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People v Chua

Melissa Chua (appellant) was indicted for Illegal Recruitment (Large The five Informations[3] charging appellant and Josie with Estafa,
Scale) and was convicted thereof by the Regional Trial Court (RTC) of docketed as Criminal Case Nos. 04-222597-601, were similarly worded and
Manila. She was also indicted for five counts of Estafa but was convicted varied only with respect to the names of the five complainants and the
only for three. The Court of Appeals, by Decision [1] dated February 27, amount that each purportedly gave to the accused. Thus each of the
2008, affirmed appellants conviction. Information reads:

The Information[2] charging appellant, together with one Josie xxxx


Campos (Josie), with Illegal Recruitment (Large Scale), docketed as
Criminal Case No. 04-222596, reads: That on or about . . . in the City of Manila,
Philippines, the said accused, conspiring and confederating
The undersigned accuses JOSIE CAMPOS and together and mutually helping each other, did then and
MELISSA CHUA of violation of Article 38 (a) PD 1413, there willfully, unlawfully and feloniously defraud xxx in the
amending certain provisions of Book I, PD 442, otherwise following manner, to wit: the said accused by means of
known as the New Labor Code of the Philippines, in relation false manifestations which they made to the said . . . to the
to Art. 13 (b) and (c ) of said Code, as further amended by effect that they had the power and capacity to recruit the
PD Nos. 1693, 1920 and 2019 and as further amended by latter as factory worker to work in Taiwan and could
Sec. 6 (a), (1) and (m) of RA 8042 committed in a [sic] facilitate the processing of the pertinent papers if given the
large scale as follows: necessary amount to meet the requirements thereof, and
by means of other similar deceits, induced and succeeded
That sometime during the month of September, in inducing said xxx to give and deliver, as in fact he gave
2002, in the City of Manila, Philippines, the said accused, and delivered to the said accused the amount of . . . on the
conspiring and confederating together and mutually strength of said manifestations and representations, said
helping each other, representing themselves to have the accused well knowing that the same were false and
capacity to contract, enlist and transport Filipino workers fraudulent and were made solely to obtain, as in fact they
for employment abroad, did then and there willfully, did obtain the amount of . . . which amount once in their
unlawfully and knowingly for a fee, recruit and promise possession, with intent to defraud, they willfully, unlawfully
employment/job placement abroad to ERIK DE GUIA TAN, and feloniously misappropriated, misapplied and converted
MARILYN O. MACARANAS, NAPOLEON H. YU, JR., HARRY to their own personal use and benefit, to the damage of
JAMES P. KING and ROBERTO C. ANGELES for overseas said . . . in the aforesaid amount of . . ., Philippine Currency.
employment abroad without first having secured the
required license from the Department of Labor and xxxx
Employment as required by law, and charge or accept
directly from: Appellant pleaded not guilty on arraignment. Her co-accused Josie
remained at large. The cases were consolidated, hence, trial proceeded
ERIK DE GUIA TAN - P73,000.00 only with respect to appellant.
MARILYN D. MACARANAS - 83,000.00
NAPOLEON H. YU, JR. - 23,000.00 Of the five complainants, only three testified, namely, Marilyn D.
HARRY JAMES P. KING - 23,000.00 Macaranas (Marilyn), Erik de Guia Tan (Tan) and Harry James King
ROBERTO C. ANGELES - 23,000.00 (King). The substance of their respective testimonies follows:

For purposes of their deployment, which amounts are in Marilyns testimony:


excess of or greater than that specified in the schedule of
allowable fees as prescribed by the POEA, and without After she was introduced in June 2002 by Josie to appellant as
valid reasons and without the fault of said complainants, capacitated to deploy factory workers to Taiwan, she paid
failed to actually deploy them and failed to reimburse appellant P80,000 as placement fee andP3,750 as medical expenses fee, a
expenses incurred in connection with their documentation receipt[4] for the first amount of which was issued by appellant.
and processing for purposes of their deployment.
Appellant had told her that she could leave for Taiwan in the last
xxxx week of September 2002 but she did not, and despite appellants assurance
that she would leave in the first or second week of October, just the same WHEREFORE, the prosecution having established the guilt
she did not. of accused Melissa Chua beyond reasonable doubt,
judgment is hereby rendered convicting the accused as
She thus asked for the refund of the amount she paid but appellant principal of a large scale illegal recruitment and estafa
claimed that she was not in possession thereof but promised anyway to three (3) counts and she is sentenced to life imprisonment
raise the amount to pay her, but she never did. and to pay a fine of Five Hundred Thousand Pesos
(P500,000.00) for illegal recruitment.
She later learned in June 2003 that appellant was not a licensed
recruiter, prompting her to file the complaint against appellant and Josie. The accused is likewise convicted of estafa committed
against Harry James P. King and she is sentenced to suffer
Tans testimony: the indeterminate penalty of Four (4) years and Two (2)
months of prision correctional as minimum, to Six (6) years
After he was introduced by Josie to appellant at the Golden Gate, and One (1) day of prision mayor as maximum; in Criminal
Inc., (Golden Gate) an agency situated in Paragon Tower Hotel in Ermita, Case No. 04-22598; in Criminal Case No. 04-222600
Manila, he underwent medical examination upon appellants assurance that committed against Marilyn Macaranas, accused is sentence
he could work in Taiwan as a factory worker with a guaranteed monthly [sic] to suffer the indeterminate penalty of Four (4) years
salary of 15,800 in Taiwan currency. and Two (2) months of prision correctional as minimum,
to Twelve (12) years and one (1) day of reclusion temporal
He thus paid appellant, on September 6, as maximum; and in Criminal Case No. 04-222601
2002, P70,000[5] representing placement fees for which she issued a committed against Erik de Guia Tan, she is likewise
receipt. Appellant welched on her promise to deploy him to Taiwan, sentence [sic] to suffer an indeterminate penalty of Four
however, hence, he demanded the refund of his money but appellant failed (4) years and Two (2) months of prision correctional as
to. He later learned that Golden Gate was not licensed to deploy workers to minimum, to Eleven (11) years and One (1) day of prision
Taiwan, hence, he filed the complaint against appellant and Josie. mayor as maximum.

Kings testimony: Accused Melissa Chua is also ordered to return the


amounts of P20,000.00 to Harry James P. King, P83,750.00
His friend and a fellow complainant Napoleon Yu introduced him to to Marilyn D. Macaranas, and P70,000.00 to Erik de Guia
Josie who in turn introduced appellant as one who could deploy him to Tan.
Taiwan.
On September 24, 2002,[6] he paid appellant P20,000 representing As regards Criminal Cases Nos. 04-222597 and 04-
partial payment for placement fees amounting to P80,000, but when he 222599, both are dismissed for lack of interest of
later inquired when he would be deployed, Golden Gates office was already complainants Roberto Angeles and Napoleon Yu, Jr.
closed. He later learned that Golden Gates license had already expired,
prompting him to file the complaint. In the service of her sentence, the accused is credited with
the full period of preventive imprisonment if she agrees in
Appellant denied the charges. Claiming having worked as a temporary writing to abide by the disciplinary rules imposed,
cashier from January to October, 2002 at the office of Golden Gate, owned otherwise only 4/5 shall be credited.
by one Marilyn Calueng,[7] she maintained that Golden Gate was a licensed
recruitment agency and that Josie, who is her godmother, was an agent. SO ORDERED.

Admitting having received P80,000 each from Marilyn and Tan,


receipt of which she issued but denying receiving any amount from King, The Court of Appeals, as stated early on, affirmed the trial courts decision
she claimed that she turned over the money to the documentation officer, by the challenged Decision of February 27, 2008, it holding that appellants
one Arlene Vega, who in turn remitted the money to Marilyn Calueng defense that, as temporary cashier of Golden Gate, she received the
whose present whereabouts she did not know. money which was ultimately remitted to Marilyn Calueng is immaterial, she
having failed to prove the existence of an employment relationship
By Decision of April 5, 2006, Branch 36 of the Manila RTC convicted between her and Marilyn, as well as the legitimacy of the operations of
appellant of Illegal Recruitment (Large Scale) and three counts of Golden Gate and the extent of her involvement therein.
Estafa, disposing as follows:
Citing People v. Sagayaga,[8] the appellate court ruled that an Illegal recruitment is deemed committed by a
employee of a company engaged in illegal recruitment may be held liable syndicate if carried out by a group of three (3) or more
as principal together with his employer if it is shown that he, as in the case persons conspiring and/or confederating with one another
of appellant, actively and consciously participated therein. in carrying out any unlawful or illegal transaction,
enterprise or scheme defined under the first paragraph
Respecting the cases for Estafa, the appellate court, noting that a person hereof. Illegal recruitment is deemed committed in large
convicted of illegal recruitment may, in addition, be convicted of Estafa as scale if committed against three (3) or more persons
penalized under Article 315, paragraph 2(a) of the Revised Penal Code, individually or as a group. (emphasis supplied)
held that the elements thereof were sufficiently established, viz: that
appellant deceived the complainants by assuring them of employment in
Taiwan provided they pay the required placement fee; that relying on such
representation, the complainants paid appellant the amount From the foregoing provisions, it is clear that any recruitment activities to
demanded; that her representation turned out to be false because she be undertaken by non-licensee or non-holder of contracts, or as in the
failed to deploy them as promised; and that the complainants suffered present case, an agency with an expired license, shall be deemed illegal
damages when they failed to be reimbursed the amounts they paid. and punishable under Article 39 of the Labor Code of the Philippines. And
illegal recruitment is deemed committed in large scale if committed
Hence, the present appeal, appellant reiterating the same against three or more persons individually or as a group.
arguments she raised in the appellate court.
Thus for illegal recruitment in large scale to prosper, the prosecution has to
The appeal is bereft of merit. prove three essential elements, to wit: (1) the accused undertook
a recruitment activity under Article 13(b) or any prohibited practice under
The term recruitment and placement is defined under Article 13(b) Article 34 of the Labor Code; (2) the accused did not have the license or
of the Labor Code of the Philippines as follows: the authority to lawfully engage in the recruitment and placement of
workers; and (3) the accused committed such illegal activity against three
(b) Recruitment and placement refers to any act of or more persons individually or as a group.[9]
canvassing, enlisting, contracting, transporting, utilizing,
hiring, or procuring workers, and includes referrals, In the present case, Golden Gate, of which appellant admitted
contract services, promising or advertising for being a cashier from January to October 2002, was initially authorized to
employment, locally or abroad, whether for profit or recruit workers for deployment abroad. Per the certification from the
not. Provided, That any person or entity which, in any POEA, Golden Gates license only expired on February 23, 2002 and it was
manner, offers or promises for a fee employment to two or delisted from the roster of licensed agencies onApril 2, 2002.
more persons shall be deemed engaged in recruitment and
placement. (emphasis supplied) Appellant was positively pointed to as one of the persons who
enticed the complainants to part with their money upon the fraudulent
On the other hand, Article 38, paragraph (a) of the Labor Code, as representation that they would be able to secure for them employment
amended, under which appellant was charged, provides: abroad. In the absence of any evidence that the complainants were
motivated by improper motives, the trial courts assessment of their
credibility shall not be interfered with by the Court. [10]
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 Even if appellant were a mere temporary cashier of Golden Gate,
Ministry of Labor and Employment or any law enforcement that did not make her any less an employee to be held liable for illegal
officer may initiate complaints under this Article. recruitment as principal by direct participation, together with the employer,
(b) Illegal recruitment when committed by a as it was shown that she actively and consciously participated in the
syndicate or in large scale shall be considered an offense recruitment process. [11]
involving economic sabotage and shall be penalized in
accordance with Article 39 hereof. Assuming arguendo that appellant was unaware of the illegal
nature of the recruitment business of Golden Gate, that does not free her
of liability either. Illegal Recruitment in Large Scale penalized under that only Criminal Case No. 02-206293, which was filed against accused-
Republic Act No. 8042, or The Migrant Workers and Overseas Filipinos Act appellant Gallo, Pacardo and Manta for syndicated illegal recruitment, and
of 1995, is a special law, a violation of which ismalum Criminal Case Nos. 02-206297, 02-206300 and 02-206308, which were
prohibitum, not malum in se. Intent is thus immaterial. And that explains filed against accused-appellant Gallo, Pacardo and Manta for estafa,
why appellant was, aside from Estafa, convicted of such offense. proceeded to trial due to the fact that the rest of the accused remained at
large. Further, the other cases, Criminal Case Nos. 02-206294 to 02-
[I]llegal recruitment is malum 206296, 02-206298 to 02-206299, 02-206301 to 02-206307 and 02-
prohibitum, while estafa is malum in se. In the first, the 206309 to 02-206311 were likewise provisionally dismissed upon motion of
criminal intent of the accused is not necessary for Pacardo, Manta and accused-appellant for failure of the respective
conviction. In the second, such an intent is complainants in said cases to appear and testify during trial.
imperative. Estafa under Article 315, paragraph 2, of the
Revised Penal Code, is committed by any person who
defrauds another by using fictitious name, or falsely It should also be noted that after trial, Pacardo and Manta were
pretends to possess power, influence, qualifications, acquitted in Criminal Case Nos. 02-206293, 02-206297, 02-206300 and 02-
property, credit, agency, business or imaginary 206308 for insufficiency of evidence. Likewise, accused-appellant Gallo was
transactions, or by means of similar deceits executed prior similarly acquitted in Criminal Case Nos. 02-206300, the case filed by
to or simultaneously with the commission of fraud. Guantero, and 02-206308, the case filed by Sare. However, accused-
[12]
(emphasis supplied) appellant was found guilty beyond reasonable doubt in Criminal Case Nos.
02-206293 and 02-206297, both filed by Dela Caza, for syndicated illegal
recruitment and estafa, respectively.
WHEREFORE, the appeal is hereby DENIED.

SO ORDERED.
Thus, the present appeal concerns solely accused-appellants
conviction for syndicated illegal recruitment in Criminal Case No. 02-
206293 and for estafa in Criminal Case No. 02-206297.
People v Gallo

The Case
In Criminal Case No. 02-206293, the information charges the
accused-appellant, together with the others, as follows:
This is an appeal from the Decision[1] dated December 24, 2008 of
the Court of Appeals (CA) in CA-G.R. CR-H.C. No. 02764 entitled People of
the Philippines v. Rodolfo Gallo y Gadot (accused-appellant), Fides Pacardo The undersigned accuses MARDEOLYN MARTIR,
y Jungco and Pilar Manta y Dungo (accused), which affirmed the ISMAEL GALANZA, NELMAR MARTIR, MARCELINO MARTIR,
Decision[2] dated March 15, 2007 of the Regional Trial Court (RTC), Branch NORMAN MARTIR, NELSON MARTIR, MA. CECILIA M. RAMOS,
30 in Manila which convicted the accused-appellant Rodolfo Gallo y Gadot LULU MENDANES, FIDES PACARDO y JUNGCO, RODOLFO
(accused-appellant) of syndicated illegal recruitment in Criminal Case No. GALLO y GADOT, PILAR MANTA y DUNGO, ELEONOR
02-206293 and estafa in Criminal Case No. 02-206297. PANUNCIO and YEO SIN UNG of a violation of Section 6(a),
(l) and (m) of Republic Act 8042, otherwise known as the
Migrant Workers and Overseas Filipino Workers Act of 1995,
committed by a syndicate and in large scale, as follows:
The Facts
That in or about and during the period comprised
between November 2000 and December, 2001, inclusive,
Originally, accused-appellant Gallo and accused Fides Pacardo in the City of Manila, Philippines, the said accused
(Pacardo) and Pilar Manta (Manta), together with Mardeolyn Martir conspiring and confederating together and helping with
(Mardeolyn) and nine (9) others, were charged with syndicated illegal one another, representing themselves to have the capacity
recruitment and eighteen (18) counts of estafa committed against eighteen to contract, enlist and transport Filipino workers for
complainants, including Edgardo V. Dela Caza (Dela Caza), Sandy Guantero employment abroad, did then and there willfully and
(Guantero) and Danilo Sare (Sare). The cases were respectively docketed unlawfully, for a fee, recruit and promise employment/job
as Criminal Case Nos. 02-2062936 to 02-206311. However, records reveal placement abroad to FERDINAND ASISTIN, ENTICE
BRENDO, REYMOND G. CENA, EDGARDO V. DELA CAZA, knowing that the same were false and untrue and were
RAYMUND EDAYA, SANDY O. GUANTENO, RENATO V. made [solely] for the purpose of obtaining, as in fact they
HUFALAR, ELENA JUBICO, LUPO A. MANALO, ALMA V. did obtain the said amount of P45,000.00 which amount
MENOR, ROGELIO S. MORON, FEDILA G. NAIPA, OSCAR once in their possession, with intent to defraud said
RAMIREZ, MARISOL L. SABALDAN, DANILO SARE, MARY [EDGARDO] V. DELA CAZA, they willfully, unlawfully and
BETH SARDON, JOHNNY SOLATORIO and JOEL TINIO in feloniously misappropriated, misapplied and converted the
Korea as factory workers and charge or accept directly or said amount of P45,000.00 to their own personal use and
indirectly from said FERDINAND ASISTIN the amount of benefit, to the damage and prejudice of the said EDGARDO
P45,000.00; ENTICE BRENDO P35,000.00; REYMOND G. V. DELA CAZA in the aforesaid amount of P45,000.00,
CENA P30,000.00; EDGARDO V. DELA CAZA P45,000.00; Philippine currency.
RAYMUND EDAYA P100,000.00; SANDY O. GUANTENO
CONTRARY TO LAW.[4]
P35,000.00; RENATO V. HUFALAR P70,000.00; ELENA
JUBICO P30,000.00; LUPO A. MANALO P75,000.00; ALMA V.
MENOR P45,000.00; ROGELIO S. MORON P70,000.00;
FEDILA G. NAIPA P45,000.00; OSCAR RAMIREZ P45,000.00; When arraigned on January 19, 2004, accused-appellant Gallo
MARISOL L. SABALDAN P75,000.00; DANILO SARE entered a plea of not guilty to all charges.
P100,000.00; MARY BETH SARDON P25,000.00; JOHNNY
SOLATORIO P35,000.00; and JOEL TINIO P120,000.00 as
placement fees in connection with their overseas On March 3, 2004, the pre-trial was terminated and trial ensued,
employment, which amounts are in excess of or greater thereafter.
than those specified in the schedule of allowable fees
prescribed by the POEA Board Resolution No. 02, Series
1998, and without valid reasons and without the fault of During the trial, the prosecution presented as their witnesses,
the said complainants failed to actually deploy them and Armando Albines Roa, the Philippine Overseas Employment Administration
failed to reimburse the expenses incurred by the said (POEA) representative and private complainants Dela Caza, Guanteno and
complainants in connection with their documentation and Sare. On the other hand, the defense presented as its witnesses, accused-
processing for purposes of their deployment. [3] (Emphasis appellant Gallo, Pacardo and Manta.
supplied)

Version of the Prosecution


In Criminal Case No. 02-206297, the information reads:

On May 22, 2001, Dela Caza was introduced by Eleanor Panuncio to


That on or about May 28, 2001, in the City of accused-appellant Gallo, Pacardo, Manta, Mardeolyn, Lulu Mendanes, Yeo
Manila, Philippines, the said accused conspiring and Sin Ung and another Korean national at the office of MPM International
confederating together and helping with [sic] one another, Recruitment and Promotion Agency (MPM Agency) located in Malate,
did then and there willfully, unlawfully and feloniously Manila.
defraud EDGARDO V. DELA CAZA, in the following manner,
to wit: the said accused by means of false manifestations
and fraudulent representations which they made to the
latter, prior to and even simultaneous with the commission Dela Caza was told that Mardeolyn was the President of MPM
of the fraud, to the effect that they had the power and Agency, while Nelmar Martir was one of the incorporators. Also, that
capacity to recruit and employ said EDGARDO V. DELA Marcelino Martir, Norman Martir, Nelson Martir and Ma. Cecilia Ramos were
CAZA in Korea as factory worker and could facilitate the its board members. Lulu Mendanes acted as the cashier and accountant,
processing of the pertinent papers if given the necessary while Pacardo acted as the agencys employee who was in charge of the
amount to meet the requirements thereof; induced and records of the applicants. Manta, on the other hand, was also an employee
succeeded in inducing said EDGARDO V. DELA CAZA to give who was tasked to deliver documents to the Korean embassy.
and deliver, as in fact, he gave and delivered to said
accused the amount of P45,000.00 on the strength of said
manifestations and representations, said accused well
Accused-appellant Gallo then introduced himself as a relative of The testimony of prosecution witness Armando Albines Roa, a
Mardeolyn and informed Dela Caza that the agency was able to send many POEA employee, was dispensed with after the prosecution and defense
workers abroad. Together with Pacardo and Manta, he also told Dela Caza stipulated and admitted to the existence of the following documents:
about the placement fee of One Hundred Fifty Thousand Pesos (PhP
150,000) with a down payment of Forty-Five Thousand Pesos (PhP 45,000)
and the balance to be paid through salary deduction. 1. Certification issued by Felicitas Q. Bay, Director II,
Licensing Branch of the POEA to the effect that New
Filipino Manpower Development & Services, Inc., with
Dela Caza, together with the other applicants, were briefed by office address at1256 Batangas St., Brgy. San
Mardeolyn about the processing of their application papers for job Isidro, Makati City, was a licensed landbased agency
placement in Korea as a factory worker and their possible salary. Accused whose license expired on December 10, 2001 and was
Yeo Sin Ung also gave a briefing about the business and what to expect delisted from the roster of licensed agencies on
from the company and the salary. December 14, 2001. It further certified that Fides J.
Pacardo was the agencys Recruitment Officer;
2. Certification issued by Felicitas Q. Bay of the POEA to
With accused-appellants assurance that many workers have been the effect that MPM International Recruitment and
sent abroad, as well as the presence of the two (2) Korean nationals and Promotion is not licensed by the POEA to recruit
upon being shown the visas procured for the deployed workers, Dela Caza workers for overseas employment;
was convinced to part with his money. Thus, on May 29, 2001, he paid
Forty-Five Thousand Pesos (PhP 45,000) to MPM Agency through accused- 3. Certified copy of POEA Memorandum Circular No. 14,
appellant Gallo who, while in the presence of Pacardo, Manta and Series of 1999 regarding placement fee ceiling for
Mardeolyn, issued and signed Official Receipt No. 401. landbased workers.
4. Certified copy of POEA Memorandum Circular No. 09,
Series of 1998 on the placement fee ceiling
Two (2) weeks after paying MPM Agency, Dela Caza went back to for Taiwan and Korean markets, and
the agencys office in Malate, Manila only to discover that the office had
moved to a new location at Batangas Street, Brgy. San Isidro, Makati. He 5. Certified copy of POEA Governing Board Resolution
proceeded to the new address and found out that the agency was renamed No. 02, series of 1998.
to New Filipino Manpower Development & Services, Inc. (New Filipino). At
the new office, he talked to Pacardo, Manta, Mardeolyn, Lulu Mendanes and
accused-appellant Gallo. He was informed that the transfer was done for Version of the Defense
easy accessibility to clients and for the purpose of changing the name of
the agency.
For his defense, accused-appellant denied having any part in the
recruitment of Dela Caza. In fact, he testified that he also applied with MPM
Dela Caza decided to withdraw his application and recover the Agency for deployment to Korea as a factory worker. According to him, he
amount he paid but Mardeolyn, Pacardo, Manta and Lulu Mendanes talked gave his application directly with Mardeolyn because she was his town
him out from pursuing his decision. On the other hand, accused-appellant mate and he was allowed to pay only Ten Thousand Pesos (PhP 10,000) as
Gallo even denied any knowledge about the money. processing fee. Further, in order to facilitate the processing of his papers,
he agreed to perform some tasks for the agency, such as taking
photographs of the visa and passport of applicants, running errands and
After two (2) more months of waiting in vain to be deployed, Dela performing such other tasks assigned to him, without salary except for
Caza and the other applicants decided to take action. The first attempt was some allowance. He said that he only saw Dela Caza one or twice at the
unsuccessful because the agency again moved to another place. However, agencys office when he applied for work abroad. Lastly, that he was also
with the help of the Office of Ambassador Seeres and the Western Police promised deployment abroad but it never materialized.
District, they were able to locate the new address at 500 Prudential
Building, Carriedo, Manila. The agency explained that it had to move in
order to separate those who are applying as entertainers from those Ruling of the Trial Court
applying as factory workers. Accused-appellant Gallo, together with
Pacardo and Manta, were then arrested.
On March 15, 2007, the RTC rendered its Decision convicting the Ruling of the Appellate Court
accused of syndicated illegal recruitment and estafa. The dispositive
portion reads:
On appeal, the CA, in its Decision dated December 24, 2008, disposed of
the case as follows:
WHEREFORE, judgment is hereby rendered as follows:

I. Accused FIDES PACARDO y JUNGO WHEREFORE, the appealed Decision of the Regional Trial
and PILAR MANTA y DUNGO are hereby Court of Manila, Branch 30, in Criminal Cases Nos. 02-
ACQUITTED of the crimes charged in 206293 and 02-206297, dated March 15, 2007, is
Criminal Cases Nos. 02-206293, 02- AFFIRMED with the MODIFICATION that in Criminal Case No.
206297, 02-206300 and 02-206308; 02-206297, for estafa, appellant is sentenced to four (4)
years of prision correccional to ten (10) years of prision
II. Accused RODOLFO GALLO y GADOT is mayor.
found guilty beyond reasonable doubt in
Criminal Case No. 02-206293 of the crime SO ORDERED.[6]
of Illegal Recruitment committed by a
syndicate and is hereby sentenced to suffer
the penalty of life imprisonment and to pay The CA held the totality of the prosecutions evidence showed that the
a fine of ONE MILLION (Php1,000,000.00) accused-appellant, together with others, engaged in the recruitment of
PESOS. He is also ordered to indemnify Dela Caza. His actions and representations to Dela Caza can hardly be
EDGARDO DELA CAZA of the sum of FORTY- construed as the actions of a mere errand boy.
FIVE THOUSAND (Php45,000.00) PESOS
with legal interest from the filing of the
information on September 18, 2002 until
fully paid. As determined by the appellate court, the offense is considered economic
sabotage having been committed by more than three (3) persons, namely,
accused-appellant Gallo, Mardeolyn, Eleonor Panuncio and Yeo Sin Ung.
III. Accused RODOLFO GALLO y GADOT in
More importantly, a personal found guilty of illegal recruitment may also be
Criminal Case No. 02-206297 is likewise
convicted of estafa.[7] The same evidence proving accused-appellants
found guilty and is hereby sentenced to
commission of the crime of illegal recruitment in large scale also
suffer the indeterminate penalty of FOUR
establishes his liability for estafa under paragragh 2(a) of Article 315 of the
(4) years of prision correccional as
Revised Penal Code (RPC).
minimum to NINE (9) years of prision
mayor as maximum.

IV. Accused RODOLFO GALLO y GADOT is On January 15, 2009, the accused-appellant filed a timely appeal before
hereby ACQUITTED of the crime charged in this Court.
Criminal Cases Nos. 02-206300 and 02-
206308.
The Issues
Let alias warrants for the arrest of the other
accused be issued anew in all the criminal cases. Pending
their arrest, the cases are sent to the archives. Accused-appellant interposes in the present appeal the following
assignment of errors:
The immediate release of accused Fides Pacardo
and Pilar Manta is hereby ordered unless detained for other
lawful cause or charge. I
The court a quo gravely erred in finding the accused-
SO ORDERED.[5] appellant guilty of illegal recruitment committed by a
syndicate despite the failure of the prosecution to prove utilizing, hiring or procuring workers, and includes referrals, contract
the same beyond reasonable doubt. services, promising or advertising for employment, locally or abroad,
whether for profit or not.
II
The court a quo gravely erred in finding the accused-
appellant guilty of estafa despite the failure of the After a thorough review of the records, we believe that the
prosecution to prove the same beyond reasonable doubt. prosecution was able to establish the elements of the offense sufficiently.
The evidence readily reveals that MPM Agency was never licensed by the
POEA to recruit workers for overseas employment.
Our Ruling

Even with a license, however, illegal recruitment could still be


The appeal has no merit. committed under Section 6 of Republic Act No. 8042 (R.A. 8042), otherwise
known as the Migrants and Overseas Filipinos Act of 1995, viz:

Evidence supports
conviction of the Sec. 6. Definition. For purposes of this Act, illegal
crime of Syndicated recruitment shall mean any act of canvassing, enlisting,
Illegal Recruitment contracting, transporting, utilizing, hiring, or procuring
workers and includes referring, contract services,
promising or advertising for employment abroad, whether
Accused-appellant avers that he cannot be held criminally liable for for profit or not, when undertaken by a non-licensee or
illegal recruitment because he was neither an officer nor an employee of non-holder of authority contemplated under Article 13(f) of
the recruitment agency. He alleges that the trial court erred in adopting the Presidential Decree No. 442, as amended, otherwise known
asseveration of the private complainant that he was indeed an employee as the Labor Code of the Philippines: Provided, That any
because such was not duly supported by competent evidence. According to such non-licensee or non-holder who, in any manner, offers
him, even assuming that he was an employee, such cannot warrant his or promises for a fee employment abroad to two or more
outright conviction sans evidence that he acted in conspiracy with the persons shall be deemed so engaged. It shall, likewise,
officers of the agency. include the following act, whether committed by any
person, whether a non-licensee, non-holder, licensee or
holder of authority:
We disagree. (a) To charge or accept directly or indirectly any
amount greater than that specified in the
schedule of allowable fees prescribed by the
To commit syndicated illegal recruitment, three elements must be Secretary of Labor and Employment, or to
established: (1) the offender undertakes either any activity within the make a worker pay any amount greater than
meaning of recruitment and placement defined under Article 13(b), or any that actually received by him as a loan or
of the prohibited practices enumerated under Art. 34 of the Labor Code; (2) advance;
he has no valid license or authority required by law to enable one to
xxxx
lawfully engage in recruitment and placement of workers; [8] and (3) the
illegal recruitment is committed by a group of three (3) or more persons (l) Failure to actually deploy without valid reason as
conspiring or confederating with one another. [9] When illegal recruitment is determined by the Department of Labor and
committed by a syndicate or in large scale, i.e., if it is committed against Employment; and
three (3) or more persons individually or as a group, it is considered an
offense involving economic sabotage.[10] (m) Failure to reimburse expenses incurred by the
worker in connection with his documentation
and processing for purposes of deployment and
processing for purposes of deployment, in
Under Art. 13(b) of the Labor Code, recruitment and placement cases where the deployment does not actually
refers to any act of canvassing, enlisting, contracting, transporting, take place without the workers fault. Illegal
recruitment when committed by a syndicate or Q: What was the conversation that transpired
in large scale shall be considered an offense among you before you demanded the
involving economic sabotage. return of your money and documents?
Illegal recruitment is deemed committed by a A: When I tried to withdraw my application as well
syndicate if carried out by a group of three (3) or more as my money, Mr. Gallo told me I know
persons conspiring or confederating with one another. It is nothing about your money while Pilar
deemed committed in large scale if committed against Manta and Fides Pacardo told me, why
three (3) or more persons individually or as a group. should I withdraw my application and my
money when I was about to be [deployed]
The persons criminally liable for the above offenses or I was about to leave.
are the principals, accomplices and accessories. In case of
juridical persons, the officers having control, management xxxx
or direction of their business shall be liable.
Q: And what transpired at that office after this
Panuncio introduced you to those persons
whom you just mentioned?
In the instant case, accused-appellant committed the acts
enumerated in Sec. 6 of R.A. 8042. Testimonial evidence presented by the A: The three of them including Rodolfo Gallo told
prosecution clearly shows that, in consideration of a promise of foreign me that the placement fee in that agency
employment, accused-appellant received the amount of Php 45,000.00 is Php 150,000.00 and then I should
from Dela Caza. When accused-appellant made misrepresentations deposit the amount of Php 45,000.00. After
concerning the agencys purported power and authority to recruit for I have deposited said amount, I would just
overseas employment, and in the process, collected money in the guise of wait for few days
placement fees, the former clearly committed acts constitutive of illegal xxxx
recruitment.[11] Such acts were accurately described in the testimony of
prosecution witness, Dela Caza, to wit: Q: They were the one (sic) who told you that you
have to pay Php 45,000.00 for deposit
only?
PROS. MAGABLIN A: Yes, maam, I was told by them to deposit Php
Q: How about this Rodolfo Gallo? 45,000.00 and then I would pay the
remaining balance of Php105,000.00,
A: He was the one who received my money. payment of it would be through salary
deduction.
Q: Aside from receiving your money, was there any
other representations or acts made by Q: That is for what Mr. Witness again?
Rodolfo Gallo?
A: For placement fee.
A: He introduced himself to me as relative of
Mardeolyn Martir and he even intimated to Q: Now did you believe to (sic) them?
me that their agency has sent so many A: Yes, maam.
workers abroad.
Q: Why, why did you believe?
xxxx
A: Because of the presence of the two Korean
PROS. MAGABLIN nationals and they keep on telling me that
Q: Mr. Witness, as you claimed you tried to they have sent abroad several workers and
withdraw your application at the agency. they even showed visas of the records that
Was there any instance that you were able they have already deployed abroad.
to talk to Fides Pacardo, Rodolfo Gallo and Q: Aside from that, was there any other
Pilar Manta? representations which have been made
A: Yes, maam. upon you or make you believe that they
can deploy you?
A: At first I was adamant but they told me If you do
not want to believe us, then we could do
nothing. But once they showed me the
[visas] of the people whom they have PROS. MAGABLIN
deployed abroad, that was the time I
believe them. Q: And after that, what did this Gallo do after he
received your money?
Q: So after believing on the representations, what
did you do next Mr. Witness? A: They told me maam just to call up and make a
follow up with our agency.
A: That was the time that I decided to give the
money. xxxx

xxxx Q: Now Mr. Witness, after you gave your money to


the accused, what happened with the
PROS. MAGABLIN application, with the promise of
employment that he promised?
Q: Do you have proof that you gave the money?
A: Two (2) weeks after giving them the money, they
A: Yes, maam.
moved to a new office in Makati, Brgy. San
Q: Where is your proof that you gave the money? Isidro.
A: I have it here. xxxx
PROS. MAGABLIN: Q: And were they able to deploy you as promised
by them?
Witness is producing to this court a Receipt dated
May 28, 2001 in the amount of Php45,000.00 which A: No, maam, they were not able to send us
for purposes of record Your Honor, may I request abroad.[12]
that the same be marked in the evidence as our
Exhibit F.
Essentially, Dela Caza appeared very firm and consistent in
xxxx
positively identifying accused-appellant as one of those who induced him
PROS. MAGABLIN and the other applicants to part with their money. His testimony showed
that accused-appellant made false misrepresentations and promises in
Q: There appears a signature appearing at the left assuring them that after they paid the placement fee, jobs inKorea as
bottom portion of this receipt. Do you know factory workers were waiting for them and that they would be deployed
whose signature is this? soon. In fact, Dela Caza personally talked to accused-appellant and gave
A: Yes, maam, signature of Rodolfo Gallo. him the money and saw him sign and issue an official receipt as proof of
his payment. Without a doubt, accused-appellants actions constituted
PROS. MAGABLIN illegal recruitment.
Q: Why do you say that that is his signature?
A: Rodolfo Gallos signature Your Honor because he Additionally, accused-appellant cannot argue that the trial court
was the one who received the money and erred in finding that he was indeed an employee of the recruitment agency.
he was the one who filled up this O.R. and On the contrary, his active participation in the illegal recruitment is
while he was doing it, he was flanked by unmistakable. The fact that he was the one who issued and signed the
Fides Pacardo, Pilar Manta and Mardeolyn official receipt belies his profession of innocence.
Martir.
xxxx
This Court likewise finds the existence of a conspiracy between the
Q: So it was Gallo who received your money?
accused-appellant and the other persons in the agency who are currently
A: Yes, maam. at large, resulting in the commission of the crime of syndicated illegal
recruitment.
In this case, it cannot be denied that the accused-appellent The prosecution likewise established that accused-appellant is
together with Mardeolyn and the rest of the officers and employees of MPM guilty of the crime of estafa as defined under Article 315 paragraph 2(a) of
Agency participated in a network of deception. Verily, the active the Revised Penal Code, viz:
involvement of each in the recruitment scam was directed at one single
purpose to divest complainants with their money on the pretext of
guaranteed employment abroad. The prosecution evidence shows that Art. 315. Swindling (estafa). Any person who shall
complainants were briefed by Mardeolyn about the processing of their defraud another by any means mentioned hereinbelow
papers for a possible job opportunity in Korea, as well as their possible
salary. Likewise, Yeo Sin Ung, a Korean national, gave a briefing about the xxxx
business and what to expect from the company. Then, here comes 2. By means of any of the following false pretenses
accused-appellant who introduced himself as Mardeolyns relative and or fraudulent acts executed prior to or simultaneously with
specifically told Dela Caza of the fact that the agency was able to send the commission of the fraud:
many workers abroad. Dela Caza was even showed several workers visas
who were already allegedly deployed abroad. Later on, accused-appellant (a) By using fictitious name, or falsely pretending
signed and issued an official receipt acknowledging the down payment of to possess power, influence, qualifications,
Dela Caza. Without a doubt, the nature and extent of the actions of property, credit, agency, business or imaginary
accused-appellant, as well as with the other persons in MPM Agency clearly transactions; or by means of other similar
show unity of action towards a common undertaking. Hence, conspiracy is deceits.
evidently present.

The elements of estafa in general are: (1) that the accused


In People v. Gamboa,[13] this Court discussed the nature of defrauded another (a) by abuse of confidence, or (b) by means of deceit;
conspiracy in the context of illegal recruitment, viz: and (2) that damage or prejudice capable of pecuniary estimation is
caused to the offended party or third person. [15] Deceit is the false
representation of a matter of fact, whether by words or conduct, by false or
Conspiracy to defraud aspiring overseas contract misleading allegations, or by concealment of that which should have been
workers was evident from the acts of the malefactors disclosed; and which deceives or is intended to deceive another so that he
whose conduct before, during and after the commission of shall act upon it, to his legal injury.
the crime clearly indicated that they were one in purpose
and united in its execution. Direct proof of previous
agreement to commit a crime is not necessary as it may be All these elements are present in the instant case: the accused-
deduced from the mode and manner in which the offense appellant, together with the other accused at large, deceived the
was perpetrated or inferred from the acts of the accused complainants into believing that the agency had the power and capability
pointing to a joint purpose and design, concerted action to send them abroad for employment; that there were available jobs for
and community of interest. As such, all the accused, them in Korea as factory workers; that by reason or on the strength of such
including accused-appellant, are equally guilty of the crime assurance, the complainants parted with their money in payment of the
of illegal recruitment since in a conspiracy the act of one is placement fees; that after receiving the money, accused-appellant and his
the act of all. co-accused went into hiding by changing their office locations without
informing complainants; and that complainants were never deployed
abroad. As all these representations of the accused-appellant proved false,
paragraph 2(a), Article 315 of the Revised Penal Code is thus applicable.
To reiterate, in establishing conspiracy, it is not essential that there
be actual proof that all the conspirators took a direct part in every act. It is
sufficient that they acted in concert pursuant to the same objective. [14] Defense of Denial Cannot Prevail
over Positive Identification

Estafa
Indubitably, accused-appellants denial of the crimes charged
crumbles in the face of the positive identification made by Dela Caza and
his co-complainants as one of the perpetrators of the crimes charged. As
enunciated by this Court in People v. Abolidor,[16] [p]ositive identification Shipping Limited. The contract of employment entered into
where categorical and consistent and not attended by any showing of ill by Yap and Capt. Francisco B. Adviento, the General
motive on the part of the eyewitnesses on the matter prevails over alibi Manager of Intermare, was for a duration of 12 months. On
and denial. 23 August 2001, Yap boarded M/T SEASCOUT and
commenced his job as electrician. However, on or about 08
November 2001, the vessel was sold. The Philippine
The defense has miserably failed to show any evidence of ill motive Overseas Employment Administration (POEA) was informed
on the part of the prosecution witnesses as to falsely testify against him. about the sale on 06 December 2001 in a letter signed by
Capt. Adviento. Yap, along with the other crewmembers,
was informed by the Master of their vessel that the same
was sold and will be scrapped. They were also informed
Therefore, between the categorical statements of the prosecution about the Advisory sent by Capt. Constatinou, which
witnesses, on the one hand, and bare denials of the accused, on the other states, among others:
hand, the former must prevail.[17]
PLEASE ASK YR OFFICERS AND RATINGS IF THEY WISH TO
BE TRANSFERRED TO OTHER VESSELS AFTER VESSEL S
Moreover, this Court accords the trial courts findings with the DELIVERY (GREEK VIA ATHENS-PHILIPINOS VIA MANILA
probative weight it deserves in the absence of any compelling reason to FOR CREW NOT WISH TRANSFER TO DECLARE THEIR
discredit the same. It is a fundamental judicial dictum that the findings of PROSPECTED TIME FOR REEMBARKATION IN ORDER TO
fact of the trial court are not disturbed on appeal except when it SCHEDULE THEM ACCLY
overlooked, misunderstood or misapplied some facts or circumstances of
weight and substance that would have materially affected the outcome of Yap received his seniority bonus, vacation bonus, extra
the case. We find that the trial court did not err in convicting the accused- bonus along with the scrapping bonus. However, with
appellant. respect to the payment of his wage, he refused to accept
the payment of one-month basic wage. He insisted that he
was entitled to the payment of the unexpired portion of his
WHEREFORE, the appeal is DENIED for failure to sufficiently show contract since he was illegally dismissed from
reversible error in the assailed decision. The Decision dated December 24, employment. He alleged that he opted for immediate
2008 of the CA in CA-G.R. CR-H.C. No. 02764 is AFFIRMED. transfer but none was made.

[Respondents], for their part, contended that Yap was not illegally
dismissed. They alleged that following the sale of the M/T
No costs.
SEASCOUT, Yap signed off from the vessel on 10 November
2001 and was paid his wages corresponding to the months
he worked or until 10 November 2001 plus his seniority
SO ORDERED. bonus, vacation bonus and extra bonus. They further
alleged that Yaps employment contract was validly
terminated due to the sale of the vessel and no
Yap v Thenamaris arrangement was made for Yaps transfer to Thenamaris
Before this Court is a Petition for Review on Certiorari[1] under Rule other vessels.[4]
45 of the Rules of Civil Procedure, seeking the reversal of the Court of
Appeals (CA) Decision[2] dated February 28, 2007, which affirmed with
modification the National Labor Relations Commission (NLRC) Thus, Claudio S. Yap (petitioner) filed a complaint for Illegal
resolution[3] dated April 20, 2005. Dismissal with Damages and Attorneys Fees before the Labor Arbiter (LA).
Petitioner claimed that he was entitled to the salaries corresponding to the
The undisputed facts, as found by the CA, are as follows: unexpired portion of his contract. Subsequently, he filed an amended
complaint, impleading Captain Francisco Adviento of respondents
Intermare Maritime Agencies, Inc. (Intermare) and Thenamaris Ships
[Petitioner] Claudio S. Yap was employed as electrician of Management (respondents), together with C.J. Martionos, Interseas Trading
the vessel, M/T SEASCOUT on 14 August 2001 by Intermare and Financing Corporation, and Vulture Shipping Limited/Stejo Shipping
Maritime Agencies, Inc. in behalf of its principal, Vulture Limited.
contract should only be limited to three (3) months basic
On July 26, 2004, the LA rendered a decision [5] in favor of petitioner, finding salary.
the latter to have been constructively and illegally dismissed by
respondents. Moreover, the LA found that respondents acted in bad faith Respondents Intermare Maritime Agency, Inc.[,]
when they assured petitioner of re-embarkation and required him to Vulture Shipping Limited and Thenamaris Ship
produce an electrician certificate during the period of his contract, but Management are hereby ordered to jointly and severally
actually he was not able to board one despite of respondents numerous pay complainant, the following:
vessels. Petitioner made several follow-ups for his re-embarkation but
respondents failed to heed his plea; thus, petitioner was forced to litigate 1. Three (3) months basic salary US$4,290.00 or
in order to vindicate his rights. Lastly, the LA opined that since the its peso equivalent at the time of actual
unexpired portion of petitioners contract was less than one year, petitioner payment.
was entitled to his salaries for the unexpired portion of his contract for a 2. Moral damages P100,000.00
period of nine months. The LA disposed, as follows: 3. Exemplary damages P50,000.00
4. Attorneys fees equivalent to 10% of the total
monetary award.
WHEREFORE, in view of the foregoing, a decision is
hereby rendered declaring complainant to have been SO ORDERED.[11]
constructively dismissed. Accordingly, respondents
Intermare Maritime Agency Incorporated, Thenamaris Ships Respondents filed a Motion for Partial Reconsideration, [12] praying for the
Mgt., and Vulture Shipping Limited are ordered to pay reversal and setting aside of the NLRC decision, and that a new one be
jointly and severally complainant Claudio S. Yap the sum of rendered dismissing the complaint. Petitioner, on the other hand, filed his
$12,870.00 or its peso equivalent at the time of own Motion for Partial Reconsideration,[13] praying that he be paid the nine
payment. In addition, moral damages of ONE HUNDRED (9)-month basic salary, as awarded by the LA.
THOUSAND PESOS (P100,000.00) and exemplary damages
of FIFTY THOUSAND PESOS (P50,000.00) are awarded plus On April 20, 2005, a resolution [14] was rendered by the NLRC, affirming the
ten percent (10%) of the total award as attorneys fees. findings of Illegal Dismissal and respondents failure to transfer petitioner
to another vessel. However, finding merit in petitioners arguments, the
Other money claims are DISMISSED for lack of NLRC reversed its earlier Decision, holding that there can be no choice to
merit. grant only three (3) months salary for every year of the unexpired
term because there is no full year of unexpired term which this can be
SO ORDERED.[6] applied. Hence

Aggrieved, respondents sought recourse from the NLRC. WHEREFORE, premises considered, complainants Motion
for Partial Reconsideration is hereby granted. The award of
In its decision[7] dated January 14, 2005, the NLRC affirmed the LAs three (3) months basic salary in the sum of US$4,290.00 is
findings that petitioner was indeed constructively and illegally dismissed; hereby modified in that complainant is entitled to his salary
that respondents bad faith was evident on their wilful failure to transfer for the unexpired portion of employment contract in the
petitioner to another vessel; and that the award of attorneys fees was sum of US$12,870.00 or its peso equivalent at the time of
warranted. However, the NLRC held that instead of an award of salaries actual payment.
corresponding to nine months, petitioner was only entitled to salaries for
three months as provided under Section 10 [8] of Republic Act (R.A.) No. All aspect of our January 14, 2005 Decision STANDS.
8042,[9] as enunciated in our ruling in Marsaman Manning Agency, Inc. v.
National Labor Relations Commission.[10] Hence, the NLRC ruled in this SO ORDERED.[15]
wise:
Respondents filed a Motion for Reconsideration, which the NLRC
WHEREFORE, premises considered, the decision of denied.
the Labor Arbiter finding the termination of complainant
illegal is hereby AFFIRMED with a MODIFICATION. Undaunted, respondents filed a petition for certiorari[16] under Rule
Complainant[s] salary for the unexpired portion of his 65 of the Rules of Civil Procedure before the CA. On February 28, 2007, the
CA affirmed the findings and ruling of the LA and the NLRC that petitioner
was constructively and illegally dismissed. The CA held that respondents
failed to show that the NLRC acted without statutory authority and that its 2) Assuming that it is, whether or not the Court of
findings were not supported by law, jurisprudence, and evidence on record. Appeals gravely erred in granting petitioner only
Likewise, the CA affirmed the lower agencies findings that the advisory of three (3) months backwages when his unexpired
Captain Constantinou, taken together with the other documents and term of 9 months is far short of the every year of the
additional requirements imposed on petitioner, only meant that the latter unexpired term threshold.[20]
should have been re-embarked. In the same token, the CA upheld the
lower agencies unanimous finding of bad faith, warranting the imposition of
moral and exemplary damages and attorneys fees. However, the CA ruled In the meantime, while this case was pending before this Court, we
that the NLRC erred in sustaining the LAs interpretation of Section 10 of declared as unconstitutional the clause or for three months for every year
R.A. No. 8042. In this regard, the CA relied on the clause or for three of the unexpired term, whichever is less provided in the 5th paragraph of
months for every year of the unexpired term, whichever is less provided in Section 10 of R.A. No. 8042 in the case of Serrano v. Gallant Maritime
the 5th paragraph of Section 10 of R.A. No. 8042 and held: Services, Inc.[21] on March 24, 2009.

In the present case, the employment contract Apparently, unaware of our ruling in Serrano, petitioner claims that
concerned has a term of one year or 12 months which the 5th paragraph of Section 10, R.A. No. 8042, is violative of Section 1,
commenced on August 14, 2001. However, it was [22]
Article III and Section 3, [23] Article XIII of the Constitution to the extent
preterminated without a valid cause. [Petitioner] was paid that it gives an erring employer the option to pay an illegally dismissed
his wages for the corresponding months he worked until migrant worker only three months for every year of the unexpired term of
the 10th of November. Pursuant to the provisions of Sec. 10, his contract; that said provision of law has long been a source of abuse by
[R.A. No.] 8042, therefore, the option of three months for callous employers against migrant workers; and that said provision violates
every year of the unexpired term is applicable.[17] the equal protection clause under the Constitution because, while illegally
dismissed local workers are guaranteed under the Labor Code of
Thus, the CA provided, to wit: reinstatement with full backwages computed from the time compensation
was withheld from them up to their actual reinstatement, migrant workers,
WHEREFORE, premises considered, this Petition for by virtue of Section 10 of R.A. No. 8042, have to waive nine months of their
Certiorari is DENIED. The Decision dated January 14, 2005, collectible backwages every time they have a year of unexpired term of
and Resolutions, dated April 20, 2005 and July 29, 2005, contract to reckon with. Finally, petitioner posits that, assuming said
respectively, of public respondent National Labor Relations provision of law is constitutional, the CA gravely abused its discretion when
Commission-Fourth Division, Cebu City, in NLRC No. V- it reduced petitioners backwages from nine months to three months as his
000038-04 (RAB VIII (OFW)-04-01-0006) are nine-month unexpired term cannot accommodate the lesser relief of three
herebyAFFIRMED with the MODIFICATION that private months for every year of the unexpired term.[24]
respondent is entitled to three (3) months of basic salary
computed at US$4,290.00 or its peso equivalent at the On the other hand, respondents, aware of our ruling in Serrano,
time of actual payment. aver that our pronouncement of unconstitutionality of the clause or for
three months for every year of the unexpired term, whichever is
Costs against Petitioners.[18] less provided in the 5th paragraph of Section 10 of R.A. No. 8042
in Serrano should not apply in this case because Section 10 of R.A. No.
Both parties filed their respective motions for reconsideration, 8042 is a substantive law that deals with the rights and obligations of the
which the CA, however, denied in its Resolution[19] dated August 30, 2007. parties in case of Illegal Dismissal of a migrant worker and is not merely
procedural in character. Thus, pursuant to the Civil Code, there should be
Unyielding, petitioner filed this petition, raising the following no retroactive application of the law in this case. Moreover, respondents
issues: asseverate that petitioners tanker allowance of US$130.00 should not be
included in the computation of the award as petitioners basic salary, as
1) Whether or not Section 10 of R.A. [No.] 8042, to provided under his contract, was only US$1,300.00. Respondents submit
the extent that it affords an illegally dismissed that the CA erred in its computation since it included the said tanker
migrant worker the lesser benefit of salaries for [the] allowance. Respondents opine that petitioner should be entitled only to
unexpired portion of his employment US$3,900.00 and not to US$4,290.00, as granted by the CA.
contract or for three (3) months for every year of the Invoking Serrano, respondents claim that the tanker allowance should be
unexpired term, whichever is less is constitutional; excluded from the definition of the term salary. Also, respondents manifest
and that the full sum of P878,914.47 in Intermares bank account was garnished
and subsequently withdrawn and deposited with the NLRC Cashier of
Tacloban City on February 14, 2007. On February 16, 2007, while this case We have already spoken. Thus, this case should not be different
was pending before the CA, the LA issued an Order releasing the amount from Serrano.
of P781,870.03 to petitioner as his award, together with the sum
of P86,744.44 to petitioners former lawyer as attorneys fees, and the As a general rule, an unconstitutional act is not a law; it confers no
amount of P3,570.00 as execution and deposit fees. Thus, respondents rights; it imposes no duties; it affords no protection; it creates no office; it
pray that the instant petition be denied and that petitioner be directed to is inoperative as if it has not been passed at all. The general rule is
return to Intermare the sum of US$8,970.00 or its peso equivalent. [25] supported by Article 7 of the Civil Code, which provides:

On this note, petitioner counters that this new issue as to the Art. 7. Laws are repealed only by subsequent ones,
inclusion of the tanker allowance in the computation of the award was not and their violation or non-observance shall not be excused
raised by respondents before the LA, the NLRC and the CA, nor was it by disuse or custom or practice to the contrary.
raised in respondents pleadings other than in their Memorandum before
this Court, which should not be allowed under the circumstances. [26]
The petition is impressed with merit. The doctrine of operative fact serves as an exception to the
aforementioned general rule. In Planters Products, Inc. v. Fertiphil
Prefatorily, it bears emphasis that the unanimous finding of the LA, Corporation,[29] we held:
the NLRC and the CA that the dismissal of petitioner was illegal is not
disputed. Likewise not disputed is the tribunals unanimous finding of bad The doctrine of operative fact, as an exception to
faith on the part of respondents, thus, warranting the award of moral and the general rule, only applies as a matter of equity and fair
exemplary damages and attorneys fees. What remains in issue, therefore, play. It nullifies the effects of an unconstitutional law by
is the constitutionality of the 5th paragraph of Section 10 of R.A. No. 8042 recognizing that the existence of a statute prior to a
and, necessarily, the proper computation of the lump-sum salary to be determination of unconstitutionality is an operative fact
awarded to petitioner by reason of his illegal dismissal. and may have consequences which cannot always be
ignored. The past cannot always be erased by a new
Verily, we have already declared in Serrano that the clause or for judicial declaration.
three months for every year of the unexpired term, whichever is The doctrine is applicable when a declaration of
less provided in the 5th paragraph of Section 10 of R.A. No. 8042 is unconstitutionality will impose an undue burden on those
unconstitutional for being violative of the rights of Overseas Filipino who have relied on the invalid law. Thus, it was applied to a
Workers (OFWs) to equal protection of the laws. In an exhaustive criminal case when a declaration of unconstitutionality
discussion of the intricacies and ramifications of the said clause, this Court, would put the accused in double jeopardy or would put in
in Serrano, pertinently held: limbo the acts done by a municipality in reliance upon a
law creating it.[30]
The Court concludes that the subject clause
contains a suspect classification in that, in the computation Following Serrano, we hold that this case should not be included in
of the monetary benefits of fixed-term employees who are the aforementioned exception. After all, it was not the fault of petitioner
illegally discharged, it imposes a 3-month cap on the claim that he lost his job due to an act of illegal dismissal committed by
of OFWs with an unexpired portion of one year or more in respondents. To rule otherwise would be iniquitous to petitioner and other
their contracts, but none on the claims of other OFWs or OFWs, and would, in effect, send a wrong signal that principals/employers
local workers with fixed-term employment. The subject and recruitment/manning agencies may violate an OFWs security of tenure
clause singles out one classification of OFWs and burdens it which an employment contract embodies and actually profit from such
with a peculiar disadvantage.[27] violation based on an unconstitutional provision of law.

Moreover, this Court held therein that the subject clause does not In the same vein, we cannot subscribe to respondents postulation
state or imply any definitive governmental purpose; hence, the same that the tanker allowance of US$130.00 should not be included in the
violates not just therein petitioners right to equal protection, but also his computation of the lump-sum salary to be awarded to petitioner.
right to substantive due process under Section 1, Article III of the
Constitution.[28] Consequently, petitioner therein was accorded his salaries First. It is only at this late stage, more particularly in their
for the entire unexpired period of nine months and 23 days of his Memorandum, that respondents are raising this issue. It was not raised
employment contract, pursuant to law and jurisprudence prior to the before the LA, the NLRC, and the CA. They did not even assail the award
enactment of R.A. No. 8042. accorded by the CA, which computed the lump-sum salary of petitioner at
the basic salary of US$1,430.00, and which clearly included the US$130.00
tanker allowance. Hence, fair play, justice, and due process dictate that
this Court cannot now, for the first time on appeal, pass upon this question. WHEREFORE, the Petition is GRANTED. The Court of Appeals
Matters not taken up below cannot be raised for the first time on appeal. Decision dated February 28, 2007 and Resolution dated August 30, 2007
They must be raised seasonably in the proceedings before the lower are hereby MODIFIEDto the effect that petitioner is AWARDED his salaries
tribunals. Questions raised on appeal must be within the issues framed by for the entire unexpired portion of his employment contract consisting of
the parties; consequently, issues not raised before the lower tribunals nine months computed at the rate of US$1,430.00 per month. All other
cannot be raised for the first time on appeal. [31] awards are hereby AFFIRMED. No costs.

Second. Respondents invocation of Serrano is unavailing. Indeed, SO ORDERED.


we made the following pronouncements in Serrano, to wit:
People v Panis
The word salaries in Section 10(5) does not include
overtime and leave pay. For seafarers like petitioner, DOLE The basic issue in this case is the correct interpretation of Article 13(b) of
Department Order No. 33, series 1996, provides a Standard P.D. 442, otherwise known as the Labor Code, reading as follows:
Employment Contract of Seafarers, in which salary is
understood as the basic wage, exclusive of overtime, leave
pay and other bonuses; whereas overtime pay is (b) Recruitment and placement' refers to any act of
compensation for all work performed in excess of the canvassing, enlisting, contracting, transporting, hiring, or
regular eight hours, and holiday pay is compensation for procuring workers, and includes referrals, contract
any work performed on designated rest days and holidays. services, promising or advertising for employment, locally
[32] 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
A close perusal of the contract reveals that the tanker allowance of deemed engaged in recruitment and placement.
US$130.00 was not categorized as a bonus but was rather encapsulated in
the basic salary clause, hence, forming part of the basic salary of Four informations were filed on January 9, 1981, in the Court of First
petitioner. Respondents themselves in their petition for certiorari before Instance of Zambales and Olongapo City alleging that Serapio Abug,
the CA averred that petitioners basic salary, pursuant to the contract, was private respondent herein, "without first securing a license from the
US$1,300.00 + US$130.00 tanker allowance.[33] If respondents intended it Ministry of Labor as a holder of authority to operate a fee-charging
differently, the contract per se should have indicated that said allowance employment agency, did then and there wilfully, unlawfully and criminally
does not form part of the basic salary or, simply, the contract should have operate a private fee charging employment agency by charging fees and
separated it from the basic salary clause. expenses (from) and promising employment in Saudi Arabia" to four
separate individuals named therein, in violation of Article 16 in relation to
A final note. Article 39 of the Labor Code. 1

We ought to be reminded of the plight and sacrifices of our Abug filed a motion to quash on the ground that the informations did not
OFWs. In Olarte v. Nayona,[34] this Court held that: 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),
Our overseas workers belong to a disadvantaged he claimed, there would be illegal recruitment only "whenever two or more
class. Most of them come from the poorest sector of our persons are in any manner promised or offered any employment for a fee.
society. Their profile shows they live in suffocating slums, "2
trapped in an environment of crimes. Hardly literate and in
ill health, their only hope lies in jobs they find with difficulty
in our country. Their unfortunate circumstance makes them Denied at first, the motion was reconsidered and finally granted in the
easy prey to avaricious employers. They will climb Orders of the trial court dated June 24 and September 17, 1981. The
mountains, cross the seas, endure slave treatment in prosecution is now before us on certiorari. 3
foreign lands just to survive. Out of despondence, they will
work under sub-human conditions and accept salaries The posture of the petitioner is that the private respondent is being
below the minimum. The least we can do is to protect them prosecuted under Article 39 in relation to Article 16 of the Labor Code;
with our laws. hence, Article 13(b) is not applicable. However, as the first two cited
articles penalize acts of recruitment and placement without proper It is unfortunate that we can only speculate on the meaning of the
authority, which is the charge embodied in the informations, application of questioned provision for lack of records of debates and deliberations that
the definition of recruitment and placement in Article 13(b) is unavoidable. would otherwise have been available if the Labor Code had been enacted
as a statute rather than a presidential decree. The trouble with presidential
The view of the private respondents is that to constitute recruitment and decrees is that they could be, and sometimes were, issued without
placement, all the acts mentioned in this article should involve dealings previous public discussion or consultation, the promulgator heeding only
with two or mre persons as an indispensable requirement. On the other his own counsel or those of his close advisers in their lofty pinnacle of
hand, the petitioner argues that the requirement of two or more persons is power. The not infrequent results are rejection, intentional or not, of the
imposed only where the recruitment and placement consists of an offer or interest of the greater number and, as in the instant case, certain esoteric
promise of employment to such persons and always in consideration of a provisions that one cannot read against the background facts usually
fee. The other acts mentioned in the body of the article may involve even reported in the legislative journals.
only one person and are not necessarily for profit.
At any rate, the interpretation here adopted should give more force to the
Neither interpretation is acceptable. We fail to see why the proviso should campaign against illegal recruitment and placement, which has victimized
speak only of an offer or promise of employment if the purpose was to many Filipino workers seeking a better life in a foreign land, and investing
apply the requirement of two or more persons to all the acts mentioned in hard- earned savings or even borrowed funds in pursuit of their dream,
the basic rule. For its part, the petitioner does not explain why dealings only to be awakened to the reality of a cynical deception at the hands of
with two or more persons are needed where the recruitment and theirown countrymen.
placement consists of an offer or promise of employment but not when it is
done through "canvassing, enlisting, contracting, transporting, utilizing, WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are
hiring or procuring (of) workers. set aside and the four informations against the private respondent
reinstated. No costs.
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 SO ORDERED.
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 Trans Action Overseas v DOLE Secretary
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 issue presented in the case at bar is whether or not the Secretary
of Labor and Employment has jurisdiction to cancel or revoke the license of
a private fee-charging employment agency.
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 From July 24 to September 9, 1987, petitioner Trans Action Overseas
only one prospective worker is involved. The proviso merely lays down a Corporation, a private fee-charging employment agency, scoured Iloilo City
rule of evidence that where a fee is collected in consideration of a promise for possible recruits for alleged job vacancies in Hongkong. Private
or offer of employment to two or more prospective workers, the individual respondents sought employment as domestic helpers through petitioners
or entity dealing with them shall be deemed to be engaged in the act of employees, Luzviminda Aragon, Ben Hur Domincil and his wife Cecille.The
recruitment and placement. The words "shall be deemed" create that applicants paid placement fees ranging from P1,000.00 to P14,000.00, but
presumption. petitioner failed to deploy them. Their demands for refund proved
unavailing; thus, they were constrained to institute complaints against
petitioner for violation of Articles 32 and 34(a) [1] of the Labor Code, as
This is not unlike the presumption in article 217 of the Revised Penal Code, amended.
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 Petitioner denied having received the amounts allegedly collected
words, he shall be deemed to have malversed such funds or property. In from respondents, and averred that Aragon, whose only duty was to pre-
the instant case, the word "shall be deemed" should by the same token be screen and interview applicants, and the spouses Domincil were not
given the force of a disputable presumption or of prima facie evidence of authorized to collect fees from the applicants. Accordingly, it cannot be
engaging in recruitment and placement. (Klepp vs. Odin Tp., McHenry held liable for the money claimed by respondents. Petitioner maintains that
County 40 ND N.W. 313, 314.) it even warned respondents not to give any money to unauthorized
individuals.
POEA Regional Extension Unit Coordinator Edgar Somes testified that valid for non-compliance with the Revised Administrative Code of 1987
although he was aware that petitioner collected fees from respondents, the regarding its registration with the U.P. Law Center.
latter insisted that they be allowed to make the payments on the
assumption that it could hasten their deployment abroad. He added that Under Executive Order No. 797 [3] (E.O. No. 797) and Executive Order
Mrs. Honorata Manliclic, a representative of petitioner tasked to oversee No. 247 (E.O. No. 247),[4] the POEA was established and mandated to
the conduct of the interviews, told him that she was leaving behind assume the functions of the Overseas Employment Development Board
presigned receipts to Aragon as she cannot stay in Iloilo City for the (OEDB), the National Seamen Board (NSB), and the overseas employment
screening of the applicants. Manliclic, however,denied this version and function of the Bureau of Employment Services (BES).Petitioner theorizes
argued that it was Somes who instructed her to leave the receipts behind that when POEA absorbed the powers of these agencies, Article 35 of the
as it was perfectly alright to collect fees. Labor Code, as amended, was rendered ineffective.

On April 5, 1991, then Labor Undersecretary Nieves R. Confesor The power to suspend or cancel any license or authority to recruit
rendered the assailed order, the dispositive portion of which reads: employees for overseas employment is vested upon the Secretary of Labor
and Employment. Article 35 of the Labor Code, as amended, which
WHEREFORE, respondents are hereby ordered to pay, jointly and severally. provides:

Respondent agency is liable for twenty eight (28) counts of violation of ART. 35. Suspension and/or Cancellation of License or Authority. - The
Article 32 and five (5) counts of Article 34 (a) with a corresponding Minister of Labor shall have the power to suspend or cancel any license or
suspension in the aggregate period of sixty six (66) months.Considering authority to recruit employees for overseas employment for violation of
however, that under the schedule of penalties, any suspension amounting rules and regulations issued by the Ministry of Labor, the Overseas
to a period of 12 months merits the imposition of the penalty of Employment Development Board, and the National Seamen Board, or for
cancellation, the license of respondent TRANS ACTION OVERSEAS violation of the provisions of this and other applicable laws, General Orders
CORPORATION to participate in the overseas placement and recruitment of and Letters of Instructions.
workers is hereby ordered CANCELLED, effective immediately.
In the case of Eastern Assurance and Surety Corp. v. Secretary of
SO ORDERED.[2] (Underscoring supplied) Labor,[5] we held that:

On April 29, 1991, petitioner filed its Motion for Temporary Lifting of The penalties of suspension and cancellation of license or authority are
Order of Cancellation alleging, among other things, that to deny it the prescribed for violations of the above quoted provisions, among
authority to engage in placement and recruitment activities would others. And the Secretary of Labor has the power under Section 35 of the
jeopardize not only its contractual relations with its foreign principals, but law to apply these sanctions, as well as the authority, conferred by Section
also the welfare, interests, and livelihood of recruited workers scheduled to 36, not only to restrict and regulate the recruitment and placement
leave for their respective assignments. Finally, it manifested its willingness activities of all agencies, but also to promulgate rules and regulations to
to post a bond to insure payment of the claims to be awarded, should its carry out the objectives and implement the provisions governing said
appeal or motion be denied. activities. Pursuant to this rule-making power thus granted, the Secretary
of Labor gave the POEA,[6] on its own initiative or upon filing of a complaint
Finding the motion to be well taken, Undersecretary Confesor or report or upon request for investigation by any aggrieved person, x x
provisionally lifted the cancellation of petitioners license pending resolution (authority to) conduct the necessary proceedings for the suspension or
of its Motion for Reconsideration filed on May 6, 1991. On January 30, cancellation of the license or authority of any agency or entity for certain
1992, however, petitioners motion for reconsideration was eventually enumerated offenses including -
denied for lack of merit, and the April 5, 1991, order revoking its license
was reinstated. 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
Petitioner contends that Secretary Confesor acted with grave abuse of prescribed by the Administration, and
discretion in rendering the assailed orders on alternative grounds, viz.: (1)
it is the Philippine Overseas Employment Administration (POEA) which has 2) any other violation of pertinent provisions of the Labor Code and other
the exclusive and original jurisdiction to hear and decide illegal recruitment relevant laws, rules and regulations.[7]
cases, including the authority to cancel recruitment licenses, or (2) the
cancellation order based on the 1987 POEA Schedule of Penalties is not
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 Petitioner assails the September 20, 2004 Resolution [1] of the Court of
thereof.[8] (Underscoring supplied) Appeals in CA-G.R. SP No. 86170, dismissing outright the petition for
certiorari for failure to attach copies of all relevant pleadings and
This power conferred upon the Secretary of Labor and Employment transcripts of the hearings, as well as the March 29, 2005
was echoed in People v. Diaz,[9] viz.: Resolution[2] denying the motion for reconsideration.

A non-licensee or non-holder of authority means any person, corporation or


entity which has not been issued a valid license or authority to engage in
recruitment and placement by the Secretary of Labor, or whose license or This case stemmed from two separate complaints filed before the
authority has been suspended, revoked or cancelled by the POEA or the Philippine Overseas Employment Administration (POEA) against Principalia
Secretary. (Underscoring supplied) Management and Personnel Consultants, Incorporated (Principalia) for
violation of the 2002 POEA Rules and Regulations. The first complaint
In view of the Courts disposition on the matter, we rule that the power dated July 16, 2003 filed by Ruth Yasmin Concha (Concha) was docketed as
to suspend or cancel any license or authority to recruit employees for POEA Case No. RV 03-07-1497. The second complaint dated October 14,
overseas employment is concurrently vested with the POEA and the 2003 filed by Rafael E. Baldoza (Baldoza) was docketed as POEA Case No.
Secretary of Labor. RV 03-07-1453.

As regards petitioners alternative argument that the non-filing of the


1987 POEA Schedule of Penalties with the UP Law Center rendered it
ineffective and, hence, cannot be utilized as basis for penalizing them, we In the first complaint, Concha alleged that in August 2002, she applied with
agree with Secretary Confesors explanation, to wit: Principalia for placement and employment as caregiver or physical
therapist in the USA or Canada. Despite paying P20,000.00 out of the
On the other hand, the POEA Revised Rules on the Schedule of Penalties P150,000.00 fee required by Principalia which was not properly receipted,
was issued pursuant to Article 34 of the Labor Code, as amended. The Principalia failed to deploy Concha for employment abroad. [3]
same merely amplified and particularized the various violations of the rules
and regulations of the POEA and clarified and specified the penalties
therefore (sic). Indeed, the questioned schedule of penalties contains only
a listing of offenses. It does not prescribe additional rules and regulations
governing overseas employment but only detailed the administrative In its March 15, 2004 Order, [4] the Adjudication Office of the POEA
sanctions imposable by this Office for some enumerated prohibited acts. found Principalia liable for violations of the 2002 POEA Rules and
Regulations, particularly for collecting a fee from the applicant before
employment was obtained; for non-issuance of official receipt; and for
Under the circumstances, the license of the respondent agency was misrepresenting that it was able to secure employment for Concha. For
cancelled on the authority of Article 35 of the Labor Code, as amended, these infractions, Principalias license was ordered suspended for 12
and not pursuant to the 1987 POEA Revised Rules on Schedule of Penalties. months or in lieu thereof, Pricipalia is ordered to pay a fine of P120,000.00
[10]
and to refund Conchas placement fee of P20,000.00.

WHEREFORE, in view of the foregoing, the instant petition is hereby


DISMISSED. Accordingly, the decision of the Secretary of Labor dated April
5, 1991, is AFFIRMED. No costs.
Baldoza initiated the second complaint on October 14,
2003[5] alleging that Principalia assured him of employment in Doha, Qatar
SO ORDERED. as a machine operator with a monthly salary of $450.00. After paying
P20,000.00 as placement fee, he departed for Doha, Qatar on May 31,
2003 but when he arrived at the jobsite, he was made to work as welder, a
Republic v Principalia job which he had no skills. He insisted that he was hired as machine
operator but the alternative position offered to him was that of helper,
which he refused.Thus, he was repatriated on July 5, 2003.
Philippine Overseas Employment Administration, their
subordinates, agents, representatives and all other persons
On November 12, 2003, Baldoza and Principalia entered into a compromise acting for and in their behalf, for (sic) implementing the
agreement with quitclaim and release whereby the latter agreed to Orders of Suspension under VC No. LRD 03-100-95 and
redeploy Baldoza for employment abroad. Principalia, however, failed to POEA Case No. RV-03-07-1497.
deploy Baldoza as agreed hence, in an Order dated April 29, 2004, [6] the
POEA suspended Principalias documentary processing.

Let the hearing on Preliminary Injunction and Preliminary


Mandatory Injunction be set on June 22, 2004 at 1:30
Principalia moved for reconsideration which the POEA granted on oclock in the afternoon.
June 25, 2004.[7] The latter lifted its order suspending the documentary
processing by Principalia after noting that it exerted efforts to obtain
overseas employment for Baldoza within the period stipulated in the
settlement agreement but due to Baldozas lack of qualification, his SO ORDERED.[11]
application was declined by its foreign principal.

Meanwhile, on June 14, 2004, or before the promulgation of POEAs order


lifting the suspension, Principalia filed a Complaint [8] (Complaint) against
Rosalinda D. Baldoz in her capacity as Administrator of POEA and Atty. After the hearing on the preliminary injunction, Administrator Baldoz and
Jovencio R. Abara in his capacity as POEA Conciliator, before the Regional Atty. Abara submitted their Memorandum (Memorandum). [12] In an Order
Trial Court (RTC) of Mandaluyong City forAnnulment of Order for dated July 2, 2004,[13] the trial court held that the issue on the application
Suspension of Documentation Processing with Damages and Application for for preliminary mandatory injunction has become moot because POEA had
Issuance of a Temporary Restraining Order and/or Writ of Preliminary already released the renewal of license of Principalia. However, on the
Injunction, and a Writ of Preliminary Mandatory Injunction. Principalia issue against the implementation of the order of suspension, the trial court
claimed that the suspension of its documentary processing would ruin its resolved, to wit:
reputation and goodwill and would cause the loss of its applicants,
employers and principals. Thus, a writ of preliminary injunction and a writ
of mandatory injunction must be issued to prevent serious and irreparable
damage to it. Accordingly, the only issue left for the resolution of this
Court is whether or not a Writ of Preliminary Prohibitory
Injunction will lie against the immediate implementation of
the Order of Suspension of License of the Plaintiff dated
On June 14, 2004,[9] Judge Paulita B. Acosta-Villarante of the RTC of March 15, 2004 under POEA case No. RV-03-07-1497,
Mandaluyong City, Branch 211, granted a 72-hour restraining order issued by the POEA Administrator Rosalinda D. Baldoz.
enjoining Administrator Baldoz and Atty. Abara to refrain from imposing the
suspension orders before the matter can be heard in full. On June 17, 2004,
[10]
Judge Rizalina T. Capco-Umali, RTC of Mandaluyong City, Branch 212,
held thus: In support of its Application for a Writ of Preliminary
Prohibitory Injunction, Plaintiff presented evidence to prove
the following:

WHEREFORE, in order to preserve status quo ANTE, the


prayer for a Temporary Restraining Order is hereby
GRANTED enjoining the defendant[s] ROSALINDA D. (1) that it has a license,
BALDOZ and ATTY. JOVENCIO ABARA, other officers of
(2) that the said license was renewed, where the penalty imposed carried the
maximum penalty of twelve (12) months
(3) the existence of the two (2) suspension orders suspension o[r] cancellation of license, the
subject of this case; decision shall be immediately executory
despite pendency of the appeal.
(4) the irreparable damages to the Plaintiff.

The Order dated March 15, 2004 decreed Plaintiff as having


violated Section 2 (a) (d) and (e) of Rule I, Part VI of the
The defendants on the other hand did not present POEA Rules and Regulations and the Plaintiffs was imposed
evidence to controvert the evidence of the the penalty of twelve (12) months suspension of license (or
plaintiff. Instead, defendants submitted a Memorandum. in lieu, to pay fine of P120,000, it being it[s] first offense).

Upon a careful evaluation and assessment of the Violation of Section 2 (a) (d) and (e) Rule I, Part VI of POEA
evidence by the plaintiff and their respective memoranda Rules and Regulations imposes a penalty of two (2) months
of the parties, this Court finds the need to issue the Writ of to six (6) months suspension of license for the FIRST
Preliminary Prohibitory Injunction prayed for by the offender (sic). And in the absence of mitigating or
plaintiff. aggravating circumstance, the medium range of the
imposable penalty which is four (4) months shall be meted
out. Being a first offender, the plaintiff was imposed
suspension of license for four (4) months for each violation
It bears stressing that the Order of Suspension or an aggregate period of suspension for twelve (12)
dated March 15, 2004 is still pending appeal before the months for the three (3) violations.
Office of the Secretary of Labor and Employment.

It was not however made clear in the Order of Suspension


It is likewise significant to point out that the said dated March 15, 2004 that the Plaintiffs case falls under
Order dated March 15, 2004 does not categorically state the EXCEPTION under Section 5 Rule V, Part VI of the 2002
that the suspension of Plaintiffs License is immediately POEA Rules and Regulation, warranting the immediate
executory contrary to the contention of the defendants. implementation thereof even if an appeal is pending with
the POEA.

Counsel for POEA argued that the basis for the


immediate implementation thereof is Section 5, Rule V, The Plaintiff had established that even if it has been
Part VI of the 2002 POEA Rules and Regulation, which is granted a renewal license, but if the same is suspended
quoted hereunder, as follows: under the March 15, 2004 Order in POEA case No. RV-03-
07-1497, it could not use the license to do business. As
earlier mentioned, the said Order is still pending appeal.

Section 5. Stay of Execution. The decision


of the Administration shall be stayed during
the pendency of the appeal; Provided that In the meantime that the appeal has not been resolved,
Plaintiffs clients/principals will have to look for other
agencies here and abroad, to supply their needs for does not categorically state that the suspension of the license is
employees and workers. The end result would be a immediately executory.
tremendous loss and even closure of its business. More
importantly, Plaintiffs reputation would be tarnished and it
would be difficult, if not impossible for it to regain its
existing clientele if the immediate implementation of the
suspension of its license continues. POEA appealed to the Court of Appeals which was dismissed [15] outright for
failure of POEA to attach copies of its Memorandum dated June 30, 2004,
as well as the transcripts of the hearings conducted on June 22, 2004 and
June 29, 2004 as required under Section 3 of Rule 46 of the Rules of
Court. POEAs motion for reconsideration was denied [16] hence, this petition
The defendants and even the POEA, upon the other hand, on the following grounds:
will not suffer any damage, if the immediate
implementation of the suspension of plaintiffs license as
decreed in the March 15, 2004 Order, is enjoined.
I

SECTION 1, RULE 65 OF THE REVISED RULES OF COURT


WHEREFORE, as prayed for by the Plaintiff, the application REQUIRES ONLY THAT THE PETITION SHOULD BE
for the issuance of the Writ of Preliminary Prohibitory ACCOMPANIED BY CERTIFIED TRUE COPIES OF THE
Injunction is hereby GRANTED, upon posting of a bond in JUDGMENT, ORDER OR RESOLUTION SUBJECT THEREOF
the amount of FIVE HUNDRED THOUSAND PESOS (Php AND OTHER DOCUMENTS RELEVANT AND PERTINENT
500,000.00), enjoining and restraining the Defendants THERETO. PETITIONER ATTACHED ALL THE DOCUMENTS
ROSALINDA D. BALDOZ and Atty. Jovencio Abarra (sic), PERTINENT TO THE PETITION FILED WITH THE COURT OF
other officers of the POEA, their subordinates, agents, APPEALS.
representative, and all other persons acting for and in their
behalf, from immediately implementing the Order of
Suspension dated March 15, 2004 under POEA Case No. RV-
03-07-1497.
II

THE REGIONAL TRIAL COURT GRAVELY ABUSED ITS


The Writ of Preliminary Prohibitory Injunction shall be in full DISCRETION WHEN IT GRANTED RESPONDENT PRICIPALIAS
force and effect immediately upon receipt thereof and to APPLICATION FOR A WRIT OF PRELIMINARY INJUNCTION
be carried out on subsequent days thereafter pending the DESPITE THE ABSENCE OF A CLEAR AND CONVINCING
termination of this case and/or unless a contrary Order is RIGHT TO THE RELIEF DEMANDED.
issued by this court.[14] (Emphasis supplied)

III

THE REGIONAL TRIAL COURT COMMITTED GRAVE ABUSE OF


The trial court stressed that it issued the injunctive writ because the order DISCRETION WHEN IT GRANTED RESPONDENT
of suspension dated March 15, 2004 is still pending appeal before the PRINCIPALIAS APPLICATION DESPITE THE ABSENCE OF
Office of the Secretary of Labor and Employment; that there is a possibility PROOF OF IRREPARABLE DAMAGE AS REQUIRED UNDER
that Principalia will suffer tremendous losses and even closure of business THE RULES OF COURT.
pending appeal; that POEA will not suffer any damage if the immediate
implementation of the suspension of Principalia is enjoined; that the order
IV SEC. 3. Contents and filing of petition; effect of
non-compliance with requirements. - The petition shall
THE INJUNCTIVE WRIT ISSUED BY THE REGIONAL TRIAL contain the full names and actual addresses of all the
COURT DOES NOT LIE TO ENJOIN AN ACCOMPLISHED ACT. petitioners and respondents, a concise statement of the
matters involved, the factual background of the case, and
the grounds relied upon for the relief prayed for.

V
In actions filed under Rule 65, the petition shall
THE ISSUANCE OF AN INJUNCTIVE WRIT BY THE REGIONAL further indicate the material dates showing when notice of
TRIAL COURT IS TANTAMOUNT TO THE REVERSAL OF THE the judgment or final order or resolution subject thereof
PRESUMPTION OF REGULARITY OF AN OFFICIAL ACT. [17] was received, when a motion for new trial or
reconsideration, if any, was filed and when notice of the
denial thereof was received.

The core issues for resolution are as follows: (1) whether the Court of It shall be filed in seven (7) clearly legible copies
Appeals erred in dismissing the Petition for Certiorari based on purely together with proof of service thereof on the respondent
technical grounds; and (2) whether the trial court erred in issuing the writ with the original copy intended for the court indicated as
of preliminary injunction. such by the petitioner, and shall be accompanied by a
clearly legible duplicate original or certified true copy of
the judgment, order, resolution, or ruling subject thereof,
such material portions of the record as are referred to
therein, and other documents relevant or pertinent
POEA avers that the Court of Appeals Resolution dismissing thereto. The certification shall be accomplished by the
outright the petition for certiorari is not valid because the documents proper clerk of court or by his duly authorized
attached to the petition substantially informed the Court of Appeals that representative, or by the proper officer of the court,
the trial court gravely abused its discretion in granting the preliminary tribunal, agency or office involved or by his duly authorized
injunction. Thus, the attached documents were sufficient to render an representative. The other requisite number of copies of the
independent assessment of its improvident issuance. petition shall be accompanied by clearly legible plain
copies of all documents attached to the original.

We disagree.

xxxx

The Court of Appeals dismissed the petition for certiorari due to


POEAs failure to comply with Section 3, Rule 46 and Section 1, Rule 65 of
the Rules of Court which read as follows:
The failure of the petitioner to comply with any of
the foregoing requirements shall be sufficient ground for
the dismissal of the petition. (Emphasis supplied)

RULE 46

RULE 65
SECTION. 1. Petition for certiorari. When any tribunal, POEA avers that the trial court gravely abused its discretion in granting the
board or officer exercising judicial or quasi-judicial writ of preliminary prohibitory injunction when the requirements to issue
functions has acted without or in excess of its or his the same have not been met. It asserts that Principalia had no clear and
jurisdiction, or with grave abuse of discretion amounting to convincing right to the relief demanded as it had no proof of irreparable
lack or excess of jurisdiction, and there is no appeal, nor damage as required under the Rules of Court.
any plain, speedy, and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a
verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered annulling
or modifying the proceedings of such tribunal, board or We do not agree.
officer, and granting such incidental reliefs as law and
justice may require.

The trial court did not decree that the POEA, as the granting authority of
Principalias license to recruit, is not allowed to determine Principalias
The petition shall be accompanied by a certified true copy compliance with the conditions for the grant, as POEA would have us
of the judgment, order or resolution subject thereof, copies believe. For all intents and purposes, POEA can determine whether the
of all pleadings and documents relevant and pertinent licensee has complied with the requirements. In this instance, the trial
thereto, and a sworn certification of non-forum shopping as court observed that the Order of Suspension dated March 15, 2004 was
provided in the third paragraph of Section 3, Rule 46. pending appeal with the Secretary of the Department of Labor and
Employment (DOLE). Thus, until such time that the appeal is resolved with
finality by the DOLE, Principalia has a clear and convincing right to operate
as a recruitment agency.

In the case at bar, the Court of Appeals dismissed the petition for certiorari Furthermore, irreparable damage was duly proven by
due to POEAs failure to attach the following relevant documents: (1) the Principalia. Suspension of its license is not easily quantifiable nor is it
Memorandum filed by POEA in the trial court to oppose the Complaint; and susceptible to simple mathematical computation, as alleged by POEA. The
(2) the transcripts of stenographic notes (TSN) of the hearings conducted trial court in its Order stated, thus:
by the trial court on June 22, 2004 and June 29, 2004. In its motion for
reconsideration dated October 13, 2004,[18] POEA only attached the TSN
dated June 30, 2004,[19] with the explanation that the trial court did not
furnish it with copies of the other hearings. However, we note that POEA
still failed to attach a copy of the Memorandum which the Court of Appeals In the meantime that the appeal has not been resolved,
deemed essential in its determination of the propriety of the trial courts Plaintiffs clients/principals will have to look for other
issuance of the writ of preliminary prohibitory injunction. agencies here and abroad, to supply their needs for
employees and workers.The end result would be a
tremendous loss and even closure of its business. More
importantly, Plaintiffs reputation would be tarnished and it
would be difficult, if not impossible for it to regain its
The allowance of the petition on the ground of substantial compliance with existing clientele if the immediate implementation of the
the Rules is not a novel occurrence in our jurisdiction. [20] Indeed, if we apply suspension of its license continues.[22]
the Rules strictly, we cannot fault the Court of Appeals for dismissing the
petition[21] because the POEA did not demonstrate willingness to comply
with the requirements set by the rules and to submit the necessary
documents which the Court of Appeals need to have a proper perspective
of the case.
If the injunctive writ was not granted, Principalia would have been Sometime in 1989, respondent First Cosmopolitan Manpower & Promotion
labeled as an untrustworthy recruitment agency before there could be any Services, Inc. recruited petitioner Santosa B. Datuman to work abroad
final adjudication of its case by the DOLE. It would have lost both its under the following terms and conditions:
employer-clients and its prospective Filipino-applicants. Loss of the former
due to a tarnished reputation is not quantifiable.

Site of employment Bahrain

Moreover, POEA would have no authority to exercise its regulatory


functions over Principalia because the matter had already been brought to
the jurisdiction of the DOLE.Principalia has been granted the license to
recruit and process documents for Filipinos interested to work abroad. Employees Classification/Position/Grade - Saleslady
Thus, POEAs action of suspending Principalias license before final
adjudication by the DOLE would be premature and would amount to a
violation of the latters right to recruit and deploy workers.
Basic Monthly Salary - US$370.0

Finally, the presumption of regular performance of duty by the


POEA under Section 3 (m), Rule 131 of the Rules of Court, finds no
application in the case at bar, as it applies only where a duty is imposed on Duration of Contract - One (1) y
an official to act in a certain way, and assumes that the law tells him what
his duties are. Therefore the presumption that an officer will discharge his
duties according to law does not apply where his duties are not specified
by law and he is given unlimited discretion. [23] The issue threshed out
before the trial court was whether the order of suspension should be Foreign Employer - Mohamm
implemented pending appeal. It did not correct a ministerial duty of the
POEA. As such, the presumption on the regularity of performance of duty
does not apply.
On April 17, 1989, petitioner was deployed to Bahrain after paying the
required placement fee. However, her employer Mohammed Hussain took
her passport when she arrived there; and instead of working as a saleslady,
WHEREFORE, in light of the foregoing, the petition is DENIED for lack of she was forced to work as a domestic helper with a salary of Forty Bahrain
merit. Dinar (BD40.00), equivalent only to One Hundred US Dollars (US$100.00).
This was contrary to the agreed salary of US$370.00 indicated in her
Contract of Employment signed in the Philippines and approved by the
SO ORDERED. Philippine Overseas Employment Administration (POEA).3

On September 1, 1989, her employer compelled her to sign another


contract, transferring her to another employer as housemaid with a salary
Datuman v First Cosmopolitan of BD40.00 for the duration of two (2) years. 4 She pleaded with him to give
her a release paper and to return her passport but her pleas were
Before us is a petition for review on certiorari under Rule 45 of the 1997 unheeded. Left with no choice, she continued working against her will.
Rules of Civil Procedure, as amended, assailing the Court of Appeals (CA) Worse, she even worked without compensation from September 1991 to
Decision1 dated August 7, 2002, in CA-G.R. SP No. 59825, setting aside the April 1993 because of her employer's continued failure and refusal to pay
Decision of the National Labor Relations Commission (NLRC). her salary despite demand. In May 1993, she was able to finally return to
the Philippines through the help of the Bahrain Passport and Immigration
Department.5
The facts are as follows:
In May 1995, petitioner filed a complaint before the POEA Adjudication approved Contract of Employment, respondent Agency committed
Office against respondent for underpayment and nonpayment of salary, a breach of said Employment Contract. Worthy of mention is the
vacation leave pay and refund of her plane fare, docketed as Case No. fact that respondent agency in their Position Paper paragraph 2,
POEA ADJ. (L) 95-05-1586.6 While the case was pending, she filed the Brief Statement of the Facts and of the Case - admitted that it had
instant case before the NLRC for underpayment of salary for a period of entered into an illegal contract with complainant by proposing the
one year and six months, nonpayment of vacation pay and reimbursement position of a housemaid which said position was then not allowed
of return airfare. by the POEA, by making it appear in the Employment Contract that
the position being applied for is the position of a saleslady. As it is,
When the parties failed to arrive at an amicable settlement before the we find indubitably clear that the foreign employer had took
Labor Arbiter, they were required to file their respective position papers, advantage to the herein hopeless complainant and because of this
subsequent pleadings and documentary exhibits. ordeal, the same obviously rendered complainant's continuous
employment unreasonable if not downright impossible. The facts
and surrounding circumstances of her ordeal was convincingly laid
In its Position Paper,7 respondent countered that petitioner actually agreed down by the complainant in her Position Paper, from which we find
to work in Bahrain as a housemaid for one (1) year because it was the only no flaws material enough to disregard the same. Complainant had
position available then. However, since such position was not yet allowed clearly made out her case and no amount of persuasion can
by the POEA at that time, they mutually agreed to submit the contract to convince us to tilt the scales of justice in favor of respondents
the POEA indicating petitioner's position as saleslady. Respondent added whose defense was anchored solely on the flimsy allegations that
that it was actually petitioner herself who violated the terms of their for a period of more than five (5) years - from 1989 until 1995 -
contract when she allegedly transferred to another employer without nothing was heard from her or from her relatives, presuming then
respondent's knowledge and approval. Lastly, respondent raised the that complainant had no problem with her employment abroad. We
defense of prescription of cause of action since the claim was filed beyond also find that the pleadings and the annexes filed by the parties
the three (3)-year period from the time the right accrued, reckoned from reveal a total lapse on the part of respondent First Cosmopolitan
either 1990 or 1991.8 Manpower and Promotions - their failure to support with substantial
evidence their contention that complainant transferred from one
On April 29, 1998, Labor Arbiter Jovencio Mayor, Jr. rendered a Decision employer to another without knowledge and approval of
finding respondent liable for violating the terms of the Employment respondent agency in contravention of the terms of the POEA
Contract and ordering it to pay petitioner: (a) the amount of US$4,050.00, approved Employment Contract. Obviously, respondent Agency
or its equivalent rate prevailing at the time of payment, representing her anchored its disquisition on the alleged "contracts" signed by the
salary differentials for fifteen (15) months; and, (b) the amount of BD complainant that she agreed with the terms of said contracts - one
180.00 or its equivalent rate prevailing at the time of payment, (1) year duration only and as a housemaid - to support its
representing the refund of plane ticket, thus: contention that complainant violated the contract agreement by
transferring from one employer to another on her own volition
From the foregoing factual backdrop, the only crucial issue for us to without the knowledge and consent of respondent agency. To us,
resolve in this case is whether or not complainant is entitled to her this posture of respondent agency is unavailing. These
monetary claims. "documents" are self-serving. We could not but rule that the same
were fabricated to tailor-fit their defense that complainant was
guilty of violating the terms of the Employment Contract.
xxx Consequently, we could not avoid the inference of a more logical
conclusion that complainant was forced against her will to continue
In the instant case, from the facts and circumstances laid down, it with her employment notwithstanding the fact that it was in
is thus self-evident that the relationship of the complainant and violation of the original Employment Contract including the illegal
respondent agency is governed by the Contract of Employment, withholding of her passport.
the basic terms a covenants of which provided for the position of
saleslady, monthly compensation of US$370.00 and duration of With the foregoing, we find and so rule that respondent Agency
contract for one (1) year. As it is, when the parties - complainant failed to discharge the burden of proving with substantial evidence
and respondent Agency - signed and executed the POEA - that complainant violated the terms of the Employment Contract,
approved Contract of Employment, this agreement is the law that thus negating respondent Agency's liability for complainant's
governs them. Thus, when respondent agency deviated from the money claims. All the more, the record is bereft of any evidence to
terms of the contract by assigning the position of a housemaid to show that complainant Datuman is either not entitled to her wage
complainant instead of a saleslady as agreed upon in the POEA- differentials or have already received the same from respondent.
As such, we are perforce constrained to grant complainant's prayer On appeal, the NLRC, Second Division, issued a Decision 10 affirming with
for payment of salary differentials computed as follows: modification the Decision of Labor Arbiter Mayor, Jr., by reducing the award
of salary differentials from US$4,050.00 to US$2,970.00 ratiocinating as
January 1992 April 1993 (15 months) follows:

US$370.00 agreed salary Accordingly, we find that the claims for salary differentials accruing
earlier than April of 1993 had indeed prescribed. This is so as
complainant had filed her complaint on May 31, 1995 when she
US$100.00 actual paid salary arrived from the jobsite in April 1993. Since the cause of action for
salary differential accrues at the time when it falls due, it is clear
US$270.00 balance that only the claims for the months of May 1993 to April 1994 have
not yet prescribed. With an approved salary rate of US$370.00 vis-
US$270.00 x 15 months = US$4050.00 -vis the amount of salary received which was $100.00,
complainant is entitled to the salary differential for the said period
in the amount of $2,970.00.
We are also inclined to grant complainant's entitlement to a refund
of her plane ticket in the amount of BD 180 Bahrain Dinar or the
equivalent in Philippine Currency at the rate of exchange prevailing xxx
at the time of payment.
WHEREFORE, premises considered, judgment is hereby rendered
Anent complainant's claim for vacation leave pay and overtime MODIFYING the assailed Decision by reducing the award of salary
pay, we cannot, however, grant the same for failure on the part of differentials to $2,970.00 to the complainant.
complainant to prove with particularity the months that she was
not granted vacation leave and the day wherein she did render The rest of the disposition is AFFIRMED.
overtime work.
SO ORDERED.11
Also, we could not grant complainant's prayer for award of
damages and attorney's fees for lack of factual and legal basis. On July 21, 2000, respondent elevated the matter to the CA through a
petition for certiorari under Rule 65.
WHEREFORE, premises considered, judgment is hereby rendered,
finding respondent Agency liable for violating the term of On August 2, 2000,12 the CA dismissed the petition for being insufficient in
Employment Contract and respondent First Cosmopolitan form pursuant to the last paragraph of Section 3, Rule 42 of the 1997 Rules
Manpower and Promotions is hereby ordered: of Civil Procedure, as amended.

To pay complainant the amount of US$ FOUR THOUSAND AND On October 20, 2000,13 however, the CA reinstated the petition upon
FIFTY (US$4,050.00), or its equivalent rate prevailing at the time of respondent's motion for reconsideration.14
payment, representing her salary differentials for fifteen (15)
months;
On August 7, 2002, the CA issued the assailed Decision 15 granting the
petition and reversing the NLRC and the Labor Arbiter, thus:
To pay complainant the amount of BD 180.00 or its equivalent rate
prevailing at the time of payment, representing the refund of plane
ticket; Under Section 1 (f), Rule II, Book II of the 1991 POEA Rules and
Regulations, the local agency shall assume joint and solidary
liability with the employer for all claims and liabilities which may
All other claims are hereby dismissed for lack of merit. arise in connection with the implementation of the contract,
including but not limited to payment of wages, health and disability
SO ORDERED.9 (emphasis supplied) compensation and repatriation.
Respondent Commission was correct in declaring that claims of I.
private respondent "for salary differentials accruing earlier than
April of 1993 had indeed prescribed." It must be noted that THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE
petitioner company is privy only to the first contract. Granting ERROR WHEN IT ABANDONED THE FACTUAL FINDINGS OF THE
arguendo that its liability extends to the acts of its foreign LABOR ARBITER AS AFFIRMED BY THE NATIONAL LABOR RELATIONS
principal, the Towering Recruiting Services, which appears to have COMMISSION.
a hand in the execution of the second contract, it is Our considered
opinion that the same would, at the most, extend only up to the
expiration of the second contract or until 01 September 1991. II.
Clearly, the money claims subject of the complaint filed in 1995
had prescribed. THE HONORABLE COURT OF APPEALS PATENTLY ERRED IN HOLDING
THAT THE RESPONDENT AGENCY IS ONLY A [sic] PRIVY AND LIABLE
However, this Court declares respondent Commission as not only TO THE PRINCIPAL CONTRACT.
having abused its discretion, but as being without jurisdiction at all,
in declaring private respondent entitled to salary differentials. After III.
decreeing the money claims accruing before April 1993 as having
prescribed, it has no more jurisdiction to hold petitioner company THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING
for salary differentials after that period. To reiterate, the local THAT THE CAUSE OF ACTION OF THE PETITIONER ALREADY
agency shall assume joint and solidary liability with the employer PRESCRIBED.
for all claims and liabilities which may arise in connection with the
implementation of the contract. Which contract? Upon a judicious
consideration, we so hold that it is only in connection with The respondent counters in its Comment that the CA is correct in ruling
thefirst contract. The provisions in number 2, Section 10 (a), Rule that it is not liable for the monetary claims of petitioner as the claim had
V, Book I of the Omnibus Rules Implementing the Labor Code already prescribed and had no factual basis.
Section 1 (f), Rule II, Book II of the 1991 POEA Rules and
Regulations were not made to make the local agency a perpetual Simply put, the issues boil down to whether the CA erred in not holding
insurer against all untoward acts that may be done by the foreign respondent liable for petitioner's money claims pursuant to their Contract
principal or the direct employer abroad. It is only as regards the of Employment.
principal contract to which it is privy shall its liability extend.
In Catan v. National Labor Relations Commission, 160 SCRA 691 We grant the petition.
(1988), it was held that the responsibilities of the local agent and
the foreign principal towards the contracted employees under the
recruitment agreement extends up to and until the expiration of On whether respondent is solidarily liable for petitioner's monetary claims
the employment contracts of the employees recruited and
employed pursuant to the said recruitment agreement. Section 1 of Rule II of the POEA Rules and Regulations states that:

xxx Section 1. Requirements for Issuance of License. - Every applicant


for license to operate a private employment agency or manning
Foregoing considered, the assailed Decision dated 24 February agency shall submit a written application together with the
2000 and the Resolution dated 23 June 2000 of respondent following requirements:
Commission in NLRC NCR CA 016354-98 are hereby SET ASIDE.
xxx
SO ORDERED.16
f. A verified undertaking stating that the applicant:
Petitioner's Motion for Reconsideration17 thereon was denied in the assailed
Resolution18 dated November 14, 2002. xxx

Hence, the present petition based on the following grounds: (3) Shall assume joint and solidary liability with the employer for all
claims and liabilities which may arise in connection with the
implementation of the contract; including but not limited to In Placewell International Services Corporation v. Camote,23 we held that
payment of wages, death and disability compensation and the subsequently executed side agreement of an overseas contract worker
repatriation. (emphasis supplied) with her foreign employer which reduced his salary below the amount
approved by the POEA is void because it is against our existing laws,
The above provisions are clear that the private employment agency shall morals and public policy. The said side agreement cannot supersede the
assume joint and solidary liability with the employer. 19 This Court has, time terms of the standard employment contract approved by the POEA.
and again, ruled that private employment agencies are held jointly and
severally liable with the foreign-based employer for any violation of the Hence, in the present case, the diminution in the salary of petitioner from
recruitment agreement or contract of employment. 20 This joint and solidary US$370.00 to US$100 (BD 40.00) per month is void for violating the POEA-
liability imposed by law against recruitment agencies and foreign approved contract which set the minimum standards, terms, and
employers is meant to assure the aggrieved worker ofimmediate and conditions of her employment. Consequently, the solidary liability of
sufficient payment of what is due him.21 This is in line with the policy of the respondent with petitioner's foreign employer for petitioner's money claims
state to protect and alleviate the plight of the working class. continues although she was forced to sign another contract in Bahrain. It is
the terms of the original POEA-approved employment contract that shall
In the assailed Decision, the CA disregarded the aforecited provision of the govern the relationship of petitioner with the respondent recruitment
law and the policy of the state when it reversed the findings of the NLRC agency and the foreign employer. We agree with the Labor Arbiter and the
and the Labor Arbiter. As the agency which recruited petitioner, respondent NLRC that the precepts of justice and fairness dictate that petitioner must
is jointly and solidarily liable with the latter's principal employer abroad for be compensated for all months worked regardless of the supposed
her (petitioner's) money claims. Respondent cannot, therefore, exempt termination of the original contract in April 1990. It is undisputed that
itself from all the claims and liabilities arising from the implementation of petitioner was compelled to render service until April 1993 and for the
their POEA-approved Contract of Employment. entire period that she worked for the foreign employer or his unilaterally
appointed successor, she should have been paid US$370/month for every
month worked in accordance with her original contract.
We cannot agree with the view of the CA that the solidary liability of
respondent extends only to the first contract (i.e. the original, POEA-
approved contract which had a term of until April 1990). The signing of the Respondent cannot disclaim liability for the acts of the foreign employer
"substitute" contracts with the foreign employer/principal before the which forced petitioner to remain employed in violation of our laws and
expiration of the POEA-approved contract and any continuation of under the most oppressive conditions on the allegation that it purportedly
petitioner's employment beyond the original one-year term, against the had no knowledge of, or participation in, the contract unwillingly signed by
will of petitioner, are continuing breaches of the original POEA-approved petitioner abroad. We cannot give credence to this claim considering that
contract. To accept the CA's reasoning will open the floodgates to even respondent by its own allegations knew from the outset that the contract
more abuse of our overseas workers at the hands of their foreign submitted to the POEA for approval was not to be the "real" contract.
employers and local recruiters, since the recruitment agency could easily Respondent blithely admitted to submitting to the POEA a contract stating
escape its mandated solidary liability for breaches of the POEA-approved that the position to be filled by petitioner is that of "Saleslady" although
contract by colluding with their foreign principals in substituting the she was to be employed as a domestic helper since the latter position was
approved contract with another upon the worker's arrival in the country of not approved for deployment by the POEA at that time. Respondent's
employment. Such outcome is certainly contrary to the State's policy of evident bad faith and admitted circumvention of the laws and regulations
extending protection and support to our overseas workers. To be sure, on migrant workers belie its protestations of innocence and put petitioner
Republic Act No. 8042 explicitly prohibits the substitution or alteration to in a position where she could be exploited and taken advantage of
the prejudice of the worker of employment contracts already approved and overseas, as what indeed happened to her in this case.
verified by the Department of Labor and Employment (DOLE) from the time
of actual signing thereof by the parties up to and including the period of We look upon with great disfavor the unsubstantiated actuations of
the expiration of the same without the approval of the DOLE. 22 innocence or ignorance on the part of local recruitment agencies of acts of
their foreign principals, as if the agencies' responsibility ends with the
Respondent's contention that it was petitioner herself who violated their deployment of the worker. In the light of the recruitment agency's legally
Contract of Employment when she signed another contract in Bahrain mandated joint and several liability with the foreign employer for all claims
deserves scant consideration. It is the finding of both the Labor Arbiter and in connection with the implementation of the contract, it is the recruitment
the NLRC - which, significantly, the CA did not disturb - that petitioner was agency's responsibility to ensure that the terms and conditions of the
forced to work long after the term of her original POEA-approved contract, employment contract, as approved by the POEA, are faithfully complied
through the illegal acts of the foreign employer. with and implemented properly by its foreign client/principal. Indeed, it is
in its best interest to do so to avoid being haled to the courts or labor However, it should be for the period May 31, 1992 to April 1993 and not
tribunals and defend itself from suits for acts of its foreign principal. May 1993 to April 1994 as erroneously stated in the NLRC's Decision.

On whether petitioner's claims for underpaid salaries have prescribed A final note

It should be recalled that the Labor Arbiter and the NLRC similarly found This Court reminds local recruitment agencies that it is their bounden duty
that petitioner is entitled to underpaid salaries, albeit they differed in the to guarantee our overseas workers that they are being recruited for bona
number of months for which salary differentials should be paid. The CA, on fide jobs with bona fide employers. Local agencies should never allow
the other hand, held that all of petitioner's monetary claims have themselves to be instruments of exploitation or oppression of their
prescribed pursuant to Article 291 of the Labor Code which provides that: compatriots at the hands of foreign employers. Indeed, being the ones who
profit most from the exodus of Filipino workers to find greener pastures
Art. 291. Money Claims. - All money claims arising from employer- abroad, recruiters should be first to ensure the welfare of the very people
employee relations accruing during the effectivity of this Code shall that keep their industry alive.
be filed within three years from the time that cause of action
accrued; otherwise, they shall be forever barred. (emphasis WHEREFORE, the petition is GRANTED. The assailed Decision of the Court
supplied) of Appeals dated August 7, 2002 and Resolution dated November 14, 2002
in CA-G.R. SP No. 59825 are REVERSED AND SET ASIDE. The Decision of
We do not agree with the CA when it held that the cause of action of the National Labor Relations Commission dated February 24, 2000
petitioner had already prescribed as the three-year prescriptive period is REINSTATED with a qualification with respect to the award of salary
should be reckoned from September 1, 1989 when petitioner was forced to differentials, which should be granted for the period May 31, 1992 to April
sign another contract against her will. As stated in the complaint, one of 1993 and not May 1993 to April 1994.
petitioner's causes of action was for underpayment of salaries. The NLRC
correctly ruled the right to claim unpaid salaries (or in this case, unpaid SO ORDERED.
salary differentials) accrue as they fall due.24 Thus, petitioner's cause of
action to claim salary differential for October 1989 only accrued after she
had rendered service for that month (or at the end of October 1989). Her
right to claim salary differential for November 1989 only accrued at the
end of November 1989, and so on and so forth. Stolt- Nielsen v Medequillo

Both the Labor Arbiter and the NLRC found that petitioner was forced to Before the Court is a Petition for Review on Certiorari1 of the Decision2 of
work until April 1993. Interestingly, the CA did not disturb this finding but the First Division of the Court of Appeals in CA-G.R. SP No. 91632 dated 31
held only that the extent of respondent's liability was limited to the term January 2007, denying the petition for certiorari filed by Stolt-Nielsen
under the original contract or, at most, to the term of the subsequent Transportation Group, Inc. and Chung Gai Ship Management (petitioners)
contract entered into with the participation of respondent's foreign and affirming the Resolution of the National Labor Relations Commission
principal, i.e. 1991. We have discussed previously the reasons why (a) the (NLRC). The dispositive portion of the assailed decision reads:
CA's theory of limited liability on the part of respondent is untenable and
(b) the petitioner has a right to be compensated for all months she, in fact, WHEREFORE, the petition is hereby DENIED.
was forced to work. To determine for which months petitioner's right to Accordingly, the assailed Decision promulgated on
claim salary differentials has not prescribed, we must count three years February 28, 2003 and the Resolution dated July 27, 2005
prior to the filing of the complaint on May 31, 1995. Thus, only claims are AFFIRMED.3
accruing prior to May 31, 1992 have prescribed when the complaint was
filed on May 31, 1995. Petitioner is entitled to her claims for salary
differentials for the period May 31, 1992 to April 1993, or approximately
eleven (11) months.25
The facts as gathered by this Court follow:
We find that the NLRC correctly computed the salary differential due to
petitioner at US$2,970.00 (US$370.00 as approved salary rate - US$100.00
as salary received = US$290 as underpaid salary per month x 11 months).
On 6 March 1995, Sulpecio Madequillo (respondent) filed a 7. The POEA, without knowledge that he was not deployed
complaint before the Adjudication Office of the Philippine Overseas with the vessel, certified the Second Employment Contract
Employment Administration (POEA) against the petitioners for illegal on 18 September 1992.
dismissal under a first contract and for failure to deploy under a second
contract. In his complaint-affidavit,4 respondent alleged that:

8. Despite the commencement of the Second Contract on 21


April 1992, petitioners failed to deploy him with the vessel
1. On 6 November 1991(First Contract), he was hired by Stolt- MV Stolt Pride;
Nielsen Marine Services, Inc on behalf of its principal
Chung-Gai Ship Management of Panama as Third Assistant 9. He made a follow-up with the petitioner but the same
Engineer on board the vessel Stolt Aspiration for a period refused to comply with the Second Employment Contract.
of nine (9) months;

10. On 22 December 1994, he demanded for his passport,


2. He would be paid with a monthly basic salary of $808.00 seamans book and other employment documents.
and a fixed overtime pay of $404.00 or a total of $1,212.00 However, he was only allowed to claim the said documents
per month during the employment period commencing on in exchange of his signing a document;
6 November 1991;

11. He was constrained to sign the document involuntarily


3. On 8 November 1991, he joined the vessel MV Stolt because without these documents, he could not seek
Aspiration; employment from other agencies.

4. On February 1992 or for nearly three (3) months of He prayed for actual, moral and exemplary damages as well as
rendering service and while the vessel was at Batangas, he attorneys fees for his illegal dismissal and in view of the Petitioners bad
was ordered by the ships master to disembark the vessel faith in not complying with the Second Contract.
and repatriated back to Manila for no reason or
explanation;

The case was transferred to the Labor Arbiter of the DOLE upon the
effectivity of the Migrant Workers and Overseas Filipinos Act of 1995.
5. Upon his return to Manila, he immediately proceeded to the
petitioners office where he was transferred employment
with another vessel named MV Stolt Pride under the
same terms and conditions of the First Contract;
The parties were required to submit their respective position papers
before the Labor Arbiter. However, petitioners failed to submit their
respective pleadings despite the opportunity given to them. 5
6. On 23 April 1992, the Second Contract was noted and
approved by the POEA; On 21 July 2000, Labor Arbiter Vicente R. Layawen rendered a
judgment6 finding that the respondent was constructively dismissed by the
petitioners. The dispositive portion reads:
In all other respects, the assailed decision so
stands as, AFFIRMED.11
WHEREFORE, premises considered, judgment is
hereby rendered, declaring the respondents guilty of
constructively dismissing the complainant by not honoring
the employment contract. Accordingly, respondents are
hereby ordered jointly and solidarily to pay complainant
the following:
Before the NLRC, the petitioners assailed that they were not properly
notified of the hearings that were conducted before the Labor Arbiter. They
further alleged that after the suspension of proceedings before the POEA,
the only notice they received was a copy of the decision of the Labor
1. $12,537.00 or its peso equivalent at the time of payment. 7 Arbiter.12

The NLRC ruled that records showed that attempts to serve the various
notices of hearing were made on petitioners counsel on record but these
The Labor Arbiter found the first contract entered into by and between the failed on account of their failure to furnish the Office of the Labor Arbiter a
complainant and the respondents to have been novated by the execution copy of any notice of change of address. There was also no evidence that a
of the second contract. In other words, respondents cannot be held liable service of notice of change of address was served on the POEA. 13
for the first contract but are clearly and definitely liable for the breach of
the second contract.8 However, he ruled that there was no substantial
evidence to grant the prayer for moral and exemplary damages.9
The NLRC upheld the finding of unjustified termination of contract for
failure on the part of the petitioners to present evidence that would justify
their non-deployment of the respondent. 14 It denied the claim of the
The petitioners appealed the adverse decision before the National Labor petitioners that the monetary award should be limited only to three (3)
Relations Commission assailing that they were denied due process, that months for every year of the unexpired term of the contract. It ruled that
the respondent cannot be considered as dismissed from employment the factual incidents material to the case transpired within 1991-1992 or
because he was not even deployed yet and the monetary award in favor of before the effectivity of Republic Act No. 8042 or the Migrant Workers and
the respondent was exorbitant and not in accordance with law. 10 Overseas Filipinos Act of 1995 which provides for such limitation. 15

On 28 February 2003, the NLRC affirmed with modification the However, the NLRC upheld the reduction of the monetary award with
Decision of the Labor Arbiter. The dispositive portion reads: respect to the deletion of the overtime pay due to the non-deployment of
the respondent.16

WHEREFORE, premises considered, the decision


under review is hereby, MODIFIED BY DELETING the award The Partial Motion for Reconsideration filed by the petitioners was
of overtime pay in the total amount of Three Thousand Six denied by the NLRC in its Resolution dated 27 July 2005. 17
Hundred Thirty Six US Dollars (US $3,636.00).

The petitioners filed a Petition for Certiorari before the Court of


Appeals alleging grave abuse of discretion on the part of NLRC when it
affirmed with modification the ruling of the Labor Arbiter. They prayed that
the Decision and Resolution promulgated by the NLRC be vacated and
another one be issued dismissing the complaint of the respondent. THE COURT A QUO ERRED IN RULING THAT THERE WAS
CONSTRUCTIVE DISMISSAL UNDER THE SECOND
CONTRACT.

Finding no grave abuse of discretion, the Court of Appeals


AFFIRMED the Decision of the labor tribunal.
1. IT IS LEGALLY IMPOSSIBLE TO HAVE CONSTRUCTIVE
DISMISSAL WHEN THE EMPLOYMENT HAS NOT YET
COMMENCED.
The Courts Ruling

2. ASSUMING THERE WAS OMISSION UNDER THE SECOND


The following are the assignment of errors presented before this CONTRACT, PETITIONERS CAN ONLY BE FOUND AS
Court: HAVING FAILED IN DEPLOYING PRIVATE RESPONDENT
BUT WITH VALID REASON.

I.
III.

THE COURT A QUO ERRED IN FAILING TO FIND THAT EVEN


ASSUMING THERE WAS BASIS FOR HOLDING PETITIONER
THE COURT A QUO ERRED IN FINDING THAT THE SECOND LIABLE FOR FAILURE TO DEPLOY RESPONDENT, THE POEA
CONTRACT NOVATED THE FIRST CONTRACT. RULES PENALIZES SUCH OMISSION WITH A MERE
REPRIMAND.18

1. THERE WAS NO NOVATION OF THE FIRST CONTRACT BY


THE SECOND CONTRACT; THE ALLEGATION OF ILLEGAL The petitioners contend that the first employment contract
DISMISSAL UNDER THE FIRST CONTRACT MUST BE between them and the private respondent is different from and
RESOLVED SEPARATELY FROM THE ALLEGATION OF independent of the second contract subsequently executed upon
FAILURE TO DEPLOY UNDER THE SECOND CONTRACT. repatriation of respondent to Manila.

2. THE ALLEGED ILLEGAL DISMISSAL UNDER THE FIRST We do not agree.


CONTRACT TRANSPIRED MORE THAN THREE (3) YEARS
AFTER THE CASE WAS FILED AND THEREFORE HIS CASE
SHOULD HAVE BEEN DISMISSED FOR BEING BARRED BY
PRESCRIPTION.
Novation is the extinguishment of an obligation by the substitution
or change of the obligation by a subsequent one which extinguishes or
modifies the first, either by changing the object or principal conditions, or,
by substituting another in place of the debtor, or by subrogating a third
II.
person in the rights of the creditor. In order for novation to take place, the principal. These contracts were for overseas employment
concurrence of the following requisites is indispensable: aboard different vessels. The first contract was for
employment aboard the MV Stolt Aspiration while the
1. There must be a previous valid obligation, second contract involved working in another vessel, the MV
Stolt Pride. Petitioners and Madequillo, Jr. accepted the
terms and conditions of the second contract. Contrary to
2. There must be an agreement of the parties concerned to petitioners assertion, the first contract was a previous
a new contract, valid contract since it had not yet been terminated at the
time of Medequillo, Jr.s repatriation to Manila. The legality
3. There must be the extinguishment of the old contract, of his dismissal had not yet been resolved with finality.
and Undoubtedly, he was still employed under the first contract
when he negotiated with petitioners on the second
4. There must be the validity of the new contract. 19 contract. As such, the NLRC correctly ruled that petitioners
could only be held liable under the second contract. 21

In its ruling, the Labor Arbiter clarified that novation had set in between the
first and second contract. To quote: We concur with the finding that there was a novation of the first
employment contract.

We reiterate once more and emphasize the ruling in Reyes v.


National Labor Relations Commission,22 to wit:
xxx [T]his office would like to make it clear that the first
contract entered into by and between the complainant and
the respondents is deemed to have been novated by the
execution of the second contract. In other words,
respondents cannot be held liable for the first contract but x x x [F]indings of quasi-judicial bodies like the NLRC, and
are clearly and definitely liable for the breach of the second affirmed by the Court of Appeals in due course, are
contract.20 conclusive on this Court, which is not a trier of facts.

This ruling was later affirmed by the Court of Appeals in its decision xxxx
ruling that:

x x x Findings of fact of administrative agencies and quasi-


Guided by the foregoing legal precepts, it is judicial bodies, which have acquired expertise because
evident that novation took place in this particular case. The their jurisdiction is confined to specific matters, are
parties impliedly extinguished the first contract by generally accorded not only respect, but finality when
agreeing to enter into the second contract to placate affirmed by the Court of Appeals. Such findings deserve full
Medequillo, Jr. who was unexpectedly dismissed and respect and, without justifiable reason, ought not to be
repatriated to Manila. The second contract would not have altered, modified or reversed.(Emphasis supplied)23
been necessary if the petitioners abided by the terms and
conditions of Madequillo, Jr.s employment under the first
contract. The records also reveal that the 2 nd contract
extinguished the first contract by changing its object or
With the finding that respondent was still employed under the first The petitioners argue that under the POEA Contract, actual
contract when he negotiated with petitioners on the second deployment of the seafarer is a suspensive condition for the
contract,24 novation became an unavoidable conclusion. commencement of the employment.28 We agree with petitioners on such
point. However, even without actual deployment, the perfected contract
gives rise to obligations on the part of petitioners.

Equally settled is the rule that factual findings of labor officials,


who are deemed to have acquired expertise in matters within their
jurisdiction, are generally accorded not only respect but even finality by A contract is a meeting of minds between two persons whereby
the courts when supported by substantial evidence, i.e., the amount of one binds himself, with respect to the other, to give something or to render
relevant evidence which a reasonable mind might accept as adequate to some service.29 The contracting parties may establish such stipulations,
justify a conclusion.25 But these findings are not infallible. When there is a clauses, terms and conditions as they may deem convenient, provided they
showing that they were arrived at arbitrarily or in disregard of the evidence are not contrary to law, morals, good customs, public order, or public
on record, they may be examined by the courts.26 In this case, there was policy.30
no showing of any arbitrariness on the part of the lower courts in their
findings of facts. Hence, we follow the settled rule.

The POEA Standard Employment Contract provides that


employment shall commence upon the actual departure of the seafarer
We need not dwell on the issue of prescription. It was settled by from the airport or seaport in the port of hire. 31 We adhere to the terms
the Court of Appeals with its ruling that recovery of damages under the and conditions of the contract so as to credit the valid prior stipulations of
first contract was already time-barred. Thus: the parties before the controversy started. Else, the obligatory force of
every contract will be useless. Parties are bound not only to the fulfillment
of what has been expressly stipulated but also to all the consequences
which, according to their nature, may be in keeping with good faith, usage
and law.32
Accordingly, the prescriptive period of three (3)
years within which Medequillo Jr. may initiate money claims
under the 1st contract commenced on the date of his Thus, even if by the standard contract employment commences
repatriation. xxx The start of the three (3) year prescriptive only upon actual departure of the seafarer, this does not mean that the
period must therefore be reckoned on February 1992, seafarer has no remedy in case of non-deployment without any valid
which by Medequillo Jr.s own admission was the date of his reason. Parenthetically, the contention of the petitioners of the alleged
repatriation to Manila. It was at this point in time that poor performance of respondent while on board the first ship MV Stolt
Medequillo Jr.s cause of action already accrued under the Aspiration cannot be sustained to justify the non-deployment, for no
first contract. He had until February 1995 to pursue a case evidence to prove the same was presented. 33
for illegal dismissal and damages arising from the
1st contract. With the filing of his Complaint-Affidavit on
March 6, 1995, which was clearly beyond the prescriptive
period, the cause of action under the 1 st contract was We rule that distinction must be made between the perfection of
already time-barred.27 the employment contract and the commencement of the employer-
employee relationship. The perfection of the contract, which in this case
coincided with the date of execution thereof, occurred when petitioner and
respondent agreed on the object and the cause, as well as the rest of the
terms and conditions therein. The commencement of the employer-
employee relationship, as earlier discussed, would have taken place had
petitioner been actually deployed from the point of hire. Thus, even before
The issue that proceeds from the fact of novation is the the start of any employer-employee relationship, contemporaneous with
consequence of the non-deployment of respondent. the perfection of the employment contract was the birth of certain rights
and obligations, the breach of which may give rise to a cause of action
against the erring party. Thus, if the reverse had happened, that is the
seafarer failed or refused to be deployed as agreed upon, he would be
liable for damages.34
Now, the question to be dealt with is how will the seafarer be
compensated by reason of the unreasonable non-deployment of the
petitioners?
Further, we do not agree with the contention of the petitioners that
the penalty is a mere reprimand.

The POEA Rules Governing the Recruitment and Employment of


Seafarers do not provide for the award of damages to be given in favor of
The POEA Rules and Regulations Governing Overseas the employees. The claim provided by the same law refers to a valid
Employment35 dated 31 May 1991 provides for the consequence and contractual claim for compensation or benefits arising from employer-
penalty against in case of non-deployment of the seafarer without any employee relationship or for any personal injury, illness or death at levels
valid reason. It reads: provided for within the terms and conditions of employment of
seafarers. However, the absence of the POEA Rules with regard to the
payment of damages to the affected seafarer does not mean that the
seafarer is precluded from claiming the same. The sanctions provided for
non-deployment do not end with the suspension or cancellation of license
Section 4. Workers Deployment. An agency shall deploy or fine and the return of all documents at no cost to the worker. As earlier
its recruits within the deployment period as indicated discussed, they do not forfend a seafarer from instituting an action for
below: damages against the employer or agency which has failed to deploy him. 37

xxx We thus decree the application of Section 10 of Republic Act No.


8042 (Migrant Workers Act) which provides for money claims by reason of a
contract involving Filipino workers for overseas deployment. The law
provides:
b. Thirty (30) calendar days from the date of processing by
the administration of the employment contracts of
seafarers.
Sec. 10. Money Claims. Notwithstanding any provision of
law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original
and exclusive jurisdiction to hear and decide, within ninety
Failure of the agency to deploy a worker within the (90) calendar days after the filing of the complaint, the
prescribed period without valid reasons shall be a cause claims arising out of an employer-employee relationship or
for suspension or cancellation of license or fine. In addition, by virtue of any law or contract involving Filipino workers
the agency shall return all documents at no cost to the for overseas deployment including claims for actual, moral,
worker.(Emphasis and underscoring supplied) exemplary and other forms of damages. x x x
(Underscoring supplied)
The appellate court correctly ruled that the penalty of reprimand 36 provided
under Rule IV, Part VI of the POEA Rules and Regulations Governing the
Recruitment and Employment of Land-based Overseas Workers is not
applicable in this case. The breach of contract happened on February 1992
and the law applicable at that time was the 1991 POEA Rules and
Regulations Governing Overseas Employment. The penalty for non-
deployment as discussed is suspension or cancellation of license or fine. Following the law, the claim is still cognizable by the labor arbiters
of the NLRC under the second phrase of the provision.
Arraigned on June 20, 1994, the accused pleaded not guilty 2 to these
charges.
Applying the rules on actual damages, Article 2199 of the New Civil
Code provides that one is entitled to an adequate compensation only for At the trial, the prosecution presented five (5) witnesses, namely, Erlie
such pecuniary loss suffered by him as he has duly proved. Respondent is Ramos, SPO2 Erwin Manalopilar, Eileen Fermindoza, Nancy Araneta and
thus liable to pay petitioner actual damages in the form of the loss of nine Lourdes Modesto. The succeeding narration is gathered from their
(9) months worth of salary as provided in the contract. 38This is but proper testimonies:
because of the non-deployment of respondent without just cause.
On January 30, 1994, at exactly 10:00 in the morning, Erlie Ramos,
Attorney II of the Philippine Overseas Employment Agency (POEA), received
a telephone call from an unidentified woman inquiring about the legitimacy
WHEREFORE, the appeal is DENIED. The 31 January 2007 Decision of the recruitment conducted by a certain Mrs. Carol Figueroa. Ramos,
of the Court of Appeals in CA-G.R. SP. No. 91632 is hereby AFFIRMED. The whose duties include the surveillance of suspected illegal recruiters,
Petitioners are hereby ordered to pay Sulpecio Medequillo, Jr., the award of immediately contacted a friend, a certain Mayeth Bellotindos, so they could
actual damages equivalent to his salary for nine (9) months as provided by both go to No. 26-D, Tetuan Highway, Sta. Cruz, Zamboanga City, where
the Second Employment Contract. the recruitment was reportedly being undertaken. Upon arriving at the
reported area at around 4:00 p.m., Bellotindos entered the house and
pretended to be an applicant. Ramos remained outside and stood on the
pavement, from where he was able to see around six (6) persons in the
house's sala. Ramos even heard a woman, identified as Carol Fegueroa,
SO ORDERED. talk about the possible employment she has to provide in Singapore and
the documents that the applicants have to comply with. Fifteen (15)
People v Dela Piedra minutes later, Bellotindos came out with a bio-data form in hand.

Accused-appellant Carol M. dela Piedra questions her conviction for illegal On February 1, 1994, Ramos conferred with a certain Capt. Mendoza of the
recruitment in large scale and assails, as well, the constitutionality of the Criminal Investigation Service (CIS) to organize the arrest of the alleged
law defining and penalizing said crime. illegal recruiter. Also present were other members of the CIS, including Col.
Rodolfo Almonte, Regional Director of the PNP-CIS for Region IX, Eileen
Fermindoza, and a certain SPO3 Santos. The group planned to entrap the
The Court affirms the constitutionality of the law and the conviction of the illegal recruiter the next day by having Fermindoza pose as an applicant. 3
accused, but reduces the penalty imposed upon her.
On February 2, 1994, at around 8:00 p.m., Col. Almonte directed the case
The accused was charged before the Regional Trial Court of Zamboanga to SPO2 Erwin Manalopilar, a member of the Philippine National Police who
City in an information alleging: was assigned as an investigator of the CIS, to conduct a surveillance of the
area to confirm the report of illegal recruitment. Accordingly, he, along with
That on or about January 30, 1994, in the City of Zamboanga, Philippines, Eileen Fermindoza, immediately proceeded to Tetuan Highway. The two did
and within the jurisdiction of this Honorable Court, the above-named not enter the house where the recruitment was supposedly being
accused, without having previously obtained from the Philippine Overseas conducted, but Fermindoza interviewed two people who informed them
Employment Administration, a license or authority to engage in that some people do go inside the house. Upon returning to their office at
recruitment and overseas placement of workers, did then and there, around 8:30 a.m., the two reported to Capt. Mendoza who organized a
wilfully, unlawfully and feloniously, offer and promise for a fee employment team to conduct the raid.
abroad particularly in Singapore thus causing Maria Lourdes Modesto [y]
Gadrino, Nancy Araneta y Aliwanag and Jennelyn Baez y Timbol, all The raiding team, which included Capt. Mendoza, SPO2 Manalopilar,
qualified to apply, in fact said Maria Lourdes Modesto had already Fermindoza and a certain Oscar Bucol, quickly set off and arrived at the
advanced the amount of P2,000.00 to the accused for and in consideration reported scene at 9:30 that morning. There they met up with Erlie Ramos
of the promised employment which did not materialized [sic] thus causing of the POEA. Fermindoza then proceeded to enter the house while the rest
damage and prejudice to the latter in the said sum; furthermore, the acts of the team posted themselves outside to secure the area. Fermindoza was
complained of herein tantamount [sic] to economic sabotage in that the instructed to come out after she was given a bio-data form, which will
same were committed in large scale.1 serve as the team's cue to enter the house.4
Fermindoza introduced herself as a job applicant to a man and a woman, At the trial, Nancy Araneta, 23, recounted that she was at Jasmine
apparently the owners of the house, and went inside. There, she saw Alejandro's house in the afternoon of January 30, 1994. Araneta had
another woman, later identified as Jasmine, coming out of the bathroom. learned from Sandra Aquino, also a nurse at the Cabato Medical Hospital,
The man to whom Fermindoza earlier introduced herself told Jasmine that that a woman was there to recruit job applicants for Singapore.
Fermindoza was applying for a position. Jasmine, who was then only
wearing a towel, told her that she would just get dressed. Jasmine then Araneta and her friends, Jennelyn Baez and Sandra Aquino, arrived at
came back and asked Fermindoza what position she was applying for. Jasmine's house at around 4:30 p.m. Jasmine welcomed them and told
Fermindoza replied that she was applying to be a babysitter or any other them to sit down. They listened to the "recruiter" who was then talking to a
work so long as she could go abroad. Jasmine then gave her an application number of people. The recruiter said that she was "recruiting" nurses for
form. Singapore. Araneta and her friends then filled up bio-data forms and were
required to submit pictures and a transcript of records. They were also told
A few minutes later, a certain Carol arrived. Jasmine informed Carol that to pay P2,000, and "the rest will be salary deduction." Araneta submitted
Fermindoza was an applicant. Fermindoza asked Carol what the her bio-data form to Carol that same afternoon, but did not give any money
requirements were and whether she (Fermindoza) was qualified. Carol told because she was "not yet sure."
Fermindoza that if she had a passport, she could fill up the application
papers. Fermindoza replied that she had no passport yet. Carol said she On the day of the raid on February 2, 1994, Araneta was again at the
need not worry since Jasmine will prepare the passport for her. While filling Alejandro residence to submit her transcript of records and her picture. She
up the application form, three women who appeared to be friends of arrived at the house 30 minutes before the raid but did not witness the
Jasmine arrived to follow up the result of their applications and to give their arrest since she was at the porch when it happened. 12
advance payment. Jasmine got their papers and put them on top of a small
table. Fermindoza then proceeded to the door and signaled to the raiding
party by raising her hand. Maria Lourdes Modesto, 26, was also in Jasmine Alejandro's house on
January 30, 1994. A friend of Jasmine had informed her that there was
someone recruiting in Jasmine's house. Upon arriving at the Alejandro
Capt. Mendoza asked the owners of the house, a married couple, for residence, Lourdes was welcomed by Jasmine.1wphi1.nt
permission to enter the same. The owners granted permission after the
raiding party introduced themselves as members of the CIS. Inside the
house, the raiding party saw some supposed applicants. Application forms, Lourdes recalled that Carol Figueroa was already briefing some people
already filled up, were in the hands of one Mrs. Carol Figueroa. The CIS when she arrived. Carol Figueroa asked if they would like a "good
asked Figueroa if she had a permit to recruit. Figueroa retorted that she opportunity" since a hospital was hiring nurses. She gave a breakdown of
was not engaged in recruitment. Capt. Mendoza nevertheless proceeded to the fees involved: P30,000 for the visa and the round trip ticket, and
arrest Figueroa. He took the application forms she was holding as the P5,000 as placement fee and for the processing of the papers. The initial
raiding party seized the other papers5 on the table.6 payment was P2,000, while P30,000 will be by salary deduction.

The CIS team then brought Figueroa, a certain Jasmine Alejandro, and the Lourdes filled up the application form and submitted it to Jasmine. After the
three women suspected to be applicants, to the office for investigation.7 interview, she gave the initial payment of P2,000 to Jasmine, who assured
Lourdes that she was authorized to receive the money. On February 2,
1994, however, Lourdes went back to the house to get back the money.
In the course of their investigation, the CIS discovered that Carol Figueroa Jasmine gave back the money to Lourdes after the raid.13
had many aliases, among them, Carol Llena and Carol dela Piedra. The
accused was not able to present any authority to recruit when asked by the
investigators.8 A check by Ramos with the POEA revealed that the acused Denial comprised the accused's defense.
was not licensed or authorized to conduct recruitment. 9 A
certification dated February 2, 1994 stating thus was executed by
10
Carol dela Piedra, 37, is a housewife and a resident of Cebu City. Her
Renegold M. Macarulay, Officer-in-Charge of the POEA. husband is a businessman from Cebu, the manager of the Region 7 Branch
of the Grollier International Encyclopedia. They own an apartment in Cebu
The CIS likewise interviewed the supposed applicants, Lourdes Modesto, City, providing lodging to students.
Nancy Araneta and Jennelyn Baez, all registered nurses working at the
Cabato Medical Hospital, who executed their respective written The accused claimed that she goes to Singapore to visit her relatives. She
statements.11 first traveled to Singapore on August 21, 1993 as a tourist, and came back
to the Philippines on October 20 of the same year. Thereafter, she returned Two (2) minutes later, three (3) girls entered the house looking for Jasmine.
to Singapore on December 10, 1993. The woman Carol was talking with then stood up and went out. A minute
after, three (3) members of the CIS and a POEA official arrived. A big man
On December 21, 1993, while in Singapore, the accused was invited to a identified himself as a member of the CIS and informed her that they
Christmas party sponsored by the Zamboanga City Club Association. On received a call that she was recruiting. They told her she had just
that occasion, she met a certain Laleen Malicay, who sought her help. A interviewed a woman from the CIS. She denied this, and said that she
midwife, Malicay had been working in Singapore for six (6) years. Her came only to say goodbye to the occupants of the house, and to get
employer is a certain Mr. Tan, a close friend of Carol. whatever Jasmine would be sending for Laleen Malicay. She even showed
them her ticket for Cebu City.
According to the accused, Malicay sent P15,000 home for her father who
was then seriously ill. Malicay was not sure, however, whether her father Erlie Ramos then went up to Jasmine's room and returned with some
received the money so she requested the accused to verify from her papers. The accused said that those were the papers that Laleen Malicay
relatives receipt thereof. She informed the accused that she had a cousin requested Jasmine to give to her (the accused). The accused surmised that
by the name of Jasmine Alejandro. Malicay gave the accused Jasmine's because Laleen Malicay wanted to go home but could not find a
telephone number, address and a sketch of how to get there. replacement, one of the applicants in the forms was to be her (Malicay's)
substitute. Ramos told the accused to explain in their office.
The accused returned to the country on January 21, 1994. From Cebu City,
the accused flew to Zamboanga City on January 23, 1994 to give some The accused denied in court that she went to Jasmine's residence to
presents to her friends. engage in recruitment. She claimed she came to Zamboanga City to visit
her friends, to whom she could confide since she and her husband were
having some problems. She denied she knew Nancy Araneta or that she
On January 30, 1994, the accused called up Jasmine Alejandro, Laleen brought information sheets for job placement. She also denied instructing
Malicay's cousin, to inform her that she would be going to her house. At Jasmine to collect P2,000 from alleged applicants as processing fee. 14
around noon that day, the accused, accompanied by her friend Hilda
Falcasantos, arrived at the house where she found Jasmine entertaining
some friends. Jasmine came down with two of her friends whom she The accused presented two witnesses to corroborate her defense.
introduced as her classmates. Jasmine told them that the accused was a
friend of Laleen Malicay. The first, Jasmine Alejandro, 23, testified that she met the accused for the
first time only on January 30, 1994 when the latter visited them to deliver
The accused relayed to Jasmine Malicay's message regarding the money Laleen Malicay's message regarding the money she sent. Carol, who was
the latter had sent. Jasmine assured her that they received the money, and accompanied by a certain Hilda Falcasantos, stayed in their house for 10 to
asked Carol to tell Malicay to send more money for medicine for Malicay's 15 minutes only. Carol came back to the house a few days later on
mother. Jasmine also told her that she would send something for Malicay February 2 at around 8:00 in the morning to "get the envelope for the
when the accused goes back to Singapore. The accused replied that she candidacy of her daughter." Jasmine did not elaborate.
just needed to confirm her flight back to Cebu City, and will return to
Jasmine's house. After the meeting with Jasmine, the accused went Jasmine denied that she knew Nancy Araneta or Lourdes Modesto. She
shopping with Hilda Falcasantos. The accused was in the house for only denied that the accused conducted recruitment. She claimed she did not
fifteen (15) minutes. see Carol distribute bio-data or application forms to job applicants. She
disclaimed any knowledge regarding the P2,000 application fee. 15
On February 2, 1994, the accused went to the Philippine Airlines office at
7:30 in the morning to confirm her 5:30 p.m. flight to Cebu City. She then The other defense witness, Ernesto Morales, a policeman, merely testified
proceeded to Jasmine's residence, arriving there at past 8 a.m. that the accused stayed in their house in No. 270 Tugbungan, Zamboanga
City, for four (4) days before her arrest, although she would sometimes go
Inside the house, she met a woman who asked her, "Are you Carol from downtown alone. He said he did not notice that she conducted any
Singapore?" The accused, in turn, asked the woman if she could do recruitment.16
anything for her. The woman inquired from Carol if she was recruiting.
Carol replied in the negative, explaining that she was there just to say On May 5, 1995, the trial court rendered a decision convicting the accused,
goodbye to Jasmine. The woman further asked Carol what the requirements thus:
were if she (the woman) were to go to Singapore. Carol replied that she
would need a passport.
WHEREFORE, in view of all the foregoing consideration[s][,] this ILLEGALLY RECRUITED BY THE ACCUSED-APPELLANT, HENCE,
Court finds the accused Carol dela Piedra alias Carol Llena and ACCUSED-APPELLANT SHOULD BE ACQUITTED;
Carol Figueroa guilty beyond reasonable doubt of Illegal
Recruitment committed in a large scale and hereby sentences her V
to suffer the penalty of LIFE IMPRISONMENT and to pay a fine of
P100,000.00, and also to pay the costs.
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT DETECTING
THAT NANCY ARANETA WAS NOT ILLEGALLY RECRUITED BY THE
Being a detention prisoner, the said accused is entitled to the full ACCUSED-APPELLANT, HENCE, ACCUSED SHOULD BE EXONERATED;
time of the period of her detention during the pendency of this
case under the condition set forth in Article 29 of the Revised Penal
Code. VI

SO ORDERED.17 WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT REALIZING
THAT MARIA LOURDES MODESTO WAS NOT ILLEGALLY RECRUITED
BY THE ACCUSED-APPELLANT, HENCE, ACCUSED-APPELLANT
The accused, in this appeal, ascribes to the trial court the following errors: SHOULD BE EXCULPATED;

I VII

WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING WITH DUE RESPECT, THE LOWER COURT ERRED IN FINDING THAT
SEC. 13 (B) OF P.D. 442[,] AS AMENDED[,] OTHERWISE KNOWN AS THE ACCUSED-APPELLANT WAS CHARGED WITH LARGE SCALE
[THE] ILLEGAL RECRUITMENT LAW UNCONSTITUTIONAL. ILLEGAL RECRUITMENT ON JANUARY 30, 1994, THE DATE STATED IN
THE INFORMATION AS THE DATE OF THE CRIME, BUT ACCUSED
II WAS ARRESTED ON FEB. 2, 1994 AND ALL THE EVIDENCES [sic]
INDICATED [sic] THAT THE ALLEGED CRIME WERE [sic] COMMITTED
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT HOLDING ON FEB. 2, 1994, HENCE, THE INFORMATION IS FATALLY DEFECTIVE;
THAT THE APPREHENDING TEAM COMPOSED OF POEA AND CIS
REPRESENTATIVES ENTERED INTO [sic] THE RESIDENCE OF VIII
JASMIN[E] ALEJANDRO WITHOUT ANY SEARCH WARRANT IN
VIOLATION OF ARTICLE III, SECTION 2 OF THE PHILIPPINE WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING
CONSTITUTION, AND ANY EVIDENCE OBTAINED IN VIOLATION THAT THE ALLEGED CRIME OF ILLEGAL RECRUITMENT WAS
THEREOF, SHALL BE INADMISSIBLE FOR ANY PURPOSE IN ANY COMMITTED NOT ON [sic] LARGE SCALE, HENCE, THE PENALTY
PROCEEDING AS PROVIDED UNDER ARTICLE III, SECTION 3, (2) OF SHOULD NOT BE LIFE IMPRISONMENT;
THE SAME CONSTITUTION;
IX
III
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT FINDING
WITH DUE RESPECT, THE LOWER COURT ERRED IN IGNORING THAT THAT THOSE EVIDENCES [sic] SEIZED AT THE HOUSE OF JASMIN[E]
WHEN SPO2 [sic] EILE[E]N FERMINDOZA ENTERED THE RESIDENCE ALEJANDRO AND PRESENTED TO THE COURT WERE PLANTED BY A
OF JASMIN[E] ALEJANDRO, THERE WAS NO CRIME COMMITTED BOGUS ATTORNEY[,] ERLIE S. RAMOS OF THE POEA;
WHATSOEVER, HENCE THE ARREST OF THE ACCUSED-APPELLANT
WAS ILLEGAL;
X
[IV]
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT
DISCOVERING THAT ACCUSED-APPELLANT DID NOT RECEIVE ANY
WITH DUE RESPECT, THE LOWER COURT ERRED IN NOT PAYMENT EVEN A SINGLE CENTAVO FROM THE ALLEGED VICTIMS
DISCOVERING THAT SPO2 [sic] EILE[E]N FERMINDOZA WAS NOT WHO DID NOT SUFFER DAMAGE IN ANY MANNER, YET SHE WAS
CONVICTED TO SERVE HER ENTIRE LIFE BEHIND PRISON BARS.
SUCH PUNISHMENT WAS CRUEL AND UNUSUAL, HENCE, A WANTON Coates highlights what has been referred to as a "perfectly vague"
VIOLATION OF THE CONSTITUTION.18 act whose obscurity is evident on its face. It is to be distinguished,
however, from legislation couched in imprecise languagebut
In the first assigned error, appellant maintains that the law defining which nonetheless specifies a standard though defectively phrased
"recruitment and placement" violates due process. Appellant also avers, as in which case, it may be "saved" by proper construction.
part of her sixth assigned error, that she was denied the equal protection
of the laws. Here, the provision in question reads:

We shall address the issues jointly. ART. 13. Definitions.(a) x x x.

Appellant submits that Article 13 (b) of the Labor Code defining (b) "Recruitment and placement" refers to any act of canvassing,
"recruitment and placement" is void for vagueness and, thus, violates the enlisting, contracting, transporting, utilizing, hiring or procuring
due process clause.19 workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or
Due process requires that the terms of a penal statute must be sufficiently not: Provided, That any person or entity which, in any manner,
explicit to inform those who are subject to it what conduct on their part will offers or promises for a fee employment to two or more persons
render them liable to its penalties. 20 A criminal statute that "fails to give a shall be deemed engaged in recruitment and placement.
person of ordinary intelligence fair notice that his contemplated conduct is
forbidden by the statute," or is so indefinite that "it encourages arbitrary x x x.
and erratic arrests and convictions," is void for vagueness. 21 The
constitutional vice in a vague or indefinite statute is the injustice to the When undertaken by non-licensees or non-holders of authority, recruitment
accused in placing him on trial for an offense, the nature of which he is activities are punishable as follows:
given no fair warning.22
ART. 38. Illegal Recruitment. (a) Any recruitment activities,
We reiterated these principles in People vs. Nazario:23 including the prohibited practices enumerated under Article 34 of
this Code, to be undertaken by non-licensees or non-holders of
As a rule, a statute or act may be said to be vague when it lacks authority shall be deemed illegal and punishable under Article 39
comprehensible standards that men "of common intelligence must of this Code. The Ministry of Labor and Employment or any law
necessarily guess at its meaning and differ as to its application." It is enforcement officer may initiate complaints under this Article.
repugnant to the Constitution in two respects: (1) it violates due process
for failure to accord persons, especially the parties targeted by it, fair (b) Illegal recruitment when committed by a syndicate or in large
notice of the conduct to avoid; and (2) it leaves law enforcers unbridled scale shall be considered an offense involving economic sabotage
discretion in carrying out its provisions and become an arbitrary flexing of and shall be penalized in accordance with Article 39 hereof.
the Government muscle.
Illegal recruitment is deemed committed by a syndicate if carried
We added, however, that: out by a group of three (3) or more persons conspiring and/or
confederating with one another in carrying out any unlawful or
x x x the act must be utterly vague on its face, that is to say, it illegal transaction, enterprise or scheme defined under the first
cannot be clarified by either a saving clause or by construction. paragraph hereof. Illegal recruitment is deemed committed in large
Thus, in Coates v. City of Cincinnati, the U.S. Supreme Court struck scale if committed against three (3) or more persons individually or
down an ordinance that had made it illegal for "three or more as a group.
persons to assemble on any sidewalk and there conduct
themselves in a manner annoying to persons passing by." Clearly, x x x.
the ordinance imposed no standard at all "because one may never
know in advance what 'annoys some people but does not annoy
others.'" 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:
(b) Any licensee or holder of authority found violating or causing As we see it, the proviso was intended neither to impose a condition on the
another to violate any provision of this Title or its implementing basic rule nor to provide an exception thereto but merely to create a
rules and regulations, shall upon conviction thereof, suffer the presumption. The presumption is that the individual or entity is engaged in
penalty of imprisonment of not less than five years or a fine of not recruitment and placement whenever he or it is dealing with two or more
less than P10,000 nor more than P50,000 or both such persons to whom, in consideration of a fee, an offer or promise of
imprisonment and fine, at the discretion of the court; employment is made in the course of the "canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring (of) workers."
(c) Any person who is neither a licensee nor a holder of authority
under this Title found violating any provision thereof or its The number of persons dealt with is not an essential ingredient of the act
implementing rules and regulations shall, upon conviction thereof, of recruitment and placement of workers. Any of the acts mentioned in the
suffer the penalty of imprisonment of not less than four years nor basic rule in Article 13(b) will constitute recruitment and placement even if
more than eight years or a fine of not less than P20,000 nor more only one prospective worker is involved. The proviso merely lays down a
than P100,000 or both such imprisonment and fine, at the rule of evidence that where a fee is collected in consideration of a promise
discretion of the court; 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
x x x. recruitment and placement. The words "shall be deemed" create that
presumption.
In support of her submission that Article 13 (b) is void for vagueness,
appellant invokes People vs. Panis,24 where this Court, to use appellant's This is not unlike the presumption in article 217 of the Revised Penal Code,
term, "criticized" the definition of "recruitment and placement" as follows: 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
It is unfortunate that we can only speculate on the meaning of the words, he shall be deemed to have malversed such funds or property. In
questioned provision for lack of records of debates and deliberations that the instant case, the word "shall be deemed" should by the same token be
would otherwise have been available if the Labor Code had been enacted given the force of a disputable presumption or of prima facie evidence of
as a statute rather than a presidential decree is that they could be, and engaging in recruitment and placement.
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 It is unfortunate that we can only speculate on the meaning of the
rejection, intentional or not, of the interest of the greater number and, as in questioned provision for lack of records of debates and deliberations that
the instant case, certain esoteric provisions that one cannot read against would otherwise have been available if the Labor Code had been enacted
the background facts usually reported in the legislative journals. as a statute rather than a presidential decree 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
If the Court in Panis "had to speculate on the meaning of the questioned advisers in their lofty pinnacle of power. The not infrequent results are
provision," appellant asks, what more "the ordinary citizen" who does not rejection, intentional or not, of the interest of the greater number and, as in
possess the "necessary [legal] knowledge?" the instant case, certain esoteric provisions that one cannot read against
the background facts usually reported in the legislative journals.
Appellant further argues that the acts that constitute "recruitment and
placement" suffer from overbreadth since by merely "referring" a person At any rate, the interpretation here adopted should give more force to the
for employment, a person may be convicted of illegal recruitment. campaign against illegal recruitment and placement, which has victimized
many Filipino workers seeking a better life in a foreign land, and investing
These contentions cannot be sustained. 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 their
Appellant's reliance on People vs. Panis is misplaced. The issue own countrymen.
in Panis was whether, under the proviso of Article 13 (b), the crime of
illegal recruitment could be committed only "whenever two or more Evidently, therefore, appellant has taken the penultimate paragraph in the
persons are in any manner promised or offered any employment for a fee." excerpt quoted above out of context. The Court, in Panis, merely
The Court held in the negative, explaining: bemoaned the lack of records that would help shed light on the meaning of
the proviso. The absence of such records notwithstanding, the Court was
able to arrive at a reasonable interpretation of the proviso by applying Alejandro handed out application forms and even received Lourdes
principles in criminal law and drawing from the language and intent of the Modesto's payment, appellant was the only one criminally charged.
law itself. Section 13 (b), therefore, is not a "perfectly vague act" whose Alejandro, on the other hand, remained scot-free. From this, appellant
obscurity is evident on its face. If at all, the proviso therein is merely concludes that the prosecution discriminated against her on grounds of
couched in imprecise language that was salvaged by proper construction. regional origins. Appellant is a Cebuana while Alejandro is a
It is not void for vagueness. Zamboanguea, and the alleged crime took place in Zamboanga City.

An act will be declared void and inoperative on the ground of vagueness The argument has no merit.
and uncertainty, only upon a showing that the defect is such that the
courts are unable to determine, with any reasonable degree of certainty, At the outset, it may be stressed that courts are not confined to the
what the legislature intended. x x x. In this connection we cannot pretermit language of the statute under challenge in determining whether that
reference to the rule that "legislation should not be held invalid on the statute has any discriminatory effect. A statute nondiscriminatory on its
ground of uncertainty if susceptible of any reasonable construction that will face may be grossly discriminatory in its operation. 29 Though the law itself
support and give it effect. An Act will not be declared inoperative and be fair on its face and impartial in appearance, yet, if it is applied and
ineffectual on the ground that it furnishes no adequate means to secure administered by public authority with an evil eye and unequal hand, so as
the purpose for which it is passed, if men of common sense and reason can practically to make unjust and illegal discriminations between persons in
devise and provide the means, and all the instrumentalities necessary for similar circumstances, material to their rights, the denial of equal justice is
its execution are within the reach of those intrusted therewith." 25 still within the prohibition of the Constitution.30

That Section 13 (b) encompasses what appellant apparently considers as The prosecution of one guilty person while others equally guilty are not
customary and harmless acts such as " labor or employment referral" prosecuted, however, is not, by itself, a denial of the equal protection of
("referring" an applicant, according to appellant, for employment to a the laws.31 Where the official action purports to be in conformity to the
prospective employer) does not render the law overbroad. Evidently, statutory classification, an erroneous or mistaken performance of the
appellant misapprehends concept of overbreadth. statutory duty, although a violation of the statute, is notwithout more a
denial of the equal protection of the laws. 32 The unlawful administration by
A statute may be said to be overbroad where it operates to inhibit the officers of a statute fair on its face, resulting in its unequal application to
exercise of individual freedoms affirmatively guaranteed by the those who are entitled to be treated alike, is not a denial of equal
Constitution, such as the freedom of speech or religion. A generally worded protection unless there is shown to be present in it an element
statute, when construed to punish conduct which cannot be of intentional or purposeful discrimination. This may appear on the face of
constitutionally punished is unconstitutionally vague to the extent that it the action taken with respect to a particular class or person, or it may only
fails to give adequate warning of the boundary between the be shown by extrinsic evidence showing a discriminatory design over
constitutionally permissible and the constitutionally impermissible another not to be inferred from the action itself. But a discriminatory
applications of the statute.26 purpose is not presumed, there must be a showing of "clear and intentional
discrimination."33 Appellant has failed to show that, in charging appellant in
In Blo Umpar Adiong vs. Commission on Elections,27 for instance, we struck court, that there was a "clear and intentional discrimination" on the part of
down as void for overbreadth provisions prohibiting the posting of election the prosecuting officials.
propaganda in any place including private vehicles other than in the
common poster areas sanctioned by the COMELEC. We held that the The discretion of who to prosecute depends on the prosecution's sound
challenged provisions not only deprived the owner of the vehicle the use of assessment whether the evidence before it can justify a reasonable belief
his property but also deprived the citizen of his right to free speech and that a person has committed an offense.34 The presumption is that the
information. The prohibition in Adiong, therefore, was so broad that it prosecuting officers regularly performed their duties, 35 and this
covered even constitutionally guaranteed rights and, hence, void for presumption can be overcome only by proof to the contrary, not by mere
overbreadth. In the present case, however, appellant did not even specify speculation. Indeed, appellant has not presented any evidence to
what constitutionally protected freedoms are embraced by the definition of overcome this presumption. The mere allegation that appellant, a
"recruitment and placement" that would render the same constitutionally Cebuana, was charged with the commission of a crime, while a
overbroad. Zamboanguea, the guilty party in appellant's eyes, was not, is insufficient
to support a conclusion that the prosecution officers denied appellant
Appellant also invokes the equal protection clause28 in her defense. She equal protection of the laws.
points out that although the evidence purportedly shows that Jasmine
There is also common sense practicality in sustaining appellant's Appellant's denials cannot prevail over the positive declaration of the
prosecution. prosecution witnesses. Affirmative testimony of persons who are
eyewitnesses of the fact asserted easily overrides negative testimony. 41
While all persons accused of crime are to be treated on a basis of equality
before the law, it does not follow that they are to be protected in the That appellant did not receive any payment for the promised or offered
commission of crime. It would be unconscionable, for instance, to excuse a employment is of no moment. From the language of the statute, the act of
defendant guilty of murder because others have murdered with impunity. recruitment may be "for profit or not;" it suffices that the accused
The remedy for unequal enforcement of the law in such instances does not "promises or offers for a fee employment" to warrant conviction for illegal
lie in the exoneration of the guilty at the expense of society x x x. recruitment.
Protection of the law will be extended to all persons equally in the pursuit
of their lawful occupations, but no person has the right to demand The testimonies of Araneta and Modesto, coming as they do from credible
protection of the law in the commission of a crime. 36 witnesses, meet the standard of proof beyond reasonable doubt that
appellant committed recruitment and placement. We therefore do not
Likewise, deem it necessary to delve into the second and third assigned errors
assailing the legality of appellant's arrest and the seizure of the application
[i]f the failure of prosecutors to enforce the criminal laws as to some forms. A warrantless arrest, when unlawful, has the effect of invalidating
persons should be converted into a defense for others charged with crime, the search incidental thereto and the articles so seized are rendered
the result would be that the trial of the district attorney for nonfeasance inadmissible in evidence. 42 Here, even if the documents seized were
would become an issue in the trial of many persons charged with heinous deemed inadmissible, her conviction would stand in view of Araneta and
crimes and the enforcement of law would suffer a complete breakdown. 37 Modesto's testimonies.

We now come to the third, fourth and fifth assigned errors, all of which Appellant attempts to cast doubt on the prosecution's case by claiming in
involve the finding of guilt by the trial court. her ninth assigned error that Erlie Ramos of the POEA supposedly "planted"
the application forms. She also assails his character, alleging that he
passed himself off as a lawyer, although this was denied by Ramos.
Illegal recruitment is committed when two elements concur. First, the
offender has no valid license or authority required by law to enable one to
lawfully engage in recruitment and placement of workers. Second, he or The claim of "frame-up," like alibi, is a defense that has been invariably
she undertakes either any activity within the meaning of "recruitment and viewed by the Court with disfavor for it can easily be concocted but difficult
placement" defined under Article 13 (b), or any prohibited practices to prove.43 Apart from her self-serving testimony, appellant has not offered
enumerated under Article 34 of the Labor Code.38 In case of illegal any evidence that she was indeed framed by Ramos. She has not even
recruitment in large scale, a third element is added: that the accused hinted at any motive for Ramos to frame her. Law enforcers are presumed
commits said acts against three or more persons, individually or as a to have performed their duties regularly in the absence of evidence to the
group.39 contrary.44

In this case, the first element is present. The certification of POEA Officer- Considering that the two elements of lack of license or authority and the
in-Charge Macarulay states that appellant is not licensed or authorized to undertaking of an activity constituting recruitment and placement are
engage in recruitment and placement. present, appellant, at the very least, is liable for "simple" illegal
recruitment. But is she guilty of illegal recruitment in large scale? We find
that she is not.
The second element is also present. Appellant is presumed engaged in
recruitment and placement under Article 13 (b) of the Labor Code. Both
Nancy Araneta and Lourdes Modesto testified that appellant promised A conviction for large scale illegal recruitment must be based on a
them employment for a fee. Their testimonies corroborate each other on finding in each case of illegal recruitment of three or more persons whether
material points: the briefing conducted by appellant, the time and place individually or as a group. 45 In this case, only two persons, Araneta and
thereof, the fees involved. Appellant has not shown that these witnesses Modesto, were proven to have been recruited by appellant. The third
were incited by any motive to testify falsely against her. The absence of person named in the complaint as having been promised employment for a
evidence as to an improper motive actuating the principal witnesses of the fee, Jennelyn Baez, was not presented in court to testify.
prosecution strongly tends to sustain that no improper motive existed and
that their testimony is worthy of full faith and credence. 40 It is true that law does not require that at least three victims testify at the
trial; nevertheless, it is necessary that there is sufficient evidence proving
that the offense was committed against three or more persons. 46 In this This witness is going to testify that at around that date Your
case, evidence that appellant likewise promised her employment for a fee Honor, she was connected with the CIS, that she was
is sketchy. The only evidence that tends to prove this fact is the testimony instructed together with a companion to conduct a
of Nancy Araneta, who said that she and her friends, Baez and Sandra surveillance on the place where the illegal recruitment was
Aquino, came to the briefing and that they (she and her "friends") filled up supposed to be going on, that she acted as an applicant,
application forms. Your Honor, to ascertain the truthfulness of the illegal
recruitment going on, to identify the accused, as well as to
The affidavit47 Baez executed jointly with Araneta cannot support Araneta's identify some exhibits for the prosecution.53
testimony. The affidavit was neither identified, nor its contents affirmed, by
Baez. Insofar as it purports to prove that appellant recruited Baez, xxx
therefore, the affidavit is hearsay and inadmissible. 48 In any case, hearsay
evidence, such as the said affidavit, has little probative value. 49 Courts may consider a piece of evidence only for the purpose for which it
was offered,54 and the purpose of the offer of their testimonies did not
Neither can appellant be convicted for recruiting CIS agent Eileen include the proving of the purported recruitment of other supposed
Fermindoza or even the other persons present in the briefing of January 30, applicants by appellant.
1994. Appellant is accused of recruiting only the three persons named in
the information Araneta, Modesto and Baez. The information does not Appellant claims in her seventh assigned error that the information is
include Fermindoza or the other persons present in the briefing as among fatally defective since it charges her with committing illegal recruitment in
those promised or offered employment for a fee. To convict appellant for large scale on January 30, 1994 while the prosecution evidence supposedly
the recruitment and placement of persons other than those alleged to have indicates that she committed the crime on February 2, 1994.
been offered or promised employment for a fee would violate her right to
be informed of the nature and cause of the accusation against her. 50
We find that the evidence for the prosecution regarding the date of the
commission of the crime does not vary from that charged in the
In any event, the purpose of the offer of the testimonies of Araneta, information. Both Nancy Araneta and Lourdes Modesto testified that on
Morales and Fermindoza, respectively, was limited as follows: January 30, 1994, while in the Alejandro residence, appellant offered them
employment for a fee. Thus, while the arrest was effected only on February
FISCAL BELDUA: 2, 1994, the crime had already been committed three (3) days earlier on
January 30, 1994.
Your Honor please, we are offering the oral testimony of the
witness, as one of those recruited by the accused, and also The eighth and tenth assigned errors, respectively, pertain to the penalty
to identify some exhibits for the prosecution and as well as of life imprisonment imposed by the trial court as well as the
to identify the accused.51 constitutionality of the law prescribing the same, appellant arguing that it
is unconstitutional for being unduly harsh. 55 Section 19 (1), Article III of the
xxx Constitution states: "Excessive fines shall not be imposed, nor cruel,
degrading or inhuman punishment inflicted."
FISCAL BELDUA:
The penalty of life imprisonment imposed upon appellant must be reduced.
Because the prosecution was able to prove that appellant committed
We are offering the oral testimony of the witness, Your recruitment and placement against two persons only, she cannot be
Honor, to testify on the fact about her recruitment by the convicted of illegal recruitment in large scale, which requires that
accused and immediately before the recruitment, as well recruitment be committed against three or more persons. Appellant can
as to identify some exhibits for the prosecution, and also only be convicted of two counts of "simple" illegal recruitment, one for that
the accused in this case, Your Honor.52 committed against Nancy Araneta, and another count for that committed
against Lourdes Modesto. Appellant is sentenced, for each count, to suffer
xxx the penalty of four (4) to six (6) years of imprisonment and to pay a fine of
P30,000.00. This renders immaterial the tenth assigned error, which
FISCAL BELDUA: assumes that the proper imposable penalty upon appellant is life
imprisonment.
WHEREFORE, the decision of the regional trial court is MODIFIED. Appellant Merridy Jane averred that the P20,000.00 already received by Joven Mar
is hereby declared guilty of illegal recruitment on two (2) counts and is should be considered advance payment of the total claim of US$90,000.
sentenced, for each count, to suffer the penalty of four (4) to six (6) years [00].
of imprisonment and to pay a fine of P30,000.00.1wphi1.nt
[Herein respondents], on the other hand, asserted that the NLRC had no
SO ORDERED. jurisdiction over the action on account of the absence of employer-
employee relationship between GCI and Nelson at the time of the latters
Estate of Nelson Dulay v Aboitiz death. Nelson also had no claims against petitioners for sick leave
allowance/medical benefit by reason of the completion of his contract with
GCI. They further alleged that private respondent is not entitled to death
Before the Court is a petition for review on certiorari under Rule 45 of the benefits because petitioners are only liable for such "in case of death of the
Rules of Court seeking to reverse and set aside the Decision 1 and seafarer during the term of his contract pursuant to the POEA contract"
Resolution2 dated July 11, 2005 and April 18, 2006 of the Court of Appeals and the cause of his death is not work-related. Petitioners admitted liability
(CA) in CA-G.R. SP No. 76489. only with respect to article 20(A)2 [of the CBA]. x x x

The factual and procedural antecedents of the case, as summarized by the xxxx
CA, are as follows:
However, as petitioners stressed, the same was already discharged.
Nelson R. Dulay (Nelson, for brevity) was employed by [herein respondent]
General Charterers Inc. (GCI), a subsidiary of co-petitioner [herein co-
respondent] Aboitiz Jebsen Maritime Inc. since 1986. He initially worked as The Labor Arbiter ruled in favor of private respondent. It took cognizance of
an ordinary seaman and later as bosun on a contractual basis. From the case by virtue of Article 217 (a), paragraph 6 of the Labor Code and the
September 3, 1999 up to July 19, 2000, Nelson was detailed in petitioners existence of a reasonable causal connection between the employer-
vessel, the MV Kickapoo Belle. employee relationship and the claim asserted. It ordered the petitioner to
pay P4,621,300.00, the equivalent of US$90,000.00 less P20,000.00, at the
time of judgment x x x
On August 13, 2000, or 25 days after the completion of his employment
contract, Nelson died due to acute renal failure secondary to septicemia. At
the time of his death, Nelson was a bona fide member of the Associated xxxx
Marine Officers and Seamans Union of the Philippines (AMOSUP), GCIs
collective bargaining agent. Nelsons widow, Merridy Jane, thereafter The Labor Arbiter also ruled that the proximate cause of Nelsons death
claimed for death benefits through the grievance procedure of the was not work-related.
Collective Bargaining Agreement (CBA) between AMOSUP and GCI.
However, on January 29, 2001, the grievance procedure was "declared On appeal, [the NLRC] affirmed the Labor Arbiters decision as to the grant
deadlocked" as petitioners refused to grant the benefits sought by the of death benefits under the CBA but reversed the latters ruling as to the
widow. proximate cause of Nelsons death.3

On March 5, 2001, Merridy Jane filed a complaint with the NLRC Sub- Herein respondents then filed a special civil action for certiorari with the CA
Regional Arbitration Board in General Santos City against GCI for death and contending that the NLRC committed grave abuse of discretion in affirming
medical benefits and damages. the jurisdiction of the NLRC over the case; in ruling that a different
provision of the CBA covers the death claim; in reversing the findings of the
On March 8, 2001, Joven Mar, Nelsons brother, received P20,000.00 from Labor Arbiter that the cause of death is not work-related; and, in setting
[respondents] pursuant to article 20(A)2 of the CBA and signed a aside the release and quitclaim executed by the attorney-in-fact and not
"Certification" acknowledging receipt of the amount and releasing AMOSUP considering the P20,000.00 already received by Merridy Jane through her
from further liability. Merridy Jane contended that she is entitled to the attorney-in-fact.
aggregate sum of Ninety Thousand Dollars ($90,000.00) pursuant to
[A]rticle 20 (A)1 of the CBA x x x On July 11, 2005, the CA promulgated its assailed Decision, the dispositive
portion of which reads as follows:
xxxx
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED and grievance machinery and voluntary arbitration as may be provided
the case is REFERRED to the National Conciliation and Mediation Board for in said agreements.
the designation of the Voluntary Arbitrator or the constitution of a panel of
Voluntary Arbitrators for the appropriate resolution of the issue on the On their part, respondents insist that in the present case, Article 217,
matter of the applicable CBA provision. paragraph (c) as well as Article 261 of the Labor Code remain to be the
governing provisions of law with respect to unresolved grievances arising
SO ORDERED.4 from the interpretation and implementation of collective bargaining
agreements. Under these provisions of law, jurisdiction remains with
The CA ruled that while the suit filed by Merridy Jane is a money claim, the voluntary arbitrators.
same basically involves the interpretation and application of the provisions
in the subject CBA. As such, jurisdiction belongs to the voluntary arbitrator Article 261 of the Labor Code reads, thus:
and not the labor arbiter.
ARTICLE 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary
Petitioner filed a Motion for Reconsideration but the CA denied it in its Arbitrators. The Voluntary Arbitrator or panel of Voluntary Arbitrators
Resolution of April 18, 2006. shall have original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or implementation of
Hence, the instant petition raising the sole issue of whether or not the CA the Collective Bargaining Agreement and those arising from the
committed error in ruling that the Labor Arbiter has no jurisdiction over the interpretation or enforcement of company personnel policies referred to in
case. the immediately preceding article. Accordingly, violations of a Collective
Bargaining Agreement, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved as
Petitioner contends that Section 10 of Republic Act (R.A.) 8042, otherwise grievances under the Collective Bargaining Agreement. For purposes of this
known as the Migrant Workers and Overseas Filipinos Act of 1995, vests article, gross violations of Collective Bargaining Agreement shall mean
jurisdiction on the appropriate branches of the NLRC to entertain disputes flagrant and/or malicious refusal to comply with the economic provisions of
regarding the interpretation of a collective bargaining agreement involving such agreement.
migrant or overseas Filipino workers. Petitioner argues that the
abovementioned Section amended Article 217 (c) of the Labor Code which,
in turn, confers jurisdiction upon voluntary arbitrators over interpretation The Commission, its Regional Offices and the Regional Directors of the
or implementation of collective bargaining agreements and interpretation Department of Labor and Employment shall not entertain disputes,
or enforcement of company personnel policies. grievances or matters under the exclusive and original jurisdiction of the
Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately
dispose and refer the same to the Grievance Machinery or Voluntary
The pertinent provisions of Section 10 of R.A. 8042 provide as follows: Arbitration provided in the Collective Bargaining Agreement.

SEC. 10. Money Claims. - Notwithstanding any provision of law to the The petition is without merit.
contrary, the Labor Arbiters of the National Labor Relations Commission
(NLRC) shall have the original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after filing of the complaint, the claims It is true that R.A. 8042 is a special law governing overseas Filipino
arising out of an employer-employee relationship or by virtue of any law or workers. However, a careful reading of this special law would readily show
contract involving Filipino workers for overseas deployment including that there is no specific provision thereunder which provides for jurisdiction
claims for actual, moral, exemplary and other forms of damages. over disputes or unresolved grievances regarding the interpretation or
implementation of a CBA. Section 10 of R.A. 8042, which is cited by
petitioner, simply speaks, in general, of "claims arising out of an employer-
Article 217(c) of the Labor Code, on the other hand, states that: employee relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment including claims for actual, moral,
xxxx exemplary and other forms of damages." On the other hand, Articles
217(c) and 261 of the Labor Code are very specific in stating that voluntary
(c) Cases arising from the interpretation or implementation of arbitrators have jurisdiction over cases arising from the interpretation or
collective bargaining agreements and those arising from the implementation of collective bargaining agreements. Stated differently, the
interpretation or enforcement of company personnel policies shall instant case involves a situation where the special statute (R.A. 8042)
be disposed by the Labor Arbiter by referring the same to the refers to a subject in general, which the general statute (Labor Code) treats
in particular.5 In the present case, the basic issue raised by Merridy Jane in bargaining agreement shall submit the claim or dispute to the original and
her complaint filed with the NLRC is: which provision of the subject CBA exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators. If
applies insofar as death benefits due to the heirs of Nelson are concerned. the parties are not covered by a collective bargaining agreement, the
The Court agrees with the CA in holding that this issue clearly involves the parties may at their option submit the claim or dispute to either the
interpretation or implementation of the said CBA. Thus, the specific or original and exclusive jurisdiction of the National Labor Relations
special provisions of the Labor Code govern. Commission (NLRC), pursuant to Republic Act (RA) 8042, otherwise known
as the Migrant Workers and Overseas Filipinos Act of 1995 or to the original
In any case, the Court agrees with petitioner's contention that the CBA is and exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators.
the law or contract between the parties. Article 13.1 of the CBA entered If there is no provision as to the voluntary arbitrators to be appointed by
into by and between respondent GCI and AMOSUP, the union to which the parties, the same shall be appointed from the accredited voluntary
petitioner belongs, provides as follows: arbitrators of the National Conciliation and Mediation Board of the
Department of Labor and Employment.
The Company and the Union agree that in case of dispute or conflict in the
interpretation or application of any of the provisions of this Agreement, or The Philippine Overseas Employment Administration (POEA) shall exercise
enforcement of Company policies, the same shall be settled through original and exclusive jurisdiction to hear and decide disciplinary action on
negotiation, conciliation or voluntary arbitration. The Company and the cases, which are administrative in character, involving or arising out of
Union further agree that they will use their best endeavor to ensure that violations of recruitment laws, rules and regulations involving employers,
any dispute will be discussed, resolved and settled amicably by the parties principals, contracting partners and Filipino seafarers. (Emphasis supplied)
hereof within ninety (90) days from the date of filing of the dispute or
conflict and in case of failure to settle thereof any of the parties retain their It is clear from the above that the interpretation of the DOLE, in
freedom to take appropriate action.6 (Emphasis supplied) consultation with their counterparts in the respective committees of the
Senate and the House of Representatives, as well as the DFA and the POEA
From the foregoing, it is clear that the parties, in the first place, really is that with respect to disputes involving claims of Filipino seafarers
intended to bring to conciliation or voluntary arbitration any dispute or wherein the parties are covered by a collective bargaining agreement, the
conflict in the interpretation or application of the provisions of their CBA. It dispute or claim should be submitted to the jurisdiction of a voluntary
is settled that when the parties have validly agreed on a procedure for arbitrator or panel of arbitrators. It is only in the absence of a collective
resolving grievances and to submit a dispute to voluntary arbitration then bargaining agreement that parties may opt to submit the dispute to either
that procedure should be strictly observed.7 the NLRC or to voluntary arbitration. It is elementary that rules and
regulations issued by administrative bodies to interpret the law which they
are entrusted to enforce, have the force of law, and are entitled to great
It may not be amiss to point out that the abovequoted provisions of the respect.8 Such rules and regulations partake of the nature of a statute and
CBA are in consonance with Rule VII, Section 7 of the present Omnibus are just as binding as if they have been written in the statute itself. 9 In the
Rules and Regulations Implementing the Migrant Workers and Overseas instant case, the Court finds no cogent reason to depart from this
Filipinos Act of 1995, as amended by Republic Act No. 10022, which states rule.1wphi1
that "[f]or OFWs with collective bargaining agreements, the case shall be
submitted for voluntary arbitration in accordance with Articles 261 and 262
of the Labor Code." The Court notes that the said Omnibus Rules and The above interpretation of the DOLE, DFA and POEA is also in consonance
Regulations were promulgated by the Department of Labor and with the policy of the state to promote voluntary arbitration as a mode of
Employment (DOLE) and the Department of Foreign Affairs (DFA) and that settling labor disputes.10
these departments were mandated to consult with the Senate Committee
on Labor and Employment and the House of Representatives Committee on No less than the Philippine Constitution provides, under the third
Overseas Workers Affairs. paragraph, Section 3, Article XIII, thereof that "[t]he State shall promote
the principle of shared responsibility between workers and employers and
In the same manner, Section 29 of the prevailing Standard Terms and the preferential use of voluntary modes in settling disputes, including
Conditions Governing the Employment of Filipino Seafarers on Board Ocean conciliation, and shall enforce their mutual compliance therewith to foster
Going Vessels, promulgated by the Philippine Overseas Employment industrial peace."
Administration (POEA), provides as follows:
Consistent with this constitutional provision, Article 211 of the Labor Code
Section 29. Dispute Settlement Procedures. In cases of claims and provides the declared policy of the State "[t]o promote and emphasize the
disputes arising from this employment, the parties covered by a collective primacy of free collective bargaining and negotiations, including voluntary
arbitration, mediation and conciliation, as modes of settling labor or I received a phone call today from the wife of Paul Santiago in
industrial disputes." Masbate asking me not to send her husband to MSV Seaspread
anymore. Other callers who did not reveal their identity gave me
On the basis of the foregoing, the Court finds no error in the ruling of the some feedbacks that Paul Santiago this time if allowed to depart
CA that the voluntary arbitrator has jurisdiction over the instant case. will jump ship in Canada like his brother Christopher Santiago, O/S
who jumped ship from the C.S. Nexus in Kita-kyushu, Japan last
December, 1997.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the
Court of Appeals in CA-G.R. SP No. 76489 dated July 11, 2005 and April 18,
2006, respectively, are AFFIRMED. We do not want this to happen again and have the vessel penalized
like the C.S. Nexus in Japan.
SO ORDERED.
Forewarned is forearmed like his brother when his brother when he
was applying he behaved like a Saint but in his heart he was a
serpent. If you agree with me then we will send his replacement.

Kindly advise.3

To this message the captain of "MSV Seaspread" replied:


Santiago v CF Sharp
Many thanks for your advice concerning P. Santiago, A/B. Please
At the heart of this case involving a contract between a seafarer, on one cancel plans for him to return to Seaspread.4
hand, and the manning agent and the foreign principal, on the other, is this
erstwhile unsettled legal quandary: whether the seafarer, who was On 9 February 1998, petitioner was thus told that he would not be leaving
prevented from leaving the port of Manila and refused deployment without for Canada anymore, but he was reassured that he might be considered for
valid reason but whose POEA-approved employment contract provides that deployment at some future date.
the employer-employee relationship shall commence only upon the
seafarers actual departure from the port in the point of hire, is entitled to
relief? Petitioner filed a complaint for illegal dismissal, damages, and attorney's
fees against respondent and its foreign principal, Cable and Wireless
(Marine) Ltd.5 The case was raffled to Labor Arbiter Teresita Castillon-Lora,
This treats of the petition for review filed by Paul V. Santiago (petitioner) who ruled that the employment contract remained valid but had not
assailing the Decision and Resolution of the Court of Appeals dated 16 commenced since petitioner was not deployed. According to her,
October 2003 and 19 February 2004, respectively, in CA-G.R. SP No. respondent violated the rules and regulations governing overseas
68404.1 employment when it did not deploy petitioner, causing petitioner to suffer
actual damages representing lost salary income for nine (9) months and
Petitioner had been working as a seafarer for Smith Bell Management, Inc. fixed overtime fee, all amounting to US$7, 209.00.
(respondent) for about five (5) years.2On 3 February 1998, petitioner
signed a new contract of employment with respondent, with the duration of The labor arbiter held respondent liable. The dispositive portion of her
nine (9) months. He was assured of a monthly salary of US$515.00, Decision dated 29 January 1999 reads:
overtime pay and other benefits. The following day or on 4 February 1998,
the contract was approved by the Philippine Overseas Employment
Administration (POEA). Petitioner was to be deployed on board the "MSV WHEREFORE, premises considered, respondent is hereby Ordered
Seaspread" which was scheduled to leave the port of Manila for Canada on to pay complainant actual damages in the amount of US$7,209.00
13 February 1998. plus 10% attorney's fees, payable in Philippine peso at the rate of
exchange prevailing at the time of payment.
A week before the scheduled date of departure, Capt. Pacifico Fernandez,
respondents Vice President, sent a facsimile message to the captain of All the other claims are hereby DISMISSED for lack of merit.
"MSV Seaspread," which reads:
SO ORDERED.6
On appeal by respondent, the National Labor Relations Commission (NLRC) A. The Honorable Court of Appeals committed a serious error of law
ruled that there is no employer-employee relationship between petitioner when it ignored [S]ection 10 of Republic Act [R.A.] No. 8042
and respondent because under the Standard Terms and Conditions otherwise known as the Migrant Workers Act of 1995 as well as
Governing the Employment of Filipino Seafarers on Board Ocean Going Section 29 of the Standard Terms and Conditions Governing the
Vessels (POEA Standard Contract), the employment contract shall Employment of Filipino Seafarers On-Board Ocean-Going Vessels
commence upon actual departure of the seafarer from the airport or (which is deemed incorporated under the petitioners POEA
seaport at the point of hire and with a POEA-approved contract. In the approved Employment Contract) that the claims or disputes of the
absence of an employer-employee relationship between the parties, the Overseas Filipino Worker by virtue of a contract fall within the
claims for illegal dismissal, actual damages, and attorneys fees should be jurisdiction of the Labor Arbiter of the NLRC.
dismissed.7 On the other hand, the NLRC found respondents decision not
to deploy petitioner to be a valid exercise of its management B. The Honorable Court of Appeals committed a serious error when
prerogative.8 The NLRC disposed of the appeal in this wise: it disregarded the required quantum of proof in labor cases, which
is substantial evidence, thus a total departure from established
WHEREFORE, in the light of the foregoing, the assailed Decision jurisprudence on the matter.17
dated January 29, 1999 is hereby AFFIRMED in so far as other
claims are concerned and with MODIFICATION by VACATING the Petitioner maintains that respondent violated the Migrant Workers Act and
award of actual damages and attorneys fees as well as excluding the POEA Rules when it failed to deploy him within thirty (30) calendar
Pacifico Fernandez as party respondent. days without a valid reason. In doing so, it had unilaterally and arbitrarily
prevented the consummation of the POEA- approved contract. Since it
SO ORDERED.9 prevented his deployment without valid basis, said deployment being a
condition to the consummation of the POEA contract, the contract is
Petitioner moved for the reconsideration of the NLRCs Decision but his deemed consummated, and therefore he should be awarded actual
motion was denied for lack of merit. 10 He elevated the case to the Court of damages, consisting of the stipulated salary and fixed overtime
Appeals through a petition for certiorari. pay.18Petitioner adds that since the contract is deemed consummated, he
should be considered an employee for all intents and purposes, and thus
the labor arbiter and/or the NLRC has jurisdiction to take cognizance of his
In its Decision11 dated 16 October 2003, the Court of Appeals noted that claims.19
there is an ambiguity in the NLRCs Decision when it affirmed with
modification the labor arbiters Decision, because by the very modification
introduced by the Commission (vacating the award of actual damages and Petitioner additionally claims that he should be considered a regular
attorneys fees), there is nothing more left in the labor arbiters Decision to employee, having worked for five (5) years on board the same vessel
affirm.12 owned by the same principal and manned by the same local agent. He
argues that respondents act of not deploying him was a scheme designed
to prevent him from attaining the status of a regular employee. 20
According to the appellate court, petitioner is not entitled to actual
damages because damages are not recoverable by a worker who was not
deployed by his agency within the period prescribed in Petitioner submits that respondent had no valid and sufficient cause to
abandon the employment contract, as it merely relied upon alleged phone
calls from his wife and other unnamed callers in arriving at the conclusion
the POEA Rules.13 It agreed with the NLRCs finding that petitioners non- that he would jump ship like his brother. He points out that his wife had
deployment was a valid exercise of respondents management executed an affidavit21 strongly denying having called respondent, and that
prerogative.14 It added that since petitioner had not departed from the Port the other alleged callers did not even disclose their identities to
of Manila, no employer-employee relationship between the parties arose respondent.22 Thus, it was error for the Court of Appeals to adopt the
and any claim for damages against the so-called employer could have no unfounded conclusion of the NLRC, as the same was not based on
leg to stand on.15 substantial evidence.23

Petitioners subsequent motion for reconsideration was denied on 19 On the other hand, respondent argues that the Labor Arbiter has no
February 2004.16 jurisdiction to award petitioners monetary claims. His employment with
respondent did not commence because his deployment was withheld for a
The present petition is anchored on two grounds, to wit: valid reason. Consequently, the labor arbiter and/or the NLRC cannot
entertain adjudication of petitioners case much less award damages to
him. The controversy involves a breach of contractual obligations and as instituting an action for damages against the employer or agency which
such is cognizable by civil courts. 24 On another matter, respondent claims has failed to deploy him.
that the second issue posed by petitioner involves a recalibration of facts
which is outside the jurisdiction of this Court. 25 The POEA Rules only provide sanctions which the POEA can impose on
erring agencies. It does not provide for damages and money claims
There is some merit in the petition. recoverable by aggrieved employees because it is not the POEA, but the
NLRC, which has jurisdiction over such matters.
There is no question that the parties entered into an employment contract
on 3 February 1998, whereby petitioner was contracted by respondent to Despite the absence of an employer-employee relationship between
render services on board "MSV Seaspread" for the consideration of petitioner and respondent, the Court rules that the NLRC has jurisdiction
US$515.00 per month for nine (9) months, plus overtime pay. However, over petitioners complaint. The jurisdiction of labor arbiters is not limited
respondent failed to deploy petitioner from the port of Manila to Canada. to claims arising from employer-employee relationships. Section 10 of R.A.
Considering that petitioner was not able to depart from the airport or No. 8042 (Migrant Workers Act), provides that:
seaport in the point of hire, the employment contract did not commence,
and no employer-employee relationship was created between the parties. 26 Sec. 10. Money Claims. Notwithstanding any provision of law to
the contrary, the Labor Arbiters of the National Labor Relations
However, a distinction must be made between the perfection of the Commission (NLRC) shall have the original and exclusive
employment contract and the commencement of the employer-employee jurisdiction to hear and decide, within ninety (90) calendar days
relationship. The perfection of the contract, which in this case coincided after the filing of the complaint, the claims arising out of an
with the date of execution thereof, occurred when petitioner and employer-employee relationship or by virtue of any law or contract
respondent agreed on the object and the cause, as well as the rest of the involving Filipino workers for overseas deployment including claims
terms and conditions therein. The commencement of the employer- for actual, moral, exemplary and other forms of damages. x x x
employee relationship, as earlier discussed, would have taken place had [Emphasis supplied]
petitioner been actually deployed from the point of hire. Thus, even before
the start of any employer-employee relationship, contemporaneous with Since the present petition involves the employment contract entered into
the perfection of the employment contract was the birth of certain rights by petitioner for overseas employment, his claims are cognizable by the
and obligations, the breach of which may give rise to a cause of action labor arbiters of the NLRC.
against the erring party. Thus, if the reverse had happened, that is the
seafarer failed or refused to be deployed as agreed upon, he would be
liable for damages. Article 2199 of the Civil Code provides that one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly
proved. Respondent is thus liable to pay petitioner actual damages in the
Moreover, while the POEA Standard Contract must be recognized and form of the loss of nine (9) months worth of salary as provided in the
respected, neither the manning agent nor the employer can simply prevent contract. He is not, however, entitled to overtime pay. While the contract
a seafarer from being deployed without a valid reason. indicated a fixed overtime pay, it is not a guarantee that he would receive
said amount regardless of whether or not he rendered overtime work. Even
Respondents act of preventing petitioner from departing the port of Manila though petitioner was "prevented without valid reason from rendering
and boarding "MSV Seaspread" constitutes a breach of contract, giving rise regular much less overtime service,"28 the fact remains that there is no
to petitioners cause of action. Respondent unilaterally and unreasonably certainty that petitioner will perform overtime work had he been allowed to
reneged on its obligation to deploy petitioner and must therefore answer board the vessel. The amount of US$286.00 stipulated in the contract will
for the actual damages he suffered. be paid only if and when the employee rendered overtime work. This has
been the tenor of our rulings in the case of Stolt-Nielsen Marine Services
We take exception to the Court of Appeals conclusion that damages are (Phils.), Inc. v. National Labor Relations Commission29 where we discussed
not recoverable by a worker who was not deployed by his agency. The fact the matter in this light:
that the POEA Rules27 are silent as to the payment of damages to the
affected seafarer does not mean that the seafarer is precluded from The contract provision means that the fixed overtime pay of 30%
claiming the same. The sanctions provided for non-deployment do not end would be the basis for computing the overtime pay if and when
with the suspension or cancellation of license or fine and the return of all overtime work would be rendered. Simply stated, the rendition of
documents at no cost to the worker. They do not forfend a seafarer from overtime work and the submission of sufficient proof that said work
was actually performed are conditions to be satisfied before a
seaman could be entitled to overtime pay which should be MODIFICATION that respondent CF Sharp Crew Management, Inc. is ordered
computed on the basis of 30% of the basic monthly salary. In short, to pay actual or compensatory damages in the amount of US$4,635.00
the contract provision guarantees the right to overtime pay but the
entitlement to such benefit must first be established. Realistically representing salary for nine (9) months as stated in the contract, and
speaking, a seaman, by the very nature of his job, stays on board a attorneys fees at the reasonable rate of 10% of the recoverable amount.
ship or vessel beyond the regular eight-hour work schedule. For the
employer to give him overtime pay for the extra hours when he
might be sleeping or attending to his personal chores or even just SO ORDERED.
lulling away his time would be extremely unfair and
unreasonable.30

The Court also holds that petitioner is entitled to attorneys fees in the Hon. Sto Tomas v Salac
concept of damages and expenses of litigation. Attorney's fees are
recoverable when the defendant's act or omission has compelled the These consolidated cases pertain to the constitutionality of certain
plaintiff to incur expenses to protect his interest. 31 We note that provisions of Republic Act 8042, otherwise known as the Migrant Workers
respondents basis for not deploying petitioner is the belief that he will and Overseas Filipinos Act of 1995.
jump ship just like his brother, a mere suspicion that is based on alleged
phone calls of several persons whose identities were not even confirmed.
Time and again, this Court has upheld management prerogatives so long The Facts and the Case
as they are exercised in good faith for the advancement of the employers
interest and not for the purpose of defeating or circumventing the rights of On June 7, 1995 Congress enacted Republic Act (R.A.) 8042 or the Migrant
the employees under special laws or under valid Workers and Overseas Filipinos Act of 1995 that, for among other purposes,
agreements.32 Respondents failure to deploy petitioner is unfounded and sets the Governments policies on overseas employment and establishes a
unreasonable, forcing petitioner to institute the suit below. The award of higher standard of protection and promotion of the welfare of migrant
attorneys fees is thus warranted. workers, their families, and overseas Filipinos in distress.

However, moral damages cannot be awarded in this case. While G.R. 152642 and G.R. 152710
respondents failure to deploy petitioner seems baseless and unreasonable,
we cannot qualify such action as being tainted with bad faith, or done (Constitutionality of Sections 29 and 30, R.A. 8042)
deliberately to defeat petitioners rights, as to justify the award of moral
damages. At most, respondent was being overzealous in protecting its
interest when it became too hasty in making its conclusion that petitioner Sections 29 and 30 of the Act 1 commanded the Department of Labor and
will jump ship like his brother. Employment (DOLE) to begin deregulating within one year of its passage
the business of handling the recruitment and migration of overseas Filipino
workers and phase out within five years the regulatory functions of the
We likewise do not see respondents failure to deploy petitioner as an act Philippine Overseas Employment Administration (POEA).
designed to prevent the latter from attaining the status of a regular
employee. Even if petitioner was able to depart the port of Manila, he still
cannot be considered a regular employee, regardless of his previous On January 8, 2002 respondents Rey Salac, Willie D. Espiritu, Mario
contracts of employment with respondent. In Millares v. National Labor Montenegro, Dodgie Belonio, Lolit Salinel, and Buddy Bonnevie (Salac, et
Relations Commission,33 the Court ruled that seafarers are considered al.) filed a petition for certiorari, prohibition and mandamus with
contractual employees and cannot be considered as regular employees application for temporary restraining order (TRO) and preliminary
under the Labor Code. Their employment is governed by the contracts they injunction against petitioners, the DOLE Secretary, the POEA Administrator,
sign every time they are rehired and their employment is terminated when and the Technical Education and Skills Development Authority (TESDA)
the contract expires. The exigencies of their work necessitates that they be Secretary-General before the Regional Trial Court (RTC) of Quezon City,
employed on a contractual basis.34 Branch 96.2

WHEREFORE, petition is GRANTED IN PART. The Decision dated 16 October Salac, et al. sought to: 1) nullify DOLE Department Order 10 (DOLE DO 10)
2003 and the Resolution dated 19 February 2004 of the Court of Appeals and POEA Memorandum Circular 15 (POEA MC 15); 2) prohibit the DOLE,
are REVERSED and SET ASIDE. The Decision of Labor Arbiter Teresita D. POEA, and TESDA from implementing the same and from further issuing
Castillon-Lora dated 29 January 1999 is REINSTATED with the rules and regulations that would regulate the recruitment and placement of
overseas Filipino workers (OFWs); and 3) also enjoin them to comply with xxxx
the policy of deregulation mandated under Sections 29 and 30 of Republic
Act 8042. SEC. 1. Section 23, paragraph (b.1) of Republic Act No. 8042, otherwise
known as the "Migrant Workers and Overseas Filipinos Act of 1995" is
On March 20, 2002 the Quezon City RTC granted Salac, et al.s petition and hereby amended to read as follows:
ordered the government agencies mentioned to deregulate the recruitment
and placement of OFWs.3 The RTC also annulled DOLE DO 10, POEA MC 15, (b.1) Philippine Overseas Employment Administration The Administration
and all other orders, circulars and issuances that are inconsistent with the shall regulate private sector participation in the recruitment and overseas
policy of deregulation under R.A. 8042. placement of workers by setting up a licensing and registration system. It
shall also formulate and implement, in coordination with appropriate
Prompted by the RTCs above actions, the government officials concerned entities concerned, when necessary, a system for promoting and
filed the present petition in G.R. 152642 seeking to annul the RTCs monitoring the overseas employment of Filipino workers taking into
decision and have the same enjoined pending action on the petition. consideration their welfare and the domestic manpower requirements.

On April 17, 2002 the Philippine Association of Service Exporters, Inc. In addition to its powers and functions, the administration shall inform
intervened in the case before the Court, claiming that the RTC March 20, migrant workers not only of their rights as workers but also of their rights
2002 Decision gravely affected them since it paralyzed the deployment as human beings, instruct and guide the workers how to assert their rights
abroad of OFWs and performing artists. The Confederated Association of and provide the available mechanism to redress violation of their rights.
Licensed Entertainment Agencies, Incorporated (CALEA) intervened for the
same purpose.4 In the recruitment and placement of workers to service the requirements
for trained and competent Filipino workers of foreign governments and
On May 23, 2002 the Court5 issued a TRO in the case, enjoining the Quezon their instrumentalities, and such other employers as public interests may
City RTC, Branch 96, from enforcing its decision. require, the administration shall deploy only to countries where the
Philippines has concluded bilateral labor agreements or arrangements:
In a parallel case, on February 12, 2002 respondents Asian Recruitment Provided, That such countries shall guarantee to protect the rights of
Council Philippine Chapter, Inc. and others (Arcophil, et al.) filed a petition Filipino migrant workers; and: Provided, further, That such countries shall
for certiorari and prohibition with application for TRO and preliminary observe and/or comply with the international laws and standards for
injunction against the DOLE Secretary, the POEA Administrator, and the migrant workers.
TESDA Director-General,6 before the RTC of Quezon City, Branch 220, to
enjoin the latter from implementing the 2002 Rules and Regulations SEC. 2. Section 29 of the same law is hereby repealed.
Governing the Recruitment and Employment of Overseas Workers and to
cease and desist from issuing other orders, circulars, and policies that tend SEC. 3. Section 30 of the same law is also hereby repealed.
to regulate the recruitment and placement of OFWs in violation of the
policy of deregulation provided in Sections 29 and 30 of R.A. 8042.
xxxx
On March 12, 2002 the Quezon City RTC rendered an Order, granting the
petition and enjoining the government agencies involved from exercising On August 20, 2009 respondents Salac, et al. told the Court in G.R. 152642
regulatory functions over the recruitment and placement of OFWs. This that they agree9 with the Republics view that the repeal of Sections 29 and
prompted the DOLE Secretary, the POEA Administrator, and the TESDA 30 of R.A. 8042 renders the issues they raised by their action moot and
Director-General to file the present action in G.R. 152710. As in G.R. academic. The Court has no reason to disagree. Consequently, the two
152642, the Court issued on May 23, 2002 a TRO enjoining the Quezon City cases, G.R. 152642 and 152710, should be dismissed for being moot and
RTC, Branch 220 from enforcing its decision. academic.

On December 4, 2008, however, the Republic informed 7 the Court that on G.R. 167590
April 10, 2007 former President Gloria Macapagal-Arroyo signed into law
R.A. 94228 which expressly repealed Sections 29 and 30 of R.A. 8042 and (Constitutionality of Sections 6, 7, and 9 of R.A. 8042)
adopted the policy of close government regulation of the recruitment and
deployment of OFWs. R.A. 9422 pertinently provides:
On August 21, 1995 respondent Philippine Association of Service Exporters, The RTC of Manila declared Section 6 unconstitutional after hearing on the
Inc. (PASEI) filed a petition for declaratory relief and prohibition with prayer ground that its definition of "illegal recruitment" is vague as it fails to
for issuance of TRO and writ of preliminary injunction before the RTC of distinguish between licensed and non-licensed recruiters 11 and for that
Manila, seeking to annul Sections 6, 7, and 9 of R.A. 8042 for being reason gives undue advantage to the non-licensed recruiters in violation of
unconstitutional. (PASEI also sought to annul a portion of Section 10 but the right to equal protection of those that operate with government
the Court will take up this point later together with a related case.) licenses or authorities.

Section 6 defines the crime of "illegal recruitment" and enumerates the But "illegal recruitment" as defined in Section 6 is clear and unambiguous
acts constituting the same. Section 7 provides the penalties for prohibited and, contrary to the RTCs finding, actually makes a distinction between
acts. Thus: licensed and non-licensed recruiters. By its terms, persons who engage in
"canvassing, enlisting, contracting, transporting, utilizing, hiring, or
SEC. 6. Definition. For purposes of this Act, illegal recruitment shall mean procuring workers" without the appropriate government license or
any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, authority are guilty of illegal recruitment whether or not they commit the
procuring workers and includes referring, contract services, promising or wrongful acts enumerated in that section. On the other hand, recruiters
advertising for employment abroad, whether for profit or not, when who engage in the canvassing, enlisting, etc. of OFWs, although with the
undertaken by a non-license or non-holder of authority contemplated under appropriate government license or authority, are guilty of illegal
Article 13(f) of Presidential Decree No. 442, as amended, otherwise known recruitment only if they commit any of the wrongful acts enumerated in
as the Labor Code of the Philippines: Provided, That such non-license or Section 6.
non-holder, who, in any manner, offers or promises for a fee employment
abroad to two or more persons shall be deemed so engaged. It shall The Manila RTC also declared Section 7 unconstitutional on the ground that
likewise include the following acts, whether committed by any person, its sweeping application of the penalties failed to make any distinction as
whether a non-licensee, non-holder, licensee or holder of authority: to the seriousness of the act committed for the application of the penalty
imposed on such violation. As an example, said the trial court, the mere
xxxx failure to render a report under Section 6(h) or obstructing the inspection
by the Labor Department under Section 6(g) are penalized by
imprisonment for six years and one day and a minimum fine
SEC. 7. Penalties. of P200,000.00 but which could unreasonably go even as high as life
imprisonment if committed by at least three persons.
(a) Any person found guilty of illegal recruitment shall suffer the
penalty of imprisonment of not less than six (6) years and one (1) Apparently, the Manila RTC did not agree that the law can impose such
day but not more than twelve (12) years and a fine not less than grave penalties upon what it believed were specific acts that were not as
two hundred thousand pesos (P200,000.00) nor more than five condemnable as the others in the lists. But, in fixing uniform penalties for
hundred thousand pesos (P500,000.00). each of the enumerated acts under Section 6, Congress was within its
prerogative to determine what individual acts are equally reprehensible,
(b) The penalty of life imprisonment and a fine of not less than five consistent with the State policy of according full protection to labor, and
hundred thousand pesos (P500,000.00) nor more than one million deserving of the same penalties. It is not within the power of the Court to
pesos (P1,000,000.00) shall be imposed if illegal recruitment question the wisdom of this kind of choice. Notably, this legislative policy
constitutes economic sabotage as defined herein. has been further stressed in July 2010 with the enactment of R.A.
1002212 which increased even more the duration of the penalties of
Provided, however, That the maximum penalty shall be imposed if the imprisonment and the amounts of fine for the commission of the acts listed
person illegally recruited is less than eighteen (18) years of age or under Section 7.
committed by a non-licensee or non-holder of authority.10
Obviously, in fixing such tough penalties, the law considered the unsettling
Finally, Section 9 of R.A. 8042 allowed the filing of criminal actions arising fact that OFWs must work outside the countrys borders and beyond its
from "illegal recruitment" before the RTC of the province or city where the immediate protection. The law must, therefore, make an effort to somehow
offense was committed or where the offended party actually resides at the protect them from conscienceless individuals within its jurisdiction who,
time of the commission of the offense. fueled by greed, are willing to ship them out without clear assurance that
their contracted principals would treat such OFWs fairly and humanely.
As the Court held in People v. Ventura,13 the State under its police power G.R. 182978-79 and G.R. 184298-99 are consolidated cases. Respondent
"may prescribe such regulations as in its judgment will secure or tend to spouses Simplicio and Mila Cuaresma (the Cuaresmas) filed a claim for
secure the general welfare of the people, to protect them against the death and insurance benefits and damages against petitioners Becmen
consequence of ignorance and incapacity as well as of deception and Service Exporter and Promotion, Inc. (Becmen) and White Falcon Services,
fraud." Police power is "that inherent and plenary power of the State which Inc. (White Falcon) for the death of their daughter Jasmin Cuaresma while
enables it to prohibit all things hurtful to the comfort, safety, and welfare of working as staff nurse in Riyadh, Saudi Arabia.
society."14
The Labor Arbiter (LA) dismissed the claim on the ground that the
The Manila RTC also invalidated Section 9 of R.A. 8042 on the ground that Cuaresmas had already received insurance benefits arising from their
allowing the offended parties to file the criminal case in their place of daughters death from the Overseas Workers Welfare Administration
residence would negate the general rule on venue of criminal cases which (OWWA). The LA also gave due credence to the findings of the Saudi
is the place where the crime or any of its essential elements were Arabian authorities that Jasmin committed suicide.
committed. Venue, said the RTC, is jurisdictional in penal laws and, allowing
the filing of criminal actions at the place of residence of the offended On appeal, however, the National Labor Relations Commission (NLRC)
parties violates their right to due process. Section 9 provides: found Becmen and White Falcon jointly and severally liable for Jasmins
death and ordered them to pay the Cuaresmas the amount of
SEC. 9. Venue. A criminal action arising from illegal recruitment as US$113,000.00 as actual damages. The NLRC relied on the Cabanatuan
defined herein shall be filed with the Regional Trial Court of the province or City Health Offices autopsy finding that Jasmin died of criminal violence
city where the offense was committed or where the offended party actually and rape.
resides at the time of the commission of the offense: Provided, That the
court where the criminal action is first filed shall acquire jurisdiction to the Becmen and White Falcon appealed the NLRC Decision to the Court of
exclusion of other courts: Provided, however, That the aforestated Appeals (CA).18 On June 28, 2006 the CA held Becmen and White Falcon
provisions shall also apply to those criminal actions that have already been jointly and severally liable with their Saudi Arabian employer for actual
filed in court at the time of the effectivity of this Act. damages, with Becmen having a right of reimbursement from White Falcon.
Becmen and White Falcon appealed the CA Decision to this Court.
But there is nothing arbitrary or unconstitutional in Congress fixing an
alternative venue for violations of Section 6 of R.A. 8042 that differs from On April 7, 2009 the Court found Jasmins death not work-related or work-
the venue established by the Rules on Criminal Procedure. Indeed, Section connected since her rape and death did not occur while she was on duty at
15(a), Rule 110 of the latter Rules allows exceptions provided by laws. the hospital or doing acts incidental to her employment. The Court deleted
Thus: the award of actual damages but ruled that Becmens corporate directors
and officers are solidarily liable with their company for its failure to
SEC. 15. Place where action is to be instituted. (a) Subject to existing investigate the true nature of her death. Becmen and White Falcon
laws, the criminal action shall be instituted and tried in the court of the abandoned their legal, moral, and social duty to assist the Cuaresmas in
municipality or territory where the offense was committed or where any of obtaining justice for their daughter. Consequently, the Court held the
its essential ingredients occurred. (Emphasis supplied) foreign employer Rajab and Silsilah, White Falcon, Becmen, and the latters
corporate directors and officers jointly and severally liable to the
xxxx Cuaresmas for: 1) P2,500,000.00 as moral damages; 2) P2,500,000.00 as
exemplary damages; 3) attorneys fees of 10% of the total monetary
award; and 4) cost of suit.
Section 9 of R.A. 8042, as an exception to the rule on venue of criminal
actions is, consistent with that laws declared policy 15 of providing a
criminal justice system that protects and serves the best interests of the On July 16, 2009 the corporate directors and officers of Becmen, namely,
victims of illegal recruitment. Eufrocina Gumabay, Elvira Taguiam, Lourdes Bonifacio and Eddie De
Guzman (Gumabay, et al.) filed a motion for leave to Intervene. They
questioned the constitutionality of the last sentence of the second
G.R. 167590, G.R. 182978-79, 16 and G.R. 184298-9917 paragraph of Section 10, R.A. 8042 which holds the corporate directors,
officers and partners jointly and solidarily liable with their company for
(Constitutionality of Section 10, last sentence of 2nd paragraph) money claims filed by OFWs against their employers and the recruitment
firms. On September 9, 2009 the Court allowed the intervention and
admitted Gumabay, et al.s motion for reconsideration.
The key issue that Gumabay, et al. present is whether or not the 2nd WHEREFORE, in G.R. 152642 and 152710, the Court DISMISSES the
paragraph of Section 10, R.A. 8042, which holds the corporate directors, petitions for having become moot and academic.1wphi1
officers, and partners of recruitment and placement agencies jointly and
solidarily liable for money claims and damages that may be adjudged In G.R. 167590, the Court SETS ASIDE the Decision of the Regional Trial
against the latter agencies, is unconstitutional. Court ofManila dated December 8, 2004 and DECLARES Sections 6, 7, and
9 of Republic Act 8042 valid and constitutional.
In G.R. 167590 (the PASEI case), the Quezon City RTC held as
unconstitutional the last sentence of the 2nd paragraph of Section 10 of In G.R. 182978-79 and G.R. 184298-99 as well as in G.R. 167590, the Court
R.A. 8042. It pointed out that, absent sufficient proof that the corporate HOLDS the last sentence of the second paragraph of Section 10 of Republic
officers and directors of the erring company had knowledge of and allowed Act 8042 valid and constitutional. The Court, however, RECONSIDERS and
the illegal recruitment, making them automatically liable would violate SETS ASIDE the portion of its Decision in G.R. 182978-79 and G.R. 184298-
their right to due process of law. 99 that held intervenors Eufrocina Gumabay, Elvira Taguiam, Lourdes
Bonifacio, and Eddie De Guzman jointly and solidarily liable with
The pertinent portion of Section 10 provides: respondent Becmen Services Exporter and Promotion, Inc. to spouses
Simplicia and Mila Cuaresma for lack of a finding in those cases that such
SEC. 10. Money Claims. x x x intervenors had a part in the act or omission imputed to their corporation.

The liability of the principal/employer and the recruitment/placement SO ORDERED.


agency for any and all claims under this section shall be joint and several.
This provision shall be incorporated in the contract for overseas
employment and shall be a condition precedent for its approval. The
performance bond to be filed by the recruitment/placement agency, as Sameer Overseas v Cabilles
provided by law, shall be answerable for all money claims or damages that
may be awarded to the workers. If the recruitment/placement agency is a
juridical being, the corporate officers and directors and partners as the This case involves an overseas Filipino worker with shattered dreams. It is
case may be, shall themselves be jointly and solidarily liable with the our duty, given the facts and the law, to approximate justice for her.
corporation or partnership for the aforesaid claims and damages.
(Emphasis supplied) We are asked to decide a petition for review 1 on certiorari assailing the
Court of Appeals decision2 dated June 27, 2005. This decision partially
affirmed the National Labor Relations Commissions resolution dated March
But the Court has already held, pending adjudication of this case, that the 31, 2004,3 declaring respondents dismissal illegal, directing petitioner to
liability of corporate directors and officers is not automatic. To make them pay respondents three-month salary equivalent to New Taiwan Dollar
jointly and solidarily liable with their company, there must be a finding that (NT$) 46,080.00, and ordering it to reimburse the NT$3,000.00 withheld
they were remiss in directing the affairs of that company, such as from respondent, and pay her NT$300.00 attorneys fees. 4cralawred
sponsoring or tolerating the conduct of illegal activities. 19 In the case of
Becmen and White Falcon,20 while there is evidence that these companies Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and
were at fault in not investigating the cause of Jasmins death, there is no placement agency.5Responding to an ad it published, respondent, Joy C.
mention of any evidence in the case against them that intervenors Cabiles, submitted her application for a quality control job in
Gumabay, et al., Becmens corporate officers and directors, were Taiwan.6cralawred
personally involved in their companys particular actions or omissions in
Jasmins case. Joys application was accepted. 7 Joy was later asked to sign a one-year
employment contract for a monthly salary of NT$15,360.00. 8 She alleged
As a final note, R.A. 8042 is a police power measure intended to regulate that Sameer Overseas Agency required her to pay a placement fee of
the recruitment and deployment of OFWs. It aims to curb, if not eliminate, P70,000.00 when she signed the employment contract. 9cralawred
the injustices and abuses suffered by numerous OFWs seeking to work
abroad. The rule is settled that every statute has in its favor the Joy was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal) on June 26,
presumption of constitutionality. The Court cannot inquire into the wisdom 1997.10 She alleged that in her employment contract, she agreed to work
or expediency of the laws enacted by the Legislative Department. Hence, as quality control for one year. 11In Taiwan, she was asked to work as a
in the absence of a clear and unmistakable case that the statute is cutter.12cralawred
unconstitutional, the Court must uphold its validity.
Sameer Overseas Placement Agency claims that on July 14, 1997, a certain termination.40 There was no sufficient proof to show that respondent was
Mr. Huwang from Wacoal informed Joy, without prior notice, that she was inefficient in her work and that she failed to comply with company
terminated and that she should immediately report to their office to get requirements.41 Furthermore, procedural due process was not observed in
her salary and passport.13 She was asked to prepare for immediate terminating respondent.42cralawred
repatriation.14cralawred
The National Labor Relations Commission did not rule on the issue of
Joy claims that she was told that from June 26 to July 14, 1997, she only reimbursement of placement fees for lack of jurisdiction. 43 It refused to
earned a total of NT$9,000. 15 According to her, Wacoal deducted NT$3,000 entertain the issue of the alleged transfer of obligations to Pacific. 44 It did
to cover her plane ticket to Manila. 16cralawred not acquire jurisdiction over that issue because Sameer Overseas
Placement Agency failed to appeal the Labor Arbiters decision not to rule
On October 15, 1997, Joy filed a complaint 17 with the National Labor on the matter.45cralawred
Relations Commission against petitioner and Wacoal. She claimed that she
was illegally dismissed.18 She asked for the return of her placement fee, the The National Labor Relations Commission awarded respondent only three
withheld amount for repatriation costs, payment of her salary for 23 (3) months worth of salary in the amount of NT$46,080, the
months as well as moral and exemplary damages.19 She identified Wacoal reimbursement of the NT$3,000 withheld from her, and attorneys fees of
as Sameer Overseas Placement Agencys foreign principal. 20cralawred NT$300.46cralawred

Sameer Overseas Placement Agency alleged that respondent's termination The Commission denied the agencys motion for reconsideration 47 dated
was due to her inefficiency, negligence in her duties, and her failure to May 12, 2004 through a resolution48 dated July 2, 2004.
comply with the work requirements [of] her foreign [employer]. 21 The
agency also claimed that it did not ask for a placement fee of ? Aggrieved by the ruling, Sameer Overseas Placement Agency caused the
70,000.00.22 As evidence, it showed Official Receipt No. 14860 dated June filing of a petition49for certiorari with the Court of Appeals assailing the
10, 1997, bearing the amount of ?20,360.00. 23 Petitioner added that National Labor Relations Commissions resolutions dated March 31, 2004
Wacoal's accreditation with petitioner had already been transferred to the and July 2, 2004.
Pacific Manpower & Management Services, Inc. (Pacific) as of August 6,
1997.24 Thus, petitioner asserts that it was already substituted by Pacific The Court of Appeals50 affirmed the decision of the National Labor Relations
Manpower.25cralawred Commission with respect to the finding of illegal dismissal, Joys
entitlement to the equivalent of three months worth of salary,
Pacific Manpower moved for the dismissal of petitioners claims against reimbursement of withheld repatriation expense, and attorneys fees. 51 The
it.26 It alleged that there was no employer-employee relationship between Court of Appeals remanded the case to the National Labor Relations
them.27 Therefore, the claims against it were outside the jurisdiction of the Commission to address the validity of petitioner's allegations against
Labor Arbiter.28 Pacific Manpower argued that the employment contract Pacific.52 The Court of Appeals held, thus:chanRoblesvirtualLawlibrary
should first be presented so that the employers contractual obligations
might be identified.29 It further denied that it assumed liability for Although the public respondent found the dismissal of the complainant-
petitioners illegal acts.30cralawred respondent illegal, we should point out that the NLRC merely awarded her
three (3) months backwages or the amount of NT$46,080.00, which was
On July 29, 1998, the Labor Arbiter dismissed Joys complaint. 31 Acting based upon its finding that she was dismissed without due process, a
Executive Labor Arbiter Pedro C. Ramos ruled that her complaint was finding that we uphold, given petitioners lack of worthwhile discussion
based on mere allegations.32 The Labor Arbiter found that there was no upon the same in the proceedings below or before us. Likewise we sustain
excess payment of placement fees, based on the official receipt presented NLRCs finding in regard to the reimbursement of her fare, which is
by petitioner.33 The Labor Arbiter found unnecessary a discussion on squarely based on the law; as well as the award of attorneys fees.
petitioners transfer of obligations to Pacific 34 and considered the matter
immaterial in view of the dismissal of respondents complaint. 35cralawred But we do find it necessary to remand the instant case to the public
respondent for further proceedings, for the purpose of addressing the
Joy appealed36 to the National Labor Relations Commission. validity or propriety of petitioners third-party complaint against the
transferee agent or the Pacific Manpower & Management Services, Inc. and
In a resolution37 dated March 31, 2004, the National Labor Relations Lea G. Manabat. We should emphasize that as far as the decision of the
Commission declared that Joy was illegally dismissed. 38 It reiterated the NLRC on the claims of Joy Cabiles, is concerned, the same is hereby
doctrine that the burden of proof to show that the dismissal was based on affirmed with finality, and we hold petitioner liable thereon, but without
a just or valid cause belongs to the employer. 39 It found that Sameer prejudice to further hearings on its third party complaint against Pacific for
Overseas Placement Agency failed to prove that there were just causes for reimbursement.
Security of tenure for labor is guaranteed by our Constitution. 64cralawred
WHEREFORE, premises considered, the assailed Resolutions are hereby
partlyAFFIRMED in accordance with the foregoing discussion, but subject to Employees are not stripped of their security of tenure when they move to
the caveat embodied in the last sentence. No costs. work in a different jurisdiction. With respect to the rights of overseas
Filipino workers, we follow the principle of lex loci contractus.
SO ORDERED.53
Thus, in Triple Eight Integrated Services, Inc. v. NLRC, 65 this court
Dissatisfied, Sameer Overseas Placement Agency filed this noted:chanRoblesvirtualLawlibrary
petition.54cralawred
Petitioner likewise attempts to sidestep the medical certificate requirement
We are asked to determine whether the Court of Appeals erred when it by contending that since Osdana was working in Saudi Arabia, her
affirmed the ruling of the National Labor Relations Commission finding employment was subject to the laws of the host country. Apparently,
respondent illegally dismissed and awarding her three months worth of petitioner hopes to make it appear that the labor laws of Saudi Arabia do
salary, the reimbursement of the cost of her repatriation, and attorneys not require any certification by a competent public health authority in the
fees despite the alleged existence of just causes of termination. dismissal of employees due to illness.

Petitioner reiterates that there was just cause for termination because Again, petitioners argument is without merit.
there was a finding of Wacoal that respondent was inefficient in her
work.55 Therefore, it claims that respondents dismissal was First, established is the rule that lex loci contractus (the law of the place
valid.56cralawred where the contract is made) governs in this jurisdiction. There is no
question that the contract of employment in this case was perfected here
Petitioner also reiterates that since Wacoals accreditation was validly in the Philippines. Therefore, the Labor Code, its implementing rules and
transferred to Pacific at the time respondent filed her complaint, it should regulations, and other laws affecting labor apply in this case. Furthermore,
be Pacific that should now assume responsibility for Wacoals contractual settled is the rule that the courts of the forum will not enforce any foreign
obligations to the workers originally recruited by petitioner. 57cralawred claim obnoxious to the forums public policy. Here in the Philippines,
employment agreements are more than contractual in nature. The
Sameer Overseas Placement Agencys petition is without merit. We find for Constitution itself, in Article XIII, Section 3, guarantees the special
respondent. protection of workers, to wit:chanRoblesvirtualLawlibrary

I The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of
Sameer Overseas Placement Agency failed to show that there was just employment opportunities for all.
cause for causing Joys dismissal. The employer, Wacoal, also failed to
accord her due process of law. It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including
Indeed, employers have the prerogative to impose productivity and quality the right to strike in accordance with law. They shall be entitled to security
standards at work.58 They may also impose reasonable rules to ensure that of tenure, humane conditions of work, and a living wage. They shall also
the employees comply with these standards. 59 Failure to comply may be a participate in policy and decision-making processes affecting their rights
just cause for their dismissal. 60 Certainly, employers cannot be compelled and benefits as may be provided by law.
to retain the services of an employee who is guilty of acts that are inimical
to the interest of the employer. 61 While the law acknowledges the plight . . . .chanrobleslaw
and vulnerability of workers, it does not authorize the oppression or self-
destruction of the employer. 62 Management prerogative is recognized in This public policy should be borne in mind in this case because to allow
law and in our jurisprudence. foreign employers to determine for and by themselves whether an
overseas contract worker may be dismissed on the ground of illness would
This prerogative, however, should not be abused. It is tempered with the encourage illegal or arbitrary pre-termination of employment
employees right to security of tenure.63 Workers are entitled to contracts.66 (Emphasis supplied, citation omitted)
substantive and procedural due process before termination. They may not
be removed from employment without a valid or just cause as determined Even with respect to fundamental procedural rights, this court emphasized
by law and without going through the proper procedure. in PCL Shipping Philippines, Inc. v. NLRC,67 to
wit:chanRoblesvirtualLawlibrary
Petitioners admit that they did not inform private respondent in writing of employer. The employer must affirmatively show rationally adequate
the charges against him and that they failed to conduct a formal evidence that the dismissal was for a justifiable cause. 70 Failure to show
investigation to give him opportunity to air his side. However, petitioners that there was valid or just cause for termination would necessarily mean
contend that the twin requirements of notice and hearing applies strictly that the dismissal was illegal.71cralawred
only when the employment is within the Philippines and that these need
not be strictly observed in cases of international maritime or overseas To show that dismissal resulting from inefficiency in work is valid, it must
employment. be shown that: 1) the employer has set standards of conduct and
workmanship against which the employee will be judged; 2) the standards
The Court does not agree. The provisions of the Constitution as well as the of conduct and workmanship must have been communicated to the
Labor Code which afford protection to labor apply to Filipino employees employee; and 3) the communication was made at a reasonable time prior
whether working within the Philippines or abroad. Moreover, the principle to the employees performance assessment.
of lex loci contractus (the law of the place where the contract is made)
governs in this jurisdiction. In the present case, it is not disputed that the This is similar to the law and jurisprudence on probationary employees,
Contract of Employment entered into by and between petitioners and which allow termination of the employee only when there is just cause or
private respondent was executed here in the Philippines with the approval when [the probationary employee] fails to qualify as a regular employee in
of the Philippine Overseas Employment Administration (POEA). Hence, the accordance with reasonable standards made known by the employer to the
Labor Code together with its implementing rules and regulations and other employee at the time of his [or her] engagement. 72cralawred
laws affecting labor apply in this case. 68 (Emphasis supplied, citations
omitted) However, we do not see why the application of that ruling should be limited
to probationary employment. That rule is basic to the idea of security of
By our laws, overseas Filipino workers (OFWs) may only be terminated for a tenure and due process, which are guaranteed to all employees, whether
just or authorized cause and after compliance with procedural due process their employment is probationary or regular.
requirements.
The pre-determined standards that the employer sets are the bases for
Article 282 of the Labor Code enumerates the just causes of termination by determining the probationary employees fitness, propriety, efficiency, and
the employer. Thus:chanRoblesvirtualLawlibrary qualifications as a regular employee. Due process requires that the
probationary employee be informed of such standards at the time of his or
Art. 282. Termination by employer. An employer may terminate an her engagement so he or she can adjust his or her character or
employment for any of the following causes:cralawlawlibrary workmanship accordingly. Proper adjustment to fit the standards upon
which the employees qualifications will be evaluated will increase ones
(a) Serious misconduct or willful disobedience by the employee of the chances of being positively assessed for regularization by his or her
lawful orders of his employer or representative in connection with his employer.
work;chanroblesvirtuallawlibrary
Assessing an employees work performance does not stop after
(b) Gross and habitual neglect by the employee of his regularization. The employer, on a regular basis, determines if an
duties;chanroblesvirtuallawlibrary employee is still qualified and efficient, based on work standards. Based on
that determination, and after complying with the due process requirements
(c) Fraud or willful breach by the employee of the trust reposed in him by of notice and hearing, the employer may exercise its management
his employer or duly authorized representative;chanroblesvirtuallawlibrary prerogative of terminating the employee found unqualified.

(d) Commission of a crime or offense by the employee against the person The regular employee must constantly attempt to prove to his or her
of his employer or any immediate member of his family or his duly employer that he or she meets all the standards for employment. This
authorized representatives; andChanRoblesVirtualawlibrary time, however, the standards to be met are set for the purpose of retaining
employment or promotion. The employee cannot be expected to meet any
(e) Other causes analogous to the foregoing. standard of character or workmanship if such standards were not
communicated to him or her. Courts should remain vigilant on allegations
Petitioners allegation that respondent was inefficient in her work and of the employers failure to communicate work standards that would
negligent in her duties69may, therefore, constitute a just cause for govern ones employment if [these are] to discharge in good faith [their]
termination under Article 282(b), but only if petitioner was able to prove it. duty to adjudicate.73cralawred

The burden of proving that there is just cause for termination is on the In this case, petitioner merely alleged that respondent failed to comply
with her foreign employers work requirements and was inefficient in her entitled to the full reimbursement of his placement fee with interest of
work.74No evidence was shown to support such allegations. Petitioner did twelve (12%) per annum, plus his salaries for the unexpired portion of his
not even bother to specify what requirements were not met, what employment contract or for three (3) months for every year of the
efficiency standards were violated, or what particular acts of respondent unexpired term, whichever is less.
constituted inefficiency.
Sec. 10. MONEY CLAIMS. Notwithstanding any provision of law to the
There was also no showing that respondent was sufficiently informed of the contrary, the Labor Arbiters of the National Labor Relations Commission
standards against which her work efficiency and performance were (NLRC) shall have the original and exclusive jurisdiction to hear and decide,
judged. The parties conflict as to the position held by respondent showed within ninety (90) calendar days after filing of the complaint, the claims
that even the matter as basic as the job title was not clear. arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including
The bare allegations of petitioner are not sufficient to support a claim that claims for actual, moral, exemplary and other forms of damages.
there is just cause for termination. There is no proof that respondent was
legally terminated. The liability of the principal/employer and the recruitment/placement
agency for any and all claims under this section shall be joint and several.
Petitioner failed to comply with This provisions [sic] shall be incorporated in the contract for overseas
the due process requirements employment and shall be a condition precedent for its approval. The
performance bond to be filed by the recruitment/placement agency, as
Respondents dismissal less than one year from hiring and her repatriation provided by law, shall be answerable for all money claims or damages that
on the same day show not only failure on the part of petitioner to comply may be awarded to the workers. If the recruitment/placement agency is a
with the requirement of the existence of just cause for termination. They juridical being, the corporate officers and directors and partners as the
patently show that the employers did not comply with the due process case may be, shall themselves be jointly and solidarily liable with the
requirement. corporation or partnership for the aforesaid claims and damages.

A valid dismissal requires both a valid cause and adherence to the valid Such liabilities shall continue during the entire period or duration of the
procedure of dismissal.75 The employer is required to give the charged employment contract and shall not be affected by any substitution,
employee at least two written notices before termination. 76 One of the amendment or modification made locally or in a foreign country of the said
written notices must inform the employee of the particular acts that may contract.
cause his or her dismissal. 77 The other notice must [inform] the employee
of the employers decision. 78 Aside from the notice requirement, the Any compromise/amicable settlement or voluntary agreement on money
employee must also be given an opportunity to be heard. 79cralawred claims inclusive of damages under this section shall be paid within four (4)
months from the approval of the settlement by the appropriate authority.
Petitioner failed to comply with the twin notices and hearing requirements.
Respondent started working on June 26, 1997. She was told that she was In case of termination of overseas employment without just, valid or
terminated on July 14, 1997 effective on the same day and barely a month authorized cause as defined by law or contract, the workers shall be
from her first workday. She was also repatriated on the same day that she entitled to the full reimbursement of his placement fee with interest of
was informed of her termination. The abruptness of the termination twelve (12%) per annum, plus his salaries for the unexpired portion of his
negated any finding that she was properly notified and given the employment contract or for three (3) months for every year of the
opportunity to be heard. Her constitutional right to due process of law was unexpired term, whichever is less.
violated.
. . . .
II
(Emphasis supplied)chanrobleslaw
Respondent Joy Cabiles, having been illegally dismissed, is entitled to her
salary for the unexpired portion of the employment contract that was Section 15 of Republic Act No. 8042 states that repatriation of the worker
violated together with attorneys fees and reimbursement of amounts and the transport of his [or her] personal belongings shall be the primary
withheld from her salary. responsibility of the agency which recruited or deployed the worker
overseas. The exception is when termination of employment is due solely
Section 10 of Republic Act No. 8042, otherwise known as the Migrant to the fault of the worker, 80 which as we have established, is not the case.
Workers and Overseas Filipinos Act of 1995, states that overseas workers It reads:chanRoblesvirtualLawlibrary
who were terminated without just, valid, or authorized cause shall be
SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND. claims for actual, moral, exemplary and other forms of damage. Consistent
The repatriation of the worker and the transport of his personal belongings with this mandate, the NLRC shall endeavor to update and keep abreast
shall be the primary responsibility of the agency which recruited or with the developments in the global services industry.
deployed the worker overseas. All costs attendant to repatriation shall be
borne by or charged to the agency concerned and/or its principal. Likewise, The liability of the principal/employer and the recruitment/placement
the repatriation of remains and transport of the personal belongings of a agency for any and all claims under this section shall be joint and several.
deceased worker and all costs attendant thereto shall be borne by the This provision shall be incorporated in the contract for overseas
principal and/or local agency. However, in cases where the termination of employment and shall be a condition precedent for its approval. The
employment is due solely to the fault of the worker, the principal/employer performance bond to de [sic] filed by the recruitment/placement agency,
or agency shall not in any manner be responsible for the repatriation of the as provided by law, shall be answerable for all money claims or damages
former and/or his belongings. that may be awarded to the workers. If the recruitment/placement agency
is a juridical being, the corporate officers and directors and partners as the
.... case may be, shall themselves be jointly and solidarily liable with the
corporation or partnership for the aforesaid claims and damages.
The Labor Code81 also entitles the employee to 10% of the amount of
withheld wages as attorneys fees when the withholding is unlawful. Such liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution,
The Court of Appeals affirmed the National Labor Relations Commissions amendment or modification made locally or in a foreign country of the said
decision to award respondent NT$46,080.00 or the three-month equivalent contract.
of her salary, attorneys fees of NT$300.00, and the reimbursement of the
withheld NT$3,000.00 salary, which answered for her repatriation. Any compromise/amicable settlement or voluntary agreement on money
claims inclusive of damages under this section shall be paid within thirty
We uphold the finding that respondent is entitled to all of these (30) days from approval of the settlement by the appropriate authority.
awards. The award of the three-month equivalent of respondents salary
should, however, be increased to the amount equivalent to the unexpired In case of termination of overseas employment without just, valid or
term of the employment contract. authorized cause as defined by law or contract, or any unauthorized
deductions from the migrant workers salary, the worker shall be entitled to
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., the full reimbursement if [sic] his placement fee and the deductions made
Inc.,82 this court ruled that the clause or for three (3) months for every with interest at twelve percent (12%) per annum, plus his salaries for the
year of the unexpired term, whichever is less 83 is unconstitutional for unexpired portion of his employment contractor for three (3) months for
violating the equal protection clause and substantive due every year of the unexpired term, whichever is less.
process.84cralawred
In case of a final and executory judgement against a foreign
A statute or provision which was declared unconstitutional is not a law. It employer/principal, it shall be automatically disqualified, without further
confers no rights; it imposes no duties; it affords no protection; it creates proceedings, from participating in the Philippine Overseas Employment
no office; it is inoperative as if it has not been passed at all. 85cralawred Program and from recruiting and hiring Filipino workers until and unless it
fully satisfies the judgement award.
We are aware that the clause or for three (3) months for every year of the
unexpired term, whichever is less was reinstated in Republic Act No. 8042 Noncompliance with the mandatory periods for resolutions of case
upon promulgation of Republic Act No. 10022 in 2010. Section 7 of provided under this section shall subject the responsible officials to any or
Republic Act No. 10022 provides:chanRoblesvirtualLawlibrary all of the following penalties:cralawlawlibrary

Section 7. Section 10 of Republic Act No. 8042, as amended, is hereby (a) The salary of any such official who fails to render his decision or
amended to read as follows:chanRoblesvirtualLawlibrary resolution within the prescribed period shall be, or caused to be, withheld
until the said official complies therewith;chanroblesvirtuallawlibrary
SEC. 10. Money Claims. Notwithstanding any provision of law to the
contrary, the Labor Arbiters of the National Labor Relations Commission (b) Suspension for not more than ninety (90) days; or
(NLRC) shall have the original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after the filing of the complaint, the claims (c) Dismissal from the service with disqualification to hold any appointive
arising out of an employer-employee relationship or by virtue of any law or public office for five (5) years.
contract involving Filipino workers for overseas deployment including
Provided, however, That the penalties herein provided shall be without Likewise, there are special reasons of judicial efficiency and economy that
prejudice to any liability which any such official may have incured [sic] attend to these cases.
under other existing laws or rules and regulations as a consequence of
violating the provisions of this paragraph. (Emphasis supplied) The new law puts our overseas workers in the same vulnerable position as
they were prior toSerrano. Failure to reiterate the very ratio decidendi of
Republic Act No. 10022 was promulgated on March 8, 2010. This means that case will result in the same untold economic hardships that our
that the reinstatement of the clause in Republic Act No. 8042 was not yet reading of the Constitution intended to avoid. Obviously, we cannot
in effect at the time of respondents termination from work in countenance added expenses for further litigation that will reduce their
1997.86 Republic Act No. 8042 before it was amended by Republic Act No. hard-earned wages as well as add to the indignity of having been deprived
10022 governs this case. of the protection of our laws simply because our precedents have not been
followed. There is no constitutional doctrine that causes injustice in the
When a law is passed, this court awaits an actual case that clearly raises face of empty procedural niceties. Constitutional interpretation is complex,
adversarial positions in their proper context before considering a prayer to but it is never unreasonable.
declare it as unconstitutional.
Thus, in a resolution88 dated October 22, 2013, we ordered the parties and
However, we are confronted with a unique situation. The law passed the Office of the Solicitor General to comment on the constitutionality of
incorporates the exact clause already declared as unconstitutional, without the reinstated clause in Republic Act No. 10022.
any perceived substantial change in the circumstances.
In its comment,89 petitioner argued that the clause was
This may cause confusion on the part of the National Labor Relations constitutional.90 The legislators intended a balance between the employers
Commission and the Court of Appeals. At minimum, the existence of and the employees rights by not unduly burdening the local recruitment
Republic Act No. 10022 may delay the execution of the judgment in this agency.91 Petitioner is also of the view that the clause was already declared
case, further frustrating remedies to assuage the wrong done to petitioner. as constitutional in Serrano.92cralawred
Hence, there is a necessity to decide this constitutional issue.
The Office of the Solicitor General also argued that the clause was valid
Moreover, this court is possessed with the constitutional duty to and constitutional.93However, since the parties never raised the issue of
[p]romulgate rules concerning the protection and enforcement of the constitutionality of the clause as reinstated in Republic Act No. 10022,
constitutional rights.87 When cases become moot and academic, we do its contention is that it is beyond judicial review. 94cralawred
not hesitate to provide for guidance to bench and bar in situations where
the same violations are capable of repetition but will evade review. This is On the other hand, respondent argued that the clause was unconstitutional
analogous to cases where there are millions of Filipinos working abroad because it infringed on workers right to contract. 95cralawred
who are bound to suffer from the lack of protection because of the
restoration of an identical clause in a provision previously declared as We observe that the reinstated clause, this time as provided in Republic
unconstitutional. Act. No. 10022, violates the constitutional rights to equal protection and
due process.96 Petitioner as well as the Solicitor General have failed to
In the hierarchy of laws, the Constitution is supreme. No branch or office of show any compelling change in the circumstances that would warrant us to
the government may exercise its powers in any manner inconsistent with revisit the precedent.
the Constitution, regardless of the existence of any law that supports such
exercise. The Constitution cannot be trumped by any other law. All laws We reiterate our finding in Serrano v. Gallant Maritime that limiting wages
must be read in light of the Constitution. Any law that is inconsistent with it that should be recovered by an illegally dismissed overseas worker to three
is a nullity. months is both a violation of due process and the equal protection clauses
of the Constitution.
Thus, when a law or a provision of law is null because it is inconsistent with
the Constitution, the nullity cannot be cured by reincorporation or Equal protection of the law is a guarantee that persons under like
reenactment of the same or a similar law or provision. A law or provision of circumstances and falling within the same class are treated alike, in terms
law that was already declared unconstitutional remains as such unless of privileges conferred and liabilities enforced. 97 It is a guarantee against
circumstances have so changed as to warrant a reverse conclusion. undue favor and individual or class privilege, as well as hostile
discrimination or the oppression of inequality. 98cralawred
We are not convinced by the pleadings submitted by the parties that the
situation has so changed so as to cause us to reverse binding precedent. In creating laws, the legislature has the power to make distinctions and
classifications.99 In exercising such power, it has a wide
discretion.100cralawred equivalent to the unexpired portion of their employment
contracts.116 Meanwhile, illegally dismissed overseas workers with
The equal protection clause does not infringe on this legislative power. 101 A employment terms of at least a year were granted a cap equivalent to
law is void on this basis, only if classifications are made arbitrarily. 102 There three months of their salary for the unexpired portions of their
is no violation of the equal protection clause if the law applies equally to contracts.117cralawred
persons within the same class and if there are reasonable grounds for
distinguishing between those falling within the class and those who do not Observing the terminologies used in the clause, we also found that the
fall within the class. 103 A law that does not violate the equal protection subject clause creates a sub-layer of discrimination among OFWs whose
clause prescribes a reasonable classification. 104cralawred contract periods are for more than one year: those who are illegally
dismissed with less than one year left in their contracts shall be entitled to
A reasonable classification (1) must rest on substantial distinctions; (2) their salaries for the entire unexpired portion thereof, while those who are
must be germane to the purposes of the law; (3) must not be limited to illegally dismissed with one year or more remaining in their contracts shall
existing conditions only; and (4) must apply equally to all members of the be covered by the reinstated clause, and their monetary benefits limited to
same class.105cralawred their salaries for three months only.118cralawred

The reinstated clause does not satisfy the requirement of reasonable We do not need strict scrutiny to conclude that these classifications do not
classification. rest on any real or substantial distinctions that would justify different
treatments in terms of the computation of money claims resulting from
In Serrano, we identified the classifications made by the reinstated clause. illegal termination.
It distinguished between fixed-period overseas workers and fixed-period
local workers.106 It also distinguished between overseas workers with Overseas workers regardless of their classifications are entitled to security
employment contracts of less than one year and overseas workers with of tenure, at least for the period agreed upon in their contracts. This means
employment contracts of at least one year. 107 Within the class of overseas that they cannot be dismissed before the end of their contract terms
workers with at least one-year employment contracts, there was a without due process. If they were illegally dismissed, the workers right to
distinction between those with at least a year left in their contracts and security of tenure is violated.
those with less than a year left in their contracts when they were illegally
dismissed.108cralawred The rights violated when, say, a fixed-period local worker is illegally
terminated are neither greater than nor less than the rights violated when
The Congress classification may be subjected to judicial review. In Serrano, a fixed-period overseas worker is illegally terminated. It is state policy to
there is a legislative classification which impermissibly interferes with the protect the rights of workers without qualification as to the place of
exercise of a fundamental right or operates to the peculiar disadvantage of employment.119 In both cases, the workers are deprived of their expected
a suspect class.109cralawred salary, which they could have earned had they not been illegally
dismissed. For both workers, this deprivation translates to economic
Under the Constitution, labor is afforded special protection. 110 Thus, this insecurity and disparity.120 The same is true for the distinctions between
court in Serrano, [i]mbued with the same sense of obligation to afford overseas workers with an employment contract of less than one year and
protection to labor, . . . employ[ed] the standard of strict judicial scrutiny, overseas workers with at least one year of employment contract, and
for it perceive[d] in the subject clause a suspect classification prejudicial to between overseas workers with at least a year left in their contracts and
OFWs.111cralawred overseas workers with less than a year left in their contracts when they
were illegally dismissed.
We also noted in Serrano that before the passage of Republic Act No. 8042,
the money claims of illegally terminated overseas and local workers with For this reason, we cannot subscribe to the argument that [overseas
fixed-term employment were computed in the same manner. 112 Their workers] are contractual employees who can never acquire regular
money claims were computed based on the unexpired portions of their employment status, unlike local workers 121 because it already justifies
contracts.113 The adoption of the reinstated clause in Republic Act No. differentiated treatment in terms of the computation of money
8042 subjected the money claims of illegally dismissed overseas workers claims.122cralawred
with an unexpired term of at least a year to a cap of three months worth of
their salary.114 There was no such limitation on the money claims of illegally Likewise, the jurisdictional and enforcement issues on overseas workers
terminated local workers with fixed-term employment. 115cralawred money claims do not justify a differentiated treatment in the computation
of their money claims.123 If anything, these issues justify an equal, if not
We observed that illegally dismissed overseas workers whose employment greater protection and assistance to overseas workers who generally are
contracts had a term of less than one year were granted the amount more prone to exploitation given their physical distance from our
government.
The so-called incentive is rendered particularly odious by its effect on the
We also find that the classifications are not relevant to the purpose of the OFWs the benefits accruing to the recruitment/manning agencies and
law, which is to establish a higher standard of protection and promotion of their principals are taken from the pockets of the OFWs to whom the full
the welfare of migrant workers, their families and overseas Filipinos in salaries for the unexpired portion of the contract rightfully belong. Thus,
distress, and for other purposes.124 Further, we find specious the argument the principals/employers and the recruitment/manning agencies even profit
that reducing the liability of placement agencies redounds to the benefit from their violation of the security of tenure that an employment contract
of the [overseas] workers.125cralawred embodies. Conversely, lesser protection is afforded the OFW, not only
because of the lessened recovery afforded him or her by operation of law,
Putting a cap on the money claims of certain overseas workers does not but also because this same lessened recovery renders a wrongful dismissal
increase the standard of protection afforded to them. On the other hand, easier and less onerous to undertake; the lesser cost of dismissing a
foreign employers are more incentivized by the reinstated clause to enter Filipino will always be a consideration a foreign employer will take into
into contracts of at least a year because it gives them more flexibility to account in termination of employment decisions. . . . 126
violate our overseas workers rights. Their liability for arbitrarily
terminating overseas workers is decreased at the expense of the workers Further, [t]here can never be a justification for any form of government
whose rights they violated. Meanwhile, these overseas workers who are action that alleviates the burden of one sector, but imposes the same
impressed with an expectation of a stable job overseas for the longer burden on another sector, especially when the favored sector is composed
contract period disregard other opportunities only to be terminated earlier. of private businesses such as placement agencies, while the
They are left with claims that are less than what others in the same disadvantaged sector is composed of OFWs whose protection no less than
situation would receive. The reinstated clause, therefore, creates a the Constitution commands. The idea that private business interest can be
situation where the law meant to protect them makes violation of rights elevated to the level of a compelling state interest is odious. 127cralawred
easier and simply benign to the violator.
Along the same line, we held that the reinstated clause violates due
As Justice Brion said in his concurring opinion in process rights. It is arbitrary as it deprives overseas workers of their
Serrano:chanRoblesvirtualLawlibrary monetary claims without any discernable valid purpose. 128cralawred

Section 10 of R.A. No. 8042 affects these well-laid rules and measures, and Respondent Joy Cabiles is entitled to her salary for the unexpired portion of
in fact provides a hidden twist affecting the principal/employers liability. her contract, in accordance with Section 10 of Republic Act No. 8042. The
While intended as an incentive accruing to recruitment/manning award of the three-month equivalence of respondents salary must be
agencies, the law, as worded, simply limits the OFWs recovery in wrongful modified accordingly. Since she started working on June 26, 1997 and was
dismissal situations. Thus, it redounds to the benefit of whoever may be terminated on July 14, 1997, respondent is entitled to her salary from July
liable, including the principal/employer the direct employer primarily 15, 1997 to June 25, 1998. To rule otherwise would be iniquitous to
liable for the wrongful dismissal. In this sense, Section 10 read as a grant petitioner and other OFWs, and would, in effect, send a wrong signal that
of incentives to recruitment/manning agencies oversteps what it aims to principals/employers and recruitment/manning agencies may violate an
do by effectively limiting what is otherwise the full liability of the foreign OFWs security of tenure which an employment contract embodies and
principals/employers. Section 10, in short, really operates to benefit the actually profit from such violation based on an unconstitutional provision of
wrong party and allows that party, without justifiable reason, to mitigate its law.129cralawred
liability for wrongful dismissals. Because of this hidden twist, the limitation
of liability under Section 10 cannot be an appropriate incentive, to III
borrow the term that R.A. No. 8042 itself uses to describe the incentive it
envisions under its purpose clause. On the interest rate, the Bangko Sentral ng Pilipinas Circular No. 799 of
June 21, 2013, which revised the interest rate for loan or forbearance from
What worsens the situation is the chosen mode of granting the incentive: 12% to 6% in the absence of stipulation, applies in this case. The pertinent
instead of a grant that, to encourage greater efforts at recruitment, is portions of Circular No. 799, Series of 2013,
directly related to extra efforts undertaken, the law simply limits their read:chanRoblesvirtualLawlibrary
liability for the wrongful dismissals of already deployed OFWs. This is
effectively a legally-imposed partial condonation of their liability to OFWs, The Monetary Board, in its Resolution No. 796 dated 16 May 2013,
justified solely by the laws intent to encourage greater deployment efforts. approved the following revisions governing the rate of interest in the
Thus, the incentive, from a more practical and realistic view, is really part absence of stipulation in loan contracts, thereby amending Section 2 of
of a scheme to sell Filipino overseas labor at a bargain for purposes solely Circular No. 905, Series of 1982:cralawlawlibrary
of attracting the market. . . .
Section 1. The rate of interest for the loan or forbearance of any money, period being deemed to be by then an equivalent to a forbearance
goods or credits and the rate allowed in judgments, in the absence of an of credit.
express contract as to such rate of interest, shall be six percent (6%) per
annum.
And, in addition to the above, judgments that have become final and
Section 2. In view of the above, Subsection X305.1 of the Manual of executory prior to July 1, 2013, shall not be disturbed and shall continue to
Regulations for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the be implemented applying the rate of interest fixed therein. 131
Manual of Regulations for Non-Bank Financial Institutions are hereby
amended accordingly. Circular No. 799 is applicable only in loans and forbearance of money,
goods, or credits, and in judgments when there is no stipulation on the
This Circular shall take effect on 1 July 2013. applicable interest rate. Further, it is only applicable if the judgment did not
become final and executory before July 1, 2013. 132cralawred
Through the able ponencia of Justice Diosdado Peralta, we laid down the
guidelines in computing legal interest in Nacar v. Gallery We add that Circular No. 799 is not applicable when there is a law that
Frames:130cralawred states otherwise. While the Bangko Sentral ng Pilipinas has the power to
set or limit interest rates,133 these interest rates do not apply when the law
II. With regard particularly to an award of interest in the concept of actual provides that a different interest rate shall be applied. [A] Central Bank
and compensatory damages, the rate of interest, as well as the accrual Circular cannot repeal a law. Only a law can repeal another
thereof, is imposed, as follows:chanRoblesvirtualLawlibrary law.134cralawred

1. When the obligation is breached, and it consists in the payment of For example, Section 10 of Republic Act No. 8042 provides that unlawfully
a sum of money, i.e., a loan or forbearance of money, the interest terminated overseas workers are entitled to the reimbursement of his or
due should be that which may have been stipulated in writing. her placement fee with an interest of 12% per annum. Since Bangko
Furthermore, the interest due shall itself earn legal interest from Sentral ng Pilipinas circulars cannot repeal Republic Act No. 8042, the
the time it is judicially demanded. In the absence of stipulation, the issuance of Circular No. 799 does not have the effect of changing the
rate of interest shall be 6% per annum to be computed from interest on awards for reimbursement of placement fees from 12% to 6%.
default, i.e., from judicial or extrajudicial demand under and This is despite Section 1 of Circular No. 799, which provides that the 6%
subject to the provisions of Article 1169 of the Civil Code. interest rate applies even to judgments.

Moreover, laws are deemed incorporated in contracts. The contracting


2. When an obligation, not constituting a loan or forbearance of
parties need not repeat them. They do not even have to be referred to.
money, is breached, an interest on the amount of damages
Every contract, thus, contains not only what has been explicitly stipulated,
awarded may be imposed at the discretion of the court at the rate
but the statutory provisions that have any bearing on the matter. 135There
of 6% per annum. No interest, however, shall be adjudged on
is, therefore, an implied stipulation in contracts between the placement
unliquidated claims or damages, except when or until the demand
agency and the overseas worker that in case the overseas worker is
can be established with reasonable certainty. Accordingly, where
adjudged as entitled to reimbursement of his or her placement fees, the
the demand is established with reasonable certainty, the interest
amount shall be subject to a 12% interest per annum. This implied
shall begin to run from the time the claim is made judicially or
stipulation has the effect of removing awards for reimbursement of
extrajudicially (Art. 1169, Civil Code), but when such certainty
placement fees from Circular No. 799s coverage.
cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date the
The same cannot be said for awards of salary for the unexpired portion of
judgment of the court is made (at which time the quantification of
the employment contract under Republic Act No. 8042. These awards are
damages may be deemed to have been reasonably ascertained).
covered by Circular No. 799 because the law does not provide for a specific
The actual base for the computation of legal interest shall, in any
interest rate that should apply.
case, be on the amount finally adjudged.
In sum, if judgment did not become final and executory before July 1, 2013
3. When the judgment of the court awarding a sum of money and there was no stipulation in the contract providing for a different
becomes final and executory, the rate of legal interest, whether the interest rate, other money claims under Section 10 of Republic Act No.
case falls under paragraph 1 or paragraph 2, above, shall be 8042 shall be subject to the 6% interest per annum in accordance with
6% per annum from such finality until its satisfaction, this interim Circular No. 799.
This means that respondent is also entitled to an interest of 6% per annum
on her money claims from the finality of this judgment. Corollary to the assurance of immediate recourse in law, the provision on
joint and several liability in the Migrant Workers and Overseas Filipinos Act
IV of 1995 shifts the burden of going after the foreign employer from the
overseas worker to the local employment agency. However, it must be
Finally, we clarify the liabilities of Wacoal as principal and petitioner as the emphasized that the local agency that is held to answer for the overseas
employment agency that facilitated respondents overseas employment. workers money claims is not left without remedy. The law does not
preclude it from going after the foreign employer for reimbursement of
Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 whatever payment it has made to the employee to answer for the money
provides that the foreign employer and the local employment agency are claims against the foreign employer.
jointly and severally liable for money claims including claims arising out of
an employer-employee relationship and/or damages. This section also A further implication of making local agencies jointly and severally liable
provides that the performance bond filed by the local agency shall be with the foreign employer is that an additional layer of protection is
answerable for such money claims or damages if they were awarded to the afforded to overseas workers. Local agencies, which are businesses by
employee. nature, are inoculated with interest in being always on the lookout against
foreign employers that tend to violate labor law. Lest they risk their
This provision is in line with the states policy of affording protection to reputation or finances, local agencies must already have mechanisms for
labor and alleviating workers plight.136cralawred guarding against unscrupulous foreign employers even at the level prior to
overseas employment applications.
In overseas employment, the filing of money claims against the foreign
employer is attended by practical and legal complications. The distance of With the present state of the pleadings, it is not possible to determine
the foreign employer alone makes it difficult for an overseas worker to whether there was indeed a transfer of obligations from petitioner to
reach it and make it liable for violations of the Labor Code. There are also Pacific. This should not be an obstacle for the respondent overseas worker
possible conflict of laws, jurisdictional issues, and procedural rules that to proceed with the enforcement of this judgment. Petitioner is possessed
may be raised to frustrate an overseas workers attempt to advance his or with the resources to determine the proper legal remedies to enforce its
her claims. rights against Pacific, if any.

It may be argued, for instance, that the foreign employer must be V


impleaded in the complaint as an indispensable party without which no
final determination can be had of an action. 137cralawred Many times, this court has spoken on what Filipinos may encounter as they
travel into the farthest and most difficult reaches of our planet to provide
The provision on joint and several liability in the Migrant Workers and for their families. In Prieto v. NLRC:141cralawred
Overseas Filipinos Act of 1995 assures overseas workers that their rights
will not be frustrated with these complications. The Court is not unaware of the many abuses suffered by our overseas
workers in the foreign land where they have ventured, usually with heavy
The fundamental effect of joint and several liability is that each of the hearts, in pursuit of a more fulfilling future. Breach of contract,
debtors is liable for the entire obligation. 138 A final determination may, maltreatment, rape, insufficient nourishment, sub-human lodgings, insults
therefore, be achieved even if only one of the joint and several debtors are and other forms of debasement, are only a few of the inhumane acts to
impleaded in an action. Hence, in the case of overseas employment, either which they are subjected by their foreign employers, who probably feel
the local agency or the foreign employer may be sued for all claims arising they can do as they please in their own country. While these workers may
from the foreign employers labor law violations. This way, the overseas indeed have relatively little defense against exploitation while they are
workers are assured that someone the foreign employers local agent abroad, that disadvantage must not continue to burden them when they
may be made to answer for violations that the foreign employer may have return to their own territory to voice their muted complaint. There is no
committed. reason why, in their very own land, the protection of our own laws cannot
be extended to them in full measure for the redress of their
The Migrant Workers and Overseas Filipinos Act of 1995 ensures that grievances.142chanrobleslaw
overseas workers have recourse in law despite the circumstances of their
employment. By providing that the liability of the foreign employer may be But it seems that we have not said enough.
enforced to the full extent139 against the local agent, the overseas worker
is assured of immediate and sufficient payment of what is due We face a diaspora of Filipinos. Their travails and their heroism can be told
them.140cralawred a million times over; each of their stories as real as any other. Overseas
Filipino workers brave alien cultures and the heartbreak of families left more years, after which she returned to the Philippines on February 4,
behind daily. They would count the minutes, hours, days, months, and 2000.
years yearning to see their sons and daughters. We all know of the joy and
sadness when they come home to see them all grown up and, being so, Shortly after her return or on February 14, 2000, Divina filed a
they remember what their work has cost them. Twitter accounts, Facetime, complaint[2] before the National Labor Relations Commission (NLRC) against
and many other gadgets and online applications will never substitute for Sunace, one Adelaide Perez, the Taiwanese broker, and the employer-
their lost physical presence. foreign principal alleging that she was jailed for three months and that she
was underpaid.
Unknown to them, they keep our economy afloat through the ebb and flow
of political and economic crises. They are our true diplomats, they who The following day or on February 15, 2000, Labor Arbitration
show the world the resilience, patience, and creativity of our people. Associate Regina T. Gavin issued Summons [3] to the Manager of Sunace,
Indeed, we are a people who contribute much to the provision of material furnishing it with a copy of Divinas complaint and directing it to appear for
creations of this world. mandatory conference on February 28, 2000.

This government loses its soul if we fail to ensure decent treatment for all The scheduled mandatory conference was reset. It appears to have
Filipinos. We default by limiting the contractual wages that should be paid been concluded, however.
to our workers when their contracts are breached by the foreign
employers. While we sit, this court will ensure that our laws will reward our On April 6, 2000, Divina filed her Position Paper [4] claiming that
overseas workers with what they deserve: their dignity. under her original one-year contract and the 2-year extended contract
which was with the knowledge and consent of Sunace, the following
Inevitably, their dignity is ours as well. amounts representing income tax and savings were deducted:

WHEREFORE, the petition is DENIED. The decision of the Court of Appeals


is AFFIRMED with modification. Petitioner Sameer Overseas Placement Year Deduction for Deduction for Savings
Agency is ORDERED to pay respondent Joy C. Cabiles the amount Income Tax
equivalent to her salary for the unexpired portion of her employment
contract at an interest of 6% per annum from the finality of this judgment. 1997 NT10,450.00 NT23,100.00
Petitioner is alsoORDERED to reimburse respondent the withheld 1998 NT9,500.00 NT36,000.00
NT$3,000.00 salary and pay respondent attorneys fees of NT$300.00 at an 1999 NT13,300.00 NT36,000.00;[5]
interest of 6% per annum from the finality of this judgment.

The clause, or for three (3) months for every year of the unexpired term,
whichever is less in Section 7 of Republic Act No. 10022 amending Section and while the amounts deducted in 1997 were refunded to her, those
10 of Republic Act No. 8042 is declared unconstitutional and, therefore, null deducted in 1998 and 1999 were not. On even date, Sunace, by its
and void. Proprietor/General Manager Maria Luisa Olarte, filed its Verified Answer and
Position Paper,[6] claiming as follows, quoted verbatim:
SO ORDERED.

COMPLAINANT IS NOT ENTITLED


Sunace v NLRC FOR THE REFUND OF HER 24 MONTHS
SAVINGS

Petitioner, Sunace International Management Services (Sunace), a 3. Complainant could not anymore claim nor entitled for the refund
corporation duly organized and existing under the laws of the Philippines, of her 24 months savings as she already took back her
deployed to Taiwan Divina A. Montehermozo (Divina) as a domestic helper saving already last year and the employer did not deduct
under a 12-month contract effective February 1, 1997.[1] The deployment any money from her salary, in accordance with a Fascimile
was with the assistance of a Taiwanese broker, Edmund Wang, President of Message from the respondent SUNACEs employer, Jet
Jet Crown International Co., Ltd. Crown International Co. Ltd., a xerographic copy of which is
herewith attached asANNEX 2 hereof;
After her 12-month contract expired on February 1, 1998, Divina
continued working for her Taiwanese employer, Hang Rui Xiong, for two COMPLAINANT IS NOT ENTITLED
TO REFUND OF HER 14 MONTHS TAX To Sunaces . . . ANSWER TO COMPLAINANTS POSITION PAPER, Divina filed a 2-page
AND PAYMENT OF ATTORNEYS FEES reply,[8] without, however, refuting Sunaces disclaimer of knowledge of the
extension of her contract and without saying anything about the Release,
4. There is no basis for the grant of tax refund to the complainant Waiver and Quitclaim and Affidavit of Desistance.
as the she finished her one year contract and hence, was
not illegally dismissed by her employer. She could only lay The Labor Arbiter, rejected Sunaces claim that the extension of Divinas
claim over the tax refund or much more be awarded of contract for two more years was without its knowledge and consent in this
damages such as attorneys fees as said reliefs are wise:
available only when the dismissal of a migrant worker is
without just valid or lawful cause as defined by law or We reject Sunaces submission that it
contract. should not be held responsible for the amount
withheld because her contract was extended for 2
The rationales behind the award of tax refund and payment of more years without its knowledge and consent
attorneys fees is not to enrich the complainant but to because as Annex B[9] shows, Sunace and Edmund
compensate him for actual injury suffered. Complainant did Wang have not stopped communicating with each
not suffer injury, hence, does not deserve to be other and yet the matter of the contracts extension
compensated for whatever kind of damages. and Sunaces alleged non-consent thereto has not
been categorically established.
Hence, the complainant has NO cause of action against respondent
SUNACE for monetary claims, considering that she has What Sunace should have done was to
been totally paid of all the monetary benefits due her write to POEA about the extension and its objection
under her Employment Contract to her full satisfaction. thereto, copy furnished the complainant herself,
her foreign employer, Hang Rui Xiong and the
6. Furthermore, the tax deducted from her Taiwanese broker, Edmund Wang.
salary is in compliance with the Taiwanese law, which
respondent SUNACE has no control and complainant has And because it did not, it is presumed to
to obey and this Honorable Office has no have consented to the extension and should be
authority/jurisdiction to intervene because the power to liable for anything that resulted thereform (sic).
tax is a sovereign power which the Taiwanese Government [10]
(Underscoring supplied)
is supreme in its own territory. The sovereign power of
taxation of a state is recognized under international law The Labor Arbiter rejected too Sunaces argument that it is not liable on
and among sovereign states. account of Divinas execution of a Waiver and Quitclaim and an Affidavit of
Desistance. Observed the Labor Arbiter:

Should the parties arrive at any agreement as to


the whole or any part of the dispute, the same shall be
7. That respondent SUNACE respectfully reserves the right to file reduced to writing and signed by the parties and their
supplemental Verified Answer and/or Position Paper to respective counsel (sic), if any, before the Labor Arbiter.
substantiate its prayer for the dismissal of the above case
against the herein respondent. AND BY WAY OF - The settlement shall be approved by the Labor
Arbiter after being satisfied that it was voluntarily entered
x x x x (Emphasis and underscoring supplied) into by the parties and after having explained to them the
terms and consequences thereof.
Reacting to Divinas Position Paper, Sunace filed on April 25,
2000 an . . . ANSWER TO COMPLAINANTS POSITION PAPER[7] alleging that Divinas 2- A compromise agreement entered into by the
year extension of her contract was without its knowledge and consent, parties not in the presence of the Labor Arbiter before
hence, it had no liability attaching to any claim arising therefrom, and whom the case is pending shall be approved by him, if after
Divina in fact executed a Waiver/Quitclaim and Release of Responsibility confronting the parties, particularly the complainants, he is
and an Affidavit of Desistance, copy of each document was annexed to satisfied that they understand the terms and conditions of
said . . . ANSWER TO COMPLAINANTS POSITION PAPER. the settlement and that it was entered into freely
voluntarily (sic) by them and the agreement is not contrary ACCORDINGLY, the petition is hereby DENIED DUE
to law, morals, and public policy. COURSE and DISMISSED.[17]

And because no consideration is indicated in the SO ORDERED.


documents, we strike them down as contrary to law,
morals, and public policy. [11] (Emphasis on words in capital letters in the
original; emphasis on words in small letters and
underscoring supplied)

He accordingly decided in favor of Divina, by decision of October 9, 2000,


[12]
the dispositive portion of which reads: Its Motion for Reconsideration having been denied by the appellate court
by Resolution of January 14, 2004, [18] Sunace filed the present petition for
review on certiorari.
Wherefore, judgment is hereby rendered ordering
respondents SUNACE INTERNATIONAL SERVICES and its The Court of Appeals affirmed the Labor Arbiter and NLRCs finding
owner ADELAIDA PERGE, both in their personal capacities that Sunace knew of and impliedly consented to the extension of Divinas 2-
and as agent of Hang Rui Xiong/Edmund Wang to jointly year contract. It went on to state that It is undisputed that [Sunace] was
and severally pay complainant DIVINA A. MONTEHERMOZO continually communicating with [Divinas] foreign employer. It thus
the sum of NT91,950.00 in its peso equivalent at the date concluded that [a]s agent of the foreign principal, petitioner cannot profess
of payment, as refund for the amounts which she is hereby ignorance of such extension as obviously, the act of the principal extending
adjudged entitled to as earlier discussed plus 10% thereof complainant (sic) employment contract necessarily bound it.
as attorneys fees since compelled to litigate, complainant
had to engage the services of counsel. Contrary to the Court of Appeals finding, the alleged continuous
communication was with the Taiwanese broker Wang, not with the foreign
SO ORDERED.[13] (Underescoring employer Xiong.
supplied)
The February 21, 2000 telefax message from the Taiwanese broker
to Sunace, the only basis of a finding of continuous communication,
On appeal of Sunace, the NLRC, by Resolution of April 30, 2002, reads verbatim:
[14]
affirmed the Labor Arbiters decision.
xxxx
Via petition for certiorari,[15] Sunace elevated the case to the Court
of Appeals which dismissed it outright by Resolution of November 12, Regarding to Divina, she did not
2002,[16] the full text of which reads: say anything about her saving in police
station. As we contact with her employer,
The petition for certiorari faces outright dismissal. she took back her saving already last
The petition failed to allege facts constitutive of years. And they did not deduct any money
grave abuse of discretion on the part of the public from her salary. Or she will call back her
respondent amounting to lack of jurisdiction when the employer to check it again. If her employer
NLRC affirmed the Labor Arbiters finding that said yes! we will get it back for her.
petitioner Sunace International Management Services
impliedly consented to the extension of the contract of
private respondent Divina A. Montehermozo. It is
undisputed that petitioner was continually communicating Thank you and best regards.
with private respondents foreign employer (sic). As agent (sgd.)
of the foreign principal, petitioner cannot profess ignorance Edmund Wang
of such extension as obviously, the act of the principal President[19]
extending complainant (sic) employment contract
necessarily bound it. Grave abuse of discretion is not
present in the case at bar. The finding of the Court of Appeals solely on the basis of the
above-quoted telefax message, that Sunace continually communicated
with the foreign principal (sic)and therefore was aware of and had
consented to the execution of the extension of the contract is misplaced. Furthermore, as Sunace correctly points out, there was an implied
The message does not provide evidence that Sunace was privy to the new revocation of its agency relationship with its foreign principal when, after
contract executed after the expiration on February 1, 1998 of the original the termination of the original employment contract, the foreign principal
contract. That Sunace and the Taiwanese broker communicated regarding directly negotiated with Divina and entered into a new and separate
Divinas allegedly withheld savings does not necessarily mean that Sunace employment contract in Taiwan. Article 1924 of the New Civil Code reading
ratified the extension of the contract. As Sunace points out in its
Reply[20] filed before the Court of Appeals, The agency is revoked if the principal directly
manages the business entrusted to the agent, dealing
As can be seen from that letter directly with third persons.
communication, it was just an information given to
the petitioner that the private respondent had
t[aken] already her savings from her foreign thus applies.
employer and that no deduction was made on her
salary. It contains nothing about the extension or In light of the foregoing discussions, consideration of the validity of
the petitioners consent thereto.[21] the Waiver and Affidavit of Desistance which Divina executed in favor of
Sunace is rendered unnecessary.

Parenthetically, since the telefax message is dated February 21, WHEREFORE, the petition is GRANTED. The challenged resolutions
2000, it is safe to assume that it was sent to enlighten Sunace who had of the Court of Appeals are hereby REVERSED and SET ASIDE. The
been directed, by Summons issued on February 15, 2000, to appear on complaint of respondent Divina A. Montehermozo against petitioner
February 28, 2000 for a mandatory conference following Divinas filing of is DISMISSED.
the complaint on February 14, 2000.
SO ORDERED.
Respecting the Court of Appeals following dictum:
As agent of its foreign principal, [Sunace] cannot
profess ignorance of such an extension as obviously, the Maersk v Avestruz
act of its principal extending [Divinas] employment
contract necessarily bound it,[22]
DECISION

it too is a misapplication, a misapplication of the theory of imputed Assailed in this petition for review on certiorari1 are the Decision2 dated
knowledge. January 4, 2013 and the Resolution3 dated April 16, 2013 rendered by the
Court of Appeals (CA) in CA-G.R. SP No. 125773 which reversed and set
The theory of imputed knowledge ascribes the knowledge of the agent, aside the Decision4 dated April 26, 2012 and the Resolution 5dated June 18,
Sunace, to the principal, employer Xiong, not the other way around.[23] The 2012 of the National Labor Relations Commission (NLRC) in NLRC NCR Case
knowledge of the principal-foreign employer cannot, therefore, be imputed No. (M) 07-10704-11 [NLRC LAC No. (OFW-M)-01-000123-12] dismissing the
to its agent Sunace. illegal dismissal complaint filed by respondent Toribio C. Avestruz
(Avestruz) and awarding him nominal damages.chanroblesvirtuallawlibrary
There being no substantial proof that Sunace knew of and
consented to be bound under the 2-year employment contract extension, it The Facts
cannot be said to be privy thereto. As such, it and its owner cannot be held
solidarily liable for any of Divinas claims arising from the 2-year On April 28, 2011, petitioner Maersk-Filipinas Crewing, Inc. (Maersk), on
employment extension. As the New Civil Code provides, behalf of its foreign principal, petitioner A.P. Moller Singapore Pte. Ltd. (A.P.
Moller), hired Avestruz as Chief Cook on board the vessel M/V Nedlloyd
Contracts take effect only between the Drake for a period of six (6) months, with a basic monthly salary of
parties, their assigns, and heirs, except in case US$698.00.6 Avestruz boarded the vessel on May 4, 2011.7cralawred
where the rights and obligations arising from the
contract are not transmissible by their nature, or by On June 22, 2011, in the course of the weekly inspection of the vessels
stipulation or by provision of law.[24] galley, Captain Charles C. Woodward (Captain Woodward) noticed that the
cover of the garbage bin in the kitchen near the washing area was oily. As
part of Avestruzs job was to ensure the cleanliness of the galley, Captain sent two (2) electronic mail messages 24 (e-mails) to Maersk explaining the
Woodward called Avestruz and asked him to stand near the garbage bin decision to terminate Avestruzs employment and requesting for Avestruzs
where the former took the latters right hand and swiped it on the oily replacement. Avestruz was discharged from the vessel and arrived in the
cover of the garbage bin, telling Avestruz to feel it. Shocked, Avestruz Philippines on July 4, 2011. 25cralawred
remarked, Sir if you are looking for [dirt], you can find it[;] the ship is big.
Tell us if you want to clean and we will clean it. Captain Woodward replied Petitioners maintained that Avestruz was dismissed for a just and valid
by shoving Avestruzs chest, to which the latter complained and said, cause and is, therefore, not entitled to recover his salary for the unexpired
Dont touch me, causing an argument to ensue between them. 8cralawred portion of his contract.26 They likewise claimed that they were justified in
deducting his airfare from his salary, and that the latter was not entitled to
Later that afternoon, Captain Woodward summoned and required 9 Avestruz moral and exemplary damages and attorneys fees. 27 Hence, they prayed
to state in writing what transpired in the galley that morning. Avestruz that the complaint be dismissed for lack of merit. 28cralawred
complied and submitted his written statement 10 on that same day. Captain
Woodward likewise asked Messman Jomilyn P. Kong (Kong) to submit his The LA Ruling
own written statement regarding the incident, to which the latter
immediately complied.11 On the very same day, Captain Woodward In a Decision29 dated November 29, 2011, the Labor Arbiter (LA) dismissed
informed Avestruz that he would be dismissed from service and be Avestruzs complaint for lack of merit. The LA found that he failed to
disembarked in India. On July 3, 2011, Avestruz was disembarked in perform his duty of maintaining cleanliness in the galley, and that he also
Colombo, Sri Lanka and arrived in the Philippines on July 4, repeatedly failed to obey the directives of his superior, which was
2011.12cralawred tantamount to insubordination.30 In support of its finding, the LA cited the
Collective Bargaining Agreement31 (CBA) between the parties which
Subsequently, he filed a complaint13 for illegal dismissal, payment for the considers the act of insulting a superior officer by words or deed as an act
unexpired portion of his contract, damages, and attorneys fees against of insubordination.32cralawred
Maersk, A.P. Moller, and Jesus Agbayani (Agbayani), an officer 14 of
Maersk.15 He alleged that no investigation or hearing was conducted nor Aggrieved, Avestruz appealed33 to the NLRC.chanroblesvirtuallawlibrary
was he given the chance to defend himself before he was dismissed, and
that Captain Woodward failed to observe the provisions under Section 17 of The NLRC Ruling
the Philippine Overseas Employment Administration (POEA) Standard
Employment Contract (POEA-SEC) on disciplinary procedures. Also, he In a Decision34 dated April 26, 2012, the NLRC sustained the validity of
averred that he was not given any notice stating the ground for his Avestruzs dismissal but found that petitioners failed to observe the
dismissal.16 Additionally, he claimed that the cost of his airfare in the procedures laid down in Section 17 of the POEA-SEC, 35 which
amount of US$606.15 was deducted from his wages. 17 Furthermore, states:chanRoblesvirtualLawlibrary
Avestruz prayed for the award of the following amounts: (a) US$5,372.00
representing his basic wages, guaranteed overtime, and vacation leave; (b) SECTION 17. DISCIPLINARY PROCEDURES.
on board allowance of US$1,936.00; (c) ship maintenance bonus of
US$292.00; (d) hardship allowance of US$8,760.00; (e) P300,000.00 as The Master shall comply with the following disciplinary procedures against
moral damages, (f) P200,000.00 as exemplary damages; and (g) attorneys an erring seafarer:
fees of ten percent (10%) of the total monetary award.18cralawred

In their defense,19 Maersk, A.P. Moller, and Agbayani (petitioners) claimed A. The Master shall furnish the seafarer with a written
that during his stint on the vessel, Avestruz failed to attend to his tasks, notice containing the following:
specifically to maintain the cleanliness of the galley, which prompted
Captain Woodward to issue weekly reminders.20 Unfortunately, despite the 1. Grounds for the charges as listed in Section 33 of this
reminders, Avestruz still failed to perform his duties properly. 21 On June 22, Contract or analogous act constituting the same.
2011, when again asked to comply with the aforesaid duty, Avestruz
became angry and snapped, retorting that he did not have time to do all 2. Date, time and place for a formal investigation of the
the tasks required of him. As a result, Captain Woodward initiated charges against the seafarer concerned.
disciplinary proceedings and informed Avestruz during the hearing of the
offenses he committed, i.e., his repeated failure to follow directives
pertaining to his duty to maintain the cleanliness of the galley, as well as
his act of insulting an officer.22 Thereafter, he was informed of his dismissal
from service due to insubordination. 23 Relative thereto, Captain Woodward
B. The Master or his authorized representative shall conduct the been engaged to discharge. The CA found that, contrary to the rulings of
investigation or hearing, giving the seafarer the opportunity to the labor tribunals, there was no evidence on record to bolster petitioners
explain or defend himself against the charges. These procedures claims that Avestruz willfully failed to comply with his duties as Chief Cook
must be duly documented and entered into the ships logbook. and that he displayed a perverse and wrongful attitude. 42cralawred

C. If after the investigation or hearing, the Master is convinced that Moreover, it gave more credence to Avestruzs account of the incident in
imposition of a penalty is justified, the Master shall issue a written the galley on June 22, 2011, being supported in part by the statement 43 of
notice of penalty and the reasons for it to the seafarer, with copies Kong, who witnessed the incident. On the other hand, the e-mails sent by
furnished to the Philippine agent. Captain Woodward to Maersk were uncorroborated. On this score, the CA
observed the absence of any logbook entries to support petitioners
stance.44cralawred
D. Dismissal for just cause may be effected by the Master without
furnishing the seafarer with a notice of dismissal if there is a clear Similarly, the CA found that petitioners failed to accord procedural due
and existing danger to the safety of the crew or the vessel. The process to Avestruz, there being no compliance with the requirements of
Master shall send a complete report to the manning agency Section 17 of the POEA-SEC as above-quoted, or the two-notice rule. It
substantiated by witnesses, testimonies and any other documents held that the statement45 Captain Woodward issued to Avestruz neither
in support thereof. (Emphases supplied) contained the grounds for which he was being charged nor the date, time,
and place for the conduct of a formal investigation. Likewise, Captain
cralawlawlibrary Woodward failed to give Avestruz any notice of penalty and the reasons for
its imposition, with copies thereof furnished to the Philippine
As the records are bereft of evidence showing compliance with the Agent.46cralawred
foregoing rules, the NLRC held petitioners jointly and severally liable to pay
Avestruz the amount of P30,000.00 by way of nominal In arriving at the monetary awards given to Avestruz, the CA considered
damages.36cralawred the provisions of Section 7 of Republic Act No. (RA) 10022, 47 amending RA
8042,48 which grants upon the illegally dismissed overseas worker the full
Avestruz moved for reconsideration37 of the aforesaid Decision, which was reimbursement [of] his placement fee and the deductions made with
denied in the Resolution38 dated June 18, 2012. Dissatisfied, he elevated interest at twelve percent (12%) per annum, plus his salaries for the
the matter to the CA via petition forcertiorari.39cralawred unexpired portion of his employment contract. However, with respect to
Avestruzs claims for overtime and leave pay, the same were denied for
The CA Ruling failure to show entitlement thereto. All other monetary claims were likewise
denied in the absence of substantial evidence to prove the same. Finally,
In a Decision40 dated January 4, 2013, the CA reversed and set aside the the CA awarded attorneys fees of ten percent (10%) of the total monetary
rulings of the NLRC and instead, found Avestruz to have been illegally award in accordance with Article 111 49 of the Labor Code.50cralawred
dismissed. Consequently, it directed petitioners to pay him, jointly and
severally, the full amount of his placement fee and deductions made, with Petitioners moved for reconsideration,51 which the CA denied in its
interest at twelve percent (12%) per annum, as well as his salaries for the Resolution52 dated April 16, 2013, hence, this petition.
unexpired portion of his contract, and attorneys fees of ten percent (10%)
of the total award. All other money claims were denied for lack of The Issue Before the Court
merit.41cralawred
The sole issue advanced for the Courts resolution is whether or not the CA
In so ruling, the CA found that the conclusion of the NLRC, which affirmed erred when it reversed and set aside the ruling of the NLRC finding that
that of the LA, that Avestruz was lawfully dismissed, was not supported by Avestruz was legally dismissed and accordingly, dismissing the complaint,
substantial evidence, there being no factual basis for the charge of albeit with payment of nominal damages for violation of procedural due
insubordination which petitioners claimed was the ground for Avestruzs process.
dismissal. It found that petitioners, as employers, were unable to discharge
the burden of proof required of them to establish that Avestruz was guilty The Courts Ruling
of insubordination, which necessitates the occurrence of two (2) conditions
as a just cause for dismissal: (1) the employees assailed conduct must The petition is devoid of merit.
have been willful, that is, characterized by a wrongful and perverse
attitude; and (2) the order violated must have been reasonable, lawful, Generally, a re-examination of factual findings cannot be done by the Court
made known to the employee, and must pertain to the duties which he had acting on a petition for review on certiorari because the Court is not a trier
of facts but reviews only questions of law.53 Thus, in petitions for review credence, being corroborated63 by Kong, a messman who witnessed the
on certiorari, only questions of law may generally be put into issue. This same.
rule, however, admits of certain exceptions. 54 In this case, considering that
the factual findings of the LA and the NLRC, on the one hand, and the CA, Conversely, apart from Captain Woodwards e-mails, no other evidence
on the other hand, are contradictory, the general rule that only legal issues was presented by the petitioners to support their claims. While rules of
may be raised in a petition for review oncertiorari under Rule 45 of the evidence are not strictly observed in proceedings before administrative
Rules of Court does not apply,55 and the Court retains the authority to pass bodies,64 petitioners should have offered additional proof to corroborate the
upon the evidence presented and draw conclusions therefrom. 56cralawred statements65 described therein. Thus, in Ranises v. NLRC66 which involved a
seafarer who was repatriated to the Philippines for allegedly committing
It is well-settled that the burden of proving that the termination of an illegal acts amounting to a breach of trust, as based on a telex dispatch by
employee was for a just or authorized cause lies with the employer. If the the Master of the vessel, the Court impugned and eventually vetoed the
employer fails to meet this burden, the conclusion would be that the credence given by the NLRC upon the telex, to
dismissal was unjustified and, therefore, illegal. 57 In order to discharge this wit:chanRoblesvirtualLawlibrary
burden, the employer must present substantial evidence, which is defined
as that amount of relevant evidence which a reasonable mind might accept Unfortunately, the veracity of the allegations contained in the aforecited
as adequate to justify a conclusion,58 and not based on mere surmises or telex was never proven by respondent employer. Neither was it shown that
conjectures.59cralawred respondent employer exerted any effort to even verify the truthfulness of
Capt. Sonodas report and establish petitioners culpability for his alleged
After a punctilious examination of the evidence on record, the Court finds illegal acts. Worse, no other evidence was submitted to corroborate the
that the CA did not err in reversing and setting aside the factual charges against petitioner.67cralawlawlibrary
conclusions of the labor tribunals that Avestruzs dismissal was lawful.
Instead, the Court finds that there was no just or valid cause for his Likewise, in Skippers United Pacific, Inc. v. NLRC,68 the Court ruled that the
dismissal, hence, he was illegally dismissed. lone evidence offered by the employer to justify the seafarers
dismissal, i.e., the telexed Chief Engineers Report which contained the
Petitioners maintain that Avestruz was dismissed on the ground of causes for said dismissal, did not suffice to discharge the onus required of
insubordination, consisting of his repeated failure to obey his superiors the employer to show that the termination of an employees service was
order to maintain cleanliness in the galley of the vessel as well as his act valid.69The same doctrine was enunciated in Pacific Maritime Services, Inc.
of insulting a superior officer by words or deeds. 60 In support of this v. Ranay,70 where the Court held that the telefax transmission purportedly
contention, petitioners presented as evidence the e-mails sent by Captain executed and signed by a person on board the vessel is insufficient
Woodward, both dated June 22, 2011, and time-stamped 10:07 a.m. and evidence to prove the commission of the acts constituting the grounds for
11:40 a.m., respectively, which they claim chronicled the relevant the dismissal of two seafarers, being uncorroborated evidence. 71cralawred
circumstances that eventually led to Avestruzs dismissal.
As in this case, it was incumbent upon the petitioners to present other
The Court, however, finds these e-mails to be uncorroborated and self- substantial evidence to bolster their claim that Avestruz committed acts
serving, and therefore, do not satisfy the requirement of substantial that constitute insubordination as would warrant his dismissal. At the least,
evidence as would sufficiently discharge the burden of proving that they could have offered in evidence entries in the ships official logbook
Avestruz was legally dismissed. On the contrary, petitioners failed to prove showing the infractions or acts of insubordination purportedly committed
that he committed acts of insubordination which would warrant his by Avestruz, the ships logbook being the official repository of the day-to-
dismissal. day transactions and occurrences on board the vessel. 72 Having failed to do
so, their position that Avestruz was lawfully dismissed cannot be sustained.
Insubordination, as a just cause for the dismissal of an employee,
necessitates the concurrence of at least two requisites: (1) the employees Similarly, the Court affirms the finding of the CA that Avestruz was not
assailed conduct must have been willful, that is, characterized by a accorded procedural due process, there being no compliance with the
wrongful and perverse attitude; and (2) the order violated must have been provisions of Section 17 of the POEA-SEC as above-cited, which requires
reasonable, lawful, made known to the employee, and must pertain to the the two-notice rule. As explained in Skippers Pacific, Inc. v.
duties which he had been engaged to discharge. 61cralawred Mira:73cralawred

In this case, the contents of Captain Woodwards e-mails do not establish An erring seaman is given a written notice of the charge against him and is
that Avestruzs conduct had been willful, or characterized by a wrongful afforded an opportunity to explain or defend himself. Should sanctions be
and perverse attitude. The Court concurs with the CAs observation that imposed, then a written notice of penalty and the reasons for it shall be
Avestruzs statement62 regarding the incident in the galley deserves more furnished the erring seafarer. It is only in the exceptional case of clear and
existing danger to the safety of the crew or vessel that the required notices
are dispensed with; but just the same, a complete report should be sent to Gagui v Dejero
the manning agency, supported by substantial evidence of the
findings.74cralawlawlibrary This is a Rule 45 Petition 1 dated 30 March 2011 assailing the Decision 2 and
Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 104292, which
In this case, there is dearth of evidence to show that Avestruz had been affirmed the Decision4 of the National Labor Relations Commission (NLRC)
given a written notice of the charge against him, or that he was given the in NLRC Case No. OCW-RAB-IV-4-392-96-RI, finding petitioner Elizabeth M.
opportunity to explain or defend himself. The statement 75 given by Captain Gagui solidarily liable with the placement agency, PRO Agency Manila, Inc.,
Woodward requiring him to explain in writing the events that transpired at to pay respondents all the money claims awarded by virtue of their illegal
the galley in the morning of June 22, 2011 hardly qualifies as a written dismissal.
notice of the charge against him, nor was it an opportunity for Avestruz to
explain or defend himself. While Captain Woodward claimed in his e- The antecedent facts are as follows:
mail76 that he conducted a disciplinary hearing informing Avestruz of his
inefficiency, no evidence was presented to support the same. On 14 December 1993, respondents Simeon Dejero and Teodoro Permejo
filed separate Complaints5 for illegal dismissal, nonpayment of salaries and
Neither was Avestruz given a written notice of penalty and the reasons for overtime pay, refund of transportation expenses, damages, and attorneys
its imposition. Instead, Captain Woodward verbally informed him that he fees against PRO Agency Manila, Inc., and Abdul Rahman Al Mahwes.
was dismissed from service and would be disembarked from the vessel. It
bears stressing that only in the exceptional case of clear and existing After due proceedings, on 7 May 1997, Labor Arbiter Pedro Ramos rendered
danger to the safety of the crew or vessel that the required notices may be a Decision,6 the dispositive portion of which
dispensed with, and, once again, records are bereft of evidence showing reads:chanRoblesvirtualLawlibrary
that such was the situation when Avestruz was dismissed.
WHEREFORE, ALL FOREGOING CONSIDERED, judgment is hereby rendered
Finally, with respect to the monetary awards given to Avestruz, the Court ordering respondents Pro Agency Manila, Inc., and Abdul Rahman Al
finds the same to be in consonance with Section 10 of RA 8042, as Mahwes to jointly and severally pay complainants, as follows:
amended by RA 10022, which reads:chanRoblesvirtualLawlibrary
a) US$4,130.00 each complainant or a total of US$8,260.00, their unpaid
Section 10. Money claims. x x x.chanrobleslaw
salaries from July 31, 1992 up to September 1993, less cash advances
of total of SR11,000.00, or its Peso equivalent at the time of payment;
x x x x
b) US$1,032.00 each complainant for two (2) hours overtime pay for
In case of termination of overseas employment without just, valid or fourteen (14) months of services rendered or a total of US$2,065.00 or
authorized cause as defined by law or contract, or any unauthorized its Peso equivalent at the time of payment;
deductions from the migrant workers salary, the worker shall be entitled to c) US$2,950.00 each complainant or a total of US$5,900.00 or its Peso
the full reimbursement of his placement fee and the deductions made with equivalent at the time of payment, representing the unexpired portion
interest at twelve percent (12%) per annum, plus his salaries for the of their contract;
unexpired portion of his employment contract or for three (3) months for
every year of the unexpired term, whichever is less. 77cralawred d) Refund of plane ticket of complainants Teodoro Parejo and Simeon
Dejero from Saudi Arabia to the Philippines, in the amount of
x x x x P15,642.90 and P16,932.00 respectively;
cralawlawlibrary e) Refund of excessive collection of placement fees in the amount of
P4,000.00 each complainant, or a total of P8,000.00;
Similarly, the Court affirms the grant of attorneys fees of ten percent f) Moral and exemplary damages in the amount of P10,000.00 each
(10%) of the total award. All other monetary awards are denied for lack of complainant, or a total of P20,000.00;
merit.
g) Attorneys fees in the amount of P48,750.00.
WHEREFORE, the petition is DENIED. The Decision dated January 4, 2013
and the Resolution dated April 16, 2013 rendered by the Court of Appeals SO ORDERED.
in CA-G.R. SP No. 125773 are herebyAFFIRMED.
Pursuant to this Decision, Labor Arbiter Ramos issued a Writ of
SO ORDERED.cralawlawlibrary Execution7 on 10 October 1997. When the writ was returned
unsatisfied,8 an Alias Writ of Execution was issued, but was also returned Aggrieved, petitioner appealed to the NLRC, which rendered a Decision 26 in
unsatisfied.9 the following wise:chanRoblesvirtualLawlibrary

On 30 October 2002, respondents filed a Motion to Implead Respondent Pro WHEREFORE, premises considered, the appeal of the respondent Elizabeth
Agency Manila, Inc.s Corporate Officers and Directors as Judgment M. Gagui is hereby DENIED for lack of merit. Accordingly, the Order of
Debtors.10 It included petitioner as the Vice-President/Stockholder/Director Labor Arbiter Lita V. Aglibut dated June 26, 2006 is AFFIRMED.
of PRO Agency, Manila, Inc.
SO ORDERED.
After due hearing, Executive Labor Arbiter Voltaire A. Balitaan issued an
Order11 on 25 April 2003 granting respondents motion, to The NLRC ruled that in so far as overseas migrant workers are concerned,
wit:chanRoblesvirtualLawlibrary it is R.A. 8042 itself that describes the nature of the liability of the
corporation and its officers and directors. x x x [I]t is not essential that the
WHEREFORE, the motion to implead is hereby granted insofar as Merlita G. individual officers and directors be impleaded as party respondents to the
Lapuz and Elizabeth M. Gagui as parties-respondents and accordingly held case instituted by the worker. A finding of liability on the part of the
liable to complainant jointly and solidarily with the original party- corporation will necessarily mean the liability of the corporate officers or
respondent adjudged liable under the Decision of May 7, 1998. Let 2nd directors.27
Alias Writ of Execution be issued for the enforcement of the Decision
consistent with the foregoing tenor. Upon appellate review, the CA affirmed the NLRC in a
Decision28 promulgated on 15 November 2010:chanRoblesvirtualLawlibrary
SO ORDERED.
From the foregoing, the Court finds no reason to hold the NLRC guilty of
On 10 June 2003, a 2nd Alias Writ of Execution was issued,12 which resulted grave abuse of discretion amounting to lack or excess of jurisdiction in
in the garnishment of petitioners bank deposit in the amount of affirming the Order of Executive Labor Arbiter Aglibut which held petitioner
P85,430.48.13 However, since the judgment remained unsatisfied, solidarily liable with PRO Agency Manila, Inc. and Abdul Rahman Al Mahwes
respondents sought the issuance of a third alias writ of execution on 26 as adjudged in the May 7, 1997 Decision of Labor Arbiter Pedro Ramos.
February 2004.14
WHEREFORE, the Petition is DENIED.
On 15 December 2004, Executive Labor Arbiter Lita V. Aglibut issued an
Order15 granting respondents motion for a third alias writ. Accordingly, the SO ORDERED. (Emphasis in the original)
3rd Alias Writ of Execution 16 was issued on 6 June 2005, resulting in the
levying of two parcels of lot owned by petitioner located in San Fernando, The CA stated that there was no need for petitioner to be impleaded x x x
Pampanga.17 because by express provision of the law, she is made solidarily liable with
PRO Agency Manila, Inc., for any and all money claims filed by private
On 14 September 2005, petitioner filed a Motion to Quash 3rd Alias Writ of respondents.29 The CA further said that this is not a case in which the
Execution;18 and on 29 June 2006, a Supplemental Motion to Quash Alias liability of the corporate officer must be established because an allegation
Writ of Execution.19 In these motions, petitioner alleged that apart from not of malice must be proven. The general rule is that corporate officers,
being made aware that she was impleaded as one of the parties to the directors and stockholders are not liable, except when they are made liable
case,20 the dispositive portion of the 7 May 1997 Decision (1997 Decision) for their corporate act by a specific provision of law, such as R.A. 8042. 30
did not hold her liable in any form whatsoever. 21 More importantly,
impleading her for the purpose of execution was tantamount to modifying On 8 and 15 December 2010, petitioner filed two Motions for
a decision that had long become final and executory. 22 Reconsideration, but both were denied in a Resolution 31 issued by the CA
on 25 February 2011.
On 26 June 2006, Executive Labor Arbiter Lita V. Aglibut issued an
Order23 denying petitioners motions on the following grounds: (1) records Hence, this Petition for Review filed on 30 March 2011.
disclosed that despite having been given sufficient notices to be able to
register an opposition, petitioner refused to do so, effectively waiving her On 1 August 2011, respondents filed their Comment, 32 alleging that the
right to be heard;24 and (2) under Section 10 of Republic Act No. 8042 (R.A. petition had been filed 15 days after the prescriptive period of appeal
8042) or the Migrant Workers and Overseas Filipinos Act of 1995, corporate under Section 2, Rule 45 of the Rules of Court.
officers may be held jointly and severally liable with the placement agency
for the judgment award.25 On 14 February 2012, petitioner filed a Reply, 33 countering that she has a
fresh period of 15 days from 16 March 2011 (the date she received the counted from receipt of the order denying the motion for new trial, motion
Resolution of the CA) or up to 31 March 2011 to file the Petition. for reconsideration (whether full or partial) or any final order or resolution.

ISSUES Since petitioner received the CA Resolution denying her two Motions for
Reconsideration only on 16 March 2011, she had another 15 days within
From the foregoing, we reduce the issues to the following: which to file her Petition, or until 31 March 2011. This Petition, filed on 30
March 2011, fell within the prescribed 15-day period.
1. Whether or not this petition was filed on time; and
Petitioner may not be held jointly and severally liable, absent a finding that
she was remiss in directing the affairs of the agency.
2. Whether or not petitioner may be held jointly and severally liable
with PRO Agency Manila, Inc. in accordance with Section 10 of R.A. As to the merits of the case, petitioner argues that while it is true that R.A.
8042, despite not having been impleaded in the Complaint and 8042 and the Corporation Code provide for solidary liability, this liability
named in the Decision. must be so stated in the decision sought to be implemented. 35 Absent this
express statement, a corporate officer may not be impleaded and made to
personally answer for the liability of the corporation. 36 Moreover, the 1997
Decision had already been final and executory for five years and, as such,
THE COURTS RULING can no longer be modified.37 If at all, respondents are clearly guilty of
laches for waiting for five years before taking action against petitioner. 38

Petitioner has a fresh period of 15 days within In disposing the issue, the CA cited Section 10 of R.A. 8042, stating that
which to file this petition, in accordance with there was no need for petitioner to be impleaded x x x because by
the Neypes rule. express provision of the law, she is made solidarily liable with PRO Agency
Manila, Inc., for any and all money claims filed by private
We first address the procedural issue of this case. respondents.39ChanRoblesVirtualawlibrary

In a misleading attempt to discredit this petition, respondents insist that by We reverse the CA.
opting to file a Motion for Reconsideration instead of directly appealing the
CA Decision, petitioner effectively lost her right to appeal. Hence, she At the outset, we have declared that R.A. 8042 is a police power measure
should have sought an extension of time to file her appeal from the denial intended to regulate the recruitment and deployment of OFWs. It aims to
of her motion. curb, if not eliminate, the injustices and abuses suffered by numerous
OFWs seeking to work abroad. 40
This contention, however, deserves scant consideration. We agree with
petitioner that starting from the date she received the Resolution denying The pertinent portion of Section 10, R.A. 8042 reads as
her Motion for Reconsideration, she had a fresh period of 15 days within follows:chanRoblesvirtualLawlibrary
which to appeal to this Court. The matter has already been settled
in Neypes v. Court of Appeals,34 as follows:chanRoblesvirtualLawlibrary SEC. 10. MONEY CLAIMS. - Notwithstanding any provision of law to the
contrary, the Labor Arbiters of the National Labor Relations Commission
To standardize the appeal periods provided in the Rules and to afford (NLRC) shall have the original and exclusive jurisdiction to hear and decide,
litigants fair opportunity to appeal their cases, the Court deems it practical within ninety (90) calendar days after filing of the complaint, the claims
to allow a fresh period of 15 days within which to file the notice of appeal arising out of an employer-employee relationship or by virtue of any law or
in the Regional Trial Court, counted from receipt of the order dismissing a contract involving Filipino workers for overseas deployment including
motion for a new trial or motion for reconsideration. claims for actual, moral, exemplary and other forms of damages.

Henceforth, this fresh period rule shall also apply to Rule 40 governing The liability of the principal/employer and the recruitment/placement
appeals from the Municipal Trial Courts to the Regional Trial Courts; Rule 42 agency for any and all claims under this section shall be joint and several.
on petitions for review from the Regional Trial Courts to the Court of This provision shall be incorporated in the contract for overseas
Appeals; Rule 43 on appeals from quasi-judicial agencies to the Court of employment and shall be a condition precedent for its approval. The
Appeals and Rule 45 governing appeals by certiorari to the Supreme Court. performance bond to be filed by the recruitment/placement agency, as
The new rule aims to regiment or make the appeal period uniform, to be provided by law, shall be answerable for all money claims or damages that
may be awarded to the workers. If the recruitment/placement agency is a
juridical being, the corporate officers and directors and partners as the portion of the decision.
case may be, shall themselves be jointly and solidarily liable with the
corporation or partnership for the aforesaid claims and damages. In INIMACO v. NLRC,45 we also held thus:chanRoblesvirtualLawlibrary
(Emphasis supplied)cralawlawlibrary
None of the parties in the case before the Labor Arbiter appealed the
In Sto. Tomas v. Salac,41 we had the opportunity to pass upon the Decision dated March 10, 1987, hence the same became final and
constitutionality of this provision. We have thus executory. It was, therefore, removed from the jurisdiction of the Labor
maintained:chanRoblesvirtualLawlibrary Arbiter or the NLRC to further alter or amend it. Thus, the proceedings held
for the purpose of amending or altering the dispositive portion of the said
The key issue that Gumabay, et al. present is whether or not the 2nd decision are null and void for lack of jurisdiction. Also, the Alias Writ of
paragraph of Section 10, R.A. 8042, which holds the corporate directors, Execution is null and void because it varied the tenor of the judgment in
officers, and partners of recruitment and placement agencies jointly and that it sought to enforce the final judgment against Antonio
solidarily liable for money claims and damages that may be adjudged Gonzales/Industrial Management Development Corp. (INIMACO) and/or
against the latter agencies, is unconstitutional. Filipinas Carbon and Mining Corp. and Gerardo Sicat, which makes the
liability solidary.
x x x
In other words, [o]nce a decision or order becomes final and executory, it
But the Court has already held, pending adjudication of this case, that the is removed from the power or jurisdiction of the court which rendered it to
liability of corporate directors and officers is not automatic. To make them further alter or amend it. It thereby becomes immutable and unalterable
jointly and solidarily liable with their company, there must be a finding that and any amendment or alteration which substantially affects a final and
they were remiss in directing the affairs of that company, such as executory judgment is null and void for lack of jurisdiction, including the
sponsoring or tolerating the conduct of illegal activities. In the case of entire proceedings held for that purpose. An order of execution which
Becmen and White Falcon, while there is evidence that these companies varies the tenor of the judgment or exceeds the terms thereof is a
were at fault in not investigating the cause of Jasmins death, there is no nullity.46
mention of any evidence in the case against them that intervenors
Gumabay, et al., Becmens corporate officers and directors, were While labor laws should be construed liberally in favor of labor, we must be
personally involved in their companys particular actions or omissions in able to balance this with the equally important right of petitioner to due
Jasmins case. (Emphasis supplied)cralawlawlibrary process. Because the 1997 Decision of Labor Arbiter Ramos was not
appealed, it became final and executory and was therefore removed from
Hence, for petitioner to be found jointly and solidarily liable, there must be his jurisdiction. Modifying the tenor of the judgment via a motion
a separate finding that she was remiss in directing the affairs of the impleading petitioner and filed only in 2002 runs contrary to settled
agency, resulting in the illegal dismissal of respondents. Examination of the jurisprudence, rendering such action a nullity.
records would reveal that there was no finding of neglect on the part of the
petitioner in directing the affairs of the agency. In fact, respondents made WHEREFORE, the Petition for Review on Certiorari is hereby GRANTED. The
no mention of any instance when petitioner allegedly failed to manage the assailed Decision dated 15 November 2010 and Resolution dated 25
agency in accordance with law, thereby contributing to their illegal February 2011 of the Court of Appeals in CA-G.R. SP No. 104292 are
dismissal. hereby REVERSED.chanRoblesvirtualLawlibrary

Moreover, petitioner is correct in saying that impleading her for the SO ORDERED.
purpose of execution is tantamount to modifying a decision that had long
become final and executory.42 The fallo of the 1997 Decision by the NLRC
only held respondents Pro Agency Manila Inc., and Abdul Rahman Al IPAMS v De Vera
Mahwes to jointly and severally pay complainants x x x. 43 By holding her
liable despite not being ordained as such by the decision, both the CA and
NLRC violated the doctrine on immutability of judgments. When can a foreign law govern an overseas employment contract? This is
the fervent question that the Court shall resolve, once and for all.
In PH Credit Corporation v. Court of Appeals, 44 we stressed that
respondents [petitioners] obligation is based on the judgment rendered This petition for review on certiorari seeks to reverse and set aside the
by the trial court. The dispositive portion or thefallo is its decisive January 24, 2013 Decision 1 of the Court of Appeals (CA) in CA-G.R. SP No.
resolution and is thus the subject of execution. x x x. Hence the execution 118869, which modified the November 30, 2010 Decision 2 of the National
must conform with that which is ordained or decreed in the dispositive Labor Relations Commission (NLRC) and its February 2, 2011 Resolution, 3 in
NLRC LAC Case No. 08-000572-10/NLRC Case No. NCR 09-13563-09, a case The petitioners denied the charge of illegal dismissal against them. They
for illegal termination of an Overseas Filipino Worker (OFW). claimed that SNC-Lavalin was greatly affected by the global financial crises
during the latter part of 2008. The economy of Madagascar, where SNC-
The Facts Lavalin had business sites, also slowed down. As proof of its looming
financial standing, SNC-Lavalin presented a copy of a news item in the
Petitioner Industrial Personnel & Management Services, Inc. (IPAMS) is a Financial Post,10 dated March 5, 2009, showing the decline of the value of
local placement agency duly organized and existing under Philippine laws, its stocks. Thus, it had no choice but to minimize its expenditures and
with petitioner Angelito C. Hernandez as its president and managing operational expenses. It re-organized its Health and Safety Department at
director. Petitioner SNC Lavalin Engineers & Contractors, Inc. (SNC-Lavalin) the Ambatovy Project site and Arriola was one of those affected. 11
is the principal of IPAMS, a Canadian company with business interests in
several countries. On the other hand, respondent Alberto Arriola (Arriola) is The petitioners also invoked EDI-Staffbuilders International, Inc. v.
a licensed general surgeon in the Philippines. 4 NLRC12 (EDI-Staffbuilders), pointing out that particular labor laws of a
foreign country incorporated in a contract freely entered into between an
Employee's Position OFW and a foreign employer through the latter's agent was valid. In the
present case, as all of Arriola's employment documents were processed in
Arriola was offered by SNC-Lavalin, through its letter, 5 dated May 1, 2008, Canada, not to mention that SNC-Lavalin's office was in Ontario, the
the position of Safety Officer in its Ambatovy Project site in Madagascar. principle of lex loci celebrationis was applicable. Thus, the petitioners
The position offered had a rate of CA$32.00 per hour for forty (40) hours a insisted that Canadian laws governed the contract.
week with overtime pay in excess of forty (40) hours. It was for a period of
nineteen (19) months starting from June 9, 2008 to December 31, 2009. The petitioners continued that the pre-termination of Arriola's contract was
valid for being consistent with the provisions of both the Expatriate Policy
Arriola was then hired by SNC-Lavalin, through its local manning agency, and laws of Canada. The said foreign law did not require any ground for
IPAMS, and his overseas employment contract was processed with the early termination of employment, and the only requirement was the
Philippine Overseas Employment Agency (POEA)6 In a letter of written notice of termination. Even assuming that Philippine laws should
understanding,7 dated June 5, 2008, SNC-Lavalin confirmed Arriola's apply, Arriola would still be validly dismissed because domestic law
assignment in the Ambatovy Project. According to Arriola, he signed the recognized retrenchment and redundancy as legal grounds for termination.
contract of employment in the Philippines.8 On June 9, 2008, Arriola started
working in Madagascar. In their Rejoinder,13 the petitioners presented a copy of the Employment
Standards Act (ESA) of Ontario, which was duly authenticated by the
After three months, Arriola received a notice of pre-termination of Canadian authorities and certified by the Philippine Embassy.
employment,9 dated September 9, 2009, from SNC-Lavalin. It stated that
his employment would be pre-terminated effective September 11, 2009 The LA Ruling
due to diminishing workload in the area of his expertise and the
unavailability of alternative assignments. Consequently, on September 15, In a Decision,14 dated May 31, 2010, the LA dismissed Arriola's complaint
2009, Arriola was repatriated. SNC-Lavalin deposited in Arriola's bank for lack of merit. The LA ruled that the rights and obligations among and
account his pay amounting to Two Thousand Six Hundred Thirty Six Dollars between the OFW, the local recruiter/agent, and the foreign
and Eight Centavos (CA$2,636.80), based on Canadian labor law. employer/principal were governed by the employment contract pursuant to
theEDI-Staffbuilders case. Thus, the provisions on termination of
Aggrieved, Arriola filed a complaint against the petitioners for illegal employment found in the ESA, a foreign law which governed Arriola's
dismissal and non-payment of overtime pay, vacation leave and sick leave employment contract, were applied. Given that SNC-Lavalin was able to
pay before the Labor Arbiter (LA). He claimed that SNC-Lavalin still owed produce the duly authenticated ESA, the LA opined that there was no other
him unpaid salaries equivalent to the three-month unexpired portion of his conclusion but to uphold the validity of Arriola's dismissal based on
contract, amounting to, more or less, One Million Sixty-Two Thousand Nine Canadian law. The fallo of the LA decision reads:
Hundred Thirty-Six Pesos (P1,062,936.00). He asserted that SNC-Lavalin chanRoblesvirtualLawlibrary
never offered any valid reason for his early termination and that he was
not given sufficient notice regarding the same. Arriola also insisted that the WHEREFORE, all the foregoing premises being considered, judgment is
petitioners must prove the applicability of Canadian law before the same hereby rendered dismissing the complaint for lack of merit.
could be applied to his employment contract.
SO ORDERED.15ChanRoblesVirtualawlibrary
Employer's Position Aggrieved, Arriola elevated the LA decision before the NLRC.
The NLRC Ruling
Still not satisfied with the decreased award, IPAMS filed a separate petition
In its decision, dated November 30, 2010, the NLRC reversed the LA for certiorari before the CA. In its decision, dated July 25, 2013, the CA
decision and ruled that Arriola was illegally dismissed by the petitioners. affirmed the decrease in Arriola's backpay because the unpaid period in his
Citing PNB v. Cabansag,16 the NLRC stated that whether employed locally contract was just three (3) months and three (3) weeks.
or overseas, all Filipino workers enjoyed the protective mantle of Philippine
labor and social legislation, contract stipulations to the contrary Unperturbed, IPAMS appealed before the Court and the case was docketed
notwithstanding. Thus, the Labor Code of the Philippines and Republic Act as G.R. No. 212031. The appeal, however, was dismissed outright by the
(R.A.) No. 8042, or the Migrant Workers Act, as amended, should be Court in its resolution, dated August 8, 2014, because it was belatedly filed
applied. Moreover, the NLRC added that the overseas employment contract and it did not comply with Sections 4 and 5 of Rule 7 of the Rules of Court.
of Arriola was processed in the POEA. Hence, it was settled in the execution proceedings that the award of
backpay to Arriola should only amount to three (3) months and three (3)
Applying the Philippine laws, the NLRC found that there was no substantial weeks of his pay.
evidence presented by the petitioners to show any just or authorized cause
to terminate Arriola. The ground of financial losses by SNC-Lavalin was not The CA Ruling
supported by sufficient and credible evidence. The NLRC concluded that,
for being illegally dismissed, Arriola should be awarded CA$81,920.00 Returning to the principal case of illegal dismissal, in its assailed January
representing sixteen (16) months of Arriola's purported unpaid salary, 24, 2013 decision, the CA affirmed that Arriola was illegally dismissed by
pursuant to the Serrano v. Gallant17 doctrine. The decretal portion of the the petitioners. The CA explained that even though an authenticated copy
NLRC decision states: of the ESA was submitted, it did not mean that the said foreign law
chanRoblesvirtualLawlibrary automatically applied in this case. Although parties were free to establish
WHEREFORE, premises considered, judgment is hereby rendered finding stipulations in their contracts, the same must remain consistent with law,
complainant-appellant to have been illegally dismissed. Respondents- morals, good custom, public order or public policy. The appellate court
appellees are hereby ordered to pay complainant-appellant the amount of wrote that the ESA allowed an employer to disregard the required notice of
CA$81,920.00, or its Philippine Peso equivalent prevailing at the time of termination by simply giving the employee a severance pay. The ESA could
payment. Accordingly, the decision of the Labor Arbiter dated May 31, not be made to apply in this case for being contrary to our Constitution,
2010 is hereby VACATED and SET ASIDE. specifically on the right of due process. Thus, the CA opined that our labor
laws should find application.
SO ORDERED.18ChanRoblesVirtualawlibrary
The petitioners moved for reconsideration, but their motion was denied by As the petitioners neither complied with the twin notice-rule nor offered
the NLRC in its resolution, dated February 2, 2011. any just or authorized cause for his termination under the Labor Code, the
CA held that Arriola's dismissal was illegal. Accordingly, it pronounced that
Undaunted, the petitioners filed a petition for certiorari before the CA Arriola was entitled to his salary for the unexpired portion of his contract
arguing that it should be the ESA, or the Ontario labor law, that should be which is three (3) months and three (3) weeks salary. It, however,
applied in Arriola's employment contract. No temporary restraining order, decreased the award of backpay to Arriola because the NLRC made a
however, was issued by the CA. wrong calculation. Based on his employment contract, the backpay of
Arriola should only be computed on a 40-hour per week workload, or in the
The Execution Proceedings amount of CA$19,200.00. The CA disposed the case in this wise:
chanRoblesvirtualLawlibrary
In the meantime, execution proceedings were commenced before the LA WHEREFORE, in view of the foregoing premises, the petition is PARTIALLY
by Arriola. The LA granted the motion for execution in the Order, 19 dated GRANTED. The assailed Order of the National Labor Relations Commission
August 8, 2011. in NLRC LAC No. 08-000572-10/NLRC Case No. NCR 09-13563-09 is
MODIFIED in that private respondent is only entitled to a monetary
The petitioners appealed the execution order to the NLRC. In its judgment equivalent to his unpaid salaries in the amount of CA$19,200.00
Decision,20 dated May 31, 2012, the NLRC corrected the decretal portion of or its Philippine Peso equivalent.
its November 30, 2010 decision. It decreased the award of backpay in the
amount of CA$26,880.00 or equivalent only to three (3) months and three SO ORDERED.21ChanRoblesVirtualawlibrary
(3) weeks pay based on 70-hours per week workload. The NLRC found that Hence, this petition, anchored on the following
when Arriola was dismissed on September 9, 2009, he only had three (3) ISSUES
months and three (3) weeks or until December 31, 2009 remaining under
his employment contract. I
In their Consolidated Memorandum, 27 the petitioners reiterated that the
WHETHER OR NOT RESPONDENT ARRIOLA WAS VALIDLY DISMISSED ESA was applicable in the present case and that recent jurisprudence
PURSUANT TO THE EMPLOYMENT CONTRACT. recognized that the parties could agree on the applicability of foreign laws
in their labor contracts.
II
The Court's Ruling
GRANTING THAT THERE WAS ILLEGAL DISMISSAL IN THE CASE AT BAR,
WHETHER OR NOT THE SIX-WEEK ON, TWO-WEEK OFF SCHEDULE SHOULD The petition lacks merit.
BE USED IN THE COMPUTATION OF ANY MONETARY AWARD.
Application of foreign laws with labor contracts
III
At present, Filipino laborers, whether skilled or professional, are enticed to
GRANTING THAT THERE WAS ILLEGAL DISMISSAL, WHETHER OR NOT THE depart from the motherland in search of greener pastures. There is a
AMOUNT BEING CLAIMED BY RESPONDENTS HAD ALREADY BEEN distressing reality that the offers of employment abroad are more lucrative
SATISFIED, OR AT THE VERY LEAST, WHETHER OR NOT THE AMOUNT OF than those found in our own soils. To reap the promises of the foreign
CA$2,636.80 SHOULD BE DEDUCTED FROM THE MONETARY dream, our unsung heroes must endure homesickness, solitude,
AWARD.22ChanRoblesVirtualawlibrary discrimination, mental and emotional struggle, at times, physical turmoil,
The petitioners argue that the rights and obligations of the OFW, the local and, worse, death. On the other side of the table is the growing number of
recruiter, and the foreign employer are governed by the employment foreign employers attracted in hiring Filipino workers because of their
contract, citing EDI-Staffbuilders; that the terms and conditions of Arriola's reasonable compensations and globally-competitive skills and
employment are embodied in the Expatriate Policy, Ambatovy Project - qualifications. Between the dominant foreign employers and the vulnerable
Site, Long Term, hence, the laws of Canada must be applied; that the ESA, and desperate OFWs, however, there is an inescapable truth that the latter
or the Ontario labor law, does not require any ground for the early are in need of greater safeguard and protection.
termination of employment and it permits the termination without any
notice provided that a severance pay is given; that the ESA was duly In order to afford the full protection of labor to our OFWs, the State has
authenticated by the Canadian authorities and certified by the Philippine vigorously enacted laws, adopted regulations and policies, and established
Embassy; that the NLRC Sixth Division exhibited bias and bad faith when it agencies to ensure that their needs are satisfied and that they continue to
made a wrong computation on the award of backpay; and that, assuming work in a humane living environment outside of the country. Despite these
there was illegal dismissal, the CA$2,636.80, earlier paid to Arriola, and his efforts, there are still issues left unsolved in the realm of overseas
home leaves should be deducted from the award of backpay. employment. One existing question is posed before the Court -when should
an overseas labor contract be governed by a foreign law? To answer this
In his Comment,23 Arriola countered that foreign laws could not apply to burning query, a review of the relevant laws and jurisprudence is
employment contracts if they were contrary to law, morals, good customs, warranted.
public order or public policy, invokingPakistan International Airlines
Corporation v. Ople (Pakistan International);24 that the ESA was not R.A. No. 8042, or the Migrant Workers Act, was enacted to institute the
applicable because it was contrary to his constitutional right to due policies on overseas employment and to establish a higher standard of
process; that the petitioners failed to substantiate an authorized cause to protection and promotion of the welfare of migrant workers. 28 It
justify his dismissal under Philippine labor law; and that the petitioners emphasized that while recognizing the significant contribution of Filipino
could not anymore claim a deduction of CA$2,636.80 from the award of migrant workers to the national economy through their foreign exchange
backpay because it was raised for the first time on appeal. remittances, the State does not promote overseas employment as a means
to sustain economic growth and achieve national development. 29 Although
In their Reply,25 the petitioners asserted that R.A. No. 8042 recognized the it acknowledged claims arising out of law or contract involving Filipino
applicability of foreign laws on labor contracts; that the Pakistan workers,30 it does not categorically provide that foreign laws are absolutely
International case was superseded by EDI-Staffbuilders and other and automatically applicable in overseas employment contracts.
subsequent cases; and that SNC-Lavalin suffering financial losses was an
authorized cause to terminate Arriola's employment. The issue of applying foreign laws to labor contracts was initially raised
before the Court inPakistan International. It was stated in the labor contract
In his Memorandum,26 Arriola asserted that his employment contract was therein (1) that it would be governed by the laws of Pakistan, (2) that the
executed in the Philippines and that the alleged authorized cause of employer have the right to terminate the employee at any time, and (3)
financial losses by the petitioners was not substantiated by evidence. that the one-month advance notice in terminating the employment could
be dispensed with by paying the employee an equivalent one-month salary.
Therein, the Court elaborated on the parties' right to stipulate in labor abandoned their legal, moral and social obligation to assist the victim's
contracts, to wit: family in obtaining justice for her death, and so her family was awarded
chanRoblesvirtualLawlibrary P5,000,000.00 for moral and exemplary damages.
A contract freely entered into should, of course, be respected, as PIA
argues, since a contract is the law between the parties. The principle of In ATCI Overseas Corporation v. Echin35 (ATCI Overseas), the private
party autonomy in contracts is not, however, an absolute principle. The recruitment agency invoked the defense that the foreign employer was
rule in Article 1306, of our Civil Code is that the contracting parties may immune from suit and that it did not sign any document agreeing to be
establish such stipulations as they may deem convenient, "provided they held jointly and solidarily liable. Such defense, however, was rejected
are not contrary to law, morals, good customs, public order or public because R.A. No. 8042 precisely afforded the OFWs with a recourse against
policy." Thus, counterbalancing the principle of autonomy of contracting the local agency and the foreign employer to assure them of an immediate
parties is the equally general rule that provisions of applicable law, and sufficient payment of what was due. Similar to EDI-Staffbuilders, the
especially provisions relating to matters affected with public policy, are local agency therein failed to prove the Kuwaiti law specified in the labor
deemed written into the contract. Put a little differently, the governing contract, pursuant to Sections 24 and 25 of Rule 132 of the Revised Rules
principle is that parties may not contract away applicable provisions of law of Court.
especially peremptory provisions dealing with matters heavily impressed
with public interest. The law relating to labor and employment is clearly Also, in the recent case of Sameer Overseas Placement Agency, Inc. v.
such an area and parties are not at liberty to insulate themselves and their Cabiles36 (Sameer Overseas), it was declared that the security of tenure for
relationships from the impact of labor laws and regulations by simply labor was guaranteed by our Constitution and employees were not stripped
contracting with each other. x x x31 of the same when they moved to work in other jurisdictions. Citing PCL
Shipping Phils., Inc. v. NLRC 37 (PCL Shipping), the Court held that the
[Emphases Supplied] principle of lex loci contractus (the law of the place where the contract is
In that case, the Court held that the labor relationship between OFW and made) governed in this jurisdiction. As it was established therein that the
the foreign employer is "much affected with public interest and that the overseas labor contract was executed in the Philippines, the Labor Code
otherwise applicable Philippine laws and regulations cannot be rendered and the fundamental procedural rights were observed. It must be noted
illusory by the parties agreeing upon some other law to govern their that no foreign law was specified in the employment contracts in both
relationship."32 Thus, the Court applied the Philippine laws, instead of the cases.
Pakistan laws. It was also held that the provision in the employment
contract, where the employer could terminate the employee at any time Lastly, in Saudi Arabian Airlines (Saudia) v. Rebesencio 38, the employer
for any ground and it could even disregard the notice of termination, therein asserted the doctrine of forum non conveniens because the
violates the employee's right to security of tenure under Articles 280 and overseas employment contracts required the application of the laws of
281 of the Labor Code. Saudi Arabia, and so, the Philippine courts were not in a position to hear
the case. In striking down such argument, the Court held that while a
In EDI-Staffbuilders, the case heavily relied on by the petitioners, it was Philippine tribunal was called upon to respect the parties' choice of
reiterated that, "[i]n formulating the contract, the parties may establish governing law, such respect must not be so permissive as to lose sight of
such stipulations, clauses, terms and conditions as they may deem considerations of law, morals, good customs, public order, or public policy
convenient, provided they are not contrary to law, morals, good customs, that underlie the contract central to the controversy. As the dispute in that
public order, or public policy."33 In that case, the overseas contract case related to the illegal termination of the employees due to their
specifically stated that Saudi Labor Laws would govern matters not pregnancy, then it involved a matter of public interest and public policy.
provided for in the contract. The employer, however, failed to prove the Thus, it was ruled that Philippine laws properly found application and that
said foreign law, hence, the doctrine of processual presumption came into Philippine tribunals could assume jurisdiction.
play and the Philippine labor laws were applied. Consequently, the Court
did not discuss any longer whether the Saudi labor laws were contrary to Based on the foregoing, the general rule is that Philippine laws apply even
Philippine labor laws. to overseas employment contracts. This rule is rooted in the constitutional
provision of Section 3, Article XIII that the State shall afford full protection
The case of Becmen Service Exporter and Promotion, Inc. v. Spouses to labor, whether local or overseas. Hence, even if the OFW has his
Cuaresma,34 though not an illegal termination case, elucidated on the employment abroad, it does not strip him of his rights to security of tenure,
effect of foreign laws on employment. It involved a complaint for insurance humane conditions of work and a living wage under our Constitution. 39
benefits and damages arising from the death of a Filipina nurse from Saudi
Arabia. It was initially found therein that there was no law in Saudi Arabia As an exception, the parties may agree that a foreign law shall govern the
that provided for insurance arising from labor accidents. Nevertheless, the employment contract. A synthesis of the existing laws and jurisprudence
Court concluded that the employer and the recruiter in that case reveals that this exception is subject to the following requisites:
chanRoblesvirtualLawlibrary order, public policy and good customs shall not be rendered ineffective by
laws of a foreign country; and (2) Article 1306, which states that the
1. That it is expressly stipulated in the overseas employment contract stipulations, clauses, terms and conditions in a contract must not be
that a specific foreign law shall govern; contrary to law, morals, good customs, public order, or public policy. The
said doctrine was applied in the case of Pakistan International.
2. That the foreign law invoked must be proven before the courts Finally, if the fourth requisite is missing, or that the overseas employment
pursuant to the Philippine rules on evidence; contract was not processed through the POEA, then Article 18 of the Labor
Code is violated. Article 18 provides that no employer may hire a Filipino
3. That the foreign law stipulated in the overseas employment worker for overseas employment except through the boards and entities
contract must not be contrary to law, morals, good customs, public authorized by the Secretary of Labor. In relation thereto, Section 4 of R.A.
order, or public policy of the Philippines; and No. 8042, as amended, declares that the State shall only allow the
deployment of overseas Filipino workers in countries where the rights of
4. That the overseas employment contract must be processed Filipino migrant workers are protected. Thus, the POEA, through the
through the POEA. assistance of the Department of Foreign Affairs, reviews and checks
whether the countries have existing labor and social laws protecting the
rights of workers, including migrant workers. 43 Unless processed through
The Court is of the view that these four (4) requisites must be complied the POEA, the State has no effective means of assessing the suitability of
with before the employer could invoke the applicability of a foreign law to the foreign laws to our migrant workers. Thus, an overseas employment
an overseas employment contract. With these requisites, the State would contract that was not scrutinized by the POEA definitely cannot be invoked
be able to abide by its constitutional obligation to ensure that the rights as it is an unexamined foreign law.
and well-being of our OFWs are fully protected. These conditions would
also invigorate the policy under R.A. No. 8042 that the State shall, at all In other words, lacking any one of the four requisites would invalidate the
times, uphold the dignity of its citizens whether in country or overseas, in application of the foreign law, and the Philippine law shall govern the
general, and the Filipino migrant workers, in particular. 40 Further, these overseas employment contract.
strict terms are pursuant to the jurisprudential doctrine that "parties may
not contract away applicable provisions of law especially peremptory As the requisites of the applicability of foreign laws in overseas labor
provisions dealing with matters heavily impressed with public contract have been settled, the Court can now discuss the merits of the
interest,"41 such as laws relating to labor. At the same time, foreign case at bench.
employers are not at all helpless to apply their own laws to overseas
employment contracts provided that they faithfully comply with these A judicious scrutiny of the records of the case demonstrates that the
requisites. petitioners were able to observe the second requisite, or that the foreign
law must be proven before the court pursuant to the Philippine rules on
If the first requisite is absent, or that no foreign law was expressly evidence. The petitioners were able to present the ESA, duly authenticated
stipulated in the employment contract which was executed in the by the Canadian authorities and certified by the Philippine Embassy, before
Philippines, then the domestic labor laws shall apply in accordance with the the LA. The fourth requisite was also followed because Arriola's
principle of lex loci contractus. This is based on the cases of Sameer employment contract was processed through the POEA. 44
Overseas and PCL Shipping.
Unfortunately for the petitioners, those were the only requisites that they
If the second requisite is lacking, or that the foreign law was not proven complied with. As correctly held by the CA, even though an authenticated
pursuant to Sections 24 and 25 of Rule 132 of the Revised Rules of Court, copy of the ESA was submitted, it did not mean that said foreign law could
then the international law doctrine of processual presumption operates. be automatically applied to this case. The petitioners miserably failed to
The said doctrine declares that "[w]here a foreign law is not pleaded or, adhere to the two other requisites, which shall be discussed in seratim.
even if pleaded, is not proved, the presumption is that foreign law is the
same as ours."42 This was observed in the cases of EDI- The foreign law was not expressly specified in the employment contract
Staffbuilders and ATCI Overseas.
The petitioners failed to comply with the first requisite because no foreign
If the third requisite is not met, or that the foreign law stipulated is law was expressly stipulated in the overseas employment contract with
contrary to law, morals, good customs, public order or public policy, then Arriola. In its pleadings, the petitioners did not directly cite any specific
Philippine laws govern. This finds legal bases in the Civil Code, specifically: provision or stipulation in the said labor contract which indicated the
(1) Article 17, which provides that laws which have, for their object, public applicability of the Canadian labor laws or the ESA. They failed to show on
the face of the contract that a foreign law was agreed upon by the parties. could be immediately dismissed without giving him the opportunity to
Rather, they simply asserted that the terms and conditions of Arriola's explain and defend himself.
employment were embodied in the Expatriate Policy, Ambatovy Project -
Site, Long Term.45 Then, they emphasized provision 8.20 therein, regarding The provisions of the ESA are patently inconsistent with the right to
interpretation of the contract, which provides that said policy would be security of tenure. Both the Constitution 51 and the Labor Code52 provide
governed and construed with the laws of the country where the applicable that this right is available to any employee. In a host of cases, the Court
SNC-Lavalin, Inc. office was located. 46 Because of this provision, the has upheld the employee's right to security of tenure in the face of
petitioners insisted that the laws of Canada, not of Madagascar or the oppressive management behavior and management prerogative. Security
Philippines, should apply. Then, they finally referred to the ESA. of tenure is a right which cannot be denied on mere speculation of any
unclear and nebulous basis.53
It is apparent that the petitioners were simply attempting to stretch the
overseas employment contract of Arriola, by implication, in order that the Not only do these provisions collide with the right to security of tenure, but
alleged foreign law would apply. To sustain such argument would allow any they also deprive the employee of his constitutional right to due process by
foreign employer to improperly invoke a foreign law even if it is not denying him of any notice of termination and the opportunity to be
anymore reasonably contemplated by the parties to control the overseas heard.54 Glaringly, these disadvantageous provisions under the ESA
employment. The OFW, who is susceptible by his desire and desperation to produce the same evils which the Court vigorously sought to prevent in the
work abroad, would blindly sign the labor contract even though it is not cases of Pakistan International and Sameer Overseas. Thus, the Court
clearly established on its face which state law shall apply. Thus, a better concurs with the CA that the ESA is not applicable in this case as it is
rule would be to obligate the foreign employer to expressly declare at the against our fundamental and statutory laws.
onset of the labor contract that a foreign law shall govern it. In that
manner, the OFW would be informed of the applicable law before signing In fine, as the petitioners failed to meet all the four (4) requisites on the
the contract. applicability of a foreign law, then the Philippine labor laws must govern
the overseas employment contract of Arriola.
Further, it was shown that the overseas labor contract was executed by
Arriola at his residence in Batangas and it was processed at the POEA on No authorized cause for dismissal was proven
May 26, 2008.47 Considering that no foreign law was specified in the
contract and the same was executed in the Philippines, the doctrine oflex Article 279 of our Labor Code has construed security of tenure to mean
loci celebrationis applies and the Philippine laws shall govern the overseas that the employer shall not terminate the services of an employee except
employment of Arriola. for a just cause or when authorized by law. 55Concomitant to the employer's
right to freely select and engage an employee is the employer's right to
The foreign law invoked is contrary to the Constitution and the Labor Code discharge the employee for just and/or authorized causes. To validly effect
terminations of employment, the discharge must be for a valid cause in the
Granting arguendo that the labor contract expressly stipulated the manner required by law. The purpose of these two-pronged qualifications is
applicability of Canadian law, still, Arriola's employment cannot be to protect the working class from the employer's arbitrary and
governed by such foreign law because the third requisite is not satisfied. A unreasonable exercise of its right to dismiss. 56
perusal of the ESA will show that some of its provisions are contrary to the
Constitution and the labor laws of the Philippines. Some of the authorized causes to terminate employment under the Labor
Code would be installation of labor-saving devices, redundancy,
First, the ESA does not require any ground for the early termination of retrenchment to prevent losses and the closing or cessation of operation of
employment.48 Article 54 thereof only provides that no employer should the establishment or undertaking. 57 Each authorized cause has specific
terminate the employment of an employee unless a written notice had requisites that must be proven by the employer with substantial evidence
been given in advance.49 Necessarily, the employer can dismiss any before a dismissal may be considered valid.
employee for any ground it so desired. At its own pleasure, the foreign
employer is endowed with the absolute power to end the employment of Here, the petitioners assert that the economy of Madagascar weakened
an employee even on the most whimsical grounds. due to the global financial crisis. Consequently, SNC-Lavalin's business also
slowed down. To prove its sagging financial standing, SNC-Lavalin
Second, the ESA allows the employer to dispense with the prior notice of presented a copy of a news item in the Financial Post, dated March 5, 2009.
termination to an employee. Article 65(4) thereof indicated that the They insist that SNC-Lavalin had no choice but to minimize its expenditures
employer could terminate the employment without notice by simply paying and operational expenses.58 In addition, the petitioners argued that the
the employee a severance pay computed on the basis of the period within government of Madagascar prioritized the employment of its citizens, and
which the notice should have been given.50 The employee under the ESA not foreigners. Thus, Arriola was terminated because there was no more
job available for him.59 jurisdiction of this Honorable Court, the above-named accused,
representing herself to have capacity to contract, enlist, transport and refer
The Court finds that Arriola was not validly dismissed. The petitioners workers for employment abroad, did then and there, without any license or
simply argued that they were suffering from financial losses and Arriola authority, recruit for overseas employment and for a fee, the following
had to be dismissed. It was not even clear what specific authorized cause, complainants, to wit:
whether retrenchment or redundancy, was used to justify Arriola's MONICA B. HIMAN
dismissal. Worse, the petitioners did not even present a single credible ERWIN B. DELA VEGA
evidence to support their claim of financial loss. They simply offered an GLADYS Z. REMORENTO
unreliable news article which deserves scant consideration as it is JOEY P. BACOLOD
undoubtedly hearsay. Time and again the Court has ruled that in illegal MARLON B. DELA CRUZ
dismissal cases like the present one, the onus of proving that the employee AUGUSTO A. CEZAR GARCES
was dismissed and that the dismissal was not illegal rests on the employer, LEYNARD B. TUTANES
and failure to discharge the same would mean that the dismissal is not thus in a large scale amounting to economic sabotage but said accused
justified and, therefore, illegal.60 failed to deploy said complainants and likewise failed to return the money
incurred by them and the documents submitted despite demands, to the
As to the amount of backpay awarded, the Court finds that the latter's damage and prejudice.
computation of the CA was valid and proper based on the employment
contract of Arriola. Also, the issue of whether the petitioners had made CONTRARY TO LAW.2ChanRoblesVirtualawlibrary
partial payments on the backpay is a matter best addressed during the cralawlawlibrary
execution process.chanrobleslaw
Accused-appellant was also charged and tried under seven (7) separate
WHEREFORE, the petition is DENIED. The January 24, 2013 Decision of the informations for estafa under Article 315 par. 2 (a) of the RPC, to
Court of Appeals in CA-G.R. SP No. 118869 is AFFIRMED in toto. wit:chanRoblesvirtualLawlibrary

SO ORDERED. 1) That in or about and sometime during the month of September 2005, in
the City of Makati, Philippines, a place within the jurisdiction of this
People v Solina Honorable Court, the abovenamed accused, did then and there willfully,
unlawfully and feloniously, defraud complainant MONICA I-IIMAN y
Accused-appellant Ma. Fe Torres Solina a.k.a. Ma. Fe Bay Ion Gallo appeals BASAMOT in the following manners, to wit: the said accused by means of
her case to this Court after the Court of Appeals (CA) in its Decision1 dated false manifestations and fraudulent representations made prior and
March 11, 2010 affirmed with modification her conviction beyond simultaneously with the commission of fraud, to the effect that she have
reasonable doubt of the crime of illegal recruitment in large scale under the capacity to deploy complainant for overseas employment and could
Republic Act No. 8042, otherwise known as the Migrant Workers and facilitate the necessary papers, in connection therewith if given the
Overseas Filipinos Act of 1995 (R.A. 8042) imposing the penalty of life necessary amount and by means of other deceit of similar import, induced
imprisonment and ordered to pay a. fine in the amount of =P200,000.00 and succeeded in inducing complainant to give and deliver and, in fact, the
with subsidiary liability in case of insolvency and six (6) counts of Estafa complainant gave and delivered to said accused the total amount of
under Article 315 (2) (a) of the Revised Penal Code (RPC), imposing the Php20,000.00 on the strength of said manifestation and representation
indeterminate penalty of one (1) year, eight (8) months and twenty (20) which turned out to be false, to the damage and prejudice of said
days prision correccional, as minimum, to five (5) years, five (5) months complainant in the aforementioned amount of P20,000.00.
and eleven (11) days of prision mayor, as maximum, for each count and
ordered to return to each complainant the amount of P20,000.00 as actual CONTRARY TO LAW.3
damages, handed clown by the Regional Trial Court (RTC), Branch 147, in
Makati City. 2) That in or about and sometime during the month of October, 2005, in
the City ofMakati, Philippines, a place within the jurisdiction of this
Accused-appellant was arraigned and tried under an Information dated Honorable Court, the abovenamed accused, did then and there willfully,
June 16, 2006 charging her of the crime of illegal recruitment in large scale unlawfully and feloniously, defraud complainant JOEY BACOLOD y
under R.A. 8042, thus:chanRoblesvirtualLawlibrary PORTILLES in the following manners, to wit: the said accused by means of
false manifestations and fraudulent representations made prior and
That in or about and sometime during the period from September, 2005 up simultaneously with the commission of fraud, to the ellect that she have
to February 2006, in the City of Makati, Philippines, a place within the the capacity to deploy complainant for overseas employment and could
facilitate the necessary papers, in connection therewith if given the
necessary amount and by means of other deceit of similar import, induced simultaneously with the commission of fraud, to the effect that she have
and succeeded in inducing complainant to give and deliver and, in fact, the the capacity to deploy complainant for overseas employment and could
complainant gave and delivered to said accused the total amount of facilitate the necessary papers, in connection therewith if given the
Php20,000.00 on the strength of said manilestation and representation necessary amount and by means of other deceit of similar import, induced
which turned out to be false, to the damage and prejudice of said and succeeded in inducing complainant to give and deliver and, in fact, the
complainant in the aforementioned amount of P20,000.00. complainant gave and delivered to said accused the total amount of
Php20,000.00 on the strength of said manifestation and representation
CONTRARY TO LAW.4 which turned out to be false, to the damage and prejudice of said
complainant in the aforementioned amount of P20,000.00.
3) That in or about and sometime during the month of October, 2005, in
the City ofMakati, Philippines, a place within the jurisdiction of this CONTRARY TO LAW.7
Honorable Court, the abovenamed accused, did then and there willfully,
unlawfully and feloniously, defraud complainant MARLON DEL A CRUZ y 6) That in or about and sometime during the month of February, 2006, in
BOLESA in the following manners, to wit: the said accused by means of the City of Makati, Philippines, a place within the jurisdiction of this
false manifestations and fraudulent representations made prior and Honorable Court, the abovenamed accused, did then and there willfully,
simultaneously with the commission of fraud, to the effect that she have unlawfully and feloniously, defraud complainant AUGUSTO CEZAR GARCES
the capacity to deploy complainant for overseas employment and could y ALIMAGNO in the following manners, to wit: the said accused by means
facilitate the necessary papers, in connection therewith if given the of false manifestations and fraudulent representations made prior and
necessary amount and by means of other deceit of similar import, induced simultaneously with the commission of fraud, to the effect that she have
and succeeded in inducing complainant to give and deliver and, in fact, the the capacity to deploy complainant for overseas employment and could
complainant gave and delivered to said accused the total amount of facilitate the necessary papers, in connection therewith if given the
Php20,000.00 on the strength of said manifestation and representation necessary amount and by means of other deceit of similar import, induced
which turned out to be false, to the damage and prejudice of said and succeeded in inducing complainant to give and deliver and, in fact, the
complainant in the aforementioned amount of P20,000.00. complainant gave and delivered to said accused the total amount of
Php20,000.00 on the strength of said manifestation and representation
CONTRARY TO LAW.5 which turned out to be false, to the damage and prejudice of said
complainant in the aforementioned amount of P20,000.00.
4) That in or about and sometime during the month of November, 2005, in
the City ofMakati, Philippines, a place within the jurisdiction of this CONTRARY TO LAW.8
Honorable Court, the abovenamed accused, did then and there willfully,
unlawfully and feloniously, defraud complainant ERWIN DELA VEGA y 7) That in or about and sometime during the month of February, 2006, in
BRIONES in the following manners, to wit: the said accused by means of the City of Makati, Philippines, a place within the jurisdiction of this
false manifestations and fraudulent representations made prior and Honorable Court, the abovenamed accused, did then and there willfully,
simultaneously with the commission of fraud, to the effect that she have unlawfully and feloniously, defraud complainant LEYNARD TUTANES y
the capacity to deploy complainant for overseas employment and could BADIOLA in the following manners, to wit: the said accused by means of
facilitate the necessary papers, in connection therewith if given the false manifestations and fraudulent representations made prior and
necessary amount and by means of other deceit of similar import, induced simultaneously with the commission of fraud, to the effect that she have
and succeeded in inducing complainant to give and deliver and, in fact, the the capacity to deploy complainant for overseas employment and could
complainant gave and delivered to said accused the total amount of facilitate the necessary papers, in connection therewith if given the
Php20,000.00 on the strength of said manifestation and representation necessary amount and by means of other deceit of similar import, induced
which turned out to be false, to the damage and prejudice of said and succeeded in inducing complainant to give and deliver and, in fact, the
complainant in the aforementioned amount of P20,000.00. complainant gave and delivered to said accused the total amount of
Php20,000.00 on the strength of said manifestation and representation
CONTRARY TO LAW.6 which turned out to be false, to the damage and prejudice of said
complainant in the aforementioned amount of P20,000.00.
5) That in or about and sometime during the month of November, 2005, in
the City of Fvfakati, Philippines, a place within the jurisdiction of this CONTRARY TO LAW.9cralawlawlibrary
Honorable Court, the abovenamed accused, did then and there willfully,
unlawfully and feloniously, defraud complainant GLADYS REMORENTO y Accused-appellant pleaded "not guilty" and after trial on the merits, the
ZAMORA in the following manners, to wit: the said accused by means of RTC found accused-appellant guilty beyond reasonable doubt of the crimes
false manifestations and fraudulent representations made prior and charged except for one charge of estafa which was provisionally dismissed
by the RTC, upon motion of accused-appellant, without prejudice to
reinstatement considering that the subpoena sent to complainant Monica In her Brief, accused-appellant assigned the following errors:
B. Himan had not been duly served upon her person. The dispositive I.
portion of the decision reads:chanRoblesvirtualLawlibrary
THE COURT A QUO GRAVELY ERRED IN REJECTING THE ACCUSED-
WHEREFORE, premises considered, judgment is rendered in these cases as APPELLANT'S DEFENSE.
follows:chanRoblesvirtualLawlibrary
II.
1. In Crim. Case No. 06-1275, finding herein accused Ma. Fe Torres Solina
a.k.a. Ma. Fe Baylon Gallo, Guilty Beyond Reasonable Doubt of Illegal THE COURT A QUO GRAVELY ERRED IN FINDING THE ACCUSED-APPELLANT
Recruitment in Large Scale and sentencing her to suffer the indeterminate GUILTY DESPITE THE PROSECUTION'S FAILURE TO PROVE HER GUILT
penalty of six (6) years and one (1) day as minimum to eight (8) years as BEYOND REASONABLE DOUBT.cralawlawlibrary
maximum, and to pay a fine in the amount of P200,O00.O0 with subsidiary
liability in case of insolvency; Accused-appellant maintains her denial that she was engaged in the
business of recruiting possible workers for jobs abroad. She insists that like
2. In Crim. Cases Nos. 06-1277 to 06-1282, finding the said accused Ma. Fe all the private complainants, she was also an applicant for a job as an
Torres Solina a.k.a. Ma. Fe Baylon Gallo, Guilty Beyond Reasonable Doubt of overseas worker and that she merely accompanied them to a recruitment
six (6) counts of Estafa under Art. 315, par. 2 (a), Revised Penal Code, and agency. She alleges that private complainant Dela Vega and Dela Cruz
sentencing her to suffer for each count, the indeterminate penalty of one conspired together, used her name, and represented themselves to the
(1) year, eight (8) months, and twenty (20) days prision correccional as other applicants as being authorized to collect documents and fees and
minimum to five (5) years, five (5) months, and eleven (11) days of prision that she only met the other private complainants in the trainings/seminars
mayor as maximum; to return to each private complainant, namely, Joey P. she attended. Anent the acknowledgment receipt signed by her and
Bacolod, Marlon B. dela Cruz, Erwin B. Dela Vega, Gladys Z. Remorento, presented by the prosecution as evidence, accused-appellant argues that it
Augusto Cezar A. Garces, and Leynard B. Tutanes, the amount of does not prove that the money received by her was the consideration for
P20,000.00 as actual damages. private complainant Garces' placement abroad.

SO ORDERED. As to the charges of estafa, accused-appellant claims that the prosecution


failed to prove that she employed deceit to entice private complainants to
Makati City, October 30, 2007.10ChanRoblesVirtualawlibrary part with their money because she did not represent or pass herself off as
cralawlawlibrary a licensed recruiter.

Thereafter, accused-appellant filed a Notice of Appeal, 11 thus elevating the After a careful review of the records, this Court finds no reason to reverse
cases to the CA. On March 11, 2010, the CA affirmed the decision of the the decision of the CA.
RTC with modification, the dispositive portion of which reads as
follows:chanRoblesvirtualLawlibrary All the elements of the crime of illegal recruitment in large scale are
present, namely: (1) the offender has no valid license or authority required
WHEREFORE, the foregoing considered, the instant appeal is hereby by law to enable him to lawfully engage in recruitment and placement of
DENTED. However, the assailed Decision dated 30 October 2007 is workers; (2) the offender undertakes any of the activities within the
MODIFIED in that the appellant is hereby sentenced to suffer the penalty of meaning of "recruitment and placement" under Article 13 (b) 14 of the Labor
LIFE IMPRISONMENT as penalty for the crime of illegal recruitment in large Code, or any of the prohibited practices enumerated under Article 34 of the
scale and is ordered to pay a line in the amount of P200,000.00 with said Code (now Section 6 of R.A. 8042); and (3) the offender committed the
subsidiary liability in case of insolvency. No costs. same against three (3) or more persons, individually or as a group. More
importantly, all the said elements have been established beyond
SO ORDERED. reasonable doubt. Thus, as ruled by the CA:chanRoblesvirtualLawlibrary
cralawlawlibrary
First off, the first element is admittedly present. Appellant had no license to
Thus, the case is now before this Court after accused-appellant filed her recruit or engage in placement activities and she herself had admitted to
Notice of Appeal on March 24, 2010.12 her lack of authority to do so. The Certification dated 7 April 2006 issued
by 1he POHA also undeniably establishes this fact.
Accused-appellant and the Office of the Solicitor General (OSG) both
adopted their respective briefs filed before the CA.13 In like manner, the second and third elements also obtain in this case. On
separate occasions and under different premises, appellant met with and To reiterate, settled is the rule that the findings and conclusion of the trial
herself recruited the private complainants, six (6) in number, giving them court on the credibility of witnesses are entitled to great respect because
the impression that she had the capability to facilitate applications for the trial courts have the advantage of observing the demeanor of
employment as factory workers in Japan. All these complainants testified witnesses as they testify.19 The determination by the trial court of the
that appellant had promised them employment for a fee amounting to credibility of witnesses, when affirmed by the appellate court, as in this
P2(),000.00. Their testimonies corroborate each other on material points, case, is accorded full weight and credit as well as great respect, if not
such as the amount exacted by appellant as placement fee, the country of conclusive effect.20
destination, the training that they had to undergo to qualify for
employment and the submission of documentary requirements needed for Ancnt the CA's modification as to the penalty imposed, this Court finds no
the same. The private complainants were positive and categorical in reason for its correction. The trial court imposed the indeterminate penalty
testifying that they personally met the appellant and that she asked for, of six (6) years and one (1) day, as minimum, to eight (8) years, as
among others, the payment of placement fees in consideration for the maximum, for the crime of illegal recruitment in large scale, whereas the
promised employment in Japan. 15ChanRoblesVirtualawlibrary proper penalty should have been life imprisonment, as provided under
cralawlawlibrary Section 7 (b) of R.A. 8042. As ruled by the CA:chanRoblesvirtualLawlibrary

Accused-appellant's defense of denial cannot overcome the positive Be that as it may, this Court finds reversible error on the part of the trial
testimonies of the witnesses presented by the prosecution. As is well- court respecting the penalty imposed on the appellant for the crime of
settled in this jurisdiction, greater weight is given to the positive large scale illegal recruitment. Under the last paragraph of Section 6 of R.A.
identification of the accused by the prosecution witnesses than the 8042, illegal recruitment shall be considered an offense involving economic
accused's denial and explanation concerning the commission of the sabotage if committed in large scale, viz., committed against three or more
crime.16 Based on the factual findings of the RTC, the combined and persons individually or as a group. In the present case, six (6) private
corroborative testimonies of the witnesses for the prosecution show that: it complainants testified against appellant's acts of illegal recruitment,
was appellant herself who informed them of the existence of the job thereby rendering her acts tantamount to economic sabotage. Under
vacancies in Japan and of the requirements needed for the processing of Section 7 (b) of R.A. 8042, the penalty of life imprisonment and a fine of
their applications. It was properly established that it was accused-appellant not less than P500.000.00 nor more than P1,000,000.00 shall be imposed if
who accompanied the private complainants to undergo training and illegal recruitment constitutes economic sabotage.cralawlawlibrary
seminar conducted by a person who represented himself as connected with
the Technical Education and Skills Development Authority (TESDA). Nevertheless, the CA erred in not increasing the amount of fine imposed by
Evidence was also presented that the private complainants, relying the RFC. In modifying the penalty to life imprisonment, the CA cited
completely on accused-appellant's representations, entrusted their money Section 7 (b) of R.A. 8042 because the present case involves economic
to her. Finally, since there were six (6) victims, the RTC therefore did not sabotage, however, the same provision reads, [t]he penalty of life
commit any error in convicting accused-appellant of the charge of illegal imprisonment and a fine of not less than five hundred thousand pesos
recruitment in large scale. (P500,000.00) nor more than one million pesos (P1,000,000.00) shall be
imposed if illegal recruitment constitutes economic sabotage. Hence, the
This Court is also in agreement with the ruling of the CA that accused- fine imposed should have been not less than five hundred thousand pesos
appellant is guilty of six (6) counts of estafa under Article 315, par. 2 (a) of (P500,000.00) nor more than one million pesos (P1,000,000.00) and not
the Revised Penal Code, as amended. It is settled that a person may be two hundred thousand pesos (P200,000.00) as ruled by the RTC and the
charged and convicted separately of illegal recruitment under R.A. 8042, in CA.
relation to the Labor Code, and estafa under Article 315 (2) (a) of the
Revised Penal Code.17 The elements of estafa are: (a) that the accused WHEREFORE, the appeal is DISMISSED and the Court of Appeals Decision
defrauded another by abuse of confidence or by means of deceit, and (b) dated March 11, 2010 is AFFIRMED with the MODIFICATION that accused-
that damage or prejudice capable of pecuniary estimation is caused to the appellant Ma. Fe Torres Solina a.k.a. Ma Fe Baylon Gallo
offended party or third person. 18 As aptly found by the RTC and affirmed by is ORDERED to PAY a fine in the amount of Five Hundred Thousand
the CA, accused-appellant defrauded the private complainants into (P500,000.00) Pesos with subsidiary liability in case of insolvency, instead
believing that she had the authority and capability to send them for of the P200,000.00 adjudged earlier by the RTC and the CA for the crime of
overseas employment in Japan and because of such assurances, private illegal recruitment in large scale. Anent the six (6) counts of Estafa under
complainants each parted with P20,000.00 in exchange for said promise of Article 315, paragraph 2 (a), Revised Penal Code, accused-appellant
future work abroad. Still, accused-appellant's promise never materialized, is ORDERED to RETURN to each private complainant the amount of Twenty
thus, private complainants suffered damages to the extent of the sum of Thousand Pesos (P20,000.00), plus the legal interest of six percent (6%)
money that they had delivered to accused-appellant. per annum from the finality of judgment until fully paid, as actual
damages.
The Labor Arbiter (LA)11 and the NLRC12 gave more credence to the medical
SO ORDERED.chanroblesvirtuallawlibrary report of petitioner's independent doctor and, thus, granted petitioner's
disability claim, and ordered respondents to jointly and severally pay
petitioner his permanent total disability benefits, albeit at different
amounts.13chanrobleslaw

However, the CA disagreed with the conclusions of the LA and the NLRC,
and dismissed petitioner's complaint.14 It ruled that the claim was
premature because at the time the complaint was filed: (a) petitioner was
still under medical treatment by the company-designated physicians; (b)
Jakerson Gargallo v Dohle no medical assessment has yet been issued by the company-designated
physicians as to his fitness or disability since the allowable 240-day
treatment period during which he is considered under temporary total
For the Court's resolution are the Motion for Reconsideration 1 and Motion disability has not yet lapsed; and (c) petitioner has not yet consulted his
for Partial Reconsideration2 filed by petitioner Jakerson G. Gargallo own doctor, hence, had no sufficient basis to prove his incapacity. 15The CA
(petitioner), and respondents Dohle Seafront Crewing (Manila), Inc. (Dohle likewise gave more credence to the fit to work assessment of the company-
Seafront), Dohle Manning Agencies, Inc. (Dohle Manning), and Mr. designated physician who treated and closely monitored petitioner's
Mayronilo B. Padiz (Padiz; collectively, respondents), respectively, of the condition, over the contrary declaration of petitioner's doctor who attended
Court's Decision3 dated September 16, 2015, which affirmed the to him only once, two (2) months after the filing of the
Decision4 dated June 10, 2014 and the Resolution 5 dated November 21, complaint.16chanrobleslaw
2014 of the Court of Appeals (CA) in CA-G.R. SP No. 130266, dismissing
petitioner's claim for permanent total disability benefits, but ordered In its September 16, 2015 Decision, the Court upheld the CA's dismissal of
respondents Dohle Seafront and Dohle Manning, jointly and severally, to petitioner's claim for permanent total disability benefits, but ordered Dohle
pay petitioner his income benefit for one hundred ninety-four (194) days, Seafront and Dohle Manning, jointly and severally, to pay petitioner the
plus 10% of the total amount of the income benefit as attorney's fees. income benefit arising from his temporary total disability which lasted for
194 days from his repatriation on March 11, 2012 until his last visit to the
The Facts company-designated physician on September 21, 2012 17 (the date when he
was declared fit to work)18plus 10% of the total amount of the income
On July 20, 2012, petitioner filed a complaint for permanent total disability benefit as attorney's fees.19 Meanwhile, the Court found no basis hold Padiz
benefits against respondents before the National Labor Relations solidarity liable with Dohle Seafront and Dohle Manning for payment of the
Commission (NLRC).6 The complaint stemmed from his claim that: (a) he monetary awards to petitioner, absent any showing that acted beyond the
accidentally fell on deck while lifting heavy loads of lube oil drum, with his scope of his authority or with malice. 20chanrobleslaw
left arm hitting the floor first, bearing his full body weight; 7 (b) he has
remained permanently unfit for further sea service despite major surgery Dissatisfied, both parties filed their respective motions for reconsideration
and further treatment by the company-designated physicians; 8 and (c) his of the Court's September 16, 2015 Decision. 21chanrobleslaw
permanent total unfitness to work was duly certified by his chosen
physician whose certification must prevail over the palpably self-serving I. Petitioner's Motion for Reconsideration
and biased assessment of the company-designated
physicians.9chanrobleslaw At the outset, the Court notes that, except as to the issue of respondents'
liability for the payment of income benefit, the arguments propounded in
For their part, respondents countered that the fit-to-work findings of the petitioner's Motion for Reconsideration had been adequately passed upon
company-designated physicians must prevail over that of petitioner's in its September 16, 2015 Decision. In essence, petitioner argues that: (a)
independent doctor, considering that: (a) they were the ones who the lapse of the 120-day period from the onset of disability rendered him
continuously treated and monitored petitioner's medical condition; and (b) permanently and totally disabled because the extension of the medical
petitioner failed to comply with the conflict-resolution procedure under the treatment was unjustified;22 and (b) resort to a third doctor is am directory,
Philippine Overseas Employment Administration-Standard Employment not a mandatory requirement.23chanrobleslaw
Contract (POEA-SEC). Respondents further averred that the filing of the
disability claim was premature since petitioner was still undergoing Such arguments remain untenable.
medical treatment within the allowable 240-day period at the time the
complaint was filed.10chanrobleslaw The Court had already disposed of the foregoing matters in its September
16, 2015 Decision, dismissing the complaint on the grounds of: (a)
premature filing; and (b) failure to comply with the mandated conflict- claims, and results in the affirmance of the fit-to-work certification of the
resolution procedure under the POEA-SEC, viz.:ChanRoblesVirtualawlibrary company-designated physician, thus:ChanRoblesVirtualawlibrary
It is undisputed that petitioner was repatriated on March 11, 2012 and The [POEA-SEC] and the CBA clearly provide that when a seafarer sustains
immediately subjected to medical treatment. Despite the lapse of the a work-related illness or injury while on board the vessel, his fitness or
initial 120-day period on July 9, 2012, such treatment continued due to unfitness for work shall be determined by the company-designated
persistent pain complained of by petitioner, which was observed until his physician.
180th day of treatment on September 7, 2012. In this relation, the CA
correctly ruled that the tiling of the complaint for permanent total disability If the physician appointed by the seafarer disagrees with the company-
benefits on July 20, 2012 was premature, and should have been dismissed designated physician's assessment, the opinion of a third doctor may be
for lack of cause of action, considering that at that time: (a) petitioner was agreed jointly between the employer and the seafarer to be the decision
still under the medical treatment of the company-designated physicians final and binding on them.
within the allowable 240-day period; (b) the latter had not yet issued any
assessment as to his fitness or disability; and (c) petitioner had not yet Thus, while petitioner had the right to seek a second and even a third
secured any assessment from his chosen physician, whom he consulted opinion, the final determination of whose decision must prevail must be
only more than two (2) months thereafter, or on October 2, 2012. done in accordance with an agreed procedure. Unfortunately, the petitioner
did not avail of this procedure; hence, we have no option but to declare
Moreover, petitioner failed to comply with the prescribed procedure under that the company-designated doctor's certification is the final
the afore-quoted Section 20 (A) (3) of the 2010 POEA-SEC on the joint determination that must prevail.
appointment by the parties of a third doctor, in case the seafarer's There being no cogent reason to depart from the aforementioned ruling,
personal doctor disagrees with the company-designated physician's fit-to- the Court denies petitioner's Motion for Reconsideration insofar as it seeks
work assessment. The [2008-2011 ver.di. IMEC IBF CBA (IBF CBA)] similarly to reinstate the NLRC's ruling finding petitioner entitled to permanent total
outlined the procedure, viz.:ChanRoblesVirtualawlibrary disability benefits.
25.2 The disability suffered by the seafarer shall be determined by a
Nonetheless, the Court concurs with petitioner's asseveration that it was
doctor appointed by the Company. If a doctor appointed by or
erroneous to absolve Padiz from joint and several liability with Dchle
on behalf of the seafarer disagrees with the assessment, a third
Seafront and Dohle Manning for the payment of the income benefit arising
doctor may be nominated jointly between the Company and the
from his temporary total disability,25cralawred in view of Section 10 of
Union and the decision of this doctor shall be final and binding
Republic Act No. (RA) 8042,26 otherwise known as the "Migrant Workers and
on both parties.
Overseas Filipinos Act of 1995," as amended by RA 10022 27 (RA 8042, as
amended), which pertinently reads:ChanRoblesVirtualawlibrary
SECTION. 10. Money Claims. - xxx
xxxx
The liability of the principal/employer and the recruitment/placement
agency for any and all claims under this section shall be joint and several.
This provision shall be incorporated in the contract for overseas
25.4. A seafarer whose disability, in accordance with 25.2 above is employment and shall be a condition precedent for its approval. The
assessed at 50% or more shall, for the purpose of this performance bond to be filed by the recruitment/placement agency, as
paragraph, be regarded as permanently unfit for further sea provided by law, shall be answerable for all money claims or damages that
service in any capacity and be entitled to 100% compensation. may be awarded to the workers. If the recruitment/placement agency is a
Furthermore, any seafarer assessed at less than 50% disability juridical being, the corporate officers and directors and partners as the
but certified as permanently unfit for further sea service in any case may be, shall themselves be jointly and solidarity liable with the
capacity by the Company-nominated doctor, shall also be corporation or partnership for the aforesaid claims and
entitled to 100% compensation. Any disagreement as to the damages.28 (Emphasis and underscoring supplied)
assessment or entitlement shall be resolved in accordance with Section 10 of RA 8042, as amended, expressly provides for joint and
clause 25.2 above. solidary liability of corporate directors and officers with the
recruitment/placement agency for all money claims or damages that may
In the recent case of Veritas Maritime Corporation v. Gepanaga, Jr. [(see be awarded to Overseas Filipino Workers (OFWs). While a corporate
G.R. No. 206285, February 4, 2015, 750 SCRA 104, 117-118)], involving an director, trustee, or officer who entered into contracts in behalf of the
almost identical provision of the CBA, the Court reiterated the well-settled corporation generally. cannot be held personally liable for the liabilities of
rule that the seafarer's non-compliance with the mandated conflict- the latter, in deference to the separate and distinct legal personality of a
resolution procedure under the POEA-SEC and the CBA militates against his corporation from the persons composing it, personal liability of such
corporate director, trustee, or officer, along (although not necessarily) with falls on the SSS in view of their compliance with the above duty, 39 because
the corporation, may validly attach when he is made by a specific provision the income benefit arising from a covered employee's temporary total
of law personally answerable for his corporate action,29 as in this case. disability is to be advanced by the employer, subject to reimbursement by
Thus, in the recent case of Sealanes Marine Services, Inc. v. Dela the SSS40 upon compliance with the conditions set forth under Section
Torre,30 the Court had sustained the joint and solidary liability of the 1,41 Rule X of the Rules Implementing Title II, Book IV of the Labor Code.
manning agency, its foreign principal and the manning agency's President Consequently, the Court finds no reason to reverse or modify the directive
in accordance with Section 10 of RA 8042, as amended. for respondents to jointly and severally pay petitioner his income benefit
for 194 days, save for the inclusion of Padiz as a solidary debtor.
In addition, Dohle Seafront is presumed to have submitted a verified
undertaking by its officers and directors that they will be jointly and However, after surveying existing jurisprudence on the matter, the Court
severally liable with the company over claims arising from an employer- finds merit in respondents' supplication 42 that the award of attorney's fees
employee relationship when it applied for a license to operate a seafarer's must be deleted. As a rule, the mere fact of having been forced to litigate
manning agency, as required under the 2003 POEA Rules and Regulations to protect one's interest does not amount to a compelling legal reason to
Governing the Recruitment and Employment of Seafarers (POEA Rules) justify an award of attorney's fees in the claimant's favor. 43 Verily,
jurisprudence is replete with cases holding that attorney's fees may be
"Applicable laws form part of, and are read into, contracts without need for awarded to a claimant who is compelled to litigate with third persons or
any express reference thereto; more so, when it pertains to a labor incur expenses to protect his interest by reason of an unjustified act or
contract which is imbued with public interest. Each contract thus contains omission on the part of the party from whom it is sought only when there is
not only what was explicitly stipulated therein, but also the statutory sufficient showing of bad faith on the part of the latter in refusing to
provisions that have any bearing on the matter." 32 As applied herein, pay.44chanrobleslaw
Section 10 of RA 8042, as amended, and the pertinent POEA Rules are
deemed incorporated in petitioner's employment contract with However, in the case of Montierro v. Rickmers Marine Agency Phils., Inc.
respondents. These provisions are in line with the State's policy of affording (Montierro),45similarly involving a claim for permanent total disability
protection to labor and alleviating the workers' plight, 33 and are meant to benefits filed by a seafarer, the Court had pronounced that in labor cases,
assure OFWs immediate and sufficient payment of what is due the withholding of wages and benefits need not be coupled with malice or
them.34 Thus, as the law provides, corporate directors and officers are bad faith to warrant the grant of attorney's fees since all that is required is
themselves solidarily liable with the recruitment/placement agency for all that the refusal to pay was without justification, thus, compelling the
money claims or damages that may be awarded to OFWs. employee to litigate.46Nonetheless, since the complaint in Montierro was
filed: (a) when the petitioner therein was still under treatment; (b) prior to
Based on the foregoing premises, the Court, therefore, finds Padiz jointly the assessment of the company-designated physician within the allowable
and solidarily liable with Dohle Seafront and Dohle Manning for the 240-day period; and (c) without complying with the prescribed conflict-
payment of the income benefit arising from petitioner's temporary total resolution procedure, the Court declared that there was no unlawful
disability, and, to such extent, grants petitioner's motion for withholding of benefits, rendering the award of attorney's fees to be
reconsideration, and, in consequence, modifies the September 16, 2015 improper. Thus, considering that similar circumstances obtain in the
Decision accordingly. present case, the Court finds it proper to rule in the same way.

II. Respondents' Motion for Partial Reconsideration WHEREFORE, the Court hereby RESOLVES to:

Petitioner's entitlement to income benefit was clearly shown in this case, in 1. PARTLY GRANT petitioner Jakerson G. Gargallo's (petitioner) Motion for
light of the undisputed fact that he needed continuous medical treatment Reconsideration and, hereby, DECLARE respondent Mr. Mayronilo B. Padiz
for 194 days from his repatriation on March 11, 2012, until his last visit (Padiz) jointly and severally liable with respondents Dohle Seafront Crewing
with the company-designated physician on September 21, 2012, 35 when he (Manila), Inc. (Dohle Seafront) and Dohle Manning Agencies, Inc. (Dohle
was declared fit to work.36chanrobleslaw Manning), to pay petitioner his income benefit for one hundred ninety-four
(194) days; and cralawlawlibrary
In this relation, the Court cannot subscribe to respondents' contention that
entitlement to income benefit is applicable only to land-based employees 2. PARTLY GRANT the Motion for Partial Reconsideration fi ed by
compulsorily registered with the Social Security System respondents Dohle Seafront, Dohle Manning, and Padiz, thereby, deleting
(SSS),37 considering that the 2010 POEA-SEC accords upon the manning the award of attorney's fees equivalent to 10% of the adjudged income
agency/foreign principal the duty to cover Filipino seafarers under the SSS benefit in favor of petitioner.
and other social protection government agencies.38 Neither is the Court
persuaded by respondents' argument that the obligation to pay the same The rest of the Court's September 16, 2015 Decision stands.
(Constitutionality of Sections 29 and 30, R.A. 8042)
SO ORDERED.
Sections 29 and 30 of the Act 1 commanded the Department of Labor and
Employment (DOLE) to begin deregulating within one year of its passage
the business of handling the recruitment and migration of overseas Filipino
workers and phase out within five years the regulatory functions of the
Philippine Overseas Employment Administration (POEA).

On January 8, 2002 respondents Rey Salac, Willie D. Espiritu, Mario


Montenegro, Dodgie Belonio, Lolit Salinel, and Buddy Bonnevie (Salac, et
al.) filed a petition for certiorari, prohibition and mandamus with
application for temporary restraining order (TRO) and preliminary
injunction against petitioners, the DOLE Secretary, the POEA Administrator,
and the Technical Education and Skills Development Authority (TESDA)
Secretary-General before the Regional Trial Court (RTC) of Quezon City,
Branch 96.2

Salac, et al. sought to: 1) nullify DOLE Department Order 10 (DOLE DO 10)
and POEA Memorandum Circular 15 (POEA MC 15); 2) prohibit the DOLE,
POEA, and TESDA from implementing the same and from further issuing
rules and regulations that would regulate the recruitment and placement of
overseas Filipino workers (OFWs); and 3) also enjoin them to comply with
the policy of deregulation mandated under Sections 29 and 30 of Republic
Act 8042.

On March 20, 2002 the Quezon City RTC granted Salac, et al.s petition and
ordered the government agencies mentioned to deregulate the recruitment
and placement of OFWs.3 The RTC also annulled DOLE DO 10, POEA MC 15,
and all other orders, circulars and issuances that are inconsistent with the
policy of deregulation under R.A. 8042.
ARTS 22- 78
Prompted by the RTCs above actions, the government officials concerned
filed the present petition in G.R. 152642 seeking to annul the RTCs
Hon. Sto Tomas v Salac decision and have the same enjoined pending action on the petition.

These consolidated cases pertain to the constitutionality of certain On April 17, 2002 the Philippine Association of Service Exporters, Inc.
provisions of Republic Act 8042, otherwise known as the Migrant Workers intervened in the case before the Court, claiming that the RTC March 20,
and Overseas Filipinos Act of 1995. 2002 Decision gravely affected them since it paralyzed the deployment
abroad of OFWs and performing artists. The Confederated Association of
The Facts and the Case Licensed Entertainment Agencies, Incorporated (CALEA) intervened for the
same purpose.4
On June 7, 1995 Congress enacted Republic Act (R.A.) 8042 or the Migrant
Workers and Overseas Filipinos Act of 1995 that, for among other purposes, On May 23, 2002 the Court5 issued a TRO in the case, enjoining the Quezon
sets the Governments policies on overseas employment and establishes a City RTC, Branch 96, from enforcing its decision.
higher standard of protection and promotion of the welfare of migrant
workers, their families, and overseas Filipinos in distress. In a parallel case, on February 12, 2002 respondents Asian Recruitment
Council Philippine Chapter, Inc. and others (Arcophil, et al.) filed a petition
G.R. 152642 and G.R. 152710 for certiorari and prohibition with application for TRO and preliminary
injunction against the DOLE Secretary, the POEA Administrator, and the observe and/or comply with the international laws and standards for
TESDA Director-General,6 before the RTC of Quezon City, Branch 220, to migrant workers.
enjoin the latter from implementing the 2002 Rules and Regulations
Governing the Recruitment and Employment of Overseas Workers and to SEC. 2. Section 29 of the same law is hereby repealed.
cease and desist from issuing other orders, circulars, and policies that tend
to regulate the recruitment and placement of OFWs in violation of the
policy of deregulation provided in Sections 29 and 30 of R.A. 8042. SEC. 3. Section 30 of the same law is also hereby repealed.

On March 12, 2002 the Quezon City RTC rendered an Order, granting the xxxx
petition and enjoining the government agencies involved from exercising
regulatory functions over the recruitment and placement of OFWs. This On August 20, 2009 respondents Salac, et al. told the Court in G.R. 152642
prompted the DOLE Secretary, the POEA Administrator, and the TESDA that they agree9 with the Republics view that the repeal of Sections 29 and
Director-General to file the present action in G.R. 152710. As in G.R. 30 of R.A. 8042 renders the issues they raised by their action moot and
152642, the Court issued on May 23, 2002 a TRO enjoining the Quezon City academic. The Court has no reason to disagree. Consequently, the two
RTC, Branch 220 from enforcing its decision. cases, G.R. 152642 and 152710, should be dismissed for being moot and
academic.
On December 4, 2008, however, the Republic informed 7 the Court that on
April 10, 2007 former President Gloria Macapagal-Arroyo signed into law G.R. 167590
R.A. 94228 which expressly repealed Sections 29 and 30 of R.A. 8042 and
adopted the policy of close government regulation of the recruitment and (Constitutionality of Sections 6, 7, and 9 of R.A. 8042)
deployment of OFWs. R.A. 9422 pertinently provides:
On August 21, 1995 respondent Philippine Association of Service Exporters,
xxxx Inc. (PASEI) filed a petition for declaratory relief and prohibition with prayer
for issuance of TRO and writ of preliminary injunction before the RTC of
SEC. 1. Section 23, paragraph (b.1) of Republic Act No. 8042, otherwise Manila, seeking to annul Sections 6, 7, and 9 of R.A. 8042 for being
known as the "Migrant Workers and Overseas Filipinos Act of 1995" is unconstitutional. (PASEI also sought to annul a portion of Section 10 but
hereby amended to read as follows: the Court will take up this point later together with a related case.)

(b.1) Philippine Overseas Employment Administration The Administration Section 6 defines the crime of "illegal recruitment" and enumerates the
shall regulate private sector participation in the recruitment and overseas acts constituting the same. Section 7 provides the penalties for prohibited
placement of workers by setting up a licensing and registration system. It acts. Thus:
shall also formulate and implement, in coordination with appropriate
entities concerned, when necessary, a system for promoting and SEC. 6. Definition. For purposes of this Act, illegal recruitment shall mean
monitoring the overseas employment of Filipino workers taking into any act of canvassing, enlisting, contracting, transporting, utilizing, hiring,
consideration their welfare and the domestic manpower requirements. procuring workers and includes referring, contract services, promising or
advertising for employment abroad, whether for profit or not, when
In addition to its powers and functions, the administration shall inform undertaken by a non-license or non-holder of authority contemplated under
migrant workers not only of their rights as workers but also of their rights Article 13(f) of Presidential Decree No. 442, as amended, otherwise known
as human beings, instruct and guide the workers how to assert their rights as the Labor Code of the Philippines: Provided, That such non-license or
and provide the available mechanism to redress violation of their rights. non-holder, who, in any manner, offers or promises for a fee employment
abroad to two or more persons shall be deemed so engaged. It shall
In the recruitment and placement of workers to service the requirements likewise include the following acts, whether committed by any person,
for trained and competent Filipino workers of foreign governments and whether a non-licensee, non-holder, licensee or holder of authority:
their instrumentalities, and such other employers as public interests may
require, the administration shall deploy only to countries where the xxxx
Philippines has concluded bilateral labor agreements or arrangements:
Provided, That such countries shall guarantee to protect the rights of SEC. 7. Penalties.
Filipino migrant workers; and: Provided, further, That such countries shall
(a) Any person found guilty of illegal recruitment shall suffer the Apparently, the Manila RTC did not agree that the law can impose such
penalty of imprisonment of not less than six (6) years and one (1) grave penalties upon what it believed were specific acts that were not as
day but not more than twelve (12) years and a fine not less than condemnable as the others in the lists. But, in fixing uniform penalties for
two hundred thousand pesos (P200,000.00) nor more than five each of the enumerated acts under Section 6, Congress was within its
hundred thousand pesos (P500,000.00). prerogative to determine what individual acts are equally reprehensible,
consistent with the State policy of according full protection to labor, and
(b) The penalty of life imprisonment and a fine of not less than five deserving of the same penalties. It is not within the power of the Court to
hundred thousand pesos (P500,000.00) nor more than one million question the wisdom of this kind of choice. Notably, this legislative policy
pesos (P1,000,000.00) shall be imposed if illegal recruitment has been further stressed in July 2010 with the enactment of R.A.
constitutes economic sabotage as defined herein. 1002212 which increased even more the duration of the penalties of
imprisonment and the amounts of fine for the commission of the acts listed
under Section 7.
Provided, however, That the maximum penalty shall be imposed if the
person illegally recruited is less than eighteen (18) years of age or
committed by a non-licensee or non-holder of authority.10 Obviously, in fixing such tough penalties, the law considered the unsettling
fact that OFWs must work outside the countrys borders and beyond its
immediate protection. The law must, therefore, make an effort to somehow
Finally, Section 9 of R.A. 8042 allowed the filing of criminal actions arising protect them from conscienceless individuals within its jurisdiction who,
from "illegal recruitment" before the RTC of the province or city where the fueled by greed, are willing to ship them out without clear assurance that
offense was committed or where the offended party actually resides at the their contracted principals would treat such OFWs fairly and humanely.
time of the commission of the offense.
As the Court held in People v. Ventura,13 the State under its police power
The RTC of Manila declared Section 6 unconstitutional after hearing on the "may prescribe such regulations as in its judgment will secure or tend to
ground that its definition of "illegal recruitment" is vague as it fails to secure the general welfare of the people, to protect them against the
distinguish between licensed and non-licensed recruiters 11 and for that consequence of ignorance and incapacity as well as of deception and
reason gives undue advantage to the non-licensed recruiters in violation of fraud." Police power is "that inherent and plenary power of the State which
the right to equal protection of those that operate with government enables it to prohibit all things hurtful to the comfort, safety, and welfare of
licenses or authorities. society."14

But "illegal recruitment" as defined in Section 6 is clear and unambiguous The Manila RTC also invalidated Section 9 of R.A. 8042 on the ground that
and, contrary to the RTCs finding, actually makes a distinction between allowing the offended parties to file the criminal case in their place of
licensed and non-licensed recruiters. By its terms, persons who engage in residence would negate the general rule on venue of criminal cases which
"canvassing, enlisting, contracting, transporting, utilizing, hiring, or is the place where the crime or any of its essential elements were
procuring workers" without the appropriate government license or committed. Venue, said the RTC, is jurisdictional in penal laws and, allowing
authority are guilty of illegal recruitment whether or not they commit the the filing of criminal actions at the place of residence of the offended
wrongful acts enumerated in that section. On the other hand, recruiters parties violates their right to due process. Section 9 provides:
who engage in the canvassing, enlisting, etc. of OFWs, although with the
appropriate government license or authority, are guilty of illegal
recruitment only if they commit any of the wrongful acts enumerated in SEC. 9. Venue. A criminal action arising from illegal recruitment as
Section 6. defined herein shall be filed with the Regional Trial Court of the province or
city where the offense was committed or where the offended party actually
resides at the time of the commission of the offense: Provided, That the
The Manila RTC also declared Section 7 unconstitutional on the ground that court where the criminal action is first filed shall acquire jurisdiction to the
its sweeping application of the penalties failed to make any distinction as exclusion of other courts: Provided, however, That the aforestated
to the seriousness of the act committed for the application of the penalty provisions shall also apply to those criminal actions that have already been
imposed on such violation. As an example, said the trial court, the mere filed in court at the time of the effectivity of this Act.
failure to render a report under Section 6(h) or obstructing the inspection
by the Labor Department under Section 6(g) are penalized by
imprisonment for six years and one day and a minimum fine But there is nothing arbitrary or unconstitutional in Congress fixing an
of P200,000.00 but which could unreasonably go even as high as life alternative venue for violations of Section 6 of R.A. 8042 that differs from
imprisonment if committed by at least three persons. the venue established by the Rules on Criminal Procedure. Indeed, Section
15(a), Rule 110 of the latter Rules allows exceptions provided by laws. the award of actual damages but ruled that Becmens corporate directors
Thus: and officers are solidarily liable with their company for its failure to
investigate the true nature of her death. Becmen and White Falcon
SEC. 15. Place where action is to be instituted. (a) Subject to existing abandoned their legal, moral, and social duty to assist the Cuaresmas in
laws, the criminal action shall be instituted and tried in the court of the obtaining justice for their daughter. Consequently, the Court held the
municipality or territory where the offense was committed or where any of foreign employer Rajab and Silsilah, White Falcon, Becmen, and the latters
its essential ingredients occurred. (Emphasis supplied) corporate directors and officers jointly and severally liable to the
Cuaresmas for: 1) P2,500,000.00 as moral damages; 2) P2,500,000.00 as
exemplary damages; 3) attorneys fees of 10% of the total monetary
xxxx award; and 4) cost of suit.

Section 9 of R.A. 8042, as an exception to the rule on venue of criminal On July 16, 2009 the corporate directors and officers of Becmen, namely,
actions is, consistent with that laws declared policy 15 of providing a Eufrocina Gumabay, Elvira Taguiam, Lourdes Bonifacio and Eddie De
criminal justice system that protects and serves the best interests of the Guzman (Gumabay, et al.) filed a motion for leave to Intervene. They
victims of illegal recruitment. questioned the constitutionality of the last sentence of the second
paragraph of Section 10, R.A. 8042 which holds the corporate directors,
G.R. 167590, G.R. 182978-79, 16 and G.R. 184298-9917 officers and partners jointly and solidarily liable with their company for
money claims filed by OFWs against their employers and the recruitment
(Constitutionality of Section 10, last sentence of 2nd paragraph) firms. On September 9, 2009 the Court allowed the intervention and
admitted Gumabay, et al.s motion for reconsideration.
G.R. 182978-79 and G.R. 184298-99 are consolidated cases. Respondent
spouses Simplicio and Mila Cuaresma (the Cuaresmas) filed a claim for The key issue that Gumabay, et al. present is whether or not the 2nd
death and insurance benefits and damages against petitioners Becmen paragraph of Section 10, R.A. 8042, which holds the corporate directors,
Service Exporter and Promotion, Inc. (Becmen) and White Falcon Services, officers, and partners of recruitment and placement agencies jointly and
Inc. (White Falcon) for the death of their daughter Jasmin Cuaresma while solidarily liable for money claims and damages that may be adjudged
working as staff nurse in Riyadh, Saudi Arabia. against the latter agencies, is unconstitutional.

The Labor Arbiter (LA) dismissed the claim on the ground that the In G.R. 167590 (the PASEI case), the Quezon City RTC held as
Cuaresmas had already received insurance benefits arising from their unconstitutional the last sentence of the 2nd paragraph of Section 10 of
daughters death from the Overseas Workers Welfare Administration R.A. 8042. It pointed out that, absent sufficient proof that the corporate
(OWWA). The LA also gave due credence to the findings of the Saudi officers and directors of the erring company had knowledge of and allowed
Arabian authorities that Jasmin committed suicide. the illegal recruitment, making them automatically liable would violate
their right to due process of law.
On appeal, however, the National Labor Relations Commission (NLRC)
found Becmen and White Falcon jointly and severally liable for Jasmins The pertinent portion of Section 10 provides:
death and ordered them to pay the Cuaresmas the amount of
US$113,000.00 as actual damages. The NLRC relied on the Cabanatuan SEC. 10. Money Claims. x x x
City Health Offices autopsy finding that Jasmin died of criminal violence
and rape. The liability of the principal/employer and the recruitment/placement
agency for any and all claims under this section shall be joint and several.
Becmen and White Falcon appealed the NLRC Decision to the Court of This provision shall be incorporated in the contract for overseas
Appeals (CA).18 On June 28, 2006 the CA held Becmen and White Falcon employment and shall be a condition precedent for its approval. The
jointly and severally liable with their Saudi Arabian employer for actual performance bond to be filed by the recruitment/placement agency, as
damages, with Becmen having a right of reimbursement from White Falcon. provided by law, shall be answerable for all money claims or damages that
Becmen and White Falcon appealed the CA Decision to this Court. may be awarded to the workers. If the recruitment/placement agency is a
juridical being, the corporate officers and directors and partners as the
On April 7, 2009 the Court found Jasmins death not work-related or work- case may be, shall themselves be jointly and solidarily liable with the
connected since her rape and death did not occur while she was on duty at corporation or partnership for the aforesaid claims and damages.
the hospital or doing acts incidental to her employment. The Court deleted (Emphasis supplied)
But the Court has already held, pending adjudication of this case, that the petitioner submitted its apprenticeship program for approval to the
liability of corporate directors and officers is not automatic. To make them Technical Education and Skills Development Authority (TESDA) of the
jointly and solidarily liable with their company, there must be a finding that Department of Labor and Employment (DOLE). On 26 September 1997, the
they were remiss in directing the affairs of that company, such as TESDA approved petitioners apprenticeship program.4
sponsoring or tolerating the conduct of illegal activities. 19 In the case of
Becmen and White Falcon,20 while there is evidence that these companies According to petitioner, a performance evaluation was conducted on 15
were at fault in not investigating the cause of Jasmins death, there is no November 1997, where petitioner gave Palad a rating of N.I. or "needs
mention of any evidence in the case against them that intervenors improvement" since she scored only 27.75% based on a 100%
Gumabay, et al., Becmens corporate officers and directors, were performance indicator. Furthermore, according to the performance
personally involved in their companys particular actions or omissions in evaluation, Palad incurred numerous tardiness and absences. As a
Jasmins case. consequence, petitioner issued a termination notice 5 dated 22 November
1997 to Palad, informing her of her termination effective at the close of
As a final note, R.A. 8042 is a police power measure intended to regulate business hours of 28 November 1997.
the recruitment and deployment of OFWs. It aims to curb, if not eliminate,
the injustices and abuses suffered by numerous OFWs seeking to work Palad then filed a complaint for illegal dismissal, underpayment of wages,
abroad. The rule is settled that every statute has in its favor the and non-payment of pro-rated 13th month pay for the year 1997.
presumption of constitutionality. The Court cannot inquire into the wisdom
or expediency of the laws enacted by the Legislative Department. Hence,
in the absence of a clear and unmistakable case that the statute is On 25 February 1999, the Labor Arbiter dismissed the complaint for lack of
unconstitutional, the Court must uphold its validity. merit but ordered petitioner to pay Palad her last salary and her pro-rated
13th month pay. The dispositive portion of the Labor Arbiters decision
reads:
WHEREFORE, in G.R. 152642 and 152710, the Court DISMISSES the
petitions for having become moot and academic.1wphi1
WHEREFORE, premises considered, judgment is hereby rendered declaring
that the complaint for illegal dismissal filed by the complainant against the
In G.R. 167590, the Court SETS ASIDE the Decision of the Regional Trial respondents in the above-entitled case should be, as it is hereby
Court ofManila dated December 8, 2004 and DECLARES Sections 6, 7, and DISMISSED for lack of merit. However, the respondents are hereby ordered
9 of Republic Act 8042 valid and constitutional. to pay the complainant the amount of ONE THOUSAND SIX HUNDRED
THIRTY-TWO PESOS (P1,632.00), representing her last salary and the
In G.R. 182978-79 and G.R. 184298-99 as well as in G.R. 167590, the Court amount of SEVEN THOUSAND TWO HUNDRED TWENTY EIGHT (P7,228.00)
HOLDS the last sentence of the second paragraph of Section 10 of Republic PESOS representing her prorated 13th month pay.
Act 8042 valid and constitutional. The Court, however, RECONSIDERS and
SETS ASIDE the portion of its Decision in G.R. 182978-79 and G.R. 184298- All other issues are likewise dismissed.
99 that held intervenors Eufrocina Gumabay, Elvira Taguiam, Lourdes
Bonifacio, and Eddie De Guzman jointly and solidarily liable with
respondent Becmen Services Exporter and Promotion, Inc. to spouses SO ORDERED.6
Simplicia and Mila Cuaresma for lack of a finding in those cases that such
intervenors had a part in the act or omission imputed to their corporation. On appeal, the National Labor Relations Commission (NLRC) affirmed with
modification the Labor Arbiters decision, thus:
SO ORDERED.
WHEREFORE, premises considered, the decision of the Arbiter dated 25
Century Canning Corp v CA February 1999 is hereby MODIFIED in that, in addition, respondents are
ordered to pay complainants backwages for two (2) months in the amount
ofP7,176.00 (P138.75 x 26 x 2 mos.). All other dispositions of the Arbiter as
The Facts appearing in the dispositive portion of his decision are AFFIRMED.

On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. SO ORDERED.7


Palad (Palad) as "fish cleaner" at petitioners tuna and sardines factory.
Palad signed on 17 July 1997 an apprenticeship agreement 3 with petitioner.
Palad received an apprentice allowance of P138.75 daily. On 25 July 1997, Upon denial of Palads motion for reconsideration, Palad filed a special civil
action for certiorari with the Court of Appeals. On 12 November 2001, the
Court of Appeals rendered a decision, the dispositive portion of which 2. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE
reads: ERROR IN HOLDING THAT PETITIONER HAD NOT ADEQUATELY
PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING THE
WHEREFORE, in view of the foregoing, the questioned decision of the NLRC SERVICE OF PRIVATE RESPONDENT.10
is hereby SET ASIDE and a new one entered, to wit:
The Ruling of the Court
(a) finding the dismissal of petitioner to be illegal;
The petition is without merit.
(b) ordering private respondent to pay petitioner her
underpayment in wages; Registration and Approval by the TESDA of Apprenticeship Program
Required Before Hiring of Apprentices
(c) ordering private respondent to reinstate petitioner to her former
position without loss of seniority rights and to pay her full The Labor Code defines an apprentice as a worker who is covered by a
backwages computed from the time compensation was withheld written apprenticeship agreement with an employer. 11 One of the
from her up to the time of her reinstatement; objectives of Title II (Training and Employment of Special Workers) of the
Labor Code is to establish apprenticeship standards for the protection of
(d) ordering private respondent to pay petitioner attorneys fees apprentices.12 In line with this objective, Articles 60 and 61 of the Labor
equivalent to ten (10%) per cent of the monetary award herein; Code provide:
and
ART. 60. Employment of apprentices. Only employers in the highly
(e) ordering private respondent to pay the costs of the suit. technical industries may employ apprentices and only in apprenticeable
occupations approved by the Minister of Labor and Employment. (Emphasis
supplied)
SO ORDERED.8
ART. 61. Contents of apprenticeship agreements. Apprenticeship
The Ruling of the Court of Appeals agreements, including the wage rates of apprentices, shall conform to the
rules issued by the Minister of Labor and Employment. The period of
The Court of Appeals held that the apprenticeship agreement which Palad apprenticeship shall not exceed six months. Apprenticeship agreements
signed was not valid and binding because it was executed more than two providing for wage rates below the legal minimum wage, which in no case
months before the TESDA approved petitioners apprenticeship program. shall start below 75 percent of the applicable minimum wage, may be
The Court of Appeals cited Nitto Enterprises v. National Labor Relations entered into only in accordance with apprenticeship programs duly
Commission,9 where it was held that prior approval by the DOLE of the approved by the Minister of Labor and Employment. The Ministry shall
proposed apprenticeship program is a condition sine qua non before an develop standard model programs of apprenticeship. (Emphasis supplied)
apprenticeship agreement can be validly entered into.
In Nitto Enterprises v. National Labor Relations Commission,13 the Court
The Court of Appeals also held that petitioner illegally dismissed Palad. The cited Article 61 of the Labor Code and held that an apprenticeship program
Court of Appeals ruled that petitioner failed to show that Palad was should first be approved by the DOLE before an apprentice may be hired,
properly apprised of the required standard of performance. The Court of otherwise the person hired will be considered a regular employee. The
Appeals likewise held that Palad was not afforded due process because Court held:
petitioner did not comply with the twin requirements of notice and hearing.
In the case at bench, the apprenticeship agreement between petitioner
The Issues and private respondent was executed on May 28, 1990 allegedly
employing the latter as an apprentice in the trade of "care maker/molder."
Petitioner raises the following issues: On the same date, an apprenticeship program was prepared by petitioner
and submitted to the Department of Labor and Employment. However, the
apprenticeship agreement was filed only on June 7, 1990. Notwithstanding
1. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE the absence of approval by the Department of Labor and Employment, the
ERROR IN HOLDING THAT PRIVATE RESPONDENT WAS NOT AN apprenticeship agreement was enforced the day it was signed.
APPRENTICE; and
Based on the evidence before us, petitioner did not comply with the k) "Apprentice" is a person undergoing training for an approved
requirements of the law. It is mandated that apprenticeship agreements apprenticeable occupation during an established period assured by
entered into by the employer and apprentice shall be entered only in an apprenticeship agreement;
accordance with the apprenticeship program duly approved by the Minister
of Labor and Employment. l) "Apprentice Agreement" is a contract wherein a prospective
employer binds himself to train the apprentice who in turn accepts
Prior approval by the Department of Labor and Employment of the the terms of training for a recognized apprenticeable occupation
proposed apprenticeship program is, therefore, a condition sine qua non emphasizing the rights, duties and responsibilities of each party;
before an apprenticeship agreement can be validly entered into.
m) "Apprenticeable Occupation" is an occupation officially
The act of filing the proposed apprenticeship program with the Department endorsed by a tripartite body and approved for apprenticeship by
of Labor and Employment is a preliminary step towards its final approval the Authority [TESDA]; (Emphasis supplied)
and does not instantaneously give rise to an employer-apprentice
relationship. In this case, the apprenticeship agreement was entered into between the
parties before petitioner filed its apprenticeship program with the TESDA
Article 57 of the Labor Code provides that the State aims to "establish a for approval. Petitioner and Palad executed the apprenticeship agreement
national apprenticeship program through the participation of employers, on 17 July 1997 wherein it was stated that the training would start on 17
workers and government and non-government agencies" and "to establish July 1997 and would end approximately in December 1997. 17 On 25 July
apprenticeship standards for the protection of apprentices." To translate 1997, petitioner submitted for approval its apprenticeship program, which
such objectives into existence, prior approval of the DOLE to any the TESDA subsequently approved on 26 September 1997. 18 Clearly, the
apprenticeship program has to be secured as a condition sine qua non apprenticeship agreement was enforced even before the TESDA approved
before any such apprenticeship agreement can be fully enforced. The role petitioners apprenticeship program. Thus, the apprenticeship agreement is
of the DOLE in apprenticeship programs and agreements cannot be void because it lacked prior approval from the TESDA.
debased.
The TESDAs approval of the employers apprenticeship program is
Hence, since the apprenticeship agreement between petitioner and private required before the employer is allowed to hire apprentices. Prior approval
respondent has no force and effect in the absence of a valid apprenticeship from the TESDA is necessary to ensure that only employers in the highly
program duly approved by the DOLE, private respondents assertion that technical industries may employ apprentices and only in apprenticeable
he was hired not as an apprentice but as a delivery boy ("kargador" or occupations.19 Thus, under RA 7796, employers can only hire apprentices
"pahinante") deserves credence. He should rightly be considered as a for apprenticeable occupations which must be officially endorsed by a
regular employee of petitioner as defined by Article 280 of the Labor Code tripartite body and approved for apprenticeship by the TESDA.1avvphil This
x x x. (Emphasis supplied)14 is to ensure the protection of apprentices and to obviate possible abuses
by prospective employers who may want to take advantage of the lower
Republic Act No. 779615 (RA 7796), which created the TESDA, has wage rates for apprentices and circumvent the right of the employees to
transferred the authority over apprenticeship programs from the Bureau of be secure in their employment.
Local Employment of the DOLE to the TESDA. 16 RA 7796 emphasizes
TESDAs approval of the apprenticeship program as a pre-requisite for the The requisite TESDA approval of the apprenticeship program prior to the
hiring of apprentices. Such intent is clear under Section 4 of RA 7796: hiring of apprentices was further emphasized by the DOLE with the
issuance of Department Order No. 68-04 on 18 August 2004. Department
SEC. 4. Definition of Terms. As used in this Act: Order No. 68-04, which provides the guidelines in the implementation of
the Apprenticeship and Employment Program of the government,
specifically states that no enterprise shall be allowed to hire apprentices
xxx unless its apprenticeship program is registered and approved by TESDA.20

j) "Apprenticeship" training within employment with compulsory Since Palad is not considered an apprentice because the apprenticeship
related theoretical instructions involving acontract between an agreement was enforced before the TESDAs approval of petitioners
apprentice and an employer on an approved apprenticeable apprenticeship program, Palad is deemed a regular employee performing
occupation; the job of a "fish cleaner." Clearly, the job of a "fish cleaner" is necessary in
petitioners business as a tuna and sardines factory. Under Article 28021 of
the Labor Code, an employment is deemed regular where the employee to the typewritten position of "Division/Department Head", which is below
has been engaged to perform activities which are usually necessary or the signature of complainants immediate superior who made the
desirable in the usual business or trade of the employer. evaluation indicated as "11-15-97."

Illegal Termination of Palad The only conclusion We can infer is that this evaluation was made
belatedly, specifically, after the filing of the case and during the progress
We shall now resolve whether petitioner illegally dismissed Palad. thereof in the Arbitral level, as shown that nothing thereon indicate that
complainant was notified of the results. Its authenticity therefor, is a big
question mark, and hence lacks any credibility. Evidence, to be admissible
Under Article 27922 of the Labor Code, an employer may terminate the in administrative proceedings, must at least have a modicum of
services of an employee for just causes 23 or for authorized authenticity. This, respondents failed to comply with. As such, complainant
causes.24 Furthermore, under Article 277(b)25 of the Labor Code, the is entitled to the payment of her wages for the remaining two (2) months
employer must send the employee who is about to be terminated, a of her apprenticeship agreement.27 (Emphasis supplied)
written notice stating the causes for termination and must give the
employee the opportunity to be heard and to defend himself. Thus, to
constitute valid dismissal from employment, two requisites must concur: Indeed, it appears that the Labor Arbiters conclusion that petitioner validly
(1) the dismissal must be for a just or authorized cause; and (2) the terminated Palad was based mainly on the performance evaluation
employee must be afforded an opportunity to be heard and to defend allegedly conducted by petitioner. However, Palad alleges that she had no
himself.26 knowledge of the performance evaluation conducted and that she was not
even informed of the result of the alleged performance evaluation. Palad
also claims she did not receive a notice of dismissal, nor was she given the
In this case, the Labor Arbiter held that petitioner terminated Palad for chance to explain. According to petitioner, Palad did not receive the
habitual absenteeism and poor efficiency of performance. Under Section termination notice because Palad allegedly stopped reporting for work after
25, Rule VI, Book II of the Implementing Rules of the Labor Code, habitual being informed of the result of the evaluation.
absenteeism and poor efficiency of performance are among the valid
causes for which the employer may terminate the apprenticeship
agreement after the probationary period. Under Article 227 of the Labor Code, the employer has the burden of
proving that the termination was for a valid or authorized
cause.28 Petitioner failed to substantiate its claim that Palad was
However, the NLRC reversed the finding of the Labor Arbiter on the issue of terminated for valid reasons. In fact, the NLRC found that petitioner failed
the legality of Palads termination: to prove the authenticity of the performance evaluation which petitioner
claims to have conducted on Palad, where Palad received a performance
As to the validity of complainants dismissal in her status as an apprentice, rating of only 27.75%. Petitioner merely relies on the performance
suffice to state that the findings of the Arbiter that complainant was evaluation to prove Palads inefficiency. It was likewise not shown that
dismissed due to failure to meet the standards is nebulous. What clearly petitioner ever apprised Palad of the performance standards set by the
appears is that complainant already passed the probationary status of the company. When the alleged valid cause for the termination of employment
apprenticeship agreement of 200 hours at the time she was terminated on is not clearly proven, as in this case, the law considers the matter a case of
28 November 1997 which was already the fourth month of the illegal dismissal.29
apprenticeship period of 1000 hours. As such, under the Code, she can
only be dismissed for cause, in this case, for poor efficiency of performance Furthermore, Palad was not accorded due process. Even if petitioner did
on the job or in the classroom for a prolonged period despite warnings duly conduct a performance evaluation on Palad, petitioner failed to warn Palad
given to the apprentice. of her alleged poor performance. In fact, Palad denies any knowledge of
the performance evaluation conducted and of the result thereof. Petitioner
We noted that no clear and sufficient evidence exist to warrant her likewise admits that Palad did not receive the notice of
dismissal as an apprentice during the agreed period. Besides the absence termination30 because Palad allegedly stopped reporting for work. The
of any written warnings given to complainant reminding her of "poor records are bereft of evidence to show that petitioner ever gave Palad the
performance," respondents evidence in this respect consisted of an opportunity to explain and defend herself. Clearly, the two requisites for a
indecipherable or unauthenticated xerox of the performance evaluation valid dismissal are lacking in this case.
allegedly conducted on complainant. This is of doubtful authenticity and/or
credibility, being not only incomplete in the sense that appearing thereon
is a signature (not that of complainant) side by side with a date indicated
as "1/16/98". From the looks of it, this signature is close to and appertains
WHEREFORE, we AFFIRM the Decision dated 12 November 2001 and the -and-
Resolution dated 5 April 2002 of the Court of Appeals in CA-G.R. SP No.
60379. , years old, of legal age, , and residing at
(hereinafter referred to as the ("EMPLOYEE").
SO ORDERED.
WITNESSETH : That
Bernardo v NLRC
WHEREAS, the BANK, cognizant of its social responsibility, realizes that
The Magna Carta for Disabled Persons mandates that qualified disabled there is a need to provide disabled and handicapped persons gainful
persons be granted the same terms and conditions of employment as employment and opportunities to realize their potentials, uplift their socio-
qualified able-bodied employees. Once they have attained the status of economic well being and welfare and make them productive, self-reliant
regular workers, they should be accorded all the benefits granted by law, and useful citizens to enable them to fully integrate in the mainstream of
notwithstanding written or verbal contracts to the contrary. This treatments society;
is rooted not merely on charity or accomodation, but on justice for all.
WHEREAS, there are certain positions in the BANK which may be filled-up
The Case by disabled and handicapped persons, particularly deaf-mutes, and the
BANK ha[s] been approached by some civic-minded citizens and authorized
Challenged in the Petition for Certiorari 1 before us is the June 20, 1995 government agencies [regarding] the possibility of hiring handicapped
Decision 2 of the National Labor Relations Commission (NLRC), 3 which workers for these positions;
affirmed the August, 22 1994 ruling of Labor Arbiter Cornelio L. Linsangan.
The labor arbiter's Decision disposed as follows: 4 WHEREAS, the EMPLOYEE is one of those handicapped workers who [were]
recommended for possible employment with the BANK;
WHEREFORE, judgment is hereby rendered dismissing the
above-mentioned complaint for lack of merit. NOW, THEREFORE, for and in consideration of the foregoing premises and
in compliance with Article 80 of the Labor Code of the Philippines as
Also assailed is the August 4, 1995 Resolution 5
of the NLRC, which denied amended, the BANK and the EMPLOYEE have entered into this Employment
the Motion for Reconsideration. Contract as follows:

The Facts 1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE
agrees to diligently and faithfully work with the BANK, as Money
Sorter and Counter.
The facts were summarized by the NLRC in this wise: 6

2. The EMPLOYEE shall perform among others, the following duties and
Complainants numbering 43 (p. 176, Records) are deaf-mutes who were responsibilities:
hired on various periods from 1988 to 1993 by respondent Far East Bank
and Trust Co. as Money Sorters and Counters through a uniformly worded
agreement called "Employment Contract for Handicapped Workers". (pp. i. Sort out bills according to color;
68 & 69, Records) The full text of said agreement is quoted below:
ii. Count each denomination per hundred, either manually or with the aid of
EMPLOYMENT CONTRACT FOR HANDICAPPED WORKERS a counting machine;

This Contract, entered into by and between: iii. Wrap and label bills per hundred;

FAR EAST BANK AND TRUST COMPANY, a universal banking corporation iv. Put the wrapped bills into bundles; and
duly organized and existing under and by virtue of the laws of the
Philippines, with business address at FEBTC Building, Muralla, Intramuros, v. Submit bundled bills to the bank teller for verification.
Manila, represented herein by its Assistant Vice President, MR. FLORENDO
G. MARANAN, (hereinafter referred to as the "BANK");
3. The EMPLOYEE shall undergo a training period of one (1) month, after IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s]
which the BANK shall determine whether or not he/she should be allowed this day of , at Intramuros, Manila, Philippines.
to finish the remaining term of this Contract.
In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989
4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 another two (2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6) and
per day, subject to adjustment in the sole judgment of the BANK, payable in 1993, twenty-one (21). Their employment[s] were renewed every six
every 15th and end of the month.1wphi1.nt months such that by the time this case arose, there were fifty-six (56) deaf-
mutes who were employed by respondent under the said employment
5. The regular work schedule of the EMPLOYEE shall be five (5) days per agreement. The last one was Thelma Malindoy who was employed in 1992
week, from Mondays thru Fridays, at eight (8) hours a day. The EMPLOYEE and whose contract expired on July 1993.
may be required to perform overtime work as circumstance may warrant,
for which overtime work he/she [shall] be paid an additional compensation Disclaiming that complainants were regular employees, respondent Far
of 125% of his daily rate if performed during ordinary days and 130% if East Bank and Trust Company maintained that complainants who are a
performed during Saturday or [a] rest day. special class of workers the hearing impaired employees were hired
temporarily under [a] special employment arrangement which was a result
6. The EMPLOYEE shall likewise be entitled to the following benefits: of overtures made by some civic and political personalities to the
respondent Bank; that complainant[s] were hired due to "pakiusap" which
must be considered in the light of the context career and working
i. Proportionate 13th monthpay based on his basic daily wage. environment which is to maintain and strengthen a corps of professionals
trained and qualified officers and regular employees who are baccalaureate
ii. Five (5) days incentive leave. degree holders from excellent schools which is an unbending policy in the
hiring of regular employees; that in addition to this, training continues so
iii. SSS premium payment. that the regular employee grows in the corporate ladder; that the idea of
hiring handicapped workers was acceptable to them only on a special
arrangement basis; that it was adopted the special program to help tide
7. The EMPLOYEE binds himself/herself to abide [by] and comply with all over a group of workers such as deaf-mutes like the complainants who
the BANK Rules and Regulations and Policies, and to conduct could do manual work for the respondent Bank; that the task of counting
himself/herself in a manner expected of all employees of the BANK. and sorting of bills which was being performed by tellers could be assigned
to deaf-mutes that the counting and sorting of money are tellering works
8. The EMPLOYEE acknowledges the fact that he/she had been employed which were always logically and naturally part and parcel of the tellers'
under a special employment program of the BANK, for which reason the normal functions; that from the beginning there have been no separate
standard hiring requirements of the BANK were not applied in his/her case. items in the respondent Bank plantilla for sortes or counters; that the
Consequently, the EMPLOYEE acknowledges and accepts the fact that the tellers themselves already did the sorting and counting chore as a regular
terms and conditions of the employment generally observed by the BANK feature and integral part of their duties (p. 97, Records); that through the
with respect to the BANK's regular employee are not applicable to the "pakiusap" of Arturo Borjal, the tellers were relieved of this task of counting
EMPLOYEE, and that therefore, the terms and conditions of the EMPLOYEE's and sorting bills in favor of deaf-mutes without creating new positions as
employment with the BANK shall be governed solely and exclusively by this there is no position either in the respondent or in any other bank in the
Contract and by the applicable rules and regulations that the Department Philippines which deals with purely counting and sorting of bills in banking
of Labor and Employment may issue in connection with the employment operations.
ofdisabled and handicapped workers. More specifically, the EMPLOYEE
hereby acknowledges that the provisions of Book Six of the Labor Code of Petitioners specified when each of them was hired and dimissed, viz: 7

the Philippines as amended, particularly on regulation of employment and


separation pay are not applicable to him/her
As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against
herein petitioners. Hence, this recourse to this Court. 9
9. The Employment Contract shall be for a period of six (6) months or from
to unless earlier terminated by the BANK for any just or
reasonable cause. Any continuation or extension of this Contract shall be in The Ruling of the NLRC
writing and therefore this Contract will automatically expire at the end of
its terms unless renewed in writing by the BANK.
In affirming the ruling of the labor arbiter that herein petitioners could not Respondent Far East Bank and Trust Company argues that a review of the
be deemed regular employees under Article 280 of the Labor Code, as findings of facts of the NLRC is not allowed in a petition for certiorari.
amended, Respondent Commission ratiocinated as follows: Specifically, it maintains that the Court cannot pass upon the findings of
public respondent that petitioners were not regular employees.
We agree that Art. 280 is not controlling herein. We give due credence to
the conclusion that complainants were hired as an accommodation to [the] True, the Court, as a rule, does not review the factual findings of public
recommendation of civic oriented personalities whose employment[s] were respondents in a certiorari proceeding. In resolving whether the petitioners
covered by . . . Employment Contract[s] with special provisions on duration have become regular employees, we shall not change the facts found by
of contract as specified under Art. 80. Hence, as correctly held by the Labor the public respondent. Our task is merely to determine whether the NLRC
Arbiter a quo, the terms of the contract shall be the law between the committed grave abuse of discretion in applying the law to the established
parties. 10 facts, as above-quoted from the assailed Decision.

The NLRC also declared that the Magna Carta for Disabled Persons was not Main Issue
applicable, "considering the prevailing circumstances/milieu of the case."
Are Petitioners Regular Employee?
Issues
Petitioners maintain that they should be considered regular employees,
In their Memorandum, petitioners cite the following grounds in support of because their task as money sorters and counters was necessary and
their cause: desirable to the business of respondent bank. They further allege that their
contracts served merely to preclude the application of Article 280 and to
I. The Honorable Commission committed grave abuse of discretion in bar them from becoming regular employees.
holding that the petitioners money sorters and counters working in a
bank were not regular employees. Private respondent, on the other hand, submits that petitioners were hired
only as "special workers and should not in any way be considered as part
II. The Honorable Commission committed grave abuse of discretion in of the regular complement of the Bank." 12 Rather, they were "special"
holding that the employment contracts signed and renewed by the workers under Article 80 of the Labor Code. Private respondent contends
petitioners which provide for a period of six (6) months were valid. that it never solicited the services of petitioners, whose employment was
merely an "accommodation" in response to the requests of government
officials and civic-minded citizens. They were told from the start, "with the
III. The Honorable Commission committed grave abuse of discretion in not assistance of government representatives," that they could not become
applying the provisions of the Magna Carta for the Disabled (Republic Act regular employees because there were no plantilla positions for "money
No. 7277), on proscription against discrimination against disabled sorters," whose task used to be performed by tellers. Their contracts were
persons. 11 renewed several times, not because of need "but merely for humanitarian
reasons." Respondent submits that "as of the present, the "special
In the main, the Court will resolve whether petitioners have become position" that was created for the petitioners no longer exist[s] in private
regular employees. respondent [bank], after the latter had decided not to renew anymore their
special employment contracts."
This Court's Ruling
At the outset, let it be known that this Court appreciates the nobility of
The petition is meritorious. However, only the employees, who worked for private respondent's effort to provide employment to physically impaired
more than six months and whose contracts were renewed are deemed individuals and to make them more productive members of society.
regular. Hence, their dismissal from employement was illegal. However, we cannot allow it to elude the legal consequences of that effort,
simply because it now deems their employment irrelevant. The facts,
viewed in light of the Labor Code and the Magna Carta for Disabled
Preliminary Matter: Persons, indubitably show that the petitioners, except sixteen of them,
should be deemed regular employees. As such, they have acquired legal
Propriety of Certiorari rights that this Court is duty-bound to protect and uphold, not as a matter
of compassion but as a consequence of law and justice.
The uniform employment contracts of the petitioners stipulated that they Sec. 5. Equal Opportunity for Employment. No disabled person shall be
shall be trained for a period of one month, after which the employer shall denied access to opportunities for suitable employment. A qualified
determine whether or not they should be allowed to finish the 6-month disabled employee shall be subject to the same terms and conditions of
term of the contract. Furthermore, the employer may terminate the employment and the same compensation, privileges, benefits, fringe
contract at any time for a just and reasonable cause. Unless renewed in benefits, incentives or allowances as a qualified able bodied person.
writing by the employer, the contract shall automatically expire at the end
of the term.1wphi1.nt The fact that the employees were qualified disabled persons necessarily
removes the employment contracts from the ambit of Article 80. Since the
According to private respondent, the employment contracts were prepared Magna Carta accords them the rights of qualified able-bodied persons, they
in accordance with Article 80 of the Labor code, which provides; are thus covered by Article 280 of the Labor Code, which provides:

Art. 80. Employment agreement. Any employer who employs Art. 280. Regular and Casual Employment. The provisions of written
handicapped workers shall enter into an employment agreement with agreement to the contrary notwithstanding and regardless of the oral
them, which agreement shall include: agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
(a) The names and addresses of the handicapped workers to be employed; usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been
(b) The rate to be paid the handicapped workers which shall be not less determined at the time of the engagement of the employee or where the
than seventy five (75%) per cent of the applicable legal minimum wage; work or services to be performed is seasonal in nature and the
employment is for the duration of the season.
(c) The duration of employment period; and
An employment shall be deemed to be casual if it is not covered by the
(d) The work to be performed by handicapped workers. preceding paragraph: Provided, That, any employee who has rendered at
least one year of service, whether such service is continuous or broken,
The employment agreement shall be subject to inspection by the Secretary shall be considered as regular employee with respect to the activity in
of Labor or his duly authorized representatives. which he is employed and his employment shall continue while such
activity exists.
The stipulations in the employment contracts indubitably conform with the
aforecited provision. Succeeding events and the enactment of RA No. 7277 The test of whether an employee is regular was laid down in De Leon
(the Magna Carta for Disabled Persons), 13 however, justify the application v. NLRC, 14 in which this Court held:
of Article 280 of the Labor Code.
The primary standard, therefore, of determining regular employment is the
Respondent bank entered into the aforesaid contract with a total of 56 reasonable connection between the particular activity performed by the
handicapped workers and renewed the contracts of 37 of them. In fact, two employee in relation to the usual trade or business of the employer. The
of them worked from 1988 to 1993. Verily, the renewal of the contracts of test is whether the former is usually necessary or desirable in the usual
the handicapped workers and the hiring of others lead to the conclusion business or trade of the employer. The connection can be determined by
that their tasks were beneficial and necessary to the bank. More important, considering the nature of the work performed and its relation to the
these facts show that they were qualified to perform the responsibilities of scheme of the particular business or trade in its entirety. Also if the
their positions. In other words, their disability did not render them employee has been performing the job for at least one year, even if the
unqualified or unfit for the tasks assigned to them. performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of
the necessity if not indispensibility of that activity to the business. Hence,
In this light, the Magna Carta for Disabled Persons mandates that a the employment is considered regular, but only with respect to such
qualified disabled employee should be given the same terms and activity, and while such activity exist.
conditions of employment as a qualified able-bodied person. Section 5 of
the Magna Carta provides:
Without a doubt, the task of counting and sorting bills is necessary and
desirable to the business of respondent bank. With the exception of sixteen
of them, petitioners performed these tasks for more than six months. Thus,
the following twenty-seven petitioners should be deemed regular limit imposed on their contracts, imposed by reason of their disability, was
employees: Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David a glaring instance of the very mischief sought to be addressed by the new
P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. law.
Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel
Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth Moreover, it must be emphasized that a contract of employment is
D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, impressed with public interest. 22 Provisions of applicable statutes are
Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, deemed written into the contract, and the "parties are not at liberty to
Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace insulate themselves and their relationships from the impact of labor laws
S. Pardo. and regulations by simply contracting with each other." 23 Clearly, the
agreement of the parties regarding the period of employment cannot
As held by the Court, "Articles 280 and 281 of the Labor Code put an end prevail over the provisions of the Magna Carta for Disabled Persons, which
to the pernicious practice of making permanent casuals of our lowly mandate that petitioners must be treated as qualified able-bodied
employees by the simple expedient of extending to them probationary employees.
appointments,ad infinitum." 15 The contract signed by petitioners is akin to
a probationary employment, during which the bank determined the Respondent's reason for terminating the employment of petitioners is
employees' fitness for the job. When the bank renewed the contract after instructive. Because the Bangko Sentral ng Pilipinas (BSP) required that
the lapse of the six-month probationary period, the employees thereby cash in the bank be turned over to the BSP during business hours from
became regular employees. 16 No employer is allowed to determine 8:00 a.m. to 5:00 p.m., respondent resorted to nighttime sorting and
indefinitely the fitness of its employees. counting of money. Thus, it reasons that this task "could not be done by
deaf mutes because of their physical limitations as it is very risky for them
As regular employees, the twenty-seven petitioners are entitled to security to travel at night." 24 We find no basis for this argument. Travelling at night
of tenure; that is, their services may be terminated only for a just or involves risks to handicapped and able-bodied persons alike. This excuse
authorized cause. Because respondent failed to show such cause, 17 these cannot justify the termination of their employment.
twenty-seven petitioners are deemed illegally dismissed and therefore
entitled to back wages and reinstatement without loss of seniority rights Other Grounds Cited by Respondent
and other privileges. 18 Considering the allegation of respondent that the
job of money sorting is no longer available because it has been assigned
back to the tellers to whom it originally belonged, 18 petitioners are hereby Respondent argues that petitioners were merely "accommodated"
awarded separation pay in lieu of reinstatement. 20 employees. This fact does not change the nature of their employment. As
earlier noted, an employee is regular because of the nature of work and
the length of service, not because of the mode or even the reason for
Because the other sixteen worked only for six months, they are not hiring them.
deemed regular employees and hence not entitled to the same benefits.
Equally unavailing are private respondent's arguments that it did not go
Applicability of the Brent Ruling out of its way to recruit petitioners, and that its plantilla did not contain
their positions. In L. T. Datu v. NLRC, 25 the Court held that "the
Respondent bank, citing Brent School v. Zamora 21 in which the Court determination of whether employment is casual or regular does not
upheld the validity of an employment contract with a fixed term, argues depend on the will or word of the employer, and the procedure of hiring . . .
that the parties entered into the contract on equal footing. It adds that the but on the nature of the activities performed by the employee, and to
petitioners had in fact an advantage, because they were backed by then some extent, the length of performance and its continued existence."
DSWD Secretary Mita Pardo de Tavera and Representative Arturo Borjal.
Private respondent argues that the petitioners were informed from the
We are not persuaded. The term limit in the contract was premised on the start that they could not become regular employees. In fact, the bank
fact that the petitioners were disabled, and that the bank had to determine adds, they agreed with the stipulation in the contract regarding this point.
their fitness for the position. Indeed, its validity is based on Article 80 of Still, we are not persuaded. The well-settled rule is that the character of
the Labor Code. But as noted earlier, petitioners proved themselves to employment is determined not by stipulations in the contract, but by the
be qualified disabled persons who, under the Magna Carta for Disabled nature of the work performed. 26 Otherwise, no employee can become
Persons, are entitled to terms and conditions of employment enjoyed regular by the simple expedient of incorporating this condition in the
by qualified able-bodied individuals; hence, Article 80 does not apply contract of employment.
because petitioners are qualified for their positions. The validation of the
In this light, we iterate our ruling in Romares v. NLRC: 27
Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert
Hallare, Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Liliberh
Art. 280 was emplaced in our statute books to prevent the circumvention Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino
of the employee's right to be secure in his tenure by indiscriminately and Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R.
completely ruling out all written and oral agreements inconsistent with the Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma
concept of regular employment defined therein. Where an employee has Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky
been engaged to perform activities which are usually necessary or Baloloa, Elizabeth Ventura and Grace S. Pardo. The NLRC is hereby directed
desirable in the usual business of the employer, such employee is deemed to compute the exact amount due each of said employees, pursuant to
a regular employee and is entitled to security of tenure notwithstanding existing laws and regulations, within fifteen days from the finality of this
the contrary provisions of his contract of employment. Decision. No costs.1wphi1.nt

xxx xxx xxx SO ORDERED.

At this juncture, the leading case of Brent School, Inc. v. Zamora proves
instructive. As reaffirmed in subsequent cases, this Court has upheld the
legality of fixed-term employment. It ruled that 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 the parties for the
commencement and termination of their employment relationship. But this
Court went on to say that where from the circumstances it is apparent that
the periods have been imposed to preclude acquisition of tenurial security
by the employee, they should be struck down or disregarded as contrary to
public policy and morals.

In rendering this Decision, the Court emphasizes not only the constitutional
bias in favor of the working class, but also the concern of the State for the
plight of the disabled. The noble objectives of Magna Carta for Disabled
Persons are not based merely on charity or accommodation, but on justice
and the equal treatment of qualifiedpersons, disabled or not. In the present
case, the handicap of petitioners (deaf-mutes) is not a hindrance to their
work. The eloquent proof of this statement is the repeated renewal of their
employment contracts. Why then should they be dismissed, simply
because they are physically impaired? The Court believes, that, after
showing their fitness for the work assigned to them, they should be treated
and granted the same rights like any other regular employees.

In this light, we note the Office of the Solicitor General's prayer joining the
petitioners' cause. 28

WHEREFORE, premises considered, the Petition is hereby GRANTED. The


June 20, 1995 Decision and the August 4, 1995 Resolution of the NLRC are
REVERSED and SET ASIDE. Respondent Far East Bank and Trust Company is
hereby ORDERED to pay back wages and separation pay to each of the
following twenty-seven (27) petitioners, namely, Marites Bernardo, Elvira

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