims of the 1,.. claimants in
said labor casesH 'i&* declaring %tty/ =lorante ,/ de )astro guilty of forum1shoppingH
and '&* dismissing 0"(% )ase 8o/ L1814:144H and
'-* to re&erse the #esolution dated ,arch 24, 1992 of 8L#), denying the motion for
reconsideration of its #esolution dated September 2, 1991 'Rollo, pp/ 81288*/
The petition in ?/#/ 8os/ 144911114, entitled D2ien&enido ,/ )adalin, et/ al/, &/ >on/ 8ational Labor
#elations )ommission, et/ al/,D !as filed under #ule : of the #e&ised #ules of )ourt;
'1* to re&erse the #esolution dated September 2, 1991 of 8L#) in 0"(% )ases
8os/ L184141:::, L18:1141..., L18:1141.99 and
L1814:144 insofar as it; 'i* applied the three1year prescripti&e period under the
Labor )ode of the 0hilippines instead of the ten1year prescripti&e period under the
)i&il )ode of the 0hilippinesH and 'ii* denied the
Dthree1hour daily a&erageD formula in the computation of petitioners+ o&ertime payH
and
'2* to re&erse the #esolution dated ,arch 24, 1992 of 8L#), denying the motion for
reconsideration of its #esolution dated September 2, 1991 'Rollo, pp/ 812:H 21224*/
The petition in ?/#/ 8os/ 14:4291-2, entitled D%sia 5nternational 2uilders )orporation, et/ al/, &/
8ational Labor #elations )ommission, et/ al/D !as filed under #ule : of the #e&ised #ules of )ourt;
'1* to re&erse the #esolution dated September 2, 1991 of 8L#) in 0"(% )ases
8os/ L184141:::, L18:1141..., L18:1141..9 and
L1814:144, insofar as it granted the claims of 149 claimantsH and
'2* to re&erse the #esolution dated ,arch 21, 1992 of 8L#) insofar as it denied the
motions for reconsideration of %52) and 2#55 'Rollo, pp/ 21:9H 112-4*/
The #esolution dated September 2, 1991 of 8L#), !hich modified the decision of 0"(% in four
labor cases; '1* a!arded monetary benefits only to 149 claimants and '2* directed Labor %rbiter
=atima 9/ =ranco to conduct hearings and to recei&e e&idence on the claims dismissed by the 0"(%
for lack of substantial e&idence or proof of employment/
&onsolidation o" &ases
?/#/ 8os/ 144.. and 14:4291-2 !ere originally raffled to the Third Di&ision !hile ?/#/ 8os/
144911114 !ere raffled to the Second Di&ision/ 5n the #esolution dated 9uly 2, 199-, the Second
Di&ision referred ?/#/ 8os/ 144911114 to the Third Di&ision '?/#/ 8os/ 144911114, Rollo, p/ 89:*/
5n the #esolution dated September 29, 199-, the Third Di&ision granted the motion filed in ?/#/ 8os/
144911114 for the consolidation of said cases !ith ?/#/ 8os/ 144.. and 14:4291-2, !hich !ere
assigned to the =irst Di&ision '?/#/ 8os/ 144911114, Rollo, pp/ 9811,14.H ?/#/ 8os/ 14:4291
-4, Rollo, pp/ -91-.., 4214-2*/ 5n the #esolution dated "ctober 2., 199-, the =irst Di&ision
granted the motion to consolidate ?/#/ 8os/ 144911114 !ith ?/#/ 8o/ 144.. '?/#/ 8os/ 1449111
14, Rollo, p/ 1149H ?/#/ 8os/ 14:4291-2, Rollo, p/ 1:2*/
5
"n 9une , 1984, 2ien&enido ,// )adalin, #olando ,/ %mul and Donato 2/ (&angelista, in their o!n
behalf and on behalf of .28 other o&erseas contract !orkers '")3s* instituted a class suit by filing
an D%mended )omplaintD !ith the 0hilippine "&erseas (mployment %dministration '0"(%* for
money claims arising from their recruitment by %52) and employment by 2#55 '0"(% )ase 8o/ L1
84141:::*/ The claimants !ere represented by %tty/ ?erardo del ,undo/
2#55 is a foreign corporation !ith headEuarters in >ouston, TeCas, and is engaged in constructionH
!hile %52) is a domestic corporation licensed as a ser&ice contractor to recruit, mobili6e and deploy
=ilipino !orkers for o&erseas employment on behalf of its foreign principals/
The amended complaint principally sought the payment of the uneCpired portion of the employment
contracts, !hich !as terminated prematurely, and secondarily, the payment of the interest of the
earnings of the Tra&el and #eser&ed =und, interest on all the unpaid benefitsH area !age and salary
differential payH fringe benefitsH refund of SSS and premium not remitted to the SSSH refund of
!ithholding taC not remitted to the 25#H penalties for committing prohibited practicesH as !ell as the
suspension of the license of %52) and the accreditation of 2#55 '?/#/ 8o/ 144.., Rollo, pp/ 1-114*/
%t the hearing on 9une 2:, 1984, %52) !as furnished a copy of the complaint and !as gi&en,
together !ith 2#55, up to 9uly :, 1984 to file its ans!er/
"n 9uly -, 1984, 0"(% %dministrator, upon motion of %52) and 2#55, ordered the claimants to file a
bill of particulars !ithin ten days from receipt of the order and the mo&ants to file their ans!ers !ithin
ten days from receipt of the bill of particulars/ The 0"(% %dministrator also scheduled a pre1trial
conference on 9uly 2:, 1984/
"n 9uly 1-, 1984, the claimants submitted their D)ompliance and ,anifestation/D "n 9uly 2-, 1984,
%52) filed a D,otion to Strike "ut of the #ecordsD, the D)omplaintD and the D)ompliance and
,anifestation/D "n 9uly 2:, 1984, the claimants filed their D#eFoinder and )omments,D a&erring,
among other matters, the failure of %52) and 2#55 to file their ans!ers and to attend the pre1trial
conference on 9uly 2:, 1984/ The claimants alleged that %52) and 2#55 had !ai&ed their right to
present e&idence and had defaulted by failing to file their ans!ers and to attend the pre1trial
conference/
"n "ctober 2, 1984, the 0"(% %dministrator denied the D,otion to Strike "ut of the #ecordsD filed
by %52) but reEuired the claimants to correct the deficiencies in the complaint pointed out in the
order/
"n "ctober 14, 1984, claimants asked for time !ithin !hich to comply !ith the "rder of "ctober 2,
1984 and filed an D@rgent ,anifestation,D praying that the 0"(% %dministrator direct the parties to
submit simultaneously their position papers, after !hich the case should be deemed submitted for
decision/ "n the same day, %tty/ =lorante de )astro filed another complaint for the same money
claims and benefits in behalf of se&eral claimants, some of !hom !ere also claimants in 0"(% )ase
8o/ L184141::: '0"(% )ase 8o/ 8:1141..9*/
"n "ctober 19, 1984, claimants filed their D)omplianceD !ith the "rder dated "ctober 2, 1984 and
an D@rgent ,anifestation,D praying that the 0"(% direct the parties to submit simultaneously their
position papers after !hich the case !ould be deemed submitted for decision/ "n the same day,
%52) asked for time to file its comment on the D)omplianceD and D@rgent ,anifestationD of
claimants/ "n 8o&ember , 1984, it filed a second motion for eCtension of time to file the comment/
"n 8o&ember 8, 1984, the 0"(% %dministrator informed %52) that its motion for eCtension of time
!as granted/
"n 8o&ember 14, 1984, claimants filed an opposition to the motions for eCtension of time and asked
that %52) and 2#55 be declared in default for failure to file their ans!ers/
"n 8o&ember 24, 1984, %52) and 2#55 filed a D)ommentD praying, among other reliefs, that
claimants should be ordered to amend their complaint/
"n December 2., 1984, the 0"(% %dministrator issued an order directing %52) and 2#55 to file their
ans!ers !ithin ten days from receipt of the order/
"n =ebruary 2., 198:, %52) and 2#55 appealed to 8L#) seeking the re&ersal of the said order of
the 0"(% %dministrator/ )laimants opposed the appeal, claiming that it !as dilatory and praying that
%52) and 2#55 be declared in default/
"n %pril 2, 198:, the original claimants filed an D%mended )omplaint and7or 0osition 0aperD dated
,arch 24, 198:, adding ne! demands; namely, the payment of o&ertime pay, eCtra night !ork pay,
annual lea&e differential pay, lea&e indemnity pay, retirement and sa&ings benefits and their share of
forfeitures '?/#/ 8o/ 144.., Rollo, pp/ 1411*/ "n %pril 1:, 198:, the 0"(% %dministrator directed
%52) to file its ans!er to the amended complaint '?/#/ 8o/ 144.., Rollo, p/ 24*/
"n ,ay 28, 198:, claimants filed an D@rgent ,otion for Summary 9udgment/D "n the same day, the
0"(% issued an order directing %52) and 2#55 to file their ans!ers to the D%mended )omplaint,D
other!ise, they !ould be deemed to ha&e !ai&ed their right to present e&idence and the case !ould
be resol&ed on the basis of complainant+s e&idence/
"n 9une :, 198:, %52) countered !ith a D,otion to Dismiss as 5mproper )lass Suit and ,otion for
2ill of 0articulars #e; %mended )omplaint dated ,arch 24, 198:/D )laimants opposed the motions/
"n September 4, 198:, the 0"(% %dministrator reiterated his directi&e to %52) and 2#55 to file their
ans!ers in 0"(% )ase 8o/ L184141:::/
"n September 18, 198:, %52) filed its second appeal to the 8L#), together !ith a petition for the
issuance of a !rit of inFunction/ "n September 19, 198:, 8L#) enFoined the 0"(% %dministrator
from hearing the labor cases and suspended the period for the filing of the ans!ers of %52) and
2#55/
"n September 19, 198:, claimants asked the 0"(% %dministrator to include additional claimants in
the case and to in&estigate alleged !rongdoings of 2#55, %52) and their respecti&e la!yers/
"n "ctober 14, 198:, #omeo 0atag and t!o co1claimants filed a complaint '0"(% )ase 8o/ L18:1
141...* against %52) and 2#55 !ith the 0"(%, demanding monetary claims similar to those subFect
of 0"(% )ase 8o/ L184141:::/ 5n the same month, Solomon #eyes also filed his o!n complaint
'0"(% )ase 8o/ L18:1141..9* against %52) and 2#55/
"n "ctober 1., 198:, the la! firm of =lorante ,/ de )astro B %ssociates asked for the substitution
of the original counsel of record and the cancellation of the special po!ers of attorney gi&en the
original counsel/
"n December 12, 198:, %tty/ Del ,undo filed in 8L#) a notice of the claim to enforce attorney+s
lien/
"n ,ay 29, 198, %tty/ De )astro filed a complaint for money claims '0"(% )ase 8o/ 814:144* in
behalf of 11 claimants including 2ien&enido )adalin, a claimant in 0"(% )ase 8o/ 84141:::/
"n December 12, 198, the 8L#) dismissed the t!o appeals filed on =ebruary 2., 198: and
September 18, 198: by %52) and 2#55/
5n narrating the proceedings of the labor cases before the 0"(% %dministrator, it is not amiss to
mention that t!o cases !ere filed in the Supreme )ourt by the claimants, namely G ?/#/ 8o/ .21-2
on September 2, 198: and %dministrati&e )ase 8o/ 28:8 on ,arch 18, 198/ "n ,ay 1-, 198.,
the Supreme )ourt issued a resolution in %dministrati&e )ase 8o/ 28:8 directing the 0"(%
%dministrator to resol&e the issues raised in the motions and oppositions filed in 0"(% )ases 8os/
L184141::: and L1814:144 and to decide the labor cases !ith deliberate dispatch/
%52) also filed a petition in the Supreme )ourt '?/#/ 8o/ .8489*, Euestioning the "rder dated
September 4, 198: of the 0"(% %dministrator/ Said order reEuired 2#55 and %52) to ans!er the
amended complaint in 0"(% )ase 8o/ L184141:::/ 5n a resolution dated 8o&ember 9, 198., !e
dismissed the petition by informing %52) that all its technical obFections may properly be resol&ed in
the hearings before the 0"(%/
)omplaints !ere also filed before the "mbudsman/ The first !as filed on September 22, 1988 by
claimant >ermie %rguelles and 18 co1claimants against the 0"(% %dministrator and se&eral 8L#)
)ommissioners/ The "mbudsman merely referred the complaint to the Secretary of Labor and
(mployment !ith a reEuest for the early disposition of 0"(% )ase 8o/ L184141:::/ The second
!as filed on %pril 28, 1989 by claimants (migdio 0/ 2autista and #olando #/ Lobeta charging %52)
and 2#55 for &iolation of labor and social legislations/ The third !as filed by 9ose #/ Santos,
,aCimino 8/ Talibsao and %mado 2/ 2ruce denouncing %52) and 2#55 of &iolations of labor la!s/
"n 9anuary 1-, 198., %52) filed a motion for reconsideration of the 8L#) #esolution dated
December 12, 198/
"n 9anuary 14, 198., %52) reiterated before the 0"(% %dministrator its motion for suspension of
the period for filing an ans!er or motion for eCtension of time to file the same until the resolution of
its motion for reconsideration of the order of the 8L#) dismissing the t!o appeals/ "n %pril 28,
198., 8L#) en banc denied the motion for reconsideration/
%t the hearing on 9une 19, 198., %52) submitted its ans!er to the complaint/ %t the same hearing,
the parties !ere gi&en a period of 1: days from said date !ithin !hich to submit their respecti&e
position papers/ "n 9une 24, 198. claimants filed their D@rgent ,otion to Strike "ut %ns!er,D
alleging that the ans!er !as filed out of time/ "n 9une 29, 198., claimants filed their DSupplement to
@rgent ,anifestational ,otionD to comply !ith the 0"(% "rder of 9une 19, 198./ "n =ebruary 24,
1988, %52) and 2#55 submitted their position paper/ "n ,arch 4, 1988, claimants filed their D?x.
Parte ,otion to (Cpunge from the #ecordsD the position paper of %52) and 2#55, claiming that it !as
filed out of time/
"n September 1, 1988, the claimants represented by %tty/ De )astro filed their memorandum in
0"(% )ase 8o/ L1814:144/ "n September , 1988, %52) and 2#55 submitted their Supplemental
,emorandum/ "n September 12, 1988, 2#55 filed its D#eply to )omplainant+s ,emorandum/D "n
"ctober 2, 1988, claimants submitted their D?x.Parte ,anifestational ,otion and )ounter1
Supplemental ,otion,D together !ith 44 indi&idual contracts of employments and ser&ice records/
"n "ctober 2., 1988, %52) and 2#55 filed a D)onsolidated #eply/D
"n 9anuary -4, 1989, the 0"(% %dministrator rendered his decision in 0"(% )ase 8o/ L184141:::
and the other consolidated cases, !hich a!arded the amount of P824,:2/44 in fa&or of only -24
complainants/
"n =ebruary 14, 1989, claimants submitted their D%ppeal ,emorandum =or 0artial %ppealD from the
decision of the 0"(%/ "n the same day, %52) also filed its motion for reconsideration and7or appeal
in addition to the D8otice of %ppealD filed earlier on =ebruary , 1989 by another counsel for %52)/
"n =ebruary 1., 1989, claimants filed their D%ns!er to %ppeal,D praying for the dismissal of the
appeal of %52) and 2#55/
"n ,arch 1:, 1989, claimants filed their DSupplement to )omplainants+ %ppeal ,emorandum,D
together !ith their Dne!ly disco&ered e&idenceD consisting of payroll records/
"n %pril :, 1989, %52) and 2#55 submitted to 8L#) their D,anifestation,D stating among other
matters that there !ere only .28 named claimants/ "n %pril 24, 1989, the claimants filed their
D)ounter1,anifestation,D alleging that there !ere 1,.. of them/
"n 9uly 2., 1989, claimants filed their D@rgent ,otion for (CecutionD of the Decision dated 9anuary
-4, 1989 on the grounds that 2#55 had failed to appeal on time and %52) had not posted the
supersedeas bond in the amount of P824,:2/44/
"n December 2-, 1989, claimants filed another motion to resol&e the labor cases/
"n %ugust 21, 1994, claimants filed their D,anifestational ,otion,D praying that all the 1,..
claimants be a!arded their monetary claims for failure of pri&ate respondents to file their ans!ers
!ithin the reglamentary period reEuired by la!/
"n September 2, 1991, 8L#) promulgated its #esolution, disposing as follo!s;
3>(#(="#(, premises considered, the Decision of the 0"(% in these
consolidated cases is modified to the eCtent and in accordance !ith the follo!ing
dispositions;
1/ The claims of the 94 complainants identified and listed in %nneC
D%D hereof are dismissed for ha&ing prescribedH
2/ #espondents %52) and 2ro!n B #oot are hereby ordered, Fointly
and se&erally, to pay the 149 complainants, identified and listed in
%nneC D2D hereof, the peso eEui&alent, at the time of payment, of the
total amount in @S dollars indicated opposite their respecti&e namesH
-/ The a!ards gi&en by the 0"(% to the 19 complainants classified
and listed in %nneC D)D hereof, !ho appear to ha&e !orked
else!here than in 2ahrain are hereby set aside/
4/ %ll claims other than those indicated in %nneC D2D, including those
for o&ertime !ork and fa&orably granted by the 0"(%, are hereby
dismissed for lack of substantial e&idence in support thereof or are
beyond the competence of this )ommission to pass upon/
5n addition, this )ommission, in the eCercise of its po!ers and authority under %rticle
218'c* of the Labor )ode, as amended by #/%/ .1:, hereby directs Labor %rbiter
=atima 9/ =ranco of this )ommission to summon parties, conduct hearings and
recei&e e&idence, as eCpeditiously as possible, and thereafter submit a !ritten report
to this )ommission '=irst Di&ision* of the proceedings taken, regarding the claims of
the follo!ing;
'a* complainants identified and listed in %nneC DDD attached and
made an integral part of this #esolution, !hose claims !ere
dismissed by the 0"(% for lack of proof of employment in 2ahrain
'these complainants numbering 8-, are listed in pages 1- to 2- of
the decision of 0"(%, subFect of the appeals* and,
'b* complainants identified and listed in %nneC D(D attached and made
an integral part of this #esolution, !hose a!ards decreed by the
0"(%, to "ur mind, are not supported by substantial e&idenceD '?/#/
8o/ 144..H Rollo, pp/ 11-111:H ?/#/ 8os/ 144911114, pp/ 8:18.H
?/#/ 8os/ 14:4291-1, pp/ 1241122*/
"n 8o&ember 2., 1991, claimant %mado S/ Tolentino and 12
co1claimants, !ho !ere former clients of %tty/ Del ,undo, filed a petition for certiorari !ith the
Supreme )ourt '?/#/ 8os/ 124.41144*/ The petition !as dismissed in a resolution dated 9anuary 2.,
1992/
Three motions for reconsideration of the September 2, 1991 #esolution of the 8L#) !ere filed/ The
first, by the claimants represented by %tty/ Del ,undoH the second, by the claimants represented by
%tty/ De )astroH and the third, by %52) and 2#55/
5n its #esolution dated ,arch 24, 1992, 8L#) denied all the motions for reconsideration/
>ence, these petitions filed by the claimants represented by %tty/ Del ,undo '?/#/ 8o/ 144..*, the
claimants represented by %tty/ De )astro '?/#/ 8os/ 144911114* and by %52) and 2#55 '?/#/ 8os/
14:4291-2*/
55
&ompromise Agreements
2efore this )ourt, the claimants represented by %tty/ De )astro and %52) and 2#55 ha&e submitted,
from time to time, compromise agreements for our appro&al and Fointly mo&ed for the dismissal of
their respecti&e petitions insofar as the claimants1parties to the compromise agreements !ere
concerned 'See %nneC % for list of claimants !ho signed Euitclaims*/
Thus the follo!ing manifestations that the parties had arri&ed at a compromise agreement and the
corresponding motions for the appro&al of the agreements !ere filed by the parties and appro&ed by
the )ourt;
1* 9oint ,anifestation and ,otion in&ol&ing claimant (migdio %barEue6 and 4. co1
claimants dated September 2, 1992 '?/#/ 8os/ 144911114, Rollo, pp/ 2-144H ?/#/
8os/ 14:4291-2, Rollo, pp/
4.411:*H
2* 9oint ,anifestation and ,otion in&ol&ing petitioner 2ien&enido )adalin and 82 co1
petitioners dated September -, 1992 '?/#/ 8o/ 144.., Rollo, pp/ -41:4.*H
-* 9oint ,anifestation and ,otion in&ol&ing claimant 9ose
,/ %ban and - co1claimants dated September 1., 1992 '?/#/ 8os/ 14:4291
-2, Rollo, pp/ 1-1.22H ?/#/ 8o/ 144.., Rollo, pp/ :1812H ?/#/ 8os/ 1449111
14, Rollo, pp/ 44.1:1*H
4* 9oint ,anifestation and ,otion in&ol&ing claimant %ntonio T/ %nglo and 1. co1
claimants dated "ctober 14, 1992 '?/#/ 8os/
14:4291-2, Rollo, pp/ ..8184-H ?/#/ 8o/ 144.., Rollo, pp/ :41.1-H ?/#/ 8os/
144911114, Rollo, pp/ :-41:94*H
:* 9oint ,anifestation and ,otion in&ol&ing claimant Dionisio 2obongo and co1
claimants dated 9anuary 1:, 199- '?/#/ 8o/ 144.., Rollo, pp/ 81-18-H ?/#/ 8os/
144911114, Rollo, pp/ 291:2*H
* 9oint ,anifestation and ,otion in&ol&ing claimant <alerio %/ (&angelista and 4 co1
claimants dated ,arch 14, 199- '?/#/ 8os/ 144911114, Rollo, pp/ .-11.4H ?/#/ 8o/
144.., Rollo, pp/ 181:11829*H
.* 9oint ,anifestation and ,otion in&ol&ing claimants 0alconeri 2anaag and : co1
claimants dated ,arch 1., 199- '?/#/ 8o/ 144.., Rollo, pp/ 1:.11.4-H ?/#/ 8os/
144911114, Rollo, pp/ ::1.:*H
8* 9oint ,anifestation and ,otion in&ol&ing claimant 2enFamin %mbrosio and 1: other
co1claimants dated ,ay 4, 199- '?/#/ 8os/ 14:4291-2, Rollo, pp/ 9419:H ?/#/
8os/ 144911114, Rollo, pp/ .91.29H ?/#/ 8o/ 144.., Rollo, pp/ 1..-11814*H
9* 9oint ,anifestation and ,otion in&ol&ing <alerio (&angelista and - co1claimants
dated ,ay 14, 199- '?/#/ 8o/ 144.., Rollo, pp/ 181:11829*H
14* 9oint ,anifestation and ,otion in&ol&ing petitioner Luiterio #/ %gudo and - co1
claimants dated 9une 14, 199- '?/#/ 8os/ 14:4291-2, Rollo, pp/ 9.411194H ?/#/
8os/ 144911114, Rollo, pp/ .48184H ?/#/ 8o/ 144.., Rollo, pp/ 141118-*H
11* 9oint ,anifestation and ,otion in&ol&ing claimant %rnaldo 9/ %lon6o and 19 co1
claimants dated 9uly 22, 199- '?/#/ 8o/ 144.., Rollo, pp/ 11.-112-:H ?/#/ 8os/
14:4291-2, Rollo, pp/ 119-112:H ?/#/ 8os/ 144911114, Rollo, pp/ 8919:9*H
12* 9oint ,anifestation and ,otion in&ol&ing claimant #icardo )/ Dayrit and 2 co1
claimants dated September ., 199- '?/#/ 8os/
14:4291-2, Rollo, pp/ 12112.8H ?/#/ 8o/ 144.., Rollo, pp/ 124-112:4H ?/#/ 8os/
144911114,Rollo, pp/ 9.21984*H
1-* 9oint ,anifestation and ,otion in&ol&ing claimant Dante )/ %ceres and -. co1
claimants dated September 8, 199- '?/#/ 8o/ 144.., Rollo, pp/ 12:.11-.:H ?/#/
8os/ 144911114, Rollo, pp/ 98.1114:H ?/#/ 8os/ 14:4291-2, Rollo, pp/ 128411-9.*H
14* 9oint ,anifestation and ,otion in&ol&ing <i&encio </ %bella and 2. co1claimants
dated 9anuary 14, 1994 '?/#/ 8os/ 14:4291-2, Rollo, <ol/ 55*H
1:* 9oint ,anifestation and ,otion in&ol&ing Domingo 2/ Solano and siC co1claimants
dated %ugust 2:, 1994 '?/#/ 8os/ 14:4291-2H ?/#/ 8o/ 144..H ?/#/ 8os/ 1449111
14*/
555
The facts as found by the 8L#) are as follo!s;
3e ha&e taken painstaking efforts to sift o&er the more than fifty &olumes no!
comprising the records of these cases/ =rom the records, it appears that the
complainants1appellants allege that they !ere recruited by respondent1appellant
%52) for its accredited foreign principal, 2ro!n B #oot, on &arious dates from 19.:
to 198-/ They !ere all deployed at &arious proFects undertaken by 2ro!n B #oot in
se&eral countries in the ,iddle (ast, such as Saudi %rabia, Libya, @nited %rab
(mirates and 2ahrain, as !ell as in Southeast %sia, in 5ndonesia and ,alaysia/
>a&ing been officially processed as o&erseas contract !orkers by the 0hilippine
?o&ernment, all the indi&idual complainants signed standard o&erseas employment
contracts '#ecords, <ols/ 2:1-2/ >ereafter, reference to the records !ould be
sparingly made, considering their chaotic arrangement* !ith %52) before their
departure from the 0hilippines/ These o&erseas employment contracts in&ariably
contained the follo!ing rele&ant terms and conditions/
0%#T 2 G
'1* (mployment 0osition )lassification ;GGGGGGGGG
')ode* ;GGGGGGGGG
'2* )ompany (mployment Status ;GGGGGGGGG
'-* Date of (mployment to )ommence on ;GGGGGGGGG
'4* 2asic 3orking >ours 0er 3eek ;GGGGGGGGG
':* 2asic 3orking >ours 0er ,onth ;GGGGGGGGG
'* 2asic >ourly #ate ;GGGGGGGGG
'.* "&ertime #ate 0er >our ;GGGGGGGGG
'8* 0roFected 0eriod of Ser&ice
'SubFect to )'1* of this MsicN* ;GGGGGGGGG
,onths and7or
9ob )ompletion
CCC CCC CCC
-/ >"@#S "= 3"#K %8D )",0(8S%T5"8
a* The (mployee is employed at the hourly rate and o&ertime rate as set out in 0art
2 of this Document/
b* The hours of !ork shall be those set forth by the (mployer, and (mployer may, at
his sole option, change or adFust such hours as maybe deemed necessary from time
to time/
4/ T(#,58%T5"8
a* 8ot!ithstanding any other terms and conditions of this agreement, the (mployer
may, at his sole discretion, terminate employee+s ser&ice !ith cause, under this
agreement at any time/ 5f the (mployer terminates the ser&ices of the (mployee
under this %greement because of the completion or termination, or suspension of the
!ork on !hich the (mployee+s ser&ices !ere being utili6ed, or because of a
reduction in force due to a decrease in scope of such !ork, or by change in the type
of construction of such !ork/ The (mployer !ill be responsible for his return
transportation to his country of origin/ 8ormally on the most eCpeditious air route,
economy class accommodation/
CCC CCC CCC
14/ <%)%T5"87S5)K L(%<( 2(8(=5TS
a* %fter one '1* year of continuous ser&ice and7or satisfactory completion of contract,
employee shall be entitled to 121days &acation lea&e !ith pay/ This shall be
computed at the basic !age rate/ =ractions of a year+s ser&ice !ill be computed on
a pro.rata basis/
b* Sick lea&e of 1:1days shall be granted to the employee for e&ery year of ser&ice
for non1!ork connected inFuries or illness/ 5f the employee failed to a&ail of such
lea&e benefits, the same shall be forfeited at the end of the year in !hich said sick
lea&e is granted/
11/ 2"8@S
% bonus of 24I 'for offshore !ork* of gross income !ill be accrued and payable only
upon satisfactory completion of this contract/
12/ "==D%A 0%A
The se&enth day of the !eek shall be obser&ed as a day of rest !ith 8 hours regular
pay/ 5f !ork is performed on this day, all hours !ork shall be paid at the premium
rate/ >o!e&er, this offday pay pro&ision is applicable only !hen the la!s of the >ost
)ountry reEuire payments for rest day/
5n the State of 2ahrain, !here some of the indi&idual complainants !ere deployed,
>is ,aFesty 5sa 2in Salman %l Kaifa, %mir of 2ahrain, issued his %miri Decree 8o/ 2-
on 9une 1, 19., other!ise kno!n as the Labour La! for the 0ri&ate Sector
'#ecords, <ol/ 18*/ This decree took effect on %ugust 1, 19./ Some of the
pro&isions of %miri Decree 8o/ 2- that are rele&ant to the claims of the complainants1
appellants are as follo!s 'italics supplied only for emphasis*;
%rt/ .9; / / / A )or4er shall receive payment "or each extra ho%r
e>%ivalent to his )age entitlement increased by a minimum of t!enty1
fi&e per cent%m thereof for hours !orked during the dayH and by a
minim%m o" "i"ty per cent%m thereo" "or ho%rs )or4ed d%ring the
night !hich shall be deemed to being from se&en o+clock in the
e&ening until se&en o+clock in the morning/ / / /
%rt/ 84; =riday shall be deemed to be a !eekly day of rest on full pay/
/ / / an employer may re>%ire a )or4er, !ith his consent, to )or4 on
his )ee4ly day o" rest if circumstances so reEuire and in respect o"
)hich an additional s%m e>%ivalent to *23J o" his normal )age shall
be paid to him/ / / /
%rt/ 81; / / / 7hen conditions o" )or4 re>%ire the )or4er to )or4 on
any o""icial holiday, he shall be paid an additional s%m e>%ivalent to
*23J o" his normal )age/
%rt/ 84; ?very )or4er )ho has completed one year8s contin%o%s
service )ith his employer shall be entitled to leave on "%ll pay "or a
period o" not less than +* days "or each year increased to a period
not less than +1 days a"ter "ive contin%o%s years o" service/
% !orker shall be entitled to such lea&e upon a >%ant%m mer%it in
respect of the proportion of his ser&ice in that year/
%rt/ 14.; % contract of employment made for a period of indefinite
duration may be terminated by either party thereto after gi&ing the
other party thirty days+ prior notice before such termination, in )riting,
in respect of monthly paid !orkers and fifteen days+ notice in respect
of other !orkers/ !he party terminating a contract )itho%t giving the
re>%ired notice shall pay to the other party compensation e>%ivalent
to the amo%nt o" )ages payable to the )or4er "or the period o" s%ch
notice or the %nexpired portion thereo".
%rt/ 111; / / / the employer concerned shall pay to such !orker, upon
termination of employment, a leaving indemnity "or the period o" his
employment calc%lated on the basis o" "i"teen days8 )ages "or each
year o" the "irst three years o" service and o" one month8s )ages "or
each year o" service therea"ter/ Such !orker shall be entitled to
payment of lea&ing indemnity upon a >%ant%m mer%it in proportion to
the period of his ser&ice completed !ithin a year/
%ll the indi&idual complainants1appellants ha&e already been
repatriated to the 0hilippines at the time of the filing of these cases
'#/#/ 8o/ 144.., Rollo, pp/ :91:*/
5<
The issues raised before and resol&ed by the 8L#) !ere;
9irst; G 3hether or not complainants are entitled to the benefits pro&ided by %miri
Decree 8o/ 2- of 2ahrainH
'a* 3hether or not the complainants !ho ha&e !orked in 2ahrain are
entitled to the abo&e1mentioned benefits/
'b* 3hether or not %rt/ 44 of the same Decree 'allegedly prescribing a
more fa&orable treatment of alien employees* bars complainants from
enFoying its benefits/
Second; G %ssuming that %miri Decree 8o/ 2- of 2ahrain is applicable in these
cases, !hether or not complainants+ claim for the benefits pro&ided therein ha&e
prescribed/
!hird; G 3hether or not the instant cases Eualify as a class suit/
9o%rth; G 3hether or not the proceedings conducted by the 0"(%, as !ell as the
decision that is the subFect of these appeals, conformed !ith the reEuirements of due
processH
'a* 3hether or not the respondent1appellant !as denied its right to
due processH
'b* 3hether or not the admission of e&idence by the 0"(% after
these cases !ere submitted for decision !as &alidH
'c* 3hether or not the 0"(% acEuired Furisdiction o&er 2ro!n B #oot
5nternational, 5nc/H
'd* 3hether or not the Fudgment a!ards are supported by substantial
e&idenceH
'e* 3hether or not the a!ards based on the a&erages and formula
presented by the complainants1appellants are supported by
substantial e&idenceH
'f* 3hether or not the 0"(% a!arded sums beyond !hat the
complainants1appellants prayed forH and, if so, !hether or not these
a!ards are &alid/
9i"th; G 3hether or not the 0"(% erred in holding respondents %52) and 2ro!n B
#oot Fointly are se&erally liable for the Fudgment a!ards despite the alleged finding
that the former !as the employer of the complainantsH
'a* 3hether or not the 0"(% has acEuired Furisdiction o&er 2ro!n B
#ootH
'b* 3hether or not the undisputed fact that %52) !as a licensed
construction contractor precludes a finding that 2ro!n B #oot is liable
for complainants claims/
Sixth; G 3hether or not the 0"(% %dministrator+s failure to hold respondents in
default constitutes a re&ersible error/
Seventh; G 3hether or not the 0"(% %dministrator erred in dismissing the follo!ing
claims;
a/ @neCpired portion of contractH
b/ 5nterest earnings of Tra&el and #eser&e =undH
c/ #etirement and Sa&ings 0lan benefitsH
d/ 3ar Jone bonus or premium pay of at least 144I of basic payH
e/ %rea Differential 0ayH
f/ %ccrued interests on all the unpaid benefitsH
g/ Salary differential payH
h/ 3age differential payH
i/ #efund of SSS premiums not remitted to SSSH
F/ #efund of !ithholding taC not remitted to 25#H
k/ =ringe benefits under 2 B #+s D% Summary of (mployee 2enefitsD
'%nneC DLD of %mended )omplaint*H
l/ ,oral and eCemplary damagesH
m/ %ttorney+s fees of at least ten percent of the Fudgment a!ardH
n/ "ther reliefs, like suspending and7or cancelling the license to
recruit of %52) and the accreditation of 2 B # issued by 0"(%H
o/ 0enalty for &iolations of %rticle -4 'prohibited practices*, not
eCcluding reportorial reEuirements thereof/
?ighth; G 3hether or not the 0"(% %dministrator erred in not dismissing 0"(%
)ase 8o/ 'L* 81:144 on the ground of multiplicity of suits '?/#/ 8os/ 1449111
14, Rollo, pp/ 2:129, :11::*/
%nent the first issue, 8L#) set aside Section 1, #ule 129 of the 1989 #e&ised #ules on (&idence
go&erning the pleading and proof of a foreign la! and admitted in e&idence a simple copy of the
2ahrain+s %miri Decree 8o/ 2- of 19. 'Labour La! for the 0ri&ate Sector*/ 8L#) in&oked %rticle
221 of the Labor )ode of the 0hilippines, &esting on the )ommission ample discretion to use e&ery
and all reasonable means to ascertain the facts in each case !ithout regard to the technicalities of
la! or procedure/ 8L#) agreed !ith the 0"(% %dministrator that the %miri Decree 8o/ 2-, being
more fa&orable and beneficial to the !orkers, should form part of the o&erseas employment contract
of the complainants/
8L#), ho!e&er, held that the %miri Decree 8o/ 2- applied only to the claimants, !ho !orked in
2ahrain, and set aside a!ards of the 0"(% %dministrator in fa&or of the claimants, !ho !orked
else!here/
"n the second issue, 8L#) ruled that the prescripti&e period for the filing of the claims of the
complainants !as three years, as pro&ided in %rticle 291 of the Labor )ode of the 0hilippines, and
not ten years as pro&ided in %rticle 1144 of the )i&il )ode of the 0hilippines nor one year as
pro&ided in the %miri Decree 8o/ 2- of 19./
"n the third issue, 8L#) agreed !ith the 0"(% %dministrator that the labor cases cannot be treated
as a class suit for the simple reason that not all the complainants !orked in 2ahrain and therefore,
the subFect matter of the action, the claims arising from the 2ahrain la!, is not of common or general
interest to all the complainants/
"n the fourth issue, 8L#) found at least three infractions of the cardinal rules of administrati&e due
process; namely, '1* the failure of the 0"(% %dministrator to consider the e&idence presented by
%52) and 2#55H '2* some findings of fact !ere not supported by substantial e&idenceH and '-* some
of the e&idence upon !hich the decision !as based !ere not disclosed to %52) and 2#55 during the
hearing/
"n the fifth issue, 8L#) sustained the ruling of the 0"(% %dministrator that 2#55 and %52) are
solidarily liable for the claims of the complainants and held that 2#55 !as the actual employer of the
complainants, or at the &ery least, the indirect employer, !ith %52) as the labor contractor/
8L#) also held that Furisdiction o&er 2#55 !as acEuired by the 0"(% %dministrator through the
summons ser&ed on %52), its local agent/
"n the siCth issue, 8L#) held that the 0"(% %dministrator !as correct in denying the ,otion to
Declare %52) in default/
"n the se&enth issue, !hich in&ol&ed other money claims not based on the %miri Decree 8o/ 2-,
8L#) ruled;
'1* that the 0"(% %dministrator has no Furisdiction o&er the claims for refund of the
SSS premiums and refund of !ithholding taCes and the claimants should file their
claims for said refund !ith the appropriate go&ernment agenciesH
'2* the claimants failed to establish that they are entitled to the claims !hich are not
based on the o&erseas employment contracts nor the %miri Decree 8o/ 2- of 19.H
'-* that the 0"(% %dministrator has no Furisdiction o&er claims for moral and
eCemplary damages and nonetheless, the basis for granting said damages !as not
establishedH
'4* that the claims for salaries corresponding to the uneCpired portion of their contract
may be allo!ed if filed !ithin the three1year prescripti&e periodH
':* that the allegation that complainants !ere prematurely repatriated prior to the
eCpiration of their o&erseas contract !as not establishedH and
'* that the 0"(% %dministrator has no Furisdiction o&er the complaint for the
suspension or cancellation of the %52)+s recruitment license and the cancellation of
the accreditation of 2#55/
8L#) passed s%b silencio the last issue, the claim that 0"(% )ase 8o/ 'L* 81:144 should ha&e
been dismissed on the ground that the claimants in said case !ere also claimants in 0"(% )ase
8o/ 'L* 84141:::/ 5nstead of dismissing 0"(% )ase 8o/ 'L* 81:144, the 0"(% Fust resol&ed the
corresponding claims in 0"(% )ase 8o/ 'L* 84141:::/ 5n other !ords, the 0"(% did not pass upon
the same claims t!ice/
<
;.R. :o. *3B,,T
)laimants in ?/#/ 8o/ 144.. based their petition for certiorari on the follo!ing grounds;
'1* that they !ere depri&ed by 8L#) and the 0"(% of their right to a speedy
disposition of their cases as guaranteed by Section 1, %rticle 555 of the 198.
)onstitution/ The 0"(% %dministrator allo!ed pri&ate respondents to file their
ans!ers in t!o years 'on 9une 19, 198.* after the filing of the original complaint 'on
%pril 2, 198:* and 8L#), in total disregard of its o!n rules, affirmed the action of the
0"(% %dministratorH
'2* that 8L#) and the 0"(% %dministrator should ha&e declared %52) and 2#55 in
default and should ha&e rendered summary Fudgment on the basis of the pleadings
and e&idence submitted by claimantsH
'-* the 8L#) and 0"(% %dministrator erred in not holding that the labor cases filed
by %52) and 2#55 cannot be considered a class suitH
'4* that the prescripti&e period for the filing of the claims is ten yearsH and
':* that 8L#) and the 0"(% %dministrator should ha&e dismissed 0"(% )ase 8o/
L1814:144, the case filed by %tty/ =lorante de )astro 'Rollo, pp/ -1144*/
%52) and 2#55, commenting on the petition in ?/#/ 8o/ 144.., argued;
'1* that they !ere not responsible for the delay in the disposition of the labor cases,
considering the great difficulty of getting all the records of the more than 1,:44
claimants, the piece1meal filing of the complaints and the addition of hundreds of ne!
claimants by petitionersH
'2* that considering the number of complaints and claimants, it !as impossible to
prepare the ans!ers !ithin the ten1day period pro&ided in the 8L#) #ules, that
!hen the motion to declare %52) in default !as filed on 9uly 19, 198., said party had
already filed its ans!er, and that considering the staggering amount of the claims
'more than @SP:4,444,444/44* and the complicated issues raised by the parties, the
ten1day rule to ans!er !as not fair and reasonableH
'-* that the claimants failed to refute 8L#)+s finding that
there !as no common or general interest in the subFect matter of the contro&ersy G
!hich !as the applicability of the %miri Decree 8o/ 2-/ Like!ise, the nature of the
claims &aried, some being based on salaries pertaining to the uneCpired portion of
the contracts !hile others being for pure money claims/ (ach claimant demanded
separate claims peculiar only to himself and depending upon the particular
circumstances obtaining in his caseH
'4* that the prescripti&e period for filing the claims is that prescribed by %rticle 291 of
the Labor )ode of the 0hilippines 'three years* and not the one prescribed by %rticle
1144 of the )i&il )ode of the 0hilippines 'ten years*H and
':* that they are not concerned !ith the issue of !hether 0"(% )ase 8o/ L1814:1
44 should be dismissed, this being a pri&ate Euarrel bet!een the t!o labor la!yers
'Rollo, pp/ 2921-4:*/
Attorney8s #ien
"n 8o&ember 12, 1992, %tty/ ?erardo %/ del ,undo mo&ed to strike out the Foint manifestations and
motions of %52) and 2#55 dated September 2 and 11, 1992, claiming that all the claimants !ho
entered into the compromise agreements subFect of said manifestations and motions !ere his clients
and that %tty/ =lorante ,/ de )astro had no right to represent them in said agreements/ >e also
claimed that the claimants !ere paid less than the a!ard gi&en them by 8L#)H that %tty/ De )astro
collected additional attorney+s fees on top of the 2:I !hich he !as entitled to recei&eH and that the
consent of the claimants to the compromise agreements and Euitclaims !ere procured by fraud
'?/#/ 8o/ 144.., Rollo, pp/ 8-81814*/ 5n the #esolution dated 8o&ember 2-, 1992, the )ourt
denied the motion to strike out the 9oint ,anifestations and ,otions dated September 2 and 11,
1992 '?/#/ 8os/ 144911114, Rollo, pp/ 48149*/
"n December 14, 1992, %tty/ Del ,undo filed a D8otice and )laim to (nforce %ttorney+s Lien,D
alleging that the claimants !ho entered into compromise agreements !ith %52) and 2#55 !ith the
assistance of %tty/ De )astro, had all signed a retainer agreement !ith his la! firm '?/#/ 8o/
144.., Rollo, pp/ 2-124H 8-811:-:*/
&ontempt o" &o%rt
"n =ebruary 18, 199-, an omnibus motion !as filed by %tty/ Del ,undo to cite %tty/ De )astro and
%tty/ Kat6 Tierra for contempt of court and for &iolation of )anons 1, 1: and 1 of the )ode of
0rofessional #esponsibility/ The said la!yers allegedly misled this )ourt, by making it appear that
the claimants !ho entered into the compromise agreements !ere represented by %tty/ De )astro,
!hen in fact they !ere represented by %tty/ Del ,undo '?/#/ 8o/ 144.., Rollo, pp/ 1:41114*/
"n September 2-, 1994, %tty/ Del ,undo reiterated his charges against %tty/ De )astro for unethical
practices and mo&ed for the &oiding of the Euitclaims submitted by some of the claimants/
;.R. :os. *3BA**.*B
The claimants in ?/#/ 8os/ 144911114 based their petition for certiorari on the grounds that 8L#)
gra&ely abused its discretion !hen it; '1* applied the three1year prescripti&e period under the Labor
)ode of the 0hilippinesH and '2* it denied the claimant+s formula based on an a&erage o&ertime pay
of three hours a day 'Rollo, pp/ 18122*/
The claimants argue that said method !as proposed by 2#55 itself during the negotiation for an
amicable settlement of their money claims in 2ahrain as sho!n in the ,emorandum dated %pril 1,
198- of the ,inistry of Labor of 2ahrain 'Rollo, pp/ 21122*/
2#55 and %52), in their )omment, reiterated their contention in ?/#/ 8o/ 144.. that the prescripti&e
period in the Labor )ode of the 0hilippines, a special la!, pre&ails o&er that pro&ided in the )i&il
)ode of the 0hilippines, a general la!/
%s to the memorandum of the ,inistry of Labor of 2ahrain on the method of computing the o&ertime
pay, 2#55 and %52) claimed that they !ere not bound by !hat appeared therein, because such
memorandum !as proposed by a subordinate 2ahrain official and there !as no sho!ing that it !as
appro&ed by the 2ahrain ,inister of Labor/ Like!ise, they claimed that the a&eraging method !as
discussed in the course of the negotiation for the amicable settlement of the dispute and any offer
made by a party therein could not be used as an admission by him 'Rollo, pp/ 22812-*/
;.R. :os. *323+A.@+
5n ?/#/ 8os/ 14:4291-2, 2#55 and %52) claim that 8L#) gra&ely abused its discretion !hen it; '1*
enforced the pro&isions of the %miri Decree 8o/ 2- of 19. and not the terms of the employment
contractsH '2* granted claims for holiday, o&ertime and lea&e indemnity pay and other benefits, on
e&idence admitted in contra&ention of petitioner+s constitutional right to due processH and '-* ordered
the 0"(% %dministrator to hold ne! hearings for the 8- claimants !hose claims had been
dismissed for lack of proof by the 0"(% %dministrator or 8L#) itself/ Lastly, they allege that
assuming that the %miri Decree 8o/ 2- of 19. !as applicable, 8L#) erred !hen it did not apply the
one1year prescription pro&ided in said la! 'Rollo, pp/ 291-4*/
<5
;.R. :o. *3B,,T/ ;.R. :os. *3BA**.*B/ ;.R. :os. *323+A.@+
%ll the petitions raise the common issue of prescription although they disagreed as to the time that
should be embraced !ithin the prescripti&e period/
To the 0"(% %dministrator, the prescripti&e period !as ten years, applying %rticle 1144 of the )i&il
)ode of the 0hilippines/ 8L#) belie&ed other!ise, fiCing the prescripti&e period at three years as
pro&ided in %rticle 291 of the Labor )ode of the 0hilippines/
The claimants in ?/#/ 8o/ 144.. and ?/#/ 8os/ 144911114, in&oking different grounds, insisted that
8L#) erred in ruling that the prescripti&e period applicable to the claims !as three years, instead of
ten years, as found by the 0"(% %dministrator/
The Solicitor ?eneral eCpressed his personal &ie! that the prescripti&e period !as one year as
prescribed by the %miri Decree 8o/ 2- of 19. but he deferred to the ruling of 8L#) that %rticle 291
of the Labor )ode of the 0hilippines !as the operati&e la!/
The 0"(% %dministrator held the &ie! that;
These money claims 'under %rticle 291 of the Labor )ode* refer to those arising from
the employer+s &iolation of the employee+s right as pro&ided by the Labor )ode/
5n the instant case, !hat the respondents &iolated are not the rights of the !orkers as
pro&ided by the Labor )ode, but the pro&isions of the %miri Decree 8o/ 2- issued in
2ahrain, !hich ipso "actoamended the !orker+s contracts of employment/
#espondents consciously failed to conform to these pro&isions !hich specifically
pro&ide for the increase of the !orker+s rate/ 5t !as only after 9une -4, 198-, four
months after the bro!n builders brought a suit against 2 B # in 2ahrain for this same
claim, !hen respondent %52)+s contracts ha&e undergone amendments in 2ahrain
for the ne! hires7rene!als '#espondent+s (Chibit .*/
>ence, premises considered, the applicable la! of prescription to this instant case is
%rticle 1144 of the )i&il )ode of the 0hilippines, !hich pro&ides;
%rt/ 1144/ The follo!ing actions may be brought !ithin ten years from
the time the cause of action accrues;
'1* @pon a !ritten contractH
'2* @pon an obligation created by la!H
Thus, herein money claims of the complainants against the respondents shall
prescribe in ten years from %ugust 1, 19./ 5nasmuch as all claims !ere filed !ithin
the ten1year prescripti&e period, no claim suffered the infirmity of being prescribed
'?/#/ 8o/ 144.., Rollo, 89194*/
5n o&erruling the 0"(% %dministrator, and holding that the prescripti&e period is three years as
pro&ided in %rticle 291 of the Labor )ode of the 0hilippines, the 8L#) argued as follo!s;
The Labor )ode pro&ides that Dall money claims arising from employer1employee
relations / / / shall be filed !ithin three years from the time the cause of action
accruedH other!ise they shall be fore&er barredD '%rt/ 291, Labor )ode, as
amended*/ This three1year prescripti&e period shall be the one applied here and
!hich should be reckoned from the date of repatriation of each indi&idual
complainant, considering the fact that the case is ha&ing 'sic* filed in this country/ 3e
do not agree !ith the 0"(% %dministrator that this three1year prescripti&e period
applies only to money claims specifically reco&erable under the 0hilippine Labor
)ode/ %rticle 291 gi&es no such indication/ Like!ise, 3e can not consider
complainants+ cause7s of action to ha&e accrued from a &iolation of their employment
contracts/ There !as no &iolationH the claims arise from the benefits of the la! of the
country !here they !orked/ '?/#/ 8o/ 144.., Rollo, pp/
94191*/
%nent the applicability of the one1year prescripti&e period as pro&ided by the %miri Decree 8o/ 2- of
19., 8L#) opined that the applicability of said la! !as one of characteri6ation, i/e/, !hether to
characteri6e the foreign la! on prescription or statute of limitation as Dsubstanti&eD or Dprocedural/D
8L#) cited the decision in Bo%rnias v. Atlantic Maritime &ompany '224 =/ 2d/ 1:2, 2d )ir/ M19::N,
!here the issue !as the applicability of the 0anama Labor )ode in a case filed in the State of 8e!
Aork for claims arising from said )ode/ 5n said case, the claims !ould ha&e prescribed under the
0anamanian La! but not under the Statute of Limitations of 8e! Aork/ The @/S/ )ircuit )ourt of
%ppeals held that the 0anamanian La! !as procedural as it !as not Dspecifically intended to be
substanti&e,D hence, the prescripti&e period pro&ided in the la! of the forum should apply/ The )ourt
obser&ed;
/ / / %nd !here, as here, !e are dealing !ith a statute of limitations of a foreign
country, and it is not clear on the face of the statute that its purpose !as to limit the
enforceability, outside as !ell as !ithin the foreign country concerned, of the
substanti&e rights to !hich the statute pertains, !e think that as a yardstick for
determining !hether that !as the purpose this test is the most satisfactory one/ 5t
does not lead %merican courts into the necessity of eCamining into the unfamiliar
peculiarities and refinements of different foreign legal systems/ / /
The court further noted;
CCC CCC CCC
%pplying that test here it appears to us that the libelant is entitled to succeed, for the
respondents ha&e failed to satisfy us that the 0anamanian period of limitation in
Euestion !as specifically aimed against the particular rights !hich the libelant seeks
to enforce/ The 0anama Labor )ode is a statute ha&ing broad obFecti&es, &i6; DThe
present )ode regulates the relations bet!een capital and labor, placing them on a
basis of social Fustice, so that, !ithout inFuring any of the parties, there may be
guaranteed for labor the necessary conditions for a normal life and to capital an
eEuitable return to its in&estment/D 5n pursuance of these obFecti&es the )ode gi&es
laborers &arious rights against their employers/ %rticle 2- establishes the period of
limitation for all such rights, eCcept certain ones !hich are enumerated in %rticle 21/
%nd there is nothing in the record to indicate that the 0anamanian legislature ga&e
special consideration to the impact of %rticle 2- upon the particular rights sought to
be enforced here, as distinguished from the other rights to !hich that %rticle is also
applicable/ 3ere !e confronted !ith the Euestion of !hether the limitation period of
%rticle 21 '!hich car&es out particular rights to be go&erned by a shorter limitation
period* is to be regarded as Dsubstanti&eD or DproceduralD under the rule of DspecifityD
!e might ha&e a different caseH but here on the surface of things !e appear to be
dealing !ith a Dbroad,D and not a Dspecific,D statute of limitations '?/#/ 8o/
144.., Rollo, pp/
92194*/
)laimants in ?/#/ 8os/ 144911114 are of the &ie! that %rticle 291 of the Labor )ode of the
0hilippines, !hich !as applied by 8L#), refers only to claims Darising from the employer+s &iolation
of the employee+s right as pro&ided by the Labor )ode/D They assert that their claims are based on
the &iolation of their employment contracts, as amended by the %miri Decree 8o/ 2- of 19. and
therefore the claims may be brought !ithin ten years as pro&ided by %rticle 1144 of the )i&il )ode of
the 0hilippines 'Rollo, ?/#/ 8os/ 144911114, pp/
18121*/ To bolster their contention, they cite PA#?A v. Philippine Airlines, nc/, .4 S)#% 244 '19.*/
%52) and 2#55, insisting that the actions on the claims ha&e prescribed under the %miri Decree 8o/
2- of 19., argue that there is in force in the 0hilippines a Dborro!ing la!,D !hich is Section 48 of
the )ode of )i&il 0rocedure and that !here such kind of la! eCists, it takes precedence o&er the
common1la! conflicts rule '?/#/ 8o/ 144..,Rollo, pp/ 4:14*/
=irst to be determined is !hether it is the 2ahrain la! on prescription of action based on the %miri
Decree 8o/ 2- of 19. or a 0hilippine la! on prescription that shall be the go&erning la!/
%rticle 1: of the %miri Decree 8o/ 2- of 19. pro&ides;
% claim arising out of a contract of employment shall not be actionable after the lapse
of one year from the date of the eCpiry of the contract/ '?/#/ 8os/ 14:4291-1, Rollo,
p/ 22*/
%s a general rule, a foreign procedural la! !ill not be applied in the forum/ 0rocedural matters, such
as ser&ice of process, Foinder of actions, period and reEuisites for appeal, and so forth, are go&erned
by the la!s of the forum/ This is true e&en if the action is based upon a foreign substanti&e la!
'#estatement of the )onflict of La!s, Sec/ 8:H Salonga, 0ri&ate 5nternational La!, 1-1 M19.9N*/
% la! on prescription of actions is s%i generis in )onflict of La!s in the sense that it may be &ie!ed
either as procedural or substanti&e, depending on the characteri6ation gi&en such a la!/
Thus in Bo%rnias v. Atlantic Maritime &ompany, s%pra, the %merican court applied the statute of
limitations of 8e! Aork, instead of the 0anamanian la!, after finding that there !as no sho!ing that
the 0anamanian la! on prescription !as intended to be substanti&e/ 2eing considered merely a
procedural la! e&en in 0anama, it has to gi&e !ay to the la! of the forum on prescription of actions/
>o!e&er, the characteri6ation of a statute into a procedural or substanti&e la! becomes irrele&ant
!hen the country of the forum has a Dborro!ing statute/D Said statute has the practical effect of
treating the foreign statute of limitation as one of substance '?oodrich, )onflict of La!s 1:211:-
M19-8N*/ % Dborro!ing statuteD directs the state of the forum to apply the foreign statute of limitations
to the pending claims based on a foreign la! 'Siegel, )onflicts, 18- M19.:N*/ 3hile there are se&eral
kinds of Dborro!ing statutes,D one form pro&ides that an action barred by the la!s of the place !here
it accrued, !ill not be enforced in the forum e&en though the local statute has not run against it
'?oodrich and Scoles, )onflict of La!s, 1:211:- M19-8N*/ Section 48 of our )ode of )i&il 0rocedure
is of this kind/ Said Section pro&ides;
5f by the la!s of the state or country !here the cause of action arose, the action is
barred, it is also barred in the 0hilippines 5slands/
Section 48 has not been repealed or amended by the )i&il )ode of the 0hilippines/ %rticle 22.4 of
said )ode repealed only those pro&isions of the )ode of )i&il 0rocedures as to !hich !ere
inconsistent !ith it/ There is no pro&ision in the )i&il )ode of the 0hilippines, !hich is inconsistent
!ith or contradictory to Section 48 of the )ode of )i&il 0rocedure '0aras, 0hilippine )onflict of La!s
144 M.th ed/N*/
5n the light of the 198. )onstitution, ho!e&er, Section 48 cannot be enforced ex proprio
vigore insofar as it ordains the application in this Furisdiction of Section 1: of the %miri Decree 8o/
2- of 19./
The courts of the forum !ill not enforce any foreign claim obnoCious to the forum+s public policy
')anadian 8orthern #ail!ay )o/ &/ (ggen, 2:2 @/S/ ::-, 44 S/ )t/ 442, 4 L/ ed/ .1- M1924N*/ To
enforce the one1year prescripti&e period of the %miri Decree 8o/ 2- of 19. as regards the claims in
Euestion !ould contra&ene the public policy on the protection to labor/
5n the Declaration of 0rinciples and State 0olicies, the 198. )onstitution emphasi6ed that;
The state shall promote social Fustice in all phases of national de&elopment/ 'Sec/
14*/
The state affirms labor as a primary social economic force/ 5t shall protect the rights
of !orkers and promote their !elfare 'Sec/ 18*/
5n article $555 on Social 9ustice and >uman #ights, the 198. )onstitution pro&ides;
Sec/ -/ The State shall afford full protection to labor, local and o&erseas, organi6ed
and unorgani6ed, and promote full employment and eEuality of employment
opportunities for all/
>a&ing determined that the applicable la! on prescription is the 0hilippine la!, the neCt Euestion is
!hether the prescripti&e period go&erning the filing of the claims is three years, as pro&ided by the
Labor )ode or ten years, as pro&ided by the )i&il )ode of the 0hilippines/
The claimants are of the &ie! that the applicable pro&ision is %rticle 1144 of the )i&il )ode of the
0hilippines, !hich pro&ides;
The follo!ing actions must be brought !ithin ten years from the time the right of
action accrues;
'1* @pon a !ritten contractH
'2* @pon an obligation created by la!H
'-* @pon a Fudgment/
8L#), on the other hand, belie&es that the applicable pro&ision is %rticle 291 of the Labor )ode of
the 0hilippines, !hich in pertinent part pro&ides;
,oney claims1all money claims arising from employer1employee relations accruing
during the effecti&ity of this )ode shall be filed !ithin three '-* years from the time
the cause of action accrued, other!ise they shall be fore&er barred/
CCC CCC CCC
The case of Philippine Air #ines ?mployees Association v. Philippine Air #ines, nc., .4 S)#% 244
'19.* in&oked by the claimants in ?/#/ 8os/ 144911114 is inapplicable to the cases at bench 'Rollo,
p/ 21*/ The said case in&ol&ed the correct computation of o&ertime pay as pro&ided in the collecti&e
bargaining agreements and not the (ight1>our Labor La!/
%s noted by the )ourt; DThat is precisely !hy petitioners did not make any reference as to the
computation for o&ertime !ork under the (ight1>our Labor La! 'Secs/ - and 4, )% 8o/ 494* and
instead insisted that !ork computation pro&ided in the collecti&e bargaining agreements bet!een the
parties be obser&ed/ Since the claim for pay differentials is primarily anchored on the !ritten
contracts bet!een the litigants, the ten1year prescripti&e period pro&ided by %rt/ 1144'1* of the 8e!
)i&il )ode should go&ern/D
Section .1a of the (ight1>our Labor La! ')% 8o/ 444 as amended by #/%/ 8o/ 199--* pro&ides;
%ny action to enforce any cause of action under this %ct shall be commenced !ithin
three years after the cause of action accrued other!ise such action shall be fore&er
barred, / / / /
The court further eCplained;
The three1year prescripti&e period fiCed in the (ight1>our Labor La! ')% 8o/ 444 as
amended* !ill apply, if the claim for differentials for o&ertime !ork is solely based on
said la!, and not on a collecti&e bargaining agreement or any other contract/ 5n the
instant case, the claim for o&ertime compensation is not so much because of
)ommon!ealth %ct 8o/ 444, as amended but because the claim is demandable right
of the employees, by reason of the abo&e1mentioned collecti&e bargaining
agreement/
Section .1a of the (ight1>our Labor La! pro&ides the prescripti&e period for filing Dactions to enforce
any cause of action under said la!/D "n the other hand, %rticle 291 of the Labor )ode of the
0hilippines pro&ides the prescripti&e period for filing Dmoney claims arising from employer1employee
relations/D The claims in the cases at bench all arose from the employer1employee relations, !hich is
broader in scope than claims arising from a specific la! or from the collecti&e bargaining agreement/
The contention of the 0"(% %dministrator, that the three1year prescripti&e period under %rticle 291 of
the Labor )ode of the 0hilippines applies only to money claims specifically reco&erable under said
)ode, does not find support in the plain language of the pro&ision/ 8either is the contention of the
claimants in ?/#/ 8os/ 144911114 that said %rticle refers only to claims Darising from the employer+s
&iolation of the employee+s right,D as pro&ided by the Labor )ode supported by the facial reading of
the pro&ision/
<55
;.R. :o. *3B,,T
%/ %s to the first t!o grounds for the petition in ?/#/ 8o/ 144.., claimants a&er; '1* that !hile their
complaints !ere filed on 9une , 1984 !ith 0"(%, the case !as decided only on 9anuary -4, 1989,
a clear denial of their right to a speedy disposition of the caseH and '2* that 8L#) and the 0"(%
%dministrator should ha&e declared %52) and 2#55 in default 'Rollo, pp/
-11-:*/
)laimants in&oke a ne! pro&ision incorporated in the 198. )onstitution, !hich pro&ides;
Sec/ 1/ %ll persons shall ha&e the right to a speedy disposition of their cases before
all Fudicial, Euasi1Fudicial, or administrati&e bodies/
5t is true that the constitutional right to Da speedy disposition of casesD is not limited to the accused in
criminal proceedings but eCtends to all parties in all cases, including ci&il and administrati&e cases,
and in all proceedings, including Fudicial and Euasi1Fudicial hearings/ >ence, under the )onstitution,
any party to a case may demand eCpeditious action on all officials !ho are tasked !ith the
administration of Fustice/
>o!e&er, as held in &aballero v. Al"onso, $r/, 1:- S)#% 1:- '198.*, Dspeedy disposition of casesD is
a relati&e term/ 9ust like the constitutional guarantee of Dspeedy trialD accorded to the accused in all
criminal proceedings, Dspeedy disposition of casesD is a fleCible concept/ 5t is consistent !ith delays
and depends upon the circumstances of each case/ 3hat the )onstitution prohibits are
unreasonable, arbitrary and oppressi&e delays !hich render rights nugatory/
&aballero laid do!n the factors that may be taken into consideration in determining !hether or not
the right to a Dspeedy disposition of casesD has been &iolated, thus;
5n the determination of !hether or not the right to a Dspeedy trialD has been &iolated,
certain factors may be considered and balanced against each other/ These are
length of delay, reason for the delay, assertion of the right or failure to assert it, and
preFudice caused by the delay/ The same factors may also be considered in
ans!ering Fudicial inEuiry !hether or not a person officially charged !ith the
administration of Fustice has &iolated the speedy disposition of cases/
Like!ise, in ;on<ales v. Sandiganbayan, 199 S)#% 298, '1991*, !e held;
5t must be here emphasi6ed that the right to a speedy disposition of a case, like the
right to speedy trial, is deemed &iolated only !hen the proceeding is attended by
&eCatious, capricious, and oppressi&e delaysH or !hen unFustified postponements of
the trial are asked for and secured, or !hen !ithout cause or Fustified moti&e a long
period of time is allo!ed to elapse !ithout the party ha&ing his case tried/
Since 9uly 2:, 1984 or a month after %52) and 2#55 !ere ser&ed !ith a copy of the amended
complaint, claimants had been asking that %52) and 2#55 be declared in default for failure to file their
ans!ers !ithin the ten1day period pro&ided in Section 1, #ule 555 of 2ook <5 of the #ules and
#egulations of the 0"(%/ %t that time, there !as a pending motion of %52) and 2#55 to strike out of
the records the amended complaint and the D)omplianceD of claimants to the order of the 0"(%,
reEuiring them to submit a bill of particulars/
The cases at bench are not of the run1of1the1mill &ariety, such that their final disposition in the
administrati&e le&el after se&en years from their inception, cannot be said to be attended by
unreasonable, arbitrary and oppressi&e delays as to &iolate the constitutional rights to a speedy
disposition of the cases of complainants/
The amended complaint filed on 9une , 1984 in&ol&ed a total of 1,.. claimants/ Said complaint
had undergone se&eral amendments, the first being on %pril -, 198:/
The claimants !ere hired on &arious dates from 19.: to 198-/ They !ere deployed in different
areas, one group in and the other groups outside of, 2ahrain/ The monetary claims totalling more
than @SP: million according to %tty/ Del ,undo, included;
1/ @neCpired portion of contractH
2/ 5nterest earnings of Tra&el and =undH
-/ #etirement and Sa&ings 0lan benefitH
4/ 3ar Jone bonus or premium pay of at least 144I of basic payH
:/ %rea Differential payH
/ %ccrued 5nterest of all the unpaid benefitsH
./ Salary differential payH
8/ 3age Differential payH
9/ #efund of SSS premiums not remitted to Social Security SystemH
14/ #efund of 3ithholding TaC not remitted to 2ureau of 5nternal #e&enue '2/5/#/*H
11/ =ringe 2enefits under 2ro!n B #oot+s D% Summary of (mployees 2enefits
consisting of 4- pages '%nneC DLD of %mended )omplaint*H
12/ ,oral and (Cemplary DamagesH
1-/ %ttorney+s fees of at least ten percent of amountsH
14/ "ther reliefs, like suspending and7or cancelling the license to recruit of %52) and
issued by the 0"(%H and
1:/ 0enalty for &iolation of %rticle -4 '0rohibited practices* not eCcluding reportorial
reEuirements thereof '8L#) #esolution, September 2, 1991, pp/ 18119H ?/#/ 8o/
144.., Rollo, pp/ .-1.4*/
5nasmuch as the complaint did not allege !ith sufficient definiteness and clarity of some facts, the
claimants !ere ordered to comply !ith the motion of %52) for a bill of particulars/ 3hen claimants
filed their D)ompliance and ,anifestation,D %52) mo&ed to strike out the complaint from the records
for failure of claimants to submit a proper bill of particulars/ 3hile the 0"(% %dministrator denied the
motion to strike out the complaint, he ordered the claimants Dto correct the deficienciesD pointed out
by %52)/
2efore an intelligent ans!er could be filed in response to the complaint, the records of employment
of the more than 1,.44 claimants had to be retrie&ed from &arious countries in the ,iddle (ast/
Some of the records dated as far back as 19.:/
The hearings on the merits of the claims before the 0"(% %dministrator !ere interrupted se&eral
times by the &arious appeals, first to 8L#) and then to the Supreme )ourt/
%side from the inclusion of additional claimants, t!o ne! cases !ere filed against %52) and 2#55 on
"ctober 14, 198: '0"(% )ases 8os/
L18:1141... and L18:1141..9*/ %nother complaint !as filed on ,ay 29, 198 '0"(% )ase 8o/ L181
4:144*/ 8L#), in eCasperation, noted that the eCact number of claimants had ne&er been
completely established '#esolution, Sept/ 2, 1991, ?/#/ 8o/ 144.., Rollo, p/ :.*/ %ll the three ne!
cases !ere consolidated !ith 0"(% )ase 8o/ L184141:::/
8L#) blamed the parties and their la!yers for the delay in terminating the proceedings, thus;
These cases could ha&e been spared the long and arduous route to!ards resolution
had the parties and their counsel been more interested in pursuing the truth and the
merits of the claims rather than eChibiting a fanatical reliance on technicalities/
0arties and counsel ha&e made these cases a litigation of emotion/ The
intransigence of parties and counsel is remarkable/ %s late as last month, this
)ommission made a last and final attempt to bring the counsel of all the parties 'this
)ommission issued a special order directing respondent 2ro!n B #oot+s resident
agent7s to appear* to come to a more conciliatory stance/ (&en this failed 'Rollo,
p/ :8*/
The sEuabble bet!een the la!yers of claimants added to the delay in the disposition of the cases, to
the lament of 8L#), !hich complained;
5t is &ery e&ident from the records that the protagonists in these consolidated cases
appear to be not only the indi&idual complainants, on the one hand, and %52) and
2ro!n B #oot, on the other hand/ The t!o la!yers for the complainants, %tty/
?erardo Del ,undo and %tty/ =lorante De )astro, ha&e yet to settle the right of
representation, each one persistently claiming to appear in behalf of most of the
complainants/ %s a result, there are t!o appeals by the complainants/ %ttempts by
this )ommission to resol&e counsels+ conflicting claims of their respecti&e authority to
represent the complainants pro&e futile/ The bickerings by these t!o counsels are
reflected in their pleadings/ 5n the charges and countercharges of falsification of
documents and signatures, and in the disbarment proceedings by one against the
other/ %ll these ha&e, to a large eCtent, abetted in confounding the issues raised in
these cases, Fumble the presentation of e&idence, and e&en derailed the prospects of
an amicable settlement/ 5t !ould not be far1fetched to imagine that both counsel,
un!ittingly, perhaps, painted a rainbo! for the complainants, !ith the pro&erbial pot
of gold at its end containing more than @SP144 million, the aggregate of the claims in
these cases/ 5t is, like!ise, not improbable that their misplaced 6eal and eCuberance
caused them to thro! all caution to the !ind in the matter of elementary rules of
procedure and e&idence 'Rollo, pp/ :81:9*/
%dding to the confusion in the proceedings before 8L#), is the listing of some of the complainants
in both petitions filed by the t!o la!yers/ %s noted by 8L#), Dthe problem created by this situation is
that if one of the t!o petitions is dismissed, then the parties and the public respondents !ould not
kno! !hich claim of !hich petitioner !as dismissed and !hich !as not/D
2/ )laimants insist that all their claims could properly be consolidated in a Dclass suitD because Dall
the named complainants ha&e similar money claims and similar rights sought irrespecti&e of !hether
they !orked in 2ahrain, @nited %rab (mirates or in %bu Dhabi, Libya or in any part of the ,iddle
(astD 'Rollo, pp/ -:1-8*/
% class suit is proper !here the subFect matter of the contro&ersy is one of common or general
interest to many and the parties are so numerous that it is impracticable to bring them all before the
court '#e&ised #ules of )ourt, #ule -, Sec/ 12*/
3hile all the claims are for benefits granted under the 2ahrain La!, many of the claimants !orked
outside 2ahrain/ Some of the claimants !ere deployed in 5ndonesia and ,alaysia under different
terms and conditions of employment/
8L#) and the 0"(% %dministrator are correct in their stance that inasmuch as the first reEuirement
of a class suit is not present 'common or general interest based on the %miri Decree of the State of
2ahrain*, it is only logical that only those !ho !orked in 2ahrain shall be entitled to file their claims in
a class suit/
3hile there are common defendants '%52) and 2#55* and the nature of the claims is the same 'for
employee+s benefits*, there is no common Euestion of la! or fact/ 3hile some claims are based on
the %miri La! of 2ahrain, many of the claimants ne&er !orked in that country, but !ere deployed
else!here/ Thus, each claimant is interested only in his o!n demand and not in the claims of the
other employees of defendants/ The named claimants ha&e a special or particular interest in specific
benefits completely different from the benefits in !hich the other named claimants and those
included as members of a DclassD are claiming '2erses &/ <illanue&a, 2: 0hil/ 4.- M191-N*/ 5t appears
that each claimant is only interested in collecting his o!n claims/ % claimants has no concern in
protecting the interests of the other claimants as sho!n by the fact, that hundreds of them ha&e
abandoned their co1claimants and ha&e entered into separate compromise settlements of their
respecti&e claims/ % principle basic to the concept of Dclass suitD is that plaintiffs brought on the
record must fairly represent and protect the interests of the others 'Dimayuga &/ )ourt of 5ndustrial
#elations, 141 0hil/ :94 M19:.N*/ =or this matter, the claimants !ho !orked in 2ahrain can not be
allo!ed to sue in a class suit in a Fudicial proceeding/ The most that can be accorded to them under
the #ules of )ourt is to be allo!ed to Foin as plaintiffs in one complaint '#e&ised #ules of )ourt, #ule
-, Sec/ */
The )ourt is eCtra1cautious in allo!ing class suits because they are the eCceptions to the
condition sine >%a non, reEuiring the Foinder of all indispensable parties/
5n an improperly instituted class suit, there !ould be no problem if the decision secured is fa&orable
to the plaintiffs/ The problem arises !hen the decision is ad&erse to them, in !hich case the others
!ho !ere impleaded by their self1appointed representati&es, !ould surely claim denial of due
process/
)/ The claimants in ?/#/ 8o/ 144.. also urged that the 0"(% %dministrator and 8L#) should
ha&e declared %tty/ =lorante De )astro guilty of Dforum shopping, ambulance chasing acti&ities,
falsification, duplicity and other unprofessional acti&itiesD and his appearances as counsel for some
of the claimants as illegal 'Rollo, pp/ -8144*/
The %nti1=orum Shopping #ule '#e&ised )ircular 8o/ 28191* is intended to put a stop to the practice
of some parties of filing multiple petitions and complaints in&ol&ing the same issues, !ith the result
that the courts or agencies ha&e to resol&e the same issues/ Said #ule, ho!e&er, applies only to
petitions filed !ith the Supreme )ourt and the )ourt of %ppeals/ 5t is entitled D%dditional
#eEuirements =or 0etitions =iled !ith the Supreme )ourt and the )ourt of %ppeals To 0re&ent
=orum Shopping or ,ultiple =iling of 0etitioners and )omplainants/D The first sentence of the circular
eCpressly states that said circular applies to an go&erns the filing of petitions in the Supreme )ourt
and the )ourt of %ppeals/
3hile %dministrati&e )ircular 8o/ 44194 eCtended the application of the anti1forum shopping rule to
the lo!er courts and administrati&e agencies, said circular took effect only on %pril 1, 1994/
0"(% and 8L#) could not ha&e entertained the complaint for unethical conduct against %tty/ De
)astro because 8L#) and 0"(% ha&e no Furisdiction to in&estigate charges of unethical conduct of
la!yers/
Attorney8s #ien
The D8otice and )laim to (nforce %ttorney+s LienD dated December 14, 1992 !as filed by %tty/
?erardo %/ Del ,undo to protect his claim for attorney+s fees for legal ser&ices rendered in fa&or of
the claimants '?/#/ 8o/ 144.., Rollo, pp/ 8411844*/
% statement of a claim for a charging lien shall be filed !ith the court or administrati&e agency !hich
renders and eCecutes the money Fudgment secured by the la!yer for his clients/ The la!yer shall
cause !ritten notice thereof to be deli&ered to his clients and to the ad&erse party '#e&ised #ules of
)ourt, #ule 1-8, Sec/ -.*/ The statement of the claim for the charging lien of %tty/ Del ,undo should
ha&e been filed !ith the administrati&e agency that rendered and eCecuted the Fudgment/
&ontempt o" &o%rt
The complaint of %tty/ ?erardo %/ Del ,undo to cite %tty/ =lorante De )astro and %tty/ Kat6 Tierra for
&iolation of the )ode of 0rofessional #esponsibility should be filed in a separate and appropriate
proceeding/
;.R. :o. *3BA**.*B
)laimants charge 8L#) !ith gra&e abuse of discretion in not accepting their formula of DThree
>ours %&erage Daily "&ertimeD in computing the o&ertime payments/ They claim that it !as 2#55
itself !hich proposed the formula during the negotiations for the settlement of their claims in 2ahrain
and therefore it is in estoppel to disclaim said offer 'Rollo, pp/ 21122*/
)laimants presented a ,emorandum of the ,inistry of Labor of 2ahrain dated %pril 1, 198-, !hich
in pertinent part states;
%fter the perusal of the memorandum of the (ice President and the Area Manager,
Middle ?ast, o" Bro)n U Root &o/ and the Summary of the compensation offered by
the )ompany to the employees in respect of the difference of pay of the !ages of the
o&ertime and the difference of &acation lea&e and the perusal of the documents
attached thereto i/e/, minutes of the meetings bet!een the #epresentati&e of the
employees and the management of the )ompany, the complaint filed by the
employees on 147278- !here they ha&e claimed as hereinabo&e stated, sample of
the Ser&ice )ontract eCecuted bet!een one of the employees and the company
through its agent in 'sic*Philippines, Asia nternational B%ilders &orporation !here it
has been pro&ided for 48 hours of !ork per !eek and an annual lea&e of 12 days
and an overtime )age o" * U *SB o" the normal ho%rly )age/
CCC CCC CCC
The )ompany in its computation reached the follo!ing a&erages;
%/ 1/ The a&erage duration of the actual ser&ice of the employee is -: months for the
0hilippino 'sic* employees / / / /
2/ The a&erage !age per hour for the 0hilippino 'sic* employee is @SP2/9 / / / /
-/ !he average ho%rs "or the overtime is @ ho%rs pl%s in all p%blic holidays and
)ee4ends/
4/ Payment o" 0SR1.,+ per months 5sic6 o" service as compensation "or the
di""erence o" the )ages o" the o&ertime done for each 0hilippino 'sic* employee / / /
'Rollo, p/22*/
2#55 and %52) countered; '1* that the ,emorandum !as not prepared by them but by a subordinate
official in the 2ahrain Department of LaborH '2* that there !as no sho!ing that the 2ahrain ,inister
of Labor had appro&ed said memorandumH and '-* that the offer !as made in the course of the
negotiation for an amicable settlement of the claims and therefore it !as not admissible in e&idence
to pro&e that anything is due to the claimants/
3hile said document !as presented to the 0"(% !ithout obser&ing the rule on presenting official
documents of a foreign go&ernment as pro&ided in Section 24, #ule 1-2 of the 1989 #e&ised #ules
on (&idence, it can be admitted in e&idence in proceedings before an administrati&e body/ The
opposing parties ha&e a copy of the said memorandum, and they could easily &erify its authenticity
and accuracy/
The admissibility of the offer of compromise made by 2#55 as contained in the memorandum is
another matter/ @nder Section 2., #ule 1-4 of the 1989 #e&ised #ules on (&idence, an offer to
settle a claim is not an admission that anything is due/
Said #ule pro&ides;
"ffer of compromise not admissible/ G 5n ci&il cases, an offer of compromise is not
an admission of any liability, and is not admissible in e&idence against the offeror/
This #ule is not only a rule of procedure to a&oid the cluttering of the record !ith un!anted e&idence
but a statement of public policy/ There is great public interest in ha&ing the protagonists settle their
differences amicable before these ripen into litigation/ (&ery effort must be taken to encourage them
to arri&e at a settlement/ The submission of offers and counter1offers in the negotiation table is a
step in the right direction/ 2ut to bind a party to his offers, as !hat claimants !ould make this )ourt
do, !ould defeat the salutary purpose of the #ule/
;.R. :os. *323+A.@+
%/ 8L#) applied the %miri Decree 8o/ 2- of 19., !hich pro&ides for greater benefits than those
stipulated in the o&erseas1employment contracts of the claimants/ 5t !as of the belief that D!here the
la!s of the host country are more fa&orable and beneficial to the !orkers, then the la!s of the host
country shall form part of the o&erseas employment contract/D 5t Euoted !ith appro&al the
obser&ation of the 0"(% %dministrator that D/ / / in labor proceedings, all doubts in the
implementation of the pro&isions of the Labor )ode and its implementing regulations shall be
resol&ed in fa&or of laborD 'Rollo, pp/ 94194*/
%52) and 2#55 claim that 8L#) acted capriciously and !himsically !hen it refused to enforce the
o&erseas1employment contracts, !hich became the la! of the parties/ They contend that the
principle that a la! is deemed to be a part of a contract applies only to pro&isions of 0hilippine la! in
relation to contracts eCecuted in the 0hilippines/
The o&erseas1employment contracts, !hich !ere prepared by %52) and 2#55 themsel&es, pro&ided
that the la!s of the host country became applicable to said contracts if they offer terms and
conditions more fa&orable that those stipulated therein/ 5t !as stipulated in said contracts that;
The (mployee agrees that !hile in the employ of the (mployer, he !ill not engage in
any other business or occupation, nor seek employment !ith anyone other than the
(mployerH that he shall de&ote his entire time and attention and his best energies,
and abilities to the performance of such duties as may be assigned to him by the
(mployerH that he shall at all times be subFect to the direction and control of the
(mployerH and that the benefits pro&ided to (mployee hereunder are substituted for
and in lieu of all other benefits pro&ided by any applicable la!, provided o" co%rse,
that total rem%neration and bene"its do not "all belo) that o" the host co%ntry
reg%lation or c%stom, it being %nderstood that sho%ld applicable la)s establish that
"ringe bene"its, or other s%ch bene"its additional to the compensation herein agreed
cannot be )aived, (mployee agrees that such compensation !ill be adFusted
do!n!ard so that the total compensation hereunder, plus the non1!ai&able benefits
shall be eEui&alent to the compensation herein agreed 'Rollo, pp/ -:21-:-*/
The o&erseas1employment contracts could ha&e been drafted more felicitously/ 3hile a part thereof
pro&ides that the compensation to the employee may be DadFusted do!n!ard so that the total
computation 'thereunder* plus the non1!ai&able benefits shall be eEui&alent to the compensationD
therein agreed, another part of the same pro&ision categorically states Dthat total remuneration and
benefits do not fall belo! that of the host country regulation and custom/D
%ny ambiguity in the o&erseas1employment contracts should be interpreted against %52) and 2#55,
the parties that drafted it '(astern Shipping Lines, 5nc/ &/ ,argarine1<erkaufs1@nion, 9- S)#% 2:.
M19.9N*/
%rticle 1-.. of the )i&il )ode of the 0hilippines pro&ides;
The interpretation of obscure !ords or stipulations in a contract shall not fa&or the
party !ho caused the obscurity/
Said rule of interpretation is applicable to contracts of adhesion !here there is already a prepared
form containing the stipulations of the employment contract and the employees merely Dtake it or
lea&e it/D The presumption is that there !as an imposition by one party against the other and that the
employees signed the contracts out of necessity that reduced their bargaining po!er '=ieldmen+s
5nsurance )o/, 5nc/ &/ Songco, 2: S)#% .4 M198N*/
%pplying the said legal precepts, !e read the o&erseas1employment contracts in Euestion as
adopting the pro&isions of the %miri Decree 8o/ 2- of 19. as part and parcel thereof/
The parties to a contract may select the la! by !hich it is to be go&erned ')heshire, 0ri&ate
5nternational La!, 18. M.th ed/N*/ 5n such a case, the foreign la! is adopted as a DsystemD to regulate
the relations of the parties, including Euestions of their capacity to enter into the contract, the
formalities to be obser&ed by them, matters of performance, and so forth '1 %m 9ur 2d,
1:4111*/
5nstead of adopting the entire mass of the foreign la!, the parties may Fust agree that specific
pro&isions of a foreign statute shall be deemed incorporated into their contract Das a set of terms/D
2y such reference to the pro&isions of the foreign la!, the contract does not become a foreign
contract to be go&erned by the foreign la!/ The said la! does not operate as a statute but as a set of
contractual terms deemed !ritten in the contract '%nton, 0ri&ate 5nternational La!, 19. M19.NH Dicey
and ,orris, The )onflict of La!s, .421.4-, M8th ed/N*/
% basic policy of contract is to protect the eCpectation of the parties '#eese, )hoice of La! in Torts
and )ontracts, 1 )olumbia 9ournal of Transnational La! 1, 21 M19..N*/ Such party eCpectation is
protected by gi&ing effect to the parties+ o!n choice of the applicable la! '=ricke &/ 5sbrandtsen )o/,
5nc/, 1:1 =/ Supp/ 4:, 4. M19:.N*/ The choice of la! must, ho!e&er, bear some relationship to the
parties or their transaction 'Scoles and >ayes, )onflict of La! 4414. M1982N*/ There is no Euestion
that the contracts sought to be enforced by claimants ha&e a direct connection !ith the 2ahrain la!
because the ser&ices !ere rendered in that country/
5n :orse Management &o. 5P!?6 v. :ational Seamen Board, 11. S)#% 48 '1982*, the
D(mployment %greement,D bet!een 8orse ,anagement )o/ and the late husband of the pri&ate
respondent, eCpressly pro&ided that in the e&ent of illness or inFury to the employee arising out of
and in the course of his employment and not due to his o!n misconduct, Dcompensation shall be
paid to employee in accordance !ith and subFect to the limitation of the 3orkmen+s )ompensation
%ct of the #epublic of the 0hilippines or the 3orker+s 5nsurance %ct of registry of the &essel,
!hiche&er is greater/D Since the la!s of Singapore, the place of registry of the &essel in !hich the
late husband of pri&ate respondent ser&ed at the time of his death, granted a better compensation
package, !e applied said foreign la! in preference to the terms of the contract/
The case of Bagong 9ilipinas Overseas &orporation v. :ational #abor Relations &ommission, 1-:
S)#% 2.8 '198:*, relied upon by %52) and 2#55 is inapposite to the facts of the cases at bench/ The
issue in that case !as !hether the amount of the death compensation of a =ilipino seaman should
be determined under the shipboard employment contract eCecuted in the 0hilippines or the
>ongkong la!/ >olding that the shipboard employment contract !as controlling, the court
differentiated said case from 8orse ,anagement )o/ in that in the latter case there !as an eCpress
stipulation in the employment contract that the foreign la! !ould be applicable if it afforded greater
compensation/
2/ %52) and 2#55 claim that they !ere denied by 8L#) of their right to due process !hen said
administrati&e agency granted =riday1pay differential, holiday1pay differential, annual1lea&e
differential and lea&e indemnity pay to the claimants listed in %nneC 2 of the #esolution/ %t first,
8L#) re&ersed the resolution of the 0"(% %dministrator granting these benefits on a finding that the
0"(% %dministrator failed to consider the e&idence presented by %52) and 2#55, that some findings
of fact of the 0"(% %dministrator !ere not supported by the e&idence, and that some of the
e&idence !ere not disclosed to %52) and 2#55 'Rollo, pp/ -:1-H 14114.*/ 2ut instead of remanding
the case to the 0"(% %dministrator for a ne! hearing, !hich means further delay in the termination
of the case, 8L#) decided to pass upon the &alidity of the claims itself/ 5t is this procedure that %52)
and 2#55 complain of as being irregular and a Dre&ersible error/D
They pointed out that 8L#) took into consideration e&idence submitted on appeal, the same
e&idence !hich 8L#) found to ha&e been Dunilaterally submitted by the claimants and not disclosed
to the ad&erse partiesD 'Rollo, pp/ -.1-9*/
8L#) noted that so many pieces of e&identiary matters !ere submitted to the 0"(% administrator
by the claimants after the cases !ere deemed submitted for resolution and !hich !ere taken
cogni6ance of by the 0"(% %dministrator in resol&ing the cases/ 3hile %52) and 2#55 had no
opportunity to refute said e&idence of the claimants before the 0"(% %dministrator, they had all the
opportunity to rebut said e&idence and to present their
counter1e&idence before 8L#)/ %s a matter of fact, %52) and 2#55 themsel&es !ere able to present
before 8L#) additional e&idence !hich they failed to present before the 0"(% %dministrator/
@nder %rticle 221 of the Labor )ode of the 0hilippines, 8L#) is enFoined to Duse e&ery and all
reasonable means to ascertain the facts in each case speedily and obFecti&ely and !ithout regard to
technicalities of la! or procedure, all in the interest of due process/D
5n deciding to resol&e the &alidity of certain claims on the basis of the e&idence of both parties
submitted before the 0"(% %dministrator and 8L#), the latter considered that it !as not eCpedient
to remand the cases to the 0"(% %dministrator for that !ould only prolong the already protracted
legal contro&ersies/
(&en the Supreme )ourt has decided appealed cases on the merits instead of remanding them to
the trial court for the reception of e&idence, !here the same can be readily determined from the
uncontro&erted facts on record 'De&elopment 2ank of the 0hilippines &/ 5ntermediate %ppellate
)ourt, 194 S)#% :- M1994NH 0agdonsalan &/ 8ational Labor #elations )ommission, 12. S)#% 4-
M1984N*/
)/ %52) and 2#55 charge 8L#) !ith gra&e abuse of discretion !hen it ordered the 0"(%
%dministrator to hold ne! hearings for 8- claimants listed in %nneC D of the #esolution dated
September 2, 1991 !hose claims had been denied by the 0"(% %dministrator Dfor lack of proofD and
for 9 claimants listed in %nneC ( of the same #esolution, !hose claims had been found by 8L#)
itself as not Dsupported by e&idenceD 'Rollo, pp/ 4114:*/
8L#) based its ruling on %rticle 218'c* of the Labor )ode of the 0hilippines, !hich empo!ers it DMtoN
conduct in&estigation for the determination of a Euestion, matter or contro&ersy, !ithin its Furisdiction,
/ / / /D
5t is the posture of %52) and 2#55 that 8L#) has no authority under %rticle 218'c* to remand a case
in&ol&ing claims !hich had already been dismissed because such pro&ision contemplates only
situations !here there is still a Euestion or contro&ersy to be resol&ed 'Rollo, pp/ 41142*/
% principle !ell embedded in %dministrati&e La! is that the technical rules of procedure and
e&idence do not apply to the proceedings conducted by administrati&e agencies '=irst %sian
Transport B Shipping %gency, 5nc/ &/ "ple, 142 S)#% :42 M198NH %sia!orld 0ublishing >ouse, 5nc/
&/ "ple, 1:2 S)#% 219 M198.N*/ This principle is enshrined in %rticle 221 of the Labor )ode of the
0hilippines and is no! the bedrock of proceedings before 8L#)/
8ot!ithstanding the non1applicability of technical rules of procedure and e&idence in administrati&e
proceedings, there are cardinal rules !hich must be obser&ed by the hearing officers in order to
comply !ith the due process reEuirements of the )onstitution/ These cardinal rules are collated
in Ang !ibay v. &o%rt o" nd%strial Relations, 9 0hil/ -: '1944*/
<555
The three petitions !ere filed under #ule : of the #e&ised #ules of )ourt on the grounds that
8L#) had committed gra&e abuse of discretion amounting to lack of Furisdiction in issuing the
Euestioned orders/ 3e find no such abuse of discretion/
3>(#(="#(, all the three petitions are D5S,5SS(D/
S" "#D(#(D/
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Catan vs. )ational Labor Relations Co--ission, 1% SCRA &1 , April
1*, 1&''
Case (itle : MAN>ELA S. CATANMM.S. CATAN PLACEMENT A#ENCY,
petitioners, s. THE NATIONAL LA!OR RELATIONS COMMISSION,
PHILIPPINE O9ERSEAS EMPLOYMENT ADMINISTRATION 'nd "RANCISCO D.
REYES, respondents.Case )at$re : SPECIAL CI9IL ACTION %or &ertior'ri to
reie( t)e reso-.tion o% t)e N'tion'- L'bor Re-'tions Co//ission.
Syllabi Class : L'bor*Oerse's E/p-oy/ent*Dis'bi-ity !ene%its
Syllabi:
1. Labor; O"erseas E#ploy#ent; Disability 9enefits; 7he employeeIs
in.ury was sustained during the lifetime of the employment contract as no
notice of termination of the contract was given by either or both of the
parties at least a month before its expiration.2
". Labor; O"erseas E#ploy#ent; Disability 9enefits; / private
employment agency may be sued .ointly and solidarily with its foreign
principal for violations of the recruitment agreement and the contracts of
employment.2
!. Labor; O"erseas E#ploy#ent; Disability 9enefits; 3ven if petitioner
and the #audi principal had already severed their agency agreement at the
time private respondent was in.ured petitioner may still be sued for
violation of the employment contract.2
4. Labor; O"erseas E#ploy#ent; Disability 9enefits; 1edical 3xpensesF
<or!er entitled to award of medical expenses absent proof that he was not
medically fit to wor! when he returned to #audi /rabia.2
+ivision: TH-RD DI9ISION
+oc,et )$-ber: No. L;11?13
Co$nsel: De/etri', Reyes, Merris = Asso&i'tes, T)e So-i&itor #ener'-,
!'y'ni #. Di('
.onente: CORTES
+ispositive .ortion:
6HERE"ORE, in ie( o% t)e %ore,oin,, t)e petition is DISMISSED %or -'&F o%
/erit, (it) &osts ','inst petitioner.
0etitioner, in this special ci&il action for certiorari, alleges gra&e abuse of discretion on the part of the
8ational Labor #elations )ommission in an effort to nullify the latters resolution and thus free
petitioner from liability for the disability suffered by a =ilipino !orker it recruited to !ork in Saudi
%rabia/ This )ourt, ho!e&er, is not persuaded that such an abuse of discretion !as committed/ This
petition must fail/
The facts of the case are Euite simple/
0etitioner, a duly licensed recruitment agency, as agent of %li and =ahd Shabokshi ?roup, a Saudi
%rabian firm, recruited pri&ate respondent to !ork in Saudi %rabia as a steelman/
The term of the contract !as for one year, from ,ay 1:,1981 to ,ay 14, 1982/ >o!e&er, the contract
pro&ided for its automatic rene!al;
=5=T>; The &alidity of this )ontract is for "8( A(%# commencing from the date the
S()"8D 0%#TA assumes hill port/ This )ontract is rene!able automatically if
neither of the 0%#T5(S notifies the other 0%#TA of his !ishes to terminate the
)ontract by at least "8( ,"8T> prior to the eCpiration of the contractual period/
M0etition, pp/ 1.H #ollo, pp/ .18N/
The contract !as automatically rene!ed !hen pri&ate respondent !as not repatriated by his Saudi
employer but instead !as assigned to !ork as a crusher plant operator/ "n ,arch -4, 198-, !hile
he !as !orking as a crusher plant operator, pri&ate respondent+s right ankle !as crushed under the
machine he !as operating/
"n ,ay 1:, 198-, after the eCpiration of the rene!ed term, pri&ate respondent returned to the
0hilippines/ >is ankle !as operated on at the Sta/ ,esa >eights ,edical )enter for !hich he
incurred eCpenses/
"n September 9, 198-, he returned to Saudi %rabia to resume his !ork/ "n ,ay 1:,1984, he !as
repatriated/
@pon his return, he had his ankle treated for !hich he incurred further eCpenses/
"n the basis of the pro&ision in the employment contract that the employer shall compensate the
employee if he is inFured or permanently disabled in the course of employment, pri&ate respondent
filed a claim, docketed as 0"(% )ase 8o/ 8414984., against petitioner !ith respondent 0hilippine
"&erseas (mployment %dministration/ "n %pril 14, 198, the 0"(% rendered Fudgment in fa&or of
pri&ate respondent, the dispositi&e portion of !hich reads;
3>(#(="#(, Fudgment is hereby rendered in fa&or of the complainant and against
the respondent, ordering the latter to pay to the complainant;
1/ S(<(8 T>"@S%8D 858( >@8D#(D (5?>TA1=5<( 0(S"S and 47144
'0.,98:/4*, 0hilippine currency, representing disability benefitsH
2/ T3(8TA1=5<( T>"@S%8D 858(TA1S5$ 0hilippine pesos and 247144 '29,49/24*
representing reimbursement for medical eCpensesH
-/ Ten percent '14I* of the abo&ementioned amounts as and for attorney+s fees/
M8L#) #esolution, p/ 1H #ollo, p/ 1N/
"n appeal, respondent 8L#) affirmed the decision of the 0"(% in a resolution dated December 12,
198/
8ot satisfied !ith the resolution of the 0"(%, petitioner instituted the instant special ci&il action for
certiorari, alleging gra&e abuse of discretion on the part of the 8L#)/
1/ 0etitioner claims that the 8L#) gra&ely abused its discretion !hen it ruled that petitioner !as
liable to pri&ate respondent for disability benefits since at the time he !as inFured his original
employment contract, !hich petitioner facilitated, had already eCpired/ =urther, petitioner disclaims
liability on the ground that its agency agreement !ith the Saudi principal had already eCpired !hen
the inFury !as sustained/
There is no merit in petitioner+s contention/
0ri&ate respondents contract of employment can not be said to ha&e eCpired on ,ay 14, 1982 as it
!as automatically rene!ed since no notice of its termination !as gi&en by either or both of the
parties at least a month before its eCpiration, as so pro&ided in the contract itself/ Therefore, pri&ate
respondent+s inFury !as sustained during the lifetime of the contract/
% pri&ate employment agency may be sued Fointly and solidarily !ith its foreign principal for
&iolations of the recruitment agreement and the contracts of employment;
Sec/ 14/ Re>%irement be"ore recr%itment.I 2efore recruiting any !orker, the pri&ate
employment agency shall submit to the 2ureau the follo!ing documents;
'a* % formal appointment or agency contract eCecuted by a foreign1based employer
in fa&or of the license holder to recruit and hire personnel for the former ///
CCC CCC CCC
2/ 0o!er of the agency to sue and be sued Fointly and solidarily !ith
the principal or foreign1based employer for any of the &iolations of the
recruitment agreement and the contracts of employment/ MSection
14'a* '2* #ule <, 2ook 5, #ules to 5mplement the Labor )odeN/
Thus, in the recent case of Ambra>%e nternational Placement U Services v. :#R& M?/#/ 8o/ ..9.4,
9anuary 28,1988N, the )ourt ruled that a recruitment agency !as solidarily liable for the unpaid
salaries of a !orker it recruited for employment in Saudi %rabia/
(&en if indeed petitioner and the Saudi principal had already se&ered their agency agreement at the
time pri&ate respondent !as inFured, petitioner may still be sued for a &iolation of the employment
contract because no notice of the agency agreement+s termination !as gi&en to the pri&ate
respondent;
%rt 1921/ 5f the agency has been entrusted for the purpose of contra !ith specified
persons, its re&ocation shall not preFudice the latter if they !ere not gi&en notice
thereof/ M)i&il )odeN/
5n this connection the 8L#) elaborated;
Suffice it to state that albeit local respondent ,/ S/ )atan %gency !as at the time of
complainant+s accident resulting in his permanent partial disability !as 'sic* no longer
the accredited agent of its foreign principal, foreign respondent herein, yet its
responsibility o&er the proper implementation of complainant+s employment7ser&ice
contract and the !elfare of complainant himself in the foreign Fob site, still eCisted,
the contract of employment in Euestion not ha&ing eCpired yet/ !his m%st be so,
beca%se the obligations covenanted in the recr%itment agreement entered into by
and bet)een the local agent and its "oreign principal are not cotermin%s )ith the
term o" s%ch agreement so that i" either or both o" the parties decide to end the
agreement, the responsibilities o" s%ch parties to)ards the contracted employees
%nder the agreement do not at all end, b%t the same extends %p to and %ntil the
expiration o" the employment contracts o" the employees recr%ited and employed
p%rs%ant to the said recr%itment agreement. Other)ise, this )ill render n%gatory the
very p%rpose "or )hich the la) governing the employment o" )or4ers "or "oreign 'obs
abroad )as enacted. M8L#) #esolution, p/ 4H #ollo, p/ 18N/ '(mphasis supplied*/
2/ 0etitioner contends that e&en if it is liable for disability benefits, the 8L#) gra&ely abused its
discretion !hen it affirmed the a!ard of medical eCpenses !hen the said eCpenses !ere the
conseEuence of pri&ate respondent+s negligence in returning to !ork in Saudi %rabia !hen he kne!
that he !as not yet medically fit to do so/
%gain, there is no merit in this contention/
8o e&idence !as introduced to pro&e that pri&ate respondent !as not medically fit to !ork !hen he
returned to Saudi %rabia/ (Chibit D2D, a certificate issued by Dr/ ShafEuat 8ia6i, the camp doctor, on
8o&ember 1, 198-, merely stated that pri&ate respondent !as Dunable to !alk properly, moreo&er he
is still complaining MofN pain during !alking and different lo!er limbs mo&ementD M%nneC D2D, #eplyH
#ollo, p/ :1N/ 8o!here does it say that he !as not medically fit to !ork/
=urther, since petitioner e&en assisted pri&ate respondent in returning to !ork in Saudi %rabia by
purchasing his ticket for him M(Chibit D(DH %nneC D%D, #eply to #espondents+ )ommentsN, it is as if
petitioner had certified his fitness to !ork/ Thus, the 8L#) found;
=urthermore, it has remained unrefuted by respondent that complainant+s
subseEuent departure or return to Saudi %rabia on September 9, 198- !as !ith the
full kno!ledge, consent and assistance of the former/ %s sho!n in (Chibit D(D of the
record, it !as respondent !ho facilitated the tra&el papers of complainant/ M8L#)
#esolution, p/ :H #ollo, p/ 19N/
3>(#(="#(, in &ie! of the foregoing, the petition is D5S,5SS(D for lack of merit, !ith costs
against petitioner/
S" "#D(#(D/
Royal Cro9n 3nternationale vs. )LRC, 17' SCRA *& , <ctober 1, 1&'&
Case (itle : ROYAL CRO6N INTERNATIONALE, petitioner, s. NATIONAL
LA!OR RELATIONS COMMISSION 'nd 9IR#ILIO P. NACIONALES,
respondents.Case )at$re : PETITION to reie( t)e de&ision o% t)e N'tion'-
L'bor Re-'tions Co//ission.
Syllabi Class : Re/edi'- L'(*L'bor L'(*Appe'-*0.risdi&tion*N'tion'- L'bor
Re-'tions Co//ission*Ter/in'tion o% e/p-oy/ent*Constit.tion'- L'(
Syllabi:
1. Re#edial Law; &ppeal; / petition for review under Rule B5 of the Rules
of &ourt is not the proper means by which 4LR& decisions are appealed to
the #upreme &ourt.2
". Sa#e; $onstittional Law; /ll Eilipino wor!ers en.oy the protective
mantle of Philippine labor and social legislation contract stipulations to the
contrary notwithstanding.-
>7he provisions of the Labor &ode of the Philippines its implementing rules
and regulations and doctrines laid down in .urisprudence dealing with the
principle of due process and the basic right of all Eilipino wor!ers to security
of tenure provide the standard by which the legality of the exercise by
management of its prerogative to dismiss incompetent dishonest or
recalcitrant employees is to be determined. <hether employed locally or
overseas all Eilipino wor!ers en.oy the protective mantle of Philippine labor
and social legislation contract stipulations to the contrary notwithstanding.
7his pronouncement is in !eeping with the basic public policy of the #tate to
afford protection to labor promote full employment ensure equal wor!
opportunities regardless of sex race or creed and regulate the relations
between wor!ers and employers. Eor the #tate assures the basic rights of all
wor!ers to self-organi@ation collective bargaining security of tenure and
.ust and humane conditions of wor! M/rticle ; of the Labor &ode of the
Philippines: #ee also #ection (+ /rticle %% and #ection ; /rticle Q%%% (*+$
&onstitutionN. 7his ruling is li!ewise rendered imperative by /rticle ($ of the
&ivil &ode which states that laws 8which have for their ob.ect public order
public policy and good customs shall not be rendered ineffective by laws or
.udgments promulgated or by determination or conventions agreed upon in
a foreign country.9
!. Sa#e; Sa#e; Sa#e; Sa#e; 4LR& committed no grave abuse of
discretion in upholding the P'3/Is finding of insufficiency of evidence to
prove termination for .ust and valid cause.-
>7he &ourt holds therefore that the 4LR& committed no grave abuse of
discretion amounting to lac! or excess of .urisdiction in upholding the P'3/Is
finding of
4. Sa#e; Sa#e; Sa#e; Petitioner failed to discharge the burden of proving
that private respondent was terminated for .ust and valid cause.-
>%n the case at bar petitioner had indeed failed to discharge the burden of
proving that private respondent was terminated from employment for .ust
and valid cause.
*. Sa#e; 6er#ination of e#ploy#ent; %n termination cases the burden
of proof rests upon the employer to show that the dismissal is for .ust and
valid cause.2
. Sa#e; National Labor Relations $o##ission; 4LR& committed no
grave abuse of discretion amounting to lac! or excess of .urisdiction in
declaring petitioner .ointly and severally liable with S/13L.2
7. Sa#e; %risdiction; Rule that service upon an agent of a foreign
corporation whether or not engaged in business in the Philippines constitutes
personal service upon that corporation well-settled.2
'. Sa#e; Sa#e; 7he various contractual underta!ings constitute the legal
basis for holding petitioner liable .ointly and severally with its principal the
foreign-based employer for all claims filed by recruited wor!ers.2
&. Labor Law; PetitionerIs conclusion that it cannot be held .ointly and
severally liable with S/13L for violation of private respondentIs service
agreement is erroneous.-
>PetitionerIs conclusion is erroneous. Petitioner conveniently overloo!s the
fact that it had voluntarily assumed solidary liability under the various
contractual underta!ings it submitted to the Dureau of 3mployment
#ervices. %n applying for its license to operate a private employment agency
for overseas recruitment and placement petitioner was required to submit
among others a document or verified underta!ing whereby it assumed all
responsibilities for the proper use of its license and the implementation of
the contracts of employment with the wor!ers it recruited and deployed for
overseas employment M#ection C"e, Rule H Doo! % Rules to %mplement the
Labor &ode "(*$),N. %t was also required to file with the Dureau a formal
appointment or agency contract executed by the foreign-based employer in
its favor to recruit and hire personnel for the former which contained a
provision empowering it to sue and be sued .ointly and solidarily with the
foreign principal for any of the violations of the recruitment agreement and
the contracts of employment M#ection (6 "a, "C, Rule H Doo! % of the Rules
to %mplement the Labor &ode "(*$),N. Petitioner was required as well to
post such cash and surety bonds as determined by the #ecretary of Labor to
guarantee compliance with prescribed recruitment procedures rules and
regulations and terms and conditions of employment as appropriate.
+ivision: THIRD DI9ISION
+oc,et )$-ber: #.R. No. 12427
Co$nsel: Ce%erino P'd.' L'( O%%i&e, A&ost' = Ri&o L'( O%%i&es
.onente: CORTQS
+ispositive .ortion:
6HERE"ORE, t)e Co.rt Reso-ed to DISMISS t)e inst'nt petition.
0etitioner #oyal )ro!n 5nternationale seeks the nullification of a resolution of the 8ational Labor
#elations )ommission '8L#)* !hich affirmed a decision of the 0hilippine "&erseas (mployment
%dministration '0"(%* holding it liable to pay, Fointly and se&erally !ith Jamel1Turbag (ngineering
and %rchitectural )onsultant 'J%,(L*, pri&ate respondent <irgilio 0/ 8acionales+ salary and &acation
pay corresponding to the uneCpired portion of his employment contract !ith J%,(L/
5n 198-, petitioner, a duly licensed pri&ate employment agency, recruited and deployed pri&ate
respondent for employment !ith J%,(L as an architectural draftsman in Saudi %rabia/ "n ,ay 2:,
198-, a ser&ice agreement !as eCecuted by pri&ate respondent and J%,(L !hereby the former
!as to recei&e per month a salary of @SP:44/44 plus @SP144/44 as allo!ance for a period of one
'1* year commencing from the date of his arri&al in Saudi %rabia/ 0ri&ate respondent departed for
Saudi %rabia on 9une 28,198-/
"n =ebruary 1-, 1984, J%,(L terminated the employment of pri&ate respondent on the ground that
his performance !as belo! par/ =or three '-* successi&e days thereafter, he !as detained at his
Euarters and !as not allo!ed to report to !ork until his eCit papers !ere ready/ "n =ebruary 1,
1984, he !as made to board a plane bound for the 0hilippines/
0ri&ate respondent then filed on %pril 2-, 1984 a complaint for illegal termination against petitioner
and J%,(L !ith the 0"(%, docketed as 0"(% )ase 8o/ 'L* 841441441/
2ased on a finding that petitioner and J%,(L failed to establish that pri&ate respondent !as
terminated for Fust and &alid cause, the 3orkers+ %ssistance and %dFudication "ffice of the 0"(%
issued a decision dated 9une 2-, 198 signed by Deputy %dministrator and "fficer1in1)harge
)rescencio ,/ Siddayao, the dispositi&e portion of !hich reads;
3>(#(="#(, Fudgment is hereby rendered in fa&or of the complainant and against
respondents, ordering the latter to pay, Fointly and se&erally, to complainant the
follo!ing amounts;
1/ T3" T>"@S%8D S5$ >@8D#(D ="#TA @S D"LL%#S '@SP2,44/44* or its
eEui&alent in 0hilippine currency at the time of payment, representing the salaries
corresponding to the uneCpired portion of complainant+s contractH
2/ S5$ >@8D#(D @S D"LL%#S '@SP 44/44* less partial payment of =5<(
>@8D#(D =5=TA1(5?>T S%@D5 #5A%LS 'S#::8*, or its eEui&alent in 0hilippine
currency at the time of actual payment, representing the unpaid balance of
complainant+s &acation payH
-/ T>#(( >@8D#(D =5=TA @S D"LL%#S '@SP-:4/44* or its eEui&alent in
0hilippine currency at the time of actual payment representing reimbursement of
salary deductions for return tra&el fundH
4/ Ten percent '14I* of the abo&e1stated amounts, as and for attorney+s fees/
)omplainant+s claim for legal and transportation eCpenses are hereby D5S,5SS(D
for lack of merit/
S" "#D(#(D/
M0"(% Decision, p/ :H #ollo, p/ -4/N
"n 9uly 18, 198, petitioner filed thru its ne! counsel a motion for reconsideration !hich !as treated
as an appeal to the 8L#) by the 0"(%/ 0etitioner alleged that the 0"(% erred in holding it
solidarity liable for J%,(L+s &iolation of pri&ate respondent+s ser&ice agreement e&en if it !as not a
party to the agreement/
5n a resolution promulgated on December 11, 198, the 8L#) affirmed the 0"(% decision, holding
that, as a duly licensed pri&ate employment agency, petitioner is Fointly and se&erally liable !ith its
foreign principal J%,(L for all claims and liabilities !hich may arise in connection !ith the
implementation of the employment contract or ser&ice agreement M8L#) Decision, pp/ -14H #ollo,
pp/ 212.N/
"n ,arch -4, 198., the 8L#) denied for lack of merit petitioner+s motion for reconsideration/
>ence, petitioner filed the present petition captioned as D0etition for #e&ie!D/
%t this point, it is not amiss to note that the filing of a D0etition for #e&ie!D under #ule 4: of the
#ules of )ourt is not the proper means by !hich 8L#) decisions are appealed to the Supreme
)ourt/ 5t is only through a petition for certiorari under #ule : that 8L#) decisions may be re&ie!ed
and nullified on the grounds of lack of Furisdiction or gra&e abuse of discretion amounting to lack or
eCcess of Furisdiction/ 8e&ertheless, in the interest of Fustice, this )ourt opted to treat the instant
petition as if it !ere a petition for certiorari/ Thus, after the filing of respondents+ comments,
petitioner+s Foint reply thereto, and respondents+ reFoinders, the )ourt resol&ed to consider the issues
Foined and the case submitted for decision/
The case at bar in&ol&es t!o principal issues, to !it;
5/ 3hether or not petitioner as a pri&ate employment agency may be held Fointly and
se&erally liable !ith the foreign1based employer for any claim !hich may arise in
connection !ith the implementation of the employment contracts of the employees
recruited and deployed abroadH
55/ 3hether or not sufficient e&idence !as presented by petitioner to establish the
termination of pri&ate respondent+s employment for Fust and &alid cause/
5/
0etitioner contends that there is no pro&ision in the Labor )ode, or the omnibus rules implementing
the same, !hich either pro&ides for the Dthird1party liabilityD of an employment agency or recruiting
entity for &iolations of an employment agreement performed abroad, or designates it as the agent of
the foreign1based employer for purposes of enforcing against the latter claims arising out of an
employment agreement/ Therefore, petitioner concludes, it cannot be held Fointly and se&erally liable
!ith J%,(L for &iolations, if any, of pri&ate respondent+s ser&ice agreement/
0etitioner+s conclusion is erroneous/ 0etitioner con&eniently o&erlooks the fact that it had &oluntarily
assumed solidary liability under the &arious contractual undertakings it submitted to the 2ureau of
(mployment Ser&ices/ 5n applying for its license to operate a pri&ate employment agency for
o&erseas recruitment and placement, petitioner !as reEuired to submit, among others, a document
or &erified undertaking !hereby it assumed all responsibilities for the proper use of its license
and the implementation o" the contracts o" employment )ith the )or4ers it recruited and deployed for
o&erseas employment MSection 2'e*, #ule <, 2ook 1, #ules to 5mplement the Labor )ode '19.*N/ 5t
!as also reEuired to file !ith the 2ureau a formal appointment or agency contract eCecuted by the
foreign1based employer in its fa&or to recruit and hire personnel for the former, !hich contained a
pro&ision empo!ering it to s%e and be s%ed 'ointly and solidarily )ith the "oreign principal "or any o"
the violations o" the recr%itment agreement and the contracts o" employment MSection 14 'a* '2*,
#ule <, 2ook 5 of the #ules to 5mplement the Labor )ode '19.*N/ 0etitioner !as reEuired as !ell to
post such cash and surety bonds as determined by the Secretary of Labor to guarantee compliance
!ith prescribed recruitment procedures, rules and regulations, and terms and conditions of
employment as appropriate MSection 1 of 0res/ Dec/ 1412 '19.8* amending %rticle -1 of the Labor
)odeN/
These contractual undertakings constitute the legal basis for holding petitioner, and other pri&ate
employment or recruitment agencies, liable Fointly and se&erally !ith its principal, the foreign1based
employer, for all claims filed by recruited !orkers !hich may arise in connection !ith the
implementation of the ser&ice agreements or employment contracts MSee %mbraEue 5nternational
0lacement and Ser&ices &/ 8L#), ?/#/ 8o/ ..9.4, 9anuary 28, 1988, 1:. S)#% 4-1H )atan &/
8L#), ?/#/ 8o/ ..2.9, %pril 1:, 1988, 14 S)#% 91H %lga ,oher 5nternational 0lacement
Ser&ices &/ %tien6a, ?/#/ 8o/ .414, September -4, 1988N/
5n a belated attempt to bolster its position, petitioner contends in its Foint reply that the omnibus rules
implementing the Labor )ode are in&alid for not ha&ing been published in the "fficial ?a6ette
pursuant to the )ourt+s pronouncements in the cases of !anada v. !%vera M?/#/ 8o/ -91:, %pril 2:,
198:, 1- S)#% 2.H December 29, 198, 14 S)#% 44N/ 0etitioner further contends that the 198:
0"(% #ules and #egulations, in particular Section 1, #ule 5 of 2ook <55!! Euoted in the 8L#) decision, should
not ha&e been retroacti&ely applied to the case at bar/
2ut these contentions are irrele&ant to the issues at bar/ They proceed from a misapprehension of
the legal basis of petitioner+s liabilities as a duly licensed pri&ate employment agency/ 5t bears
repeating that the basis for holding petitioner Fointly and se&erally liable !ith the foreign1based
employer J%,(L is the contractual undertakings described abo&e !hich it had submitted to the
2ureau of (mployment Ser&ices/ The sections of the omnibus rules implementing the Labor )ode
cited by this )ourt merely enumerate the &arious documents or undertakings !hich !ere submitted
by petitioner as applicant for the license to operate a pri&ate employment agency for o&erseas
recruitment and placement/ These sections do not create the obligations and liabilities of a pri&ate
employment agency to an employee it had recruited and deployed for !ork o&erseas/ 5t must be
emphasi6ed again that petitioner assumed the obligations and liabilities of a pri&ate employment
agency by contract/ Thus, !hether or not the omnibus rules are effecti&e in accordance !ith !anada
v. !%vera is an issue the resolution of !hich does not at all render nugatory the binding effect upon
petitioner of its o!n contractual undertakings/
The )ourt, conseEuently, finds it unnecessary to pass upon both the implications of !anada v.
!%vera on the omnibus rules implementing the Labor )ode as !ell as the applicability of the 198:
0"(% #ules and #egulations/
0etitioner further argues that it cannot be held solidarily liable !ith J%,(L since public respondent
had not acEuired Furisdiction o&er J%,(L through eCtra1territorial ser&ice of summons as mandated
by Section 1., #ule 14 of the #ules of )ourt/
This argument is untenable/ 5t is !ell1settled that ser&ice upon any agent of a foreign corporation,
!hether or not engaged in business in the 0hilippines, constitutes personal ser&ice upon that
corporation, and accordingly, Fudgment may be rendered against said foreign corporation M=acilities
,anagement )orporation &/ De la "sa, ?/#/ 8o/ L1-849, ,arch 2, 19.9, 89 S)#% 1-1N/ 5n the
case at bar, it cannot be denied that petitioner is an agent of J%,(L/ The ser&ice agreement !as
eCecuted in the 0hilippines bet!een pri&ate respondent and ,ilagros ?/ =austo, the ?eneral
,anager of petitioner, for and in behalf of J%,(L M%nneC DDD of 0etition, p/ -H #ollo, p/ -.N/
,oreo&er, one of the documents presented by petitioner as e&idence, i/e/, the counter1affida&it of its
?eneral ,anager ,s/ =austo, contains an admission that it is the representati&e and agent of
J%,(L MSee 0aragraph 8o/ 1 of %nneC D>D of 0etitionH #ollo/ p/ 4-N/
)onsidering the foregoing, the )ourt holds that the 8L#) committed no gra&e abuse of discretion
amounting to lack or eCcess of Furisdiction in declaring petitioner Fointly and se&erally liable !ith its
foreign principal J%,(L for all claims !hich ha&e arisen in connection !ith the implementation of
pri&ate respondent+s employment contract/
55/
0etitioner asserts that the 8L#) failed to consider the o&er!helming e&idence it had presented
before the 0"(% !hich establishes the fact that pri&ate respondent !as terminated for Fust and &alid
cause in accordance !ith his ser&ice agreement !ith J%,(L/
This assertion is !ithout merit/ The 8L#) upheld the 0"(% finding that petitioner+s e&idence !as
insufficient to pro&e termination from employment for Fust and &alid cause/ %nd a careful study of the
e&idence thus far presented by petitioner re&eals to this )ourt that there is legal basis for public
respondent+s conclusion/
5t must be borne in mind that the basic principle in termination cases is that the burden of proof rests
upon the employer to sho! that the dismissal is for Fust and &alid cause, and failure to do so !ould
necessarily mean that the dismissal !as not Fustified and, therefore, !as illegal M0olymedic ?eneral
>ospital &/ 8L#), ?/#/ 8o/ 4194, 9anuary -1, 198:,1-4 S)#% 424H and also %rticle 2.. of the
Labor )odeN/ %nd !here the termination cases in&ol&e a =ilipino !orker recruited and deployed for
o&erseas employment, the burden naturally de&ol&es upon both the foreign1based employer and the
employment agency or recruitment entity !hich recruited the !orker, for the latter is not only the
agent of the former, but is also solidarily liable !ith its foreign principal for any claims or liabilities
arising from the dismissal of the !orker/
5n the case at bar, petitioner had indeed failed to discharge the burden of pro&ing that pri&ate
respondent !as terminated from employment for Fust and &alid cause/ 0etitioner+s e&idence
consisted only of the follo!ing documents;
'1* % letter dated ,ay l:, 1984 allegedly !ritten by an official of J%,(L, stating that a
periodic e&aluation of the entire staff !as conductedH that the personnel concerned
!ere gi&en a chance to impro&eH that complainant+s performance !as found belo!
parH and that on =ebruary 1-,1984, at about 8;-4 %,, complainant !as caught on the
!ay out of the office to look for another Fob during office hours !ithout the permission
of his super&isorH
'2* % teleC message allegedly sent by employees of J%,(L, stating that they ha&e
not eCperienced maltreatment, and that the !orking conditions 'in J%,(L* are goodH
'-* The signatures of fifteen '1:* persons !ho allegedly sent the teleC messageH
'4* % receipt dated =ebruary 1, 1984 signed by complainant, stating that he !as
paid S#91: representing his salary and S#::8, representing &acation pay for the
month of =ebruary 1984H
':* The counter1affida&it of ,ilagros ?/ =austo, the ?eneral ,anager of #oyal
)ro!n, stating that complainant !as dismissed because of poor performance, acts of
dishonesty and misconduct, and denying complainant+s claim that his salary and
lea&e pay !ere not paid, and that he !as maltreated MSee 0"(% Decision, p/ -H
#ollo, p/ -2, See also %nneCes D(D, D=D, D=11 D, D?D and D>D of 0etitionH #ollo, pp/ -81
4-N/
)ertainly, the teleC message supposedly sent by the employees of J%,(L is not rele&ant in the
determination of the legality of pri&ate respondent+s dismissal/ "n the other hand, the receipt signed
by pri&ate respondent does not pro&e payment to him of the salary and &acation pay corresponding
to the uneCpired portion of his contract/
,ore importantly, eCcept for its allegation that pri&ate respondent !as caught on =ebruary 1-,1984
on his !ay out of the office compound !ithout permission, petitioner had failed to allege and to pro&e
!ith particularity its charges against pri&ate respondent/ The letter dated ,ay 1:, 1984 allegedly
!ritten by the %ctg/ 0roFect %rchitect and the counter1affida&it of petitoner+s ?eneral ,anager merely
stated that the grounds for the employee+s dismissal !ere his unsatisfactory performance and
&arious acts of dishonesty, insubordination and misconduct/ 2ut the particular acts !hich !ould
indicate pri&ate respondent+s incompetence or constitute the abo&e infractions !ere neither specified
nor described therein/ 5n the absence of any other e&idence to substantiate the general charges
hurled against pri&ate respondent, these documents, !hich comprise petitioner+s e&idence in chief,
contain empty and self1ser&ing statements insufficient to establish Fust and &alid cause for the
dismissal of pri&ate respondent MSee (uro1Lines, 0hils/, 5nc/ &/ 8L#), ?/#/ 8o/ .:.82, December 1,
198.,1: S)#% .8H %mbraEue 5nternational 0lacement and Ser&ices &/ 8L#), s%praN/
The )ourt is a!are of the document attached in petitioner+s manifestation and Foint reply !hich is
purportedly a CeroC copy of a statement eCecuted on December 1-, 198. in Saudi %rabia by pri&ate
respondent claiming that the latter had settled the case !ith J%,(L and had Drecei&ed all MhisN
benefits that is salary, &acation pay, se&erance pay and all other bonuses before MheN left the
kingdom of Saudi %rabia on 1- =eb/ 1984 and hereby indemnify MJ%,(LN from any claims or
liabilities, MheN raised in the 0hilippine )ourtsD M%nneC D%D of petitioner+s ,anifestation !ith ,otion to
hold in %beyanceH #ollo, p/ 82/ %nd also %nneC D%D of petitioner+s 9oint #eplyH #ollo, p/ 111N/
2ut the &eracity of the contents of the document is precisely disputed by pri&ate respondent/ >e
claims that he !as made to sign the abo&e statement against his !ill and under threat of deportation
MSee !eleC of pri&ate respondent recei&ed by the Supreme )ourt of the 0hilippines on 9anuary
14,1988H #ollo, p/ 8-/ %nd also pri&ate respondent+s #eFoinder, pp/ 11-H #ollo, pp/ 1-91141N/
0etitioner finally contends that inasmuch as clause no/ 1- of the ser&ice agreement pro&ided that the
la! under !hich the agreement shall be regulated !as the la!s of Saudi %rabia M%nneC DDD of
0etition, p/ 2H #ollo, p/ -N, public respondent should ha&e taken into account the la!s of Saudi
%rabia and the stricter concept of morality a&ailing in that Furisdiction for the determination of the
legality of pri&ate respondent+s dismissal/
This contention is patently erroneous/ The pro&isions of the Labor )ode of the 0hilippines, its
implementing rules and regulations, and doctrines laid do!n in Furisprudence dealing !ith the
principle of due process and the basic right of all =ilipino !orkers to security of tenure, pro&ide the
standard by !hich the legality of the eCercise by management of its prerogati&e to dismiss
incompetent, dishonest or recalcitrant employees, is to be determined/ 3hether employed locally or
o&erseas, all =ilipino !orkers enFoy the protecti&e mantle of 0hilippine labor and social legislation,
contract stipulations to the contrary not!ithstanding/ This pronouncement is in keeping !ith the
basic public policy of the State to afford protection to labor, promote full employment, ensure eEual
!ork opportunities regardless of seC, race or creed, and regulate the relations bet!een !orkers and
employers/ =or the State assures the basic rights of all !orkers to self1organi6ation, collecti&e
bargaining, security of tenure, and Fust and humane conditions of !ork M%rticle - of the Labor )ode
of the 0hilippinesH See also Section 18, %rticle 55 and Section -, %rticle $555, 198. )onstitutionN/ This
ruling is like!ise rendered imperati&e by %rticle 1. of the )i&il )ode !hich states that la!s D!hich
ha&e for their obFect public order, public policy and good customs shall not be rendered ineffecti&e by
la!s or Fudgments promulgated, or by determination or con&entions agreed upon in a foreign
country/D
8eedless to say, the la!s of Saudi %rabia !hich !ere, incidentally, neither pleaded nor pro&ed by
petitioner, ha&e absolutely no bearing !hatsoe&er to the case at bar/
The )ourt holds, therefore, that the 8L#) committed no gra&e abuse of discretion amounting to lack
or eCcess of Furisdiction in upholding the 0"(%+s finding of insufficiency of e&idence to pro&e
termination for Fust and &alid cause/
3>(#(="#(, the )ourt #esol&ed to D5S,5SS the instant petition/
S" "#D(#(D/
Sala6ar vs. Achacoso, 1'! SCRA 14* , March 14, 1&&%
Case (itle : HORTENCIA SALA>AR, petitioner, s. HON. TOMAS
D. ACHAC<S<, in )is &'p'&ity 's Ad/inistr'tor o% t)e P)i-ippine Oerse's
E/p-oy/ent Ad/inistr'tion, 'nd "ERDIE MARK>EA, respondents.Case
)at$re : PETITION to reie( t)e de&ision o% t)e Ad/inistr'tor o% t)e
P)i-ippine Oerse's E/p-oy/ent Ad/inistr'tion.
Syllabi Class : L'bor L'(*Constit.tion'- L'(*Constit.tion'- L'(*
Ad/inistr'tie L'(*Re/edi'- L'(*E5&eption
Syllabi:
1. Labor Law; $onstittional Law; &d#inistrati"e Law; Re#edial
Law; 'nly a .udge may issue warrants of search and arrest.-
>#ection ;+ paragraph "c, of the Labor &ode as now written was entered
as an amendment by Presidential Decrees 4os. (*C6 and C6(+ of the late
President Eerdinand 1arcos to Presidential Decree 4o. ()*; in the exercise
of his legislative powers under /mendment 4o. ) of the (*$; &onstitution.
<e reiterate that the #ecretary of Labor not being a .udge may no longer
issue search or arrest warrants. 0ence the authorities must go through the
.udicial process. 7o that extent we declare /rticle ;+ paragraph "c, of the
Labor &ode unconstitutional and of no force and effect.
". $onstittional Law; &d#inistrati"e Law; Re#edial
Law; E/ception; 7he President has the power to order the arrest "of illegal
or undesirable aliens, for the purpose of deportation.-
>7he #tate has the inherent power to deport undesirable aliens "&huoco
7iaco vs. Eorbes CC+ -.#. 5B* 5$ L. 3d. *)6 B6 Phil. ((CC ((C5,. 7hat
power may be exercised by the &hief 3xecutive 8when he deems such action
necessary for the peace and domestic tranquility of the nation.9 =ustice
=ohnsonIs opinion is that when the &hief 3xecutive finds that there are aliens
whose continued presence in the country is in.urious to the public interest
8he may even in the absence of express law deport them.9 "Eorbes vs.
&huoco 7iaco and &rossfield () Phil. 5;B 5)+ 5)*F %n re 1c&ulloch Dic!
;+ Phil. B(,.
+ivision: EN !ANC
+oc,et )$-ber: #.R. No. 2+7+4
Co$nsel: #.tierre< = A-o L'( O%%i&es
.onente: SARMIENTO
+ispositive .ortion:
6HERE"ORE, t)e petition is #RANTED. Arti&-e H2, p'r',r'p) B&C o% t)e L'bor
Code is de&-'red >NCONSTIT>TIONAL 'nd n.-- 'nd oid. T)e respondents
're ORDERED to ret.rn '-- /'teri'-s sei<ed 's ' res.-t o% t)e i/p-e/ent'tion
o% Se'r&) 'nd Sei<.re Order No. +?47.
This concerns the &alidity of the po!er of the Secretary of Labor to issue !arrants of arrest and
sei6ure under %rticle -8 of the Labor )ode, prohibiting illegal recruitment/
The facts are as follo!s;
CCC CCC CCC
1/ "n "ctober 21, 198., #osalie Tesoro of 1.. Tupa6 Street, Le&eri6a, 0asay )ity, in
a s!orn statement filed !ith the 0hilippine "&erseas (mployment %dministration
'0"(% for bre&ity* charged petitioner >ortencia Sala6ar, vi<;
44/ T; %no ba ang dahilan at ika! ngayon ay narito at
nagbibigay ng salaysay/
S; @pang ireklamo sa dahilan ang aking 0()) )ard ay
aya! ibigay sa akin ng dati kong manager/ G >orty
Sala6ar G 1: #/"/ Santos, ,andaluyong, ,la/
4:/ T; Kailan at saan naganap and gina!ang
panloloko sa
iyo ng tao7mga taong inireklamo moR
S/ Sa bahay ni >orty Sala6ar/
4/ T; 0aano naman naganap ang pangyayariR
S/ 0agkagaling ko sa 9apan ipinata!ag niya ako/
Kinuha
ang 0()) )ard ko at sinabing hahanapan ako ng
booking sa 9apan/ ,ag 9 month+s na ako sa 0hils/ ay
hindi pa niya ako napa1alis/ So lumipat ako ng ibang
company pero aya! niyang ibigay and 0()) )ard
ko/
2/ "n 8o&ember -, 198., public respondent %tty/ =erdinand ,arEue6 to !hom said
complaint !as assigned, sent to the petitioner the follo!ing telegram;
A"@ %#( >(#(2A D5#()T(D T" %00(%# 2(="#( =(#D5(
,%#L@(J 0"(% %8T5 5LL(?%L #()#@5T,(8T @85T T> =L#/
0"(% 2LD?/ (DS% )"#/ "#T5?%S %<(/ ,%8D%L@A"8? ,, "8
8"<(,2(# , 198. %T 14 %, #( )%S( =5L(D %?%58ST A"@/
=%5L 8"T @8D(# 0(8%LTA "= L%3/
4/ "n the same day, ha&ing ascertained that the petitioner had no license to operate
a recruitment agency, public respondent %dministrator Tomas D/ %chacoso issued his
challenged )L"S@#( %8D S(5J@#( "#D(# 8"/ 124: !hich reads;
>"#TA S%L%J%#
8o/ 1: #/"/ Santos St/
,andaluyong, ,etro ,anila
0ursuant to the po!ers &ested in me under 0residential Decree 8o/ 1924 and
(Cecuti&e "rder 8o/ 1422, 5 hereby order the )L"S@#( of your recruitment agency
being operated at 8o/ 1: #/"/ Santos St/, ,andaluyong, ,etro ,anila and the
sei6ure of the documents and paraphernalia being used or intended to be used as
the means of committing illegal recruitment, it ha&ing &erified that you ha&e G
'1* 8o &alid license or authority from the Department of Labor and
(mployment to recruit and deploy !orkers for o&erseas employmentH
'2* )ommitted7are committing acts prohibited under %rticle -4 of the
8e! Labor )ode in relation to %rticle -8 of the same code/
This "#D(# is !ithout preFudice to your criminal prosecution under
eCisting la!s/
Done in the )ity of ,anila, this -th day of 8o&ember, 198./
:/ "n 9anuary 2, 1988 0"(% Director on Licensing and #egulation %tty/ (stelita 2/
(spiritu issued an office order designating respondents %tty/ ,arEue6, %tty/ 9o&encio
%bara and %tty/ (rnesto <istro as members of a team tasked to implement )losure
and Sei6ure "rder 8o/ 124:/ Doing so, the group assisted by ,andaluyong
policemen and mediamen Lito )astillo of the 0eople+s 9ournal and (rnie 2aluyot of
8e!s Today proceeded to the residence of the petitioner at 1: #/"/ Santos St/,
,andaluyong, ,etro ,anila/ There it !as found that petitioner !as operating
>annalie Dance Studio/ 2efore entering the place, the team ser&ed said )losure and
Sei6ure order on a certain ,rs/ =lora Sala6ar !ho &oluntarily allo!ed them entry into
the premises/ ,rs/ =lora Sala6ar informed the team that >annalie Dance Studio !as
accredited !ith ,oreman De&elopment '0hil/*/ >o!e&er, !hen reEuired to sho!
credentials, she !as unable to produce any/ 5nside the studio, the team chanced
upon t!el&e talent performers G practicing a dance number and sa! about t!enty
more !aiting outside, The team confiscated assorted costumes !hich !ere duly
receipted for by ,rs/ %suncion ,aguelan and !itnessed by ,rs/ =lora Sala6ar/
/ "n 9anuary 28, 1988, petitioner filed !ith 0"(% the follo!ing letter;
?entlemen;
"n behalf of ,s/ >orty Sala6ar of 1: #/"/ Santos, ,andaluyong, ,etro ,anila, !e
respectfully reEuest that the personal properties sei6ed at her residence last 9anuary
2, 1988 be immediately returned on the ground that said sei6ure !as contrary to
la! and against the !ill of the o!ner thereof/ %mong our reasons are the follo!ing;
1/ "ur client has not been gi&en any prior notice or hearing, hence
the )losure and Sei6ure "rder 8o/ 124: dated 8o&ember -, 198.
&iolates Ddue process of la!D guaranteed under Sec/ 1, %rt/ 555, of the
0hilippine )onstitution/
2/ Aour acts also &iolate Sec/ 2, %rt/ 555 of the 0hilippine )onstitution
!hich guarantees right of the people Dto be sec%re in their persons,
ho%ses, papers, and e""ects against %nreasonable searches and
sei<%res of !hate&er nature and for any purpose/D
-/ The premises in&aded by your ,r/ =erdi ,arEue6 and fi&e ':*
others 'including 2 policemen* are the private residence o" the
Sala<ar "amily, and the entry, search as !ell as the sei6ure of the
personal properties belonging to our client !ere !ithout her consent
and !ere done !ith unreasonable force and intimidation, together
!ith gra&e abuse of the color of authority, and constitute robbery and
&iolation of domicile under %rts/ 29- and 128 of the #e&ised 0enal
)ode/
@nless said personal properties !orth around T(8 T>"@S%8D
0(S"S '014,444/44* in all 'and !hich !ere already due for shipment
to 9apan* are returned !ithin t!enty1four '24* hours from your receipt
hereof, !e shall feel free to take all legal action, ci&il and criminal, to
protect our client+s interests/
3e trust that you !ill gi&e due attention to these important matters/
./ "n =ebruary 2, 1988, before 0"(% could ans!er the letter, petitioner filed the
instant petitionH on e&en date, 0"(% filed a criminal complaint against her !ith the
0asig 0ro&incial =iscal, docketed as 5S18818-/
1
"n =ebruary 2, 1988, the petitioner filed this suit for prohibition/ %lthough the acts sought to be
barred are already"ait accompli, thereby making prohibition too late, !e consider the petition as one
for certiorari in &ie! of the gra&e public interest in&ol&ed/
The )ourt finds that a lone issue confronts it; ,ay the 0hilippine "&erseas (mployment
%dministration 'or the Secretary of Labor* &alidly issue !arrants of search and sei6ure 'or arrest*
under %rticle -8 of the Labor )odeR 5t is also an issue sEuarely raised by the petitioner for the
)ourt+s resolution/
@nder the ne! )onstitution, !hich states;
/ / / no search !arrant or !arrant of arrest shall issue eCcept upon probable cause to
be determined personally by the Fudge after eCamination under oath or affirmation of
the complainant and the !itnesses he may produce, and particularly describing the
place to be searched and the persons or things to be sei6ed/
2
it is only a Fudge !ho may issue !arrants of search and arrest/
3
5n one case, it !as declared that
mayors may not eCercise this po!er;
CCC CCC CCC
2ut it must be emphasi6ed here and no! that !hat has Fust been described is the
state of the la! as it !as in September, 198:/ The la! has since been altered/ 8o
longer does the mayor ha&e at this time the po!er to conduct preliminary
in&estigations, much less issue orders of arrest/ Section 14- of the Local
?o&ernment )ode, conferring this po!er on the mayor has been abrogated,
rendered "%nct%s o""icio by the 198. )onstitution !hich took effect on =ebruary 2,
198., the date of its ratification by the =ilipino people/ Section 2, %rticle 555 of the
198. )onstitution pertinently pro&ides that Dno search !arrant or !arrant of arrest
shall issue eCcept upon probable cause to be determined personally by the Fudge
after eCamination under oath or affirmation of the complainant and the !itnesses he
may produce, and particularly describing the place to be searched and the person or
things to be sei6ed/D The constitutional proscription has thereby been manifested that
thenceforth, the function of determining probable cause and issuing, on the basis
thereof, !arrants of arrest or search !arrants, may be &alidly eCercised only by
Fudges, this being e&idenced by the elimination in the present )onstitution of the
phrase, Dsuch other responsible officer as may be authori6ed by la!D found in the
counterpart pro&ision of said 19.- )onstitution, !ho, aside from Fudges, might
conduct preliminary in&estigations and issue !arrants of arrest or search !arrants/
4
8either may it be done by a mere prosecuting body;
3e agree that the 0residential %nti1Dollar Salting Task =orce eCercises, or !as
meant to eCercise, prosecutorial po!ers, and on that ground, it cannot be said to be
a neutral and detached DFudgeD to determine the eCistence of probable cause for
purposes of arrest or search/ @nlike a magistrate, a prosecutor is naturally interested
in the success of his case/ %lthough his office Dis to see that Fustice is done and not
necessarily to secure the con&iction of the person accused,D he stands, in&ariably, as
the accused+s ad&ersary and his accuser/ To permit him to issue search !arrants and
indeed, !arrants of arrest, is to make him both Fudge and Fury in his o!n right, !hen
he is neither/ That makes, to our mind and to that eCtent, 0residential Decree 8o/
19- as amended by 0residential Decree 8o/ 2442, unconstitutional/
5
Section -8, paragraph 'c*, of the Labor )ode, as no! !ritten, !as entered as an amendment by
0residential Decrees 8os/ 1924 and 2418 of the late 0resident =erdinand ,arcos, to 0residential
Decree 8o/ 19-, in the eCercise of his legislati&e po!ers under %mendment 8o/ of the 19.-
)onstitution/ @nder the latter, the then ,inister of Labor merely eCercised recommendatory po!ers;
'c* The ,inister of Labor or his duly authori6ed representati&e shall ha&e the po!er
to recommend the arrest and detention of any person engaged in illegal
recruitment/
6
"n ,ay 1, 1984, ,r/ ,arcos promulgated 0residential Decree 8o/ 1924, !ith the a&o!ed purpose of
gi&ing more teeth to the campaign against illegal recruitment/ The Decree ga&e the ,inister of Labor
arrest and closure po!ers;
'b* The ,inister of Labor and (mployment shall ha&e the po!er to cause the arrest
and detention of such non1licensee or non1holder of authority if after proper
in&estigation it is determined that his acti&ities constitute a danger to national security
and public order or !ill lead to further eCploitation of Fob1seekers/ The ,inister shall
order the closure of companies, establishment and entities found to be engaged in
the recruitment of !orkers for o&erseas employment, !ithout ha&ing been licensed or
authori6ed to do so/
7
"n 9anuary 2, 198, he, ,r/ ,arcos, promulgated 0residential Decree 8o/ 2418, gi&ing the Labor
,inister search and sei6ure po!ers as !ell;
'c* The ,inister of Labor and (mployment or his duly authori6ed representati&es
shall ha&e the po!er to cause the arrest and detention of such non1licensee or non1
holder of authority if after in&estigation it is determined that his acti&ities constitute a
danger to national security and public order or !ill lead to further eCploitation of Fob1
seekers/ The ,inister shall order the search of the office or premises and sei6ure of
documents, paraphernalia, properties and other implements used in illegal
recruitment acti&ities and the closure of companies, establishment and entities found
to be engaged in the recruitment of !orkers for o&erseas employment, !ithout
ha&ing been licensed or authori6ed to do so/
"
The abo&e has no! been etched as %rticle -8, paragraph 'c* of the Labor )ode/
The decrees in Euestion, it is !ell to note, stand as the dying &estiges of authoritarian rule in its
t!ilight moments/
3e reiterate that the Secretary of Labor, not being a Fudge, may no longer issue search or arrest
!arrants/ >ence, the authorities must go through the Fudicial process/ To that eCtent, !e declare
%rticle -8, paragraph 'c*, of the Labor )ode, unconstitutional and of no force and effect/
The Solicitor ?eneral+s reliance on the case of Morano v/ (ivo
#
is not !ell1taken/ (ivo in&ol&ed a
deportation case, go&erned by Section 9 of the defunct #e&ised %dministrati&e )ode and by Section -.
of the 5mmigration La!/ 3e ha&e ruled that in deportation cases, an arrest 'of an undesirable alien*
ordered by the 0resident or his duly authori6ed representati&es, in order to carry out a final decision of
deportation is &alid/
1$
5t is &alid, ho!e&er, because of the recogni6ed supremacy of the (Cecuti&e in
matters in&ol&ing foreign affairs/ 3e ha&e held;
11
CCC CCC CCC
The State has the inherent po!er to deport undesirable aliens ')huoco Tiaco &s/
=orbes, 228 @/S/ :49, :. L/ (d/ 94, 44 0hil/ 1122, 112:*/ That po!er may be
eCercised by the )hief (Cecuti&e D!hen he deems such action necessary for the
peace and domestic tranEuility of the nation/D 9ustice 9ohnson+s opinion is that !hen
the )hief (Cecuti&e finds that there are aliens !hose continued presence in the
country is inFurious to the public interest, Dhe may, e&en in the absence of eCpress
la!, deport themD/ '=orbes &s/ )huoco Tiaco and )rossfield, 1 0hil/ :-4, :8, :9H
5n re ,c)ulloch Dick, -8 0hil/ 41*/
The right of a country to eCpel or deport aliens because their continued presence is
detrimental to public !elfare is absolute and unEualified 'Tiu )hun >ai and ?o Tam
&s/ )ommissioner of 5mmigration and the Director of 825, 144 0hil/ 949, 9:*/
12
The po!er of the 0resident to order the arrest of aliens for deportation is, ob&iously, eCceptional/ 5t
'the po!er to order arrests* can not be made to eCtend to other cases, like the one at bar/ @nder the
)onstitution, it is the sole domain of the courts/
,oreo&er, the search and sei6ure order in Euestion, assuming, ex gratia arg%menti, that it !as
&alidly issued, is clearly in the nature of a general !arrant;
0ursuant to the po!ers &ested in me under 0residential Decree 8o/ 1924 and
(Cecuti&e "rder 8o/ 1422, 5 hereby order the )L"S@#( of your recruitment agency
being operated at 8o/ 1: #/"/ Santos St/, ,andaluyong, ,etro ,anila and the
sei6ure of the documents and paraphernalia being used or intended to be used as
the means of committing illegal recruitment, it ha&ing &erified that you ha&e G
'1* 8o &alid license or authority from the Department of Labor and
(mployment to recruit and deploy !orkers for o&erseas employmentH
'2* )ommitted7are committing acts prohibited under %rticle -4 of the
8e! Labor )ode in relation to %rticle -8 of the same code/
This "#D(# is !ithout preFudice to your criminal prosecution under eCisting la!s/
13
3e ha&e held that a !arrant must identify clearly the things to be sei6ed, other!ise, it is null and
&oid, thus;
CCC CCC CCC
%nother factor !hich makes the search !arrants under consideration constitutionally
obFectionable is that they are in the nature of general !arrants/ The search !arrants
describe the articles sought to be sei6ed in this !ise;
1* %ll printing eEuipment, paraphernalia, paper, ink, photo eEuipment,
type!riters, cabinets, tables, communications7 recording eEuipment,
tape recorders, dictaphone and the like used and7or connected in the
printing of the D3( ="#@,D ne!spaper and any and all
documents7communications, letters and facsimile of prints related to
the D3( ="#@,D ne!spaper/
2* Sub&ersi&e documents, pamphlets, leaflets, books, and other
publications to promote the obFecti&es and purposes of the
sub&ersi&e organi6ations kno!n as ,o&ement for =ree 0hilippines,
Light1a1=ire ,o&ement and %pril ,o&ementH and
-* ,otor &ehicles used in the distribution7circulation of the D3(
="#@,D and other sub&ersi&e materials and propaganda, more
particularly,
1* Toyota1)orolla, colored yello! !ith 0late 8o/ 8K% 892H
2* D%TS@8, pick1up colored !hite !ith 0late 8o/ 8K< 99H
-* % deli&ery truck !ith 0late 8o/ 82S :42H
4* T"A"T%1T%,%#%3, colored !hite !ith 0late 8o/ 020 :H and
:* T"A"T% >i1LuC, pick1up truck !ith 0late 8o/ 8?< 4.2 !ith
marking D2agong Silang/D
5n Stan"ord v/ State o" !exas, the search !arrant !hich authori6ed the search for
Dbooks, records, pamphlets, cards, receipts, lists, memoranda, pictures, recordings
and other !ritten instruments concerning the )ommunist 0arties of TeCas, and the
operations of the )ommunity 0arty in TeCas,D !as declared &oid by the @/S/
Supreme )ourt for being too general/ 5n like manner, directions to Dsei6e any
e&idence in connection !ith the &iolation of SD) 1-1-.4- or other!iseD ha&e been
held too general, and that portion of a search !arrant !hich authori6ed the sei6ure of
any Dparaphernalia !hich could be used to &iolate Sec/ :4119. of the )onnecticut
?eneral Statutes 'the statute dealing !ith the crime of conspiracy*D !as held to be a
general !arrant, and therefore in&alid/ The description of the articles sought to be
sei6ed under the search !arrants in Euestion cannot be characteri6ed differently/
5n the Stanford case, the @/S/ Supreme court calls to mind a notable chapter in
(nglish historyH the era of disaccord bet!een the Tudor ?o&ernment and the (nglish
0ress, !hen D"fficers of the )ro!n !ere gi&en ro&ing commissions to search !here
they pleased in order to suppress and destroy the literature of dissent both )atholic
and 0uritan/D #eference herein to such historical episode !ould not be rele&ant for it
is not the policy of our go&ernment to suppress any ne!spaper or publication that
speaks !ith Dthe &oice of non1conformityD but poses no clear and imminent danger to
state security/
14
=or the guidance of the bench and the bar, !e reaffirm the follo!ing principles;
1/ @nder %rticle 555, Section 2, of the l98. )onstitution, it is only Fudges, and no other,
!ho may issue !arrants of arrest and search;
2/ The eCception is in cases of deportation of illegal and undesirable aliens, !hom
the 0resident or the )ommissioner of 5mmigration may order arrested, follo!ing a
final order of deportation, for the purpose of deportation/
3>(#(="#(, the petition is ?#%8T(D/ %rticle -8, paragraph 'c* of the Labor )ode is declared
@8)"8ST5T@T5"8%L and null and &oid/ The respondents are "#D(#(D to return all materials
sei6ed as a result of the implementation of Search and Sei6ure "rder 8o/ 124:/
8o costs/
S" "#D(#(D/
.eople vs. Re-$llo, !'! SCRA &! , #$ne %, "%%"
Case (itle : PEOPLE O" THE PHILIPPINES, p-'inti%%;'ppe--ee, s. NIM"A
REM>LLO, '&&.sed;'ppe--'nt.Case )at$re : APPEAL %ro/ ' de&ision o% t)e
Re,ion'- Tri'- Co.rt o% M'F'ti City, !r. +H?.
Syllabi Class : 6itnesses*Cri/in'- L'(*Deni'-*L'bor L'(*I--e,'-
Re&r.it/ent in L'r,e S&'-e*Est'%'
Syllabi:
1. 4itnesses; 7he trial courtIs assessment concerning the credibility of
witnesses and their testimony has been sustained and accorded great weight
by appellate courts because of the trial courtIs vantage position to observe
firsthand the witnessesI demeanor and deportment in the course of their
testimony under oath.-
7ime and again however the trial courtIs assessment concerning the
credibility of witnesses and their testimony has been sustained and accorded
great weight by appellate courts because of the trial courtIs vantage
position to observe firsthand the witnessesI demeanor and deportment in
the course of their testimony under oath. 7he exception is when the trial
court has overloo!ed or misapprehended certain facts or circumstances that
if considered would alter the result of the case.
". $ri#inal Law; Labor Law; *llegal Recrit#ent in Large
Scale; 3lements.-
%n &riminal &ase 4o. *5-)5; appellant was charged with illegal recruitment
in large scale. Eor such a charge to prosper the following elements must
concur: "(, the accused was engaged in recruitment activity defined under
/rticle (; "b, or any prohibited practice under /rticle ;B of the Labor &odeF
"C, he or she lac!s the requisite license or authority to lawfully engage in
the recruitment and placement of wor!ersF and ";, he or she committed
such acts against three or more persons individually or as a group.
!. Denial; 7he defense of denial is intrinsically wea! a self-serving negative
evidence that cannot prevail over the testimony of credible witnesses who
testified on affirmative matters.2
4. $ri#inal Law; Labor Law; *llegal Recrit#ent; 7he natural tendency
of one who has been wronged is to see! redress from the person who
caused the harm or in.ury not from anyone else.-
%ndeed it would have been easy for private complainants to pin down Platon
if she were the one who received the money and issued the corresponding
receipts. Private complainants would have had the receipts to prove their
claim. Dut why would private complainants not go after Platon if they had
evidence to prove that she too! their moneyT %f appellantIs assertions were
true there would have been no rhyme nor reason for private complainants
to file a case against appellant and go through the rigors and expenses of a
court trial if somebody else caused them harm. <e note that the natural
tendency of one who has been wronged is to see! redress from the person
who caused the harm or in.ury not from anyone else.
*. $ri#inal Law; Estafa; 3lements.2
+ivision: SECOND DI9ISION
+oc,et )$-ber: #.R. Nos. +?888H;8D
Co$nsel: T)e So-i&itor #ener'-, P.b-i& Attorneys O%%i&e
.onente: K>IS>M!IN#
+ispositive .ortion:
6HERE"ORE, t)e 'ppe'-ed de&ision o% t)e Re,ion'- Tri'- Co.rt, M'F'ti City,
!r'n&) +H?, is )ereby A""IRMED. In Cri/in'- C'se No. 37;D7H, %or i--e,'-
re&r.it/ent in -'r,e s&'-e, 'ppe--'nt NIM"A REM>LLO is %o.nd ,.i-ty 'nd
senten&ed to -i%e i/prison/ent 'nd to p'y ' %ine o% P+44,444L 'nd in
Cri/in'- C'ses Nos. 37;D78, 37;D77 'nd 37;D7D %or est'%', s)e is de&-'red
,.i-ty senten&ed in e'&) &'se to t(o B?C ye'rs, %o.r B8C /ont)s 'nd one B+C
d'y o% prision &orre&&ion'- to si5 BDC ye'rs 'nd one B+C one d'y o% prision
/'yor, 'nd to p'y by ('y o% restit.tion P+7,444 to e'&) o% t)e pri'te
&o/p-'in'nts, 0ene-yn K.ins''t, Ros'rio C'd'&io 'nd Honorin' MeEi',
to,et)er (it) t)e &osts.
On ppel is the decision
,1-
of the Regionl %ril 0ourt, *8ti 0ity, Crnch 1:7, in 0riminl
0ses &os$ K>35>: to K>35>5, con"icting ppellnt &imf Remullo nd sentencing her to suffer
the follo#ing penlties: (1) in 0riminl 0se &o$ K>35>:, in"ol"ing illegl recruitment on
lrge scle, life imprisonment nd the pyment of ;1<<,<<< fine, (7) for ech cse of estafa in
0riminl 0ses &os$ K>35>= to K>35>5, t#o yers, four months, nd one dy of prision
correccional to si9 yers nd one dy of prision mayor, nd to indemnify the pri"te
complinnts ;1>,<<< ech, nd (:) to py the costs$
)n 0riminl 0se &o$ K>35>:, ppellnt #s indicted in n informtion tht reds:
%ht in or bout nd during the months from *rch to *y 1KK:, in the *uniciplity
of *8ti, *etro *nil, ;hilippines, plce #ithin the jurisdiction of this Honorble
0ourt, the bo"e nmed ccused, flsely representing herself to h"e the cpcity nd
po#er to contrct, enlist nd recruit #or8ers for job1plcement brod, did then nd
there #illfully, unl#fully nd feloniously collect for fee, recruit nd promise
employment job plcement brod to the complinnts, RO+(R)O 0(B(0)O,
AE&E.2& QH)&+((% nd HO&OR)&( *EA)(, #ithout first securing the re?uired
license or uthority from the Beprtment of .bor nd Employment, thus committing
illegl recruitment in lrge scle in "ioltion of ,(rticle :F(7) in reltion to (rticle :K
(b) of the .bor 0ode-$
,7-
)n 0riminl 0se &o$ K>35>=, the llegtions in the informtion red:
%ht in or bout nd during the months from *rch to *y 1KK: in the *uniciplity
of *8ti, *etro *nil, ;hilippines, plce #ithin the jurisdiction of this Honorble
0ourt, the bo"e nmed ccused, by mens of flse pretenses nd frudulent
representtion mde prior to or simultneously #ith the commission of the frud, #ith
intent to defrud the complinnt AE&E.2& QH)&+((% to the effect tht she #ould
send her brod for the purpose of employment nd #ould need certin mount for the
e9penses in the processing of ppers thereof, #hich representtions the ccused #ell
8ne# #s (sic) flse nd frudulent nd #s only mde by her to induce sid
complinnt to gi"e nd py, s in fct the ltter g"e nd pid to her the mount of
;1>,<<<$<< #hich the ccused once in possession of the sid mount, did then nd
there #illfully, unl#fully nd feloniously pproprite nd con"ert to her o#n
personl use nd benefit, to the dmge nd prejudice of the complinnt AE&E.2&
QH)&+((% in the forementioned mount of ;1>,<<<$<<$
,:-
E9cept for the nme of the pri"te complinnts, the informtions in 0riminl 0ses &os$
K>35>> nd K>35>5 red substntilly the sme s tht for 0riminl 0se &o$ K>35>=$
,=-
)nsted of
Aenelyn Quinst, the lleged "ictims of estafa #ere Rosrio 0dcio nd Honorin *eji,
respecti"ely$
Hpon her rrignment, ppellnt pleded not guilty to ll the chrges ginst her$
,>-
%ril
ensued therefter$
%he prosecution presented s its #itnesses pri"te complinnts Honorin *eji, Rosrio
0dcio, nd Aenelyn QuinstG 0or/on (?uino of the licensing deprtment of the ;hilippine
O"erses Employment (dministrtion (;OE()G nd E"elyn .ndrito, "ice president nd generl
mnger of Amil nd 0o$, )nc$, ppellnt!s employer$
;ri"te complinnts AE&E.2& QH)&+((%, RO+(R)O 0(B(0)O, nd HO&OR)&(
*EA)( testified on essentilly the sme fcts$ %hey "erred tht they #ent to ppellnt!s house
sometime in *rch 1KK:, #here ppellnt told them she #s recruiting fctory #or8ers for
*lysi$ (ppellnt told them to fill up ppliction forms nd to go to the office of Amil nd
0o$, the recruitment gency #here ppellnt #or8ed$ (ppellnt lso re?uired ech pplicnt to
submit pssport, pictures, nd clernce from the &tionl Cureu of )n"estigtion (&C))G nd
then to undergo medicl e9mintion$ (ppellnt told them the plcement fee #s;1>,<<< for
ech pplicnt, #hich pri"te complinnts g"e her$ ;rt of the fee #s pid in ppellnt!s
house nd prt #s pid t the Amil office$ (ppellnt did not issue receipts for ny of the
pyments$
(t the Amil office, pri"te complinnts met certin +te"en *h, the lleged bro8er from
the compny in *lysi tht #s interested in hiring the #omen$ *h #s supposed to
inter"ie# pri"te complinnts but insted just loo8ed t them nd told them they #ere fit to
#or8$
;ri"te complinnts #ere supposed to le"e for *lysi on Aune 5, 1KK:$ On *y 7F,
1KK:, pri"te complinnt Quinst testified tht she nd the others met #ith ppellnt t the
;hilippine Jenerl Hospitl #here ppellnt sho#ed them their plne tic8ets$ (ppellnt lso
told them to fill up deprture crds by chec8ing the #ord 4holidy6 thereon$
(t the irport on Aune 5, 1KK:, n immigrtion officer told pri"te complinnts they lc8ed
re?uirement imposed by the ;hilippine O"erses Employment (dministrtion (;OE()$
,5-
%heir
pssports #ere cncelled nd their bording psses mr8ed 4offloded6$ ;ri"te complinnt
*eji testified tht ppellnt told them they #ere not ble to le"e becuse their "iss #ere for
tourists only$
,N-
(ppellnt told pri"te complinnts they #ould be ble to le"e on Aune 7<, 1KK: but this,
too, did not push through$
;ri"te complinnt *eji in?uired from Amil nd 0o$ regrding their ppliction
ppers$ )n response, E"elyn .ndrito, "ice president nd generl mnger to Amil, denied ny
8no#ledge of such ppers$ .ndrito told *eji tht ppellnt did not submit ny document to
Amil$ +he further certified tht ppellnt #s not uthori/ed to recei"e pyments on behlf of
Amil$
,F-
E'E.2& .(&BR)%O testified tht ppellnt #s mr8eting consultnt for Amil$
,K-
(s
such, her #or8 #s limited to securing job orders for the compny through contcts
brod$ (ccording to .ndrito, ppellnt #ent on bsence #ithout le"e in lte 1KK:$
.ndrito did not 8no# the pri"te complinnts$ +he stted tht Amil did not h"e job
orders ccredited by the ;OE( for *lysi$
,1<-
+he 8ne# of +te"en *h #ho represented
*nifield Enterprise but the greement #ith tht compny did not push through nd ;OE( did
not ccredit *nifield$
,11-
0E.2&)( 0H2( testified tht she #s cler8 t the Amil office, responsible for
processing documents for submission to the ;OE($ +he lso ssisted in inter"ie#ing job
pplicnts$ +he nrrted tht (mdo ;nch, one of the #itnesses for the defense #ho climed
tht he pplied for job brod through Amil, ne"er pplied t Amil bsed on their
records$ +he presented in court certifiction to this effect, signed by E"elyn .ndrito$
,17-
)n her defense, ppellnt &)*F( RE*H..O denied h"ing recruited pri"te complinnts
nd recei"ing ny money from them$ (ccording to her testimony, she met pri"te complinnts
sometime in *rch 1KK: t the Amil office #here she #s mr8eting consultnt$ %hey s8ed
for her help in obtining jobs brod, so she hd them fill up bio3dt forms nd told them to
#it for job openings$
,1:-
+he lleged tht Amil hd n greement #ith Werness Electronics,
bsed in *lysi, concerning the recruitment of #or8ers for Werness$
,1=-
;ri"te complinnts
#ere supposed to h"e been recruited for Werness$
,1>-
(ppellnt e9plined tht +te"en *h #s the o#ner of *nifield
,15-
Enterprise,
,1N-

recruitment gency$ (ppellnt sid tht *h 4#ent to *lysi to loo8 for job opening nd he
#s ble to find this compny, Werness Electronics$6
,1F-
(ppellnt insisted tht pri"te complinnts did not hnd their plcement fees to her but to
+te"en *h nd to certin .ni ;lton$
,1K-
+he presented in e"idence photocopies of receipts
llegedly signed by ;lton$
,7<-
+he sid pri"te complinnts sought her ssistnce fter they #ere
unble to le"e for brod$ +he pointed out tht she helped pri"te complinnts f9 letter to
+te"en *h in +ingpore s8ing for the return of their money$
,71-
+he lso ccompnied them to
Ctngs #here .ni ;lton #s supposed to be residing$
,77-
On cross3e9mintion, ppellnt insisted tht her job t Amil #s not limited to finding
prospecti"e employers brod$ +he sid tht her duties included those ssigned by 'irgini
0stro, Amil!s deputy mnger, mong them entertining job pplicnts$
,7:-
+he sid tht it #s
ctully 0stro #ho told *h to inter"ie# pri"te complinnts t the Amil office$
,7=-
*h #ent
to Amil sometime on *y 7=, 1KK: to deli"er documents regrding job openings in +ingpore
nd *lysi$
,7>-
On tht sme dy, pri"te complinnts hppened to be t the Amil office$
,75-
(ppellnt lso climed tht pri"te complinnts lter trnscted business #ith *h #ithout
the 8no#ledge of Amil$ (ccording to her, .ni ;lton told her tht pri"te complinnts #ere
supposed to le"e on Aune 5, 1KK:$
(lso for the defense, #itness (*(BO ;(&0H( testified tht he cme to 8no# ppellnt
#hen he #s pplying for job brod through Amil$ He climed tht he #s t the Amil
office on *y :<, 1KK: nd s# some people, presumbly pri"te complinnts, inside
ppellnt!s office$
,7N-
He met .ni ;lton nd s8ed her #ht she #s doing t Amil$ ;lton
llegedly replied tht she #s recruiting femle #or8ers for jobs brod$ +he introduced ;nch
to her +ingporen compnion, +te"en *h$
,7F-
%herefter, ccording to ;nch, pri"te
complinnts g"e ;lton n en"elope contining money tht ;lton put inside her bg$ ;ri"te
complinnts then hnded ;lton piece of bond pper #ith something type#ritten on it, #hich
the ltter signed$
,7K-
(ppellnt signed on the sme piece of pper$
)n decision dted Becember 11, 1KK>, the tril court found ppellnt guilty s chrged,
thus:
WHEREFORE, judgment is rendered s follo#s:
1$ )n 0riminl 0se &o$ K>35>:, the ccused is sentenced to life imprisonment nd to
py fine of ;1<<,<<<$<< nd the costsG
7$ )n 0riminl 0se &o$ K>35>=, she is sentenced to suffer imprisonment from t#o (7)
yers, four (=) months nd one (1) dy of prision correcional to si9 (5) yers nd one
(1) dy of prision mayorG to indemnify Aenelyn Quinst the sum of ;1>,<<<$<<, nd
to py the costsG
:$ )n 0riminl 0se &o$ K>35>>, she is sentenced to suffer imprisonment from t#o (7)
yers, four (=) months nd one (1) dy of prision correccional to si9 (5) yers nd one
(1) dy of prision mayorG to indemnify Rosrio 0dcio the sum of ;1>,<<<$<<, nd to
py the costsG
=$ )n 0riminl 0se &o$ K>35>5, she is sentenced to suffer imprisonment from t#o (7)
yers, four (=) months nd one (1) dy of prision correccional to si9 (5) yers nd one
(1) dy of prision mayorG to indemnify Honorin *eji the sum of ;1>,<<<$<<G nd to
py the costs$
+O ORBEREB$
,:<-
Hence, this ppel$ (ppellnt contends tht the tril court erred:
I
D )& &O% F)&B)&J %H(% EOH)C)%+ 4:6, 4=6 (&B 4156 (RE 0REB)C.E (&B
0O*;E%E&% ;ROOF+ %H(% %HE 0O*;.()&(&%+ %R(&+(0%EB W)%H
(&B J('E %HE)R *O&E2 %O .(&) ;.(%O& (&B +%E'E& *(H )&
0O&&E0%)O& W)%H %HE)R (;;.)0(%)O&+ FOR O'ER+E(+
E*;.O2*E&%$
II
D )& &O% F)&B)&J %H(% %HE 'ER+)O&+ OF %HE 0O*;.()&(&%+ (RE
&O% 0REB)C.E$
III
D )& J)')&J ;ROC(%)'E '(.HE ,%O- %HE %E+%)*O&2 OF W)%&E++
E'E.2& .(&BR)%O$
IV
D )& F)&B)&J %HE (;;E..(&% JH).%2 CE2O&B RE(+O&(C.E BOHC%
OF %HE 0R)*E+ 0H(RJEB$
,:1-
Essentilly, ppellnt is ssiling the credibility of the #itnesses presented by the
prosecution, #hile shifting by #y of her defense the onus of illegl recruitment nd estafa to
third prties in order to crete resonble doubt$
%ime nd gin, ho#e"er, the tril court!s ssessment concerning the credibility of #itnesses
nd their testimony hs been sustined nd ccorded gret #eight by ppellte courts, becuse of
the tril court!s "ntge position to obser"e firsthnd the #itnesses! demenor nd deportment in
the course of their testimony under oth$ %he e9ception is #hen the tril court hs o"erloo8ed or
mispprehended certin fcts or circumstnces tht, if considered, #ould lter the result of the
cse$
,:7-
)n this cse, #e find no e9ceptionl fcts or circumstnces, hence no reson to de"ite from
the generl rule$ %he tril court!s findings nd conclusions re duly supported by the e"idence
on record, thus there is no sufficient reson to disturb them$
)n 0riminl 0se &o$ K>35>:, ppellnt #s chrged #ith illegl recruitment in lrge
scle$ For such chrge to prosper, the follo#ing elements must concur: (1) the ccused #s
engged in recruitment cti"ity defined under (rticle 1: (b), or ny prohibited prctice under
(rticle := of the .bor 0odeG (7) he or she lc8s the re?uisite license or uthority to l#fully
engge in the recruitment nd plcement of #or8ersG nd (:) he or she committed such cts
ginst three or more persons, indi"idully or s group$
,::-
(rticle 1: (b) of the .bor 0ode pro"ides:
(R%$ 1:$ Befinitions$ 33 999
(b) 4Recruitment nd plcement6 refers to ny ct of cn"ssing, enlisting,
contrcting, trnsporting, utili/ing, hiring or procuring #or8ers, nd includes referrls,
contct ser"ices, promising or d"ertising for employment, loclly or brod, #hether
for profit or not: ;ro"ided, %ht ny person or entity #hich, in ny mnner, offers or
promises for fee employment to t#o or more persons shll be deemed engged in
recruitment nd plcement$
We re con"inced tht pri"te complinnts, the min #itnesses for the prosecution, #ere
enticed by ppellnt to pply for jobs brod$ %he three pri"te complinnts filled up
ppliction forms t ppellnt!s house, nd ech pid ppellnt the mount of ;1>,<<< s
plcement fee$ Ho#e"er, she cted #ithout license or l#ful uthority to conduct recruitment of
#or8ers for o"erses plcement$ %he ;OE(!s licensing brnch issued certifiction stting tht
ppellnt, in her personl cpcity, #s not uthori/ed to engge in recruitment cti"ities$
,:=-
E"elyn .ndrito, generl mnger of the plcement gency #here ppellnt used to #or8,
denied tht the scope of ppellnt!s #or8 included recruiting #or8ers nd recei"ing plcement
fees$ +uch lc8 of uthority to recruit is lso pprent from reding of the job description of
mr8eting consultnt,
,:>-
the post tht ppellnt occupied t Amil nd 0o$
)n the fce of e"idence pointing to her #rongdoing, ppellnt only offers denils, #hile
pointing to n lleged ill moti"e on the prt of pri"te complinnts tht prompted them to testify
ginst her$ (ccording to ppellnt, pri"te complinnts filed to find the responsible prties,
nmely +te"en *h nd his compnion .ni ;lton, nd so re no# going fter her$
(ppellnt!s rguments fil to persude us of her innocence$ %he defense of denil is
intrinsiclly #e8, self3ser"ing negti"e e"idence tht cnnot pre"il o"er the testimony of
credible #itnesses #ho testified on ffirmti"e mtters$
,:5-
)n People vs. Hernandez, #e held:
For ppellnt to sy tht she #s merely chosen s scpegot for ppellees!
misfortune, h"ing filed to bring the lleged rel recruiter to justice, does not pper
#ell3founded$ )t is but hsty generli/tion of no probti"e significnce$ Without
credible e"idence proffered by the defense, bd fith or ulterior moti"e could not be
imputed on the prt of the ppellees in pointing to the ccused s the illegl recruiter
#ho "ictimi/ed them$ When there is no sho#ing tht the principl #itnesses for the
prosecution #ere ctuted by improper moti"e, the presumption is tht the #itnesses
#ere not so ctuted nd their testimonies re thus entitled to full fith nd credit$
,:N-
Further, ppellnt fults the tril court for not finding the receipts nd f9 messge she
presented in e"idence s competent nd credible proofs of the lleged trnsction bet#een
pri"te complinnts nd +te"en *h nd .ni ;lton$ (ppellnt insists tht it #s .ni ;lton,
not her, #ho recei"ed pri"te complinnts! plcement fees$ (ccording to her, ;lton e"en
issued receipts to pro"e tht she hd t8en the money$ Cut mere insistence on her prt tht
;lton #s the culprit could not defet positi"e testimonies of complinnts to the contrry$
)ndeed, it #ould h"e been esy for pri"te complinnts to pin do#n ;lton if she #ere the
one #ho recei"ed the money nd issued the corresponding receipts$ ;ri"te complinnts #ould
h"e hd the receipts to pro"e their clim$ Cut #hy #ould pri"te complinnts not go fter
;lton if they hd e"idence to pro"e tht she too8 their moneyR )f ppellnt!s ssertions #ere
true, there #ould h"e been no rhyme nor reson for pri"te complinnts to file cse ginst
ppellnt nd go through the rigors nd e9penses of court tril if somebody else cused them
hrm$ We note tht the nturl tendency of one #ho hs been #ronged is to see8 redress from
the person #ho cused the hrm or injury, not from nyone else$
Befense #itness (mdo ;nch ttempted to corroborte ppellnt!s testimony tht pri"te
complinnts hnded their money to .ni ;lton nd not to ppellnt$ Ho#e"er, ;nch did not
specificlly identify the persons #hom he llegedly s# hnding ;lton n en"elope contining
money$ He only sid tht there #ere "isitors inside ppellnt!s office, tht they #ere 4four girls6,
,:F-
nd tht he #ould be ble to identify them if he sees them gin$ Ho#e"er, he #s not s8ed
to identify the lleged four girls nor the pri"te complinnts in ny #y$ His testimony is
ptently incomplete, #ith hrdly ny probti"e "lue$
(nent ppellnt!s con"iction for estafa in 0riminl 0ses &os$ K>35>= to K>35>5, #e find no
error committed by the tril court$ %heir con"iction nd sentence re fully supported by the
e"idence on record$ For chrges of estafa to prosper, the follo#ing elements must be
present: (1) tht the ccused defruded nother by buse of confidence or by mens of deceit,
nd (7) tht dmge or prejudice cpble of pecuniry estimtion is cused to the offended prty
or third person$
,:K-
)n this cse, ppellnt clerly defruded pri"te complinnts by decei"ing
them into belie"ing tht she hd the po#er nd uthority to send them on jobs brod$ Cy "irtue
of ppellnt!s flse representtions, pri"te complinnts ech prted #ith their hrd3erned
money$ Ech complinnt pid ;1>,<<< s recruitment fee to ppellnt, #ho then pproprited
the money for her o#n use nd benefit, but filed utterly to pro"ide o"erses job plcements to
the complinnts$ )n clssic rigmrole, complinnts #ere pro"ided defecti"e "iss, brought to
the irport #ith their pssports nd tic8ets, only to be offloded tht dy, but #ith promises to be
boo8ed in plne flight on nother dy$ %he recruits #it in "in for #ee8s, months, e"en yers,
only to reli/e they #ere gypped, s no jobs #it them brod$ &o clerer cses of estafa could
be imgined thn those for #hich ppellnt should be held criminlly responsible$
WHEREFORE, the ppeled decision of the Regionl %ril 0ourt, *8ti 0ity, Crnch
1:7, is hereby (FF)R*EB$ )n 0riminl 0se &o$ K>35>:, for illegl recruitment in lrge scle,
ppellnt &)*F( RE*H..O is found guilty nd sentenced to life imprisonment nd to py
fine of ;1<<,<<<G nd in 0riminl 0ses &os$ K>35>=, K>35>> nd K>35>5 for estafa, she is
declred guilty sentenced in ech cse to t#o (7) yers, four (=) months nd one (1) dy
of prision correccional to si9 (5) yers nd one (1) one dy of prision mayor, nd to py by #y
of restitution ;1>,<<< to ech of the pri"te complinnts, Aenelyn Quinst, Rosrio 0dcio
nd Honorin *eji, together #ith the costs$
SO ORDERED.
.eople vs. An/eles, !'% SCRA *1& , April 11, "%%"
Case (itle : PEOPLE O" THE PHILIPPINES, p-'inti%%;'ppe--ee s. SAMINA
AN#ELES y CALMA, '&&.sed;'ppe--'nt.Case )at$re : APPEAL %ro/ '
de&ision o% t)e Re,ion'- Tri'- Co.rt o% M'ni-', !r. 74.
Syllabi Class : L'bor L'(*Cri/in'- L'(*I--e,'- Re&r.it/ent*Est'%'
Syllabi:
1. Labor Law; *llegal Recrit#ent; 3ssential elements of the crime of
illegal Recruitment.-
%llegal recruitment is committed when two "C, elements concur: (, that the
offender has no valid license or authority required by law to enable one to
lawfully engage in recruitment and placement of wor!ersF and C, that the
offender underta!es either any activity within the meaning of recruitment
and placement defined under /rticle (;"b, or any prohibited practices
enumerated under /rticle ;B.
". Labor Law; *llegal Recrit#ent; 7o prove illegal recruitment it must
be shown that the accused-appellant gave complainants the distinct
impression that he had the power or ability to send complainants abroad for
wor! such that the latter were convinced to part with their money in order
to be employed.-
7o prove illegal recruitment it must be shown that the accused-appellant
gave complainants the distinct impression that he had the power or ability to
send complainants abroad for wor! such that the latter were convinced to
part with their money in order to be employed. 7o be engaged in the
practice of recruitment and placement it is plain that there must at least be
a promise or offer of an employment from the person posing as a recruiter
whether locally or abroad.
!. $ri#inal Law; Estafa; 3lements of estafa under /rticle ;(5 par. C"a, of
the Revised Penal &ode.-
-nder /rticle ;(5 paragraph C"a, of the Revised Penal &ode the elements
of estafa are: "(, the accused has defrauded another by abuse of confidence
or by means of deceitF and "C, damage or pre.udice capable of pecuniary
estimation is caused to the offended party or third person.
+ivision: "IRST DI9ISION
+oc,et )$-ber: #.R. No. +H?H1D
Co$nsel: T)e So-i&itor #ener'-, Leopo-do Din,-'s'n, #'ino Reyes
.onente: YNARES;SANTIA#O
+ispositive .ortion:
6HERE"ORE, in ie( o% t)e %ore,oin,, t)e 'ppe'-ed De&ision is MODI"IED 's
%o--o(s:
(ccused3ppellnt +min (ngeles y 0lm #s chrged #ith four (=) counts of estf nd
one (1) count of illegl recruitment in the follo#ing informtions:
,1-
0riminl 0se &o$ K=31=<>F> (Estf)
%ht on or bout +eptember F, 1KK= in the 0ity of *nil, ;hilippines, the sid
ccused did then nd there #illfully, unl#fully nd feloniously defrud *(R)(
%O.O+( BE +(RBES( 2 %(C.(B( in the follo#ing mnner to #it: the sid
ccused, by mens of flse mnifesttions nd frudulent representtions #hich she
mde to sid *ri %olos de +rdeT y %bld to the effect tht she hd the po#er
nd cpcity to recruit nd employ her s domestic helper in ;ris, Frnce, nd could
fcilitte the processing of the pertinent ppers if gi"en the necessry mount to meet
the re?uirements thereof, nd by mens of other similr deceits, induced nd
succeeded in inducing sid *ri %olos de +rdeT y %bld to gi"e nd deli"er, s
in fct she g"e nd deli"ered to sid ccused the mount of ;1<N,<<<$<< on the
strength of sid mnifesttions nd representtions, ccused #ell 8no#ing tht the
sme #ere flse nd frudulent nd #ere mde solely, to obtin, s in fct she did
obtin the mount of ;1<N,<<<$<< #hich mount once in her possession, #ith intent to
defrud, #illfully, unl#fully nd feloniously mispproprited, mispplied nd
con"erted the sme to her o#n personl use nd benefit to the dmge nd prejudice
of sid *ri %olos de +rdeT y %bld in the foresid sum of ;1<N,<<<$<<
;hilippine 0urrency$
0riminl 0se &o$ K=31=<=F5 (Estf)
%ht on or bout +eptember F, 1KK= in the 0ity of *nil, ;hilippines, the sid
ccused did then nd there #illfully, unl#fully nd feloniously defrud
*(R0E.)(&O %$ %O.O+( in the follo#ing mnner, to #it: the sid ccused, by
mens of flse mnifesttions nd frudulent representtions #hich she mde to sid
*(R0E.)(&O %$ %O.O+( to the effect tht she hd the po#er nd cpcity to
recruit nd employ him s contrct #or8er in ;ris, Frnce nd could fcilitte the
processing of the pertinent ppers if gi"en the necessry mount to meet the
re?uirements thereof, nd by mens of other similr deceits, induced nd succeeded in
inducing sid *rcelino %$ %olos ccused #ell 8no#ing tht the sme #ere flse
nd frudulent nd #ere mde solely, to obtin, s in fct she did obtin the mount of
;1K<,<<<$<< #hich mount once in their possession, #ith intent to defrud, #illfully,
unl#fully nd feloniously mispproprited, mispplied nd con"erted the sme to her
o#n personl use nd benefit, to the dmge nd prejudice of sid *rcelino %$
%olos in the foresid sum of ;1K<,<<<$<<, ;hilippine 0urrency$
0riminl 0se &o$ K=31=<=FN (Estf)
%ht on or bout +eptember K, 1KK= in the 0ity of *nil, ;hilippines, the sid
ccused did then nd there #illfully, unl#fully nd feloniously defrud ;RE0).( ;$
O.;)&BO in the follo#ing mnner to #it: the sid ccused, by mens of flse
mnifesttions nd frudulent representtions #hich she mde to sid ;recil ;$
Olpindo to the effect tht she hd the po#er nd cpcity to recruit nd employ her s
contrct #or8er in 0nd nd could fcilitte the processing of the pertinent ppers if
gi"en the necessry mount to meet the re?uirements thereof, nd by mens of other
similr deceits, induced nd succeeded in inducing sid ;recil ;$ Olpindo to gi"e nd
deli"er, s in fct she deli"ered to sid ccused the mount of E7,>><$<< on the
strength of sid mnifesttions nd representtions, sid ;recil ;$ Olpindo ccused
#ell 8no#ing tht the sme #ere flse nd frudulent nd #ere mde solely, to obtin,
s in fct she did obtin the mount of E7,>><$<< #hich mount once in her
possession, #ith intent to defrud, #illfully, unl#fully nd feloniously
mispproprited, mispplied nd con"erted the sme to her o#n personl use nd
benefit, to the dmge nd prejudice of sid ;recil ;$ Olpindo in the foresid sum of
E7,>><$<< or its e?ui"lent in ;hilippine 0urrency of ;51,7<<$<<$
0riminl 0se &o$ K=31=<=FF (Estf)
%ht on or bout the first #ee8 of +eptember 1KK= in the 0ity of *nil, ;hilippines,
the sid ccused, did then nd there #illfully, unl#fully nd feloniously defrud
').*( +$ CR)&( in the follo#ing mnner to #it: the sid ccused, by mens of flse
mnifesttions nd frudulent representtions #hich she mde to sid 'ilm +$ Crin
to the effect tht she hd the po#er nd cpcity to recruit nd employ her s contrct
#or8er in 0nd nd could fcilitte the processing of the pertinent ppers if gi"en
the necessry mount to meet the re?uirements thereof, nd by mens of other similr
deceits, induced nd succeeded in inducing sid 'ilm +$ Crin to gi"e nd deli"er, s
in fct she g"e nd deli"ered to sid ccused the mount of E7,>><$<< on the strength
of sid mnifesttions nd representtions, ccused #ell 8no#ing tht the sme #ere
flse nd frudulent nd #ere mde solely, to obtin, s in fct she did obtin the
mount of E7,>><$<< #hich mount once in her possession, #ith intent to defrud,
#illfully, unl#fully nd feloniously mispproprited, mispplied nd con"erted the
sme to her o#n personl use nd benefit, to the dmge nd prejudice of sid 'ilm
+$ Crin in the foresid sum of E7,>><$<< or its e?ui"lent in ;hilippine 0urrency of
;51,7<<$<<$
0riminl 0se &o$ K=31=<=FK ()llegl Recruitment)
%he undersigned ccuses +(*)&( (&JE.E+ y 0(.*( of "ioltion of (rt$ :F ()
;res$ Becree &o$ 1=17 mending certin pro"isions of Coo8 1, ;res$ Becree &o$ ==7
other#ise 8no#n s the &e# .bor 0ode of the ;hilippines in reltion to (rticle 1:
(b) nd (c) of sid 0ode, s further mended in lrge scle, s follo#s:
%ht sometime during the month of +eptember 1KK= in the 0ity of *nil,
;hilippines, the sid ccused, representing herself to h"e the cpcity to contrct,
enlist nd trnsport Filipino #or8ers for employment brod, did then nd there
#illfully nd unl#fully for fee, recruit nd promise employment1job plcement
brod to the follo#ing persons:
1$ *rcelino %$ %olos
7$ ;recil ;$ Olpindo
:$ 'ilm +$ Crin
=$ *ri %olos de +rdeT y %bld
Without first h"ing secured the re?uired license or uthority from the Beprtment of
.bor nd Employment$
%he fi"e (>) cses #ere consolidted nd tried jointly by the Regionl %ril 0ourt of *nil,
Crnch ><$
*ri %olos +rdeT #s #or8ing in +udi (rbi #hen she recei"ed cll from her sister,
;riscill (goncillo, #ho #s in ;ris, Frnce$ ;riscill d"ised *ri to return to the ;hilippines
nd #it the rri"l of her friend, ccused3ppellnt +min (ngeles, #ho #ill ssist in
processing her tr"el nd employment documents to ;ris, Frnce$ Heeding her sister!s d"ice,
*ri immeditely returned to the ;hilippines$
*rcelino %olos #ho t tht time #s in the ;hilippines li8e#ise recei"ed instructions
from his sister ;riscill to meet ccused3ppellnt #ho #ill lso ssist in the processing of his
documents for ;ris, Frnce$
*ri nd *rcelino e"entully met ccused3ppellnt in +eptember 1KK= t E9pert %r"el
(gency on *bini +treet, *nil$ Buring their meeting, ccused3ppellnt s8ed if they hd the
money re?uired for the processing of their documents$ On +eptember F, 1KK=, *ri g"e
;1<N,<<<$<< to ccused3ppellnt t E9pert %r"el (gency$ +ubse?uently, she g"e nother
;=5,<<<$<< nd H+E1,><<$<< s dditionl pyments to ccused3ppellnt$
*rcelino, on the other hnd, initilly g"e ;1<<,<<<$<< to ccused3ppellnt but on
+eptember 7F, 1KK=, he g"e n dditionl ;=5,<<<$<< nd H+E1,><<$<< to ccused3ppellnt t
the Hnited 0oconut ;lnters Cn8 in *8ti$
(nlyn Olpindo met ccused3ppellnt in Celgium$ (t tht time, (nlyn #s #or8ing in
0nd but she #ent to Celgium to "isit her in3l#s$ (fter meeting ccused3ppellnt, (nlyn
Olpindo clled up her sister, ;recil Olpindo, in the ;hilippines nd told her to meet ccused3
ppellnt upon the ltter!s rri"l in the ;hilippines becuse ccused3ppellnt cn help process
her documents for employment in 0nd$
;recil Olpindo e"entully met ccused3ppellnt t the E9pert %r"el (gency on +eptember
N, 1KK=$ (ccused3ppellnt s8ed for the mount of E=,><<$<<, but ;recil #s only ble to gi"e
E7,><<$<<$
&o e"idence #s dduced in reltion to the complint of 'ilm Crin since she did not
testify in court$
(ccused3ppellnt told ;recil Olpindo nd 'ilm Crin tht it #s esier to complete the
processing of their ppers if they strt from A8rt, )ndonesi rther thn from *nil$ %hus, on
+eptember 7:, 1KK=, ;recil Olpindo, 'ilm Crin nd ccused3ppellnt fle# to A8rt,
)ndonesi$ Ho#e"er, ccused3ppellnt returned to the ;hilippines fter t#o dys, le"ing
behind ;recil nd 'ilm$ %hey #ited for ccused3ppellnt in A8rt but the ltter ne"er
returned$ ;recil nd 'ilm e"entully cme home to the ;hilippines on &o"ember 7>, 1KK=$
When she rri"ed in the ;hilippines, ;recil tried to get in touch #ith ccused3ppellnt t
the E9pert %r"el (gency, but she could not rech her$ *en#hile, *ri nd *rcelino %olos
lso begn loo8ing for ccused3ppellnt fter she disppered #ith their money$
Elis 0mpninos of the ;hilippine O"erses Employment (gency presented certifiction
to the effect tht ccused3ppellnt #s not duly licensed to recruit #or8ers here nd brod$
)n her defense, ccused3ppellnt "erred tht, contrry to the prosecution!s llegtions, she
ne"er represented to the complinnts tht she cn pro"ide them #ith #or8 brod$ +he insisted
tht she #s mr8eting consultnt nd n interntionl trde fir orgni/er$ )n Aune 1KK=, she
#ent to ;ris, Frnce to orgni/e trde fir$ %here she met ;riscill (goncillo, domestic
helper, nd they becme friends$ ;riscill s8ed her to ssist her siblings, *ri nd *rcelino,
prticulrly in the processing of their tr"el documents for Frnce$ (ccused3ppellnt told
;riscill tht she cn only help in the processing of tr"el documents nd nothing more$ )t #s
;riscill #ho promised employment to *ri nd *rcelino$ +he recei"ed money from
complinnts not in the form of plcement fees but for the cost of tic8ets, hotel ccommodtions
nd other tr"el re?uirements$
(ccording to ccused3ppellnt, she met (nlyn Olpindo in Celgium #hile she #s
orgni/ing trde fir$ %hey lso becme friends nd it #s (nlyn #ho s8ed her to help
;recil$ Aust li8e in the cse of *ri nd *rcelino, ccused3ppellnt e9plined tht her
ssistnce shll only entil the processing of ;recil!s tr"el documents to 0nd$
(fter tril on the merits, the tril court found ccused3ppellnt guilty of illegl recruitment
nd four (=) counts of estf nd correspondingly sentenced her s follo#s:
WHEREFORE, in "ie# of the forementioned premises the ccused +(*)&(
(&JE.E+ is hereby declred:
)n 0riminl 0se &o$ K=31=<=FK for the crime of )llegl Recruitment, JH).%2 ((rt$
:F .bor 0ode) nd is hereby sentenced to suffer the penlty of life imprisonment nd
fine of One Hundred %housnd ;esos (;1<<,<<<$<<)$
)n 0riminl 0se &o$ K=31=<=F> for the crime of Estf the ccused is hereby
declred JH).%2 nd is hereby sentenced to suffer the penlty of from t#el"e (17)
yers nd one (1) dy to t#enty (7<) yers$ )n ddition the ccused is ordered to
reimburse the mount of One hundred se"en thousnd pesos (;1<N,<<<$<<) to
complinnt *ri %olos de +rdeT$ With costs$
)n 0riminl 0se &o$ K=31=<=F5 for the crime of Estf the ccused is hereby
declred JH).%2 nd is hereby sentenced to suffer the penlty of from t#el"e (17)
yers nd one (1) dy to t#enty (7<) yers$ )n ddition the ccused is ordered to
reimburse the mount of One hundred ninety thousnd pesos (;1K<,<<<$<<) to
complinnt *rcelino %$ %olos$ With costs$
)n 0riminl 0se &o$ K=31=<=FN for the crime of Estf the ccused is hereby
declred JH).%2 nd is hereby sentenced to suffer the penlty of from t#el"e (17)
yers nd one (1) dy to t#enty (7<) yers$ )n ddition the ccused is ordered to
reimburse the mount of %#o thousnd fi"e hundred fifty dollrs (H+E7,>><$<<) or its
e?ui"lent in ;hilippine currency of +i9ty one thousnd t#o hundred pesos
(;51,7<<$<<), to complinnt ;recil ;$ Olpindo$ With 0osts$
)n 0riminl 0se &o$ K=31=<=FF for the crime of Estf the ccused is hereby
declred JH).%2 nd is hereby sentenced to suffer the penlty of from t#el"e (17)
yers nd one (1) dy to t#enty (7<) yers$ )n ddition the ccused is ordered to
reimburse the mount of %#o thousnd fi"e hundred fifty dollrs (H+E7,>><$<<) or its
e?ui"lent in ;hilippine 0urrency of +i9ty one thousnd t#o hundred pesos
(;51,7<<$<<) to complinnt 'ilm +$ Crin$ With costs$
,7-
(ccused3ppellnt is no# before us on ppel, rguing tht the prosecution filed to pro"e
her guilt for estf nd illegl recruitment by proof beyond resonble doubt$
(ccused3ppellnt points out tht not one of the complinnts testified on #ht 8ind of jobs
#ere promised to them, ho# much they #ould recei"e s slries, the length of their employment
nd e"en the nmes of their employers, #hich re bsic subjects prospecti"e employee #ould
first determine$
)n sum, ccused3ppellnt posits tht the prosecution did not present single e"idence to
pro"e tht she promised or offered ny of the complinnts jobs brod$ )llegl recruitment is
committed #hen t#o (7) elements concur: 1) tht the offender hs no "lid license or uthority
re?uired by l# to enble one to l#fully engge in recruitment nd plcement of #or8ersG nd
7) tht the offender undert8es either ny cti"ity #ithin the mening of recruitment nd
plcement defined under (rticle 1:(b), or ny prohibited prctices enumerted under (rticle :=$
,:-
(rticle 1:(b), of the .bor 0ode pro"ides, thus:
(b) 4Recruitment nd plcement6 refers to ny ct of cn"ssing, enlisting,
contrcting, trnsporting, utili/ing, hiring or procuring #or8ers, nd includes referrls,
contrct ser"ices, promising or d"ertising for employment loclly or brod, #hether
for profit or not: ;ro"ided, tht ny person or entity #hich, in ny mnner, offers or
promises for fee employment to t#o or more persons shll be deemed engged in
recruitment nd plcement$
%o pro"e illegl recruitment, it must be sho#n tht the ccused3ppellnt g"e complinnts
the distinct impression tht he hd the po#er or bility to send complinnts brod for #or8
such tht the ltter #ere con"inced to prt #ith their money in order to be employed$
,=-
%o be
engged in the prctice of recruitment nd plcement, it is plin tht there must t lest be
promise or offer of n employment from the person posing s recruiter #hether loclly or
brod$
)n the cse t br, ccused3ppellnt lleges tht she ne"er promised nor offered ny job to
the complinnts$
We gree$
( perusl of the records re"els tht not one of the complinnts testified tht ccused3
ppellnt lured them to prt #ith their hrd3erned money #ith promises of jobs brod$ On the
contrry, they #ere ll consistent in sying tht their relti"es brod #ere the ones #ho
contcted them nd urged them to meet ccused3ppellnt #ho #ould ssist them in processing
their tr"el documents$ (ccused3ppellnt did not h"e to m8e promises of employment brod
s these #ere lredy done by complinnts! relti"es$ %hus, in the cross3e9mintion of *ri
%olos de 0rden:
(tty$ Binglsn:
Q: (nd you #ould li8e#ise gree tht ;riscill informed you tht she cn find n employment for
you once you entered ;ris, is tht correctR
(: 2es, becuse ccording to her tht is #ht +min (ngeles sid to her$
Q: Cut during tht time you #ould gree tht you do not 8no# personlly or met in person +min
(ngelesR
(: &ot yet sir$
Q: )n fct, e"en #hen you rri"ed in the ;hilippines, nd ctully met in person +min (ngeles,
you did not 8no# #ho is +min (ngeles nd #ht her business #s then tht timeR
(: ) recogni/ed becuse my sister sent me picture of +min (ngeles$
Q: +o, it is cler tht #hen you met +min (ngeles sometime on +eptember F, 1KK=, you #ere
lredy decided to go to ;ris becuse you #ere then relying on the instruction from the d"ice of
;riscillR
(: 2es, sir$
Q: (nd tht #s the reson #hy you e"en terminted your employment contrct in +udiR
(: 2es, sir$
,>-
;recil Olpindo, on cross3e9mintion, dmitted thus:
Q: 2ou #ould li8e to confirm tht before you nd +min met in the ;hilippines sometime in
+eptember of 1KK>, you #ere lredy decided to le"e for 0nd s per d"ice of your sisterR
(: 2es, sir$
Q: (nd you li8e#ise gree mdm #itness tht e"en before you met the ccused sometime in
+eptember of 1KK>, you #ere lredy directed nd informed by your sister (n s to ho# much
nd she #ill py the ccused +min for the fcilittion of your tr"el in going to 0nd, is tht
correctR
(: 2es, sir$
,5-
)n the cross3e9mintion of *rcelino %olos, thus:
Q: &o#, #ould you gree tht your sister is #or8ing in ;risR
(: 2es, sir$
Q: (nd for ho# mny yers #or8ing in ;risR
(: (lmost > yers$
Q: (nd ho# much #s she erning or recei"ing in ;ris, FrnceR
(: ;7<,<<<$<< or more, sir$
Q: (nd it #s for this reson she d"ised your sister then in +udi (rbi nd you to lso go to ;ris
becuse she #ill be recei"ing more in ;ris, correctR
(: +he sid #hen #e follo# to her office, sir$
Q: +o #ht your sister told you if you!re lso interested to go to ;ris you cn "il of the help of
+min (ngeles, so you cn lso le"e for ;ris nd join her, is tht correctR
(: 2es, sir$
Q: (nd tht #s the reson #hy your sister #rote you letter nd g"e instruction to go to ccused
sometime on +eptember, 1KK=, is tht correctR
(: 2es, sir$
Q: &o# you #ould gree #ith me *r$ Witness prior to tht dte +eptember F, 1KK= you don!t 8no#
personlly the person of +min (ngeles nd do not 8no# nything bout the nture of her
business or personl circumstnces, is tht correctR
(: 2es, sir$
,N-
;linly, there is no testimony tht ccused3ppellnt offered complinnts jobs
brod$ Hence, ccused3ppellnt +min (ngeles cnnot be l#fully con"icted of illegl
recruitment$
(nent the four chrges of estf, +min (ngeles rgues tht the element of deceit
consisting in the flse sttement or frudulent representtion of the ccused mde prior to or
simultneously #ith the deli"ery of the sums of money is lc8ing in the instnt cse$ +he clims
tht she ne"er decei"ed complinnts into belie"ing tht she hd the uthority nd cpbility to
send them brod for employment$
We re not persuded$
Hnder (rticle :1>, prgrph 7() of the Re"ised ;enl 0ode, the elements of estf re: (1)
the ccused hs defruded nother by buse of confidence or by mens of deceit nd (7) dmge
or prejudice cpble of pecuniry estimtion is cused to the offended prty or third
person$ 0lerly, these elements re present in this cse$
,F-
(lthough +min (ngeles did not decei"e complinnts into belie"ing tht she could find
employment for them brod, nonetheless, she mde them belie"e tht she #s processing their
tr"el documents for Frnce nd 0nd$ %hey prted #ith their money belie"ing tht +min
(ngeles #ould use it to py for their plne tic8ets, hotel ccommodtions nd other tr"el
re?uirements$ Hpon recei"ing "rious mounts from complinnts, +min (ngeles used it for
other purposes nd then con"eniently disppered$
0omplinnts trusted +min (ngeles becuse she #s referred to them by their o#n
relti"es$ +he bused their confidence #hen she led them to belie"e tht she cn process their
tr"el documents brod, thus inducing them to prt #ith their money$ When they demnded
from +min their tr"el documents, she filed to produce them$ .i8e#ise, she filed to return
the mounts entrusted to her$
0lerly, +min (ngeles defruded complinnts by flsely pretending to possess the po#er
nd cpcity to process their tr"el documents$
(rticle :1> of the Re"ised ;enl 0ode imposes the penlty of prision correccional in its
m9imum period to prision mayor in its minimum period, if the mount of the frud is o"er
;17,<<<$<< but does not e9ceed ;77,<<<$<<G if the mount e9ceeds ;77,<<<$<<, the penlty
pro"ided shll be imposed in its m9imum period, dding one yer for ech dditionl
;1<,<<<$<<$ Ho#e"er, the totl penlty #hich my be imposed shll not e9ceed t#enty yers$
,K-
)n People v. Ordono,
,1<-
it #s held:
Hnder the )ndeterminte +entence .#, the m9imum term of the penlty shll be
4tht #hich, in "ie# of the ttending circumstnces, could be properly imposed6
under the Re"ised ;enl 0ode, nd the minimum shll be 4#ithin the rnge of the
penlty ne9t lo#er to tht prescribed for the offense$6 %he penlty ne9t lo#er should
be bsed on the penlty prescribed by the 0ode for the offense, #ithout first
considering ny modifying circumstnce ttendnt to the commission of the
crime$ %he determintion of the minimum penlty is left by l# to the sound
discretion of the court nd it cn be ny#here #ithin the rnge of the penlty ne9t
lo#er #ithout ny reference to the periods into #hich it might be subdi"ided$ %he
modifying circumstnces re considered only in the imposition of the m9imum term
of the indeterminte sentence$
%hus, in 0riminl 0se &o$ K=31=<=F>, *ri %olos testified tht she g"e ;1<N,<<<$<<,
;=5,<<<$<< nd H+E1,><<$<< to +min (ngeles$ %he )nformtion, ho#e"er, lleged tht *ri
g"e only ;1<N,<<<$<<$ +min (ngeles could therefore be held ccountble for only tht
mount$
)n 0riminl 0se &o$ K=31=<=F5, *rcelino testified tht he g"e ;1<<,<<<$<<, ;=5,<<<$<<
nd H+E1,><<$<< to +min (ngeles$ %he )nformtion ho#e"er lleged tht *rcelino g"e
only totl of ;1K<,<<<$<<G hence tht is the only mount tht +min (ngeles could be held
ccountble for$
)n 0riminl 0se &o$ K=31=<=FN, ;recil testified tht she g"e H+E7,>><$<< to +min
(ngeles$ %he )nformtion lleged tht the e?ui"lent mount thereof in ;hilippine 0urrency is
;51,7<<$<<$ +min (ngeles is therefore criminlly lible for ;51,7<<$<<$
0omplinnt 'ilm Crin did not pper in court to testify$ %hus, the dmge in the mount
of E7,>><$<< lleged in 0riminl 0se &o$ K=31=<=FF #s not pro"ed$
WHEREFORE, in "ie# of the foregoing, the ppeled Becision is *OB)F)EB s follo#s:
(1) )n 0riminl 0se &o$ K=31=<=F>, ccused3ppellnt +min (ngeles is found
JH).%2 beyond resonble doubt of the crime of Estf nd sentenced to suffer
prison term of four (=) yers nd t#o (7) months of prision correccional, s minimum,
to si9teen (15) yers ofreclusion temporal, s m9imum, nd is ORBEREB to
indemnify *ri +rdeT the mount of ;1<N,<<<$<<$
(7) )n 0riminl 0se &o$ K=31=<=F5, ccused3ppellnt +min (ngeles is found
JH).%2 beyond resonble doubt of the crime of Estf nd sentenced to suffer
prison term of four (=) yers nd t#o (7) months of prision correccional, s minimum,
to t#enty (7<) yers ofreclusion temporal, s m9imum, nd is ORBEREB to
indemnify *rcelino %olos the mount of ;1K<,<<<$<<$
(:) )n 0riminl 0se &o$ K=31=<=FN, ccused3ppellnt +min (ngeles is found
JH).%2 beyond resonble doubt of the crime of Estf nd sentenced to suffer
prision term of four (=) yers nd t#o (7) months of prision correccional, s
minimum, to ele"en (11) yers ofprision mayor, s m9imum, nd is ORBEREB to
indemnify ;recil Olpindo the mount of ;51,7<<$<<$
(=) )n 0riminl 0se &o$ K=31=<=FF for Estf, ccused3ppellnt +min (ngeles
is (0QH)%%EB for filure of the prosecution to pro"e her guilt beyond resonble
doubt$
(>) )n 0riminl 0se &o$ K=31=<=FK for )llegl Recruitment, ccused3ppellnt
+min (ngeles is (0QH)%%EB for filure of the prosecution to pro"e her guilt
beyond resonble doubt$
SO ORDERED.
1astern Ass$rance ? S$rety Corp. vs. Secretary of Labor, 1'1 SCRA
11%, #an$ary 17, 1&&%
12cerpt : 1. #.R. Nos. 138HD;74. 0'n.'ry +1, +334. RS"IRST
DI9ISION.T 1AS(1R) ASS5RA)C1 S5R1(@C<R.<RA(3<) , petitioner ,
vs . S1CR1(AR@ <8 LA4<R , .H3L3..3)1 <:1RS1AS 1M.L<@M1)(A+
M3)3S(RA(3<) , 1L:3RA :1)(5RA , 1S(1R (RA)A53LLA) , et al ., re
spondents . SPECIAL CI9IL ACTIONof &ertior'ri to reie( t)e
order of t)e Secretary of Labor . T)e %'&ts 're st'ted in t)e opinion of t)e
Co.rt. T'nE.'t&o, Oret', T'nE.'t&o, !eren,.er S'n 9i&ente %or petitioner .
NAR9ASA, 0.: In &onne&tion (it) t)e 'pp-i&'tion (it)
t)e .hilippine <verseas 1-ploy-ent Ad-inistration BPOEAC of 0 !
M'npo(er Spe&i'-ist, In&. %or ' -i&ense to en,',e in b.siness 's '
re&r.it/ent ',en&y, ' s$rety bond ('s %i-ed on 0'n.'ry ?, +327 by t)e
More E5&erpts
Case (itle : EASTERN ASS>RANCE = S>RETY CORPORATION, petitioner, s.
SECRETARY O" LA!OR, PHILIPPINE O9ERSEAS EMPLOYMENT
ADMINISTRATION, EL9IRA 9ENT>RA, ESTER TRAN#>ILLAN, et '-.,
respondents.
Case )at$re : SPECIAL CI9IL ACTION o% &ertior'ri to reie( t)e order o%
t)e Se&ret'ry o% L'bor.
Syllabi Class :L'bor*
Syllabi:
1. Labor; #ecretary of Labor has the power and authority not only to
restrict and regulate the recruitment and placement activities of all agencies
but also to promulgate rules and regulations to carry out the ob.ectives and
implement the provisions governing said activities.2
". Labor; %mplicit in these powers is the award of appropriate relief to the
victims of the offenses committed by the respondent agency or contractor.2
!. Labor; /rgument that the recruiter and its victims are in pari delicto.-
3ven more untenable is 3/#&'Is next argument that the recruiter and its
victims are in pari delicto>the former for having required payment and the
latter for having voluntarily paid 8prohibited recruitment fees9>and
therefore said victims are barred from obtaining relief. 7he sophistical if
not callous character of the argument is evident upon the most cursory
reading thereofF it merits no consideration whatever.
4. Labor; 3/#&'Is claim that it had not been properly served with
summons as regards a few of the complaints must be re.ected.2
+ivision: "IRST DI9ISION.
+oc,et )$-ber: #.R. Nos. 138HD;74
Co$nsel: T'nE.'t&o, Oret', !eren,.er = S'n 9i&ente
.onente: NAR9ASA
+ispositive .ortion:
6HERE"ORE, t)e petition is DISMISSED %or -'&F o% /erit, 'nd t)is de&ision is
de&-'red to be i//edi'te-y e5e&.tory. Costs ','inst petitioner.
5n connection !ith the application !ith the 0hilippine "&erseas (mployment %dministration '0"(%*
of 9 B 2 ,anpo!er Specialist, 5nc/ for a license to engage in business as a recruitment agency, a
surety bond !as filed on 9anuary 2, 198: by the applicant and the (astern %ssurance and Surety
)orporation, herein petitioner, in &irtue of !hich they both held themsel&es G
/ / / firmly bound unto 'said* 0hilippine "&erseas (mployment %dministration, ,inistry
of Labor in the penal sum of 0(S"S "8( >@8D#(D =5=TA T>"@S%8D "8LA / / /
'0l:4,444/44* for the payment of !hich !ill and truly to be made, / / / 'they bound
themsel&es, their* heirs, eCecutors, administrators, successors and assigns, Fointly
and se&erally / /
The bond stipulated that;
a* it !as Dconditioned upon the true and faithful performance and obser&ance of the / / / principal '9
B 2 ,anpo!er Specialist, 5nc/* of its duties and obligations in accordance !ith all the rules and
regulations promulgated by the ,inistry of Labor 0hilippine "&erseas (mployment %dministration
and !ith the terms and conditions stipulated in the LicenseH
b* the liability of the / / / Surety 'petitioner* shall in no case eCceed the sum of 0(S"S "8(
>@8D#(D =5=TA T>"@S%8D '01:4,444/44* "8LA, 0>5L50058( )@##(8)AH
1
c* notice to the 0rincipal is also a notice to the SuretyH and
d* L5%25L5TA of the surety / / / shall eCpire on 9%8@%#A 42, 198 and this bond shall be
automatically cancelled ten '14* days after its eCpiration and the surety shall not be liable for any
claim not disco&ered and presented to it in !riting !ithin said period of / / / from eCpiration and the
obligee hereby eCpressly !ai&es the rights to file any court action against the Surety after
termination of said period of / / / / abo&e cited/
2
%s narrated by respondent Secretary of Labor, the facts are as follo!s;
3
=rom 9une 198- to December 198: / / / thirty three '--* / / / 'persons* applied for
o&erseas employment !ith / / / '9 B 2*/ 5n consideration of promised deployment,
complainants paid respondent &arious amounts for &arious fees/ ,ost of+ the receipts
issued !ere sighed by ,rs/ 2aby 2undalian, (Cecuti&e <ice10resident of / / / '9 B 2*/
2ecause of non1deployment / / / 'the applicants* filed separate complaints !ith the
Licensing and #egulation "ffice of 0"(% against / / / '9 B 2* for &iolation of %rticles
-2 and -4 'a* of the Labor )ode bet!een the months of %pril to "ctober 198:/
Despite summons7notices of hearing,, / / / '9 B 2* failed to file %ns!er nor appear in
the hearings conducted/
5n its separate %ns!er, / / / (%S)" essentially disclaimed liability on the ground that
the claims !ere not eCpressly co&ered by the bond, that 0"(% had no Furisdiction to
order forfeiture of the bond, that some of the claims !ere paid beyond or prior to the
period of effecti&ity of the bond/
"n September 8, 198, the 0"(% %dministrator issued the "rder in fa&or of
complainants ruling thus;
%fter careful e&aluation, !e find that the receipts and testimonies of
complainants, in the absence of contro&erting e&idence substantially
establish that respondent charged and collected fees from them in
amounts eCceeding !hat is prescribed by this %dministration/
)omplainants+ non1deployment strongly indicates that there !as no
employment obtained for them/ >ence, &iolation of %rticles -2 and -4
'a* of the Labor )ode, as amended, is established against
respondent/ The claims of complainants ha&ing arose 'arisen* out of
acts of the principal co&ered under the surety 'bond*, the respondent
surety is eEually liable therefor/
(Ccept for complainants #amos, Samson, de Leon and #i6ada, !hose claims !ere
transacted prior to the effecti&ity of the bond, / / / (%S)" !as declared Fointly and
se&erally liable !ith / / / '9 B 2* to t!enty1nine '29* complainants/
'The dispositi&e portion of the 0"(% %dministrator+s "rder also contained the
follo!ing statement and direction, vi</;
#espondent !as suspended on ,ay 2-, 198:, 9une 2, 198: and
9anuary 1., 198 all for illegal eCaction/ )onsidering its track record
of illegal eCaction acti&ities and considering further the gross &iolation
of recruitment rules and regulations established against it in the
instant cases, and the eCpiration of its license on =ebruary 1:, 198:,
it is hereby fore&er banned from participation in the o&erseas
employment program/ 5t is ordered to cease and desist from further
engaging in recruitment acti&ities other!ise it shall be prosecuted for
illegal recruitment/+*
'9 B 2 filed a motion for reconsideration*/ "n December 19, 198, the then deputy
,inister of Labor and (mployment denied the / / / ,otion for #econsideration for lack
of merit and affirmed the findings in the "rder of the 0"(% %dministrator finding no
re&ersible error therein/
"n appeal by (%S)" G 9 B 2 ha&ing as aforestated taken no part in the proceeding despite due
ser&ice of summons G the Fudgment !as modified by the Secretary of Labor, by "rder dated 9uly 1,
198., disposing as follo!s;
4
3>(#(="#(, in &ie! of the foregoing, the #esolution of the then Deputy ,inister of
Labor dated December 19, 198 affirming the "rder of the 0"(% %dministrator dated
September 8, 198 is hereby ,"D5=5(D/ #espondent 9 B 2 ,anpo!er Specialist is
directed to refund all thirty1three '--* complainants as listed in the "rder of
September 8, 198 in the amounts listed thereto !ith the modification that
complainants Lucena )abasal and =eliC #i&ero are both entitled only to 01:,984 and
not 01:,984 each/ Respondent ?astern Ass%rance and S%rety &orporation is hereby
"o%nd 'ointly and severally liable )ith respondent $ U B Manpo)er Specialist to
re"%nd nineteen 5*A6 complainants in the modi"ied amo%nts / / / 5partic%larly
speci"ied6/
The other findings in the "rder of the 0"(% %dministrator dated September 8, 198
affirmed in the #esolution of the then Deputy ,inister / / / are also hereby
%==5#,(D/ This "rder is =58%L/ 8o further ,otion for #econsideration hereof shall
be entertained/
5t is note!orthy that (%S)"+s liability for the refund, Fointly and se&erally !ith its principal, !as
limited to 19 named complainants 'in contrast to &erdicts of the 0"(% and the Deputy ,inister !hich
both ordered payment to no less than -- complainants* and !as correspondingly reduced from
0-48,.:1/.: and @S P 444/44
5
to the aggregate amount of 0 144,81./.:/
6
The special ci&il action of certiorari at bar !as thereafter instituted by (%S)"
7
praying for the
nullification of the 0"(% %dministrator+s "rder of September 8, 198, the #esolution of the Deputy
,inister of Labor of+ December 19, 198, and the "rder of the Secretary of Labor of 9uly 1, 198., 5t
theori6es that;
1* the 0"(% had no Furisdiction o&er the claims for refund filed by non1employeesH
2* neither did the Secretary of Labor ha&e Furisdiction of the claimsH
-* assuming they had Furisdiction, both the 0"(% and Secretary of Labor also
committed legal errors and acted !ith gra&e abuse of discretion !hen they ruled that
petitioner is liable on the claims/
(%S)" contends that the 0"(% had no DadFudicatory FurisdictionD o&er the monetary claims in
Euestion because the same Ddid not arise from employer1employee relations/D 5n&oked in support of
the argument is Section 4 'a* of (" .9. pro&iding in part
"
that the 0"(% has G
/ / / original and eCclusi&e Furisdiction o&er all cases, including money
claims, involving employer.employee relations arising out of or by &irtue of any la! or
contract in&ol&ing =ilipino !orkers for o&erseas employment including seamen / / /
The complaints are ho!e&er for &iolation of %rticles -2 and -4 a* of the Labor )ode/ %rticle
-2 and paragraph 'a* of %rticle -4 read as follo!s;
%rt/ -2/ 9ees to be paid by )or4ers/G%ny person applying !ith a pri&ate fee1
charging employment agency for employment assistance shall not be charged any
fee until he has obtained employment through its efforts or has actually commenced
employment/ Such fee shall be al!ays co&ered !ith the appro&ed receipt clearly
sho!ing the amount paid/ The Secretary of Labor shall promulgate a schedule of
allo!able fees/
%rt/ -4/ Prohibited practices/G5t shall be unla!ful for any indi&idual, entity, licensee,
or holder of authority;
a* To charge or accept, directly or indirectly, any amount greater than that specified in
the schedule of allo!able fees prescribed by the Secretary of Labor, or to make a
!orker pay any amount greater than actually recei&ed by him as a loan or
ad&anceH / / /
The penalties of suspension and cancellation of license or authority are prescribed for &iolations of
the abo&e Euoted pro&isions, among others/ %nd the Secretary of Labor has the po!er under
Section -: of the la! to apply these sanctions, as !ell as the authority, conferred by Section -, not
only, to Drestrict and regulate the recruitment and placement acti&ities of all agencies,D but also to
Dpromulgate rules and regulations to carry out the obFecti&es and implement the pro&isionsD
go&erning said acti&ities/ 0ursuant to this rule1making po!er thus granted, the Secretary of Labor
ga&e the 0"(%
#
Don its o!n initiati&e or upon filing of a complaint or report or upon reEuest for
in&estigation by any aggrie&ed person, / / / 'authority to* conduct the necessary proceedings for the
suspension or cancellation of the license or authority of any agency or entityD for certain enumerated
offenses including G
1* the imposition or acceptance, directly or indirectly, of any amount of money, goods or ser&ices, or
any fee or bond in eCcess of !hat is prescribed by the %dministration, and
2* any other &iolation of pertinent pro&isions of the Labor )ode and other rele&ant la!s, rules and
regulations/
1$
The %dministrator !as also gi&en the po!er to Dorder the dismissal of the case or the
suspension of the license or authority of the respondent agency or contractor or recommend
to the ,inister the cancellation thereof/D
11
5mplicit in these po!ers is the a!ard of appropriate relief to the &ictims of the offenses committed by
the respondent agency or contractor, specially the refund or reimbursement of such fees as may
ha&e been fraudulently or other!ise illegally collected, or such money, goods or ser&ices imposed
and accepted in eCcess of !hat is licitly prescribed/ 5t !ould be illogical and absurd to limit the
sanction on an offending recruitment agency or contractor to suspension or cancellation of its
license, !ithout the concomitant obligation to repair the inFury caused to its &ictims/ 5t !ould result
either in re!arding unla!ful acts, as it !ould lea&e the &ictims !ithout recourse, or in compelling the
latter to litigate in another forum, gi&ing rise to that multiplicity of actions or proceedings !hich the
la! abhors/
(&en more untenable is (%S)"+s neCt argument that the recruiter and its &ictims are in pari
delicto G the former for ha&ing reEuired payment, and the latter for ha&ing &oluntarily paid,
Dprohibited recruitment feesD G and therefore, said &ictims are barred from obtaining relief/ The
sophistical, if not callous, character of the argument is e&ident upon the most cursory reading
thereofH it merits no consideration !hate&er/
The )ourt is intrigued by (%S)"+s reiteration of its argument that it should not be held liable for
claims !hich accrued prior to or after the effecti&ity of its bond, considering that the respondent
Secretary had conceded the &alidity of part of said argument, at least/ The Secretary ruled that
(%S)"+s Dcontention that it should not be held liable for claims7payments made to respondent
agency before the effecti&ity of the surety bond on 9anuary 2, 198: is !ell taken/D %ccording to the
Secretary;
12
/ / / % close eCamination of the records re&eal's* that respondent (%S)" is not Fointly
and se&erally liable !ith respondent agency to refund complainants Lucena )abasal,
=eliC #i&ero, #omulo del #osario, #ogelio 2an6uela, 9osefina "gatis, =rancisco
Sorato, Sonny Luia6on, 9osefina Dictado, ,ario del ?u6man and #ogelio ,ercado
'14 in all*/ !hese complainants paid respondent agency in *A1B, or be"ore the
e""ectivity o" the bond on $an%ary +, *A12 as evidence by the reciept and their
testimonies/
The related argument, that it is also not liable for claims filed after the eCpiry 'on 9anuary 2, 198* of
the period stipulated in the surety bond for the filing of claims against the bond, must ho!e&er be
reFected, as the Secretary did/ The )ourt discerns no gra&e abuse of discretion in the Secretary+s
statement of his reasons for doing so, to !it;
/ / / 3hile it may be true that respondent (%S)" recei&ed notice of their claims after
the ten '14* day eCpiration period from cancellation or after 9anuary 12, 198 as
pro&ided in the surety bond, records sho! that / / / (%S)"+s principal, respondent
agency, !as notified7 summoned prior to the eCpiration period or before 9anuary 12,
198/ #espondent agency recei&ed summons on 9uly 24, 198: !ith respect to
claims of complainants 0enarroyo, dela )ru6 and )anti/ 5t also recei&ed summons on
8o&ember 2, 198: !ith respect to ?io&anni ?arbillons+ claim/ #espondent agency
!as like!ise considered constructi&ely notified of the claims of complainants
)alayag, Danuco Domingo and )ampena on "ctober , 198:/ 5n this connection, it
may be stressed that the surety bond pro&ides that notice to the principal is notice to
the surety/ 2esides, it has been held that the contract of a compensated surety like
respondent (%S)" is to be interpreted liberally in the interest of the promises and
beneficiaries rather than strictly in fa&or of the surety '%coustics 5nc/ &/ %merican
Surety, .4 8e&1, -24 02d/ 2, .4 %m/ 9ur/ 2d*/
So, too, (%S)"+s claim that it had not been properly ser&ed !ith summons as regards a fe! of the
complaints must be reFected, the issue being factual, and the )ourt ha&ing been cited to no gra&e
error in&alidating the respondent Secretary+s conclusion that summons had indeed been duly ser&ed/
=inally, (%S)"+s half1hearted argument that its liability should be limited to the maCimum amount
set in its surety bond, i/e/, 01:4,444/44, is palpably !ithout merit, since the aggregate liability
imposed on it, 0144,81./.:, s%pra, does not in fact eCceed that limit/
3>(#(="#(, the petition is D5S,5SS(D for lack of merit, and this decision is declared to be
immediately eCecutory/ )osts against petitioner/
S" "#D(#(D/
&r%<, ;ancayco, ;ri=o.A>%ino and Medialdea, $$., conc
Aeneral Millin/ Corporation vs. (orres, 1& SCRA "1* , April "", 1&&1
Case (itle : #ENERAL MILLIN# CORPORATION 'nd EARL TIMOTHY CONE,
petitioners, s. HON. R>!EN D. TORRES, in )is &'p'&ity 's Se&ret'ry o%
L'bor 'nd E/p-oy/ent, HON. !IEN9ENIDO E. LA#>ESMA, in )is &'p'&ity 's
A&tin, Se&ret'ry o% L'bor 'nd E/p-oy/ent, 'nd !AS:ET!ALL COACHES
ASSOCIATION O" THE PHILIPPINES, respondents.Case )at$re : PETITION
%or &ertior'ri to reie( t)e de&ision o% t)e Dep'rt/ent o% L'bor 'nd
E/p-oy/ent.
Syllabi Class : Contr'&ts*L'bor L'(*
Syllabi:
1. $ontracts; Provisions of applicable laws especially those relating to
matters affected with public policy are deemed written into contracts.-
4either can petitioners validly claim that implementation of respondent
#ecretaryIs decision would amount to an impairment of the obligations of
contracts. 7he provisions of the Labor &ode and its %mplementing Rules and
Regulations requiring alien employment permits were in existence long
before petitioners entered into their contract of employment. %t is firmly
settled that provisions of applicable laws especially provisions relating to
matters affected with public policy are deemed written into contracts.
Private parties cannot constitutionally contract away the otherwise
applicable provisions of law.
". Labor Law; 7he Department of Labor is the agency vested with
.urisdiction to determine the question of availability of local wor!ers.-
PetitionersI contention that respondent #ecretary of Labor should have
deferred to the findings of &ommission on %mmigration and Deportation as
to the necessity of employing petitioner &one is again bereft of legal basis.
7he Labor &ode itself specifically empowers respondent #ecretary to ma!e a
determination as to the availability of the services of a 8person in the
Philippines who is competent able and willing at the time of application to
perform the services for which an alien is desired.9 %n short the Department
of Labor is the agency vested with .urisdiction to determine the question of
availability of local wor!ers. 7he constitutional validity of legal provisions
granting such .urisdiction and authority and requiring proof of non-
availability of local nationals able to carry out the duties of the position
involved cannot be seriously questioned.
+ivision: THIRD DI9ISION
+oc,et )$-ber: #.R. No. 3HDDD
Co$nsel: Sobrein's, Di'<, H'y.dini = !ode,on L'( O%%i&e, Rodri,o, C.e's
= De !orE'
.onente: "ELICIANO
+ispositive .ortion:
ACCORDIN#LY, t)e Co.rt Reso-ed to DISMISS t)e Petition %or Certior'ri %or
-'&F o% /erit. Costs ','inst petitioners.
"n 1 ,ay 1989, the 8ational )apital #egion of the Department of Labor and (mployment issued
%lien (mployment 0ermit 8o/ ,14891-1:-: in fa&or of petitioner (arl Timothy )one, a @nited
States citi6en, as sports consultant and assistant coach for petitioner ?eneral ,illing )orporation
'D?,)D*/
"n 2. December 1989, petitioners ?,) and )one entered into a contract of employment !hereby
the latter undertook to coach ?,)+s basketball team/
"n 1: 9anuary 1994, the 2oard of Special 5nEuiry of the )ommission on 5mmigration and
Deportation appro&ed petitioner )one+s application for a change of admission status from temporary
&isitor to pre1arranged employee/
"n 9 =ebruary 1994, petitioner ?,) reEuested rene!al of petitioner )one+s alien employment
permit/ ?,) also reEuested that it be allo!ed to employ )one as full1fledged coach/ The D"L(
#egional Director, Luna 0ie6as, granted the reEuest on 1: =ebruary 1994/
"n 18 =ebruary 1994, %lien (mployment 0ermit 8o/ ,14294-1881, &alid until 2: December 1994,
!as issued/
0ri&ate respondent 2asketball )oaches %ssociation of the 0hilippines 'D2)%0D* appealed the
issuance of said alien employment permit to the respondent Secretary of Labor !ho, on 2- %pril
1994, issued a decision ordering cancellation of petitioner )one+s employment permit on the ground
that there !as no sho!ing that there is no person in the 0hilippines !ho is competent, able and
!illing to perform the ser&ices reEuired nor that the hiring of petitioner )one !ould redound to the
national interest/
0etitioner ?,) filed a ,otion for #econsideration and t!o '2* Supplemental ,otions for
#econsideration but said ,otions !ere denied by %cting Secretary of Labor 2ien&enido (/
Laguesma in an "rder dated 8 9une 1994/
0etitioners are no! before the )ourt on a 0etition for &ertiorari, dated 14 9une 1994, alleging that;
1/ respondent Secretary of Labor gra&ely abused his discretion !hen he re&oked
petitioner )one+s alien employment permitH and
2/ Section 'c*, #ule $5<, 2ook 5 of the "mnibus #ules 5mplementing the Labor
)ode is null and &oid as it is in &iolation of the enabling la! as the Labor )ode does
not empo!er respondent Secretary to determine if the employment of an alien !ould
redound to national interest/
Deliberating on the present 0etition for &ertiorari, the )ourt considers that petitioners ha&e failed to
sho! any gra&e abuse of discretion or any act !ithout or in eCcess of Furisdiction on the part of
respondent Secretary of Labor in rendering his decision, dated 2- %pril 1994, re&oking petitioner
)one+s %lien (mployment 0ermit/
The alleged failure to notify petitioners of the appeal filed by pri&ate respondent 2)%0 !as cured
!hen petitioners !ere allo!ed to file their ,otion for #econsideration before respondent Secretary
of Labor/
1
0etitioner ?,)+s claim that hiring of a foreign coach is an employer+s prerogati&e has no legal basis
at all/ @nder %rticle 44 of the Labor )ode, an employer seeking employment of an alien must first
obtain an employment permit from the Department of Labor/ 0etitioner ?,)+s right to choose !hom
to employ is, of course, limited by the statutory reEuirement of an alien employment permit/
0etitioners !ill not find solace in the eEual protection clause of the )onstitution/ %s pointed out by
the Solicitor1?eneral, no comparison can be made bet!een petitioner )one and ,r/ 8orman 2lack
as the latter is Da long time resident of the country,D and thus, not subFect to the pro&isions of %rticle
44 of the Labor )ode !hich apply only to Dnon1resident aliens/D 5n any case, the term Dnon1resident
alienD and its ob&erse Dresident alien,D here must be gi&en their technical connotation under our la!
on immigration/
8either can petitioners &alidly claim that implementation of respondent Secretary+s decision !ould
amount to an impairment of the obligations of contracts/ The pro&isions of the Labor )ode and its
5mplementing #ules and #egulations reEuiring alien employment permits !ere in eCistence long
before petitioners entered into their contract of employment/ 5t is firmly settled that pro&isions of
applicable la!s, especially pro&isions relating to matters affected !ith public policy, are deemed
!ritten into contracts/
2
0ri&ate parties cannot constitutionally contract a!ay the other!ise applicable
pro&isions of la!/
0etitioners+ contention that respondent Secretary of Labor should ha&e deferred to the findings of
)ommission on 5mmigration and Deportation as to the necessity of employing petitioner )one, is,
again, bereft of legal basis/ The Labor )ode itself specifically empo!ers respondent Secretary to
make a determination as to the a&ailability of the ser&ices of a Dperson in the 0hilippines !ho is
competent, able and !illing at the time of application to perform the ser&ices for !hich an alien is
desired/D
3
5n short, the Department of Labor is the agency &ested !ith Furisdiction to determine the
Euestion of a&ailability of local !orkers/ The constitutional &alidity of legal pro&isions granting such
Furisdiction and authority and reEuiring proof of non1a&ailability of local nationals able to carry out the
duties of the position in&ol&ed, cannot be seriously Euestioned/
0etitioners apparently also Euestion the &alidity of the 5mplementing #ules and #egulations,
specifically Section 'c*, #ule $5<, 2ook 5 of the 5mplementing #ules, as imposing a condition not
found in the Labor )ode itself/ Section 'c*, #ule $5<, 2ook 5 of the 5mplementing #ules, pro&ides
as follo!s;
Section / ss%ance o" ?mployment Permit VV the Secretary of Labor may issue an
employment permit to the applicant based on;
a* )ompliance by the applicant and his employer !ith the reEuirements of Section 2
hereofH
b* #eport of the 2ureau Director as to the a&ailability or non1a&ailability of any person
in the 0hilippines !ho is competent and !illing to do the Fob for !hich the ser&ices of
the applicant are desired/
'c* His assessment as to )hether or not the employment o" the applicant )ill
redo%nd to the national interestH
'd* %dmissibility of the alien as certified by the )ommission on 5mmigration and
DeportationH
'e* The recommendation of the 2oard of 5n&estments or other appropriate
go&ernment agencies if the applicant !ill be employed in preferred areas of
in&estments or in accordance !ith the imperati&e of economic de&elopmentH
CCC CCC CCC
'(mphasis supplied*
%rticle 44 of the Labor )ode reads as follo!s;
%rt/ 44/ ?mployment per %nit o" non.resident aliens/ ZZ %ny alien seeking admission
to the 0hilippines for employment purposes and any domestic or foreign employer
!ho desires to engage an alien for employment in the 0hilippines shall obtain an
employment permit from the Department of Labor/
!he employment permit may be iss%ed to a non.resident alien or to the applicant
employer after a determination of the non1a&ailability of a person in the 0hilippines
!ho is competent, able and !illing at the time of application to perform the ser&ices
for !hich the alien is desired/
=or an enterprise registered in preferred areas of in&estments, said employment
permit may be issued upon recommendation of the go&ernment agency charged !ith
the super&ision of said registered enterprise/ '(mphasis supplied*
0etitioners apparently suggest that the Secretary of Labor is not authori6ed to take into
account the Euestion of !hether or not employment of an alien applicant !ould Dredound to
the national interestD because %rticle 44 does not eCplicitly refer to such assessment/ This
argument '!hich seems impliedly to concede that the relationship of basketball coaching and
the national interest is tenuous and unreal* is not persuasi&e/ 5n the first place, the second
paragraph of %rticle 44 says; DMtNhe employment permit may be issued to a non1resident alien
or to the applicant employer after a determination of the non1a&ailability of a person in the
0hilippines !ho is competent, able and !illing at the time of application to perform the
ser&ices for !hich the alien is desired/D The permissi&e language employed in the Labor
)ode indicates that the authority granted in&ol&es the eCercise of discretion on the part of the
issuing authority/ 5n the second place, %rticle 12 of the Labor )ode sets forth a statement of
obFecti&es that the Secretary of Labor should, and indeed must, take into account in
eCercising his authority and Furisdiction granted by the Labor )ode,
%rt/ 12/ Statement o" Ob'ectives/ ZZ 5t is the policy of the State;
a* To promote and maintain a state of full employment through impro&ed manpo!er
training, allocation and utili6ationH
CCC CCC CCC
c* To facilitate a free choice of a&ailable employment by persons seeking !ork in
conformity !ith the national interestH
d* To facilitate and regulate the mo&ement of !orkers in conformity !ith the national
interestH
e* To regulate the employment of aliens, including the establishment of a registration
and7or !ork permit systemH
CCC CCC CCC
Thus, !e find petitioners+ arguments on the abo&e points of constitutional la! too insubstantial to
reEuire further consideration/
0etitioners ha&e &ery recently manifested to this )ourt that public respondent Secretary of Labor has
re&ersed his earlier decision and has issued an (mployment 0ermit to petitioner )one/ 0etitioners
seek to !ithdra! their 0etition for &ertiorari on the ground that it has become moot and academic/
3hile ordinarily this )ourt !ould dismiss a petition that clearly appears to ha&e become moot and
academic, the circumstances of this case and the nature of the Euestions raised by petitioners are
such that !e do not feel Fustified in lea&ing those Euestions unans!ered/
4
,oreo&er, assuming that
an alien employment permit has in fact been issued to petitioner )one, the basis of the re&ersal by the
Secretary of Labor of his earlier decision does not appear in the record/ 5f such re&ersal is based on some
&ie! of constitutional la! or labor la! different from those here set out, then such employment permit, if
one has been issued, !ould appear open to serious legal obFections/
%))"#D58?LA, the )ourt #esol&ed to D5S,5SS the 0etition for certiorari for lack of merit/ )osts
against petitioners/