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ANGELES V NLRC

In this petition for certiorari, petitioner ASIAN CENTER FOR CAREER &
EMPLOYMENT SYSTEM & SERVICES, INC. (ACCESS) seeks to modify the monetary
awards against it in the Decision of respondent National Labor Relations Commission (NLRC),
dated October 14, 1997, a case for illegal dismissal.
The records disclose that petitioner hired respondent IBNO MEDIALES to work as a mason
in Jeddah, Saudi Arabia, with a monthly salary of 1,200 Saudi Riyals (SR). The term of his
contract was two (2) years, from February 28, 1995 until February 28, 1997.
On May 26, 1996, respondent applied with petitioner for vacation leave with pay which he
earned after working for more then a year. His application for leave was granted. While en route
to the Philippines, his co-workers informed him that he has been dismissed from service. The
information turned out to be true.
On June 17, 1996, respondent filed a complaint with the labor arbiter for illegal dismissal,
non-payment of overtime pay, refund of transportation fare, illegal deductions, non-payment of
13th month pay and salary for the unexpired portion of his employment contract.
On March 17, 1997, the labor arbiter found petitioner guilty of illegal
dismissal.[1] The dispositive portion reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered declaring the illegality
of complainants dismissal and ordering the respondent ACCESS and/or ABDULLAH
LELINA to pay the complainant the amount of SR 13,200 representing complainants
payment for the unexpired portion of his contract and refund of the illegality deducted
amount less P5,000.00, the legally allowed placement fee.
Respondent are further ordered to pay attorneys fees equivalent to ten percent (10%)
of the judgment award or the amount of SR 1,320, within ten (10) days from receipt
hereof.
All other issues are dismissed for lack of merit.
SO ORDERD. (emphasis supplied)
It is noteworthy, however, that in the body of his decision, the labor arbiter applied Section
10 R.A. 8042,[2] the law relative to the protection of Filipino overseas-workers, and computed
private respondents salary for the unexpired portion of his contract as follows: SR1,200 x 3 months
= SR3,600.
On appeal by petitioner, the NLRC affirmed the factual findings of the labor arbiter but
modified the appealed decision by deleting the order of refund of excessive placement fee for lack
of jurisdiction.[3]
Petitioner moved for reconsideration with respect to the labor arbiters award of SR13,200 in
the dispositive portion of the decision, representing respondents salary for the unexpired portion
of his contract. invoking Section 10 R.A. 8042. Petitioner urged that its liability for respondents
salary is for only three (3) months. Petitioner claimed that it should pay only SR 3.600 (SR 1,200
x 3 months) for the unexpired portion of respondents employment and SR360 (10% of SR3,600)
for attorneys fees.[4]
The NLRC denied petitioners motion. It ruled that R.A. 8042 does not apply as
respondents employment which started in February 1995 occurred prior to its effectivity on
July 15, 1995.[5]
Hence, this petition for certiorari.
In the case at bar, petitioners illegal dismissal from service is no longer disputed. Petitioner
merely impugns the monetary awards granted by the NLRC to private respondent. It submits that
although the unexpired portion of private respondents employment contract is eight (8)
months,[6] it is liable to pay respondent only three (3) months of his basic salary, pursuant to
Section 10 of R.A. 8042, or SR1,200 (monthly salary) multiplied by 3 months, for a total of
SR3,600. Petitioner claims that the NLRC erred in ruling that as private respondents employment
started only on February 28, 1995, R.A. 8042, which took effect on July 15, 1995, would not apply
to his case. Petitioner argues that it is not the date of employment but the date of dismissal which
should be considered in determining the applicability of R.A. 8042. Petitioner prays that the
award in the NLRC Decision dated October 14, 1997, be changed to SR3,600 instead of
13,200 and that the award of attorneys fees be deleted.
We affirm with modifications.
As a rule, jurisdiction is determined by the law at the time of the commencement of the
action.[7] In the case at bar, private respondents cause of action did not accrue on the date of his
date of his employment or on February 28, 1995. His cause of action arose only from the-time he
was illegally dismissed by petitioner from service in June 1996, after his vacation leave expired. It
is thus clear that R.A. 8042 which took effect a year earlier in July 1995 applies to the case
at bar.
Under Section 10 of R.A. 8042, a worker dismissed from overseas employment without just,
valid or authorized cause is entitled to his salary for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less.
In the case at bar, the unexpired portion of private respondents employment contract is eight
(8) months. Private respondent should therefore be paid his basic salary corresponding to
three (3) months or a total of SR3,600.[8]
We note that this same computation was made by the labor arbiter in the body of his
decision.[9] Despite said computation in the body of the decision, however, the labor arbiter
awarded higher sum (SR13,200) in the dispositive portion.
The general rule is that where there is a conflict between the dispositive portion or
the fallo and the body of the decision, the fallo controls. This rule rests on the theory that
the fallo is the final order while the opinion in the body is merely a statement ordering
nothing. However, where the inevitable conclusion from the body of the decision is so clear as
to show that there was a mistake in the dispositive portion, the body of the decision will
prevail.[10]
We find that the labor arbiters award of a higher amount in the dispositive portion was clearly
an error for there is nothing in the text of the decision which support the award of said higher
amount. We reiterate that the correct award to private respondent for the unexpired portion of his
employment contract is SR3,600.
We come now to the award of attorneys fees in favor of private respondent. Article 2208 of
the Civil Code allows attorneys fees to be awarded when its claimant is compelled to litigate with
third persons or to incur expenses to protect his interest by reason of an unjustified act or
omission of the party for whom it is sought. Moreover, attorneys fees are recoverable when there
is sufficient showing of bad faith.[11] The Labor Code,[12] on the other hand, fixes the attorneys
fees that may be recovered in an amount which should not exceed 10% of the total amount of
wages awarded.
In the case at bar, petitioners bad faith in dismissing private respondent is
manifest. Respondent was made to believe that he would be temporarily leaving Jeddah, Kingdom
of Saudi Arabia, for a 30-day vacation leave with pay. However, while on board the plane back to
the Philippines, his co-employees told him that he has been dismissed from his job as he was given
only a one-way plane ticket by petitioner. True enough, private respondent was not allowed to
return to his jobsite in Jeddah after his vacation leave. Thus, private respondent was compelled
to file an action for illegal dismissal with the labor arbiter and hence entitled to an award of
attorneys fees.
IN VIEW OF THE FOREGOING, the decision of the public respondent National Labor
Relations Commission, dated October 14, 1997, is AFFIRMED with modifications: petitioner is
ordered to pay private respondent IBNO MEDIALES the peso equivalent of the amounts of
SR3,600 for the unexpired portion of his employment contract, and SR360 for attorneys fees. No
costs.
SERRANO V. GALLANT MARITIME SERVICES,INC.

By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the Decision
and Resolution of the Court of Appeals (CA).
FACTS:

Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd.
(respondents) under a Philippine Overseas Employment Administration (POEA)-approved
Contract of Employment with the following terms and conditions:
Duration of contract 12 months
Position Chief Officer
Basic monthly salary US$1,400.00
Hours of work 48.0 hours per week
Overtime US$700.00 per month
Vacation leave with pay 7.00 days per month
On March 19, 1998, the date of his departure, petitioner was constrained to accept
a downgraded employment contract for the position of Second Officer with a monthly salary
of US$1,000.00, upon the assurance and representation of respondents that he would be made
Chief Officer by the end of April 1998.
Respondents did not deliver on their promise to make petitioner Chief Officer. Hence,
petitioner refused to stay on as Second Officer and was repatriated to the Philippines on
May 26, 1998.
Petitioner’s employment contract was for a period of 12 months or from March 19, 1998 up to
March 19, 1999, but at the time of his repatriation on May 26, 1998, he had
served only two (2) months and seven (7) days of his contract, leaving an
unexpired portion of nine (9) months and twenty-three (23) days.
Petitioner filed with the Labor Arbiter (LA) a Complaint against respondents
for constructive dismissal and for payment of his money claims in the total
amount of US$26,442.73.

The LA rendered a Decision dated July 15, 1999, declaring the dismissal of
petitioner illegal and awarding him monetary benefits, to wit:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of
the complainant (petitioner) by the respondents in the above-entitled case was illegal and the
respondents are hereby ordered to pay the complainant [petitioner], jointly
and severally, in Philippine Currency, based on the rate of exchange
prevailing at the time of payment, the amount of EIGHT THOUSAND SEVEN
HUNDRED SEVENTY U.S. DOLLARS (US $8,770.00), representing the
complainant’s salary for three (3) months of the unexpired portion of the
aforesaid contract of employment.
The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack
of merit.
In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his
computation on the salary period of three months only — rather than the
entire unexpired portion of nine months and 23 days of petitioner’s
employment contract – applying the subject clause. However, the LA applied
the salary rate of US$2,590.00, consisting of petitioner’s “[b]asic salary,
US$1,400.00/month + US$700.00/month, fixed overtime pay, +
US$490.00/month, vacation leave pay = US$2,590.00/compensation per
month.”

Respondents appealed to the National Labor Relations Commission (NLRC) to question the
finding of the LA that petitioner was illegally dismissed.
The NLRC modified the LA Decision and corrected the LA’s computation of the lump-sum salary
awarded to petitioner by reducing the applicable salary rate from US$2,590.00 to
US$1,400.00 because R.A. No. 8042 “does not provide for the award of
overtime pay, which should be proven to have been actually performed, and
for vacation leave pay.
Petitioner filed a Motion for Partial Reconsideration, but this time he
questioned the constitutionality of the subject clause. The NLRC denied the
motion.
Petitioner filed a Petition for Certiorari with the CA, reiterating the constitutional challenge against
the subject clause. After initially dismissing the petition on a technicality, the CA eventually gave
due course to it, as directed by this Court in its Resolution which granted the petition for
certiorari,filed by petitioner.
The CA affirmed the NLRC ruling on the reduction of the applicable salary
rate; however, the CA skirted the constitutional issue raised by petitioner.
His Motion for Reconsideration having been denied by the CA, petitioner brings his cause to this
Court on the following grounds:
The Court of Appeals and the labor tribunals have decided the case in a way not in accord with
applicable decision of the Supreme Court involving similar issue of granting unto the migrant
worker back wages equal to the unexpired portion of his contract of
employment instead of limiting it to three (3) months.
Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042,
the Court of Appeals gravely erred in law in excluding from petitioner’s award
the overtime pay and vacation pay provided in his contract since under the
contract they form part of his salary.
The Court now takes up the full merit of the petition mindful of the extreme importance of the
constitutional question raised therein.
ISSUES:

 Whether Section 10 (par 5) of RA 8042 is unconstitutional


 Proper computation of the Lump-sum salary to be awarded to petitioner by reason of
his illegal dismissal
 Whether the overtime and leave pay should form part of the salary basis in the
computation of his monetary award

The unanimous finding of the LA, NLRC and CA that the dismissal of
petitioner was illegal is not disputed. Likewise not disputed is the salary differential of
US$45.00 awarded to petitioner in all three fora.
Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at
the monthly rate of US$1,400.00 covering the period of three months out of the unexpired portion
of nine months and 23 days of his employment contract or a total of US$4,200.00.
Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the
US$4,200.00 awarded by the NLRC and the CA, he is entitled to US$21,182.23 more or
a total of US$25,382.23, equivalent to his salaries for the entire nine months
and 23 days left of his employment contract, computed at the monthly rate of
US$2,590.00.31
Arguments of the Petitioner
For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section
10, Republic Act (R.A.) No. 8042, violates the OFWs’ constitutional rights in that it impairs the
terms of their contract, deprives them of equal protection and denies them due process.
The Arguments of Respondents

Respondents contend that the constitutional issue should not be entertained, for this was belatedly
interposed by petitioner in his appeal before the CA, and not at the earliest opportunity, which was
when he filed an appeal before the NLRC.40
The Arguments of the Solicitor General

The Solicitor General (OSG)41 points out that as R.A. No. 8042 took effect on July 15, 1995, its
provisions could not have impaired petitioner’s 1998 employment contract. Rather, R.A. No. 8042
having preceded petitioner’s contract, the provisions thereof are deemed part of the minimum
terms of petitioner’s employment, especially on the matter of money claims, as this was not
stipulated upon by the parties.
The Court’s Ruling:

First Issue

Does the subject clause violate Section 1, Article III of the Constitution, and
Section 18, Article II and Section 3, Article XIII on Labor as protected sector?

The answer is in the affirmative.

Section 1, Article III of the Constitution guarantees:


No person shall be deprived of life, liberty, or property without due process of law nor shall any
person be denied the equal protection of the law.
Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without
distinction as to place of deployment, full protection of their rights and welfare.
To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate
to economic security and parity: all monetary benefits should be equally enjoyed by workers of
similar category, while all monetary obligations should be borne by them in equal degree; none
should be denied the protection of the laws which is enjoyed by, or spared the burden imposed on,
others in like circumstances.
Imbued with the same sense of “obligation to afford protection to labor,” the
Court in the present case also employs the standard of strict judicial scrutiny,
for it perceives in the subject clause a suspect classification prejudicial to
OFWs.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs.
However, a closer examination reveals that the subject clause has a discriminatory
intent against, and an invidious impact on OFWs
The subject clause does not state or imply any definitive governmental purpose; and it is for that
precise reason that the clause violates not just petitioner’s right to equal
protection, but also her right to substantive due process under Section 1,
Article III of the Constitution.
Second Issue

It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the
unexpired portions thereof, were treated alike in terms of the computation of their monetary
benefits in case of illegal dismissal. Their claims were subjected to a uniform rule of
computation: their basic salaries multiplied by the entire unexpired portion of
their employment contracts.
The enactment of the subject clause in R.A. No. 8042 introduced a
differentiated rule of computation of the money claims of illegally dismissed
OFWs based on their employment periods, in the process singling out one category
whose contracts have an unexpired portion of one year or more and subjecting them to the peculiar
disadvantage of having their monetary awards limited to their salaries for 3 months or for the
unexpired portion thereof, whichever is less, but all the while sparing the other category from such
prejudice, simply because the latter’s unexpired contracts fall short of one year.
Prior to R.A. No. 8042, a uniform system of computation of the monetary awards of illegally
dismissed OFWs was in place. This uniform system was applicable even to local
workers with fixed-term employment.
The subject clause does not state or imply any definitive governmental purpose; and it is for that
precise reason that the clause violates not just petitioner’s right to equal
protection, but also her right to substantive due process under Section 1,
Article III of the Constitution.
The subject clause being unconstitutional, petitioner is entitled to his
salaries for the entire unexpired period of nine months and 23 days of his
employment contract, pursuant to law and jurisprudence prior to the
enactment of R.A. No. 8042.

Third Issue

Petitioner contends that his overtime and leave pay should form part of the salary basis in the
computation of his monetary award, because these are fixed benefits that have been stipulated into
his contract.
Petitioner is mistaken.
The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like
petitioner, DOLE Department Order No. 33, series 1996, provides a Standard 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
compensation for all work “performed” in excess of the regular eight hours,
and holiday pay is compensation for any work “performed” on designated
rest days and holidays.
In the same vein, the claim for the day’s leave pay for the unexpired portion of the contract is
unwarranted since the same is given during the actual service of the seamen.
WHEREFORE, the Court GRANTS the Petition. The subject clause “or for
three months for every year of the unexpired term, whichever is less” in the
5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED
UNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005
Resolution of the Court of Appeals are MODIFIED to the effect that petitioner
is AWARDED his salaries for the entire unexpired portion of his employment
contract consisting of nine months and 23 days computed at the rate of
US$1,400.00 per month.

DEE C. CHUAN & SONS, INC., petitioner,


vs.
THE COURT OF INDUSTRIAL RELATIONS, CONGRESS OF LABOR
ORGANIZATIONS (CLO), KAISAHAN NG MGA MANGGAGAWA SA KAHOY SA
PILIPINAS and JULIAN LUMANOG AND HIS WORK-CONTRACT
LABORERS, respondents.

Quisumbing, Sycip and Quisumbing for petitioner.


Lazatin and Caballero for respondents.
Arsenio I. Martinez for the Court of Industrial Relations.

TUASON, J.:

Dee C. Chuan & Sons, Inc. assails the validity of an order of the Court of Industrial
Relations. The order made upon petitioner's request for authority to hire" about twelve(12)
more laborers from time to time and on a temporary basis," contains the proviso that "the
majority of the laborers to be employed should be native." The petition was filed pending
settlement by the court of a labor dispute between the petitioner and Kaisahan Ng Mga
Manggagawa sa Kahoy sa Pilipinas.

At the outset, the appellant takes exception to the finding of the court below that Dee C.
Chuan & Sons, Inc. is capitalized with foreign descent. This question has little or no
bearing on the case and may well be passed over except incidentally as a point of
argument in relation to the material issues.

It is next said that "The Court of Industrial Relations cannot intervene in questions of
selection of employees and workers so as to impose unconstitutional restrictions," and
that "The restrictions of the number of aliens that nay be employed in any business,
occupation, trade or profession of any kind, is a denial of the equal protection of the laws."
Although the brief does not name the persons who are supposed to be denied the equal
protection of the laws, it is clearly to be inferred that aliens in general are in petitioner's
mind. certainly, the order does not, directly or indirectly, immediately or remotely,
discriminate against the petitioner on account of race or citizenship. The order could have
been issued in a case in which the employer was a Filipino. As a matter of fact the
petitioner insists that 75 % of its shares of stock are held by Philippine citizens, a
statement which is here assumed to be correct.
But is petitioner entitled to challenge the constitutionality of a law or an order which does
not adversely affect it, in behalf of aliens who are prejudiced thereby? The answer is not
in doubt. An alien may question the constitutionality of a statute (or court order) only when
and so far as it is being, or is about to be, applied to his disadvantage. (16 C.J.S. 157 et
seq.) The prospective employees whom the petitioner may contemplate employing have
not come forward to seek redress; their identity has not even been revealed. Clearly the
petitioner has no case in so far as it strives to protect the rights of others, much less others
who are unknown and undetermined. U.S. vs. Wong Ku Ark, 169 U.S. 649;
Truax vs. Reich, 239 U.S. 39 60 Law ed., 131., and other American decisions cited do
not support the petitioner for the very simple reasons that in those cases it was the
persons themselves whose rights and immunities under the constitution were being
violated that invoked the protection of the courts.

The petitioner is within its legitimate sphere of interest when it complains that the
appealed order restrains it in its liberty to engage the men it pleases. This complaint merits
a more detailed examination.

That the employer's right to hire labor is not absolute has to be admitted. "This privilege
of hiring and firing ad libitumis, of course, being subjected to restraints today." Statutes
are cutting in on it. And so does Commonwealth Act No. 103. The regulations of the hours
of labor of employees and of the employment of women and children are familiar
examples of the limitation of the employer's right in this regard. The petitioner's request
for permission to employ additional; laborers is an implicit recognition of the correctness
of the proposition. The power of the legislature to make regulations is subject only to the
condition that they should be affected with public interest and reasonable under the
circumstances. The power may be exercised directly by the law-making body or
delegated by appropriate rules to the courts or administrative agencies.

We are of the opinion that the order under consideration meets the test of reasonableness
and public interest. The passage of Commonwealth Act No. 103 was "in conformity with
the constitutional objective and . . . the historical fact that industrial and agricultural
disputes have given rise to disquietude, bloodshed and revolution in our country."
(Antamok Goldfields Mining Co. vs. Court of Industrial Relations, 40 Off. Gaz., 8th Supp.,
173.)1 "Commonwealth Act No. 103 has precisely vested the Court of Industrial Relations
with authority to intervene in all disputes between employees or strikes arising from the
difference as regards wages, compensation, and other labor conditions which it may take
cognizance of." (Central Azucarera de Tarlac vs. Court of Industrial Relations, 40 Off.
Gaz., 3rd Supp., 319, 324.)2 Thus it has jurisdiction to determine the number of men to
be laid off during off-seasons. By the same token, the court may specify that a certain
proportion of the additional laborers to be employed should be Filipinos, if such condition,
in the court's opinion, "is necessary or expedient for the purpose of settling disputes or
doing justice to the parties."

The order in question has that specific end in view. In parallel view the court observed:
"Undoubtedly, without the admonition of the Court, nothing could prevent petitioner from
hiring purely alien laborers, and there is no gainsaying the fact that further conflict or
dispute would naturally ensue. To cope with this contingency, and acting within the
powers granted by the organic law, the court, believing in the necessity and expediency
of making patent its desire to avoid probable and possible further misunderstanding
between the parties, issued the order."

We are not prepared to declare that the order is not conducive to the aim pursued. The
question is a practical one depending on facts with which the court is best familiar. The
fact already noted should not be lost sight of — that there is a pending strike and besides,
that the employment of temporary laborers was opposed by the striking employees and
was the subject of a protracted hearing.

We can not agree with the petitioner that the order constitutes an unlawful intrusion into
the sphere of legislation, by attempting to lay down a public policy of the state or to settle
a political question. In the first place, we believe, as we have already explained, that the
court's action falls within the legitimate scope of its jurisdiction. In the second place, the
order does not formulate a policy and is not political in character. It is not a permanent,
all-embracing regulation. It is a compromise and emergency measure applicable only in
this case and calculated to bridge a temporary gap and to adjust conflicting interests in
an existing and menacing controversy. The hiring of Chinese laborers by the petitioner
was rightly considered by the court likely to lead the parties away from the reconciliation
which it was the function of the court to effectuate.

As far as the petitioner is concerned, the requirement that majority of the laborers to be
employed should be Filipinos is certain not arbitrary, unreasonable or unjust. The
petitioner's right to employ labor or to make contract with respect thereto is not
unreasonably curtailed and its interest is not jeopardized. We take it that the nationality
of the additional laborers to be taken in is immaterial to the petitioner. In its application for
permission to employ twelve temporary laborers it expressly says that these could be
Filipinos or Chinese. On the face of this statement, assuming the same to be sincere, the
petitioner objection to the condition imposed by the court would appear to be academic
and a trifle.

We should not close without adverting to the fact that the petitioner does not so much as
pretend that the hiring of additional laborers is its prerogative as a matter of right. It seems
to be conceded that during the pendency of the dispute the petitioner could employ
temporary laborers only with the permission of the Court of Industrial Relations. The
granting of the application thus lies within the sound judgment of the court, and if the court
could turn it down entirely, as we think it could, its authority to quality the permission
should be undeniable, provided only that the qualification is not arbitrary, against law,
morals, or established public policy, which it is not; it is an expedient and emergency step
designed to relieve petitioner's own difficulties. Also important to remember is that it is not
compulsory on petitioner's part to take advantage of the order. Being a permute petitioner
is the sole judge of whether it should take the order as it is, or leave it if it does not suit its
interest to hire new laborers other than Chinese.
The order appealed from is affirmed with costs to this appeal against the petitioner-
appellant.

Moran, C.J., Pablo, Padilla, and Torres, JJ., concur.

Separate Opinions

OZAETA, J., with whom concur PARAS, MONTEMAYOR, and


REYES, JJ., dissenting:

During the trial of an industrial dispute between the petitioner and the respondent labor
union, the former applied to the Court of Industrial Relations for authority "to hire about
twelve more laborers from time to time and on a temporary basis, to be chosen by the
petitioner from either Filipinos or Chinese." the court granted the authority applied for but
imposed as a condition that the majority of the twelve new laborers to be hired "should
be native and only a nominal percentage thereof alien." In imposing such condition the
court said:

The hiring of laborers who are not native or Filipino should be discouraged, as it is
being discouraged by this court. In these critical moments of unemployment, any
competition of alien and native labor would be destructive of our Nation that is in
the making. By the act of God, this nation is the Philippines, her soil is the
patrimony of the Filipino people, and in this Philippine soil the Filipino laborers must
have priority and preference. No capitalistic management can violate this written
law, unless it wants to court trouble and conflict. In the hiring, therefore, of laborers,
it is the opinion of this court that management, in employing aliens, should be
prudent and cautious and should, as much as possible, employ only a small
percentage thereof limited to those absolutely necessary and confidential.

The power of the Court of Industrial Relations to impose such condition as to limit the
authority of the employer to hire laborers than Filipinos is challenged by the petitioner.
"The petitioner is within its legitimate sphere of interest when it complains that the
appealed order restrains it in liberty to engage the men it pleases," says the majority
opinion, and we add — "regardless of race or nationality." It is true that no alien laborer
who may be adversely affected by the order has been made a party herein. Under the
circumstances of the case he could not be expected to have intervened in the incident
which gave rise to the order complained of. But his intervention is not necessary in order
to determine whether or not the Court of Industrial Relations is empowered by law to
impose the condition above mentioned. If the court has no power to discriminate against
a certain class of laborers on account of their race or nationality, it has no power to impose
the condition in question, and the employer has legitimate right to complain against such
imposition.
The Court of Industrial Relations impliedly admits the nonexistence of any statue
providing that Filipino laborers must be preferred over aliens; but it claims or adopts an
"unwritten law" to that effect and says that "no capitalistic management can violate this
unwritten law, unless it wants to court trouble and conflict." Who made such unwritten
law? Certainly the Congress of the Philippines, the only entity authorized by the
Constitution to make laws, and which does not promulgate unwritten laws, did not do so.
The court, therefore, cannot take cognizance of, and much less apply, such supposed
unwritten law.

It is sheer usurpation of legislative power for the court to enact or make laws. Its power is
confined to interpreting and applying the laws enacted by the legislature.

The case of Truax vs. Reich (600 law. ed., 131), which was decided by the Supreme
Court of the United States on November 1, 1915, is of pertinent and persuasive
application to the question at issue in that, in our opinion, it emphasizes the utter lack of
power of the court to impose the condition here complained of; for in said case Supreme
Court of the United States ruled that the Legislature of the State of Arizona could not
validly enact a law similar to the supposed unwritten law which the Court of Industrial
Relations has conceived and has tried to enforce. X

SEC. 1. Any company, corporation, partnership, association or individual who is,


may hereafter become, an employer of more than five (5) workers at any one time,
in the state of Arizona, regardless of kind or class of work, or sex of workers, shall
employ not less than (80) per cent qualified electors or native-born citizens of the
United States or some subdivision thereof.

SEC. 2. Any company, corporation, partnership, association or individual, their


agent or agents, found guilty of violating any of the provisions of this act shall be
subject to a fine of not less than one hundred ($100) dollars, and imprisoned for
not less than thirty (30) days.

Mike Raich, a native of Austria and an inhabitant of the State of Arizona, but not a qualified
elector, was employed as a cook by William Truax in his restaurant, where he had nine
employees, of whom seven were neither native-born citizens of the United States nor
qualified electors. After the passage of said law Raich was informed by his employer that
because of its requirements and because of the fear of the penalties that would be
incurred in case of its violation, he would be discharged. Thereupon Raich sued Truax
and the Attorney General of Arizona to enjoin them from enforcing the law on the ground
that it was unconstitutional because it denied him the equal protection of the laws. Both
the District Court and the Supreme Court of the United States upheld his contention. The
court said that the complainant was entitled under the Fourteenth Amendment to the
equal protection of the laws of Arizona. "These provisions," said the court, "are universal
in their application, to all person within the territorial jurisdiction, without regard to any
differences of race, of color, or of nationality; and the equal laws. . . . The discrimination
defined by the act does not pertain to the regulation or distribution of the public domain,
or of the common property or resources of the people of the state, the enjoyment of which
may be limited to its citizens as against both aliens and the citizens of other states." The
court said further:

It is sought to justify this act as an exercise of the power of the state to make
reasonable classifications in legislating to promote the health, safety, morals, and
welfare of those within its jurisdiction. But this admitted authority, with the broad
range of legislative discretion that it implies, does not go so far as to make it
possible for the state to deny to lawful inhabitants, because of their race or
nationality, the ordinary means of earning a livelihood. It requires no argument to
show that the right to work for a living in the common occupations of the community
is of the very essence of the personal freedom and opportunity that it was the
purpose of the Amendment to secure. . . . If this could be refused solely upon the
ground of race or nationality, the prohibition of the denial to any person of the equal
protection of the laws would be a barren form of words. It is no answer to say, as
it is argued, that the act proceeds upon the assumption that 'the employment of
aliens, unless restrained, was a peril to the public welfare. The discrimination
against aliens in the wide range of employments to which the acts relates is made
an end in itself, and thus the authority to deny to aliens, upon the mere fact of their
alienage, the right to obtain support in the ordinary fields of labor, is necessarily
involved.

Our own Constitution contains a provision similar to the Fourteenth Amendment to the
Constitution of the United States. Section 1 of Article III provides:

No person shall be deprived of life, liberty, or property without due process of law,
nor shall any person be denied the equal protection of the laws.

It is patent that if the lawmaking body itself cannot validly enact the supposed unwritten
law conceived or adopted by the lower court, much less could the latter do so.

Section 13 of Commonwealth Act No. 103, invoked by the trial court and by majority of
this court as authorizing the imposition of the discriminatory condition contained in the
order appealed from, reads as follows:

SEC. 13. Character of the award. — In making an award, order or decision, under
the provision of section four of this Act, the Court shall not be restricted to the
specific relief claimed or demands made by the parties to the industrial or
agricultural dispute, but may include in the award, order or decision any matter or
determination which may be deemed necessary or expedient for the purpose of
setting the dispute or of preventing further industrial or agricultural dispute.

As correctly stated by Judge Lanting of the lower court in his dissenting opinion:

The reference in the resolution of the majority to section 13 of Commonwealth Act


No. 103, authorizing this Court to include in its awards, orders or decisions "any
matter or determination which may be deemed necessary or expedient for the
purpose of setting the dispute or of preventing further . . . disputes", is farfetched.
This provision certainly does not authorize this Court to go beyond its prescribed
powers and issue an order which grossly violates the fundamental law. More
specifically, it cannot make any ruling which will produce the effect of discriminating
against and oppressing a person or class of persons and deny them the equal
protection of the laws, aside from curtailing their individual freedom and their right
to live.

As matter of fact the respondent labor union "manifested its conformity to the hiring of
additional laborers, provided that it be consulted by the petitioner and that it be given the
privilege of recommending the twelve new laborers that are to be hired." And Judge
Roldan in his order overruled that proposition by saying : "The stand taken by the
respondent labor union is not correct, because it attempts to encroach upon the
prerogative of the company to determine and adopt its own policy in the selection of its
employees and workers, and the Court should only intervene in questions of this nature
when there is discrimination or retaliation on the part of the company, which has not been
proven or even alleged in the case bar (Manila Trading & Supply Co. vs. Judge Francisco
Zulueta et al., G. R. No. 46853;1 Manila Chauffeurs League vs. Bachrach Motor Co., G.
R. No. 49138;2 Pampanga Bus Co. vs.Pampanga Bus Co. Employees' Union, G. R. No.
46739;3 National Labor Union vs. San Miguel Brewery, CIR case No. 26-V, June 12,
1947)."

Thus the Court of Industrial Relations itself correctly held that the respondent labor union
has no right to encroach upon the prerogative of the company to determine and adopt its
own policy in the selection of its employees and workers, and that the court itself should
not intervene in such selection because there was no proof of discrimination or retaliation
on the part of the company. Yet in the dispositive part of its order the court not only
intervenes in such selection but compels the company to discriminate against a certain
class of laborers. The inconsistency and illegality of the order appealed from are too
patent fro argument.

To hold that the Court of Industrial Relations may, under section 13, impose any condition
in its order or award in order to prevent further industrial disputes, regardless of whether
or not such condition is in violation of law or of the Constitution, is, in our opinion,
thinkable. It goes without saying that industrial dispute must be settled in accordance with
law and justice. Suppose that the members of a labor union should demand of an
employer that 80 per cent of the new laborers the latter may hire should be Filipinos, or
that all of them should be Tagalogs or Ilocanos, and should threaten to declare a strike
unless such demand be complied with; would the court be justified in granting such
demand under section 13 on the ground that by doing so it would prevent a or strike or
lockout and settle an industrial dispute? The negative answer can hardly be disputed,
since unreasonableness or illegal demands should not be countenanced by the court. Yet
the affirmance by this Court of the order appealed from in effect authorizes the Court of
Industrial Relations hereafter to commit such arbitrariness.
For the foregoing reasons, we vote to modify the appealed order by eliminating therefrom
the discriminatory condition in question.

FELICIANO, J.:

On 1 May 1989, the National Capital Region of the Department of Labor and Employment
issued Alien Employment Permit No. M-0689-3-535 in favor of petitioner Earl Timothy
Cone, a United States citizen, as sports consultant and assistant coach for petitioner
General Milling Corporation ("GMC").

On 27 December 1989, petitioners GMC and Cone entered into a contract of employment
whereby the latter undertook to coach GMC's basketball team.

On 15 January 1990, the Board of Special Inquiry of the Commission on Immigration and
Deportation approved petitioner Cone's application for a change of admission status from
temporary visitor to pre-arranged employee.

On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien


employment permit. GMC also requested that it be allowed to employ Cone as full-fledged
coach. The DOLE Regional Director, Luna Piezas, granted the request on 15 February
1990.

On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25


December 1990, was issued.

Private respondent Basketball Coaches Association of the Philippines ("BCAP") appealed


the issuance of said alien employment permit to the respondent Secretary of Labor who,
on 23 April 1990, issued a decision ordering cancellation of petitioner Cone's employment
permit on the ground that there was no showing that there is no person in the Philippines
who is competent, able and willing to perform the services required nor that the hiring of
petitioner Cone would redound to the national interest.

Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental Motions for
Reconsideration but said Motions were denied by Acting Secretary of Labor Bienvenido
E. Laguesma in an Order dated 8 June 1990.

Petitioners are now before the Court on a Petition for Certiorari, dated 14 June 1990,
alleging that:

1. respondent Secretary of Labor gravely abused his discretion when he revoked


petitioner Cone's alien employment permit; and

2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor
Code is null and void as it is in violation of the enabling law as the Labor Code
does not empower respondent Secretary to determine if the employment of an
alien would redound to national interest.
Deliberating on the present Petition for Certiorari, the Court considers that petitioners
have failed to show any grave abuse of discretion or any act without or in excess of
jurisdiction on the part of respondent Secretary of Labor in rendering his decision, dated
23 April 1990, revoking petitioner Cone's Alien Employment Permit.

The alleged failure to notify petitioners of the appeal filed by private respondent BCAP
was cured when petitioners were allowed to file their Motion for Reconsideration before
respondent Secretary of Labor.1

Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative has no
legal basis at all. Under Article 40 of the Labor Code, an employer seeking employment
of an alien must first obtain an employment permit from the Department of Labor.
Petitioner GMC's right to choose whom to employ is, of course, limited by the statutory
requirement of an alien employment permit.

Petitioners will not find solace in the equal protection clause of the Constitution. As
pointed out by the Solicitor-General, no comparison can be made between petitioner
Cone and Mr. Norman Black as the latter is "a long time resident of the country," and thus,
not subject to the provisions of Article 40 of the Labor Code which apply only to "non-
resident aliens." In any case, the term "non-resident alien" and its obverse "resident
alien," here must be given their technical connotation under our law on immigration.

Neither can petitioners validly claim that implementation of respondent Secretary's


decision would amount to an impairment of the obligations of contracts. The provisions of
the Labor Code and its Implementing Rules and Regulations requiring alien employment
permits were in existence long before petitioners entered into their contract of
employment. It is firmly settled that provisions of applicable laws, especially provisions
relating to matters affected with public policy, are deemed written into contracts.2 Private
parties cannot constitutionally contract away the otherwise applicable provisions of law.

Petitioners' contention that respondent Secretary of Labor should have deferred to the
findings of Commission on Immigration and Deportation as to the necessity of employing
petitioner Cone, is, again, bereft of legal basis. The Labor Code itself specifically
empowers respondent Secretary to make a determination as to the availability of the
services of a "person in the Philippines who is competent, able and willing at the time of
application to perform the services for which an alien is desired." 3

In short, the Department of Labor is the agency vested with jurisdiction to determine the
question of availability of local workers. The constitutional validity of legal provisions
granting such jurisdiction and authority and requiring proof of non-availability of local
nationals able to carry out the duties of the position involved, cannot be seriously
questioned.

Petitioners apparently also question the validity of the Implementing Rules and
Regulations, specifically Section 6 (c), Rule XIV, Book I of the Implementing Rules, as
imposing a condition not found in the Labor Code itself. Section 6 (c), Rule XIV, Book I of
the Implementing Rules, provides as follows:

Section 6. Issuance of Employment Permit –– the Secretary of Labor may issue


an employment permit to the applicant based on:

a) Compliance by the applicant and his employer with the requirements of Section
2 hereof;

b) Report of the Bureau Director as to the availability or non-availability of any


person in the Philippines who is competent and willing to do the job for which the
services of the applicant are desired.

(c) His assessment as to whether or not the employment of the applicant will
redound to the national interest;

(d) Admissibility of the alien as certified by the Commission on Immigration and


Deportation;

(e) The recommendation of the Board of Investments or other appropriate


government agencies if the applicant will be employed in preferred areas of
investments or in accordance with the imperative of economic development;

xxx xxx xxx

(Emphasis supplied)

Article 40 of the Labor Code reads as follows:

Art. 40. Employment per unit of non-resident aliens. –– Any alien seeking
admission to the Philippines for employment purposes and any domestic or foreign
employer who desires to engage an alien for employment in the Philippines shall
obtain an employment permit from the Department of Labor.

The employment permit may be issued to a non-resident alien or to the applicant


employer after a determination of the non-availability of a person in the Philippines
who is competent, able and willing at the time of application to perform the services
for which the alien is desired.

For an enterprise registered in preferred areas of investments, said employment


permit may be issued upon recommendation of the government agency charged
with the supervision of said registered enterprise. (Emphasis supplied)

Petitioners apparently suggest that the Secretary of Labor is not authorized to take into
account the question of whether or not employment of an alien applicant would "redound
to the national interest" because Article 40 does not explicitly refer to such assessment.
This argument (which seems impliedly to concede that the relationship of basketball
coaching and the national interest is tenuous and unreal) is not persuasive. In the first
place, the second paragraph of Article 40 says: "[t]he employment permit may be issued
to a non-resident alien or to the applicant employer after a determination of the non-
availability of a person in the Philippines who is competent, able and willing at the time of
application to perform the services for which the alien is desired." The permissive
language employed in the Labor Code indicates that the authority granted involves the
exercise of discretion on the part of the issuing authority. In the second place, Article 12
of the Labor Code sets forth a statement of objectives that the Secretary of Labor should,
and indeed must, take into account in exercising his authority and jurisdiction granted by
the Labor Code,

Art. 12. Statement of Objectives. –– It is the policy of the State:

a) To promote and maintain a state of full employment through improved


manpower training, allocation and utilization;

xxx xxx xxx

c) To facilitate a free choice of available employment by persons seeking work in


conformity with the national interest;

d) To facilitate and regulate the movement of workers in conformity with the


national interest;

e) To regulate the employment of aliens, including the establishment of a


registration and/or work permit system;

xxx xxx xxx

Thus, we find petitioners' arguments on the above points of constitutional law too
insubstantial to require further consideration.1avvphi1

Petitioners have very recently manifested to this Court that public respondent Secretary
of Labor has reversed his earlier decision and has issued an Employment Permit to
petitioner Cone. Petitioners seek to withdraw their Petition for Certiorari on the ground
that it has become moot and academic.

While ordinarily this Court would dismiss a petition that clearly appears to have become
moot and academic, the circumstances of this case and the nature of the questions raised
by petitioners are such that we do not feel justified in leaving those questions
unanswered.4

Moreover, assuming that an alien employment permit has in fact been issued to petitioner
Cone, the basis of the reversal by the Secretary of Labor of his earlier decision does not
appear in the record. If such reversal is based on some view of constitutional law or labor
law different from those here set out, then such employment permit, if one has been
issued, would appear open to serious legal objections.

ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack of
merit. Costs against petitioners.

General Milling Corporation vs. Torres

196 SCRA 215 [G.R No. 9366, April 22, 1991]

FACTS:
Earl Timothy Cone is a US citizen, who was hired by General Milling as a sports consultant and
assistant coach. He possessed an alien employment permit which was changed to pre-arranged
employee by the Board of Special Inquiry of the Commission on Immigration and Deportation.
GMC requested that Cone’s employment permit be changed to a full-fledged coach, which was
contested by The Basketball Coaches Association of the Philippines. Alleging that GMC failed to
show that there is no competent person in the Philippines to do the coaching job. Secretary of
Labor cancelled Cone’s employment permit.

ISSUE:
Whether or not the Secretary of Labor act with grave abuse of discretion in revoking Cone’s Alien
Employment Permit?

HELD:
The Secretary of Labor did not act with grave abuse of discretion in revoking Cone’s Alien
Employment Permit. GMC’s claim that hiring of a foreign coach is an employer’s prerogative has
no legal basis. Under Section 40 of the Labor Code, an employer seeking employment of an alien
must first obtain an employment permit from the Department of labor.
GMC’s right to choose whom to employ is limited by the statutory requirement of an
employment permit. The Labor Code empowers the Labor Secretary to determine as to the
availability of the services of a “person in the Philippines who is competent, able and willing at
the time of the application to perform the services for which an alien is desired.” DOLE is the
agency vested with jurisdiction to determine the question of availability of local workers.

NITTO ENTERPRISES, petitioner,


vs.
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO CAPILI, respondents.

KAPUNAN, J.:
This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the
decision1 rendered by public respondent National Labor Relations Commission, which
reversed the decision of the Labor Arbiter.

Briefly, the facts of the case are as follows:

Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum
products, hired Roberto Capili sometime in May 1990 as an apprentice machinist, molder
and core maker as evidenced by an apprenticeship agreement 2 for a period of six (6)
months from May 28, 1990 to November 28, 1990 with a daily wage rate of P66.75 which
was 75% of the applicable minimum wage.

At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass
which he was working on, accidentally hit and injured the leg of an office secretary who
was treated at a nearby hospital.

Later that same day, after office hours, private respondent entered a workshop within the
office premises which was not his work station. There, he operated one of the power
press machines without authority and in the process injured his left thumb. Petitioner
spent the amount of P1,023.04 to cover the medication of private respondent.

The following day, Roberto Capili was asked to resign in a letter3 which reads:

Augus
t 2,
1990

Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa


kung papaano gamitin and "TOOL" sa pagbuhat ng salamin, sarili niyang
desisyon ang paggamit ng tool at may disgrasya at nadamay pa ang isang
sekretarya ng kompanya.

Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng
hapon siya ay pumasok sa shop na hindi naman sakop ng kanyang trabaho.
Pinakialaman at kinalikot ang makina at nadisgrasya niya ang kanyang
sariling kamay.

Nakagastos ang kompanya ng mga sumusunod:

Emergency and doctor fee P715.00


Medecines (sic) and others 317.04

Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang


matanggal ang tahi ng kanyang kamay.
Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at
ika-4 ng Agosto, 1990.

Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng


kanyang kamay, pagkatapos ng siyam na araw mula ika-2 ng Agosto.

Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang


resignasyon, kasama ng kanyang comfirmasyon at pag-ayon na ang lahat
sa itaas ay totoo.

Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking


pagkakasala sa hindi pagsunod sa alintuntunin ng kompanya.

(Sgd.)
Roberto
Capili
Roberto
Capili

On August 3, 1990 private respondent executed a Quitclaim and Release in favor of


petitioner for and in consideration of the sum of P1,912.79.4

Three days after, or on August 6, 1990, private respondent formally filed before the NLRC
Arbitration Branch, National Capital Region a complaint for illegal dismissal and payment
of other monetary benefits.

On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of
private respondent as valid and dismissing the money claim for lack of merit. The
dispositive portion of the ruling reads:

WHEREFORE, premises considered, the termination is valid and for cause,


and the money claims dismissed for lack of merit.

The respondent however is ordered to pay the complainant the amount of


P500.00 as financial assistance.

SO ORDERED.5

Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto
Capilian was valid. First, private respondent who was hired as an apprentice violated the
terms of their agreement when he acted with gross negligence resulting in the injury not
only to himself but also to his fellow worker. Second, private respondent had shown that
"he does not have the proper attitude in employment particularly the handling of machines
without authority and proper training.6
On July 26, 1993, the National Labor Relations Commission issued an order reversing
the decision of the Labor Arbiter, the dispositive portion of which reads:

WHEREFORE, the appealed decision is hereby set aside. The respondent


is hereby directed to reinstate complainant to his work last performed with
backwages computed from the time his wages were withheld up to the time
he is actually reinstated. The Arbiter of origin is hereby directed to further
hear complainant's money claims and to dispose them on the basis of law
and evidence obtaining.

SO ORDERED.7

The NLRC declared that private respondent was a regular employee of


petitioner by ruling thus:

As correctly pointed out by the complainant, we cannot understand how an


apprenticeship agreement filed with the Department of Labor only on June
7, 1990 could be validly used by the Labor Arbiter as basis to conclude that
the complainant was hired by respondent as a plain "apprentice" on May
28, 1990. Clearly, therefore, the complainant was respondent's regular
employee under Article 280 of the Labor Code, as early as May 28,1990,
who thus enjoyed the security of tenure guaranteed in Section 3, Article XIII
of our 1987 Constitution.

The complainant being for illegal dismissal (among others) it then behooves
upon respondent, pursuant to Art. 227(b) and as ruled in Edwin Gesulgon
vs. NLRC, et al. (G.R. No. 90349, March 5, 1993, 3rd Div., Feliciano, J.) to
prove that the dismissal of complainant was for a valid cause. Absent such
proof, we cannot but rule that the complainant was illegally dismissed.8

On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only private
respondent's representative was present.

On April 22, 1994, a Writ of Execution was issued, which reads:

NOW, THEREFORE, finding merit in [private respondent's] Motion for


Issuance of the Writ, you are hereby commanded to proceed to the
premises of [petitioner] Nitto Enterprises and Jovy Foster located at No. l
74 Araneta Avenue, Portero, Malabon, Metro Manila or at any other places
where their properties are located and effect the reinstatement of herein
[private respondent] to his work last performed or at the option of the
respondent by payroll reinstatement.

You are also to collect the amount of P122,690.85 representing his


backwages as called for in the dispositive portion, and turn over such
amount to this Office for proper disposition.
Petitioner filed a motion for reconsideration but the same was denied.

Hence, the instant petition — for certiorari.

The issues raised before us are the following:

WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE


ABUSE OF DISCRETION IN HOLDING THAT PRIVATE RESPONDENT
WAS NOT AN APPRENTICE.

II

WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE


ABUSE OF DISCRETION IN HOLDING THAT PETITIONER HAD NOT
ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN
TERMINATING THE SERVICE OF PRIVATE RESPONDENT.

We find no merit in the petition.

Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly
be considered an apprentice since no apprenticeship program had yet been filed and
approved at the time the agreement was executed.

Petitioner further insists that the mere signing of the apprenticeship agreement already
established an employer-apprentice relationship.

Petitioner's argument is erroneous.

The law is clear on this matter. Article 61 of the Labor Code provides:

Contents of apprenticeship agreement. — Apprenticeship agreements,


including the main rates of apprentices, shall conform to the rules issued by
the Minister of Labor and Employment. The period of apprenticeship shall
not exceed six months. Apprenticeship agreements providing for wage
rates below the legal minimum wage, which in no case shall start below
75% per cent of the applicable minimum wage, may be entered into only in
accordance with apprenticeship program duly approved by the Minister of
Labor and Employment. The Ministry shall develop standard model
programs of apprenticeship. (emphasis supplied)

In the case at bench, the apprenticeship agreement between petitioner and private
respondent was executed on May 28, 1990 allegedly employing the latter as an
apprentice in the trade of "care maker/molder." 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 the absence of approval by the Department of Labor and Employment,
the apprenticeship agreement was enforced the day it was signed.

Based on the evidence before us, petitioner did not comply with the requirements of the
law. It is mandated that apprenticeship agreements entered into by the employer and
apprentice shall be entered only in accordance with the apprenticeship program duly
approved by the Minister of Labor and Employment.

Prior approval by the Department of Labor and Employment of the proposed


apprenticeship program is, therefore, a condition sine quo non before an apprenticeship
agreement can be validly entered into.

The act of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step towards its final approval and does not instantaneously
give rise to an employer-apprentice relationship.

Article 57 of the Labor Code provides that the State aims to "establish a national
apprenticeship program through the participation of employers, workers and government
and non-government agencies" and "to establish apprenticeship standards for the
protection of apprentices." To translate such objectives into existence, prior approval of
the DOLE to any apprenticeship program has to be secured as a condition sine qua
non before any such apprenticeship agreement can be fully enforced. The role of the
DOLE in apprenticeship programs and agreements cannot be debased.

Hence, since the apprenticeship agreement between petitioner and private respondent
has no force and effect in the absence of a valid apprenticeship program duly approved
by the DOLE, private respondent's assertion that he was hired not as an apprentice but
as a delivery boy ("kargador" or "pahinante") deserves credence. He should rightly be
considered as a regular employee of petitioner as defined by Article 280 of the Labor
Code:

Art. 280. Regular and Casual Employment. — The provisions of written


agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
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
determined at the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and the employment
is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the


preceding paragraph: Provided, That, any employee who has rendered at
least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in which
he is employed and his employment shall continue while such activity exists.
(Emphasis supplied)

and pursuant to the constitutional mandate to "protect the rights of workers and
promote their welfare."9

Petitioner further argues that, there is a valid cause for the dismissal of private
respondent.

There is an abundance of cases wherein the Court ruled that the twin requirements of
due process, substantive and procedural, must be complied with, before valid dismissal
exists. 10 Without which, the dismissal becomes void.

The twin requirements of notice and hearing constitute the essential elements of due
process. This simply means that the employer shall afford the worker ample opportunity
to be heard and to defend himself with the assistance of his representative, if he so
desires.

Ample opportunity connotes every kind of assistance that management must accord the
employee to enable him to prepare adequately for his defense including legal
representation. 11

As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12

The law requires that the employer must furnish the worker sought to be
dismissed with two (2) written notices before termination of employee can
be legally effected: (1) notice which apprises the employee of the particular
acts or omissions for which his dismissal is sought; and (2) the subsequent
notice which informs the employee of the employer's decision to dismiss
him (Sec. 13, BP 130; Sec. 2-6 Rule XIV, Book V, Rules and Regulations
Implementing the Labor Code as amended). Failure to comply with the
requirements taints the dismissal with illegality. This procedure is
mandatory, in the absence of which, any judgment reached by management
is void and in existent (Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990];
National Service Corp. vs. NLRC, 168 SCRA 122; Ruffy vs. NLRC. 182
SCRA 365 [1990]).

The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only
three days after he was made to sign a Quitclaim, a clear indication that such resignation
was not voluntary and deliberate.

Private respondent averred that he was actually employed by petitioner as a delivery boy
("kargador" or "pahinante").
He further asserted that petitioner "strong-armed" him into signing the aforementioned
resignation letter and quitclaim without explaining to him the contents thereof. Petitioner
made it clear to him that anyway, he did not have a choice. 13

Petitioner cannot disguise the summary dismissal of private respondent by orchestrating


the latter's alleged resignation and subsequent execution of a Quitclaim and Release. A
judicious examination of both events belies any spontaneity on private respondent's part.

WHEREFORE, finding no abuse of discretion committed by public respondent National


Labor Relations Commission, the appealed decision is hereby AFFIRMED.

NITO ENTERPRISES V NLRC

FACTS:

Petitioner Nito Enterprises hired Capili as an apprentice machinist under an apprenticeship


agreement for six months for a daily wage, which was 75% of applicable minimum wage.
However, shortly 2 months after he started work, Capili was asked to resign for the reason that he
had been causing accidents, that he has been doing certain things beyond the scope of his duty,
and that he had even injured himself in handling one of the machines, to the financial prejudice of
the company as his medication would be shouldered by Nito Enterprises.

Capili later filed a complaint for illegal dismissal, which the Labor Arbiter dismissed. This
decision was reversed by the NLRC, holding that Capili was a regular employee. With this, Nito
came to the Supreme Court. Nito Enterprises assails the NLRC decision on the ground that no
apprenticeship program had yet been filed and approved at the time the agreement was executed.

ISSUE:

Is Capili a regular employee or an apprentice?

RULING:
Capili is a regular employee. Apprenticeship needs DOLE’s prior approval, or apprentice becomes
regular employee.

Petitioner did not comply with the requirements of the law. It is mandated that apprenticeship
agreements entered into by the employer and apprentice shall be entered only in accordance with
the apprenticeship program duly approved by the Minister of Labor and Employment.

Prior approval by the Department of Labor and Employment of the proposed apprenticeship
program is, therefore, a condition sine quo nonbefore an apprenticeship agreement can be validly
entered into.

The act of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step towards its final approval and does not instantaneously give rise
to an employer-apprentice relationship.

Hence, since the apprenticeship agreement between petitioner and private respondent has no force
and effect in the absence of a valid apprenticeship program duly approved by the DOLE, private
respondent’s assertion that he was hired not as an apprentice but as a delivery boy (“kargador” or
“pahinante”) deserves credence. He should rightly be considered as a regular employee of
petitioner as defined by Article 280 of the Labor Code and pursuant to the constitutional mandate
to protect the rights of workers and promote their welfare.

FILAMER V aCA

Daniel Funtecha was a working student at the Filamer Christian Institute. He was
assigned as the school janitor to clean the school 2 hours every morning. Allan Masa was
the son of the school president and at the same time he was the school’s jeepney service
driver. On October 20, 1977 at about 6:30pm, after driving the students to their homes,
Masa returned to the school to report and thereafter have to go home with the jeep so
that he could fetch the students early in the morning. Masa and Funtecha live in the same
place so they usually go home together. Funtecha had a student driver’s license so Masa
let him take the driver’s seat. While Funtecha was driving, he accidentally hit an elderly
Kapunan which led to his hospitalization for 20 days. Kapunan filed a criminal case and
an independent civil action based on Article 2180 against Funtecha.
In the independent civil action, the lower court ruled that Filamer is subsidiarily liable for
the tortious act of Funcheta and was compelled to pay for damages based on Article 2180
which provides that employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks. Filamer assailed
the decision and it argued that under Section 14, Rule X, Book III of the Labor Code IRR,
working scholars are excluded from the employment coverage hence there is no
employer-employee relations between Filamer and Funcheta; that the negligent act of
Funcheta was due to negligence only attributable to him alone as it is outside his assigned
task of being the school janitor. The CA denied Filamer’s appeal but the Supreme Court
agreed with Filamer. Kapunan filed for a motion for reconsideration.
ISSUE: Whether or not Filamer should be held subsidiarily liable.
HELD: Yes. This time, the SC ruled in favor of Kapunan (actually his heirs cause by this
time Kapunan was already dead). The provisions of Section 14, Rule X, Book III of the
Labor Code IRR was only meant to provide guidelines as compliance with labor
provisions on working conditions, rest periods, and wages is concerned. This does not in
any way affect the provisions of any other laws like the civil code. The IRR cannot defeat
the provisions of the Civil Code. In other words, Rule X is merely a guide to the
enforcement of the substantive law on labor. There is a distinction hence Section 14, Rule
X, Book III of the Rules is not the decisive law in a civil suit for damages instituted by an
injured person during a vehicular accident against a working student of a school and
against the school itself.
The present case does not deal with a labor dispute on conditions of employment between
an alleged employee and an alleged employer. It invokes a claim brought by one for
damages for injury caused by the patently negligent acts of a person, against both doer-
employee and his employer. Hence, the reliance on the implementing rule on labor to
disregard the primary liability of an employer under Article 2180 of the Civil Code is
misplaced. An implementing rule on labor cannot be used by an employer as a shield to
void liability under the substantive provisions of the Civil Code.
Funtecha is an employee of Filamer. He need not have an official appointment for a
driver’s position in order that Filamer may be held responsible for his grossly negligent
act, it being sufficient that the act of driving at the time of the incident was for the benefit
of Filamer (the act of driving the jeep from the school to Masa’s house is beneficial to the
school because this enables Masa to do a timely school transportation service in the
morning). Hence, the fact that Funtecha was not the school driver or was not acting with
the scope of his janitorial duties does not relieve Filamer of the burden of rebutting the
presumption juris tantum that there was negligence on its part either in the selection of a
servant or employee, or in the supervision over him. Filamer has failed to show proof of
its having exercised the required diligence of a good father of a family over its employees
Funtecha and Allan.