G.R. Nos.

L-58674-77 July 11, 1990

PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance of
Zambales & Olongapo City, Branch III and SERAPIO ABUG, respondents.
CRUZ, J:
The basic issue in this case is the correct interpretation of Article 13(b) of P.D.
442, otherwise known as the Labor Code, reading as follows:
(b) Recruitment and placement' refers to any act of canvassing,
enlisting, contracting, transporting, hiring, or procuring workers,
and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit
or not: Provided, That any person or entity which, in any
manner, offers or promises for a fee employment to two or
more persons shall be deemed engaged in recruitment and
placement.
Four informations were filed on January 9, 1981, in the Court of First Instance
of Zambales and Olongapo City alleging that Serapio Abug, private respondent
herein, "without first securing a license from the Ministry of Labor as a holder
of authority to operate a fee-charging employment agency, did then and there
wilfully, unlawfully and criminally operate a private fee charging employment
agency by charging fees and expenses (from) and promising employment in
Saudi Arabia" to four separate individuals named therein, in violation of Article
16 in relation to Article 39 of the Labor Code. 1
Abug filed a motion to quash on the ground that the informations did not
charge an offense because he was accused of illegally recruiting only one
person in each of the four informations. Under the proviso in Article 13(b), he
claimed, there would be illegal recruitment only "whenever two or more
persons are in any manner promised or offered any employment for a fee. " 2
Denied at first, the motion was reconsidered and finally granted in the Orders
of the trial court dated June 24 and September 17, 1981. The prosecution is
now before us on certiorari. 3

The posture of the petitioner is that the private respondent is being prosecuted
under Article 39 in relation to Article 16 of the Labor Code; hence, Article 13(b)
is not applicable. However, as the first two cited articles penalize acts of
recruitment and placement without proper authority, which is the charge
embodied in the informations, application of the definition of recruitment and
placement in Article 13(b) is unavoidable.
The view of the private respondents is that to constitute recruitment and
placement, all the acts mentioned in this article should involve dealings with
two or mre persons as an indispensable requirement. On the other hand, the
petitioner argues that the requirement of two or more persons is imposed only
where the recruitment and placement consists of an offer or promise of
employment to such persons and always in consideration of a fee. The other
acts mentioned in the body of the article may involve even only one person
and are not necessarily for profit.
Neither interpretation is acceptable. We fail to see why the proviso should
speak only of an offer or promise of employment if the purpose was to apply
the requirement of two or more persons to all the acts mentioned in the basic
rule. For its part, the petitioner does not explain why dealings with two or more
persons are needed where the recruitment and placement consists of an offer
or promise of employment but not when it is done through "canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers.
As 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. The 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 "canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring (of) workers. "
The number of persons dealt with is not an essential ingredient of the act of
recruitment and placement of workers. Any of the acts mentioned in the basic
rule in Article 13(b) win constitute recruitment and placement even if only one
prospective worker is involved. The 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 workers, the individual or entity

dealing with them shall be deemed to be engaged in the act of recruitment and
placement. The words "shall be deemed" create that presumption.
This is not unlike the presumption in article 217 of the Revised Penal Code, for
example, regarding the failure of a public officer to produce upon lawful
demand funds or property entrusted to his custody. Such failure shall be prima
facie evidence that he has put them to personal use; in other words, he shall
be deemed to have malversed such funds or property. In the instant case, the
word "shall be deemed" should by the same token be given the force of a
disputable presumption or of prima facie evidence of engaging in recruitment
and placement. (Klepp vs. Odin Tp., McHenry County 40 ND N.W. 313, 314.)
It is unfortunate that we can only speculate on the meaning of the questioned
provision for lack of records of debates and deliberations that would otherwise
have been available if the Labor Code had been enacted as a statute rather
than a presidential decree. The trouble with presidential decrees is that they
could be, and sometimes were, issued without previous public discussion or
consultation, the promulgator heeding only his own counsel or those of his
close advisers in their lofty pinnacle of power. The not infrequent results are
rejection, intentional or not, of the interest of the greater number and, as in the
instant case, certain esoteric provisions that one cannot read against the
background facts usually reported in the legislative journals.
At any rate, the interpretation here adopted should give more force to the
campaign against illegal recruitment and placement, which has victimized
many Filipino workers seeking a better life in a foreign land, and investing
hard- earned savings or even borrowed funds in pursuit of their dream, only to
be awakened to the reality of a cynical deception at the hands of theirown
countrymen.
WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are set
aside and the four informations against the private respondent reinstated. No
costs.

G.R. No. L-79436-50 January 17, 1990

EASTERN ASSURANCE & SURETY CORPORATION, petitioner,
vs.
SECRETARY OF LABOR, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, ELVIRA VENTURA, ESTER TRANGUILLAN, et
al., respondents.
Tanjuatco, Oreta, Tanjuatco, Berenguer & San Vicente for petitioner.
NARVASA, J.:
In connection with the application with the Philippine Overseas Employment
Administration (POEA) of J & B Manpower Specialist, Inc. for a license to
engage in business as a recruitment agency, a surety bond was filed on
January 2, 1985 by the applicant and the Eastern Assurance and Surety
Corporation, herein petitioner, in virtue of which they both held themselves
. . . firmly bound unto (said) Philippine Overseas Employment Administration,
Ministry of Labor in the penal sum of PESOS ONE HUNDRED FIFTY
THOUSAND ONLY . . . (Pl50,000.00) for the payment of which will and truly to
be made, . . . (they bound themselves, their) heirs, executors, administrators,
successors and assigns, jointly and severally . .
The bond stipulated that:
a) it was "conditioned upon the true and faithful performance and observance
of the . . . principal (J & B Manpower Specialist, Inc.) of its duties and
obligations in accordance with all the rules and regulations promulgated by the
Ministry of Labor Philippine Overseas Employment Administration and with the
terms and conditions stipulated in the License;
b) the liability of the . . . Surety (petitioner) shall in no case exceed the sum of
PESOS ONE HUNDRED FIFTY THOUSAND (P150,000.00) ONLY,
PHILIPPINE CURRENCY; 1

SO ORDERED.
c) notice to the Principal is also a notice to the Surety; and

d) LIABILITY of the surety . . . shall expire on JANUARY 02, 1986 and this
bond shall be automatically cancelled ten (10) days after its expiration and the
surety shall not be liable for any claim not discovered and presented to it in
writing within said period of . . . from expiration and the obligee hereby
expressly waives the rights to file any court action against the Surety after
termination of said period of . . . . above cited. 2
As narrated by respondent Secretary of Labor, the facts are as follows:

established against respondent. The claims of complainants having arose

(arisen) out of acts of the principal covered under the surety (bond), the
respondent surety is equally liable therefor.
Except for complainants Ramos, Samson, de Leon and Rizada, whose claims
were transacted prior to the effectivity of the bond, . . . EASCO was declared
jointly and severally liable with . . . (J & B) to twenty-nine (29) complainants.

From June 1983 to December 1985 . . . thirty three (33) . . . (persons) applied
for overseas employment with . . . (J & B). In consideration of promised
deployment, complainants paid respondent various amounts for various fees.
Most of' the receipts issued were sighed by Mrs. Baby Bundalian, Executive
Vice-President of . . . (J & B).
Because of non-deployment . . . (the applicants) filed separate complaints with
the Licensing and Regulation Office of POEA against . . . (J & B) for violation of
Articles 32 and 34 (a) of the Labor Code between the months of April to
October 1985.
Despite summons/notices of hearing,, . . . (J & B) failed to file Answer nor
appear in the hearings conducted.
In its separate Answer, . . . EASCO essentially disclaimed liability on the
ground that the claims were not expressly covered by the bond, that POEA
had no jurisdiction to order forfeiture of the bond, that some of the claims were
paid beyond or prior to the period of effectivity of the bond.
On September 8, 1986, the POEA Administrator issued the Order in favor of
complainants ruling thus:
After careful evaluation, we find that the receipts and testimonies of
complainants, in the absence of controverting evidence substantially establish
that respondent charged and collected fees from them in amounts exceeding
what is prescribed by this Administration. Complainants' non-deployment
strongly indicates that there was no employment obtained for them. Hence,
violation of Articles 32 and 34 (a) of the Labor Code, as amended, is

(The dispositive portion of the POEA Administrator's Order also contained the
following statement and direction, viz.:
Respondent was suspended on May 23, 1985, June 26, 1985 and January 17,
1986 all for illegal exaction. Considering its track record of illegal exaction
activities and considering further the gross violation of recruitment rules and
regulations established against it in the instant cases, and the expiration of its
license on February 15, 1985, it is hereby forever banned from participation in
the overseas employment program. It is ordered to cease and desist from
further engaging in recruitment activities otherwise it shall be prosecuted for
illegal recruitment.')
(J & B filed a motion for reconsideration). On December 19, 1986, the then
deputy Minister of Labor and Employment denied the . . . Motion for
Reconsideration for lack of merit and affirmed the findings in the Order of the
POEA Administrator finding no reversible error therein.
On appeal by EASCO J & B having as aforestated taken no part in the
proceeding despite due service of summons the judgment was modified by
the Secretary of Labor, by Order dated July 1, 1987, disposing as follows: 4
WHEREFORE, in view of the foregoing, the Resolution of the then Deputy
Minister of Labor dated December 19, 1986 affirming the Order of the POEA
Administrator dated September 8, 1986 is hereby MODIFIED. Respondent J &
B Manpower Specialist is directed to refund all thirty-three (33) complainants
as listed in the Order of September 8, 1986 in the amounts listed thereto with
the modification that complainants Lucena Cabasal and Felix Rivero are both
entitled only to P15,980 and not P15,980 each. Respondent Eastern
Assurance and Surety Corporation is hereby found jointly and severally liable

with respondent J & B Manpower Specialist to refund nineteen (19)

complainants in the modified amounts . . . (particularly specified).

law or contract involving Filipino workers for overseas employment including

seamen . . .

The other findings in the Order of the POEA Administrator dated September 8,
1986 affirmed in the Resolution of the then Deputy Minister . . . are also hereby
AFFIRMED. This Order is FINAL. No further Motion for Reconsideration hereof
shall be entertained.

The complaints are however for violation of Articles 32 and 34 a) of the Labor
Code. Article 32 and paragraph (a) of Article 34 read as follows:

It is noteworthy that EASCO's liability for the refund, jointly and severally with
its principal, was limited to 19 named complainants (in contrast to verdicts of
the POEA and the Deputy Minister which both ordered payment to no less than
33 complainants) and was correspondingly reduced from P308,751.75 and US
$ 400.00 5 to the aggregate amount of P 140,817.75. 6
The special civil action of certiorari at bar was thereafter instituted by
EASCO 7 praying for the nullification of the POEA Administrator's Order of
September 8, 1986, the Resolution of the Deputy Minister of Labor of'
December 19, 1986, and the Order of the Secretary of Labor of July 1, 1987, It
theorizes that:
1) the POEA had no jurisdiction over the claims for refund filed by nonemployees;
2) neither did the Secretary of Labor have jurisdiction of the claims;
3) assuming they had jurisdiction, both the POEA and Secretary of Labor also
committed legal errors and acted with grave abuse of discretion when they
ruled that petitioner is liable on the claims.
EASCO contends that the POEA had no "adjudicatory jurisdiction" over the
monetary claims in question because the same "did not arise from employeremployee relations." Invoked in support of the argument is Section 4 (a) of EO
797 providing in part 8 that the POEA has
. . . original and exclusive jurisdiction over all cases, including money
claims, involving employer-employee relations arising out of or by virtue of any

Art. 32. Fees to be paid by workers.Any person applying with a private feecharging 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 always covered with the approved
receipt clearly showing the amount paid. The Secretary of Labor shall
promulgate a schedule of allowable fees.
Art. 34. Prohibited practices.It shall be unlawful for any individual, entity,
licensee, or holder of authority:
a) To charge or accept, directly or indirectly, any amount greater than that
specified in the schedule of allowable fees prescribed by the Secretary of
Labor, or to make a worker pay any amount greater than actually received by
him as a loan or advance; . . .
The penalties of suspension and cancellation of license or authority are
prescribed for violations of the above quoted provisions, among others. And
the Secretary of Labor has the power under Section 35 of the law to apply
these sanctions, as well as the authority, conferred by Section 36, 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 objectives and
implement the provisions" governing said activities. Pursuant to this rulemaking power thus granted, the Secretary of Labor gave the POEA 9 "on its
own initiative or upon filing of a complaint or report or upon request for
investigation by any aggrieved person, . . . (authority to) conduct the necessary
proceedings for the suspension or cancellation of the license or authority of
any agency or entity" for certain enumerated offenses including
1) the imposition or acceptance, directly or indirectly, of any amount of money,
goods or services, or any fee or bond in excess of what is prescribed by the
Administration, and

2) any other violation of pertinent provisions of the Labor Code and other
relevant laws, rules and regulations. 10
The Administrator was also given the power to "order the dismissal of the case
or the suspension of the license or authority of the respondent agency or
contractor or recommend to the Minister the cancellation thereof." 11
Implicit in these powers is the award of appropriate relief to the victims of the
offenses committed by the respondent agency or contractor, specially the
refund or reimbursement of such fees as may have been fraudulently or
otherwise illegally collected, or such money, goods or services imposed and
accepted in excess of what is licitly prescribed. It would be illogical and absurd
to limit the sanction on an offending recruitment agency or contractor to
suspension or cancellation of its license, without the concomitant obligation to
repair the injury caused to its victims. It would result either in rewarding
unlawful acts, as it would leave the victims without recourse, or in compelling
the latter to litigate in another forum, giving rise to that multiplicity of actions or
proceedings which the law abhors.
Even more untenable is EASCO's 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, "prohibited recruitment fees" and therefore,
said victims are barred from obtaining relief. The sophistical, if not callous,
character of the argument is evident upon the most cursory reading thereof; it
merits no consideration whatever.
The Court is intrigued by EASCO's reiteration of its argument that it should not
be held liable for claims which accrued prior to or after the effectivity of its
bond, considering that the respondent Secretary had conceded the validity of
part of said argument, at least. The Secretary ruled that EASCO's "contention
that it should not be held liable for claims/payments made to respondent
agency before the effectivity of the surety bond on January 2, 1985 is well
taken." According to the Secretary: 12
. . . A close examination of the records reveal(s) that respondent EASCO is not
jointly and severally liable with respondent agency to refund complainants
Lucena Cabasal, Felix Rivero, Romulo del Rosario, Rogelio Banzuela,

Josefina Ogatis, Francisco Sorato, Sonny Quiazon, Josefina Dictado, Mario

del Guzman and Rogelio Mercado (10 in all). These complainants paid
respondent agency in 1984, or before the effectivity of the bond on January
2, 1985 as evidence by the reciept and their testimonies.
The related argument, that it is also not liable for claims filed after the expiry
(on January 2, 1986) of the period stipulated in the surety bond for the filing of
claims against the bond, must however be rejected, as the Secretary did. The
Court discerns no grave abuse of discretion in the Secretary's statement of his
reasons for doing so, to wit:
. . . While it may be true that respondent EASCO received notice of their
claims after the ten (10) day expiration period from cancellation or after
January 12, 1986 as provided in the surety bond, records show that . . .
EASCO's principal, respondent agency, was notified/ summoned prior to the
expiration period or before January 12, 1986. Respondent agency received
summons on July 24, 1985 with respect to claims of complainants Penarroyo,
dela Cruz and Canti. It also received summons on November 26, 1985 with
respect to Giovanni Garbillons' claim. Respondent agency was likewise
considered constructively notified of the claims of complainants Calayag,
Danuco Domingo and Campena on October 6, 1985. In this connection, it may
be stressed that the surety bond provides that notice to the principal is notice
to the surety. Besides, it has been held that the contract of a compensated
surety like respondent EASCO is to be interpreted liberally in the interest of the
promises and beneficiaries rather than strictly in favor of the surety (Acoustics
Inc. v. American Surety, 74 Nev-6, 320 P2d. 626, 74 Am. Jur. 2d).
So, too, EASCO's claim that it had not been properly served with summons as
regards a few of the complaints must be rejected, the issue being factual, and
the Court having been cited to no grave error invalidating the respondent
Secretary's conclusion that summons had indeed been duly served.
Finally, EASCO's half-hearted argument that its liability should be limited to the
maximum amount set in its surety bond, i.e., P150,000.00, is palpably without
merit, since the aggregate liability imposed on it, P140,817.75, supra, does not
in fact exceed that limit.

WHEREFORE, the petition is DISMISSED for lack of merit, and this decision is
declared to be immediately executory. Costs against petitioner.

Francisco Beo P6,380.00

Lourdes Raya Bernabe P6,700.00
Cesar Cortez P4,505.00
Eugenia Panganiban Cruz P6,380.00
Alfredo Gutierrez P4,505.00
Daniel Perez P6,380.00
Lourdes Perez P3,000.00

SO ORDERED.

G.R. No. 104995 August 26, 1993

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
BALTAZAR DE LEON and MARIETTA DE LEON @ "BENJIE," accused.
BALTAZAR DE LEON, accused-appellant.
The Solicitor General for plaintiff-appellee.
Reynaldo S. Fajardo, Al A. Cosata & Bartolome P. Reus for accused-appellant.

without first securing the required license or authority from the Department of
Labor and Employment, by falsely representing to the said persons that they
were in a position to obtain overseas jobs from them and in violation of the
aforementioned law against Illegal Recruitment committed in large scale and
amounting to economic sabotage.

DAVIDE, JR., J.:

CONTRARY TO LAW." 2

This case, involves the crime of illegal recruitment. At its bottom are the
hapless citizens in search of a better life who still fall victim to the false
promise of employment in foreign lands and the inhumanity of illegal recruiters
who prey upon the misfortunes of the former and make a mockery of the law.

Only Baltazar de Leon was arrested. Marietta de Leon remains at large up to

the present. The former entered a plea of not guilty at his arraignment on 2
April 1991 3 and the trial on the merits proceeded with respect to him.

In an information filed on 28 February 1991 by the Office of the Provincial

Prosecutor of Rizal with the Regional Trial Court (RTC) of Pasig, Metro Manila,
and assigned to Branch 156 1 thereof, the accused Baltazar de Leon and
Marietta de Leon, alias "Benjie," who are husband and wife, were charged with
"the crime of Illegal Recruitment under P.D. No. 2018 (Large Scale)" in that:
. . . on or about the period comprised of the month of August and September,
1990 in the Municipality of Taguig, Metro Manila, Philippines, and within the
jurisdiction of this Honorable Court the above-named accused, representing
themselves to have the capacity to contract, enlist and transport Filipino
workers [for] employment abroad conspiring and confederating together and
mutually helping and aiding with one another, did then and there willfully,
unlawfully and feloniously, for a fee recruit and promise employment/job
placement abroad [to] the following persons to wit:

In its decision promulgated on 7 April 1992, the trial court 4 found Baltazar de
Leon guilty as charged and decreed as follows:
WHEREFORE, premises considered, the Court finds the accused BALTAZAR
DE LEON guilty beyond reasonable doubt of the crime of Illegal Recruitment
(in Large Scale) constituting economic sabotage and hereby sentences said
accused BALTAZAR DE LEON to suffer the penalty of life imprisonment, to
pay a fine of ONE HUNDRED THOUSAND PESOS (P100,000.00), to
reimburse the complainant-victims, namely: Francisco Beo through Flordeliza
Beo in the amount of P6,380.00; Lourdes Raya-Bernabe in the amount of
P6,700.00; Cesar Cortez in the amount of P3,505.00; Eugenia PanganibanCruz in the amount of P6,380.00; Alfredo Gutierrez in the amount of
P3,500.00; Daniel and Lourdes Perez in the amount of P5,000.00 plus
P1,380.00 through Noeta Perez and to pay the costs.
In the service of his sentence, the accused shall be credited in full with the
period of his preventive imprisonment.

Let alias warrant be issued for the arrest of accused MARIETTA DE LEON
alias "Benjie", the same to be served by the NBI, PNP/CIS and other national
police agencies.
SO ORDERED. 5
The judgment of conviction is based upon the following findings and
conclusion of the trial court:
Clearly accused Baltazar de Leon is neither authorized nor licensed to recruit
workers for overseas jobs and yet he and his wife recruited workers, talked to
the applicants and collected fees for requirements that each applicant had to
comply with in order that their applications may be processed. Although Mrs.
De Leon was more active in the recruitment, accused Baltazar played an
important part as both spouses convincingly played out their roles resulting in
the applicants' reposing their trust and belief in them. It is of little surprise that
the complaining witnesses conclusively identified accused Baltazar as the man
who recruited them or their relatives. Said witnesses even gave in evidence
the list of requirements and fees that they were told to pay. Said lists clearly
show that a great deal of money was involved and received by the accused.
The charade played by both accused show a unity of purpose and unity in
execution of their unlawful objective establishing the existence of a conspiracy
for which both accused must suffer the same penalty. (People vs. Talla, 181
SCRA 133)." 6
The summary by the People of the prosecution's evidence concerning the
recruitment of the appellant is hereby adopted, it being fully supported by the
testimonies of the complaining witnesses:
Camila del Rosario, who was a neighbor of appellant, told Noeta Perez,
Eugene Panganiban, Elvira Alonzo, Lourdes Bernabe, and one Ador, all of
whom were working for the same employer, that del Rosario's daughter was
able to work abroad through the efforts of appellant and his wife. (TSN, N.
Perez, June 26, 1991, p. 4).
On September 16, 1990 del Rosario, together with Noeta Perez and the latter's
sister, Lourdes and brother Daniel, went to appellant's house in Pateros, Rizal.

Noeta Perez's purpose in going to appellant's house was to apply for overseas
jobs for her brother Daniel and sister Lourdes. When del Rosario, Noeta Perez
and her brother reached appellant's house, they met appellant and his wife
who informed them that they have already sent persons to Micronesia who
were hired as chambermaids and roomboys. Noeta Perez then asked her
sister and brother to apply, and she gave P1,380.00 to appellant's wife (Id., pp.
5-6).
The following day, September 17, 1990, appellant's wife asked Daniel to go
back together with Lourdes to file their application and to undergo medical
examination. On the same day, Daniel and Lourdes gave appellant and his
wife P2,500.00 for the passport, and, in addition, they paid P5,000.00 to
appellant. For helping Daniel and Lourdes get jobs abroad, appellant
demanded P6,380.00 from each of the applicants allegedly for the processing
of the papers, medical examination, pictures and passport. Noeta Perez was
able top give P3,000.00 to appellant for her sister Lourdes' application, but she
was unable to give any amount for Daniel's application (Id., pp. 6-9).
Sometime in November, 1990, Noeta Perez received a letter from the National
Bureau of Investigation ("NBI") saying that the applications for overseas jobs
sent to Micronesia were sent to the NBI because there were no such job
orders from Micronesia. Upon getting this information, Noeta, together with her
sister Lourdes and brother Daniel could not have gone to Micronesia since the
alleged jobs offered to them by appellant never existed (Id., pp. 9-11).
Cesar Cortez suffered a similar fate as that of Daniel and Lourdes Perez.
Cortez came to know appellant through a friend, Alfredo Gutierrez, who
applied with appellant for an overseas job in Micronesia. Because his friend
applied, Cortez also applied with appellant for a job as roomboy in Micronesia.
When Cortez filed his application, appellant immediately required him to give
P680.00 for alleged medical fee, which Cortez paid. After paying the medical
fee, appellant's wife asked Cortez to pay P175.00 as transportation fee for
securing the passport. Then appellant asked P1,000.00 as downpayment for
the passport, which amount was paid to and received by appellant's wife. In
addition, Cortez paid P1,650.00, which was received by appellant's wife in the
presence of the appellant, for full payment of the passport. Cortez gave these
amounts to appellant or his wife between the second week of August, 1990

and second week of September, 1990. Appellant promised Cortez that he

could leave for Micronesia in the month of September, 1990, and when this did
not materialize, appellant promised again that Cortez could leave by
November, 1990. Cortez, however, was unable to leave for Micronesia for it
turned out that appellant had no business partner in Micronesia (TSN, C.
Cortez, October 29, 1991, pp. 2-4).
Alfredo Gutierrez, a friend of Cortez, also applied with appellant for the job of
driver in Guam. Gutierrez knew appellant because a certain Mila introduced
him to appellant who represented that he could send workers abroad. The
introduction occurred at appellant's house in the first week of August, 1990.
Appellant asked for P680.00 allegedly for medical fee and pictures, which
Gutierrez paid. Gutierrez was required to give additional amounts, and the total
amount he paid reached P3,500.00. He paid this amount to appellant for the
promised job as driver in Guam. Gutierrez, however, was unable to leave for
Guam because it turned out that there was no such job order in Guam (TSN,
A. Gutierrez, October 21, 1991, pp. 2-4). 7
The prosecution further proved through the unrebutted testimony of Elisa
Roque, Senior Officer of the Licensure Division of the Philippine Overseas
Employment Administration (POEA), that the appellant does not have
any license or authority from the POEA to recruit workers for overseas
employment. 8
On the other hand, there is nothing in the appellant's brief testimony except the
denial of the separate accusations of the complaining witnesses and the
assertion that he does not know anything about the transactions between the
complainants and his co-accused as he was always out of his residence at
daytime. He declared that he was employed as a driver by Reymar
Advertising, which is owned by Mr. Reynaldo Bucsit. He served as such daily
from 8:00 a.m. to 5:00 p.m. and oftentimes worked from 6:30 p.m. to midnight
as a driver of a passenger jeepney. 9 Mr. Bucsit testified that the appellant was
his driver from July 1987 to 22 November 1990 and that the latter worked
"[s]ometimes four or five days in a week because he had to rest after driving
the
whole
10
day."

Immediately after the promulgation of the judgment, Baltazar de Leon

(hereinafter referred to as the appellant) filed his notice of appeal 11 and, in his
main brief 12 filed on 27 November 1992, raised this sole error allegedly
committed by the trial court:
THE COURT A QUO ERRED IN HOLDING THAT THE GUILT OF ACCUSED
BALTAZAR DE LEON FOR THE CRIME CHARGED WAS PROVEN BEYOND
REASONABLE DOUBT.
We find no merit in this appeal.
Before proceeding any further, some observations on the information filed are
in order.
The information charges the appellant with "the crime of Illegal Recruitment
under P.D. No. 2018 (Large Scale)." However, this decree merely further
amended Articles 38 and 39 of the Labor Code 13 by making large-scale illegal
recruitment, i.e., committed against three or more persons individually or
collectively, a crime of economic sabotage and punishable with life
imprisonment. More precisely then, the information should have been for the
violation of Article 38 in relation to Article 39 of the Labor Code, as amended.
Although this error seems to be innocuous since the body of the complaint
recites the elements of large-scale illegal recruitment, proof beyond
reasonable doubt of which would sustain a conviction under Articles 38 and 39
of the said Code, we, nevertheless, make these observations by way of advice
to prosecutors to exercise the greatest care in the preparation of informations.
The pertinent portions of Articles 38 and 39 of the Labor Code, as amended by
P.D. No. 2018, read as follows:
Art. 38. Illegal Recruitment. (a) Any recruitment activities, including the
prohibited practices enumerated under Article 34 of this Code, to be
undertaken by non-licensees or non-holders of authority shall be deemed
illegal and punishable under Article 39 of this Code. The Ministry of Labor and
Employment or any law enforcement officer may initiate complaints under this
Article.

(b) Illegal recruitment when committed by a syndicate or in large scale shall be

considered an offense involving economic sabotage and shall be penalized in
accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a
group of three (3) or more persons conspiring and/or confederating with one
another in carrying out any unlawful or illegal transaction, enterprise or scheme
defined under the first paragraph hereof. Illegal recruitment is deemed
committed in large scale if committed against three (3) or more persons
individually or as a group.

In support of the assigned error, the appellant contends that: (a) he did not
transact business with any one of the complaining witnesses nor did he
receive any monetary consideration from them; (b) granting for the sake of
argument that his wife was engaged in illegal recruitment, there is no sufficient
evidence to prove that he acted in conspiracy with his wife; (c) he had no
opportunity to engage in recruitment because he was then employed as a
driver by one Reynaldo Bucsit with a work schedule from 8:00 a.m. to 5:00
p.m. and likewise worked as a driver of a passenger jeepney until midnight or
the morning of the following day; and (d) the complaining witnesses implicated
him because he is the husband of Marietta de Leon who allegedly recruited
them but who is now at large.

xxx xxx xxx

Art. 39. Penalties. (a) The penalty of life imprisonment and a fine of One
Hundred Thousand Pesos (P100,000) shall be imposed if illegal recruitment
constitutes economic sabotage as defined herein:"
xxx xxx xxx
Article 13(b) the same Code defines recruitment as follows:
"Recruitment and placement" refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and includes
referrals, contract services, promising or advertising for for employment, locally
or abroad, whether for profit or not: Provided, That any person or entity which,
in any manner, offers or promises for a fee employment to two or more
persons shall be deemed engaged in recruitment and placement.
While among the prohibited practices enumerated in Article 34 of the said
Code is:
(b) To furnish or publish any false notice or information or document in relation
to recruitment or employment.
And now to the merits of this appeal.

Our own reading and evaluation of the testimonies of the complaining

witnesses lead to no other conclusion than that the appellant and his wife were
co-conspirators in the illegal recruitment business conducted in their residence
with each contributing coordinative and cooperative acts to insure the success
of an enterprise that provided them with income for their mutual benefit and
advantage. The complainants separately came to the appellant's residence on
various dates because they were informed by their co-workers that he and his
wife were known to be recruiting for employment in Micronesia, Guam and
Singapore. In all the occasions when they came to his house, the appellant
was always there. Complainant Noeta Perez categorically declared that the
appellant and his wife told her and her companions that "they sent people
abroad, in Micronesia, hired [sic] there as chambermaid and roomboy" and
that she gave the money demanded in connection with the application of her
brother and sister to Marietta in the presence of the appellant. 14 Complainant
Eugenia Cruz declared that when she and her companions, Elma Conde and
Adelaida Cabungkay, were in the house of the appellant filling up the papers in
connection with their application for employment abroad, the latter help [sic] us
how to file the papers given to" them and told them that they "would be
receiving salary of $2.15/hour," and that she gave P6,380.00 to Marietta in the
presence of the appellant. 15 Complainant Flordeliza Beo testified that when
she accompanied her husband to apply for employment, the appellant
explained to them the terms of employment and was present when she gave
the amount of P6,380.00 to Marietta. 16 Complainant Alfredo Gutierrez was
directly introduced to the appellant by Mila and the appellant himself asked
from him various sums, amounting to P3,500.00, ostensibly in connection with

his application for employment, and personally received it from

Alfredo. 17 Complainant Cesar Cortes was also directly introduced to the
appellant and paid the various sums demanded from him to Marietta in the
presence of the appellant. 18 Complainant Lourdes Bernabe testified that the
appellant offered her the job of domestic helper in Singapore, informed her of
the requirements for her application, and, together with his wife, received her
payment of P2,500.00 purportedly for the processing of her papers. 19
All these acts of the appellant and his wife conclusively established a common
criminal design mutually deliberated upon and accomplished through
coordinated moves.
Such acts constitute enlisting, contracting or procuring workers for or
promising them overseas employment, which are among the acts of
recruitment embraced in Article 13(b) of the Labor Code, as amended. The
furnishing of the victims with certain documents which they were required to fill
up allegedly in connection with their overseas employment, which actually did
not exist, also constitutes the violation of paragraph (b), Article 34 of the same
Code. Since the appellant does not have the license or authority to recruit and
he committed the said acts against at least three individuals, he is guilty of
large-scale illegal recruitment under Article 38, which offense is penalized with
life imprisonment and a fine of P100,000.00 in the succeeding Article 39.
We are not persuaded by the appellant's contention that he could not have
transacted business with the complainants and participated in the activities of
his wife because he was not in his residence during the daytime in view of his
employment at Reymar Advertising and his driving of a passenger jeepney
after working hours until midnight. He sets up, in effect, the defense of alibi.
We have carefully searched for a statement in his testimony in court as to the
specific dates he was employed by Reymar Advertising. We found none.
Rather, it was his witness, Mr. Reynaldo Bucsit, who attempted to do so by
claiming that the appellant was his personal driver from July 1987 to 22
November 1990. 20 We then have a situation where a party who claimed that it
was impossible for him to have committed a crime because he was
somewhere else at the time of its commission did not even specifically and
explicitly testify that the dates when he was allegedly somewhere else
coincided with the dates specified in the information and proven by the

evidence as the dates when the crime was committed. This is rather strange
and only manifests the weakness of his plea. In any case, the trial court
disregarded the testimony of Mr. Bucsit. Settled is the rule that a trial court's
finding on the credibility of a witness is entitled to the highest degree of respect
and will not be disturbed on appeal in the absence of any showing that the said
court overlooked, misunderstood or misapplied some facts or circumstances of
weight and substance which would have affected the result of the case. 21 But
even if Mr. Bucsit's testimony were to be given full faith, it discloses that it was
not at all impossible for the appellant to have met and transacted business with
the complainants or to have participated in the business of his wife since he
drove for Mr. Bucsit for only four or five days a week. The latter declared:
Q In a week, how many days did he perform his job?
A Sometimes four or five days in a week because he had to rest after driving
the whole day, sir. 22
Moreover, the appellant was positively identified by the complainants. It is
axiomatic that alibi cannot prevail over the positive identification of the
accused. 23
Appellant's final argument that the complainants filed the case against him in
order to harass him and compel him "to answer their money claims, after
failing to recover from the real culprit," 24 is nothing but a flimsy excuse which
we cannot accept. As previously discussed, the appellant is a co-conspirator in
the crime of illegal recruitment, and in conspiracy the act of one is the act of
all. 25
The decision appealed from is therefore fully supported by facts which
established the guilt of the appellant beyond reasonable doubt.
We cannot end this case without some parting thoughts to conclude what we
had stated at the beginning. Something must be wrong somewhere if, in spite
of the stiff penalties for illegal recruitment, some still brazenly take advantage
of the misery of others and profit from their misfortunes while many still fall for
the false promises of illegal recruiters despite the painful lessons the
experiences of others have taught. What is clear to us is that illegal recruiters

10

cannot flout our laws and prey on the hard lot of others if the Government had
the will to resolutely enforce the laws against illegal recruitment and to be
merciless against the violators. They do not deserve any mercy. Large-scale
illegal recruitment is a crime which is not difficult to discover, prosecute and
prove, for it cannot be done in absolute secrecy. That there must be an end to
illegal recruitment is a matter of public policy for not only must the State protect
those who, because of economic difficulties or lack of employment
opportunities in the country, seek greener pastures in foreign lands and from
whose earnings the State itself benefits, it must also punish to the fullest extent
of the law illegal recruiters, especially those engaged in syndicated or largescale illegal recruitment, who continue to wreak havoc on our economy. It is
thus earnestly wished that the Government flex its muscles to eradicate this
pernicious evil.
WHEREFORE, the judgment appealed from is hereby AFFIRMED in toto.
Costs against the appellant.

salary differential and overtime pay and limited the reimbursement of his cash
bond to P15,000.00 instead of P20,000.00.
In search for better opportunities and higher income, petitioner Norberto
Soriano, a licensed Second Marine Engineer, sought employment and was
hired by private respondent Knut Knutsen O.A.S. through its authorized
shipping agent in the Philippines, Offshore Shipping and Manning Corporation.
As evidenced by the Crew Agreement, petitioner was hired to work as Third
Marine Engineer on board Knut Provider" with a salary of US$800.00 a month
on a conduction basis for a period of fifteen (15) days. He admitted that the
term of the contract was extended to six (6) months by mutual agreement on
the promise of the employer to the petitioner that he will be promoted to
Second Engineer. Thus, while it appears that petitioner joined the aforesaid
vessel on July 23, 1985 he signed off on November 27, 1985 due to the
alleged failure of private respondent-employer to fulfill its promise to promote
petitioner to the position of Second Engineer and for the unilateral decision to
reduce petitioner's basic salary from US$800.00 to US$560.00. Petitioner was
made to shoulder his return airfare to Manila.

SO ORDERED.
G.R. No. 78409 September 14, 1989
NORBERTO SORIANO, petitioner,
vs.
OFFSHORE SHIPPING AND MANNING CORPORATION, KNUT KNUTSEN
O.A.S., and NATIONAL LABOR RELATIONS COMMISSION (Second
Division), respondents.

R. C. Carrera Law Firm for petitioner.

Elmer V. Pormento for private respondents.
FERNAN, C.J.:
This is a petition for certiorari seeking to annul and set aside the decision of
public respondent National Labor Relations Commission affirming the decision
of the Philippine Overseas Employment Administration in POEA Case No.
(M)85-12-0953 entitled "Norberto Soriano v. Offshore Shipping and Manning
Corporation and Knut Knutsen O.A.S.", which denied petitioner's claim for

In the Philippines, petitioner filed with the Philippine Overseas Employment

Administration (POEA for short), a complaint against private respondent for
payment of salary differential, overtime pay, unpaid salary for November, 1985
and refund of his return airfare and cash bond allegedly in the amount of
P20,000.00 contending therein that private respondent unilaterally altered the
employment contract by reducing his salary of US$800.00 per month to
US$560.00, causing him to request for his repatriation to the Philippines.
Although repatriated, he claims that he failed to receive payment for the
following:
1. Salary for November which is equivalent to US$800.00;
2. Leave pay equivalent to his salary for 16.5 days in the sum of US$440.00;
3. Salary differentials which is equivalent to US$240.00 a month for four (4)
months and one (1) week in the total sum of US$1,020,00;

11

4. Fixed overtime pay equivalent to US$240.00 a month for four (4) months
and one (1) week in the sum of US$1,020.00;
5. Overtime pay for 14 Sundays equivalent to US$484.99;
6. Repatriation cost of US$945.46;

Dissatisfied, both parties appealed the aforementioned decision of the POEA

to the National Labor Relations Commission. Complainant-petitioner's appeal
was dismissed for lack of merit while respondents' appeal was dismissed for
having been filed out of time.
Petitioner's motion for reconsideration was likewise denied. Hence this
recourse.

7. Petitioner's cash bond of P20,000.00. 1

In resolving aforesaid case, the Officer-in-Charge of the Philippine Overseas
Employment Administration or POEA found that petitioner-complainant's total
monthly emolument is US$800.00 inclusive of fixed overtime as shown and
proved in the Wage Scale submitted to the Accreditation Department of its
Office which would therefore not entitle petitioner to any salary differential; that
the version of complainant that there was in effect contract substitution has no
grain of truth because although the Employment Contract seems to have
corrections on it, said corrections or alterations are in conformity with the Wage
Scale duly approved by the POEA; that the withholding of a certain amount
due petitioner was justified to answer for his repatriation expenses which
repatriation was found to have been requested by petitioner himself as shown
in the entry in his Seaman's Book; and that petitioner deposited a total amount
of P15,000.00 only instead of P20,000.00 cash bond. 2
Accordingly, respondent POEA ruled as follows:
VIEWED IN THE LIGHT OF THE FOREGOING, respondents are hereby
ordered to pay complainant, jointly and severally within ten (10) days from
receipt hereof the amount of P15,000.00 representing the reimbursement of
the cash bond deposited by complainant less US$285.83 (to be converted to
its peso equivalent at the time of actual payment).
Further, attorney's fees equivalent to 10 % of the aforesaid award is assessed
against respondents.
All other claims are hereby dismissed for lack of merit.
SO ORDERED. 3

Petitioner submits that public respondent committed grave abuse of discretion

and/or acted without or in excess of jurisdiction by disregarding the alteration
of the employment contract made by private respondent. Petitioner claims that
the alteration by private respondent of his salary and overtime rate which is
evidenced by the Crew Agreement and the exit pass constitutes a violation of
Article 34 of the Labor Code of the Philippines. 6
On the other hand, public respondent through the Solicitor General, contends
that, as explained by the POEA: "Although the employment contract seems to
have corrections, it is in conformity with the Wage Scale submitted to said
office. 7
Apparently, petitioner emphasizes the materiality of the alleged unilateral
alteration of the employment contract as this is proscribed by the Labor Code
while public respondent finds the same to be merely innocuous. We take a
closer look at the effects of these alterations upon petitioner's right to demand
for his differential, overtime pay and refund of his return airfare to Manila.
A careful examination of the records shows that there is in fact no alteration
made in the Crew Agreement 8 or in the Exit Pass. 9 As the original data
appear, the figures US$800.00 fall under the column salary, while the word
"inclusive" is indicated under the column overtime rate. With the supposed
alterations, the figures US$560.00 were handwritten above the figures
US$800.00 while the figures US$240.00 were also written above the word
"inclusive".
As clearly explained by respondent NLRC, the correction was made only to
specify the salary and the overtime pay to which petitioner is entitled under the
contract. It was a mere breakdown of the total amount into US$560.00 as

12

basic wage and US$240.00 as overtime pay. Otherwise stated, with or without
the amendments the total emolument that petitioner would receive under the
agreement as approved by the POEA is US$800.00 monthly with wage
differentials or overtime pay included. 10
Moreover, the presence of petitioner's signature after said items renders
improbable the possibility that petitioner could have misunderstood the amount
of compensation he will be receiving under the contract. Nor has petitioner
advanced any explanation for statements contrary or inconsistent with what
appears in the records. Thus, he claimed: [a] that private respondent extended
the duration of the employment contract indefinitely, 11 but admitted in his
Reply that his employment contract was extended for another six (6) months
by agreement between private respondent and himself: 12 [b] that when
petitioner demanded for his overtime pay, respondents repatriated him 13 which
again was discarded in his reply stating that he himself requested for his
voluntary repatriation because of the bad faith and insincerity of private
respondent; 14 [c] that he was required to post a cash bond in the amount of
P20,000.00 but it was found that he deposited only the total amount of
P15,000.00; [d] that his salary for November 1985 was not paid when in truth
and in fact it was petitioner who owes private respondent US$285.83 for cash
advances 15 and on November 27, 1985 the final pay slip was executed and
signed; 16 and [e] that he finished his contract when on the contrary, despite
proddings that he continue working until the renewed contract has expired, he
adamantly insisted on his termination.
Verily, it is quite apparent that the whole conflict centers on the failure of
respondent company to give the petitioner the desired promotion which
appears to be improbable at the moment because the M/V Knut Provider
continues to be laid off at Limassol for lack of charterers. 17
It is axiomatic that laws should be given a reasonable interpretation, not one
which defeats the very purpose for which they were passed. This Court has in
many cases involving the construction of statutes always cautioned against
narrowly interpreting a statute as to defeat the purpose of the legislator and
stressed that it is of the essence of judicial duty to construe statutes so as to
avoid such a deplorable result (of injustice or absurdity) and that therefore "a

literal interpretation is to be rejected if it would be unjust or lead to absurd

results." 18
There is no dispute that an alteration of the employment contract without the
approval of the Department of Labor is a serious violation of law.
Specifically, the law provides:
Article 34 paragraph (i) of the Labor Code reads:
Prohibited Practices. It shall be unlawful for any individual, entity, licensee,
or holder of authority:
xxxx
(i) To substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties up
to and including the period of expiration of the same without the approval of
the Department of Labor.
In the case at bar, both the Labor Arbiter and the National Labor Relations
Commission correctly analyzed the questioned annotations as not constituting
an alteration of the original employment contract but only a clarification thereof
which by no stretch of the imagination can be considered a violation of the
above-quoted law. Under similar circumstances, this Court ruled that as a
general proposition, exceptions from the coverage of a statute are strictly
construed. But such construction nevertheless must be at all times reasonable,
sensible and fair. Hence, to rule out from the exemption amendments set forth,
although they did not materially change the terms and conditions of the original
letter of credit, was held to be unreasonable and unjust, and not in accord with
the declared purpose of the Margin Law. 19
The purpose of Article 34, paragraph 1 of the Labor Code is clearly the
protection of both parties. In the instant case, the alleged amendment served
to clarify what was agreed upon by the parties and approved by the
Department of Labor. To rule otherwise would go beyond the bounds of reason
and justice.

13

As recently laid down by this Court, the rule that there should be concern,
sympathy and solicitude for the rights and welfare of the working class, is meet
and proper. That in controversies between a laborer and his master, doubts
reasonably arising from the evidence or in the interpretation of agreements
and writings should be resolved in the former's favor, is not an unreasonable or
unfair rule. 20 But to disregard the employer's own rights and interests solely on
the basis of that concern and solicitude for labor is unjust and unacceptable.
Finally, it is well-settled that factual findings of quasi-judicial agencies like the
National Labor Relations Commission which have acquired expertise because
their jurisdiction is confined to specific matters are generally accorded not only
respect but at times even finality if such findings are supported by substantial
evidence. 21
In fact since Madrigal v. Rafferty 22 great weight has been accorded to the
interpretation or construction of a statute by the government agency called
upon to implement the same. 23
WHEREFORE, the instant petition is DENIED. The assailed decision of the
National Labor Relations Commission is AFFIRMED in toto.
SO ORDERED.
G.R. No. L-58011 & L-58012 November 18, 1983
VIR-JEN SHIPPING AND MARINE SERVICES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ROGELIO BISULA RUBEN
ARROZA JUAN GACUTNO LEONILO ATOK, NILO CRUZ, ALVARO
ANDRADA, NEMESIO ADUG SIMPLICIO BAUTISTA, ROMEO ACOSTA,
and JOSE ENCABO respondents.

Antonio R. Atienza for petitioner.

The Solicitor General for respondent NLRC,
Quasha, Asperilia, Ancheta &- Valmonte Pena Marcos Law Offices for
private respondents.
RESOLUTION

GUTIERREZ, JR.,
Before the Court en banc is a motion to reconsider the decision
promulgated on July 20, 1982 which set aside the decision of
respondent National Labor Relations Commission and reinstated
the decision of the National Seamen Board.
To better understand the issues raised in the motion for reconsideration, we
reiterate the background facts of the case, Taken from the decision of the
National Labor Relations Commission:
It appears that on different dates in December, 1978 and January, 1979, the
Seamen entered into separate contracts of employment with the Company,
engaging them to work on board M/T' Jannu for a period of twelve (12)
months. After verification and approval of their contracts by the NSB, the
Seamen boarded their vessel in Japan.
On 10 January 1919, the master of the vessel complainant Rogelio H. Bisula,
received a cable from the Company advising him of the possibility that the
vessel might be directed to call at ITF-controlled ports said at the same time
informing him of the procedure to be followed in the computation of the special
or additional compensation of crew members while in said ports. ITF is the
acronym for the International Transport Workers Federation, a militant
international labor organization with affiliates in different ports of the world,
which reputedly can tie down a vessel in a port by preventing its loading or
unloading, This is a sanction resorted to by ITF to enforce the payment of its
wages rates for seafarers the so-called ITF rates, if the wages of the crew
members of a vessel who have affiliated with it are below its prescribed rates.)
In the same cable of the Company, the expressed its regrets for hot clarifying
earlier the procedure in computing the special compensation as it thought that
the vessel would 'trade in Caribbean ports only.
On 22 March 1979, the Company sent another cable to complainant Bisula,
this time informing him of the respective amounts each of the officers and crew
members would receive as special compensation when the vessel called at the
port of Kwinana Australia, an ITF-controlled port. This was followed by another
cable on 23 March 1979, informing him that the officers and crew members
had been enrolled as members of the ITF in Sidney, Australia, and that the

14

membership fee for the 28 personnel complement of the vessel had already
been paid.
In answer to the Company's cable last mentioned, complainant Bisula, in
representation of the other officers and crew members, sent on 24 March 1979
a cable informing the Company that the officers and crew members were not
agreeable to its 'suggestion'; that they were not contented with their present
salaries 'based on the volume of works, type of ship with hazardous cargo and
registered in a world wide trade': that the 'officers and crew (were) not
interested in ITF membership if not actually paid with ITF rate that their
'demand is only 50% increase based on present basic salary and that the
proposed wage increase is the 'best and only solution to solve ITF problem'
since the Company's salary rates 'especially in tankers (are) very far in
comparison with other shipping agencies in Manila ...
In reply, the Company proposed a 25% increase in the basic pay of the
complainant crew members, although it claimed, that it would "suffer and
absorb considerable amount of losses." The proposal was accepted by the
Seamen with certain conditions which were accepted by the Company.
Conformably with the agreement of the parties which was effected through the
cables abovementioned, the Seamen were paid their new salary rates.
Subsequently, the Company sought authority from the NSB 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 request was granted by the NSB Executive Director in a letter dated 10
April 1979. Soon thereafter, the Company cabled the Seamen informing them
that their contracts would be terminated upon the vessel's arrival in Japan. On
19 April 1979 they Arere asked to disembark from the vessel, their contracts
were terminated, and they were repatriated to Manila. There is no showing that
the Seamen were given the opportunity to at least comment on the Company's
request for the cancellation of their contracts, although they had served only
three (3) out of the twelve (12) months' duration of their contracts.
The private respondents filed a complaint for illegal dismissal and nonpayment of earned wages with the National Seamen Board. The Vir-jen
Shipping and Marine Services Inc. in turn filed a complaint for breach of

contract and recovery of excess salaries and overtime pay against the private
respondents. On July 2, 1980, the NSB rendered a decision declaring that the
seamen breached their employment contracts when they demanded and
received from Vir-jen Shipping wages over and above their contracted rates.
The dismissal of the seamen was declared legal and the seamen were ordered
suspended.
The seamen appealed the decision to the NLRC which reversed the decision
of the NSB and required the petitioner to pay the wages and other monetary
benefits corresponding to the unexpired portion of the manning contract on the
ground that the termination of the contract by the petitioner was without valid
cause. Vir-jen Shipping filed the present petition.
The private respondents submit the following issues in their motion for
reconsideration: t.hqw
A. THIS HONORABLE COURT DID VIOLENCE TO LAW AND
JURISPRUDENCE WHEN IT HELD THAT THE FINDING OF FACT OF THE
NATIONAL SEAMEN BOARD THAT THE SEAMEN VIOLATED THEIR
CONTRACTS IS MORE CREDIBLE THAN THE FINDING OF FACT OF THE
NATIONAL LABOR RELATIONS COMMISSION THAT THE SEAMEN DID
NOT VIOLATE THEIR CONTRACT.
B. THIS HONORABLE COURT ERRED IN FINDING THAT VIR-JEN'S
HAVING AGREED TO A 25% INCREASE OF THE SEAMEN'S BASIC WAGE
WAS NOT VOLUNTARY BUT WAS DUE TO THREATS.
C. THIS HONORABLE COURT ERRED WHEN IT TOOK COGNIZANCE OF
THE ADDENDUM AGREEMENT; ASSUMING THAT THE ADDENDUM
AGREEMENT COULD BE TAKEN COGNIZANCE OF, THIS HONORABLE
COURT ERRED WHEN' IT FOUND THAT PRIVATE RESPONDENTS HAD
VIOLATED THE SAME.
D, THIS HONORABLE COURT ERRED WHEN IT DID NOT FIND
PETITIONER VIRJEN LIABLE FOR HAVING TERMINATED BEFORE EXPIRY
DATE THE EMPLOYMENT CONTRACTS OF PRIVATE RESPONDENTS,

15

THERE BEING NO LEGAL AND JUSTIFIABLE GROUND FOR SUCH

TERMINATION.
E. THIS HONORABLE COURT ERRED IN FINDING THAT THE
PREPARATION BY PETITIONER OF THE TWO PAYROLLS AND THE
EXECUTION OF THE SIDE CONTRACT WERE NOT MADE IN BAD FAITH.
F. THIS HONORABLE COURT INADVERTENTLY DISCRIMINATED AGAINST
PRIVATE RESPONDENTS.
At the outset, we are faced with the question whether or not the Court en banc
should give due course to the motion for reconsideration inspite of its having
been denied twice by the Court's Second Division. The case was referred to
and accepted by the Court en banc because of the movants' contention that
the decision in this case by the Second Division deviated from Wallem Phil.
Shipping Inc. v. Minister of Labor (L-50734-37, February 20, 1981), a First
Division case with the same facts and issues. We are constrained to answer
the initial question in the affirmative.
A fundamental postulate of Philippine Constitutional Law is the fact, that there
is only one Supreme Court from whose decisions all other courts are required
to take their bearings. (Albert v. Court of First Instance, 23 SCRA 948; Barrera
v. Barrera, 34 SCRA 98; Tugade v. Court of Appeals, 85 SCRA 226). The
majority of the Court's work is now performed by its two Divisions, but the
Court remains one court, single, unitary, complete, and supreme. Flowing from
this nature of the Supreme Court is the fact that, while ' individual Justices may
dissent or partially concur with one another, when the Court states what the
law is, it speaks with only one voice. And that voice being authoritative should
be a clear as possible.
Any doctrine or principle of law laid down by the Court, whether en banc or in
Division, may be modified or reversed only by the Court en banc. (Section
2(3), Article X, Constitution.) In 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 Court en banc to reconcile any
seeming conflict, to reverse or modify an earlier decision, and to declare the
Court's doctrine. This is what has happened in this case.

The decision sought to be reconsidered appears to be a deviation from the

Court's decision, speaking through the First Division, in Wallem Shipping, Inc.
v. Hon. Minister of Labor (102 SCRA 835). Faced with two seemingly
conflicting resolutions of basically the same issue by its two Divisions, the
Court. therefore, resolved to transfer the case to the Court en banc.
Parenthetically, the petitioner's comment on the third motion for
reconsideration states that the resolution of the motion might be the needed
vehicle to make the ruling in the Wallem case clearer and more in time with the
underlying principles of the Labor Code. We agree with the petitioner.
After an exhaustive, painstaking, and perspicacious consideration of the
motions for reconsideration and the comments, replies, and other pleadings
related thereto, the Court en banc is constrained to grant the motions. To grant
the motion is to keep faith with the constitutional mandate to afford protection
to labor and to assure the rights of workers to self-organization and to just and
humane conditions of work. We sustain the decision of the respondent
National labor Relations Commission.
There are various 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 Court, we would in effect "kill the
en that lays the golden egg." In other words, Filipino seamen, admittedly
among the best in the world, should remain satisfied with relatively lower if not
the lowest, international rates of compensation, should not agitate for higher
wages while their contracts of employment are subsisting, should accept as
sacred, iron clad, and immutable the side contracts which require them to
falsely pretend to be members of international labor federations, pretend to
receive higher salaries at certain foreign ports only to return the increased pay
once the ship leaves that port, should stifle not only their right to ask for
improved terms of employment but their freedom of speech and expression,
and should suffer instant termination of employment at the slightest sign of
dissatisfaction with no protection from their Government and their courts.
Otherwise, the petitioners contend that Filipinos would no longer be accepted
as seamen, those employed would lose their jobs, and the still unemployed
would be left hopeless.

16

This is not the first time and it will not be the last where the threat of
unemployment and loss of jobs would be used to argue against the interests of
labor; where efforts by workingmen to better their terms of employment would
be characterized as prejudicing the interests of labor as a whole.
In 1867 or one hundred sixteen years ago. Chief Justice Beasley of the
Supreme Court of New Jersey was ponente of the court's opinion declaring as
a conspiracy the threat of workingmen to strike in connection with their efforts
to promote unionism, t.hqw
It is difficult to believe that a right exists in law which we can scarcely conceive
can produce, in any posture of affairs, other than injuriois results. It is simply
the right of workmen, by concert of action, and by taking advantage of their
position, to control the business of another, I am unwilling to hold that aright
which cannot, in any, event, be advantageous to the employee, and which
must always be hurtful to the employer, exists in law. In my opinion this
indictment sufficiently shows that the force of the confederates was brought to
bear upon their employer for the purpose of oppression and mischief and that
this amounts to a conspiracy, (State v. Donaldson, 32 NJL 151, 1867. Cited in
Chamberlain, Sourcebook on Labor, p. 13. Emphasis supplied)
The same arguments have greeted every major advance in the rights of the
workingman. And they have invariably been proved unfounded and false.
Unionism, employers' liability acts, minimum wages, workmen's compensation,
social security and collective bargaining to name a few were all initially
opposed by employers and even well meaning leaders of government and
society as "killing the hen or goose which lays the golden eggs." The claims of
workingmen were described as outrageously injurious not only to the employer
but more so to the employees themselves before these claims or demands
were established by law and jurisprudence as "rights" and before these were
proved beneficial to management, labor, and the nation as a whole beyond
reasonable doubt.
The case before us does not represent any major advance in the rights of
labor and the workingmen. The private respondents merely sought rights
already established. No matter how much the petitioner-employer tries to

present itself as speaking for the entire industry, there is no evidence that it is
typical of employers hiring Filipino seamen or that it can speak for them.
The contention that manning industries in the Philippines would not survive if
the instant case is not decided in favor of the petitioner is not supported by
evidence. The Wallem case was decided on February 20, 1981. There have
been no severe repercussions, no drying up of employment opportunities for
seamen, and none of the dire consequences repeatedly emphasized by the
petitioner. Why should Vir-jen be all exception?
The wages of seamen engaged in international shipping are shouldered by the
foreign principal. The local manning office is an agent whose primary function
is recruitment and who .usually gets a lump sum from the shipowner to defray
the salaries of the crew. The hiring of seamen and the determination of their
compensation is subject to the interplay of various market factors and one key
factor is how much in terms of profits the local manning office and the foreign
shipowner may realize after the costs of the voyage are met. And costs include
salaries of officers and crew members.
Filipino seamen are admittedly as competent and reliable as seamen from any
other country in the world. Otherwise, there would not be so many of them in
the vessels sailing in every ocean and sea on this globe. It is competence and
reliability, not cheap labor that makes our seamen so greatly in demand.
Filipino seamen have never demanded the same high salaries as seamen
from the United States, the United Kingdom, Japan and other developed
nations. But certainly they are entitled to government protection when they ask
for fair and decent treatment by their employer.-, and when they exercise the
right to petition for improved terms of employment, especially when they feel
that these are sub-standard or are capable of improvement according to
internationally accepted rules. In the domestic scene, there are marginal
employers who prepare two sets of payrolls for their employees one in
keeping with minimum wages and the other recording the sub-standard wages
that the employees really receive, The reliable employers, however, not only
meet the minimums required by fair labor standards legislation but even go
way above the minimums while earning reasonable profits and prospering. The
same is true of international employment. There is no reason why this Court
and the Ministry of Labor and. Employment or its agencies and commissions

17

should come out with pronouncements based on the standards and practices
of unscrupulous or inefficient shipowners, who claim they cannot survive
without resorting to tricky and deceptive schemes, instead of Government
maintaining labor law and jurisprudence according to the practices of
honorable, competent, and law-abiding employers, domestic or foreign.

established principles of labor legislation. The National Labor Relations

Commission, as the appellate tribunal from decisions of the National Seamen
Board, correctly ruled that the seamen did not violate their contracts to warrant
their dismissal.
The respondent Commission ruled: t.hqw

If any minor advantages given to Filipino seamen may somehow cut into the
profits of local manning agencies and foreign shipowners, that is not sufficient
reason why the NSB or the ILRC should not stand by the former instead of
listening to unsubstantiated fears that they would be killing the hen which lays
the golden eggs.
Prescinding from the above, we now hold that neither the National Seamen
Board nor the National Labor Relations Commission should, as a matter of
official policy, legitimize and enforce cubious arrangements where shipowners
and seamen enter into fictitious contracts similar to the addendum agreements
or side contracts in this case whose purpose is to deceive. The Republic of the
Philippines and its ministries and agencies should present a more honorable
and proper posture in official acts to the whole world, notwithstanding our
desire to have as many job openings both here and abroad for our workers. At
the very least, such as sensitive matter involving no less than our dignity as a
people and the welfare of our workingmen must proceed from the Batasang
Pambansa in the form of policy legislation, not from administrative rule making
or adjudication
Another issue raised by the movants is whether or not the seamen violated
their contracts of employment.
The form contracts approved by the National Seamen Board are designed to
protect Filipino seamen not foreign shipowners who can take care of
themselves. The standard forms embody' the basic minimums which must be
incorporated as parts of the employment contract. (Section 15, Rule V, Rules
and Regulations Implementing the Labor Code.) They are not collective
bargaining agreements or immutable contracts which the parties cannot
improve 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

In the light of all the foregoing facts, we find that the cable of the seamen
proposing an increase in their wage rates was not and could not have been
intended as a threat to comp el the Company to accede to their proposals. But
even assuming, if only for the sake of argument, that the demand or
proposal for a wage increase was accompanied by a threat that they would
report to ITF if the Company did not accede to the contract revision - although
there really was no such threat as pointed out earlier the Seamen should
not be held at fault for asking such a demand. In the same case cited above,
the Supreme Court held: t.hqw
Petitioner claims that the dismissal of private respondents was justified
because the latter threatened the ship authorities in acceding to their
demands, and this constitutes serious misconduct as contemplated by the
Labor Code. This contention is not well-taken. But even if there had been such
a threat, respondents' behavior should not be censured because it is but
natural for them to employ some means of pressing their demands for
petitioner, the refusal to abide with the terms of the Special Agreement, to
honor and respect the same, They were only acting in the exercise of their
rights, and to deprive them of their freedom of expression is contrary to law
and public policy. There is no serious misconduct to speak of in the case at bar
which would justify respondents' dismissal just because of their firmness in
their demand for the fulfillment by petitioner of its obligation it entered into
without any coercion, specially on the part of private respondents. (Emphasis
supplied).
The above citation is from Wallem.
The facts show that when the respondents boarded the M/T Jannu there was
no intention to send their ship to Australia. On January 10, 1979, the petitioner
sent a cable to respondent shipmaster Bisula informing him of the procedure to

18

be followed in the computation of special compensation of crewmembers while

in ITF controlled ports and expressed regrets for not having earlier clarified the
procedure as it thought that the vessel would trade in Carribean ports only.
On March 22, 1979, the petitioner sent another cable informing Bisula of the
special compensation when the ship would call at Kwinana Australia.
The following day, shipmaster Bisula cabled Vir-jen stating that the officers and
crews were not interested in ITF membership if not paid ITF rates and that
their only demand was a 50 percent increase based on their then salaries.
Bisula also pointed out that Vir-jen rates were "very far in comparison with
other shipping agencies in Manila."
In reply, Vir-jen counter proposed a 25 percent increase. Only after Kyoei
Tanker Co., Ltd., declined to increase the lumps sum amount given monthly to
Vir-jen was the decision to terminate the respondents' employment formulated.
The facts show that Virjen Initiated the discussions which led to the demand
for increased . The seamen made a proposal and the petitioner organized with
a counter-proposal. The ship had not vet gone to Australia or any ITF
controlled port. There was absolutely no mention of any strike. much less a
threat to strike. The seamen had done in act which under Philippine law or any
other civilized law would be termed illegal, oppressive, or malicious. Whatever
pressure existed, it was mild compared to accepted valid modes of labor
activity.

the same, They were only acting in the exercise of their rights, and to deprive
them of their form of expression is contrary to law and public policy. ...
Our dismissing the petition is premised on the assumption that the Ministry of
Labor and Employment and all its agencies exist primarily for the workinginan's
interests and, of course, the nation as a whole. The points raised by the
Solicitor-General in his comments refer to the issue of allowing what the
petitioner importunes under the argument of "killing the hen which lays the
golden eggs." This is one of policy which should perhaps be directed to the
Batasang Pambansa and to our country's other policy makers for more specific
legislation on the matter, subject to the constitutional provisions protecting
labor, promoting social justice, and guaranteeing non-abridgement of the
freedom of speech, press, peaceable assembly and petition. We agree with
the movants that there is no showing of any cause, which under the Labor
Code or any current applicable law, would warrant the termination of the
respondents' services before the expiration of their contracts. The Constitution
guarantees State assurance of the rights of workers to security of tenure. (Sec.
9, Article II, Constitution). Presumptions and provisions of law, the evidence on
record, and fundamental State policy all dictate that the motions for
reconsideration should be granted.
WHEREFORE, the motions for reconsideration are hereby GRANTED. The
petition is DISMISSED for lack of merit. The decision of the National Labor
Relations Commission is AFFIRMED. No costs.
SO ORDERED.

We reiterate our ruling in Wallem. t.hqw

Petitioner claims that the dismissal of private respondents was justified
because the latter threatened the ship authorities in acceding to their
demands, and this constitutes serious misconduct as contemplated by the
Labor Code. This contention is not well-taken. The records fail to establish
clearly the commission of any threat, But even if there had been such a threat,
respondents' behavior should not be censured because it is but natural for
them to employ some means of pressing their demands for petitioner, who
refused to abide with the terms of the Special Agreement, to honor and respect

G.R. Nos. L-57999, 58143-53 August 15, 1989

RESURRECCION SUZARA, CESAR DIMAANDAL, ANGELITO MENDOZA,
ANTONIO TANEDO, AMORSOLO CABRERA, DOMINADOR SANTOS,
ISIDRO BRACIA, RAMON DE BELEN, ERNESTO SABADO, MARTIN
MALABANAN, ROMEO HUERTO and VITALIANO PANGUE, petitioners,
vs.
THE HON. JUDGE ALFREDO L. BENIPAYO and MAGSAYSAY LINES,
INC., respondents.

19

G.R. Nos. L-64781-99 August 15, 1989

RESURRECCION SUZARA, CESAR DIMAANDAL, ANGELITO MENDOZA,
ANTONIO TANEDO, RAYMUNDO PEREZ, AMORSOLO CABRERA,
DOMINADOR SANTOS, ISIDRO BRACIA, CATALINO CASICA, VITALIANO
PANGUE, RAMON DE BELEN, EDUARDO PAGTALUNAN, ANTONIO
MIRANDA, RAMON UNIANA, ERNESTO SABADO, MARTIN MALABANAN,
ROMEO HUERTO and WILFREDO CRISTOBAL, petitioners,
vs.
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, THE
NATIONAL SEAMEN BOARD (now the Philippine Overseas Employment
Administration), and MAGSAYSAY LINES, INC., respondents.

Quasha, Asperilla, Ancheta, Pe;a and Nolasco for petitioners.

Samson S. Alcantara for private respondent.
GUTIERREZ, JR., J.:
These petitions ask for a re-examination of this Court's precedent setting
decision in Vir-Jen Shipping and Marine Services Inc. v. National Labor
Relations Commission, et al. (125 SCRA 577 [1983]). On constitutional,
statutory, and factual grounds, we find no reason to disturb the doctrine in VirJen Shipping and to turn back the clock of progress for sea-based overseas
workers. The experience gained in the past few years shows that, following
said doctrine, we should neither deny nor diminish the enjoyment by Filipino
seamen of the same rights and freedoms taken for granted by other workingmen here and abroad.
The cases at bar involve a group of Filipino seamen who were declared by the
defunct National Seamen Board (NSB) guilty of breaching their employment
contracts with the private respondent because they demanded, upon the
intervention and assistance of a third party, the International Transport
Worker's Federation (ITF), the payment of wages over and above their
contracted rates without the approval of the NSB. The petitioners were ordered
to reimburse the total amount of US$91,348.44 or its equivalent in Philippine
Currency representing the said over-payments and to be suspended from the
NSB registry for a period of three years. The National Labor Relations
Commission (NLRC) affirmed the decision of the NSB.

In a corollary development, the private respondent, for failure of the petitioners

to return the overpayments made to them upon demand by the former, filed
estafa charges against some of the petitioners. The criminal cases were
eventually consolidated in the sala of then respondent Judge Alfredo
Benipayo. Hence, these consolidated petitions, G.R. No. 64781-99 and G.R.
Nos. 57999 and 58143-53, which respectively pray for the nullification of the
decisions of the NLRC and the NSB, and the dismissal of the criminal cases
against the petitioners.
The facts are found in the questioned decision of the NSB in G.R. No. 6478199.
From the records of this case it appears that the facts established and/or
admitted by the parties are the following: that on different dates in 1977 and
1978 respondents entered into separate contracts of employment (Exhs. "B" to
"B-17", inclusive) with complainant (private respondent) to work aboard
vessels owned/operated/manned by the latter for a period of 12 calendar
months and with different rating/position, salary, overtime pay and allowance,
hereinbelow specified: ...; that aforesaid employment contracts were verified
and approved by this Board; that on different dates in April 1978 respondents
(petitioners) joined the M/V "GRACE RIVER"; that on or about October 30,
1978 aforesaid vessel, with the respondents on board, arrived at the port of
Vancouver, Canada; that at this port respondent received additional wages
under rates prescribed by the Intemational Transport Worker's Federation (ITF)
in the total amount of US$98,261.70; that the respondents received the
amounts appearing opposite their names, to wit: ...; that aforesaid amounts
were over and above the rates of pay of respondents as appearing in their
employment contracts approved by this Board; that on November 10, 1978,
aforesaid vessel, with respondent on board, left Vancouver, Canada for
Yokohama, Japan; that on December 14, 1978, while aforesaid vessel, was at
Yura, Japan, they were made to disembark. (pp. 64-66, Rollo)
Furthermore, according to the petitioners, while the vessel was docked at
Nagoya, Japan, a certain Atty. Oscar Torres of the NSB Legal Department
boarded the vessel and called a meeting of the seamen including the
petitioners, telling them that for their own good and safety they should sign an
agreement prepared by him on board the vessel and that if they do, the cases

20

filed against them with NSB on November 17, 1978 would be dismissed. Thus,
the petitioners signed the. "Agreement" dated December 5, 1978. (Annex C of
Petition) However, when they were later furnished xerox copies of what they
had signed, they noticed that the line "which amount(s) was/were received and
held by CREWMEMBERS in trust for SHIPOWNERS" was inserted therein,
thereby making it appear that the amounts given to the petitioners representing
the increase in their wages based on ITF rates were only received by them in
trust for the private respondent.

owners of the vessel to pay to them various sums totalling US$104,244.35;

that the respondent entered into the "Special Agreement" to pay the
petitioners' wage differentials because it was under duress as the vessel would
not be allowed to leave Vancouver unless the said agreement was signed, and
to prevent the shipowner from incurring further delay in the shipment of goods;
and that in view of petitioners' breach of contract, the latter's names must be
removed from the NSB's Registry and that they should be ordered to return the
amounts they received over and above their contracted rates.

When the vessel reached Manila, the private respondent demanded from the
petitioners the "overpayments" made to them in Canada. As the petitioners
refused to give back the said amounts, charges were filed against some of
them with the NSB and the Professional Regulations Commission. Estafa
charges were also filed before different branches of the then Court of First
Instance of Manila which, as earlier stated, were subsequently consolidated in
the sala of the respondent Judge Alfredo Benipayo and which eventually led to
G.R. Nos. 57999 and 58143-53.

The respondent NSB ruled that the petitioners were guilty of breach of contract
because despite subsisting and valid NSB-approved employment contracts,
the petitioners sought the assistance of a third party (ITF) to demand from the
private respondent wages in accordance with the ITF rates, which rates are
over and above their rates of pay as appearing in their NSB-approved
contracts. As bases for this conclusion, the NSB stated:

In G.R. Nos. 64781-99, the petitioners claimed before the NSB that contrary to
the private respondent's allegations, they did not commit any illegal act nor
stage a strike while they were on board the vessel; that the "Special
Agreement" entered into in Vancouver to pay their salary differentials is valid,
having been executed after peaceful negotiations. Petitioners further argued
that the amounts they received were in accordance with the provision of law,
citing among others, Section 18, Rule VI, Book I of the Rules and Regulations
Implementing the Labor Code which provides that "the basic minimum salary
of seamen shall not be less than the prevailing minimum rates established by
the International Labor Organization (ILO) or those prevailing in the country
whose flag the employing vessel carries, whichever is higher ..."; and that the
"Agreement" executed in Nagoya, Japan had been forced upon them and that
intercalations were made to make it appear that they were merely trustees of
the amounts they received in Vancouver.
On the other hand, the private respondent alleged that the petitioners
breached their employment contracts when they, acting in concert and with the
active participations of the ITF while the vessel was in Vancouver, staged an
illegal strike and by means of threats, coercion and intimidation compelled the

1) The fact that respondents sought the aid of a third party (ITF) and
demanded for wages and overtime pay based on ITF rates is shown in the
entries of their respective Pay-Off Clearance Slips which were marked as their
Exhs. "1" to "18", and we quote "DEMANDED ITF WAGES, OVERTIME,
DIFFERENTIALS APRIL TO OCTOBER 1978". Respondent Suzara admitted
that the entries in his Pay-Off Clearance Slip (Exh. "1") are correct (TSN., p.
16, Dec. 6, 1979).lwph1.t Moreover, it is the policy (reiterated very often)
by the ITF that it does not interfere in the affairs of the crewmembers and
masters and/or owners of a vessel unless its assistance is sought by the
crewmembers themselves. Under this pronounced policy of the ITF, it is
reasonable to assume that the representatives of the ITF in Vancouver,
Canada assisted and intervened by reason of the assistance sought by the
latter.
2) The fact that the ITF assisted and intervened for and in behalf of the
respondents in the latter's demand for higher wages could be gleaned from the
answer of the respondents when they admitted that the ITF acted in their
behalf in the negotiations for increase of wages. Moreover, respondent Cesar
Dimaandal admitted that the ITF differential pay was computed by the ITF
representative (TSN, p. 7, Dec. 12, 1979)

21

3) The fact that complainant and the owner/operator of the vessel were
compelled to sign the Special Agreement (Exh. "20") and to pay ITF
differentials to respondents in order not to delay the departure of the vessel
and to prevent further losses is shown in the "Agreement" (Exhs. "R-21") ...
(pp. 69-70, Rollo)
The NSB further said:
While the Board recognizes the rights of the respondents to demand for higher
wages, provided the means are peaceful and legal, it could not, however,
sanction the same if the means employed are violent and illegal. In the case at
bar, the means employed are violent and illegal for in demanding higher wages
the respondents sought the aid of a third party and in turn the latter intervened
in their behalf and prohibited the vessel from sailing unless the owner and/or
operator of the vessel acceded to respondents' demand for higher wages. To
avoid suffering further incalculable losses, the owner and/or operator of the
vessel had no altemative but to pay respondents' wages in accordance with
the ITF scale. The Board condemns the act of a party who enters into a
contract and with the use of force/or intimidation causes the other party to
modify said contract. If the respondents believe that they have a valid ground
to demand from the complainant a revision of the terms of their contracts, the
same should have been done in accordance with law and not thru illegal
means. (at p. 72, Rollo).
Although the respondent NSB found that the petitioners were entitled to the
payment of earned wages and overtime pay/allowance from November 1,
1978 to December 14, 1978, it nevertheless ruled that the computation should
be based on the rates of pay as appearing in the petitioners' NSB-approved
contracts. It ordered that the amounts to which the petitioners are entitled
under the said computation should be deducted from the amounts that the
petitioners must return to the private respondent.
On appeal, the NLRC affirmed the NSB's findings. Hence, the petition in G.R.
Nos. 64781-99.
Meanwhile, the petitioners in G.R. Nos. 57999 and 58143-53 moved to quash
the criminal cases of estafa filed against them on the ground that the alleged

crimes were committed, if at all, in Vancouver, Canada and, therefore,

Philippine courts have no jurisdiction. The respondent judge denied the
motion. Hence, the second petition.
The principal issue in these consolidated petitions is whether or not the
petitioners are entitled to the amounts they received from the private
respondent representing additional wages as determined in the special
agreement. If they are, then the decision of the NLRC and NSB must be
reversed. Similarly, the criminal cases of estafa must be dismissed because it
follows as a consequence that the amounts received by the petitioners belong
to them and not to the private respondent.
In arriving at the questioned decision, the NSB ruled that the petitioners are
not entitled to the wage differentials as determined by the ITF because the
means employed by them in obtaining the same were violent and illegal and
because in demanding higher wages the petitioners sought the aid of a third
party, which, in turn, intervened in their behalf and prohibited the vessel from
sailing unless the owner and/or operator of the vessel acceded to respondents'
demand for higher wages. And as proof of this conclusion, the NSB cited the
following: (a) the entries in the petitioners Pay-Off Clearance Slip which
contained the phrase "DEMANDED ITF WAGES ..."; (b) the alleged policy of
the ITF in not interfering with crewmembers of a vessel unless its intervention
is sought by the crewmembers themselves; (c), the petitioners' admission that
ITF acted in their behalf; and (d) the fact that the private respondent was
compelled to sign the special agreement at Vancouver, Canada.
There is nothing in the public and private respondents' pleadings, to support
the allegations that the petitioners used force and violence to secure the
special agreement signed in Vancouver. British Columbia. There was no need
for any form of intimidation coming from the Filipino seamen because the
Canadian Brotherhood of Railways and Transport Workers (CBRT), a strong
Canadian labor union, backed by an international labor federation was actually
doing all the influencing not only on the ship-owners and employers but also
against third world seamen themselves who, by receiving lower wages and
cheaper accommodations, were threatening the employment and livelihood of
seamen from developed nations.

22

The bases used by the respondent NSB to support its decision do not prove
that the petitioners initiated a conspiracy with the ITF or deliberately sought its
assistance in order to receive higher wages. They only prove that when ITF
acted in petitioners' behalf for an increase in wages, the latter manifested their
support. This would be a logical and natural reaction for any worker in whose
benefit the ITF or any other labor group had intervened. The petitioners admit
that while they expressed their conformity to and their sentiments for higher
wages by means of placards, they, nevertheless, continued working and going
about their usual chores. In other words, all they did was to exercise their
freedom of speech in a most peaceful way. The ITF people, in turn, did not
employ any violent means to force the private respondent to accede to their
demands. Instead, they simply applied effective pressure when they intimated
the possibility of interdiction should the shipowner fail to heed the call for an
upward adjustment of the rates of the Filipino seamen. Interdiction is nothing
more than a refusal of ITF members to render service for the ship, such as to
load or unload its cargo, to provision it or to perform such other chores
ordinarily incident to the docking of the ship at a certain port. It was the fear of
ITF interdiction, not any action taken by the seamen on board the vessel which
led the shipowners to yield.
The NSB's contusion that it is ITF's policy not to intervene with the plight of
crewmembers of a vessel unless its intervention was sought is without basis.
This Court is cognizant of the fact that during the period covered by the labor
controversies in Wallem Philippines Shipping, Inc. v. Minister of Labor (102
SCRA 835 [1981]; Vir-Jen Shipping and Marine Services, Inc. v. NLRC (supra)
and these consolidated petitions, the ITF was militant worldwide especially in
Canada, Australia, Scandinavia, and various European countries, interdicting
foreign vessels and demanding wage increases for third world seamen. There
was no need for Filipino or other seamen to seek ITF intervention. The ITF
was waiting on its own volition in all Canadian ports, not particularly for the
petitioners' vessel but for all ships similarly situated. As earlier stated, the ITF
was not really acting for the petitioners out of pure altruism. The ITF was
merely protecting the interests of its own members. The petitioners happened
to be pawns in a higher and broader struggle between the ITF on one hand
and shipowners and third world seamen, on the other. To subject our seamen
to criminal prosecution and punishment for having been caught in such a
struggle is out of the question.

As stated in Vir-Jen Shipping (supra):

The seamen had done no act which under Philippine law or any other civilized
law would be termed illegal, oppressive, or malicious. Whatever pressure
existed, it was mild compared to accepted and valid modes of labor activity. (at
page 591)
Given these factual situations, therefore, we cannot affirm the NSB and
NLRC's finding that there was violence, physical or otherwise employed by the
petitioners in demanding for additional wages. The fact that the petitioners
placed placards on the gangway of their ship to show support for ITF's
demands for wage differentials for their own benefit and the resulting ITF's
threatened interdiction do not constitute violence. The petitioners were
exercising their freedom of speech and expressing sentiments in their hearts
when they placed the placard We Want ITF Rates." Under the facts and
circumstances of these petitions, we see no reason to deprive the seamen of
their right to freedom of expression guaranteed by the Philippine Constitution
and the fundamental law of Canada where they happened to exercise it.
As we have ruled in Wallem Phil. Shipping Inc. v. Minister of Labor, et al.
supra:
Petitioner claims that the dismissal of private respondents was justified
because the latter threatened the ship authorities in acceding to their
demands, and this constitutes serious misconduct as contemplated by the
Labor Code. This contention is now well-taken. The records fail to establish
clearly the commission of any threat. But even if there had been such a threat,
respondents' behavior should not be censured because it is but natural for
them to employ some means of pressing their demands for petitioner, who
refused to abide with the terms of the Special Agreement, to honor and respect
the same. They were only acting in the exercise of their rights, and to deprive
them of their freedom of expression is contrary to law and public policy. ... (at
page 843)
We likewise, find the public respondents' conclusions that the acts of the
petitioners in demanding and receiving wages over and above the rates
appearing in their NSB-approved contracts is in effect an alteration of their

23

valid and subsisting contracts because the same were not obtained through.
mutual consent and without the prior approval of the NSB to be without basis,
not only because the private respondent's consent to pay additional wages
was not vitiated by any violence or intimidation on the part of the petitioners
but because the said NSB-approved form contracts are not unalterable
contracts that can have no room for improvement during their effectivity or
which ban any amendments during their term.
For one thing, the employer can always improve the working conditions without
violating any law or stipulation.
We stated in the Vir-Jen case (supra) that:
The form contracts approved by the National Seamen Board are designed to
protect Filipino seamen not foreign shipowners who can take care of
themselves. The standard forms embody the basic minimums which must be
incorporated as parts of the employment contract. (Section 15, Rule V, Rules
and Regulations Implementing the Labor Code).lwph1.t They are not
collective bargaining agreements or immutable contracts which the parties
cannot improve 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 National Labor Relations
Commission, as the appellate tribunal from the decisions of the National
Seamen Board, correctly ruled that the seamen did not violate their contracts
to warrant their dismissal. (at page 589)
It is impractical for the NSB to require the petitioners, caught in the middle of a
labor struggle between the ITF and owners of ocean going vessels halfway
around the world in Vancouver, British Columbia to first secure the approval of
the NSB in Manila before signing an agreement which the employer was
willing to sign. It is also totally unrealistic to expect the petitioners while in
Canada to exhibit the will and strength to oppose the ITF's demand for an
increase in their wages, assuming they were so minded.
An examination of Annex C of the petition, the agreement signed in Japan by
the crewmembers of the M/V Grace River and a certain M. Tabei,

representative of the Japanese shipowner lends credence to the petitioners'

claim that the clause "which amount(s) was received and held by
CREWMEMBERS in trust for SHIPOWNER" was an intercalation added after
the execution of the agreement. The clause appears too closely typed below
the names of the 19 crewmen and their wages with no similar intervening
space as that which appears between all the paragraphs and the triple space
which appears between the list of crewmembers and their wages on one hand
and the paragraph above which introduces the list, on the other. The verb
"were" was also inserted above the verb "was" to make the clause
grammatically correct but the insertion of "were" is already on the same line as
"Antonio Miranda and 5,221.06" where it clearly does not belong. There is no
other space where the word "were" could be intercalated. (See Rollo, page
80).
At any rate, the proposition that the petitioners should have pretended to
accept the increased wages while in Vancouver but returned them to the
shipowner when they reached its country, Japan, has already been answered
earlier by the Court:
Filipino seamen are admittedly as competent and reliable as seamen from any
other country in the world. Otherwise, there would not be so many of them in
the vessels sailing in every ocean and sea on this globe. It is competence and
reliability, not cheap labor that makes our seamen so greatly in demand.
Filipino seamen have never demanded the same high salaries as seamen
from the United States, the United Kingdom, Japan and other developed
nations. But certainly they are entitled to government protection when they ask
for fair and decent treatment by their employer and when they exercise the
right to petition for improved terms of employment, especially when they feel
that these are sub-standard or are capable of improvement according to
internationally accepted rules. In the domestic scene, there are marginal
employers who prepare two sets of payrolls for their employees one in
keeping with minimum wages and the other recording the sub-standard wages
that the employees really receive. The reliable employers, however, not only
meet the minimums required by fair labor standards legislation but even go
away above the minimums while earning reasonable profits and prospering.
The same is true of international employment. There is no reason why this
court and the Ministry of Labor and Employment or its agencies and

24

commissions should come out with pronouncements based on the standards

and practices of unscrupulous or inefficient shipowners, who claim they cannot
survive without resorting to tricky and deceptive schemes, instead of
Government maintaining labor law and jurisprudence according to the
practices of honorable, competent, and law-abiding employers, domestic or
foreign. (Vir-Jen Shipping, supra, pp. 587-588)
It is noteworthy to emphasize that while the Intemational Labor Organization
(ILO) set the minimum basic wage of able seamen at US$187.00 as early as
October 1976, it was only in 1979 that the respondent NSB issued Memo
Circular No. 45, enjoining all shipping companies to adopt the said minimum
basic wage. It was correct for the respondent NSB to state in its decision that
when the petitioners entered into separate contracts between 1977-1978, the
monthly minimum basic wage for able seamen ordered by NSB was still fixed
at US$130.00. However, it is not the fault of the petitioners that the NSB not
only violated the Labor Code which created it and the Rules and Regulations
Implementing the Labor Code but also seeks to punish the seamen for a
shortcoming of NSB itself.
Article 21(c) of the Labor Code, when it created the NSB, mandated the Board
to "(O)btain the best possible terms and conditions of employment for
seamen."
Section 15, Rule V of Book I of the Rules and Regulations Implementing the
Labor Code provides:
Sec. 15. Model contract of employment. The NSB shall devise a model
contract of employment which shall embody all the requirements of pertinent
labor and social legislations and the prevailing standards set by applicable
International Labor Organization Conventions. The model contract shall set the
minimum standards of the terms and conditions to govern the employment of
Filipinos on board vessels engaged in overseas trade. All employers of
Filipinos shall adopt the model contract in connection with the hiring and
engagement of the services of Filipino seafarers, and in no case shall a
shipboard employment contract be allowed where the same provides for
benefits less than those enumerated in the model employment contract, or in
any way conflicts with any other provisions embodied in the model contract.

Section 18 of Rule VI of the same Rules and Regulations provides:

Sec. 18. Basic minimum salary of able-seamen. The basic minimum salary
of seamen shall be not less than the prevailing minimxun rates established by
the International Labor Organization or those prevailing in the country whose
flag the employing vessel carries, whichever is higher. However, this provision
shall not apply if any shipping company pays its crew members salaries above
the minimum herein provided.
Section 8, Rule X, Book I of the Omnibus Rules provides:
Section 8. Use of standard format of service agreement. The Board shall
adopt a standard format of service agreement in accordance with pertinent
labor and social legislation and prevailing standards set by applicable
International Labor Organization Conventions. The standard format shall set
the minimum standard of the terms and conditions to govern the employment
of Filipino seafarers but in no case shall a shipboard employment contract
(sic), or in any way conflict with any other provision embodied in the standard
format.
It took three years for the NSB to implement requirements which, under the
law, they were obliged to follow and execute immediately. During those three
years, the incident in Vancouver happened. The terms and conditions agreed
upon in Vancouver were well within ILO rates even if they were above NSB
standards at the time.
The sanctions applied by NSB and affirmed by NLRC are moreover not in
keeping with the basic premise that this Court stressed in the Vir-Jen
Shipping case (supra) that the Ministry now the Department of Labor and
Employment and all its agencies exist primarily for the workingman's interest
and the nation's as a whole.
Implicit in these petitions and the only reason for the NSB to take the side of
foreign shipowners against Filipino seamen is the "killing the goose which lays
the golden eggs" argument. We reiterate the ruling of the Court in Vir-Jen
Shipping (supra)

25

There are various 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 Court, we would in effect "kill the
hen that lays the golden egg." In other words, Filipino seamen, admittedly
among the best in the world, should remain satisfied with relatively lower if not
the lowest, international rates of compensation, should not agitate for higher
wages while their contracts of employment are subsisting, should accept as
sacred, iron clad, and immutable the side contracts which require: them to
falsely pretend to be members of international labor federations, pretend to
receive higher salaries at certain foreign ports only to return the increased pay
once the ship leaves that port, should stifle not only their right to ask for
improved terms of employment but their freedom of speech and expression,
and should suffer instant termination of employment at the slightest sign of
dissatisfaction with no protection from their Government and their courts.
Otherwise, the petitioners contend that Filipinos would no longer be accepted
as seamen, those employed would lose their jobs, and the still unemployed
would be left hopeless.
This is not the first time and it will not be the last where the threat of
unemployment and loss of jobs would be used to argue against the interests of
labor; where efforts by workingmen to better their terms of employment would
be characterized as prejudicing the interests of labor as a whole.
xxx xxx xxx
Unionism, employers' liability acts, minimum wages, workmen's compensation,
social security and collective bargaining to name a few were all initially
opposed by employers and even well meaning leaders of government and
society as "killing the hen or goose which lays the golden eggs." The claims of
workingmen were described as outrageously injurious not only to the employer
but more so to the employees themselves before these claims or demands
were established by law and jurisprudence as "rights" and before these were
proved beneficial to management, labor, and the national as a whole beyond
reasonable doubt.

already established. No matter how much the petitioner-employer tries to

present itself as speaking for the entire industry, there is no evidence that it is
typical of employers hiring Filipino seamen or that it can speak for them.
The contention that manning industries in the Philippines would not survive if
the instant case is not decided in favor of the petitioner is not supported by
evidence. The Wallem case was decided on February 20, 1981. There have
been no severe repercussions, no drying up of employment opportunities for
seamen, and none of the dire consequences repeatedly emphasized by the
petitioner. Why should Vir-Jen be an exception?
The wages of seamen engaged in international shipping are shouldered by the
foreign principal. The local manning office is an agent whose primary function
is recruitment and who usually gets a lump sum from the shipowner to defray
the salaries of the crew. The hiring of seamen and the determination of their
compensation is subject to the interplay of various market factors and one key
factor is how much in terms of profits the local manning office and the foreign
shipowner may realize after the costs of the voyage are met. And costs include
salaries of officers and crew members. (at pp. 585-586)
The Wallem Shipping case, was decided in 1981. Vir-Jen Shipping was
decided in 1983. It is now 1989. There has'been no drying up of employment
opportunities for Filipino seamen. Not only have their wages improved thus
leading ITF to be placid and quiet all these years insofar as Filipinos are
concerned but the hiring of Philippine seamen is at its highest level ever.
Reporting its activities for the year 1988, the Philippine Overseas Employment
Administration (POEA) stated that there will be an increase in demand for
seamen based overseas in 1989 boosting the number to as high as 105,000.
This will represent a 9.5 percent increase from the 1988 aggregate. (Business
World, News Briefs, January 11, 1989 at page 2) According to the POEA,
seabased workers numbering 95,913 in 1988 exceeded by a wide margin of
28.15 percent the year end total in 1987. The report shows that sea-based
workers posted bigger monthly increments compared to those of landbased
workers. (The Business Star, Indicators, January 11, 1988 at page 2)

The case before us does not represent any major advance in the rights of
labor and the workingmen. The private respondents merely sought rights

26

Augmenting this optimistic report of POEA Administrator Tomas Achacoso is

the statement of Secretary of Labor Franklin M. Drilon that the Philippines has
a big jump over other crewing nations because of the Filipinos' abilities
compared with any European or westem crewing country. Drilon added that
cruise shipping is also a growing market for Filipino seafarers because of their
flexibility in handling odd jobs and their expertise in handling almost all types of
ships, including luxury liners. (Manila Bulletin, More Filipino Seamen Expected
Development, December 27, 1988 at page 29).lwph1.t Parenthetically, the
minimum monthly salary of able bodied seamen set by the ILO and adhered to
by the Philippines is now $276.00 (id.) more than double the $130.00 sought to
be enforced by the public respondents in these petitions.
The experience from 1981 to the present vindicates the finding in Vir-Jen
Shipping that a decision in favor of the seamen would not necessarily mean
severe repercussions, drying up of employment opportunities for seamen, and
other dire consequences predicted by manning agencies and recruiters in the
Philippines.
From the foregoing, we find that the NSB and NLRC committed grave 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. Consequently, the criminal prosecutions for estafa in G.R.
Nos. 57999 and 58143-53 should be dismissed.
WHEREFORE, the petitions are hereby GRANTED. The decisions of the
National Seamen Board and National Labor Relations Commission in G. R.
Nos. 64781-99 are REVERSED and SET ASIDE and a new one is entered
holding the petitioners not guilty of the offenses for which they were charged.
The petitioners' suspension from the National Seamen Board's Registry for
three (3) years is LIFTED. The private respondent is ordered to pay the
petitioners their earned but unpaid wages and overtime pay/allowance from
November 1, 1978 to December 14, 1978 according to the rates in the Special
Agreement that the parties entered into in Vancouver, Canada.
The criminal cases for estafa, subject matter of G. R. Nos. 57999 and 5814353, are ordered DISMISSED.

SO ORDERED.
G.R. No. 82252 February 28, 1989
SEAGULL MARITIME CORP. AND PHILIMARE SHIPPING & EQUIPMENT
SUPPLY, petitioners
vs.
NERRY D. BALATONGAN, NATIONAL LABOR RELATIONS COMMISSION
AND PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, respondents.

Tanjuatco, Oreta, Tanjuatco, Berenguer & San Vicente for petitioners.

The Solicitor General for public respondent.
Benjamin B. Vergara for private respondent
GANCAYCO, J.:
On November 2, 1982, a "crew Agreement" was entered into by private
respondent Nerry D. Balatongan and Philimare Shipping and Equipment
Supply (hereinafter called Philimare) whereby the latter employed the former
as able seaman on board its vessel "Santa Cruz" (renamed "Turtle Bay") with
a monthly salary of US $ 300.00. Said agreement was processed and
approved by the National Seaman's Board (NSB) on November 3, 1982. 1
While on board said vessel the said parties entered into a supplementary
contract of employment on December 6, 1982 2 which provides among others:
1. The employer shall be obliged to insure the employee during his
engagement against death or permanent invalidity caused by accident on
board up to:
US $ 40,000 - for death caused by accident
US $ 50,000 - for permanent total disability caused by accident.

On October 6, 1983 Balatongan met an accident in the Suez Canal, Egypt as a

result of which he was hospitalized at the Suez Canal Authority Hospital. Later,
he was repatriated to the Philippines and was hospitalized at the Makati
Medical Center from October 23, 1983 to March 27, 1984. On August 19, 1985

27

the medical certificate was issued describing his disability as "permanent in

nature."

Hence, Seagull and Philimare filed this petition for certiorari with a prayer for
the issuance of a temporary restraining order based on the following grounds:

Balatongan demanded payment for his claim for total disability insurance in the
amount of US $ 50,000.00 as provided for in the contract of employment but
his claim was denied for having been submitted to the insurers beyond the
designated period for doing so.

1. Respondent POEA erred in applying the Supplemental Contract;

Thus, Balatongan filed on June 21, 1985 a complaint against Philimare and
Seagull Maritime Corporation (hereinafter called Seagull) in the Philippine
Overseas Employment Administration (POEA) for non-payment of his claim for
permanent total disability with damages and attorney's fees.
After the parties submitted their respective position papers with the
corresponding documentary evidence, the officer-in-charge of the Workers
Assistance and Adjudication Office of the POEA rendered a decision on May 2,
1986, the dispositive part of which reads as follows:
WHEREFORE, premises considered, respondents are hereby ordered to pay
complainant the amount of US $ 50,000.00 representing permanent total
disability insurance and attorney's fees at 10% of the award. Payment should
be made in this Office within ten (10) days from receipt hereof at the prevailing
rate of exchange. This Office cannot however rule on damages, having no
jurisdiction on the matter.
SO ORDERED. 4
Seagull and Philimare appealed said decision to the National Labor Relations
Commission (NLRC) on June 4, 1986. Pending resolution of their appeal
because of the alleged transfer of the agency of Seagull to Southeast Asia
Shipping Corporation, Seagull filed on April 28, 1987 a Motion For
Substitution/Inclusion of Party Respondent which was opposed by
Balatongan. 5 This was followed by an ex-parte motion for leave to file third
party complaint on June 4, 1987 by Seagull. A decision was promulgated on
December 7, 1987 denying both motions and dismissing the appeal for lack of
merit. 6 A motion for reconsideration of said decision was denied for lack of
merit in a resolution dated February 26, 1988.7

2. Respondents POEA and NLRC acted with grave abuse of discretion in

holding that the Supplemental Contract was signed on board MV Santa Cruz
by and between private respondent and your petitioner; and
3. Respondent NLRC acted with grave abuse of discretion in not giving due
course to your petitioners' Motion for Leave to File Third Party Complaint as
well as their Motion for Inclusion/Substitution of respondents. 8
On March 21, 1988, the Court issued a temporary restraining order enjoining
respondents from enforcing the questioned decision and resolution of public
respondents.
Petitioners argue that prior to private respondent's departure he executed a
crew agreement on November 2, 1982 which was duly approved by the POEA;
that the supplementary contract of employment that was entered into on board
the vessel "Turtle Bay" which provides for a US $ 50,000.00 insurance benefit
in case of permanent disability was neither approved nor verified by
respondent POEA; and that the same violates Article 34(i) of the Labor Code,
as amended, which provides as follows:
Art. 34. Prohibited Practices. - It shall be unlawful for any individual, entity,
licensee, or holder of authority:
xxx xxx xxx
xxx xxx xxx
(i) to substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties up
to and including the period of expiration of the same without the approval of
the Department of Labor.

28

Petitioners also call attention to Article VIII, paragraph 2 of the Supplementary

Contract which provides as follows:
2. Notwithstanding his claim against the insurers the employee hereby
expressly waives all claims of his own or his heirs for compensation of
damages due to death or permanent invalidity which he suffered during his
engagement against the employers ... unless his death or permanent invalidity
has been caused by willful act of any of the above-named persons. 9
Petitioners stress that while public respondents upheld the applicability of said
supplementary contract insofar as it increased the benefits to private
respondent, public respondents considered the provision on the waiver against
all claims by private respondent to be contrary to public policy.
In its questioned decision dated December 7, 1987, the respondent NLRC
made the following disquisition:
The focal issue for determination is the validity and enforceability of the second
contract of employment entered into by and between complainant and
respondents on board the vessel where the former had served as a member of
its complement despite the absence of NSB verification or approval. With
respect to the findings of facts in the appealed decision, We consider the same
as duly supported by substantial evidence and the admissions of the parties in
their pleadings.
Much stress and emphasis are made by the respondents in their appeal that
this claim has no legal basis or footing inasmuch as the second contract of
employment containing a total disability insurance benefit of US $ 50,000.00,
much more than that embodied in the first contract of employment which was
approved by the defunct NSB, was not verified or approved by the latter.
Accordingly, the respondents posit the argument that subject claim may not
prosper pursuant to the provisions of Art. 34(i) of the Labor Code, as amended,
which provides that it shall be unlawful for any individual, entity, licensee, or
holder of authority '(T)o substitute or alter employment contracts approved and
verified by the Department of Labor from the time of actual signing thereof by
the parties up to and including the period of expiration of the same without the
approval of the Department of Labor.

Did the POEA commit a reversible error when it considered the second
contract of employment as validsans any verification or approval thereof by the
NSB? Our answer to this query is in the negative. Apparently, the intention of
the law when Art. 34 of the Labor Code was enacted is to provide for the
prohibited and unlawful practices relative to recruitment and placement. As
shown in the 'Explanatory Note' of Parliamentary Bill No. 4531, pertaining to
Art. 34 (supra), thus:
Many of the provisions are already existing and were simply restated. Some
however were restated with modifications and new ones were introduced to
reflect what in the past have been noted to be pernicious practices which tend
to place workers at a disadvantage.'
it is indubitably clear that the purpose of having overseas contracts of
employment approved by the NSB(POEA) is whether or not such contracts
conform to the minimum terms and conditions prescribed by the NSB (POEA).
In other words, the law did not at all prohibit any alteration which provided for
increases in wages or other benefits voluntarily granted by the employer.
Precisely, under Section 2, Rule 1, Book V of the Rules and Regulations of the
POEA, '(t)he standard format of employment contracts shall set the minimum
standards of the terms and conditions of employment. All employers and
principals shall adopt the model contract in connection with the hiring of
workers without prejudice to their adopting other terms and conditions of
employment over and above the minimum standards of the
Administration.' Where, as here, it is admitted that the second contract
although not verified or approved by the NSB (POEA) granted more benefits
by way of total disability insurance to the complainant, the respondents may
not be allowed to disvow their own voluntary acts by insisting that such
beneficial contract in favor of the seaman is null and void. (Emphasis
supplied.) 10
We agree.
The supplementary contract of employment was entered into between
petitioner and private respondent to modify the original contract of employment
The reason why the law requires that the POEA should approve and verify a
contract under Article 34(i) of the Labor Code is to insure that the employee

29

shall not thereby be placed in a disadvantageous position and that the same
are within the minimum standards of the terms and conditions of such
employment contract set by the POEA. This is why a standard format for
employment contracts has been adopted by the Department of Labor.
However, there is no prohibition against stipulating in a contract more benefits
to the employee than those required by law. Thus, in this case wherein a
"supplementary contract" was entered into affording greater benefits to the
employee than the previous one, and although the same was not submitted for
the approval of the POEA, the public respondents properly considered said
contract to be valid and enforceable. Indeed, said pronouncements of public
respondents have the effect of an approval of said contract. Moreover, as said
contract was voluntarily entered into by the parties the same is binding
between them. 11 Not being contrary to law, morals, good customs, public
policy or public order, its validity must be sustained. 12 By the same token, the
court sustains the ruling of public respondents that the provision in the
supplementary contract whereby private respondent waives any claim against
petitioners for damages arising from death or permanent disability is against
public policy, oppressive and inimical to the rights of private respondent. The
said provision defeats and is inconsistent with the duty of petitioners to insure
private respondent against said contingencies as clearly stipulated in the said
contract.
Petitioners however argue that they could not have entered into said
supplementary contract of employment as Philimare was a mere manning
agent in the Philippines of the shipping company managed by Navales
Shipping Management and Marine Consultant (Pte) Ltd., its principal.
Petitioners assert that the said supplementary contract was entered into by
private respondent with their principal, Navales Shipping Management and
Marine Consultant (Pte) Ltd. on board the vessel Turtle Bay so petitioners
cannot be held responsible thereunder.

This Court is not a trier of facts and the findings of the public respondents are
conclusive in this proceeding. Public respondents found that petitioner
Philimare and private respondent entered into said supplementary contract of
employment on December 6, 1982. Assuming for the sake of argument that it
was petitioners' principal which entered into said contract with private
respondent, nevertheless petitioner, as its manning agent in the Philippines, is
jointly responsible with its principal thereunder. 13
There is no question that under the said supplementary contract of
employment, it is the duty of the employer, petitioners herein, to insure the
employee, during his engagement, against death and permanent invalidity
caused by accident on board up to $ 50,000.00. Consequently, it is also its
concomitant obligation to see to it that the claim against the insurance
company is duly filed by private respondent or in his behalf, and within the time
provided for by the terms of the insurance contract.
In this case, the private respondent met the accident on October 6, 1983.
Since then, he was hospitalized at the Suez Canal Authority Hospital and
thereafter be was repatriated to the Philippines wherein he was also
hospitalized from October 22, 1983 to March 27, 1984. It was only on August
19, 1985 that he was issued a medical certificate describing his disability to be
permanent in nature. It was not possible for private respondent to file a claim
for permanent disability with the insurance company within the one-year period
from the time of the injury, as his disability was ascertained to be permanent
only thereafter. Petitioners did not exert any effort to assist private respondent
to recover payment of his claim from the insurance company. They did not
even care to dispute the finding of the insurer that the claim was not flied on
time. 14 Petitioners must, therefore, be held responsible for its omission, if not
negligence, by requiring them to pay the claim of private respondent.
The Court finds that the respondent NLRC did not commit a grave abuse of
discretion in denying petitioners, motion for leave to file third-party complaint
and substitution inclusion of party respondent. Such motion is largely
addressed to the discretion of the said Commission. Inasmuch as the alleged
transfer of interest took place only after the POEA had rendered its decision,
the denial of the motion so as to avoid further delay in the settlement of the

30

claim of private respondent was well-taken. At any rate, petitioners may pursue
their claim against their alleged successor-in-interest in a separate suit.
WHEREFORE, the petition is hereby DISMISSED for lack of merit and the
temporary restraining order issued by this Court on March 21, 1988 is hereby
LIFTED. No costs. This decision is immediately executory.

contracts, each for a fixed period, by three different companies, namely, Esso
Tankers, Inc. (ETI), EEM and Esso International Shipping (Bahamas) Co., Ltd.
(EIS), Singapore Branch. Ravago worked with Esso vessels until August 22,
1992, a period spanning more than 22 years, thus:
CONTRACT
FROM

DURATION TO

POSITION

VESSEL

COMPAN

13 Feb 70

10 Feb 71

SN/Wiper

Esso Bataan

ETI[2]

07 May 71

27 May 72

Wiper

Esso Yokohama

EEM[3]

07 Aug 72

02 Jul 73

Oiler

Esso Kure

EEM

03 Oct 73

30 Jun 74

Oiler

Esso Bangkok

ETI

18 Sep 74

26 July 75

Oiler

Esso Yokohama

EEM

23 Oct 75

22 Jun 76

Oiler

Esso
Dickson

EEM

10 Sep 76

26 Dec 76

Oiler

Esso Bangkok

ETI

27 Dec 76

29 Apr 77

Temporary
3AE

Esso Bangkok

ETI

08 Jul 77

15 Mar 78

Jr. 3AE

Esso Bombay

ETI

03 Jun 78

03 Feb 79

Temporary 3AE

Esso Hongkong

ETI

04 Apr 79

24 Jun 79

3AE

Esso Orient

EEM

25 Jun 79

16 Jul 79

3AE

Esso Yokohama

EEM

17 Jul 79

05 Dec 79

3AE

Esso Orient

EEM

10 Feb 80

25 Oct 80

3AE

Esso Orient

EEM

SO ORDERED.
[G.R. No. 158324. March 14, 2005]
ROBERTO RAVAGO, petitioner, vs. ESSO EASTERN MARINE, LTD. and
TRANS-GLOBAL MARITIME AGENCY, INC., respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules
of Court, as amended, of the Decision[1] of the Court of Appeals (CA) as well as
its Resolution in CA-G.R. SP No. 66234 which denied the motion for
reconsideration thereof.
The Factual Antecedents
The Esso Eastern Marine Ltd. (EEM), now the Petroleum Shipping Ltd., is a
foreign company based in Singapore and engaged in maritime commerce. It is
represented in the Philippines by its manning agent and co-respondent TransGlobal Maritime Agency, Inc. (Trans-Global), a corporation organized under the
Philippine laws.
Roberto Ravago was hired by Trans-Global to work as a seaman on board
various Esso vessels. On February 13, 1970, Ravago commenced his duty as
S/N wiper on board the Esso Bataan under a contract that lasted until
February 10, 1971. Thereafter, he was assigned to work in different Esso
vessels where he was designated diverse tasks, such as oiler, then assistant
engineer. He was employed under a total of 34 separate and unconnected

Jr.

Port

31

19 Jan 81

03 Jun 81

3AE

Esso
Dickson

04 Jun 81

11 Sep 81

3AE

Esso Orient

EEM

06 Dec 81

20 Apr 82

3AE

Esso Chawan

21 Apr 82

01 Aug 82

Temporary 2AE

03 Nov 82

06 Feb 83

2AE

07 Feb 83

10 Jul 83

2AE

Port

EEM

Dickson
28 Jul 89

17 Feb 90

1AE

Esso
Melbourne

EIS

EEM

16 Apr 90

11 Dec 90

1AE

Esso Orient

EIS

Esso Chawan

EEM*

09 Feb 91

06 Oct 91

1AE

Esso
Melbourne

EIS

Esso Jurong

EEM
16 Dec 91

22 Aug 92

1AE

Esso Orient

EIS

Esso Yokohama

EEM
* Upgraded/Confirmed on regular rank on board. [5]

31 Aug 83

13 Mar 84

2AE

Esso Tumasik

EEM

04 May 84

08 Jan 85

2AE

Esso
Dickson

EEM

13 Mar 85

31 Oct 85

2AE

Esso Castellon

EEM

29 Dec 85

22 Jul 86

2AE

Esso Jurong

EIS[4]

13 Sep 86

09 Jan 87

2AE

Esso Orient

EIS

21 Mar 87

15 Oct 87

2AE

Esso
Dickson

20 Nov 87

18
Dec
Temporary

1AE

Esso Chawan

EIS

19 Dec 87

25 Jun 88

2AE

Esso
Melbourne

EIS

04 Aug 88

19 Mar 89

Temporary 1AE

Esso
Dickson

Port

EIS

20 Mar 89

19 May 89

1AE

Esso

Port

EIS*

87

Port

Port

EIS

On August 24, 1992, or shortly after completing his latest contract with EIS,
Ravago was granted a vacation leave with pay from August 23, 1992 until
October 28, 1992. Preparatory to his embarkation under a new contract, he
was ordered to report, on September 28, 1992, for a Medical Pre-Employment
Examination.[6] The Pre-Employment Physical Examination Record shows that
Ravago passed the medical examination conducted by the O.P. Jacinto
Medical Clinic, Inc. on October 6, 1992.[7] He, likewise, attended a PreDeparture Orientation Seminar conducted by the Capt. I.P. Estaniel Training
Center, a division of Trans-Global, on October 7, 1992.[8]
On the night of October 12, 1992, a stray bullet hit Ravago on the left leg while
he was waiting for a bus ride in Cubao, Quezon City. He fractured his left
proximal tibia and was hospitalized at the Philippine Orthopedic Hospital.
Ravagos wife, Lolita, informed Trans-Global and EIS of the incident on
October 13, 1992 for purposes of availing medical benefits. As a result of his
injury, Ravagos doctor opined that he would not be able to cope with the job of
a seaman and suggested that he be given a desk job.[9] Ravagos left leg had
become apparently shorter, making him walk with a limp. For this reason, the
company physician, Dr. Virginia G. Manzo, found him to have lost his dexterity,
making him unfit to work once again as a seaman.[10] Citing the opinion of
Ravagos doctor, Dr. Manzo wrote:

32

Because of his unsteady gait, pronounced limp, and loss of normal dexterity of
his leg and foot, we doubted whether Mr. Ravago can physically tackle the
usual activities of a seaman in the course of his work without any added risk
over and above the ordinary or standard risk inherent to his job. These
activities include climbing up and down the engine room through a long flight of
iron stairs with narrow steps which could be slippery at times due to grease or
oil, jumping from an unsteady and floating motor launch or boat to board or
alight a tanker through a flight of steps or climbing up and down a pilot ladder,
wearing of heavy safety shoes, etc.
Mr. Ravagos doctor replied that, after being informed about the nature of the
job, he believes that Mr. Ravago would not be able to cope with these kinds of
activities. In effect, the Orthopedic doctor said Mr. Ravago is not fit to go back
to his work as a seaman.
We concur with the opinion of the doctor that Mr. Ravago is not fit to go back to
his job as a seaman in view of the risk of physical injury to himself as result of
the deformity and loss of dexterity of his injured leg.
As a seaman, we consider his inability partial permanent. His injury
corresponds to Grade 13 in the Schedule of Disability of the Standard
Employment Contract. [11]
Consequently, instead of rehiring Ravago, EIS paid him his Career
Employment Incentive Plan (CEIP)[12] as of March 1, 1993 and his final tax
refund for 1992. After deducting his Social Security System and medical
contributions from November 1992 to February 1993, EIS remitted the net
amount of P162,232.65, following Ravagos execution of a Deed of Quitclaim
and/or Release.[13]
However, on March 22, 1993, Ravago filed a complaint [14] for illegal dismissal
with prayer for reinstatement, backwages, damages and attorneys fees against
Trans-Global and EIS with the Philippine Overseas Employment Administration
Adjudication Office.
In their Answer dated April 14, 1993, respondents denied that Ravago was
dismissed without notice and just cause. Rather, his services were no longer

engaged in view of the disability he suffered which rendered him unfit to work
as a seafarer. This fact was further validated by the company doctor and
Ravagos attending physician. They averred that Ravago was a contractual
employee and was hired under 34 separate contracts by different companies.
In his position paper, Ravago insisted that he was fit to resume pre-injury
activities as evidenced by the certification[15] issued by Dr. Marciano Foronda
M.D., one of his attending physicians at the Philippine Orthopedic Hospital,
that at present, fracture of tibia has completely healed and patient is fit to
resume pre-injury activities anytime.[16]Ravago, likewise, asserted that he was
not a mere contractual employee because the respondents regularly and
continuously rehired him for 23 years and, for his continuous service, was
awarded a CEIP payment upon his termination from employment.
On December 15, 1996, Labor Arbiter Ramon Valentin C. Reyes rendered a
decision in favor of Ravago, the complainant. He ruled that Ravago was a
regular employee because he was engaged to perform activities which were
usually necessary or desirable in the usual trade or business of the employer.
The Labor Arbiter noted that Ravagos services were repeatedly contracted; he
was even given several promotions and was paid a monthly service
experience bonus. This was in keeping with the increasing number of long
term careers established with the respondents. Finally, the Labor Arbiter
resolved that an employer cannot terminate a workers employment on the
ground of disease unless there is a certification by a competent public health
authority that the said disease is of such nature or at such a stage that it
cannot be cured within a period of six months even with proper medical
treatment. He concluded that Ravago was illegally dismissed. The decretal
portion of the Labor Arbiters decision reads:
WHEREFORE, premises considered, judgment is hereby rendered finding the
dismissal illegal and ordering respondents to reinstate complainant to his
former position without loss of seniority rights and other benefits. Further, the
respondents are jointly and severally liable to pay complainant backwages
from the time of his dismissal up to the promulgation of this decision. Such
backwages is provisionally fixed at US$96,285.00 less the P162,285.83 (sic)
paid to the complainant as Career Employment Incentive Plan. And ordering

33

respondents to pay complainant 10% of the total monetary award as attorneys

fees.
All other claims are dismissed for lack of merit.

re-hired by private respondents even after the expiration of their respective

eight-month contracts. Such repeated re-hiring which continued for 20 years,
cannot but be appreciated as sufficient evidence of the necessity and
indispensability of petitioners service to the private respondents business or
trade.

SO ORDERED.[17]
Aggrieved, the respondents appealed the decision to the National Labor
Relations Commission (NLRC) on July 3, 1997, raising the following grounds:
THE DECISION IS VITIATED BY SERIOUS ERRORS IN THE FINDINGS OF
FACT WHICH, IF NOT CORRECTED, WOULD CAUSE GRAVE OR
IRREPARABLE DAMAGE OR INJURY TO THE RESPONDENTS. THESE
FINDINGS ARE:
(A) THAT COMPLAINANT WAS A REGULAR EMPLOYEE BECAUSE HE
WAS HIRED AND REHIRED IN VARIOUS CAPACITIES ON BOARD ESSO
VESSELS IN A SPAN OF 23 YEARS;
(B) THAT COMPLAINANT WAS A REGULAR EMPLOYEE BECAUSE HE
WAS ENGAGED IN THE SERVICES INDISPENSABLE IN THE OPERATION
OF THE VARIOUS VESSELS OF RESPONDENTS;
(C) THAT COMPLAINANT WAS FIT TO RESUME PRE-INJURY ACTIVITIES
AND HIS FRACTURE COMPLETELY HEALED NOTWITHSTANDING A
CONTRARY MEDICAL OPINION OF COMPLAINANTS OWN PHYSICIAN
AND RESPONDENTS COMPANY PHYSICIAN; AND
(D) THAT COMPLAINANT WAS ILLEGALLY DISMISSED BY
RESPONDENTS.[18]
On April 26, 2001, the NLRC rendered a decision affirming that of the Labor
Arbiter. The NLRC based its decision in the case of Millares v. National Labor
Relations Commission,[19] wherein it was held that:
It is, likewise, clear that petitioners had been in the employ of the private
respondents for 20 years. The records reveal that petitioners were repeatedly

Verily, as petitioners had rendered 20 years of service, performing activities

which were necessary and desirable in the business or trade of private
respondents, they are, by express provision of Article 280 of the Labor Code,
considered regular employees.[20]
The NLRC, likewise, declared that Ravago was illegally dismissed and that the
quitclaim executed by him could not be considered as a waiver of his right to
question the validity of his dismissal and seek reinstatement and other reliefs.
According to the NLRC, such quitclaim is against public policy, considering the
economic disadvantage of the employee and the inevitable pressure brought
about by financial capacity.
The respondents filed a motion for reconsideration of the decision, claiming
that the ruling of the Court in Millares v. NLRC[21] had not yet become final and
executory. However, the NLRC denied the motion.
Thereafter, the respondents filed a petition for certiorari before the CA on the
following grounds: (a) the ruling in Millares v. NLRC had not yet acquired
finality, nor has it become a law of the case or stare decisis because the Court
was still resolving the pending motion for reconsideration; (b) Ravago was not
illegally dismissed because after the expiration of his contract, there was no
obligation on the part of the respondents to rehire him; and (c) the quitclaim
signed by Ravago was voluntarily entered into and represented a reasonable
settlement of the account due him.
On August 29, 2001, the respondents filed an Urgent Application for the
Issuance of a Temporary Restraining Order and Writ of Preliminary Injunction
to enjoin and restrain the Labor Arbiter from enforcing his decision. On
September 5, 2001, the CA issued a Resolution[22] temporarily restraining
NLRC Sheriff Manolito Manuel from enforcing and/or implementing the
decision of the Labor Arbiter as affirmed by the NLRC.

34

On November 14, 2001, the CA granted the application for preliminary

injunction upon filing by the respondents of a bond in the amount
of P500,000.00. Thus, the respondents filed the surety bond as directed by the
appellate court. Before the approval thereof, however, Ravago filed a motion to
set aside the Resolution dated November 14, 2001, principally arguing that the
instant case was a labor dispute, wherein an injunction is proscribed under
Article 254[23] of the Labor Code of the Philippines.
In their comment on Ravagos motion, the respondents professed that the case
before the CA did not involve a labor dispute within the meaning of Article
212(l)[24] of the Labor Code of the Philippines, but a money claim against the
employer as a result of termination of employment.
On August 28, 2002, the CA rendered a decision in favor the respondents.
The fallo of the decision reads:
WHEREFORE, the petition is GRANTED. The assailed decisions of the NLRC
are hereby REVERSED and SET ASIDE and the injunctive writ issued on
November 14, 2001, is hereby made PERMANENT.
SO ORDERED.[25]
The CA ratiocinated as follows:
The employment, deployment, rights and obligation of Filipino seafarers are
particularly set forth under the rules and regulations governing overseas
employment promulgated by the POEA. Section C, Part I of the Standard
Employment Contract Governing the Employment of All Filipino Seamen on
Board Ocean-Going Vessels emphatically provides the following:
SECTION C. DURATION OF CONTRACT
The period of employment shall be for a fix ( sic) period but in no case to
exceed 12 months and shall be stated in the Crew Contract. Any extension of
the Contract period shall be subject to the mutual consent of the parties.

It is clear from the foregoing that seafarers are contractual employees whose
terms of employment are fixed for a certain period of time. A fixed term is an
essential and natural appurtenance of seamens employment contracts to
which, whatever the nature of the engagement, the concept of regular
employment under Article 280 of the Labor Code does not find application. The
contract entered into by a seafarer with his employer sets in detail the nature
of his job, the amount of his wage and, foremost, the duration of his
employment. Only a satisfactory showing that both parties dealt with each
other on more or less equal terms with no dominance exercised by the
employer over the seafarer is necessary to sustain the validity of the
employment contract. In the absence of duress, as it is in this case, the
contract constitutes the law between the parties.[26]
The CA noted that the employment status of seafarers has been established
with finality by the Courts reconsideration of its decision in Millares v. National
Labor Relations Commission,[27] wherein it was ruled that seamen are
contractual employees. According to the CA, the fact that Ravago was not
rehired upon the completion of his contract did not result in his illegal
dismissal; hence, he was not entitled to reinstatement or payment of
separation pay. The CA, likewise, affirmed the writ of preliminary injunction it
earlier issued, declaring that an injunction is a preservative remedy issued for
the protection of a substantive right or interest, an antidote resorted to only
when there is a pressing necessity to avoid injurious consequences which
cannot be rendered under any standard compensation.
Hence, the present recourse.
Ravago, now the petitioner, has raised the following issues:
I.
[WHETHER OR NOT] THE COURT OF APPLEALS GRAVELY ERRED AND
VIOLATED THE LABOR CODE WHEN IT ISSUED A RESTRAINING ORDER AND
THEREAFTER A WRIT OF PRELIMINARY INJUNCTION IN CA-G.R. SP NO.
66234.
II.
[WHETHER OR NOT] THE COURT OF APPEALS GRAVELY ERRED, [AND]
BLATANTLY DISREGARDED THE CONSTITUTIONAL MANDATE ON
PROTECTION TO FILIPINO OVERSEAS WORKERS, AND COUNTENANCED

35

UNWARRANTED DISCRIMINATION WHEN IT RULED THAT PETITIONER

CANNOT BECOME A REGULAR EMPLOYEE.[28]

On the first issue, the petitioner asserts that the CA violated Article 254 of the
Labor Code when it issued a temporary restraining order, and thereafter a writ
of preliminary injunction, to derail the enforcement of the final and executory
judgment of the Labor Arbiter as affirmed by the NLRC. On the other hand, the
respondents contend that the issue has become academic since the CA had
already decided the case on its merits.
The contention of the petitioner does not persuade.
The petitioners reliance on Article 254[29] of the Labor Code is misplaced. The
law proscribes the issuance of injunctive relief only in those cases involving or
growing out of a labor dispute. The case before the NLRC neither involves nor
grows out of a labor dispute. It did not involve the fixing of terms or conditions
of employment or representation of persons with respect thereto. In fact, the
petitioners complaint revolves around the issue of his alleged dismissal from
service and his claim for backwages, damages and attorneys fees. Moreover,
Article 254 of the Labor Code specifically provides that the NLRC may grant
injunctive relief under Article 218 thereof.
Besides, the anti-injunction policy of the Labor Code, basically, is freedom at
the workplace. It is more appropriate in the promotion of the primacy of free
collective bargaining and negotiations, including voluntary arbitration,
mediation and conciliation, as modes of settling labor and industrial disputes. [30]
Generally, an injunction is a preservative remedy for the protection of a
persons substantive rights or interests. It is not a cause of action in itself but a
mere provisional remedy, an appendage to the main suit. Pressing necessity
requires that it should be resorted to only to avoid injurious consequences
which cannot be remedied under any measure of consideration. The
application of an injunctive writ rests upon the presence of an exigency or of
an exceptional reason before the main case can be regularly heard.
The indispensable conditions for granting such temporary injunctive relief are:
(a) that the complaint alleges facts which appear to be satisfactory to establish
a proper basis for injunction, and (b) that on the entire showing from the
contending parties, the injunction is reasonably necessary to protect the legal
rights of the plaintiff pending the litigation.[31]

It bears stressing that in the present case, the respondents petition contains
facts sufficient to warrant the issuance of an injunction under Article 218,
paragraph (e) of the Labor Code of the Philippines.[32] Further, respondents had
already posted a surety bond more than adequate to cover the judgment
award.
On the second issue, the petitioner earnestly urges this Court to re-examine its
Resolution dated July 29, 2002 in Millares v. National Labor Relations
Commission[33] and reinstate the doctrine laid down in its original decision
rendered on March 14, 2000, wherein it was initially determined that a seafarer
is a regular employee. The petitioner asserts that the decision of the CA and,
indirectly, that of the Resolution of this Court dated July 29, 2002, are violative
of the constitutional mandate of full protection to labor,[34] whether local or
overseas, because it deprives overseas Filipino workers, such as seafarers, an
opportunity to become regular employees without valid and serious reasons.
The petitioner maintains that the decision is discriminatory and violates the
constitutional provision on equal protection of the laws, in addition to being
partial to and overly protective of foreign employers.
The respondents, on the other hand, asseverate that there is no law or
administrative rule or regulation imposing an obligation to rehire a seafarer
upon the completion of his contract. Their refusal to secure the services of the
petitioner after the expiration of his contract can never be tantamount to a
termination. The respondents aver that the petitioner is not entitled to
backwages, not only because it is without factual justification but also because
it is not warranted under the law. Furthermore, the respondents assert that the
rulings in the Coyoca v. NLRC,[35] and the latest Millares case remain good and
valid precedents that need to be reaffirmed. The respondents cited the ruling of
the Court in Coyoca case where the Court ruled that a Filipino seamans
contract does not provide for separation or termination pay because it is
governed by the Rules and Regulations Governing Overseas Employment.
The contention of the respondents is correct.
In a catena of cases, this Court has consistently ruled that seafarers are
contractual, not regular, employees.

36

In Brent School, Inc. v. Zamora,[36] the Court ruled that seamen and overseas
contract workers are not covered by the term regular employment as defined in
Article 280 of the Labor Code. The Court said in that case:

tradition rotated among the faculty members, and where fixed terms are a
necessity without which no reasonable rotation would be possible. ... [38]
...

The question immediately provoked ... is whether or not a voluntary agreement

on a fixed term or period would be valid where the employee has been
engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer. The definition seems non
sequitur. From the premise that the duties of an employee entail activities
which are usually necessary or desirable in the usual business or trade of the
employer the conclusion does not necessarily follow that the employer and
employee should be forbidden to stipulate any period of time for the
performance of those activities. There is nothing essentially contradictory
between a definite period of an employment contract and the nature of the
employees duties set down in that contract as being usually necessary or
desirable in the usual business or trade of the employer. The concept of the
employees duties as being usually necessary or desirable in the usual
business or trade of the employer is not synonymous with or identical to
employment with a fixed term. Logically, the decisive determinant in term
employment should not be the activities that the employee is called upon to
perform, but the day certain agreed upon by the parties for the commencement
and termination of their employment relationship, a day certain being
understood to be that which must necessarily come, although it may not be
known when. Seasonal employment, and employment for a particular
project are merely instances of employment in which a period, were not
expressly set down, is necessarily implied.[37]

Accordingly, and since the entire purpose behind the development of

legislation culminating in the present Article 280 of the Labor Code clearly
appears to have been, as already observed, to prevent circumvention of the
employees right to be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral agreements
conflicting with the concept of regular employment as defined therein should
be construed to refer to the substantive evil that the Code itself has singled
out: agreements entered into precisely to circumvent security of tenure. It
should have no application to instances where a fixed period of employment
was agreed upon knowingly and voluntarily by the parties, without any force,
duress or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent, or where it satisfactorily
appears that the employer and employee dealt with each other on more or
less equal terms with no moral dominance whatever being exercised by the
former over the latter. Unless, thus, limited in its purview, the law would be
made to apply to purposes other than those explicitly stated by its framers; it
thus becomes pointless and arbitrary, unjust in its effects and apt to lead to
absurd and unintended consequences.[39]
The Court made the same ruling in Coyoca v. National Labor Relations
Commission[40] and declared that a seafarer, not being a regular employee, is
not entitled to separation or termination pay.

...
Some familiar examples may be cited of employment contracts which may be
neither for seasonal work nor for specific projects, but to which a fixed term is
an essential and natural appurtenance: overseas employment contracts, for
one, to which, whatever the nature of the engagement, the concept of regular
employment with all that it implies does not appear ever to have been applied,
Article 280 of the Labor Code notwithstanding; also appointments to the
positions of dean, assistant dean, college secretary, principal, and other
administrative offices in educational institutions, which are by practice or

Furthermore, petitioners contract did not provide for separation benefits. In this
connection, it is important to note that neither does the POEA standard
employment contract for Filipino seamen provide for such benefits.
As a Filipino seaman, petitioner is governed by the Rules and Regulations
Governing Overseas Employment and the said Rules do not provide for
separation or termination pay. ...
...

37

Therefore, although petitioner may not be a regular employee of private

respondent, the latter would still have been liable for payment of the benefits
had the principal failed to pay the same. [41]
In the July 29, 2002 Resolution of this Court in Millares v. National Labor
Relations Commission,[42] it reiterated its ruling that seafarers are contractual
employees and, as such, are not covered by Article 280 of the Labor Code of
the Philippines:
From the foregoing cases, it is clear that seafarers are considered contractual
employees. They cannot be considered as regular employees under Article
280 of the Labor Code. Their employment is governed by the contracts they
sign every time they are rehired and their employment is terminated when the
contract expires. Their employment is contractually fixed for a certain period of
time. They fall under the exception of Article 280 whose employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of engagement of the employee or
where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season. We need not depart from the
rulings of the Court in the two aforementioned cases which indeed
constitute stare decisis with respect to the employment status of seafarers.

Petitioners make much of the fact that they have been continually re-hired or
their contracts renewed before the contracts expired (which has admittedly
been going on for twenty [20] years). By such circumstance they claim to have
acquired regular status with all the rights and benefits appurtenant to it.
Such contention is untenable. Undeniably, this circumstance of continuous rehiring was dictated by practical considerations that experienced crew
members are more preferred. Petitioners were only given priority or preference
because of their experience and qualifications but this does not detract the fact
that herein petitioners are contractual employees. They can not be considered
regular employees. We quote with favor the explanation of the NLRC in this
wise:
xxx The reference to permanent and probationary masters and employees in
these papers is a misnomer and does not alter the fact that the contracts for
enlistment between complainants-appellants and respondent-appellee Esso
International were for a definite periods of time, ranging from 8 to 12 months.
Although the use of the terms permanent and probationary is unfortunate, what
is really meant is eligible for-re-hire. This is the only logical conclusion possible
because the parties cannot and should not violate POEAs requirement that a
contract of enlistment shall be for a limited period only; not exceeding twelve
(12) months.

...
... The Standard Employment Contract governing the Employment of All
Filipino Seamen on Board Ocean-Going Vessels of the POEA, particularly in
Part I, Sec. C, specifically provides that the contract of seamen shall be for a
fixed period. And in no case should the contract of seamen be longer than 12
months. It reads:
Section C. Duration of Contract
The period of employment shall be for a fixed period but in no case to exceed
12 months and shall be stated in the Crew Contract. Any extension of the
Contract period shall be subject to the mutual consent of the parties.

From all the foregoing, we hereby state that petitioners are not considered
regular or permanent employees under Article 280 of the Labor
Code. Petitioners employment have automatically ceased upon the expiration
of their contracts of enlistment (COE). Since there was no dismissal to speak
of, it follows that petitioners are not entitled to reinstatement or payment of
separation pay or backwages, as provided by law. [43]
The Court ruled that the employment of seafarers for a fixed period is not
discriminatory against seafarers and in favor of foreign employers. As
explained by this Court in its July 29, 2002 Resolution in Millares:
Moreover, it is an accepted maritime industry practice that employment of
seafarers are for a fixed period only. Constrained by the nature of their
employment which is quite peculiar and unique in itself, it is for the mutual

38

interest of both the seafarer and the employer why the employment status
must be contractual only or for a certain period of time. Seafarers spend most
of their time at sea and understandably, they can not stay for a long and an
indefinite period of time at sea. Limited access to shore society during the
employment will have an adverse impact on the seafarer. The national, cultural
and lingual diversity among the crew during the COE is a reality that
necessitates the limitation of its period.[44]
[45]

In Pentagon International Shipping, Inc. v. William B. Adelantar, the Court

cited its rulings in Millares and Coyoca and reiterated that a seafarer is not a
regular employee entitled to backwages and separation pay:
Therefore, Adelantar, a seafarer, is not a regular employee as defined in Article
280 of the Labor Code. Hence, he is not entitled to full backwages and
separation pay in lieu of reinstatement as provided in Article 279 of the Labor
Code. As we held in Millares, Adelantar is a contractual employee whose rights
and obligations are governed primarily by [the] Rules and Regulations of the
POEA and, more importantly, by R.A. 8042, or the Migrant Workers and
Overseas Filipinos Act of 1995.
The latest ruling of the Court in Marcial Gu-Miro v. Rolando C. Adorable and
Bergesen D.Y. Manila[46] reaffirmed yet again its rulings that a seafarer is
employed only on a contractual basis:

Clearly, petitioner cannot be considered as a regular employee

notwithstanding that the work he performs is necessary and desirable in the
business of respondent company. As expounded in the abovementioned Millares Resolution, an exception is made in the situation of
seafarers. The exigencies of their work necessitates that they be employed on
a contractual basis.
Thus, even with the continued re-hiring by respondent company of petitioner to
serve as Radio Officer onboard Bergesens different vessels, this should be
interpreted not as a basis for regularization but rather a series of contract
renewals sanctioned
under
the
doctrine
set
down
by
the
second Millares case. If at all, petitioner was preferred because of practical
considerations namely, his experience and qualifications. However, this does
not alter the status of his employment from being contractual.
The petitioner failed to convince the Court why it should restate its decision
in Millares and reverse its July 29, 2002 Resolution in the same case.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The
assailed Decision dated August 28, 2002 of the Court of Appeals is hereby
AFFIRMED. No pronouncement as to costs.
SO ORDERED.

39