I. Fundamental Principles and Policies Section 3.
Section 3. The State shall afford full protection to labor, local and overseas, organized and
A. Constitutional provisions
1. Article II, Secs. 9, 10, 18, 20.
ARTICLE III
STATE POLICIES
Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity
and independence of the nation and free the people from poverty through policies that provide
adequate social services, promote full employment, a rising standard of living, and an improved
quality of life for all.
Section 10. The State shall promote social justice in all phases of national development.
Section 18. The State affirms labor as a primary social economic force. It shall protect the rights
of workers and promote their welfare.
Section 20. The State recognizes the indispensable role of the private sector, encourages private
enterprise, and provides incentives to needed investments.
2. Article III, Secs. 4, 8, 10, 16, 18(2).
ARTICLE III
BILL OF RIGHTS
Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press,
or the right of the people peaceably to assemble and petition the government for redress of
grievances.
Section 8. The right of the people, including those employed in the public and private sectors,
to form unions, associations, or societies for purposes not contrary to law shall not be abridged.
Section 10. No law impairing the obligation of contracts shall be passed.
Section 16. All persons shall have the right to a speedy disposition of their cases before all
judicial, quasi-judicial, or administrative bodies.
Section 18. (2) No involuntary servitude in any form shall exist except as a punishment for a
crime whereof the party shall have been duly convicted.
3. Article XIII, Secs. 2, 3, 13, 14.
ARTICLE XIII
SOCIAL JUSTICE AND HUMAN RIGHTS
Section 2. The promotion of social justice shall include the commitment to create economic
opportunities based on freedom of initiative and self-reliance.
LABOR
unorganized, and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with
law. They shall be entitled to security of tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers
and the preferential use of voluntary modes in settling disputes, including conciliation, and shall
enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of
labor to its just share in the fruits of production and the right of enterprises to reasonable
returns to investments, and to expansion and growth.
HEALTH
Section 13. The State shall establish a special agency for disabled person for their rehabilitation,
self-development, and self-reliance, and their integration into the mainstream of society.
WOMEN
Section 14. The State shall protect working women by providing safe and healthful working
conditions, taking into account their maternal functions, and such facilities and opportunities
that will enhance their welfare and enable them to realize their full potential in the service of
the nation.
B. Civil Code
1. Articles 1700 to 1703
SECTION 2
Contract of Labor (n)
Article 1700. The relations between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts must yield to the common good. Therefore,
such contracts are subject to the special laws on labor unions, collective bargaining, strikes and
lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.
Article 1701. Neither capital nor labor shall act oppressively against the other, or impair the
interest or convenience of the public.
Article 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in
favor of the safety and decent living for the laborer.
Article 1703. No contract which practically amounts to involuntary servitude, under any guise
whatsoever, shall be valid.
1
C. Labor Code
1. Articles 3, 4, 166, 211, 212, 255, 277
Article 3. Declaration of basic policy. The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed and regulate the
relations between workers and employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of work.
Article 4. Construction in favor of labor. All doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules and regulations, shall be resolved
in favor of labor.
Title II
EMPLOYEES’ COMPENSATION AND STATE INSURANCE FUND
Article 166. Policy. The State shall promote and develop a tax-exempt employees’ compensation
program whereby employees and their dependents, in the event of work-connected disability
or death, may promptly secure adequate income benefit and medical related benefits.
BOOK FIVE
LABOR RELATIONS
Article 211. Declaration of Policy.
It is the policy of the State:
To promote and emphasize the primacy of free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial
disputes;
To promote free trade unionism as an instrument for the enhancement of democracy and the
promotion of social justice and development;
To foster the free and voluntary organization of a strong and united labor movement;
To promote the enlightenment of workers concerning their rights and obligations as union
members and as employees;
To provide an adequate administrative machinery for the expeditious settlement of labor or
industrial disputes;
To ensure a stable but dynamic and just industrial peace; and
To ensure the participation of workers in decision and policy-making processes affecting their
rights, duties and welfare.
To encourage a truly democratic method of regulating the relations between the employers and
employees by means of agreements freely entered into through collective bargaining, no court
or administrative agency or official shall have the power to set or fix wages, rates of pay, hours
of work or other terms and conditions of employment, except as otherwise provided under this
Code. (As amended by Section 3, Republic Act No. 6715, March 21, 1989)
Article 212. Definitions.
"Commission" means the National Labor Relations Commission or any of its divisions, as the
case may be, as provided under this Code.
"Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in the
regional offices established under Presidential Decree No. 1, in the Department of Labor.
"Board" means the National Conciliation and Mediation Board established under Executive
Order No. 126.
"Council" means the Tripartite Voluntary Arbitration Advisory Council established under
Executive Order No. 126, as amended.
"Employer" includes any person acting in the interest of an employer, directly or indirectly. The
term shall not include any labor organization or any of its officers or agents except when acting
as employer.
"Employee" includes any person in the employ of an employer. The term shall not be limited to
the employees of a particular employer, unless the Code so explicitly states. It shall include any
individual whose work has ceased as a result of or in connection with any current labor dispute
or because of any unfair labor practice if he has not obtained any other substantially equivalent
and regular employment.
"Labor organization" means any union or association of employees which exists in whole or in
part for the purpose of collective bargaining or of dealing with employers concerning terms and
conditions of employment.
"Legitimate labor organization" means any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof.
"Company union" means any labor organization whose formation, function or administration
has been assisted by any act defined as unfair labor practice by this Code.
"Bargaining representative" means a legitimate labor organization whether or not employed by
the employer.
"Unfair labor practice" means any unfair labor practice as expressly defined by the Code.
"Labor dispute" includes any controversy or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating, fixing, maintaining,
changing or arranging the terms and conditions of employment, regardless of whether the
disputants stand in the proximate relation of employer and employee.
"Managerial employee" is one who is vested with the powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign
or discipline employees. Supervisory employees are those who, in the interest of the employer,
2
effectively recommend such managerial actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of independent judgment. All employees not
falling within any of the above definitions are considered rank-and-file employees for purposes
of this Book.
"Voluntary Arbitrator" means any person accredited by the Board as such or any person named
or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary
Arbitrator, or one chosen with or without the assistance of the National Conciliation and
Mediation Board, pursuant to a selection procedure agreed upon in the Collective Bargaining
Agreement, or any official that may be authorized by the Secretary of Labor and Employment
to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor
dispute.
"Strike" means any temporary stoppage of work by the concerted action of employees as a
result of an industrial or labor dispute.
"Lockout" means any temporary refusal of an employer to furnish work as a result of an
industrial or labor dispute.
"Internal union dispute" includes all disputes or grievances arising from any violation of or
disagreement over any provision of the constitution and by laws of a union, including any
violation of the rights and conditions of union membership provided for in this Code.
"Strike-breaker" means any person who obstructs, impedes, or interferes with by force,
violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or
conditions of work or in the exercise of the right of self-organization or collective bargaining.
"Strike area" means the establishment, warehouses, depots, plants or offices, including the sites
or premises used as runaway shops, of the employer struck against, as well as the immediate
vicinity actually used by picketing strikers in moving to and fro before all points of entrance to
and exit from said establishment. (As amended by Section 4, Republic Act No. 6715, March 21,
1989)
Article 255. Exclusive bargaining representation and workers’ participation in policy and
decision-making. The labor organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit shall be the exclusive representative of
the employees in such unit for the purpose of collective bargaining. However, an individual
employee or group of employees shall have the right at any time to present grievances to their
employer.
Any provision of law to the contrary notwithstanding, workers shall have the right, subject to
such rules and regulations as the Secretary of Labor and Employment may promulgate, to
participate in policy and decision-making processes of the establishment where they are
employed insofar as said processes will directly affect their rights, benefits and welfare. For this
purpose, workers and employers may form labor-management councils: Provided, That the
representatives of the workers in such labor-management councils shall be elected by at least
the majority of all employees in said establishment. (As amended by Section 22, Republic Act
No. 6715, March 21, 1989)
Article 277. Miscellaneous provisions.
All unions are authorized to collect reasonable membership fees, union dues, assessments and
fines and other contributions for labor education and research, mutual death and
hospitalization benefits, welfare fund, strike fund and credit and cooperative undertakings. (As
amended by Section 33, Republic Act No. 6715, March 21, 1989)
Subject to the constitutional right of workers to security of tenure and their right to be protected
against dismissal except for a just and authorized cause and without prejudice to the
requirement of notice under Article 283 of this Code, the employer shall furnish the worker
whose employment is sought to be terminated a written notice containing a statement of the
causes for termination and shall afford the latter ample opportunity to be heard and to defend
himself with the assistance of his representative if he so desires in accordance with company
rules and regulations promulgated pursuant to guidelines set by the Department of Labor and
Employment. Any decision taken by the employer shall be without prejudice to the right of the
worker to contest the validity or legality of his dismissal by filing a complaint with the regional
branch of the National Labor Relations Commission. The burden of proving that the termination
was for a valid or authorized cause shall rest on the employer. The Secretary of the Department
of Labor and Employment may suspend the effects of the termination pending resolution of the
dispute in the event of a prima facie finding by the appropriate official of the Department of
Labor and Employment before whom such dispute is pending that the termination may cause a
serious labor dispute or is in implementation of a mass lay-off. (As amended by Section 33,
Republic Act No. 6715, March 21, 1989)
Any employee, whether employed for a definite period or not, shall, beginning on his first day
of service, be considered as an employee for purposes of membership in any labor union. (As
amended by Section 33, Republic Act No. 6715)
No docket fee shall be assessed in labor standards disputes. In all other disputes, docket fees
may be assessed against the filing party, provided that in bargaining deadlock, such fees shall
be shared equally by the negotiating parties.
The Minister of Labor and Employment and the Minister of the Budget shall cause to be created
or reclassified in accordance with law such positions as may be necessary to carry out the
objectives of this Code and cause the upgrading of the salaries of the personnel involved in the
Labor Relations System of the Ministry. Funds needed for this purpose shall be provided out of
the Special Activities Fund appropriated by Batas Pambansa Blg. 80 and from annual
appropriations thereafter. (Incorporated by Batas Pambansa Bilang 130, August 21, 1981)
A special Voluntary Arbitration Fund is hereby established in the Board to subsidize the cost of
voluntary arbitration in cases involving the interpretation and implementation of the Collective
Bargaining Agreement, including the Arbitrator’s fees, and for such other related purposes to
promote and develop voluntary arbitration. The Board shall administer the Special Voluntary
Arbitration Fund in accordance with the guidelines it may adopt upon the recommendation of
the Council, which guidelines shall be subject to the approval of the Secretary of Labor and
Employment. Continuing funds needed for this purpose in the initial yearly amount of fifteen
million pesos (P15,000,000.00) shall be provided in the 1989 annual general appropriations acts.
3
The amount of subsidy in appropriate cases shall be determined by the Board in accordance
with established guidelines issued by it upon the recommendation of the Council.

The Fund shall also be utilized for the operation of the Council, the training and education of
Voluntary Arbitrators, and the Voluntary Arbitration Program. (As amended by Section 33,
Republic Act No. 6715, March 21, 1989)

The Ministry shall help promote and gradually develop, with the agreement of labor
organizations and employers, labor-management cooperation programs at appropriate levels
of the enterprise based on the shared responsibility and mutual respect in order to ensure
industrial peace and improvement in productivity, working conditions and the quality of working
life. (Incorporated by Batas Pambansa Bilang 130, August 21, 1981)

In establishments where no legitimate labor organization exists, labor-management

committees may be formed voluntarily by workers and employers for the purpose of promoting
industrial peace. The Department of Labor and Employment shall endeavor to enlighten and
educate the workers and employers on their rights and responsibilities through labor education
with emphasis on the policy thrusts of this Code. (As amended by Section 33, Republic Act No.
6715, March 21, 1989)

To ensure speedy labor justice, the periods provided in this Code within which decisions or
resolutions of labor relations cases or matters should be rendered shall be mandatory. For this
purpose, a case or matter shall be deemed submitted for decision or resolution upon the filing
of the last pleading or memorandum required by the rules of the Commission or by the
Commission itself, or the Labor Arbiter, or the Director of the Bureau of Labor Relations or Med-
Arbiter, or the Regional Director.

Upon expiration of the corresponding period, a certification stating why a decision or resolution
has not been rendered within the said period shall be issued forthwith by the Chairman of the
Commission, the Executive Labor Arbiter, or the Director of the Bureau of Labor Relations or
Med-Arbiter, or the Regional Director, as the case may be, and a copy thereof served upon the
parties.

Despite the expiration of the applicable mandatory period, the aforesaid officials shall, without
prejudice to any liability which may have been incurred as a consequence thereof, see to it that
the case or matter shall be decided or resolved without any further delay. (Incorporated by
Section 33, Republic Act No. 6715, March 21, 1989)

4
II. Recruitment and Placement
YAP V. THENAMARIS SHIP’S MANAGEMENT AND INTERMARE MARITIME AGENCIES, INC.
G.R. No. 179532, May 30, 2011
CLAUDIO S. YAP, PETITIONER,
VS.
THENAMARIS SHIP'S MANAGEMENT AND INTERMARE MARITIME AGENCIES, INC.,
RESPONDENTS.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari[1]
under Rule 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)
resolution[3] dated April 20, 2005.
The undisputed facts, as found by the CA, are as follows:
[Petitioner] Claudio S. Yap was employed as electrician of the vessel, M/T SEASCOUT
on 14 August 2001 by Intermare Maritime Agencies, Inc. in behalf of its principal,
Vulture Shipping Limited. The contract of employment entered into by Yap and Capt.
Francisco B. Adviento, the General Manager of Intermare, was for a duration of 12
months. On 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 Overseas Employment Administration (POEA) was informed 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 about the Advisory sent by Capt.
Constatinou, which states, among others:
" ...PLEASE ASK YR OFFICERS AND RATINGS IF THEY WISH TO BE TRANSFERRED TO
OTHER VESSELS AFTER VESSEL S DELIVERY (GREEK VIA ATHENS-PHILIPINOS VIA
MANILA...
...FOR CREW NOT WISH TRANSFER TO DECLARE THEIR PROSPECTED TIME FOR
REEMBARKATION IN ORDER TO SCHEDULE THEM ACCLY..."
Yap received his seniority bonus, vacation bonus, extra bonus along with the
scrapping bonus. However, with 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 contract since he was illegally dismissed from
employment. He alleged that he opted for immediate 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 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 bonus, vacation bonus and extra
bonus. They further alleged that Yap's employment contract was validly terminated
due to the sale of the vessel and no arrangement was made for Yap's transfer to
Thenamaris' other vessels.[4]
Thus, Claudio S. Yap (petitioner) filed a complaint for Illegal Dismissal with Damages and
Attorney's Fees before the Labor Arbiter (LA). Petitioner claimed that he was entitled to the
salaries corresponding to the unexpired portion of his contract. Subsequently, he filed an
amended complaint, impleading Captain Francisco Adviento of respondents Intermare
Maritime Agencies, Inc. (Intermare) and Thenamaris Ship's Management (respondents),
together with C.J. Martionos, Interseas Trading and Financing Corporation, and Vulture Shipping
Limited/Stejo Shipping Limited.
On July 26, 2004, the LA rendered a decision[5] in favor of petitioner, finding the latter to have
been constructively and illegally dismissed by respondents. Moreover, the LA found that
respondents acted in bad faith when they assured petitioner of re-embarkation and required
him to produce an electrician certificate during the period of his contract, but actually he was
not able to board one despite of respondents' numerous vessels. Petitioner made several
follow-ups for his re-embarkation but respondents failed to heed his plea; thus, petitioner was
forced to litigate in order to vindicate his rights. Lastly, the LA opined that since the unexpired
portion of petitioner's contract was less than one year, petitioner was entitled to his salaries for
the unexpired portion of his contract for a period of nine months. The LA disposed, as follows:
WHEREFORE, in view of the foregoing, a decision is hereby rendered declaring
complainant to have been constructively dismissed. Accordingly, respondents
Intermare Maritime Agency Incorporated, Thenamaris Ship's Mgt., and Vulture
Shipping Limited are ordered to pay jointly and severally complainant Claudio S. Yap
the sum of $12,870.00 or its peso equivalent at the time of payment. In addition,
moral damages of ONE HUNDRED THOUSAND PESOS (P100,000.00) and exemplary
damages of FIFTY THOUSAND PESOS (P50,000.00) are awarded plus ten percent (10%)
of the total award as attorney's fees.
Other money claims are DISMISSED for lack of merit.
SO ORDERED.[6]
Aggrieved, respondents sought recourse from the NLRC.
In its decision[7] dated January 14, 2005, the NLRC affirmed the LA's findings that petitioner was
indeed constructively and illegally dismissed; that respondents' bad faith was evident on their
wilful failure to transfer petitioner to another vessel; and that the award of attorney's fees was
warranted. However, the NLRC held that instead of an award of salaries 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. 8042,[9] as enunciated in our ruling in Marsaman Manning Agency,
Inc. v. National Labor Relations Commission.[10] Hence, the NLRC ruled in this wise:
WHEREFORE, premises considered, the decision of the Labor Arbiter finding the
termination of complainant illegal is hereby AFFIRMED with a MODIFICATION.
5
 Complainant['s] salary for the unexpired portion of his contract should only be limited
to three (3) months basic salary.
Respondents Intermare Maritime Agency, Inc.[,] Vulture Shipping Limited and
Thenamaris Ship Management are hereby ordered to jointly and severally pay
complainant, the following:
1. Three (3) months basic salary - US$4,290.00 or its peso equivalent at the time of
actual payment.
2. Moral damages - P100,000.00
3. Exemplary damages - P50,000.00
4. Attorney's fees equivalent to 10% of the total monetary award.
SO ORDERED.[11]
Respondents filed a Motion for Partial Reconsideration,[12] praying for the reversal and setting
aside of the NLRC decision, and that a new one be rendered dismissing the complaint.
Petitioner, on the other hand, filed his own Motion for Partial Reconsideration,[13] praying that
he be paid the nine (9)-month basic salary, as awarded by the LA.
On April 20, 2005, a resolution[14] was rendered by the NLRC, affirming the findings of Illegal
Dismissal and respondents' failure to transfer petitioner to another vessel. However, finding
merit in petitioner's arguments, the NLRC reversed its earlier Decision, holding that "there can
be no choice to 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 applied." Hence -
WHEREFORE, premises considered, complainant's Motion for Partial Reconsideration
is hereby granted. The award of three (3) months basic salary in the sum of
US$4,290.00 is hereby modified in that complainant is entitled to his salary for the
unexpired portion of employment contract in the sum of US$12,870.00 or its peso
equivalent at the time of actual payment.
All aspect of our January 14, 2005 Decision STANDS.
SO ORDERED.[15]
Respondents filed a Motion for Reconsideration, which the NLRC denied.
Undaunted, respondents filed a petition for certiorari[16]
under Rule 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 findings
were not supported by law, jurisprudence, and evidence on record. Likewise, the CA affirmed
the lower agencies' findings that the advisory of Captain Constantinou, taken together with the
other documents and additional requirements imposed on petitioner, only meant that the latter
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
attorney's fees. However, the CA ruled that the NLRC erred in sustaining the LA's interpretation
of Section 10 of R.A. No. 8042. In this regard, the CA relied on the clause "or for three months
for every year of the unexpired term, whichever is less" provided in the 5th paragraph of Section
10 of R.A. No. 8042 and held:
In the present case, the employment contract concerned has a term of one year or
12 months which commenced on August 14, 2001. However, it was preterminated
without a valid cause. [Petitioner] was paid his wages for the corresponding months
he worked until the 10th of November. Pursuant to the provisions of Sec. 10, [R.A. No.]
8042, therefore, the option of "three months for every year of the unexpired term" is
applicable.[17]
Thus, the CA provided, to wit:
WHEREFORE, premises considered, this Petition for Certiorari is DENIED. The Decision
dated January 14, 2005, and Resolutions, dated April 20, 2005 and July 29, 2005,
respectively, of public respondent National Labor Relations Commission-Fourth
Division, Cebu City, in NLRC No. V-000038-04 (RAB VIII (OFW)-04-01-0006) are hereby
AFFIRMED with the MODIFICATION that private respondent is entitled to three (3)
months of basic salary computed at US$4,290.00 or its peso equivalent at the time of
actual payment.
Costs against Petitioners.[18]
Both parties filed their respective motions for reconsideration, which the CA, however, denied
in its Resolution[19] dated August 30, 2007.
Unyielding, petitioner filed this petition, raising the following issues:
1) Whether or not Section 10 of R.A. [No.] 8042, to the extent that it affords an illegally
dismissed migrant worker the lesser benefit of - "salaries for [the] unexpired portion
of his employment contract or for three (3) months for every year of the unexpired
term, whichever is less" - is constitutional; and
2) Assuming that it is, whether or not the Court of Appeals gravely erred in granting
petitioner only three (3) months backwages when his unexpired term of 9 months is
far short of the "every year of the unexpired term" threshold.[20]
In the meantime, while this case was pending before this Court, we declared as unconstitutional
the clause "or for three months for every year of the unexpired term, whichever is less" provided
in the 5th paragraph of Section 10 of R.A. No. 8042 in the case of Serrano v. Gallant Maritime
Services, Inc.[21] on March 24, 2009.
Apparently, unaware of our ruling in Serrano, petitioner claims that the 5th paragraph of Section
10, R.A. No. 8042, is violative of Section 1,[22] Article III and Section 3,[23] Article XIII of the
Constitution to the extent that it gives an erring employer the option to pay an illegally dismissed
migrant worker only three months for every year of the unexpired term of his contract; that
said provision of law has long been a source of abuse by callous employers against migrant
workers; and that said provision violates the equal protection clause under the Constitution
6
because, while illegally dismissed local workers are guaranteed under the Labor Code of
reinstatement with full backwages computed from the time compensation was withheld from
them up to their actual reinstatement, migrant workers, by virtue of Section 10 of R.A. No. 8042,
have to waive nine months of their collectible backwages every time they have a year of
unexpired term of contract to reckon with. Finally, petitioner posits that, assuming said
provision of law is constitutional, the CA gravely abused its discretion when it reduced
petitioner's backwages from nine months to three months as his nine-month unexpired term
cannot accommodate the lesser relief of three months for every year of the unexpired term.[24]
On the other hand, respondents, aware of our ruling in Serrano, aver that our pronouncement
of unconstitutionality of the clause "or for three months for every year of the unexpired term,
whichever is 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. 8042 is a substantive law that deals with
the rights and obligations of the 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 no
retroactive application of the law in this case. Moreover, respondents asseverate that
petitioner's tanker allowance of US$130.00 should not be included in the computation of the
award as petitioner's basic salary, as provided under his contract, was only US$1,300.00.
Respondents submit that the CA erred in its computation since it included the said tanker
allowance. Respondents opine that petitioner should be entitled only to US$3,900.00 and not
to US$4,290.00, as granted by the CA. Invoking Serrano, respondents claim that the tanker
allowance should be excluded from the definition of the term "salary." Also, respondents
manifest that the full sum of P878,914.47 in Intermare's 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 was pending before the CA, the LA issued an Order
releasing the amount of P781,870.03 to petitioner as his award, together with the sum of
P86,744.44 to petitioner's former lawyer as attorney's fees, and the amount of P3,570.00 as
execution and deposit fees. Thus, respondents pray that the instant petition be denied and that
petitioner be directed to return to Intermare the sum of US$8,970.00 or its peso equivalent.[25]
On this note, petitioner counters that this new issue as to the inclusion of the tanker allowance
in the computation of the award was not raised by respondents before the LA, the NLRC and
the CA, nor was it 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.
Prefatorily, it bears emphasis that the unanimous finding of the LA, 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 faith on the part of respondents, thus, warranting the award of moral
and exemplary damages and attorney's fees. What remains in issue, therefore, is the
constitutionality of the 5th paragraph of Section 10 of R.A. No. 8042 and, necessarily, the proper
computation of the lump-sum salary to be awarded to petitioner by reason of his illegal
dismissal.
Verily, we have already declared in Serrano that the clause "or for three months for every year
of the unexpired term, whichever is less" provided in the 5th paragraph of Section 10 of R.A. No.
8042 is unconstitutional for being violative of the rights of Overseas Filipino Workers (OFWs) to
equal protection of the laws. In an exhaustive discussion of the intricacies and ramifications of
the said clause, this Court, in Serrano, pertinently held:
The Court concludes that the subject clause contains a suspect classification in that, in
the computation of the monetary benefits of fixed-term employees who are illegally
discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion
of one year or more in their contracts, but none on the claims of other OFWs or local
workers with fixed-term employment. The subject clause singles out one classification
of OFWs and burdens it with a peculiar disadvantage.[27]
Moreover, this Court held therein that the subject clause does not state or imply any definitive
governmental purpose; hence, the same violates not just therein petitioner's right to equal
protection, but also his right to substantive due process under Section 1, Article III of the
Constitution.[28] Consequently, petitioner therein was accorded 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.
We have already spoken. Thus, this case should not be different from Serrano.
As a general rule, an unconstitutional act is not a law; it confers no rights; it imposes no duties;
it affords no protection; it creates no office; it is inoperative as if it has not been passed at all.
The general rule is supported by Article 7 of the Civil Code, which provides:
Art. 7. Laws are repealed only by subsequent ones, and their violation or non-
observance shall not be excused by disuse or custom or practice to the contrary.
The doctrine of operative fact serves as an exception to the aforementioned general rule. In
Planters Products, Inc. v. Fertiphil Corporation,[29] we held:
The doctrine of operative fact, as an exception to the general rule, only applies as a
matter of equity and fair play. It nullifies the effects of an unconstitutional law by
recognizing that the existence of a statute prior to a determination of
unconstitutionality is an operative fact and may have consequences which cannot
always be ignored. The past cannot always be erased by a new judicial declaration.
The doctrine is applicable when a declaration of unconstitutionality will impose an
undue burden on those who have relied on the invalid law. Thus, it was applied to a
criminal case when a declaration of unconstitutionality would put the accused in
double jeopardy or would put in limbo the acts done by a municipality in reliance upon
a law creating it.[30]
Following Serrano, we hold that this case should not be included in the aforementioned
exception. After all, it was not the fault of petitioner that he lost his job due to an act of illegal
dismissal committed by respondents. To rule otherwise would be iniquitous to petitioner and
other OFWs, and would, in effect, send a wrong signal that principals/employers and
recruitment/manning agencies may violate an OFW's security of tenure which an employment
contract embodies and actually profit from such violation based on an unconstitutional
provision of law.
7
In the same vein, we cannot subscribe to respondents' postulation that the tanker allowance of AWARDED his salaries for the entire unexpired portion of his employment contract consisting
US$130.00 should not be included in the computation of the lump-sum salary to be awarded to of nine months computed at the rate of US$1,430.00 per month. All other awards are hereby
petitioner. AFFIRMED. No costs.

First. It is only at this late stage, more particularly in their Memorandum, that respondents are SO ORDERED.
raising this issue. It was not raised before the LA, the NLRC, and the CA. They did not even assail
the award accorded by the CA, which computed the lump-sum salary of petitioner at the basic Carpio, J., Chairperson, Peralta, Abad, and Mendoza, JJ., concur.
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. Matters not taken up below cannot be raised for the first time on
appeal. They must be raised seasonably in the proceedings before the lower tribunals.
Questions raised on appeal must be within the issues framed by the parties; consequently,
issues not raised before the lower tribunals cannot be raised for the first time on appeal.[31]

Second. Respondents' invocation of Serrano is unavailing. Indeed, we made the following

pronouncements in Serrano, to wit:

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.[32]

A close perusal of the contract reveals that the tanker allowance of 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 petitioner. Respondents themselves in their petition for certiorari
before the CA averred that petitioner's basic salary, pursuant to the contract, was "US$1,300.00
+ US$130.00 tanker allowance."[33] If respondents intended it differently, the contract per se
should have indicated that said allowance does not form part of the basic salary or, simply, the
contract should have separated it from the basic salary clause.

A final note.

We ought to be reminded of the plight and sacrifices of our OFWs. In Olarte v. Nayona,[34] this
Court held that:

Our overseas workers belong to a disadvantaged class. Most of them come from the
poorest sector of our society. Their profile shows they live in suffocating slums,
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 easy prey to avaricious employers. They will climb mountains, cross the
seas, endure slave treatment in foreign lands just to survive. Out of despondence,
they will work under sub-human conditions and accept salaries below the minimum.
The least we can do is to protect them with our laws.

WHEREFORE, the Petition is GRANTED. The Court of Appeals Decision dated February 28, 2007
and Resolution dated August 30, 2007 are hereby MODIFIED to the effect that petitioner is

8
II. Recruitment and Placement
EASTERN MEDITERRANEAN MARITIME LTD., ET AL. V ESTANISLAO SURIO, ET AL.
G.R. No. 154213, August 23, 2012
EASTERN MEDITERRANEAN MARITIME LTD. AND AGEMAR MANNING AGENCY, INC.,
PETITIONERS,
VS.
ESTANISLAO SURIO, FREDDIE PALGUIRAN, GRACIANO MORALES, HENRY CASTILLO,
ARISTOTLE ARREOLA, ALEXANDER YGOT, ANRIQUE BATTUNG, GREGORIO ALDOVINO,
NARCISO FRIAS, VICTOR FLORES, SAMUEL MARCIAL, CARLITO PALGUIRAN, DUQUE
VINLUAN, JESUS MENDEGORIN, NEIL FLORES, ROMEO MANGALIAG, JOE GARFIN AND
SALESTINO SUSA, RESPONDENTS.
DECISION
BERSAMIN, J.:
On appeal is the decision the Court of Appeals (CA) promulgated on December 21, 2001
affirming the resolution of the National Labor Relations Commission (NLRC) declaring itself to
be without appellate jurisdiction to review the decision of the Philippine Overseas Employment
Administration (POEA) involving petitioners’ complaint for disciplinary action against
respondents.[1]
Respondents were former crewmembers of MT Seadance, a vessel owned by petitioner Eastern
Mediterranean Maritime Ltd. and manned and operated by petitioner Agemar Manning Agency,
Inc. While respondents were still on board the vessel, they experienced delays in the payment
of their wages and in the remittance of allotments, and were not paid for extra work and extra
overtime work. They complained about the vessel’s inadequate equipment, and about the
failure of the petitioners to heed their repeated requests for the improvement of their working
conditions. On December 19, 1993, when MT Seadance docked at the port of Brofjorden,
Sweden to discharge oil, representatives of the International Transport Federation (ITF)
boarded the vessel and found the wages of the respondents to be below the prevailing rates.
The ensuing negotiations between the ITF and the vessel owner on the increase in respondents’
wages resulted in the payment by the vessel owner of wage differentials and the immediate
repatriation of respondents to the Philippines.
Subsequently, on December 23, 1993, the petitioners filed against the newly-repatriated
respondents a complaint for disciplinary action based on breach of discipline and for the
reimbursement of the wage increases in the Workers Assistance and Adjudication Office of the
POEA.
During the pendency of the administrative complaint in the POEA, Republic Act No. 8042
(Migrant Workers and Overseas Filipinos Act of 1995) took effect on July 15, 1995. Section 10 of
Republic Act No. 8042 vested original and exclusive jurisdiction over all money claims arising
out of employer-employee relationships involving overseas Filipino workers in the Labor
Arbiters, to wit:
Section 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 (90) calendar days
after the filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of
damages.
The jurisdiction over such claims was previously exercised by the POEA under the POEA Rules
and Regulations of 1991 (1991 POEA Rules).
On May 23, 1996, the POEA dismissed the complaint for disciplinary action. Petitioners received
the order of dismissal on July 24, 1996.[2]
Relying on Section 1, Rule V, Book VII of the 1991 POEA Rules, petitioners filed a partial appeal
on August 2, 1996 in the NLRC, still maintaining that respondents should be administratively
sanctioned for their conduct while they were on board MT Seadance.
On March 21, 1997, the NLRC dismissed petitioners’ appeal for lack of jurisdiction,[3] thus:
We dismiss the partial appeal.
The Commission has no jurisdiction to review cases decided by the POEA
Administrator involving disciplinary actions. Under the Migrant Workers and Overseas
Filipinos Act of 1995, the Labor Arbiter shall have jurisdiction over money claims
involving employer-employee relationship (sec. 10, R.A. 8042). Said law does not
provide that appeals from decisions arising from complaint for disciplinary action rest
in the Commission.
PREMISES CONSIDERED, instant appeal from the Order of May 23, 1996 is hereby
DISMISSED for lack of jurisdiction.
SO ORDERED.
Not satisfied, petitioners moved for reconsideration, but the NLRC denied their motion. They
received the denial on July 8, 1997.[4]
Petitioners then commenced in this Court a special civil action for certiorari and mandamus.
Citing St. Martin Funeral Homes v. National Labor Relations Commission,[5] however, the Court
referred the petition to the CA on November 25, 1998.
Petitioners contended in their petition that:
THE NLRC GRAVELY ABUSED ITS DISCRETION AND/OR GRAVELY ERRED IN DISMISSING
PETITIONERS’ APPEAL AND MOTION FOR RECONSIDERATION WHEN IT REFUSED TO
TAKE COGNIZANCE OF PETITIONERS’ APPEAL DESPITE BEING EMPOWERED TO DO SO
UNDER THE LAW.[6]
On December 21, 2001, the CA dismissed the petition for certiorari and mandamus, holding that
the inclusion and deletion of overseas contract workers from the POEA blacklist/watchlist were
9
within the exclusive jurisdiction of the POEA to the exclusion of the NLRC, and that the NLRC
had no appellate jurisdiction to review the matter, viz:
Section 10 of RA 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995, provides that:
“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
(90) calendar days after the filing of the complaint, the claims arising out of
an employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for
actual, moral, exemplary and other forms of damages. xxxx
Likewise, the Rules and Regulations implementing RA 8042 reiterate the jurisdiction
of POEA, thus:
“Section 28. Jurisdiction of the POEA. – The POEA shall exercise original and
exclusive jurisdiction to hear and decide:
a) All cases, which are administrative in character, involving or arising out
of violations of rules and regulations relating to licensing and registration of
recruitment and employment agencies or entities; and
b) Disciplinary action cases and other special cases, which are
administrative in character, involving employers, principals, contracting
partners and Filipino migrant workers.”
Further, Sections 6 and 7 Rule VII, Book VII of the POEA Rules & Regulations (1991)
provide:
“Sec. 6. Disqualification of Contract Workers. Contract workers, including
seamen, against whom have been imposed or with pending obligations
imposed upon them through an order, decision or resolution shall be
included in the POEA Blacklist Workers shall be disqualified from overseas
employment unless properly cleared by the Administration or until their
suspension is served or lifted.
Sec. 7. Delisting of the Contract Worker’s Name from the POEA Watchlist.
The name of an overseas worker may be excluded, deleted and removed
from the POEA Watchlist only after disposition of the case by the
Administration.”
Thus, it can be concluded from the afore-quoted law and rules that, public respondent
has no jurisdiction to review disciplinary cases decided by [the] POEA involving
contract workers. Clearly, the matter of inclusion and deletion of overseas contract
workers in the POEA Blacklist/Watchlist is within the exclusive jurisdiction of the POEA
to the exclusion of the public respondent. Nor has the latter appellate jurisdiction to
review the findings of the POEA involving such cases.
xxx
In fine, we find and so hold, that, no grave abuse of discretion can be imputed to the
public respondent when it issued the assailed Decision and Order, dated March 21,
1997 and June 13, 1997, respectively, dismissing petitioners’ appeal from the decision
of the POEA.
WHEREFORE, finding the instant petition not impressed with merit, the same is
hereby DENIED DUE COURSE. Costs against petitioners.
SO ORDERED.[7]
Issue
Petitioners still appeal, submitting to the Court the sole issue of:
WHETHER OR NOT THE NLRC HAS JURISDICTION TO REVIEW ON APPEAL CASES
DECIDED BY THE POEA ON MATTERS PERTAINING TO DISCIPLINARY ACTIONS AGAINST
PRIVATE RESPONDENTS.
They contend that both the CA and the NLRC had no basis to rule that the NLRC had no
jurisdiction to entertain the appeal only because Republic Act No. 8042 had not provided for its
retroactive application.
Respondents counter that the appeal should have been filed with the Secretary of Labor who
had exclusive jurisdiction to review cases involving administrative matters decided by the POEA.
Ruling
The petition for review lacks merit.
Petitioners’ adamant insistence that the NLRC should have appellate authority over the POEA’s
decision in the disciplinary action because their complaint against respondents was filed in 1993
was unwarranted. Although Republic Act No. 8042, through its Section 10, transferred the
original and exclusive jurisdiction to hear and decide money claims involving overseas Filipino
workers from the POEA to the Labor Arbiters, the law did not remove from the POEA the original
and exclusive jurisdiction to hear and decide all disciplinary action cases and other special cases
administrative in character involving such workers. The obvious intent of Republic Act No. 8042
was to have the POEA focus its efforts in resolving all administrative matters affecting and
involving such workers. This intent was even expressly recognized in the Omnibus Rules and
Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995 promulgated
on February 29, 1996, viz:
Section 28. Jurisdiction of the POEA. – The POEA shall exercise original and exclusive
jurisdiction to hear and decide:
(a) all cases, which are administrative in character, involving or arising out of violations
or rules and regulations relating to licensing and registration of recruitment and
employment agencies or entities; and
10
 (b) disciplinary action cases and other special cases, which are administrative in
character, involving employers, principals, contracting partners and Filipino migrant
workers.
Section 29. Venue – The cases mentioned in Section 28(a) of this Rule, may be filed
with the POEA Adjudication Office or the DOLE/POEA regional office of the place
where the complainant applied or was recruited, at the option of the complainant.
The office with which the complaint was first filed shall take cognizance of the case.
When Republic Act No. 8042 withheld the appellate jurisdiction of the NLRC in respect of cases
decided by the POEA, the appellate jurisdiction was vested in the Secretary of Labor in
accordance with his power of supervision and control under Section 38(1), Chapter 7, Title II,
Book III of the Revised Administrative Code of 1987, to wit:
Section 38. Definition of Administrative Relationship. – Unless otherwise expressly
stated in the Code or in other laws defining the special relationships of particular
agencies, administrative relationships shall be categorized and defined as follows:

Disciplinary action cases and other special cases, as mentioned in the preceding
Section, shall be filed with the POEA Adjudication Office.
It is clear to us, therefore, that the NLRC had no appellate jurisdiction to review the decision of
the POEA in disciplinary cases involving overseas contract workers.
Petitioners’ position that Republic Act No. 8042 should not be applied retroactively to the
review of the POEA’s decision dismissing their complaint against respondents has no support in
jurisprudence. Although, as a rule, all laws are prospective in application unless the contrary is
expressly provided,[8] or unless the law is procedural or curative in nature,[9] there is no serious
question about the retroactive applicability of Republic Act No. 8042 to the appeal of the POEA’s
decision on petitioners’ disciplinary action against respondents. In a way, Republic Act No. 8042
was a procedural law due to its providing or omitting guidelines on appeal. A law is procedural,
according to De Los Santos v. Vda. De Mangubat,[10] when it –
[R]efers to the adjective law which prescribes rules and forms of procedure in order
that courts may be able to administer justice. Procedural laws do not come within the
legal conception of a retroactive law, or the general rule against the retroactive
operation of statues — they may be given retroactive effect on actions pending and
undetermined at the time of their passage and this will not violate any right of a
person who may feel that he is adversely affected, insomuch as there are no vested
rights in rules of procedure.
Supervision and Control. – Supervision and control shall include authority to act
directly whenever a specific function is entrusted by law or regulation to a
subordinate; direct the performance of duty; restrain the commission of acts; review,
approve, reverse or modify acts and decisions of subordinate officials or units;
determine priorities in the execution of plans and programs. Unless a different
meaning is explicitly provided in the specific law governing the relationship of
particular agencies, the word “control” shall encompass supervision and control as
defined in this paragraph. xxx.
Thus, Section 1, Part VII, Rule V of the 2003 POEA Rules and Regulations specifically provides, as
follows:
Section 1. Jurisdiction. – The Secretary shall have the exclusive and original jurisdiction
to act on appeals or petition for review of disciplinary action cases decided by the
Administration.
In conclusion, we hold that petitioners should have appealed the adverse decision of the POEA
to the Secretary of Labor instead of to the NLRC. Consequently, the CA, being correct on its
conclusions, committed no error in upholding the NLRC.
WHEREFORE, we AFFIRM the decision promulgated on December 21, 2001 by the Court of
Appeals; and ORDER the petitioners to pay the costs of suit.

Republic Act No. 8042 applies to petitioners’ complaint by virtue of the case being then still SO ORDERED.
pending or undetermined at the time of the law’s passage, there being no vested rights in rules
of procedure.[11] They could not validly insist that the reckoning period to ascertain which law Leonardo-De Castro, (Acting Chairperson), Villarama, Jr., *Perez, and Perlas-Bernabe, JJ., concur.
or rule should apply was the time when the disciplinary complaint was originally filed in the
POEA in 1993. Moreover, Republic Act No. 8042 and its implementing rules and regulations
were already in effect when petitioners took their appeal. A statute that eliminates the right to
appeal and considers the judgment rendered final and unappealable only destroys the right to
appeal, but not the right to prosecute an appeal that has been perfected prior to its passage,
for, at that stage, the right to appeal has already vested and cannot be impaired.[12] Conversely
and by analogy, an appeal that is perfected when a new statute affecting appellate jurisdiction
comes into effect should comply with the provisions of the new law, unless otherwise provided
by the new law. Relevantly, petitioners need to be reminded that the right to appeal from a
decision is a privilege established by positive laws, which, upon authorizing the taking of the
appeal, point out the cases in which it is proper to present the appeal, the procedure to be
observed, and the courts by which the appeal is to be proceeded with and resolved.[13] This is
why we consistently hold that the right to appeal is statutory in character, and is available only
if granted by law or statute.[14]
11
II. Recruitment and Placement That on or about covering the period from February 2001 up to March 2001, in the
City of Parañaque, Philippines, and within the jurisdiction of this Honorable Court, the
PEOPLE OF THE PHILIPPINES V ANGELITA I. DAUD above-named accused, conspiring and confederating together and all of them
mutually helping and aiding one another, did then and there willfully and feloniously
G.R. No. 197539, June 2, 2014 defraud Marcelo de Guzman y Ignacio pertinent to his overseas job employment if he
would deliver to them the amount of P545,000.00 by means of other similar deceit
PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE,
knowing it to be false and only made to induce the aforementioned complainant to
VS.
give and deliver the said amount of P545,000.00 and accused once in possession of
ANGELITA I. DAUD, HANELITA M. GALLEMIT AND RODERICK GALLEMIT Y TOLENTINO,
the same, did then and there willfully, unlawfully and feloniously misapply and
ACCUSED.[BR][BR]RODERICK GALLEMIT Y TOLENTINO, ACCUSED-APPELLANT.
misappropriate the said amount to their own personal use and benefit to the damage
DECISION and prejudice of the said MARCELO DE GUZMAN y IGNACIO in the aforementioned
amount.[4]
LEONARDO-DE CASTRO, J.:
The seven other Informations in Criminal Case Nos. 03-0124 to 03-0130 were similarly worded
For Our consideration is an appeal from the Decision[1] dated March 18, 2011 of the Court of as the aforequoted Information, except as to the name of the private complainant and the
Appeals in CA-G.R. CR.-H.C. No. 03168, which affirmed the Joint Decision[2] dated January 15, amount purportedly collected from him/her, to wit:
2007 of the Regional Trial Court (RTC), Parañaque City, Branch 195, in Criminal Case Nos. 03-
0122 to 30, finding accused-appellant Roderick Gallemit y Tolentino guilty of the crimes of (1) Docket No. Private Complainant Amount Collected
illegal recruitment in large scale, as defined and penalized under Article II, Section 6, in relation
Crim. Case No. 03-0124[5] Evangeline I. Relox, P25,000.00
to Section 7(b) of Republic Act No. 8042, otherwise known as the “Migrant Workers and
Overseas Filipinos Act of 1995;” and (2) estafa, as defined and penalized under Article 315, Crim. Case No. 03-0125[6] Marcelo E. Rayo P45,000.00
paragraph 2(a) of the Revised Penal Code, but modified the penalties imposed upon appellant
for said crimes. Crim. Case No. 03-0126[7] Brigada A. Rayo P28,000.00

In an Information dated January 3, 2003, docketed as Criminal Case No. 03-0122, Angelita Crim. Case No. 03-0127[8] Gina T. Decena P70,000.00
I. Daud (Daud), Hanelita M. Gallemit (Hanelita), and appellant Roderick Gallemit y Tolentino
were charged before the RTC with illegal recruitment in large scale, allegedly committed as Crim. Case No. 03-0128[9] Nenita F. Policarpio P50,000.00
follows:
Crim. Case No. 03-0129[10] Myrna S. Crisostomo P24,500.00
That on or about or sometime during the period from February 5, 2001 to August
2001, in the City of Parañaque, Philippines, and within the jurisdiction of this Crim. Case No. 03-0130[11] Francisco S. Poserio P70,000.00
Honorable Court, the above-named accused, conspiring and confederating together
and both of them mutually helping and aiding one another, representing themselves
to have the capacity to contract, enlist and transport Filipino workers for employment Only appellant was apprehended, while his co-accused Daud and Hanelita eluded arrest and
abroad, did then and there willfully, unlawfully and feloniously, for a fee, recruit and remained at large.
promise employment abroad to complainants Marcelo De Guzman, Evangeline Relox,
The nine criminal cases against appellant before the RTC were consolidated. When arraigned,
Maricel Rayo, Brigida Rayo, Gina Decena, Nenita Policarpio, Myrna Crisostomo and
appellant pleaded not guilty to all the charges against him. Thereafter, joint trial of the nine
Francisco Poserio, without first securing the required license or authority from the
criminal cases ensued.
Department of Labor and Employment thus deemed committed in large scale and
therefore amounting to economic sabotage. [3] The prosecution offered as evidence the Philippine Overseas Employment Administration
(POEA) Certification dated September 19, 2002 stating that Green Pasture Worldwide Tour and
Eight more Informations, all dated January 3, 2003, docketed as Criminal Case Nos. 03-0123 to
Consultancy, with address at India St., Don Bosco, Parañaque City, set up and operated by
03-0130, charged Daud, Hanelita, and appellant before the RTC with eight counts of Estafa,
appellant and his co-accused, is not licensed to recruit workers for overseas employment.[12] Of
committed separately upon eight private complainants, namely, Marcelo I. De Guzman (De
all the private complainants, only De Guzman, Decena, and Poserio testified against
Guzman), Evangeline I. Relox, Marcelo E. Rayo, Brigada A. Rayo, Gina T. Decena (Decena), Nenita
Gallemit. The presentation of a POEA representative was dispensed with after the defense
F. Policarpio, Myrna S. Crisostomo and Francisco S. Poserio (Poserio), respectively.
admitted the due execution and genuineness of the POEA Certification dated September 19,
The Information in Criminal Case No. 03-0123 alleged: 2002.[13] Evidence for the defense consisted solely of appellant’s testimony.

12
After trial on the merits, the RTC rendered its Decision dated January 15, 2007 finding appellant
guilty of Illegal Recruitment in Large Scale and Estafa on three (3) counts. The dispositive
portion of the judgment reads:
WHEREFORE, judgment is hereby rendered as follows:
(1) In Criminal Case No. 03-0122, the Court finds accused Roderick Gallemit y Tolentino,
GUILTY BEYOND REASONABLE DOUBT as principal of the crime of Illegal Recruitment
in Large Scale in violation of Section 6 in relation to Section 7 of RA 8042, otherwise
known as the Migrant Workers and Overseas Filipinos Act of 1995 and hereby
sentences him to a penalty of life imprisonment and a fine of Five Hundred Thousand
Pesos (P500,000.00).
(2) In Criminal Case No. 03-0123, the Court finds accused Roderick Gallemit y Tolentino
GUILTY BEYOND REASONABLE DOUBT as principal of the crime of Estafa under Article
315 paragraph 2(a) of the Revised Penal Code and hereby sentences him to suffer the
Indeterminate Penalty of two (2) years and four (4) months as minimum to thirteen
(13) years as maximum which carries with it the accessory penalty of suspension from
public office, from the right to follow a profession or calling, and that of perpetual
special disqualification from the right of suffrage. The accused is further sentenced
to pay complaining witness Marcelo De Guzman y Ignacio the amount of Eighty
Thousand Pesos (P80,000.00) plus twelve percent (12%) interest from the date of the
filing of the Information on February 3, 2003, with subsidiary imprisonment in case of
insolvency, plus the costs of suit;
(3) In Criminal Case No. 03-0127, the Court finds accused Roderick Gallemit y Tolentino
GUILTY BEYOND REASONABLE DOUBT as principal of the crime of Estafa under Article
315 paragraph 2(a) of the Revised Penal Code and hereby sentences him to suffer the
indeterminate Penalty of two (2) years, four (4) months as minimum to nine (9) years
as maximum which carries with it the accessory penalty of suspension from public
office, from the right to follow a profession or calling, and that of perpetual special
disqualification from the right of suffrage. The accused is further sentenced to pay
the costs of suit; and
(4) In Criminal Case No. 03-0130, the Court finds accused Roderick Gallemit y Tolentino
GUILTY BEYOND REASONABLE DOUBT as principal of the crime of Estafa under Article
315 paragraph 2(a) of the Revised Penal Code and hereby sentences him to suffer the
Indeterminate Penalty of two (2) years and four (4) months as minimum to twelve
(12) years and two (2) months as maximum which carries with it the accessory penalty
of suspension from public office, from the right to follow a profession or calling, and
that of perpetual special disqualification from the right of suffrage. The accused is
further sentenced to pay costs of suit.
(5) Criminal Case Nos. 03-0124, 03-0125, 03-0126, 03-0128, and 03-0129, for failure
to prosecute, are hereby ordered Dismissed, as against accused Roderick Gallemit.
Considering that accused ANGELITA I. DAUD and HANELITA M. GALLEMIT remain at
large for more than six (6) months since the issuance and delivery of the warrant of
arrest to the proper police or peace officer, the cases against them are hereby
ordered ARCHIVED pursuant to Administrative Circular No. 7-A-92. Let an alias
warrant of arrest be issued against them.[14]
Following the denial of his Motion for Reconsideration by the RTC in an Order[15] dated April 3,
2007, appellant filed an appeal before the Court of Appeals.
The Court of Appeals summarized the private complainants’ testimonies against appellant, viz:
Marcelo de Guzman [(De Guzman)], a dentist by profession with a clinic in Bulacan,
testified that sometime in January 2001, he was introduced by his patient Modesta
Marqueda to her cousin, accused [Daud]. [Daud] encouraged [De Guzman] to apply
for work abroad and convinced him that she would be able to send him to Korea. To
prove to [De Guzman] that she was capable of sending workers abroad, [Daud] invited
him to visit her office located at Taft Avenue, Manila.
A month later, [De Guzman] and his cousins Maricel Rayo, Brigida Rayo, Myrna
Crisostomo, Francisco Poserio, Evangeline Relox, [Decena] and Nenita Policarpio,
went to see [Daud] at the Jemimah International Manpower Services, located at Taft
Avenue, Manila where the latter was then working as a liaison officer. The group was
shown job orders and photos of [Daud] with Korean employees to prove that she was
indeed sending workers abroad. It was at this office that [De Guzman] first met
[appellant] and [Hanelita].
Meanwhile, [Daud], together with [Hanelita] and [appellant], put up their own
business named Green Pastures Worldwide Tours and Consultancy Corporation in
their residence at No. 4 Sta. Maria Apartment, India St., Better Living Subdivision,
Barangay Don Bosco, Parañaque City.
Having been convinced by the documents shown to him at the Taft Avenue office, [De
Guzman] paid [Daud] the amount of P35,000[.]00 as initial payment for his placement
fee at the latter’s office and residence in Parañaque City on February 2, 2001. On
February 5, 2001, [De Guzman] gave [Daud] the amount of P15,000[.]00 which was
witnessed by Hanelita. He gave another P15,000.00 on February 22, 2001. However,
he lost the original receipts.
On March 3, 6 and 7, 2001, [De Guzman] again gave [Daud] x x x different amounts
consisting of P35,000.00, P30,000.00 and P15,000.00, respectively, at her office in
Parañaque City (Exhibits “A” to “C”). In [De Guzman]’s presence, [Daud] counted the
money, issued receipts therefor as “processing fees of Nike applicants”, affixed her
signature after signing the receipts in the name of “Nimfa Min”. [Daud] explained to
him that “Nimfa Min” was her contact who happened to be the wife of a Korean
national. [De Guzman] trusted [Daud] and accepted her explanation. Whenever he
gave his payment to [Daud], it was in the presence of Hanelita and [appellant] but he
did not require the two to sign as witnesses because he trusted them as they were
members of the same family. [De Guzman] was told by [Daud] and [appellant] that
he and his group would be leaving in two week’s time.
[De Guzman] and his companions were instructed to appear before the Korean
Embassy and were promised that they would be able to leave on March 11, 2001 as
13
trainee workers in Korea where they would earn a monthly salary of US$400, overtime
pay, with benefits of free board and lodging and 30-day leave within a year. De
Guzman’s group were shown photocopies of their passport and stamped visas for
Korea. However, they were not given their working permits and job contracts.
When their departure date was getting near, [Daud] postponed it thrice. Eventually,
[De Guzman] asked from accused [Daud] a photocopy of his passport with a stamped
Korean Visa. Upon inquiry with the Korean Embassy, [De Guzman] was told that it
was fake. He proceeded to the Philippine Overseas Employment Administration
(POEA) and verified the registration of Green Pastures Worldwide Tour and
Consultancy Corporation. The POEA informed them that it was not registered with
the POEA and gave [De Guzman] a certification to the effect that the said agency was
not licensed to recruit employees for abroad (Exhibit D).
Embarrassed because of the money given by his cousins, [De Guzman] verbally asked
[Daud], Hanelita and [appellant] to return the money. They promised him that they
would settle the matter but they failed to return the money. x x x.
Gina Decena, for her part testified that sometime in January 2001, she was introduced
by her cousin, Maricel Rayo, to accused [Daud], [Hanelita] and [appellant], at the
Makati Medical Towers where Maricel had her medical examination. [Decena] again
met the three accused at their office at No. 4 Sta. Maria Apartment, Better Living
Subdivision, Parañaque City when Maricel obtained a copy of her medical
certificate. They enticed [Decena] to apply at their agency by showing her job orders
that offered $400 [a] month salary, 150% overtime pay, free board and lodging as well
as photographs of prospective Korean employers. [Appellant] even gave her a copy
of the job order. The three accused assured [Decena] that they had already sent
several applicants for employment abroad. Convinced, [Decena] and her husband
Marcelo Rayo applied at their agency. They were instructed to undergo medical
examination, to attend a Korean Language seminar, and to pay P70,000.00 processing
fee.
Thus, on February 15, 2001, [Decena] and her husband each gave accused [Daud] the
amount of P35,000.00 as placement fees. During trial, [Decena] presented her
receipt for P35,000.00 which was received and signed by [Daud].
Thereafter, the couple were told to wait for two weeks for the processing of their
visas. As two weeks have passed and nothing happened to their applications,
[Decena] and her husband went to the POEA to verify the status of the agency. They
were informed to the effect that said agency was not licensed to send workers
abroad. [Decena] and her husband went back to the agency and tried to look for the
accused but they were all gone. They later came to know, through [De Guzman], that
[appellant] was apprehended. She identified her sworn statement in court.
Sometime in January 2001, Francisco Poserio [(Poserio)] was brought along by his
cousin [De Guzman] to No. 4 Sta. Maria Apt., India St., Better Living Subdivision,
Barangay Don Bosco, Parañaque City. While thereat, [De Guzman] introduced [Daud],
Hanelita and [appellant] as the owners of Green Pastures Worldwide Tours and
Consultancy and that they were sending workers to Korea. The three accused
encouraged [Poserio] to apply for work in Korea where he could get a job which
offered a monthly salary of US$400 with free meals and housing, 150% pay on
overtime work and vacation leave of thirty (30) days in a two-year contract. To
convince [Poserio] that they can send workers to Korea, they showed him job orders
from Hyundai Group and Nike requiring workers for Korea, a copy of a Korean visa of
one of their job applicants, and photos of [Daud] in Korea with a Korean national who
would be [Poserio]’s prospective employer if he applied with their agency. Further,
he would be able to earn back his placement fee in three months work.
Enticed, [Poserio] mortgaged his property to get funds for his job application. [Daud]
and Hanelita informed him to undergo a medical examination and seminar and even
gave him a referral. On January 27, 2001, he gave his passport, medical examination
result, seminar result and certification for employment. He was then told to pay
P100,000.00 as processing fee for his job application. On March 3, 2001, he gave his
downpayment of P25,000.00 to [Daud] in the presence of Hanelita and
[appellant]. He was told to wait for two weeks for the processing of his papers. On
July 2001, he was informed that additional amount was needed to process his
papers. Thus, on July 5, 2001, he gave P45,000.00 as additional payment to [Daud] in
the presence of Hanelita. He was again told to wait for another three weeks. He was
even promised that they would return his money if he would not be sent abroad. A
year after his payment, [Poserio] was still not able to leave the country. Upon
verification with the POEA, he and the other job applicants discovered that the said
agency was not licensed to recruit workers for overseas employment. He talked over
the phone with the accused and demanded the return of his money. When they failed
to return his money, he filed a complaint with the Parañaque police.
All three complainants positively identified [appellant] in court.[16] (Citations omitted.)
The Court of Appeals similarly provided a gist of appellant’s testimony, thus:
Roderick Gallemit [(appellant)] denied owning the agency, undertaking any
recruitment act or receiving any amount from the complainants considering that his
name did not appear in the receipts. He admitted that he is married to co-accused
[Hanelita] and that co-accused [Daud] is his mother-in-law.
He knew private complainants [De Guzman] and [Poserio] who were introduced to
him by [Daud] who was then working as a liaison officer at Jemimah International
Manpower Services located in Taft Avenue, Manila. [Appellant] denied knowing the
other complainants. He was just brought along by [Daud] since he was also one of
the job seekers applying at the Jemimah International Manpower Services where
[Daud] worked. [Daud] told him that private complainant [De Guzman] is her business
partner. [Poserio] was one of those applying for a job abroad and [De Guzman] would
refer them to [Daud]. Thus, [De Guzman] frequented their apartment in Parañaque.
He admitted that, from February 2001 to August 2001, he had been staying at the
apartment in India Street, Better Living Subdivision, Parañaque City he shared with his
wife Hanelita, their child and his mother-in-law [Daud]. He and his wife were not
employed since they were applying for a job abroad. His siblings help him out by
sending him money for his job application. He was aware that his mother-in-law
14
 [Daud] was a recruiter and owned an agency named Green Pasture Worldwide Travel
and Tours which she operated in the same apartment. He claimed that [Daud] has
only one employee, a certain Badjong, who processed documents. At first he did not
apply with [Daud] because her business was still new. He applied with her when she
convinced him that she could process his passport and papers to Korea.
He denied he was present when the complainants gave their payments to [Daud]. He
insisted that he was not involved with [Daud]’s business and that he was always out
of the house as he would often go to Cavite to ask for financial help from his siblings.
x x x.[17] (Citations omitted.)
In its Decision dated March 18, 2011, the Court of Appeals affirmed appellant’s conviction by
the RTC, but modified the indeterminate penalties imposed on appellant for the three counts
of estafa. The appellate court decreed:
WHEREFORE, the appealed decision finding accused-appellant RODERICK GALLEMIT y
TOLENTINO guilty beyond reasonable doubt of Illegal Recruitment in Large Scale and
of Estafa is AFFIRMED with modification with respect to the indeterminate penalties
imposed on appellant for the three counts of estafa, to wit:
(1) In Criminal Case No. 03-0123, appellant is sentenced to suffer the indeterminate
penalty of two (2) years and four (4) months of prision correccional as minimum to
thirteen (13) years of reclusion temporal as maximum.
(2) In Criminal Case No. 03-0127, appellant is sentenced to suffer the indeterminate
penalty of two (2) years and four (4) months of prision correccional as minimum to
nine (9) years of prision mayor as maximum.
(3) In Criminal Case No. 03-0130, appellant is sentenced to suffer the indeterminate
penalty of two (2) years and four (4) months of prision correccional as minimum to
twelve (12) years of prision mayor as maximum.
In all other respects, the assailed Decision is AFFIRMED.[18]
Hence, appellant comes before us via the instant appeal with the same assignment of errors
which he raised before the Court of Appeals:
I abroad, whether for profit or not, when undertaken by a non-licensee or non-holder
THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT OF LARGE-SCALE
ILLEGAL RECRUITMENT AND ESTAFA DESPITE THE PROSECUTION’S FAILURE TO PROVE HIS
GUILT BEYOND REASONABLE DOUBT.
II
THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT OF ESTAFA
DESPITE THE ABSENCE [OF] THE ELEMENT OF DECEIT.
Illegal recruitment in large scale
Appellant anchors his bid for acquittal on the failure of the prosecution to prove that he gave
private complainants the distinct impression that he had the power or ability to send them
abroad for work such that they were convinced to part with their money. Any encouragement
or promise of employment abroad was solely made by Daud. Appellant points out that it was
only his alleged presence at the time private complainants were making their payments to Daud
that led said private complainants to believe that appellant participated in the recruitment
scheme.
The Office of the Solicitor General, as counsel for the appellee, insists that appellant acted in
conspiracy with his co-accused in engaging in illegal recruitment activities, specifically
performing the following acts: (1) Appellant, together with his co-accused, owned and operated
Green Pasture Worldwide Tour and Consultancy Corporation; (2) Appellant, together with his
co-accused, encouraged private complainants to apply for jobs abroad with their agency,
promising private complainants salary of US$400.00, 150% overtime pay, and free board and
lodging; (3) Appellant, together with his co-accused, assured private complainants that they
could leave for Korea within a short period after paying their placement fees; and (4) Appellant
was present everytime private complainants made payments to his co-accused Daud. In
addition, private complainants De Guzman, Decena, and Poserio positively identified and
pointed to appellant in court as one of the persons who recruited them for work abroad.[19]
Article 13(b) of the Labor Code defines recruitment and placement as “any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring workers; and includes referrals,
contract services, promising or advertising for employment, locally or abroad, whether for profit
or not.” In the simplest terms, illegal recruitment is committed by persons who, without
authority from the government, give the impression that they have the power to send workers
abroad for employment purposes.[20]
Republic Act No. 8042 broadened the concept of illegal recruitment under the Labor Code and
provided stiffer penalties, especially for those that constitute economic sabotage, i.e., Illegal
Recruitment in Large Scale and Illegal Recruitment Committed by a Syndicate.
Section 6 of Republic Act No. 8042 defined illegal recruitment as follows:
SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers
and includes referring, contract services, promising or advertising for employment
of authority contemplated under Article 13(f) of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code of the Philippines: Provided, That any
such non-licensee or 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
likewise include the following acts, whether committed by any person, whether a non-
licensee, non-holder, licensee or holder of authority:
xxxx
(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker’s fault. Illegal
15
 recruitment when committed by a syndicate or in large scale shall be considered an
offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring or confederating with one another. It is deemed
committed in large scale if committed against three (3) or more persons individually
or as a group.
To constitute illegal recruitment in large scale, three elements must concur: (a) the offender
has no valid license or authority required by law to enable him to lawfully engage in recruitment
and placement of workers; (b) the offender undertakes any of the activities within the meaning
of “recruitment and placement” under Article 13(b) of the Labor Code, or any of the prohibited
practices enumerated under Article 34 of the said Code (now Section 6 of Republic Act No.
8042); and (c) the offender committed the same against three or more persons, individually or
as a group.[21]
Both the RTC and the Court of Appeals ruled that all the foregoing elements of illegal
recruitment in large scale are present in the case at bar. As the Court of Appeals discussed in
detail:
First, neither the agency “Green Pastures World Wide Tours and Consultancy” nor
appellant himself had a valid license or authority to engage in the recruitment and
placement of workers. This was established by the POEA certification stating that the
said agency located in that apartment was not licensed to recruit employees for
abroad. A license is a document issued by the Department of Labor and Employment
(DOLE) authorizing a person or entity to operate a private employment agency, while
an authority is a document issued by the DOLE authorizing a person or association to
engage in recruitment and placement activities as a private recruitment entity. It is
the lack of the necessary license or authority that renders the recruitment activity, as
in this case, unlawful or criminal.
Second, despite not having such authority, appellant, along with his co-accused,
nevertheless engaged in recruitment activities, offering and promising jobs to private
complainants and collecting from them various amounts as placement fees. This is
substantiated by the respective testimonies of the three private complainants who
fell victim to their illegal activities. Marcelo de Guzman testified that appellant was
physically present during the time that he and his companions were being shown job
orders and while he was paying for the fees for himself and in behalf of his
companions. Francisco Poserio testified that appellant was one of those who
apprised him of job benefits and tried to convince him to apply for overseas
employment through their agency. Gina Decena mentioned that [appellant] even
gave her a copy of the job order.
We find no cogent reason to disturb the findings of the lower court that there was
conspiracy among the accused in the commission of the offense. Direct proof of
previous agreement to commit a crime is not necessary. It may be deduced from the
mode and manner in which the offense was perpetrated, or inferred from the acts of
the accused which point to a joint purpose and design, concerted action and
community of interest. Conspiracy exists where the participants performed specific
acts with such closeness and coordination as unmistakably to indicate a common
purpose or design in committing the crime.
The testimonies of the complainants on the matter are affirmative in nature and
sufficiently corroborative of each other to be less than credible. It would be contrary
to human nature and experience for several persons to conspire and accuse appellant
of a crime and send him to prison just to appease their feeling of rejection and
vindicate the frustration of their dreams to work abroad if all he did was just to reside
in the same apartment where his mother-in-law [Daud] operated her recruitment
agency. It is in this light that We find any inconsistencies that accused-appellant harps
on in the tesimonines of the complainants to be inconsequential. What is important
is that they have positively identified accused-appellant as one of those who enticed
them to part with their money in exchange for promised jobs abroad.
The crime of illegal recruitment, according to the Supreme Court is committed when,
among other things, a person, who without being duly authorized according to law,
represents or gives the distinct impression that he or she has the power or the ability
to provide work abroad convincing those to whom the representation is made or to
whom the impression is given to thereupon part with their money in order to be
assured of that employment. This is what obtains in this case.
Contrary to appellant’s mistaken notion, it is not the issuance or signing of receipts
for the placement fees that makes a case for illegal recruitment, but rather the
undertaking of recruitment activities without the necessary license or authority. The
absence of receipts to evidence payment is not necessarily fatal to the prosecution’s
cause. A person charged with the illegal recruitment may be convicted on the
strength of the testimony of the complainants, if found to be credible and convincing.
Considering the evidence on record, We agree with the trial court that accused-
appellant engaged in recruitment of workers which was illegal and in large
scale. Illegal recruitment is deemed committed in large scale if committed against
three or more persons individually or as a group. In this case, three complainants
testified against appellant’s acts of illegal recruitment.[22] (Citations omitted.)
The Court finds no cogent reason to deviate from the findings and conclusions of the RTC and
the Court of Appeals. The prosecution witnesses were positive and categorical in their
testimonies that they personally met appellant; that they knew appellant was associated with
Green Pasture Worldwide Tour and Consultancy; and that appellant had performed recruitment
activities such as promising employment abroad, encouraging job applications, and providing
copies of job orders. The private complainants’ testimonies are consistent and corroborate one
another on material points, such as the amount of the placement fees asked, and the purported
country of destination and nature of work.
It was not necessary for the prosecution to still prove that appellant himself received the
placement fees from private complainants and issued receipts for the same, given the finding
of both the RTC and the Court of Appeals of the existence of conspiracy among appellant and
his co-accused Hanelita and Daud, appellant’s wife and mother-in-law, respectively. When
there is conspiracy, the act of one is the act of all.[23] It is not essential that there be actual proof
16
that all the conspirators took a direct part in every act. It is sufficient that they acted in concert
pursuant to the same objective.[24]
Between the categorical statements of the private complainants, on the one hand, and the bare
denial of appellant, on the other hand, the former must perforce prevail. An affirmative
testimony is far stronger than a negative testimony especially when the former comes from the
mouth of a credible witness. Denial, same as an alibi, if not substantiated by clear and
convincing evidence, is negative and self-serving evidence undeserving of weight in law. It is
considered with suspicion and always received with caution, not only because it is inherently
weak and unreliable, but also because it is easily fabricated and concocted.[25]
Furthermore, without any evidence to show that private complainants were propelled by any ill
motive to testify falsely against appellant, their testimonies deserve full faith and credit. After
all, the doctrinal rule is that findings of fact made by the trial court, which had the opportunity
to directly observe the witnesses and to determine the probative value of the other testimonies,
are entitled to great weight and respect because the trial court is in a better position to assess
the same, an opportunity not equally open to the appellate court. The absence of any showing
that the trial court plainly overlooked certain facts of substance and value that, if considered,
might affect the result of the case, or that its assessment was arbitrary, impels us to defer to
the trial court’s determination according credibility to the prosecution evidence.[26] This is more
true if the findings of the trial court were affirmed by the appellate court, since it is settled that
when the trial court’s findings have been affirmed by the appellate court, said findings are
generally binding upon this Court.[27]
Given the foregoing, we uphold the conviction of appellant for illegal recruitment in a large
scale, which constitutes economic sabotage. The penalty of life imprisonment and the fine of
P500,000.00, imposed upon appellant for the said offense by the RTC, and affirmed by the Court
of Appeals, is in accord with Section 7(b) of Republic Act No. 8042, which provides:
Sec. 7. Penalties. –
(a) Any person found guilty of illegal recruitment shall suffer the penalty of
imprisonment of not less than six (6) years and one (1) day but not more than twelve
(12) years and a fine of not less than Two hundred thousand pesos (P200,000.00) nor
more than Five hundred thousand pesos (P500,000.00).
(b) The penalty of life imprisonment and a fine of not less than Five hundred thousand
pesos (P500,000.00) nor more than One million pesos (P1,000,000.00) shall be imposed
if illegal recruitment constitutes economic sabotage as defined herein. (Emphasis ours.)
Estafa
We likewise affirm the conviction of appellant for three counts of estafa committed against the
private complainants in Criminal Case Nos. 03-0123, 03-0127, and 03-0130, based on the very
same evidence that proved appellant’s criminal liability for illegal recruitment.
It is settled that a person may be charged and convicted separately of illegal recruitment under
Republic Act No. 8042, in relation to the Labor Code, and estafa under Article 315, paragraph
2(a) of the Revised Penal Code. As we explained in People v. Cortez and Yabut[28]:
In this jurisdiction, it is settled that a person who commits illegal recruitment may be
charged and convicted separately of illegal recruitment under the Labor Code and
estafa under par. 2(a) of Art. 315 of the Revised Penal Code. The offense of illegal
recruitment is malum prohibitum where the criminal intent of the accused is not
necessary for conviction, while estafa is malum in se where the criminal intent of the
accused is crucial for conviction. Conviction for offenses under the Labor Code does
not bar conviction for offenses punishable by other laws. Conversely, conviction for
estafa under par. 2(a) of Art. 315 of the Revised Penal Code does not bar a conviction
for illegal recruitment under the Labor Code. It follows that one’s acquittal of the
crime of estafa will not necessarily result in his acquittal of the crime of illegal
recruitment in large scale, and vice versa. (Citations omitted.)
Article 315, paragraph 2(a) of the Revised Penal Code defines estafa as:
Art. 315. Swindling (estafa). - Any person who shall defraud another by any of the
means mentioned hereinbelow x x x:
xxxx
2. By means of any of the following false pretenses or fraudulent acts executed prior
to or simultaneously with the commission of the fraud:
(a) By using a fictitious name, or falsely pretending to possess power, influence,
qualifications, property, credit, agency, business or imaginary transactions; or by
means of other similar deceits.
The elements of estafa are: (a) that the accused defrauded another by abuse of confidence or
by means of deceit, and (b) that damage or prejudice capable of pecuniary estimation is caused
to the offended party or third person.[29]
Appellant contends that he cannot be convicted of estafa because the element of deceit is
lacking. He insists on the absence of proof that he made any false statement or fraudulent
representation to private complainants.
We are not persuaded. As we had previously discussed herein, private complainants were able
to establish, through their positive and credible testimonies, that appellant acted in conspiracy
with his co-accused to mislead private complainants into believing that appellant and his co-
accused, for a fee, can deploy private complainants abroad for employment. Decena testified
that appellant gave her a copy of the purported job order for Korea, while Poserio avowed that
appellant encouraged him to apply for work abroad. Daud, appellant’s fellow conspirator,
accepted placement fees from private complainants, even issuing receipts for some; instructed
private complainants to undergo medical examination; and took private complainants’
passports. The representations made by appellant and his co-accused to private complainants
were actually false and fraudulent, not only because they were not duly authorized to undertake
recruitment for overseas employment, but also because there were no actual jobs waiting for
private complainants in Korea and private complainants never had a chance to leave for work
abroad.
17
Appellant also argues that the second element of estafa, which is prejudice or pecuniary loss, lower to that prescribed by the Revised Penal Code, or anywhere within prision correccional
was not established during trial as the prosecution was unable to present any receipt signed by minimum and medium (i.e., from 6 months and 1 day to 4 years and 2
appellant proving that he received money from private complainants. months).[31] Consequently, the minimum terms in Criminal Case Nos. 03-0123, 03-127, and 03-
0130 were correctly fixed by the RTC, and affirmed by the Court of Appeals, at 2 years and 4
We disagree once more with appellant. We reiterate that when conspiracy has been months of prision correccional.
established, the act of one conspirator is the act of all. All three private complainants testified
that they paid placement fees to Daud, who issued receipts for some amounts either in her The maximum term under the Indeterminate Sentence Law shall be that which, in view of
name or in the name of one “Nimfa Min.” Moreover, the payment of placement fees to illegal attending circumstances, could be properly imposed under the rules of the Revised Penal
recruiters is not evidenced by receipts alone; it can also be established by testimonies of Code. To compute the minimum, medium, and maximum periods of the prescribed penalty for
witnesses. In People v. Pabalan,[30] we held: estafa when the amount of fraud exceeds P12,000.00, the time included in prision correccional
maximum to prision mayor minimum shall be divided into three equal portions, with each
Although not all of the amounts testified to by complainants were covered by portion forming a period. Following this computation, the minimum period for prision
receipts, the fact that there were no receipts for some of the amounts delivered to correccional maximum to prision mayor minimum is from 4 years, 2 months, and 1 day to 5
him does not mean that appellant did not accept or receive such payments. This Court years, 5 months, and 10 days; the medium period is from 5 years, 5 months, and 11 days to 6
has ruled in several cases that the absence of receipts in a criminal case for illegal years, 8 months, and 20 days; and the maximum period is from 6 years, 8 months, and 21 days
recruitment does not warrant the acquittal of the accused and is not fatal to the case to 8 years. Any incremental penalty (i.e., one year for every P10,000.00 in excess of P22,000.00)
of the prosecution. As long as the witnesses had positively shown through their shall thus be added to anywhere from 6 years, 8 months, and 21 days to 8 years, at the discretion
respective testimonies that the accused is the one involved in the prohibited of the court, provided that the total penalty does not exceed 20 years.[32]
recruitment, he may be convicted of the offense despite the want of receipts.
In Criminal Case Nos. 03-0123, 03-127, and 03-0130, the maximum term shall be taken from
The Statute of Frauds and the rules of evidence do not require the presentations of the maximum period of the prescribed penalty, which is 6 years, 8 months, and 21 days to 8
receipts in order to prove the existence of a recruitment agreement and the years. The Court of Appeals fixed the maximum term at 8 years.
procurement of fees in illegal recruitment cases. The amounts may consequently be
proved by the testimony of witnesses. (Citation omitted.) But then, since private complainants were defrauded in the amounts exceeding P22,000.00,
incremental penalty shall be imposed upon appellant, determined as follows:
Again, there is no cogent reason for us to disturb the finding of the RTC, affirmed by the Court
of Appeals, that both elements of estafa are present in Criminal Case Nos. 03-0123, 03-0127, Criminal Case Amount Difference Quotient After Incremental
and 03-0130. Thus, we sustain appellant’s conviction for estafa, punishable under Article 315, No. Defrauded After Dividing by Penalty[33]
paragraph 2(a), of the Revised Penal Code. (Private Subtracting P10,000.00
Complainant) P22,000.00
The penalty for estafa depends on the amount of defraudation. Per Article 315 of the Revised
Penal Code: 03-0123 P80,000.00 P58,000.00 5.8 5 years
(De Guzman)
Art. 315. Swindling (estafa). – Any person who shall defraud another by any of the
means mentioned herein below shall be punished by 03-0127 P35,000.00 P13,000.00 1.3 1 year
(Decena)
1st. The penalty of prision correccional in its maximum period to prision mayor in its
minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed 03-130 P70,000.00 P48,000.00 4.8 4 years
22,000 pesos; and if such amount exceeds the latter sum, the penalty provided in this (Poserio)
paragraph shall be imposed in its maximum period, adding one year for each
additional 10,000 pesos; but the total penalty which may be imposed shall not exceed
twenty years. In such cases, and in connection with the accessory penalties which The incremental penalty shall be added to the maximum term of 8 years fixed by the Court of
may be imposed and for the purpose of the other provisions of this Code, the penalty Appeals. Thus, we agree with the Court of Appeals in imposing the maximum penalty in Criminal
shall be termed prision mayor or reclusion temporal, as the case may be[.] Case No. 03-0123 at thirteen (13) years of reclusion temporal; in Criminal Case No. 03-0127 at
nine (9) years of prision mayor; and in Criminal Case No. 03-0130 at twelve (12) years of prision
The prescribed penalty for estafa under Article 315 of the Revised Penal Code, when the amount mayor.
of the fraud is over P12,000.00 but not exceeding P22,000.00, is prision correccional maximum
to prision mayor minimum (i.e., from 4 years, 2 months, and 1 day to 8 years). Under the Lastly, it is still incumbent upon appellant to indemnify private complainants for the amounts
Indeterminate Sentence Law, the minimum term shall be within the range of the penalty next paid to him and his conspirators, with legal interest at the rate of 6% per annum, from the time

18
of demand, which, in this case, shall be deemed as the same day the Informations were filed
against appellant, until the said amounts are fully paid.[34]

WHEREFORE, we AFFIRM with MODIFICATIONS the Decision dated March 18, 2011 of the Court
of Appeals in CA-G.R. CR.-H.C. No. 03168, to read as follows:

1. In Criminal Case No. 03-0122, appellant Roderick T. Gallemit is found GUILTY beyond
reasonable doubt of illegal recruitment in large scale, constituting economic sabotage, as
defined and penalized in Section 6, in relation to Section 7(b), of Republic Act No. 8042, for
which he is sentenced to suffer the penalty of life imprisonment and is ordered to pay a fine of
Five Hundred Thousand Pesos (P500.000.00);

2. In Criminal Case No. 03-0123, appellant Roderick T. Gallemit is found GUILTY beyond
reasonable doubt of the crime of estafa, as defined and penalized in Article 315, paragraph 2(a)
of the Revised Penal Code, for which he is sentenced to a prison term of two (2) years and four
(4) months of prision correccional, as minimum, to thirteen years (13) of reclusion temporal, as
maximum, and ordered to indemnify private complainant Marcelo I. De Guzman in the amount
of Eighty Thousand Pesos (P80,000.00) as actual damages, with legal interest of six percent (6%)
per annum from January 3, 2003, until the said amount is fully paid;

3. In Criminal Case No. 03-0127, appellant Roderick T. Gallemit is found GUILTY beyond
reasonable doubt of the crime of estafa, as defined and penalized in Article 315, paragraph 2(a)
of the Revised Penal Code, for which he is sentenced to a prison term of two (2) years and four
(4) months of prision correccional, as minimum, to nine (9) years of prision mayor, as maximum,
ordered to indemnify private complainant Gina T. Decena in the amount of Thirty-Five Thousand
Pesos (P35,000.00) as actual damages, with legal interest of six percent (6%) per annum from
January 3, 2003, until the said amount is fully paid; and

4. In Criminal Case No. 03-0130, appellant Roderick T. Gallemit is found GUILTY beyond
reasonable doubt of the crime of estafa, as defined and penalized in Article 315, paragraph 2(a)
of the Revised Penal Code, for which he is sentenced to a prison term of two (2) years and four
(4) months of prision correccional, as minimum, to twelve (12) years of prision mayor, as
maximum, and ordered to indemnify private complainant Francisco S. Poserio in the amount of
Seventy Thousand Pesos (P70,000.00) as actual damages, with legal interest of six percent (6%)
per annum from January 3, 2003, until the said amount is fully paid.

SO ORDERED.

Sereno, CJ., (Chairperson), Bersamin, Villarama, Jr., and Reyes, JJ., concur.

19
II. Recruitment and Placement
SAMEER OVERSEAS PLACEMENT AGENCY V CABILES
G.R. No. 170139, August 05, 2014
SAMEER OVERSEAS PLACEMENT AGENCY, INC., PETITIONER,
VS.
JOY C. CABILES, RESPONDENT.
DECISION
LEONEN, J.:
This case involves an overseas Filipino worker with shattered dreams. It is our duty, given the
facts and the law, to approximate justice for her.
We are asked to decide a petition for review[1]
on certiorari assailing the Court of Appeals’
decision[2] dated June 27, 2005. This decision partially affirmed the National Labor Relations
Commission’s resolution dated March 31, 2004,[3] declaring respondent’s dismissal illegal,
directing petitioner to pay respondent’s three-month salary equivalent to New Taiwan Dollar
(NT$) 46,080.00, and ordering it to reimburse the NT$3,000.00 withheld from respondent, and
pay her NT$300.00 attorney’s fees.[4]
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement agency.[5]
Responding to an ad it published, respondent, Joy C. Cabiles, submitted her application for a
quality control job in Taiwan.[6]
Joy’s 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 that Sameer Overseas Agency required her
to pay a placement fee of P70,000.00 when she signed the employment contract.[9]
Joy was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal) on June 26, 1997.[10] She alleged
that in her employment contract, she agreed to work as quality control for one year.[11] In
Taiwan, she was asked to work as a cutter.[12]
Sameer Overseas Placement Agency claims that on July 14, 1997, a certain Mr. Huwang from
Wacoal informed Joy, without prior notice, that she was terminated and that “she should
immediately report to their office to get her salary and passport.”[13] She was asked to “prepare
for immediate repatriation.”[14]
Joy claims that she was told that from June 26 to July 14, 1997, she only earned a total of
NT$9,000.[15] According to her, Wacoal deducted NT$3,000 to cover her plane ticket to
Manila.[16]
On October 15, 1997, Joy filed a complaint[17] with the National Labor Relations Commission
against petitioner and Wacoal. She claimed that she was illegally dismissed.[18] She asked for the
return of her placement fee, the withheld amount for repatriation costs, payment of her salary
for 23 months as well as moral and exemplary damages.[19] She identified Wacoal as Sameer
Overseas Placement Agency’s foreign principal.[20]
Sameer Overseas Placement Agency alleged that respondent's termination was due to her
inefficiency, negligence in her duties, and her “failure to comply with the work requirements
[of] her foreign [employer].”[21] The agency also claimed that it did not ask for a placement fee
of ?70,000.00.[22] As evidence, it showed Official Receipt No. 14860 dated June 10, 1997, bearing
the amount of ?20,360.00.[23] Petitioner added that Wacoal's accreditation with petitioner had
already been transferred to the Pacific Manpower & Management Services, Inc. (Pacific) as of
August 6, 1997.[24] Thus, petitioner asserts that it was already substituted by Pacific
Manpower.[25]
Pacific Manpower moved for the dismissal of petitioner’s claims against it.[26] It alleged that
there was no employer-employee relationship between them.[27] Therefore, the claims against
it were outside the jurisdiction of the Labor Arbiter.[28] Pacific Manpower argued that the
employment contract should first be presented so that the employer’s contractual obligations
might be identified.[29] It further denied that it assumed liability for petitioner’s illegal acts.[30]
On July 29, 1998, the Labor Arbiter dismissed Joy’s complaint.[31] Acting Executive Labor Arbiter
Pedro C. Ramos ruled that her complaint was based on mere allegations.[32] The Labor Arbiter
found that there was no excess payment of placement fees, based on the official receipt
presented by petitioner.[33] The Labor Arbiter found unnecessary a discussion on petitioner’s
transfer of obligations to Pacific[34] and considered the matter immaterial in view of the
dismissal of respondent’s complaint.[35]
Joy appealed[36] to the National Labor Relations Commission.
In a resolution[37] dated March 31, 2004, the National Labor Relations Commission declared that
Joy was illegally dismissed.[38] It reiterated the doctrine that the burden of proof to show that
the dismissal was based on a just or valid cause belongs to the employer.[39] It found that Sameer
Overseas Placement Agency failed to prove that there were just causes for termination.[40] There
was no sufficient proof to show that respondent was inefficient in her work and that she failed
to comply with company requirements.[41] Furthermore, procedural due process was not
observed in terminating respondent.[42]
The National Labor Relations Commission did not rule on the issue of reimbursement of
placement fees for lack of jurisdiction.[43] It refused to entertain the issue of the alleged transfer
of obligations to Pacific.[44] It did not acquire jurisdiction over that issue because Sameer
Overseas Placement Agency failed to appeal the Labor Arbiter’s decision not to rule on the
matter.[45]
The National Labor Relations Commission awarded respondent only three (3) months worth of
salary in the amount of NT$46,080, the reimbursement of the NT$3,000 withheld from her, and
attorney’s fees of NT$300.[46]
The Commission denied the agency’s motion for reconsideration[47] dated May 12, 2004
through a resolution[48] dated July 2, 2004.
Aggrieved by the ruling, Sameer Overseas Placement Agency caused the filing of a petition[49]
for certiorari with the Court of Appeals assailing the National Labor Relations Commission’s
resolutions dated March 31, 2004 and July 2, 2004.
20
The Court of Appeals[50] affirmed the decision of the National Labor Relations Commission with
respect to the finding of illegal dismissal, Joy’s entitlement to the equivalent of three months
worth of salary, reimbursement of withheld repatriation expense, and attorney’s fees.[51] The
Court of Appeals remanded the case to the National Labor Relations Commission to address the
validity of petitioner's allegations against Pacific.[52] The Court of Appeals held, thus:
Although the public respondent found the dismissal of the complainant-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 based upon its finding that she
was dismissed without due process, a finding that we uphold, given petitioner’s lack
of worthwhile discussion upon the same in the proceedings below or before us.
Likewise we sustain NLRC’s finding in regard to the reimbursement of her fare, which
is squarely based on the law; as well as the award of attorney’s fees.
But we do find it necessary to remand the instant case to the public respondent for
further proceedings, for the purpose of addressing the validity or propriety of
petitioner’s third-party complaint against the transferee agent or the Pacific
Manpower & Management Services, Inc. and Lea G. Manabat. We should emphasize
that as far as the decision of the NLRC on the claims of Joy Cabiles, is concerned, the
same is hereby affirmed with finality, and we hold petitioner liable thereon, but
without prejudice to further hearings on its third party complaint against Pacific for
reimbursement.
WHEREFORE, premises considered, the assailed Resolutions are hereby partly
AFFIRMED in accordance with the foregoing discussion, but subject to the caveat
embodied in the last sentence. No costs.
SO ORDERED.[53]
Dissatisfied, Sameer Overseas Placement Agency filed this petition.[54]
We are asked to determine whether the Court of Appeals erred when it affirmed the ruling of
the National Labor Relations Commission finding respondent illegally dismissed and awarding
her three months’ worth of salary, the reimbursement of the cost of her repatriation, and
attorney’s fees despite the alleged existence of just causes of termination.
Petitioner reiterates that there was just cause for termination because there was a finding of
Wacoal that respondent was inefficient in her work.[55] Therefore, it claims that respondent’s
dismissal was valid.[56]
Petitioner also reiterates that since Wacoal’s accreditation was validly transferred to Pacific at
the time respondent filed her complaint, it should be Pacific that should now assume
responsibility for Wacoal’s contractual obligations to the workers originally recruited by
petitioner.[57]
Sameer Overseas Placement Agency’s petition is without merit. We find for respondent.
I the right to strike in accordance with law. They shall be entitled to security
Sameer Overseas Placement Agency failed to show that there was just cause for causing Joy’s
dismissal. The employer, Wacoal, also failed to accord her due process of law.
Indeed, employers have the prerogative to impose productivity and quality standards at
work.[58] They may also impose reasonable rules to ensure that the employees comply with
these standards.[59] Failure to comply may be a just cause for their dismissal.[60] Certainly,
employers cannot be compelled 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 and
vulnerability of workers, it does not “authorize the oppression or self-destruction of the
employer.”[62] Management prerogative is recognized in law and in our jurisprudence.
This prerogative, however, should not be abused. It is “tempered with the employee’s right to
security of tenure.”[63] Workers are entitled to substantive and procedural due process before
termination. They may not be removed from employment without a valid or just cause as
determined by law and without going through the proper procedure.
Security of tenure for labor is guaranteed by our Constitution.[64]
Employees are not stripped of their security of tenure when they move to work in a different
jurisdiction. With respect to the rights of overseas Filipino workers, we follow the principle of
lex loci contractus.
Thus, in Triple Eight Integrated Services, Inc. v. NLRC,[65] this court noted:
Petitioner likewise attempts to sidestep the medical certificate requirement by
contending that since Osdana was working in Saudi Arabia, her employment was
subject to the laws of the host country. Apparently, petitioner hopes to make it appear
that the labor laws of Saudi Arabia do not require any certification by a competent
public health authority in the dismissal of employees due to illness.
Again, petitioner’s argument is without merit.
First, established is the rule that lex loci contractus (the law of the place where the
contract is made) governs in this jurisdiction. There is no question that the contract of
employment in this case was perfected here in the Philippines. Therefore, the Labor
Code, its implementing rules and regulations, and other laws affecting labor apply in
this case. Furthermore, settled is the rule that the courts of the forum will not enforce
any foreign claim obnoxious to the forum’s public policy. Here in the Philippines,
employment agreements are more than contractual in nature. The Constitution itself,
in Article XIII, Section 3, guarantees the special protection of workers, to wit:
The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of
employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including
of tenure, humane conditions of work, and a living wage. They shall also
21
 participate in policy and decision-making processes affecting their rights
and benefits as may be provided by law.
....
This public policy should be borne in mind in this case because to allow foreign
employers to determine for and by themselves whether an overseas contract worker
may be dismissed on the ground of illness would encourage illegal or arbitrary pre-
termination of employment contracts.[66] (Emphasis supplied, citation omitted)
Even with respect to fundamental procedural rights, this court emphasized in PCL Shipping
Philippines, Inc. v. NLRC,[67] to wit:
Petitioners admit that they did not inform private respondent in writing of the charges
against him and that they failed to conduct a formal investigation to give him
opportunity to air his side. However, petitioners contend that the twin requirements
of notice and hearing applies strictly only when the employment is within the
Philippines and that these need not be strictly observed in cases of international
maritime or overseas employment.
The Court does not agree. The provisions of the Constitution as well as the Labor Code
which afford protection to labor apply to Filipino employees whether working within the
Philippines or abroad. Moreover, the principle 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 Contract of Employment entered into by and between petitioners
and private respondent was executed here in the Philippines with the approval of the
Philippine Overseas Employment Administration (POEA). Hence, the Labor Code
together with its implementing rules and regulations and other laws affecting labor
apply in this case.[68] (Emphasis supplied, citations omitted)
By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or authorized
cause and after compliance with procedural due process requirements.
Article 282 of the Labor Code enumerates the just causes of termination by the employer. Thus:
Art. 282. Termination by employer. An employer may terminate an employment for
any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders
of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and
(e) Other causes analogous to the foregoing.
Petitioner’s allegation that respondent was inefficient in her work and negligent in her duties[69]
may, therefore, constitute a just cause for termination under Article 282(b), but only if
petitioner was able to prove it.
The burden of proving that there is just cause for termination is on the employer. “The employer
must affirmatively show rationally adequate evidence that the dismissal was for a justifiable
cause.”[70] Failure to show that there was valid or just cause for termination would necessarily
mean that the dismissal was illegal.[71]
To show that dismissal resulting from inefficiency in work is valid, it must be shown that: 1) the
employer has set standards of conduct and workmanship against which the employee will be
judged; 2) the standards of conduct and workmanship must have been communicated to the
employee; and 3) the communication was made at a reasonable time prior to the employee’s
performance assessment.
This is similar to the law and jurisprudence on probationary employees, which allow termination
of the employee only when there is “just cause or when [the probationary employee] fails to
qualify as a regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of his [or her] engagement.”[72]
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 tenure and due process, which are
guaranteed to all employees, whether their employment is probationary or regular.
The pre-determined standards that the employer sets are the bases for determining the
probationary employee’s fitness, propriety, efficiency, and qualifications as a regular employee.
Due process requires that the probationary employee be informed of such standards at the time
of his or her engagement so he or she can adjust his or her character or workmanship
accordingly. Proper adjustment to fit the standards upon which the employee’s qualifications
will be evaluated will increase one’s chances of being positively assessed for regularization by
his or her employer.
Assessing an employee’s work performance does not stop after regularization. The employer,
on a regular basis, determines if an employee is still qualified and efficient, based on work
standards. Based on that determination, and after complying with the due process
requirements of notice and hearing, the employer may exercise its management prerogative of
terminating the employee found unqualified.
The regular employee must constantly attempt to prove to his or her employer that he or she
meets all the standards for employment. This 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 standard of character or workmanship if such standards were not communicated to
him or her. Courts should remain vigilant on allegations of the employer’s failure to
communicate work standards that would govern one’s employment “if [these are] to discharge
in good faith [their] duty to adjudicate.”[73]
22
In this case, petitioner merely alleged that respondent failed to comply with her foreign
employer’s work requirements and was inefficient in her work.[74] No evidence was shown to
support such allegations. Petitioner did not even bother to specify what requirements were not
met, what efficiency standards were violated, or what particular acts of respondent constituted
inefficiency.
There was also no showing that respondent was sufficiently informed of the standards against
which her work efficiency and performance were judged. The parties’ conflict as to the position
held by respondent showed that even the matter as basic as the job title was not clear.
The bare allegations of petitioner are not sufficient to support a claim that there is just cause
for termination. There is no proof that respondent was legally terminated.
Petitioner failed to comply with
the due process requirements
Respondent’s dismissal less than one year from hiring and her repatriation on the same day
show not only failure on the part of petitioner to comply with the requirement of the existence
of just cause for termination. They patently show that the employers did not comply with the
due process requirement.
A valid dismissal requires both a valid cause and adherence to the valid procedure of
dismissal.[75] The employer is required to give the charged employee at least two written notices
before termination.[76] One of the written notices must inform the employee of the particular
acts that may cause his or her dismissal.[77] The other notice must “[inform] the employee of the
employer’s decision.”[78] Aside from the notice requirement, the employee must also be given
“an opportunity to be heard.”[79]
Petitioner failed to comply with the twin notices and hearing requirements. Respondent started
working on June 26, 1997. She was told that she was terminated on July 14, 1997 effective on
the same day and barely a month from her first workday. She was also repatriated on the same
day that she was informed of her termination. The abruptness of the termination negated any
finding that she was properly notified and given the opportunity to be heard. Her constitutional
right to due process of law was violated.
II
Respondent Joy Cabiles, having been illegally dismissed, is entitled to her salary for the
unexpired portion of the employment contract that was violated together with attorney’s fees
and reimbursement of amounts withheld from her salary.
Section 10 of Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995, states that overseas workers who were terminated without just, valid, or
authorized cause “shall be entitled to the full reimbursement of his placement fee with interest
of twelve (12%) per annum, plus his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less.”
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 (90) calendar days
after filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of
damages.
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 provisions [sic] 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 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
case may be, shall themselves be jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period or duration of the employment
contract and shall not be affected by any substitution, amendment or modification
made locally or in a foreign country of the said contract.
Any compromise/amicable settlement or voluntary agreement on money claims
inclusive of damages under this section shall be paid within four (4) months from the
approval of the settlement by the appropriate authority.
In case of termination of overseas employment without just, valid or authorized cause
as defined by law or contract, the workers shall be entitled to the full reimbursement
of his placement fee with interest of twelve (12%) per annum, plus his salaries for the
unexpired portion of his employment contract or for three (3) months for every year of
the unexpired term, whichever is less.
....
(Emphasis supplied)
Section 15 of Republic Act No. 8042 states that “repatriation of the worker and the transport of
his [or her] personal belongings shall be the primary responsibility of the agency which recruited
or deployed the worker overseas.” The exception is when “termination of employment is due
solely to the fault of the worker,”[80] which as we have established, is not the case. It reads:
SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND. – The
repatriation of the worker and the transport of his personal belongings shall be the
primary responsibility of the agency which recruited or 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 repatriation of remains and transport of
the personal belongings of a deceased worker and all costs attendant thereto shall be
borne by the principal and/or local agency. However, in cases where the termination
of employment is due solely to the fault of the worker, the principal/employer or
agency shall not in any manner be responsible for the repatriation of the former
and/or his belongings.
23
 ....
The Labor Code[81] also entitles the employee to 10% of the amount of withheld wages as
attorney’s fees when the withholding is unlawful.
The Court of Appeals affirmed the National Labor Relations Commission’s decision to award
respondent NT$46,080.00 or the three-month equivalent of her salary, attorney’s fees of
NT$300.00, and the reimbursement of the withheld NT$3,000.00 salary, which answered for
her repatriation.
We uphold the finding that respondent is entitled to all of these awards. The award of the three-
month equivalent of respondent’s salary should, however, be increased to the amount equivalent
to the unexpired term of the employment contract.
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc.,[82] this court ruled
that the clause “or for three (3) months for every year of the unexpired term, whichever is
less”[83] is unconstitutional for violating the equal protection clause and substantive due
process.[84]
A statute or provision which was declared unconstitutional is not a law. It “confers no rights; it
imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has not
been passed at all.”[85]
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 upon promulgation of Republic Act
No. 10022 in 2010. Section 7 of Republic Act No. 10022 provides:
Section 7. Section 10 of Republic Act No. 8042, as amended, is hereby amended to
read as follows:
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 (90) calendar days after the filing of the complaint, the claims
arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including
claims for actual, moral, exemplary and other forms of damage. Consistent
with this mandate, the NLRC shall endeavor to update and keep abreast
with the developments in the global services industry.
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
employment and shall be a condition precedent for its approval. The
performance bond to de [sic] filed by the recruitment/placement agency,
as 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
case may be, shall themselves be jointly and solidarily liable with the
corporation or partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution,
amendment or modification made locally or in a foreign country of the said
contract.
Any compromise/amicable settlement or voluntary agreement on money
claims inclusive of damages under this section shall be paid within thirty
(30) days from approval of the settlement by the appropriate authority.
In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, or any unauthorized
deductions from the migrant worker’s salary, the worker shall be entitled
to the full reimbursement if [sic] his placement fee and the deductions
made with interest at twelve percent (12%) per annum, plus his salaries for
the unexpired portion of his employment contract or for three (3) months
for every year of the unexpired term, whichever is less.
In case of a final and executory judgement against a foreign
employer/principal, it shall be automatically disqualified, without further
proceedings, from participating in the Philippine Overseas Employment
Program and from recruiting and hiring Filipino workers until and unless it
fully satisfies the judgement award.
Noncompliance with the mandatory periods for resolutions of case
provided under this section shall subject the responsible officials to any or
all of the following penalties:
(a) The salary of any such official who fails to render his decision or
resolution within the prescribed period shall be, or caused to be, withheld
until the said official complies therewith;
(b) Suspension for not more than ninety (90) days; or
(c) Dismissal from the service with disqualification to hold any appointive
public office for five (5) years.
Provided, however, That the penalties herein provided shall be without
prejudice to any liability which any such official may have incured [sic] under
other existing laws or rules and regulations as a consequence of violating
the provisions of this paragraph. (Emphasis supplied)
Republic Act No. 10022 was promulgated on March 8, 2010. This means that the reinstatement
of the clause in Republic Act No. 8042 was not yet in effect at the time of respondent’s
termination from work in 1997.[86] Republic Act No. 8042 before it was amended by Republic
Act No. 10022 governs this case.
24
When a law is passed, this court awaits an actual case that clearly raises adversarial positions in
their proper context before considering a prayer to declare it as unconstitutional.
However, we are confronted with a unique situation. The law passed incorporates the exact
clause already declared as unconstitutional, without any perceived substantial change in the
circumstances.
This may cause confusion on the part of the National Labor Relations Commission and the Court
of Appeals. At minimum, the existence of Republic Act No. 10022 may delay the execution of
the judgment in this case, further frustrating remedies to assuage the wrong done to petitioner.
Hence, there is a necessity to decide this constitutional issue.
Moreover, this court is possessed with the constitutional duty to “[p]romulgate rules concerning
the protection and enforcement of constitutional rights.”[87] When cases become moot and
academic, we do 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 analogous to cases where
there are millions of Filipinos working abroad who are bound to suffer from the lack of
protection because of the restoration of an identical clause in a provision previously declared
as unconstitutional.
In the hierarchy of laws, the Constitution is supreme. No branch or office of the government
may exercise its powers in any manner inconsistent with the Constitution, regardless of the
existence of any law that supports such exercise. The Constitution cannot be trumped by any
other law. All laws must be read in light of the Constitution. Any law that is inconsistent with it
is a nullity.
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 reenactment of the same or a similar law or
provision. A law or provision of law that was already declared unconstitutional remains as such
unless circumstances have so changed as to warrant a reverse conclusion.
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.
Likewise, there are special reasons of judicial efficiency and economy that attend to these cases.
The new law puts our overseas workers in the same vulnerable position as they were prior to
Serrano. Failure to reiterate the very ratio decidendi of that case will result in the same untold
economic hardships that our reading of the Constitution intended to avoid. Obviously, we
cannot countenance added expenses for further litigation that will reduce their hard-earned
wages as well as add to the indignity of having been deprived of the protection of our laws
simply because our precedents have not been followed. There is no constitutional doctrine that
causes injustice in the face of empty procedural niceties. Constitutional interpretation is
complex, but it is never unreasonable.
Thus, in a resolution[88] dated October 22, 2013, we ordered the parties and the Office of the
Solicitor General to comment on the constitutionality of the reinstated clause in Republic Act
No. 10022.
In its comment,[89] petitioner argued that the clause was constitutional.[90] The legislators
intended a balance between the employers’ and the employees’ rights by not unduly burdening
the local recruitment agency.[91] Petitioner is also of the view that the clause was already
declared as constitutional in Serrano.[92]
The Office of the Solicitor General also argued that the clause was valid and constitutional.[93]
However, since the parties never raised the issue of the constitutionality of the clause as
reinstated in Republic Act No. 10022, its contention is that it is beyond judicial review.[94]
On the other hand, respondent argued that the clause was unconstitutional because it infringed
on workers’ right to contract.[95]
We observe that the reinstated clause, this time as provided in Republic Act. No. 10022, violates
the constitutional rights to equal protection and due process.[96] Petitioner as well as the
Solicitor General have failed to show any compelling change in the circumstances that would
warrant us to revisit the precedent.
We reiterate our finding in Serrano v. Gallant Maritime that limiting wages that should be
recovered by an illegally dismissed overseas worker to three months is both a violation of due
process and the equal protection clauses of the Constitution.
Equal protection of the law is a guarantee that persons under like circumstances and falling
within the same class are treated alike, in terms of “privileges conferred and liabilities
enforced.”[97] It is a guarantee against “undue favor and individual or class privilege, as well as
hostile discrimination or the oppression of inequality.”[98]
In creating laws, the legislature has the power “to make distinctions and classifications.” [99] In
exercising such power, it has a wide discretion.[100]
The equal protection clause does not infringe on this legislative power.[101] A law is void on this
basis, only if classifications are made arbitrarily.[102] There is no violation of the equal protection
clause if the law applies equally to persons within the same class and if there are reasonable
grounds for distinguishing between those falling within the class and those who do not fall
within the class.[103] A law that does not violate the equal protection clause prescribes a
reasonable classification.[104]
A reasonable classification “(1) must rest on substantial distinctions; (2) must be germane to the
purposes of the law; (3) must not be limited to existing conditions only; and (4) must apply
equally to all members of the same class.”[105]
The reinstated clause does not satisfy the requirement of reasonable classification.
In Serrano, we identified the classifications made by the reinstated clause. It distinguished
between fixed-period overseas workers and fixed-period local workers.[106] It also distinguished
between overseas workers with employment contracts of less than one year and overseas
workers with employment contracts of at least one year.[107] Within the class of overseas
workers with at least one-year employment contracts, there was a distinction between those
with at least a year left in their contracts and those with less than a year left in their contracts
when they were illegally dismissed.[108]
25
The Congress’ classification may be subjected to judicial review. In Serrano, there is a “legislative
classification which impermissibly interferes with the exercise of a fundamental right or
operates to the peculiar disadvantage of a suspect class.”[109]
Under the Constitution, labor is afforded special protection.[110] Thus, this court in Serrano,
“[i]mbued with the same sense of ‘obligation to afford protection to labor,’ . . . employ[ed] the
standard of strict judicial scrutiny, for it perceive[d] in the subject clause a suspect classification
prejudicial to OFWs.”[111]
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 fixed-term employment were computed
in the same manner.[112] Their money claims were computed based on the “unexpired portions
of their contracts.”[113] The adoption of the reinstated clause in Republic Act No. 8042 subjected
the money claims of illegally dismissed overseas workers 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 terminated local workers with fixed-term employment.[115]
We observed that illegally dismissed overseas workers whose employment contracts had a term
of less than one year were granted the amount equivalent to the unexpired portion of their
employment contracts.[116] Meanwhile, illegally dismissed overseas workers with employment
terms of at least a year were granted a cap equivalent to three months of their salary for the
unexpired portions of their contracts.[117]
Observing the terminologies used in the clause, we also found that “the subject clause creates
a sub-layer of discrimination among OFWs whose 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 their salaries for the entire unexpired portion thereof, while those who are illegally dismissed
with one year or more remaining in their contracts shall be covered by the reinstated clause,
and their monetary benefits limited to their salaries for three months only.”[118]
We do not need strict scrutiny to conclude that these classifications do not rest on any real or
substantial distinctions that would justify different treatments in terms of the computation of
money claims resulting from illegal termination.
Overseas workers regardless of their classifications are entitled to security of tenure, at least for
the period agreed upon in their contracts. This means that they cannot be dismissed before the
end of their contract terms without due process. If they were illegally dismissed, the workers’
right to security of tenure is violated.
The rights violated when, say, a fixed-period local worker is illegally terminated are neither
greater than nor less than the rights violated when a fixed-period overseas worker is illegally
terminated. It is state policy to protect the rights of workers without qualification as to the place
of employment.[119] In both cases, the workers are deprived of their expected salary, which they
could have earned had they not been illegally dismissed. For both workers, this deprivation
translates to economic insecurity and disparity.[120] The same is true for the distinctions between
overseas workers with an employment contract of less than one year and overseas workers with
at least one year of employment contract, and between overseas workers with at least a year
left in their contracts and overseas workers with less than a year left in their contracts when
they were illegally dismissed.
For this reason, we cannot subscribe to the argument that “[overseas workers] are contractual
employees who can never acquire regular employment status, unlike local workers”[121] because
it already justifies differentiated treatment in terms of the computation of money claims.[122]
Likewise, the jurisdictional and enforcement issues on overseas workers’ 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 greater protection and assistance to overseas workers who
generally are more prone to exploitation given their physical distance from our government.
We also find that the classifications are not relevant to the purpose of the law, which is to
“establish a higher standard of protection and promotion of the welfare of migrant workers,
their families and overseas Filipinos in distress, and for other purposes.”[124] Further, we find
specious the argument that reducing the liability of placement agencies “redounds to the
benefit of the [overseas] workers.”[125]
Putting a cap on the money claims of certain overseas workers does not increase the standard
of protection afforded to them. On the other hand, foreign employers are more incentivized by
the reinstated clause to enter into contracts of at least a year because it gives them more
flexibility to violate our overseas workers’ rights. Their liability for arbitrarily terminating
overseas workers is decreased at the expense of the workers whose rights they violated.
Meanwhile, these overseas workers who are impressed with an expectation of a stable job
overseas for the longer contract period disregard other opportunities only to be terminated
earlier. They are left with claims that are less than what others in the same situation would
receive. The reinstated clause, therefore, creates a situation where the law meant to protect
them makes violation of rights easier and simply benign to the violator.
As Justice Brion said in his concurring opinion in Serrano:
Section 10 of R.A. No. 8042 affects these well-laid rules and measures, and in fact
provides a hidden twist affecting the principal/employer’s liability. While intended as
an incentive accruing to recruitment/manning agencies, the law, as worded, simply
limits the OFWs’ recovery in wrongful dismissal situations. Thus, it redounds to the
benefit of whoever may be liable, including the principal/employer – the direct
employer primarily liable for the wrongful dismissal. In this sense, Section 10 – read as
a grant of incentives to recruitment/manning agencies – oversteps what it aims to do
by effectively limiting what is otherwise the full liability of the foreign
principals/employers. Section 10, in short, really operates to benefit the wrong party
and allows that party, without justifiable reason, to mitigate its liability for wrongful
dismissals. Because of this hidden twist, the limitation of liability under Section 10
cannot be an “appropriate” incentive, to borrow the term that R.A. No. 8042 itself
uses to describe the incentive it envisions under its purpose clause.
What worsens the situation is the chosen mode of granting the incentive: instead of
a grant that, to encourage greater efforts at recruitment, is directly related to extra
efforts undertaken, the law simply limits their liability for the wrongful dismissals of
already deployed OFWs. This is effectively a legally-imposed partial condonation of
their liability to OFWs, justified solely by the law’s intent to encourage greater
deployment efforts. Thus, the incentive, from a more practical and realistic view, is
26
 really part of a scheme to sell Filipino overseas labor at a bargain for purposes solely
of attracting the market. . . .
The so-called incentive is rendered particularly odious by its effect on the OFWs —
the benefits accruing to the recruitment/manning agencies and their principals are
taken from the pockets of the OFWs to whom the full salaries for the unexpired
portion of the contract rightfully belong. Thus, the principals/employers and the
recruitment/manning agencies even profit from their violation of the security of
tenure that an employment contract embodies. Conversely, lesser protection is
afforded the OFW, not only because of the lessened recovery afforded him or her by
operation of law, but also because this same lessened recovery renders a wrongful
dismissal easier and less onerous to undertake; the lesser cost of dismissing a Filipino
will always be a consideration a foreign employer will take into account in termination
of employment decisions. . . .[126]
Further, “[t]here can never be a justification for any form of government action that alleviates
the burden of one sector, but imposes the same burden on another sector, especially when the
favored sector is composed of private businesses such as placement agencies, while the
disadvantaged sector is composed of OFWs whose protection no less than the Constitution
commands. The idea that private business interest can be elevated to the level of a compelling
state interest is odious.”[127]
Along the same line, we held that the reinstated clause violates due process rights. It is arbitrary
as it deprives overseas workers of their monetary claims without any discernable valid
purpose.[128]
Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her contract, in
accordance with Section 10 of Republic Act No. 8042. The award of the three-month
equivalence of respondent’s salary must be modified accordingly. Since she started working on
June 26, 1997 and was terminated on July 14, 1997, respondent is entitled to her salary from
July 15, 1997 to June 25, 1998. “To rule otherwise would be iniquitous to petitioner and other
OFWs, and would, in effect, send a wrong signal that principals/employers and
recruitment/manning agencies may violate an OFW’s security of tenure which an employment
contract embodies and actually profit from such violation based on an unconstitutional
provision of law.”[129]
III
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 12% to 6% in the absence of stipulation,
applies in this case. The pertinent portions of Circular No. 799, Series of 2013, read
The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the
following revisions governing the rate of interest in the absence of stipulation in loan
contracts, thereby amending Section 2 of Circular No. 905, Series of 1982:
Section 1. The rate of interest for the loan or forbearance of any money, goods or
credits and the rate allowed in judgments, in the absence of an express contract as to
such rate of interest, shall be six percent (6%) per annum.
Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations for
Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for
Non-Bank Financial Institutions are hereby amended accordingly.
This Circular shall take effect on 1 July 2013.
Through the able ponencia of Justice Diosdado Peralta, we laid down the guidelines in
computing legal interest in Nacar v. Gallery Frames:[130]
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as
follows:
1. When the obligation is breached, and it consists in the payment of a sum of money,
i.e., a loan or forbearance of money, the interest due should be that which may have
been stipulated in writing. Furthermore, the interest due shall itself earn legal interest
from the time it is judicially demanded. In the absence of stipulation, the rate of
interest shall be 6% per annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an
interest on the amount of damages awarded may be imposed at the discretion of the
court at the rate of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages, except when or until the demand can be established
with reasonable certainty. Accordingly, where the demand is established with
reasonable certainty, the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be
so reasonably established at the time the demand is made, the interest shall begin to
run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The
actual base for the computation of legal interest shall, in any case, be on the amount
finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this
interim period being deemed to be by then an equivalent to a forbearance of credit.
And, in addition to the above, judgments that have become final and executory prior to
July 1, 2013, shall not be disturbed and shall continue to be implemented applying the rate
of interest fixed therein.[131]
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 applicable interest rate. Further, it is only
applicable if the judgment did not become final and executory before July 1, 2013.[132]
We add that Circular No. 799 is not applicable when there is a law that states otherwise. While
the Bangko Sentral ng Pilipinas has the power to set or limit interest rates,[133] these interest
27
rates do not apply when the law provides that a different interest rate shall be applied. “[A]
Central Bank Circular cannot repeal a law. Only a law can repeal another law.”[134]
For example, Section 10 of Republic Act No. 8042 provides that unlawfully terminated overseas
workers are entitled to the reimbursement of his or her placement fee with an interest of 12%
per annum. Since Bangko Sentral ng Pilipinas circulars cannot repeal Republic Act No. 8042, the
issuance of Circular No. 799 does not have the effect of changing the interest on awards for
reimbursement of placement fees from 12% to 6%. This is despite Section 1 of Circular No. 799,
which provides that the 6% interest rate applies even to judgments.
Moreover, laws are deemed incorporated in contracts. “The contracting parties need not repeat
them. They do not even have to be referred to. Every contract, thus, contains not only what has
been explicitly stipulated, but the statutory provisions that have any bearing on the matter.”[135]
There is, therefore, an implied stipulation in contracts between the placement agency and the
overseas worker that in case the overseas worker is adjudged as entitled to reimbursement of
his or her placement fees, the amount shall be subject to a 12% interest per annum. This implied
stipulation has the effect of removing awards for reimbursement of placement fees from
Circular No. 799’s coverage.
The same cannot be said for awards of salary for the unexpired portion of the employment
contract under Republic Act No. 8042. These awards are covered by Circular No. 799 because
the law does not provide for a specific interest rate that should apply.
In sum, if judgment did not become final and executory before July 1, 2013 and there was no
stipulation in the contract providing for a different interest rate, other money claims under
Section 10 of Republic Act No. 8042 shall be subject to the 6% interest per annum in accordance
with 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.
IV
Finally, we clarify the liabilities of Wacoal as principal and petitioner as the employment agency
that facilitated respondent’s overseas employment.
Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995 provides that the foreign
employer and the local employment agency are jointly and severally liable for money claims
including claims arising out of an employer-employee relationship and/or damages. This section
also provides that the performance bond filed by the local agency shall be answerable for such
money claims or damages if they were awarded to the employee.
This provision is in line with the state’s policy of affording protection to labor and alleviating
workers’ plight.[136]
In overseas employment, the filing of money claims against the foreign employer is attended by
practical and legal complications. The distance of the foreign employer alone makes it difficult
for an overseas worker to reach it and make it liable for violations of the Labor Code. There are
also possible conflict of laws, jurisdictional issues, and procedural rules that may be raised to
frustrate an overseas worker’s attempt to advance his or her claims.
It may be argued, for instance, that the foreign employer must be impleaded in the complaint
as an indispensable party without which no final determination can be had of an action.[137]
The provision on joint and several liability in the Migrant Workers and Overseas Filipinos Act of
1995 assures overseas workers that their rights will not be frustrated with these complications.
The fundamental effect of joint and several liability is that “each of the debtors is liable for the
entire obligation.”[138] A final determination may, therefore, be achieved even if only one of the
joint and several debtors are impleaded in an action. Hence, in the case of overseas
employment, either the local agency or the foreign employer may be sued for all claims arising
from the foreign employer’s labor law violations. This way, the overseas workers are assured
that someone — the foreign employer’s local agent — may be made to answer for violations
that the foreign employer may have committed.
The Migrant Workers and Overseas Filipinos Act of 1995 ensures that overseas workers have
recourse in law despite the circumstances of their employment. By providing that the liability of
the foreign employer may be “enforced to the full extent”[139] against the local agent, the
overseas worker is assured of immediate and sufficient payment of what is due them.[140]
Corollary to the assurance of immediate recourse in law, the provision on joint and several
liability in the Migrant Workers and Overseas Filipinos Act of 1995 shifts the burden of going
after the foreign employer from the overseas worker to the local employment agency. However,
it must be emphasized that the local agency that is held to answer for the overseas worker’s
money claims is not left without remedy. The law does not preclude it from going after the
foreign employer for reimbursement of whatever payment it has made to the employee to
answer for the money claims against the foreign employer.
A further implication of making local agencies jointly and severally liable with the foreign
employer is that an additional layer of protection is afforded to overseas workers. Local
agencies, which are businesses by nature, are inoculated with interest in being always on the
lookout against foreign employers that tend to violate labor law. Lest they risk their reputation
or finances, local agencies must already have mechanisms for guarding against unscrupulous
foreign employers even at the level prior to overseas employment applications.
With the present state of the pleadings, it is not possible to determine whether there was
indeed a transfer of obligations from petitioner to Pacific. This should not be an obstacle for the
respondent overseas worker to proceed with the enforcement of this judgment. Petitioner is
possessed with the resources to determine the proper legal remedies to enforce its rights
against Pacific, if any.
V
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 for their families. In Prieto v.
NLRC:[141]
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 hearts, in pursuit of a more
fulfilling future. Breach of contract, maltreatment, rape, insufficient nourishment,
28
 sub-human lodgings, insults and other forms of debasement, are only a few of the
inhumane acts to which they are subjected by their foreign employers, who probably
feel they can do as they please in their own country. While these workers may indeed
have relatively little defense against exploitation while they are abroad, that
disadvantage must not continue to burden them when they return to their own
territory to voice their muted complaint. There is no 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 grievances.[142]

But it seems that we have not said enough.

We face a diaspora of Filipinos. Their travails and their heroism can be told 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 behind daily. They would count the minutes, hours, days, months,
and 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, they remember what their work has
cost them. Twitter accounts, Facetime, and many other gadgets and online applications will
never substitute for their lost physical presence.

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 show the world the resilience, patience,
and creativity of our people. Indeed, we are a people who contribute much to the provision of
material creations of this world.

This government loses its soul if we fail to ensure decent treatment for all Filipinos. We default
by limiting the contractual wages that should be paid 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 overseas workers with what they deserve: their dignity.

Inevitably, their dignity is ours as well.

WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is AFFIRMED with
modification. Petitioner Sameer Overseas Placement Agency is ORDERED to pay respondent Joy
C. Cabiles the amount 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. Petitioner is also
ORDERED to reimburse respondent the withheld NT$3,000.00 salary and pay respondent
attorney’s fees of NT$300.00 at an 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 10 of Republic Act No. 8042 is declared
unconstitutional and, therefore, null and void.

SO ORDERED.

Carpio, Acting C.J., Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Del Castillo, Villarama,
Jr., Perez, Mendoza, Reyes, and Perlas-Bernabe, JJ., concur.
Sereno, C.J., on Leave.
Brion, J., see dissenting opinion.

29
II. Recruitment and Placement – A. Recruitment of local and migrant workers; 1. Illegal
recruitment (Sec. 5, R.A. No. 10022); d) Liabilities; (2) Theory of imputed knowledge
SUNACE INTERNATIONAL MANAGEMENT SERVICES INC. V NLRC
G.R. NO. 161757, January 25, 2006
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC. PETITIONER,
VS.
NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION; HON. ERNESTO S. DINOPOL, IN
HIS CAPACITY AS LABOR ARBITER, NLRC; NCR, ARBITRATION BRANCH, QUEZON CITY AND DIVINA
A. MONTEHERMOZO, RESPONDENTS.
DECISION
CARPIO MORALES, J.:
Petitioner, Sunace International Management Services (Sunace), a corporation duly organized
and existing under the laws of the Philippines, deployed to Taiwan Divina A. Montehermozo
(Divina) as a domestic helper under a 12-month contract effective February 1, 1997.[1] The
deployment was with the assistance of a Taiwanese broker, Edmund Wang, President of Jet
Crown International Co., Ltd.
After her 12-month contract expired on February 1, 1998, Divina continued working for her
Taiwanese employer, Hang Rui Xiong, for two more years, after which she returned to the
Philippines on February 4, 2000.
Shortly after her return or on February 14, 2000, Divina filed a complaint[2] before the National
Labor Relations Commission (NLRC) against Sunace, one Adelaide Perez, the Taiwanese broker,
and the employer-foreign principal alleging that she was jailed for three months and that she
was underpaid.
The following day or on February 15, 2000, Labor Arbitration Associate Regina T. Gavin issued
Summons[3] to the Manager of Sunace, furnishing it with a copy of Divina's complaint and
directing it to appear for mandatory conference on February 28, 2000.
The scheduled mandatory conference was reset. It appears to have been concluded, however.
On April 6, 2000, Divina filed her Position Paper[4] claiming that under her original one-year
contract and the 2-year extended contract which was with the knowledge and consent of
Sunace, the following amounts representing income tax and savings were deducted:
Year Deduction for Income Tax Deduction for Savings
1997 NT10,450.00 NT23,100.00
1998 NT9,500.00 NT36,000.00
1999 NT13,300.00 NT36,000.00;[5]
and while the amounts deducted in 1997 were refunded to her, those deducted in 1998 and
1999 were not. On even date, Sunace, by its Proprietor/General Manager Maria Luisa Olarte,
filed its Verified Answer and Position Paper,[6] claiming as follows, quoted verbatim:
COMPLAINANT IS NOT ENTITLED
FOR THE REFUND OF HER 24 MONTHS
SAVINGS
3. Complainant could not anymore claim nor entitled for the refund of her 24 months
savings as she already took back her saving already last year and the employer did not
deduct any money from her salary, in accordance with a Fascimile Message from the
respondent SUNACE's employer, Jet Crown International Co. Ltd., a xerographic copy
of which is herewith attached as ANNEX "2" hereof;
COMPLAINANT IS NOT ENTITLED
TO REFUND OF HER 14 MONTHS TAX
AND PAYMENT OF ATTORNEY'S FEES
4. There is no basis for the grant of tax refund to the complainant as the she finished her
one year contract and hence, was not illegally dismissed by her employer. She could
only lay claim over the tax refund or much more be awarded of damages such as
attorney's fees as said reliefs are available only when the dismissal of a migrant worker
is without just valid or lawful cause as defined by law or contract.
The rationales behind the award of tax refund and payment of attorney's fees is not
to enrich the complainant but to compensate him for actual injury suffered.
Complainant did not suffer injury, hence, does not deserve to be compensated for
whatever kind of damages.
Hence, the complainant has NO cause of action against respondent SUNACE for
monetary claims, considering that she has been totally paid of all the monetary
benefits due her under her Employment Contract to her full satisfaction.
6. Furthermore, the tax deducted from her salary is in compliance with the Taiwanese
law, which respondent SUNACE has no control and complainant has to obey and this
Honorable Office has no authority/jurisdiction to intervene because the power to tax
is a sovereign power which the Taiwanese Government is supreme in its own territory.
The sovereign power of taxation of a state is recognized under international law and
among sovereign states.
7. That respondent SUNACE respectfully reserves the right to file supplemental Verified
Answer and/or Position Paper to substantiate its prayer for the dismissal of the above
case against the herein respondent. AND BY WAY OF –
x x x x (Emphasis and underscoring supplied)
30
Reacting to Divina's Position Paper, Sunace filed on April 25, 2000 an ". . . answer to
complainant's position paper"[7] alleging that Divina's 2-year extension of her contract was
without its knowledge and consent, hence, it had no liability attaching to any claim arising
therefrom, and Divina in fact executed a Waiver/Quitclaim and Release of Responsibility and an
Affidavit of Desistance, copy of each document was annexed to said ". . . answer to
complainant's position paper."
To Sunace's ". . .ANSWER TO COMPLAINANT'S PAPER" Divina filed a 2-page reply,[8] without,
however, refuting Sunace's disclaimer of knowledge of the extension of her contract and
without saying anything about the Release, Waiver and Quitclaim and Affidavit of Desistance.
The Labor Arbiter, rejected Sunace's claim that the extension of Divina's contract for two more
years was without its knowledge and consent in this wise:
We reject Sunace's submission that it should not be held responsible for the amount
withheld because her contract was extended for 2 more years without its knowledge
and consent because as Annex "B"[9] shows, Sunace and Edmund Wang have not
stopped communicating with each other and yet the matter of the contract's
extension and Sunace's alleged non-consent thereto has not been categorically
established.
What Sunace should have done was to write to POEA about the extension and its
objection thereto, copy furnished the complainant herself, her foreign employer,
Hang Rui Xiong and the Taiwanese broker, Edmund Wang.
And because it did not, it is presumed to have consented to the extension and should
be liable for anything that resulted thereform (sic).[10] (Underscoring supplied)
The Labor Arbiter rejected too Sunace's argument that it is not liable on account of Divina's
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 reduced to writing and signed by the parties and their respective
counsel (sic), if any, before the Labor Arbiter. The settlement shall be approved by the
Labor Arbiter after being satisfied that it was voluntarily entered into by the parties
and after having explained to them the terms and consequences thereof.
A compromise agreement entered into by the parties not in the presence of the Labor
Arbiter before whom the case is pending shall be approved by him, if after confronting
the parties, particularly the complainants, he is satisfied that they understand the
terms and conditions of the settlement and that it was entered into freely voluntarily
(sic) by them and the agreement is not contrary to law, morals, and public policy.
And because no consideration is indicated in the documents, we strike them down as
contrary to law, morals, and public policy.[11]
He accordingly decided in favor of Divina, by decision of October 9, 2000,[12] the dispositive
portion of which reads:
Wherefore, judgment is hereby rendered ordering respondents SUNACE
INTERNATIONAL SERVICES and its owner ADELAIDA PERGE, both in their personal
capacities and as agent of Hang Rui Xiong/Edmund Wang to jointly and severally pay
complainant DIVINA A. MONTEHERMOZO the sum of NT91,950.00 in its peso
equivalent at the date of payment, as refund for the amounts which she is hereby
adjudged entitled to as earlier discussed plus 10% thereof as attorney's fees since
compelled to litigate, complainant had to engage the services of counsel.
SO ORDERED.[13] (Underescoring supplied)
On appeal of Sunace, the NLRC, by Resolution of April 30, 2002,[14] affirmed the Labor Arbiter's
decision.
Via petition for certiorari,[15] Sunace elevated the case to the Court of Appeals which dismissed
it outright by Resolution of November 12, 2002,[16] the full text of which reads:
The petition for certiorari faces outright dismissal.
The petition failed to allege facts constitutive of grave abuse of discretion on the part
of the public respondent amounting to lack of jurisdiction when the NLRC affirmed
the Labor Arbiter's finding that 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 with
private respondent's foreign employer (sic). As agent of the foreign principal,
"petitioner cannot profess ignorance of such extension as obviously, the act of the
principal extending complainant (sic) employment contract necessarily bound it."
Grave abuse of discretion is not present in the case at bar.
ACCORDINGLY, the petition is hereby DENIED DUE COURSE and DISMISSED.[17]
SO ORDERED.
(Emphasis on words in capital letters in the original; emphasis on words in small letters
and underscoring supplied)
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.
The Court of Appeals affirmed the Labor Arbiter and NLRC's finding that Sunace knew of and
impliedly consented to the extension of Divina's 2-year contract. It went on to state that "It is
undisputed that [Sunace] was continually communicating with [Divina's] foreign employer." It
thus concluded that "[a]s agent of the foreign principal, "petitioner cannot profess ignorance of
such extension as obviously, the act of the principal extending complainant (sic) employment
contract necessarily bound it.'"
Contrary to the Court of Appeals finding, the alleged continuous communication was with the
Taiwanese broker Wang, not with the foreign employer Xiong.
The February 21, 2000 telefax message from the Taiwanese broker to Sunace, the only basis of
a finding of continuous communication, reads verbatim:
xxxx
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 Regarding to Divina, she did not say anything about her saving in police station. As we
contact with her employer, she took back her saving already last years. And they did
not deduct any money from her salary. Or she will call back her employer to check it
again. If her employer said yes! we will get it back for her.
Thank you and best regards.
(sgd.)
Contracts take effect only between the parties, their assigns, and heirs, except in case
where the rights and obligations arising from the contract are not transmissible by
their nature, or by stipulation or by provision of law.[24]
Furthermore, as Sunace correctly points out, there was an implied revocation of its agency
relationship with its foreign principal when, after the termination of the original employment
contract, the foreign principal directly negotiated with Divina and entered into a new and
separate employment contract in Taiwan. Article 1924 of the New Civil Code reading

Edmund Wang The agency is revoked if the principal directly manages the business entrusted to the
President[19] agent, dealing directly with third persons.

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. The
message does not provide evidence that Sunace was privy to the new contract executed after
the expiration on February 1, 1998 of the original contract. That Sunace and the Taiwanese
broker communicated regarding Divina's allegedly withheld savings does not necessarily mean
that Sunace ratified the extension of the contract. As Sunace points out in its Reply [20] filed
before the Court of Appeals,
thus applies.
In light of the foregoing discussions, consideration of the validity of the Waiver and Affidavit of
Desistance which Divina executed in favor of Sunace is rendered unnecessary.
WHEREFORE, the petition is GRANTED. The challenged resolutions of the Court of Appeals are
hereby REVERSED and SET ASIDE. The complaint of respondent Divina A. Montehermozo against
petitioner is DISMISSED.

As can be seen from that letter communication, it was just an information given to SO ORDERED.
the petitioner that the private respondent had t[aken] already her savings from her
foreign employer and that no deduction was made on her salary. It contains nothing Quisumbing, (Chairperson), Carpio, and Tinga, JJ., concur.
about the extension or the petitioner's consent thereto.[21]

Parenthetically, since the telefax message is dated February 21, 2000, it is safe to assume that
it was sent to enlighten Sunace who had been directed, by Summons issued on February 15,
2000, to appear on February 28, 2000 for a mandatory conference following Divina's filing of
the complaint on February 14, 2000.

Respecting the Court of Appeals following dictum:

As agent of its foreign principal, [Sunace] cannot profess ignorance of such an

extension as obviously, the act of its principal extending [Divina's] employment
contract necessarily bound it,[22]

it too is a misapplication, a misapplication of the theory of imputed knowledge.

The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal,
employer Xiong, not the other way around.[23] The knowledge of the principal-foreign employer
cannot, therefore, be imputed to its agent Sunace.

There being no substantial proof that Sunace knew of and consented to be bound under the 2-
year employment contract extension, it cannot be said to be privy thereto. As such, it and its
"owner" cannot be held solidarily liable for any of Divina's claims arising from the 2-year
employment extension. As the New Civil Code provides,

32